CELEX: 51973PC1018
Language: en
Date: 1973-06-22 00:00:00
Title: Recommendation for a Council Decision on the negotiation of an agreement concerning three draft annexes to the international Convention for the simplification and harmonization of customs procedures and rules of origin (submitted to the Council by the Commission)

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COM (73) 1018
Vol. 1973/0186
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                                COM(73)1018 final
                                                                Brussels , 22 June 1973
                                      Recommendation
                                          for a
                                                        \
                                     Council Decision
                            on the negotiation of an agreement
            concerning three draft annexes to the international Convention
                        for the simplification and harmonization of
                                    customs procedures
                                    and rules of origin
                      ( submitted to the Council by the Commission)
 CQIï(73 ) 1018 final
 ---pagebreak---                            EXPLANATORY   NOTE
Introduction
1.1 . A draft international Convention for the simplification and
      harmonisation of customs procedures was prepared by the Customs
      Cooperation Council ( C.C.C. ) and submitted for adoption at its
      meeting on 16 to 22 May 1973 * This Convention has been the
      subject of a Recommendation for a Council Decision ( doc . COM
      ( 73 ) hGO final of 28 March 1973 R/977/73 ( COMER 156 ) of 12
      April 1973 ) in regard to the Community .
      The Convention opens the possibility , at the time of signature ,
      to specify the Annex or the Annexes which the Contracting
      Parties undertake to apply (Article 11 (*f ). of the Convention ).
      In addition , for the purpose of voting at the C.C.C. , each
      Annex is taken as constituting a separate Convention (Article 6
      of the Convention ).
1.2 . The Permanent Technical Committee of the . C.C.C. has directed
      Secretariat to draft annexes to- the said. Convention on Customs
      problems on . the origin of goods . The outline for the Annexes
      to the Convention is to have three on the origin of goods ,
      viz :
      - rules of origin ,
      - documentary proof of origin ,
      - control of origin .
      Of these three Annexes only that on the rules of origin has at
      present been prepared by the Secretariat ( doc . 19*582 of
      2 May 1973 cfr . Annex I ). The two others will be prepared later .
 ---pagebreak---           The Secretariat of the C.C.C. has invited Member States as well as
          non-Members and international organisations concerned, to submit
          any observations and suggestions whioh they may have on the draft
          annex on the ru&is of origin before 29 June 1973 *
           ]
   1.3    The Commission will examine these drafts with representatives of
          Member States with a view to preparing a common stand to be taken ,
          to be conveyed to the Secretariat of the Customs Cooperation Council
          within the time limit laid down . ■
• The main features of the drafts               -
    2.1 The work on this draft by the Secretariat of the (5.C.C. has taken into
          account , inter alia, the provisions on rules^j^ origin made by the
          Council or the Commission either unilaterally of following contractual
          obligations ( 2 ),        ■
    2.2 . The drafts are based on the following considerations :
          – The absence of common rules of origin , for exportation as much as
             for importation , complicates the task of both the customs administra­
             tions and the organisations entitled to issue documentary proof of
             origin and oauses difficulties for international commercial middle-men}
  (l ) See , particularly regulation         (EEC)802/68 of the Council of 27 June,1968
        (0»J. L.148 , 28 June , I968 , p.l ), Regulation     (EEC ) 2862/7I of the
        Commission of 22 December , 1971 on gs»n©r^l4sQd preferences ( O.J. L 289 ,
        31 December, 1971 ) extended by Regulation (®c) 2818/72 of the Commission
        of 22 December, 1972 ( O.J. L 297 30 Deoember, 1972).
  ( 2) Yaoundé Convention, Agreements EEC-East Africa , EEC-Tuaiisia , EEC-Maroceo ,
       EEC-Spain, EEC-Israel , EEC-Malta , EEC-Austria , EEC-Ieeland , EEC-Portugal ,
       EEC-Sweden and EEC-Switzerland.
 ---pagebreak---                                       - 3 -
          - it is in the mutual interest of all countries to aim progressively
             for harmonisation in this matter ?
          - the variety of criteria "used to define the concept of origin or
             the different methods of laying down similar criteria do not
             appear , technically , to be necessary . Even when different
             oriteria have been laid down to take account of eoonomio con­
             siderations of preferential tariff agreements , they should
             be written into a common or uniform form to make it easier
             for the many commercial interests to understand and for the
             customs to apply.
