G/RO/41
Page 1102
ISSUES FOR DECISION;  CHAPTERS 84 TO 90
Table of Contents
Part 1: List of unresolved issues submitted to the CRO for decision
Part 2: Generic issues for Chapters 84 to 90
Part 3: Product specific issues for Chapters 84 to 90
Part 4: Reorganised Chapter Rules and Notes for Chapters 84 to 90
Part 5: Product specific rules of origin provided in the matricesG/RO/41
Page 1103
PART 1  :  LIST OF UNRESOLVED ISSUES SUBMITTED TO THE CRO FOR DECISION
Chapters 84 to 90
ISSUE
NO.UNRESOLVED ISSUES SUBMITTED TO THE CRO FOR DECISION
Part 2:  Generic Issues:   Chapters 84 – 90
No.1:ORIGIN CONFERRING ASSEMBLY FOR GOODS OF CHAPTERS 84 TO 90
It should be noted that if Option A/1 is finally taken: i) the scope of the split (sub)heading to
address the parts to parts issue; ii) choice be tween CTH and CTSH to address the modification
issue should yet be finalised as substantive issues.  However, when the other options are taken
these issues become only a single terminology issue on which no technical discussion is needed.
No.2:GIR 2(a):  PRODUCTION OF COMPLETE OR FINISHED GOODS (INCLUDING SUB-
ASSEMBLY) FROM FORGED OR CAST BLANKS
No.3:GIR 2(a):  MANUFACTURE OF A FINISHED ARTICLE OR PART (INCLUDING SUB-
ASSEMBLY) FROM AN UNFINISHED ARTICLE OR PART OTHER THAN BLANK
No.4:GIR 2(a):  CHANGE OF CLASSIFICATION BY VIRTUE OF THE APPLICATION OF THE
SECOND PART OF GIR 2(A) - COLLECTION OF PARTS
No.5:GIR 2(a):  CHANGE OF CLASSIFICATION BY VIRTUE OF THE APPLICATION OF THE
SECOND PART OF GIR 2(A) - ASSEMBLY OF THE COLLECTED PARTS
No.6:CHANGE OF CLASSIFICATION BY VIRTUE OF PACKAGING OR REPACKAGING OF
GOODS
No.7:CHANGE OF CLASSIFICATION BY VIRTUE OF THE APPLICATION OF NOTE 4 TO
SECTION XVI OF THE HS (FUNCTIONAL UNITS)
No.8:CHANGE OF CLASSIFICATION BY VIRTUE OF: DEGRADATION BY AGEING OR
CONSUMPTION OR ANY OTHER REASON
No.9: CHANGE OF CLASSIFICATION BY VIRTUE OF: CHANGE OF USE
No.10:CHANGE OF CLASSIFICATION BY VIRTUE OF: RECERTIFICATION OR RETESTING
OF ARTICLES
No.11:ORIGIN OF A DISASSEMBLED OR RECOVERED PART OR A REMOVED ARTICLE
FROM THE GOOD THAT WOULD HAVE PERFORMED ITS ORIGINAL PURPOSE ORWOULD HAVE BEEN CAPABLE OF BEING RESTORED OR REPAIRED
No.12:ORIGIN OF A RECOVERED OR COLLECTED PART OR A REMOVED ARTICLE FROM
THE GOOD THAT CAN NO LONGER PERFORM ITS ORIGINAL PURPOSE NOR IS
CAPABLE OF BEING RESTORED OR REPAIRED (PARTS OR ARTICLES COVERED BY
THE WHOLLY OBTAINED GOODS DEFINITIONS)
[No.13: REASSEMBLY OF THE DISASSEMBLED GOODS]
Part 3:  Product specific issues
CHAPTER 84 :
No.14: ATTACHMENT OF ENGINES OR MOTORS TO PARTS
No.15:ATTACHMENT OF COMPRESSORS TO PARTS OF MECHANICAL APPLIANCES FOR
PROJECTING, DISPERSING OR SPRAYING LIQUIDS OR POWDERS, ETC. (8424.90)
No.16:USE OF MACHINE-TOOLS OF HEADINGS 84.58 THROUGH [84.63] [84.65] FOR THE
ASSEMBLY OF MACHINING CENTRES, UNIT CONSTRUCTION MACHINES (SINGLE
STATION) OR MULTI-STATION TRANSFER MACHINES
No.17:USE OF MACHINING CENTRES OR UNIT CONSTRUCTION MACHINES (SINGLE
STATION) FOR THE ASSEMBLY OF MULTI-STATION TRANSFER MACHINESG/RO/41
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ISSUE
NO.UNRESOLVED ISSUES SUBMITTED TO THE CRO FOR DECISION
No.18:MANUFACTURE OF NUMERICALLY CONTROLLED MACHINE-TOOLS OF HEADINGS
84.58, 84.59, 84.60 AND 84.62 FROM NON-NUMERICALLY CONTROLLED MACHINE-
TOOLS CLASSIFIED IN THE SAME HEADING
No.19:PRODUCTION OF CIPHERING EQUIPMENT WITH THE MANUFACTURING OF THE
CORRESPONDING PRINTED CIRCUIT BOARDS (HARDWARE) AND THE
INTEGRATION OF THE CIPHERING CAPABILITIES (SOFTWARE)
No.20:PRESENTATION OF DIGITAL AUTOMATIC DATA PROCESSING MACHINES
CLASSIFIED IN SUBHEADINGS 8471.49 (PRESENTED IN THE FORM OF SYSTEM)
FROM UNITS CLASSIFIED IN THE SAME HEADING
No.21:ASSEMBLY OF DIGITAL PROCESSING UNITS WHICH DO NOT CONTAIN IN THE
SAME HOUSING ANY OF THE STORAGE UNITS, INPUT UNITS OR OUTPUT UNITS
(EX 8471.50(A)) FROM ANY OT HER UNITS CLASSIFIED OTHER THAN SUBHEADING
8471.50 INCLUDING OPTICAL DISK FILING SYSTEMS    
No.22:USING DIGITAL PROCESSING UNITS WHICH DO NOT CONTAIN IN THE SAME
HOUSING ANY OF THE STORAGE UNITS, INPUT UNITS OR OUTPUT UNITS (EX
8471.50(a)) AS STARTING MATERIALS
No.23:ASSEMBLY OF INPUT OR OUTPUT UNITS (OTHER THAN PRINTER UNITS) WHICH
DO NOT CONTAIN THE STORAGE UNITS IN THE SAME HOUSING (EX 8471.60(a) OF
SPLIT SUBHEADINGS (A) AND (B)) FROM ANY OTHER UNITS CLASSIFIED OTHER
THAN SUBHEADING 8471.60 INCLUDING OPTICAL DISK FILING SYSTEMS
No.24:USING INPUT OR OUTPUT UNITS (OTHER THAN PRINTER UNITS) WHICH DO NOT
CONTAIN THE STORAGE UNITS IN THE SAME HOUSING (EX 8471.60(a) OF SPLIT
SUBHEADINGS (A) AND (B)) AS STARTING MATERIALS
No.25:ASSEMBLY OF PRINTER UNITS WHICH DO NOT CONTAIN THE STORAGE UNITS
FROM ANY OTHER UNITS CLASSIFI ED OTHER THAN SUBHEADING 8471.60
INCLUDING OPTICAL DISK FILING SYSTEMS  
No.26:USING PRINTER UNITS WHICH DO NOT CONTAIN THE STORAGE UNITS (SPLIT
SUBHEADING (B), EX 8471.60(C)) AS STARTING MATERIALS
No.27:ASSEMBLY OF PRINTER UNITS WHICH DO NOT INCORPORATE ONE OR MORE OF
THE MEDIA TRANSPORT ASSEMBLY, COMMAND OR CONTROL ASSEMBLY OR
PRINT MECHANISM ASSEMBLY (SPLIT  SUBHEADING (A) EX 8471.60(c))
No.28:USING PRINTER UNITS WHICH DO NOT INCORPORATE ONE OR MORE OF THE
MEDIA TRANSPORT ASSEMBLY, COMMAND OR CONTROL ASSEMBLY OR PRINT
MECHANISM ASSEMBLY (SPLIT SUBHEA DING (A) EX 8471.60(c)) AS STARTING
MATERIALS
No.29:ATTACHMENT OF TWO OR MORE OF THE READ AND/OR WRITE UNITS, COMMON
INTERFACE OR CONTROL UNITS TO STORAGE UNITS WHICH DO NOT CONTAIN
MORE THAN ONE OF THE READ AND/OR WRITE UNITS, COMMON INTERFACE OR
CONTROL UNITS (SUCH AS HARD DISK DRIVES) TO PRODUCE RAID (REDUNDANT
ARRAY OF INEXPENSIVE DISKS) (SPLIT SUBHEADING (A) EX 8471.70(A))
No.30:ATTACHMENT OF A CONTROL OR ADAPTER UNIT CONNECTED TO ONE OR MORE
STORAGE UNITS TO OTHER STORAGE UNITS TO PRODUCE ASSEMBLIES
CONTAINING IN THE SAME HOUSING A CONTROL OR ADAPTER UNIT CONNECTEDTO ONE OR MORE STORAGE UNITS (SPLIT SUBHEADING (B) EX 8471.70(A))
No.31:ASSEMBLY OF STORAGE UNITS OTHER THAN ASSEMBLIES WHICH CONTAINING
IN THE SAME HOUSING A CONTROL OR ADAPTER UNIT CONNECTED TO ONE OR
MORE STORAGE UNITS (SPLIT SUBHEADING (B) EX 8471.70(a)) FROM OTHER UNITS
OF HEADING 84.71 OTHER THAN THOSE OF SUBHEADING 8471.70
No.32:ASSEMBLY OF PLASMA DISPLAY PANELS, LASER PRINTER CARTRIDGES, INKJET
CARTRIDGES, PRINTER HEADS OR SHEET FEEDERS FROM THEIR PARTS
CLASSIFIED IN THE SAME SUBHEADING (8473.30)G/RO/41
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ISSUE
NO.UNRESOLVED ISSUES SUBMITTED TO THE CRO FOR DECISION
No.33:ASSEMBLY OF MEMORY MODULES (F OR EXAMPLE, SIMMs, DIMMs AND MEMORY
BOARDS) FROM ELECTRONIC INTEGRATED CIRCUITS AND MICROASSEMBLIES
(85.42)
No.34:ATTACHMENT OF HEATING OR REFRIGERATING DEVICE TO AUTOMATIC GOODS-
VENDING MACHINES
No.35:ASSEMBLY OF BALL OR ROLLER BEARINGS (8482.10 THROUGH 8482.80) FROM
FINISHED INNER OR OUTER RINGS OR RACES CLASSIFIED IN SUBHEADING 8482.99
No.36:HEAT TREATMENT AND GRINDING TO MANUFACTURE INNER OR OUTER RINGS
OR RACES OF BALL OR ROLLER BEARINGS (EX 8482.99(a))
No.37: INCORPORATION OF BALL OR ROLLER BEARINGS INTO BEARING HOUSINGS
No.38:MANUFACTURE OF MECHANICAL SEALS FROM OTHER ARTICLES CLASSIFIED IN
ANOTHER SUBHEADING
No.39: PACKAGING OR REPACKAGING OF GASKETS (SET)
CHAPTER 85 :
No.40: ASSEMBLY OF ELECTRIC MOTORS AND GENERATORS FROM PARTS
No.41:ASSEMBLY OF ELECTRIC GENERATING SETS AND ROTARY CONVERTERS FROM
GENERATORS (85.01) AND PRIME MOVERS (STEAM TURBINES, GAS TURBINES,
INTERNAL COMBUSTION ENGINES ETC. OF HEADINGS 84.06, 84.07, 84.08, 84.11,
84.12)
No.42:ASSEMBLY OF BALLASTS FOR DISCHARGE LAMPS OR TUBES FROM ELECTRICAL
TRANSFORMERS OR INDUCTORS
No.43:ASSEMBLY OF PRIMARY BATTERIES AND ELECTRIC ACCUMULATORS FROM
CELLS
No.44:MANUFACTURE OF PARTS FOR THE GOODS OF HEADINGS 85.08, 85.09, 85.10, 85.16
THAT INCLUDE ELECTRIC MOTORS OR GENERATORS OF HEADING 85.01
No.45: ASSEMBLY OF A “CAVITY” FROM  ITS PARTS (ex 8516.90(b)  for 8516.90
No.46:ADDITION OR REMOVAL OF DEVICES THAT RESULTS IN A CHANGE OF
CLASSIFICATION:  WELDING MACHINES AND APPARATUS
No.47:ASSEMBLY OF THE ELECTRICAL HEATING RESISTORS OF SUBHEADING 8516.80
FROM PARTS CLASSIFIED IN THE SAME HEADING
No.48: FITTING OF ELECTRONIC ENCRYPTION SYSTEMS
No.49: ASSEMBLY OF ELECTRIC SOUND AMPLIFIER SETS
No.50:FINISHING OPERATIONS FROM COATED OR EVAPORATED AND SLITTED ROLL
(MAGNETIC TAPES), FROM COATED OR EVAPORATED (MAGNETIC DISCS), OR
FROM SPUTTERED AND SURFACE PROTECTED (OTHER PREPARED UNRECORDED
MEDIA)
No.51: RECORDING SOUND, IMAGE OR DATA
No.52: PROGRAMMING AND CONTROL OF MAGNETIC “SWIPE” CARDS
No.53:ATTACHING OR REMOVING RECEPTION APPARATUS TO MANUFACTURE THE
TRANSMISSION APPARATUS FOR RADIO-TELEPHONY, ETC.
No.54: ATTACHING OR REMOVING RADAR APPARATUS
No.55:ASSEMBLY OF FINISHED OR COMPLETE TELEVISION RECEIVERS, VIDEO
PROJECTORS OR VIDEO MONITORS FROM UNFINISHED OR INCOMPLETE GOODS
CLASSIFIED IN THE SAME SUBHEADING AS THE COMPLETE OR FINISHED
PRODUCT
No.56:ASSEMBLY OF TELEVISION RECEIVERS, VIDEO MONITORS VIDEO PROJECTORS
ETC. OF HEADING 85.28 USING A N ON-ORIGINATING CATHODE RAY TUBE
No.57: MANUFACTURE OF ENERGY DISTRIBUTION DIRECTING SYSTEMS
No.58: ASSEMBLY OF CATHODE RAY TUBE BLOCKS FROM CATHODE RAY TUBESG/RO/41
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ISSUE
NO.UNRESOLVED ISSUES SUBMITTED TO THE CRO FOR DECISION
No.59:MOUNTING OF DIODES, TRANSISTORS, OTHER SEMICONDUCTORS, INTEGRATED
CIRCUITS ETC.
No.60: MOUNTING OF MORE THAN 2 ITEMS OF HEADING 85.41
No.61:PROGRAMMING DIODES, TRANSISTORS, SIMILAR SEMICONDUCTOR DEVICES
AND OTHER GOODS OF HEAD ING 85.41 AND ELECTRONIC CIRCUITS AND MICRO-
ASSEMBLIES OF HEADING 85.42
No.62:PROGRAMMING UNMOUNTED OR MOUNTED ELECTRONIC INTEGRATED
CIRCUITS AND MICROASSEMBLIES (E.G., ERASABLE PROGRAMMABLE READ
ONLY MEMORY (EPROM) FOR FIRE DETECTION OR INTRUSION ALARM SYSTEMS
OF 8531.90) OF HEADING 85.42
No.63:TESTING OF DIODES, TRANSISTORS, SEMICONDUCTORS, INTEGRATED CIRCUITS
ETC. OF HEADINGS 85.41, 85.42
No.64: ASSEMBLY OF FLAME SENSORS FROM OTHER GOODS OF HEADING 85.41
No.65: ASSEMBLY OF IGNITION WIRING SETS (8544.30)
No.66:COMBINING INSULATED WIRE, CABLE OR OTHER INSULATED ELECTRIC
CONDUCTORS OR OPTICAL FIBRE CABLES CLASSIFIED IN THE SAME HEADING;
ASSEMBLY OF IGNITION WIRING SETS
NO.67:FITTING CONNECTORS (85.36) TO INSULATED ELECTRIC CONDUCTORS (8544.49
AND 8544.59)
CHAPTER 86 :
No.68:CHANGE OF CLASSIFICATION BY ATTACHING FITTINGS TO TANKS, CASKS,
CONTAINERS FOR COMPRESSED OR LIQUEFIED GAS, OF IRON OR STEEL, ETC.
CLASSIFIED IN HEADINGS 73.09 THROUGH 73.11
CHAPTER 87:
No.69: MANUFACTURE OF A VEHICLE FROM A CHASSIS FITTED WITH ITS ENGINE
NO.70:MANUFACTURE OF MOUNTED BRAKE LININGS FROM BRAKE PADS AND LININGS
OF SUBHEADING 6813.10
CHAPTER 88:
ISSUES OF THIS CHAPTER ARE COVERED BY THE GENERIC ISSUES FOR CHAPTERS 84
TO 90
CHAPTER 89 :
NO.71:ASSEMBLY OF A VESSEL  OF HEADINGS 89.01 TO 89.05 FROM A HULL THAT DOES
NOT HAVE THE ESSENTIAL CHARACTER OF A VESSEL OF A PARTICULAR KIND
NO.72:ASSEMBLY OF A COMPLETE OR FINISHED VESSEL  CLASSIFIED A HEADING
BETWEEN 89.01 AND 89.05 FROM A HULL OR AN INCOMPLETE OR UNFINISHED
VESSEL THAT HAS THE ESSENTIAL CHARACTER OF THE VESSEL CONCERNED
NO.73:ASSEMBLY OF A COMPLETE OR FINISHED OTHER VESSEL  OF HEADINGS 89.06
FROM A HULL OR AN INCOMPLETE OR UNFINISHED OTHER VESSEL OF HEADING
89.06
No.74: ORIGIN OF VESSELS AND OTHER FLOATING STRUCTURES FOR BREAKING UP
CHAPTER 90:
No.75:PRODUCTION OF OPTICAL FIBRES FROM PREFORMS CLASSIFIED OUTSIDE
HEADING 90.01
No.76: PRODUCTION OF OPTICAL FIBRE BUNDLES FROM OPTICAL FIBRESG/RO/41
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ISSUE
NO.UNRESOLVED ISSUES SUBMITTED TO THE CRO FOR DECISION
No.77:PRODUCTION OF OPTICAL FIBRE CABLES OTHER THAN THOSE OF 8544.70 FROM
OPTICAL FIBRES AND OPTICAL FIBRE BUNDLES
No.78:POLISHING OF SPECTACLE LENSES OF GLASS OR OTHER MATERIALS OR OF
OTHER OPTICAL ELEMENTS
No.79: COATING OF WORKED OPTICAL ELEMENTS OF 9001.90
No.80:MOUNTING OF LENSES, PRISMS, MIRRORS AND OTHER WORKED OPTICAL
ELEMENTS
No.81:PRODUCTION OF PARTS AND ACCESSORIES FOR BINOCULARS, MONOCULARS,
TELESCOPES AND OTHER ASTRONOMICAL INSTRUMENTS FROM WORKEDOPTICAL ELEMENTS OR MOUNTED OPTICAL ELEMENTS
No.82:ATTACHMENT OF INTERCHANGEABLE LENSES TO CAMERAS, PROJECTORS AND
PHOTOGRAPHIC ENLARGERS AND REDUCERS OF HEADINGS 90.06, 90.07 AND 90.08
No.83:PRODUCTION OF FRAMES AND MOUNTINGS FOR SPECTACLES, GOGGLES AND
THE LIKE FROM IDENTIFIABLE PARTS
No.84: MOUNTING OF LENSES IN FRAMES TO PRODUCE SPECTACLES OR GOGGLES
No.85: ASSEMBLY OF CATHETERS, CANNULAE AND THE LIKE USING RUBBER TUBING
No.86:ASSEMBLY OF PARTS AND ACCESSORIES OF AUTOMATIC REGULATING OR
CONTROLLING INSTRUMENTS AND APPARATUS USING CONTROL PANELS OR
PROGRAMMABLE CONTROLLERSG/RO/41
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ISSUES FOR DECISION
PART 2  :   GENERIC ISSUES FOR CHAPTERS 84 TO 90
ISSUE No.1:  ORIGIN CONFERRING ASSE MBLY FOR GOODS OF CHAPTERS 84 TO 90
NOTE
1. For goods of Chapters 84 to 90 three major criteria for substantial transformation have been
proposed, i.e., assembly, expressed by a change of tariff classification, satisfaction of a definition or a
requirement, or combination of both; specified processes or operations; and value added , with or
without a change of tariff classification.  Any of the proposed rules appears to be technicallyjustifiable.  These criteria are applicable to a different aspect of production of goods, for instance,
focusing on the line of production (assembly) or the cost of production (value added) or a particular
process or operation in the course of production.  The relationship between these criteria would be
illustrated as follows:
2. In this document the above-mentioned Criterion C (a specific process or operation which
confers origin on a good: boxes C, A & C, B & C and A, B & C in the diagram) is, where appropriate,
dealt with as product specific issues for each Chapter in Part 3.  Thus generic issues for Chapters 84 to
90 (Part 2) cover first the different approaches  between assembly and value added (Issue No.1).
3. The scope of the expression “assembly” varies from one to another.  To compare the different
proposals for origin conferring assembly the issues of assembly of articles from parts, parts from parts
and articles from articles, including modification, are all treated as part of assembly issue (No.1),
whether or not a change of tariff classification takes place.
4. It should be noted that if Option A/2 or B is finally taken a choice between CTH and CTSH
and splitting a heading or subheading in the matri ces comes to an issue of terminology (the same
origin outcome is achieved by application of other primary rules or the residual rules).  However, if
Option A/1 is finally taken the proposed CTH rule and CTSH rule bring about the different originCriterion A:
Assembly confers origin
on a goodCriterion B:
45% (60% for
some vehicles)
value added
confers origin on a
good
Criterion C:
A specified process
or operation confers
origin on a good                                A
A & B
BA, B, C    A & C
B & C             CG/RO/41
Page 1109
outcome when a good is modified from articles classified in the same heading.  The scope of the split
heading or subheading will also be a crucial issue to address a manufacture of parts from parts.  Thus
the modification and the “parts to parts” issues become substantial issues.
5. The generic issues for Chapters 84 to 90 cover also four issues related to GIR 2(a) (blanks,
non-blanks, collection of parts and assembly of the collected goods: Nos.2 to 5); six proposedlimitations on change of classification rules (packaging, functional unit, degradation, change of use,
recertification and disassembly: Nos.6 to 13).
OUTLINE OF THE PROPOSALS
6. The country attribution to the options proposed is as follows:
Option A :    Assembly approach – assembly alone confers origin on a good
A/1 Tariff shift rules and [general] [final] residual rules
A/1/a without negative standards for a non-origin-conferring assembly - (COL)
(CAN) (MEX) (PHI) (HK)
A/1/b with negative standards for a non-origin-conferring assembly – (JPN) (CH)
A/2 Tariff shift rules, definition or requirement of assembly and [general] [final] residual
rules
A/2/a co-equal primary rules: a tariff shift rule or the definition of assembly
(assembly from parts) – (SG)
A/2/b co-equal primary rules: a tariff shift rule or the definition of assembly (a new
good having new characteristics) – (IND) (MOR)
A/2/c cascading approach: 1st tariff shift rules, 2nd subsidiary rules, 3rd the
requirement of assembly (5 parts rule) with negative standards for a non-origin-conferring assembly, 4
th specified processes (giving new mechanical
or electrical functions) with negative standards for a non-origin-conferring
assembly, 5th [Chapter residual] rule for assembly of less than 5 parts (use of
at least one originating part) with negative standards for a non-origin-
conferring assembly, and 6th [general] [final] residual rules – (US)
Option B : Value added approach - assembly alone  does not always confer origin on a good; if
the required value added is not achieved, a [general] [final] residual rule is applied.
B/1 Horizontal approach to whole Chapters 84 to 90 (60% for some complete vehicles or
45% for others) – (EC)
B/2 Product specific approach (60% for all goods of Chapters 84 and 86; 60% for some
goods of Chapter 85; 60% of some goods of Chapter 87; 45%, 51% or 60% for some
goods of Chapter 90) – (BRA)
B/3 Product specific approach (45% for some goods of Chapter 85 only) – (TUR)B/4 Product specific approach (60% for some complete vehicles or 45% for other goods
of Chapter 87 only) – (AUS)G/RO/41
Page 1110
B/5 Product specific approach (40% for goods of 85.28 only) – (EGY)
7. The CRO is invited to decide what should be the conditions for assembly to be recognised as
origin conferring.
OPTIONS
OPTION A : Assembly approach – assembly alone confers origin on a good8. This approach sets out two types of criteria for assembly alone being a substantial
transformation.  These are as follows:
A/1 Origin conferring assembly is expressed exclusively by a change of tariff
classification specified in the matrix as a primary rule;
If origin of a good is not determined by a change of tariff classification a [general]
[final] residual rule is applied;
A/1/a if a change of tariff classification rule is satisfied origin is conferred without
condition;  (COL) (CAN) (MEX) (PHI) (HK)
A/1/b if a change of tariff classification rule is satisfied origin is conferred, subject
to the negative standards for a non-origin-conferring assembly;  (JPN) (CH)
A/2 Origin conferring assembly is expressed by both a change of tariff classification
specified in the matrix as a primary rule and the satisfaction of a definition or a
requirement of assembly provided in the Chapter notes as a [primary] [or Chapter
residual] rule;
A/2/a the criterion of a change of tariff classification and satisfaction of a definition
of assembly (assembly from parts) are considered co-equal primary rules,
thus time sequence determines the applicable primary rule to a good;
if origin is not determined either by the change of classification rule or
satisfaction of the definition of assembly a [general] [final] residual rule is
applied; (SG)
A/2/b the criterion of a change of tariff classification and satisfaction of a definition
of assembly (a new good having new characteristics) are considered co-equal
primary rules, thus time sequence determin es the applicable primary rule to a
good;
if origin is not determined either by the change of classification rule or
satisfaction of the definition of assembly a [general] [final] residual rule is
applied; (IND) (MOR)
A/2/c a cascading structure is taken for this product sector, thus when the criterion
of a change of tariff classification is not met satisfaction of a requirement of
assembly (“5 parts” rule) is required as a [primary] [Chapter residual] rule;
for several headings, prior to applying the “5 parts” rule, the country of origin
of the excepted good from a change of tariff classification rule is considered
to be the country of origin of a good in question (a subsidiary rule);G/RO/41
Page 1111
when the processes undergone give a good one or more new mechanical or
electrical functions such processes confer origin on the good where it was
processed;
[as a Chapter residual rule,] when the “5 parts” rule is not satisfied use of at
least one originating part confers origin;
if neither a requirement of assembly (“5 parts” rule), the specified processes
(giving new mechanical or electrical functions) nor a [Chapter residual] rule
(use of at least one originating part) is satisfied, or if any of the negative
standards for a non-origin-conferring assembly is applicable, a [general]
[final] residual rule is applied; (US)
9. Proposed definitions or requirements of assembly as being origin conferring are as follows:
A/2/a Obtaining goods from parts by asse mbly, including sub-assembly, shall be
considered as reflecting last substantial transformation; (SG)
A/2/b An assembly operation resulting in a new good having new characteristics is
considered to be substantial transformation. (IND) (MOR)
A/2/c Goods produced by assembly of 5 or more parts (other than parts of general
use, as defined in Note 2 to Section XV or similar parts of plastic (Chapter39)) shall have origin in the country of assembly; or
Goods produced as a result of processing non-originating components into a
device or apparatus capable of performing one or more new mechanical or
electrical functions shall have origin in the country of such processing; or
[Residual rule ].— Goods produced by the assembly of less than 5 parts (other than
parts of general use, as defined in Note 2 to Section XV of the HS or similar
parts of plastic (Chapter 39)), and one or more of whose parts (other than
parts of general use, as defined in Note 2 to Section XV of the HS or similarparts of plastic (Chapter 39)) satisfies the requirements for origin in the
country of assembly, shall have origin in the country of assembly. (US)
10. To prevent simple assembly from conferring origin on goods by the Chapter [residual] rules,
the following processes or operations are identi fied by the proponents as the negative standards:
“(i) the attachment of machinery to a base; (US) (CH) (JPN)(ii) the [installation (US)] [attachment (JPN)] of machinery or apparatus into cabinets or similar
encasements; (US) (CH) (JPN)
(iii) the attachment of parts of general use (as defined in [Note 2 to Section XV of the HS or
similar parts of plastic (Chapter 39) (US)] [note 1(g) to Section XVI of the HS) (CH) (JPN)];
(US) (CH) (JPN)
(iv) the attachment of handles, dials, knobs, hand cranks, and other consumer-operated controls;
(US) (CH) (JPN)
(v) the attachment of a power cord;  (US) (CH)G/RO/41
Page 1112
(vi) installation of batteries, accumulators, [sensors, thermostats (TUR)] or [other (US)] [similar
(JPN)] articles not designed to or supplied become a permanent part of the good; (US) (CH)
(JPN)
(vii) the attachment of accessories or parts (including printed circuits with components assembled
thereon), which serve only to enhance the operation of the machine or device; (US)
It should be noted that there are two approaches to deal with the negative standards for a non-origin-
conferring assembly described above.  One (US) is to limit the scope of the negative standards for a
non-origin-conferring assembly to the specific rules, such as blank rules or the “5 parts” rule.  By
this approach any origin outcome determined by a change of tariff classification is unchallengeable
unless Chapter Note 1 (limitation on change of classification rules) denies the results.  Another (JPN,
CH) approach is to regard these negative standards for a non-origin-conferring assembly ascomprehensive notes applicable not only to change of classification rules but to any other
supplementary criteria. (Sec)
OPTION B : Value added approach - assembly al one does not always confer origin on a good
11. Assembly is considered to be a substantial transformation only when:
B/1 Horizontal approach to whole Chapters 84 to 90  (EC)(a) with a few exceptions, the increase in value acquired as a result of working and
processing and, if applicable, the incorporation of parts originating in the country of
manufacture represents at least 60 (for some complete vehicles) or 45 (for others)
percent of the ex-works price of the good is carried out;
(b) with a few exceptions, a specified change of tariff classification (transformation to a
good directly from raw materials or to an article from parts other than parts suitable
for use solely or principally with the article) takes place.
(c) if neither the required value added nor the change of tariff classification rule is
satisfied a [general] [final] residual rule is applied;
B/2 Product specific approach (all goods of Chapters 84 and 86; Some goods of Chapters
85, 87 and 90)  (BRA)
(a) the increase in value acquired as a result of working and processing and, if applicable,
the incorporation of parts originating in the country of manufacture represents at least
the specified percentage of the product is carried out;
(b) The figures of ad valorem percentages required are as follows:  for goods of Chapters
84 and 86, of headings 85.01, 85.03, 85.38, 87.01 to 87.06, 90.08 and 90.09, and of
subheadings 8504.21, 8504.22, 8504.23, 8504.33, 8504.34, 8504.40, 8504.90,
8532.10, 8532.29, 8536.10, 8536.20, 8536.49, 8537.10 and 8537.20 at least 60percent;  for goods of headings 90.06 and 90.10 at least 51 percent;  and for goods of
headings 90.18 to 90.22 at least 45 percent;
(c) for Chapter 85 additional specific requirements are set forth for each heading or
subheading to which the value added rule is proposed, thus the value added and thespecific requirements should be satisfied;G/RO/41
Page 1113
(d) however, for goods of Chapters 88 and 89 and for goods which are not covered by the
value added rule in Chapters 85, 87 and 90, a change of tariff classification rule is
applicable;
(e) if neither the required value added nor the change of tariff classification rule is
satisfied a [general] [final] residual rule is applied;
B/3 Product specific approach (Some goods of Chapter 85 only)  (TUR)(a) for goods of headings/subheadings 8504.10 to 8504.40, 8509.10, 8509.40, 8509.90,
8511.30 to 8511.50, 8511.90, 8512.20, 8512.30, 8512.90, 8516.10, 8516.29, 8516.60,
8516.79 to 8516.90, 8517.90, 8518.40, 8529.10, 8529.90, 85.34, 8535.21, 85.36,
8537.20, 8544.11 to 8544.41, 8544.51, 8544.59, 8544.70 and 85.46, the increase invalue acquired as a result of working and processing and, if applicable, the
incorporation of parts originating in the country of manufacture represents at least
45 percent of the ex-works price of the good is carried out;
(b) however, for Chapters 84, 86 to 90, a change of tariff classification rule is applicable.
