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EN EN
EUROPEAN COMMISSION
Brussels, 20.9.2019
COM(2019) 424 final
2019/0200 (NLE)
Proposal for a
COUNCIL DECISION
on the position to be taken on behalf of the European Union in the Committee on Rules
of Origin set up by the Agreement on Rules of Origin (WTO-GATT 1994), annexed to
the final act signed in Marrakech on 15 April 1994
EN 1 EN
EXPLANATORY MEMORANDUM
1. SUBJECT MATTER OF THE PROPOSAL
This proposal concerns the decision establishing the position to be taken on the Union's behalf
in the Committee on Rules of Origin set up by the Agreement on Rules of Origin (WTO-
GATT 1994) annexed to the final act signed in Marrakech on 15 April 1994, in connection
with the envisaged adoption of a communication on enhancing transparency in non-
preferential rules of origin.
2. CONTEXT OF THE PROPOSAL
2.1. The Agreement on Rules of Origin
The Agreement on Rules of Origin (WTO-GATT 1994) annexed to the final act signed in
Marrakech on 15 April 1994 (‘the Agreement’) aims to ensure that non-preferential rules of
origin do not themselves create unnecessary obstacles to trade and aims to harmonise at
international level rules of origin, other than rules of origin relating to the granting of tariff
preferences. Until the completion of the harmonisation programme, contracting parties are to
ensure that their rules of origin are transparent; that they do not have restricting, distorting or
disruptive effects on international trade; that they are administered in a consistent, uniform,
impartial and reasonable manner, and that they are based on a positive standard. The
Agreement entered into force on 1 January 1995.
The European Union is a party to the Agreement1. All Member States are also parties to the
Agreement.
2.2. The Committee on Rules of Origin
The Committee on Rules of Origin was established within the framework of the World Trade
Organisation (WTO) and is open to WTO members. It is to meet at least once a year and is to
review the implementation and operation of the Agreement on Rules of Origin. The work of
the Committee focused primarily on the harmonisation of non-preferential rules of origin. The
negotiations have not concluded and WTO members currently apply national rules of origin
for non-preferential purposes. More recently, some work on preferential rules of origin have
been initiated, in particular on those used under trade preferences for least-developed
countries. Decisions in the Committee are normally taken by consensus.
2.3. The envisaged act of the Committee on Rules of Origin
On [date], during its annual meeting, the Committee on Rules of Origin is to adopt a
Communication2 regarding “Enhancing transparency in non-preferential rules of origin” (‘the
envisaged act’).
The purpose of the envisaged act is to enhance transparency of laws, regulations and practices
regarding non-preferential rules of origin and to complement the notification obligations of
Article 5 of the Agreement on Rules of Origin.
Neither the Agreement establishing the World Trade Organisation nor the Agreement on
Rules of Origin address the legal status of acts adopted by the WTO committees. The binding
1 Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the
European Community, as regards matters within its competence, of the agreements reached in the
Uruguay Round multilateral negotiations (1986-1994) OJ L 336, 23.12.1994, p.1). 2 Communication from Australia; Brazil; Canada; Hong Kong; Japan; Republic of Korea; New Zealand;
Norway; Philippines; Russian Federation; Singapore; Switzerland; the separate customs territory of
Taiwan, Penghu, Kinmen and Matsu; and the United States.
EN 2 EN
nature of the envisaged act is to be determined in the light of the text used in the said act.
Taking into consideration the wording of the communication on enhancing transparency in
non-preferential rules of origin, the envisaged act will become binding on the parties.
3. POSITION TO BE TAKEN ON THE UNION'S BEHALF
Non-preferential rules of origin are those rules, which apply in the absence of any trade
preference, i.e. when trade is performed on a most-favoured nation basis. In addition, some
trade policy measures such as quotas, anti-dumping or origin marking may require a
determination of origin based on the application of non-preferential rules of origin.
In accordance with Article 5 of the Agreement on Rules of origin, each WTO member had to
notify to the WTO secretariat within a given deadline from the entry into force of the WTO
agreement for it, its rules of origin, judicial decisions and administrative rulings of general
application relating to non-preferential rules of origin in effect on that date. The European
Union notified the required information to the WTO secretariat.