3 . Scope for Community action in the negotiation of the drafts .
    The main characteristics of these drafts (paragraph 2 above ) have a
    bearing on those Customs procedures which rank among the prinoipal
    instruments of commercial policy. Consequently , when these procedures
    are the subject of international agreements , they become both tariff
    and commercial agreements which ar®part of the common commercial
    policy , by virtue of Article 113 of the EEC Treaty. The nature of
    Articles 113 and 114 of the EEC Treaty is such that only the Community
    has the competence to negotiate and conclude these agreements .
    Artiole 113 ( 3 ) of the EEC Treaty on the other " hand stipulates that
    if agreements on which it has a bearing need to be negotiated with
    third countries , the Commission Bhall submit its recommendations to
    the Council for authority to open the necessary negotiations .
 ---pagebreak---                                     - 4 -
4. Conclusion
   The Commission recommends that the Council , by virtue of Article 113
   of the EEC Treaty , should, having regard to Community provisions re­
   garding the question of origin, authorise it to negotiate the draft
   annexes at the international Convention for the simplification and
   harmonisation of Customs procedures and rules of origin.
 ---pagebreak---                                   - 5 -
                             Recommendat ion
                                  for a
                             Council Decision
                    on the negotiation of an agreement
        concerning three draft annexes to the international Convention
                for the simplification and harmonisation of
                              customs procedures
                             and rules of origin ...
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
having regard to the Treaty establishing the European Economic Community ,
and in particular Article 113 thereof ;
having regard to the Recommendation of the Commission }
whereas the conclusion of an agreement concerning three draft annexes to
the International Convention for the simplification and harmonisation
of customs procedures and rules of origin can efficiently contribute to
the development of international trade , and in particular international
commerce ;
whereas the aforesaid agreement has a bearing on the common customs
legislation , in particular in the matter of the Common Customs feriff ;
whereas it is necessary to have regard to the proper requirements of a
Customs Union | whereas it is agreed that the Community negotiate and
conclude this agreement :
 ---pagebreak--- HAS IECIIED :
                            Article 1
The Commission is authorised to conduct negotiations with the Customs
Co-operation Council in order to conclude . an agreement concerning three
cL-aft annexes to the International Convention for the simplification
and harmonisation of customs prooe dure s and rules of origin.
The Commission shall conduct these 'negotiations , as provided for' under'
Article 113 of the Treaty , in consultation with the Special Committee ,
which shall assist the Commission in that task.
                                            Done at Brussels ,
                                            For the Council
                                            The President
 ---pagebreak---                             ANNEX 1
 D.l - PRELIMINARY DRAFT ANNEX RELATING TO RULES
INTRODUCTION
       The concept of the origin of goods enters into the
implementation of many measures whose application is the
responsibility of the Customs . Rules of origin employ a variety
of criteria based mainly on economic or' trade-policy considera­
tions . The comparative study of techniques used to develop
systems for the determination of origin shows that , despite these
differences , the aim of the criteria is in most cases to determine
whether the goods have become sufficiently integrated into the
economic circuit of a country to have acquired national origin .
       It must be stressed that the absence of common rules of
origin at both the importation and exportation stages not? only
complicates the task of Customs administrations and of the bodies
empowered to issue documentary evidence of origin but also causes
difficulties for the participants in international trade .
This points to the desirability of moving progressively towards
a certain degree of harmonization in this field .
              /
       There seems to be no good technical reason for the wide
range of criteria used to express the concept of origin or for the
many different ways in which similar criteria are formulated .
Where various criteria have been introduced to reflect economic
conditions or negotiating factors in preferential tariff
arrangements , it seems very desirable that they should exist within
a common or standard framework , for ease of understanding by
traders and ease of application by the Customs .
    . The introduction to the present Annex has been supplemented
by a statement of the advantages and disadvantages of the various
origin criteria from the point of view of the Customs , who are
required to apply them .
                                                                 1.
 ---pagebreak--- Doc . 19.582 E
       After defining certain technical terms , the Annex proper
proposes those origin criteria which it is felt can be more
easily applied and controlled from the Customs viewpoint , with
less risk of misunderstanding and fraud and the least inter­
ference with commercial activities .
