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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
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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 back to top
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
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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
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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 Modificationand
Introduction of New Rules of Origin
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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.
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
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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 back to top
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 back to top
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 Criteria
Upon
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 back to top
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 back to top
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.
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