As an exceptional case, for goods of ex 8471.60(a) of split subheadings (A) and (B)
the “5 parts” rule, the specified process rule, the use of one originating part rule are
applicable when the CTH rule is not met;
(c) to prevent simple assembly from conferring origin on goods of these Chapters, the
following 5 processes or operations are identified as the negative standards:
“(i) the attachment of a power cord, change of mains voltage/frequency by adding
transformer, adapter or converter;
(ii) installation of batteries, accumulators, sensors, thermostats or [other (US)]
[similar (JPN)] articles not designed to or supplied become a permanent part
of the good;
(iii) presetting, adding, changing parameters and settings of a programme in a
machine, equipment or electronic equipment;
(iv) Adding manuals, warranty cards, conformance certificates to standards with
or without test, adding brand, name and/or model labels or relabeling;
(v) Loading new software, version or different user language;”
(d) if neither the required value added nor the change of tariff classification rule is
satisfied, or the “5 parts” rule, the specified process rule or the use of one originating
part rule is not met for the goods of ex 8471.60(a) of split subheadings (A) and (B), or
if any of the negative standards for a non-origin-conferring assembly is applicable, a
[general] [final] residual rule is applied;
B/4 Product specific approach (Chapter 87 only)  (AUS)(a) for whole Chapter 87, the increase in value acquired as a result of working and
processing and, if applicable, the incorporation of parts originating in the country ofmanufacture represents at least 60 (for some complete vehicles) or 45 (for others)
percent of the ex-works price of the good is carried out;G/RO/41
Page 1114
(b) however, a cascading structure is taken for Chapters 84 to 86, 88 to 90, thus when the
criterion of a change of tariff classification is not met satisfaction of a requirement of
assembly (“5 parts” rule) is required as a [primary] [Chapter residual] rule;
“Goods produced by assembly of 5 or more parts (other than parts of general use, as
defined in note 1(g) to Section XVI of the HS) shall have origin in the country ofassembly; or
[Residual rule ].—Goods produced by the assembly of less than 5 parts (other than
parts of general use, as defined in note 1(g) to Section XVI of the HS), and one or
more of the parts (other than parts of general use, as defined in note 1(g) to Section
XVI of the HS) satisfies the requirements for origin in the country of assembly, shall
have origin in the country of assembly”;
(c) to prevent simple assembly from conferring origin on goods by the Chapter [residual]
rules, the following 7 processes or operations are identified as the negative standards:
“(i) the attachment of machinery to a base;
(ii) the [installation (US)] [attachment (JPN)] of machinery or apparatus into
cabinets or similar encasements;
(iii) the attachment of parts of general use (as defined in note 1(g) to Section XVI
of the HS);
(iv) the attachment of handles, dials, knobs, hand cranks, and other consumer-
operated controls;
(v) the attachment of a power cord, [change of mains voltage/frequency by
adding transformer, adapter or converter (TUR)]
(vi) installation of batteries, accumulators, [sensors, thermostats (TUR)] or [other
(US)] [similar (JPN)] articles not designed to or supplied become apermanent part of the good;
(vii) the attachment of accessories or parts (including printed circuits with
components assembled thereon), which serve only to enhance the operation
of the machine or device;”
(d) if neither a requirement of assembly (“5 parts” rule) nor a [Chapter residual] rule (use
of at least one originating part) is satisfied, or if any of the negative standards for a
non-origin-conferring assembly is applicable, a [general] [final] residual rule is
applied;
B/5 Product specific approach (television or video monitors of heading 85.28 only)
(EGY)
(a) for television or video monitors of heading 85.28, the 40 percent value added is
applicable;
(b) however, other headings of Chapters 84 to 90, a change of tariff classification rule is
applicable;G/RO/41
Page 1115
(c) if neither the required value added nor the change of tariff classification rule is
satisfied a [general] [final] residual rule is applied.
JUSTIFICATIONS FOR THE PROPOSED APPROACHES
Option A:Option A/1:
12. This approach is to maximise the exclusive use of a change of tariff classification criterion as
a primary rule for determining the country of origin of goods in Chapters 84 to 90.  The change of
tariff classification is the best practicable approach to address assembly of goods because it is a
technical criterion based on clear distinctions between parts and articles and expresses with specificitythe changes which take place by reason of assembly.
13. In principle, modification of machines or manufacture of articles from the similar articles
classified in another subheading of the same heading is  an origin conferring event.  Technically such a
change could be even more difficult than manufacturing a new machine from the parts proper.  It maynot easily occur in real commerce, but once it does this is considered as substantial transformation.
Thus for most articles’ headings or subheadings a CTSH rule as the minimum change within the
nomenclature is proposed.
14. Parts classified in a “parts heading or subheading
1” should be assembled directly from raw
materials, unless a split heading or subheading subdivides the parts concerned.
15. Providing a definition or requirement for assembly is as difficult as defining substantial
transformation.  Considering variety of goods covered in Chapters 84 to 90 it is not relevant to place a
threshold by number of parts used for the assembly.
16. The A/1/a approach (COL) (CAN) (MEX) (PHI) (HK) does not need the negative standards
for a non-origin-conferring assembly, because Chapter Note 1 (Limitations on change of classification
rules) takes care of the issue of non-origin-conferring assembly.
17. The A/1/b approach (JPN) (CH) takes the negative standards for a non-origin-conferring
assembly, because Chapter Note 1 (Limitations on change of classification rules) alone is not enough
to takes care of the issue of non-origin-conferring assembly.
Option A/2:
18. This approach is: to utilise the clarity of a change of tariff classification criterion by which
most of complete articles assembled from parts are conferred origin; and to address the issues of
                                                     
1 For the purposes of this document:
For Chapters 84 and 85:  “parts” means parts suitable for use so lely or principally with a particular machines or with a
number of machines of the same heading as provided in Note 2 (b) to HS Section XVI, and other parts classified
according to Note 2 (c) to HS Section XVI.For Chapters 86 to 88 and 90:  “parts” means parts which are suitable for use solely or principally with the articles of the
Chapter concerned.
For Chapter 89:  Chapter 89 excludes all separately presented parts (other than hulls) and accessories of vessels or
floating structures, even if they are clearly identifiable as such.  Such parts and accessories are classified in theappropriate headings elsewhere in the Nomenclature.  “A  hull, an unfinished or incomplete vessel, assembled,
unassembled or disassembled, or a complete vessel unassembled or disassembled, is to be classified in heading No.
89.06 if it does not have the essential character of a vessel of a particular kind.  (Note 1 to Chapter 89)”G/RO/41
Page 1116
assembly of “parts to parts” by satisfaction of a definition or a requirement, instead of applying
immediately a [general] [final] residual rule.
19. Considering unique characteristics of goods of Chapters 84 to 90, a change of tariff
classification alone is not relevant to deal with assembly of parts.  It appears unrealistic to require the
assembly of parts from raw materials only or to split all the possible parts in the parts headings orsubheadings.  This approach gives broader opportunities for a part to be originating in the country of
production.
20. For complete articles, when a [general] [final] residual rule is applied it requires [value]
[volume] [weight] of parts to be aggregated country by country.  Taking into account number of parts
used for assembly of goods of Chapters 84 to 90, i.e., for some goods thousands or tens of thousands
parts are used, this appears to be too burdensome to the manufacturers or traders.  Therefore, as far aspossible origin should be conferred, prior to applying a [general] [final] residual rule, on a complete
article where the assembly of the article is completed.
21. The A/2/a approach (SG) takes the method of application of rules same as the chemical
Chapters, thus a change of tariff classification rule and satisfaction of the definition are considered co-
equal primary rules.  This definition does not specify how many parts should be used for the
assembly.  Attaching one part to another part can be interpreted as assembly, as long as a good is
assembled from parts.  Therefore, by easy satisfaction of the definition all the goods of Chapters 84 to
90 would have the country of origin of the place where the assembly took place.
22. However, this approach does not accept assembly of “articles to articles (modification)” as an
origin conferring event.  Assembly must take place from parts to parts or parts to articles.
23. The A/2/b approach (IND) (MOR) is similar to the A/2/a approach.  However, this approach
addresses all the issues of assembly, including “parts to articles”, “parts to parts” and “articles to
articles (modification)” by the definition of assembly, which requires materials to result in a new good
having new characteristics.  It is difficult to quantify the criteria to judge whether “new”
characteristics are acquired.  Attaching two parts may give a new characteristic to a good; assembling
hundreds of parts may not change their characteristics.  Thus designation of how many parts should be
used for assembly does not provide a rational result.
24. The A/2/c approach (US) takes a cascading structure to determine the country of origin.  The
first rule (a change of classification rule) confers origin of most of complete articles; the second rule
(subsidiary rule) designates a significant parts supplying country as the country of origin; the third
rule (“5 parts” rule) takes care of parts assembled from parts (normally no change of tariff
classification unless split is proposed), articles modified from another articles and the some complete
goods which failed to meet a change of classification rule; the fourth rule (specified processes)
focuses on specific processes which give new mechanical or electrical functions to a good; the fifth
rule ([Chapter residual] rule) covers any good whic h failed to meet the foregoing if at least one
originating part is used; the last rule is a [general] [final] residual rule.
25. The above mentioned fourth rule is not an assembly rule, but a process rule.  Goods produced
as a result of processing non-originating components into a device or apparatus capable of performing
one or more new mechanical or electrical functions shall have origin in the country of such
processing.
26. Assembly of article to article by modification is an origin conferring event by application of a
“5 parts” rule or a [Chapter residual] rule (use of at least one originating part).G/RO/41
Page 1117
27. This approach also addresses the issue of non-origin-conferring assembly by providing
negative standards for a non-origin-conferring assembly for the definition or requirement (the 3rd, 4th
and 5th rules) as a safety valve.
Option B :
Option B/1:  (EC)
28. This approach does not need any complex rules at a Chapter level.  For almost all headings of
Chapters 84 to 90 both a tariff shift rule and the 45 or 60% value added rule are proposed.
29. There are many possible assemblies involved, from very simple or so-called screw-driver
operations to highly sophisticated assemblies, which may include the use of subassemblies and ofparts which may possess the character of the complete or finished goods.  It cannot be concluded, as a
general rule, that a change of tariff classification from parts classified in a separate “parts” heading or
subheading of Chapters 84 to 88 and 90 to the corresponding complete or finished articles always
reflects a substantial transformation.
30. The value added criterion is simple and user-friendly.  This criterion is free from the
complexity of the HS structure, such as the consideration of functional units (Note 4 to Section XVI).
To administer this criterion merely the information of the value of non-originating goods used may be
required, instead of identifying the originating status of goods used and their tariff classification.
31. This approach is as simple as the approach offered by option A.  However, option A does not
offer clear and transparent method to determine whether or not substantial transformation takes place.
In fact, the option A approach confers origin on any single good which is worked under the name of
“assembly”, thus that approach does not offer rational safety valves to prevent non-origin-conferring
assembly from conferring origin.  This approach is supplemented by [general] [final] residual rules.
32. For the purposes of calculating the percentage of the value added requested:
(a) The term “ex works price” shall mean the price paid for the product obtained to the
manufacturer in whose undertaking the last working or processing is carried out.  Theex-works price shall include the value of all materials used in manufacture and all
costs (material costs as well as other costs) effectively incurred by the manufacturer.
Internal taxes which are, or may be, repaid when such product is exported or
commercial price reductions shall not be taken into account.
(b) The terms “value acquired as a result of working and processing” and “incorporation
of parts originating in the country of manufacture” shall mean the increase in valueresulting from the assembly itself, togeth er with any preparatory, finishing and
checking operations, and from the incorporation of any parts originating in the
country where the operations were carried out, including profit and general costs
borne in that country as a result of these operations.
Option B/2 :  (BRA)
33. For goods of Chapters 84 and 86, for goods of headings 85.01, 85.03 and 85.38, and of
subheadings 8504.21, 8504.22, 8504.23, 8504.33, 8504.34, 8504.40, 8504.90, 8532.10, 8532.29,
8536.10, 8536.20, 8536.49, 8537.10 and 8537.20, for goods of headings 87.01 to 87.06, and for goodsof headings 90.06 and 90.10, the value added approach is most suitable to address a substantial
transformation.  The figures of ad valorem percentages vary from a good to another; 45% and 51% for
some goods of Chapter 90, 60% for goods of Chapters 84 and 86, and some goods of Chapters 85, 87
and 90.G/RO/41
Page 1118
34. For these goods a change of classification rule does not appropriately address a substantial
transformation.  However, for other goods a change of tariff classification properly addresses a
substantial transformation.
Option B/3 :  (TUR)
35. For goods of headings/subheadings 8504.10 to 8504.40, 8509.10, 8509.40, 8509.90, 8511.30
to 8511.50, 8511.90, 8512.20, 8512.30, 8512.90, 8516.10, 8516.29, 8516.60, 8516.79 to 8516.90,
8517.90, 8518.40, 8529.10, 8529.90, 85.34, 8535.21, 85.36, 8537.20, 8544.11 to 8544.41, 8544.51,
8544.59, 8544.70 and 85.46, the value added approach is most suitable to address a substantial
transformation.  For these goods a change of classification rule does not appropriately address a
substantial transformation.
36. For the purposes of calculating the percentage of the value added requested:
(a) The term “ex works price” shall mean the price paid for the product obtained to the
manufacturer in whose undertaking the last working or processing is carried out.  The
ex-works price shall include the value of all materials used in manufacture and allcosts (material costs as well as other costs) effectively incurred by the manufacturer.
Internal taxes which are, or may be, repaid when such product is exported or
commercial price reductions shall not be taken into account.
(b) The terms “value acquired as a result of working and processing” and “incorporation
of parts originating in the country of manufacture” shall mean the increase in value
resulting from the assembly itself, togeth er with any preparatory, finishing and
checking operations, and from the incorporation of any parts originating in the
country where the operations were carried out, including profit and general costs
borne in that country as a result of these operations.
37. For the other goods of Chapter 85 and goods of Chapters 84, 86 to 90, a change of tariff
classification is sufficient to address a substantial transformation.  However, this criterion should be
subject to 5 negative standards to address the issue of non-origin-conferring assembly.
Option B/4 :   (AUS)
38. For goods of Chapter 87, the value added approach is most suitable to address a substantial
transformation.  For these goods a change of classification rule does not appropriately address a
substantial transformation.
39. For the purposes of calculating the percentage of the value added requested:
(a) The term “ex works price” shall mean the price paid for the product obtained to the
manufacturer in whose undertaking the last working or processing is carried out.  The
ex-works price shall include the value of all materials used in manufacture and all
costs (material costs as well as other costs) effectively incurred by the manufacturer.Internal taxes which are, or may be, repaid when such product is exported or
commercial price reductions shall not be taken into account.
(b) The terms “value acquired as a result of working and processing” and “incorporation
of parts originating in the country of manufacture” shall mean the increase in valueresulting from the assembly itself, togeth er with any preparatory, finishing and
checking operations, and from the incorporation of any parts originating in the
country where the operations were carried out, including profit and general costs
borne in that country as a result of these operations.G/RO/41
Page 1119
40. For goods of Chapters 84 to 86, 88 to 90, a change of tariff classification properly address a
substantial transformation.  When a change of tariff classification rule is not satisfied, a “5 parts” rule
should apply, subject to the 7 proposed negative standards for a non-origin-conferring assembly.
When assembly of less than 5 parts is carried out, at least one originating part should be used, subject
to the said negative standards.  Otherwise a [general] [final] residual rule determines the country of
origin.
Option B/5 :  (EGY)
41. For television or video monitors of heading 85.28, the value added approach is most suitable
to address a substantial transformation.  For these goods a change of classification rule does not
appropriately address a substantial transformation.  However, for other goods a change of tariff
classification properly addresses a substantial transformation.
Relevant HS Codes :
All headings of Chapters 84 to 90, except for 8548.10 (waste and scrap of primary cells)
ISSUE NO. 2:
GIR 2(a) : PRODUCTION OF COMPLETE OR FINISHED GOODS (INCLUDING SUB-
ASSEMBLY) FROM FORGED OR CAST BLANKS
NOTE :
42. The General Rule for the Interpretation of the Harmonized System (GIR) 2(a) provides as
follows:
“2.(a) Any reference in a heading to an article shall be taken to include a reference to that
article incomplete or unfinished, provided that, as presented, the incomplete or unfinished
article has the essential character of the complete or finished article.  It shall also be taken to
include a reference to that article complete or fi nished (or falling to be classified as complete
or finished by virtue of this Rule), presented unassembled or disassembled.”
43. According to the Explanatory Note (I) to the GIR 2(a), “the first part of rule 2(a) extends the
scope of any heading which refers to a particular article to cover not only the complete article but also
that article incomplete or unfinished, provided that, as presented, it has the essential character of the
complete or finished article”.  The Explanatory Note  (II) to the GIR 2(a) defines the term “blank” as
follows:
“The term “blank” means an article, not ready for direct use, having the approximate shape or
outline of the finished article or part, and which can only be used, other than in exceptional
cases, for completion into the finished article or part (e.g., bottle preforms of plastics being
intermediate products having tubular shape, with one closed end and one open end threaded tosecure a screw type closure, the portion below the threaded end being intended to be
expanded to a desired size and shape.”
OPTION A : Yes, provided  (by required processes)
44. Not all changes from forged or cast blanks to finished goods or parts are considered as
substantial transformation.  A Chapter Note is proposed to specify the conditions of processes or
operations by which the blanks substantially change their characters.  A change of classification ruleG/RO/41
Page 1120
should be complemented by the Chapter Note to express substantial transformation.  In Chapters 84 to
90 this Chapter Note would be applicable mostly to parts.
45. If the Chapter Note is not satisfied, the country of origin of the goods shall be the country of
origin of the blank.
46. The Chapter Note should be:
Option A/1 :  (CH)
 “A. Goods produced from forged or cast blanks
Where goods are produced from forged or cast blanks which had the essential character of the
complete or finished goods and were classifiable, by application of HS General Interpretative
Rule 2(a), in the same heading or subheading as the complete or finished goods:
(1) Provided the following criteria are met, the country of origin of the goods shall be the
country in which the blank was finished:
In the country in which the goods were finished:
(i) The blank was configured to final shape by the removal of material (other
than merely by honing or polishing or both), or by bending, hammering,pressing, stamping or similar forming process; and
(ii) The blank underwent one or more of the following processes:
1. Heat treatment or thermochemical treatment, such as glowing,
tempering, hardening; or
2. Assembly with five or more parts (other than parts of general use as
defined in Note 1(g) to Section XVI of the HS); or
3. Surface treatment, such as coating, compressing, condensing,
impregnating or insulating;
(2) If the criteria of subparagraph (1) above are not satisfied, the country of origin of the
goods shall be the country of origin of the blank.”
Option A/2 :  (US)
“A. Goods produced from forged or cast blanks
Where goods are produced from forged or cast blanks which had the essential character of the
complete or finished goods and were classifiable, by application of HS General InterpretativeRule 2(a), in the same heading or subheading as the complete or finished goods:
(1) Provided the following criteria are met, the country of origin of the goods shall be the
country in which the blank was finished:
(a) In its imported prefinished condition, the blank was not capable of
functioning for its ultimate use and was not advanced beyond cleaning or
working to remove flash, sprues, burrs or similar excess material, andG/RO/41
Page 1121
(b) In the country in which the goods were finished:
(i) The blank was configured to final shape by the removal of material
(other than merely by honing or polishing or both), or by bending,
hammering, pressing, stamping or similar forming process; and
(ii) The blank underwent one or more of the following processes:
1. Hardening to a minimum hardness of 38 degrees Rockwell C
[or Vickers H-V-3-70] or equiva lent standard of hardness; or
2. Assembly with five or more pa rts (other than parts of general
use as defined in Note 2 to Section XV or similar parts ofplastic (Chapter 39)
(2) If the criteria of subparagraph (1) above are not satisfied, the country of origin of the
goods shall be the country of origin of the blank.”
Option A/3 :  (AUS)
“A. Goods produced from forged or cast blanks
Where goods are produced from forged or cast blanks which had the essential character of the
complete or finished goods and were classifiable, by application of HS General Interpretative
Rule 2(a), in the same heading or subheading as the complete or finished goods:
(1) Provided the following criteria are met, the country of origin of the goods shall be the
country in which the blank was finished:
- In its imported prefinished condition, the blank was not capable of
functioning for its ultimate use and was not advanced beyond cleaning or
working to remove flash, sprues, burrs or similar excess material,
(2) If the criteria of subparagraph (1) above are not satisfied, the country of origin of the
goods shall be the country of origin of the blank.”
OPTION B : Yes, provided  (by the value added rule)  (EC) (BRA – all goods of Chapters 84 and 86;
Some goods of Chapters 85, 87 and 90) (TUR – some  goods of Chapter 85) (AUS – goods of Chapter
87) (EGY – 85.28)
47. When a blank is finished in one country, provided that the required value added (40% (EGY),
45% (EC, BRA, TUR, AUS), 51% (BRA) or 60% (EC,  BRA, AUS)) is achieved in that country as a
result of working and processing and, if applicable, the incorporation of parts originating in that
country, origin should be conferred on that article.
48. The proposed value added rules are as follows:
“the increase in value acquired as a result of working and processing and, if applicable, the
incorporation of parts originating in the country of manufacture represents at least 60 (for
some complete vehicles) or 45 (for others) percent of the ex-works price of the good is carriedout”  (EC) (TUR) (AUS)
“the increase in value acquired as a result of working and processing and, if applicable, the
incorporation of parts originating in the country of manufacture represents at least 60% for allG/RO/41
Page 1122
goods of Chapters 84 and 86; 60% for some goods of Chapter 85; 60% of some goods of
Chapter 87; 45%, 51% or 60% for some goods of Chapter 90”  (BRA)
“40% value added”  (EGY)
49. If neither the required value added nor the change of tariff classification rule is satisfied a
[general] [final] residual rule is applied.  (EC) (TUR) (BRA) (EGY)
OPTION C:  No  (JPN) (CAN) (IND)50. A change of tariff classification criterion has a built-in mechanism to refrain simple processes
or operations from conferring origin on a finished good or part manufactured from a blank that has the
essential character of that good or part.  Such changes from blank to the finished good or part shouldbe regarded as insubstantial transformation.  Thus no exception of this principle is acceptable.
Relevant HS Codes:
All headings of Chapters 84 to 90, except for 8548.10 (waste and scrap of primary cells)ISSUE No.3 :GIR 2(a) :  MANUFACTURE OF A FINISHED ARTICLE OR PART (INCLUDING SUB-
ASSEMBLY) FROM AN UNFINISHED ARTICLE OR PART OTHER THAN BLANK
NOTE:
51. The General Rule for the Interpretation of the Harmonized System (GIR) 2(a) provides as
follows:
“2.(a) Any reference in a heading to an article shall be taken to include a reference to that
article incomplete or unfinished, provided that, as presented, the incomplete or unfinished
article has the essential character of the complete or finished article.  It shall also be taken to
include a reference to that article complete or fi nished (or falling to be classified as complete
or finished by virtue of this Rule), presented unassembled or disassembled.”
52. According to the Explanatory Note (I) to the GIR 2(a), “the first part of rule 2(a) extends the
scope of any heading which refers to a particular article to cover not only the complete article but also
that article incomplete or unfinished, provided that, as presented, it has the essential character of the
complete or finished article”.  The Explanatory No te (II) to the GIR 2(a) defines the term “blank”
(See the draft template for “blanks”).  Therefore, this issue covers an article or part which isincomplete or unfinished, and have the essential character of the complete or finished article or part,
except blanks.
OPTION A: Yes, provided
Option A/1:  (CH)
53. Not all changes from incomplete or unfinished goods to complete or finished goods are
considered as substantial transformation.  A Chapter Note is proposed to specify the conditions of
processes or operations by which the incomplete or unfinished goods substantially change theircharacters.  A change of classification rule should be complemented by the Chapter Note to express
substantial transformation.  Once origin is conferred by this Chapter Note, the negative standards for a
non-origin-conferring assembly proposed as part of Chapter [residual] rule do not apply.G/RO/41
Page 1123
54. The Chapter Note should be:
“Finished goods or parts  produced from unfinished goods or parts, other than blanks:
Whenever the change of classification rules set out for goods of chapters 84 to 90 and 93 are
not determinant of the country of origin of the good, the following substantial transformationrules are to be applied:
(a) A finished good or part produced from a non-originating unfinished good or part
classified in the same heading or subheading as the finished good or part shall
originate in the country in which the good or part was finished, provided:
(i) The unfinished good or part is not functioning for its ultimate use in its
imported condition and has undergone at least two or more of the following
processes:
• assembly by built-up such as but not limited to welding, soldering, shrinking, bolting, glueing,
fitting, fixing, spooling, winding, connecting, wiring, coupling; or
• heat treatment or thermochemical treatment such as glowing, tempering, hardening; or
• treatment for the purpose of shaping, form ing such as cold or warm forming; or
• mechanical treatment, refining of form-, positional- and surface tolerances of functional finished
shapes such as turning, milling, drilling, broaching, grinding, polishing, honing, eroding; or
• surface treatment such as coating, compressing,  condensing, impregnating (excluding temporary
conservation for transport and/or storage purpose), insulating; or
• system engineering, software-development and application;
and
(ii) The finished good or part has undergone final testing such as but not limited
to balancing, spinning, voltage testing, performance- or isolation test.
(b) A finished good or part, produced from a non-originating good or part, classified in
the same subdivision as the finished good or part which do not satisfy the conditions
mentioned in Rule 2.B.(1) (a) above shall originate in the country contributing mostto the product in terms of total value of parts (including an unfinished good) and
related processing activities.”
55. If the Chapter Note is not satisfied a [general] [final] residual rule is applied.
Option A/2 :  (US)
56. It is not necessary to set out a Chapter Note to deal with this issue only.  A “5 parts” rule or a
Chapter [residual] rule requiring use of at least one originating part may confer origin on a good that
is manufactured from an article that has the essential character of that good.  However, a “simple”assembly operation should not confer origin on any good.  The proposed negative standards can
properly prevent the non-origin-conferring assembly from conferring origin.
57. The negative standards for a non-origin-conferring assembly should be:G/RO/41
Page 1124
“the following shall not be considered origin conferring operations:
(i) the attachment of machinery to a base;(ii) the installation of machinery or apparatus into cabinets or similar encasements;(iii) the attachment of parts of general use (as defined in Note 2 to Section XV of the HS
or similar parts of plastic (Chapter 39));
(iv) the attachment of handles, dials, knobs, hand cranks, and other consumer-operated
controls;
(v) the attachment of a power cord;
(vi) installation of batteries, accumulators, or other articles not designed to or supplied
become a permanent part of the good;
(vii) the attachment of accessories or parts (including printed circuits with components
assembled thereon), which serve only to enhance the operation of the machine or
device;”
58. If the “5 parts” rule or a Chapter [residual] rule is not satisfied or if any of the negative
standards for a non-origin-conferring assembly is applicable, a [general] [final] residual rule is
applied.
59. When a finished good is capable of performing one or more new mechanical or electrical
functions that good has origin where the good is finished subject to the negative standards for a non-origin-conferring assembly.  The proposed process rule is as follows:
“Goods produced as a result of processing non-originating components into a device or
apparatus capable of performing one or more new mechanical or electrical functions shall
have origin in the country of such processing.”
Option A/3 :  (SG) (IND) (MOR)
60. It is not necessary to set out a Chapter Note to deal with this issue only.  If finishing
operations are undergone with the assembly defined under the proposed definition, the assembly
confers origin on a good that is manufactured from an article that has the essential character that good.
61. The definition of assembly that confers origin on a good is as follows:
• Obtaining goods from parts by assembly, including sub-assembly, shall be considered as reflecting
last substantial transformation; (SG)
• An assembly operation resulting in a new good having new characteristics is considered to be
substantial transformation;  (IND) (MOR)
62. If the definition is not satisfied a [general] [final] residual rule is applied.Option A/4 :  (EC) (BRA – all goods of Chapters  84 and 86; some goods of Chapters 85, 87 and
90) (TUR – some goods of Chapter 85) (AUS – goods of Chapter 87) (EGY – 85.28)G/RO/41
Page 1125
63. When an incomplete or unfinished article is completed or finished in one country, provided
that the required value added (40% (EGY), 45% (EC, BRA, TUR, AUS), 51% (BRA) or 60% (EC,
BRA, AUS)) is achieved in that country as a result of working and processing and, if applicable, the
incorporation of parts originating in that country, origin should be conferred on that article.
64. The proposed value added rules are as follows:
“the increase in value acquired as a result of working and processing and, if applicable, the
incorporation of parts originating in the country of manufacture represents at least 60 (for
some complete vehicles) or 45 (for others) percent of the ex-works price of the good is carried
out”  (EC) (TUR) (AUS)
“the increase in value acquired as a result of working and processing and, if applicable, the
incorporation of parts originating in the country of manufacture represents at least 60% for all
goods of Chapters 84 and 86; 60% for some goods of Chapter 85; 60% of some goods of
Chapter 87; 45%, 51% or 60% for some goods of Chapter 90”  (BRA)
“40% value added”  (EGY) (SEN)
65. If neither the required value added nor the change of tariff classification rule is satisfied a
[general] [final] residual rule is applied.  (EC) (TUR) (BRA) (EGY) (SEN)
66. Origin conferred by application of the value added rule should not be nullified by the negative
standards for a non-origin-conferring assembly.  When neither the required value added nor the
change of tariff classification rule is met, the “5 pa rts” rule, the specified process rule, the use of one
originating part rule and a [general] [final ] residual rule apply in sequence. (AUS)
Note for Option A:
67. The similar issues have been raised in the product-specific proposals which recognise the
further working or assembly of incomplete or unfinished goods classified in the same heading or
subheading as an origin conferring event.  These ar e examined in more detail in the part 2 of this
document (product specific issues).
OPTION B :  No68. A change of tariff classification criterion has a built-in mechanism to refrain simple processes
or operations from conferring origin on an complete or finished good manufactured from an
incomplete or unfinished article that has the essential character of that good.  Such changes from
incomplete or unfinished stage to complete or finished should be regarded as insubstantialtransformation.  Thus no exception of this principle is acceptable.  (JPN) (CAN)
Relevant HS Codes :
All headings of Chapters 84 to 90, except for 8548.10 (waste and scrap of primary cells)
ISSUE No.4 : CHANGE OF CLASSIFICATION BY VIRTUE OF THE APPLICATION OF THE
SECOND PART OF GIR 2(A) - COLLECTION OF PARTS
NOTE :
69. The General Rule for the Interpretation of the Harmonized System (GIR) 2(a) provides as
follows:G/RO/41
Page 1126
“2.(a) Any reference in a heading to an article shall be taken to include a reference to that
article incomplete or unfinished, provided that, as presented, the incomplete or unfinished
article has the essential character of the complete or finished article.  It shall also be taken to
include a reference to that article complete or fi nished (or falling to be classified as complete
or finished by virtue of this Rule), presented unassembled or disassembled.”
70. This issue arises by virtue of the second part of GIR 2(a) when non-originating articles are
presented unassembled or disassembled (a set of parts classified as articles).  This issue is still valid
even if some parts are missing from the set of parts when presented, as long as those presented parts
as a whole have the essential character of the complete or finished article concerned (First part of GIR
2(a)).  However, this issue is not valid when parts are separately presented to Customs, i.e., parts are
classified as parts.
OPTION A :  Yes, collecting parts is an origin conferring event under the specified conditions
(IND) (SEN)
71. The legal requirements of the Harmonized System should be strictly observed in order to
apply the Harmonized Rules of Origin.  The Agreement provides that the change of tariff
classification criterion should be based on the Harmoni zed System.  This means that the HS is being
used not only to identify a good by classification but also to judge whether or not a good undergoes a
substantial transformation by a change of classification.  Therefore if the HS is not sufficient for the
origin determination purposes, supplementary criteria should be elaborated instead of modifying theHS.  The Customs officials and traders are familiar with the current HS in force, thus if the HS is
applied for the origin determination purposes different from the way which is applicable to the
classification purposes, the Customs officials and traders would be confused.
72. A set of parts, which has the essential character of the complete or finished article, is
considered to have substantially transformed from individual parts, when these parts collected take a
form of a set with a manual or an instructional document for assembly and a guarantee by the
supplier.
73. Similar to a do-it-yourself kit or unassembled furniture, handy electronics equipment is
commonly found in this form in a market.  Origin of these sets must be the country where they are
collected and arranged as sets with a guarantee by the supplier; otherwise the same set would have
different origin depending on the place where it is finally assembled.
OPTION B : No, collecting parts is not an origin conferring event  (US) (AUS) (JPN) (EC) (BRA)
(CAN)
74. Collection of parts should not be considered as substantial transformation.  Collection of parts
requires storing and regrouping of goods only; thus  assembly or working or processing on the parts
are not necessary.  Parts may be grouped together, but an individual part is still the same part.
75. The Chapter Note/Chapter Rule/Legal Note should be :
“[Where a change in classification results from the application of HS General Interpretative
Rule 2(a) with respect to collections of parts that are presented as unassembled articles of
another heading or subheading the individual pa rts shall retain their origin prior to such
collection.  (For goods assembled from collecti ons of parts, Note 2.C shall apply.)  (US)
(AUS)]”
orG/RO/41
Page 1127
“[A change of classification which results from the application of Rule 2(a) of the General
Rules for the Interpretation of the HS (GIR 2(a)),  with respect to a collection of parts, shall
not be considered as the change required by the rule set forth in the matrix.  (Sec)]”  Origin of
the collected parts should be determined as a good by a [general] [final] residual rule.
Relevant HS Codes :
All headings of Chapters 84 to 90, except for 8548.10 (waste and scrap of primary cells)ISSUE No.5 :  CHANGE OF CLASSIFICATION BY VIRTUE OF THE APPLICATION OF THE
SECOND PART OF GIR 2(A) - ASSEMBLY OF THE COLLECTED PARTS
OPTION A : Yes.   (by an assembly definition)Option A/1:  (SG)
76. Any assembly from parts confers origin on the assembled goods.
77. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (MOR)
78. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.
79. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B :     Yes, provided
Option B/1 :  (by a value added rule)   (EC) (BRA – all goods of Chapters 84 and 86; Some goods
of Chapters 85, 87 and 90) (TUR – some goods of Chapter 85) (AUS – goods ofChapter 87) (EGY – 85.28)
80. When the collected parts are assembled, provided that the required value added (40% (EGY),
45% (EC, BRA, TUR, AUS), 51% (BRA) or 60% (EC,  BRA, AUS)) is achieved in that country as a
result of working and processing and, if applicable, the incorporation of parts originating in that
country, origin should be conferred on that article.
81. The proposed value added rules are as follows:
“the increase in value acquired as a result of working and processing and, if applicable, the
incorporation of parts originating in the country of manufacture represents at least 60 (for
some complete vehicles) or 45 (for others) percent of the ex-works price of the good is carried
out”  (EC) (TUR) (AUS)
“the increase in value acquired as a result of working and processing and, if applicable, the
incorporation of parts originating in the country of manufacture represents at least 60% for all
goods of Chapters 84 and 86; 60% for some goods of Chapter 85; 60% of some goods of
Chapter 87; 45%, 51% or 60% for some goods of Chapter 90”  (BRA)G/RO/41
Page 1128
“40% value added”  (EGY) (SEN)
82. If neither the required value added nor the change of tariff classification rule is satisfied a
[general] [final] residual rule is applied.  (EC) (TUR) (BRA) (EGY)
83. Origin conferred by application of the value added rule should not be nullified by the negative
standards for a non-origin-conferring assembly.  When the required value added rule is not met or the
value added rule is not set out, the “5 parts” rule, the specified process rule, the use of one originating
part rule and a [general] [final] resi dual rule apply in sequence. (AUS)
Option B/2:  (by a cascading approach)  (US)
84. When a collection of parts occurred in one country, the individual parts shall retain their
origin prior to such collection by application of a Chapter [Legal] Note.  If the collected parts are
assembled there is no change in classification after the assembly.  Thus a change of classification rule
is not applicable.  Origin of the assembled good from the collected parts is determined by application
of the “5 parts” rule with negative standards for a non-origin-conferring assembly, the specified
processes with negative standards for a non-origin-conferring assembly, or the use of at least oneoriginating part with negative standards for a non-origin-conferring assembly.
85. The Chapter [Legal] Note should be:
“[Where a change in classification results from the application of HS General Interpretative
Rule 2(a) with respect to collections of parts that are presented as unassembled articles of
another heading or subheading the individual pa rts shall retain their origin prior to such
collection.  (For goods assembled from collections of parts, Note 2.C shall apply.)]”
Option B/3:  (by a Chapter Note and a change of tariff classification rule) (JPN) (CAN) (HK) (CH)
86. Assembly of the collected parts should be treated the same as assembly of separately
imported parts.  Application of a change of tariff classification rule should not be foregone depending
on whether or not parts are presented together and satisfy the requirements of GIR 2(a).  Therefore, a
Chapter Note should be set out to deal with this qu estion first, and a change of tariff classification rule
determines origin of the collected parts.
87. The Chapter Note should be:
“A good assembled from a collection of parts that are classified by virtue of the application of
GIR 2(a) in the same heading or subheading as the good shall have origin in the country
where, subject to paragraph [next], the relevant rule or note set out in the Appendix is
satisfied.
The change of classification that may be required by the relevant rule in the matrices is
considered to have taken place in the country in which the good is assembled from the
collection of parts.”
OPTION C: No  (IND)88. The legal requirements of the Harmonized System should be strictly observed in order to
apply the Harmonized Rules of Origin.  The Agreement provides that the change of tariffclassification criterion should be based on the Harmoni zed System.  This means that the HS is being
used not only to identify a good by classification but also to judge whether or not a good undergoes a
substantial transformation by a change of classification.  Therefore if the HS is not sufficient for the
origin determination purposes, supplementary criteria should be elaborated instead of modifying theG/RO/41
Page 1129
HS.  The Customs officials and traders are familiar with the current HS in force, thus if the HS is
applied for the origin determination purposes different from the way which is applicable to the
classification purposes, the Customs officials and traders would be confused.
89. A collection of parts, which has the essential ch aracter of the complete or finished article, is
considered to have substantially transformed from individual parts, when these parts collected take aform of a set with a manual or an instructional document for assembly and a guarantee by the
supplier.
90. Origin of these collections, even though finally assembled elsewhere, must be the country
where they are collected and arranged as sets with a guarantee by the supplier; otherwise the same set
would have different origin depending on the place where it is finally assembled.
Relevant HS Codes :
All headings of Chapters 84 to 90, except for 8548.10 (waste and scrap of primary cells)
ISSUE No.6:  CHANGE OF CLASSIFICATION BY VIRTUE OF PACKAGING OR
REPACKAGING OF GOODS
NOTE:
91. It should be noted that the proposed General Rule 5 (minimal operations or processes)
provides one of the minimal operations or processes as follows:
“[(iii) operations or processes that concern the packaging or presentation of goods for
sale.]”
92. This issue refers to a change of classification by virtue of packaging or repackaging.
Therefore, this issue does not cover whether or not the “value acquired as a result of working or
processing” includes the cost of packaging or repackaging.  It should also be noted that the Secretariat
(Tariff and Trade Affairs Directorate) is of the vi ew (NC0008E1) that a rep ackaging would not lead to
a change of classification.  At its 23rd Session the HS Committee took note of this.  However, to
ensure that in all cases a packaging or repackaging cannot be considered as an origin conferring event
a Chapter Note is proposed.
OPTION A: Yes.93. If a change of classification by virtue of packaging and repackaging is not an origin
conferring event, such a change should be explicitly excluded from a change of classification rule.Otherwise, once a change of tariff classification rule is set forth in the matrix and the rule is satisfied
by any cause, origin should be conferred.
OPTION B: No.  (US) (AUS) (SEN)
94. A change of classification by virtue of packaging and repackaging should not be considered
as substantial transformation. Packaging and repackaging does not require any assembly or working
or processing on the good itself.  A good may be packed or repacked, but the good is still the same
good.
95. The Chapter Note/Chapter Rule/Legal Note should be :
[Where a change in classification results from packaging or repackaging the origin of the
good shall be the origin prior to such packaging or repackaging. (US) (AUS)]G/RO/41
Page 1130
Relevant HS Codes :
All headings of Chapters 84 to 90, except for 8548.10 (waste and scrap of primary cells)
ISSUE No.7:  CHANGE OF CLASSIFICATION BY VIRTUE OF THE APPLICATION OF NOTE
4 TO SECTION XVI OF THE HS (FUNCTIONAL UNITS)
96. Note 4 to Section XVI provides as follows :
“4. Where a machine (including a combination of machines) consists of individual
components (whether separate or interconnected by piping, by transmi ssion devices, by electric
cables or by other devices) intended to contribute together to a clearly defined function coveredby one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the
heading appropriate to that function.”
97. Note 3 to Chapter 90 provides as follows :
“3.   The provisions of Note 4 to Section XVI apply to this Chapter.”
OPTION A: Yes.  (IND)98. The legal requirements of the Harmonized System should be strictly observed in order to
apply the Harmonized Rules of Origin.  The Agreement provides that the change of tariff
classification criterion should be based on the Harmoni zed System.  This means that the HS is being
used not only to identify a good and but to set forth a rule of origin for that particular good.  The
Customs officials and traders are familiar with the current HS in force, thus if the HS is applied for
the origin determination purposes different from the way which is applicable to the classificationpurposes, the Customs officials a nd traders would be confused.
99. A set of components, which was intended to contribute together to a clearly defined function
covered by one of the headings in Chapters 84, 85 and 90, is considered to have substantially
transformed from individual components, when th ese components take a form of a set with a
guarantee by the supplier.
100. When a change of tariff classification rule is set forth in the matrix and that rule is satisfied by
any cause, origin should be conferred.
OPTION B: Yes, provided
Option B/1:  (SG) (MOR)
101. If forming functional units takes place in the course of the assembly defined under the
proposed definition, the assembly confers origin on the goods recognised as a functional unit.
102. The definition of assembly that confers origin on a good is as follows:
• Obtaining goods from parts by assembly, including sub-assembly, shall be considered as reflecting
last substantial transformation; (SG)
• An assembly operation resulting in a new good having new characteristics is considered to be
substantial transformation.  (MOR)G/RO/41
Page 1131
103. If the definition is not satisfied a [general] [final] residual rule is applied.
Option B/2:  (EC) (BRA - all goods of Chapters 84; Some goods of Chapters 85 and 90) (TUR –
some goods in Chapter 85) (EGY – 85.28 only)
104. The application of Note 4 to Section XVI appears to be very complex.  Origin determination
should not be subjected to such a difficult criterion.  When a functional unit is formed in one country,
provided that the required value added (40% or 45%) is achieved in that country as a result of
working and processing and, if applicable, the incorporation of parts originating in that country, origin
should be conferred on that article.  Option C may have a danger to lead to multiple countries of
origin for a single good.
105. The proposed value added rules are as follows:
“the increase in value acquired as a result of working and processing and, if applicable, the
incorporation of parts originating in the country of manufacture represents at least 45 percent
of the ex-works price of the good is carried out”  (EC) (TUR)
“the increase in value acquired as a result of working and processing and, if applicable, the
incorporation of parts originating in the country of manufacture represents at least 60% for all
goods of Chapter 84; 60% for some goods of Chapter 85; 45%, 51% or 60% for some goods
of Chapter 90”  (BRA)
“40% value added”  (EGY)
106. If the required value added is not satisfied a [general] [final] residual rule is applied.OPTION C: No.  (US) (JPN) (AUS)107. It is difficult to justify that goods made up as a functional unit by, for example, connecting
electric cables, piping, transmission devices, and presented together with the separate packaging in a
single shipment has been substantially transformed from the components.  Those goods are not
considered as a single good in terms of origin determination.  Therefore, each component shouldretain its origin prior to such presentation.
108. The Chapter Note should be :
“Where a change in classification results from the application of Note 4 to Section XVI to
separately packaged goods presented together in a single shipment, the separately packaged
goods shall retain their origin prior to such presentation.”
Relevant HS Codes :
All headings of Chapters 84, 85 except for 8548.10 (waste and scrap of primary cells) and 90
COMBINED MACHINES OF CHAPTER 84 AND 85
Multi-function
machinesComposite
machinesFunctional units
How many machines are
connected as a unit ?1 only 2 or more fitted
togetherSeveral componentsG/RO/41
Page 1132
What are the criteria to
classify ?Principal function
(Note 3 to Sec.
XVI)Principal
functionClearly defined function
covered by one heading of
Chapters 84 or 85
(Note 4 to Sec. XVI)
How many functions ? Separate complementary or
alternative functions   (2 or more)1 only
Are they attached
permanently ? Yes YesNo
(Can be connected with, e.g.
cables or pipes)
Notes Components which fulfil
auxiliary functions and which
do not contribute to the
function of the whole are to
be classified in their ownappropriate heading.
Applicable also to Chap.90
(Note 3 to Chap.90)G/RO/41
Page 1133
ISSUE No.8:  CHANGE OF CLASSIFICATION BY VIRTUE OF:  DEGRADATION BY AGEING
OR CONSUMPTION OR ANY OTHER REASON
NOTE
109. Origin of vessels and other floating structures for breaking up (Issue No.74) is taken as a
product specific issue.  This issue arises when used goods are classified in a heading or subheading
different from the one initially classified, due to declining the capacity, etc.  If there is no change in
tariff classification the goods retain their origin until they become waste and scrap as defined in
Appendix 1.  So far no proposal has been made to accept consumption as an origin conferring event.
OPTION A: Yes.
110. So far there is no Member who supports this option.  However, the TCRO has not decided yet
that degradation by ageing or consumption or any other reason is not an origin conferring event.
OPTION B: No.
111. A change of classification by virtue of degr adation by ageing or consumption or any other
reason is not considered as substantial transformation.
112. The Chapter Note/Chapter Rule/Legal Note should be :
[[Unless otherwise provided] a change of classification which results from degradation of the
good by ageing or consumption or any other reason shall not be considered as the change
required by the rule set forth in the matrix.  (SEN)]
Relevant HS Codes :
All headings of Chapters 84 to 90, except for 8548.10 (waste and scrap of primary cells) and 89.08
(vessels and other floating structures for breaking up)
Headings mentioning numerically specified ca pacity, size, etc. in the subheading text:
84.02,  84.06,  84.07,  84.10,  84.11,  84.14,  84.18,  84.23,  84.43,  84.46,  84.47,  84.50,  84.51,
84.60,  84.71,  85.01,  85.02,  85.04,  85.32,  85.33,  85.35,  85.36,  85.37,  85.39,  85.44,  88.02
ISSUE No.9 : CHANGE OF CLASSIFICATION BY VIRTUE OF:  CHANGE OF USENOTE
113. It is understood that application of the HS GIR and other legal notes provides that the actual
use of a good would not result in a re-classification.  It should also be noted that the Secretariat (Tariff
and Trade Affairs Directorate) is of the view (N C0008E1) that a change of use of a good would not
lead to a change of classification.  At its 23rd Session the HS Committee took note of this.  However,
to ensure that in all cases a change of use cannot be considered as an origin conferring event a Chapter
Note is proposed.
114. This issue is different from the issue of modification of goods.  Modification is considered as
part of assembly processes; a change of use is considered to be a case caused by a cross-boardertransfer of goods which might be classified in a different heading or subheading depending on the
intended use in the importing country.
OPTION A : Yes.G/RO/41
Page 1134
115. So far there is no Member who supports this option.  However, the TCRO has not decided yet
that a change of classification by a change of use is not an origin conferring event.
OPTION B : No.116. A change of classification by virtue of a change of use is not considered as substantial
transformation.
117. The Chapter Note/Chapter Rule/Legal Note should be :
[a change of classification which results from the change of use of the good shall not be
considered as the change required by the rule set forth in the matrix.  (SEN)]
Relevant HS Codes :
All headings of Chapters 84 to 90
ISSUE No.10 :  CHANGE OF CLASSIFICATION BY VIRTUE OF:  RECERTIFICATION OR
RETESTING OF ARTICLES
NOTE
118. It should be noted that there is an opinion that the classification of a machine does not depend
on certification presented by the manufacturers or traders.  Consequently, the recertification or
retesting of a machine will not lead to a reclassification of the machine, but a rectification of the
classification.
OPTION A : Yes.119. So far there is no Member who supports this option.  However, the TCRO has not decided yet
that a change of classification by recertification or retesting a good is not an origin conferring event.
OPTION B : No.  (US)120. A change of classification by virtue of recertification or retesting is not considered as
substantial transformation.
121. When a good is exported, it would be very difficult to physically examine each product as to
whether the precise tariff classification is given; thus the Customs authority trusts to a certain extent
certification provided by the manufacturers or traders.  Therefore, once a classification of the good isdetermined in one country and exported to another country, that classification is usually referred to in
the importing country.  When the good is classified differently in the importing country as a result of
recertification or retesting and re-exported to the third country, a change of tariff classification ruler
may be satisfied even though the good itself is unchanged.
122. The Chapter Note/Chapter Rule/Legal Note should be :
[a change of classification which results from the recertification or retesting of the good shall
not be considered as the change required by the rule set forth in the matrix.  (Sec)]
Relevant HS Codes :
All headings of Chapters 84 to 90, in particular:G/RO/41
Page 1135
Headings mentioning numerically specified ca pacity, size, etc. in the subheading text:
84.02,  84.06,  84.07,  84.10,  84.11,  84.14,  84.18,  84.23,  84.43,  84.46,  84.47,  84.50,  84.51,
84.60,  84.71,  85.01,  85.02,  85.04,  85.32,  85.33,  85.35,  85.36,  85.37,  85.39,  85.44,  88.02
ISSUE No.11 :  ORIGIN OF A DISASSEMBLED OR RECOVERED PART OR A REMOVED
ARTICLE FROM THE GOOD THAT WOULD HAVE PERFORMED ITS ORIGINAL PURPOSE
OR WOULD HAVE BEEN RESTORED OR REPAIRED
NOTE
123. It has been agreed that disassembly is not an origin conferring event.  This issue deals with
origin of a disassembled (recovered) part or a removed article from the good that would haveperformed its original purpose or would have been restored or repaired.  Thus this issue covers parts
or articles which are not subject to Definitions f), g) and h) of the wholly obtained goods.
124. Chapter Note/Rule was proposed to cover this issue as follows:
“Disass0embly    ( not origin conferring )
A change of classification which results from the disassembly of the good shall not be
considered as the change required by the rule set forth in the matrix.   (Basket 1)
[(1) A change of classification which results from the disassembly of the good that can
perform its original purpose shall not be considered as the change required by the rule set
forth in the matrix.  The parts recovered from the good shall retain the country of origin of the
good prior to disassembly.
(2) A change of classification which results from the disassembly of the good that cannot
perform its original purpose without being restored or repaired shall not be considered as the
change required by the rule set forth in the ma trix.  The country of origin of the recovered
parts shall be (one among the following options (US):
[(a) the country where the parts are recovered]  (SEN)
[(b) the country of origin of the good from which the parts are recovered]  (CAN)(c) the initial country of origin of the parts].  (IND)]”
OPTION A: (by Chapter Note/Rule (a))  (SEN)125. A change of classification which results from the disassembly of the good that would have
performed its original purpose or would have been restored or repaired shall not be considered as the
change required by the rule set forth in the matrix.  However, the parts recovered from the good or the
articles removed from the good should have origin in the country where the parts or the articles arerecovered.  This approach is the most practical and administratively less burdensome.  This approach
is the same as Definition (h), Alternative 1 of the wholly obtained goods.  (Disassembly confers origin
on the disassembled goods.)
OPTION B: (by Chapter Note/Rule (b))  (CAN)126. A change of classification which results from the disassembly of the good that would have
performed its original purpose or would have been restored or repaired shall not be considered as the
change required by the rule set forth in the matrix.  The parts recovered from the good or the articlesG/RO/41
Page 1136
removed from the good shall retain the country of origin of the good prior to disassembly.  If
disassembly does not confer origin on a disassembled good this approach should be taken.  The
proposed rule (c) is difficult to implement, due to the fact that not all parts or articles have the
marking of the country of origin.
OPTION C: (by Chapter Note/Rule (c))  (IND)127. A change of classification which results from the disassembly of the good that would have
performed its original purpose or would have been restored or repaired shall not be considered as the
change required by the rule set forth in the matrix.  The parts recovered from the good or the articles
removed from the good shall retain the initial country of origin of the parts or the articles.  If
disassembly does not confer origin on a good this approach is theoretically correct.  When the country
of origin of the part or article is marked on its surface, this approach does not confuse themanufacturers or traders.
OPTION D:  (by application of Appendix 2, Rule 2)  (EC)128. A change of classification which results from the disassembly of the good that would have
performed its original purpose or would have been restored or repaired shall not be considered as the
change required by the rule set forth in the matrix.  It is not necessary to have a provision in the
Chapter Notes/Rules to deal with this issue.  The origin of the parts recovered from the good or of the
articles removed from the good is determined by a [g eneral] [final] residual rule set forth in Appendix
2, Rule 2.  [A rule to be finalised]
Relevant HS Codes :
All headings of Chapters 84 to 90
ISSUE No.12 :  ORIGIN OF A RECOVERED OR COLLECTED PART OR A REMOVED
ARTICLE FROM THE GOOD THAT CAN NO LONGER PERFORM ITS ORIGINAL PURPOSE
NOR IS CAPABLE OF BEING RESTORED OR REPAIRED (PARTS OR ARTICLES COVERED
BY THE WHOLLY OBTAINED GOODS DEFINITIONS)
NOTE
129. It has been agreed that disassembly is not an origin conferring event.  However, it appears
that the TCRO’s decision (partly endorsed by  the CRO) made on the wholly obtained goods
definitions and its another decision on disassembly may contradict each other.  This issue is to
address consistency between Appendix 1 and Appendix 2 rules. (Sec)
130. Definitions f), g) and h) of the wholly obtained goods provide as follows:
(f) Scrap and waste derived from manufacturing or processing operations or from
consumption in that country and fit only for disposal or for the recovery of raw
materials;
(g) [Articles collected in that country which can no longer perform their original purpose
nor are capable of being restored or repaired and which are fit only for disposal or for
the recovery of parts or raw materials;]
(h) Alternative 1:
[Parts or raw materials recovered in that country from articles which can no longer
perform their original purpose nor are capable of being restored or repaired;] [*]G/RO/41
Page 1137
Alternative 2:
[Parts or raw materials obtained in that country from articles collected in that country
which are not fit for their original purpose nor are capable of being restored or
repaired and are fit only for disposal or for the recovery of parts or raw materials;]
*   [In the recovery of parts or raw materials, environmental considerations may arise, particularly for
radioactive, hazardous and toxic waste that may result from the recovery of parts or raw materials
from Articles.  In this connection, this rule is without prejudice to Members’ rights to take WTO-
consistent measures to protect the environment.]
OPTION A: (Alternative 1 of Definiti on (h) of the wholly obtained goods)
131. A part recovered from the good that can no longer perform its original purpose nor is capable
of being restored or repaired shall have origin wher e the part is recovered (Definition (h), Alternative
1 of the wholly obtained goods).  However,  disassembly confers origin on the disassembled goods.
OPTION B: (Alternative 2 of Definiti on (h) of the wholly obtained goods)
132. When a part is recovered from the good that collected in the same country, and the good is not
fit for its original purpose nor is capable of being restored or repaired, the part shall have origin where
the part is recovered (Definition (h), Alte rnative 2 of the wholly obtained goods).  It would be
understood that once an article is collected subject to Definition (h), Alternative 2,that article
becomes a wholly obtained good.  By application of Definition (i) parts recovered solely from the
collected good must have origin of the article (the country where the good is collected and the part is
recovered).
OPTION C: Contradictory to Definition (h), Alternative 1
133. The country of origin of a part recovered or collected from the good that can no longer
perform its original purpose nor is capable of being restored or repaired should be the country of
origin of the good from which the part is recovered.
OPTION D: Contradictory to Definition (h), Alternative 1
134. The country of origin of a part recovered or collected from the good that can no longer
perform its original purpose nor is capable of being restored or repaired should be the initial country
of origin of the part.
Relevant HS Codes :
All headings of Chapters 84 to 90
[ISSUE No.13 : REASSEMBLY OF THE DISASSEMBLED GOODS
NOTE
135. When an enormous machine, such as a turbin e is exported, the machine is disassembled for
the transport purposes, and reassembled in the importing country.  When a machine is overhauled the
machine may be disassembled first and reassembled with some spare parts.  This issue is to addresswhether or not the reassembly itself confers origin on the disassembled good.
136. A machine may be newly and entirely assembled from the used parts taken from machines
other than scrap and waste or the recovered parts from scrapped machines.  In this case it appears thatG/RO/41
Page 1138
there is no need to distinguish between assembly of brand-new parts and assembly of used parts.
Therefore, in this issue the scope of a reassembled good is limited to such a good as being identical to
the good prior to its disassembly.
OPTION A: Yes, provided the applicable origin rules are satisfied.  See Issue No.1 (origin
conferring assembly for goods of Chapters 84 to 90)
137. To clearly articulate this approach, a Chapter Note/Chapter Rule/Legal Note is proposed.  The
Chapter Note/Chapter Rule/Legal Note should be:
[A good reassembled from disassembled parts shall have origin in the country where the good
satisfy the rule set forth in the matrix.  If the country of origin is not determined by the rule
set forth in the matrix, [[Note][Rule] 2] [a [general] [final] residual rule]  shall apply. (CH)]
OPTION B: No.138. As long as a reassembled good is identical to the good prior to its disassembly, the
reassembled good must have the initial origin of the good.  Otherwise, an unreasonable origin
outcome may be given by disassembly of a good for the transport purposes or an over-haul of a good.
[OPTION C:  No.
139. It is not necessary to have a provision in the Chapter Notes/Rules to deal with this issue.  The
origin of the reassembled goods is determined by a [general] [final] residual rule set forth in Appendix
2, Rule 2.  [A rule to be finalised]  (EC)]
Relevant HS Codes :
All headings of Chapters 84 to 90, except for 8548.10 (waste and scrap of primary cells)]G/RO/41
Page 1139
PART 3 : PRODUCT SPECIFIC ISSUES
Product specific issues:   Chapter 84
ISSUE No.14:  ATTACHMENT OF ENGINES OR MOTORS TO PARTS
140. The Technical Committee agreed that unless particular product specific issues on parts are
raised the manufacture of parts from materials outside the parts heading or subheading concerned is
origin conferring.
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
141. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
142. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”  or
CTSH  (for subheadings 8474.90, 8475.90, 8476.90, 8477.90, 8478.90 and 8479.90 only)
Option A/2:  (IND) (MOR) (SEN)
143. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching a motor to other parts results in a new good having newcharacteristics.
144. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)145. Once engines or motors are attached to other parts to form as a new and different part or sub-
assembly which can be used only for a specific machine, that part or sub-assembly is no longer a
motor or engine in general terms.  When articles which can be used for multiple purposes are furthermanufactured to meet the specific use or function required, the articles are considered to be
substantially transformed to new and different goods.  Therefore, a change to parts from materials
classified outside the parts heading or subheading is always origin conferring.
146. The rule should be :
(a) CTH  (JPN) (CAN) (MEX) (COL) (T UR) (PHI – except 8451.90, 8452.90) (AUS)
(HK) (CH - except 84.31) (EC - 84.31, 84.66 only)
for 8422.90,  84.31,  8433.90,  8434.90.  8435.90,  8436.99,  8437.90,
8438.90,  8439.91,  8439.99,  8440.90,  8441.90,  8442.40,  ex8443.90(b),
8448.20,  8448.32,  8448.39,  8448.49,  8448.59,  8450.90,  8451.90,
8452.90,  8453.90,  8455.90,  84.66,  8467.91,  8467.92,  8467.99,  8474.90,
8475.90,  8476.90,  8477.90,  8478.90,  8479.90G/RO/41
Page 1140
Note :  Exclusions of article headings to deal with disassembly are treated as straight CTH. (Sec)
CTH; or“Manufacture where the increase in va lue acquired as a result of working and
processing, and if applicable, the incorporation of parts originating in the country of
manufacture represents at least 45% of the ex-works price of the product”  (herein
after referred to as “45% value added rule”)  (EC)
for 8422.90,  84.31 (CTH only),  8433.90,  8434.90,  8435.90,  8436.99,  8437.90,
8438.90,  8439.91,  8439.99,  8440.90,  8441.90,  8442.40,  ex 443.90(b),  8448.20,
8448.32,  8448.39,  8448.49,  8448.59,  8450.90,  8451.90,  8452.90,  8453.90,8455.90,  84.66 (CTH only),  8467.91,  8467.92,  8467.99,  8474.90,  8475.90,
8476.90,  8477.90,  8478.90,  8479.90
OPTION C:  Yes, provided  (by a value added rule)  (BRA)
147. Any material may be used regardless of its classification, provided the criterion of 60% value
added rule is satisfied.
148. The rule should be:
60% value added rule”
OPTION D:  No.149. Parts classified in the parts heading or subheading are, as provided in Note 2(b) or (c) to
Section XVI, suitable for use solely or principally w ith a particular kind of machine, or with a number
of machines of the same heading; or other (multiple use) parts.  Therefore, mere attachment of some
parts to operate the machine in question changes the classification from motors (85.01) or engines
(84.07, 84.08) heading to that parts heading or subheading concerned.  However, even though the
parts incorporating motors or engines are suitable  for use solely or principally with a particular
machine the characteristics of the parts in question is still motors or engines.  Therefore, in principle,
such parts should retain the origin of the motors or engines.
150. The rule should be :
- CTH, except from heading 85.01
for 8422.90 (US),  84.31 (US) (CH),  8434.90 (US),  8435.90 (US),  8440.90 (US),  8441.90
(US),  8442.40 (US),  8448.20 (US),  8448.32 (US),  8448.39 (US),  8448.49 (US),  8448.59
(US),  8450.90 (US),  8451.90 (US) (PHI),   8452.90 (US) (PHI),  8453.90 (US),  8455.90
(US),  84.66 (US),  8474.90 (US),  8475.90 (US),  8476.90 (US),  8477.90 (US),  8478.90
(US)
- CTH, except from heading 84.07, 84.08 or 85.01for 8433.90 (US),  8436.99 (US) (PHI),  8437.90 (US) (PHI),  8438.90 (US),  8439.91 (US),
8439.99 (US),  8479.90 (US)
- CTH, except from heading 84.07 or 84.12for 8467.91 (US),  8467.99 (US)G/RO/41
Page 1141
- CTH, except from heading 84.12
for 8467.92 (US)- CTSHS, except from heading 85.01for ex8443.90(b) (US)
Option D/1:  (US)
151. A subsidiary rule is prepared for the case when an electric motor is used.  Therefore the origin
of the parts to which a motor is attached is the country where the electric motor is originated.
- The country of origin shall be the country of origin of the electric motorfor 84.31 only
152. Otherwise the “5 parts” rule, the specified process rule, the use of one originating part rule
and a [general] [final] residual rule apply in sequence.
Option D/2:  (CH) (PHI)
153. When an electric motor is used origin is de termined by application of a [general] [final]
residual rule.
Relevant HS Codes :
8422.90,  84.31,  8433.90,  8434.90,  8435.90,  8436.99,  8437.90,  8438.90,  8439.91,  8439.99,
8440.90,  8441.90,  8442.40,  ex8443.90(b),  8448.20,  8448.32,  8448.39,  8448.49,  8448.59,
8450.90,  8451.90,  8452.90,  8453.90,  8455.90,  84.66,  8467.91,  8467.92,  8467.99,  8474.90,
8475.90,  8476.90,  8477.90,  8478.90,  8479.90
ISSUE No.15:  ATTACHMENT OF COMPRESSORS TO PARTS OF MECHANICAL
APPLIANCES FOR PROJECTING, DISPERSING OR SPRAYING LIQUIDS OR POWDERS,
ETC. (8424.90)
Note: This issue may be merged with Issue No.1 (origin conferring assembly) if the parts of
mechanical appliances for projecting, dispersing or spraying liquids or powders, etc. with
compressors are classified in either articles subheadings (8424.10 - 8424.89) or compressorssubheadings (8414.40, 8414.80).
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
154. Any assembly from parts confers origin on the assembled goods.
155. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”G/RO/41
Page 1142
Option A/2:  (IND) (MOR) (SEN)
156. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching a compressor to other parts results in a new good having new
characteristics.
157. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)158. Once compressors are attached to other parts to form as a new and different part or sub-
assembly which can be used only for mechanical appliances for projecting, dispersing or spraying
liquids or powders, etc., that part or sub-assembly is no longer a compressor in general terms.  When
articles which can be used for multiple purposes are further manufactured to meet specific use orfunction required, the articles are considered to be substantially transformed to new and different
goods.  Therefore, a change to parts from materials classified outside the parts heading or subheading
is always origin conferring.
159. The rule should be :
(a) CTH  (CAN) (MEX) (COL) (AUS)(b) CTH; or 45% value added rule  (EC)
OPTION C: Yes, provided  (by a value added rule) (BRA)
160. Any material may be used regardless of its classification, provided the criterion of 60% value
added rule is satisfied.
161. The rule should be:
60% value added rule
162. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: No.
163. Parts classified in the parts heading or subheading are, as provided in Note 2(b) or (c) to
Section XVI, suitable for use solely or principally w ith a particular kind of machine, or with a number
of machines of the same heading; or other (multiple use) parts.  [Therefore, mere attachment of someparts to operate the machine in question changes the classification from compressors (8414.40,
8414.80) to that of parts of mechanical appliances for projecting, dispersing or spraying liquids or
powders, etc.]  However, even though the parts in corporating compressors are suitable for use solely
or principally with the machines, the characteristics of the parts in question are still compressors.
Therefore, such parts should remain the origin of compressors.164. The rule should be :
CTH, except from subheading 8414.40 or 8414.80G/RO/41
Page 1143
Option D/1:  (US) (JPN)
165. A subsidiary rule is prepared for the case when compressors are used.  Therefore the origin of
the parts to which compressors are attached is the country where the compressors are originated.
The country of origin shall be the country of origin of the compressors.
Option D/1/a:  (US)
166. Otherwise the “5 parts” rule, the specified process rule, the use of one originating part rule
and a [general] [final] residual rule apply in sequence.
Option D/1/b:  (JPN)
167. Otherwise origin is determined by application of a [general] [final] residual rule.Option D/2:  (CH) (PHI)
168. When compressors are used origin is determined  by application of a [general] [final] residual
rule.
Relevant HS Code:
8424.90ISSUE No.16:   USE OF MACHINE-TOOL S OF HEADINGS 84.58 THROUGH [84.63] [84.65]
FOR THE ASSEMBLY OF MACHINING CENTRES, UNIT CONSTRUCTION MACHINES
(SINGLE STATION) OR MULTI-STATION TRANSFER MACHINES
NOTE
169. Note 4 to Chapter 84 provides as follows :
“Heading No. 84.57 applies only to machine-tool s for working metal, other than lathes
(including turning centres), which can carry out different types of machining operations either :
(a) by automatic tool change from a magazine or the like in conformity with a machining
programme (machining centres),
(b) by the automatic use, simultaneously or se quentially, of different unit heads working on
a fixed position workpiece (unit constr uction machines, single station), or
(c) by the automatic transfer of the workpiece to different unit heads (multi-station transfer
machines).” (see “SUMMARY TABLE OF MACHINE-TOOLS OF HEADING
84.57” below)
OPTION A: Yes.  (by assembly)
Option A/1:  (SG)
170. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
171. The Chapter rule and the product specific rule should be :G/RO/41
Page 1144
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”  or
CTSH (for subheading 8457.30 only)
Option A/2:  (IND) (MOR) (SEN)
172. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation. Using machining centres , unit construction machines or multi-station
transfer machines as starting materials results in a new good having new characteristics.
173. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)
Option B/1:  (JPN) (CH) (COL ) (US) (TUR) (AUS) (PHI – for subheadings 8457.10 and 8457.20
only)
174. Other machine-tools classified outside this heading can be used as starting materials.
Characteristics of machining centres, unit construction machines or multi-station transfer machinesare totally different from other machine-tools in terms of their technical complexity and
sophistication.  CTH for subheadings 8457.10 and 8457.20, CTSH for subheading 8457.30 are
sufficient to express substantial transformation.
175. The rule should be:
- CTH  for subheadings 8457.10, 8457.20;
- CTSH for subheading 8457.30
Option B/2:  (EC)
176. Any non-originating machine-tools may be used.  However, parts of machining centres, unit
construction machines or multi-station transfer machines (84.66) cannot be used as starting materials,
because assembly of parts into machines is not substantial transformation.  If non-originating parts are
used, the 45% value added requirement should be met.
177. The rule should be :
CTH, except from heading 84.66; or 45 % value added rule
OPTION C: Yes, provided  (by a value added rule) (BRA)
178. Any material may be used regardless of its classification, provided the criterion of 60% value
added rule is satisfied.
179. The rule should be:
60% value added rule
180. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.G/RO/41
Page 1145
OPTION D: No.  (CAN) (MEX)
181. Machining centres, unit construction machines or multi-station transfer machines should be
assembled directly from parts classified in heading 84.66.  Any modification of machine-tools
classified in heading 84.58 through [84.63] [84.65] to machining centres or unit constructionmachines should not be recognised as substantial transformation.
182. The rule should be :
CTH, except from headings 84.58 through [84.63 (CAN)] [84.65 (MEX)]
183. When machine-tools classified in heading 84.58 through [84.63] [84.65] are used origin is
determined by application of a [general] [final] residual rule.
Note :  Headings 84.64 and 84.65 cover machine-tools used for working non-metal goods.  (Sec)Relevant HS Codes :
8457.10,  8457.20,  8457.30SUMMARY TABLE OF MACHINE-TOOLS OF HEADING 84.57
Heading 84.57
Machining Centres Unit construction machines
(Single station)Multi-station transfer
machines
How many machinesare connected as an
unit ?1 only 1 only
with 2 or more unit heads 2 or more
stations
(Note 4 to Chapter 84)
What are the criteria toclassify ?•  Several machining
operations;
•  Automatic tool
change• Automatic use of different
unit heads;
• Workpiece is fixed, while
unit heads move.• Automatic transfer of
workpiece to the tool;
• different stations;
• Several machiningoperations.
How many functions ? 2 or more 2 or more 2 or more
Are they attachedpermanently ? Yes Yes Yes
ISSUE No.17:  USE OF MACHINING CENTRES OR UNIT CONSTRUCTION MACHINES(SINGLE STATION) FOR THE ASSEMBLY OF MULTI-STATION TRANSFER MACHINES
184. See NOTE to Issue No.16 and Summary Table above.OPTION A: Yes.  (by assembly)
Option A/1:  (SG)
185. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
186. The Chapter rule and the product specific rule should be :G/RO/41
Page 1146
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”  or
CTSH
Option A/2:  (IND) (MOR) (SEN)
187. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Using machining centres or unit construction machines as starting
materials results in a new good having new characteristics.
188. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)  (JPN) (US) (CH) (TUR) (AUS)
189. Machining centres or unit construction machines can be used as starting materials.
Characteristics of multi-station transfer machines are totally different from machining centres or unit
construction machines in terms of their technical complexity and sophistication.  A CTSH rule is
sufficient to express substantial transformation.
190. The rule should be :
CTSH
OPTION C: Yes, provided  (by a value added rule)Option C/1:  (EC)
191. Machining centres or unit construction machines may be used as starting materials, provided
the 45% value added requirement is met.  However, assembly of multi-station transfer machines fromparts (84.66) alone is not substantial transformation.  When the parts are used for the assembly, the
45% value added requirement should also be satisfied.
192. The rule should be :
CTH, except from heading 84.66; or 45 % value added rule
Option C/2:  (BRA)
193. Machining centres or unit construction machines may be used as starting materials, provided
the 60% value added requirement is met.
194. The rule should be :
60 % value added rule
195. For both Options C/1 and C/2, if the required value added is not achieved origin is determined
by application of a [general] [final] residual rule.
OPTION D: No.G/RO/41
Page 1147
196. Machining centres or unit construction machines cannot be used as starting materials.
Characteristics of multi-station transfer machines are similar to machining centres or unit construction
machines.  A CTH rule is sufficient to express substantial transformation.
197. The rule should be :
(a) CTH  (COL) ;
(b) CTH, except from headings 84.58 through [84.63 (CAN)] [84.65 (MEX)]
198. When machining centres or unit construction machines are used origin is determined by
application of a [general] [final] residual rule.
Relevant HS Code :
8457.30ISSUE No.18:  MANUFACTURE OF NUMERICALLY CONTROLLED MACHINE-TOOLS OF
HEADINGS 84.58, 84.59, 84.60 AND 84.62 FROM NON-NUMERICALLY CONTROLLED
MACHINE-TOOLS CLASSIFIED IN THE SAME HEADING
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
199. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
200. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”  or
CTSH
Option A/2:  (IND) (MOR) (SEN)
201. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation. Combining mechanical and automatically operated tools results in a new
good having new characteristics.
202. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)  (JPN) (IND) (COL)203. Manufacture of numerically controlled machine-tools of headings 84.58, 84.59, 84.60 and
84.62 from non-numerically controlled machine-tools classified in the same heading is substantial
transformation.  The non-numerically controlled machine-tools can be used as one of the components
of the numerically controlled machine-tools.  Th e manufacturing process is not simply achieved by
adding the numerical control equipment, but needed further sophisticated adjustment for the proper
use of the machines.  Thus, the numerically controlled machine-tools were completely different from
non-numerically controlled ones in speed of work and the automation character.G/RO/41
Page 1148
204. The rule should be :
CTSH  (for heading 84.62 only (COL))
OPTION C: Yes, provided  (by a value added rule)
Option C/1:  (EC)
205. Non-numerically controlled machine-tools can be used as one of the components of the
numerically controlled machine-tools, provided the 45 % value added requirement is satisfied.
However, assembly of the numerically controlled machine-tools from parts (84.66) alone is not
substantial transformation.  When the parts are used for the assembly, the 45% value added
requirement should be satisfied.
206. The rule should be :
CTH, except from heading 84.66; or 45% value added rule
Option C/2:  (BRA)
207. Non-numerically controlled machine-tools can be used as one of the components of the
numerically controlled machine-tools, provided the 60 % value added requirement is satisfied.
208. The rule should be :
60% value added rule
209. For both Options C/1 and C/2, if the required value added is not achieved origin is determined
by application of a [general] [final] residual rule.
OPTION D: No.210. This option is to preclude origin being conferred when a non-originating machine tool was
modified such that its classification is changed from one subheading to another within the same
heading.  Such changes generally do not result in substantial transformations.  The difference between
these two machine-tools is simply either mechanical or automatically operated for the same function.
Thus, there was no substantive difference.  A study undertaken in a country shows that the
numerically controlled machine-tools must have been produced directly from the parts.  Therefore, the
change in question appeared to be unlikely.
211. The rule should be :
TH
Option D/1:  (US)
212. the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Option D/2:  (AUS)
213. the CTH rule is not met, the “5 parts” rule, the use of one originating part rule and a [general]
[final] residual rule apply in sequence.G/RO/41
Page 1149
Option D/3:  (CH) (CAN) (MEX) (TUR) (HK)
214. the CTH rule is not met, origin is determined by application of a [general] [final] residual
rule.
Relevant HS Codes :
84.58, 84.59, 84.60, 84.62ISSUE No.19:  PRODUCTION OF CIPHERING EQUIPMENT WITH THE MANUFACTURING
OF THE CORRESPONDING PRINTED CIRCUIT BOARDS (HARDWARE) AND THE
INTEGRATION OF THE CIPHERING CAPABILITIES (SOFTWARE)
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
215. Any assembly from parts confers origin on the assembled goods.
216. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
217. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  The production or installation of a hardware and its software results in a
new good having new characteristics.
218. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)  (CH) (AUS)219. Encryption equipment - high security cipher ing equipment specifically referred to word
processors, automatic data processing machines, telephones, faxes and radio transceivers.  The
telephones, for example, were manufactured to fit with encryption system, under which highly
confidential information was transferred.  A major difference between a regular phone and a cipheringphone was the ciphering phone’s stronger construc tion (weight), complex hardware and the way of
communication which was only possible between ciphering phones equipped with the same hardware
and software in order to decipher secret messages.  These goods were normally under the export
control of the government and used exclusively by military or diplomatic services.  The production of
that equipment (hardware) started with shielding plates to protect the system, and ensured the securityfunctions by installing the security processor into the ciphered phone, and finally a speech processor
was installed into the telephone unit.  Testing, burn-in and artificial ageing must have followed after
the production of these goods.  (See Doc.41.927 for further information.)
220. The production of ciphering high security word processors (ex8469.11(a)), ciphering high
security PC security modules (ex8471.80(a)) or other ciphering high security office machines
(ex8472.90(a)) is considered to be substantial transformation.
221. The rules should be :G/RO/41
Page 1150
CTSHS
OPTION C: Yes, provided  (by a value added rule)  (EC) (BRA)222. The production or installation of a hardware and its software may increase the value of goods
in question.  If encryption system equipment is manufactured from non-originating materials, or if
non-originating encryption system equipment and its software are used for the production of goods,
the criterion of substantial transformation is as to whether the good produced meets the specified
added value requirement.
223. The rule should be :
(a) 45% value added rule  (EC)
(b) 60% value added rule  (BRA)
224. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: No.225. The production or installation of a hardware and its software does not change the
characteristics of the machines concerned.
226. The rule should be:
CTSH  (COL - ex 8471.80(a), ex 8472.90(a) only) (PHI - ex 8471.80(a) only) (TH - ex
8471.80(a) only)
Option D/1:  (US)
227. When the CTSH rule is not met, the “5 parts”  rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Option D/2:  (JPN) (CAN) (MEX) (HK) (COL) (PHI) (TH)
228. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Codes :
ex 8469.11(a),  ex 8471.80(a),  ex 8472.90(a)
ISSUE No.20:  PRESENTATION OF DIGITAL AUTOMATIC DATA PROCESSING MACHINES
CLASSIFIED IN SUBHEADINGS 8471.49 (PRESENTED IN THE FORM OF SYSTEM) FROM
UNITS CLASSIFIED IN THE SAME HEADING
NOTE
229. Subheading 8471.49 covers other digital automatic data processing machines presented in the
form of systems, comprising at least th e following, but not in the same housing:
(i) a central processing unit;G/RO/41
Page 1151
(ii) an input unit (e.g., a keyboard, a scanner);
(iii) an output unit (e.g., a visual display unit, a printer).
230. Subheading Note 1 to Chapter 84 provides as follows :
“1.- For the purposes of subheading No. 8471.49, the term "systems" means automatic data
processing machines whose units satisfy the c onditions laid down in Note 5 (B) to Chapter 84
and which comprise at least a central processing  unit, one input unit (for example, a keyboard or
a scanner), and one output unit (for example, a visual display unit or a printer).”
231. Note 5(B) to Chapter 84 provides as follows :
“5(B) Automatic data processing machines may be in the form of systems consisting of a
variable number of separate units.  Subject to paragraph (E) below, a unit is to be regarded as
being a part of a complete system if it meets all of the following conditions :
(a) It is of a kind solely or principally used in an automatic data processing system;
(b) It is connectable to the central processing  unit either directly or through one or more
other units; and
(c) It is able to accept or deliver data in a form  (codes or signals) which can be used by the
system.”
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
232. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
233. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”  or
CTSH
Option A/2:  (IND) (MOR) (SEN)
234. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Pres enting other ADP machines in th e form of systems using units
classified in the same heading results in a new good having new characteristics.
235. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
Option A/3:  (TH)
236. Presenting other ADP machines in the form of systems using units classified in the different
subheading shall have origin in the country of assembly.
237. The rule should be :G/RO/41
Page 1152
CTSH
OPTION B: Yes, provided  (by a value added rule)  (EC) (BRA)238. Any units may be used regardless of its classification, provided the specified value added rule
is satisfied.  Even though an ADP machine is classified as a system, processes of manufacturing theADP machine may vary from one machine to another.  The value added rule is the most appropriate
criterion to determine a substantial transformation in this product sector.
239. The rule should be :
(a) 45 % value added rule  (EC)
(b) 60% value added rule  (BRA)
240. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION C: No.
241. Presentation of other ADP machin es in the form of systems from units classified in the same
heading is not considered to be substantial transformation.  Mere attachment of units by electric cable
to form a system may change the classification.  Therefore, other ADP machines in the form ofsystems are considered to be substantially transformed if they are assembled from parts classified
outside the heading.
242. The rule should be :
CTH
Option C/1:  (US)
243. When the CTSH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Option D/2:  (CH) (MEX) (JPN) (PHI) (CAN) (KOR) (COL) (AUS) (HK)
244. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Codes :
8471.49
ISSUE No.21:  ASSEMBLY OF DIGITAL PROCESSING UNITS WHICH DO NOT CONTAIN IN
THE SAME HOUSING ANY OF THE STORAGE UNITS, INPUT UNITS OR OUTPUT UNITS(EX 8471.50(A)) FROM ANY OT HER UNITS CLASSIFIED OTHER THAN SUBHEADING
8471.50 INCLUDING OPTICAL DISK FILING SYSTEMS
NOTE
245. Subheading 8471.50 covers digital processing units (other than those of subheading 8471.41
and 8471.49), whether or not containing in the same housing one or two of the following:
(i) storage units;G/RO/41
Page 1153
(ii) input units (e.g., a keyboard, a scanner);
(iii) output units (e.g., a visual display unit, a printer).
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
246. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
247. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”  or
CTSH
Option A/2:  (IND) (MOR) (SEN)
248. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching optical disk  filing systems classified in subheading [8471.90]
[8471.70] or any other units classified other than subheading 8471.50 to parts of digital processing
units (84.73) results in a new good having new characteristics.
249. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (CAN) (COL) (PHI) (CH) (AUS) (HK)
(TH) (JPN) (KOR)
250. The digital processing units which do not contain in the same housing any of the storage
units, input units or output units (ex 8471.50(a)) can be assembled from optical disk filing systems
classified in subheading [8471.90] [8471.70] or an y other units classified other than subheading
8471.50.
251. The rule should be :
CTSH
252. The CTSH rule does not mean to accept disassembly of ADP machines of 8471.49 as originconferring.  Disassembly issue should separately be dealt with in a Chapter Note.
OPTION C: Yes, provided  (by a value added rule)  (EC) (BRA)253. Any unit may be used regardless of its classification, provided the specified value added rule
is satisfied.
254. The rule should be :
(a) 45 % value added rule  (EC)(b) 60% value added rule  (BRA)G/RO/41
Page 1154
255. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: No.  (US) (MEX)256. The digital processing units which do not contain in the same housing any of the storage
units, input units or output units (ex 8471.50(a)) should be assembled from parts of digital processing
units (84.73) only.
257. The rule should be :
CTH
Option D/1:  (US)
258. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Option D/2:  (MEX)
259. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Codes :
ex 8471.50 (a)
ISSUE No.22:  USING DIGITAL PROCESSING UNITS WHICH DO NOT CONTAIN IN THE
SAME HOUSING ANY OF THE STORAGE UNITS, INPUT UNITS OR OUTPUT UNITS (EX8471.50(A)) AS STARTING MATERIALS
See NOTE to Issue No.21.OPTION A: Yes.  (by assembly)Option A/1:  (SG)
260. Any assembly from parts confers origin on the assembled goods.261. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
262. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching storage units, input units or output units to digital processing
units which do not contain in the same housing any of the storage units, input units or output units
results in a new good having new characteristics.
263. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”G/RO/41
Page 1155
OPTION B: Yes.  (by a change of tariff cl assification rule)  (JPN) (US) (MEX) (KOR)
264. Digital processing units which contain in th e same housing one or two of the storage units,
input units or output units (ex 8471.50(b)) can be assembled from storage units (8471.70) or input or
output units (8471.60) and digital processing units which do not contain in the same housing any of
the storage units, input units or output units (ex 8471.50(a)).
265. The rule should be :
CTSHS for split subheading ex 8471.50(b)
OPTION C: Yes, provided  (by a value added rule)  (EC) (BRA)
266. Any unit may be used regardless of its classification, provided the specified value added rule
is satisfied.
267. The rule should be :
(a) 45 % value added rule  (EC)
(b) 60% value added rule  (BRA)
268. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: No.269. Digital processing units which contain in th e same housing one or two of the storage units,
input units or output units can be assembled from  non-originating storage units (8471.70) or input or
output units (8471.60) and parts of digital processing units (84.73).  However, non-originating digital
processing units which do not contain in the same housing any of the storage units, input units or
output units cannot be used as starting materials, and should directly be assembled from their parts(84.73).  The CTSH rule does not mean to accept disassembly of ADP machines of 8471.49 as originconferring.  Disassembly issue should separately be dealt with in a Chapter Note.
270. The rule should be :
CTSH  
Option D/1:  (AUS)
271. When the CTSH rule is not met, the “5 parts”  rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Option D/2:  (CAN) (COL) (PHI) (CH) (HK) (TH)
272. When the CTSH rule is not met, origin is de termined by application of a [general] [final]
residual rule.
Relevant HS Codes :
ex 8471.50 (b)ISSUE No.23:  ASSEMBLY OF INPUT OR OUTPUT UNITS (OTHER THAN PRINTER UNITS)
WHICH DO NOT CONTAIN THE STORAGE UNI TS IN THE SAME HOUSING (EX 8471.60(a)G/RO/41
Page 1156
OF SPLIT SUBHEADINGS (A) AND (B)) FROM ANY OTHER UNITS CLASSIFIED OTHER
THAN SUBHEADING 8471.60 INCLUDING OPTICAL DISK FILING SYSTEMS
NOTE
273. Subheading 8471.60 covers input or output units (w hether or not containing storage units in
the same housing).
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
274. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
275. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”  or
CTSH
Option A/2:  (IND) (MOR) (SEN)
276. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching optical disk  filing systems classified in subheading [8471.90]
[8471.70] or any other units classified other than subheading 8471.60 to parts of input or output units
(84.73) results in a new good having new characteristics.
277. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (CAN) (COL) (PHI) (CH) (AUS) (HK)
(TH) (JPN)
278. The input or output units (other than printer units) which do not contain the storage units in
the same housing (ex 8471.60(a)) can be assembled from optical disk filing systems classified in
subheading [8471.90] [8471.70] or any other units classified other than subheading 8471.60.
279. The rule should be :
CTSH
280. The CTSH rule does not mean to accept disassembly of ADP machines of 8471.49 as origin
conferring.  Disassembly issue should separately be dealt with in a Chapter Note.
OPTION C: Yes, provided  (by a value added rule)  (EC) (BRA)281. Any unit may be used regardless of its classification, provided the specified value added rule
is satisfied.
282. The rule should be :G/RO/41
Page 1157
(a) 45 % value added rule  (EC)
(b) 60% value added rule  (BRA)
283. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: No.  (US) (MEX) (TUR)284. The input or output units (other than printer units) which do not contain the storage units in
the same housing (ex 8471.60(a)) should be assembled from parts of input or output units (84.73)
only.
285. The rule should be :
CTH
Option D/1:  (US) (TUR)
286. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Option D/2:  (MEX)
287. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Codes :
ex 8471.60(a) of split subheadings (A) and (B)ISSUE No.24:  USING INPUT OR OUTPUT UNITS (OTHER THAN PRINTER UNITS) WHICH
DO NOT CONTAIN THE STORAGE UNITS IN THE SAME HOUSING (EX 8471.60(a) OF SPLIT
SUBHEADINGS (A) AND (B)) AS STARTING MATERIALSSee NOTE to Issue No.23.
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
288. Any assembly from parts confers origin on the assembled goods.289. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
290. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching storage units to input or output units (other than printer units)which do not contain the storage units in the same housing results in a new good having new
characteristics.
291. The Chapter rule should be :G/RO/41
Page 1158
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)  (JPN) (US) (MEX)
292. Input or output units (other than printer units) which contain the storage units in the same
housing (ex 8471.60(b)) can be assembled from storage units (8471.70) and input or output units
which do not contain the storage units in the same housing (ex 8471.60(a)).
293. The rule should be :
CTSHS for ex 8471.60(b) of split subheadings (A) and (B)
OPTION C: Yes, provided  (by a value added rule)  (EC) (BRA)294. Any unit may be used regardless of its classification, provided the specified value added rule
is satisfied.
295. The rule should be :
(a) 45 % value added rule  (EC)
(b) 60% value added rule  (BRA)
296. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: No. (CAN) (COL) (PHI) (CH) (HK) (TH)
297. Input or output units (other than printer units) which contain the storage units in the same
housing can be assembled from storage units (8471.70) and parts of input or output units (84.73).
However, input or output units which do not contain the storage units in the same housing cannot be
used as starting materials, and should directly be assembled from parts (84.73).  The CTSH rule does
not mean to accept disassembly of ADP machines of  8471.49 as origin conferring.  Disassembly issue
should separately be dealt with in a Chapter Note.
298. The rule should be :
CTSH
299. When the CTSH rule is not met, origin is de termined by application of a [general] [final]
residual rule.
Relevant HS Codes :
ex 8471.60(b) of split subheadings (A) and (B)ISSUE No.25:  ASSEMBLY OF PRINTER UNITS WHICH DO NOT CONTAIN THE STORAGE
UNITS FROM ANY OTHER UNITS CLASSI FIED OTHER THAN SUBHEADING 8471.60
INCLUDING OPTICAL DISK FILING SYSTEMS
See NOTE to Issue No.23.  This issue and Issues Nos.26, 27 and 28 deal with printer units.  However,
the splits proposed are different in scope.  When these issues are settled the scope of and the rules for
ex 8471.60(c) and (d) should be adjusted accordingly.  (Sec)G/RO/41
Page 1159
OPTION A: Yes.  (by assembly)
Option A/1:  (SG)
300. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
301. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”  or
CTSH
Option A/2:  (IND) (MOR) (SEN)
302. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching optical disk  filing systems classified in subheading [8471.90]
[8471.70] or any other units classified other than subheading 8471.60 to parts of printer units (84.73)
results in a new good having new characteristics.
303. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (CAN) (COL) (PHI) (CH) (AUS) (HK)
(TH) (JPN) (KOR)
304. The printer units which do not contain the storage units in the same housing (split subheading
(B) ex 8471.60(c)) can also be assembled from optical  disk filing systems classified in subheading
[8471.90] [8471.70] or any other units classified other than subheading 8471.60.305. The rule should be :
CTSH
306. The CTSH rule does not mean to accept disassembly of ADP machines of 8471.49 as origin
conferring.  Disassembly issue should separately be dealt with in a Chapter Note.
OPTION C: Yes, provided  (by a value added rule)  (EC) (BRA)
307. Any unit may be used regardless of its classification, provided the specified value added rule
is satisfied.
308. The rule should be :
(a) 45 % value added rule  (EC)(b) 60% value added rule  (BRA)
309. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.G/RO/41
Page 1160
OPTION D: No.  (MEX)
310. The printer units which do not contain the storage units in the same housing (split subheading
(B) ex 8471.60(c)) should be assembled from parts of input or output units (84.73) only.311. The rule should be :
CTH
312. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Codes :
split subheading (B) ex 8471.60(c)ISSUE No.26:  USING PRINTER UNITS WHICH DO NOT CONTAIN THE STORAGE UNITS
(SPLIT SUBHEADING (B), EX 8471.60(C)) AS STARTING MATERIALS
See NOTE to Issue No.23.  This issue and Issues Nos.25, 27 and 28 deal with printer units.  However,
the splits proposed are different in scope.  When these issues are settled the scope of and the rules for
ex 8471.60(c) and (d) should be adjusted accordingly.  (Sec)
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
313. Any assembly from parts confers origin on the assembled goods.
314. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
315. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching storage units to printer units results in a new good having new
characteristics.
316. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)  (JPN) (MEX) (KOR)
317. Printer units which contain the storage units in the same housing (split subheading (B) ex
8471.60(d)) can be assembled from storage units (8471.70) and printer units which do not contain the
storage units in the same housing (split subheading (B) ex 8471.60(c)).
318. The rule should be :
CTSHS for split subheading (B) ex 8471.60(d)
OPTION C: Yes, provided  (by a value added rule)  (EC) (BRA)G/RO/41
Page 1161
319. Any unit may be used regardless of its classification, provided the specified value added rule
is satisfied.
320. The rule should be :
(a) 45 % value added rule  (EC)
(b) 60% value added rule  (BRA)
321. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: No.
322. Printer units which contain the storage units in the same housing can be assembled from
storage units (8471.70) and parts of printer units (84.73).  However, printer units which do not contain
the storage units in the same housing cannot be used as starting materials, and should directly be
assembled from parts (84.73).  The CTSH rule does not mean to accept disassembly of ADP machines
of 8471.49 as origin conferring.  Disassembly issue should separately be dealt with in a Chapter Note.
323. The rule should be :
CTSH
Option D/1:  (AUS)
324. When the CTSH rule is not met, the “5 parts”  rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Option D/2:  (CAN) (COL) (PHI) (CH) (HK) (TH)
325. When the CTSH rule is not met, origin is de termined by application of a [general] [final]
residual rule.
Relevant HS Codes :
split subheading (B) ex 8471.60(d)ISSUE No.27:  ASSEMBLY OF PRINTER UNITS WHICH DO NOT INCORPORATE ONE OR
MORE OF THE MEDIA TRANSPORT ASSEMBLY, COMMAND OR CONTROL ASSEMBLYOR PRINT MECHANISM ASSEMBLY ( SPLIT SUBHEADING (A) EX 8471.60(c))
See NOTE to Issue No.23.  This issue and Issues Nos.25, 26 and 28 deal with printer units.  However,
the splits proposed are different in scope.  When these issues are settled the scope of and the rules for
ex 8471.60(c) and (d) should be adjusted accordingly.  (Sec)
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
326. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
327. The Chapter rule and the product specific rule should be :G/RO/41
Page 1162
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”  or
CTSH
Option A/2:  (IND) (MOR) (SEN)
328. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  The assembly of printer units which do not incorporate one or more of the
media transport assembly, command or control assembly or print mechanism assembly results in a
new good having new characteristics.
329. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (CAN) (COL) (PHI) (CH) (AUS) (HK)
(TH)
330. Printer units which do not incorporate one or more of the media transport assembly, command
or control assembly or print mechanism assembly (split subheading (A) ex 8471.60(c)) can be
assembled from any units classified other than subheading 8471.60 and parts of printer units (84.73).
The CTSH rule does not mean to accept disassembly of ADP machines of 8471.49 as origin
conferring.  Disassembly issue should separately be dealt with in a Chapter Note.
331. The rule should be :
CTSH
OPTION C: Yes, provided  (by a value added rule)  (EC) (BRA)
332. Any unit may be used regardless of its classification, provided the specified value added rule
is satisfied.
333. The rule should be :
(a) 45 % value added rule  (EC)
(b) 60% value added rule  (BRA)
334. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: No.  (US)335. The printer units which lack one or more of the following essential components; media
transport assembly, command or control assembly, or print mechanism assembly (split subheading
8471.60(c)), should be assembled from parts of printer units (84.73) only.
336. The rule should be :G/RO/41
Page 1163
CTH for split subheading (A) ex 8471.60(c)
337. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Codes :
split subheading (A) ex 8471.60(c)
ISSUE No.28:  USING PRINTER UNITS WHICH DO NOT INCORPORATE ONE OR MORE OF
THE MEDIA TRANSPORT ASSEMBLY, COMMAND OR CONTROL ASSEMBLY OR PRINT
MECHANISM ASSEMBLY (SPLIT SUBHEA DING (A) EX 8471.60(c)) AS STARTING
MATERIALS
See NOTE to Issue No.23.  This issue and Issues Nos.25, 26 and 27 deal with printer units.  However,
the splits proposed are different in scope.  When these issues are settled the scope of and the rules for
ex 8471.60(c) and (d) should be adjusted accordingly.  (Sec)
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
338. Any assembly from parts confers origin on the assembled goods.
339. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
340. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching media transport assembly, command or control assembly orprint mechanism assembly results in a new good having new characteristics.
341. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)  (US)
342. Printer units which have all of the following essential components; media transport assembly,
command or control assembly, or print mechanism assembly (split subheading A ex8471.60(d)) can
be assembled from non-originating printer units which lack one or more of those components (splitsubheading A ex8471.60 (c)) and media transport assembly, command or control assembly, or print
mechanism assembly (ex84.73).
343. The rule should be :
CTSHS for split subheading (A) ex 8471.60(d)
OPTION C: Yes, provided  (by a value added rule)  (EC) (BRA)G/RO/41
Page 1164
344. Any unit may be used regardless of its classification, provided the specified value added rule
is satisfied.
345. The rule should be :
(a) 45 % value added rule  (EC)(b) 60% value added rule  (BRA)
346. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: No.347. Printer units which have all of the following essential components; media transport assembly,
command or control assembly, or print mechanism assembly (split subheading A ex8471.60(d)) can
be assembled from any units classified other than subheading 8471.60.  However, printer units which
do not incorporate one or more of the media transport assembly, command or control assembly or
print mechanism assembly (split subheading (A) ex 8471.60(c)) cannot be used as starting materials,
and should directly be assembled from parts (84.73).  The CTSH rule does not mean to accept
disassembly of ADP machines of 8471.49 as origin conferring.  Disassembly issue should separately
be dealt with in a Chapter Note.
348. The rule should be :
CTSH
Option D/1:  (AUS)
349. When the CTSH rule is not met, the “5 parts”  rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Option D/2:  (CAN) (COL) (PHI) (CH) (HK) (TH)
350. When the CTSH rule is not met, origin is de termined by application of a [general] [final]
residual rule.
Relevant HS Codes :
split subheading (A) ex 8471.60(d)
ISSUE No.29:  ATTACHMENT OF TWO OR MORE OF THE READ AND/OR WRITE UNITS,
COMMON INTERFACE OR CONTROL UNITS TO STORAGE UNITS WHICH DO NOT
CONTAIN MORE THAN ONE OF THE READ AND/OR WRITE UNITS, COMMON
INTERFACE OR CONTROL UNITS (SUCH AS HARD DISK DRIVES) TO PRODUCE RAID
(REDUNDANT ARRAY OF INEXPENSIVE DISKS) (SPLIT SUBHEADING (A) EX 8471.70(a))
This issue and Issues Nos.30 and 31 deal with storage units.  However, the splits proposed are
different in scope.  When these issues are settled the scope of and the rules for ex 8471.70(a) and (b)
should be adjusted accordingly.  (Sec)
OPTION A: Yes.  (by assembly)
Option A/1:  (SG)G/RO/41
Page 1165
351. Any assembly from parts confers origin on the assembled goods.
352. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
353. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching two or more of the read and/or write units, common interface or
control units result in a new good having new characteristics.
354. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)  (JPN)
355. RAID (Redundant Array of Inexpensive Disks) provides the quality and cost effectiveness
equivalent to or even better than conventional disks by placing inexpensive disks (such as mass-
produced 3.5 inch HDDs) as an array to create redundancy (the state in which a failed disk does notaffect the system).  RAID contains in the same housing at least two or more of the following units:
read and/or write units; common interface; or c ontrol units.  Assembly of RAID requires highly
sophisticated technology and RAID is substantially different in characteristics and functions from
storage units consisting of single read/write units.  Therefore, use of HDD (8471.70), PCB Assembly
(8473.30) and some other parts or components classified outside this subheading should be accepted.
356. The rule should be :
CTSHS for split subheading (A) ex8471.70(a)
OPTION C: Yes, provided  (by a value added rule)  (EC) (BRA)
357. Any unit may be used to assemble storage units regardless of its classificati on, provided the
specified value added rule is satisfied.
358. The rule should be :
(a) 45 % value added rule  (EC)
(b) 60% value added rule  (BRA)
359. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: No.360. Storage units can be assembled from other units classified in heading 84.71 and parts of
storage units (84.73).  However, HDD cannot be used as starting materials, and should directly be
assembled from parts (84.73).  The CTSH rule does not mean to accept disassembly of ADP machines
or other units of 8471.49, 8471.50 or 8471.60 as origin conferring.  Disassembly issue should
separately be dealt with in a Chapter Note.G/RO/41
Page 1166
361. The rule should be :
CTSH
Option D/1:  (AUS)
362. When the CTSH rule is not met, the “5 parts”  rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Option D/2:  (CAN) (COL) (MEX) (PHI) (CH) (HK) (TH)
363. When the CTSH rule is not met, origin is de termined by application of a [general] [final]
residual rule.