       These criteria are accompanied by certain rules of origin
generally agreed to be essential for the development of a system
of origin determination .
       The Annex deals solely with the Customs aspects of rules
of origin .   It does not , for example , extend to measures taken
to protect industrial or commercial property or to ensure respect
for the origin indications or other trade descriptions in force .
CRITERIA COMMONLY USED TO DETERMINE THE ORIGIN OF GOODS
       The choice of the criteria on which rules for determining
the origin of goods are based is an important matter in which
economic or trade-policy considerations take precedence over all
others .  But for the desired aim to be achieved the criteria must
be. correctly applied in practice .   This means that they must be '
both readily understood by the traders concerned and readily
verifiable by the Customs authorities . It is therefore useful
to consider from these two points of view the advantages and \
disadvantages of the criteria commonly used to determine origin#
       These advantages and disadvantages may reveal themselves .
at different stages : interpretation by the exporter , the producer
etc . in relation to the goods to decide whether he can claim
origin ; issuing or visaing of certifications of origin by the
administrative authority or competent body in the country of
exportation ; checking of declared origin in the country of
importation , and the carrying out of post-importation controls .
 ---pagebreak---                                                          Annex
                                                         Doc . 19.582 E
1 . The " wholly produced " criterion
    ( a ) Description
         This is a criterion present in almost , all origin determina­
tion systems , and requires that no part or component of the goods
or any materials used in production have been introduced from ,
outside the country of origin . It is generally used in combina­
tion with the criteria applicable when two or more countries are
concerned in the production of .the article .     Thij criterion
applies mainly to mineral products , vegetable products , animals
and animal products , marine products , and products of hunting or
fishing .
         Products extracted from the sea by a vessel are usually
regarded as originating in the country to which the vessel
belongs . However , the requirements that vessels have to meet in
order to be regarded as belonging to a particular country often
vary from one origin determination system to another ." A similar
problem arises with factory ships which process marine products
on the spot .
         In addition to these " natural " products , the criterion is
generally applied to used articles fit only for . the recovery of
materials , scrap and waste , all of which are taken to originate '
in the country, where they have been collected .
         The criterion also applies to goods made wholly in the
country and exclusively from the products or articles referred to
above . It does not apply to goods containing any parts or
materials imported or of unknown origin .
    ( b ) Advantages
         The "wholly produced " criterion can be formulated with great
precision and is particularly appropriate in the case of natural
products such as plants and animals . The truth or falsity of a
claim that goods are "wholly produced " can normally be established
with little risk of error .
                                                                      3.
 ---pagebreak--- Annex
Doc . 19.582 E
         The criterion also provides a satisfactory solution for
the case of used articles , scrap and waste , to which other
criteria might be difficult t.o apply . .       .      .
    ( c ) Disadvantages
         Difficulties can arise in applying this criterion to
products of deep-sea fishing , particularly in connection with
checks that requirements such as , for example , the nationality
of the shipowner and of the crew are actually met .
         The application of this criterion to industrial goods
" wholly produced " in a country may give rise to difficulties of
interpretation . Manufacturers and producers tend to assume that
for manufactured go6ds the criterion applies to those goods in
                                                   '                *
respect to which all the manufacturing processes have been
carried out in the country concerned , regardless of the origin
of the materials or components used in their manufacture .
In fact this , criterion is very stringent and applies only to a
small number of products since they must not contain even very
minor materials or components imported from outside .
2 . " Value added " or " percentaae " criterion
    ( a ) Description           - •
         According to this criterion , in order to determine origin
regard is had to the extent of the processing or manufacturing
undergone in a country , by reference to the concept of the value
added thereby to the goods . When this added value equals or
exceeds a specified percentage , the goods acquire origin in the
country where the processing or manufacturing was carried out .
         The value added may also be calculated by reference to the
materials or components of foreign or unknown origin used in
manufacturing or producing the goods . For the final product to
 ---pagebreak---                                                         Annex ;
                                                        Doc . 19.582 E
retain its origin in a specific country the value of these
materials or components must not exceed a specified percentage
of its own value .
              r
        In practice , therefore , the application of this criterion
comes down to comparison of the value of the materials imported
or of unknown origin with the value of the finished product .
        The value of constituents imported or of unknown origin
is generally established from the import value or the purchase
price .
