RESTRICTED
WORLD TRADE G/RO/W/18
1November 1996
ORGANIZATION(96-4605)
Committee onRules ofOrigin
SECOND ANNUAL REVIEW OFTHE IMPLEMENTATION AND
OPERATION OFTHE AGREEMENT ONRULES OFORIGIN
Background Document bytheSecretariat
Thisworking document iscirculated bytheSecretariat inpreparation forthesecond annual
review oftheimplementation andoperation oftheAgreement onRules ofOrigin, tobeconducted
atthemeeting oftheCommittee onRules ofOrigin on22November 1996.
_______________
Article 6:1oftheAgreement onRules ofOrigin provides that"theCommittee shallreview
annually theimplementation andoperation ofPartIIandPartIIIofthisAgreement having regard to
itsobjectives". Themainobjectives oftheAgreement arethose listed inthepreambular paragraphs.G/RO/W/18
Page2
Thecontents ofthisdocument areasfollows:
Page
1. Members andObserver Status 3
2. Officers oftheWTO Committee onRules ofOrigin 4
3. Meetings oftheCommitteeon Rules ofOrigin 4
4. Harmonization ofrules oforigin 4
5. Notifications ofnational rules oforigin 8
6. Amendments, interpretations andrectifications ofthe
textoftheAgreement 8
7. Consultation anddispute settlement 8
8. Annual report totheCouncil forTrade inGoods 8G/RO/W/18
Page3
1. MEMBERS AND OBSERVER STATUS
(a) MEMBERS (125)
Antigua andBarbuda
Argentina
Australia
Austria
Bahrain
Bangladesh
Barbados
Belgium
Belize
Benin
Bolivia
Botswana
Brazil
Brunei Darussalam
Burkina Faso
Burundi
Cameroon
Canada
Central African Republic
Chad
Chile
Colombia
Costa Rica
Côted'Ivoire
Cuba
Cyprus
Czech Republic
Denmark
Djibouti
Dominica
Dominican Republic
EC
Ecuador
Egypt
ElSalvador
Fiji
Finland
France
Gabon
Gambia
Germany
GhanaGreece
Grenada
Guatemala
Guinea Bissau
Guinea, Rep.of
Guyana
Haiti
Honduras
Hong Kong
Hungary
Iceland
India
Indonesia
Ireland
Israel
Italy
Jamaica
Japan
Kenya
Korea
Kuwait
Lesotho
Liechtenstein
Luxembourg
Macau
Madagascar
Malawi
Malaysia
Maldives
Mali
Malta
Mauritania
Mauritius
Mexico
Morocco
Mozambique
Myanmar
Namibia
Netherlands
NewZealand
Nicaragua
NigeriaNorway
Pakistan
Papua NewGuinea
Paraguay
Peru
Philippines
Poland
Portugal
Qatar
Romania
Rwanda
Saint KittsandNevis
Saint Lucia
Saint Vincent &Gren.
Senegal
Sierra Leone
Singapore
Slovak Republic
Slovenia
Solomon Islands
South Africa
Spain
SriLanka
Suriname
Swaziland
Sweden
Switzerland
Tanzania
Thailand
Togo
Trinidad andTobago
Tunisia
Turkey
Uganda
United Arab Emirates
United Kingdom
United States
Uruguay
Venezuela
Zambia
ZimbabweG/RO/W/18
Page4
(b) OBSERVER GOVERNMENTS (36)
Albania
Algeria
Angola
Armenia
Belarus
Bulgaria
Cambodia
China
Congo
Croatia
Estonia
Former Yugoslav Rep. of
MacedoniaGeorgia
Jordan
Kazakstan
Kyrgyz Rep.
