Circular No. 49/2010/TT-BTC guiding the classification of, and application

• Official number: 49/2010/TT-BTC
• Legislation Type: Circular
• Organization: The Ministry of Finance
• Signer: Do Hoang Anh Tuan
• Issued Date: 12/04/2010

THE MINISTRY. OF FINANCE -------	SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ----------
No. 49/2010/TT-BTC	Hanoi, April 12, 2010

CIRCULAR

GUIDING THE CLASSIFICATION OF, AND APPLICATION OF TARIFFS TO, IMPORTS AND EXPORTS

Pursuant to June 29, 2001 Customs Law No. 29/2001/Ql110; June 14. 2005 Law No. 42/2005/ QHII Amending and Supplementing a Number of Articles of the Customs Law; June 14, 2005 Law No. 45/2005/QIIII on Import Duty and Export Duty; June 3, 2008 Law No. 13/2008/ QHI2 on Value-Added Tax; November 14, 200S Law No. 27/200S/QIII2 on Excise Tax; November 29. 2006 Law No. 27/2006/QIIII on Tax Administration; and decrees detailing the implementation of these laws;

Pursuant to Decision No. 49/QD-CTN of March 6, 1998, of the President of the Socialist Republic of Vietnam, on Vietnam's accession to the HS Convention;

Pursuant to the Government's Decree No. 06/ 2003/ND-CP of January 22, 2003, providing for the classification of imports and exports;

Pursuant to the Government's Decree No. 118/2008/ND-CP of November 27. 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

In furtherance of the Protocol governing the implementation of the ASEAN Harmonized Tariff Nomenclature (AHTN);

The Ministry of Finance guides the classification of and application of tariffs to, imports and exports as follows:

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GENERAL PROVISIONS

Article 1. Scope of regulation and subjects of application

1. This Circular guides the classification of. and application of tariffs (including pro rata tariffs and specific tariffs) to. imports and exports:

2. This Circular applies to importers and exporters of goods, customs offices, customs officers and other organizations and individuals when performing jobs related to the classification of. and application of tariffs to. imports and exports.

Article 2. Interpretation of terms

In this Circular, the terms below are construed as follows:

1. ASEAN Harmonized Tariff Nomenclature (AHTN) is a commodity nomenclature of ASEAN member countries which is elaborated on the basis of the Harmonized Commodity Description and Coding System (HS) of the World Customs Organization (WCO).

2. Vietnam's list of imports and exports, import tariff, export tariff, value-added tariff and excise tariff refer to legal documents promulgated by competent authorities and specified in Appendix I to this Circular (not printed herein).

3. Analysis and classification means the physical inspection of imports and exports carried out by customs offices with machines and technical equipment to identify commodity names and codes according to the list of imports and exports and tariffs applicable to imports and exports.

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5. Commodity classification and tariff application databases (below referred to as databases) means information relating to the classification of. and application of tariffs lo. imports and exports which are summarized, collected, updated and used by customs offices to serve the classification of. and application of tariffs to. imports and exports.

Article 3. Rights and obligations of customs declarants and taxpayers in the classification of. and application of tariffs to. imports and exports

1. Rights of customs declarants:

1.1 To be provided with information by customs offices, to check goods or take- goods samples under customs supervision before carrying out customs procedures lo serve customs declaration, commodity classification and tariff application.

1.2 To request customs offices to guide the commodity classification and tariff application according to law;

1.3 To lodge complaints about, initiate lawsuits against, and claim compensations for damage caused by. administrative decisions and administrative acts of customs offices, customs officers and other organizations and individuals in commodity classification and tariff application according to law.

1.4 To denounce illegal acts committed by customs offices, customs officers and other organi­zations and individuals in commodity classifica­tion and tariff application according to law:

1.5 To exercise other rights provided in Article 6 of the Law on Tax Administration.

2. Obligations of customs declarants:

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2.2 To supply goods samples and relevant vouchers and documents to serve commodity classification and tax inspection at the request of cusioms offices:

2.3 To observe cusioms offices' administra­tive decisions on commodity classification and codes and tariffs according to law;

2.4 To perform other obligations specified in Article 7 of the Law on Tax Administration:

2.5 To certify, sign and affix their seals to vouchers and documents made by themselves as well as copies and translations included in classification dossiers before submitting them to customs offices under the guidance in this Circular and lake responsibility before law for the accuracy, truthfulness and lawfulness of these papers.

Article 4. Responsibilities and powers and customs offices in the classification of. and application of tariffs to. imports and exports

1. Responsibilities of customs offices:

1.1. To inspect commodity names, codes and tariffs declared by customs declarants according to law:

1.2 To conduct commodity analysis and classification, identify commodity codes and apply tariffs according to law;

1.3 To settle complaints about, and pay compensation for damage caused by. illegal administrative decisions or administrative acts issued or committed by themselves or their officers:

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1.5. To provide information and guide cusioms declarants in commodity classification and tariff application upon request;

1.6. To bear other responsibilities as defined in Article 8 of the Law on Tax Administration

2. Powers of customs offices and customs officers:

2.1. To request customs declarants and taxpayers to provide goods samples and relevant vouchers and documents for commodity classification and tarifl application;

2.2. To conduct tax assessment, collect deficit tax amounts and sanction administrative violations of declaring incorrect commodity codes and tariffs according to regulations and take responsibility before law for their tax assessment;

2.3. To exercise other powers provided in Article () of the Law on Tax Administration.

Chapter II

COMMODITY CLASSIFICATION AND TARIFF APPLICATION

Section 1. PRINCIPLES AND BASES FOR COMMODITY CLASSIFICATION AND TARIFF APPLICATION

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1. When classifying imports and exports, the following must be complied with:

1.1 Vietnam's list of imports and exports (explanatory notes of sections and chapters: detailed lists of sections and chapters, headings and subheadings):

1.2 The Preferential Import Tariff:

1.3. Six (6) general rules on commodity classification according to the Harmonized Commodity Description and Coding System (Appendix 2 to this Circular-not printed herein):

1.4. The Governments Decree No. 06/2006/ND-CP of January 22. 2003. providing the classification of imports and exports and the guidance in this Circular.

2. Apart from the principles defined in Clause 1 of this Article, during classification, the following documents must be referred to:

2.1 The HS explanatory notes:

2.2 The W CO compendium of classification opinions:

2.3 The W CO alphabetical index:

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2.5. The AHTN supplementary explanatory notes (Appendix 3 to this Circular - not printed herein).

