CELEX: 52019PC0424
Language: en
Date: 2019-09-20
Title: Proposal for a COUNCIL DECISION on the position to be taken on behalf of the European Union in the Committee on Rules of Origin set up by the Agreement on Rules of Origin (WTO-GATT 1994), annexed to the final act signed in Marrakech on 15 April 1994

EUROPEAN COMMISSION
            Brussels, 20.9.2019
            COM(2019) 424 final
            ANNEX
            to the 
            Proposal for a COUNCIL DECISION
            on the position to be taken on behalf of the European Union in the Committee on Rules of Origin set up by the Agreement on Rules of Origin (WTO-GATT 1994), annexed to the final act signed in Marrakech on 15 April 1994.
            
               
         
         
            
               Enhancing Transparency in Non-preferential Rules of Origin
            
            
               _______________
            
            
               Members of the World Trade Organization,
            
            
               Desiring to ensure that rules of origin themselves do not create restrictive, distorting or disruptive effects on international trade;
            
            
               Desiring to ensure that rules of origin are prepared and applied in an impartial, transparent, predictable, consistent and neutral manner;
            
            
               Recognizing that clear and predictable rules of origin and their application facilitate the flow of international trade;
            
            
               Recognizing that it is desirable to provide transparency of laws, regulations, and practices regarding rules of origin;
            
            
               Desiring to complement the notifications obligations of Article 5 of the Agreement on Rules of Origin;
            
            
               Affirming that enhancing transparency of laws, regulations, and practices regarding rules of origin contribute to mitigate compliance costs of economic operators wishing to integrate global value chains, notably micro, small and medium enterprises;
            
            
               Decide, with respect to rules of origin, as follows:
            
            
               1.That it is desirable to maintain and promote a high level of transparency and mutual understanding about existing rules of origin and related documentary requirements used by WTO Members. Rules of origin are understood as those falling under the scope of Article 1 of the Agreement on Rules of Origin.
            
            
               2.In order to enhance transparency and promote a better understanding of rules of origin, Members shall notify the WTO Secretariat, pursuant to Annex 1 of this Decision, the rules of origin that they use in the application of most-favoured-nation treatment under Articles I, II, III, XI and XIII of GATT 1994.
            
            
               3.Members are encouraged to complete the notification template in Annex 1 when notifying the WTO Secretariat of any other rules of origin that they use for the application of other non-preferential commercial policy instruments as provided for in Article 1.2 of the Agreement on Rules of Origin.
            
            
               4.In addition, Members shall describe, according to Annex 2, their practices with respect to certification of origin and other mandatory documentary proofs of origin for non-preferential purposes that have been notified according to Annex 1
                  1
               . Members that report that they do not implement rules of origin according to Annex 1 shall, nonetheless, complete Annex 2.
            
            
               5.Notifications pursuant to paragraphs 2 and 4 of this Decision shall be submitted no later than one year after the adoption of this Decision.
            
            
               6.The information notified pursuant to this decision shall be made publicly available by the WTO Secretariat.
            
            
               7.Each Member shall, within its available resources, establish or maintain one or more enquiry points to answer reasonable enquiries of governments, traders and other interested parties on matters regarding rules of origin and related documentary requirements as well as to provide the required forms and documents
                  2
               . Members shall communicate the contact details of their respective enquiry points to the WTO Secretariat pursuant to Annex 1. Least-developed country Members shall have two years to communicate this information to the WTO Secretariat.
            
            
               8.Members shall endeavour to provide legal references, websites, explanatory documents, or any other documents, in an official WTO language.
            
            
               9.Members introducing substantive changes to their rules of origin and related documentary requirements that have been notified according to this Decision, shall notify such changes promptly to the WTO Secretariat according to this Decision.
            
         
         
            
               10.The Committee on Rules of Origin (CRO) shall examine existing rules of origin and related documentary requirements based on the information notified according to this Decision, with a view to identifying trade-facilitating practices and to promoting their international diffusion.
            
            
               11.Assistance by the WTO Secretariat should be provided upon request to help developing and least-developed country Members implement the provisions of this Decision.
            
