Rules of Origin

1
Rules of Origin

• Natalie McNelis
• Counsel, WilmerHale

2
The What and Why of Rules of Origin

• A way to determine the nationality of goods
• Can impact investment and production
• Restrictive RoO undermine preferences

3
GSP, Cotonou and the EPAs

• GSP tariff reduction
• Cotonou duty free, but unilateral. Expired
  end-2007.
• (Interim)EPAs duty free, reciprocal but
  asymmetrical

4
What criteria determine origin?

• Wholly obtained
• Sufficiently worked

5
What is wholly obtained ?

• Examples
• Minerals
• Agricultural products
• Livestock
• Fish caught in the territory

6
What is sufficiently worked?

• List rules
• Change in tariff chapter, heading or sub-heading
• Value-added
• Specific processing
• Not minimal operations

7
List rules an extract
Extract from Cariforum EPA
8
Minimal operations

• Cleaning
• Mixing
• Packaging
• A Screwdriver operation

9
Cumulation

• Bilateral cumulation
• Diagonal cumulation
• Regional cumulation
• Full cumulation

10
Other issues

• Tolerance
• Duty drawback
• Proof of origin

11
Two important sectors

• FISH
• Cotonou nationality of crew and captain
  important
• Cariforum and interim EPAS ownership of vessel
• Aquaculture added as wholly obtained

• TEXTILES
• Cotonou double transformation
• Cariforum and interim EPAs single transformation

12
Asymmetry

• 1 January 2008 EU removes all tariffs and
  quotas (except on rice and sugar)
• Progressive for developing partner, avoids
  sensitive products, and safeguards possible.
• MFN also asymmetrical EU must extend Cariforum
  only must if major trading economy