ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (73)1018
Vol.1973/0186

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dergenannten Verordnung freigegeben.

COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(73)1018final
Brussels,22June1973
Recommendation
fora
\
CouncilDecision
onthenegotiation ofanagreement
concerningthreedraftannexestotheinternational Convention
forthesimplification andharmonization of
customsprocedures
andrulesoforigin
(submittedtotheCouncilbytheCommission)
CQIï(73)1018final

EXPLANATORY NOTE
Introduction
1.1 .Adraft international Convention forthesimplification and
harmonisation ofcustoms procedures wasprepared bytheCustoms
Cooperation Council (C.C.C. )andsubmitted foradoption atits
meeting on16to22May1973 *This Convention hasbeen the
subject ofaRecommendation foraCouncil Decision (doc.COM
(73)hGOfinal of28March 1973 R/977/73 (COMER 156)of12
April 1973 )inregard totheCommunity .
TheConvention opens thepossibility ,atthe time ofsignature ,
tospecify theAnnex ortheAnnexes which theContracting
Parties undertake toapply (Article 11(*f).oftheConvention ).
Inaddition ,for thepurpose ofvoting atthe C.C.C. ,each
Annex istaken asconstituting aseparate Convention (Article 6
oftheConvention ).
1.2 .The Permanent Technical Committee ofthe .C.C.C. has directed
Secretariat todraft annexes to -thesaid .Convention onCustoms
problems on .theorigin ofgoods .Theoutline fortheAnnexes
tothe Convention istohave three onthe origin ofgoods ,
viz :
-rules oforigin ,
-documentary proof oforigin ,
-control oforigin .
Ofthese three Annexes only that ontherules oforigin hasat
present been prepared bytheSecretariat (doc.19*582 of
2May1973 cfr.Annex I).Thetwoothers will beprepared later .

TheSecretariat oftheC.C.C.hasinvitedMemberStatesaswellas
non-Membersandinternational organisations concerned,tosubmit
anyobservations andsuggestions whiohtheymayhaveonthedraft
annexontheru&isoforiginbefore29June1973*
]
1.3TheCommissionwillexaminethesedraftswithrepresentatives of
MemberStateswithaviewtopreparingacommonstandtobetaken,
tobeconveyedtotheSecretariatoftheCustomsCooperationCouncil
withinthetimelimitlaiddown.■
•Themainfeaturesofthedrafts -
2.1TheworkonthisdraftbytheSecretariatofthe(5.C.C.hastakeninto
account,interalia,theprovisionsonrules^j^originmadebythe
CouncilortheCommissioneitherunilaterally offollowingcontractual
obligations (2), ■
2.2.Thedraftsarebasedonthefollowingconsiderations :
–Theabsenceofcommonrulesoforigin,forexportationasmuchas
forimportation,complicatesthetaskofboththecustomsadministra­
tionsandtheorganisations entitledtoissuedocumentaryproofof
originandoausesdifficultiesforinternational commercialmiddle-men }
(l)See,particularlyregulation (EEC)802/68oftheCouncilof27June,1968
(0»J.L.148,28June,I968,p.l),Regulation (EEC)2862/7Iofthe
Commissionof22December,1971ongs»n©r^l4sQdpreferences (O.J.L289,
31December,1971)extendedbyRegulation (®c)2818/72oftheCommission
of22December,1972(O.J.L29730Deoember,1972).
(2)YaoundéConvention,AgreementsEEC-EastAfrica,EEC-Tuaiisia,EEC-Maroceo,
EEC-Spain,EEC-Israel,EEC-Malta,EEC-Austria,EEC-Ieeland,EEC-Portugal,
EEC-Sweden andEEC-Switzerland .