            
               12.Nothing in this Decision shall be construed as affecting the rights and obligations of Members contained in Article 5 of the Agreement on Rules of Origin or in Article 1 of the Trade Facilitation Agreement.
            
            
               13.This Decision, in particular paragraphs 2 and 3, shall be reviewed three years after its adoption, and thereafter when necessary, with a view to further enhancing transparency on non-preferential rules of origin as appropriate.
            
            
            
               ANNEX 1
            
            
               NOTIFICATION TEMPLATE FOR NON-PREFERENTIAL RULES OF ORIGIN
            
            
               Annex 1 may be duplicated as many times as the member deems necessary
            
            
               I. 
                     BASIC INFORMATION
            
            
                     
                        1)
                     
                  
                  
                     
                        Notifying member
                     
                  
                  
                     
                  
               
                     
                        2)
                     
                  
                  
                     
                        Enquiry point 
                     
                     
                        (If possible, provide the following contact details: Name, tel., e-mail, website)
                     
                  
                  
                     
                  
               
                     
                        3)
                     
                  
                  
                     
                        Are Non-Preferential RO in force?
                     
                  
                  
                     
                        □
                     
                  
                  
                     
                        Yes
                     
                  
                  
                     
                        □
                     
                  
                  
                     
                        No*
                     
                  
               
                     
                  
                  
                     
                  
                  
                     
                        * If your answer is "No", the subsequent questions of this Annex do not need to be completed
                     
                  
               
                     
                        4)
                     
                  
                  
                     
                        Please indicate which commercial policy instruments use these non‑preferential RO (refer to Article 1.2 of the Agreement on Rules of Origin)
                     
                  
                  
                     
                  
               
                     
                        5)
                     
                  
                  
                     
                        Date of entry into force or any substantive modification thereof:
                     
                  
                  
                     
                  
               
                     
                        6)
                     
                  
                  
                     
                        Date of expiration, if applicable:
                     
                  
                  
                     
                  
               
                     
                        7)
                     
                  
                  
                     
                        Governmental or non-governmental authorities in charge of administration:
                     
                  
                  
                     
                  
               
                     
                        8)
                     
                  
                  
                     
                        Internet link to legislation and any other explanatory documents, if applicable:
                     
                  
                  
                     
                  
               
                     
                        9)
                     
                  
                  
                     
                        Comments, if any
                     
                  
                  
                     
                  
               
            
               II. 
                     APPLICATION OF NON-PREFERENTIAL RULES OF ORIGIN
            
            
                     
                        10)
                     
                  
                  
                     
                        Do non-preferential RO apply to imports
                     
                  
                  
                     
                        □
                     
                  
                  
                     
                        Yes
                     
                  
                  
                     
                        □
                     
                  
                  
                     
                        No
                     
                  
               
                     
                        11)
                     
                  
                  
                     
                        Do non-preferential RO apply to exports
                     
                  
                  
                     
                        □
                     
                  
                  
                     
                        Yes
                     
                  
                  
                     
                        □
                     
                  
                  
                     
                        No
                     
                  
               
                     
                        12)
                     
                  
                  
                     
                        De minimis rule for the application of non-preferential RO
                     
                  
                  
                     
                        □
                     
                  
                  
                     
                        Yes
                     
                  
                  
                     
                        □
                     
                  
                  
                     
                        No
                     
                  
               
                     
                  
                  
                     
                        If Yes, please specify the de minimis threshold and provide the relevant legal references applicable to questions 10 to 12.
                     
