WCO Lays Out Origin Provisions from TPP

While many trade agreements include provisions that require "direct transport" to prevent co-mingling of non-eligible goods during transportation, that provision is now less popular, said the WCO. "Due to the changes in transportation methods and routes, an emerging trend on a global level is to move away from a very strict requirement in relation to direct transportation or direct consignment." The TPP "requires an originating good be transported to the importing Party without passing through the territory of a non-Party," it said. "An alternative provision allows for goods to be transported through the territory of non-Parties, provided that the good retains its originating status, i.e. does not undergo any operation other that operations specifically mentioned and remains under customs control during the transit or transshipment."

The TPP origin certification is based on "self-certification," which must be submitted in writing or electronically, said the WCO. While there's no "prescribed format," the certification of origin must meet the minimum data requirements spelled out in the agreement, it said. The certification "may apply to a single shipment or to multiple shipments of identical goods" and is valid for one year after the date of issuance," it said. Origin certification isn't required for importations valued at less than $1,000 or if the "importing Party has waived the requirement of a certification of origin, said the WCO.

Imports are considered originating goods under the TPP if they meet a set of criteria. Such goods must be wholly obtained entirely in the territory of one or more of the Parties; produced entirely in the territory of one or more of the Parties, exclusively from originating materials; or produced in the territory of one or more of the Parties using non-originating materials provided the good meets the requirements of product specific rules of origin, said the WCO.

The WCO also outlined regional value content and value added rules in the TPP. The focused value method, which requires the calculation be based on the value of only the non-originating materials specified in the applicable product specific rules, is considered to be a new method for calculating the RVC of the good, said the WCO. That calculation sometimes calls for the use of a "commodity’s name and not by the [harmonized schedule] codes, e.g. where a HS code covers more than the specific material listed," said the WCO. "In these cases there could be a risk of misapplication of the rules and creating HS subheadings for such items might help to solve or mitigate the risk."

The TPP "also contains some special topics such as a provision on the update of the rules of origin to reflect changes to the Harmonized System as well as a specific chapter on textile and apparel goods," said the WCO. For textile products, TPP parties can "take emergency actions if as a result of the reduction or elimination of customs duties, textile or apparel goods are being imported in such increased quantities that it causes serious damage to domestic industry," said the WCO. The pact also creates a Committee on Rules of Origin and Origin Procedures that would "consult to prepare updates to the Rules of Origin of the Agreement that are necessary to reflect changes to the HS," the WCO said. "This provision is considered to be useful to maintain the consistency in the structure of the HS and the Rules of origin thus reduce the administrative burden on traders and to avoid misapplication of the relevant rules."