[Federal Register Volume 60, Number 119 (Wednesday, June 21, 1995)]
[Notices]
[Pages 32339-32341]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-15178]
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INTERNATIONAL TRADE COMMISSION
(Investigation No. 332-360)
International Harmonization of Customs Rules of Origin
AGENCY: United States International Trade Commission.
ACTION: Request for public comment.
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EFFECTIVE DATE: June 12, 1995.
FOR FURTHER INFORMATION CONTACT: Eugene A. Rosengarden, Director,
Office of Tariff Affairs and Trade Agreements (O/TA&TA) (202-205-2595),
or Lawrence A. DiRicco (202-205-2606). Questions with regard to
specific chapters of the Harmonized Tariff Schedule of the United
States (HTS) should now be directed to the following coordinators in
view of product reassignments:
Chapters 1-24, 41-49--Ronald H. Heller (202-205-2596)
Chapters 25-40--Edward J. Matusik (202-205-3356)
Chapters 50-63--Thomas W. Divers (202-205-2609)
Chapters 64-83, 86-89, 92-97--Lawrence A. DiRicco (202-205-2606)
Chapters 84-85, 90-91, 98-99--Craig M. Houser (202-205-2597)
Parties having an interest in particular products or HTS chapters
and desiring to be included on a mailing list to receive available
documents pertaining thereto should advise Diane Whitfield by phone
(202-205-2610) or by mail at the Commission, 500 E St SW, Room 404,
Washington, D.C. 20436. Hearing impaired persons are advised that
information on this matter can be obtained by contacting the
Commission's TDD terminal on 202-205-1810. The media should contact
Margaret O'Laughlin, Director, Office of Public Affairs (202-205-1819).
Background
Following receipt of a letter from the United States Trade
Representative (USTR) on January 25, 1995, the Commission instituted
Investigation No. 332-360, International Harmonization of Customs Rules
of Origin, under section 332(g) of the Tariff Act of 1930 (60 FR 19605,
April 19, 1995).
The investigation is intended to provide the basis for Commission
participation in work pertaining to the Uruguay Round Agreement on
Rules of Origin (ARO), under the General Agreement on Tariffs and Trade
(GATT) 1994 and adopted along with the Agreement Establishing the World
Trade Organization (WTO).
The ARO is designed to harmonize and clarify nonpreferential rules
of origin for goods in trade on the basis of the substantial
transformation test; achieve discipline in the rules' administration;
and provide a framework for notification, review, consultation, and
dispute settlement. These harmonized rules are intended to make
country-of-origin determinations impartial, predictable, transparent,
consistent, and neutral, and to avoid restrictive or distortive effects
on international trade. The ARO provides that technical work to those
ends will be undertaken by the Customs Cooperation Council (CCC) (now
informally known [[Page 32340]] as the World Customs Organization or
WCO), which must report on specified matters relating to such rules for
further action by parties to the ARO. Eventually, the WTO Ministerial
Conference is to ``establish the results of the harmonization work
program in an annex as an integral part'' of the ARO.
In order to carry out the work, the ARO calls for the establishment
of a Committee on Rules of Origin of the WTO and a Technical Committee
on Rules of Origin (TCRO) of the CCC. These Committees bear the primary
responsibility for developing rules that achieve the objectives of the
ARO.
A major component of the work program is the harmonization of
origin rules for the purpose of providing more certainty in the conduct
of world trade. To this end, the agreement contemplates a 3-year CCC
program, to be initiated as soon as possible after the entry into force
of the Agreement Establishing the WTO. Under the ARO, the TCRO is to
undertake (1) to develop harmonized definitions of goods considered
wholly obtained in one country, and of minimal processes or operations
deemed not to confer origin, (2) to consider the use of change in
Harmonized System classification as a means of reflecting substantial
transformation, and (3) for those products or sectors where a change of
tariff classification does not allow for the reflection of substantial
transformation, to develop supplementary or exclusive origin criteria
based on value, manufacturing or processing operations or on other
standards.
To assist in the first phase of the Commission's participation in
work under the Agreement on Rules of Origin (ARO), the Commission is
publishing for public comment the following: (1) A proposed harmonized
definition of the expression ``goods that are to be considered as being
wholly obtained in one country'' and (2) a proposal on the definition
of the expression ``minimal operations or processes that do not by
themselves confer origin on a good,'' the foregoing as set forth in
Article 9:2(c)(i) of the ARO.
These proposals, which have been reviewed by interested government
agencies, are intended to serve as the basis for the U.S. proposal to
the Technical Committee on Rules of Origin (TCRO) of the Customs
Cooperation Council (CCC) (now known as the World Customs Organization
or WCO).
If eventually adopted by the TCRO for submission to the Committee
on Rules of Origin of the World Trade Organization, these definitions
would comprise the initial element of the ARO work program to develop
harmonized, non-preferential country of origin rules, as discussed in
the Commission's earlier notice. Thus, in view of the importance of
these definitions, the Commission seeks to ascertain the views of
interested parties concerning (1) the extent to which additional
categories of goods or processes should be enumerated in, or named
goods or processes omitted from, the proposed text set forth above, and
(2) the need for other specific changes in or additions to the proposed
definitions. Forthcoming Commission notices will advise the public on
the progress of the TCRO's work and contain any harmonized definitions
or rules that have been provisionally or finally adopted.
