On 06 to 07 February the World Customs Organisation (WCO) conducted a Workshop on the Updating of Preferential Rules of Origin following the 35th Session of the Technical Committee on Rules of Origin.
As you know, tariff classification and origin determination of goods are closely interlinked. The Harmonised System (HS) Nomenclature is updated every 5 years and virtually all preferential rules of origin placed in Free Trade Agreements (FTAs) are linked to the HS Nomenclature and tariff classification. It is therefore critically important to update rules of origin (ie, Product Specific Rules) to ensure consistency between HS classification and origin determination. This would help to prevent misapplication of rules of origin, ensure efficient and effective revenue collection and facilitate trade.
The HS amendments are made available by the WCO at least two years before their implementation and the work can start at that time. However, it can be a challenging task for countries due to the technical nature of the work. In addition, different practices are in place in the different FTA parties. This can create obstacles in updating preferential rules of origin. In some countries, the updating of the rules requires approval by parliament, even though it is a technical task.
During the WCO’s workshop, representatives from regional economic communities, Customs administrations and the private sector expressed their views on the HS amendments and their impact on preferential rules of origin. They also shared their experiences and the challenges they were facing in relation to updating rules of origin that are based on the HS Nomenclature. Currently, not many agreements are regularly updated to the latest edition of the HS. However, this creates uncertainty and importers may lose the preferential tariff treatment. The speakers also shared their practices on how to improve this process. In this respect, the importance of close cooperation with officials responsible for tariff classification was underlined for the smooth updating of preferential rules of origin.
The WCO also presented its tool "Guide for the Technical Update of Preferential Rules of Origin" developed in 2015 and updated in January 2017 to assist members with the updating of their existing rules of origin in relation to changes in the HS.
If you are interested in receiving a copy the guide, simply send an email with the title of this article in the subject title.
