foreign trade correlatives methodology … · 2.1.conceptual framework 14 ... example of the bec...

FOREIGN TRADE CORRELATIVESMETHODOLOGY

COLLECTION OF DOCUMENTS – UPDATE 2009Num. 50

NATIONAL ADMINISTRATIVE DEPARTMENT OF STATISTICS

JORGE R. BUSTAMANTE R.Director

CHRISTIAN RAFAEL JARAMILLO HERRERADeputy Director

MARIO CHAMIE MAZZILLOGeneral Secretary

TECHNICAL DIRECTORS

NELCY ARAQUE GARCIARegulation, Planning, Standardization and Normalization

EDUARDO EFRAÍN FREIRE DELGADOMethodology and Statistical Production

LILIANA ACEVEDO ARENASCensus and Demography

MIGUEL ÁNGEL CÁRDENAS CONTRERAS Geostatistics

ANA VICTORIA VEGA ACEVEDOSynthesis and National Accounts

CAROLINA GUTIÉRREZ HERNÁNDEZDiffusion, Marketing and Statistical Culture

Regulation, Planning, Standardization and Normalization DivisionNelcy Araque García

Technical StaffMartha Helena Ariza Buitrago, Andrea del Pilar Roldán Cortés, Angela Patricia Sarmiento Robayo, Sonia Gutiérrez Rozo.

Translation teamAna Lucía MartínezJuliana MosqueraMaría Isabel MurilloDaysi Sánchez

Page

PRESENTATION 09

INTRODUCTION 10

1. BACKGROUND 12

2. DESIGN 142.1. Conceptual framework 142.1.1. Objectives 142.1.2. Reference framework 142.2. Methodological design 172.2.1. Basic components 17

3. STATISTICAL PRODUCTION 193.1. Development of Correlatives 193.1.1. Correlative by historical series (TOTPART) and Tariff. Vs. National Accounts 193.1.2. Correlative by historical series:Tariff Vs. National Accounts 243.1.3. Correlative by historical series: COR_ARAN 243.2. Updating 273.3. Maintenance 27

4. DIFFUSION 284.1. Data repository management 284.2. Diffusion Products and instruments 284.3. Promotion and diffusion of products 28

5. RELATED DOCUMENTATION 29

GLOSSARY 32

BIBLIOGRAPHY 35

ANNEXES 36Annex A. Methodological diagram. Foreign Trade Correlative 36

CONTENTS

Diagram 1. Example of the structure of a tariff subheading.Diagram 2. Interrelations between the classifications that make up the TOTPART.

DIAGRAM INDEX

Table 1. Combinations of changes used in Foreign Trade Correlatives Table 2. Example of the structure of the Correlative TOTPARTTable 3. Example of the correlative table ISIC Rev. 3 A.C. vs. ISIC Rev. 3.1 Table 4. Example of the correlative table ISIC Rev. 3 A.C. Vs. ISIC Rev. 4 A.C. Table 5. Example of the detailed structure and correspondence of the CPC Ver. 1.0 A.CTable 6. Example of how to use the correlation matrix from the ECLAC booklet. “Transportable Goods”, according to the HS 2002 sequence Table 7. Example of the BEC Appendix. Correlative BEC Vs. SITC Table 8. Example of steps in the Correlation line Table 9. Example of Homologation steps Table 10. Example of homologation of Subheadings. Tariff Vs. Tariff 1993–2008 Table 11. Example of COR_ARAN (presentation without descriptions) Table 12. Example of COR_ARAN (complete presentation)

LIST OF TABLES

ACRONYMS

Acronym

ANALDEX

BANCOLDEX

CCC (today WCO; Please see below)

ECLAC

BEC

ISIC

COR_ARAN

SITC

CUODE

CPC A.C

DANE

DIAN

DIMPE

DIRPEN

National Association of Foreign Trade

Foreign Trade Bank of Colombia

Customs Cooperation Council (today World Customs Organization)

Economic Commission for Latin America and the Caribbean

Classification by Broad Economic Categories

International Standard Industrial Classification of all Economic Activities

Correlative Tariff vs. Tariff

Standard International Trade Classification

Standard Classification by Economic Use or Destination

Central Product Classification adapted for Colombia

National Administrative Department of Statistics

National Tax and Customs Bureau

Statistical Methodology and Production Division

Statistical Regulation, Planning, Standardization and Normalization Division

Asociación Nacional de Comercio Exterior

Banco de Comercio Exterior de Colombia S. A.

Consejo de Cooperación Aduanera (actualmente Organización Mundial de

Aduanas)

Comisión Económica para América Latina y el Caribe

Clasificación por Grandes Categorías Económicas

Clasificación Industrial Internacional Uniforme de todas las Actividades

Económicas

Correlativa Arancel vs.Arancel

Clasificación Uniforme para el Comercio Internacional

Clasificación Uniforme por Uso o Destino Económico

Clasificación Central de productos Adaptada para Colombia

Departamento Administrativo Nacional de Estadística

Dirección de Impuestos y Aduanas Nacionales

Dirección de Metodología y Producción Estadística

Dirección de Regulación, Planificación, Estandarización y Normalización

Estadística

Definition in Spanish Definition in English

(Continuación)

Acronym

INCODEX

DNP

WCO

NANDINA

N & C

H.S.

NSS

TOTPART

Colombian Institute of Foreign Trade

National Planning Department

World Customs Organization

Common Tariff Nomenclature of the Member Countries of the Cartagena Agreement

Nomenclatures and Classifications Group

Harmonized Commodity Description and Coding System

National Statistical System

Total of Tariff Headings

Instituto Colombiano de Comercio Exterior

Departamento Nacional de Planeación

Organización Mundial de Aduanas

Nomenclatura ArancelariaComún de los Países Miembros del

Acuerdo de Cartagena

Grupo de Nomenclaturas y Clasificaciones

Sistema Armonizado de Designacióny Codificación de Mercancías

Sistema Estadístico Nacional

Total de partidas arancelarias

Definition in Spanish Definition in English

PRESENTATION

The National Administrative Department of Statistics, DANE as the coordinating entity of the National Statistical System (NSS), within the framework of the "Statistical Planning and Harmonization" project, works to strengthen and consolidate the NSS. This is carried out through several processes such as: the production of strategic statistics; the generation, adaptation, adoption and diffusion of standards; the consolidation and harmonization of statistical information, and the connection of instruments, stakeholders, initiatives and products. These actions are carried out in order to improve the quality of strategic statistical information, its availability, timeliness and accessibility so as to respond to users demand.

In this context DANE, aware of the need and obligation to provide better products for its users, developed a standard presentation guide for methodologies. The aim of this guide is to contribute to the visualization and understanding of the statistical processes, allowing further analysis, control, replicability and evaluation. The documents are presented in a standard and comprehensive manner, thus facilitating the understanding of the main technical characteristics involved in the processes and sub-processes of each research, making them available for both specialized users and the general public.

These series of guides promote the transparency and credibility of the technical expertise of DANE, for a better understanding and use of statistical information. This information is produced according to the principles of coherence, comparability, integrality and quality of the statistics.

INTRODUCTION

DANE, as the governing body of the National Statistical Information System, has the fundamental mission of guaranteeing the availability, quality and impartiality of strategic statistical information for the country’s social, economic and political development. For this reason it is necessary to count on efficient, timely and accurate information systems, that enable comparisons of statistics at a national, multinational and international levels, to carry out different types of analyses, aimed at generating foreign trade indexes.

Pursuant to the above, DANE’s Classifications and Nomenclatures Group (supported by Decree 262 dated January 28, 2004, article 17, paragraph 6) develops correlation matrices based on the “Arancel Externo Colombiano” (Colombian External Tariff), and depending on classifications of economic activities, product classifications, foreign trade classifications and the Nomenclature of National Accounts, so that they are equivalent and provide the necessary information to foreign trade statistics users.

This document presents a methodology with the standard guidelines for the development offoreign trade correlation matrices, to simplify user consultation on foreign trade statistics.