Written Submissions
Interested persons are invited to submit written statements
concerning this phase of the Commission's investigation. Written
statements should be submitted as quickly as possible, and follow-up
statements are permitted; but all statements must be received at the
Commission by the close of business on July 15, 1995, in order to be
considered in the drafting of the final U.S. proposal to the TCRO.
Information supplied to the Customs Service in statements filed
pursuant to notices of that agency has been given to us and need not be
separately provided to the Commission. Again, the Commission notes that
it is particularly interested in receiving input from the private
sector on the effects of the various proposed rules and definitions on
U.S. exports. Commercial or financial information which a submitter
desires the Commission to treat as confidential must be submitted on
separate sheets of paper, each marked ``Confidential Business
Information'' at the top. All submissions requesting confidential
treatment must conform with the requirements of section 201.6 of the
Commission's Rules of Practice and Procedure (19 CFR 201.6). All
written submissions, except for confidential business information, will
be available for inspection by interested persons. All submissions
should be addressed to the Office of the Secretary, United States
International Trade Commission, 500 E Street SW., Washington, DC 20436.
By order of the Commission.
Issued: June 13, 1995.
Donna R. Koehnke,
Secretary.
Annex--Proposed U.S. Note on the Definition of Goods Wholly Obtained in
One Country
At its first session, the Technical Committee on Rules of Origin
(TCRO) undertook discussions on the definition of goods wholly
obtained in one country. This work is part of the first phase of
development of worldwide harmonization of non-preferential rules of
origin, as envisaged by the World Trade Organization (WTO) in its
Agreement on Rules of Origin.
The TCRO invited comments on the draft definition of goods
considered to be ``wholly obtained in a single country''. The United
States Administration submits the following comments and proposals.
The approach put forward by the Secretariat in the working
document provides a useful basis for considering the definition of
goods wholly obtained in one country. However, we are proposing a
number of modifications which are intended to:
--provide greater certainty as to the product scope of individual
provisions,
--present the rules for goods of similar materials together and to
the extent practical in the order in which they occur in the
Harmonized System, and
--clarify the presentation of the rules.
Further, we endorse the decision by the TCRO to make use of
explanatory notes to provide guidance, but without legal effect, in
the interpretation of the rules of origin, thereby enhancing an
understanding of the rules.
Accordingly, the United States submits the following proposal:
Goods obtained or produced wholly in a country shall be taken as
originating in that country.
The following are to be considered as being wholly obtained in
one country:
A. The following goods:
(1) live animals born and raised in that country;
(2) products obtained by hunting, trapping or fishing in that
country;
(3) products obtained from live animals in that country;
(4) fish, shellfish and other marine life taken from the sea by
vessels of that country;
(5) goods produced on board factory ships of that country from
the goods of paragraph (4) of that country;
(6) plant and plant products harvested or gathered in that
country;
(7) mineral goods extracted from the territory, soil, subsoil,
airspace, territorial waters, sea-bed or beneath the sea-bed of that
country,
(8) mineral goods extracted by that country from marine soil or
subsoil outside that country's territorial waters, or from outer
space, provided that country has rights to recover such goods,
(9) waste and scrap and used goods of any material, collected in
that country and fit only for the recovery of raw materials or for
disposal.
B. Goods produced in a country from materials of that country
referred to in paragraph A, or derived therefrom, which do not
contain constituents obtained from any other country and which have
not undergone processing in any other country at any stage of
production.
Proposed U.S. Note on the Definition of Minimal Processing Operations
that do not Confer Origin [[Page 32341]]
At its first meeting, the Technical Committee on Rules of Origin
(TCRO) invited comments on the subject of minimal processing
operations that are considered not to confer origin. The United
States administration accordingly submits the following comments and
proposal.
While there are numerous operations that, in specific instances,
will not confer origin, there are only a few operations that never
or almost never effect a substantial transformation. Consequently,
only a limited number of minimal processing operations should be
recognized in a general rule as not conferring origin. Although for
any specific product certain processes ought not to confer origin,
it is the view of the U.S. administration that such situations are
best addressed by tariff shift rules that do not recognize
particular processes as origin-conferring for a specific product.
The rule should apply to negate only the operation of the tariff
shift rules. The rule would operate to preclude conferring origin
only when an origin-conferring change in tariff classification is
accomplished solely by means of one or more of the listed processing
operations. The rule would not operate to preclude conferring origin
on goods if the change in tariff classification occurred as a result
of other operations, even though one or more of the ``minimal
processing'' operations occurred as well.
The rule should not affect the definition of wholly obtained
goods or apply to any supplementary rules, even when those goods
undergo such listed operations. The U.S. administration believes the
following ought to be included in this enumeration:
Change in tariff classification resulting solely from a change
in the use of the article;
Simple packing or packaging for retail sale;
Mere dilution with water or another substance that does not
alter the essential character of the good; and
Dismantling or disassembly in order to facilitate
transportation.
The U.S. administration wishes to emphasize that the appropriate
content of this enumeration depends heavily on the nature and effect
of the tariff shift rules yet to be considered. As a result, this
issue should be reconsidered after the tariff shift rules have been
completed.
[FR Doc. 95-15178 Filed 6-20-95; 8:45 am]
BILLING CODE 7020-02-P
