Rules of origin

Rules of origin are used to determine the country of origin of a product for purposes of international trade. There are two common type of rules of origin depending upon application, the preferential and non-preferential rules of origin.Fact|date=March 2008 The exact rules vary from country to country.

Non-preferential

Non-preferential rules of origin are used to determine the country of origin for certain purposes.These purposes "may" be for quotas, anti-dumping, anti-circumvention, statistics or origin labeling.

The basis for the non-preferential rules originates from the Kyoto convention [ [http://www.unece.org/trade/kyoto/ky-d1-e0.htm Kyoto Convention ] ] which states that if a product is wholly obtained or produced completely within one country the product shall be deemed having origin in that country. For products which has been produced in more than one country the product shall be determined to have origin in the country where the last substantial transformation took place.

To determine exactly what was the last substantial transformation, three general rules are applied:
# Change of tariff classification (on any level, though 4-digit level is the most common)
# Value added-rule (ad-valorem)
# Special processing rule, the minimum transformation is described. For instance, in the EU non-preferential rules of origin for T-shirts (HS6109), the origin is supposed to be in the country where the "complete making-up" was done. [ [http://eur-lex.europa.eu/Result.do?direct=yes&lang=en&consleg=01993R2454 EUR-Lex - Simple search ] ]

According to the non-preferential rules a product always has exactly one country of origin. However, the non-preferential rules. Non-preferential may differ form country to country; the same product may have different origins depending on which country's scheme is applied. Usually it is the rules of the country into which a product is being imported that apply.

Preferential

Preferential RoO are part of a free trade area or preferential trade arrangement which includes tariff concessions. These trade arrangements might be unilateral, bilateral or regional (also sometimes called multilateral) trade arrangements. The rules of origin determine what products can benefit from the tariff concession or preference, in order to avoid transshipment.

ee also

*Country of origin principle

References

Links

* [http://www.wto.org/English/tratop_e/roi_e/roi_e.htm WTO on Rules on origin (Non-preferential RoO)]
* [http://www.unece.org/trade/kyoto/ Kyoto Convention]
* [http://www.fhs.ch/en/swissm.php Overview of "Swiss Made" from the Federation of the Swiss Watch Industry]
* [http://www.ftc.gov/opa/1997/05/examples.shtm Examples from US FTC about when Made in USA can be applied]
* [http://www.intracen.org/tfs/docs/publications/ruleori2.pdf Detailed analysis of the international treaties applying to country of origin]