Overview
Part I Definitions and Scope of Application
Article I Rules of Origin
1. For the purposes of Parts I to IV of this Agreement, rules of origin mean laws, regulations and administrative decisions of general application adopted by any Member for the purpose of determining the country of origin of goods and not relating to contractual or autonomous trading systems that result in the granting of tariff preferences to which Article I of the General Agreement on Tariffs and Trade 1994 does not apply;
2. The rules of origin referred to in paragraph 1 above shall include all rules of origin used in non-preferential commercial policy instruments, such as: most-favored-nation treatment under Articles I, II, III, XI and XIII of the General Agreement on Tariffs and Trade 1994; anti-dumping and countervailing duties under Article VI of the General Agreement on Tariffs and Trade 1994; safeguard measures under Article XIX of the General Agreement on Tariffs and Trade 1994; origin marking requirements and any discriminatory quantitative restrictions or tariff quotas under Article IX of the General Agreement on Tariffs and Trade 1994. They should also include rules of origin used in government procurement and trade statistics.
Part II Provisions on General Rules of Origin Article 2 Provisions during the Transition Period
Pending the completion of the programme of work on the harmonization of rules of origin established in Part IV, Members shall ensure that:
(a) when issuing administrative decisions of general application, the requirements to be complied with are clearly defined. In particular:
(i) where the criterion of change of tariff heading applies, the rules of origin and their exceptions must clearly indicate in the tariff schedule the subheading or subheading to which the rules apply;
(ii) where the criterion of ad valorem percentage applies, the method of calculating the percentage should also be stated in the rules of origin;
(iii) where the criterion of production or processing operations applies, the operations that confer origin on the goods concerned should be accurately stated;
(b) despite the link between rules of origin and measures or instruments of commercial policy, rules of origin should not be used as a means to pursue trade objectives directly or indirectly;
(c) rules of origin themselves should not have restrictive, distorting or disruptive effects on international trade. Rules of origin should not impose unduly strict requirements or require the fulfillment of certain conditions unrelated to production or processing as a prerequisite for determining the country of origin. However, for the purpose of applying the ad valorem criterion in cases where the provisions of (a) above are met, costs not directly related to production or processing may be included;
(d) rules of origin applicable to imported goods should not be more stringent than the rules of origin applicable to determining whether the goods are domestic products and should not discriminate between other Members regardless of the nature of the manufacturer of the goods concerned;
(e) rules of origin should be applied in a consistent, uniform, fair and reasonable manner;
(f) rules of origin should be based on positive criteria. However, negative criteria of origin that state what does not confer origin are also permitted as part of the explanation of positive criteria or when positive confirmation of origin is not required in individual cases;
(g) The publication of laws, regulations, judicial decisions and administrative rules of general application relating to rules of origin should be as if subject to and in compliance with the provisions of paragraph 1 of Article X of the General Agreement on Tariffs and Trade 1994;
(h) Upon the request of the exporter, importer or any person with a legitimate reason, the assessment of origin report for the goods shall be made as soon as possible but not later than 150 days after the request for such assessment, provided that all necessary documents have been submitted. The request for an assessment of origin may be accepted before the commencement of trade in the goods concerned or at any time thereafter. The assessment of origin report shall be valid for three years provided that the facts and conditions on which the assessment of origin is based, including the rules of origin, remain similar. The assessment of origin report shall cease to be valid if a different decision is made in the review referred to in (j) below, provided that the parties concerned are notified in advance. Such assessment reports shall be made publicly available subject to the provisions of (k) below;
(i) In changing rules of origin or instituting new rules of origin, Members shall not apply retroactively the changes defined in their laws or regulations and shall not prejudice their laws or regulations;
(j) Any administrative action taken by a Member relating to the determination of origin shall be subject to prompt review by a judicial, arbitral or administrative body or procedure which is independent of the authority determining the origin and which may modify or revoke the original decision;
(k) Information provided for the application of rules of origin which is of a confidential nature or is treated in confidence shall not be disclosed without the express permission of the person or government providing the information.
Article 3 Provisions after the Transition Period
Taking into account the objective of all Members to achieve the outcome of the programme of work on harmonization set out in Part IV – the development of harmonized rules of origin. In implementing the results of the harmonization programme, Members shall ensure that:
(a) origin schemes are applied equally for all purposes set out in Article 1 above;
(b) the country of origin determined as the origin of a particular good under the rules of origin of each Member shall be the country in which the good is wholly obtained or, where the production of the good involves more than one country, the country in which the last substantial transformation is effected.
