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National Administrative Department of Statistics
COLLECTION OF DOCUMENTS - UPDATE 2009
FOREIGN TRADE CORRELATIVES METHODOLOGY
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NATIONAL ADMINISTRATIVE DEPARTMENT OF STATISTICS
JORGE BUSTAMANTE ROLDÁN. Director
CHISTIAN JARAMILLO HERRERA
Deputy Director
MARIO CHAMIE MAZZILLO General Secretary
Technical Directors
EDUARDO EFRAÍN FREIRE DELGADO Methodology and Statistical Production
LILIANA ACEVEDO ARENAS
Census and Demography
NELCY ARAQUE GARCÍA Regulation, Planning, Standardization and Normalization
MIGUEL ÁNGEL CÁRDENAS CONTRERAS
Geostatistics
ANA VICTORIA VEGA ACEVEDO Synthesis and National Accounts
CAROLINA GUTIÉRREZ HERNÁNDEZ
Diffusion, Marketing and Statistical Culture
Bogotá, D.C., 2009
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Regulation, Planning, Standardization and Normalization Nelcy Araque García Technical team: Martha Helena Ariza Buitrago, Jorge Enrique Dumar Rueda, Martín Augusto Rodríguez Ortega, Andrea del Pilar Roldán Cortés, Luis Ángel Solís Sinisterra, Adriana Tovar Corzo, Ángela Patricia Sarmiento Robayo, José Luis Rincón Aguilar. Translation team Ana Lucía Martínez Juliana Mosquera María Isabel Murillo Daysi Sánchez
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CONTENTS
PRESENTATION INTRODUCTION 1. BACKGROUND 2. DESIGN 2.1 Conceptual framework 2.1.1 Objectives General Objective Specific Objectives 2.1.2 Reference framework Conceptual Base Correlation Matrices International Recommendations 2.2 Methodological design 2.2.1 Basic components 3. STATISTICAL PRODUCTION 3.1 Development of Correlatives 3.1.1 Correlative by historical series (TOTPART) and Tariff. Vs. National Accounts 3.1.2 Correlative by historical series:Tariff Vs. National Accounts 3.1.3 Correlative by historical series: COR_ARAN 3.2 Updating 3.3 Maintenance 4. DIFFUSION 4.1 Data repository management 4.2 Diffusion Products and instruments 4.3 Promotion and diffusion of products
5. RELATED DOCUMENTATION GLOSSARY BIBLIOGRAPHY
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ANNEXES
DIAGRAM INDEX
Diagram 1. Example of the structure of a tariff subheading. Diagram 2. Interrelations between the classifications that make up the TOTPART.
LIST OF TABLES
Table 1. Combinations of changes used in Foreign Trade Correlatives Table 2. Example of the structure of the Correlative TOTPART Table 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.C 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 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 ANNEXES
Annex A. Methodological diagram. Foreign Trade Correlative
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ACRONYMS ACRONYM DEFINITION IN SPANISH DEFINITION IN ENGLISH
ANALDEX
Asociación Nacional de Comercio Exterior
National Association of Foreign Trade
BANCOLDEX
Banco de Comercio Exterior de Colombia S. A.
Foreign Trade Bank of Colombia
CCC (today WCO; Please see below)
Consejo de Cooperación Aduanera (actualmente Organización Mundial de Aduanas
Customs Cooperation Council (today World Customs Organization)
ECLAC
Comisión Económica para América Latina y el Caribe
Economic Commission for Latin America and the Caribbean
BEC Clasificación por Grandes Categorías Económicas
Classification by Broad Economic Categories
ISIC
Clasificación Industrial Internacional Uniforme de todas las Actividades Económicas
International Standard Industrial Classification of all Economic Activities
COR_ARAN Correlativa Arancel vs.Arancel Correlative Tariff vs. Tariff SITC
Clasificación Uniforme para el Comercio Internacional
Standard International Trade Classification
CUODE
Clasificación Uniforme por Uso o Destino Económico
Standard Classification by Economic Use or Destination
CPC A.C
Clasificación Central de productos Adaptada para Colombia
Central Product Classification adapted for Colombia
DANE Departamento Administrativo Nacional de Estadística
National Administrative Department of Statistics
DIAN Dirección de Impuestos y Aduanas Nacionales
National Tax and Customs Bureau
DIMPE Dirección de Metodología y Producción Estadística
Statistical Methodology and Production Division
DIRPEN
Dirección de Regulación, Planificación, Estandarización y Normalización Estadística
Statistical Regulation, Planning, Standardization and Normalization Division
INCODEX Instituto Colombiano de Comercio Exterior
Colombian Institute of Foreign Trade
DNP Departamento Nacional de Planeación National Planning Department
WCO Organización Mundial de Aduanas World Customs Organization
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NANDINA
Nomenclatura Arancelaria Común de los Países Miembros del Acuerdo de Cartagena
Common Tariff Nomenclature of the Member Countries of the Cartagena Agreement
N & C
Grupo de Nomenclaturas y Clasificaciones
Nomenclatures and Classifications Group
H.S.
