RESTRICTED
WORLD TRADE G/RO/4
25January 1996
ORGANIZATION(96-0266)
Committee onRules ofOrigin
SECOND REPORT TOTHE COMMITTEE ONRULES OFORIGIN
Note bytheSecretariat
1. Inconformity withparagraph 2(c)(ii) ofArticle 9oftheAgreement onRules ofOrigin, the
Technical Committee onRules ofOrigin hassubmitted totheCommittee onRules ofOrigin itsSecond
Report. TheReport pertains totheinitial work oftheTechnical Committee onRules ofOrigin
concerning theuseofchange intariff heading orsubheading fortheelaboration ofrulesoforigin on
thebasis ofthecriterion ofsubstantial transformation ofgoods.
2. Theattached Report (WCO document 39.843) isherewith circulated toMembers together with
theletter oftransmission oftheChairman oftheTechnical Committee onRules ofOrigin.G/RO/4
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Brussels, 20January 1996
Dear Mr.Osakwe,
Ihavepleasure insending youtheSecond Report oftheTechnical Committee onRules of
Origin.
Please accept, Mr.Osakwe, theassurance ofmyhighest consideration.
Yours sincerely,
R.Janeczko
Chairman
Technical Committee onRules ofOrigin
Mr.Chiedu Osakwe
Chairman
Committee onRules ofOrigin
World Trade OrganizationG/RO/4
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SECOND REPORT TOTHE COMMITTEE ONRULES OFORIGIN
1. Inaccordance withtheprovisions ofArticle 9.2(c)(ii), theCommittee onRules ofOrigin (the
Committee) shallfindherewith areport ontheinitial work oftheTechnical Committee onRules of
Origin (theTechnical Committee) concerning theuseofchange intariff heading orsubheading, for
theelaboration ofrules oforigin onthebasis ofthecriterion ofsubstantial transformation ofgoods.
2. Since theTechnical Committee 'sSecond Session, many Members haveimplemented oractively
pursued internal negotiations andconsultation procedures between administrations ontheonehand
andbetween administrations andprofessional organizations ontheother, soasto:
- draftrules oforigin proposals forparticular products orproduct sectors, taking into
account chapters orsections oftheHarmonized System (HS)nomenclature;
- formulate proposals regarding thepossible content andform ofgeneral rules aimed
atfacilitating theinterpretation andapplication ofrules oforigin.
3. Given theinterests atstake, thispreparatory phase isparticularly delicate. Hence, aware of
these difficulties andofthefactthatcareful drafting ofMembers 'contributions isvitalforthesmooth
development oftheTechnical Committee 'swork, theChairman oftheTechnical Committee wishes
tostress hissatisfaction regarding thework completed andthequality ofproposals already made at
thisstage.
4. Todate,fiveMembers havepartially orfullycompleted thiswork within theiradministrations
andhavesentproposals. These Members are:
- Japan, on20December 1995: Chapters 1to27,41to49,64to81and91to97;
- Canada, 3January 1996: Chapters 1to27,41to49,64to81and91to97;
- European Communities, 3January 1996: Chapters 1to27,41to49and64to67;
- United States, 3January 1996: Chapters 25to27;
- Switzerland, 3January 1996: Chapters 1to27,41to46,64to81and91to97.
5. Allofthese proposals arepresented inauniform manner, withtheexception oftheproposal
fromCanada which departs somewhat fromthegeneral format ofpresentation. These proposals will
beincluded intheworking documents oftheTechnical Committee, chapter bychapter, onthebasis
ofthecriteria setoutbelow (paragraph 12),fordistribution toMembers.
6. Further contributions areexpected inthenearfuture. Iftimepermits, these willbeadded
totheworking documents.
7. Inaccordance withthedecisions taken bytheTechnical Committee, various other taskshave
beencommenced.
8. Aprovisional detailed planofwork forthenexttwoTechnical Committee sessions hasbeen
drawn up:G/RO/4
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Theprovisional agendas takeaccount oftheorder inwhich theTechnical Committee hasagreed
toexamine thevarious chapters oftheHarmonized System (HS)nomenclature, i.e.:
AttheThird Session (11to22March 1996), thefollowing chapters willbeexamined
successively:
25to27,41to49,64to71,91to97,72to81and1to24.
AttheFourth Session, thefollowing Chapters willbeexamined successively:
28to40,50to63and82to90.
9. Theprovisional agendas havebeensenttoMembers oftheTechnical Committee, accompanied
byaletter fromtheWCO Secretary General. Themainpurpose ofthisletter wastoremind Members
tosubmit theirproposals totheOrigin Project Secretariat assoonaspossible, sothattheworking
documents could bedrafted andcirculated within thetimelimits laiddown intheTechnical Committee 's
Rules ofProcedure.
10. Formats fordocuments, structured chapter bychapter andbased onthe1996 version ofthe
HS,havebeenprepared. They could beusedbyallMembers toformulate, inaharmonized fashion,
theirproposals concerning thesubstantial transformation ofgoods.
11. MembershavebeeninformedthatthesedocumentsareavailableontheWCOElectronicBulletin
Board, which should facilitate thedrafting ofMembers 'proposals. Members canusethese formats
containing allcurrent tariffheadings andsubheadings andallthecorresponding heading textsandinsert
theirproposals forrules andcomments.
12. Consideration hasalsobeengiven astohowthevarious proposals received should bedistributed
toMembers. Amethod ofpresentation hasbeendesigned, based ontheprinciple ofgrouping together
alltheproposals forthesame chapter and, within thatchapter, forthesame heading or
subheading.