Commission communication - Code of conduct for the management of the Combined Nomenclature (CN)
Date: 2000-05-30
Institutions: European Commission
Subjects: Combined Nomenclature, code of conduct, tariff nomenclature

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Official Journal of the European Communities

30.5.2000

COMMISSION COMMUNICATION

CODE OF CONDUCT FOR THE MANAGEMENT OF THE COMBINED NOMENCLATURE
(CN)

(2000/C 150/03)

INTRODUCTION

The (cid:145)Communication from the Commission to the Council and
the European Parliament: Report on the results of the second
phase of SLIM (Simpler legislation for the internal market) and
the follow-up of the implementation of the first phase recom-
mendations(cid:146) includes recommendations by the CN-SLIM team.

Recommendation No 4 in the report of the CN-SLIM team on
the CN used in
the simplification and modernisation of
external
for the
trade is to establish a (cid:145)code of conduct(cid:146)
management of the CN (e.g. with regard to the process for
maintaining, creating and deleting CN codes).

Various recommendations made by the CN-SLIM team are
appropriate for inclusion in such a code of conduct.

Consequently, the Commission, having heard the views of the
Customs Code Committee (Tariff and statistical nomenclature
section) and of representatives of European Federations, has
established a code of conduct for the management of the CN.

BACKGROUND

History

On 1 January 1988 the Community introduced the concept of
the Combined Nomenclature (CN) having the aim of facilitating
trade and the collection and exchange of data on the statistics
of the external trade of the Community. It resulted from a
merger between the nomenclatures of the Common Customs
Tariff (the CCT) and the NIMEXE (the Community’s statistical
nomenclature).

Over the years, a significant number of CN subheadings have
enriched the harmonised system, HS nomenclature. Owing to
the increase in CN subheadings and the structure of the CN,
providers of statistical data have expressed difficulties in deter-
mining the correct CN subheading to be used in their statistical
declarations.

A decrease in the number of CN subheadings remains one of
the measures proposed as part of the SLIM initiative, with the
aim of reducing the burdens on European businesses and, in
particular, on small and medium-sized enterprises.

Council Regulation (EEC) No 2658/87 of 23 July 1987 on the
tariff and statistical nomenclature oand on the Common
Customs Tariff (1), provides
the
Combined Nomenclature (CN). Hence, the CN was established
to meet, at the one and the same time, the requirements of
both the CCT and of
the
the external
Community.

trade statistics of

framework for

the legal

Convention

The CN is based on the nomenclature annexed to the inter-
Commodty
national
the
Description and Coding System (HS)
auspices of
to
which the Community is a signatory.

the World Customs Organisation (WCO),

the Harmonised

issued under

on

By virtue of Article 21 of Council Regulation (EEC) No
3330/91 of 7 November 1991 on the statistics relating to
the trading of goods between Member States (2) and Article 8
of Council Regulation (EC) No 1172/95 of 22 May 1995 on the
statistics relating to the trading of goods by the Community
and its Member States with non-member countries (3), the CN
is used for the description of goods in the statistical data
medium to be
statistical
departments in Member States. Hence,
the CN constitutes
one of the main elements of Intrastat declarations made by
economic operators within the framework of intra-Community
trade. Furthermore, statistics on external trade and on intra-
Community trade that are disseminated to the public are based
on the CN.

transmitted to the

competent

Article 20 of Council Regulation (EEC) No 2913/92 of 12
October 1992 establishing the Community Customs Code (4),
confirms that the CCT comprises the CN. In accordance with
Annexes 37 and 38 to Commission Regulation (EEC) No
2454/93 (5)
the CN code
constitutes one of the essential elements in the single adminis-
trative document submitted to customs by economic operators
and used by customs in their monitoring of external trade
flows.

implementing that Regulation,

Main objectives of the CN

the results of

The CN reflects the Community’s WTO tariff commitments
trade
(e.g.
negotiations (1986 to 1994)), as well as other amendments
to the CN and adjustments of duties in accordance with
decisions taken by the Council or the Commission.

the Uruguay Round multilateral

Legal framework

According to Article 23 of the Treaty, the Community is based
on a customs union involving the use of a Common Customs
Tariff (CCT).

(1) OJ L 256, 7.9.1987, p. 1.
(2) OJ L 316, 16.11.1991, p. 1.
(3) OJ L 118, 25.5.1995, p. 10.
(4) OJ L 302, 19.10.1992, p. 1.
(5) OJ L 253, 11.10.1993, p. 1.

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It incorporates, as appropriate, WCO recommendations and
various Community policy requirements.

In order to meet the requirements of the external and internal
trade statistics of the Community and the needs for statistical
data, the CN includes subdivisions to the HS nomenclature.
Such subdivisions are maintained, created or deleted to meet
the requirements of users of the statistical data collected, estab-
lished and disseminated by reference to the CN.