Relevant HS Codes :
split subheading (A) ex 8471.70(a)G/RO/41
Page 1167
ISSUE No.30:  ATTACHMENT OF A CONTROL OR ADAPTER UNIT CONNECTED TO ONE
OR MORE STORAGE UNITS TO OTHER STORAGE UNITS TO PRODUCE ASSEMBLIES
CONTAINING IN THE SAME HOUSING A CONTROL OR ADAPTER UNIT CONNECTED TO
ONE OR MORE STORAGE UNITS (SPL IT SUBHEADING (B) EX 8471.70(a))
This issue and Issues Nos.29 and 31 deal with storage units.  However, the splits proposed are
different in scope.  When these issues are settled the scope of and the rules for ex 8471.70(a) and (b)
should be adjusted accordingly.  (Sec)
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
364. Any assembly from parts confers origin on the assembled goods.365. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
366. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching a control or adapter unit connected to one or more storage units
results in a new good having new characteristics.
367. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)  (US)
368. Assemblies containing in the same housing a control or adapter unit connected to one or more
storage units (split subheading (B) ex 8471.70(a)) can be assembled from control or adapter units and
other storage units (split subheading (B) ex 8471.70(b)).
369. The rule should be :
CTSHS for split subheading (B) ex 8471.70(a)
OPTION C: Yes, provided  (by a value added rule)  (EC) (BRA)370. Any unit may be used to assemble storage units regardless of its classificati on, provided the
specified value added rule is satisfied.
371. The rule should be :
(a) 45 % value added rule  (EC)
(b) 60% value added rule  (BRA)
372. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.G/RO/41
Page 1168
OPTION D: No.
373. Storage units can be assembled from other units classified in heading 84.71 and parts of
storage units (84.73).  However, control or adapter units and other storage units classified in
subheading 8471.70 should not be used.  The CTSH rule does not mean to accept disassembly of ADPmachines or other units of 8471.49, 8471.50 or 8471.60 as origin conferring.  Disassembly issue
should separately be dealt with in a Chapter Note.
374. The rule should be :
CTSH
Option D/1:  (AUS)
375. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Option D/2:  (CAN) (MEX) (COL) (PHI) (CH) (HK) (TH)
376. When the CTSH rule is not met, origin is de termined by application of a [general] [final]
residual rule.
Relevant HS Codes :
split subheading (B) ex 8471.70(a)
ISSUE No.31:  ASSEMBLY OF STORAGE UNITS OTHER THAN ASSEMBLIES WHICH
CONTAINING IN THE SAME HOUSING A CONTROL OR ADAPTER UNIT CONNECTED TOONE OR MORE STORAGE UNITS (SPLIT SUBHEADING (B) EX 8471.70(a)) FROM OTHER
UNITS OF HEADING 84.71 OTHER THAN THOSE OF SUBHEADING 8471.70
This issue and Issues No.29 and 30 deal with storage units.  However, the splits proposed are
different in scope.  When these issues are settled the scope of and the rules for ex 8471.70(a) and (b)should be adjusted accordingly.  (Sec)
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
377. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
378. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”  or
CTSH
Option A/2:  (IND) (MOR) (SEN)
379. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching any unit classified in heading 84.71 other than subheading
8471.70 results in a new good having new characteristics.G/RO/41
Page 1169
380. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)  (CAN) (MEX) (COL) (PHI) (CH)
(AUS) (HK) (TH)
381. Storage units other than assemblies containing in the same housing a control or adapter unit
connected to one or more storage units (split subheading (B) ex 8471.70(b)) can be assembled from
any units classified in heading 84.71 other than subheading 8471.70.
382. The rule should be :
CTSH
OPTION C: Yes, provided  (by a value added rule)  (EC) (BRA)383. Any unit may be used to assemble storage units regardless of its classificati on, provided the
specified value added rule is satisfied.
384. The rule should be :
(a) 45 % value added rule  (EC)(b) 60% value added rule  (BRA)
385. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: No.  (US)
386. Other storage units (split subheading (B) ex 8471.70(b)) should be assembled directly from
parts of storage units (84.73).
387. The rule should be :
CTH
388. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Codes :
split subheading (B) ex 8471.70(b)ISSUE No.32:  ASSEMBLY OF PLASMA DISPLAY PANELS, LASER PRINTER CARTRIDGES,
INKJET CARTRIDGES, PRINTER HEADS OR SHEET FEEDERS FROM THEIR PARTS
CLASSIFIED IN THE SAME SUBHEADING (8473.30)
OPTION A: Yes.  (by assembly)
Option A/1:  (SG)G/RO/41
Page 1170
389. Any assembly from parts confers origin on the assembled goods.
390. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
391. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Assembling plasma display panels, laser printer cartridges, inkjet
cartridges, printer heads or sheet feeders from parts classified in heading 84.73 results in a new good
having new characteristics.
392. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)  (JPN) (EGY) (AUS) (KOR)393. Plasma display panels that are classified in subheading 8473.30 as parts of plasma display
units of subheading 8471.60 are manufactured by the following processes: i) front panel and backpanel as starting materials; ii) sealing two panels by frit glass; iii) exhausting of air through
exhausting tube (8473.30); and filling of NeXe ga s through exhausting tube and closing.  These
processes require a highly sophisticated technique under a clean environment to achieve strictly
predetermined accuracy.  The plasma display panel is totally different from source materials such as
exhausting tubes and substantially transformed.  The manufacture of plasma display panels from theirparts is an origin conferring event.
394. Laser printer cartridges, inkjet cartridges, pr inter heads or sheet feeders classified in the
subheading 8473.30 as parts or accessories of the machines of the heading 84.71 have been circulated
world-wide as complete and independent components similar to the plasma display panels.  They are
manufactured from parts also classified in the subheading 8473.30 through the complicated
assembling operation.  The changes from the parts to them are worth being regarded as the last
substantial transformation.
395. The rule should be :
CTSHS for ex 8473.30(a)
OPTION C: Yes, provided  (by a value added rule)  (EC) (BRA)396. Any parts may be used to assemble plasma display panels, laser printer cartridges, inkjet
cartridges, printer heads or sheet feeders regardless of its classification, provided the specified valueadded rule is satisfied.
397. The rule should be :
(a) 45 % value added rule  (EC)(b) 60% value added rule  (BRA)
398. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.G/RO/41
Page 1171
OPTION D: No.
399. Parts or accessories of ADP machines should be manufactured from raw materials or other
articles classified in a different heading.  A change within the subheading is not considered as
substantial transformation.
400. The rule should be :
CTH
Option D/1:  (CAN) (COL) (MEX)
401. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Option D/2:  (US)
402. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Codes :
ex 8473.30(a)ISSUE No.33:  ASSEMBLY OF MEMORY MODULES (FOR EXAMPLE, SIMMs, DIMMs AND
MEMORY BOARDS) FROM ELECTRONIC INTEGRATED CIRCUITS AND
MICROASSEMBLIES (85.42)
OPTION A: Yes.  (by assembly)
Option A/1:  (SG)
403. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
404. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”  or
CTSH
Option A/2:  (IND) (MOR) (SEN)
405. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Assembling plasma display panels from parts classified in heading 84.73
results in a new good having new characteristics.
406. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”G/RO/41
Page 1172
OPTION B: Yes.  (by a change of tariff classification rule)  (JPN) (AUS) (CH) (COL) (MEX)
(CAN) (HK) (KOR)
407. Memory modules are totally different from source materials such as electronic integrated
circuits or microassemblies (85.42) and substantially transformed.  The manufacture of memory
modules from electronic integrated circuits or microassemblies (85.42) is an origin conferring event.
408. The rule should be :
CTH
OPTION C: Yes, provided  (by a value added rule)  (EC) (BRA)
409. Any parts may be used to assemble memory m odules regardless of its classification, provided
the specified value added rule is satisfied.
410. The rule should be :
(a) 45 % value added rule  (EC)
(b) 60% value added rule  (BRA)
411. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: No.  (US)412. Memory modules such as SIMMs, DIMMs or memory boards should not be manufactured
from electronic integrated circuits or microassemblies (85.42).  The memory modules are not
substantially transformed from the electronic integrated circuits or microassemblies.
413. The rule should be :
CTH, except from heading 85.42
414. When the electronic integrated circuits or microassemblies are used for the production of
memory modules, the country of origin is the country of origin of electronic integrated circuits or
microassemblies.
Relevant HS Codes :
ex 8473.30(b)ISSUE No.34:  ATTACHMENT OF HEATING OR REFRIGERATING DEVICE TO AUTOMATIC
GOODS-VENDING MACHINES
NOTE
415. Machines covered by this heading include: automatic goods-vending machines for postage
stamp, cigarette, food, beverage or money-changing.  Articles subheadings of heading 84.76 are
divided whether incorporating heating or refrigerating devices.  Therefore, attaching or removingheating or refrigerating devices can change the classification.  However, it should be noted that the
change of use issue is dealt with by Issue No.9.
OPTION A: Yes.  (by assembly)G/RO/41
Page 1173
Option A/1:  (SG)
416. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
417. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”  or
CTSH
Option A/2:  (IND) (MOR) (SEN)
418. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching or removing heating or refrigerating devices results in a new
good having new characteristics.
419. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (CAN) (CH) (COL)420. For automatic goods-vending machines for food or beverage the heating or refrigerating
devices are one of the important components of this kind of machines.  Attaching heating orrefrigerating devices to automatic goods-vending  machines changes the characteristics of the
machines concerned.  Non-originating heating or refrigerating devices may be used for the assembly
of the machines concerned.  The CTSH rule does not mean to accept disassembly of the heating or
refrigerating devices from the machines concerned as origin conferring.  Disassembly issue should
separately be dealt with in a Chapter Note.
421. The rule should be :
CTSH
OPTION C: Yes, provided  (by a value added rule)
Option C/1:  (EC)
422. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  If these articles in question are manufactured from non-
originating materials classified outside this heading, this is also an origin conferring event regardless
of the value added achieved.
423. The rule should be :
CTH; or 45 % value added rule
Option C/2:  (BRA)G/RO/41
Page 1174
424. Any non-originating material may be used regardless of its classification, provided the
criterion of 60% value added is satisfied.
425. The rule should be :
60% value added rule
426. For both Options C/1 and C/2, if the required value added is not achieved origin is determined
by application of a [general] [final] residual rule.
OPTION D: No.427. A change between articles subheadings can easily be achieved by:
(i) mere attaching heating or refrigerating devices to non-originating automatic goods-
vending machines; or
(ii) removing heating or refrigerating devices from non-originating automatic goods-
vending machines (disassembly issues:  see also Issues Nos.11-13); or
(iii) by modification of the similar machines, such as between foods-vending machines
and beverage-vending machines (modification issue:  see also Issue No.1).
428. Therefore, other subheadings of the articles subheadings should be excluded from the
assembly rule.
429. The rule should be :
CTSH, except from subheadings 8476.29 through 8476.89 for subheading 8476.21;
CTSH, except from subheading 8476.21, 8476.81 or 8476.89 for subheading 8476.29;CTSH, except from subheading 8476.21, 8476.29 or 8476.89 for subheading 8476.81;
CTSH, except from subheadings 8476.21 through 8476.81 for subheading 8476.89.
Option D/1:  (JPN) (MEX)
430. When the CTSH rule is not met, origin is de termined by application of a [general] [final]
residual rule.
Option D/2:  (US)
431. When non-originating heating or refrigerating devices are attached or removed, or non-
originating automatic goods-vending machines are modified, the country of origin of the automaticgoods-vending machines is the country where the machines excluded from the CTSH rule were first
transformed into the machines of another subheading.
432. The subsidiary rule should be :
• The country of origin will be the country in which it was first transformed into a good of the
subheading 8476.29, 8476.81 or 8476.89  -  for subheading 8476.21;
• The country of origin will be the country in which it was first transformed into a good of the
subheading 8476.21, 8476.81 or 8476.89  -  for subheading 8476.29;
• The country of origin will be the country in which it was first transformed into a good of the
subheading 8476.21, 8476.29 or 8476.89  -  for subheading 8476.81;
• The country of origin will be the country in which it was first transformed into a good of the
subheading 8476.21, 8476.29 or 8476.81  -  for subheading 8476.89.]G/RO/41
Page 1175
Relevant HS Codes :
8476.21,  8476.29,  8476.81,  8476.89
ISSUE No.35: ASSEMBLY OF BALL OR  ROLLER BEARINGS (8482.10 THROUGH 8482.80)
FROM FINISHED INNER OR OUTER RINGS OR RACES CLASSIFIED IN SUBHEADING
8482.99
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
433. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
434. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”  or
CTSH
Option A/2:  (IND) (MOR) (SEN)
435. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching balls, needles and rollers to the finished inner or outer rings or
races results in a new good having new characteristics.
436. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (COL) (MEX) (CH)437. Attaching balls, needles and rollers to the finish ed inner or outer rings or races is considered
to be substantial transformation.  Modification of finished or complete roller bearings or other
bearings to ball bearings is also origin conferring.
438. The rule should be:
CTSH
OPTION C: Yes, provided  (by a value added rule)Option C/1:  (EC)
439. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  If the ball bearings are manufactured from non-originatingmaterials classified outside this heading, this is also  an origin conferring event regardless of the value
added achieved.
440. The rule should be :G/RO/41
Page 1176
CTH; or 45 % value added rule
Option C/2:  (BRA)
441. Any non-originating material may be used regardless of its classification, provided the
criterion of 60% value added is satisfied.
442. The rule should be :
60% value added rule
443. For both Options C/1 and C/2, if the required value added is not achieved origin is determined
by application of a [general] [final] residual rule.
OPTION D:  No.  (KOR) (JPN) (TUR) (US) (AUS) (CAN)444. For manufacture of ball or roller bearings heat treatment and the subsequent grinding process
of the inner and outer rings or races of bearings are the most significant.  These processes give
bearings their important characteristics, such as a ccuracy or durability.  This reflects the fact that
assembly of a bearing from the finished or complete inner and outer rings or races is a simple process
which does not result in a substantial transformation of the races or rings.  Furthermore, these races or
rings are the major components of the bearings; the balls are considered inconsequential.  Thus, whenthe ball or roller bearings are manufactured from the turned or forged inner and outer rings or races of
bearings by heat treatment and the subsequent grinding process in one country, the origin should be
conferred on the ball or roller bearings.
445. When the finished or complete ball or roller bearings are assembled from the finished or
complete inner and outer rings or races of bearings, the origin of ball or roller bearings is the country
where heat treatment [and subsequent grinding pr ocess (KOR) (JPN) (TUR)] of the inner and outer
rings or races of bearings are undergone.
Option D/1:
446. The rule should be:
TSH, except from split subheading ex 848 2.99(a)  (KOR) (JPN) (TUR) (US) (AUS)
447. When the finished inner or outer rings or races are used as starting materials, the origin of the
finished or complete ball or roller bearings should be:
[The country of origin of the goods of this heading shall be the country in which the inner and
outer rings or races are heat treated [and subsequently ground (KOR) (JPN) (TUR)]]
The country of origin shall be the country of origin of the inner or outer rings or races of
subheading 8482.99  (US)
Option D/2:
448. The rule should be:
CTSH, except from inner or outer races or rings of subheading 8482.99 or CTSH from inneror outer races or rings of subheading 8482.99 with supplementary criteria  (CAN)
449. When the inner or outer races or rings of subheading 8482.99 are used without satisfying the
supplementary criteria, origin is determined by appl ication of a [general] [final] residual rule.  (CAN)G/RO/41
Page 1177
Relevant HS Codes :
8482.10 to 8482.80
ISSUE No.36:  HEAT TREATMENT AND GRINDING TO MANUFACTURE INNER OR OUTER
RINGS OR RACES OF BALL OR ROLLER BEARINGS (EX 8482.99(a))
OPTION A: Yes. (by a change of tariff classification rule)  (JPN) (AUS)450. For bearings heat treatment and grinding of the inner and outer rings or races of bearings are
the most significant processes.  These processes give  bearings their important characteristics, such as
accuracy or durability.
451. The rule should be :
CTH; or change from split subheading ex 8482.99(b)
OPTION B: Yes. (by a Chapter blank rule) (US) (CH)452. Although a CTH rule is proposed for subheading 8482.99 in the matrix, finishing blanks of
the inner and outer rings or races of ball or roller bearings may, under some circumstances, meet the
specified conditions proposed for blanks at the Chapter level.
453. Chapter Notes/Chapter Rules/Legal Notes should be :
Option B/1:  (US)
“Where goods are produced from forged or cast blanks which had the essential character of the
complete or finished goods and were classifiable, by application of HS General Interpretative Rule
2(a), in the same heading or subheading as the complete or finished goods:
(1) Provided the following criteria are met, the coun try of origin of the goods shall be the country
in which the blank was finished:
(a) In its imported prefinished condition, the blank was not capable of functioning for its
ultimate use and was not advanced beyond cleaning or working to remove flash,
sprues, burrs or similar excess material, and
(b) In the country in which the goods were finished:
(i) The blank was configured to final shape by the removal of material (other
than merely by honing or polishing or both), or by bending, hammering,
pressing, stamping or similar forming process; and
(ii) The blank underwent one or more of the following processes:
1. Hardening to a minimum hardness of 38 degrees Rockwell C [or Vickers H-
V-3-70] or equivalent standard of hardness; or
2. Assembly with five or more parts (oth er than parts of general use as defined
in Note 2 to Section XV or similar parts of plastic (Chapter 39).
(2) If the criteria of subparagraph (a) above are not satisfied, the country of origin of the goods
shall be the country of origin of the blank.”G/RO/41
Page 1178
Option B/2:  (CH)
“Where goods are produced from forged or cast blanks which had the essential character of the
complete or finished goods and were classifiable, by application of HS General Interpretative Rule
2(a), in the same heading or subheading as the complete or finished goods:
(1) Provided the following criteria are met, the coun try of origin of the goods shall be the country
in which the blank was finished:
(i) The blank was configured to final shape by the removal of material (other than
merely by honing or polishing or both), or by bending, hammering, pressing,
stamping or similar forming process; and
(ii) The blank underwent one or more of the following processes:
1. Heat treatment or thermochemical treatment, such as glowing, tempering,
hardening; or
2. Assembly with five or more parts (oth er than parts of general use as defined
in Note 1(g) to Section XVI of the HS); or
3. Surface treatment, such as coating, compressing, condensing, impregnating or
insulating;
(2) If the criteria of subparagraph above are not satisfied, the country of origin of the goods shall
be the country of origin of the blank.
OPTION C: Yes, provided  (by a value added rule)  (EC) (BRA)
454. Heat treatment and grinding of the inner and outer rings or races of ball or roller bearings are
origin conferring, provided the specified value added rule is satisfied.
455. The rule should be :
(a) CTH; or 45 % value added rule  (EC)(b) 60% value added rule  (BRA)
456. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: No.457. Parts of ball or roller bearings should be manufactured from raw materials.  Heat treatment
and subsequent grinding process alone do not change their characteristics of the inner and outer rings
or races as parts.  Therefore, there is no need to split this subheading.
458. The rule should be :
(a) CTH  (CAN) (MEX) (PHI) (MOR)
(b) CTSH  (COL) (SG)G/RO/41
Page 1179
459. When the CTH or CTSH rule is not met, origin  is determined by application of a [general]
[final] residual rule.
Relevant HS Codes :
8482.99
ISSUE No.37:  INCORPORATION OF BALL OR ROLLER BEARINGS INTO BEARING
HOUSINGS
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
460. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
461. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”  or
CTSH
Option A/2:  (IND) (MOR) (SEN)
462. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  The incorporation of ball or roller bearings results in a new good having
new characteristics.
463. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (COL) (MEX) (CH)464. This option allows use of bearing housings which do not incorporate ball or roller bearings
(8483.30) as starting materials.  Manufacture from materials classified outside this subheading is
considered to be substantial transformation.
465. The rule should be :
CTSH
OPTION C: Yes, provided  (by a value added rule)
Option C/1:  (EC)
466. If the bearing housings are manufactured from non-originating materials classified outside
this heading, this is an origin conferring event.  Parts of bearing housings (8483.90) or bearing
housings which do not incorporating ball or roller bearings (8483.30) may be used provided that the45% value added rule is met.
467. The rule should be :G/RO/41
Page 1180
CTH; or 45 % value added rule
Option C/2:  (BRA)
468. Any non-originating material may be used regardless of its classification, provided the
criterion of 60% value added is satisfied.
469. The rule should be :
60% value added rule
470. For both Options C/1 and C/2, if the required value added is not achieved origin is determined
by application of a [general] [final] residual rule.
OPTION D: No.471. This Option precludes origin being conferred on non-originating ball or roller bearings when
they are mounted in bearing housings.  This reflects the fact that mounting a ball or roller bearing in abearing housing does not substantially transform the bearing.  However, parts of bearing housings
(8483.90) or bearing housings which do not incorporate ball or roller bearings (8483.30) may be used.
472. The rule should be :
CTSH, except from subheadings 8482.10 through 8482.80
Option D/1:  (JPN) (CAN) (KOR)
473. When the CTH or CTSH rule is not met, origin  is determined by application of a [general]
[final] residual rule.
Option D/2:  (AUS)
474. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Option D/3:  (US)
475. When non-originating ball or roller bearings are used, the subsidiary rule for this subheading
determine the country of origin.  The country of origin shall be the country of origin of the ball or
roller bearing.
Relevant HS Code:
8483.20ISSUE No.38:  MANUFACTURE OF MECHANICAL SEALS FROM OTHER ARTICLES
CLASSIFIED IN ANOTHER SUBHEADING
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
476. Any assembly from parts confers origin on the assembled goods.477. The Chapter rule should be :G/RO/41
Page 1181
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
478. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Assembling mechanical s eals from other articles classified in another
subheading results in a new good having new characteristics.
479. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (JPN) (CAN) (MEX) (US) (CH)
(AUS)
480. Joints classified in subheading 8484.10 could be used as “parts” for mechanical seals.
Manufacture of mechanical seals from other articles classified in another subheading is considered to
be origin conferring.
481. The rule should be :
CTSH
OPTION C: Yes, rovided  (by a value added rule)  (BRA)
482. Any non-originating material may be used regardless of its classification, provided the
criterion of 60% value added is satisfied.
483. The rule should be :
60 % value added rule
484. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: No. (EC)
485. Mechanical seals should be manufactured from materials classified outside this heading.
486. The rule should be :
CTH
487. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Code:
8484.20ISSUE No.39: PACKAGING OR REPACKAGING OF GASKETS (SET)G/RO/41
Page 1182
NOTE
488. According to the Explanatory Note to the HS, “Such sets or assortments of any material
(agglomerated cork, leather, rubber, textiles, paperboard, asbestos, etc.) are classified here when put
up in pouches, envelopes, boxes, etc., provided that the gaskets or joints are not all of the same
material.  To be classified here, the sets and assortments must contain at least two gaskets or joints ofdifferent material.  Therefore, a pouch, envelop, box, etc., containing, for example, five gaskets all
made of paperboard, is not covered by the heading but  is classified in heading 48.23; but if the set also
included a rubber gasket it would fall in this heading.”
489. Decision is needed as to whether this issue should be dealt with at an Appendix level, a
Chapter level or a heading level.
OPTION A: Yes.  (MEX) (SG)
490. Any non-originating gasket (8484.10) may be used to form a set or assortment of gaskets and
similar joints.
491. The rule should be:
CTSH
OPTION B: Yes, provided  (CAN) (CH)492. Non-originating gaskets and similar joints of metal sheeting combined with other material or
of two or more layers of metal (8484.10) should not be used to form a set or assortment of gaskets and
similar joints.  Other types of non-originating gaskets or similar joints may be used for this purpose.
493. The rule should be :
CTSH, except when the change results only from putting up in pouches, envelopes or similar
packings
OPTION C: Yes, provided  (EC) (SEN)
494. Non-originating gaskets and similar joints of metal sheeting combined with other material or
of two or more layers of metal (8484.10) should not be used to form a set or assortment of gaskets and
similar joints.  Other types of non-originating gaskets or similar joints may be used for this purpose.
495. The rule should be:
CTH
OPTION D: Yes, provided  (US)496. This Option precludes origin being conferred when non-originating metal gaskets are merely
packaged with gaskets of other materials.  Other ty pes of non-originating gaskets or similar joints may
be used for this purpose.
497. The rule should be:
CTSH, except from subheading 8484.10
OPTION E: Yes, provided  (JPN) (AUS)G/RO/41
Page 1183
498. All types of non-originating gaskets or similar joints may not be used for simply putting up in
packings.
499. The rule should be:
CTH, except when the change results only from putting up in pouches, envelopes or similar
packings
OPTION F: Yes, provided  (BRA)500. Any material may be used regardless of its classification, provided the criterion of 60% value
added rule is satisfied.
501. The rule should be:
60% value added rule
Relevant HS Code:
8484.90G/RO/41
Page 1184
Product specific issues:   Chapter 85
ISSUE No.40:  ASSEMBLY OF ELECTRIC MOTORS AND GENERATORS FROM PARTS
(85.03)
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
502. Any assembly from parts confers origin on the assembled goods.503. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
504. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Assembling an electric motor or generator from its parts results in a new
good having new characteristics.
505. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (CAN) (COL) (CH) (JPN) (KOR)
(MEX) (PHI) (EGY) (HK) (TH) (MAL)
506. Manufacture of electric motors and generators by assembling parts classified in heading 85.03
is a substantial transformation.
507. The rule should be:
CTH
OPTION C: Yes, provided  (by a value added rule)Option C/1:  (EC)
508. Assembly of a motor or generator from its parts does not necessarily result in a substantial
transformation.  If the motor or generator is manufactured from non-originating materials classified
outside this heading other than 85.03, this is an origin conferring event.  Parts of motors or generators
(85.03) may be used provided that the 45% value added rule is met.
509. The rule should be :
CTH, except from heading 85.03; or 45 % value-added rule
Option C/2:  (BRA)
510. Any non-originating material may be used regardless of its classification, provided the
criterion of 60% value added and the additional specific requirement is satisfied.G/RO/41
Page 1185
511. The rule should be :
60 % value added rule; andRotor and stator should be manufactured in the country of manufacture of the product
512. For both Options C/1 and C/2, if the required value added is not achieved origin is determined
by application of a [general] [final] residual rule.
OPTION D: No.513. Electric motors and generators of heading 85.01 consist of two major parts, the stator and the
rotor, combined with a number of less significant components.  Thus assembly of a motor or
generator from its parts does not necessarily result in a substantial transformation.
514. The rule should be :
CTH, except from heading 85.03 (TUR - 8501.31, 8501.32 only)
Option D/1:  (US) (AUS)
515. When the specified rule is not met, the “5 parts” rule, the specified process rule, the use of
one originating part rule and a [general] [final] residual rule apply in sequence.
Option D/2:  (TUR)
516. When the specified rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Code:
85.01
ISSUE No.41:  ASSEMBLY OF ELECTRIC GENERATING SETS AND ROTARY CONVERTERS
FROM GENERATORS (85.01) AND PRIME MOVERS (STEAM TURBINES, GAS TURBINES,
INTERNAL COMBUSTION ENGINES ETC. OF HEADINGS 84.06, 84.07, 84.08, 84.11, 84.12)
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
517. Any assembly from parts confers origin on the assembled goods.518. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
519. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching generators (85.01) and prime movers (steam turbines, gas
turbines, internal combustion engines etc. of headings 84.06, 84.07, 84.08, 84.11, 84.12) results in a
new good having new characteristics.G/RO/41
Page 1186
520. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (CAN) (COL) (CH) (JPN) (KOR)
(MEX) (PHI) (EGY) (HK) (MAL)
521. Assembly of electric generating sets or rotary converters from generators (85.01) and prime
movers (steam turbines, gas turbines, internal combustion engines etc. of headings 84.06, 84.07,
84.08, 84.11, 84.12) is a substantial transformation.
522. The rule should be:
CTH
OPTION C: Yes, provided  (by a value added rule)  (EC)523. Assembly of electric generating sets or rotary converters from generators (85.01) and prime
movers (steam turbines, gas turbines, internal combustion engines etc. of headings 84.06, 84.07,
84.08, 84.11, 84.12) results in a substantial transformation.  However, if the electric generating sets or
rotary converters are manufactured from non-originating parts classified in 85.03, this is not asubstantial transformation.  Parts of motors or generators may be used provided that the 45% value
added rule is met.
524. The rule should be :
CTH, except from heading 85.03; or 45 % value-added rule
525. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No.  (US) (AUS)
526. The rule for electric generating sets of 85.02 precludes origin being conferred when non-
originating prime movers or non-originating generators are used.  Electric generating sets are
combinations of generators (85.01) and prime movers (steam turbines, gas turbines, internal
combustion engines etc. of headings 84.06, 84.07, 84.08, 84.11, 84.12).  Provided they are designed to
be mounted together on a common base, they do not have to be joined together in shipping; presentedtogether they undergo a change in heading.  That change of heading does not ensure that a substantial
transformation has occurred.
527. The rule should be :
CTH, except from headings 84.06, 84.07, 84.08, 84.11, 84.12, 85.01
528. When the specified rule is not met, the “5 parts” rule, the specified process rule, the use of
one originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Code:
85.02
ISSUE No.42:  ASSEMBLY OF BALLASTS FOR DISCHARGE LAMPS OR TUBES FROM
ELECTRICAL TRANSFORMERS OR INDUCTORSG/RO/41
Page 1187
OPTION A: Yes.  (by assembly)
Option A/1:  (SG)
529. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
530. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.” or
CTSH
Option A/2:  (IND) (MOR) (SEN)
531. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Assembling ballasts for discharge lamps or tubes from transformers or
inductors results in a new good having new characteristics.
532. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (JPN) (CAN) (COL) (CH) (EGY)
(KOR) (PHI) (HK) (TH) (MAL)
533. The assembly of ballasts for discharge lamps or tubes from electrical transformers or
inductors classified in the same heading is a substantial transformation.
534. The rule should be:
CTSH
OPTION C: Yes, provided  (by a value added rule)  (EC) (TUR)535. Assembly of ballasts for discharge lamps or tubes from electrical transformers or inductors
classified in the same heading does not necessarily result in a substantial transformation.  If theballasts for discharge lamps or tubes are manufactured from non-originating materials classified
outside this heading, this is an origin conferring event.  Electrical transformers or inductors may be
used provided that the 45% value added rule is met.
536. The rule should be:
CTH; or 45% value added rule
537. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No.G/RO/41
Page 1188
538. Ballasts often consist of little more than transformers or inductors.  Therefore, a change of
classification from subheadings for transformers and inductors would not constitute a substantial
transformation.
539. The rule should be:
CTSH, except from subheadings 8504.21 to 8504.50
Option D/1: (US)
540. When the specified rule is not met, a subsidiary rule applies.  The subsidiary rule should be:
“The country of origin of the good will be the country of origin of the electrical transformer
or inductor.”
Option D/2:  (AUS)
541. When the specified rule is not met, the “5 parts” rule, the specified process rule, the use of
one originating part rule and a [general] [final] residual rule apply in sequence.
Option D/3:  (MEX)
542. When the specified rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Code:
8504.10
ISSUE No.43:  ASSEMBLY OF PRIMAR Y BATTERIES AND ELECTRIC ACCUMULATORS
FROM CELLS
OPTION A: Yes.  (by assembly)
Option A/1:  (SG)
543. Any assembly from parts confers origin on the assembled goods.
544. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
545. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Assembling primary batteri es and electric accumulators from cells results
in a new good having new characteristics.
546. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (US) (MAL)G/RO/41
Page 1189
547. The assembly of primary batteries and electric accumulators from cells is a substantial
transformation.  The Chapter Notes preclude disassembly of batteries or accumulators into individual
cells from conferring origin.
548. The rules should be:
CTHS for ex 85.06(a), ex 85.06(b), ex 85.07(a) and ex 85.07(b)
OPTION C: Yes, provided  (by a value added rule)  (EC)549. Assembly of primary batteries and electric accumulators from cells does not necessarily result
in a substantial transformation.  If the primary batteries and electric accumulators are manufacturedfrom non-originating materials classified outside this heading, this is an origin conferring event.  Cells
may be used provided that the 45% value added rule is met.
550. The rule should be:
CTH; or 45% value added rule
551. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No.  (JPN) (CH) (CAN) (COL) (EGY) (KOR) (PHI) (AUS) (HK) (MEX) (TH)
552. The assembly of primary batteries and electric accumulators from their parts is a substantial
transformation, but merely putting together cells to form batteries or accumulators is not substantial.
553. The rule should be:
CTSH
554. When the CTSH rule is not met, origin is de termined by application of a [general] [final]
residual rule.
Relevant HS Codes :
85.06, 85.07ISSUE No.44:  ATTACHMENT OF ELECTRIC MOTORS OR GENERATORS TO PARTS
OPTION A: Yes.  (by assembly)
Option A/1:  (SG)
555. Any assembly from parts confers origin on the assembled goods.556. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
557. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching an electric motor or generator to parts for the electro-G/RO/41
Page 1190
mechanical tools and appliances of headings 85.08, 85.09 and 85.10 results in a new good having new
characteristics.
558. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (JPN) (CH) (CAN) (COL) (MEX)
(EGY) (KOR) (PHI) (AUS) (HK) (MAL ) (TUR – 8509.90 only) (EC – 8508.90 only)
559. Once motors or generators are attached to parts for the electro-mechanical tools and
appliances of headings 85.08, 85.09 and 85.10 to form as a new and different part or sub-assemblywhich can be used only for a specific machine, that part or sub-assembly is no longer a motor or
generator in general terms.  When articles which can be used for multiple purposes are further
manufactured to meet the specific use or function required, the articles are considered to be
substantially transformed to new and different goods.  Therefore, a change to parts from materials
classified outside the parts heading or subheading is always origin conferring.
560. The rule should be :
CTH
OPTION C: Yes, provided  (by a value added rule)  (EC)
561. Attaching an electric motor or generator to  parts for the electro-mechanical tools and
appliances of headings 85.09 and 85.10 does not necessarily result in a substantial transformation.  If
the parts for the electro-mechanical tools and appliances of headings 85.09 and 85.10 aremanufactured from non-originating materials classified outside this heading other than electric motors
or generators, this is an origin conferring event.  Electric motors or generators may be used provided
that the 45% value added rule is met.
562. The rule should be:
CTH, except from heading 85.01; or 45% value added rule
563. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No.  (US)564. Parts classified in the parts heading or subheading are, as provided in Note 2(b) or (c) to
Section XVI, suitable for use solely or principally w ith a particular kind of machine, or with a number
of machines of the same heading; or other (multiple use) parts.  Therefore, mere attachment of some
parts to operate the machine in question changes the classification from motors or generators (85.01)heading to that parts heading or subheading concerned.  However, even though the parts incorporating
motors or generators are suitable for use solely or principally with a particular machine the
characteristics of the parts in question are still motors or generators.  Therefore, in principle, such
parts should retain the origin of the motors or gene rators.  Attaching an electric motor or generator to
parts for the electro-mechanical tools and appliances of headings 85.08, 85.09 and 85.10 is not asubstantial transformation.
565. The rule should be:G/RO/41
Page 1191
CTH, except from heading 85.01
566. When the specified rule is not met, the “5 parts” rule, the specified process rule, the use of
one originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Codes :
8508.90, 8509.90, 8510.90ISSUE No.45:  ASSEMBLY OF A “CAV ITY” FROM ITS PARTS (ex 8516.90(b))
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
567. Any assembly from parts confers origin on the assembled goods.568. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
569. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  The assembly of a “cavity” (part of microwave oven) from its parts
classified in subheading 8516.90 results in a new good having new characteristics.
570. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (JPN) (KOR)571. Assembly of a “cavity” from its parts classified in subheading 8516.90 results in a
sophisticated part for microwave oven.  When parts are further manufactured to meet the specific use
or function required, these particular parts are considered to be substantially transformed to new and
different parts.
572. The rule should be :
CTSHS
OPTION C: Yes, provided  (by a value added rule)
Option C/1:  (EC)
573. Assembly of a “cavity” from its parts classified in subheading 8516.90 does not necessarily
result in a substantial transformation.  If the “cavity” is manufactured from non-originating materialsclassified outside this heading other than electric motors or generators, this is an origin conferring
event.  The parts of the “cavity” may be used provided that the 45% value added rule is met.
574. The rule should be:G/RO/41
Page 1192
CTH, except from heading 85.01; or 45% value added rule
575. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
Option C/2:  (TUR)
576. Assembly of a “cavity” from its parts classified in subheading 8516.90 does not necessarily
result in a substantial transformation.  If the “cavity” is manufactured from non-originating materials
classified outside this heading, this is an origin  conferring event.  The parts of the “cavity” may be
used provided that the 45% value added rule is met.
577. The rule should be:
CTH; or 45% value added rule
578. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No.579. Assembly of a “cavity” from its parts classified in subheading 8516.90 does not result in a
substantial transformation.  Any part of subheading 8516.90 should be assembled from materials
classified outside this heading.
580. The rule should be:
CTH
Option D/1:  (US) (AUS)
581. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Option D/2: (PHI) (CH) (CAN) (COL) (MEX) (EGY) (HK) (TH) (MAL)
582. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Code:
ex 8516.90(a)
ISSUE No.46:  ADDITION OR REMOVAL OF DEVICES THAT RESULTS IN A CHANGE OF
CLASSIFICATION:  WELDING MACHINES AND APPARATUS
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
583. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
584. The Chapter rule and the product specific rule should be :G/RO/41
Page 1193
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.” or
CTSH
Option A/2:  (IND) (MOR) (SEN)
585. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Adding or removing such devices as an automatic welding wire feeder
results in a new good having new characteristics.
586. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (JPN) (CH) (CAN) (COL) (MEX)
(KOR) (PHI) (HK) (MAL)
587. Welding machines are subdivided between automatic or partly automatic machines and non-
automatic machines.  The operations needed to chan ge a non-automatic to a fully or partly automatic
machine are considered to be substantial.
588. The rule should be:
CTSH
OPTION C: Yes, provided  (by a value added rule)  (EC)
589. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  If these articles in question are manufactured from non-
originating materials classified outside this heading, this is also an origin conferring event regardless
of the value added achieved.
590. The rule should be:
CTH; or 45% value added rule
591. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No.  (US)592. A change of subheading between automatic or partly automatic welding machines and
welding machines is not a substantial transformation.  It can be accomplished by adding such devices
as an automatic welding wire feeder to a weldin g machine or removing such devices from a welding
machine.  Such modifications would result in a change of subheading without a substantial
transformation
593. The rule should be:
for 8515.21 : CTSH, except from 8515.29
for 8515.29 : CTSH, except from 8515.21G/RO/41
Page 1194
for 8515.31 : CTSH, except from 8515.39
for 8515.39 : CTSH, except from 8515.31
Option D/1: (US)
594. When the specified rule is not met, a subsidiary rule applies.  The subsidiary rule should be:
“The country of origin shall be the country in which it was first transformed into a good of
subheading 8515.2.” for subheadings 8515.21 and 8515.29
“The country of origin shall be the country in which it was first transformed into a good of
subheading 8515.3.” for subheadings 8515.31 and 8515.39
Option D/2:  (AUS)
595. When the specified rule is not met, the “5 pa rts” rule, the specified process rule, the use of
one originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Codes :
8515.21 to 8515.39
ISSUE No.47:  ASSEMBLY OF THE ELECTRICAL HEATING RESISTORS OF SUBHEADING
8516.80 FROM PARTS CLASSIFIED IN THE SAME HEADING
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
596. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
597. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.” or
CTSH
Option A/2:  (IND) (MOR) (SEN)
598. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Assembling electric heating resistors from the parts results in a new good
having new characteristics.
599. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (CH) (CAN) (US) (COL) (MEX)
(EGY) (PHI) (AUS) (HK) (MAL) (TH)
600. The assembly of parts classified in subheading 8516.90 to produce electrical heating resistors
is a substantial transformation.G/RO/41
Page 1195
601. The rule should be :
CTSH
OPTION C: Yes, provided  (by a value added rule)
Option C/1:  (EC)
602. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  If these articles in question are manufactured from non-
originating materials classified outside this heading other than electric motors or generators (85.01),
this is also an origin conferring event regardless of the value added achieved.
603. The rule should be:
CTH, except from heading 85.01; or 45% value added rule
604. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
Option C/2:  (TUR)
605. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  If these articles in question are manufactured from non-
originating materials classified outside this heading, this is also an origin conferring event regardless
of the value added achieved.
606. The rule should be:
CTH; or 45% value added rule
607. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No.  (JPN) (KOR)608. The assembly of parts classified in the same heading to produce electric heating resistors is
not a substantial transformation.  The electric heating resistors should be manufactured from the
materials classified outside this heading.
609. The rule should be:
CTH
610. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Code:
8516.80ISSUE No.48:  FITTING OF ELECTRONIC ENCRYPTION SYSTEMSOPTION A: Yes.  (by assembly)Option A/1:  (SG)G/RO/41
Page 1196
611. Any assembly from parts confers origin on the assembled goods.
612. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
613. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  The manufacture and installation of an encryption system consisting of
hardware (printed circuit boards) and software results in a new good having new characteristics.
614. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a process rule expresse d by a change of classification) (CH) (EGY)
615. Manufacture and installation of an encryption system consisting of hardware (printed circuit
boards) and software, which does not bring about a ch ange of tariff classification, is a substantial
transformation.  These encryption systems are incorporated into goods such as videophones (ex
8517.19), for certain other telephony or telegraphy apparatus (ex 8517.80) and parts (ex 8517.90), for
certain types of transmission apparatus incorporating reception apparatus (ex 8525.20) and certain
parts for the goods of headings 85.25 to 85.28 (split (A) ex 8529-90(b)).
616. The rule should be:
“The production of the ciphering equipment with the manufacturing of the corresponding
printed circuit boards (hardware) and the integration of the ciphering capabilities (software)
confer origin.”
OPTION C: Yes, provided  (by a value added rule)Option C/1:  (EC)
617. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  If these articles classified in ex-8517.19(a), ex-8517.80(a),ex-8517.90(a) are manufactured from non-originating materials classified outside this heading, this is
also an origin conferring event regardless of the value added achieved.
618. The rule should be:
CTH; or 45% value added rule for ex 8517.19(a), ex 8517.80(a), ex 8517.90(a)
45% value added rule ex 8525.20(a), split (A) ex 8529.90(b)
619. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
Option C/2:  (TUR)G/RO/41
Page 1197
620. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  If these articles classified in ex 8517.90(a) and split (A) ex
8529.90(b) are manufactured from non-originating materials classified outside this heading, this is
also an origin conferring event regardless of the value added achieved.
621. The rule should be:
CTH; or 45% value added rule for ex 8517.90(a) and split (A) ex 8529.90(b) only
622. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No623. The addition of electronic systems does not alter the essential character of the good and is not
a substantial transformation.
624. The rules should be:
for 8517.19
• CTSH (JPN) (CAN) (MEX) (KOR) (TUR) (PHI) (HK) (US) (AUS) (MAL)
for 8517.80
• CTSH (JPN) (CAN) (MEX) (KOR) (TUR) (PHI) (HK) (US) (AUS) (TH) (MAL)
for 8517.90
• CTH  (JPN) (CAN) (MEX) (KOR) (PHI) (HK) (US) (AUS) (TH) (MAL)
for 8525.20
• CTH (COL) (MEX) (PHI) (HK) (US) (CAN) (AUS) (MAL)
• CTSH, except from 8525.10 (JPN) (KOR)
• CTSH (TUR)
for 8529.90
• CTH  (COL) (MEX) (KOR) (TUR) (PHI) (US) (AUS) (HK) (TH) (MAL)
• CTSH, except from headings 85.25 to 85.28 (CAN)
Option D/1: (COL) (MEX) (KOR) (TUR) (PHI) (CAN) (HK) (TH) (MAL)
625. When the specified rule is not met, origin is determined by application of a [general] [final]
residual rule.
Option D/2:  (US) (AUS)
626. When the specified rule is not met, the “5 parts” rule, the specified process rule, the use of
one originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Codes :
ex 8517.19(a), ex 8517.80(a), ex 8517.90(a), ex 8525.20(a), split (A) ex 8529.90(b)
ISSUE No.49:  ASSEMBLY OF ELECTRIC SOUND AMPLIFIER SETSOPTION A: Yes  (by assembly)G/RO/41
Page 1198
Option A/1:  (SG)
627. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
628. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”  or
CTSH
Option A/2:  (IND) (MOR) (SEN)
629. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  The assembly of electric sound amplifier sets results in a new good having
new characteristics.
630. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (JPN) (CH) (CAN) (MEX) (KOR)
(HK) (TH) (MAL)
631. The assembly of electric sound amplifier sets comprising microphones, audio-frequency
amplifiers and loudspeakers is a substantial transformation.  Audio-frequency amplifiers are one of
the significant components of the electric sound amplifier sets, but once formed as sets the
components substantially change into a new and different good.
632. The rule should be:
CTSH
OPTION C: Yes, provided  (by a value added rule)  (EC)633. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.
634. The rule should be:
45% value added rule
635. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: No  (US) (PHI) (AUS)
636. The assembly of electric sound amplifier sets is not a substantial transformation.  Electric
amplifier sets comprising microphones, audio-frequency amplifiers and loudspeakers have the country
of origin of the individual elements included in the set, or the country of origin of where the elements
in the set are assembled from their parts.G/RO/41
Page 1199
637. It is intended that Rule 5(d) (putting up in sets [or kits]), a Chapter Note will preclude origin
being conferred based on a change of classification within the heading if that change results merely
from disassociation, disassembly or repackaging of sets of subheading 8518.50.
638. The rules should be:
CTH or change from subheading 8518.90
639. When the specified rule is not met, origin is  determined by application of [Appendix 2, Rule
5(d) or] a [general] [final] residual rule.
Relevant HS Code:
8518.50ISSUE No.50:  FINISHING OPERATIONS FROM COATED OR EVAPORATED AND SLITTED
ROLL (MAGNETIC TAPES), FROM COATED OR EVAPORATED (MAGNETIC DISCS), OR
FROM SPUTTERED AND SURFACE PROTECTED (OTHER PREPARED UNRECORDEDMEDIA)
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
640. Any assembly from parts confers origin on the assembled goods.  The assembly of the floppy
diskettes of subheading 8523.20 from parts classified in the same subheading is a substantial
transformation.
641. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.” or
CTSHS for ex 8523.20(a) of split subheading (B)
Option A/2:  (IND) (MOR) (SEN)
642. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  The finishing operations of prepared unrecorded media are accompanied
by assembly which results in a new good having new characteristics.
643. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (JPN) (AUS) (HK) (TH – except ex
8523.90(a))
644. For cassettes the final operations from the coated or evaporated (another method of depositing
the magnetised surface) and slitted roll of magnetic tape to a finished audio or video cassette (8523.11
to 8523.13), without change of subheading, bring about a substantial transformation.  Similarly the
production of magnetic discs of 8523.20 in their final casing from the already coated or evaporatedG/RO/41
Page 1200
disc, or of the finished magnetic optical disc of 8523.90 from the sputtered and surface protected discs
of the same subheading are substantial transformations.
645. The rules should be:
CTSHS for ex 8523.11(a), ex 8523.12(a), ex 8523.13(a), ex 8523.20(a), ex 8523.90(a)
OPTION C: Yes, provided  (by a value added rule)  (EC)646. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.
647. The rule should be:
45% value added rule
648. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  Yes, provided  (by a processing criterion)  (TUR)649. Magnetic tape itself is not a consumer good alone, but should be interpreted as a raw material.
Converting process into consumer goods, such as carrier production, slitting and loading should beconsidered as substantial transformation though it undergoes no change of heading.
650. The rule should be:
CTH or carrier production, slitting and loading
651. If the processing criterion is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION E:  No.Option E/1:  (CH) (COL) (MEX) (EGY) (KOR) (PHI) (CAN) (MAL)
652. The assembly of prepared unrecorded media from parts classified in the same heading or
subheading is not a substantial transformation.
653. The rule should be:
CTH
654. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Option E/2:  (US)
655. The assembly of prepared unrecorded media from parts classified in the same heading or
subheading is not a substantial transformation.  This is also to exclude the possibility that erasing
recordings from the media classified in heading 85.24, which would bring about a change of
classification to heading 85.23, result in a change of country of origin.
The Technical Committee agreed by consensus at its Twelfth Session that change of
classification as a result of erasing recorded phenomena, such as sound images or other data, should
not be origin-conferring. (Sec)G/RO/41
Page 1201
656. The rule should be:
CTH, except from heading 85.24
657. When the specified rule is not met, origin is determined by application of a subsidiary rule.
The subsidiary rule should be:
“For media which undergo a change of classification within the group of subheadings, the
country of origin will be the country in which the good was first transformed into media
classifiable within the group of subheadings and,
For media which undergo a change of classification from heading 85.24 (i.e., by erasure), the
country of origin shall be the country in which the original unrecorded media was produced.”
Relevant HS Code:
85.23
ISSUE No.51: RECORDING SOUND, IMAGE OR DATA
OPTION A:  Yes  (by a change of tariff classification rule) (JPN) (CAN) (MEX) (EGY) (KOR)
(TUR) (US) (SG) (HK) (TH) (CH) (IND) (MAL)
658. The production of records, pre-recorded ta pes and compact discs, video discs, recorded
software on diskettes or compact discs, etc. is substantial transformation.
659. The rule should be:
CTH
OPTION B:  Yes, provided (by a value added rule)  (EC)660. The production of recorded media is a substa ntial transformation, provided the criterion of
45% value added is satisfied.
661. The rule should be:
45% value added rule
662. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION C:  No.  (COL) (BRA) (PHI*) (AUS)663. For the recorded media of 85.24, the essential operation is production of the content.  The
country of origin of records, pre-recorded tapes and compact discs, video discs, recorded software ondiskettes or compact discs, etc. is the country where the original content was produced.  Copying this
onto a carrying medium such as the records, tapes, compact discs, computer diskettes, etc. is not a
substantial transformation.
664. The rules should be:
“The phonographic products of subheadings 8524.10, 8524.32, 8524.39, 8524.51, 8524.53
shall be regarded as originating in the country where the sound recordings were produced by a
phonographic producer located or established in that country “G/RO/41
Page 1202
(* PHI joined the COL proposal on the understan ding that if the rule had implications for
intellectual property rights it would revert to  the original PHI proposal that the country of
origin should be the country in which the IPR rights over the content are held.)
Relevant HS Codes :
8524.10, 8524.32, 8524.39, 8524.51, 8524.53ISSUE No.52: PROGRAMMING AND CONTRO L OF MAGNETIC “SWIPE” CARDS
OPTION A:  Yes.  (by a process rule expressed by a change of classification)  (CH)665. For cards incorporating a magnetic stripe for reproducing phenomena other than sound or
image, e.g. “swipe” cards for security systems or for automatic bank machines, of subheading
8524.91, it is necessary to split the subheading to provide that substantial transformation with
programming and control gives the new product its essential properties without change of subheading.
666. The proposed rule is:
CTSHS
OPTION B:  Yes, provided (by a value added rule)  (EC)
667. The production of cards incorporating a magnetic stripe for reproducing phenomena other
than sound or image, e.g. “swipe” cards is a substantial transformation, provided the criterion of 45%
value added is satisfied.
668. The rule should be:
45% value added rule
669. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.OPTION C:  No  (JPN) (CAN) (MEX) (EGY) (KOR) (TUR) (US) (SG) (HK) (TH) (MAL)
670. This operation is not considered to be a substantial transformation.671. The rule should be:
CTH
672. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Code:
ex 8524.91(a)ISSUE No.53:  ATTACHING OR REMOVING RECEPTION APPARATUS TO MANUFACTURE
THE TRANSMISSION APPARATUS FOR RADIO-TELEPHONY, ETC.
OPTION A: Yes.  (by assembly)
Option A/1:  (SG)G/RO/41
Page 1203
673. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
674. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.” or
CTSH
Option A/2:  (IND) (MOR) (SEN)
675. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching or removing reception apparatus results in a new good having
new characteristics.
676. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)  (TUR)
677. Attaching or removing reception apparatus to manufacture the transmission apparatus for
radio-telephony, etc. is a substantial transformation.
678. The rule should be:
CTSH
OPTION C: Yes, provided  (by a value added rule)  (EC)679. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.
680. The rule should be:
45% value added rule
681. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No682. Adding reception apparatus to transmission apparatus or removing reception apparatus from
transmission apparatus does not result in a substantial transformation.
683. The rule should be:
(a) CTH (CH) (CAN) (COL) (MEX) (PHI) (US) (AUS) (HK) (MAL)(b) CTSH except from 8525.20   for 8525.10
CTSH except from 8525.10   for 8525.20   (JPN) (KOR)G/RO/41
Page 1204
Option D/1:  (JPN) (CH) (CAN) (COL) (MEX) (KOR) (PHI) (HK) (MAL)
684. When the specified rule is not met, origin is determined by application of a [general] [final]
residual rule.
Option D/2:  (US) (AUS)
685. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Codes :
8525.10, 8525.20ISSUE No.54: ATTACHING OR REMOVING RADAR APPARATUSOPTION A: Yes.  (by assembly)
Option A/1:  (SG)
686. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
687. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.” or
CTSH
Option A/2:  (IND) (MOR) (SEN)
688. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching or removing radio apparatus results in a new good having newcharacteristics.
689. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)  (CAN) (MEX) (US)
690. Attaching or removing radio apparatus is a substantial transformation.691. The rules should be:
CTSH 
OPTION C: Yes, provided  (by a value added rule)  (EC)692. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  For manufacturing radar apparatus and of radio navigational
aids, if these articles in question are manufactured from non-originating materials classified outside
this heading other than parts heading of 85.29, this is also an origin conferring event regardless of the
value added achieved.G/RO/41
Page 1205
693. The rule should be:
CTH, except from heading 85.29; or 45% value added rule
694. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No.695. Attaching or removing radio apparatus does not result in a substantial transformation.696. The rules should be:
CTH
Option D/1:  (JPN) (CH) (COL) (KOR) (HK) (MAL)
697. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Option D/2:  (AUS)
698. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Code:
85.26ISSUE No.55:  ASSEMBLY OF FINISHED OR COMPLETE TELEVISION RECEIVERS, VIDEO
PROJECTORS OR VIDEO MONITORS FROM UNFINISHED OR INCOMPLETE GOODS
CLASSIFIED IN THE SAME SUBHEADING AS THE COMPLETE OR FINISHED PRODUCT
NOTE
699. The Generic Issue No. 3 is prepared to deal with the “non-blank” Chapter Note proposed by
CH.  On the other hand, Issue No.55 is prepared for the JPN and KOR’s proposal to split heading
85.28.  According to the proposed Chapter Notes structure the “non-blank” rule is applicable when the
product specific rules specified in the matrices do not determine the origin of a good.  Therefore the
Issue No.55 should be considered as a product specific issue.
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
700. Any assembly from parts confers origin on the assembled goods.701. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (MOR)G/RO/41
Page 1206
702. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Assembly of finished  or complete television receivers from incomplete
television receivers not incorporating a display device; assembly of finished or complete video
projectors from incomplete video projectors not incorporating an optical block including display
device; or assembly of finished or complete video monitors from incomplete video monitors not
incorporating display devices results in a new good having new characteristics.
703. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)  (JPN) (KOR)704. Assembly of finished or complete television receivers from incomplete television receivers
which do not incorporate a display device, or of finished or complete video projectors from
incomplete video projectors which do not incorporate an optical block including display device, or of
finished or complete video monitors from incomplete video monitors which do not incorporatedisplay devices is a substantial transformation.  The finishing operations require the highly
sophisticated processing and determine the quality of the goods.  The production of these components
reflects the commercial reality of this industrial sector.  The finished television receivers, video
projectors and video monitors are substantially transformed from the unfinished or incomplete
television receivers, video projectors or video monitors.
705. The rule should be:
• CTH; or CTHS from ex-85.28(b) for ex 85.28(a)  (JPN) (KOR)
• CTHS for ex 85.28(c) (subheading 8528.30)  (JPN) (KOR)
• CTHS for ex 85.28(e)  (JPN) (KOR)
OPTION C: Yes, provided  (by a Chapter Rule/Note)  (CH)706. It is not necessary to deal with finishing operations as a product specific issue.  Finishing
unfinished or incomplete goods should be considered an origin conferring event, if the processes
satisfied the requirements laid down in the Chapter Rule/Note (the “non-blank” rule).
707. The Chapter Rule/Note should be:
“Whenever the change of classification rules set out for goods of chapters 84 to 90 and 93 are
not determinant of the country of origin of the good, the following substantial transformationrules are to be applied:
(a) A finished good or part produced from a non-originating unfinished good or part
classified in the same heading or subheading as the finished good or part shall
originate in the country in which the good or part was finished, provided:
(i) the unfinished good or part is not functioning for its ultimate use in its
imported condition and has undergone at least two or more of the following
processes:G/RO/41
Page 1207
assembly by built-up such as but not lim ited to welding, soldering, shrinking,
bolting, glueing, fitting, fixing, sp ooling, winding, connecting, wiring,
coupling; or
heat treatment or thermochemical treatment such as glowing, tempering,
hardening; or
treatment for the purpose of shaping, fo rming such as cold or warm forming;
or
mechanical treatment, refining of form-, positional- and surface tolerances of
functional finished shapes such as turning, milling, drilling, broaching,
grinding, polishing, honing, eroding; or
surface treatment such as coating, compressing, condensing, impregnating
(excluding temporary conservation for transport and/or storage purpose),
insulating; or
system engineering, software-development and application;
and
(ii) The finished good or part has undergone final testing such as but not limited
to balancing, spinning, voltage testing, performance- or isolation test.
(b) A finished good or part, produced from a non-originating good or part, classified in
the same subdivision as the finished good or part which do not satisfy the conditions
mentioned in Rule 2.B.(1) (a) above shall originate in the country contributing mostto the product in terms of total value of parts (including an unfinished good) and
related processing activities.”
708. If the required processes are not satisfied origin is determined by application of a [general]
[final] residual rule.
OPTION D: Yes, provided  (by a value added rule)Option D/1:  (EC)
709. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.
710. The rule should be:
45% value added rule
711. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
Option D/2:  (EGY)
712. Any non-originating material may be used regardless of its classification, provided the
criterion of 40% value added is satisfied.
713. The rule should be:G/RO/41
Page 1208
40% value added rule
714. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION E:  No.  (See Issue No.56 for further elaboration)
715. The assembly of these electrical goods from unfinished or incomplete goods classified in the
same subheading is not a substantial transformation.
Option E/1:
716. The rule should be:
(i) CTH    (PHI) (TH) (CAN) (HK) (MAL)
(ii) CTSH (MEX)
717. When the CTH or CTSH rule is not met, origin  is determined by application of a [general]
[final] residual rule.
Option E/2:
Option E/2/a:  (AUS)
718. The rule should be:
CTSH, except from 8540.11 or 8540.12
719. When the specified rule is not met, the “5 parts” rule, the specified process rule, the use of
one originating part rule and a [general] [final] residual rule apply in sequence.
Option E/2/b:  (US)
720. The rule should be:
CTSH, except from 8540.11 or 8540.12
721. When the specified rule is not met, a subsidiary  rule applies.  The subsidiary rule should be:
“Otherwise, the country of origin of the good sh all be the country of origin of the cathode-ray
television picture tube.”
Option E/3:  (TUR)
722. The rule should be:
CTH, except from chassis of heading 85.29.
723. When the specified rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Codes :
85.28  (ex85.28(a),  ex85.28(c),  ex85.28(e))G/RO/41
Page 1209
ISSUE No.56:  ASSEMBLY OF TELEVISION RECEIVERS, VIDEO MONITORS, VIDEO
PROJECTORS ETC. OF HEADING 85.28 US ING A NON-ORIGINATING CATHODE RAY
TUBE
OPTION A: Yes.  (by assembly)
Option A/1:  (SG)
724. Any assembly from parts confers origin on the assembled goods.
725. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
726. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Assembly of television receivers, video monitors, video projectors etc.
using a non-originating cathode ray tube results in a new good having new characteristics.
727. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)
728. Assembly of television receivers, video monitors, video projectors etc. using a non-
originating cathode ray tube is a substantial transformation.  The cathode ray tube is one of the major
parts of television receivers or video monitors.  However, there are many other important parts other
than the cathode ray tube such as the deflection yoke, electron gun, convergence purity magnet,
degaussing coil, fly back transformer, printed circuit board which is assembled from many integratedcircuits, diodes, resistors, capacitors transistors etc., tuner system (VHF, UHF, Sonderkanal and
Hyperband, Satellite reception), sound system (stereo, surround, spatial, Hi-Fi), purity adjustment
system, picture adjustment system, remote control system, power supply system, antenna system etc.
Therefore there is no reason to single out the use of cathode ray tubes.
729. The rule should be:
(i) CTH    (PHI) (TH) (CAN) (CH) (KOR) (JPN) (HK) (MAL)
(ii) CTSH  (MEX)
OPTION C: Yes, provided  (by a change of tariff classification rule)  (TUR)
730. Assembly of television receivers, video monitors, video projectors etc. using a non-
originating cathode ray tube is a substantial transformation.  However, chassis of television, video
monitors, etc. (85.29) should not be used as starting materials.  A change from chassis to television,
video monitors, etc. is not a substantial transformation.
731. The rule should be:
CTH, except from chassis of heading 85.29.G/RO/41
Page 1210
372. When the specified rule is not met, origin is determined by application of a [general] [final]
residual rule.
OPTION D: Yes, provided  (by a value added rule)Option D/1:  (EC)
733. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.
734. The rule should be:
45% value added rule
735. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
Option D/2:  (EGY)
736. Any non-originating material may be used regardless of its classification, provided the
criterion of 40% value added is satisfied.
737. The rule should be:
40% value added rule
738. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION E:  No.739. Cathode ray tubes are the most significant parts used for assembly of television receivers and
video monitors of heading 85.28.  Assembly using a non-originating cathode ray tube is not sufficientto be considered as a substantial transformation.
Option E/1:  (AUS)
740. The rule should be:
CTSH, except from 8540.11 or 8540.12
741. When the specified rule is not met, the “5 parts” rule, the specified process rule, the use of
one originating part rule and a [general] [final] residual rule apply in sequence.
Option E/2:  (US)
742. The rule should be:
CTSH, except from 8540.11 or 8540.12
743. When the specified rule is not met, a subsidiary  rule applies.  The subsidiary rule should be:
“Otherwise, the country of origin of the good sh all be the country of origin of the cathode-ray
television picture tube.”G/RO/41
Page 1211
Relevant HS Code:
85.28
ISSUE No.57: MANUFACTURE OF ENERGY DISTRIBUTION DIRECTING SYSTEMSOPTION A: Yes.  (by assembly)Option A/1:  (SG)
744. Any assembly from parts confers origin on the assembled goods.745. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
746. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Manufacture of energy distribution directing systems results in a new
good having new characteristics.
747. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a process rule)  (CH) (EGY)748. The manufacture of energy distribution direc ting systems from equipment classified in the
same heading is a substantial transformation.  The system includes several computers which are
interlinked and connected with equipment which makes it possible to communicate with remote
input/output interfaces.  Software is integrated with the hardware configuration.  A split of theheading is needed.
749. The rule should be:
[Supplementary criteria]       for ex-85.37(a)
OPTION C: Yes, provided  (by a value added rule)
Option C/1:  (EC)
750. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  For manufacturing energy distribution directing systems, if
these articles in question are manufactured from non-originating materials classified outside this
heading other than parts heading of 85.38, this is also an origin conferring event regardless of the
value added achieved.
751. The rule should be:
CTH, except from heading 85.38; or 45% value added ruleG/RO/41
Page 1212
752. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
Option C/2:  (TUR)
753. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  For manufacturing energy distribution directing systems, if
these articles in question are manufactured from non-originating materials classified outside this
heading, this is also an origin conferring event regardless of the value added achieved.
754. The rule should be:
CTH; or 45% value added rule for subheading 8537.20 only
755. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
Option C/3:  (BRA)
756. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.
757. The rule should be:
60% value added rule; andfor ex 8537.10(a) – with starting switches in thermoplastic and in metal boxes:
• Overload relay, contactor and circuit breaker which come with the starting switches should be
manufactured in the country of manufacture of the final good;
for ex 8537.10(b) – other:
• The metal box should be manufactured in the country of manufacture of the final good;
for 8537.20:
• The metal box should be manufactured in the country of manufacture of the final good.
758. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No.759. There is no substantial transformation.760. The rules should be:
CTH
Option D/1:  (JPN) (CAN) (COL) (MEX) (KOR) (PHI) (HK) (TH) (MAL)G/RO/41
Page 1213
761. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Option D/2:  (US) (AUS)
762. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Code:
ex 85.37(a)ISSUE No.58: ASSEMBLY OF CATHODE RAY TUBE BLOCKS FROM CATHODE RAY
TUBES
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
763. Any assembly from parts confers origin on the assembled goods.764. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
765. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Change from cathode ray tubes to cathode ray tube blocks results in a new
good having new characteristics.
766. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (JPN) (KOR)767. Change from cathode ray tubes to cathode ray tube blocks is a substantial transformation,
because it results from a highly sophisticated assembly process and an adjustment process.  Therelevant subheadings should be split.
768. The rule should be:
CTSHS for ex-8540.11(a) to 8540.60(a)
OPTION C: Yes, provided  (by a value added rule)  (EC)769. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  If these articles in question are manufactured from non-originating materials classified outside this heading, this is also an origin conferring event regardless
of the value added achieved.
770. The rule should be:G/RO/41
Page 1214
CTH; or 45% value added rule
771. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No.
772. Assembly of cathode ray tube blocks fr om cathode ray tubes is not a substantial
transformation.  The goods have origin in the country where they are assembled from their parts.
773. The rule should be:
CTSH
Option D/1:  (CH) (CAN) (MEX) (PHI) (H K) (MAL) (TH for subheadings 8540.11, 8540.12,
8540.40, 8540.50 only)
774. When the CTSH rule is not met, origin is de termined by application of a [general] [final]
residual rule.