3. A commodity item must, after being classified, have a full code with the maximum number of digits as prescribed in the Preferential Import Tariff and shall be arranged into only one code under the Preferential Import Tariff.

Article 6. Bases for commodity classification

Commodity classification must abide by the commodity classification principles prescribed in Article 5 of this Circular and. on a case-by-case basis, be based on at least one of the following:

1. Documents included in customs dossiers concerning commodity classification;

2. Actual conditions of imports or exports:

3. Technical documents and catalogs of to-be-classified commodity item;

4. Commodity descriptions and codes inscribed in Vietnam's list of imports and exports and the Preferential Import Tariff:

5. The commodity classification and tariff application databases on the General Department of Customs website.

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1. General principles, bases and methods

1.1 . Principles and bases: Except the cases specified in Clause 2 of this Article, when applying a tax rate to a commodity item, customs declarations, customs offices and concerned organizations and individuals shall base on:

1.1.1 Commodity classification results;

1.1.1 The tariff which is valid at the time of tax calculation and conditions and procedures and dossiers for application of tariffs prescribed in legal documents on taxes levied on imports and exports.

1.2. Method of application:

1.2.1 Compare the commodity item's code found in the Preferential Import Tariff under Clause 3. Article 5 of this Circular against commodity descriptions and codes in the Export Tariff, the Particularly Preferential Import Tariff, the Value-Added Tariff and the Excise Tariff to identify the code of this commodity item under each tariff.

1.2.2 Compare the commodity item's code found in each tariff under Point 1.2.1 of this Article against conditions, procedures and dossiers prescribed in legal documents on taxes levied on imports and export to identify tax rates applicable to this commodity item.

2. For new. confusable and complex commodity items to which the method of tariff application prescribed in Clause 1 of this Article has been applied or the Finance Ministry's General Department of Customs has given written guidance, but there remain divergent opinions on their tax rates, the Ministry of Finance shall issue a document to guide the application of tariffs to this commodity item in conformity with requirements of selective, conditional and definite-time protection of domestic production, encouragement of domestic production and investment, assurance of market stability and non-disturbance of production and business activities.

Section 2. PRIOR CLASSIFICATION

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1. The commodity name has not yet been specified in Vietnam's list of imports and export or the Preferential Import Tariff:

2. The commodity name and code can be identified on the basis of commodity descriptions, technical documents, images, samples and other documents included in prior classification dossiers without requiring results of analysis and assessment with the aid of technical equipment and devices:

3. The commodity has not yet been included in the commodity classification and tariff application databases on the General Department of Customs website.

Article 9. Dossier of prior classification

1. A written request for prior classification, with detailed descriptions of the commodity requested for prior classification and a commitment to take responsibility before law if the detailed commodity descriptions and enclosed documents arc unconformable with the goods actually imported or exported (made according to the form provided in Appendix 4 to this Circular - not primed herein): one original;

2. Technical documents, commodity images and catalogs: one original each. If submitting copies, these copies must be affixed with "true copy" stamps:

3. Goods samples (if any);

4. Other papers and documents relating to the import or export requested for prior classification: one original each. If submitting copies, these copies must be affixed with "true copy" stamps.

Papers and documents stated in Clauses 1. 2 and 4 of this Article must be in Vietnamese or English. If they are made in another language, the customs declarant shall also submit their Vietnamese translations and take responsibility before law for the content of the translations.

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Article 10. Competence and procedures for prior classification

1. The General Department of Customs (or a provincial-level Customs Department that processes data) shall receive and examine the prior classification dossiers sent from an applicant for prior classification.

2. If the commodity descriptions in the written request for prior classification or documents provided by the applicant do not contain sufficient information For prior classification, within 5 working days after receiving the prior classification dossier, the General Department of Customs (or the provincial-level Customs Department that processes data) shall issue a written request for the applicant to supply additional information.

3. If the dossier is complete and the commodity descriptions in the written request for prior classification or documents provided by the applicant are clear and contain sufficient information for prior classification, within 30 working days after receiving the dossier, the General Department of Customs (or the provincial-level Customs Department that processes data) shall decide to conduct prior classification.

4. If the dossier is complete and the commodity descriptions in the written request for prior classification or documents provided by the applicant are clear, but the goods need to be analyzed or assessed so as to obtain sufficient grounds for classification, within 5 working days after receiving the dossier, the General Department of Customs (or the provincial-level Customs Department that processes data) shall issue a written reply rejecting the prior classification and stating the reason, and return the dossier to the applicant.

Article 11. Notification and use of prior classification results

1. Prior classification results will be sent to customs declarants (made according to the form provided in Appendix 5 to this Circular - not printed herein), enclosed with a photo of the classified commodity, and updated to databases.

2. Prior classification results are valid for 1 year (365 day-.) from the date of signing.

3. Customs declarants may use prior classification results if the following conditions are fully met:

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3.2 There is no change in legal provisions relating to the commodity for which prior classification has been conducted from the date of issuance of the prior classification decision to the time of carrying out customs procedures.

Section 3. INSPECTION OF COMMODITY CLASSIFICATION AND TARIFF APPLICATION IN THE PROCESS OF CARRYING OUT CUSTOMS PROCEDURES

Article 12. Inspection principles, purposes, objects, forms and degrees

1. Inspection principles: Customs offices and officers shall apply risk management methods to inspect customs declarants' declarations on names (descriptions of characteristics, properties, compositions, concentration and utilities) and codes of. and tax rates applicable lo imports and exports.

2. Inspection purposes: Documentary examination, physical inspection and tariff inspection aim to determine the conformity between customs declarants" declarations and documents in customs dossiers and between goods actually imported or exported and customs declarants" declarations and documents in customs dossiers and. on that basis, to identify codes of. and tax rates applicable to. imports or exports subject to classification and tariff determination.

3. Inspection forms and levels:

Inspection forms and levels comply with the guidance in Clauses 3. 4 and 6. Article 3 of the Finance Ministry's Circular No. 79/2009/TT-BTC of April 20. 2009. guiding customs procedures: customs inspection and supervision: import duly, export duty and tax administration of imports and exports (below referred to as Circular No. 79/2009AT-BTC).