-3-
-itisinthemutualinterestofallcountriestoaimprogressively
forharmonisation inthismatter?
-thevarietyofcriteria "usedtodefinetheconceptoforiginor
thedifferentmethodsoflayingdownsimilarcriteriadonot
appear,technically,tobenecessary.Evenwhendifferent
oriteriahavebeenlaiddowntotakeaccountofeoonomiocon­
siderationsofpreferentialtariffagreements,theyshould
bewrittenintoacommonoruniformformtomakeiteasier
forthemanycommercialintereststounderstandandforthe
customstoapply.
3.ScopeforCommunityactioninthenegotiation ofthedrafts.
Themaincharacteristics ofthesedrafts(paragraph2above)havea
bearingonthoseCustomsprocedureswhichrankamongtheprinoipal
instrumentsofcommercialpolicy.Consequently ,whentheseprocedures
arethesubjectofinternational agreements,theybecomebothtariff
andcommercialagreementswhichar®partofthecommoncommercial
policy,byvirtueofArticle113oftheEECTreaty.Thenatureof
Articles113and114oftheEECTreatyissuchthatonlytheCommunity
hasthecompetencetonegotiateandconcludetheseagreements.
Artiole113(3)oftheEECTreatyontheother"handstipulatesthat
ifagreementsonwhichithasabearingneedtobenegotiatedwith
thirdcountries,theCommissionBhallsubmititsrecommendations to
theCouncilforauthoritytoopenthenecessarynegotiations .

-4-
4.Conclusion
TheCommissionrecommendsthattheCouncil,byvirtueofArticle113
oftheEECTreaty,should,havingregardtoCommunityprovisionsre­
gardingthequestionoforigin,authoriseittonegotiatethedraft
annexesattheinternational Conventionforthesimplification and
harmonisation ofCustomsproceduresandrulesoforigin.

-5-
Recommendat ion
for a
Council Decision
onthenegotiation ofanagreement
concerning three draft annexes totheinternational Convention
forthe simplification andharmonisation of
customs procedures
andrules oforigin ...
THECOUNCIL OFTHEEUROPEAN COMMUNITIES ,
having regard totheTreaty establishing theEuropean Economic Community ,
andinparticular Article 113thereof ;
having regard totheRecommendation oftheCommission }
whereas theconclusion ofanagreement concerning three draft annexes to
the International Convention forthe simplification andharmonisation
ofcustoms procedures andrules oforigin canefficiently contribute to
thedevelopment ofinternational trade ,andinparticular international
commerce ;
whereas theaforesaid agreement hasabearing onthecommon customs
legislation ,inparticular inthematter oftheCommon Customs feriff ;
whereas itisnecessary tohave regard totheproper requirements ofa
Customs Union |whereas itisagreed that theCommunity negotiate and
conclude this agreement :

HAS IECIIED :
Article 1
TheCommission isauthorised toconduct negotiations with theCustoms
Co-operation Council inorder toconclude .anagreement concerning three
cL-aft annexes totheInternational Convention forthesimplification
andharmonisation ofcustoms prooedure sandrules oforigin .
TheCommission shall conduct these 'negotiations ,asprovided for'under'
Article 113oftheTreaty ,inconsultation with theSpecial Committee ,
which shall assist the Commission inthat task .
Done atBrussels ,
For the Council
The President

ANNEX 1
D.l -PRELIMINARY DRAFT ANNEX RELATING TORULES
INTRODUCTION
The concept oftheorigin ofgoods enters into the
implementation ofmany measures whose application isthe
responsibility oftheCustoms .Rules oforigin employ avariety
ofcriteria based mainly oneconomic or'trade-policy considera­
tions .The comparative study oftechniques used todevelop
systems for thedetermination oforigin shows that ,despite these
differences ,the aimofthecriteria isinmost cases todetermine
whether the goods have become sufficiently integrated into the
economic circuit ofacountry tohave acquired national origin .
Itmust bestressed that the absence ofcommon rules of
origin atboth the importation and exportation stages not?only
complicates the task ofCustoms administrations and ofthebodies
empowered toissue documentary evidence oforigin but also causes
difficulties for the participants ininternational trade .
This points tothedesirability ofmoving progressively towards
acertain degree ofharmonization inthis field .
/
There seems tobenogood technical reason for the wide
range ofcriteria used toexpress theconcept oforigin orfor the
many different ways inwhich similar criteria are formulated .
Where various criteria have been introduced toreflect economic
conditions ornegotiating factors inpreferential tariff
arrangements ,itseems very desirable that they should exist within
acommon orstandard framework ,for ease ofunderstanding by
traders and ease ofapplication bytheCustoms .
.The introduction tothe present Annex has been supplemented
byastatement ofthe advantages and disadvantages ofthevarious
origin criteria from thepoint ofview ofthe Customs ,who are
required toapply them .
1.

