1. The Origin Sub-Directorate World Customs Organization
NON-PAPER prepared for the 21st Session
Technical Rectification of the Harmonized Non-Preferential Rules of Origin
The Origin Sub-Directorate
World Customs Organization
Presented at the informal Session of the Technical Committee

2. Objectives
The technical rectification exercise is aimed at adjusting the current rules of origin (agreed or proposed based on the HS 96 edition) to those based on the HS 02 edition without changing the outcome of the origin determination.
This exercise can be undertaken mechanically without difficulty. However, technical rectifications may become overly complicated in certain cases.
Taking several headings in Chapter 48 as examples, simplified rules have been suggested to the extent technically justifiable. This process requires extensive knowledge of the HS and rules of origin.
Despite all such efforts, a few rules still remain complex. Further simplification would require a decision by policy-makers.
The WCO Secretariat
2018/9/18

3. Basic Cases
Hypothetical Example
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2018/9/18

4. Case 1: CTH rule for heading 77.01 Rectification is not necessary !
Hypothetical Example :
Deletion of a subheading - Rule set out for heading
Case 1: CTH rule for heading 77.01
X, Y, Z CTH X Y Z
77.01 X, Y, Z CTH X
(deleted)
Y, Z
Rectification is not necessary !
The WCO Secretariat
2018/9/18

5. Case 2: CTSH rule for subheadings of heading 77.01
Hypothetical Example :
Deletion of a subheading - Rules set out for subheadings
Case 2: CTSH rule for subheadings of heading 77.01
X, Y, Z
X CTSH
Y CTSH
Z CTSH
77.01 X, Y, Z
X CTSH
(deleted)
Y, Z
ex (a) Y CTSHS
ex (b) Z CTSHS
The WCO Secretariat
2018/9/18

6. Case 3: CTH rule for heading 77.02 Rectification is not necessary !
Hypothetical Example :
Creation of subheadings - Rule set out for heading
Case 3: CTH rule for heading 77.02
77.02 A, B, C CTH A B C
A, B, C CTH ( )
Rectification is not necessary !
The WCO Secretariat
2018/9/18

7. Case 4 : CTSH rule for heading 77.03
Hypothetical Example :
Deletion of all subheadings - Rules set out for subheadings
Case 4 : CTSH rule for heading 77.03
P, Q, R
P CTSH
Q CTSH
R CTSH
77.03 P, Q, R
(deleted)
P, Q, R
ex77.03(a) P CTHS
ex77.03(b) Q CTHS
ex77.03(c) R CTHS
The WCO Secretariat
2018/9/18

8. Case 5: CTSH rule for heading 77.04
Hypothetical Example :
Splitting a subheading - Rules set out for subheadings
Case 5: CTSH rule for heading 77.04
E, F, G
E CTSH
F CTSH
G CTSH
77.04 E, F, G
E CTSH
(new) F1
(new) F2
G CTSH
CTSH, except from
CTSH, except from
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2018/9/18

9. Case 6(a) : CTSH rule for heading 77.05
Hypothetical Example :
Reorganisation of subheading structure - Rules set out for subheadings
Case 6(a) : CTSH rule for heading 77.05
E, F, G
E(1,2,3) CTSH
F(1,2,3) CTSH
G(1,2,3) CTSH
E, F, G
E1, F1, G1
E2, F2, G2
E3, F3, G3
The WCO Secretariat
2018/9/18

10. Case 6(b) : CTSH rule for heading 77.05 Easy way !
Hypothetical Example :
Reorganisation of subheading structure - Rules set out for subheadings
Case 6(b) : CTSH rule for heading 77.05
E, F, G
E(1,2,3) CTSH
F(1,2,3) CTSH
G(1,2,3) CTSH
E, F, G
ex77.05(a) E(1,2,3) CTHS
ex77.05(b) F(1,2,3) CTHS
ex77.05(c) G(1,2,3) CTHS
E, F, G
E1, F1, G1
E2, F2, G2
E3, F3, G3
Easy way !
The WCO Secretariat
2018/9/18