Latvia
Lithuania
Moldova
Mongolia
Nepal
Niger
Oman
Panama
Russian FederationSaudi Arabia
Seychelles
Sudan
Taipei, Chinese
Tonga
Ukraine
Uzbekistan
Vanuatu
VietNam
Zaire
(c) OBSERVER INTERNATIONAL ORGANIZATIONS (6)1
IMF
OECD
UNCTAD
World Bank
World Customs Organization
International Textiles andClothing Bureau
2. OFFICERS OFTHE COMMITTEE ONRULES OFORIGIN
Chairman: Mr.C.Osakwe (Nigeria)
Vice-Chairman: Mrs. A.Ivanka (Hungary)
3. MEETINGS OFTHE COMMITTEE ONRULES OFORIGIN
During thereporting period, theCommittee onRules ofOrigin (theCommittee) hasheldfour
formal meetings on1February, 10May, 13September, 11October [and22November] 1996. The
minutes ofthesemeetings arecontained indocuments G/RO/M/5, G/RO/M/6, G/RO/M/7, G/RO/M/8
[andG/RO/M/9 (tobeissued),] respectively.
4. HARMONIZATION OFRULES OFORIGIN
4.1 TheAgreement setsoutathree-year Work Programme fortheharmonization ofnon-preferential
rulesoforigin tobeundertaken bytheMinisterial Conference inconjunction withtheWCO Technical
Committee onRules ofOrigin (theTechnical Committee). InJuly1995theCommittee sentarequest
totheTechnical Committee toinitiate theHarmonization Work Programme which istobecompleted
byJuly1998.2
1Pending thefinalization oftheongoing consultations bytheChairman oftheGeneral Council ontheapplication of
guidelines forobserver status forinternational intergovernmental organizations, these sixorganizations areinvited onan
adhocbasis.
2DecisionsandactionstakenbytheCommi tteeduring1995 concer ningtheHarmonizationWorkProgramme arecontained
indocuments G/RO/M/2, 3and4.TheFirst Report from theTechnical Committee iscontained inG/RO/2.G/RO/W/18
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4.2 Inconformity withparagraph 2(c)(ii) ofArticle 9oftheAgreement, theTechnical Committee
submitted, on20January 1996, theSecond Report totheCommittee (G/RO/4).
4.3 Atitsmeeting on1February 1996 (G/RO/M/5), theCommittee:
- agreed thattheExplanatory Notes totheorigin definitions inAnnexes AandBofthe
FirstReport ontheResults oftheHarmonization Work Programme should belegally
binding. Itwasalsoagreed thattheCommittee should request theTechnical Committee
inBrusselstorevisittheExplanatoryNotesonthebasisofthisagreement(G/RO/W/11);
- narrowed down thedefinition ofscrap andwaste. Theproblem ofparts recovered
fromscrap andwaste articles wasrecognized asbeing different from theproblem of
articles. Consequently, itwasagreed thattheproblem ofparts should beurgently
addressed atatechnical levelintheTechnical Committee inBrussels (G/RO/W/11);
- different views wereexpressed onthequestion ofdefinition 2ofAnnex AtotheFirst
Report oftheTechnical Committee, i.e.theorigin ofproducts resulting fromactivities
ofvessels orfactory ships outside acountry; analternative drafttextwasformulated
asapossible basis foranagreed definition;
- discussed aproposal (G/RO/W/10) regarding theAnnex foreseen under Article 9.4
oftheAgreement onRules ofOrigin which would contain theresults ofthe
Harmonization Work Programme. Theproposal waswelcomed asbeing avaluable
contribution. Itwasrecognized thatthiswasanissue thatrequired urgent treatment,
andagreed thattheproposal aswellasviews expressed bymembers oftheCommittee
onthatmatter should betransmitted totheTechnical Committee (G/RO/W/11);
- tooknoteoftheSecond Report from theTechnical Committee.
4.4 TheTechnical Committee submitted, on16April 1996, theThird Report totheCommittee
onRules ofOrigin (G/RO/5).