Doc .19.582 E
After defining certain technical terms ,theAnnex proper
proposes those origin criteria which itisfelt canbemore
easily applied andcontrolled from theCustoms viewpoint ,with
less risk ofmisunderstanding and fraud and the least inter­
ference with commercial activities .
These criteria areaccompanied bycertain rules oforigin
generally agreed tobeessential for thedevelopment ofasystem
oforigin determination .
TheAnnex deals solely with theCustoms aspects ofrules
oforigin .Itdoes not ,for example ,extend tomeasures taken
toprotect industrial orcommercial property ortoensure respect
for theorigin indications orother trade descriptions inforce .
CRITERIA COMMONLY USED TODETERMINE THE ORIGIN OFGOODS
The choice ofthecriteria onwhich rules fordetermining
the origin ofgoods are based isanimportant matter inwhich
economic ortrade-policy considerations take precedence over all
others .But for the desired aim tobeachieved the criteria must
be .correctly applied inpractice .This means that they must be '
both readily understood bythe traders concerned and readily
verifiable bytheCustoms authorities .Itistherefore useful
toconsider from these twopoints ofview the advantages and \
disadvantages ofthe criteria commonly used todetermine origin#
These advantages and disadvantages may reveal themselves .
atdifferent stages :interpretation bythe exporter ,the producer
etc .inrelation tothegoods todecide whether hecan claim
origin ;issuing orvisaing ofcertifications oforigin bythe
administrative authority orcompetent body inthecountry of
exportation ;checking ofdeclared origin inthecountry of
importation ,and thecarrying outofpost-importation controls .

Annex
Doc .19.582 E
1.The "wholly produced "criterion
(a)Description
This isacriterion present inalmost ,all origin determina­
tion systems ,andrequires that nopart orcomponent ofthegoods
oranymaterials used inproduction have been introduced from ,
outside thecountry oforigin .Itisgenerally used incombina­
tion with the criteria applicable when two ormore countries are
concerned intheproduction of .the article .Thij criterion
applies mainly tomineral products ,vegetable products ,animals
and animal products ,marine products ,andproducts ofhunting or
fishing .
Products extracted from the sea byavessel are usually
regarded asoriginating inthe country towhich thevessel
belongs .However ,therequirements that vessels have tomeet in
order toberegarded asbelonging toaparticular country often
vary from oneorigin determination system toanother ."Asimilar
problem arises with factory ships which process marine products
onthe spot .
Inaddition tothese "natural "products ,the criterion is
generally applied toused articles fitonly for .therecovery of
materials ,scrap andwaste ,allofwhich are taken tooriginate '
inthe country ,where they have been collected .
The criterion also applies togoods made wholly inthe
country and exclusively from theproducts orarticles referred to
above .Itdoes not apply togoods containing any parts or
materials imported orofunknown origin .
(b)Advantages
The "wholly produced "criterion can beformulated with great
precision and isparticularly appropriate inthecase ofnatural
products such asplants and animals .The truth orfalsity ofa
claim that goods are "wholly produced "cannormally beestablished
with little risk oferror .
3.

Annex
Doc .19.582 E
The criterion also provides asatisfactory solution for
the case ofused articles ,scrap and waste ,towhich other
criteria might bedifficult t.oapply .. . .
(c)Disadvantages
Difficulties can arise inapplying this criterion to
products ofdeep-sea fishing ,particularly inconnection with
checks that requirements such as,forexample ,thenationality
ofthe shipowner and ofthe crew are actually met .
The application ofthis criterion toindustrial goods
"wholly produced "inacountry may give rise todifficulties of
interpretation .Manufacturers and producers tend toassume that
formanufactured go6ds thecriterion applies tothose goods in
' *
respect towhich all themanufacturing processes have been
carried out inthe country concerned ,regardless oftheorigin
ofthe materials orcomponents used intheir manufacture .
Infact this ,criterion isvery stringent and applies only toa
small number ofproducts since they must not contain even very
minor materials orcomponents imported from outside .
2."Value added "or "percentaae "criterion
(a)Description - •
According tothis criterion ,inorder todetermine origin
regard ishad tothe extent ofthe processing ormanufacturing
undergone inacountry ,byreference tothe concept ofthevalue
added thereby tothe goods .When this added value equals or
exceeds aspecified percentage ,thegoods acquire origin inthe
country where the processing ormanufacturing was carried out .
The value added may also becalculated byreference tothe
materials orcomponents offoreign orunknown origin used in
manufacturing orproducing thegoods .For the final product to