Option D/2:  (US) (AUS)
775. When the CTSH rule is not met, the “5 parts”  rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Codes :
ex 8540.11(a) to ex 8540.60(a)G/RO/41
Page 1215
SUMMARY NOTES TO ISSUES NOS. 63 TO 67
Structure of split headings:  85.41 (semiconductor devices, etc.; mounted piezo-electric crystals)
HS Code Goods CTHS Rule Proponents Issue No.
ex 85.41(a)semiconductor devices, etc.,
unmountedValue added rule (EC)
Assembly from parts (others)No.1
ex 85.41(b)semiconductor devices, etc.,
mountedJPN, CAN, SG, PHI, MAL No.59
ex 85.41(c)
(8541.60)mounted piezo-electric
crystalsValue added rule (EC)
Manufacture from raw materials (US) (AUS)
Assembly from parts (others)No.1
ex 85.41(d)mounted, more than 2 items
of this headingJPN No.60
ex 85.41(e) programmed SG, PHI, AUS No.61
ex 85.41(f) tested SG, MOR, MAL No.63
ex 85.41(g)
(8541.90)partsValue added rule (EC)
Manufacture from raw materials (others)No.1
ex 85.41(h)
(ex8541.40)Flame sensor CH No.65
Structure of split headings:  85.42 (IC and microassemblies)
HS Code Goods CTHS Rule Proponents Issue No.
ex 85.42(a) Unmounted, unprogrammedDiffusion for IC;
Value added for microassemblies (EC)
Manufacture from raw materials (CAN)Assembly from parts (others)No.1
ex 85.42(b) Unmounted, programmed CAN, SG, PHI, AUS, CH No.62
ex 85.42(c) Mounted, unprogrammed JPN, SG, PHI No.59
ex 85.42(d) Mounted, programmed CAN, SG, PHI, AUS, CH No.62
ex 85.42(e) tested SG, MOR, MAL No.63
ex 85.42(f)
(8542.90)partsValue added rule (EC)
Manufacture from raw materials (others)No.1G/RO/41
Page 1216
ISSUE No.59:  MOUNTING OF DIODES, TRANSISTORS, OTHER SEMICONDUCTORS,
INTEGRATED CIRCUITS ETC.
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
776. Any assembly from parts confers origin on the assembled goods.777. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
SG proposed an origin conferring primary rule  at the Chapter level:  “Process (such as
mounting of integrated circuits) as defined for the specific headings or subheadings which
result in new characteristics or use in the finished product”.  When such definitions are
submitted the applicable rule should be the specified process rule. (Sec)
Option A/2:  (IND) (MOR) (SEN)
778. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Mounting diodes, transistors, other semiconductors, integrated circuits etc.results in a new good having new characteristics.
779. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (JPN) (SG) (PHI) (CAN) (MAL)780. Mounting of diodes, transistors, other semiconductors, integrated circuits etc. is a substantial
transformation.  The processes of manufacturing di odes, transistors and other semiconductor devices
(85.41) and integrated circuits (85.42) fall into two main processes: the “front end process (wafer
processing)” covers all preparatory processes until and including diffusion to obtain the unmounted
product; the “back end process” means the assembly to the finished mounted product.  The back end
process can be divided into: (a) attaching dies and lead wires to chips; (b) encapsulating chips into
packages (encapsulation).
781. Change from unmounted to mounted is substantial transformation because the “back end
process” is technically complicated and the important step to obtain the finished products.  Splits of
the headings are needed to provide a change of classification from unmounted to mounted.
782. The rule should be:
CTHSFor ex 85.42(c), to exclude de-programming from being origin-conferring, CAN proposed
“CTHS, except from 85.42(d)”  (Sec)
OPTION C: Yes, provided  (by a value added rule)  (EC) – ex 85.41(b), microassemblies of ex
85.42(c) onlyG/RO/41
Page 1217
783. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  If the mounted diodes, transistors, other semiconductors,
etc. of ex 85.41(b) or the mounted and unprogrammed microassemblies of ex 85.42(c) are
manufactured from non-originating materials classified outside this heading, this is also an origin
conferring event regardless of the value added achieved.
784. The rule should be:
CTH; or 45% value added rule for ex 85.41(b), microassemblies of ex 85.42(c)
785. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No.
786. Mounting is not a substantial transformation.Option D/1:
787. However, if the diodes, transistors, other semiconductors, integrated circuits etc. are
assembled directly from parts to the mounted goods, these goods are considered substantially
transformed.
788. The rule should be:
CTH, or change from split heading ex 85.41(g)   for ex 85.41(b)
CTH, or change from split heading ex 85.42(f)   for ex 85.42(c)
Option D/1/a:  (US)
789. When the specified rule is not met, a subsidiary  rule applies.  The subsidiary rule should be:
“The country of origin will be the country of origin of the chips or dice therein.”   for “smart”
cards (8542.12);
“The country of origin will be the country of diffusion”   for goods of 85.41, electronic
integrated circuits of 85.42;
Otherwise, the “5 parts” rule, the specified process rule, the use of one originating part rule
and a [general] [final] residual rule apply in sequence.
Option D/1/b:  (AUS)
790. When the specified rule is not met, the “5 parts” rule, the specified process rule, the use of
one originating part rule and a [general] [final] residual rule apply in sequence.
Option D/1/c:  (KOR) (HK)
791. When the specified rule is not met, origin is determined by application of a [general] [final]
residual rule.
Option D/2:  (CH) (MEX) - for ex 85.41(b) onlyG/RO/41
Page 1218
792. However, if the diodes, transistors, other semiconductors, integrated circuits etc. are
assembled directly from parts to the mounted goods, these goods are considered substantially
transformed.
793. The rule should be:
CTSH  for ex 85.41(b)
794. When the CTSH rule is not met, origin is de termined by application of a [general] [final]
residual rule.
Option D/3:  (EC) – electronic integrated circuits of ex 85.42(c) only
795. For electronic integrated circuits of ex 85.42(c), after the diffusion process no process confers
origin on the electronic integrated circuits.  The origin will be carried forward.
796. The rule should be:
For electronic integrated circuits:  “The operation of diffusion (where integrated circuits are
formed on a semi-conductor substrate by the selective introduction of an appropriate dopant)”
Relevant HS Codes :
ex 85.41(b), ex 85.42(c)ISSUE No.60: MOUNTING OF MORE THAN 2 ITEMS OF HEADING 85.41OPTION A: Yes.  (by assembly)
Option A/1:  (SG)
797. Any assembly from parts confers origin on the assembled goods.
798. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
799. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Mounting of more than two items of heading 85.41 results in a new good
having new characteristics.
800. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (JPN)
801. Mounting of more than two items of heading 85.41 requires highly sophisticated technology
and substantially transform the starting materials into different goods.
802. The rule should be:G/RO/41
Page 1219
CTHS
OPTION C: Yes, provided  (by a value added rule)  (EC)803. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  If the items mounted together are manufactured from non-
originating materials classified outside this heading, this is also an origin conferring event regardless
of the value added achieved.
804. The rule should be:
CTH; or 45% value added rule
805. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No806. Mounting of more than two items of heading 85.41 alone is not substantial transformationOption D/1:  (CH) (CAN) (MRX) (KOR) (PHI) (MAL)
807. However, if more than two items of heading 85.41 are mounted in the continuous assembly
processes directly from parts, these goods are considered substantially transformed.
808. The rule should be:
CTSH
809. When the CTSH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Option D/2:  (US)
810. However, if more than two items of heading 85.41 are mounted in the continuous assembly
processes directly from parts, these goods are considered substantially transformed.
811. The rule should be:
CTH; or change from split heading ex 85.41(g)  (US)
812. When the CTH rule is not met or a change from other than ex 85.41(g) occurs, a subsidiary
rule applies.  The subsidiary rule should be:
“The country of origin will be the country of origin of the chips or dice therein.”   for “smart”
cards (8542.12);
“The country of origin will be the country of diffusion”   for goods of 85.41, electronic
integrated circuits of 85.42;
813. Otherwise, the “5 parts” rule, the specified process rule, the use of one originating part rule
and a [general] [final] residual rule apply in sequence.
Option D/3:  (AUS)G/RO/41
Page 1220
814. However, if more than two items of heading 85.41 are mounted in the continuous assembly
processes directly from raw materials classified outside 85.41, these goods are considered
substantially transformed.
815. The rule should be:
CTH
816. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Code:
ex 85.41(d)ISSUE No.61:  PROGRAMMING DIODES, TRANSISTORS, SIMILAR SEMICONDUCTOR
DEVICES AND OTHER GOODS OF HEADING 85.41
OPTION A: Yes.  (by a process rule expressed by a change of classification)  (SG) (PHI) (AUS)
817. Programming changes a piece of plastic or metal into an electronic device which functions as
prescribed.  Programming is one of the core portions of the production processes.
818. The rule should be:
CTHS
OPTION B: Yes, provided  (by a value added rule)  (EC)
819. If the increase in value resulting from the assembly together with programming and other
accepted operations satisfies the criterion of 45% value added, the programmed goods are considered
substantially transformed.  If the programmed goods are manufactured from non-originating materials
classified outside this heading, this is also an or igin conferring event regardless of the value added
achieved.
820. The rule should be:
CTH; or 45% value added rule
821. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION C:  NoOption C/1:  (CAN) (CH) (MEX) (KOR) (JPN) (MAL)
822. For diodes, transistors, similar semiconductor devices and other goods of heading 85.41
programming alone is not a substantial transformation.  The programmed diodes, transistors, similar
semiconductor devices and other goods of heading 85.41 are considered substantially transformed
when these good are assembled directly from parts.
823. The rule should be:
CTSHG/RO/41
Page 1221
824. When the CTSH rule is not met, origin is de termined by application of a [general] [final]
residual rule.
Option C/2:  (US)
825. For diodes, transistors, similar semiconductor devices and other goods of heading 85.41
programming alone is not a substantial transformation.  The programmed diodes, transistors, similar
semiconductor devices and other goods of heading 85.41 are considered substantially transformed
when these goods are manufactured from raw materials classified other than heading 85.41.
826. The rule should be:
CTH
827. When the CTH rule is not met, a subsidiary rule applies.  The subsidiary rule should be:
“The country of origin will be the country of diffusion”
Relevant HS Code:
ex 85.41(e)ISSUE No.62:  PROGRAMMING UNMOUNTED OR MOUNTED ELECTRONIC INTEGRATED
CIRCUITS AND MICROASSEMBLIES (E.G., ERASABLE PROGRAMMABLE READ ONLY
MEMORY (EPROM) FOR FIRE DETECTION OR INTRUSION ALARM SYSTEMS OF 8531.90)
OF HEADING 85.42
OPTION A : Yes.  (by a process rule expressed by a change of classification) (SG) (PHI) (AUS)
(CAN) (CH)
828. Programming changes a piece of plastic or metal into an electronic device which functions as
prescribed.  Programming is one of the core portions of the production processes.  The EPROM, for
example, is a programmed unmounted electronic integrated circuit and the masterpiece of the firedetection or intrusion alarm systems of subheading 8531.90.  The EPROM is normally exported
separately because it is programmed specifically for each client and each importing country according
to the national specifications for the fire detection or intrusion systems.
829. The rule should be:
CTHS
OPTION B: Yes, provided  (by a value added rule)  (EC)830. If the increase in value resulting from the assembly together with programming and other
accepted operations satisfies the criterion of 45% value added, the programmed goods are consideredsubstantially transformed.  If the programmed goods are manufactured from non-originating materials
classified outside this heading, this is also an or igin conferring event regardless of the value added
achieved.
831. The rule should be:
CTH; or 45% value added rule for microassemblies of ex 85.42(d) onlyG/RO/41
Page 1222
832. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION C:  NoOption C/1: (JPN)
833. For electronic circuits and micro-assemblies of heading 85.42 programming alone is not a
substantial transformation.  The country of origin of the goods is the country of origin of the
unprogrammed unmounted or mounted article of split heading ex 85.42(a) or ex 85.42(c).
834. This option does not accept split headings ex 85.42(b), ex 85.42(d) and ex 85.42(e), thus no
proposal is presented.
Option C/2: (US)
835. For electronic circuits and micro-assemblies of heading 85.42 programming alone is not a
substantial transformation.
836. To determine the origin of the goods, a subsidiary rule applies.  The subsidiary rule should be:
“The country of origin will be the country of origin of the chips or dice therein.”   for “smart”
cards (8542.12);“The country of origin will be the country of diffusion”   for other electronic integrated
circuits of 85.42;
Option C/3: (EC - electronic integrated circuits only)
837. For electronic integrated circuits of ex 85.42(b) or ex 85.42(d), after the diffusion no process
confers origin on the electronic integrated circuits.
838. The rule should be:
for electronic integrated circuits:  “The operation of diffusion (where integrated circuits are
formed on a semi-conductor substrate by the selective introduction of an appropriate dopant)”
Relevant HS Codes :
ex 85.42(b),  ex 85.42(d)ISSUE No.63:  TESTING OF DIODES, TRANSISTORS, SEMICONDUCTORS, INTEGRATED
CIRCUITS ETC. OF HEADINGS 85.41, 85.42
OPTION A: Yes.  (by a process rule expressed by a change of classification)  (SG) (MOR) (MAL)
839. The testing of the goods of headings 85.41 and 85.42, such as diodes, transistors,
semiconductors, integrated circuits etc., is considered to be a substantial transformation as it ensures
conformity with specifications and, therefore, the functionality of the product.
840. The rule should be:
CTHS
OPTION B: Yes, provided  (by a value added rule)  (EC)G/RO/41
Page 1223
841. If the increase in value resulting from the assembly together with testing and other accepted
operations satisfies the criterion of 45% value added, the tested goods are considered substantially
transformed.  If the tested goods are manufactured from non-originating materials classified outside
this heading, this is also an origin conferring event regardless of the value added achieved.
842. The rule should be:
CTH; or 45% value added rule for ex 85.41(f), microassemblies of ex 85.42(e) only
843. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION C: No. (JPN) (CH) (US) (KOR) (MEX) (PHI) (CAN) (EC) (AUS) (HK)
844. Testing does not transform the product.
(a) For diodes, transistors, similar semiconductor devices and other goods of heading
85.41
Option C/a/1:  (CAN) (CH) (MEX) (KOR) (JPN) (PHI) (HK)
845. For diodes, transistors, similar semiconductor devices and other goods of heading 85.41
testing alone is not a substantial transformation.  The tested diodes, transistors, similar semiconductor
devices and other goods of heading 85.41 are considered substantially transformed when these good
are assembled directly from parts.
846. The rule should be:
CTSH
847. When the CTSH rule is not met, origin is de termined by application of a [general] [final]
residual rule.
Option C/a/2:  (US)
848. For diodes, transistors, similar semiconductor devices and other goods of heading 85.41
testing alone is not a substantial transformation.  The tested diodes, transistors, similar semiconductor
devices and other goods of heading 85.41 are considered substantially transformed when these good
are manufactured from raw materials classified other than heading 85.41.
849. The rule should be:
CTH
850. When the CTH rule is not met, a subsidiary rule applies.  The subsidiary rule should be:
“The country of origin will be the country of diffusion”
Option C/a/3:  (AUS)
851. For diodes, transistors, similar semiconductor devices and other goods of heading 85.41testing alone is not a substantial transformation.  The tested diodes, transistors, similar semiconductor
devices and other goods of heading 85.41 are considered substantially transformed when these good
are manufactured from materials classified other than heading 85.41.G/RO/41
Page 1224
852. The rule should be:
CTH
853. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
(b) For electronic circuits and micro-assemblies of heading 85.42
Option C/b/1: (JPN)
854. For electronic circuits and micro-assemblies of heading 85.42 testing alone is not a substantial
transformation.  The country of origin of the goods is the country of origin of the unprogrammed
mounted article of split heading ex 85.42(c).
855. This option does not accept split heading ex  85.42(e), thus no proposal is presented.
Option C/b/2: (US)
856. For electronic circuits and micro-assemblies of heading 85.42 testing alone is not a substantial
transformation.
857. To determine the origin of the goods, a subsidiary rule applies.  The subsidiary rule should be:
“The country of origin will be the country of origin of the chips or dice therein.”   for “smart”
cards (8542.12);
“The country of origin will be the country of diffusion”   for electronic integrated circuits of85.42;
Otherwise, the “5 parts” rule, the specified process rule, the use of one originating part rule
and a [general] [final] residual rule apply in sequence.
Option C/b/3: (EC)
858. For electronic integrated circuits of ex 85.42(e), after the diffusion no process confers origin
on the electronic integrated circuits.
859. The rule should be:
for electronic integrated circuits:  “The operation of diffusion (where integrated circuits are
formed on a semi-conductor substrate by the selective introduction of an appropriate dopant)”
Relevant HS Codes :
ex 85.41(f), ex 85.42(e)
ISSUE No.64 :   ASSEMBLY OF IGNITION WIRING SETS AND OTHER WIRING SETS OF A
KIND USED IN VEHICLES, AIRCRAFT OR SHIPS (8544.30)
OPTION A: Yes.  (by assembly)
Option A/1:  (SG)G/RO/41
Page 1225
860. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
861. The Chapter rule and the product specific rule should be :
Obtaining goods from parts by assembly, including sub-assembly, shall be considered as
reflecting last substantial transformation.” or
TSH
Option A/2:  (IND) (MOR) (SEN)
862. Assembly resulting in a new good having new characteristics is considered to be substantial
transformation.  Combining other electric conductors into wiring sets results in a new good having
new characteristics.
863. Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)
864. Combining other electric conductors into wiring sets is a substantial transformation.  The
other electric conductors substantially change their characters when they are put into the wiring sets.
865. The rule should be:
CTSH  (CAN) (EGY) (US) (JPN) (PHI) (HK) (TH) (MAL)
OPTION C: Yes, provided  (by a value added rule)  (EC) (TUR)866. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  If the wiring sets are manufactured from non-originating
raw materials classified outside this heading, this is an origin conferring event regardless of the value
added achieved.
867. The rule should be:
CTH; or 45% value added rule
868. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No.
869. Combining other electric conductors into wiring sets is not a substantial transformation.  The
wiring sets should be manufactured from raw materials classified outside heading 85.44.
870. The rule should be:
CTH
Option D/1: (CH) (MEX) (KOR)G/RO/41
Page 1226
871. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Option D/2:  (AUS)
872. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Code:
8544.30ISSUE No.65:  ASSEMBLY OF FLAME SENSORS FROM OTHER GOODS OF HEADING 85.41
OPTION A: Yes.  (by assembly)
Option A/1:  (SG)
873. Any assembly from parts confers origin on the assembled goods.874. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
875. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  The assembly of flame sensors results in a new good having newcharacteristics.
876. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (CH) (MAL)877. The assembly of flame sensors from other goods of heading 85.41 is a substantial
transformation.
878. The rules should be:
CTHS
OPTION C: Yes, provided  (by a value added rule)  (EC)879. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  If these articles in question are manufactured from non-
originating materials classified outside this heading, this is also an origin conferring event regardless
of the value added achieved.
880. The rule should be:
CTH; or 45% value added ruleG/RO/41
Page 1227
881. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No
882. The assembly of flame sensors from other goods of heading 85.41 is not a substantial
transformation.
Option D/1:  (CAN) (MEX) (KOR) (JPN) (PHI)
883. The flame sensors are considered substantially transformed when these good are assembled
directly from parts.
884. The rule should be:
CTSH
885. When the CTSH rule is not met, origin is de termined by application of a [general] [final]
residual rule.
Option D/2:  (US) (AUS)
886. The flame sensors are considered substantially transformed when these good are
manufactured from raw materials classified other than heading 85.41.
887. The rule should be:
CTH
Option D/2/a:  (US)
888. When the CTH rule is not met, a subsidiary rule applies.  The subsidiary rule should be:
“The country of origin will be the country of diffusion”
Option D/2/b:  (AUS)
889. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Codes :
ex 85.41(h), (ex 8541.40)
ISSUE No.66:  USING OPTICAL FIBRE CABLES TO PRODUCE OTHER ELECTRIC
CONDUCTORS OF SUBHEADING 8544.60
NOTE
890. This issue is to address the situation when optical fibre cables are mixed with other goods to
form other electric conductors, for a voltage exceeding 1,000 V (8544.60).
OPTION A: Yes.  (by assembly)Option A/1:  (SG)G/RO/41
Page 1228
891. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
892. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.” or
CTSH
Option A/2:  (IND) (MOR) (SEN)
893. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Adding optical fibre cables to other electric conductors results in a new
good having new characteristics.
894. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)895. Adding optical fibre cables to other electric conductors is a substantial transformation.896. The rule should be:
(a) CTSH  (EGY) (US) (JPN) (PHI) (HK) (TH) (MAL)
(b) CTSH, except from subheadings 8544.41 to 8544.59  (CAN)
OPTION C: Yes, provided  (by a value added rule)  (EC)897. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  If the other electric conductors fitted with connectors are
manufactured from non-originating raw materials classified outside this heading, this is an origin
conferring event regardless of the value added achieved.
898. The rule should be:
CTH; or 45% value added rule
899. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No.
900. Adding optical fibre cables to other electric conductors is not a substantial transformation.
The other electric conductors should be manufactured from raw materials classified outside heading
85.44.
901. The rule should be:
CTHG/RO/41
Page 1229
Option D/1:  (CH) (MEX) (KOR)
902. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Option D/2:  (AUS)
903. When the CTH rule is not met, the “5 parts” rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Code :
8544.60ISSUE No.67:  FITTING CONNECTORS (85.36) TO INSULATED ELECTRIC CONDUCTORS
(8544.49 AND 8544.59)
NOTE
904. The attachment of connectors is not listed in the proposed negative standards for a non-origin-
conferring assembly presented at the Chapter level.
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
905. Any assembly from parts (the same result is achieved by a CTSH rule) confers origin on the
assembled goods.
906. The Chapter rule and the product specific rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.” or
CTSH
Option A/2:  (IND) (MOR) (SEN)
907. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching connectors to other electric conductors results in a new good
having new characteristics.
908. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule) (EGY) (JPN) (PHI) (HK) (TH) (MAL)
909. Attaching connectors to other electric conductors is a substantial transformation.
910. The rule should be:G/RO/41
Page 1230
CTSH
OPTION C: Yes, provided  (by a value added rule)  (EC) (TUR)911. Any non-originating material may be used regardless of its classification, provided the
criterion of 45% value added is satisfied.  If the other electric conductors fitted with connectors aremanufactured from non-originating raw materials classified outside this heading, this is an origin
conferring event regardless of the value added achieved.
912. The rule should be:
CTH; or 45% value added rule
913. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D:  No.
914. Attaching connectors to other electric conductors is not a substantial transformation.
Option D/1: (US)
915. The other electric conductors fitted with connectors should be manufactured from the goods
other than other electric conductors without connectors (8544.49 or 8544.59).
916. The rule should be:
CTSH, except from subheading 8544.49   for 8544.41CTSH, except from subheading 8544.59   for 8544.51
917. When the specified rule is not met, a subsidiary rule applies.  The subsidiary rule should be:
“The country of origin will be the country in which it was first transformed into a good
classified in subheading 8544.4.”    for subheading 8544.49
“The country of origin will be the country in which it was first transformed into a good
classified in subheading 8544.5.”    for subheading 8544.59
Option D/2:  (AUS) (CAN)
918. The other electric conductors fitted with connectors should be manufactured from the goodsother than the group of other electric conductors.
919. The rule should be:
CTSH, except from subheadings 8544.49 to 8544.60   for 8544.41
CTSH, except from subheadings 8544.41, 8544.49, 8544.59 or 8544.60   for 8544.51
Option D/2/a:  (AUS)
920. When the specified rule is not met, the “5 parts” rule, the specified process rule, the use of
one originating part rule and a [general] [final] residual rule apply in sequence.G/RO/41
Page 1231
Option D/2/b:  (CAN)
921. When the specified rule is not met, origin is determined by application of a [general] [final]
residual rule.
Option D/3:  (CH) (MEX) (KOR)
922. The other electric conductors fitted with connectors should be manufactured from raw
materials classified outside heading 85.44.
923. The rule should be:
CTH
924. When the CTH rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Codes :
8544.41,  8544.51G/RO/41
Page 1232
Product specific issues:   Chapter 86
ISSUE No.68:  CHANGE OF CLASSIFICATION BY ATTACHING FITTINGS TO TANKS,
CASKS, CONTAINERS FOR COMPRESSED OR LIQUEFIED GAS, OF IRON OR STEEL, ETC.
CLASSIFIED IN HEADINGS 73.09 THROUGH 73.11
NOTE
925. The heading 86.09 does not cover parts of containers, unless presented together as
unassembled or disassembled.
OPTION A: Yes.  (by assembly)
Option A/1:  (SG)
926. Any assembly from parts confers origin on the assembled goods.
927. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR) (SEN)
928. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Attaching fittings to ta nks, casks, containers for compressed or liquefied
gas, of iron or steel, etc. of headings 73.09 through 73.11 results in a new good having new
characteristics.
929. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes  (by an alternative approach)  (EC)930. Attaching fittings to tanks, casks, containers for compressed or liquefied gas, of iron or steel,
etc. of headings 73.09 through 73.11 changes the characteristics of the containers to those of being
specially designed and equipped for carriage by one or more modes of transport.  Therefore, attaching
fittings to tanks, casks, containers for compressed or liquefied gas, of iron or steel, etc. of headings73.09 through 73.11 is considered a substantial transformation.  Moreover, finishing operations to
unfinished or incomplete containers confers origin if the 45% value added rule is satisfied.
931. The rule should be :
CTH; or 45 % value-added rule
OPTION C: Yes.  (by a change of tariff classification rule)  (CH) (MEX) (CAN) (KOR) (IND)932. Attaching fittings to tanks, casks, containers fo r compressed or liquefied gas, of iron or steel,
etc. of headings 73.09 through 73.11 changes the characteristics of the containers to those of being
specially designed and equipped for carriage by one or more modes of transport.  Therefore, attaching
fittings to tanks, casks, containers for compressed or liquefied gas, of iron or steel, etc. of headings
73.09 through 73.11 is considered a substantial transformation.G/RO/41
Page 1233
933. The rule should be:
CTH
OPTION D: Yes, provided  (by a value added rule)  (BRA)934. Any parts may be used to assemble plasma display panels regardless of its classification,
provided the 60% value added rule is satisfied.
935. The rule should be :
60% value added rule
936. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION E: No.937. Attaching fittings to tanks, casks, containers for compressed or liquefied gas, of iron or steel,
etc. of headings 73.09 through 73.11 does not change the characteristics of containers.  The containers
merely change the use to those which are suitable for carriage by one or more modes of transport.
These changes are easily achieved without substantial transformation.
938. The rule should be:
CTH, except from headings 73.09 through 73.11
Option E/1:  (US) (AUS)
939. When the specified rule is not met, the “5 parts” rule, the specified process rule, the use of
one originating part rule and a [general] [final] residual rule apply in sequence.
Option E/2:  (JPN)
940. When the specified rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Code:
86.09G/RO/41
Page 1234
Product specific issues:   Chapter 87
ISSUE No.69:  MANUFACTURE OF A VEHICLE FROM A CHASSIS FITTED WITH ITS
ENGINE
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
941. Any assembly from parts confers origin on the assembled goods.942. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR)
943. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Manufacture of a vehicle from a chassis fitted with its engine results in a
new good having new characteristics.
944. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes.  (by a change of tariff classification rule)Option B/1:  (CH) (JPN) (MEX) (EGY) (US) (IND) (TH) (PHI) (TUR for 87.01 to 87.03) (TUN
for 87.01 to 87.04) (MAL for 87.01 only)
945. Manufacture of a vehicle from a chassis fitted with its engine is a substantial transformation.
The change from a chassis fitted with its engine of heading 87.06 to a finished motor vehicle mainly
occurs through the following processes:  fitting of equipment or parts such as interior panels, air
conditioner, dash boards, switch boxes, windows, rack, sheets, cabins, bumpers, etc.; inserting of
fluids such as fuel and oil; undercoating; testing.
946. The operations to fabricate and fit the bodywork are quite distinct from and just as important
as those involved to produce the chassis fitted with its engine and should be considered as asubstantial transformation.
. The Philippines propose that “change within the heading by assembly” is an origin conferring
event.  This issue is dealt with by the generic is sue No.5: GIR 2(a) – assembly of the collected parts.
(Sec)
947. The rule should be:
CTH      for headings 87.01 to 87.05
Option B/2:  (KOR for 87.05 only)G/RO/41
Page 1235
948. The manufacture of a vehicle from a chassis fitted with its engine is only substantial
transformation in the case of the special purpose vehicles of heading 87.05.  These vehicles have a
primary function other than as transport and that the country of origin should be where the special
equipment is fitted to the chassis to produce a finished vehicle.
949. The rule should be:
CTH     for heading 87.05
OPTION C: Yes, provided  (by a value added rule)Option C/1: (EC) (AUS)
950. The operation of assembling a motor vehicle from a chassis fitted with its engine is not
necessarily substantial transformation.  An assembly is considered to be a substantial transformation
only when the increase in value acquired as a result of working and processing and, if applicable, the
incorporation of parts originating in the country of manufacture, represents at least 60% of the ex-works price of the product.
951. The rule should be:
“Manufacture where the increase in value acquired as a result of working and processing, and
if applicable, the incorporation of parts originating in the country of manufacture represents at
least 60% of the ex-works price of the product.”
952. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
Option C/2: (BRA)
953. An assembly is considered to be a substantial transformation only when the increase in value
acquired as a result of working and processing and, if applicable, the incorporation of parts originatingin the country of manufacture, represents at least 60% of the product; and when the assembly
manufacturing process is carried out entirely in that country.
954. The following is the working or processing required to carry out:
• Assembling of the preliminary vehicle body and/or cabin, based on separate stamped parts;
• Anti-corrosion treatment and internal and external painting;
• Assembling of the chassis , steering system, suspension system, electrical system, brake system
and other assemblies which add significant labor value;
• Final assembly of the cabin with local preparation and installation of items, including acoustic
and thermal lining material and finishing of seats and body;
• Final assembly of the vehicle;
• Final review and pertinent tests;
• Management of the quality and productivity of the process and final product , comprising the
inspection of raw materials, intermediate products and packeging materials, the statistical processcontrol, the tests and measurement and the final product quality;
955. The rule should be:G/RO/41
Page 1236
“Manufacturing where the increase in value acquired as a result of working and processing
and, if applicable, the incorporation of parts originating in the country of manufacture
represents at least 60% of the product”
956. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION D: NoOption D/1:  (CAN) (MAL for 87.02 to 87.05) (TUR for 87.04 only)
957. The manufacture of a vehicle of headings 87.01 to 87.05 from a chassis fitted with motor
(87.06) is not a substantial transformation.  The goods of 87.06 already have the “essential character”of a vehicle.
958. The rule should be:
CTH, except from heading 87.06CTH, except from heading 87.04  (MAL for 87.05 only)
959. If the specified rule is not met, origin is determined by application of a [general] [final]
residual rule.
Option D/2:  (KOR for headings 87.01 to 87.04)
960. The manufacture of a vehicle of headings 87.01 to 87.04 from a chassis fitted with motor
(87.06) is not a substantial transformation.  The goods of 87.06 already have the “essential character”of a vehicle.
961. In heading 87.06 not only assembled but also unassembled or disassembled chassis are
classified by application of the GIR 2(a) of the Harmonized System if they are considered as having
the essential character of the assembled chassis of this heading.  The chassis of heading 87.06 areassembled from a lot of parts and in a highly complicated way.  Sometimes the chassis of this heading
can be an almost complete vehicle, even though it does not have a cab or body etc. which are not
essential.  For vehicles manufactured from an assembled chassis fitted with engine of heading 87.06
the country of origin of the vehicle is the country where assembly of the chassis of heading 87.06 was
performed.  If the vehicle is made from an unassembled chassis classified in 87.06 the country of
origin of the vehicle is the country where the assembly of the unassembled chassis of 87.06 to
produce the vehicle took place.
962. The rule should be:
CTH, except from assembled chassis of heading 87.06      for headings 87.01 to 87.04
Relevant HS Codes :
87.01 - 87.05
ISSUE No.70:  MANUFACTURE OF MOUNTED  BRAKE LININGS FROM BRAKE PADS AND
LININGS OF SUBHEADING 6813.10
OPTION A: Yes.  (by assembly)Option A/1:  (SG)G/RO/41
Page 1237
963. Any assembly from parts confers origin on the assembled goods.
964. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR)
965. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Processing brake linings or pads of subheading 6813.10 to produce
mounted brake linings results in a new good having new characteristics.
966. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes  (by an alternative approach)  (EC) (AUS)967. Processing brake linings or pads of subhe ading 6813.10 to produce mounted brake linings is a
substantial transformation.  Moreover, any non-originating material may be used regardless of itsclassification, provided the criterion of 45% value added is satisfied.
968. The rule should be:
CTH; or 45% value added rule
969. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION C: Yes.  (by a change of tariff classification rule)970. Processing brake linings or pads of subhe ading 6813.10 to produce mounted brake linings is a
substantial transformation.
(a) For subheading 8708.31:  Mounted brake linings
Option C/a/1:  (EGY) (KOR) (PHI)
971. The rule should be:
CTSH
Option C/a/2:  (CH) (US* ) (TH*) (CAN**) (MAL**)
972. The rule should be:
CTH      (* proposal is for ex 87.08(c) as shown in the matrix)
(** with exceptions to exclude disassembly (CAN) (MAL))
(b) For subheading 8709.90:  parts for works trucks, etc. (including brakes)G/RO/41
Page 1238
Option C/b:  (CH) (CAN) (MAL) (MEX) (KOR) (US*) (PHI**) (TH**)
973. The rule should be:
CTH (* proposal is for split heading (A ), ex-87.09(c) as shown in the matrix)
(** proposal is for split heading (B), ex 87.09(d) as shown in the matrix)
(c) For subheading 8714.94:  brakes for motorcycles, bicycles, invalid carriages, etc.