        The value of the goods as    exported is normally calculated
using the cost of manufacture , the ex-factory price or the export
price .
   ( b ) Advantages                      .
                                       ι
        The main advantages of this criterion are its - precision and
simplicity .
        The value of constituent materials imported or of unknown
origin can be established from available commercial records or
documents .
                /
        Where the value of the exported goods is based on the
ex-factory price or the export price , both prices are easily
established and can be supported by commercial invoices and the
commercial records of the traders concerned .
   ( c ) Disadvantages
        The main disadvantage    of this criterion stems from its
very precision : borderline cases occur in which a slight
difference upward or downward with respect to the prescribed
percentage causes a product to meet , or fail to meet , the origin
requirements .
 ---pagebreak---   Annex
  Doc . 19.582 E
         This leads to an unfair advantage for a product which just
 qualifies over a similar product which just fails to qualify .
 This situation can give rise to distortion of normal trade
                 r
 procedures in the form of efforts by manufacturers to use a
 particular material in preference to another in order to qualify
 rather than for normal manufacturing or commercial reasons .
 It also incites attempts to falsify evidence in order to support
 goods which just fail to qualify and increases the number of
 disputes with Customs . , .
         In these borderline cases , the origin attributed may depend
on the prevailing price of the imported materials . Quite minor
 fluctuations in the value of the materials used may cause goods to
r
 qualify for a specific origin at one point in time but fail to
 qualify at another even though there has been virtually no change
 in the processes of manufacture of the goods . A change of *
 supplier or a variation in labour costs may also , in certain
circumstances , produce the same effect .
        These disadvantages are accentuated if the criterion is
based on cost of manufacture or total cost of materials used .
Disputes may arise as to whether certain factors are to be
allocated to co'st of manufacture or , for example , to selling ,
distribution , etc . costs . The allocation of overheads to the cost
of manufacture of specific products is a particular source of
dispute . Moreover , as a rule the cost of manufacture cannot be
established from external evidence ( such as invoices ).    Measures
have to be taken to allow inspection of accounting records .
The total cost of materials used is also difficult to determine .
    \                                    ,
                   M
        Some countries feel that the problems attaching to control
of the factors involved in this criterion cannot be resolved
without investigations in the country of exportation in nearly
every case .
 ---pagebreak---                                                            Annex  .
                                                           Doc . 19.582 E
3 . Criteria based on the nature or importance of the processing
     or transformation undergone by the goods
      ( a ) Description
           Instead of depending on the idea of " value added ", criteria
of this type describe , more or less directly , the processing or
transformation operations which , when carried out in a given
country , cause the goods subjected to them to qualify as
originating in that country .
           This result may be achieved :
  ( i ) By means of a general definition such as that assigning to
          goods the origin of the country in which they have undergone
          the last substantial processing or transformation "
          (" substantial transformation criterion ").
                 These definitions must as a rule be supplemented by
          provisions specifying , for example , that the transformation
          or processing must :                       .                .
          - be economically justified ;
          - be carried out by a specially equipped firm ;
          - result in the production of a new product or a product /
             representing a major . stage of manufacture .
                 It may also be considered useful t<3 list the operations
          which should not be regarded as constituting " substantial " '
          processing or transformation .
( ii ) By listing, the processing or transformation operations that
          are agreed to give the goods treated the origin of the
          country in which the operations were carried out (" qualifying
        • process criterion").
 ---pagebreak--- Annex
 Doc . 19.582 E
 ( iii ) By the use of a systematic goods nomenclature by reference
           to which the processing or transformation operations can
          be defined (" criterion using the Brussels Nomenclature
           structure ").    Under this criterion , when the end product
          is classified in the Brussels Nomenclature in a heading
          other than that applicable to its constituent materials
          or components , it acquires the origin of the country where
          it underwent the processing or transformation .
                                                 V  .              1
                  This criterion is generally supplemented by two
           lists , positive and negative .
                  The " positive " list indicates the operations of
          processing or manufacture which , although not resulting
          in a change in the applicable BTN heading , nevertheless
          confer on the goods the origin of the country where they
          were carried out .
                  The " negative 1. 1 list indicates the operations of
          processing or manufacture which , although they result in
          a change in the applicable BTN heading , either do not
          give the goods the origin of the country where they were
          carried out or confer that origin only if certain other
          conditions are met .
