1. CPC Ver.2 Scope and boundary, concepts, application rules Scope and boundaryStructureChanges and new conceptsApplication rules StructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rules

2. CPC Ver.2 Scope and boundary StructureChanges and new conceptsApplication rules StructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rules

3. Purpose of the CPC  CPC has three functions: Serve as a “central” classification of products  Requires links to other product classifications, such as HS, SITC, BOP, EBOPS Provide classification of all outputs of economic activities (production), as defined in the SNA Provide definitions of services (reference classification) Scope and boundaryStructureChanges and new conceptsApplication rules StructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rules

4. Scope and boundary  CPC covers “products”, i.e. the output of economic activities  Market value not a criterion: By-products and waste are also included These are output of economic activities  Produced assets included as output of a production process. Scope and boundaryStructureChanges and new conceptsApplication rules StructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rules

5. Scope and boundary (cont.)  SNA refers to products as “goods and services”  However: there are outputs of economic activities, i.e. “products”, that do not fit the SNA definition of goods or services GoodsServices physical objects demand exist ownership can be established and transferred production and sale are separable activities Not separate entities for which ownership can be established Produced by order Changes the condition of the consuming units when production is completed, the product has already been delivered Scope and boundaryStructureChanges and new conceptsApplication rules StructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rules

6.  Other outcomes from economic activities: Original manuscripts, sound and video recordings Results of research activities Results from geological surveying activities Product design specifications Trademarks and franchises  Neither “goods” nor “services”  Still considered products, and covered in CPC Ver.2  These are intellectual property (IP) products and similar products Scope and boundary (cont.) Scope and boundaryStructureChanges and new conceptsApplication rules StructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rules

7. Important new concept: ORIGINALS  As we saw earlier, intellectual property (IP) products are output of economic activities and within scope of CPC. research results product design sound/video recordings trademarks/franchises computer software  Value lies in information content, not physical form  In the CPC, we talk about originals and content Scope and boundaryStructureChanges and new conceptsApplication rules StructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rules

8. Important new concept: ORIGINALS  Originals are outcomes of intellectual or creative activities (before copying or distribution). Value lie in information content. When intellectual/creative activity carried out on own account: the original is considered the output of that activity. However, when carried out for someone else (“fee/contract basis”), the output of the activity is considered a service.  The original, in this case, is considered output of the client.  Originals are not services  Originals are not copies There is by definition never produced more than one original. Copying an original is an act of production. A new product (the copy) is being made. The copies are not originals, but they are often content products (as identified in the alternative aggregation). Scope and boundaryStructureChanges and new conceptsApplication rules StructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rules

9. Classification of intellectual property products  Originals are neither goods nor services are classified in part 5-9 of the CPC (i.e., the “services” part), close to the services with whom they are related  e.g. research and development originals found in division 81 – “Research and development services”  Content Can be presented on physical media (disks, books, etc.), in which case the products are classified in CPC part 0-4 as tradeable goods. Can be provided in a non-physical way over the internet, in which case the products are found in group 843 – “On- line content” Scope and boundaryStructureChanges and new conceptsApplication rules StructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rulesScope and boundaryStructureChanges and new conceptsApplication rules

10. Other scope issues  One of the functions of the CPC is to serve as a “central” classification of products  Other product classifications may cover products that are not produced e.g. some forms of waste, used products  CPC covers these products as well Allows measurement of inputs for certain industries (proxy for output in physical terms)

11. CPC Ver.2 Application Rules Scope and boundaryStructureApplication rules StructureApplication rulesScope and boundaryStructureApplication rulesScope and boundaryStructureChanges and new conceptsApplication rules

12.  Within the scope of the Harmonized System – links exist  Classify according to HS and identify the corresponding CPC class(es). HS has a comprehensive system of  Section and Chapter notes  Explanatory notes  Index  “General Rules for the Interpretation of the Harmonized System”  If the relevant HS code links to more than one CPC class, CPC explanatory notes are provided. CPC index can also be helpful. Explanatory notes only in the case of split link, not provided for 1-1 cases. Application rules for section 0- 4 (transportable goods): Scope and boundaryStructureApplication rules StructureApplication rulesScope and boundaryStructureApplication rulesScope and boundaryStructureChanges and new conceptsApplication rules

13.  Where in the CPC do we classify unroasted chicory roots?  HS code: 1212.99. Where in the CPC does it link? 01391 – Locust beans 01690 – Stimulant, spice and aromatic crops n.e.c. 01802 – Sugar cane 01809 – Other sugar crops n.e.c. 01990 – Other raw vegetable materials, n.e.c.  We must consult the CPC Explanatory Notes Application rules for section 0-4: EXAMPLE Scope and boundaryStructureApplication rules StructureApplication rulesScope and boundaryStructureApplication rulesScope and boundaryStructureChanges and new conceptsApplication rules

14. Scope and boundaryStructureApplication rules StructureApplication rulesScope and boundaryStructureApplication rulesScope and boundaryStructureChanges and new conceptsApplication rules

15. Application rules for section 5-9 Scope and boundaryStructureApplication rules StructureApplication rulesScope and boundaryStructureApplication rulesScope and boundaryStructureChanges and new conceptsApplication rules  Mainly concerns services  Determine correct subclass using the provided descriptions (explanatory notes) of divisions, groups, classes and subclasses. The CPC index may also provide support.

16. Application rules for section 5-9 Scope and boundaryStructureApplication rules StructureApplication rulesScope and boundaryStructureApplication rulesScope and boundaryStructureChanges and new conceptsApplication rules  If more than one CPC subclass seems appropriate: Prefer subclass with the more specific description Composite services classified according to the service component which gives them their essential character. If still ambiguous, choose category occurring last in numerical order  Products making up a bundle of goods and services are classified to main component (according to value added). But breaking up product into homogeneous components should be considered first

17. END OF PRESENTATION