AGREEMENT ON RULES OF ORIGIN
Members,
Noting that Ministers on 20 September 1986 agreed that the Uruguay Round of Multilateral Trade Negotiations shall aim to "bring about further liberalization and expansion of world trade", "strengthen the role of GATT" and "increase the responsiveness of the GATT system to the evolving international economic environment";
Desiring to further the objectives of GATT 1994;
Recognizing that clear and predictable rules of origin and their application facilitate the flow of international trade;
Desiring to ensure that rules of origin themselves do not create unnecessary obstacles to trade;
Desiring to ensure that rules of origin do not nullify or impair the rights of Members under GATT 1994;
Recognizing that it is desirable to provide transparency of laws, regulations, and practices regarding rules of origin;
Desiring to ensure that rules of origin are prepared and applied in an impartial, transparent, predictable, consistent and neutral manner;
Recognizing the availability of a consultation mechanism and procedures for the speedy, effective and equitable resolution of disputes arising under this Agreement;
Desiring to harmonize and clarify rules of origin;
Hereby agree as follows:
PART I - DEFINITIONS AND COVERAGE
Article 1 - Rules of Origin
1. For the purposes of Parts I to IV of this Agreement, rules of origin shall be defined as those laws, regulations and administrative determinations of general application applied by any Member to determine the country of origin of goods provided such rules of origin are not
related to contractual or autonomous trade regimes leading to the granting of tariff preferences going beyond the application of paragraph 1 of Article I of GATT 1994.
2. Rules of origin referred to in paragraph 1 shall include all rules of origin used in non-preferential commercial policy instruments, such as in the application of: most-favoured-nation treatment under Articles I, II, III, XI and XIII of GATT 1994; anti-dumping and countervailing duties under Article VI of GATT 1994; safeguard measures under Article XIX of GATT 1994; origin marking requirements under Article IX of GATT 1994; and
any discriminatory quantitative restrictions or tariff quotas. They shall also include rules of origin used for government procurement and trade statistics.[1]
PART II - DISCIPLINES TO GOVERN THE APPLICATION OF RULES OF ORIGIN
Article 2 - Disciplines During the Transition Period
Until the work programme for the harmonization of rules of origin set out in Part IV is completed, Members shall ensure that:
(a) when they issue administrative determinations of general application, the requirements to be fulfilled are clearly defined. In particular:
(i) in cases where the criterion of change of tariff classification is
applied, such a rule of origin, and any exceptions to the rule, must
clearly specify the subheadings or headings within the tariff nomenclature
that are addressed by the rule;
(ii) in cases where the ad valorem percentage criterion is applied, the
method for calculating this percentage shall also be indicated in the
rules of origin;
(iii) in cases where the criterion of manufacturing or processing
operation is prescribed, the operation that confers origin on the good
concerned shall be precisely specified;
(b) notwithstanding the measure or instrument of commercial policy to
which they are linked, their rules of origin are not used as instruments
to pursue trade objectives directly or indirectly;
(c) rules of origin shall not themselves create restrictive, distorting,
or disruptive effects on international trade. They shall not pose unduly
strict requirements or require the fulfilment of a certain condition not
related to manufacturing or processing, as a prerequisite for the
determination of the country of origin. However, costs not directly
related to manufacturing or processing may be included for the purposes of
the application of an ad valorem percentage criterion consistent with
subparagraph (a);
(d) the rules of origin that they apply to imports and exports are not
more stringent than the rules of origin they apply to determine whether or
not a good is domestic and shall not discriminate between other Members,
irrespective of the affiliation of the manufacturers of the good
concerned[2];
(e) their rules of origin are administered in a consistent, uniform,
impartial and reasonable manner;
(f) their rules of origin are based on a positive standard. Rules of
origin that state what does not confer origin (negative standard) are
permissible as part of a clarification of a positive standard or in
individual cases where a positive determination of origin is not
necessary;
(g) their laws, regulations, judicial decisions and administrative rulings
of general application relating to rules of origin are published as if
they were subject to, and in accordance with, the provisions of paragraph
1 of Article X of GATT 1994;
(h) upon the request of an exporter, importer or any person with a
justifiable cause, assessments of the origin they would accord to a good
are issued as soon as possible but no later than 150 days[3] after a
request for such an assessment provided that all necessary elements have
been submitted. Requests for such assessments shall be accepted before
trade in the good concerned begins and may be accepted at any later point
in time. Such assessments shall remain valid for three years provided that
the facts and conditions, including the rules of origin, under which they
have been made remain comparable. Provided that the parties concerned are
informed in advance, such assessments will no longer be valid when a
decision contrary to the assessment is made in a review as referred to in
subparagraph (j). Such assessments shall be made publicly available
subject to the provisions of subparagraph (k);
(i) when introducing changes to their rules of origin or new rules of
origin, they shall not apply such changes retroactively as defined in, and
without prejudice to, their laws or regulations;
(j) any administrative action which they take in relation to the
determination of origin is reviewable promptly by judicial, arbitral or
administrative tribunals or procedures, independent of the authority
issuing the determination, which can effect the modification or reversal
of the determination;
(k) all information that is by nature confidential or that is provided on
a confidential basis for the purpose of the application of rules of origin
is treated as strictly confidential by the authorities concerned, which
shall not disclose it without the specific permission of the person or
government providing such information, except to the extent that it may be
required to be disclosed in the context of judicial proceedings.
