WORLD TRADE  
ORGANIZATION  RESTRICTED 
G/RO/M/56 
1 June 2011 
 (11-2760) 
Committee on Rules of Origin  
  
 
MINUTES OF THE MEETING OF 7 APRIL 2011 
 
Chairperson:  Ms Jasmine QUAH ZUBAIR (Singapore) 
  
Subjects Discussed 
 
I.  REPORT ON THE WORK OF TH E TECHNICAL COMMITTEE ON  
RULES OF ORIGIN (TCRO) ........................................................................................................ ....... 1 
II.  TECHNICAL ISSUES IN THE HARM ONIZATION WORK PROGRAMME –  
REPORTING OF THE INFORMAL CONSULTATIONS ................................................................ 2  
A.  REVISED  STATUS  UPDATE ................................................................................................................. 2  
B.  OVERALL  ARCHITECTURE ................................................................................................................ 3  
1.  General Rule 6 (Minim al operations)......................................................................................... 3  
2.  Appendix 2 - Rule 1 (e) ....................................................................................................... ........ 3 
C.  TECHNICAL  ISSUES  RAISED  PREVIOUSLY  BY MEMBERS .......................................................... 5  
1.  Chapter 30 .................................................................................................................... .............. 5  
2.  Chapters 28-32 ................................................................................................................ ........... 6 
3.  Chapters on Machinery ......................................................................................................... ..... 6 
4.  Transposition of the results of the Harmoni zation Work Programme to more recent  
versions of the Harmonized Sy stem of Nome nclature ................................................................ 7  
III.  NOTIFICATIONS TO THE CRO UNDER ARTICLE 5 AND UNDER PARAGRAPH 4 OF 
ANNEX II OF THE AGREEMENT ON RULES OF ORIGIN ......................................................... 7  
IV.  ELECTION OF OFFICERS .......................................................................................................... ....... 8 
V.  OTHER BUSINESS ................................................................................................................ ............... 8  
 
 I. REPORT ON THE WORK OF THE TEC HNICAL COMMITTEE ON RULES OF 
ORIGIN (TCRO) 
1.1 The representative of the World Customs Or ganization (WCO) stated that the Technical 
Committee on Rules of Origin (TCRO) held its 29th Session on 24 January 2011 at the WCO Headquarters in Brussels. The meeting was chaired by Mr. Liu Ping (People's Republic of China). 
 
Non-preferential rules of origin  
 1.2 Within the framework of its permanent r esponsibilities, the TCRO adopted the Twelfth 
Periodic Report and the Twelfth Annual Review on technical aspects and implementation of the 
Agreement for the period from 1 January to 31 December 2010. 
 
1.3 The Annual Review was short since the Agreem ent has not yet been implemented in practice 
and to date no problems or specific que stions have been referred to the TCRO. 
 G/RO/M/56 
Page 2  
 
  1.4 The periodic Report relating to technical aspects and operation of the Agreement also 
contained information on the Secretariat's activities a nd the work of the Technical Committee.  All the 
documents from the session can be found on the WCO Members Website.  1.5 The WTO representative informed the TCRO on the continuous efforts made by the CRO 
under the Harmonization Work Programme to improve th e text of the Draft Consolidated Text.  The 
TCRO took note of the latest outcome of the discussions within the CRO.  Preferential Rules of Origin 
 
1.6 In 2009, the WCO Secretariat launched a test version of a database of preferential 
agreements.  The database is now published as pa rt of the WCO publications.  Members can access 
the database free of charge, and non-Members can get access at a fee.  The database contains around 
200 preferential trade agreements and related rules of  origin and aims at supporting the understanding 
and application of rules of origin in preferential trade agreements.  The WCO Secretariat is – as an on-
going process - uploading available annexes / protocols of origin legislation. 
 1.7 In December 2010 the WCO Secretariat publis hed on its public website a comparative study 
on preferential rules of origin with the examina tion of rules of origin legislation in NAFTA and 
European agreements.  The study is published in  English as a first step, and French and Spanish 
versions will follow during the first half of 2011.   The WCO Secretariat is developing the next 
module of the comparative study, namely, a study on methods of verification and control of origin in 
Member Customs Administrations.  This module w ill be presented to the WCO Council in June 2011. 
 Technical Assistance and other activities provided by the WCO Secretariat  
 