4.5 Atitsmeeting on10May1996 (G/RO/M/6), theCommittee:
- decided toestablish anIntegrated Negotiating Textthatwillbecome acommon working
document andreference point fortheTechnical Committee inBrussels andthe
Committee inGeneva. Inreaching thisdecision, itwasnoted thatsuchatextwould
enhance efficiency anddiscipline inthenegotiating process, assist delegations,
particularly theircapitals, inassessing progress inthenegotiations andproblems that
existand,finally, alsoassist inbuilding abridge ofunderstanding between theTechnical
Committee inBrussels andtheCommittee inGeneva. TheIntegrated Negotiating Text
willgiveafactual account ofallstages ofnegotiations, including allreservations by
Members. TheCommittee alsoagreed onthemodalities asfollows:
(i) theIntegrated Negotiating Textwillbecompiled inaconsolidated, coherent
textasaWTO document andwould include thefollowing sections: theoverall
architectural design fortheHarmonization Work Programme; anannex of
definitions forgoods considered asbeing wholly obtained inonecountry; an
annex ofproduct-specific rules; andanannex forminimal operations and
processes which donotbythemselves confer origin. Thesections willbe
obtained byextraction fromorreference totherelevant documents emerging
from thework incourse intheTechnical Committee;G/RO/W/18
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(ii) additions ordeletions totheIntegrated Negotiating Textshallbeeffected by
theCommittee working onthebasis ofconsensus;
(iii) theChairman oftheCommittee, together withtheWTO Secretariat, shall
produce thisIntegrated Negotiating Textforearlytransmission totheTechnical
Committee intimeforitsFourth Session;
- considered therecommendation from theTechnical Committee onthedraftoverall
architectural design fortheHarmonization Work Programme, contained intheThird
Report oftheTechnical Committee onRules ofOrigin. TheCommittee alsonoted
theneedforbrevity,andconsistencyofthedraftoverallarchitecturewiththeAgreement
onRules ofOrigin. Members oftheCommittee alsoemphasized theneedforthe
Technical Committee tocontinue todevelop allpartsofthedraftoverall architecture
andtofillinthegaps, andaddnewelements, ifrequired, asitswork progresses.
Itwasagreed thatthedraftsubmitted totheCommittee presented avalidbasisforthe
continuation oftheHarmonization Work Programme;
- approved thetextsoforigin definitions 1(a),1(b), 1(c),1(d), 1(e)and1(f)andthe
legallybindingnotestothosedefinitionsinAnnex2totheThirdReport.Withreference
todefinition 1(i),itwasagreed thattheTechnical Committee should berequested to
examine themeaning oftheterm"produced" (G/RO/W/14);
- tooknoteofthereport bytheTechnical Committee concerning thenotes fordefinitions
ofminimal operations andprocesses; thereport states thattheTechnical Committee
willre-examine thenotes tomake them legally binding, astheharmonization work
develops, andthatthedefinitions ofminimal operations orprocesses andthenotes
willonlybefinally adopted attheendoftheWork Programme.
4.6 Atthatmeeting, theCommittee continued alsothediscussion onthequestion ofpartsandraw
materials recovered from articles collected which cannolonger perform theiroriginal purpose nor
arecapable ofbeing restored orrepaired; andonthequestion oftheorigin ofproducts resulting from
activities ofvessels, factory ships orinstallations outside acountry.
4.7 TheCommittee alsonoted thestatus ofwork bytheTechnical Committee inrespect ofPhase
IIoftheHarmonization Work Programme, particularly ascontained inAnnexes C1andC2,D1and
D2,andE1andE2totheReport oftheThird Session oftheTechnical Committee. Itwelcomed the
progress made todate, inparticular agreements onorigin rules elaborated onthebasis ofchange in
tariff classification forcertain specific products. Itencouraged theTechnical Committee tocontinue
increasing itsefforts, taking account ofthetime-frame established fortheHarmonization Work
Programme, particularly theperiod setaside forPhase IIoftheWork Programme forproduct-specific
rules, andconsequently totakeallnecessary steps toensure timely adherence tothedifferent phases
oftheWork Programme. TheCommittee considered different presentational approaches forproposals
byMembers attheTechnical Committee inBrussels under Phase IIoftheWork Programme. While
therewasconsensus onthenecessity forastandardized presentational format, nonetheless itwasagreed
thattheappropriate presentational format wassubject tofurther discussions. TheCommittee urged
early agreement onastandardized format forreasons, interalia,ofefficiency andclarity.
4.8 TheTechnical Committee submitted, on7June1996, itsFourth Report totheCommittee
(G/RO/6).