Article 13. Detailed inspection of customs dossiers and handling of results of detailed inspection of customs dossiers

1. When conducting detailed inspection of a customs dossier, the customs office shall check declaration contents and examine the accuracy and truthfulness of the commodity name, code and tax rates declared in the customs declaration against information provided in the customs dossier's documents. Specifically:

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1.2 The commodity code must be written in a clear, adequate and accurate manner based on detailed descriptions of the to-be-classified commodity in the tariffs applicable to imports and exports:

1.3 The tax rates must be written in a clear, adequate and accurate manner according to the tariffs which are valid at the time of declaration registration:

1.4 To examine the accuracy and truthfulness of the commodity name and code in the customs declaration against information provided in the customs dossier's documents (checking the commodity name written in contracts, invoices, packing lists, bills of lading, catalogs, use instructions and user manual).

2. Handling of inspection results:

2.1 If the customs declarant's declarations on the commodity name, code and tax rates are unclear or incomplete, the customs office shall request the customs declarant to make additional declarations:

2.2 If (he customs declarant's declarations on the commodity name, code and tax rates are clear and complete, the customs office shall conduct inspection under the guidance in Clause 1.4 of this Article and concurrently check these declarations against databases (if such a database is available):

2.3 If after conducting inspection under the guidance in Clause 1.4 of this Article and checking databases, the customs office has grounds to affirm that the customs declarant's declarations are inaccurate or untruthful, showing inconsistencies between the commodity name and code declared in the customs declaration and information provided in the customs dossiers documents, the customs office shall determine the commodity name, code and tax rates and assess payable tax amounts under the guidance in Article 23 of Circular No. 69/2009/TT-BTC and sanction violations (if any) according to law:

2.4 If after conducting inspection under the guidance in Clause 1.4 of this Article and checking databases, though the customs office has doubts about inconsistencies between the customs declarant's declarations and information provided in the customs dossier s documents, it fails to obtain grounds to affirm that these declarations are inaccurate or untruthful because physical inspection has not yet been conducted, the customs office shall conduct physical inspection under the guidance in Article 14 of this Circular to obtain grounds to conclude on the customs declarant's declarations.

If after conducting inspection under the guidance in Clause 1.4 of this Article and checking databases, the customs office concludes that there is no inconsistency between the customs declarants declarations on the commodity name, and code and information provided in the customs dossier "s documents, it shall conduct tax inspection under the guidance in Article 15 of this Circular.

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1. The physical inspection of goods shall be conducted directly by customs officers (for commodities whose names and technical properties can be described through visual inspection) or with technical machinery and equipment (for commodities whose names and technical properties cannot be described through visual inspection) in order to identify names, ingredients, concentration, properties, composition, characteristics and utilities (below collectively referred to as properties) and codes of goods actually imported or exported.

2. When conducting physical inspection, customs officers shall:

2.1 Check the commodity name (examine the descriptions of the composition, characteristics, ingredients, concentration, properties and utilities) and code written in the customs declaration and other relevant documents against goods subject to physical inspection:

2.2 Describe the name, properties and code of goods subject to physical inspection in the customs declaration (the column "results of inspection by inspectors") and take responsibility before law for the descriptions.

For a commodity item whose name and properties cannot be described through visual inspection, the district-level Customs Department that carries out customs procedures shall, together with the goods owner, take samples or request the goods owner to supply technical documents (catalogs) for sending to an analysis and classification center under the General Department of Customs or its branch (below referred to as analysis and classification center) for physical inspection with technical machinery and equipment, if the analysis and classification center is capable of conducting the analysis and classification. In case the analysis and classification center is incapable of conducting the analysis and classification or no technical document is available, the customs office and the goods owner shall jointly select an assessment service company operating under the Commercial Law to conduct the physical inspection. T he customs office shall use analysis and classification results or assessment results supplied by these agencies to make conclusions on physical inspection of imports and exports according to regulations.

3. Handling of inspection results:

3.1 If the inspection results show that there is no inconsistency between the commodity name and code declared in the customs declaration as well as information provided in the customs dossier's documents and goods actually imported or exported, the customs office shall conduct lax rate inspection under the guidance in Article 15 of this Circular:

3.2 If the inspection results show that there are inconsistencies between the commodity name and code declared in the customs declaration as well as information provided in customs dossier's documents and goods actually imported or exported, the customs office shall fix a commodity code based on the goods actually imported or exported and. on that basis, determine the tax rates and payable tax amounts under the guidance in Article 23 of Circular No. 79/2009/TT-BTC. and sanction administrative violations (if any) according to law:

3.3 If the customs declarant disagrees with conclusions on the commodity name and code of the customs office that carries out customs procedures, he/she shall, together v. ith the customs office, select a technical organization which is designated to conduct inspection for stale management purposes (below re I erred to as technical organization) or an assessment agency (if the selected technical organization refuses in writing). If the customs declarant and the customs office fail to reach agreement on the selection of a technical organization or assessment agency, the customs office shall make the selection.

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3.3.2 If the customs declarant disagrees with conclusions of the technical organization or assessment agency, he/she may lodge complaints according to law. The technical organization or assessment agency shall take responsibility for its conclusions on the physical inspection of goods:

3.3.3 If the customs office disagrees with the conclusions or has grounds to believe that the results of the physical inspection of the technical organization or assessment agency are inaccurate, it shall comply with Article 9 of Circular No. 44/ 2001/TT-BKHCNMT of July 25. 2001. of the Ministry of Science. Technology and Environment (now the Ministry of Science and Technology), guiding goods inspection activities of non-business technical units to serve the stale management.

Article 15. Tax rate inspection and handling of tax rate inspection results

1. Tax rate inspection shall be conducted concurrently with lax inspection under the guidance in Clause 2e. Article 14 of Circular No. 79/2009/TT-BTC.

When conducting lax rate inspection, the customs office shall also check the time of declaration registration so as to determine applicable legal documents and. on that basis, inspect:

1.1 The export duty rate, for exports liable to export duly;

1.2 The import duty rate (preferential rate, particularly preferential rate, tariff quota or specific duty), excise lax rate and value-added lax rate, for imports liable to import duty, excise tax or value-added tax.

2. Handling of results of tax rate inspection:

2.1 If having grounds to believe that the customs declarant's declarations are accurate, the customs office shall effect customs clearance according to the customs declarant's declarations:

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Section 4. INSPECTION OF COMMODITY CLASSIFICATION AND TARIFF APPLICATION WITH REGARD TO GOODS ALREADY CLEARED FROM CUSTOMS PROCEDURES

Article 16. Inspection principles and objects

Customs offices shall apply risk management methods lo examine customs dossiers; other documents relating lo imports or exports; imports and export and places of manufacture, when necessary, in any of the following cases:

1. No documentary examination, physical inspection or tax rate inspection has been conducted in the course of carrying out customs procedures.