1.8 Between April 2010 and March 2011, the S ecretariat has undertaken technical assistance 
activities relating to harmonization of non-preferential rules of origin and questions concerning the 
application of preferential rules.  A national semina r has been organized in the Bahamas in September 
2010.  The Secretariat also gave a presentation on th e developments in the field of origin for the 
International Training Programme on Rules of Or igin for policy-makers and trade and customs 
advisors from developing countries in Stockholm, Sweden in December 2010 and continued its 
participation at the Master's Courses "Masters of Customs Administration" at the University of 
Münster, Germany in November 2010.  Other information  
 
1.9 Guinea-Bissau became a Member of the WCO on 19 August 2010.  There are now 177 WCO 
Members.  1.10 The CRO took note of the report and expr essed appreciation for the TCRO's continued 
valuable work. 
 II. TECHNICAL ISSUES IN THE HARM ONIZATION WORK PROGRAMME – 
REPORTING OF THE INFORMAL CONSULTATIONS 
2.1 Based on informal consultations with Members,  the Chairperson summarised the main issues 
related to the Harmonization Work Programme (HWP) as follows:  
A. REVISED
 STATUS  UPDATE 
2.2 The Chairperson informed th e Committee that a revised version of the Status Update had 
been circulated (JOB/RO/1/Rev.2).  The revisi on of the Status update was a follow - up to the  G/RO/M/56 
 Page 3 
 
 
  discussions held in the Committee during its last m eeting in October 2010.  The Chairperson noted 
that only two revisions had been made to the docum ent.  The first was the replacement of footnote 1 
with a new paragraph 1 to explain that the docum ent reflected only the Chair's assessment of the 
current situation in the Committee.  The second was the addition of a paragraph reporting the 
developments regarding the Harmonization Work Pr ogramme (HWP) in the General Council in 2010.   
The Chairperson noted that this was not a negotia ting document and that it was meant for reference 
only. 
 B. OVERALL
 ARCHITECTURE 
1. General Rule 6 (Minimal operations) 
2.3 Japan stated that it could agree to remove th e square brackets in General Rule 6 as long as 
paragraph four of the preamble, which recognized th at the rules did not prejudice Members' rights, 
was maintained.  One delegation needed more time to consider this issue. 
 2.4 The Chairperson proposed to revert back to this issue at the CRO's next meeting. 
 
2. Appendix 2 - Rule 1 (e)   
2.5 The Chairperson recalled that the non-proposal put forward in March 2010 by the 
Chairperson for Appendix 2 remained unchanged a lthough some delegations reserved their positions 
on this issue.  The non-proposal read as follows:  
 
Non-Proposal from the CRO Chair 
 
APPENDIX 2 – PRODUCT SPECIFIC RULES OF ORIGIN 
 
 This Appendix sets forth rules for determini ng the country of origin of a good when the good 
is not considered to be wholly obt ained in accordance with Appendix 1. 
 
 Rule 1:  Determination of Origin 
 
 This Rule shall be applied in sequence, taking into account Rule 2 where applicable: 
 
(a) The country of origin of a good is the country  in which the good is produced exclusively from 
 originating materials; 
 
 Primary Rules 
 
(b) When a primary rule by its own terms identifies the country of origin of a good, that country 
is the country of origin of the good;  
 
(c) The country of origin of a good is the last country of production, provided a primary rule 
 prescribed for the good in this Appendi x has been satisfied in that country; 
 G/RO/M/56 
Page 4  
 
   Residual Rules 
 
(d) When a good is produced by further processing of  a material which is classified in the same 
subdivision1 as the good, the country of origin of the good shall be the single country in 
which the material originated; 
 
(e) When a good is produced by further processing a material that does not satisfy the primary 
 rule for the good, the country of origin of the good shall be the single country in which the 
 material originated.  For the purposes of this rule, account shall be taken of both originating 
 and non-originating material; 
 
(f) The country of origin of a good is the country where a residual rule at the chapter level is 
 satisfied; 
 
