[Federal Register Volume 60, Number 75 (Wednesday, April 19, 1995)]
[Notices]
[Pages 19605-19606]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-9674]



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INTERNATIONAL TRADE COMMISSION
[Investigation No. 332-360]


International Harmonization of Customs Rules of Origin

AGENCY: United States International Trade Commission.

ACTION: Institution of investigation and request for public comment.

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EFFECTIVE DATE: April 7, 1995.

FOR FURTHER INFORMATION CONTACT: Eugene A. Rosengarden, Director, 
Office of Tariff Affairs and Trade Agreements (O/TA&TA) (202-205-2592), 
or Holm J. Kappler, Deputy Director, O/TA&TA (202-205-2598). Questions 
with regard to specific products may also be referred to the following 
coordinators:

Chapters 1-24, 44-49: Ronald H. Heller (202-205-2596)
Chapters 25, 26, 64-83, 86-89: Lawrence A. DiRicco (202-205-2606)
Chapters 27-40: Edward J. Matusik (202-205-3356)
Chapters 41-43, 61-63, 93-97: Thomas W. Divers (202-205-2609)
Chapters 50-60: Larry B. Clayton (202-205-2603)
Chapters 84, 85, 90-92: Craig M. Houser (202-205-2597)

    Hearing impaired persons are advised that information on this 
matter can be obtained by contacting the Commission's TDD terminal on 
202-205-1810. The media should contact Margaret O'Laughlin, Director, 
Office of Public Affairs (202-205-1819).

BACKGROUND AND SCOPE OF INVESTIGATION: Following receipt of a letter 
from the United States Trade Representative (USTR) on January 25, 1995, 
the Commission has instituted investigation No. 332-360, International 
Harmonization of Customs Rules of Origin, under section 332(g) of the 
Tariff Act of 1930. The investigation is intended to provide the basis 
for Commission participation in work pertaining to the Uruguay Round 
Agreement on Rules of Origin (ARO), negotiated in the Uruguay Round of 
Multilateral Trade Negotiations under the General Agreement on Tariffs 
and Trade (GATT) 1994 and adopted along with the Agreement Establishing 
the World Trade Organization (WTO).
    The ARO is aimed at obtaining the harmonization and clarification 
of nonpreferential rules of origin for goods in trade on the basis of 
the substantial transformation test; at achieving discipline in the 
rules' administration; and at providing a framework for notification, 
review, consultation, and dispute settlement. These harmonized rules 
are intended to make country-of-origin determinations impartial, 
predictable, transparent, consistent, and neutral, and to avoid 
restrictive or distortive effects on international trade. The ARO 
provides that technical work to those ends will be undertaken by the 
Customs Cooperation Council (CCC) (now informally known as the World 
Customs Organization or WCO), which must report on specified matters 
relating to such rules for further action by parties to the ARO. 
Eventually, the WTO Ministerial Conference is to ``establish the 
results of the harmonization work program in an annex as an integral 
part'' of the ARO.
    In order to carry out the work, the ARO calls for the establishment 
of a Committee on Rules of Origin of the WTO and a Technical Committee 
on Rules of Origin (TCRO) of the CCC. These Committees bear the primary 
responsibility for developing rules that achieve the objectives of the 
ARO.
    A major component of the work program is aimed at harmonizing 
origin rules for the purpose of providing more certainty in the conduct 
of world trade. To this end, the agreement contemplates a 3-year CCC 
program, to be initiated as soon as possible after the entry into force 
of the Agreement Establishing the WTO. Under the ARO, the TCRO is to 
undertake (1) to develop harmonized definitions of goods considered 
wholly obtained in one country, and of minimal processes or operations 
deemed not to confer origin, (2) to consider the use of change in 
Harmonized System classification as a means of reflecting substantial 
transformation, and (3) for those products or sectors where a change of 
tariff classification does not allow for the reflection of substantial 
transformation, to develop supplementary or exclusive origin criteria 
based on value, manufacturing or processing operations or on other 
standards.
    Coordination and representation of U.S. positions will be managed 
by the TPSC subcommittee on Origin (chaired by USTR) which is 
principally concerned with matters before the WTO Origin Committee and 
by the Interagency Committee on CCC Matters (chaired by Customs) which 
is principally concerned with technical issues before the TCRO.