For statistical purposes, the drafting and maintenance of corre-
lation tables between the CN and other goods’ nomenclatures is
an important task.

Objectives and principles with regard to the code of
conduct

The main objective of the code of conduct is to eliminate
the CN and to reduce the size of
unwarranted growth of
that nomenclature. The process should lead to a modernisation
of
taking into consideration technological or
commercial developments.

the CN,

Application of the code of conduct should ensure a better
discipline in the management of the CN.

It constitutes an instrument for transparency with regard to the
parties interested in the CN and contributes to ensuring objec-
tivity in the Commission’s decision-making, after having
obtained the Committee’s opinion.

In applying the (cid:145)code of conduct(cid:146), the diversity of the interests
involved, the needs for simplification and for modernisation of
the CN, and the difficulties inherent in its management should
be respected by requiring an overall vision of its aims and the
close cooperation of the parties concerned.

A maximum threshold for the number of CN codes cannot be
fixed arbitrarily. Instead, a certain degree of flexibility should
be exercised, within the spirit of legislative simplification, in
order to take account of the divergent needs of the parties
concerned with the CN, mainly the Commission, the Member
States and European Federations.

International aspects

Within the framework of the WCO the Commission shall take
into account
the principles of stability, modernisation and
simplification when updating the HS nomenclature.

services

involved

Commission
trade
negotiations should take into account, as far as possible, the
objective of simplifying and facilitating the use of the CN, e.g.
by promoting tariff concessions facilitating the merger of CN
subheadings.

international

in

Whenever the customs duty difference is marginal, and tariff
concessions are subject to a reduction over time pursuant to
international
the CN
should be envisaged under certain conditions, and in particular
those provided for in Article 9(2) of Regulation (EEC) No
2658/87.

trade agreements, modernisation of

Other customs nomenclatures

The principles established by this code of conduct should
apply, where appropriate,
to the management of other
customs nomenclatures such as TARIC.

CODE OF CONDUCT

1.

DEFINITIONS

1.1.

In this notice the following definitons and abbreviations apply:

Committee:

Customs Code Committee, Tariff and Statistical Nomenclature Section

European Federations:

Federations at European level acting in their capacity as representatives of
the economic operators using the CN and as representatives for providers
and users of trade statistics based on the CN

Interested parties:

Directorate-General Taxation and Customs Union and Eurostat as Direc-
torates-General for the Commission responsible for the management of the
CN

the Committee

Commission services presenting requests to amend the CN for Community
policy reasons

Member States administrations

Europan Federations

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EC:

CN:

HS:

HS 4:

HS 6:

WCO:

WTO:

2.

SCOPE

European Community

Combined Nomenclature

Harmonised System

HS four digit headings

HS six digit subheadings

World Custons Organisation

World Trade Organisation

2.1.

2.2.

This code of conduct for the management of the CN (e.g. with regard to the process of maintaining,
creating and deleting CN subheadings to the HS nomenclature) seeks to facilitate the management of
the CN subheadings to the HS nomenclature reproduced in Annex I to Regualtion (EEC) No
2658/87.

In the preparation of the yearly draft Commission decision concerning the modification of the CN,
the Commission’s services will follow the principles recalled by this code, and will proceed within
the framework of the procedures and time schedule provided for in this code. It gives guidance to
all interested parties who wish to make a request for modification, creation or deletion of any CN
subheading, on how to act in order to ensure that their request will be taken into consideration.

2.3.

It applies to any request for modification, creation or deletion of any CN subheadings.

3.

PRINCIPLES

3.1.

Content

3.1.1. The CN subheadings to the HS nomenclature should reflect:

(a) the EC’s international commitments (for example WTO tariff concessions and WCO recom-

mendations),

(b) various EC policy requirements expressed by the competent Commission departments (where

the needs are not met elsewhere),

(c) legitimate needs of a Community nature for specific sectors expressed by Member States and by

European Federations.

3.2. Modernisation

3.2.1. The modernisation of the CN will involve creation or delection of CN subheadings, changes to the
CN subheading structure or modifications of descriptions, in particular in accordance with Article
9(1) of Regulation (EEC) No 2658/87.

3.2.2. In modernising the CN, due account shall be taken of nomenclatures related to the CN (e.g.

Prodcom).

3.3.

The nomenclature

3.3.1. When amending the nomenclature structure of the CN, the code number allocated to a CN
subheading should be maintained, where the coverage of the CN subheading remains the same
or the change in coverage is a minor one.

3.3.2. A CN subheading cannot be deleted unless it has been in force for at least two calendar years.

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3.3.3. Descriptions in the CN should be clear, precise and concise, and if necessary accompanied by legal

notes.

3.3.4. The products to be covered by a CN subheading should be clearly identifiable or recognisable on

the basis of objective and measurable criteria.