At first, the procedure to be followed in the development of correlation matrices is presented, namely: Total of Tariff Headings (designated as TOTPART) and Tariff with Nomenclatures of National Accounts, which are intended to present an overview of the relationship between each of the Colombian External Tariff’s subheadings (since 1993) and the following classifications:

Standard Classification by Economic Use or Destination (CUODE)

International Standard Industrial Classification of All Economic Activities Revision 2 DANE (DANE ISIC Rev. 2).

International Standard Industrial Classification of All Economic Activities International Version (ISIC Rev. 2 International).

International Standard Industrial Classification of All Economic Activities Revision 3 adapted for Colombia (ISIC Rev. 3 AC).

International Standard Industrial Classification of All Economic Activities, Revision 3.1, adapted for Colombia (ISIC Rev. 3.1 AC).

International Standard Industrial Classification of All Economic Activities Revision 4 adapted for Colombia (ISIC Rev. 4 A.C).

Central Product Classification Version 1.0 adapted for Colombia (CPC Ver. 1.0 AC).

1.

2.

3.

4.

5.

6.

7.

Standard International Trade Classification Revision 3 (SITC Rev. 3).

Standard International Trade Classification Revision 2 (SITC Rev.2).

Classification by Broad Economic Categories Revision 3 International (BEC Rev. 3).

Nomenclature of the National Accounts System (Base year 1994, Base year 2000, Base year 2000 modified and New Base year 2005).

Lastly, the methodology for the development of the correlation matrix is presented: Tariff versus Tariff (designated as COR_ARAN), which describes the different changes (closures, openings, divisions or splitting, eliminations, recodifications, text modifications, etc.) that each of the Colombian External Tariff’s subheadings have had since 1993. These changes are established by decrees issued by the Committee on Customs, Tariffs and Foreign Trade (Triple A Committee). 1

The Triple A Committee, whose Presidency and Technical Secretariat is headed by the Ministry of Commerce, Industry and Tourism, is composed of the Deputy Minister of Foreign Trade, the Technical Deputy Minister of Finance, the Deputy Ministers of Business Development, Agriculture, Mines and Energy, the Deputy Director of National Planning, the National Customs Director and Counselors of the High Council for Foreign Trade.

1

8.

9.

10.

11.

BACKGROUND

1Foreign trade correlatives emerged from the need of users and producers of statistics regarding this subject matter to count on a robust tool that would allow them to carry out different analyses and economic studies. The request for a foreign trade correlative was made in 1993 by the Inter-institutional Committee for Foreign Trade Statistics 2, which was in that year formed by: the Banco de la República (Central Bank), the National Tax and Customs Office (DIAN), DANE and the Ministry of Foreign Trade. At present, this committee is formed by: Promotion of Tourism, Investment and Exports (PROEXPORT), the Ministry of Commerce, Industry and Tourism, the DIAN, the Banco de la República and DANE (through the National Accounts Division, the Statistical Methodology and Production Division (DIMPE) and the Logistics of Auto Form-filling and Registers).

It was stated that the correlative should be historical and based on the Colombian External Tariff of 1993, which had to be standardized with CUODE and ISIC Rev. 2 DANE (for the industrial sector) and the International ISIC Rev. 2 (for the agriculture, forestry and fishing sectors). It was also stated that the correlative should be constantly updated.

The Statistical Booklet of the Economic Commission for Latin America and the Caribbean (ECLAC) was taken as reference. This booklet shows two correlation matrices that present the existing correspondence between the SITC Rev. 3 and the SITC Rev. 2., the Harmonized Commodity Description and Coding System (HS), the CPC vers.1.0, the ISIC Rev. 2, the ISIC Rev. 3 and the BEC International Rev. 3 The first matrix follows the sequence of all the tariff items that compose the SITC Rev. 3, and the second matrix follows the HS sequence.

Similarly, the following basic referents were used: the CUODE, SITC Rev. 2, ISIC Rev. 2 International, ISIC Rev. 2 DANE, the Colombian External Tariff, the HS Explanatory Notes, and other supporting documents that allowed the research and accurate understanding of the products contained in the tariff.

The result was the first version of the TOTPART, which was delivered to the Inter-institutional Committee for Foreign Trade Statistics in the year 1995.

From this moment on, standardizations with the following statistical classifications, or of reference, or derived and of foreign trade, have been incorporated into this correlative, according to the changing needs of internal and external users:

Standardization with ISIC Rev. 3.0 A.C, December 2003.

Standardization with CPC Version 1.0 AC, February 2006.

The Inter-institutional Committee for Foreign Trade Statistics is ad-hoc and summoned by DANE upon request of any of its members.2

12Foreign Trade Correlatives

1.

2.

Standardization with SITC Rev. 3 International, October 2006.

Standardization with ISIC Rev. 3.1 A.C, December 2006.

Standardization with ISIC Rev. 4 A.C., 2012.

Standardization with BEC Rev.3 International, December 2007.

Standardization with SITC Rev. 2 International, April 2008.

In 2002, the Statistical Methodology and Production Division (DIMPE) requested a tool that would enable identification of the exact changes made to the Colombian External Tariff based on the tariff of 1993, and that would establish which subheadings were comparable to each other, in order to develop Foreign Trade Indexes.

The development of the Tariff Vs. Tariff correlative (COR_ARAN) was thus started, taking as reference the TOTPART version 9, the decrees modifying the tariff during the period under study, the Colombian External Tariff, the HS, the documents issued by the Community of Andean Nations (CAN) concerning amendments to the HS nomenclature and to the Common Tariff Nomenclature of the Member Countries of the Cartagena Agreement (NANDINA), the correlatives made by this body with the changes applied over time at the NANDINA level, as well as many other technical supporting documents.

The first result of this development process (carried out by a professional coordinator and a professional specialist in international trade) was initially delivered in December 2003, for chapters 1 to 30 of the Colombian External Tariff. Subsequently, the correlative was completed up to chapter 98 and has been updated since, to include new changes according to the decrees issued by the Triple A Committee.

Finally, in the year 2005 the Synthesis and National Accounts Division requested that the Colombian External Tariff subheadings, besides being standardized with the classifications listed in TOTPART, had also to be standardized with the Nomenclature of the System of National Accounts and its base years of 1994 and 2000. The following were taken as references: the TOTPART, the Colombian External Tariff, the CPC Ver. 1.0 A.C, the ISIC Rev. 3.0 A.C and the National Accounts’ correlatives between base years 1994 and 2000.

During its process of updating and maintenance this standardization was subsequently extended to bases 2000 Modified and the New Base 2005. It is worth mentioning that this correlative is updated whenever a decree modifying the Colombian External Tariff is issued. To date, 27 versions (updates) of the correlative have been delivered. In the latest version the fifth amendment of the HS, regulated for Colombia by means of Decree No. 4927 dated December 26, 2011, was included.

13 Foreign Trade Correlatives

3.

4.

5.

6.

7.

2.1. CONCEPTUAL FRAMEWORK

2.1.1. Objectives

General objective. To develop foreign trade correlation matrices based on the comparative analysis that begins with the Colombian External Tariff and the respective standardizations with the different classifications of transportable goods object of international trade, economic activities according to their use or economic destination, the Colombian External Tariff and the base years of the National Accounts System nomenclature.

Specific objectives

Compare domestic production and foreign trade figures (imports and exports) on transportable products and economic activities that allow economic analyses, in the context of the different classifications.

Provide and ensure the analysis, comparability and validation of statistical data by time series, for users and producers of foreign trade information.

Serve as a key tool in the generation of databases, which are structured according to the Colombian External Tariff, indexes, bulletins and updates of foreign trade information.

2.1.2. Reference framework

Conceptual base. A classification is defined as the grouping of phenomena or objects, in homogeneous sets, which are exhaustive and mutually exclusive, according to predetermined criteria and based on the use of the classification.

In addition, classifications are notation linguistic systems used to communicate and statistically process the different studied phenomena. The referral as system obeys to their composition, based on a set of codes composed of different levels of categories, which allow a homogenous division of the universe of statistical data.

The United Nations has determined the following types of classifications:

By economic activities.

By goods and services.

By object of expenditure.

DESIGN

2


By employment and occupations.

Social classifications

Among the most important classifications there are: those by economic activity, such as the International Standard Industrial Classification of all Economic Activities (ISIC); by products, such as the Central Product Classification (CPC), and the Harmonized Commodity Description and Coding System (HS), which are considered as basic.