CONDUCT OF THE INVESTIGATION: This investigation will provide the basis 
for the Commission's participation in the harmonization work program 
and will include (1) soliciting public input to ensure that U.S. 
business interests are recognized in the development of U.S. proposals, 
(2) participating in the development and representation of U.S. 
proposals before the CCC and the WTO, and (3) conducting such other 
research as the exigencies of the technical work may require.
    The Commission will from time to time issue notices and solicit 
comments and proposals with respect to the development of the work. 
This initial notice seeks comments with respect to the Rules of Origin 
published by the U.S. Customs Service as Part 102 of Title 19 of the 
Code of Federal Regulations which will serve as a starting point in 
preparing the initial U.S. positions with respect to the CCC and WTO 
work programs. Subsequent notices will invite comments and proposals on 
draft U.S. proposals on the rules, which generally will be issued on a 
product sector basis and will provide information on the status of the 
work. Finally, during the course of the work program, the Commission 
will make the results of the TCRO's work available for public comment 
and hearing.
    As called for in the request from the Trade Representative, the 
Commission is conducting a technical review of the Customs Service's 
``change of tariff classification'' provisions in 19 C.F.R. 
[[Page 19606]] Part 102. The Commission will address the sufficiency of 
these change of tariff classification provisions as a means of 
determining when substantial transformation has occurred, so as to 
result in origin being ascribed to the situs country. Specifically, the 
Commission will attempt to identify instances in which these change of 
classification rules may lead to different results than the substantial 
transformation standard, as the latter test has been traditionally 
applied in determining origin for nonpreferential purposes by U.S. 
courts and the U.S. Customs Service. In addition, the Commission's 
analysis will help identify those products or sectors where the change-
of-classification approach does not reflect substantial transformation, 
requiring the use of supplementary or exclusive criteria based upon 
value, manufacturing or processing operations, or other standards. The 
Commission will assist in the development of harmonized definitions of 
goods considered wholly obtained in one country, and of minimal 
processes or operations deemed not to confer origin. Moreover, the 
Commission will help analyze foreign proposals and develop U.S. 
counterproposals as the CCC and WTO work programs progress, and will 
review provisionally adopted harmonized rules proposed by the CCC 
Technical Committee.

WRITTEN SUBMISSIONS: Interested persons are invited to submit written 
statements concerning this investigation, and, in particular, the 
change of tariff classification provisions set out in section 102.20 of 
the U.S. Customs Service Rules of Origin referenced above. Written 
statements are encouraged early in the investigative process, and 
follow-up statements are permitted; but all such statements must be 
received at the Commission by the close of business on June 15, 1995, 
in order to be considered. Information supplied to the Customs Service 
in statements filed pursuant to notices of that agency have been 
supplied to us and need not be separately provided to the Commission. 
The Commission is particularly interested in receiving views from the 
private sector on the suitability of the draft rules as a basis for 
determining origin for U.S. exports. Commercial or financial 
information which a submitter desires the Commission to treat as 
confidential must be submitted on separate sheets of paper, each marked 
``Confidential Business Information'' at the top. All submissions 
requesting confidential treatment must conform with the requirements of 
section 201.6 of the Commission's Rules of Practice and Procedure (19 
CFR 201.6). All written submissions, except for confidential business 
information, will be available for inspection by interested persons. 
All submissions should be addressed to the Office of the Secretary, 
United States International Trade Commission, 500 E Street SW., 
Washington, DC 20436.

PUBLIC HEARING: A public hearing in connection with this investigation 
may be held upon the request of interested parties. Any such hearing 
will be announced in a future public notice.

    Issued: April 10, 1995.

    By order of the Commission.
Donna R. Koehnke,
Secretary.
[FR Doc. 95-9674 Filed 4-18-95; 8:45 am]
BILLING CODE 7020-02-P