Annex ;
Doc .19.582 E
retain itsorigin inaspecific country thevalue ofthese
materials orcomponents must not exceed aspecified percentage
ofits own value .
r
Inpractice ,therefore ,theapplication ofthis criterion
comes down tocomparison ofthe value ofthematerials imported
orofunknown origin with thevalue ofthe finished product .
The value ofconstituents imported orofunknown origin
isgenerally established from theimport value orthepurchase
price .
The value ofthe goods as exported isnormally calculated
using thecost ofmanufacture ,theex-factory price ortheexport
price .
(b)Advantages .
ι
The main advantages ofthis criterion are its -precision and
simplicity .
The value ofconstituent materials imported orofunknown
origin can beestablished from available commercial records or
documents .
/
Where thevalue ofthe exported goods isbased onthe
ex-factory price orthe export price ,both prices are easily
established and can besupported bycommercial invoices and the
commercial records ofthe traders concerned .
(c)Disadvantages
Themain disadvantage ofthis criterion stems from its
very precision :borderline cases occur inwhich aslight
difference upward ordownward with respect tothe prescribed
percentage causes aproduct tomeet ,orfail tomeet ,theorigin
requirements .

Annex
Doc .19.582 E
This leads toanunfair advantage for aproduct which just
qualifies over asimilar product which just fails toqualify .
This situation can give rise todistortion ofnormal trade
r
procedures intheform ofefforts bymanufacturers touse a
particular material inpreference toanother inorder toqualify
rather than for normal manufacturing orcommercial reasons .
Italso incites attempts tofalsify evidence inorder tosupport
goods which just fail toqualify and increases thenumber of
disputes with Customs . , .
Inthese borderline cases ,theorigin attributed may depend
ontheprevailing price oftheimported materials .Quite minor
fluctuations inthevalue ofthematerials used may cause goods to
r
qualify for aspecific origin atone point intime but fail to
qualify atanother even though there has been virtually nochange
inthe processes ofmanufacture ofthe goods .Achange of *
supplier oravariation inlabour costs may also ,incertain
circumstances ,produce the same effect .
These disadvantages are accentuated ifthe criterion is
based oncost ofmanufacture ortotal cost ofmaterials used .
Disputes mayarise astowhether certain factors are tobe
allocated toco'st ofmanufacture or,for example ,toselling ,
distribution ,etc .costs .The allocation ofoverheads tothe cost
ofmanufacture ofspecific products isaparticular source of
dispute .Moreover ,asarule thecost ofmanufacture cannot be
established from external evidence (such asinvoices ). Measures
have tobetaken toallow inspection ofaccounting records .
The total cost ofmaterials used isalso difficult todetermine .
\ ,
M
Some countries feel that theproblems attaching tocontrol
ofthe factors involved inthis criterion cannot beresolved
without investigations inthecountry ofexportation innearly
every case .

Annex .
Doc .19.582 E
3.Criteria based onthenature orimportance oftheprocessing
ortransformation undergone bythe goods
(a)Description
Instead ofdepending ontheidea of"value added ",criteria
ofthis type describe ,more orless directly ,theprocessing or
transformation operations which ,when carried out inagiven
country ,cause thegoods subjected tothem toqualify as
originating inthat country .
This result may beachieved :
(i)Bymeans ofageneral definition such asthat assigning to
goods theorigin ofthecountry inwhich they have undergone
the last substantial processing ortransformation "
("substantial transformation criterion ").
These definitions must asarule besupplemented by
provisions specifying ,forexample ,that thetransformation
orprocessing must : . .
-beeconomically justified ;
-becarried out byaspecially equipped firm ;
-result intheproduction ofanew product oraproduct /
representing amajor .stage ofmanufacture .
Itmay also beconsidered useful t<3list theoperations
which should not beregarded asconstituting "substantial " '
processing ortransformation .
(ii)Bylisting ,theprocessing ortransformation operations that
are agreed togive the goods treated the origin ofthe
country inwhich theoperations were carried out ("qualifying
•process criterion ").