11. Case 6(c) : CTSH rule for heading 77.05
Hypothetical Example:
Reorganisation of subheading structure - Rules set out for subheadings
Case 6(c) : CTSH rule for heading 77.05
E, F, G
E(1,2,3) CTSH
F(1,2,3) CTSH
G(1,2,3) CTSH
E, F, G
ex (a) E1 CTSHS, except E2, E3
ex (b) F1 CTSHS, except F2, F3
ex (c) G1 CTSHS, except G2, G3
ex (a) E2 CTSHS, except E1, E3
ex (b) F2 CTSHS, except F1, F3
ex (c) G2 CTSHS, except G1, G3
ex (a) E3 CTSHS, except E1, E2
ex (b) F3 CTSHS, except F1, F2
ex (c) G3 CTSHS, except G1, G2
E, F, G
E1, F1, G1
E2, F2, G2
E3, F3, G3
Another Way !
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2018/9/18

12. (1) Changes to the HS structure remaining
Part 1 :
Analysis of the HS amendments and mechanical technical rectifications of the Harmonized Non-Preferential Rules of Origin -
(1) Changes to the HS structure remaining
within a heading
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2018/9/18

13. Rectification is not necessary !
(1) A. Complete reorganisation of the coverage of the subheadings (scrap and build) within a heading
A rule will be set out for heading 01.01
Rectification is not necessary !
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2018/9/18

14. A rule is set out for heading 38.17 Rectification is not necessary !
(1) B. Deletion of subheading(s) within the same heading; thus, in many cases, the residual subheading covers more goods than before
A rule is set out for heading 38.17
Rectification is not necessary !
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2018/9/18

15. The WCO Secretariat
2018/9/18

16. How shall rules for the residual subheading be set out ?
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2018/9/18

17. (1) C. Splitting subheading(s) within the same heading, i. e
(1) C. Splitting subheading(s) within the same heading, i.e., goods initially covered by one subheading are now covered by several subheadings
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2018/9/18

18. How shall rules for the newly split subheadings be set out ?
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2018/9/18

19. (1) D. Creating subheadings in a heading that had no subheadings under HS 1996
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2018/9/18

20. The WCO Secretariat
2018/9/18

21. (2) Changes to the HS structure extending beyond one heading
Part 1 :
Analysis of the HS amendments and mechanical technical rectifications of the Harmonized Non-Preferential Rules of Origin -
(2) Changes to the HS structure extending beyond one heading
The WCO Secretariat
2018/9/18

22. Chapter 41 - Raw hides, skins, leather
(2) A. Reorganisation of Chapter structure
Chapter 41 - Raw hides, skins, leather
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2018/9/18

23. (2) A. Reorganisation of Chapter structure
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2018/9/18

24. (2) A. Reorganisation of Chapter structure
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2018/9/18

25. (2) B. Deletion of a heading; consequently, the content of the heading was transferred to another heading
Moved to here from 25.27, ,
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2018/9/18

26. (2) C. Splitting the coverage of heading into several headings within the same Chapter
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2018/9/18

27. (2) C. Splitting the coverage of heading into several headings within the same Chapter
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2018/9/18

28. (2) D. Creating a new heading or subheading; consequently, the new heading or subheading covers various goods that were previously classified in other heading(s)
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2018/9/18

29. (2) D. Creating a new heading or subheading; consequently, the new heading or subheading covers various goods that were previously classified in other heading(s)
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2018/9/18

30. (2) E. Amending part of the heading text only, resulting in a change in the scope of the heading
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2018/9/18

31. SUGGESTED SIMPLIFIED PRESENTATION
Part 2 :
SUGGESTED SIMPLIFIED PRESENTATION
A. Undergoing complete production process - always origin conferring
B. No need to except “impossible changes” from a tariff shift rule
C. Chapter Notes can address :
“simple” cutting;
disassembly
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2018/9/18

32. Subheadings 4012.11 to 4012.19 (retreaded tyres)
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2018/9/18

33. Subheadings to
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2018/9/18

34. Outline of changes between HS 96 and HS 02
Chapter 48
Outline of changes between HS 96 and HS 02
A. Changes in dimensions
Headings 48.01, to 48.08
B. Deletion of dimensional criteria
Headings 48.02, and 48.11
C. Change in scope of the expression “graphic paper”
Adding “obtained by a chemi-mechanical process” Note 5 to Chapter 48
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2018/9/18

35. A. Changes in dimensions Headings 48.01, 48.04 to 48.08
HS 1996
HS 2002 A
not exceeding 15 cm B
15 cm –
36 cm C
exceeding 36 cm A
not exceeding 15 cm B
15 cm –
36 cm C
exceeding 36 cm
ex48.23
CTH
ex48.02
ex48.02
48.01
ex48.23
CTH
ex48.23
48.04
ex48.23
CTH
ex48.02
ex48.23
48.05
ex48.23
CTH
ex48.23
48.06
ex48.23
CTH
ex48.23
48.07
ex48.23
CTH
ex48.23
48.08
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2018/9/18