                                             - i
     ( b ) Advantages
          The chief advantage of the " substantial transformation
criterion " is that it permits the concise formulation of very
general , objective and theoretically satisfactory rules .
          With the . -" qualifying process " criterion and the " criterion
using the Brussels Nomenclature structure ", the conditions
determining origin can be formulated both simply and precisely .
          Using these criteria , relatively stringent or liberal
conditions can be established , having regard to the economic or
fiscal context .
 ---pagebreak---                                                            Annex
                                                           Doc . 19.582 E
         Rules of origin based on these criteria can be expressed
very clearly and the manufacturer , if required to produce
evidence , will normally have no difficulty in furnishing data
establishing the actual use of the " qualifying process ".
    ( c ) Disadvantages
         Terms such as " important ", " substantial ", " economically
justified "" 'and " essential character " are imprecise and may well
be a source of disputes .                               0
         A definition of origin based solely on the " substantial
transformation " criterion calls for the elaboration of detailed
rules and the existence , at national or international level , of
bodies responsible for ensuring their uniform application and
interpretation .
                         \
         The " qualifying process " criterion necessitates the
establishment of lists of processing or manufacturing operations .
The preparation of such lists is a tricky matter and moreover
they must donstantly be updated to keep them abreast of technical
developments and economic conditions . The definitions of
manufacturing or qualifying processes must not be unduly
complicated , ,since otherwise they might lead manufacturers to
commit errors in good fciith .        • ,
         A prerequisite for application of the criterion using the
Brussels Nomenclature structure is that both the country of
exportation and the country of importation have adopted the BTN as
                 ' I                      . . .
a basis for their respective tariffs and apply it uniformly *
                 ....                  •
                     • «            ^                               ,
               '' '              O          O■
      . However , these disadvantages can be considerably reduced by
combining these various criteria .
                                                                        9.
 ---pagebreak--- Annex
 Doc . 19.582 E
        For example , the " substantial transformation " criterion
can be expressed in specific terms by means of the system of
lists . of processing or transformation operations used by the
" qualifying process"' criterion ; the preparation of "these lists
may itself be facilitated by use of the Brussels Nomenclature
structure .
        In certain special cases the " value added " or " percentage "
criterion can be used either alone or to, supplement the criteria
mentioned above .
        Rules of origin formulated on these bases are clear and
precise . Their application presents no great difficulty for the
exporters or the bodies responsible for preparing or certifying
documentary evidence of origin . They lend themselves well to
effective Customs control .
DEFINITIONS
        For th&" purposes of this Annex :         •                •
( a ) The term " country of origin of goods " means the country in
      which the goods have been produced or manufactured , according
      to the criteria laid down for the purposes of application of
      the Customs tariff , of quantitative restrictions or of any
      other measure related to trade .
      Note :
             In this definition the word " country " includes a group
      of countries and a region or a part of a country .
( b ) The term " systems of determination of origin of goods " means
      the entirety of the rules and procedures , duly organized ,
      which are applied in determining the origin of goods .
10
 ---pagebreak---                                                           Annex
                                                           Doc . 19.582 E
( c ) The term " rules of origin " means the specific provisions ,
        developed from basic criteria established by national
        legislation or international conventions ("origin criteria "),
               f
        applied by a country to determine the origin* of goods .
( d ) The term " substantial transformation criterion " means the
        criterion according to which origin is determined by .
        regarding as the country of origin the country where
        processing or manufacture , deemed sufficient to give the
        commodity its essential character , has been carried out .
( e ) The term " criterion using the Brussels Nomenclature
        structure " means the criterion according to which origin
        is determined by regarding as the country of origin the
        country where processing or manufacture has resulted in
        a change in the applicable BTN heading .                  .
              This criterion is generally supplemented - by lists
        indicating the cases in which a change in the applicable
        BTN heading does not , of itself , affect -the origin of the
        product and also the cases in which the processing or
        manufacture undergone confers on the goods the origin of
        the country where it has been carried out even though it
        does not change the BTN heading .
ν              · . ,                  ί
 ( f ) The term " qualifying process criterion " means the criterion
        which specifies the nature or extent of the processes of
        production or manufacture which must be . applied in a given
        country to goods of a given description for those goods to
        be regarded as originating in that country .
