WORLD TRADE G/RO/15
25April 1997
ORGANIZATION(97-1787)
Committee onRules ofOrigin
SEVENTH REPORT OFTHE TECHNICAL COMMITTEE ONRULES OFORIGIN
TOTHE COMMITTEE ONRULES OFORIGIN
Note bytheSecretariat
1. Inconformity withparagraph 2(c)ofArticle 9oftheAgreement onRules ofOrigin, the
Technical Committee onRules ofOrigin hassubmitted totheCommittee onRules ofOrigin itsSeventh
Report. TheReport covers theresults ofthecontinuing work under Phase IIoftheHarmonization
Work Programme andreflects theprogress oftheTechnical Committee attheSeventh Session held
inBrussels from 10to21February 1997.
2. Theattached Report (WCO document 40.841) isherewith circulated toMembers, together
withtheletter oftransmission oftheChairman oftheTechnical Committee onRules ofOrigin.G/RO/15
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Brussels, 18April 1997
Dear Mr.Osakwe,
Ihavepleasure inenclosing theSeventh Report oftheTechnical Committee onRules ofOrigin
totheCommittee onRules ofOrigin.
ThisReport issubmitted inaccordance withtheprovisions ofArticle 9.2(c) oftheAgreement
andcovers theresults ofthecontinuing work under Phase IIoftheHarmonization Work Programme
andreflects theprogress oftheTechnical Committee attheSeventh Session heldinBrussels from10
to21February 1997. Attached asAnnexes AandBaredetails oftheapproved Management Plan
andCalendar fortheremaining work tobeundertaken during 1997. Alsoenclosed isacopyofthe
draftReport oftheSeventh Session oftheTechnical Committee.1Inaccordance withtheManagement
Plan, theReport oftheTechnical Committee 'sSeventh Session istobeapproved during theEighth
Session from 23Juneto4July1997 andwillbesenttoyouafterthesession.
R.Janezcko
Chairman
1Available forconsultation intheSecretariat (Market Access Division).G/RO/15
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SEVENTH REPORT OFTHE TECHNICAL COMMITTEE ONRULES OFORIGIN
TOTHE COMMITTEE ONRULES OFORIGIN
1. TheTechnical Committee onRules ofOrigin helditsSeventh Session inBrussels from 10
to21February 1997. During thissession, theTechnical Committee continued itsharmonization work
onrulesoforigin forparticular products andproduct sectors. TheTechnical Committee established
amanagement planandcalendar ofmeetings fortheremaining work tobeundertaken during 1997.
Harmonization Work Programme
2. TheTechnical Committee completed itsfirstexamination ofrules oforigin forthegoods of
Chapters 52-55, 56-63, 33-38, 39-40, 82,83and84.Theresults oftheTechnical Committee ’swork
aresetoutindetail intherelevant Annexes totheReport ontheSeventh Session oftheTechnical
Committee onRules ofOrigin, acopyofwhich isenclosed forinformation.
3. Inthese discussions itwasevident that,forcertain goods, important issues hadbeenraised
which required further study before adecision could bereached. These issues werereferred toBasket
2forfurther examination anddecision atalatersession. Itwasnoted inthiscontext thatasignificant
number ofthese issues applied toseveral headings orsubheadings andthatthisfactor should bekept
inmind forthediscussion ofthemethod ofwork.
Method ofWork andManagement Plan
4. TheTechnical Committee followed uptheinitiative taken atitsprevious session toestablish
amanagement planandcalendar foritswork inthecurrent year. Discussion focused inparticular
onthepossibility ofincreasing thenumber ofmeetings planned fortheyear, formal orinformal, to
facilitatetheBasket2negotiationsandontheneedtoestablishclearguidelines,includingstrictdeadlines,
forthesubmission ofproposals andtechnical information byMembers andforthepreparation ofnew
documents bytheSecretariat. Several important issues wereraised concerning theneedforthorough
preparation bydelegations before formal sessions oftheTechnical Committee andthebudgetary
implications formany Members ofanyincrease inthefrequency ofsessions.