                  
                  
                     
                  
               
            
               III. 
                     CRITERIA FOR DETERMINING SUBSTANTIAL TRANSFORMATION FOR ASSESSING THE ORIGIN OF THE GOOD
            
            
                     
                        13)
                     
                  
                  
                     
                        General criteria, if applicable for all products:
                     
                  
                  
                     
                  
               
                     
                        14)
                     
                  
                  
                     
                        Product specific rules of origin where applicable:
                     
                  
                  
                     
                  
               
                     
                        15)
                     
                  
                  
                     
                        Definition of non-originating material and originating material, if any:
                     
                  
                  
                     
                  
               
                     
                        16)
                     
                  
                  
                     
                        List of minimal operations not conferring origin, if any: 
                     
                  
                  
                     
                  
               
                     
                        17)
                     
                  
                  
                     
                        Residual rules, if any:
                     
                  
                  
                     
                  
               
                     
                        18)
                     
                  
                  
                     
                        Any other information the member deems necessary (provide an Internet link, if appropriate)
                     
                  
                  
                     
                  
               
            
               IV.  
                     ADVANCE RULINGS
            
            
                     
                        Are advance rulings on the origin of a good issued?
                           3
                        
                     
                  
                  
                     
                              
                                 □
                              
                           
                           
                              
                                 Yes
                              
                           
                           
                              
                                 □
                              
                           
                           
                              
                                 No
                              
                           
                        
                  
               
                     
                        Authority in charge of issuing advance rulings (on origin)
                     
                  
                  
                     
                  
               
                     
                        Instructions for the application for an advance ruling
                     
                  
                  
                     
                  
               
                     
                        Internet link to legislation and any other relevant legal references:
                     
                  
                  
                     
                  
               
         
         
            
               
            
               ANNEX 2
            
            
               NOTIFICATION TEMPLATE FOR DOCUMENTARY REQUIREMENTS RELATED TO
            
            
               NON-PREFERENTIAL RULES OF ORIGIN
            
            
                     
                        1)
                     
                  
                  
                     
                        Mandatory requirements for certificate and/or any other mandatory documentary proof of origin for imports?
                     
                  
                  
                     
                        □
                     
                     
                  
                  
                     
                        Yes
                     
                  
                  
                     
                        □
                     
                  
                  
                     
                        No**
                     
                     
                  
               
                     
                        2)
                     
                  
                  
                     
                        Mandatory requirements for certificate and/or any other mandatory documentary proof of origin for exports?
                     
                  
                  
                     
                        □
                     
                  
                  
                     
                        Yes
                     
                     
                  
                  
                     
                        □
                     
                  
                  
                     
                        No**
                     
                  
               
                     
                  
                  
                     
                  
                  
                     
                  
               
                     
                        3)
                     
                  
                  
                     
                        Is there a standardized or prescribed format and/or content of Certificate and/or any other mandatory documentary proof of origin?
                     
                     
                        If Yes, please attach a copy or provide relevant details in the Appendix of this Annex 
                     
                  
                  
                     
                           Yes
                              
                              No
                     
                     
                        ** If answers to questions 1 and 2 are "No", the subsequent questions of this Annex do not need to be completed
                     
                  
               
                     
                        4)
                     
                  
                  
                     
                        If only requested in specific circumstances, please describe the cases for which a certificate (or other mandatory documentary proofs of origin) is requested and the respective format (prescribed form or other).
                     
                  
                  
                     
                  
               
                     
                        5)
                     
                  
                  
                     
                        If mandatory requirements for certificate and/or any other mandatory documentary proof of origin are limited to certain products please specify for which HS Chapters and the respective format (prescribed form or other).
                     
                  
                  
                     
                  
               
                     
                        6)
                     
                  
                  
                     
                        Exemptions to the mandatory requirements of presenting a certificate and/or any other mandatory documentary proof of origin (e.g. low value consignments, postal consignments, …)
                     
                  
                  
                     
                  
               
                     
                        7)
                     
                  
                  
                     
                        Governmental or non-governmental authorities designated for issuance of certificate and/or any other mandatory documentary proof of origin, if any
                     
                  
                  
                     
                  
               
                     
                        8)
                     
                  
                  
                     
                        Please provide the relevant legal references applicable to Questions 1 to 7
                     
                  
                  
                     
                  
               
            
               ANNEX 2 - APPENDIX
            
            
               Please attach the prescribed form and/or Internet link to the prescribed form of Certificate of origin (or other mandatory documentary proof of origin), if applicable 
            
            
               __________
            
         
         
            
                  
                     (1)
                  
                  
                      This is without prejudice to other proofs of origin that may be required by the competent authorities for control purposes.
                  