                     •* *
 ( g ) The term " value added criterion " or " percentage   criterion "
        means the criterion according to which goods are deemed to
      • originate in a given country if :
                                                                       11
 ---pagebreak--- Annex      .
 Doc . 19.582 E
      . ( i ) the value of the processing in the country and of any
              materials originating in the country concerned and used
              in their production equals or exceeds a specified
              percentage of their value , or
       ( ii).the value of any materials not originating in the
              country concerned or of unknown origin and used in their
              production does not exceed a specified percentage of
              their value .                  ..
PRINCIPLES
1.                                                            Standard
          The rules of origin necessary for the implementation of the
measures which the Customs are responsible for applying both at
importation and at exportation shall be laid down in accordance
with the provisions of this Annex .
RULES OF ORIGIN
2.                                                            Standard
          Goods produced wholly in a given country shall be taken as
originating in that country . The following shall be taken to be
produced wholly in a given country :
( a ) Mineral products extracted in that country , including its
      territorial waters ;
( b ) Vegetable products harvested or gathered in that country ;
( c ) Live anirifals born and raised in that country ;
( d ) Products obtained from live animals raised . in that country ;
                                    't
( e)' Products obtained from hunting or fishing conducted in that
      country ;
 ---pagebreak---                                                               Annex '
                                                              Doc . 19.582 E
( f ) Products obtained by maritime fishing and other products
      taken from the sea by a vessel registered or notified in ,
      and flying the flag of , that country ;
( g ) Products' obtained aboard a factory ship solely from products
      of the kind covered by paragraph ( f ) above originating in
      that country , provided that the factory ship is registered
      or notified in , and is flying the flag of , that country ;
( h ) Productsextracted from marine soil or subsoil outside that
      country 's territorial waters , provided that the country has
      sole rights to work that soil or subsoil ;
(ij ) Scrap and waste from processing and manufacturing operations ,
      and used , articles , collected in that country and fit only
      for the irecovery of raw materials ;                          -
( k ) Goods produced in that country solely from the products
      referred - to in paragraphs ( a ) to ( ij ) above or derivatives
      thereof or from products not containing any' imported materials
      or materials of unknown origin . i
3.            " ■                                                 Standard
        Where two or more countries have taken part in the         produc­
tion of the goods , those goods shall be deemed to originate in
the country in which the . final substantial manufacturing or
processing was performed .              '
        In order to determine whether manufacturing or processing
may be regarded as substantial , use shall be made of lists of
manufacturing or processing operations which shall whenever possible
conform to the structure and the heading numbers of the Brussels
Nomenclature.' ....    s
        The " value added " or " percentage " criterion shall be used
where the " substantial " character of the manufacturing or             '
processing cannot be determined by other means . This criterion
                                                                           13 .
 ---pagebreak--- Annex
Doc . 19.582 E
may also be used to amplify and clarify the description of the
manufacturing or processing operations provided for in the
lists .         f                                      .
Notes
1.       As an alternative to complete lists of manufacturing or
processing operations , it is possible to lay down a general rule
             n n                       '
accompanied by lists relating only to exceptions to that rule .
The general rule specifies that " substantial" manufacturing or
processing operations are those which cause the product obtained
to be classified in a heading of the Brussels Nomenclature
different from the headings relating to each of the products or
components used in producing it .
                 ) i                                 ■
         The exceptions to this rule concern :
( a ) manufacturing or processing operations which , although they
      entail ; a change in BTN heading , are not regarded as
      " substantial ":
             <* >>                      ' '       .
( b ) manufacturing or processing operations which , although they
      do not entail a change in BTN heading , are regarded as
      " substantial
               r /
                     ";,
( c ) cases in which the only criterion applicable is the " value
      added " or " percentage " criterion , the relevant percentage
      being stated .
2.       The manufacturing or processing operation can be defined
by specifying either the processes qualifying ( for example ,
development of " cinematograph film , exposed and developed , etc ."
of BTN heading 37.06 ) or the stage at which manufacture must
commence ( for example , in the case of articles of BTN heading 61.10
" gloves , mittens , mitts , stockings , socks and sockettes , not being
knitted or crocheted goods " : manufacture from yarn ).