Article 3 - Disciplines after the Transition Period
Taking into account the aim of all Members to achieve, as a result of the
harmonization work programme set out in Part IV, the establishment of
harmonized rules of origin, Members shall ensure, upon the implementation
of the results of the harmonization work programme, that:
(a) they apply rules of origin equally for all purposes as set out in
Article 1;
(b) under their rules of origin, the country to be determined as the
origin of a particular good is either the country where the good has been
wholly obtained or, when more than one country is concerned in the
production of the good, the country where the last substantial
transformation has been carried out;
(c) the rules of origin that they apply to imports and exports are not
more stringent than the rules of origin they apply to determine whether or
not a good is domestic and shall not discriminate between other Members,
irrespective of the affiliation of the manufacturers of the good
concerned;
(d) the rules of origin are administered in a consistent, uniform,
impartial and reasonable manner;
(e) their laws, regulations, judicial decisions and administrative rulings
of general application relating to rules of origin are published as if
they were subject to, and in accordance with, the provisions of paragraph
1 of Article X of GATT 1994;
(f) upon the request of an exporter, importer or any person with a
justifiable cause, assessments of the origin they would accord to a good
are issued as soon as possible but no later than 150 days after a request
for such an assessment provided that all necessary elements have been
submitted. Requests for such assessments shall be accepted before trade in
the good concerned begins and may be accepted at any later point in time.
Such assessments shall remain valid for three years provided that the
facts and conditions, including the rules of origin, under which they have
been made remain comparable. Provided that the parties concerned are
informed in advance, such assessments will no longer be valid when a
decision contrary to the assessment is made in a review as referred to in
subparagraph (h). Such assessments shall be made publicly available
subject to the provisions of subparagraph (i);
(g) when introducing changes to their rules of origin or new rules of
origin, they shall not apply such changes retroactively as defined in, and
without prejudice to, their laws or regulations;
(h) any administrative action which they take in relation to the
determination of origin is reviewable promptly by judicial, arbitral or
administrative tribunals or procedures, independent of the authority
issuing the determination, which can effect the modification or reversal
of the determination;
(i) all information which is by nature confidential or which is provided
on a confidential basis for the purpose of the application of rules of
origin is treated as strictly confidential by the authorities concerned,
which shall not disclose it without the specific permission of the person
or government providing such information, except to the extent that it may
be required to be disclosed in the context of judicial proceedings.
PART III - PROCEDURAL ARRANGEMENTS ON NOTIFICATION, REVIEW, CONSULTATION
AND DISPUTE SETTLEMENT
Article 4 - Institutions
1. There is hereby established a Committee on Rules of Origin (referred to
in this Agreement as "the Committee") composed of the representatives from
each of the Members. The Committee shall elect its own Chairman and shall
meet as necessary, but not less than once a year, for the purpose of
affording Members the opportunity to consult on matters relating to the
operation of Parts I, II, III and IV or the furtherance of the objectives
set out in these Parts and to carry out such other responsibilities
assigned to it under this Agreement or by the Council for Trade in Goods.
Where appropriate, the Committee shall request information and advice from
the Technical Committee referred to in paragraph 2 on matters related to
this Agreement. The Committee may also request such other work from the
Technical Committee as it considers appropriate for the furtherance of the
above-mentioned objectives of this Agreement. The WTO Secretariat shall
act as the secretariat to the Committee.
2. There shall be established a Technical Committee on Rules of Origin
(referred to in this Agreement as "the Technical Committee") under the
auspices of the Customs Co-operation Council (CCC) as set out in Annex I.