2. The customs office detects in a tax dossier details relating to the payable tax amount, exempted, reduced or refunded tax amount which need to be further clarified.

Article 17. Inspection contents and methods and handling of inspection results The inspection of the classification and identification of codes of. and tax rates applicable to. imports and exports already cleared from customs procedures shall be conducted as follows:

1. The re-inspection section in a district-level Customs Department:

1.1 To examine customs dossiers and check the declared commodity names, codes and tax rates and documents relating to the classification and identification codes of and tax rates applicable to imports and exports of which dossiers have not yet been inspected upon customs clearance.

1.2 Inspection contents and methods comply with Article 13. 14 and 15 of this Circular.

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If the re-inspection section has doubts about customs dossiers or declared commodity names, codes and tax rates but it still fails to obtain sufficient grounds to conclude on fraudulent acts, it shall transfer doubtful matters to the post-customs clearance inspection section for verification according to regulations on post-customs clearance inspection.

2. The post-customs clearance inspection section:

2.1 Based itself on doubtful matters related to customs dossiers, documents or declared tax rates transferred from the re-inspection section or detected through the evaluation of the degree of risk by commodity item, sector or importer, to organize post-customs clearance inspection at customs offices" or enterprises" headquarters.

2.2 Inspection contents and order and the handling of inspection results comply with the guidance on post-customs clearance inspection in Part VI of Circular No. 79/2009/TT-BTC.

3. The anti-smuggling section:

To verify cases transferred from the post-customs clearance inspection section which show signs of fraudulence such as forging dossiers and documents or entering into collusion to make false declarations of commodity names or declare tax rates lower than the prescribed ones or major fraudulent cases of systematic nature which are delected by anti-smuggling forces.

4. For goods lots for which the commodity classification and tariff application inspection has been conducted upon customs clearance, including cases in which commodity codes and tariffs have been determined, but after conducting re-inspection or post-customs clearance inspection or during fighting smuggling and illegal transportation, anti-smuggling forces detect violations, they shall handle violations according to law. collect the deficit or evaded tax amounts and clarify the responsibility of the section which has conducted inspection upon customs clearance and handle violations, if any. according to regulations of the customs sector and law.

5. Within 5 working days after obtaining results of inspection of commodity classification and tax rate determination after goods are cleared from customs procedures, such results must be notified to the customs clearance section for use as a basis for collection and updating of information to the databases.

Chapter lII

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Article 18. Subjects of analysis and assessment and sending of requests for analysis and assessment for commodity classification

1. Subjects of analysis and assessment for commodity classification are samples of imports or exports (below referred to as samples).

Customs offices that carry out import or export procedures shall take and send samples to an analysis and classification center for analysis or classification or send them to an assessment agency operating under the Commercial Law for assessment according to Articles 20 and 21 of this Circular.

2. Sending analysis and assessment requests

2.1 Analysis and classification centers under the General Department of Customs shall analyze and classify imports and exports whose names and properties cannot be identified through visual inspection but must be identified through analysis with technical machinery and equipment:

2.2 When necessary to conduct commodity analysis and classification as prescribed at Point 2.1 of this Article, but analysis and classification centers under the General Department of Customs are incapable of conducting such analysis and classification or no relevant technical document is available, the customs office that carries out customs procedures shall send samples to assessment agencies for assessment under law and refer to assessment results of these agencies to draw conclusions on the customs inspection of the names and codes of. and tax rates applicable to imports and exports.

The General Department of Customs shall announce a list of commodity items which analysis and classification centers are incapable of analyzing and classifying;

2.3. If analysis and classification or assessment requests arc sent or analysis and classification or assessment results are used in contravention of this Article, these results will not be valid for use as a basis for commodity classification.

Article 19. Dossiers of request for analysis and classification or assessment

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1.1. The district-level Customs Department that carries out import and export procedures shall compile a dossier of request for analysis and classification, affix its seal on every two adjoining pages and send the dossier to an analysis and classification center. Such a dossier comprises:

a/ A written request for analysis and classification which is also used as the sampling record (made according to the form provided in Appendix 6 to this Circular - not printed herein): to be made in 2 originals, one kept by the unit that requests analysis and classification and the other sent to the analysis and classification center:

b/ Relevant technical documents: I copy;

1.2. In addition to documents stated in Clause 1 of this Article, a dossier of request for analysis and classification must comprise:

a/ A copy of the customs declaration of imports or exports requested for analysis and classification. If physical inspection has been conducted, the results of physical inspection must be written therein:

b/ A copy of the commercial contract (the part concerning analysis request):

c/ A copy of the certificate of origin (C/0);

d/ An original list of documents included in the dossier.

2. Dossiers of request for assessment comply with legal documents on commodity assessment.

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I. Samples to be analyzed and classified or assessed must be taken from the goods lot subject to inspection o\' commodity classification and tariff application. The General Department of Customs shall specify requirements on samples and sampling techniques for analysis, classification or assessment.

2. Procedures for taking and preserving samples comply with the guidance in Article 15 of Circular No. 79/200/TT-BTC.

Article 21. Delivery and receipt of samples and dossiers of request for analysis and classification or assessment

1. The customs office that requests analysis and classification or assessment shall directly hand over, send by post or authorize in writing the customs declarant to deliver samples and the dossier of request for analysis and classification or assessment to the analysis and classification center or the assessment agency.

2. When receiving samples and a dossiers of request for analysis and classification, the analysis and classification center shall issue a receipt (according to the form provided in Appendix 7 to this Circular - not printed herein), with 2 copies, one to be kept by the center and the other to be sent to the requesting customs office.

Within 3 working days, the analysis and classification center shall send the receipt to the customs office which requests analysis and classification for monitoring.

3. If the samples and the dossier of request for analysis and classification do not meet prescribed requirements, the analysis and classification center shall notify such in writing and return them within 3 working days after the receipt. The customs office which requests analysis and classification shall receive back the dossier and samples for supplementation according to regulations.

Article 22. Destruction or return of samples which have been analyzed and classified or assessed

1. Destruction of samples which have been analyzed and classified:

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1.2 The destruction of samples already analyzed and classified must be decided in writing by the director of the analysis and classification center and recorded in a sample destruction minutes. The decision and minutes on sample destruction will be kept according to regulations on dossier archival.