Annex
Doc .19.582 E
(iii )Bytheuse ofasystematic goods nomenclature byreference
towhich the processing ortransformation operations can
bedefined ("criterion using the Brussels Nomenclature
structure "). Under this criterion ,when theendproduct
isclassified inthe Brussels Nomenclature inaheading
other than that applicable toits constituent materials
orcomponents ,itacquires theorigin ofthecountry where
itunderwent theprocessing ortransformation .
V . 1
This criterion isgenerally supplemented bytwo
lists ,positive and negative .
The "positive "list indicates the operations of
processing ormanufacture which ,although not resulting
inachange inthe applicable BTN heading ,nevertheless
confer onthe goods theorigin ofthe country where they
were carried out .
The "negative 1.1list indicates theoperations of
processing ormanufacture which ,although they result in
achange inthe applicable BTN heading ,either donot
give the goods theorigin ofthe country where they were
carried out orconfer that origin only ifcertain other
conditions are met .
-i
(b)Advantages
The chief advantage ofthe "substantial transformation
criterion "isthat itpermits the concise formulation ofvery
general ,objective and theoretically satisfactory rules .
With the .-"qualifying process "criterion and the "criterion
using the Brussels Nomenclature structure ",the conditions
determining origin can beformulated both simply andprecisely .
Using these criteria ,relatively stringent orliberal
conditions can beestablished ,having regard totheeconomic or
fiscal context .

Annex
Doc .19.582 E
Rules oforigin based onthese criteria can beexpressed
very clearly and themanufacturer ,ifrequired toproduce
evidence ,will normally have nodifficulty infurnishing data
establishing the actual use ofthe "qualifying process ".
(c)Disadvantages
Terms such as"important ","substantial ","economically
justified ""'and "essential character "areimprecise andmay well
beasource ofdisputes .
0
Adefinition oforigin based solely onthe "substantial
transformation "criterion calls for the elaboration ofdetailed
rules and theexistence ,atnational orinternational level ,of
bodies responsible for ensuring their uniform application and
interpretation .
\
The "qualifying process "criterion necessitates the
establishment oflists ofprocessing ormanufacturing operations .
The preparation ofsuch lists isatricky matter andmoreover
they must donstantly beupdated tokeep them abreast oftechnical
developments andeconomic conditions .The definitions of
manufacturing orqualifying processes must not beunduly
complicated ,,since otherwise they might lead manufacturers to
commit errors ingood fciith . •,
Aprerequisite for application ofthe criterion using the
Brussels Nomenclature structure isthat both the country of
exportation and the country ofimportation have adopted the BTN as
'I . ..
abasis for their respective tariffs andapply ituniformly *
.... •
•« ^ ,
'' ' O O ■
.However ,these disadvantages canbeconsiderably reduced by
combining these various criteria .
9.

Annex
Doc .19.582 E
For example ,the "substantial transformation "criterion
can beexpressed inspecific terms bymeans ofthesystem of
lists .ofprocessing ortransformation operations used bythe
"qualifying process"' criterion ;thepreparation of "these lists
may itself befacilitated byuse oftheBrussels Nomenclature
structure .
Incertain special cases the "value added "or"percentage "
criterion can beused either alone orto ,supplement the criteria
mentioned above .
Rules oforigin formulated onthese bases are clear and
precise .Their application presents nogreat difficulty for the
exporters orthebodies responsible forpreparing orcertifying
documentary evidence oforigin .They lend themselves well to
effective Customs control .
DEFINITIONS
For th& "purposes ofthis Annex : • •
(a)The term "country oforigin ofgoods "means thecountry in
which the goods have been produced ormanufactured ,according
tothe criteria laid down for the purposes ofapplication of
theCustoms tariff ,ofquantitative restrictions orofany
other measure related totrade .
Note :
Inthis definition the word "country "includes agroup
ofcountries and aregion orapart ofacountry .
(b)The term "systems ofdetermination oforigin ofgoods "means
theentirety oftherules andprocedures ,duly organized ,
which are applied indetermining theorigin ofgoods .
10

Annex
Doc .19.582 E
(c)The term "rules oforigin "means thespecific provisions ,
developed from basic criteria established bynational
legislation orinternational conventions ("origin criteria "),
f
applied byacountry todetermine theorigin *ofgoods .
(d)The term "substantial transformation criterion "means the
criterion according towhich origin isdetermined by .
regarding asthecountry oforigin thecountry where
processing ormanufacture ,deemed sufficient togive the
commodity its essential character ,has been carried out .
(e)The term "criterion using the Brussels Nomenclature
structure "means thecriterion according towhich origin
isdetermined byregarding asthe country oforigin the
country where processing ormanufacture has resulted in
achange inthe applicable BTN heading . .
This criterion isgenerally supplemented -bylists
indicating the cases inwhich achange inthe applicable
BTN heading does not ,ofitself ,affect -the origin ofthe
product and also the cases inwhich the processing or
manufacture undergone confers onthe goods the origin of
thecountry where ithas been carried out even though it
does not change the BTN heading .
ν ·., ί
(f)The term "qualifying process criterion "means thecriterion
which specifies thenature orextent ofthe processes of
production ormanufacture which must be .applied inagiven
country togoods ofagiven description for those goods to
beregarded asoriginating inthat country .
•**
(g)The term "value added criterion "or"percentage criterion "
means thecriterion according towhich goods aredeemed to
•originate inagiven country if :
11