               
               
                  
                     (2)
                  
                  
                      It is understood that this enquiry point can be the same as established or maintained pursuant to Article 1.3 (Enquiry points) of the Trade Facilitation Agreement (TFA) and Members are not required to provide more information or provide more forms and documents than covered by the TFA.
                  
               
               
                  
                     (3)
                  
                  
                      As defined in Article 2(h) of the Agreement on Rules of Origin and Article 3 of the Trade Facilitation Agreement.
                  
               
            
      
    ---documentbreak--- 
      
         
               EUROPEAN COMMISSION
            Brussels, 20.9.2019
            COM(2019) 424 final
            2019/0200(NLE)
            Proposal for a
            COUNCIL DECISION 
            on the position to be taken on behalf of the European Union in the Committee on Rules of Origin set up by the Agreement on Rules of Origin (WTO-GATT 1994), annexed to the final act signed in Marrakech on 15 April 1994
            
               
         
         
            
               EXPLANATORY MEMORANDUM
            
            
               1.Subject matter of the proposal
            
            
               This proposal concerns the decision establishing the position to be taken on the Union's behalf in the Committee on Rules of Origin set up by the Agreement on Rules of Origin (WTO-GATT 1994) annexed to the final act signed in Marrakech on 15 April 1994, in connection with the envisaged adoption of a communication on enhancing transparency in non-preferential rules of origin.
            
            
               2.Context of the proposal
            
            
               2.1.The Agreement on Rules of Origin
            
            
               The Agreement on Rules of Origin (WTO-GATT 1994) annexed to the final act signed in Marrakech on 15 April 1994 (‘the Agreement’) aims to ensure that non-preferential rules of origin do not themselves create unnecessary obstacles to trade and aims to harmonise at international level rules of origin, other than rules of origin relating to the granting of tariff preferences. Until the completion of the harmonisation programme, contracting parties are to ensure that their rules of origin are transparent; that they do not have restricting, distorting or disruptive effects on international trade; that they are administered in a consistent, uniform, impartial and reasonable manner, and that they are based on a positive standard. The Agreement entered into force on 1 January 1995.
            
            
               The European Union is a party to the Agreement
                  1
               . All Member States are also parties to the Agreement.
            
            
               2.2.The Committee on Rules of Origin
            
            
               The Committee on Rules of Origin was established within the framework of the World Trade Organisation (WTO) and is open to WTO members. It is to meet at least once a year and is to review the implementation and operation of the Agreement on Rules of Origin. The work of the Committee focused primarily on the harmonisation of non-preferential rules of origin. The negotiations have not concluded and WTO members currently apply national rules of origin for non-preferential purposes. More recently, some work on preferential rules of origin have been initiated, in particular on those used under trade preferences for least-developed countries. Decisions in the Committee are normally taken by consensus.
            
            
               2.3.The envisaged act of the Committee on Rules of Origin
            
            
               On [date], during its annual meeting, the Committee on Rules of Origin is to adopt a Communication
                  2
                 regarding “Enhancing transparency in non-preferential rules of origin” (‘the envisaged act’).
            
            
               The purpose of the envisaged act is to enhance transparency of laws, regulations and practices regarding non-preferential rules of origin and to complement the notification obligations of Article 5 of the Agreement on Rules of Origin. 
            
            
               Neither the Agreement establishing the World Trade Organisation nor the Agreement on Rules of Origin address the legal status of acts adopted by the WTO committees. The binding nature of the envisaged act is to be determined in the light of the text used in the said act. Taking into consideration the wording of the communication on enhancing transparency in non-preferential rules of origin, the envisaged act will become binding on the parties. 
            
            
               3.Position to be taken on the Union's behalf
            
            
               Non-preferential rules of origin are those rules, which apply in the absence of any trade preference, i.e. when trade is performed on a most-favoured nation basis. In addition, some trade policy measures such as quotas, anti-dumping or origin marking may require a determination of origin based on the application of non-preferential rules of origin. 
            