36. B. Deletion of dimensional criteria Headings 48.02, 48.10 and 48.11
HS 1996
HS 2002 A
not exceeding 15 cm B
15 cm –
36 cm C
exceeding 36 cm A
not exceeding 15 cm B
15 cm –
36 cm C
exceeding 36 cm
ex48.23
CTH
ex48.02
ex48.23
CTH
48.10
ex48.23
CTSH, CTSHS
48.11
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2018/9/18

37. Obtained by a chemi-mechanical process
C. Change in scope of the expression “graphic paper” Note 5 to Chapter 48
HS 1996
HS 2002 A
not exceeding 15 cm B
15 cm –
36 cm C
exceeding 36 cm A
not exceeding 15 cm B
15 cm –
36 cm C
exceeding 36 cm
ex48.23
CTH
ex48.02
ex48.02
48.01
ex48.23
CTH
ex48.02
ex48.02
ex48.23
CTH
ex48.02
ex48.02
ex48.23
48.05
Obtained by a chemi-mechanical process
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2018/9/18

38. No change between HS 96 and HS 02
Headings 48.03, 48.09,
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2018/9/18

39. Methodology
Possible ?
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2018/9/18

40. Methodology
Possible ?
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2018/9/18

41. paper production process
Methodology
Complete
paper production process
Wood
Ch.44
Pulp
Ch.47
Paper
Ch.48
Books
Ch.49
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2018/9/18

42. How to change from one kind of paper to another?
Methodology
How to change from one kind of paper to another?
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2018/9/18

43. Involving the complete paper production process
Methodology
Recycling paper
Pulp,
Recovered paper
Chapter 48
Chapter 47
Chapter 48
Involving the complete paper production process
The WCO Secretariat
2018/9/18

44. CTH, except from Necessary ? Methodology
How to simplify the rectified rules ?
CTH, except from
Necessary ?
The WCO Secretariat
2018/9/18

45. Methodology In summary :
A. Complete paper production process - always origin conferring
B. No need to except “impossible changes” from a tariff shift rule
C. Chapter Notes can address :
“simple” cutting;
disassembly
The WCO Secretariat
2018/9/18

46. Analyses - 48.02 (graphic paper)
HS 1996
HS 2002 A
not exceeding 15 cm B
15 cm - 36 cm C
exceeding 36 cm A
not exceeding 15 cm B
15 cm - 36 cm C
exceeding 36 cm
ex48.23
CTH
ex48.02
ex48.02
48.01
Change in dimension, new definition of “graphic paper”
ex48.23
CTH
48.02
CTH
ex48.02
ex48.02
Deletion of dimensional criterion
new definition of “graphic paper”
Change in dimension, new definition of “graphic paper”
ex48.23
CTH
ex48.02
ex48.02
ex48.23
48.05
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2018/9/18

47. Analyses - 48.02 (graphic paper)
HS 1996
HS 2002 A
not exceeding 15 cm B
15 cm - 36 cm C
exceeding 36 cm A
not exceeding 15 cm B
15 cm - 36 cm C
exceeding 36 cm
ex48.23
48.01
CTH
ex48.02
ex48.02
48.01
ex48.23
CTH
48.02
CTH
ex48.02
ex48.02
CTH
ex48.23
CTH
ex48.02
ex48.02
ex48.23
48.05
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2018/9/18

48. Analyses - 48.05 (other uncoated paper)
HS 1996
HS 2002 A
not exceeding 15 cm B
15 cm - 36 cm C
exceeding 36 cm A
not exceeding 15 cm B
15 cm - 36 cm C
exceeding 36 cm
Change in dimension, new definition of “graphic paper”
new definition of “graphic paper”
ex48.23
CTH
CTH
ex48.02
ex48.02
ex48.23
ex48.23
48.05
Changes : impossible or complete production
process
CTH
Changes : by “simple” cutting
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2018/9/18