Other types of classifications, at the UN level are defined as "implicit": those that use concepts defined as specialized in the context of accounting, like the classifications by economic subject, transaction or asset, that are used in the National Accounts System.3

Correlation matrices. They express the relationship between the different classifications for standardization purposes. This shows the correspondence between classifications, within their categories, so that they are equivalent in their structure and content.4

The standardization process is carried out through the application of basic concepts, therefore, it is necessary to know the definition for a better understanding of this matter, considering that a tariff subheading consists of ten digits. The first two correspond to the HS chapter, the following two correspond to the numerical order in the chapter where it belongs; (a 4-digit heading is known as the HS heading) the fifth and sixth digits identify the HS subheading. The eighth digit identifies the NANDINA subheading, while the Colombian External Tariff is identified in the last two digits (ninth and tenth), i.e., the Colombian External Tariff is identified by a10-digit code.

Diagram 1. Example of the structure of a tariff subheading

0102 HS Heading (4 digits) 0102.29 HS Subheading (6 digits)

0102.29.90 Nandina subheading (8 digits)

0102.29.90.10 Colombian External Tariff Subheading (10 digits)

Novelties or changes occurring at the time of the homologation process by way of inclusions of bulletins, decrees and others in the correlation matrices are determined, based on the following concepts:

Splitting: this occurs when a subheading gives origin to one or more subheadings and the initial subheading continues to be valid. The splitting can occur at the levels of HS (6 digits), NANDINA (8 digits), or the Colombian External Tariff (10 digits).5

Working Group of DANE’s Statistical Standardization Division. Correspondence between Economic Classifications, Bogota, DANE Publishing Division, 1998, p. 12.Working Group of DANE’s Statistical Standardization Division, Correspondence between the International Standard Industrial Classification of All Economic Activities, ISIC, Revision 3, Adapted for Colombia and the International Standard Industrial Classification of all Economic Activities - ISIC, Revision 3, International version, p. 9.Nomenclatures and Classifications group DIRPEN –DANE. Guidelines for the development of correlatives - NYC, Bogota, DANE, June 2004, p.8.

3

4

5


Elimination: as the name implies, this occurs when a subheading is eliminated. There are three types of eliminations, namely: a) Opening: When a subheading gives origin to one or more subheadings and the initial subheading ceases to be valid (elimination of the subheading code, but not of the product); b) Closing: When two or more subheadings become one subheading, grouping the products into a new code, and the initial subheading ceases to be valid (elimination of the subheading code, but not of the product); c) Inclusion: The subheading is eliminated (elimination of the subheading code, but not of the product), sending it to an existing subheading, or to the corresponding residual one. Under no circumstances are the registers of the correlative eliminated in order to keep the historical series in matrices, but at the same time none of the deleted codes can be reused by that decree or bulletin.

Recoding: in this process the product classified in the subheading remains valid, keeping the same description, but the subheading code is eliminated and a new one is assigned. The condition for recoding is that the code where the product was previously classified is not used in the decree, bulletin or other to classify another product. However, this does not imply that the codes will be reopened with different products in future decrees or bulletins.

Modification: this corresponds to changes generated in the product description of the subheading, by adding or deleting words, concepts, abbreviations, punctuation marks, etc. The condition for these changes is that they are made in the description, but not in the subheading code.

Transfer: the product classified under a subheading is wholly or partially included in another subheading, which may be either new or an existing one. The transfer produced by a variation also applies in cases where a product is separated by parts or specific features. Transfers can occur within the same or different headings and chapters.

Reclassification: a product classified under a subheading is located in another code or in a residual one, as long as its initial code is used by the same decree or bulletin to classify another product, which is different from the reclassified one, be it new or already existing.

Additionally, classifications can have combined changes, as shown in the following table.

Table 1. Combinations of changes used in Foreign Trade Correlatives

Each classification has a defined purpose according to its use. In some cases the aim is to facilitate foreign trade analysis with different degrees of coverage and detail, in other cases, the aim is to analyze the production structure or the origin of goods and their final use6. In this context, the foreign trade correlation matrices enable the establishment of the relationship between the Colombian External Tariff and the above-mentioned economic classifications. They also allow the interrelation between classifications that form the correlation matrices (Diagram 2).

EliminatedSplittingSplittingSplittingSplittingModifiedTransferred

TransferredModifiedRecodedRecoded / transferredRecoded / transferredTransferredSplitting

Source: DANE

Statistics and Economic Projections Division of ECLAC. ECLAC Statistical Booklets. International Statistical Classifications Incorporated in the Foreign Trade Data Bank for Latin America and the Caribbean (BADECEL), ECLAC, Santiago, Chile, United Nations, May 1993, p.11.

6


Diagram 2. Interrelations between the classifications that make up the TOTPART

International recommendations. The international economic and foreign trade classifications ISIC, CPC, CUODE, SITC and BEC - that have been included in the correlation matrix - are regulated by the United Nations Statistics Division. In turn, the World Customs Organization (WCO), formerly known as the Customs Cooperation Council (CCC), regulates the HS.

Additionally, the UN recommends developing correlation matrices during the process of adoption and adaptation of classifications, in order to maintain international comparability and historical series of economic statistics.

2.2. METHODOLOGICAL DESIGN

2.2.1. Basic components. The basic components of foreign trade correlation matrices are the classifications of economic activities; the classifications of goods and services; and finally, foreign trade classifications.

The following are classifications of economic activities:

International Standard Industrial Classification of All Economic Activities (ISIC International Revision).

International Standard Industrial Classification of All Economic Activities Revision 2 DANE (ISIC Rev. 2 DANE).

International Standard Industrial Classification of All Economic Activities Revision 3 Adapted for Colombia (ISIC Rev. 3 AC).

International Standard Industrial Classification of All Economic Activities Revision 3.1 Adapted for Colombia (ISIC Rev. 3.1 AC)

International Standard Industrial Classification of All Economic Activities Revision 4 Adapted for Colombia (ISIC Rev. 4 AC).

The ISIC in its different revisions has developed a 4-digit nomenclature.

H.S. CPC 1.0 A.C. ISIC Rev. 3 A.C.

SITC Rev. 2 BEC Rev. 3 ISIC Rev. 4 A.C.

SITC Rev. 3 ISIC Rev. 2 DANE ISIC Rev. 3.1 A.C.

SITC Rev. 1* CUODE

* SITC Rev. 1 is not standardized in the Correlative “Total of tariff headings” –TOTPART. However, SITC Rev. 1 is the reference classification for the CUODE and gives origin to SITC Rev. 2.Source: DANE


The following are classifications of goods and services:

Central Product Classification Version 1.0 adapted for Colombia Sections 0 to 4 Transportable Goods (CPC V. 1.0 AC). This is a 5 and 7-digit classification.

Nomenclature of National Accounts: Base year 1994 (6 digits), Base year 2000 (9 digits), Base year 2000-modified (9 digits) and new Base year 2005 (6 digits).

Similarly, foreign trade classifications are:

Standard Classification by Economic Use or Destination (CUODE). This classification has a 3-digit nomenclature.

Standard International Trade Classification Revision 3 (SITC Rev. 3). This is a 5-digit product classification.

Standard International Trade Classification Revision 2 (SITC Rev. 2). This is a 5-digit product classification.

Classification by Broad Economic Categories Revision 3 (BEC Rev. 3). This is a 3-digit classification.

Harmonized Commodity Description and Coding System (HS) for the years 1996, 2002, 2007 and 2012. This is a 4 and a 6-digit classification for headings and subheadings, respectively.

Colombian External Tariff. This is a 10-digit classification.

It is important to note that standardization at the maximum level of disaggregation is not established for certain classifications. This is because it is not possible to determine a one-to-one relationship with some subheadings of the Colombian External Tariff, due to the nature of each classification.


STATISTICAL PRODUCTION3

3.1. DEVELOPMENT OF CORRELATIVES 7

3.1.1. Correlatives by historical series (TOTPART) and Tariff. Vs. National Accounts. These correlatives are made following the sequence of all the Colombian External Tariff subheadings and establishing their correspondence with:

CUODE

ISIC Rev. 2 DANE

ISIC Rev. 3 A.C.

