WORLD TRADE
ORGANIZATIONG/RO/45/Add.16/Rev.2
16 November 2001
(01-5826)
Committee on Rules of Origin
INTEGRATED NEGOTIATING TEXT FOR THE
HARMONIZATION WORK PROGRAMME
CHAPTER 91 (WATCHES AND CLOCKS)
Note by the Secretariat
Revision
1. At its meeting on 10 May 1996, the Committee on Rules of Origin (CRO) decided to establish
an Integrated Negotiating Text (INT) for the Harmonization Work Programme.  The first INT was
circulated in document G/RO/W/13 (24 Ma y 1996), and had been periodically updated
(G/RO/W/13/Rev.1-3, G/RO/W/13/Rev .3/Add.1 and 2).  A further consolidated INT was circulated in
document G/RO/41(3 September 1999), and has al so been periodically updated (JOB(99)/5869,
JOB(99)/7617, JOB(00)/1573, JOB(00)/323 0, JOB(00) /5207 and JOB(00)/7194).
2. The attached document is the latest update of the negotiating text for Chapter 91 and reflects
the progress made by the CRO in September/October 2001.G/RO/45/Add.16/Rev.2
Page 2
ISSUES FOR DECISION:  CHAPTER 91
ISSUE FOR DECISION NO. 1 :1. Is the country of origin of a finished watch or clock the country of final assembly or the
country of origin of the movement used in its production?
Differing views presented in the relevant Technical Committee discussions
OPTION A:  a rule of origin based on the origin of the movement for the following reasons:2. The essence of a watch, or clock, is a device which indicates the time or measures the
intervals of time (see explanatory notes under h eading 91.02 (and 91.03)).  A movement is defined in
the HS chapter notes as a device capable of determining intervals of time (see Note 3 to Chapter 91).
There is no difference in the essential character between a watch and a movement and it is the
movement which imparts the essential character of a watch.
In the manufacture of a watch or clock, the assembly of the movement is considered the last
substantial transformation because at the stage of completion of the movement, the essential characterof the watch - time-telling - is already fixed.
The final assembly from movement to watch does not substantially change the essential
character of time-telling and cannot amount to substantial transformation.
Because the essential character and quality of a watch or a clock is determined by the
movement, the origin of the movement is most important from a commercial point of view.
OPTION B:  a rule of origin based on the assembly of the watch or clock, for the following reasons:
3. The structure of the HS reflects that movements and watches are essentially different
commercial goods.
Various finished goods can be obtained from the same movement by final assembly.
While the movement is important, timekeeping is a minimum characteristic.  The movement
does not represent time and is invisible after assembly.
It is the change from components to a watch which is the last substantial transformation in
watch manufacture.  The accuracy, durability and life span of a watch are determined and guaranteed
by the final assembly.
Some Members are of the opinion that testing and adjustment, which constitute an essential
part of assembly, are also of particular importance because they determine the above-mentioned
quality of a watch.
Relevant HS code numbers and descriptions
4. 91.01 - Wrist-watches, pocket-watches and ot her watches, including stop-watches, w
with case of precious metal or of metal clad with precious metal;
91.02 - Wrist-watches, pocket-watches and other watches, including stop-watches,
other than those of heading 91.01;G/RO/45/Add.16/Rev.2
Page 3
91.03 - Clocks with watch movements, excluding clocks of heading 91.04;
91.04 - Instrument panel clocks and clocks of a similar type for vehicles, aircraft,
spacecraft or vessels;
91.05 - Other clocks;
91.06 - Time of day recording apparatus and apparatus for measuring, recording or
otherwise indicating intervals of time, with clock or watch movement or with
synchronous motor (for example, time-registers, time-recorders);
91.07 - Time switches with clock or watch movement or with synchronous motor.
ISSUE FOR DECISION NO. 25. What is the appropriate description in ex-91.10(b) of complete movements, partly assembled
and of incomplete movements?
Differing views presented in the relevant Technical Committee discussions
OPTION A:
6.        -            movements of ex-91.10(b) must contain at least two of the key components on a
common support.  The proponents consider that the sp ecification of at least two of these components
is sufficient to take up any one of the three types of movement: mechanical; analog electronic; or
digital electronic.
OPTION B:
7.        -            all of the key components, as appropriate, must be present.  This formulation is
intended to provide a more clear delineation between the types of movements and components.
Relevant HS code number and description
8.       91.10     -             Complete watch or clock movements, unassembled or partly assembled
(movement sets); incomplete watch or clock movements, assembled; rough
watch or clock movements.
ISSUE FOR DECISION NO. 3
9. Are changes to complete and assembled movements of headings 91.08 or 91.09 from partly
assembled complete movements or incomplete movements of ex-91.10(b), or from other movements
of ex-91.10(c), substantial transformations?
Differing views presented in the relevant Technical Committee discussions
OPTION A:10. - change to these headings from any other headings, that is, from 91.10 or 91.14, is
considered substantial transformation by reason of the assembly operations involved.