2. Return of goods samples which have been analyzed and classified:

2.1. If the customs declarant has clearly stated his/her request for "return of samples" in the analysis and classification request made at the district-level Customs Department, the analysis and classification center shall return samples to the district-level Customs Department or the customs declarant (if the district-level Customs Department which requests analysis has authorized the customs declarant to receive samples), if samples can be returned.

2.2. The director of the analysis and classification center shall decide on the return of samples currently preserved and will not be responsible for the quality of returned samples which have been affected by the analysis process.

2.3 In case samples are returned while the preservation duration has not yet expired, goods owners shall make written commitments not to complain about the results of analysis and classification.

2.4 When returning samples, a minutes on sample return (according to the form provided in Appendix 8 to this Circular - not printed herein), must be made.

3. The return of goods samples already assessed complies with current law on goods assessment.

Article 23. Notification of analysis and classification results

1. Within 15 working days after receiving samples and a valid dossier of request for analysis and classification as prescribed in this Circular. the analysis and classification center shall issue a notice of results of analysis and classification of the received samples (according to the form provided in Appendix 9 to this Circular – not printed herein) to the requesting unit.

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2. The notice of analysis and classification results must clearly state the commodity properties, name and code according to Vietnam's list of imports and exports and the Preferential Import Tariff.

3. The notice of analysis and classification results shall be made by an analysis and classification specialist and bear the seal and signature of the director of the analysis and classification center.

Article 24. Use of analysis and classification results

1. Analysis and classification results notified by analysis and classification centers will serve as a basis for customs offices to identify the names and codes of and tax rates applicable to imports and exports. Analysis and classification centers shall take responsibility for the accuracy of its analysis and classification results;

2. If the customs office requesting analysis and classification has sufficient grounds to believe that the code announced by the analysis and classification center is inconsistent with the customs dossier or goods actually imported or exported, within 3 working days after receiving the analysis and classification results of the analysis and classification center, the customs office shall send to the center and the provincial-level Customs Department a document stating issues on which opinions remain divergent and the reasons;

3. Within 5 working days alter receiving from the customs office which requesting analysis and classification a documents stating issues on which opinions remain divergent and the reasons, the analysis and classification center shall issue a written reply:

4. After exchanging ideas, if the analysis and classification center and the customs office requesting analysis and classification fail to reach an agreement, within 10 working days after receiving the analysis and classification center's opinions, the provincial-level Customs Department shall send to the General Department of Customs a report clearly staling issues on which opinions remains divergent and the reasons therefore, enclosed with the relevant dossier;

Within 15 working days after receiving a complete dossier and report from the provincial-level Customs Department, the General Department of Customs shall issue a document to guide the handling of classification results. For complicated cases which take more lime for consulting concerned agencies, the General Department of Customs may extend the lime limit for providing guidance which, however, must not exceed 60 days.

Chapter IV

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Article 25. Contents and sources of databases

1. Databases include:

1.1 A database on the list of. and tariffs applicable to. imports and exports:

1.2 A database on the classification of. and tariff application to. imports and exports.

2. The database on the list of. and tariffs applicable to. imports and exports includes:

2.1 Commodity codes:

2.2 Descriptions of commodity names in English and Vietnamese:

2.3 Units of calculation in English and Vietnamese:

2.4 Tax rates applicable to imports and exports.

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3.1. Commodity codes under the Preferential Import Tariff;

3.2. Descriptions of commodity names (depending on each kind of commodity, clearly slating the properties and characteristics regarding the commodity composition, ingredients, constituents, category and utilities):

3.3 Declarations of imports and exports:

3.4 Time (date) of updating information:

3.5 Commodity images (if any).

4. A database on the list of. and tariffs applicable to. imports and exports which is formed from the following sources:

4.1 Vietnam's list of imports and exports:

4.2 The Export Tariff:

4.3. The Preferential Import Tariff and Particularly Preferential Import Tariff;

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4.5 The Excise Tariff

5. A database on the classification of and tariff application to imports and export. which is formed from the following sources:

5.1 Translations of the WCO's database on commodity classification:

5.2 Results of commodity classification and tariff application collected and updated by the Genera] Department of Customs from:

5.2.1 Documents on the settlement of complaints about commodity classification and tariff rate application issued by the Ministry of Finance and the General Department of Customs:

5.2.2 Documents guiding commodity classification and tariff application issued by the Ministry of Finance and the General Department of Customs:

5.2.3. Notices of analysis and classification results issued by analysis and classification centers under the General Department of Customs:

5.2.4. Results of lax inspection and examination:

5.2.5 Prior classification decisions.

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1. The General Department of Customs shall update the database on commodity classification and tariff application.

2. Information in databases must be modified upon change m their source information.

3. The General Director of Customs is competent io decide on the change and modification of information updated to databases by the General Department of Customs.

4. The General Director of Customs shall provide for the updating, change and modification of databases.

Article 27. Exploitation and use of databases

1. When conducting commodity classification and tariff application, customs officers shall refer to the database on commodity classification and tariff application.

2. Use of databases:

2.1 Databases will serve as a basis for commodity classification and tariff application;

2.2 When conducting commodity classifi­cation, if the commodity item to be classified has already been included in databases available on the General Department of Customs website, the code indicated in databases will apply: if the commodity item to be classified is similar to an item included in databases and the classification cannot be conducted under rules 1.2 and 3. rule 4 explaining the commodity classification according to Vietnam's list of imports and exports will apply.

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COMPLAINTS. SETTLEMENT OF COMPLAINTS AND INITIATION OF LAWSUITS

Article 28. Complaints about conclusions on commodity classification and tariff application and settlement of complaints

1. Customs declarants who disagree with customs offices' conclusions on commodity classification and tariff application may lodge complaints about these conclusions.

2. The time limit for lodging complaints complies with the law on complaints and denunciations.

3. The order for settlement of complaints complies with the law on complaints and denunciations and relevant laws.

4. Pending the settlement of complaints, customs declarants and taxpayers shall pay tax according to customs offices' conclusions on the classification of. and tariff application to. imports and exports.

Article 29. Initiation of lawsuits

Customs declarants who disagree with the settlement of complaints by customs offices of different levels may initiate lawsuits at court according to law.