5. Tofacilitate thediscussion ofgeneric issues thatwere eachrelevant toseveral headings or
subheadings theSecretariat wasinstructed toprepare analytical tables tofocus onthese issues andto
assist delegations torelate theissues withtheheadings orsubheadings concerned. Itwasalsoagreed
that,inthecourse oftheBasket 2sessions, proposals forsupplementary criteria, which related toPhase
IIIoftheWork Programme, would beexamined assoonasdecisions hadbeentaken ontheapplicability
ofthecriterion ofchange oftariffclassification forparticular products orproduct sectors. ThusPhase
IIIwould ineffect runinparallel withtheBasket 2discussions toconclude Phase IIofthework
programme.
6. ThePlanalsomakes provision foramethodology tobeestablished totransmit issues tothe
Committee forresolution atacommercial policy levelincases where thetechnical possibilities have
beenfullyexplored andexhausted bytheTechnical Committee.
7. TheManagement PlanandCalendar areattached asAnnex BtothisReport andadetailed
report ofthewide-ranging discussion isatAnnex A2.
2TheManagement PlanatAnnex Bisreproduced inAnnex H/2totheReport oftheTechnical Committee ’s7thSession;
thedetailed discussion atAnnex Aisreproduced inAnnex H/1tothatReport.G/RO/15
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Requests from theCommittee onRules ofOrigin
8. TheTechnical Committee tooknoteofthediscussions andrequests oftheCommittee atits
meeting on6February asconveyed intheChairman ’sletter of7February 1997. Inparticular, it
welcomed thedecisions reached concerning theorigin ofgoods obtained orproduced onvessels, factory
ships, structures andinstallations outside acountry.
9. TheTechnical Committee welcomed thesupport oftheCommittee foritsplans toestablish
theManagement Planforthetreatment oftheoutstanding items under theHarmonization Work
Programme. TheTechnical Committee noted alsothecommon understanding thatthere wasstilla
large amount ofwork outstanding forbothcommittees andre-emphasised thecontinuing importance
ofmaintaining close collaboration between thetwocommittees.
10. TheTechnical Committee tooknoteoftherequests regarding theterm“obtained ”indefinition
1(i)ofthegoods thataretobeconsidered asbeing wholly obtained inonecountry andtheUSproposal
pursuant toArticle 9.3(a) oftheAgreement andofthediscussions concerning theneedforconsistency
andsimplicity oftherules. Itwasagreed todealwiththeissues raised aspartoftheTechnical
Committee ’sexamination oftheoverall consistency andcoherence oftheresults oftheHarmonization
Work Programme.
Report oftheSixth Session oftheTechnical Committee
11. TheReport oftheTechnical Committee ’sSixth Session wasformally adopted attheSeventh
Session. Itwasagreed, inthecontext ofthemanagement plan, thattheprocedure initiated atthe6
Session forexamination andadoption oftheFinal Report would beapplied fortheSeventh andfuture
Sessions. Consequently theenclosed copyoftheReport oftheSeventh Session isprovisional innature
andwillbereplaced bythefinalreport following itsformal approval atthenextsession.
Permanent Responsibilities
12. TheTechnical Committee tooknotethatithadfulfilled itspermanent responsibilities as
established bytheAgreement onRules ofOrigin including, inparticular, itsobligation under Annex
I,paragraph 1(d)toreview annually thetechnical aspects oftheimplementation andoperation ofParts
IIandIII.
Future Work
13. The8thSession oftheTechnical Committee willbeheldfrom 23Juneto4July1997. At
thissession theTechnical Committee willconclude thefirstexamination ofChapters 85-90andtake
uptheBasket 2decisions forChapters 25-27 and41-43. AnIntersessional group willalsobeheld
on22-25 April inTokyo, attheinvitation ofthedelegation ofJapan. Theproposed agenda forthis
meeting isreproduced intheCalendar ofMeetings atAnnex BtothisReport.G/RO/15
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ANNEX A
VIEWS AND DECISIONS OFTHE TECHNICAL COMMITTEE ONRULES OFORIGIN
TheChairman presented theworking document (Doc. 41.001) prepared bytheSecretariat,
which setoutthevarious measures suggested sofartospeed uptheTechnical Committee ’swork. In
atableappended toitwasaworking hypothesis foraprogramme for1997, consisting offourplenary
sessions andthree informal meetings. Heasked delegations fortheirreaction tothevarious measures
putforward inthatdocument.