Annex .
Doc .19.582 E
.(i)thevalue oftheprocessing inthecountry andofany
materials originating inthecountry concerned and used
intheir production equals orexceeds aspecified
percentage oftheir value ,or
(ii).the value ofanymaterials notoriginating inthe
country concerned orofunknown origin and used intheir
production does notexceed aspecified percentage of
their value . ..
PRINCIPLES
1. Standard
The rules oforigin necessary for the implementation ofthe
measures which theCustoms are responsible forapplying both at
importation and atexportation shall belaid down inaccordance
with the provisions ofthis Annex .
RULES OFORIGIN
2. Standard
Goods produced wholly inagiven country shall betaken as
originating inthat country .The following shall betaken tobe
produced wholly inagiven country :
(a)Mineral products extracted inthat country ,including its
territorial waters ;
(b)Vegetable products harvested orgathered inthat country ;
(c)Live anirifals born andraised inthat country ;
(d)Products obtained from live animals raised .inthat country ;
't
(e)'Products obtained from hunting orfishing conducted inthat
country ;

Annex '
Doc .19.582 E
(f)Products obtained bymaritime fishing andother products
taken from the seabyavessel registered ornotified in,
and flying the flag of,that country ;
(g)Products' obtained aboard afactory ship solely from products
ofthekind covered byparagraph (f)above originating in
that country ,provided that thefactory ship isregistered
ornotified in ,and isflying the flag of,that country ;
(h)Productsextracted from marine soil orsubsoil outside that
country 'sterritorial waters ,provided that thecountry has
sole rights towork that soil orsubsoil ;
(ij)Scrap andwaste from processing andmanufacturing operations ,
and used ,articles ,collected inthat country and fitonly
for the irecovery ofraw materials ; -
(k)Goods produced inthat country solely from the products
referred -toinparagraphs (a)to (ij)above orderivatives
thereof orfrom products not containing any' imported materials
ormaterials ofunknown origin .i
3. " ■ Standard
Where two ormore countries have taken part inthe produc­
tion ofthegoods ,those goods shall bedeemed tooriginate in
the country inwhich the .final substantial manufacturing or
processing wasperformed . '
Inorder todetermine whether manufacturing orprocessing
may beregarded assubstantial ,use shall bemade oflists of
manufacturing orprocessing operations which shall whenever possible
conform tothe structure and the heading numbers ofthe Brussels
Nomenclature.' .... s
The "value added "or"percentage "criterion shall beused
where the "substantial "character ofthemanufacturing or '
processing cannot bedetermined byother means .This criterion
13.

Annex
Doc .19.582 E
may also beused toamplify andclarify thedescription ofthe
manufacturing orprocessing operations provided for inthe
lists . f .
Notes
1. Asanalternative tocomplete lists ofmanufacturing or
processing operations ,itispossible tolaydown ageneral rule
nn 'accompanied bylists relating only toexceptions tothat rule .
Thegeneral rule specifies that "substantial "manufacturing or
processing operations are those which cause theproduct obtained
tobeclassified inaheading ofthe Brussels Nomenclature
different from theheadings relating toeach oftheproducts or
components used inproducing it.
)i ■
The exceptions tothis rule concern :
(a)manufacturing orprocessing operations which ,although they
entail ;achange inBTN heading ,are not regarded as
"substantial ":
<*>> '' .
(b)manufacturing orprocessing operations which ,although they
donot entail achange inBTN heading ,are regarded as
"substantial ";r / ,
(c)cases inwhich theonly criterion applicable isthe "value
added "or "percentage "criterion ,the relevant percentage
being stated .
2. The manufacturing orprocessing operation can bedefined
byspecifying either theprocesses qualifying (forexample ,
development of"cinematograph film ,exposed and developed ,etc."
ofBTNheading 37.06 )orthe stage atwhich manufacture must
commence (forexample ,inthecase ofarticles ofBTNheading 61.10
"gloves ,mittens ,mitts ,stockings ,socks and sockettes ,notbeing
knitted orcrocheted goods ":manufacture from yarn ).