OPTION B:
11. - change to these headings from any other headings, except that change from
ex-91.10(b) should be excluded because such goods have already acquired the character of
movements prior to final assembly and finishing.G/RO/45/Add.16/Rev.2
Page 4
OPTION C:
12. - changes from ex-91.10(c) should be excluded as well as changes from ex-91.10(b)
because goods of ex-91.10(c) have already undergone some amount of assembly which means that a
change to complete and assembled goods is not substantial transformation.
OPTION D:
13. -  change from any other heading, provided  that all of the following components, as
appropriate, are assembled on a common support:  time reference device, device for converting the
time reference for the purpose of display, time setting mechanism or opto-electronic display.
Relevant HS code numbers and descriptions
14. 91.08 - Watch movements, complete and assembled;
91.09 - Clock movements, complete and assembled.
ISSUE FOR DECISION NO. 4
15.        Are changes to finished watch or c lock cases from case parts, or to watch or clock cases from
case blanks, substantial transformation?
Differing views presented in the relevant Technical Committee discussions
OPTION A:
16.        -            Change of tariff heading.  No changes from subheadings for pa rts, or within
subheadings from blanks to finished goods, could reflect substantial transformation in these headings
because the watch and clock cases are produced from a small number of parts, and usually one
principal part,  by basic operations.
OPTION B:
17.        -            Change of tariff subheading.  Changes from parts to finished goods of these headings
reflects substantial transformation.
OPTION C:
18.        -            Change of tariff heading or change within subheadings by the finishing of blanks.
Changes at the subheading level from goods classified as parts to finished goods should not be
substantial transformation; but changes within subh eadings by the working, machining and polishing
of blanks should be origin-conferring.
Relevant HS code numbers and descriptions
19.        9 1.11     -            Watch cases and parts thereof;
              91.12     -            Clock cases and cases of a similar type for goods of this Chapter, and parts t
              thereof.G/RO/45/Add.16/Rev.2
Page 5
ISSUE FOR DECISION NO. 5
20. Is change to finished straps, bands or bracelets from parts classified within 91.13, or change
from blanks classified within 91.13, substantial transformation?   This issue applies also to the
heading 91.14, but only to the question of blanks (mutatis mutandis), i.e. option A and B.
Differing views presented in the relevant Technical Committee discussions
OPTION A:21. - Change of tariff heading, indicating that no changes from parts or from blanks are
considered substantial transformation.
OPTION B:
22. - Change of tariff heading or change from blanks to finished goods within the same
subheadings by working, machining or polishing.
OPTION C:
23. - Change of tariff heading or change within subheadings from parts to finished goods.
Relevant HS code number and description
24. 91.13 - Watch straps, watch bands and watch bracelets, and parts thereof
91.14     -            Other clock or watch parts
ISSUE FOR DECISION NO. 6
25.        Is the manufacture of unassembled watch straps from fabric substantial transformation?
Differing views presented in the relevant Technical Committee discussions
OPTION A:
26.        - the origin o f unassembled straps and bands of this subheading should be based on the
country of origin of the fabric; change to unassembled straps of this subheading from fabric is not
substantial transformation as it requires operations such as cutting, hemming and looping.
OPTION B:
27.        - change to unassembled goods of this subheading from any other heading is sufficient to
express substantial transformation.
Relevant HS code number and description
28.        9113.90 -            Other
References to Technical Committee documents
29.        Re port of 4th Session (Doc. 40.245) Annex H/1. paragraphs 1-14G/RO/45/Add.16/Rev.2
Page 6
              Report of  5th Session (Doc. 40.510) Annex E/1
              Draft Report of 8th Session (Doc. 41.511) Annexes IJ/1 and IJ/2
              Secretariat’s Issues List for Basket 2 (Doc. 41.221)
              Working Document:  Second Ex amination (Doc. 41.225)
              Report of the Tokyo Intersessional Group (Doc. 41.209)
              Reference Document 41.236
              Reference Document 41.218
              Reference Document 41.208
              Reference Document 41.416
              Reference Document 41.433
              Reference Document 41.507G/RO/45/Add.16/Rev.2
Page 7CHAPTER 91
Primary rule:  Chapter Notes
Disassembly operations, including those which result in a change of tariff classification, shall not be considered origin confe rring.    Basket 1 (Endorsed
by CRO)
[Product specific] [Chapter] residual rules
When application of the primary rules of this chapter (including the product specific rules provided in the matrix) does not re sult in a determination of a
country of origin, the country of origin shall be determined as follows:
1. The country of origin of goods of heading 91.13 that contain textile fabric or other textile material shall be the country wh ere the textile fabric or
other material was formed, or in the case of a good containing textile materials of more than one country,  the origin of the g ood is the country in which the textile
fabric or other textile material that predominates by weight was formed.  (US)]      Submitted to CRO for decision (Doc.OC0023E2, Issue No.77)
HS Code
NumberDescription of goods Primary rule Notes Comments
AB C D E
91.01 Wrist-watches, pocket-watches
and other watches, including
stop-watches, with case of
precious metal or of metal cladwith precious metal. [ CTH ]
 [ CTH, except from heading 91.08 or 91.09 ] Submitted to the CRO for decision
91.02 Wrist-watches, pocket-watches
and other watches, including
stop-watches, other than those of
heading No. 91.01.[ CTH ]
[ CTH, except from heading 91.08 or 91.09 ] Submitted to the CRO for decision
91.03 Clocks with watch movements,
excluding clocks of heading No.