ISIC Rev. 3.1A.C.

ISIC Rev. 4 A.C.

CPC Ver 1.0 A.C. 8

SITC Rev.2

SITC Rev.3

BEC Rev. 3

National Accounts Nomenclature base years 1994, 2000, 2000 modified, and new base year 2005.

The first step in the development of the above-mentioned correlation matrices is the reading and interpretation of the tariff subheading (10 digits). This requires sufficient knowledge of the rules of interpretation established by the HS. The bibliographic documentation of reference (HS Explanatory Notes) must be used if the description of the subheading is not easily understandable and thus ensure the correct interpretation of the subheading. Once there is clarity about the characteristics of the product the correlation itself is established, by directioning the subheading towards the classification code that is being standardized. The process begins with the CUODE and follows the order established for the correlation matrix (Table 2).


See flow chart of the steps to be followed in the process of development of correlatives (Annex A).It is important to note that for the CPC, only sections 0 to 4 are taken into account,. This is where Transportable Goods are classified.8

7

Table 2. Example of the structure of the Correlative TOTPART

Since the correlative is composed of classifications derived from each other (SITC 3 from SITC 2) and / or which are related (CPC and ISIC, SITC and BEC), it is also necessary to establish the relationship between these classifications, thus originating correlation sub matrices 9. This aspect should be taken into account in the establishment of correlations, as it indicates that the standardization is properly being conducted.

To better illustrate this process take as example subheading 1902.40.00.00 “Couscous”, which was created by decree 2800 issued on December 27, 2001 and that came into effect as from January 1, 2002. By analyzing this subheading it can be concluded that it is closed at the Nandina level and also at the Colombian External Tariff level, since its nomenclature is 00.

Following the aforementioned steps the homologation process is carried out as indicated below:

Checking of the HS 2007 Explanatory Notes. The explanatory notes state that the product Couscous is located in heading 1902 "Pasta, whether cooked or stuffed (with meat or other substances) or otherwise prepared, such as Spaghetti, Noodles, Macaroni, Tagliatelle,, Lasagna, Gnocchi, Ravioli, Cannelloni, Couscous, whether or not prepared", so in a preliminary analysis it can be inferred that couscous is a pasta. “The heading also includes couscous as a heat-treated semolina. The couscous in this heading may be cooked or otherwise prepared (presented with meat, vegetables and other ingredients, as a main dish and having the same name)." 10

Tariff

Su

bhea

ding

0101210000

9008501000

Year

2012

2012

CUOD

E720

810

ISIC

Rev

. 2 D

ANE

1110

3852

ISIC

Rev

. 3A.

C.

0124

3320

ISIC

Rev

. 3.1

A.C.

0124

3320

ISIC

Rev

. 4

A.C.

0142

2670

CPC

Ver. 1

.0 A.

C.

02113

48323

SITC

Rev

. 2

0015

88132

SITC

Rev

. 3

00151

88132

Decre

e

4927

4927

BEC

Rev.

3

111

61

Tariff

de

scrip

tion

Purebredbreedinghorses

live.

Slideprojectors.

Rema

rks

Recoding of sub-heading 0101101000, according to

the fifth amendment

of the HS

Sub-heading generated

according to Decree 4927

Fifth Amendment

of the HS by recoding.

Effec

tive d

ate

01 - Jan12

01 - Jan12

Date

ofiss

uanc

e

26 - Dec11

26 - Dec11

Source: DANE

The correlation sub-matrices make reference to the standardization process that can occur between a Colombian External Tariff subheading and each of the classifications. Thus, the matrix has 9 TOTPART sub-matrices, namely: Tariff sub-heading VS CUODE, Tariff sub-heading VS ISIC Rev. 2 DANE, Tariff Sub-heading VS ISIC Rev. 3 AC, Tariff Sub-heading VS ISIC Rev. 3.1 AC, Tariff Sub-heading Vs ISIC Rev. 4 AC, Tariff Sub-heading VS CPC 1.0 AC, Tariff Sub-heading VS SITC Rev. 2, Tariff sub-heading VS SITC Rev. 3 and Tariff Sub-heading VS BEC Rev. 3. These same cases are presented for the Tariff Correlation Matrix VS National Accounts. However, base years of the Nomenclature of National Accounts are added here. This allows the analysis of correlation matrices as a whole, or the analysis of subheadings against each of the classifications involved in the standardization process designated as sub-matrices.World Customs Organization (WCO).2007. Harmonized System Explanatory Notes. Fourth edition. Paris - France. Customs Department EII.EE Madrid, p. 109.

9

10


Correlation with CUODE: According to the above, couscous is a prepared food product. Therefore the following procedure is carried out: 1) Search of the product in group 1, "Non-Durable Consumer Goods", 2) Locate the product in subgroup 11, which corresponds to "Food products", 3) The 3-digit code revision indicates that it corresponds to code 113, "Processed food". Then, the reading of the products contained in this group is carried out, and it is confirmed that the subheading 1902.40.00.00 is correlated with code 113, "Processed Food Products".

Correlation with ISIC Rev. 2 DANE: The industrial origin that couscous may have should be taken into account. For this the ISIC Rev. 2 DANE is taken as reference. After locating division 31, "Food, Beverages and Tobacco", couscous is classified according to the group where it corresponds, in this case in group 311, which refers to "Manufacturing of food products, except drinks”. Finally, couscous is classified in class 3117 " Manufacturing of Bakery Products ", as its explanatory note specifically refers to: "Manufacturing of bread, cakes, cookies, donuts, tarts, pastries and other bakery products that deteriorate easily, such as biscuits and other "dry" bakery products, and macaroni, noodles, spaghetti and other pastas.”

Correlation with ISIC Rev. 3 A.C 11: The subheading must be initially standardized with division 15 "Manufacture of food products and beverages". The subheading is located in group 151 "Production, processing and preserving of meat and fish", and finally, it is standardized in class 1552 "Manufacturing of macaroni, noodles, couscous and similar farinaceous products ".

Correlation with ISIC Rev. 3.1 AC: This is determined by the Correlative "ISIC Rev. 3 AC vs. ISIC Rev. 3.1 AC", establishing the correlation with class 1583 of ISIC Rev. 3.1 AC "Manufacture of macaroni, noodles, couscous and similar farinaceous products". Here it is evidenced that there was a modification during the revision of the ISIC Rev. 3 (Table 3).

Table 3. Example of the correlative table ISIC Rev. 3 A.C. vs. ISIC Rev. 3.1

Correspondence between the International Standard Industrial Classification of All Economic Activities Revision 3 adapted for Colombia - ISIC Rev. 3 AC and the International Standard Industrial Classification Revision 3 adapted for Colombia - ISIC Rev. 3.1 AC


A second alternative to carry out the standardization process with ISIC Rev. 3 A.C if there is a magnetic file on the CPC Ver. 1.0 A.C. is to go directly to the detailed structure and look for the heading 19.02 on the HS column (column G), and then locate the product “Couscous” in the subclass where the heading is related". The correlation with ISIC Rev. 3 AC (column F) and ISIC 2 DANE (Column H) can be seen there. Finally the classification’s explanatory notes for subclass 1552 are analyzed, verified and a correlation is established (Table 2). However, it should be noted that in order to verify the standardization of subheadings by this method, the HS being used is that of the year 1996.

11

ISIC Rev. 3 A.C. ISIC Rev. 3.1

155

1552

1552

1582

1583

Manufacture of bakery products, macaroni, noodles, couscous and similar farinaceous products

Manufacture of bakery products

Manufacture of macaroni, noodles, couscous and similar farinaceous products

Manufacture of other food products



Group Group Class ClassDescription Description158*

Source: DANE

Correlation with ISIC Rev. 4 AC: Using the Correlative ISIC Rev. 3 AC Vs ISIC Rev. 4 A.C.12 The correlation process starts from class 1552 of ISIC Rev. 3 AC to subheading 1604.90.00.00 by searching its homologue in ISIC Rev. 4 A.C, which in this case corresponds to class 1083 "Manufacture of macaroni, noodles, couscous and similar farinaceous products" (Table 4).