The Technical Committee shall carry out the technical work called for in
Part IV and prescribed in Annex I. Where appropriate, the Technical
Committee shall request information and advice from the Committee on
matters related to this Agreement. The Technical Committee may also
request such other work from the Committee as it considers appropriate for
the furtherance of the above-mentioned objectives of the Agreement. The
CCC Secretariat shall act as the secretariat to the Technical Committee.
Article 5 - Information and Procedures for Modification - and Introduction
of New Rules of Origin
1. Each Member shall provide to the Secretariat, within 90 days after the
date of entry into force of the WTO Agreement for it, its rules of origin,
judicial decisions, and administrative rulings of general application
relating to rules of origin in effect on that date. If by inadvertence a
rule of origin has not been provided, the Member concerned shall provide
it immediately after this fact becomes known. Lists of information
received and available with the Secretariat shall be circulated to the
Members by the Secretariat.
2. During the period referred to in Article 2, Members introducing
modifications, other than de minimis modifications, to their rules of
origin or introducing new rules of origin, which, for the purpose of this
Article, shall include any rule of origin referred to in paragraph 1 and
not provided to the Secretariat, shall publish a notice to that effect at
least 60 days before the entry into force of the modified or new rule in
such a manner as to enable interested parties to become acquainted with
the intention to modify a rule of origin or to introduce a new rule of
origin, unless exceptional circumstances arise or threaten to arise for a
Member. In these exceptional cases, the Member shall publish the modified
or new rule 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 having regard to its objectives. The
Committee shall annually inform the Council for Trade in Goods of
developments during the period covered by such reviews.
2. The Committee shall review the provisions of Parts I, II and III and
propose amendments as necessary to reflect the results of the
harmonization work programme.
3. The Committee, in cooperation with the Technical Committee, shall set
up a mechanism to consider and propose amendments to the results of the
harmonization work programme, taking into account the objectives and
principles set out in Article 9. This may include instances where the
rules need to be made more operational or need to be updated to take into
account new production processes as affected by any technological change.
Article 7 - Consultation
The provisions of Article XXII of GATT 1994, as elaborated and applied by
the Dispute Settlement Understanding, are applicable to this Agreement.
Article 8 - Dispute Settlement
The provisions of Article XXIII of GATT 1994, as elaborated and applied by
the Dispute Settlement Understanding, are applicable to this Agreement.
PART IV - HARMONIZATION OF RULES OF ORIGIN
Article 9 - Objectives and Principles
1. With the objectives of harmonizing rules of origin and, inter alia,
providing more certainty in the conduct of world trade, the Ministerial
Conference shall undertake the work programme set out below in conjunction
with the CCC, on the basis of the following principles:
(a) rules of origin should be applied equally for all purposes as set out
in Article 1;
(b) rules of origin should provide for the country to be determined as the
origin of a particular good to be either the country where the good has
been wholly obtained or, when more than one country is concerned in the
production of the good, the country where the last substantial
transformation has been carried out;
(c) rules of origin should be objective, understandable and predictable;
(d) notwithstanding the measure or instrument to which they may be linked,
rules of origin should not be used as instruments to pursue trade
objectives directly or indirectly. They should not themselves create
restrictive, distorting or disruptive effects on international trade. They
should not pose unduly strict requirements or require the fulfilment of a
certain condition not relating to manufacturing or processing as a
prerequisite for the determination of the country of origin. However,
costs not directly related to manufacturing or processing may be included
for purposes of the application of an ad valorem percentage criterion;
(e) rules of origin should be administrable in a consistent, uniform,
impartial and reasonable manner;
(f) rules of origin should be coherent;
(g) rules of origin should be based on a positive standard. Negative
standards may be used to clarify a positive standard.
Work Programme
2. (a) The work programme shall be initiated as soon after the entry into
force of the WTO Agreement as possible and will be completed within three
years of initiation.
(b) The Committee and the Technical Committee provided for in Article 4
shall be the appropriate bodies to conduct this work.
(c) To provide for detailed input by the CCC, the Committee shall request
the Technical Committee to provide its interpretations and opinions
resulting from the work described below on the basis of the principles
listed in paragraph 1. To ensure timely completion of the work programme
for harmonization, such work shall be conducted on a product sector basis,
as represented by various chapters or sections of the Harmonized System
(HS) nomenclature.
(i) Wholly Obtained and Minimal Operations or Processes
The Technical Committee shall develop harmonized definitions of:
- the goods that are to be considered as being wholly obtained in one
country. This work shall be as detailed as possible;
- minimal operations or processes that do not by themselves confer origin
to a good.