Sistema Armonizado de Designación y Codificación de Mercancías
Harmonized Commodity Description and Coding System
NSS Sistema Estadístico Nacional National Statistical System TOTPART Total de partidas arancelarias Total of Tariff Headings
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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.
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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: 1. Standard Classification by Economic Use or Destination (CUODE)
2. International Standard Industrial Classification of All Economic Activities Revision 2 DANE
(DANE ISIC Rev. 2).
3. International Standard Industrial Classification of All Economic Activities International Version (ISIC Rev. 2 International).
4. 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). 6. International Standard Industrial Classification of All Economic Activities Revision 4 adapted for Colombia (ISIC Rev. 4 A.C).
7.. Central Product Classification Version 1.0 adapted for Colombia (CPC Ver. 1.0 AC). 8.. Standard International Trade Classification Revision 3 (SITC Rev. 3). 9.. Standard International Trade Classification Revision 2 (SITC Rev.2). 10. Classification by Broad Economic Categories Revision 3 International (BEC Rev. 3).
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11. 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.
1. BACKGROUND Foreign 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 Statistics2, 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,
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. 2. The Inter-institutional Committee for Foreign Trade Statistics is ad-hoc and summoned by DANE upon request of any of its members.
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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: 1. Standardization with ISIC Rev. 3.0 A.C, December 2003. 2. Standardization with CPC Version 1.0 AC, February 2006.
3. Standardization with SITC Rev. 3 International, October 2006.
4. Standardization with ISIC Rev. 3.1 A.C, December 2006.
5. Standardization with ISIC Rev. 4 A.C., 2012. 6. Standardization with BEC Rev.3 International, December 2007. 7. 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.
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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.
2. DESIGN
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.
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The United Nations has determined the following types of classifications: • By economic activities. • By goods and services. • By object of expenditure. • 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 System3. 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 0102.29.90.10 Other Domestic Bovines, Females. 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)
3 Working Group of DANE’s Statistical Standardization Division. Correspondence between Economic Classifications, Bogota, DANE Publishing Division, 1998, p. 12. 4 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.
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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.
• 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.
5.Nomenclatures and Classifications group DIRPEN –DANE. Guidelines for the development of correlatives - NYC, Bogota, DANE, June 2004, p.8
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Table 1. Combinations of changes used in Foreign Trade Correlatives.
ELIMINATED TRANSFERRED SPLITTING MODIFIED SPLITTING RECODED SPLITTING RECODED / TRANSFERRED SPLITTING MODIFIED/TRANSFERRED MODIFIED TRANSFERRED TRANSFERRED SPLITTING
Source: DANE 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). 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. Diagram 2. Interrelations between the classifications that make up the TOTPART. 6 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.
CPC 1.0 A.C. H.S. ISIC Rev. 3 A.C.
ISIC Rev. 3.1 A C
ISIC Rev. 2 DANE
ISIC Rev. 4 A.C.
SITC Rev. 3
BEC Rev. 3
CUODE
SITC Rev. 2
SITC Rev. 1*
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*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 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. 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.
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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.
3. STATISTICAL PRODUCTION 3.1 DEVELOPMENT OF CORRELATIVES7 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). 7 See flow chart of the steps to be followed in the process of development of correlatives (Annex A). 8 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.
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Table 2. Example of the structure of the Correlative TOTPART
Tarif
f Sub
head
ing
Yea
r
CU
OD
E
ISIC
Rev
. 2 D
AN
E
ISIC
Rev
. 3 A
.C.
ISIC
Rev
. 3.1
A.C
.
ISIC
Rev
. 4 A
.C.
CPC
Ver
. 1.0
A.C
.
SITC
Rev
. 2
SITC
Rev
. 3
BEC
Rev
. 3
Tarif
f des
crip
tion
Dec
ree
Effe
ctiv
e da
te
Dat
e of
issu
ance
Rem
arks
0101210000
2012
720
1110
0124
0124
0142
02113 0015 0015
1 111
Purebred breeding horses live. 492
7
01-
Jan
12
26-Dec-11
Recoding of sub-heading 0101101000, , according to the fifth amendment of the HS
9008501000
2012
810
3852
3320
3320
2670
48323
88132
88132 61
Slide projectors.
4927
01-
Jan
12
26-Dec-11
Sub-heading generated according to Decree 4927 Fifth Amendment of the HS by recoding.
Source: DANE 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 matrices9. 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:
9The 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.
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• 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. • 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.C11: 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). 10 World Customs Organization (WCO).2007. Harmonized System Explanatory Notes. Fourth edition. Paris - France. Customs Department EII.EE Madrid, p. 109. 11 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.