            
               In accordance with Article 5 of the Agreement on Rules of origin, each WTO member had to notify to the WTO secretariat within a given deadline from the entry into force of the WTO agreement for it, its rules of origin, judicial decisions and administrative rulings of general application relating to non-preferential rules of origin in effect on that date. The European Union notified the required information to the WTO secretariat.
            
            
               In the Agreement on Rules of Origin, WTO members agreed to negotiate harmonised non-preferential rules of origin. However, these negotiations have not concluded and WTO members currently apply national rules of origin for non-preferential purposes. As a result, different non-preferential rules of origin apply at import and/or export, depending on the WTO members concerned. In addition, not all WTO members apply specific legislation related to non-preferential rules of origin. In the Union, these rules are provided for by Articles 59 to 61 of Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code
                  3
               . 
            
            
               In order to avoid unnecessary obstacles to trade being created due to the variety and the multitude of non-preferential rules of origin to be applied, a small working group selected from the Committee of Rules of Origin delegates was set up in order to explore the ways to improve transparency as regards non-preferential rules of origin. The European Union participated in this small working group and contributed in a constructive manner to the envisaged act. Discussions continued in meetings of the Committee on rules of origin in March and May 2019. Coordination with the Member States was ensured through Member States’ delegations in the WTO and through the Origin Section of the Customs Expert Group.
            
            
               Considering that clear and predictable rules of origin facilitate the flow of international trade, the envisaged act aims at enhancing transparency of laws, regulations and practices regarding non-preferential rules of origin and at complementing the notification obligations of Article 5 of the Agreement on Rules of Origin. 
            
         
         
            
               The envisaged act provides for a mandatory notification of each WTO member’s non-preferential rules of origin used for the purposes of the application of the most-favoured-nation treatment under Articles I, II, III, XI and XIII of GATT 1994. It also provides for a voluntary notification of non-preferential rules of origin used for all other purposes covered by Article 1.2 of the Agreement on Rules of Origin (anti-dumping and countervailing duties under Article VI of GATT 1994, safeguard measures under Article XIX of GATT 1994, origin marking requirements under Article IX of GATT 1994, quantitative restrictions or tariff quotas, rules of origin used for government procurement and trade statistics). In addition, the envisaged act contains a notification obligation by WTO members of possible certificates of non-preferential origin, which are mandatory when performing import or export transactions. Notifications are to be carried out using templates annexed to the envisaged act.
            
            
               The envisaged act creates notification obligations in addition to those mentioned in Article 5 of the Agreement on Rules of Origin.
            
            
               As a result, a position to be taken on the Union’s behalf in the Committee on Rules of Origin is needed. 
            
            
               4.Legal basis
            
            
               4.1.Procedural legal basis
            
            
               4.1.1.Principles
            
            
               Article 218(9) of the Treaty on the Functioning of the European Union (TFEU) provides for decisions establishing ‘the positions to be adopted on the Union’s behalf in a body set up by an agreement, when that body is called upon to adopt acts having legal effects, with the exception of acts supplementing or amending the institutional framework of the agreement.’
            
            
               The concept of ‘acts having legal effects’ includes acts that have legal effects by virtue of the rules of international law governing the body in question. It also includes instruments that do not have a binding effect under international law, but that are ‘capable of decisively influencing the content of the legislation adopted by the EU legislature’
                  4
               .
            
            
               4.1.2.Application to the present case
            
            
               The Committee on Rules of Origin is a body set up by an agreement, namely the Agreement on Rules of Origin (WTO-GATT 1994).
            
            
               The act which the Committee on Rules of Origin is called upon to adopt constitutes an act having legal effects. Neither the Agreement establishing the World Trade Organisation nor the Agreement on Rules of Origin address the legal status of acts adopted by the Committee on Rules of Origin. The binding nature of the envisaged act is therefore to be determined in the light of the text used in the said act. Taking into consideration the wording of the communication on enhancing transparency in non-preferential rules of origin, the envisaged act is to be considered as having legal effects. 
            
            
               The envisaged act does not supplement or amend the institutional framework of the Agreement.
            
            
               Therefore, the procedural legal basis for the proposed decision is Article 218(9) TFEU.
            