(g) The country of origin of a good shall be the c ountry of origin of material or materials 
 incorporated in the good by further processing, pr ovided the origin of material or materials is 
 a single country; 
 
(h) When a good is produced from materials of more than one country, the country of origin of 
 the good shall be the country in which the ma jor portion of those materials originated, as 
 determined by the criterion specified in  the Chapter where the good is classified;  
 
(i) Where the criterion for the application of Rule 1 (h) above specified in a Chapter is weight or 
 volume, and that criterion does not allow for or igin to be determined, the criterion of value 
 shall be used;  where the criterion for the a pplication of Rule 1 (h) above specified in a 
 Chapter is value, and that criterion does not allo w for origin to be determined, the criterion of 
 weight or volume, as appropriate, shall be used.  
  
 Rule 2:  Application 
 
(a) The rules provided in this Appendix are to be applied to goods based upon their classification 
 in the HS as referred to in General Rule 1 of this Annex and any additional subdivisions 
 created for the purposes of this Appendix; 
(b) Reference to a change in tariff classifica tion in primary rules shall apply only to non-
originating materials;   
(c) Reference to materials in the residual rules shall apply to originating and non-originating 
materials. 
(d) When the primary rule requires a change in  tariff classification, the following changes in 
 classification shall not be considered in determining the origin of the good; 
 (i) changes which result from disassembly, 
 (ii) changes which result from packaging, repackaging, or putting up for retail sale, 
 (iii) changes which result solely from applicati on of General Rule of Interpretation 2(a) of 
the HS with respect to collections of parts that are presented as unassembled or 
disassembled articles. 
 
However, such changes shall not preclude conferri ng origin on a good if origin is conferred as 
 a result of other operations. 
                                                      
1 The term "subdivision" relates to the lowest level of classification of the good, i.e. heading, 
subheading, split heading or split subheading, at which a primary rule is specified in this Appendix.  G/RO/M/56 
 Page 5 
 
 
  (e)  Intermediate materials  
 Materials which have acquired or iginating status in a country are considered to be originating 
materials of that country for the purpose of de termining the origin of a good incorporating 
such materials, or of a good made from such materials by further working or processing in 
that country; 
(f)   Interchangeable goods and materials  
 When it is not commercially practical to keep separate stocks of interchangeable materials or 
goods originating in different countries, the country of origin of commingled materials or 
goods that are interchangeable may be allocated  on the basis of an inventory management 
method recognized in the country in which the materials or goods were commingled; 
(g)   De Minimis 
 For the purposes of the application of primar y rules based on tariff classification change, non-
originating materials that do not satisfy the prim ary rule shall, unless otherwise specified in a 
certain Chapter, be disregarded, provided that  the totality of such materials does not exceed 
10% of the value of the good. 
 
 
2.6 She also noted that the main outstanding ite m in it concerned Rule 1(e) of Appendix II 
("Residual Rules" for the determination of origin).   It had been noted during the Committee's last 
meeting in October 2010 that Rule 1(e) was useful  in cases in which the good and the material were 
classified in different tariff subdivisions and in wh ich the primary rule contained some exceptions, as 
in the example of rule for subheading 9404.90 ("CTH except from 5811").  It had also been noted that 
when there were two exceptions in the rule, as in the example of rule for subheading 1806.10 ("CTH 
except from the heading of Chapter 17 and 18.05"), Rule 1(h) would apply instead. 
 
2.7 One delegation stated that this rule was also necessary to safeguard the intent of negotiators 
vis-à-vis specific processes.  Under a major portion ru le, there would be less clarity about the outcome 
of the application of the Rule, particularly because it requires utilization of variable criteria.  It was 
also noted that this rule would be useful to su pplement the rules of about 20 primary rules which 
contained exceptions.  Such rules were largely in th e textiles and in the agricultural sectors, with a few 
concerning pharmaceutical and electronic products.  Fr om these 20 rules, 9 of them contained a single 
exception while the remaining 11 had double or more exceptions built-in.  2.8 Another delegation also recalled that it c ould not agree with the proposed Rule 2 (c). 
 