TheTechnical Committee embarked onalengthy general discussion, fromwhich twomajor
points emerged :itwasrecognized thatdefining amethod forexamining Basket 2questions wasthe
keytodefining theworking method thattheTechnical Committee hadtoadopt inorder tocomplete
theharmonization programme within thestipulated time-frame; itwasessential already toarrange
acalendar ofmeetings (with themeeting typeandAgendas) inorder toprepare theaction planrequested
bytheCommittee. Several points ofagreement andsome differences ofopinion emerged from the
discussions.
General matters
(a) Initial examination ofproducts orspecific product sectors (firstreading): delegations agreed
thatthisshould becarried outsolely inplenary session;
(b) Holding ofinformal meetings: delegations recognized theconsiderable value ofsuchmeetings,
itbeing stipulated that:
- decisions should notbetaken atthose meetings;
- simultaneousinterpretationintheTechnicalCommittee’sworkinglanguagesshouldbeprovided;
- theresults oftheworkshould becirculated rapidly forexamination bytheTechnical Committee
from itssubsequent plenary session;
(c) Areturn toreading thereport onthelastdayofthesession :several delegations feltthatreading
thereport attheendofthesession should bemaintained since itallowed thenecessary amendments
tobemade much more efficiently; oneofthese delegations added thatinsuchacase, theThursday
afternoon andtheFriday morning generally leftfreefortheSecretariat toprepare thedraftreport could
begiven overtoinformal meetings; another delegation suggested thatthesessions beextended by
onedaysothatthereport could bereadontheSaturday; finally, theTechnical Committee decided
tomaintain theprocedure forexamining andapproving thereport, asestablished atitsSixth Session.
(d) Time-limit forMembers tosubmit proposals forrules:several delegations feltthat,toavoid
holding upthework excessively, itwasessential thatatime-limit beimposed foranynewproposals
forrules concerning products being examined forthefirsttime:themonth ofMaywasputforward
asadeadline. Other delegations feltthatnewproposals could notberefused, irrespective ofwhen
theyweresubmitted, since thatwould goagainst theprinciple ofconsensus laiddown intheRules
ofProcedure.
Discussion ontheworking method
(I) Method forexamining Basket 2
Followingthediscussion,theTechnicalCommitteeacknowledgedthatthemethodforexamining
Basket 2wasprobably themostimportant aspect oftheworking method thathadtobeprepared. TheG/RO/15
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keyissuewasnotthenumber, frequency ornature ofthemeetings, buttheapproach toquestions relating
toBasket 2goods. Inthecourse ofafar-reaching exchange ofviews, theTechnical Committee
considered thefollowing points :
(a) Where there wasnoconsensus ontheruletobeadopted foraproduct orproduct sector, a
detailed report should besenttotheCommittee :thiswasapproved bydelegations asawhole.
(b) Order forexamining theHSheadings orsubheadings inBasket 2:theywould beexamined
intheorder oftheChapters adopted attheSecond Session forthefirstreading, (seeDocument 39.488,
Annex F/2):thiswasapproved bydelegations asawhole.
(c) Preparationbydelegations:delegationsshouldbeinpossessionofallthetechnicaldatanecessary
tobackuptheirownproposals andbefullyprepared toconsider anyalternative proposals; hence,
asfaraspossible theyshould have completed their internal consultations before thestartofthe
discussions: thiswasapproved bydelegations asawhole.
(d) Secretariat preparation ofanalysis documents :theSecretariat would examine thegoods by
Chapter orgroup ofChapters inorder toidentify theprincipal technical questions tobedealt with
inBasket 2;these documents would taketheform oftables setting outtheoperation concerned
(column 1),thequestion raised (column 2),alistoftheheadings orsubheadings forwhich thequestion
arose (column 3),andthenames ofthedelegations required toprovide information tobackuptheir
proposals (technical documentation and/or description ofthesuggested supplementary criteria)
(column 4):thiswasapproved bydelegations asawhole.
