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World Trade Organization Toolkit : Non-Tariff Barriers to Trade : Customs Administration

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Rules of Origin

Calculating the appropriate duty on imported goods also requires establishing the country of origin of imports. Tariff treatment may be dependent on the country of origin of the imports, for example, to determine whether MFN treatment applies or whether anti-dumping or countervailing duties apply. Origin determination may be a complex operation in view of the fact that the manufacturing of the product may take place in various countries: one part of the production process may take place in country A, another in country B and the assembly of the various parts still in country C. It is therefore necessary to have rules for the determination of the customs origin.

There is no provision in the GATT dealing with customs origin. However, it is obvious that the great diversity of the national rules of origin can create obstacles to trade, as they can act as a trade policy instrument. Harmonisation became increasingly necessary but, given the huge diversity and the complexity of rules of origin, the harmonisation process is complex.

Unlike customs valuation, there is no set of common rules for the determination of customs origin. One of the objectives of the Uruguay Round was to achieve an Agreement on the determination of origin. The Agreement on Rules of Origin which was negotiated during the Uruguay Round fails to harmonise the rules, but establishes the framework in which negotiations should take place and identifies certain key principles. Negotiations for the harmonisation of rules of origin are currently taking place.

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