In the Agreement on Rules of Origin, WTO members agreed to negotiate harmonised non-
preferential rules of origin. However, these negotiations have not concluded and WTO
members currently apply national rules of origin for non-preferential purposes. As a result,
different non-preferential rules of origin apply at import and/or export, depending on the
WTO members concerned. In addition, not all WTO members apply specific legislation
related to non-preferential rules of origin. In the Union, these rules are provided for by
Articles 59 to 61 of Regulation (EU) No 952/2013 of the European Parliament and of the
Council of 9 October 2013 laying down the Union Customs Code3.
In order to avoid unnecessary obstacles to trade being created due to the variety and the
multitude of non-preferential rules of origin to be applied, a small working group selected
from the Committee of Rules of Origin delegates was set up in order to explore the ways to
improve transparency as regards non-preferential rules of origin. The European Union
participated in this small working group and contributed in a constructive manner to the
envisaged act. Discussions continued in meetings of the Committee on rules of origin in
March and May 2019. Coordination with the Member States was ensured through Member
States’ delegations in the WTO and through the Origin Section of the Customs Expert Group.
Considering that clear and predictable rules of origin facilitate the flow of international trade,
the envisaged act aims at enhancing transparency of laws, regulations and practices regarding
non-preferential rules of origin and at complementing the notification obligations of Article 5
of the Agreement on Rules of Origin.
The envisaged act provides for a mandatory notification of each WTO member’s non-
preferential rules of origin used for the purposes of the application of the most-favoured-
nation treatment under Articles I, II, III, XI and XIII of GATT 1994. It also provides for a
voluntary notification of non-preferential rules of origin used for all other purposes covered
by Article 1.2 of the Agreement on Rules of Origin (anti-dumping and countervailing duties
under Article VI of GATT 1994, safeguard measures under Article XIX of GATT 1994,
origin marking requirements under Article IX of GATT 1994, quantitative restrictions or tariff
quotas, rules of origin used for government procurement and trade statistics). In addition, the
envisaged act contains a notification obligation by WTO members of possible certificates of
non-preferential origin, which are mandatory when performing import or export transactions.
Notifications are to be carried out using templates annexed to the envisaged act.
3 OJ L 269, 10.10.2013, p.1.
EN 3 EN
The envisaged act creates notification obligations in addition to those mentioned in Article 5
of the Agreement on Rules of Origin.
As a result, a position to be taken on the Union’s behalf in the Committee on Rules of Origin
is needed.
4. LEGAL BASIS
4.1. Procedural legal basis
4.1.1. Principles
Article 218(9) of the Treaty on the Functioning of the European Union (TFEU) provides for
decisions establishing ‘the positions to be adopted on the Union’s behalf in a body set up by
an agreement, when that body is called upon to adopt acts having legal effects, with the
exception of acts supplementing or amending the institutional framework of the agreement.’
The concept of ‘acts having legal effects’ includes acts that have legal effects by virtue of the
rules of international law governing the body in question. It also includes instruments that do
not have a binding effect under international law, but that are ‘capable of decisively
influencing the content of the legislation adopted by the EU legislature’4.
4.1.2. Application to the present case
The Committee on Rules of Origin is a body set up by an agreement, namely the Agreement
on Rules of Origin (WTO-GATT 1994).
The act which the Committee on Rules of Origin is called upon to adopt constitutes an act
having legal effects. Neither the Agreement establishing the World Trade Organisation nor
the Agreement on Rules of Origin address the legal status of acts adopted by the Committee
on Rules of Origin. The binding nature of the envisaged act is therefore to be determined in
the light of the text used in the said act. Taking into consideration the wording of the
communication on enhancing transparency in non-preferential rules of origin, the envisaged
act is to be considered as having legal effects.
The envisaged act does not supplement or amend the institutional framework of the
Agreement.
Therefore, the procedural legal basis for the proposed decision is Article 218(9) TFEU.
4.2. Substantive legal basis
4.2.1. Principles
The substantive legal basis for a decision under Article 218(9) TFEU depends primarily on
the objective and content of the envisaged act in respect of which a position is taken on the
Union's behalf. If the envisaged act pursues two aims or has two components and if one of
those aims or components is identifiable as the main one, whereas the other is merely
incidental, the decision under Article 218(9) TFEU must be founded on a single substantive
legal basis, namely that required by the main or predominant aim or component.
4.2.2. Application to the present case
The main objective and content of the envisaged act relate to the common commercial policy.
Therefore, the substantive legal basis of the proposed decision is Article 207 TFUE.
4 Judgment of the Court of Justice of 7 October 2014, Germany v Council, C-399/12,
ECLI:EU:C:2014:2258, paragraphs 61 to 64.