Chapter VI

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Article 30. Implementation responsibilities

1. The General Department of Customs shall, based on this Circular, promulgate customs procedures for the classification of. And application of tariffs to. imports and exports and a regulation on the formation of. and collection and updating of information to. databases and guide customs units to implement them in a uniform manner so as to facilitate import and export activities and ensure state management of customs.

2. Customs offices, customs declarants, taxpayers and concerned organizations and individuals shall conduct commodity classification and tariff application according to current regulations and this Circular. Any arising problems must be reported to the Ministry of Finance and the General Department of Customs for consideration and guidance for settlement.

Article 31. Effect

1. This Circular takes effect 45 days from the date of its signing and replaces the Finance Ministry's Circular No. 85/2003/TT-BTC of August 29. 2(K)3. and other guiding documents which are contrary to this Circular.

2. In the course of implementation, if relevant documents mentioned in this Circular and appendices are amended, supplemented or replaced, the amending, supplementing or replacing documents will apply.-

FOR THE MINISTER OF FINANCE
DEPUTY MINISTER




Do Hoang Anh Tuan

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(Promulgated together with the Circular No. 49/2010/TT-BTC dated April 12^th 2010 of the Ministry of Finance)

SIX GENERAL RULES

EXPLAINING THE CLASSIFICATION OF GOODS ACCORDING TO THE LIST OF EXPORTED GOODS AND IMPORTED GOODS OF VIETNAM

The classification of goods according to the List of exported and imported goods of Vietnam must comply with the following Rules:

Rule 1:

The name of the Sections, Chapters, and sub-Chapters are for easy reference only. In order to ensure the legality, the goods must be classified according to the content of each Heading, the Notes of relevant Sections and Chapters, and the Rules below, if such Heading or Notes has no other requirements.

Explanation of Rule 1:

(I) Goods being the subjects of international trade are systematically classified in the List of the Harmonization system into Sections, Chapters, and sub-Chapters The Sections, Chapters, and Sub-chapters are succinctly named to indicate the categories of goods therein. However, in many cases the names of Sections, Chapters, and Sub-chapters cannot completely cover the variety of goods therein.

(II) The first part of Rule 1 states that the names are only for “easy reference". That means the names of Sections, Chapters, and sub-Chapters do not legally affect the goods classification.

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(a) The content of the Heading and Notes of the relevant Sections or Chapters, and

(b) Rule 2, 3, 4 and 5, when the Heading or Notes have no other requirements.

(IV) Many goods may be classified into this List without considering any other Rule of explanation, that means they have been clearly expressed in the Notes according to Rule 1 in (III)(a). Example: Live horses (Heading 01.01), and pharmaceutical goods are specified in Notes 4 of Chapter 30 (Heading 30.06)

(V) The explanation of Rule 1 in part (III)(b) says “where the content of a Heading or the Notes has no other requirement" to assert that the content of the Heading and the Notes of relevant Sections and Chapters are most important, which means they must be first considered when classifying.

Example: in Chapter 31, the Notes says that a particular Heading is only relevant to some certain goods. Therefore, such Headings do not include other goods by applying Rule 2b.

Rule 2:

a) When an article is classified into a Heading, such article is not finished, but it has basic characteristics of the finished goods in that Heading. The classification is the same for finished goods that already have basic characteristics of finished goods that are not assembled.

b) If a material or substance is classified into a Heading, then the mixtures or compounds of them with other materials or substances also belong to that Heading. The goods entirely or partly made of a material or a substance shall be classified into the same Heading with such material or substance. The classification of goods made of two or more materials or substances must comply with Rule 3.

Explanation of Rule 2:

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(The unfinished articles)

(I) The first part of Rule 2a has extended some Headings of special goods, including both finished and unfinished goods, as long as they have basic characteristics of the finished goods.

(II) This Rule is also applicable to the casts in the rough shapes of the finished products. The phrase “casts in the rough shape of finished products” means the goods that cannot be instantly used, of which the physical shapes or outlines are similar to the finished products or parts, that will be made into finished products or parts (except in special cases).

The semi-finished products not in the basic shapes of finished products (in forms of bars, plates, tubes, etc.) are not considered “casts in the rough shape of finished products”.

(III) Rule 2a is not usually applicable to the products in the Headings of Section I to Section IV (Chapter 1 to Chapter 24).

(IV) The cases that apply this rule are specified in the General Notes of the Section of Chapter (example; Section XVI, Chapter 61, 62, 86, 87, and 90).

Explanation of rule 2a:

(The disassembled or unassembled articles)

(V) The second part of Rule 2a prescribes that the finished goods that are noted assembled shall be classified into the same Heading with the assembled goods. The articles are usually disassembled or unassembled for packaging, preserving, or transporting.

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(VII) For the purposes of this Rule, “unassembled or disassemble goods” means the parts that make up the goods are able to be assembled using simple tools (screws, bolts, nuts, etc.) or nailed, or weld, on conditions that such activities are merely assembly, regardless of the complexity of the assembly method.

However, the components must not go through any process to become finished products.

The unassembled components being the residual components according to the requirements for finishing the products shall be separately classified.

(VIII) The cases that apply this rule are specified in the Notes of the Section of Chapter (example; Section XVI, Chapter 44, 86, 87, and 89).

(IX) Rule 2a is not usually applicable to the products in the Heading of Section I to Section VI (Chapter 1 to Chapter 38).

Notes: In order to ensure that this Rule is practical and able to avoid trade fraud, this Rule must be uniformly applied as follows:

If the unassembled or disassembled goods have been classified according to this Rule as stated above, but there are no grounds for the customs and the declarant to classify them into the same Heading with the completely built units as prescribed in this Rule when they are going through the customs procedure, and the components thereof are separately classified, the Sub-department of customs at the checkpoint shall inspect the use of the components imported in the previous year annually, on March 31^st of the succeeding year at the latest, and:

a) Classify the components separately, if the tax payer only uses part of the imported components, and presents the sale invoice of materials for producing the components themselves, or the invoice of materials bought from a domestic component producers to serve the product assembly;

b) Classify them as completely built units, if the tax payer uses all the imported components (including the components purchased from another imported) or uses the assembled components from abroad.

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Explanation of rule 2b:

(Mixtures and compounds of materials or substances)

(X) Rule 2b is related to the mixtures and compounds of materials or substances, and the goods made of two ore more materials or substances. The Headings that this Rule mentions are the Headings relevant to materials or substances (example: Heading 05.03: Horsehair), and the Headings relevant to the goods made of some certain materials or substances (example: Heading 45.03: articles of natural cork). This rule is only applicable if the content of the Heading or the Notes of the Section or the Chapter does not have other requirements (example: 15.03: Lard stearin, lard oil, not mixed).

