TRANSPOSITION OF DRAFT NON-PREFERENTIAL RULES OF ORIGIN INTO HS 2002, HS2007 and HS2012 Committee on Rules of Origin November 2012

BACKGROUND  At the meeting of 27 October 2011, the CRO agreed to initiate the “Transposition Exercise“  i.e. the rectification of draft harmonized non- preferential rules of origin to adapt them to more recent versions of the HS nomenclature  Basis: draft Consolidated Text (G/RO/W/111/Rev.6, originally negotiated in HS1996)  HS 2002, 2007 and 2012  To be initiated immediately, to be completed as early as possible (- see G/RO/M/57) 2

How is work conducted?  Conducted by the WTO Secretariat (Market Access Div.), in collaboration with Members and TCRO  Based on the correlation tables published by the WCO  WCO Secretariat: consulted if needed  HS : Non paper prepared by the WCO for the 21 st Session of the TCRO, “How to deal with the technical rectifications relating to changes in the HS” Remarks Fresh- Fresh : Roses Carnations Orchids Chrysanthemums Other Subheading has been subdivided creating new subheadings due to the expansion of volume of trade.

How are Members kept informed?  As soon as results are ready:  WTO Members' Website (usual passwords)   WTO Resources / Market Access - Rules of Origin / Transposition  Fax informing delegations that fresh results are available  to Members (who have registered with the Secretariat) 4

What does the work entail? Most of the times, the transposition entails a purely mechanical exercise – No rectification is required: e.g. the rule is set at the heading level and the changes occur at the sub- heading level – The ROO may be transposed directly: e.g. the rules is at the split-heading level and changes occur at the heading or sub-heading level 5

What does the work entail? In a few cases, the adjustments needed are more complex The transposition requires simple changes: e.g. creation of a new split to set aside a product moved into a new sub-heading The transposition may require more complex changes: e.g. the addition of exceptions to the ROO (“Except from”) or even both (new splits, new exceptions) These cases raise the question of the application of the rules in practice!  Possible simplification needed 6

Within a single headingBeyond a single heading A. Complete reorganization of the coverage of a subheadings (scrap and built) B. Deletion of subheading(s) within the same heading (the residual subheading covers more goods than before) C. goods initially covered by one subheading are now covered by several subheadings (new splits) D. Entirely new subheadings in a heading A. Reorganization of Chapter Structure B. Deletion of a heading or subheading transferring the content to one or more headings or subheadings C. Splitting the coverage of a heading into several headings within the same Chapter D. Entirely new heading or subheading covering goods that were classified in other heading(s) E. Amendments to the heading text only but which result in a change in the scope of the heading Types of Amendments

: Types of Rectifications Purely mechanical Creation of new splits Creation of new exceptions to the rule Creation of both new splits and new exceptions More complex cases: change of the rule, creation of new sub- heading with splits and exceptions, etc.

How is work conducted?  The WTO Secretariat is undertaking purely mechanical rectifications, including for the more complex cases  Members, the WCO or the TCRO may recommend simplified rules for the more complex cases  Members must discuss changes to the rule or possible simplifications of the rule (e.g. deletion of the exceptions)  Hence, comments from Members that entailed some level of simplification or change of the ROO were left aside for the moment 9

transposition  Results presented at the 06 June 2012 CRO meeting - JOB/RO/2  Comments received from the EU, Egypt, Japan, Mexico, Norway, Switzerland and Thailand  These comments shall be reflected in a future revision  Recommendations by the TCRO are forthcoming  Additional comments are accepted at any time  The intermediate results of this work need to be reviewed by Members but need not be formally endorsed. 10

transposition  August 2012: partial results circulated for Chapters 1 to 50 (RD/MA/38 )  October 2012: partial results circulated for Chapters (RD/RO/1)  The Secretariat received comments from the EU, Japan, Mexico, Norway, Switzerland and Thailand on the first part (Chapters 1- 50)  The Secretariat received comments from Japan and Norway on the second part (Chapters 51-97) 11

transposition Corrections Sulphates; alums, peroxosulp hates -- Other As specified for split subheadings ex (a)--- Of chromium CTSHS ex (b)--- Of zincCTSHS ex (c)--- OtherCTSHS, except from ex.28.52(f) AlumsCTSHS Simplifications, questions 28.11Other inorganic acids As specified for subheadings Carbon dioxide CTSH Silicon dioxide CTSH Other As specified for split subheadings ex (a)--- Sulphur dioxide CTSHS ex (b)--- OtherCTSHS CTSH X Split not needed, (CTSH) 2 types of comments

transposition  Late October 2012: document JOB/RO/3 was circulated with the entire results:  Chapters 1 to 50 – already revised in light of comments received (editorial changes, mistakes and omissions only)  Chapters – not revised yet  Present complex cases today 13

transposition  The Secretariat is ready to begin the transposition of draft harmonized rules to the HS 2012 nomenclature  Possible presentation of the initial draft results to Members in early 2013  Circulation of results in 2 parts  Consolidated in a single document: JOB/RO/4  Presentation of results at the CRO meeting of April

Next steps  Preparation and circulation of  JOB/RO/2/Rev.1 – revised HS2002 rules  JOB/RO/3/Rev.1 – revised HS2007 rules  JOB/RO/4 – HS2012  Additional comments by Members at any time  Comments by the TCRO: may require a discussion by the CRO  Results must be verified, accurate. But need not be validated  Preparation of a new consolidated text with the transposed rules: G/RO/W/111/Rev.7 15

Thank you for your attention! 16