91.04.[ CTH ]
[ CTH, except from heading 91.08 or 91.09 ] Submitted to the CRO for decision
91.04 Instrument panel clocks and
clocks of a similar type for
vehicles aircraft, spacecraft orvessels.[ CTH ]
[ CTH, except from heading 91.08 or 91.09 ] Submitted to the CRO for decision
91.05 Other clocks. [ CTH ]
[ CTH, except from heading 91.08 or 91.09Submitted to the CRO for decisionG/RO/45/Add.16/Rev.2
Page 8HS Code
NumberDescription of goods Primary rule Notes Comments
AB C D E
91.06 Time of day recording apparatus
and apparatus for measuring,recording or otherwise
indicating intervals of time, with
clock or watch movement or
with synchronous motor (for
example, time-registers,time-recorders).[ CTH ]
[ CTH, except from heading 91.08 or 91.09 ] Submitted to the CRO for decision
91.07 Time switches with clock or
watch movement or with
synchronous motor.[ CTH ]
[ CTH, except from heading 91.08 or 91.09 ] Submitted to the CRO for decision
91.08 Watch movements, complete and
assembled.[ CTH, except from ex 91.10 (b) ]
[ CTH,  except from ex 91.10 (b) or ex 91.10
(c) ]Submitted to the CRO for decision
91.09 Clock movements, complete and
assembled.[CTH, except from ex 91.10 (b) ]
[CTH, except from ex 91.10 (b) or ex 91.10
(c) ]Submitted to the CRO for decision
91.10 Complete watch or clock
movements, unassembled or
partly assembled (movement
sets); incomplete watch or clock
movements, assembled; roughwatch or clock movements.As indicated for split heading
ex  91.10 (a) Complete watch or clock
movements, unassembled; rough
watch or clock movementsCTH except from heading 91.14 Basket 1 (endorsed by CRO)G/RO/45/Add.16/Rev.2
Page 9HS Code
NumberDescription of goods Primary rule Notes Comments
AB C D E
ex  91.10  (b) Complete watch or clock
movements, partly assembled and
incomplete watch or clock
movements, assembled, containing
at least two of the following
components on a common support:
time reference device, device for
converting the time reference for
purposes of display, time setting
mechanism or opto-electronic
display    CTH ; or
Change from split heading ex - 91.10 (a),
ex  91.10  (c) Other   CTH, except from heading 91.14 Basket 1 (endorsed by CRO)
91.11 Watch cases and parts thereof.    As specified for subheadings
9111.10 -Cases of precious metal or of
metal clad with precious metal  CTH or change from blanks to finished
goods classified in the same subheading Submitted to the CRO for decision
9111.20 -Cases of base metal, whether or
not gold- or silver-plated  CTH or change from blanks to finished
goods classified in the same subheadingSubmitted to the CRO for decision
9111.80 -Other cases  CTH or change from blanks to finished goods
classified in the same subheadingSubmitted to the CRO for decision
9111.90 -Parts   CTH Basket 1 (endorsed by CRO)
91.12 Clock cases and cases of a
similar type for other goods of
this Chapter, and parts thereof.As specified for subheadings.
9112.10 -Cases of metal  CTH or change from blanks to finished goods
classified in the same subheadingSubmitted to the CRO for decision
9112.80 -Other cases  CTH or change from blanks to finished goods
classified in the same subheadingSubmitted to the CRO for decision
9112.90 -Parts CTH Basket 1 (endorsed by CRO)
91.13 Watch straps, watch bands and
watch bracelets, and partsthereof.As specified for subheadings.G/RO/45/Add.16/Rev.2
Page 10HS Code
NumberDescription of goods Primary rule Notes Comments
AB C D E
9113.10 -Of precious metal or of metal clad
with precious metal [CTH ]
 [CTH or change from blanks to finished
goods classified in the same subheading ]
 [CTH or change from parts to finished goods
classified in the same subheading ]Submitted to the CRO for decision
9113.20 -Of base metal, whether or not
gold- or silver-plated    [ CTH ]
    [ CTH or change from blanks to finished
goods classified in the same subheading ]
    [ CTH or change from parts to finished
goods classified in the same subheading ]Submitted to the CRO for decision
9113.90 -Other CTH Endorsed by the CRO
91.14 Other clock or watch parts.  CTH Submitted to the CRO for decision
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