Table 4. Example of the correlative table ISIC Rev. 3 A.C. vs. ISIC Rev. 4 A.C.

Correlation with CPC Ver. 1.0 AC: The correlation is carried out by locating section 2, where "Food, beverages and tobacco; textiles, wearing apparel and leather products "are classified. Subsequently, by following the structure of this classification one can be directed to division 23 "Grain mill products, starches and starch products, other food products", where group 237 "Pasta: macaroni, noodles, couscous and similar farinaceous products" is located. In this way one can get to class 2372 and subclass 23720 "Pasta cooked, stuffed or otherwise prepared; couscous”. Once the contents of this subclass are verified (its relationship with the HS and the revisions of the ISIC AC) the correlation between subheading 1902.40.00.00 and code 23720 of the CPC Ver. 1.0 AC is established.13

Table 5. Example of the detailed structure and correspondence of the CPC Ver. 1.0 A.C

Correspondence between the proposed International Standard Industrial Classification of All Economic Activities Revision 3 adapted for Colombia - ISIC Rev. 3 AC and the International Standard Industrial Classification Revision 4 adapted for Colombia - ISIC Rev. 4 AC.Or one can follow the second alternative suggested in the step Correlation with ISIC Rev. 3. A.C.

12

13

Correspondence

237

2371023710012371002

23720

237200123720022372003

2372

Pasta: macaroni, noodles, couscous and similar farinaceous productsPasta uncooked, not stuffed or otherwise preparedNoodles, macaroni and similar productsScraps of noodles, macaroni and similar productsPasta: cooked, stuffed or otherwise prepared; couscousRavioliLasagnaCanelloni

1902.11.19

1902.20-.40

1902.11.19

31174015

3117402331174031

Group Class Subclass Title Harmonized systemISIC Rev. 3 A.C ISIC 2 DANEUnit

1552

kgkgkg

kgkgkg

Source: DANE


ISIC Rev. 3 A.C. ISIC Rev. 4 A.C.

155

1552

1552

Manufacture of bakery products, macaroni, noodles, couscous and similar farinaceous products



Manufacture of other food products


Manufacture of prepared meals and dishes


Group GroupClass ClassDescription Description108*

1081

1084*

1083

Source: DANE

Correlation with SITC: This correlation can be established by taking the Correlations Matrix Ordered According to the HS Sequence of the Statistical Booklet of ECLAC 14. First, the HS subheading 1902.40 is located in the first column. Then, the SITC Rev. 3 code is found in the second column, which for this case is 09891. Subsequently, taking as reference the detailed structure of the SITC Rev. 3 in the book of ECLAC 15, it is verified that “Couscous” is actually in the subheading found. In this manner, subheading 1902.40.00.00 is correlated with the SITC Rev. 3 in subclass 09891 "Pasta, cooked or stuffed; couscous, whether or not prepared" (Table 5).

Correlation with BEC: Since the SITC code already exists, the process starts by taking the correlation from the ECLAC booklet and locating the corresponding code for BEC Rev. 3, which, in this example, is located in category 122. Subsequently, the information is verified by reviewing the detailed structure of the BEC Rev. 3, thus, one can find that chapter 1 refers to "Foods and beverages", within which group 12 "Processed foods" is located and leading to class 122 "Foods and beverages, mainly for household consumption"(Table 6).

Table 6. Example of how to use the correlation matrix from the ECLAC booklet. “Transportable goods”, according to the HS 2002 sequence

Table 7. Example of the BEC Appendix. Correlative BEC Vs. SITC

Headings of the Standard International Trade Classification Revision 3 (SITC Rev.3)defined with reference to the BEC Section 0: Food products and live animals


Correspondence between international classifications of transportable products,, according to the HS 96 sequence.Correspondence between international classifications of transportable goods, according to the SITC Rev. 3 sequence.

14

15

190220190230190240190300190410

0989109891098910564504811

122122122121122

2372023720237202323023150

15441544154415321531

048304830483

0564504812

122122122121122

31173117311731213116

048304830483

0554504812

122122122121122

HS2002

SITC Rev.3

BEC Rev.3

ISIC Rev.3

SITC Rev.2

BEC Rev.1

ISIC Rev.2

SITC Rev.1 BECCPC

Source: ECLAC Statistical booklets. 2004. Num 30. 6

054.5054.6054.7054.8056.1056.4056.6056.7057.1057.2

SITC Rev.3

058.3058.9059

061.1061.21061.29 061.5 061.6061.9062

SITC Rev.3

081.94081.95081.99

091098.1098.4098.5098.6098.9

SITC Rev.3

112112122111122121122122112112

BEC

121122122121121122121112121122

BEC

1212222

122122122122121122

BEC

Source: Classification by Broad Economic categories

Table 8. Example of steps in the Correlation line

Once all the steps of the correlation line for subheading 1902.40.00.00 are completed “couscous” remains as shown in Table 7.

Table 9. Example of Homologation steps

3.1.2. Correlative by historical series: Tariff Vs. National Accounts. For homologations of the tariff with the base years of the Nomenclature of the National Accounts System, besides the above mentioned steps, the subheading is taken as reference and then the group that contains the product classified under the subheading object of the study is searched in the nomenclature, according to its structure. In this example the homologation is established with "Macaroni, noodles and similar farinaceous products”. The assignment of homologation codes is done on a spreadsheet facing the subheading to be homologated and in the column of the corresponding classification, as required. It is necessary to identify the year of the subheading and the decree number, with its date of issue and publication. In the event that there are significant aspects to inform, these are included as remarks under the column of the same name. Table 9 illustrates the steps for homologating the matrix of Tariff Correlation Vs National Accounts.

3.1.3. Correlative by historical series: COR_ARAN. This correlative was developed as from each of the tariff subheadings of the year 1993, and its correspondence with the new subheadings created by the Committee on Customs, Tariffs and Foreign Trade Affairs in accordance with the issuance of the different modifying decrees, has been established since then.

Once the corresponding decree is received the steps outlined below are followed:

First, the type of modification is analyzed (opening, closing, transfer, recoding, etc.) as well as the level at which this change is applied.

Tariff

Su

bhea

ding

1902400000Ye

ar2002

CUOD

E

113

ISIC

Rev

. 2 D

ANE

3117

ISIC

Rev

. 3A.

C.

1552

ISIC

Rev

. 3.1

A.C.

1583

ISIC

Rev

. 4

A.C.

1083

CPC

Ver. 1

.0 A.

C.

23720

SITC

Rev

. 2

0483

SITC

Rev

. 3

09891

Decre

e

2800

BEC

Rev.

3

122

Tariff

de

scrip

tion

Couscous

Rema

rks

Effec

tive d

ate

01 - Jan02

Date

ofiss

uanc

e

27 - Dec01

Source: DANE

Year

2002

Tariff

Sub

head

ing

1902400000

013002002

Natio

nal A

ccou

nts

Syste

m Ba

se ye

ar

2000

- 9 di

gits

013002002

Natio

nal A

ccou

nts

Syste

m Ba

se ye

ar

2000

Mod

ified

130202

Natio

nal A

ccou

nts

Syste

m-Ba

se ye

ar 20

05

Tariff

desc

riptio

n

Couscous

Natio

nal A

ccou

nts

Syste

m-Ba

se ye

ar

94-6

digit

s

150700

Desc

riptio

n Nati

onal

Acco

unts

Syste

m-Ba

se ye

ar 19

94

Macaroni, noodles

and similarfarinaceous

products

Desc

riptio

n Nati

onal

Acco

unts

Syste

m-Ba

se ye

ar 20

00Macaroni, noodles


products

Desc

riptio

n Nati

onal

Acco

unts

Syste

m Ba

se ye

ar 20

00 M

odifie

d

Macaroni, noodles


products

Desc

riptio

n Nati

onal

Acco

unts

Syste

m-Ba

se ye

ar 20

05

Macaroni, noodles


productsSource: DANE


An interpretive reading of the new subheading is carried out. And an adequate description for the subheading is given following the rules of interpretation on the subheadings of the HS.