The mixed products described in the Notes of the Section or Chapter or in the Heading content must be classified according to Rule 1.

(XI) Rule 2 is to extend the Headings related to materials or substances including their mixtures or compounds with other materials or substances. This Rule also extends the Headings relevant to the goods made of certain materials or substances, including the goods partly made of such materials or substances.

(XII) However, this Rule does not mean to extend to the goods that do not satisfy the requirements of Rule 1, being the goods of which characteristics described in the Heading content are changed when one material or substance is added.

(XIII) According to this Rule, the mixtures and compounds of materials or substances, and the goods made of two or more materials or substances that may apparently be classified into two or more headings, must be classified according to Rule 3.

Rule 3:

When applying Rule 2b, or the goods may apparently be classified into two ore more Headings for some reasons:

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b) If the goods being the mixtures of various materials, or goods made up from various components, and goods in bundles for retail are not classified according to Rule 3a, they shall be classified according to the materials or the components that constitute their characteristics.

c) When the goods are not able to be classified according to Rule 3a or 3b above, they must be classified into the last Heading among the equivalent Headings in the numerical order.

Explanation of Rule 3:

(I) The Rule provides 3 methods of classifying goods that may apparently be classified into two ore more Headings when applying Rule 2b or in other cases. These methods are applied in the order stated in that Rule. Thus Rule 3b is only applicable when it is not possible to apply Rule 3a, and Rule 3c is only applicable when it is not possible to apply Rule 3a and 3b. The classification must follow this order: a) The Heading with the most specific description; b) The basic characteristics; c) the last Heading in the numerical order.

(II) This Rule is only applicable when the content of the Heading, Notes, Section, or Chapter descriptions have no other requirements. Example: Notes 4b of Chapter 97 requires that if the goods are both described by one of the Heading from 97.01 to 97.05, and described by Heading 97.06, they shall be classified into one of the Heading before 97.06. In this case, the goods are classified according to Notes 4b of Chapter 97, not Rule 3.

Explanation of rule 3a:

(III) The first method of classification is described in Rule 3a: the Heading with more specific description is more prioritized than the Heading with general description.

(IV) There are no rigid rules for determining that a Heading is more specific than another. In general:

a) A Heading that mentions a particular article is more specific than a Heading that describes a category of articles.

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b) A Heading is considered more specific than other Headings into which an imported article may be classified when that Heading identifies and describes the article more precisely and specifically than other Headings.

Examples:

Example 1: carpets and other textile floor coverings being used in cars may be classified as car parts in heading 87.08, but they are described as carpets in heading 57.03. Therefore, they are classified into Heading 57.03.

Example 2: The safety glass without frame, made of toughened and laminated glass, of size and shape suitable for incorporation on airplanes, may be classified into Heading 88.03 as parts of the goods in Heading 88.01 or 88.02, but they are classified into Heading 70.07, where they are described as safety glass.

(V) However, where each Heading is only relevant to part of the materials or substances that constitute the mixture or compound, or only relevant to part of the bundles for retail, then such Headings are considered similarly describing their characteristics, even one of them describes such goods more precisely or specifically. In this case the goods are classified according to Rule 3b or 3c.

Example: a conveyor with one side made of plastic, and the other made of rubber may be classified into two Heading:

Heading 39.26: “Other articles of plastic…”

Heading 40.10: “Conveyor or transmission belts or belting, of vulcanized rubber"

Heading 40.10 is more specific than Heading 39.26 because 40.10 describes it as a “conveyor”, while Heading 39.26 does not. Thus this product may be classified into Heading 40.10 according to Rule 3a. But in this case, the product is not classified into Heading 40.10 according to Rule 3a because the description of Heading 40.10 is products made of rubbers, which is only relevant to part of that conveyor. Therefore, according to Rule 3a, Heading 39.26 and Heading 40.10 have the same specificity, though Heading 40.10 is more specific. Thus the classification must apply Rule 3b or 3c.

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(VI) The classification according to Rule 3b is applicable to:

(i) Mixtures.

(ii) Products made of various materials.

(iii) Products made of various components.

(iv) The goods packed in bundles for retail.

This method of classification is only applicable when the classification according to Rule 3a is not available.

(VII) In all cases above, the goods are classified according to their materials or components that constitute their basic characteristics within the scope of this method.

(VIII) The factors for determining the basic characteristics vary according to various kinds of goods. For instance, the characteristics may be identified according the materials, components, composition, size, quantity, weight, value, or the roles of the material in the use of the product.

(IX) Rule 3b is applicable to the articles made of various constituents, not only when such constituents are bound together as an inseparable entities, but also when they are separated, as long as they are compatible with and supplementary to each other that form a bundle that is not often separately sold.

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Example 1- An ashtray, comprising a frame and a detachable cup to hold ash.

Example 2 – The spice rack consists of a special frame (usually made of wood) and a number of spice jars in suitable shapes and sizes.

Normally, the different parts of those group of products are packed in the same bundle.

(X) According to this Rule 3b, the goods considered in a bundle for retail must satisfy the following conditions:

a) There must be at least two different kinds of goods that may apparently be classified into different Heading. Example: six forks are not considered a bundle according to this Rule because they cannot be classified into two Headings.

b) The products must be put together to satisfy a certain requirement or to perform a certain function; and

c) They must be appropriately arrange for directly selling to users without further packaging (example: packing in boxes or chests).

The term above includes the bundles such as bundles of various foods for cooking an instant meal or dish.

The examples about the bundles classified according to Rule 3b:

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a) A food bundle consists of sandwiches made of beef, with or without cheese (Heading 16.02), packed with French fries (Heading 20.04) is classified into Heading 16.02.

b) A food bundle for cooking Spaghetti consists of a box of dried pasta, a pack of fat cheese, and small pack of tomato sauce, stored in a cardboard box.

The dried pasta belongs to Heading 19.02

The fat cheese belongs to Heading 04.06

The tomato sauce belongs to Heading 21.03

In this case, the dried pasta has the basic characteristics of the product. Thus the product is classified as if they only consisted of dried pasta belongs to Heading 19.02.