(e) Thedelegations (referred toincolumn 4oftheabove-mentioned documents) should send
additional information assoonaspossible toenable theSecretariat toprepare summary documents
andtogiveMembers timetoexamine thecomplete dossier before thediscussions began: thiswas
approved bydelegations asawhole.
(f) Setting atime-limit forsubmission ofcontributions andsamples concerning either goods being
examined forthefirsttimeorgoods already examined :some delegations, putting efficiency first,
favoured relatively strict compliance withthedeadlines, which meant thatproposals submitted late
could notbetaken intoconsideration; several other delegations feltthatsome flexibility wasneeded,
pointing outthatthecontribution ofnewinformation could prove useful forprogressing aquestion
incertain specific cases. TheChairman saidthatitwasessentially aquestion ofavoiding asituation
where toomany newdocuments were produced late,asthatwould slowdown thediscussions.
(g) Refusal ofanygeneral reservation notbacked upbytechnical arguments: thiswasapproved
byalldelegations.
(h) Time-limit forentering reservations: certain delegations feltthatthere should beatime-limit
forentering reservations inorder nottoblock thetaking ofdecisions fortoolong, particularly inrespect
ofBasket 2;otherdelegations considered, however, thateachdelegation should havetherighttoreserve
itsposition untiltheendoftheprocess, failing which theprinciple ofconsensus adopted bytheTechnical
Committee would becompromised.
(i) Authorization fortheSecretariat tocontact administrations, where deemed useful, withaview
tocorrecting anytechnical errors itmight detect intheproposals ortotrying toharmonize orbring
closer together proposals thatdidnotdiffer fundamentally insubstance: thiswasapproved byall
delegations.G/RO/15
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(j) Examination ofproposed rulesinvolving supplementary criteria: although, strictly speaking,
these criteria came under Phase IIIofthework programme, itwassuggested thattheybeexamined
during theBasket 2discussions onchange oftariffclassification; thatdiscussion would therefore have
adualnature, i.e.aparallel study ofPhases IIandIIIofthework programme :thiswasapproved
byalldelegations.
Themeasures finally adopted forpreparing themethod ofexamining Basket 2aresetoutin
Annex H/2tothisReport.
(II) Organization andtimetable ofwork for1997
Onthebasisofstatements bytheWCO Secretary General andDeputy Secretary General, the
Technical Committee considered howtoincrease itsworkcapacity during 1997: theWCO wasprepared
todoitsutmost toenable theTechnical Committee tocomplete itsworkprogramme within thestipulated
timeframe. TheWCO specified, interalia,themaximum number ofhours thattheteams ofinterpreters
could work andcertain conditions regarding theirwork aswellasthepossibilities forextending the
number andlength oftheTechnical Committee 'ssessions: anadditional week would bepossible for
theEighth Session inMay; atwoorthree week session could beheldinJuly; athirdweek could be
added totheSeptember session; twofurther two-week sessions werepossible inOctober andNovember.
Inaddition, othersmaller meeting rooms could beassigned totheTechnical Committee, forother types
ofmeeting, ifnecessary.
There wasdetailed discussion ofthefollowing points :
(a) Extending theTechnical Committee 'sdaily working hours inorder appreciably toincrease
theactual working time. Thefollowing working hours were adopted:
- Amorning session from9a.m.to1p.m.(except Monday morning :from10a.m..to 1p.m.);
- Anafternoon session from 2.30p.m.to7p.m.(except Fridays: 2:30p.m.to6p.m.).
(b) Useofthedual-track process :
Thisformula, which entailed holding twomeetings simultaneously (e.g.aninformal meeting
atthesame timeasanofficial/session), wasjudged necessary bycertain delegations inorder tocarry
outthework successfully. However, theTechnical Committee wasunable toreach agreement onthis
proposal sinceseveral otherdelegations feltthatitwould beawkward toholdtwosimultaneous meetings
forthefollowing reasons:
- alackofdelegates might prevent them from taking partinoneortheother ofthemeetings;
- theAgendas would needtobearranged insuchawaythatnodelegation would havestrong
reasons toattend bothmeetings; thatwould notalways beeasy.