2.9 A third delegation introduced alternative langua ge for Rule 1(e), which simply clarified the 
scope of the rule.  A fourth delegation noted that , while sympathetic to the intent underlying the 
proposed rule, there could be possible unwanted effe cts from its application, especially since it would 
be placed before Rule 1(f).  It also noted that referring to "originating materials" was against the 
traditional approach that had guided the HWP and which consisted on defining origin through non-
originating materials. 
 2.10 The Chairperson took note of the comment s made and encouraged Members to consult 
bilaterally on this issue.  She proposed to revert to  this issue again at the Committee's next meeting. 
 
C. TECHNICAL
 ISSUES  RAISED  PREVIOUSLY  BY MEMBERS 
1. Chapter 30 
2.11 The Chairperson recalled that, during the Co mmittee's last meeting, Switzerland had made a 
technical presentation on the rules of origin in the pharmaceutical sector and expressed concern with 
the fact that the current consolidated text fo r heading 30.02 only contemplated cases in which a G/RO/M/56 
Page 6  
 
  medicament was composed of only one material and cases where the material had a single origin.  In 
reality, Switzerland argued, several materials and sever al origins could intervene in the production of 
a medicine which would justify specific rules for all materials composing a medicament.  2.12 Switzerland explained that the changes it proposed to this Chapter sought to update the 
specific rules.  First, to include only "cells" (wit hout the word "cultures") in definition 1(a), 1(c) and 
1(d) which currently covered pr oducts obtained from live animals, animals products, plant and plant 
products but did not include cells. Switzerland noted that bacteria and even viruses were included in 
the definition of "Wholly Obtained".  Thus, it would only be logical to add the cells.  The second point concerned amending the rule for heading 30.02,  since this heading was a special case, and both 
active substances, and proportioned medicine forms were classified in the same subheading.  
Switzerland also thought that from a systematic point of view, medicine put up in measured doses or packed for retail sale in heading 30.02 should not have a different approach for establishing origin 
than the same medicine put up in measured doses or packed for retail sale in heading 30.04.  Finally, 
in order to harmonize the wording of Primary Rule  4 in the Chapters 28-39, the Swiss delegation 
proposed again to replace "reduction of particle size " in Chapter 34 and 35 wi th "change of particle 
size".  2.13 Some delegations, while sympathetic to this issue, noted that this was linked to the broader 
need to update the specific rules agreed under the HWP and questioned whether time had come for the 
Committee to undertake such task.  One delegation i ndicated that it could be possible to create split 
subheadings to establish a change in origin from the bulk form to the measured dose.  Another 
delegation stated that it could not agree to ame nd the definition of wholly obtained goods since the 
amendment would have an impact not only on the ph armaceutical products but also possibly to other 
products.  The other delegation was of the view th at cells or the cell cultures could be dealt by 
Appendix 2 rules rather than Appendix 1 rules. 
 
2.14 The Chairperson suggested that Switzerla nd provide illustrations of how the proposed 
amendments could be useful and to share them with the Committee.  The Chairperson proposed to 
revert back to this issue again at the Committee's next meeting. 
 
2. Chapters 28-32 
2.15 The Chairperson reminded the Committee that the issue concerned was the Residual rules of 
Chapters 28-32, which were similar to the criteri on to apply Appendix 2, General Rule 1(h), and 
therefore the criterion to apply that rule for those chapters might not be needed. 
 2.16 Some delegations preferred the criterion to  apply Appendix 2, General Rule 1 (h) to the 
current chapter residual rule.  Anot her delegation stated that value mi ght be used for the calculation of 
the major proportion rather than weight or volume.  2.17 One delegation requested to clarify the reasons behind the part in the issue paper circulated by 
the Secretariat, which says "there might be no need  for Rule 1(g)", while residual rules for those 
chapters specify the same criterion fo r other chapters based on Rule 1(g). 
 
2.18 The Chairperson proposed to revert back to this issue at the Committee's next meeting. 
 
3. Chapters on Machinery 
2.19 The Chairperson reminded the Committee that , at its last meeting, China had briefly 
introduced a proposal to improve the logi c and structure of the Chapter rules. 
  G/RO/M/56 
 Page 7 
 
 
  2.20 China stated that, since machineries and thei r parts usually consist of hundreds of parts, "5 
parts rule" might not be applicable, and therefore proposed the "value added criteria" instead of "5 
parts rule".  One delegation stated that the Chapte r rules for machinery would be less important if the 
value added approach were applied for these chap ters.  However, other delegations stressed the 
difficulties and shortcomings of the valu e added approach to determine origin. 
 