The results of this work shall be submitted to the Committee within three
months of receipt of the request from the Committee.
(ii) Substantial Transformation - Change in Tariff Classification
- The Technical Committee shall consider and elaborate upon, on the basis
of the criterion of substantial transformation, the use of change in
tariff subheading or heading when developing rules of origin for
particular products or a product sector and, if appropriate, the minimum
change within the nomenclature that meets this criterion.
- The Technical Committee shall divide the above work on a product basis
taking into account the chapters or sections of the HS nomenclature, so as
to submit results of its work to the Committee at least on a quarterly
basis. The Technical Committee shall complete the above work within one
year and three months from receipt of the request of the Committee.
(iii) Substantial Transformation - Supplementary CriteriaUpon completion of the work under subparagraph (ii) for each product sector or individual product category where the exclusive use of the HS nomenclature does not allow for the expression of substantial transformation, the Technical Committee:
- shall consider and elaborate upon, on the basis of the criterion of substantial transformation, the use, in a supplementary or exclusive manner, of other requirements, including ad valorem percentages[4] and/or manufacturing or processing operations[5], when developing rules of origin for particular products or a product sector;
- may provide explanations for its proposals;
- shall divide the above work on a product basis taking into account the chapters or sections of the HS nomenclature, so as to submit results of its work to the Committee at least on a quarterly basis. The Technical Committee shall complete the above work within two years and three months of receipt of the request from the Committee.
Role of the Committee
3. On the basis of the principles listed in paragraph 1:
(a) the Committee shall consider the interpretations and opinions of the
Technical Committee periodically in accordance with the time-frames
provided in subparagraphs (i), (ii) and (iii) of paragraph 2(c) with a
view to endorsing such interpretations and opinions. The Committee may
request the Technical Committee to refine or elaborate its work and/or to
develop new approaches. To assist the Technical Committee, the Committee
should provide its reasons for requests for additional work and, as
appropriate, suggest alternative approaches;
(b) upon completion of all the work identified in subparagraphs (i), (ii)
and (iii) of paragraph 2(c), the Committee shall consider the results in
terms of their overall coherence.
Results of the Harmonization Work Programme and Subsequent Work
4. The Ministerial Conference shall establish the results of the
harmonization work programme in an annex as an integral part of this
Agreement.[6] The Ministerial Conference shall establish a time-frame for
the entry into force of this annex.
ANNEX I - TECHNICAL COMMITTEE ON RULES OF ORIGIN
Responsibilities
1. The ongoing responsibilities of the Technical Committee shall include
the following:
(a) at the request of any member of the Technical Committee, to examine
specific technical problems arising in the day-to-day administration of
the rules of origin of Members and to give advisory opinions on
appropriate solutions based upon the facts presented;
(b) to furnish information and advice on any matters concerning the origin
determination of goods as may be requested by any Member or the Committee;
(c) to prepare and circulate periodic reports on the technical aspects of
the operation and status of this Agreement; and
(d) to review annually the technical aspects of the implementation and
operation of Parts II and III.
2. The Technical Committee shall exercise such other responsibilities as
the Committee may request of it.
3. The Technical Committee shall attempt to conclude its work on specific
matters, especially those referred to it by Members or the Committee, in a
reasonably short period of time.
Representation
4. Each Member shall have the right to be represented on the Technical
Committee. Each Member may nominate one delegate and one or more
alternates to be its representatives on the Technical Committee. Such a
Member so represented on the Technical Committee is hereinafter referred
to as a "member" of the Technical Committee. Representatives of members of
the Technical Committee may be assisted by advisers at meetings of the
Technical Committee. The WTO Secretariat may also attend such meetings
with observer status.
5. Members of the CCC which are not Members of the WTO may be represented
at meetings of the Technical Committee by one delegate and one or more
alternates. Such representatives shall attend meetings of the Technical
Committee as observers.
6. Subject to the approval of the Chairman of the Technical Committee, the
Secretary-General of the CCC (referred to in this Annex as "the
Secretary-General") may invite representatives of governments which are
neither Members of the WTO nor members of the CCC and representatives of
international governmental and trade organizations to attend meetings of
the Technical Committee as observers.
7. Nominations of delegates, alternates and advisers to meetings of the
Technical Committee shall be made to the Secretary-General.
Meetings
8. The Technical Committee shall meet as necessary, but not less than once
a year.