However, this Rule is not applicable to a bundle that consist of multiple products packed together, for instance:

- A box of canned food consists of: 01 can of shrimps (Heading 16.05), 01 can of liver puree, 01 can of cheese (Heading 04.06), 01 can of smoked meat (Heading 16.02) and 01 can of cocktail sausage (Heading 16.01); or

- A box consists of: 01 bottle of strong wine (Heading 22.08) and 01 bottle of grape wine (Heading 22.04).

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Example 2: A hairdressing toolkit consists of: an electronic hair clipper, a comb, scissors, a brush, a towel, stored in a leather bag.

The electric hair clipper belongs to Heading 85.10

The comb belongs to Heading 96.15

The scissors are in Heading 82.13

The brush belongs to Heading 96.03

The towel belongs to Heading 63.02

The leather bag belongs to Heading 42.02

In this example, the electronic hair clipper has the basic characteristics of the hairdressing toolkit. Therefore, this product is classified into Heading 85.10.

Example 3: a drawing kit consist of a ruler, a protractor, a compass, a pencil, a pencil sharpener, stored in a plastic bag.

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The protractor belongs to Heading 90.17

The compass belongs to Heading 90.17

The pencil belongs to Heading 96.09

The pencil sharpener belongs to Heading 82.14

The leather bag belongs to Heading 42.02

In this bundle, the ruler, the protractor, and the compass have the basic characteristics of the drawing kit. Therefore, this drawing kit is classified into Heading 90.17.

For the products that do not satisfy the conditions prescribed in part X of the explanation of Rule 3b that are not considered as bundles for retail, each article shall be classified separately into the Headings that suit them the most.

(XI) This Rule is not applicable to the goods consisting of finished products being packed separately and not put together in the same bag in a certain proportion for industrial production, such as beverage production.

Explanation of Rule 3c:

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Example: the conveyors with one side made of plastic, and the other made of rubber mentioned in Rule 3a. This article is not able to be classified into Heading 40.10 or Heading 39.26 according to Rule 3a or Rule 3b. Thus it shall be classified according to Rule 3c, which means being “classified into the last Heading in the numerical order." According to this Rule, this Article shall be classified into Heading 40.10.

Rule 4:

The goods that are not classified according to the Rules above shall be classified into the Heading of the most similar goods.

Explanation of Rule 4:

(I) This Rule mentions the goods that are not able to be classified according to Rule 1 0 3. This Rule prescribes that these goods shall be classified into the Heading of the most similar goods.

(II) The classification according to Rule 4 requires the comparison between the goods being classified with the similar goods that have been classified in order to identify the goods that are most similar to them. The goods shall be classified into the Heading of the most similar goods.

(III) The similarity may be determined based on many factors such as the description, the characteristics, the properties, and the use purposes.

Rule 5:

The following provisions are applicable to the goods below.

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b) Apart from the Rule 5a stated above, the packages of goods being classified in the same Heading of goods are the packages normally used for that kind of goods. However, this Rule is not applicable to the recyclable packages

Explanation of rule 5a:

(Cases, bags, and similar packages)

(I) This Rule is only applicable to the following forms of packages:

1. Exclusive or in a particular shape for storing a certain kind of goods or bundle of goods, meaning the packages are specially designed for storing such goods. Some packages may be in the shapes of the goods store therein;

2. May be used for a long time, meaning they are designed to last together with the goods stored therein. These packages are for storing goods before using (e.g during the transportation or preservation); This characteristic distinguishes them from simple packages;

3. Are displayed together with the goods stored therein, such goods may or may not be separately packed for convenient transportation. The packages displayed separately shall be classified into appropriate Heading.

4. Being normally sold together with the goods stored therein; and

5. Not having the basic characteristics of the bundle.

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1. Jewelry box (Heading 71.13);

2. Cases of electric shavers (Heading 85.10);

3. Cases of binoculars and telescopes (Heading 90.05);

4. Cases of musical instruments (Heading 92.02);

5. Cases of guns (Heading 93.03).

(III) The products not applying this Rule such as: silver tea box, or porcelain sweet box.

Explanation of rule 5b:

(Packages)

(IV) This Rule prescribes the classification of packages normally used for packing and storing goods. However, this Rule is not applicable for recyclable packages, such as metal boxes, iron or steel bottles storing liquefied or compressed inflammable gas.

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Rule 6:

In order to ensure the legality, the goods must be classified into the sub-heading of a Heading according to the content of each sub-heading, the notes of relevant sub-heading, and the rules above (that have been appropriately adjusted), as long as they are compared with the Headings at the same level. According to this Rule, the Notes of relevant Sections and Chapters are also applicable, unless the description in the sub-heading has other requirements.

Explanation of Rule 6:

(I) The Rule 1 – 5 shall be appropriately adjusted for applying to the classification within a sub-heading in the same Heading.

(II) According to Rule 6, the terms below are construed as follows:

a) The “sub-headings at the same level”: 1-dash sub-headings (level 1) or 2-dash sub-headings (level 2).

Therefore, when examining the compatibility of two ore more 1-dash sub-heading in a sub-heading according to Rule 3a, the specificity or the similarity to the goods that need classification shall be assessed based on the content of the relevant 1-dash sub-Heading. When the most specific 1-dash sub-Heading has been determined, it shall be chosen. Consider the content of the 2-dash sub-Headings when a 1-dash sub-Heading is divided in order to choose the most suitable 2-dash sub-Heading for the goods that need classification.

b) "Unless the content of the sub-Heading has other requirements" means unless the notes of the Section or the Chapter is not consistent with the content or the Notes of the sub-Heading.

Example: In Chapter 71, the definition of “platinum” in Notes 4b of this chapter is not consistent with the Notes of sub-Heading 2 of this Chapter, in particular:

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+ The Notes in sub-Heading 2 of Chapter 71: “Notwithstanding the provisions of Chapter Note 4 (b), for the purposes of subheadings 7110.11 and 7110.19, the expression "platinum" does not include Iridium (Ir), Osmium (Os), Palladium (Pd), Rhodium(Rh) and Ruthenium (Ru).”

Therefore, the Notes of sub-Heading 2 shall apply in order to explain the sub-Heading 7010.11 or 7010.19, while the Notes 4b is not applicable.

(III) The scope of a 2-dash sub-Heading must not exceed that of the 1-dash sub-Heading to which it is affiliated; and the scope of a 1-dash sub-Heading must not exceed that of the Heading to which it is affiliated.