4.9 Atitsmeeting on13September 1996 (G/RO/M/7), theCommittee:G/RO/W/18
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- noted theFourth Report oftheTechnical Committee. Itwelcomed thereport made
bytheChairman oftheTechnical Committee, present atthemeeting, inparticular with
regard totheemphasis oninformal procedures andapproaches being developed to
accelerate progress under Phase IIoftheHarmonization Work Programme. Members
werealsosatisfied withtheemphasis onthedevelopment ofcommon terminologies
andapproaches tofacilitate work inPhase II.Inthisregard, theinformal meeting
inOttawa waswelcomed. TheCommittee wasinformed thattheFifthSession would
giveconsideration totheIntegrated Negotiating Textanditscontents. Asaresult of
earlier informal consultations, theCommittee alsoagreed totransmit totheTechnical
Committee therequest tofurther examine andclarify withaviewtopossibly defining
thefollowing terms when used inthecontext ofwholly obtained orproduced:
processing, further processing andmanufacturing;
- recalling itsletters dated 20July1995 and21May 1996 totheChairman ofthe
Technical Committee, andnoting thatthree meetings hadalready beenscheduled for
1996, reaffirmed thenecessity ofadhering totheprovisions oftheAgreement with
aviewtosubmitting theresults ofitswork totheCommittee atleastonaquarterly
basis. Tothisend,theCommittee requested theTechnical Committee totakeaccount
oftheprovisions oftheAgreement.
4.10 Atthatmeeting, theCommittee continued alsothediscussion onthequestion oftheorigin
ofgoods obtained orproduced onvessels, factory ships, structures andinstallations outside acountry;
itconsidered aproposal bytheUnited States pursuant toArticle 9.3(a) oftheAgreement (G/RO/W/15);
andtooknoteoftheIntegrated Negotiating TextfortheHarmonization Work Programme (G/RO/W/13,
G/RO/W/13/Rev.1).
4.11 Atitsmeeting on11October 1996, theCommittee continued thediscussion onthequestion
oftheorigin ofgoods obtained orproduced onvessels, factory ships orinstallations outside acountry;
andontheUnited States 'proposal pursuant toArticle 9.3(a) oftheAgreement.
5. NOTIFICATIONS OFNATIONAL RULES OFORIGIN
(i) Non-preferential rules oforigin
5.1 Article 5:1oftheAgreement provides thateachMember shallprovide totheSecretariat, within
90daysafterthedateofentry intoforce oftheWTO Agreement forit,itsrules oforigin, judicial
decisions andadministrative rulings ofgeneral application relating torulesoforigin ineffect onthat
date. Ifbyinadvertence aruleoforigin hasnotbeenprovided, theMember concerned shallprovide
itimmediately afterthisfactbecomes known. Listsofinformation received andavailable within the
Secretariat shallbecirculated totheMembers bytheSecretariat.
5.2 Article 5.2oftheAgreement onRules ofOrigin provides thatduring theperiod referred to
inArticle 2,Members introducing modifications, other thandeminimis modifications, totheirrules
oforigin orintroducing newrulesoforigin, which, forthepurpose ofthisArticle, shallinclude any
ruleoforigin referred toinparagraph 1andnotprovided totheSecretariat, shallpublish anotice to
thateffect atleast60daysbefore theentry intoforce ofthemodified ornewruleinsuchamanner
astoenable interested parties tobecome acquainted withtheintention tomodify aruleoforigin or
tointroduce anewruleoforigin, unless exceptional circumstances arise orthreaten toarise fora
Member. Inthese exceptional cases, theMember shallpublish themodified ornewruleassoonas
possible.G/RO/W/18
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5.3 Notifications relating tonon-preferential rulesoforigin havebeenreceived from51Members
ofwhich 22Members notified thattheydonothavenon-preferential rulesoforigin. Fifty-nine Members
havenotnotified (seeAnnex).