Procedures
9. The Technical Committee shall elect its own Chairman and shall
establish its own procedures.
ANNEX II - COMMON DECLARATION WITH REGARD TO PREFERENTIAL RULES OF ORIGIN
1. Recognizing that some Members apply preferential rules of origin,
distinct from non-preferential rules of origin, the Members hereby agree
as follows.
2. For the purposes of this Common Declaration, preferential rules of
origin shall be defined as those laws, regulations and administrative
determinations of general application applied by any Member to determine
whether goods qualify for preferential treatment under contractual or
autonomous trade regimes leading to the granting of tariff preferences
going beyond the application of paragraph 1 of Article I of GATT 1994.
3. The Members agree to ensure that:
(a) when they issue administrative determinations of general application,
the requirements to be fulfilled are clearly defined. In particular:
(i) in cases where the criterion of change of tariff classification is
applied, such a preferential rule of origin, and any exceptions to the
rule, must clearly specify the subheadings or headings within the tariff
nomenclature that are addressed by the rule;
(ii) in cases where the ad valorem percentage criterion is applied, the
method for calculating this percentage shall also be indicated in the
preferential rules of origin;
(iii) in cases where the criterion of manufacturing or processing
operation is prescribed, the operation that confers preferential origin
shall be precisely specified;
(b) their preferential rules of origin are based on a positive standard.
Preferential rules of origin that state what does not confer preferential
origin (negative standard) are permissible as part of a clarification of a
positive standard or in individual cases where a positive determination of
preferential origin is not necessary;
(c) their laws, regulations, judicial decisions and administrative rulings
of general application relating to preferential rules of origin are
published as if they were subject to, and in accordance with, the
provisions of paragraph 1 of Article X of GATT 1994;
(d) upon request of an exporter, importer or any person with a justifiable
cause, assessments of the preferential origin they would accord to a good
are issued as soon as possible but no later than 150 days[7] after a
request for such an assessment provided that all necessary elements have
been submitted. Requests for such assessments shall be accepted before
trade in the good concerned begins and may be accepted at any later point
in time. Such assessments shall remain valid for three years provided that
the facts and conditions, including the preferential rules of origin,
under which they have been made remain comparable. Provided that the
parties concerned are informed in advance, such assessments will no longer
be valid when a decision contrary to the assessment is made in a review as
referred to in subparagraph (f). Such assessments shall be made publicly
available subject to the provisions of subparagraph (g);
(e) when introducing changes to their preferential rules of origin or new
preferential rules of origin, they shall not apply such changes
retroactively as defined in, and without prejudice to, their laws or
regulations;
(f) any administrative action which they take in relation to the determination of preferential origin is reviewable promptly by judicial, arbitral or administrative tribunals or procedures, independent of the authority issuing the determination, which can effect the modification or
reversal of the determination;
(g) all information that is by nature confidential or that is provided on a confidential basis for the purpose of the application of preferential rules of origin is treated as strictly confidential by the authorities concerned, which shall not disclose it without the specific permission of the person or government providing such information, except to the extent
that it may be required to be disclosed in the context of judicial proceedings.
4. Members agree to provide to the Secretariat promptly their preferential rules of origin, including a listing of the preferential arrangements to which they apply, judicial decisions, and administrative rulings of general application relating to their preferential rules of origin in effect on the date of entry into force of the WTO Agreement for the Member
concerned. Furthermore, Members agree to provide any modifications to their preferential rules of origin or new preferential rules of origin as soon as possible to the Secretariat. Lists of information received and available with the Secretariat shall be circulated to the Members by the Secretariat.
[1] It is understood that this provision is without prejudice to those determinations made for purposes of defining "domestic industry" or "like products of domestic industry" or similar terms wherever they apply.
[2] With respect to rules of origin applied for the purposes of government procurement, this provision shall not create obligations additional to those already assumed by Members under GATT 1994.
[3] In respect of requests made during the first year from the date of entry into force of the WTO Agreement, Members shall only be required to issue these assessments as soon as possible.
[4] If the ad valorem criterion is prescribed, the method for calculating this percentage shall also be indicated in the rules of origin.
[5] If the criterion of manufacturing or processing operation is prescribed, the operation that confers origin on the product concerned shall be precisely specified.
[6] At the same time, consideration shall be given to arrangements concerning the settlement of disputes relating to customs classification.
[7] In respect of requests made during the first year from entry into force of the WTO Agreement, Members shall only be required to issue these assessments as soon as possible.
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