1 Origin Aspects in Remanufacturing of Goods Workshop on Remanufactured Goods October 2012 Kuala Lumpur, Malaysia

What is rules of origin? Origin = economic nationality of a good Origin is the link between a product and a country Rules of origin = rules to determine the origin of goods 2

Why do we need rules of origin? To apply certain commercial policy measures To apply the correct duty rate To collect statistics 3

Two kinds of origin Non-preferential origin – Application of commercial defense measures anti-dumping and countervailing duties, safeguards, origin marking, quantitative restrictions and tariff quotas, government procurement, trade statistics Preferential origin – Application of preferential treatment (lower duties) Provided for in FTAs Determine whether goods qualify for duty preference Prevent trade deflection and transshipment 4

Duties on remanufactured goods Same as new goods – Application of normal RoO if the HS code is included in the FTA Specific HS code for remanufactured goods – Application of normal RoO if the HS code is included in the FTA Same as used goods – If national policy to have higher duties on used goods, these tariff lines might not be included in the FTA 5

Duties on import of cores RoO are important for the duty rate Prohibition of duty drawback of, or exemption from, customs duties – No refund, remission or non-payment, partial of complete, of customs duties or charges having an equivalent effect (e.g. inward processing) 6

Origin criteria Wholly obtained Substantial transformation 7

RoO criteria for “wholly obtained” Waste and scrap derived from (i) production in the territories of one or more of the Parties, or (ii) used goods collected in the territory of one or more of the Parties, provided such goods are fit only for the recovery of raw materials; (ex. NAFTA) 8

RoO criteria for reman. goods (k) recovered goods collected in the territory of one or both of the Parties and used in the territory of one or both Parties in the production of remanufactured goods; (ex. from Canada-Colombia FTA) 9

RoO criteria for “substantial transformation” Change in tariff classification Value Added Specific Technical Process 10

More information Comparative Study on preferential rules of origin (available on WCO public website) Database of preferential trade agreements 11