(c) Increasing thenumber andlength ofplenary sessions:
Inresponse totheWCO 'soffer, theTechnical Committee examined thepossibility ofextending
certain plenary sessions tothree weeks, taking account oftheWCO 'scalendar ofmeetings. Several
delegationsfavouredsuchextensionswhichtheyconsideredessentialifthetime-framefortheprogramme
wastoberespected, bearing inmind thevolume ofwork stilltobecarried out.Other delegations
saidthatsuchalongperiod away fromtheirhome administration would beaproblem andthatmeetings
tooclose together meant thatitwasnotalways possible tohaveproperly prepared dossiers: inthis
respect, athirdmeeting week inSeptember seemed themostappropriate solution. Thequestion alsoG/RO/15
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arose astowhether apossible thirdweek would constitute anextension oftheplenary session orbe
aninformal meeting tagged ontoanofficial session.
Aspecific discussion ensued onthepossibilities foraplenary session inMaysupplemented
byaninformal meeting (total ofthreeweeks), andafurther plenary session (twoweeks) inJuly. Several
delegations were opposed tothisprogramme ofmeetings forthereasons already mentioned above.
Some delegations acknowledged thatsuchaprogramme might beuseful but, given thedifficulties
itwould entail forcertain delegations, theyfinally rallied totheviews ofthelatter. TheDelegation
oftheUnited States, though appreciating thedifficulties encountered bycertain delegations, nevertheless
argued that,given thevolume ofthework stilltobeaccomplished andtheneedtorespect thedeadlines,
itwasessential tohavethese twoperiods ofmeeting time: theMaymeeting would make itpossible
tocomplete the“first-reading ”examination oftheHSChapters andtheexamination ofcertain difficult
issues; theJulymeeting would provide theopportunity tobegin tackling theBasket 2questions and
toassess thedifficulties thattheTechnical Committee waslikely toencounter inthisrespect, prior
totheSeptember meeting. Intheabsence ofsupport from other delegations, theUnited States
Delegation accepted, bywayofacompromise, toaplenary session thatwould beheldfrom23June
to4July1997.
(d) Informal meetings andworking groups:
TheTechnical Committee agreed thatsuchmeetings wereextremely useful, indeed essential,
forthework'sprogress, provided however thattheAgendas weredrawn upverycarefully anddealt,
inparticular, withdisputed orhighly technical points where consensus wasdifficult toachieve.
TheDelegation ofJapan confirmed itsoffer toholdaworking group inJapan inApril; the
Technical Committee approved thatmeeting inprinciple andexpressed itsgratitude totheDelegation
ofJapan fortheinvitation. During thediscussion toestablish theAgenda forthatinformal meeting,
theTechnical Committee endeavoured toselect topics giving risetoparticular difficulties relating either
tospecific products ortogeneral matters orquestions ofmethod.
TheDelegation ofCanada alsooffered itsassistance totheTechnical Committee, suggesting
thataninformal meeting beheldinCanada inAugust; theTechnical Committee would examine this
proposal.
Thecalendar andAgenda forthevarious meetings scheduled for1997 tocomplete thework
ontheharmonization programme wasadopted bytheTechnical Committee andistobefound in
Annex B.G/RO/15
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ANNEX B
MANAGEMENT PLAN FOR 1997
TheTechnical Committee, having assessed theremaining work needed tocomplete the
harmonization work programme, theavailability ofmeeting facilities andMembers ’schedules, agreed
toundertake theremaining work asfollows:
(1) The“firstreading ”ofproposals forproduct-specific rulesoforigin istobecompleted atthe
Eighth Session tobeheldfrom 23Juneto4July1997 inBrussels;
(2) Preparation fortheconclusion ofthePhase IIandPhase IIIwork onproduct-specific rules
oforigin, tobetaken upintheBasket 2discussions, istobegin immediately.
TheTechnical Committee istoconduct theBasket 2discussions during its8th,9thand10th
Sessions onthebasisofadditional proposals andinformation fromMembers andworking documents
prepared bytheSecretariat. TheNinth andTenth Sessions aretobeheldon8-26September and
24November -5December. Deadlines havebeenestablished assetoutinthecalendar below.