(ii) Preferential rules oforigin
5.4 Paragraph 4ofAnnex IIoftheAgreement onRules ofOrigin provides thatMembers shall
provide totheSecretariat promptly theirpreferential rulesoforigin, including alisting ofthepreferential
arrangements towhich theyapply, judicial decisions, andadministrative rulings ofgeneral application
relating totheir preferential rules oforigin ineffect onthedateofentry intoforce oftheWTO
Agreement fortheMember concerned. Members shallprovide anymodifications totheirpreferential
rules oforigin ornewpreferential rules oforigin assoon aspossible totheSecretariat. Lists of
information received andavailable withtheSecretariat shall becirculated totheMembers bythe
Secretariat.
5.5 Notifications relating topreferential rulesoforigin havebeenreceived from51Members, of
which oneMember notified thatitdoesnothavepreferential rulesoforigin. Fifty-nine Members have
notyetnotified theirpreferential rules oforigin (seeAnnex).
_______________
5.6 Atitsmeeting of1February 1996, theCommittee adopted aprocedure todealwithqueries
byMembers inrespect ofnational legislations; suchqueries should becommunicated totheSecretariat
tenworking daysinadvance ofthemeeting atwhich theywillberaised (G/RO/M/5).
6. AMENDMENTS, INTERPRETATIONS AND RECTIFICATIONS OFTHETEXT OFTHE
AGREEMENT
During theyearunder review theCommittee hasnotdealtwithanyofthese matters.
7. CONSULTATION AND DISPUTE SETTLEMENT
TheSecretariat isnotaware ofanyMember thathasrequested consultations under Article 7
oftheAgreement. Theprovision ofArticle 8hasnotbeenresorted to.
8. REPORT TOTHE COUNCIL FOR TRADE INGOODS
TheCommittee adopted itsreport totheCouncil forTrade inGoods (G/L/119) atitsmeeting
on11October 1996.G/RO/W/18
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ANNEX
1. Members thathavenotified Non-Preferential Rules ofOrigin
Argentina (G/RO/N/2 &10)
Australia (G/RO/N/1)
Canada (G/RO/N/1)
Colombia (G/RO/N/1)
Cuba (G/RO/N/3)
Czech Rep.(G/RO/N/2)
EC(G/RO/N/1)
Hong Kong (G/RO/N/1)
Hungary (G/RO/N/2)
Japan (G/RO/N/1)Korea (G/RO/N/1)
Madagascar (G/RO/N/11)
Malta (G/RO/N/4)
Mexico (G/RO/N/12)
Morocco (G/RO/N/2)
NewZealand (G/RO/N/1)
Norway (G/RO/N/8)
Peru(G/RO/N/4 &5)
Poland (G/RO/N/8)
Romania (G/RO/N/1)Senegal (G/RO/N/10)
SlovakRepublic(G/RO/N/1)
Slovenia (G/RO/N/5 &7)
South Africa (G/RO/N/3)
Switzerland (G/RO/N/4)
Tunisia (G/RO/N/7)
Turkey (G/RO/N/8)
US(G/RO/N/1 &6)
Venezuela (G/RO/N/1 &10)
2. Members thathavenotified thattheydonothaveNon-Preferential Rules ofOrigin
Bolivia (G/RO/N/9)
BruneiDarussalam
(G/RO/N/5)
Chile (G/RO/N/6)
Costa Rica(G/RO/N/1)
DominicanRep.(G/RO/N/9)
ElSalvador (G/RO/N/10)
Honduras (G/RO/N/3)Iceland (G/RO/N/5)
India (G/RO/N/1)
Israel (G/RO/N/13)
Jamaica (G/RO/N/4)
Kenya (G/RO/N/9)
Malaysia (G/RO/N/6)