Annex
.Doc .19.582 E
4. Recommended Practice
Where the value added orpercentage criterion isused in
application ofStandard 3,thevalues tobetaken into considera­
tion for thepurpose ofdetermining thevalue added should be,
onthe one hand ,the dutiable ,value atimportation and ,onthe
other hand ,either theex-works price orthe export price ,
according "totheprovisions oifthenational legislation .
5. •. Standard
Where itisestablished that the sole purpose of
manufacturing orprocessing carried out inagiven country was
toevade theprovisions applicable tothe goods ofother specific
countries ,.such manufacturing orprocessing shall not beregarded
asconferring upon the goods soobtained the origin ofthecountry
inwhich itwas carried out . •
6. Recommended Practice
»
Operations which donot contribute or .which contribute to
only asmall extent totheessential characteristics orproperties
ofthe goods ,and inparticular operations confined toone or
more ofthose listed below ,should no'tberegarded asconstituting
*
substantial manufacturing orprocessing :
(a)handling necessary for the preservation ofgoods during
transport orstorage ;
(b)handling toimprove thepackaging orthemarketable quality
ofthegoods ortoprepare them for shipment ,such asbreaking .
bulk ,grouping ofpackages ,sorting and grading ,and repacking ;
, '
(c)simple ,assembly operations ;
\
(d;mixing ofgoods ofdifferent origins ,provided that the
resulting product does notderive itsessential characteristics
orproperties 'from such ,mixture .
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Annex
Doc .19.582 E
DIRECT TRANSPORT RULE
*
7. Recommended Practice
tA
Provisions requiring thedirect transport ofgoods from the
country oforigin should notbelaid down except with respect to
goods that may lend themselves tosubstitution andwhere atariff
preference ortheapplication oftrade oreconomic measures (for
ηηexample ,quantitative restrictions )isinvolved .
Where such provisions are laid down ,derogations from the
direct transport rule should beallowed ,inparticular for
geographical reasons (forexample ,inthecase oflandlocked
countries )arid ,inthecase ofgoods which remain under Customs
supervision inthird countries orwhich are displayed atfairs or
exhibitions inthird countries .
SPECIAL CASES .
8. . Standard
r«n -
Accessories ,spare parts and tools supplied with amachine ,
appliance ,apparatus opvehicle andforming part ofthenormal
equipment thereof ,shall bedeemed tohave the same origin asthe
machine ,appliance ,apparatus orvehicle .
I
!(i . .¡ ' .
9. r Recommended Practice
Essential spare parts for amachine ,appliance ,apparatus
orvehicle delivered previously should beregarded ashaving the
same origin asthemachine ,appliance ,apparatus orvechicle for
which they are 'intended .
!!.' '
10. Standard
■!»i
For the purposes ofdetermining their origin ,packings shall
not betreated differently from thegoods contained therein unless
they arerequired to-be declared separately under their own tariff
heading .. '.
16.

Annex
Doc .19.582 E
Note
Packings are generally required tobedeclared under their
own tariff heading when they are not ofatype normally used for
.thegoods contained therein andhave anindependent anddurable
use other than aspackings .
11. Standard
nn n •–
Indetermining the origin ofgoods ,noaccount shall be
taken ofthe origin ofthe energy ,plant ,machinery and tools
used inthe manufacture orprocessing ofthe goods .
12. Recommended Practice
Works .ofart ,collectors' pieces ,and antiques ,falling
within Chapter 99ofthe Brussels Nomenclature -for the classifica­
tion ofgoods inCustoms tariffs ,should betaken asoriginating -
inthe country from which they are consigned .
INFORMATION CONCERNING RULES OFORIGIN^
13. Standard
The Customs authorities shall ensure that all relevant
i ;
information regarding rules oforigin isreadily available to
any person interested . , ■
14. •' Standard
All changes intherules oforigin orintheprocedures for
'( !
their application shall bebrought tothe knowledge ofthe
participants ininternational trade byapprbpriate means .
15. -, Recommended Practice
Changes inthe rules oforigin orinthe procedures for
their application should enter into force only after sufficient
notice hasbeen given toenable theinterested persons ,both in
export markets and .insupplying countries ,totake account ofthe
new provisions .
17.