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
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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 concerned2;
1It
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.
2With
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.
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(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 days3 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;
3In
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.
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(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.
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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.
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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;
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(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
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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
percentages4 and/or manufacturing or
processing operations5, 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.
4If
the ad valorem criterion is prescribed, the method for calculating this
percentage shall also be indicated in the rules
of origin.
5If
the criterion of manufacturing or processing operation is prescribed, the
operation that confers origin on the product
concerned shall be precisely specified.
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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 timeframe
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.
6At
the same time, consideration shall be given to arrangements concerning the
settlement of disputes relating to customs
classification.
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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
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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 days7 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.
7In
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.