3.3.5. The descriptions in the CN should observe the parallelism between the different Community

language versions of the CN and coherence in the terminology used.

3.3.6. The tariff annexes to the CN should normally be used only for products which are the subject of
specific WTO tariff measures and for which the cration of CN subheadings is not deemed necessary.

3.3.7.

the Community. Such
(cid:145)TARIC subheadings for statistical purposes(cid:146) shall reflect
subheadings shall enter into force on the first day of a month, apply on a monthly basis for at
least one year and be subject to the normal review cycle for CN codes.

the needs of

3.4.

Statistical criteria for the maintenance or creation of CN subheadings

3.4.1. Eurostat shall consider the definition of statistical thresholds to assist in the porcess of determining

whether a CN subheading should be deleted, maintained or created.

3.4.2. Eurostat shall inform other Commission services and Member States of such statistical thresholds.

3.4.3. Eurostat will establish periodically a list of CN subheadings where the trade volume is below the

statistical threshold for submission to other Commission services and the Committee.

3.5. Other cirteria for the maintenance or creation of CN subheadings

3.5.1. CN subheadings which are no longer needed for statistical or other reasons shall be deleted

whenever they are subjected to the same customs duties.

3.5.2. A CN subheading may be created or maintained even though the volume of trade is below the
statistical threshold in question, provided that it is supported by the Commission services or by the
Member States representing a qualified majority.

4.

PROCEDURE

4.1.

Submission of requests

4.1.1. Requests to amend the CN may be formulated by interested parties as defined above.

4.1.2. Other concerned parties which are not referred to above should present requests via the appropirate
European Federation or via the administration of the Member State where they are estabilished.

4.1.3. Requests to amend the CN shall be submitted to the Commission for examination, for the attention

of the responsible service:

(cid:151) requests of statistical nature shall be addressed for the attention of Eurostat,

(cid:151) other requests than those of a statistical nature shall be for the attention of DG Taxation and

Customs Union (1).

4.1.4. With a view to examining proposals to amend the CN to enter into force on 1 January, requests for
such proposed amendments should be submitted at the latest on 30 April of the year preceding its
entry into force.

(1) All requests concerning amendments to the HS nomenclature shall be submitted to the Commission for the attention
of DG Taxation and Customs Union. Those requests will be examined in collaboration with Eurostat and the various
interested parties.

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4.2.

Presentational requirements

4.2.1. A request for amendment to the CN should contain the following information:

(a) a statement of the reasons for the request,

(b) an indication of the envisaged CN subheadings by reference to the HS 4 or HS 6 level,

(c) details of the volume of trade, expressed in euro or in statistical units with regard to the
products for which new CN subheadings are being requested or for which the deletion or
the merger of CN subheadings is proposed, including forecasts of developments in trade,

(d) details of

the type of product

illustrations, samples, as well as details of

in question, supported if necessary by drawings, sketches,
the international or

the text of

photographs,
national standards.

4.2.2. Any proposal to amend the CN, submitted by the Commission to the Committee for examination

and an opinion, should contain the following information:

(a) identification of the origin of the proposal (Commission, Member State, European Federation or

other);

(b) reasons for the proposal;

(c) details of

the proposed new structure at HS 4 or HS 6 level compared with the existing

structure, including, if necessary, duty rates and supplementary units;

(d) comments by the Commission departments.

4.2.3. Proposals should also, where appropriate, contain the following information:

(a) statistical trade data on the CN subheadings concerned, both current and if possible covering the
three previous years, together with forecasts of future trade development (e.g. for the next two
years);

(b) reference(s) to the previous Commission documents on the same or similar questions;

(c) Annexes with technical documentation.

4.3.

Treatment of a request by the Committee

4.3.1. The Commission will inform the Committee of requests received to amend the CN.

4.3.2. The Commission will inform parties having requested an amendment to the CN of progress made

on their proposals.

4.3.3. Proposals to amend the CN, supported by Member States representing a qualified majority and
endorsed by the relevant Commission services, shall be incorporated in the draft regulation.

4.3.4. The draft regulation updating the CN shall be submitted to the Committee, in accordance with
Article 10 of Regulation (EEC) No 2658/87, for its opinion at a meeting to be held, normally in June
and at the latest on 30 September of the year preceding its entry into force.

4.3.5. If necessary,

the Commission will establish working parties, chaired by the Commission and

including representatives of Member States and of European Federations.

4.3.6. Recommendations to amend the CN resulting from the activities of a working party should be

submitted to the Committee for consideration.

4.4. Commission procedure

4.4.1. The Commission shall adopt the regulation updating the CN, in accordance with Article 12 of
Regulation (EEC) No 2658/87, with a view to facilitating and ensuring its timely dissemination, in
particular to the providers of statistical data, for publication in the Official Journal of the European
Communities at the latest latest by 31 October and subsequent dissemination in electronic format,
whenever possible, soon therafter.