Mauritius (G/RO/N/1)
Nicaragua (G/RO/N/10)Philippines (G/RO/N/6)
Singapore (G/RO/N/3)
Thailand (G/RO/N/1)
Trinidad &Tob. (G/RO/N/7)
Uganda (G/RO/N/13)
United Arab Emirates (G/RO/N/13)
Uruguay (G/RO/N/12)
3. Members thathavenotnotified Non-Preferential Rules ofOrigin
Antigua andBarbuda
Bahrain
Bangladesh
Barbados
Belize
Benin
Botswana
Brazil
Burkina Faso
Burundi
Cameroon
Central African Republic
Chad
Côted'Ivoire
Cyprus
Djibouti
Dominica
Ecuador
Egypt
FijiGabon
Gambia
Ghana
Grenada
Guatemala
Guinea Bissau
Guinea, Rep.of
Guyana
Haiti
Indonesia
Kuwait
Lesotho
Liechtenstein
Macau
Malawi
Maldives
Mali
Mauritania
Mozambique
MyanmarNamibia
Nigeria
Pakistan
Papua NewGuinea
Paraguay
Qatar
Rwanda
Saint KittsandNevis
Saint Lucia
SaintVincentandGrenadines
Sierra Leone
Solomon Islands
SriLanka
Suriname
Swaziland
Tanzania
Togo
Zambia
ZimbabweG/RO/W/18
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4. Members thathavenotified Preferential Rules ofOrigin
Argentina (G/RO/N/10 &12)
Australia (G/RO/N/1)
Bolivia (G/RO/N/1 &12)
Brazil (G/RO/N/12)
BruneiDarussalam
(G/RO/N/4)
Canada (G/RO/N/1, 6&8)
Chile (G/RO/N/6)
Colombia (G/RO/N/1 &12)
Côted'Ivoire (G/RO/N/11)
Cuba (G/RO/N/3)
Czech Rep.(G/RO/N/2)
Dominican Rep.(G/RO/N/5)
EC(G/RO/N/1)
Ecuador (G/RO/N/12)
ElSalvador(G/RO/N/10&11)
Honduras (G/RO/N/3 &10)Hungary (G/RO/N/2)
India (G/RO/N/1)
Indonesia (G/RO/N/4)
Israel (G/RO/N/13)
Jamaica (G/RO/N/4)
Japan (G/RO/N/6)
Kenya (G/RO/N/9)
Korea (G/RO/N/7)
Madagascar (G/RO/N/11)
Malaysia (G/RO/N/4)
Malta (G/RO/N/4)
Mauritius (G/RO/N/1)
Mexico (G/RO/N/12)
Morocco (G/RO/N/2)
New Zealand (G/RO/N/1)
Nicaragua (G/RO/N/10)
Norway (G/RO/N/8)Paraguay (G/RO/N/12)
Peru (G/RO/N/1 &12)
Philippines (G/RO/N/4)
Poland (G/RO/N/8)
Senegal (G/RO/N/10)
Singapore (G/RO/N/3 &4)
Slovak Republic (G/RO/N/1)
Slovenia (G/RO/N/5 &7)
Switzerland(G/RO/N/6&13)
Thailand (G/RO/N/1 &4)
Trinidad &Tob. (G/RO/N/7)
Tunisia (G/RO/N/7)
Turkey (G/RO/N/8)
US(G/RO/N/1, 6&12)
Uganda (G/RO/N/13)
Uruguay (G/RO/N/5)
Venezuela (G/RO/N/1 &12)
5. Member thathasnotified thatitdoes nothave Preferential Rules ofOrigin
Hong Kong (G/RO/N/1).
6. Members thathave notnotified Preferential Rules ofOrigin
Antigua &Barbuda
Bahrain
Bangladesh
Barbados
Belize
Benin
Botswana
Burkina Faso
Burundi
Cameroon
Central African Republic
Chad
Costa Rica
Cyprus
Djibouti
Dominica
Egypt
Fiji
Gabon
GambiaGhana
Grenada
Guatemala
Guinea Bissau
Guinea, Rep. of
Guyana
Haiti
Iceland
Kuwait
Lesotho
Liechtenstein
Macau
Malawi
Maldives
Mali
Mauritania
Mozambique
Myanmar
Namibia
NigeriaPakistan
Papua New Guinea
Qatar
Romania
Rwanda
St.Kitts &Nevis
Saint Lucia
Saint Vincent &Grenadines
Sierra Leone
Solomon Islands
South Africa
SriLanka
Suriname
Swaziland
Tanzania
Togo
United Arab Emirates
Zambia
Zimbabwe