EN 4 EN
4.3. Conclusion
The legal basis of the proposed decision should be Article 207 TFUE, in conjunction with
Article 218(9) TFEU.
5. PUBLICATION OF THE ENVISAGED ACT
Not applicable.
EN 5 EN
2019/0200 (NLE)
Proposal for a
COUNCIL DECISION
on the position to be taken on behalf of the European Union in the Committee on Rules
of Origin set up by the Agreement on Rules of Origin (WTO-GATT 1994), annexed to
the final act signed in Marrakech on 15 April 1994
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular
Article 207(3) and the first paragraph of Article 207(4) in conjunction with Article 218(9)
thereof,
Having regard to the proposal from the European Commission,
Whereas:
(1) The Agreement on Rules of origin (WTO-GATT 1994) annexed to the final act signed
in Marrakech on 15 April 1994 (‘the Agreement’) was concluded by the Union by
Council Decision 94/800/EC5 and entered into force on 1 January 1995.
(2) Article 4 of the Agreement establishes the Committee on Rules of Origin.
(3) The Committee on Rules of Origin, during its session/meeting on [date], is to adopt a
communication entitled “enhancing transparency in non-preferential rules of origin”.
(4) It is appropriate to establish the position to be taken on the Union's behalf in the
Committee on Rules of Origin, as the communication will be binding on the Union.
(5) The proposed position to be taken on the Union’s behalf aims at enhancing
transparency of laws, regulations and practices regarding non-preferential rules of
origin, by means of rules on mandatory or voluntary notification by WTO members of
their non-preferential rules of origin, using standardised templates. This will result in
clearer and more predictable rules of origin and will facilitate the flow of international
trade,
HAS ADOPTED THIS DECISION:
Article 1
The position to be taken on the Union's behalf in the session/meeting of the Committee on
Rules of Origin shall be based on the draft act of the Committee on Rules of Origin attached
to this Decision.
The representatives of the Union may agree to minor editorial changes to the draft act in the
light of developments at the upcoming meetings of the Committee on Rules of Origin, in
consultation with Member States, or during on-the-spot coordination meetings, without a
further decision of the Council.
5 Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the
European Community, as regards matters within its competence, of the agreements reached in the
Uruguay Round multilateral negotiations (1986-1994) (OJ L 336, 23.12.1994, p. 1).
EN 6 EN
Article 2
This Decision is addressed to the Commission.
Done at Brussels,
For the Council
The President
EN EN
EUROPEAN COMMISSION
Brussels, 20.9.2019
COM(2019) 424 final
ANNEX
ANNEX
to the
Proposal for a COUNCIL DECISION
on the position to be taken on behalf of the European Union in the Committee on Rules
of Origin set up by the Agreement on Rules of Origin (WTO-GATT 1994), annexed to
the final act signed in Marrakech on 15 April 1994.
1
ENHANCING TRANSPARENCY IN NON-PREFERENTIAL RULES OF ORIGIN
_______________
Members of the World Trade Organization,
Desiring to ensure that rules of origin themselves do not create restrictive, distorting or disruptive
effects on international trade;
Desiring to ensure that rules of origin are prepared and applied in an impartial, transparent, predictable, consistent and neutral manner;
Recognizing that clear and predictable rules of origin and their application facilitate the flow of international trade;
Recognizing that it is desirable to provide transparency of laws, regulations, and practices regarding rules of origin;
Desiring to complement the notifications obligations of Article 5 of the Agreement on Rules of Origin;
Affirming that enhancing transparency of laws, regulations, and practices regarding rules of origin
contribute to mitigate compliance costs of economic operators wishing to integrate global value chains, notably micro, small and medium enterprises;
Decide, with respect to rules of origin, as follows:
1. That it is desirable to maintain and promote a high level of transparency and mutual understanding about existing rules of origin and related documentary requirements used by WTO Members. Rules of origin are understood as those falling under the scope of Article 1 of the Agreement on Rules of Origin.
2. In order to enhance transparency and promote a better understanding of rules of origin, Members shall notify the WTO Secretariat, pursuant to Annex 1 of this Decision, the rules of origin that they use in the application of most-favoured-nation treatment under Articles I, II,
III, XI and XIII of GATT 1994.
3. Members are encouraged to complete the notification template in Annex 1 when notifying the WTO Secretariat of any other rules of origin that they use for the application of other
non-preferential commercial policy instruments as provided for in Article 1.2 of the Agreement on Rules of Origin.