20
Table 3. Example of the correlative table ISIC Rev. 3 A.C. vs. ISIC Rev. 3.1 Group Class Description Group Class Description
155 Manufacture of bakery products, macaroni, noodles, couscous and similar farinaceous products 158* Manufacture of other food products
1582 Manufacture of bakery products
1552Manufacture of macaroni, noodles, couscous and similar farinaceous products 1583
Manufacture of macaroni, noodles, couscous and similar farinaceous products
Manufacture of bakery products1551
ISIC Rev. 3 A.C. ISIC Rev. 3.1
Source: DANE 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 • 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.
Group Class Description Group Class Description
155Manufacture of bakery products, macaroni, noodles, couscous and similar farinaceous products 108*
Manufacture of other food products
1081 Manufacture of bakery products
1084* Manufacture of prepared meals and dishes
1552Manufacture of macaroni, noodles, couscous and similar farinaceous products 1083 Manufacture of macaroni, noodles, couscous and similar
farinaceous products
Manufacture of bakery products1551
ISIC Rev. 3 A.C. ISIC Rev. 4 A.C.
Source: DANE • 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 12Correspondence 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 13 Or one can follow the second alternative suggested in the step Correlation with ISIC Rev. 3. A.C.
21
Table 5. Example of the detailed structure and correspondence of the CPC Ver. 1.0 A.C Correspondence
Group Class Subclass Title Unit ISIC Rev. 3 A.CHarmonized
system ISIC 2 DANE
237
Pasta: macaroni, noodles, couscous and similar farinaceous products
23710
Pasta uncooked, not stuffed or otherwise prepared
1552 1902.11.19
2371
2371001
Noodles, macaroni and similar products
kg
31174015
2371002
Scraps of noodles, macaroni and similar products
kg
2372
23720
Pasta: cooked, stuffed or otherwise prepared; couscous
1552 1902.20‐.40
2372001 Ravioli kg 31174023 2372002 Lasagna kg 31174031 2372003 Canelloni kg
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 ECLAC14. 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 ECLAC15, 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).
14 Correspondence between international classifications of transportable products,, according to the HS 96 sequence. 15 Correspondence between international classifications of transportable goods, according to the SITC Rev. 3 sequence.
22
• 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 HS2002 SITC Rev.3 BEC Rev.3 CPC ISIC Rev.3 SITC Rev.2 BEC Rev.1 ISIC Rev.2 SITC Rev.1 BEC190220 09891 122 23720 1544 0483 122 3117 0483 122190230 09891 122 23720 1544 0483 122 3117 0483 122190240 09891 122 23720 1544 0483 122 3117 0483 122190300 05645 121 23230 1532 05645 121 3121 05545 121190410 04811 122 23150 1531 04812 122 3116 04812 122
Source: ECLAC Statistical booklets. 2004. Num 30. Page 236 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
SITC Rev.3 BEC SITC Rev.3 BEC SITC Rev.3 BEC 054.5 112 058.3 121 081.94 121 054.6 112 058.9 122 081.95 22 054.7 122 059 122 081.99 22 054.8 111 061.1 121 091 122 056.1 122 061.21 121 098.1 122 056.4 121 061.29 122 098.4 122 056.6 122 061.5 121 098.5 122 056.7 122 061.6 112 098.6 121 057.1 112 061.9 121 098.9 122 057.2 112 062 122
Source: Classification by Broad Economic categories Table 8. Example of steps in the Correlation line
Tarif
f sub
head
ing
Yea
r
CU
OD
E
ISIC
Rev
. 2 D
AN
E
ISIC
Rev
. 3 A
.C.
ISIC
Rev
. 3.1
A.C
.
ISIC
Rev
. 4 A
.C.
CPC
Ver
. 1.0
A.C
.
SITC
Rev
. 2
SITC
Rev
. 3
BEC
Rev
. 3
Tarif
f des
crip
tion
Dec
ree
Effe
ctiv
e da
te
Dat
e of
issu
ance
Rem
arks
1902400000 2002 113 3117 1552 1583 1083 23720 0483 09891 122 2800 01- 27-
23
Couscous Jan-02
Dec-01
Source: DANE 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
Yea
r
Tarif
f Sub
head
ing
Tarif
f des
crip
tion
Nat
iona
l Acc
ount
s Sy
stem
-Bas
e ye
ar 9
4-6
digi
ts
Des
crip
tion
Nat
iona
l A
ccou
nts S
yste
m-
Bas
e ye
ar 1
994
Nat
iona
l Acc
ount
s Sy
stem
Bas
e ye
ar
2000
- 9 d
igits
Des
crip
tion
Nat
iona
l A
ccou
nts S
yste
m-
Bas
e ye
ar 2
000
Nat
iona
l Acc
ount
s Sy
stem
Bas
e ye
ar
2000
Mod
ified
Des
crip
tion
Nat
iona
l A
ccou
nts S
yste
m B
ase
year
200
0 M
odifi
ed
Nat
iona
l Acc
ount
s Sy
stem
-Bas
e ye
ar
2005
Des
crip
tion
Nat
iona
l A
ccou
nts S
yste
m-
Bas
e ye
ar 2
005
2002
1902400000
Couscous
150700
Macaroni, noodles
and similar
farinaceous
products
013002002
Macaroni, noodles
and similar
farinaceous
products
013002002
Macaroni, noodles
and similar
farinaceous
products
130202
Macaroni, noodles
and similar
farinaceous
products Source: DANE 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.