Once this information is obtained, it is necessary to consult the bibliographic databases that support the investigation, in order to bring more clarity to this issue and establish an appropriate homologation. These bibliographic documents are: the Colombian External Tariff, the NANDINA and the HS.

If the modification is made in the HS and /or NANDINA, the column of remarks must be filled with the description of the observed change. For example, Decree 1205 dated 18th April 2008 supported by the agreement with the NANDINA Decision 675. In this way the treatment given to the subheading can be determined.

The corresponding comparison between the old and the new versions is made according to the decree. Then the last related valid subheading is located in the correlative’s file and from this subheading the change to the new subheading with its corresponding explanation is established, adding the code, decree number and description in front of it.

Changes made from the HS affect the Colombian External Tariff structure in a higher proportion. In this case, the analysis is more thorough due to the fact that if the homologation is not established correctly the traceability of the historical series can be lost, resulting in the inability to track or do follow-up to the subheading in question.

For example, one of the outcomes of the HS’ fourth amendment is that all mercury compounds were moved to the new heading 2852 "Compounds, inorganic or organic, of mercury, excluding amalgams" created for this purpose. For this reason it was necessary to standardize all subheadings that included these compounds in their products with the new heading 2852.

Table 10 and 11 illustrate some of the changes that can be found in the correlative:

Table 10. Example of homologation of Subheadings. Tariff Vs. Tariff 1993 - 2008


2827 49 90 00 2852

Previous/current nomenclature

Tariff TariffDecree / year Decree / year Description Remarks / commentsDescription

Other chloride oxides and chloride hydroxides. Transfer

Compounds, inorganic or organic, of mercury, excluding amalgams

205/95 4589/06 Decree 4589/06. Only the mercury compounds that were included in this residual were transferred to the new heading 2852

Homologation (changes, modifications, splitting, closings, openings, etc.)

Source: DANE

Table 11. Example of COR_ARAN (presentation without descriptions)

Table 12. Example of COR_ARAN (complete presentation)

In order to deal with the cases where homologation is difficult the above-mentioned interdisciplinary group is summoned. Finally, the necessary technical evidential documents that support homologation decisions are prepared. These documents are then submitted to the coordination of the Nomenclature and Classification Group for their review, final adjustments and delivery to users.

Nomenclature (Previous / current)

0307 29 00 00

0307 29 10 00

0307 29 90 00

Tariff Tariff

0307 29 10 000307 29 90 00

0307 29 10 00

0307 29 90 00

Remarks / comments

Opening of the subheading at a Nandina level

Subheading 0307 29 extended its description in order to cover smoked queen scallops. Subheading 0307 29 10 00 continues to be valid at a Nandina level

Subheading 0307 29 extended its description in order to cover other prepared smoked scallops queen scallops and other mollusks. Subheading 0307 29 90 00 continues to be valid at a Nandina level

Year

2317/95

4589/06

4589/06

Decree / year

4589/064589/06

4927/11

4927/11

Homologation (Changes, modifications, splits, closings, openings, etc.)

Source: DANE

0307 29 00 00

0307 29 10 00

0307 29 90 00

0307 29 10 00

0307 29 90 00

0307 29 10 00

0307 29 90 00

Previous/current nomenclature

Tariff vrs tariff 1993 - 2012 preliminary

Tariff TariffYear Decree / year Description Remarks / commentsDescriptionOther scallops including queen scallops and other mollusks, of the genera Pecten, Chlamys or Placopecten, frozen, dried, salted or in brine. SPLIT

Queen scallops including scallops and scallop shells, frozen, dried, salted or in brine. MODIFIED.

Other scallops and mollusks, of the genera Pecten, Chlamys or Placopecten, frozen, dried, salted or in brine. MODIFIED.

Queen scallops (scallops, scallop shells) frozen, dried, salted or in brine

Other scallops and mollusks of the genera Pecten, Chlamys or Placopecten, frozen, dried, salted or in brine.

Queen scallops (scallops, scallop shells), frozen, dried, salted, in brine or smoked.

Other scallops and mollusks of the genera Pecten, Chlamys or Placopecten, dried, salted, in brine or smoked frozen.

2317/95

4589/06

4589/06

4589/06

4589/06

4927/11

4927/11

Opening of the subheading at a Nandina level

Subheading 0307 29 extended its description in order to cover smoked queen scallops. Subheading 0307 29 10 00 continues to be valid at a Nandina levelSubheading 0307 29 extended its description in order to cover other prepared smoked scallops, queen scallops and other mollusks. Subheading 0307 29 90 00 continues to be valid at a Nandina level

Homologation (changes, modifications, splitting, closings, openings, etc.)

Source: DANE


This correlative is presented in two ways: Table 11 shows the complete presentation with the full description and Table 10 shows the presentation of the correlation table without description. The latter form of presentation is intended to facilitate interpretation of the correlation table.

3.2. UPDATING

Foreign trade correlatives are updated whenever a decree modifying the Colombian External Tariff is issued. This involves changes in terms of splits, closings, eliminations, transfers or modifications, in their different levels of disaggregation (HS, NANDINA, TARIFF). Decrees are sent via email to the coordination of the Nomenclatures and Classifications Group, under instructions from the Triple A Committee and through the Subdivision of Trade Practices of the Ministry of Commerce Industry and Tourism. Decrees can also be obtained through the web.

Once the decree is obtained the type of modification to be carried out is analyzed. For this, the subheading that is affected is located in the correlative’s file and is included in ascending order. In the case of TOTPART and Tariff vs. National Accounts, the homologation with the involved classifications is established and the decree number, date of issue and date of publication are identified in the corresponding column.

For COR_ARAN the modifications are identified and located in front of the affected subheading, so that changes can be evidenced.

Similarly, each time there is a new revision or update of the contained classifications these are included in the correlative by adding a new column for their location, in order to preserve the correlation’s validity and its historical series.

3.3. MAINTENANCE

The maintenance of foreign trade correlatives is carried out through the guidelines outlined in the Guide for the Maintenance of Classifications and Correlatives - Nomenclatures and N & C Classifications, which is available for consultation in the document processing system.


DIFFUSION

44.1. DATA REPOSITORY MANAGEMENT The process of information back-up is done every month by DANE’s IT systems office. The process is carried out in the framework of the "Back-up of Information" policy, following quality management systems guidelines established for this purpose.

Once analyzed and correlated, data are entered into spreadsheets and stored in magnetic media. Data are kept under the custody of the Coordination of the Nomenclatures and Classifications Group, in conjunction with the official and / or contractor responsible for the development, maintenance and updating of foreign trade correlatives.

4.2. DIFFUSION PRODUCTS AND INSTRUMENTS

The final products are the following correlation matrices:

TOTPART.

COR_ARAN.

Tariff Vs. National Accounts Matrix.

These documents are sent to the users each time a new version is released, as a result of the updates that may take place upon request of both the existing and the new users.

4.3. PROMOTION AND DIFFUSION OF PRODUCTS

Once updated, correlatives are sent via the referenced e-mails to the list of users, in compressed files (winzip or winrar format) .

Current versions of the correlatives are published in DANE’s website. It is worth mentioning that each version of the correlatives maintains the historic series of the changes registered in the Colombian External Tariff. Such changes can be found through the modifying decrees. This feature allows the constant replacement of published versions.


RELATED DOCUMENTATION5

During the process of preparation of foreign trade correlation matrices it is necessary to resort to and consult the different documents related to nomenclatures and classifications. These documents are:

Harmonized Commodity Description and Coding System (HS): represents the core of the complete international economic classifications harmonization process. This system classifies tangible, transportable and tradeable goods and is based on 4 main criteria: composition, degree of processing, the type of industry that uses it and the function performed.

The HS has a technical and legal structure consisting of: Headings, subheadings, legal section notes, legal heading notes, legal subheading notes, and general classification rules.

In addition, the HS presents a summary of explanatory notes, an alphabetical index and some classification criteria issued by the HS committee, which constitute auxiliary tools of interpretation.16

The Fifth Amendment of the HS comes into force as from the year 2012. That gave way to the issuance of Decree 4927 dated December 26, 2011, "By which the Customs Tariff and other Provisions are adopted", and that implicitly brings the changes in classifications and nomenclatures of the Colombian External Tariff, based on the fifth Amendment of the HS.