4. In addition, Members shall describe, according to Annex 2, their practices with respect to certification of origin and other mandatory documentary proofs of origin for non-preferential
purposes that have been notified according to Annex 11. Members that report that they do not implement rules of origin according to Annex 1 shall, nonetheless, complete Annex 2.
5. Notifications pursuant to paragraphs 2 and 4 of this Decision shall be submitted no later
than one year after the adoption of this Decision.
6. The information notified pursuant to this decision shall be made publicly available by the WTO Secretariat.
7. Each Member shall, within its available resources, establish or maintain one or more enquiry points to answer reasonable enquiries of governments, traders and other interested parties on matters regarding rules of origin and related documentary requirements as well as to
1 This is without prejudice to other proofs of origin that may be required by the competent authorities
for control purposes.
2
provide the required forms and documents2. Members shall communicate the contact details of their respective enquiry points to the WTO Secretariat pursuant to Annex 1. Least-developed country Members shall have two years to communicate this information to the WTO Secretariat.
8. Members shall endeavour to provide legal references, websites, explanatory documents, or any other documents, in an official WTO language.
9. Members introducing substantive changes to their rules of origin and related documentary
requirements that have been notified according to this Decision, shall notify such changes promptly to the WTO Secretariat according to this Decision.
10. The Committee on Rules of Origin (CRO) shall examine existing rules of origin and related documentary requirements based on the information notified according to this Decision, with
a view to identifying trade-facilitating practices and to promoting their international diffusion.
11. Assistance by the WTO Secretariat should be provided upon request to help developing and
least-developed country Members implement the provisions of this Decision.
12. Nothing in this Decision shall be construed as affecting the rights and obligations of Members contained in Article 5 of the Agreement on Rules of Origin or in Article 1 of the
Trade Facilitation Agreement.
13. This Decision, in particular paragraphs 2 and 3, shall be reviewed three years after its adoption, and thereafter when necessary, with a view to further enhancing transparency on non-preferential rules of origin as appropriate.
2 It is understood that this enquiry point can be the same as established or maintained pursuant to
Article 1.3 (Enquiry points) of the Trade Facilitation Agreement (TFA) and Members are not required to provide
more information or provide more forms and documents than covered by the TFA.
3
ANNEX 1
NOTIFICATION TEMPLATE FOR NON-PREFERENTIAL RULES OF ORIGIN
Annex 1 may be duplicated as many times as the member deems necessary
I. BASIC INFORMATION
1) Notifying member
2) Enquiry point
(If possible, provide the following
contact details: Name, tel., e-mail,
website)
3) Are Non-Preferential RO in force? Yes No*
* If your answer is "No", the subsequent questions of this
Annex do not need to be completed
4) Please indicate which commercial
policy instruments use these
non-preferential RO (refer to
Article 1.2 of the Agreement on Rules
of Origin)
5) Date of entry into force or any
substantive modification thereof:
6) Date of expiration, if applicable:
7) Governmental or non-governmental
authorities in charge of
administration:
8) Internet link to legislation and any
other explanatory documents, if
applicable:
9) Comments, if any
II. APPLICATION OF NON-PREFERENTIAL RULES OF ORIGIN
10) Do non-preferential RO apply to
imports
Yes No
11) Do non-preferential RO apply to
exports
Yes No
12) De minimis rule for the application of
non-preferential RO
Yes No
If Yes, please specify the de minimis
threshold and provide the relevant
legal references applicable to
questions 10 to 12.
III. CRITERIA FOR DETERMINING SUBSTANTIAL TRANSFORMATION FOR ASSESSING THE ORIGIN OF THE GOOD
13) General criteria, if applicable for all
products:
14) Product specific rules of origin where
applicable:
4
15) Definition of non-originating material
and originating material, if any:
16) List of minimal operations not
conferring origin, if any:
17) Residual rules, if any:
18) Any other information the member
deems necessary (provide an
Internet link, if appropriate)
IV. ADVANCE RULINGS
Are advance rulings on the origin of a
good issued?1
Yes No
Authority in charge of issuing advance
rulings (on origin)
Instructions for the application for an
advance ruling
Internet link to legislation and any other
relevant legal references:
1 As defined in Article 2(h) of the Agreement on Rules of Origin and Article 3 of the Trade Facilitation
Agreement.