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• 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 11illustrate some of the changes that can be found in the correlative: TABLES 10, 11 and 12 Table 10. Example of homologation of Subheadings. Tariff Vs. Tariff 1993 - 2008
Homologation (changes, modifications, splitting, Previous/current nomenclature closings, openings, etc)
Tariff Decree. Year Description Tariff Decree. Year Description Remarks / Comments
2827 49 90 00
205/95
Other chloride oxides and chloride hydroxides. Transfer
2852
4589/06
Compounds, inorganic or organic, of mercury, excluding amalgams
Decree 4589/06. Only the mercury compounds that were included in this residual were transferred to the new heading 2852
Source: DANE
25
Table 11. Example of COR_ARAN (presentation without descriptions)
TARIFF vrs TARIFF 1993 - 2012 PRELIMINARY NOMENCLATURE
(PREVIOUS / CURRENT)
HOMOLOGATION (CHANGES, MODIFICATIONS, SPLITS, CLOSINGS, OPENINGS, ETC)
TARIFF YEAR TARIFF DECREE. YEAR REMARKS / COMMENTS
0307 29 10 00 4589/06
0307 29 00 00 2317/95 0307 29 90 00 4589/06
Opening of the subheading at a Nandina level
0307 29 10 00 4589/06 0307 29 10 00 4927/11 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
0307 29 90 00 4589/06 0307 29 90 00 4927/11
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
Source: DANE Table 12. Example of COR_ARAN (complete presentation)
TARIFF vrs TARIFF 1993 - 2012 PRELIMINARY NOMENCLATURE
(PREVIOUS / CURRENT) HOMOLOGATION (CHANGES, MODIFICATIONS, SPLITTING,
CLOSINGS, OPENINGS, ETC.)
TARIFF YEAR DESCRIPTION TARIFF
DECREE
YEAR DESCRIPTION REMARKS / COMMENTS
0307 29 10 00
4589/06
Queen scallops (scallops, scallop shells) frozen, dried, salted or in brine
0307 29 00 00
2317/95
Other scallops including queen scallops and other mollusks, of the genera Pecten, Chlamys or Placopecten, frozen, dried, salted or in brine. SPLIT
0307 29 90 00
4589/06
Other scallops and mollusks of the genera Pecten, Chlamys or Placopecten, frozen, dried, salted or in brine.
Opening of the subheading at a Nandina level
0307 29 10 00
4589/06
Queen scallops including scallops and scallop
0307 29 10 00
4927/11
Queen scallops (scallops, scallop shells), frozen, dried, salted, in brine or smoked
Subheading 0307 29 extended its description in order to cover smoked queen scallops. Subheading 0307 29 10 00 continues to be valid at a
26
shells, frozen, dried, salted or in brine. MODIFIED.
Nandina level
0307 29 90 00
4589/06
Other scallops and mollusks, of the genera Pecten, Chlamys or Placopecten, frozen, dried, salted or in brine. MODIFIED.
0307 29 90 00
4927/11
Other scallops and mollusks of the genera Pecten, Chlamys or Placopecten, dried, salted, in brine or smoked frozen.
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
Source: DANE 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. 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.
27
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.
4. DIFFUSION
4.1 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.
28
5. RELATED DOCUMENTATION. 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 • Classification by Broad Economic Categories (BEC): Prepared by the United Nations Statistics Division in order to have international trade statistics divided by broad economic
16Nomenclatures 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. 17 Ibíd., p.8. 18 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.
29
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.
19 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 20 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. 21 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.
30
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. • 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.
22 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. 23 ISIC Rev. 4 A.C. DANE. Bogota, Colombia. P. 7.
31
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.
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GLOSSARY 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. 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.
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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.
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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.
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BIBLIOGRAPHY 1)
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. 1. Translation of bibliographic titles and names is for reference purposes only
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ANNEXES
Annex A. Methodological diagram. Foreign Trade Correlative
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Publishing Imprenta Nacional de Colombia (National Press of Colombia)
Bogotá, D.C., 2009
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