(c) The rules of origin applicable to imported goods shall not be more stringent than those applicable to determining whether goods are domestic products and shall not discriminate between other Members, regardless of the nature of the manufacturer of the goods concerned;
(d) Rules of origin shall be applied in a consistent, uniform, fair and reasonable manner;
(e) In accordance with paragraph 1 of Article X of the General Agreement on Tariffs and Trade 1994, laws, regulations, judicial decisions and administrative decisions of general application relating to rules of origin shall be published and strictly observed;
(f) Upon the request of the exporter, importer or any person with just cause, the report on the assessment of the origin of the goods shall be made as soon as possible but not later than 150 days after the request for such assessment, provided that all necessary documents have been submitted. Requests for assessment of origin shall be accepted promptly at any subsequent time. The facts and conditions on which the report on origin is based shall be valid for 3 years. If the parties concerned are notified in advance, it shall be valid in accordance with (h) below. Such assessment reports shall be made publicly available subject to the provisions of (i) below;
(g) In changing rules of origin or instituting new rules of origin, Members shall not apply retroactively the changes defined in their laws or regulations and shall not prejudice their laws or regulations;
(h) Any administrative action taken by Members in connection with the determination of origin shall be subject to prompt review by judicial, arbitral or administrative bodies or procedures. Such review bodies or procedures shall be independent of the authorities determining origin and may modify or revoke the original decision;
(i) All information provided for the application of rules of origin that is confidential in nature or provided on a confidential basis shall be treated as strictly confidential by the relevant authorities. Such information shall not be disclosed without the express permission of the person or government providing the information, except in cases where its disclosure is required in judicial proceedings.
Part III Procedural Arrangements for Notification, Review, Consultation and Dispute Settlement Article 4 Institutions
1. The Committee on Rules of Origin (hereinafter referred to as the “Committee” in this Agreement) shall be composed of representatives appointed by all Members. The Committee shall elect its own Chairperson and meet as necessary, but not less than once a year, in order to provide Members with an opportunity to consult on matters relating to the implementation of Parts I, II, III and IV, or to further the objectives set out in those Parts and to discharge other responsibilities assigned to it under this Agreement or by the Council for Trade in Goods. The Committee shall, when appropriate, request the Technical Committee on Rules of Origin referred to in paragraph 2 below to undertake other work in relation to matters relating to this Agreement in order to achieve the above-mentioned objectives of this Agreement. The Secretariat of the World Trade Organization shall serve as the Secretariat of the Committee.
2. A Technical Committee on Rules of Origin (hereinafter referred to in this Agreement as the “Technical Committee”) shall be established under the guidance of the Customs Cooperation Council in accordance with the provisions of Annex I. The Technical Committee shall undertake technical work as provided for in Part IV and Annex I. The Technical Committee shall, when appropriate, request the Committee to provide information and advice on matters relating to this Agreement. The Technical Committee may also request the Committee to undertake other work when it deems it appropriate to promote the achievement of the above-mentioned objectives of this Agreement. The Secretariat of the Customs Cooperation Council shall serve as the Secretariat of the Technical Committee.
Article 5 Information and Procedures for Modifying Rules of Origin and Formulating New Rules of Origin
1. Within 90 days after the date on which the WTO Agreement enters into force for it, each Member shall provide to the Secretariat its rules of origin in force on that date and any judicial decisions and administrative rules of general application relating to rules of origin. If a rule of origin is inadvertently not provided, the Member concerned shall provide it as soon as it becomes aware of that fact. The information obtained by the Secretariat and able to be provided shall be circulated by the Secretariat to all Members.
2. Within the period referred to in Article 2, a Member that modifies its rules of origin (other than a modification of details) or formulates new rules of origin (including, for the purposes of this Article, any rule of origin referred to in paragraph 1 that has not been provided to the Secretariat) shall publish a notification at least 60 days before the entry into force of the modified or new rules of origin so that the parties concerned can become familiar with the intent of the modification or formulation of the rules of origin, unless unexpected circumstances have or will arise in the Member concerned. In these unexpected circumstances, the Member shall publish the modified or new rules of origin as soon as possible.
Article 6 Review
1. The Committee shall review annually the implementation and operation of Parts II and III of this Agreement in the light of the objectives of this Agreement. The Committee shall inform the Council for Trade in Goods annually of progress made during the review period.
2. The Committee shall review the provisions of Parts I, II and III and recommend amendments where necessary to reflect the results of the coordinated work programme.
