Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697721950430.pdf (Dominica)
INTRODUCTION TO RULES OF ORIGIN 1 INTRODUCTION TO RULES OF ORIGIN Objective: To raise awareness and build capacity in the area of Rules of Origin; 2 INTRODUCTION TO RULES OF ORIGIN Enabling Objectives: 1.

To provide basic and technical training on Rules of Origin; 2.

To enhance the understanding of Rules of Origin with regards to various treaties; 3 INTRODUCTION TO RULES OF ORIGIN Enabling Objectives Con’t: 3.
To facilitate the implementation of Rules of Origin in Caricom Countries; 4 INTRODUCTION TO RULES OF ORIGIN What are “Rules of Origin”: The Laws, Regulations and Administrative Arrangements used by individual states to determine the country of origin of goods?

5 INTRODUCTION TO RULES OF ORIGIN These rules dictate the sufficient level of processing of a product that must take place in a given exporting country in order for the product to be considered as having its origin in that country ?
6 INTRODUCTION TO RULES OF ORIGIN A universal understanding of the concept of origin would have clear benefits in terms of trade facilitation 7 INTRODUCTION TO RULES OF ORIGIN “TRADE FACILITATION” Provisions to expedite the movement of goods through borders by enhancing the efficiency of Customs and other border agencies 8 INTRODUCTION TO RULES OF ORIGIN Customs response towards Trade Facilitation: Application of modern customs techniques e.g.
risk management Application of simplified customs procedures Implementation of a single administrative document (SAD) 9 INTRODUCTION TO RULES OF ORIGIN Customs and Trade Facilitation: Upgrade of customs automated systems e.g.

Asycuda World Review of national legislation to reflect international standards e.g.
acceptance of electronic information including payments 10 INTRODUCTION TO RULES OF ORIGIN Customs and Trade Facilitation: Provision of and access to information electronically and otherwise Development of technical assistance data base Provision for formal appeal process 11 INTRODUCTION TO RULES OF ORIGIN Customs and Trade Facilitation: Implementation of SAFE framework of standards including the introduction of reforms and the acquisition of equipment for deployment at ports of entry for non- intrusive detection methods 12 INTRODUCTION TO RULES OF ORIGIN Why do we need “Rules of Origin” ?
Non – preferential purposes Preferential purposes ?

13 INTRODUCTION TO RULES OF ORIGIN Non – preferential Rules of Origin: Used for determining economic nationality of products subject to commercial policy measures such as: Tariff Quotas Anti-Dumping For statistical purposes For Government procurement ?
14 INTRODUCTION TO RULES OF ORIGIN In 1974, at the Kyoto Convention, guidelines for simplification and harmonization of customs procedures entered into force 15 INTRODUCTION TO RULES OF ORIGIN An agreement was reached to introduce harmonized non- preferential rules of origin within the World Trade Organization (WTO) framework; 16 INTRODUCTION TO RULES OF ORIGIN Harmonization of non-preferential rules of origin: why the logic?
Administrative requirements for proving origin take time and constitute costs ( non tariff barriers for traders) ?

17 INTRODUCTION TO RULES OF ORIGIN Why the logic Con’t: Different rules in different trading partner countries add to these costs; Divergence also means uncertainty and unpredictability Which can lead to trade disputes ?
18 INTRODUCTION TO RULES OF ORIGIN Harmonization of non-preferential rules of origin con’t: The WTO Agreement on rules of origin (articles 2-3) requires members to ensure that: Their rules of origin are transparent 19 INTRODUCTION TO RULES OF ORIGIN They do not have restricting, distorting or disruptive effects on international trade con’t They are administered in a consistent, uniform, impartial and reasonable manner ?
20 INTRODUCTION TO RULES OF ORIGIN They are based on a positive standard con’t Article 5 - requires members to notify its rules of origin and any modifications ?

21 INTRODUCTION TO RULES OF ORIGIN Preferential Rules of Origin: Used for determining the nationality/regionality of a product subject to preferential tariff rates within a FTA/RTA ?
22 INTRODUCTION TO RULES OF ORIGIN Preferential Rules of Origin: There are no internationally agreed upon rules of origin for preferential purposes; 23 INTRODUCTION TO RULES OF ORIGIN Preferential Rules of Origin: Each “Free Trade Area”/”Regional Trade Area” administering a trade agreement – presently establishes its own rules of origin 24 INTRODUCTION TO RULES OF ORIGIN Preferential Rules of Origin: The purpose of preferential rules of origin is to prevent trade deflection; 25 INTRODUCTION TO RULES OF ORIGIN Why do we need to understand Preferential Rules of Origin: They discriminate between goods They need to be fulfilled for being able to utilise trade agreements All administrative requirements create burdens and can distort trade 26 INTRODUCTION TO RULES OF ORIGIN con’t Defining a goods nationality becomes more difficult as globalization advances They are often used as a development tool 27 INTRODUCTION TO RULES OF ORIGIN Important differences between non- preferential and preferential rules of origin: Non-preferential rules of origin cover all goods – HS chapters (1 – 97) Preferential rules do not have to; 28 INTRODUCTION TO RULES OF ORIGIN Non-preferential rules ultimately con’t leads to a country of origin - while preferential rules only have to determine whether the goods qualify for preferential treatment; 29 INTRODUCTION TO RULES OF ORIGIN con’t Preferential rules have economic significance to a higher degree than non-preferential rules; 30 INTRODUCTION TO RULES OF ORIGIN Conclusions: Rules of origin are highly complex – both for traders and customs officials Restrictive rules often have a negative effect on trade 31 INTRODUCTION TO RULES OF ORIGIN Conclusions: con’t Regardless of their restrictiveness, divergent rules of origin are also barriers to trade; 32