Thefollowing Modalities oftheMethod ofWork forBasket 2wereagreed bytheTechnical
Committee:
Delegations should undertake allnecessary consultations soastobeabletocome toBasket 2
sessions withalltechnical dataneeded tosupport theirposition andbeabletofullyconsider
alternative proposals;
Technicalcontributions,includingnewproposalspresentedforthefirsttime,mustbeintroduced
bytheagreed deadlines. Technical information received aftertherelevant deadline willnot
betranslated norincluded intheworking documents prepared bytheSecretariat.
Reservations willnotbeaccepted, unless backed upbytechnical arguments;
TheSecretariat wasinstructed thatinthepreparation ofBasket 2working documents itconsult
withadministrations inorder toharmonise proposals thatarenotdifferent insubstance and
clarify thereasons forexisting differences; ifnecessary andpossible Secretariat willprovide
illustrative scenarios ofapplication ofalternative origin criteria;
Consideration ofproposals forsupplementary criteria forspecific products orproduct sectors
willfollow immediately theconclusion oftheexamination anddecisions ontheapplicability
ofchange oftariff classification. Drafting difficulties canbereferred tolaterdiscussions.G/RO/15
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Calendar ofMeetings April toDecember 1997
TheTechnical Committee agreed toholdthefollowing meetings in1997:
A. Intersessional Group, Sponsored byJapan
22-25 April, Tokyo
Agenda
1. Product-Specific Rules
(a) Watches andClocks (Chapter 91)
(b) Steel Articles (Chapter 72-73)
2. Overall Architectural Design, Terminology
(a) Terminology issues: howtoarticulate rulesforeachofthegoods currently described
as“WO/CC ”inaccordance withthe“Ottawa ”language.
(b) Todefine keyconcepts suchas“obtained ”,“produced ”,“manufactured ”.
(c) Tolookatstructure oftheoverall document toensure user-friendliness andeaseof
application.
3. Management oftheRemainder oftheWork Programme
Further discussion ofthemethod ofexamination oftheBasket 2items tofacilitate thedecisions
inBrussels, including: theroleoftheSecretariat inpreparing Basket 2working documents; theuse
ofillustrative scenarios toshow theapplication ofalternative origin criteria.
B. 8thSession oftheTechnical Committee
23Juneto4July, Brussels3
Agenda
Product Specific Rules: FirstReading ofChapters 85-90
Examination ofRecommendations from Tokyo Intersessional Group
Basket 2/Phase III:Chapters 25-27, 41-43.
Architecture, Terminology andGeneral Rules
Related deadlines forSecretariat andforMembers:
Secretariat listofBasket 2issues andinformation required -7March
Proposals andinformation tobesupplied byMembers -11April
Working documents produced bySecretariat -9May
Translation, printing andmailing -23May
3Beginning withthe8thSession, working hours forplenary sessions areextended to9.00-13.00 and14.30 -19.00.G/RO/15
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C. Proposed Intersessional Group, Sponsored byCanada
August (dates tobedecided), Ottawa
Agenda (tobedecided during 8thSession ofTCRO)
D. 9thSession oftheTechnical Committee
8-26September, Brussels3
Agenda
Basket 2/Phase III:Chapters 44-49, 64-71, 91-97, 72-81, 1-24, 28-40
Related deadlines forSecretariat andforMembers:
Secretariat listofBasket 2issues andinformation required -15April
Proposals andinformation tobesupplied byMembers -15June
Working documents produced bySecretariat -15July
Translation, printing andmailing -1August
E. 10thSession oftheTechnical Committee
24November -5December, Brussels3
Agenda
1. Basket 2/Phase III:Chapters 50-63, 82-90;
2. Final examination ofthework results
Related deadlines forSecretariat andforMembers:
Secretariat listofBasket 2issues andinformation required -8June
Proposals andinformation tobesupplied byMembers -20July
Working documents produced bySecretariat -24September
Translation, printing andmailing -8October
3Beginning withthe8thSession working hours fortheplenary sessions areextended to9.00-13.00 and14.30 -19.00.