Standard Classification by Economic Use or Destination (CUODE): foreign trade classification by broad economic categories whose structure facilitates the economic analysis of international trade flows; especially to investigate the possibilities of import substitution in Latin America. This classification provides a 10-group structure, primarily based on the use or destination of goods.

Its implementation has made it possible to know the structure of imports (it is limited only to them), expressing them in a series of values at current and constant prices since 1948.17

Standard International Trade Classification Revision 3 (SITC): this is a classification of all the products that are bought and sold in the foreign trade or market of goods. That is, all the goods that increase or reduce the material resources of a country as a result of their entering or leaving its customs area. Goods that are only in transit through the country are excluded.18


Nomenclatures and Classifications Group DIRPEN-DANE, Correlative Colombian Tariff Vs. CUODE Vs. ISIC Rev. 2 DANE Vs. ISIC Rev. 3 A.C. Methodological scheme, Bogota, DANE, December 2003, p.6.Ibíd., p.8.United Nations Department of International Economic and Social Affairs, Standard Classification for International Trade Rev. 3, Statistical Papers, Series M, No. 34 / Rev. 3, New York 1986, United Nations publication, Sales No. S, 86.XVII.12.

16

17

18

Classification by Broad Economic Categories (BEC): prepared by the United Nations Statistics Division in order to have international trade statistics divided by broad economic categories of products. This classification groups data according to SITC Rev. 3. The categories considered in this classification are: Foods, Industrial Supplies, Capital Goods, Durable Consumption Goods and Non-durable Consumption Goods.19

Colombian External Tariff: contains all the necessary tariffs according to the Colombian foreign trade requirements (Decree 2317 of 1995. Decree 4927 of 2011 is currently in force).

It is based on the common tariff nomenclature adopted by the member countries of the Andean Community (Colombia among them) NANDINA, which in turn has been supported in the HS.

According to the Colombian foreign trade requirements, openings are made by adding 2 more digits, thus completing ten-digit subheadings. Therefore the Colombian External Tariff is based on the NANDINA and the Harmonized System.

The Tariff fully adopts the legal and technical structure of the HS, and includes complementary notes established by the Andean Community, as well as national supplementary notes.20

Central Product Classification (CPC vs. 1.0 AC): classification of products based on the CPC International Version and the HS. This classification serves as a framework for international comparison of statistics on goods, services and assets. Its categories are exhaustive and mutually exclusive. In addition, the CPC is closely related to the ISIC Rev. 3 since the criterion applied for classification is based on the industrial origin of products and the sequence is based on their intrinsic nature. Each subclass of the CPC is an aggregate of one or more headings or subheadings of the HS.

The Annual Manufacturing Survey (chapters 8 and 9: raw materials and products) is taken as reference for the adaptation of the CPC for Colombia. The CPC A.C. includes categories for all the products that may be subject of a national or international transaction, or that can be stored.

International Standard Industrial Classification of All Economic Activities Revision 2 adapted for Colombia (DANE ISIC Rev. 2): a classification resulting from the process of adaptation of the Standard Industrial Classification of All Economic Activities in its second revision (adapted for Colombia by DANE for the industrial sector). ISIC Rev. 2 is mainly defined by the intrinsic nature of the products obtained.21

International Standard Industrial Classification of All Economic Activities Revision 3 adapted for Colombia (ISIC Rev. 3 AC): this is a classification of economic activities by production processes, which classifies statistical units based on their main economic activity.

It also establishes a set of categories to systematically classify productive activities. These categories can be used for the analysis and presentation of the corresponding statistics. This classification applies to economic agents characterized by the production processes they develop and is the result of a process of adaptation of the International Standard Industrial Classification proposed by the United Nations in 1989.

Statistics and Economic Projections Division of ECLAC, ECLAC Statistical Booklets International Statistical Classifications Incorporated in the Data Bank for Foreign Trade of Latin America and the Caribbean, ECLAC, Santiago de Chile, United Nations, May 1993, p 15.Nomenclatures and Classifications Group DIRPEN-DANE, Correlative Colombian Tariff Vs. CUODE Vs. ISIC Rev. 2 DANE Vs. ISIC Rev. 3 A.C. Methodological scheme, op. cit., p. 8.Nomenclatures and Classifications Group DIRPEN-DANE, Correlative Colombian tariff VS CUODE vs. ISIC Rev. 2 DANE VS ISIC Rev. 3 A.C. Methodological scheme, op. cit., p. 7.

19

20

21


International Standard Industrial Classification of All Economic Activities Revision 3.1 Adapted for Colombia (ISIC Rev. 3.1 AC): this is the adapted classification obtained from the new revision of the international version. It was developed in order to improve the structure and contents of its explanatory notes and in the search of an enhanced approach to the national economic context.22

International Standard Industrial Classification of All Economic Activities Revision 4 Adapted for Colombia (ISIC Rev. 4 BC): The definition of this classification is taken directly from the ISIC Rev. 4 AC.

"It is the international reference classification of productive activities. Its main objective is to provide a set of categories of activities that can be used for collecting and presenting statistical reports in accordance with these activities.

The ISIC Rev. 4 A.C. reflects the Colombian economic reality in its structure and conceptual basis, starting from the official version given by the United Nations to the international statistical community in the year 2009. The classification presents substantial modifications in its general and detailed structure, by means of the generation of new categories, such as: "Waste management and environmental sanitation activities" (section E) and "Installation, maintenance and specialized repair of machinery and equipment '(division 33). The classification also gives more relevance to the hierarchical level and reclassification of "Publishing activities” (section J, division 58). Similarly, activities included in the residual categories were reorganized and new explanatory notes were introduced in all hierarchical levels, which have been expanded to provide more detailed information, allowing a more precise interpretation of the contents and limits of each class, facilitating its implementation and improving comparability”.23

International Statistical Classifications incorporated into the data bank of foreign trade in Latin America and the Caribbean ECLAC Revision 1 and 2 (statistical booklets 18, 25 and 30): The 18th Statistical Booklet of the ECLAC is the first of 3 series, which presents a brief overview of the international statistical classifications that are incorporated in the Foreign Trade Data Bank for Latin America and the Caribbean (BADECEL). The booklet describes the main features of the classifications. In addition, it presents two correlation matrices through comparative schemes: the first one follows the sequence of all the headings that comprise the SITC Rev. 3; the second one is based on the Harmonized Commodity Description and Coding System (HS). The correspondence between the SITC Rev. 2 and 3, the HS, the CPC, the ISIC Rev. 2 and 3 and the BEC is established in these matrices. Version 25th of this booklet corresponds to the first revision, which was made to include modifications to the Harmonized System on the occasion of the second Amendment, which was applied as from January 1st 1996.

Version 30th corresponds to the second revision of this booklet and includes modifications to the Harmonized System in its third amendment applicable as from January 1st 2002.

Version 36th corresponds to the third revision of the booklet and includes modifications to the Harmonized System in its fourth amendment, applicable as from January 1st 2007.

Nomenclatures and Classifications Group DIRPEN-DANE, Correlative Colombian Tariff Vs. CUODE vs. ISIC Rev. 2 DANE Vs. ISIC Rev. 3 A.C. Methodological scheme, op. cit., p. 7.ISIC Rev. 4 A.C. DANE. Bogota, Colombia. P. 7.

22

23


Ad hoc: latin expression incorporated into Spanish, which is used to signify that something is suitable for an object or purpose. This expression often indicates that a nomination or designation (as Judge, Defender, Guardian, Curator, Inventor, etc.) has been made to act in a particular case.

Adapted classifications: resultant classification from the modification of an adopted classification structure in such way that it reflects the economic and social characteristics of a country; to do so the rearrangement of categories in the international reference version is required (elimination, subdivision, combination and inclusion of categories). The adaptation of economic and social classifications should be based on the principle that the final adapted classification must be compatible with the reference classification. To achieve such compatibility, basic procedures for adaptation should be followed. These procedures can be used jointly or individually, depending on specific requirements proper to the classification.