            
               4.2.Substantive legal basis
            
            
               4.2.1.Principles
            
            
               The substantive legal basis for a decision under Article 218(9) TFEU depends primarily on the objective and content of the envisaged act in respect of which a position is taken on the Union's behalf. If the envisaged act pursues two aims or has two components and if one of those aims or components is identifiable as the main one, whereas the other is merely incidental, the decision under Article 218(9) TFEU must be founded on a single substantive legal basis, namely that required by the main or predominant aim or component.
            
            
               4.2.2.Application to the present case
            
            
               The main objective and content of the envisaged act relate to the common commercial policy.
            
            
               Therefore, the substantive legal basis of the proposed decision is Article 207 TFUE.
            
            
               4.3.Conclusion
            
         
         
            
               The legal basis of the proposed decision should be Article 207 TFUE, in conjunction with Article 218(9) TFEU.
            
            
               5.Publication of the envisaged act
            
            
               Not applicable.
            
            
               2019/0200 (NLE)
            
            
               Proposal for a
            
            
               COUNCIL DECISION
            
            
               on the position to be taken on behalf of the European Union in the Committee on Rules of Origin set up by the Agreement on Rules of Origin (WTO-GATT 1994), annexed to the final act signed in Marrakech on 15 April 1994
            
            
               THE COUNCIL OF THE EUROPEAN UNION,
            
            
               Having regard to the Treaty on the Functioning of the European Union, and in particular Article 207(3) and the first paragraph of Article 207(4) in conjunction with Article 218(9) thereof,
            
            
               Having regard to the proposal from the European Commission,
            
            
               Whereas:
            
            
               (1)The Agreement on Rules of origin (WTO-GATT 1994) annexed to the final act signed in Marrakech on 15 April 1994 (‘the Agreement’) was concluded by the Union by Council Decision 94/800/EC
                  5
                and entered into force on 1 January 1995. 
            
            
               (2)Article 4 of the Agreement establishes the Committee on Rules of Origin. 
            
            
               (3)The Committee on Rules of Origin, during its  session/meeting on [date], is to adopt a communication entitled “enhancing transparency in non-preferential rules of origin”.
            
            
               (4)It is appropriate to establish the position to be taken on the Union's behalf in the Committee on Rules of Origin, as the communication will be binding on the Union.
            
            
               (5)The proposed position to be taken on the Union’s behalf aims at enhancing transparency of laws, regulations and practices regarding non-preferential rules of origin, by means of rules on mandatory or voluntary notification by WTO members of their non-preferential rules of origin, using standardised templates. This will result in clearer and more predictable rules of origin and will facilitate the flow of international trade, 
            
            
               HAS ADOPTED THIS DECISION:
            
            
               Article 1
            
            
               The position to be taken on the Union's behalf in the  session/meeting of the Committee on Rules of Origin shall be based on the draft act of the Committee on Rules of Origin attached to this Decision.
            
            
               The representatives of the Union may agree to minor editorial changes to the draft act in the light of developments at the upcoming meetings of the Committee on Rules of Origin, in consultation with Member States, or during on-the-spot coordination meetings, without a further decision of the Council.
            
         
         
            
               Article 2
            
            
               This Decision is addressed to the Commission.
            
            
               Done at Brussels,
            
            
               
                     For the Council
               
               
                     The President
               
            
         
         
            
                  
                     (1)
                  
                        Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994) OJ L 336, 23.12.1994, p.1).
               
               
                  
                     (2)
                  
                        Communication from Australia; Brazil; Canada; Hong Kong; Japan; Republic of Korea; New Zealand; Norway; Philippines; Russian Federation; Singapore; Switzerland; the separate customs territory of Taiwan, Penghu, Kinmen and Matsu; and the United States.
               
               
                  
                     (3)
                  
                        OJ L 269, 10.10.2013, p.1.
               
               
                  
                     (4)
                  
                        Judgment of the Court of Justice of 7 October 2014, Germany v Council, C-399/12, ECLI:EU:C:2014:2258, paragraphs 61 to 64. 
               
               
                  
                     (5)
                  
                        Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994) (OJ L 336, 23.12.1994, p. 1).