Option C/c:  (CH) (MEX) (EGY) (KOR) (PHI) (TH) (MAL*) (CAN**) (US***)
974. The rule should be:
CTH (* with exceptions to exclude disassembly)
(**with exceptions to exclude disassembly; proposal is for ex 8714.94(b) as shown in
the matrix)
(*** proposal is for ex 87.14(b) as shown in the matrix)
OPTION D: Yes  (by a value added rule)  (BRA for 8709.90 only)
975. Any non-originating material may be used regardless of its classification, provided the
criterion of 60% value added is satisfied.
976. The rule should be:
At least 60% value added
977. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION E:  No  (JPN *) (MEX for 8708.31 only)978. Processing brake linings or pads of s ubheading 6813.10 to produce mounted brake linings is
not a substantial transformation.  The change of heading can result from only attaching fittings to
brake linings and pads.
979. The rule should be:
CTH, except from subheading 6813.10
(* with exceptions to exclude disassembly and change of use )
980. If the specified rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Codes :
8708.31, 8709.90, 8714.94G/RO/41
Page 1239
Product specific issues:   Chapter 88
All issues are covered by the generic issues for Chapters 84 to 90.Product specific issues:   Chapter 89
NOTE
981. This Chapter excludes all separately presented parts (other than hulls) and accessories of
vessels or floating structures, even if they are clearly identifiable as such.  Such parts and accessories
are classified in the appropriate headings elsewhere in the Nomenclature.
Note 1 to Chapter 89:
“A hull, an unfinished or incomplete vessel, assembled, unassembled or disassembled, or a
complete vessel unassembled or disassembled, is to be classified in heading No. 89.06 if itdoes not have the essential character of a vessel of a particular kind.”
ISSUE No.71: ASSEMBLY OF A VESSEL  OF HEADINGS 89.01 THROUGH 89.05 FROM A
HULL THAT DOES NOT HAVE THE ESSENTIAL CHARACTER OF A VESSEL OF APARTICULAR KIND
NOTE
982. Hulls are the only “parts” of vessels classified in this Chapter.  However, hulls that have the
essential character of a vessels of a particular kind are to be classified with that vessel of the particular
kind.
OPTION A: Yes.  (by assembly)
Option A/1:  (SG)
983. Any assembly from parts confers origin on the assembled goods.
984. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR)
985. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Assembly of a vessel classified in a heading between 89.01 and 89.05
from a hull that does not have the essential character of a vessel of a particular kind classified in
heading 89.06 results in a new good having new characteristics.
986. The Chapter rule should be :
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes. (by an alternative approach)  (EC)G/RO/41
Page 1240
987. Assembly of a vessel classified in a heading between 89.01 and 89.05 from a hull that does
not have the essential character of a vessel of a particular kind classified in heading 89.06 is
considered a substantial transformation.  Moreover, finishing operations from unfinished or
incomplete vessels or hulls of headings 89.01 to 89.05 confers origin if the 45% value added rule is
satisfied.
988. The rule should be :
CTH; or 45 % value-added rule
OPTION C: Yes.  (by a change of tariff classification rule)  (CH) (EGY) (US) (KOR) (AUS)
(PHI) (JPN*) (CAN*) (MEX* - for headings 89.01 to 89.04)
989. Assembly of vessels from parts is an origin conferring event.  A Hull is one of the parts of
vessels.  However, assembly of a vessel from a hull which has the essential character of the vessel
concerned is not a substantial transformation.  Thus, the assembly of a vessel classified in a heading
between 89.01 and 89.05 from a hull classified in heading 89.06 is considered to be substantialtransformation.
990. The rule should be:
CTH (* with exceptions to address modification for headings 89.01 to 89.03)
OPTION D: No.  (MEX – for heading 89.05 only)991. Vessels should be built from parts classified outside this Chapter.  Therefore, the assembly of
a vessel classified in a heading between 89.01 and 89.05 from a hull classified in heading 89.06 is notconsidered to be substantial transformation.
992. The rule should be:
CTH, except from  headings 89.01 through 89.04, 89.06 through 89.08
993. If the specified rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Codes :
89.01 through 89.05
ISSUE NO.72:  ASSEMBLY OF A COMPLETE OR FINISHED VESSEL  CLASSIFIED A
HEADING BETWEEN 89.01 AND 89.05 FROM A HULL OR AN INCOMPLETE OR
UNFINISHED VESSEL THAT HAS THE ESSENTIAL CHARACTER OF THE VESSEL
CONCERNED
OPTION A: Yes.  (by assembly)
Option A/1:  (SG)
994. Any assembly from parts confers origin on the assembled goods.
995. The Chapter rule should be :G/RO/41
Page 1241
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR)
996. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Assembly of a complete or finished vessel classified in a heading between
89.01 and 89.05 from a hull or a incomplete or unfinished vessel that has the essential character of the
vessel concerned results in a new good having new characteristics.
997. The Chapter rule should be:
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes, provided   (by a value added rule)  (EC)998. Assembly of a complete or finished vessel classified in a heading between 89.01 and 89.05
from a hull or a incomplete or unfinished vessel that has the essential character of the vessel
concerned is considered to be a substantial transformation, provided the 45% value-added rule is
satisfied.
999. The rule should be:
CTH; or 45% value added rule
1000. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION C: Yes, provided  (by a Chapter Note/Rule)  (CH)1001. Assembly of a complete or finished vessel classified in a heading between 89.01 and 89.05
from a hull or a incomplete or unfinished vessel that has the essential character of the vesselconcerned is considered to be a substantial transformation, provided the requirements specified in a
Chapter Note/Rule are satisfied.
1002. The Chapter Note/Rule should be:
“Whenever the change of classification rules set out for goods of chapters 84 to 90 and 93 are
not determinant of the country of origin of the good, the following substantial transformationrules are to be applied:
(a) A finished good or part produced from a non-originating unfinished good or part
classified in the same heading or subheading as the finished good or part shall
originate in the country in which the good or part was finished, provided:
(i) the unfinished good or part is not functioning for its ultimate use in its
imported condition and has undergone at least two or more of the following
processes:
- assembly by built-up such as but not limited to welding, soldering,
shrinking, bolting, glueing, fitting, fixing, spooling, winding,
connecting, wiring, coupling; orG/RO/41
Page 1242
- heat treatment or thermochemical treatment such as glowing,
tempering, hardening; or
- treatment for the purpose of shapin g, forming such as cold or warm
forming; or
- mechanical treatment, refining of form-, positional- and surface
tolerances of functional finished shapes such as turning, milling,
drilling, broaching, grinding, polishing, honing, eroding; or
- surface treatment such as coating, compressing, condensing,
impregnating (excluding temporary conservation for transport and/or
storage purpose), insulating; or
- system engineering, software-development and application;and
(ii) The finished good or part has undergone final testing such as but not limited
to balancing, spinning, voltage testing, performance- or isolation test.
(b) A finished good or part, produced from a non-originating good or part, classified in
the same subdivision as the finished good or part which do not satisfy the conditionsmentioned in Rule 2.B.(1) (a) above shall originate in the country contributing most
to the product in terms of total value of parts (including an unfinished good) and
related processing activities.”
1003. If the requirements specified in the Chapter Note/Rule is not met, origin is determined by
application of a [general] [final] residual rule.
OPTION D: No.1004. Vessels should be assembled from parts classified outside this Chapter.  A change to a vessel
from a hull or an incomplete or unfinished vessel that has the essential character of the vessel
concerned is not considered to be a substantial transformation.
1005. The rule should be:
CTH (* with exceptions to address modification for headings 89.01 to 89.03)
(** with exceptions to address modification for headings 89.01 to 89.03, 89.05)
Option D/1:  (US)
1006. When the specified rule is not met, the “5 parts” rule, the specified process rule, the use of
one originating part rule and a [general] [final] residual rule apply in sequence.
Option D/2:  (EGY) (KOR) (AUS) (PHI) (JPN*) (CAN*) (MEX**)
1007. If the specified rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Codes :
89.01 through 89.05G/RO/41
Page 1243
ISSUE NO.73:  ASSEMBLY OF A COMPLETE OR FINISHED OTHER VESSEL  OF HEADINGS
89.06 FROM A HULL OR AN INCOMPLETE OR UNFINISHED OTHER VESSEL OF HEADING
89.06
NOTE
1008. Hulls of heading 89.06 covers the hulls which have the essential character of the complete or
finished other vessels, including warships and lifeboats; and the hulls which do not have the essential
character of a vessel of a particular kind classified in a heading between 89.01 and 89.05.
OPTION A: Yes.  (by assembly)Option A/1:  (SG)
1009. Any assembly from parts confers origin on the assembled goods.1010. The Chapter rule should be :
“Obtaining goods from parts by assembly, incl uding sub-assembly, shall be considered as
reflecting last substantial transformation.”
Option A/2:  (IND) (MOR)
1011. Any assembly resulting in a new good having new characteristics is considered to be
substantial transformation.  Assembly of an other vessel, including a warship and a lifeboat from any
hull or an incomplete or unfinished other vessel classified in heading 89.06 results in a new good
having new characteristics.
1012. The Chapter rule should be:
“An assembly operation resulting in a new good having new characteristics is considered to
be substantial transformation.”
OPTION B: Yes, provided   (by a value added rule)  (EC)
1013. Assembly of an other vessel, including a warship and a lifeboat from any hull or an
incomplete or unfinished other vessel classified in heading 89.06 is considered to be a substantial
transformation, provided the 45% value-added rule is satisfied.
1014. The rule should be:
CTH; or 45% value-added rule   (EC)
1015. If the required value added is not achieved origin is determined by application of a [general]
[final] residual rule.
OPTION C: Yes, provided  (by a Chapter Note/Rule)  (CH)
1016. Assembly of an other vessel, including a warship and a lifeboat from any hull or an
incomplete or unfinished other vessel classified in heading 89.06 is considered to be a substantial
transformation, provided the requirements specified in a Chapter Note/Rule are satisfied.
1017. The Chapter Note/Rule should be:G/RO/41
Page 1244
“Whenever the change of classification rules set out for goods of chapters 84 to 90 and 93 are
not determinant of the country of origin of the good, the following substantial transformation
rules are to be applied:
(a) A finished good or part produced from a non-originating unfinished good or part
classified in the same heading or subheading as the finished good or part shalloriginate in the country in which the good or part was finished, provided:
(i) the unfinished good or part is not functioning for its ultimate use in its
imported condition and has undergone at least two or more of the following
processes:
- assembly by built-up such as but not limited to welding, soldering,
shrinking, bolting, glueing, fitting, fixing, spooling, winding,
connecting, wiring, coupling; or
- heat treatment or thermochemical treatment such as glowing,
tempering, hardening; or
- treatment for the purpose of shapin g, forming such as cold or warm
forming; or
- mechanical treatment, refining of form-, positional- and surface
tolerances of functional finished shapes such as turning, milling,
drilling, broaching, grinding, polishing, honing, eroding; or
- surface treatment such as coating, compressing, condensing,
impregnating (excluding temporary conservation for transport and/orstorage purpose), insulating; or
- system engineering, software-development and application;and
(ii) The finished good or part has undergone final testing such as but not limited
to balancing, spinning, voltage testing, performance- or isolation test.
(b) A finished good or part, produced from a non-originating good or part, classified in
the same subdivision as the finished good or part which do not satisfy the conditions
mentioned in Rule 2.B.(1) (a) above shall originate in the country contributing mostto the product in terms of total value of parts (including an unfinished good) and
related processing activities.”
1018. If the requirements specified in the Chapter Note/Rule is not met, origin is determined by
application of a [general] [final] residual rule.
OPTION D: Yes, provided  (by a change of tariff classification rule)
1019. Assembly of an other vessel, including a warship and a lifeboat from any hull classified in
heading 89.06 is considered to be a substantial transformation.  However, completion or finishing an
incomplete or unfinished other vessel classified in heading 89.06 is not origin conferring.  Thus, theheading should be split between hulls and the other.
1020. The rule should be:G/RO/41
Page 1245
CTH for ex 89.06(a) - hulls;
CTHS for ex 89.06(b) - other
Option D/1:  (US) (AUS)
1021. When the specified rule is not met, the “5 parts” rule, the specified process rule, the use of
one originating part rule and a [general] [final] residual rule apply in sequence.
Option D/2:  [(CAN)]
1022. If the specified rule is not met, origin is determined by application of a [general] [final]
residual rule.
OPTION E:  No.  (MEX) (EGY) (KOR) (PHI) (JPN*)
1023. Other vessels, including warships and lifeboats should be built from parts classified outside
this Chapter.  A change to an other vessel, including a warship or a lifeboat of heading 89.06 from a
hull which may or may not have the essential character of the other vessel, or from an incomplete orunfinished other vessel which has the essential character of the other vessel concerned is not
considered to be a substantial transformation.
1024. The rule should be:
CTH  (* with exceptions to address modification)
1025. If the specified rule is not met, origin is determined by application of a [general] [final]
residual rule.
Relevant HS Code:
89.06
ISSUE NO.74:  ORIGIN OF VESSELS AND OTHER FLOATING STRUCTURES FOR
BREAKING
OPTION A:  (CTH)     (CAN) (MEX)1026. A CTH rule indicates that origin is conferred when the vessels and other floating structures
are exported with the intention that the vessels and other floating structures will have to be broken up.
This is declared to the Customs in the exporting c ountry and authorised.  Therefore, origin of vessels
and other floating structures for breaking up is the country in which these vessels and other floatingstructures are exported.  In most cases the origin of those goods is the country where the vessels and
other floating structures are consumed.  Even though those goods are sold on the way to the
destination, the classification does not change as long as the buyer has the same intention.
1027. The rule presented in the option B is not practical, due to the fact that the initial origin of
vessels and other floating structures cannot easily be traced back.  Documentary evidence which may
show the country of manufacture of the vessels a nd other floating structures would be provided,
however, it does not prove whether the vessels or other floating structures concerned satisfied the
rules of origin.  Thus, the Customs need to inquire whether the country of manufacture is the country
of origin.
1028. [When the vessels and other floating structures concerned are physically broken up in the
importing country, their origin subsequently changes to the importing country by virtue of application
of a definition of the wholly obtained goods.]G/RO/41
Page 1246
1029. The rule should be:
CTH
OPTION B:   (Initial origin of vessels or other floating structures)     (JPN) (EC) (PHI) (CH) (EGY)
(US) (KOR) (SG) (IND) (SEN) (AUS)
1030. The vessels and other floating structures of this heading must be worn up, however,
degradation does not confer origin as a rule at a Ch apter level provides for.  This rule indicates that
the initial origin of the vessels and other floating structures should retain until these vessels or other
floating structures are physically broken up in th e importing country.  Thus, the vessels and other
floating structures for breaking up change their origin when they are physically broken up in theimporting country by virtue of application of a definition of the wholly obtained goods as scrap and
waste.
1031. The rule presented in the option A is not relevant in the following points.  Firstly, the
classification of the exporting country does not bind that of the importing country.  Secondly, the actof Customs declaration changes the origin of goods, even though there is no physical change in the
goods.  Thirdly, it is not absolutely sure whether or when the vessel or other floating structures in
question are actually broken up.  The Customs authority may have different ways to control this
situation.
1032. Documentary evidence which clearly shows the country of manufacture of the vessels and
other floating structures can be obtained without difficulty to determine the country of origin.
[Retrospective application of the harmonized rules of  origin to all the existing or used goods is
another aspect in the overall architecture to decide upon.]
1033. The rule should be:
“The country of origin of the goods of this heading shall be the country of origin of the
vessels and other floating structures prior to being classified in this heading.”
Relevant HS Code:
89.08G/RO/41
Page 1247
Product specific issues:   Chapter 90
ISSUE No.75:  PRODUCTION OF OPTICAL FIBRES FROM PREFORMS CLASSIFIED
OUTSIDE HEADING 90.01
OPTION A: Yes  (CAN) (PHI) (JPN) (MEX) (MAL) (EC - with added value rule)1034. The production of optical fibres from glass or plastics materials known as preforms entails a
capital-intensive manufacturing operation to significantly reduce the diameter of the preforms
(drawing) and results in substantial transformation of the preforms.  The drawing operation is
essential to adapt the optical fibres to their intended uses.
1035. The rule should be:
CTH
OPTION B:  No  (US) (KOR) (CH)
1036. Substantial transformation does not take place when optical fibres are drawn from non-
originating preforms.  The properties of the fibre are established when the preform is created; the
preform is actually in effect a large fiber which needs only to be reduced in size.
1037. The rule should be:
CTH, except from preforms
Relevant HS Code:
ex9001.10(a)ISSUE No.76:  PRODUCTION OF OPTICAL FIBRE BUNDLES FROM OPTICAL FIBRESOPTION A:  (IND) (MAL)
1038. The production of optical fibre bundles from optical fibres results in a new good which has
new uses, such as endoscopic devices.  Although in the case of non-coherent bundles the new uses
generally are limited to transmission of light only, concentric bundles, i.e., those in which the fibres
are arranged in a predetermined order, are suitable also for the transmission of images.  The
production of optical fibre bundles should be considered to result in substantial transformation.
1039. The rule should be:
CTSHS
OPTION B:  Yes, provided an added value criterion is satisfied  (EC)
1040. Substantial transformation of optical fibres occurs when non-originating fibres are used to
produce optical fibre bundles, provided that the value added as a result of the operation exceeds a
specified level.  The rule should be:
CTH; or
manufacture where the increase in value acquired as a result of working and processing, and
if applicable, the incorporation of parts originating in the country of manufacture represents at
least 45% of the ex-works price of the product.
OPTION C: NoG/RO/41
Page 1248
1041. Substantial transformation does not take place when non-originating optical fibres are made
up into bundles.  Bundling fibres is a simple operation which does not transform the fibres.
1042. The rule should be:
CTH  (CAN) (KOR) (MEX) (CH) (JPN)
CTH, except from preforms, and a subsidiary rule to provide that the origin will be the
country of origin of the preforms  (US)
Relevant HS Code:
ex 9001.10(b)
ISSUE NO.77:  PRODUCTION OF OPTICAL FIBRE CABLES OTHER THAN THOSE OF
8544.70 FROM OPTICAL FIBRES AND OPTICAL FIBRE BUNDLES
OPTION A:  Yes  (US) (KOR) (IND) (PHI) (MAL)
1043. Substantial transformation takes place when non-originating optical fibres are used to produce
optical fibre cables.  The cables consist normally of multiple bundles of optical fibres which are
protected by sheathing and reinforcement against heat and outside forces and may have fittings
attached.  Such cables are normally many kilometers in length.  These cables are widely used in
telecommunications.
1044. The rule should be:
CTSHS
OPTION B:  Yes, provided  (EC)
1045. The production of optical fibre cables optical  fibres or optical fibre bundles may involve
either simple operations or substantial transformations resulting in different goods.  Substantial
transformation takes place if sufficient working or processing is undertaken which satisfies an addedvalue criterion.
1046. The rule should be:
CTH; or
Manufacture where the increase in value acquired as a result of working and processing, and
if applicable, the incorporation of parts originating in the country of manufacture represents atleast 45% of the ex-works price of the product.
OPTION C:  No  (CAN) (JPN) (MEX)1047. Optical fibres and bundles do not undergo substantial transformation when used to produce
optical fibre cables.  The rule should be:
CTH
Relevant HS Code:
ex 9001.10(c)ISSUE No.78:  POLISHING OF SPECTACLE LENSES OF GLASS OR OTHER MATERIALS OR
OF OTHER OPTICAL ELEMENTSG/RO/41
Page 1249
OPTION A: Yes  (KOR) (HK) (CAN) (IND) (MAL)
1048. Change of tariff heading is sufficient to express the substantial transformation which takes
place when unworked optical elements are worked by  grinding and polishing, or by polishing alone in
such a manner, as to produce the required optical properties.  Optical polishing alone is likely to be anessential process when the elements (blanks) of Chapter 70 or Chapter 39 are produced directly into
the desired moulded shapes but do not yet have the required optical properties.
1049. The rule should be:
CTH
OPTION B: Yes, or provided  (EC)
1050. Substantial transformation takes place when unworked optical elements are worked in such a
manner, including by polishing alone, that unworked or partially worked optical elements undergo a
change of classification to goods of heading 90.01.  In addition, worked optical elements of this
heading undergo substantial transformation as a result of working which results in the attainment of a
specified level of added value.
1051. The rule should be:
CTH; or
Manufacture where the increase in value acquired as a result of working and processing, and
if applicable, the incorporation of parts originating in the country of manufacture represents at
least 45% of the ex-works price of the product.
OPTION C:  No  (US)
1052. While optical working consists of roughing, trueing, smoothing and polishing, the EN to
heading 7014 specifies that the optical elements can undergo one or more of these processes
preceding polishing and remain in the provisions for goods not optically worked (chapter 70).Consequently, the polishing operations alone may result in a change of classification from Chapter 70
to heading 90.01.  Such polishing, without the other operations of roughing, trueing and smoothing,
do not a substantially transform the optical elements.
1053. The rule should be:
CTSH, except a change from lens blanks [of heading 7014 or subheading 7015.10, for
subheadings 9001.50 and 9001.90], if they only require polishing to transform them into
goods of heading 9001.  If this rule is not met, the country of origin of the good will be the
country of origin of the lens blank.
Relevant HS Code:
9001.40ISSUE No.79: COATING OF WORKED OPTICAL ELEMENTS OF 9001.90OPTION A: Yes  (KOR)1054. The coating of these goods is a complex and intensive operation which involves the
placement of as many as 64 layers of plastic on the element to impart optical and durability properties.
Substantial transformation of the uncoated elements takes place.G/RO/41
Page 1250
1055. The rule should be:
CTH, or change within the subheading as a result of coating.
OPTION B:  (EC)1056. The coating of optical elements of subheading 9001.90 may, under defined circumstances,
result in substantial transformation.
1057. The rule should be:
CTH; or
Manufacture where the increase in value acquired as a result of working and processing, and
if applicable, the incorporation of parts originating in the country of manufacture represents at
least 45% of the ex-works price of the product.
OPTION C:  No1058. The coating of optical elements of subheading 9001.90 is a surface-working process which
does not result in substantial transformation.  The rule should be:
CTH  (HK) (CAN) (IND) (SG) (MAL)
CTSH, except a change from lens blanks, if they only require polishing to transform them into
goods of heading 9001.  If this rule is not met, the country of origin of the good will be the
country of origin of the lens blank.  (US)
Relevant HS Code:
9001.90ISSUE No.80:  MOUNTING OF LENSES, PRISMS, MIRRORS AND OTHER WORKED
OPTICAL ELEMENTS
OPTION A: Yes
1059. The mounting of worked optical elements so as to produce parts of or fittings for instruments
or apparatus results in substantial transformation of the optical element.  The operations, far from
being simple assemblies, require the creation of vacuums in the devices and normally include the
assembly of the focusing mechanism.  It would th erefore be incorrect to assume that the mounting
process is merely an encasement of the optical element.  The change from heading 90.01 to 90.02expresses this substantial transformation.
1060. The rule should be:
CTH  (CH) (SG) (KOR) (MAL)
CTSH  (MEX)
CTH or 45% added value   (EC)
OPTION B: No  (CAN) (JPN)
1061. The mounting of optically worked lenses is a simple operation and does not result in
substantial transformation.
1062. The rule should be:G/RO/41
Page 1251
CTSH, except from 9001.90
OPTION C: No  (US)1063. The mounting of optically worked lenses, or the mounting and [polishing][optical working] of
lens blanks, does not result in substantial transformation.
1064. The rule should be:
CTSH except from 9001.90 or from lens blanks of 70.14 if they only require polishing to
transform them into goods of heading 90.01.
1065. When the CTSH rule is not met, the “5 parts”  rule, the specified process rule, the use of one
originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Code:
90.02ISSUE No.81:  PRODUCTION OF PARTS AND ACCESSORIES FOR BINOCULARS,
MONOCULARS, TELESCOPES AND OTHER ASTRONOMICAL INSTRUMENTS FROM
WORKED OPTICAL ELEMENTS OR MOUNTED OPTICAL ELEMENTS
OPTION A: Yes
1066. The mounting of optical elements to produce these parts and accessories results in substantial
transformation, as does the conversion of mountings of 90.02 to produce goods of 9005.90.
1067. The rule should be:
CTH  (CH) (CAN) (KOR) (SG) (MAL)
CTH or 45% value added rule (EC)
OPTION B: No  (JPN) (MEX) (US)
1068. The change from worked optical elements of 90.01 to parts and accessories of 9005.90
reflects a simple operation which does not substantially transform the optical elements.  The change
from mounted optical elements of 90.02 to 9005.90 represents a change of use with little processing
which should not be considered substantial transformation.  The rule should be:
CTH, except from 90.01 or 90.02
1069. When the specified rule is not met, a subsidiary  rule applies.  The subsidiary rule should be:
The country of origin of the good shall be the country of origin of the lens or other optical
element.  (US)
Relevant HS Code:
9005.90
ISSUE No.82: ATTACHMENT OF INTERCHANGEABLE LENSES TO CAMERAS,PROJECTORS AND PHOTOGRAPHIC ENLARGERS AND REDUCERS OF HEADINGS 90.06,
90.07 AND 90.08
OPTION A: No substantial transformation; separate origin treatment  (US)G/RO/41
Page 1252
1070. The attachment of an interchangeable lens to a camera, projector or photographic enlarger or
reducer does not result in substantial transformation.  Such lenses are distinct goods which should be
treated separately for origin purposes.  The rules of origin for cameras, projectors, and photographic
enlargers or reducers should provide that the addition of an interchangeable lens does not result in
substantial transformation of either the lens or the apparatus with which it is associated.  Without anappropriate exclusion, by operation of the functional unit rule the origin of the lens would be
subsumed to that of the apparatus.  This would be  the case even when the apparatus is assembled from
parts and there is a required change of tariff classification. Furthermore, interchangeable lenses and
the products on which they are used are generally marked with their country of origin in a
conspicuous manner. Treating the combination as separate goods avoids the problems of re-marking
the non-originating good.
1071. The rule should be:
CTSH, except a change from interchangeable lenses of subheading 9002.11, and a subsidiary
rule to provide that the country of origin of th e lens should be determined in accordance with
the rule for subheading 9002.11, and the country of origin of the camera, projector orphotographic enlarger or reducer in accordance with the rule for cameras, projectors or
photographic enlargers or reducers as the case may be.
OPTION B: Irrespective of substantial transformation, no separate treatment
1072. When the assembly of a camera satisfies the applicable rule of origin an interchangeable lens
which is attached or included with the camera would lose its separate identity for origin purposes.
This is a sound result because the Agreement requires that the harmonized rule of origin have, inter
alia, two features: 1) that goods have a single country of origin; and 2) that the rules be applied
equally for all the purposes set out in the Agreement.  The implication of Option A is that country oforigin marking requirements should apply separately  to the interchangeable lens, and that the camera
and accessories as imported should bear two separate markings, one for the camera and one for the
lens, even if the assembly of the camera has otherwise resulted in the conferral of origin.  If the
camera has been assembled and has a determined country of origin, the addition of the lens would not,
under any of the proposals made, change the country of origin of the camera.  It might be the functionof a residual or subsidiary rule to provide the origin  of the lens in such a case, but in formulating such
a rule proper account should be taken of simplicity and administrative burdens.
1073. The rule should be:
- CTSH (JPN, CAN, MEX, CH, KOR, SG, PHI, HK, MAL)
-C T H ;  o r- Manufacture where the increase in value acquired as a result of working and
processing, and if applicable, the incorporation of parts originating in the country of
manufacture represents at least 45% of th e ex-works price of the product.  (EC)
- 51% value added rule   for 90.06
- 60% value added rule   for 90.08  (BRA)
Relevant HS Codes :
90.06, 90.07, 90.08
ISSUE No.83:  PRODUCTION OF FRAMES AND MOUNTINGS FOR SPECTACLES, GOGGLES
AND THE LIKE FROM IDENTIFIABLE PARTS
OPTION A : Yes  (CH) (MEX) (SG) (HK) (KOR) (MAL)G/RO/41
Page 1253
1074. The assembly of frames and mountings from parts classified in subheading 9003.90 results in
substantial transformation of the parts.
1075. The rule should be:
CTSH
OPTION B: Yes, provided1076. The assemblies involved when parts identifiable as those for frames and mountings are used
may be rather simple or may be substantial.  A change of tariff classification criterion may permit
assemblies to be origin conferring which are rather simple.  Therefore, such operations should be
considered as resulting in substantial transformation only if a value added criterion is met.  Under thisapproach the rules proposed are designed to require a certain degree of manufacturing in the country
of assembly.
1077. The rule should be:
-C T H ;  o r
- Manufacture where the increase in value acquired as a result of working and
processing, and if applicable, the incorporation of parts originating in the country of
manufacture represents at least 45% of the ex-works price of the product. (EC)
- CTSH, except from more than one of: fronts (ex 9003.90(a) or temples ex 9003.90(b).
(CAN)
OPTION C: Yes, provided  (US)1078. In general, the assembly of spectacle frames from identifiable parts should not be considered
to result in substantial transformation.  However, when such assembly involves also a degree of
manufacturing in the form of the finishing of unfinished parts it is appropriate to consider that
substantial transformation takes place.
1079. The rule should be:
CTSH, except from finished temples or finished fronts of 9003.90
1080. If this rule is not satisfied the origin of the good will be the origin of the front.
OPTION D: No  (JPN)
1081. Assembly of spectacle frames is a simple process which does not substantially transform the
temples and fronts, which are the major components of the frames.  The rule should be:
CTH
Relevant HS Codes :
9003.11, 9003.19
ISSUE No.84:  MOUNTING OF LENSES IN FRAMES TO PRODUCE SPECTACLES OR
GOGGLES
OPTION A: Yes  (HK) (KOR) (SG) (PHI) (MEX) (MAL)G/RO/41
Page 1254
1082. Both lenses and frames undergo substantial transformation when lenses are mounted in
frames to produce spectacles.
1083. The rule should be:
CTH
OPTION B: Yes, provided  (EC)1084. The mounting of lenses in frames is considered to result in substantial transformation
provided an added value criterion is met.
1085. The rule should be:
- CTH, except from 9001.40, 9001.50, or 90.03; or
- Manufacture where the increase in value acquired as a result of working and
processing, and if applicable, the incorporation of parts originating in the country of
manufacture represents at least 45% of the ex-works price of the product.
OPTION C:  Yes, provided  (CAN) (SEN) (JPN)1086. Mounting alone does not substantially transform non-originating lenses.  The intent of the
proposal is that a certain degree of manufacturing of the parts should take place in the country ofassembly for origin to be conferred.
1087. The rule should be:
CTH, except from more than one of: lenses; or frames
OPTION D: No  (US) (CH)1088. Mounting of lenses in frames to produce spectacles does not result in substantial
transformation.  The rule should be:
CTH, except from 9001.40 or 9001.50.
1089. If this rule is not satisfied, the country of origin of the good will be the country of origin of
the lenses.  (US)
Relevant HS Codes :
9004.10, 9004.90ISSUE No.85:  ASSEMBLY OF CATHETERS, CANNULAE AND THE LIKE USING RUBBER
TUBING
OPTION A: Yes
1090. This assembly using rubber tubing of subheading 4009.10 results in substantial
transformation.
1091. The rule should be:
- CTSHS (CAN)
-C T H  ( M A L )G/RO/41
Page 1255
-C T H ;  o r
- Manufacture where the increase in value acquired as a result of working and
processing, and if applicable, the incorporation of parts originating in the country of
manufacture represents at least 45% of the ex-works price of the product. (EC)
- 45% value added rule  (BRA)
OPTION B: No  (US)
1092. The assembly of catheters and similar medical devices involves the simple attachment of
fittings to rubber tubing and should not be considered as origin conferring. The proposed rule
precludes origin being conferred on catheters, cannulae and the like assembled from non-originating
vulcanised rubber surgical tubing. This reflects the fact that these apparatus are often very simple,
consisting of little more than tubing and fittings, in which case assembly would not substantiallytransform the tubing.
1093. The rule should be:
CTSHS except from 4009.10
1094. When the specified rule is not met, the “5 parts” rule, the specified process rule, the use of
one originating part rule and a [general] [final] residual rule apply in sequence.
Relevant HS Code:
ex 9018.39(a)ISSUE No.86: ASSEMBLY OF PARTS AND ACCESSORIES OF AUTOMATIC REGULATING
OR CONTROLLING INSTRUMENTS AND APPARATUS USING CONTROL PANELS OR
PROGRAMMABLE CONTROLLERS
OPTION A: Yes  (JPN) (CH) (CAN) (MEX) (SG) (MAL) (EC - with alternative added value
criterion)
1095. The assembly of these devices and parts using components classified outside the heading
results in substantial transformation.
1096. The rule should be:
CTH
OPTION B: No  (US)1097. The rule should preclude origin being conferred on those parts and accessories which are
manufactured using non-originating control panels or programmable controllers of heading 85.37 as
the manufacturing process would not substantially transform those parts.
1098. The rule should be:
CTH, except from 85.37.
1099. If this rule is not met, a subsidiary rule would provide that the country of origin of the good
shall be the country of origin of the programmable controllers or control panels used in their
manufacture.G/RO/41
Page 1256
Relevant HS Code:
9032.90