 ---pagebreak---                                                         Annex
                                                      . Doc . 19.582 E
4.                                              Recommended Practice
        Where the value added or percentage criterion is used in
application of Standard 3 , the values to be taken into considera­
tion for the purpose of determining the value added should be ,
on the one hand , the dutiable , value at importation and , on the
other hand , either the ex-works price or the export price ,
according" to the provisions oif the national legislation .
5.                                           •.               Standard
        Where it is established that the sole purpose of
manufacturing or processing carried out in a given country was
to evade the provisions applicable to the goods of other specific
countries ,. such manufacturing or processing shall not be regarded
as conferring upon the goods so obtained the origin of the country
in which it was carried out .                                              •
6.                                              Recommended Practice
                                       »
        Operations which do not contribute or. which contribute to
only a small extent to the essential characteristics or properties
of the goods , and in particular operations confined to one or
more of those listed below , should no't be regarded as constituting
              *
substantial manufacturing or processing :
( a ) handling necessary for the preservation of goods during
      transport or storage ;
( b ) handling to improve the packaging or the marketable quality
      of the goods or to prepare them for shipment , such as breaking .
      bulk , grouping of packages , sorting and grading , and repacking ;
                                         ,                               '
( c ) simple, assembly operations ;
                                                                \
( d ; mixing of goods of different origins , provided that the
      resulting product does not derive its essential characteristics
      or properties ' from such , mixture .
                                                                    15 .
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Doc . 19.582 E
DIRECT TRANSPORT RULE
                                         *
7.                                                     Recommended Practice
                    t A
       Provisions requiring the direct transport of goods from the
country of origin should not be laid down except with respect to
goods that may lend themselves to substitution and where a tariff
preference or the application of trade or economic measures ( for
                η   η
example , quantitative restrictions ) is involved .
       Where such provisions are laid down , derogations from the
direct transport rule should be allowed , in particular for
geographical reasons ( for example , in the case of landlocked
countries ) arid, in the case of goods which remain under Customs
supervision in third countries or which are displayed at fairs or
exhibitions in third countries .
SPECIAL CASES           .
8.                                     .                           Standard
                r«  n                                -
       Accessories , spare parts and tools supplied with a machine ,
appliance , apparatus op vehicle and forming part of the normal
equipment thereof , shall be deemed to have the same origin as the
machine , appliance , apparatus or vehicle .
                                           I
                !( i             .  .¡       '     .
9.                                             r        Recommended Practice
       Essential spare parts for a machine , appliance , apparatus
or vehicle delivered previously should be regarded as having the
same origin as the machine , appliance , apparatus or vechicle for
which they are ' intended .
                !! . '                           '
10 .                                                               Standard
                ■ ! »i
       For the purposes of determining their origin , packings shall
not be treated differently from the goods contained therein unless
they are required to-be declared separately under their own tariff
heading . . ' .
16 .
 ---pagebreak---                                                          Annex
                                                         Doc . 19.582 E
  Note
        Packings are generally required to be declared under their
  own tariff heading when they are not of a type normally used for
. the goods contained therein and have an independent and durable
  use other than as packings .
  11 .                                                          Standard
             n n                           n                    •–
        In determining the origin of goods , no account shall be
  taken of the origin of the energy , plant , machinery and tools
  used in the manufacture or processing of the goods .
  12 .                                             Recommended Practice
        Works . of art , collectors' pieces , and antiques , falling
  within Chapter 99 of the Brussels Nomenclature - for the classifica­
  tion of goods in Customs tariffs , should be taken as originating-
  in the country from which they are consigned .
  INFORMATION CONCERNING RULES OF ORIGIN
              ^
  13 .                                                          Standard
        The Customs authorities shall ensure that all relevant
                                         i                           ;
  information regarding rules of origin is readily available to
  any person interested .       ,      ■
  14 .                              •'                          Standard
        All changes in the rules of origin or in the procedures for
             ' ( !
  their application shall be brought to the knowledge of the
  participants in international trade by apprbpriate means .
  15 .                             -,              Recommended Practice
        Changes in the rules of origin or in the procedures for
  their application should enter into force only after sufficient
  notice has been given to enable the interested persons , both in
  export markets and . in supplying countries , to take account of the
  new provisions .
                                                                       17 .