3. The Committee shall, taking into account the objectives and principles established in Article IX, work with the Technical Committee to develop a mechanism for considering and recommending amendments to the results of the coordinated work programme. Such a mechanism could include situations where rules need to be made more operational or where rules need to be updated to take into account new production processes arising from any technological developments.
Article 7 Consultations
The provisions of Article XXII of the General Agreement on Tariffs and Trade 1994, as elaborated and applied by the Dispute Settlement Understanding, shall apply to this Agreement.
Article 8 Dispute Settlement
The provisions of Article XXIII of the General Agreement on Tariffs and Trade 1994, as elaborated and applied by the Dispute Settlement Understanding, shall apply to this Agreement.
Part IV Harmonization of Rules of Origin Article 9 Objectives and Principles
1. In order to harmonize rules of origin, in particular to provide greater certainty in the conduct of international trade, the Ministerial Conference shall, together with the Customs Cooperation Council, undertake the programme of work set out below, based on the following principles:
(a) Rules of origin shall be implemented equally for the purposes of the objectives set out in Article 1;
(b) Rules of origin shall provide for the country of origin of a particular good as the country in which the good is wholly acquired or, where the production of the good involves more than one country, as the country in which the last substantial transformation is carried out;
(c) Rules of origin shall be objective, understandable and predictable;
(d) Although rules of origin may be linked to measures or instruments adopted by Members, they shall not be used as a tool to pursue trade objectives directly or indirectly. Rules of origin shall not, in themselves, have a restrictive, distorting or disruptive effect on international trade. Rules of origin shall not impose unjustifiably stringent requirements or require the fulfillment of specific conditions unrelated to production or processing as a prerequisite for determining the country of origin. However, for the purpose of applying the ad valorem percentage criterion, costs not directly related to production or processing may be included;
(e) the application of rules of origin should be consistent, uniform, fair and reasonable;
(f) rules of origin should be consistent;
(g) rules of origin should be based on positive criteria. Negative criteria may be used to interpret positive criteria.
2. Rules of Work
(a) The programme of work shall be initialled as soon as possible after the entry into force of the WTO Agreement and completed within three years of initialling.
(b) The Committees and Commissions provided for in Article 4 are the appropriate bodies to undertake this work.
(c) In order for the Customs Cooperation Council to provide details, the Committees shall, in accordance with Article 1 above, in order to ensure the timely completion of the harmonized work programme, as shown in the harmonized system table.
(i) The Technical Committee on Complete Manufacture and Production or Processing with a Small Degree of Details shall develop harmonized definitions of the following matters:
The results of the work shall be submitted to the Committee within three months of the receipt of its request.
(ii) Substantial Changes – Changes in Tariff Headings
–The Technical Committee shall consider and elaborate on the application of changes in tariff subheadings or headings in establishing rules of origin for specific products or product sectors, based on the criterion of substantial change and, if possible, the minimum changes within the scope of the terminology that meet that criterion.
–The Technical Committee shall divide the above work by product when considering sections of the Harmonized System terminology, with a view to submitting the results of its work to the Committee at least quarterly. The Technical Committee shall complete the above work within one year and three months of receipt of the Committee’s request.
(iii) Substantial change – supplementary criteria
If, upon completion of its work for each product sector or individual product category, the harmonized terminology still does not reflect a substantial change, the Technical Committee shall:
– in developing rules of origin for a particular product or product sector, consider and elaborate on other requirements, including ad valorem percentages and/or the degree of production or processing, based on the criterion of substantial change, in a complementary or exclusive manner;
– may provide explanations for its recommendations;
– shall divide the above work by product, taking into account the sections of the harmonized terminology, so as to submit the results of its work to the Committee at least quarterly. The Technical Committee shall complete the above work within two years and three months of receiving the Commission’s request.
Role of the Committee
3. Based on the principles set out in paragraph 1
(a) The Committee shall regularly consider the interpretations and opinions of the Technical Committee for acceptance in accordance with the time structure set out in paragraph 2(c)(i), (ii) and (iii) above. The Committee may request the Technical Committee to complete its work or to complete it more carefully and/or to make new recommendations. To assist the Technical Committee in its work, the Committee shall explain the reasons for any additional work it requests and, where necessary, make alternative recommendations;
(b) Upon completion of all the work identified in paragraph 2(a)(i), (ii) and (iii) above, the Committee shall consider the results of that work in the light of their overall coherence. Results and follow-up of the coordination work programme 4. The Ministerial Conference shall establish the coordination work programme in an annex as an integral part of this Agreement. The Ministerial Conference shall determine the date on which the annex shall enter into force.