49. IN SUMMARY
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2018/9/18

50. Basic Cases
Hypothetical Example
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2018/9/18

51. Case 1: CTH rule for heading 77.01 Rectification is not necessary !
Hypothetical Example :
Deletion of a subheading - Rule set out for heading
Case 1: CTH rule for heading 77.01
X, Y, Z CTH X Y Z
77.01 X, Y, Z CTH X
(deleted)
Y, Z
Rectification is not necessary !
The WCO Secretariat
2018/9/18

52. Case 2: CTSH rule for subheadings of heading 77.01
Hypothetical Example :
Deletion of a subheading - Rules set out for subheadings
Case 2: CTSH rule for subheadings of heading 77.01
X, Y, Z
X CTSH
Y CTSH
Z CTSH
77.01 X, Y, Z
X CTSH
(deleted)
Y, Z
ex (a) Y CTSHS
ex (b) Z CTSHS
The WCO Secretariat
2018/9/18

53. Case 3: CTH rule for heading 77.02 Rectification is not necessary !
Hypothetical Example :
Creation of subheadings - Rule set out for heading
Case 3: CTH rule for heading 77.02
77.02 A, B, C CTH A B C
A, B, C CTH ( )
Rectification is not necessary !
The WCO Secretariat
2018/9/18

54. Case 4 : CTSH rule for heading 77.03
Hypothetical Example :
Deletion of all subheadings - Rules set out for subheadings
Case 4 : CTSH rule for heading 77.03
P, Q, R
P CTSH
Q CTSH
R CTSH
77.03 P, Q, R
(deleted)
P, Q, R
ex77.03(a) P CTHS
ex77.03(b) Q CTHS
ex77.03(c) R CTHS
The WCO Secretariat
2018/9/18

55. Case 5: CTSH rule for heading 77.04
Hypothetical Example :
Splitting a subheading - Rules set out for subheadings
Case 5: CTSH rule for heading 77.04
E, F, G
E CTSH
F CTSH
G CTSH
77.04 E, F, G
E CTSH
(new) F1
(new) F2
G CTSH
CTSH, except from
CTSH, except from
The WCO Secretariat
2018/9/18

56. Case 6(a) : CTSH rule for heading 77.05
Hypothetical Example :
Reorganisation of subheading structure - Rules set out for subheadings
Case 6(a) : CTSH rule for heading 77.05
E, F, G
E(1,2,3) CTSH
F(1,2,3) CTSH
G(1,2,3) CTSH
E, F, G
E1, F1, G1
E2, F2, G2
E3, F3, G3
The WCO Secretariat
2018/9/18

57. Case 6(b) : CTSH rule for heading 77.05 Easy way !
Hypothetical Example :
Reorganisation of subheading structure - Rules set out for subheadings
Case 6(b) : CTSH rule for heading 77.05
E, F, G
E1, F1, G1
E2, F2, G2
E3, F3, G3
E, F, G
ex77.05(a) E(1,2,3) CTHS
ex77.05(b) F(1,2,3) CTHS
ex77.05(c) G(1,2,3) CTHS
Easy way !
The WCO Secretariat
2018/9/18

58. SUGGESTED SIMPLIFIED PRESENTATION
Part 2 :
SUGGESTED SIMPLIFIED PRESENTATION
A. Undergoing complete production process - always origin conferring
B. No need to except “impossible changes” from a tariff shift rule
C. Chapter Notes can address :
“simple” cutting;
disassembly
The WCO Secretariat
2018/9/18

59. Involving the complete paper production process
Recycling paper
Pulp,
Recovered paper
Chapter 48
Chapter 47
Chapter 48
Involving the complete paper production process
Origin conferring !
The WCO Secretariat
2018/9/18

60. How to simplify the rectified rules ?
CTH, except from
Not necessary
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2018/9/18

61. Summary - Technical rectifications
Technical rectifications can be undertaken mechanically without difficulty. However, this exercise may become overly complicated in certain cases.
Technical rectifications can go beyond a mechanical change to the rules of origin.
Consequently, most of the rules can be presented in a simple manner, without resulting in substantive changes.
But a few rules will require policy decisions to achieve further simplification.
The WCO Secretariat
2018/9/18

62. Where to Get More Information
Reference documents:
OC 0065E1(10/12/2001)
OC 0052E1(20/12/2000)
OC 0044E1(10/1/2000)
Amendments to The Harmonized System Nomenclature
Several non-papers
Address further inquiries to :
The Origin Sub-Directorate
Tel: (32 02) ; Fax: (32 02)
The WCO Secretariat
2018/9/18