2.21 The Chairperson proposed to revert back to this issue at the next meeting of the CRO. 
 
4. Transposition of the results of the Harmonization Work Programme to more recent 
versions of the Harmonized System of Nomenclature 
2.22 The Chairperson noted that, at its last meeting, the Committee had deemed it useful to 
organize a technical workshop to better understand th e implications of engaging in an exercise of 
transposing the results of the HWP to more recent versions of the Harmonized System (HS) of nomenclature.  As a result, the WTO Secretariat organized a workshop on 6 April 2011 with the 
participation of representatives of the WCO. 
 
2.23 The representatives of the WCO noted that the transposition of product-specific rules to more 
recent versions of the HS nomenclature would be possible albeit complex and major undertaking. The 
WCO said that additional resources would be re quired for it to be completed.  The WCO 
distinguished six main scenarios, ranging from simple  cases, in which the rules could be mechanically 
transposed to the new HS codes to more comple x cases, in which a detailed assessment and policy 
decision would be required.  While the transpositio n exercise was simple for the bulk of the rules, 
some would be particularly difficult, especially in Chapters 84, 85 and 90 which have been subject to 
significant changes in the HS 2007 version.  This w ould be limited, however, to the rules in column 
(3) of the consolidated text.  
2.24 Delegations raised several questions re garding the possible transposition of the HWP. 
Delegations agreed that the exercise was necessary for the eventual implementation of the rules, but 
noted that it was complex and could not be complete d without proper expertise both on the HS and on 
rules of origin.  With regard to whether the tr ansposition should target the 2007 or the newer 2012 
version of the HS, many delegations expressed flexibilit y to consider either option.  Others noted that 
transposition would need to be a regular and nece ssary task once the HWP had been completed, and 
that targeting the HS 2007 version now would still mean the need to trans pose the rules to the HS 
2012 version at a later stage.  2.25 The Chairperson concluded that the ques tion of embarking on a transposition exercise, 
including the specific modalities regarding who w ould conduct the transposition work, when and how 
remained open and noted that the CRO would need to revert back to this issue at its next meeting. 
 
III. NOTIFICATIONS TO THE CRO UNDER ARTICLE 5 AND UNDER PARAGRAPH 4 
OF ANNEX II OF THE AGREEMENT ON RULES OF ORIGIN 
3.1 The Chairperson informed the CRO that, since its last review on notifications, in October 
2010, the WTO Secretariat had received 3 new notif ications: from the EU, from Hong Kong, China 
and from Vietnam.  She further reported that, to date , the situation of notifications to the CRO was the 
following:  On non-preferential rules of origin, 38  Members informed the Committee that they apply 
non-preferential rules of origin, and 43 Members notifie d that they do not.  As a result, notifications 
regarding non-preferential rules (Article 5 of the Agreement) were received for 81 members, but no 
information was available for 45 Members.  On pref erential rules, 82 Members have notified that they 
apply preferential rules of origin;  and 6 Members ha ve notified that they do not.  As a result, 88 
Members had notified the status of their preferentia l rules of origin under Paragraph 4 of Annex II of 
the Agreement but 38 Members had not. G/RO/M/56 
Page 8  
 
   
3.2 In conclusion, the Chairperson expressed concern over the fact that a number of Members 
had not yet complied with the Agreement's notifi cation requirements and urged Members who had not 
yet notified to do so as early as possible.   
3.3 The CRO took note of the Chairperson's report and statement. 
 
IV. ELECTION OF OFFICERS 
4.1 The CRO elected Mr Daniel OWOKO (Kenya) as its new Chairperson. 
 
V. OTHER BUSINESS 
5.1 The Chairperson suggested that the next inform al meeting of the CRO be held on Tuesday 25 
and Wednesday 26 October and that the next form al meeting of the CRO be held on Thursday 27 
October 2011.  
__________