Aggregation / Disaggregation: aggregation is the combination of related categories, usually within a common branch of a hierarchy, to provide information of general character different to that disclosed in detailed observations. Disaggregation is the breakdown of observations, usually within a common branch of a hierarchy, in a more specific level at which detailed observations are carried. With standard hierarchical classifications statistics for related categories can be grouped or combined (aggregated) to provide a more general view, or categories can be divided (disaggregated) when more precise details are required and this is made possible by the codes assigned to the main observations.

Category: generic term for grouping items in any level of a classification, generally tabulation of categories, sections, subsections, divisions, subdivisions, groups, subgroups, classes and subclasses. Categories in a classification are usually identified by codes (alphabetic or numeric), which provide a unique identifier for each category and show their place in the hierarchy. Codes contain elements that can be considered as subsets of the classification to which they belong, such as activities, products, types of occupations, types of education, etc.

Class / Primary group: this is the title / name used in classifications to describe a particular level in a hierarchy. It usually refers to each of the bottom levels of a classification (e.g., in the ISIC Rev. 3 the lowest level -4-digits- refers to the class, while in the CPC the “class" level is the second lowest level). Its use is not mandatory.

Classification: grouping of events or objects in homogeneous sets, in a comprehensive and mutually exclusive manner, according to predetermined criteria and to the classification’s intended use.

GLOSSARY


Classification structure: refers to how categories are sorted, grouped and subdivided in a classification. Categories within a classification can be arranged in a hierarchical or uniform structure. In uniform classifications, categories are arranged in only one level. Hierarchical classifications have many levels, corresponding to the different degrees of determination (detail), to the extent (specification) of the variable under observation. Hierarchical classifications go from the most general levels (e.g. division) to the most detailed levels (e.g. class). Uniform classifications (such as classification by gender) are non-hierarchical.

Code, code letters and numbers: they are usually formed by one or more than one alphabetic, numeric or alphanumeric codes assigned to a title in a classification. Each code is unique to a property within a classification. If the property changes then the code must change too. Codes can connect with other codes having common characters, especially in hierarchical classifications. For example, in the ISIC Rev. 3, Technical and vocational secondary education has the class code 8022, which is connected with Group 802 Secondary Education and with Division 80 Education. The compilation, storage and retrieval of statistics are facilitated by the use of codes with their descriptors.

Coding Structure (Coding System): this refers to the systematic allocation of letters / numbers to all categories in a classification. The usage of standardized conventions when creating coding structures helps in the use and comparison of classifications. The following number systems can be applied:

A strict decimal number system, i.e. each category at a particular level in a classification system would have the same type and number of numeric characters.

A non-strict decimal number system: i.e. each category at a particular level in a classification system would have the same number of numeric characters.

Division / Major group: this is the title / name used in classifications to describe a particular level in a hierarchy. It usually refers to one of the higher levels of a classification.

Explanatory notes: explanatory notes help classification users to distinguish the limitations and scope of each category. Details vary from classification to classification, but the intention is to explain the precise meaning of categories and basic concepts. This is often done through specific examples of inclusions, exclusions and cross-references with other categories.

Maintenance: corresponds to the corrections and inclusions that are made to already adapted classifications and the correlatives derived from them.

Nomenclature: a systematic allocation of names to things, or a system of names or terms for things. In classifications, nomenclature means a systematic allocation of names to categories. The terms "nomenclature" and "classification" are frequently used interchangeably, although the definition of "classification" is broader than that of "nomenclature". A nomenclature is essentially a convention for describing observations, while a classification provides a structure and a code, besides describing them.

Structure (branch): a structure provides the means to identify relationships, usually hierarchical, between categories. A hierarchical classification is based on a branched structure, where each group of its detailed categories is a subset of categories at the level in which they are contained.

Subdivision: refers to the disaggregation of a division in a hierarchical classification. Two or more subdivisions form a division.


Table of correspondence / correlation matrix: a tool for linking classifications. A correspondence table systematically explains where and how categories in a classification can be found in other classifications, or in earlier versions of the same classification. Methodologically speaking, correspondence tables (also related as tables) describe the way in which the value groups of classifications are related. They also describe how the units classified in the groups defined for a classification would be classified in other classifications. Tables are important for the development and harmonization of international classifications. There are different circumstances for which one would like to establish relationships between classifications, and many ways that these relationships can take. Tables can be accurate, depending on the convention used for describing the type of link between tables (i.e., historical, hierarchical or concomitant).

Trade: is the resale (sale without transformation) of goods, new or used products, whether at wholesale or retail.

Updated classifications: those that have been adjusted to structural changes and analytical needs, to the rise of new technologies and new labor divisions between organizations, thus creating new types of economic activities, industries, occupations, and posing challenges for both suppliers and users of statistical data. Generally speaking, the classification structure, the conceptual basis and the limits between components remain practically unchanged in the updates. The intention is to provide detailed explanatory notes to enable a more precise interpretation of the contents and limits of a category.


Economic Commission for Latin America and the Caribbean, ECLAC (1993, May). Statistics and Economic Projections Division of ECLAC. Cuadernos Estadísticos de la CEPAL Clasificaciones Estadísticas Internacionales Incorporadas en el Banco de Datos del Comercio de Exterior de América Latina y el Caribe de la CEPAL (Statistical Booklets of ECLAC International Statistical Classifications Incorporated in ECLAC’s Data Bank on Foreign Trade of Latin America and the Caribbean). Santiago de Chile.

National Administrative Department of Statistics-DANE (2006, December). Regulation Department, Statistical Regulation, Planning, Standardization and Normalization Division- DIRPEN. Clasificación Industrial Internacional Uniforme de todas las Actividades Económicas. Revisión 3.1 Adaptada para Colombia, CIIU Rev. 3.1 AC (International Standard Industrial Classification of All Economic Activities, revision 3.1 Adapted for Colombia, ISIC Rev. 3.1 AC). Bogotá, D. C., 392 p.

________. (December 2003). Correlativa: Arancel Colombiano Vs CUODE vs. CIIU Rev. 2 DANE vs. CIIU Rev. 3 A.C. Esquema Metodológico (Correlative: Colombian Tariff Vs. CUODE Vs. ISIC Rev. 2 DANE Vs. ISIC Rev. 3 A.C. Methodological Scheme). Bogota, D. C., p. 6-8.

________. (July 2008). Guía para el mantenimiento de Clasificaciones y Correlativas. N y C. (Guide for the maintenance of Classifications and Correlatives. N & C) Bogota, D. C.

________. (June 2008). Guía para la elaboración de Correlativas, N y C (Guide for the preparation of Correlatives, N & C) . Bogota, D. C.

________. (June 2008). Sistema Estadístico Nacional y Territorial (National and territorial Statistical System)-SENT. Correspondencia entre la Clasificación Industrial Internacional Uniforme de todas las Actividades Económicas-CIIU, Revisión 3, Adaptada para Colombia y la Clasificación Industrial Internacional Uniforme de todas las Actividades Económicas - CIIU, Revisión 3, Versión Internacional (Correspondence between the International Standard Industrial Classification of All Economic Activities – ISIC Revision 3, Adapted for Colombia and the International Standard Industrial Classification of All Economic Activities – ISIC Revision 3, International Version). Bogota, D.C., p. 9.

World Customs Organization. Harmonized System Explanatory notes. Fourth edition. Paris, December 2006- 2007, p. 1205.

United Nations Organization (1989). Classification by Broad Economic Categories Revision 3, BEC Rev. 3. New York, p. 85.

BIBLIOGRAPHY24

Translation of bibliographic titles and names is for reference purposes only.24


Annex A. Methodological diagram. Foreign Trade Correlative

ANNEXES

START

Read and interpretsubheading

Subheading InterpretationCheck Colombian

External Tariff in the H.S.

Correlative exists withinvolved classifications

Assign proposedcorrelative

Discuss proposalwith advisors

Distribution to internal and external users

Assign final correlative

YES NO

END

TECHNICAL SUPPORT

Check explanatory notes HS, Internet research, search other classifications.

Consultant with N and C interdisciplinary group


PublishingImprenta Nacional de Colombia (National Press of Colombia)

Bogotá, D. C., 2009


foreign trade correlatives methodology … · 2.1.conceptual framework 14 ... example of the bec...

Documents