5
ANNEX 2
NOTIFICATION TEMPLATE FOR DOCUMENTARY REQUIREMENTS RELATED TO NON-PREFERENTIAL RULES OF ORIGIN
1) Mandatory requirements for certificate
and/or any other mandatory documentary
proof of origin for imports?
Yes No**
2) Mandatory requirements for certificate
and/or any other mandatory documentary
proof of origin for exports?
Yes
No**
3) Is there a standardized or prescribed
format and/or content of Certificate and/or
any other mandatory documentary proof of
origin?
If Yes, please attach a copy or provide
relevant details in the Appendix of this
Annex
No
** If answers to questions 1 and 2 are "No", the
subsequent questions of this Annex do not need
to be completed
4) If only requested in specific circumstances,
please describe the cases for which a
certificate (or other mandatory
documentary proofs of origin) is requested
and the respective format (prescribed form
or other).
5) If mandatory requirements for certificate
and/or any other mandatory documentary
proof of origin are limited to certain
products please specify for which HS
Chapters and the respective format
(prescribed form or other).
6) Exemptions to the mandatory requirements
of presenting a certificate and/or any other
mandatory documentary proof of origin
(e.g. low value consignments, postal
consignments, …)
7) Governmental or non-governmental
authorities designated for issuance of
certificate and/or any other mandatory
documentary proof of origin, if any
8) Please provide the relevant legal references
applicable to Questions 1 to 7
ANNEX 2 - APPENDIX
Please attach the prescribed form and/or Internet link to the prescribed form of Certificate of origin (or other mandatory documentary proof of origin), if applicable
__________
Com (2019) 424
Information Note
1. Proposal
Council Decision on the position to be taken on behalf of the European Union in the
Committee on Rules of Origin set up by the Agreement on Rules of Origin (WTO-GATT
1994), annexed to the final act signed in Marrakech on 15 April 1994.
2. Date of Commission document
20/09/2019
3. Number of Commission document
COM (2019) 424
4. Number of Council document:
2019/0200 (NLE)
5. Dealt with in Brussels by
Committee on the Rules of Origin
6. Department with primary responsibility
Department of Business, Enterprise & Innovation
7. Other Departments involved
N/A
8. Background to, Short summary and aim of the proposal
This proposal aims to ensure that non-preferential rules of origin do not themselves create
unnecessary obstacles to trade and aims to harmonise at international level rules of origin,
other than rules of origin relating to the granting of tariff preferences. As per the Marrakesh
Agreement establishing the World Trade Organization in 1995, an obligation imposed on a
member of the WTO may be waived in exceptional circumstances (paragraph 3 of Article IX
of the WTO Agreement). It should be noted that the European Union is party to the
Agreement.
The purpose of the envisaged act is to enhance transparency of laws, regulations and
practices regarding non-preferential rules of origin and to complement the notification
obligations of Article 5 of the Agreement on Rules of Origin.
The proposed position to be taken on the Union’s behalf aims at enhancing transparency of
laws, regulations and practices regarding non-preferential rules of origin, by means of rules
on mandatory or voluntary notification by WTO members of their non-preferential rules of
origin, using standardised templates. This will result in clearer and more predictable rules of
origin and will facilitate the flow of international trade.
9. Legal basis of the proposal
The legal basis of the proposal decision should be Article 207, in conjunction with Article
218(9) TFEU.
10. Voting Method
Unanimity
11. Role of the EP
Consultation – representatives of the Union may agree to minor editorial changes to the draft
act, at upcoming meetings, in consultations with Member States or during on-the-spot
coordination meetings,
12. Category of proposal
Purely technical
13. Implications for Ireland & Ireland's Initial View'
This proposed act would enhance transparency of laws, regulations and practices. It would
also have a benefit of clearer and predictable rules of origin and would facilitate trade which
would have a positive impact on Ireland as a small open economy. Additionally, the act
would not supplement or amend the institutional framework of the original Agreement.
14. Impact on the public
N/A
15. Have any consultations with Stakeholders taken place or are there any plans to do
so?
No
16. Are there any subsidiarity issues for Ireland?
N/A
17. Anticipated negotiating period
N/A
18. Proposed implementation date
This Decision shall enter into force on the date of its adoption.
19. Consequences for national legislation
N/A
20. Method of Transposition into Irish law
N/A
21. Anticipated Transposition date
N/A
22. Consequences for the EU budget in Euros annually
N/A
23. Contact name, telephone number and e-mail address of official in Department with
primary responsibility
Alan Mc Dermott
(01) 6312470
Date 02/10/2019
