Rules of Origin – for Businesses

What are rules of origin?

Rules of origin (ROOs) are a set of laws, regulations, and administrative procedures that countries impose to determine where an imported product comes from. At first glance, where a product comes from should be a simple question to answer. But digging deeper it becomes more challenging: is a product from where the materials originated? Is it from where it was first put together? What processing step determines where it is from?

ROOs provide governments with the criteria to identify whether imports qualify for preferential treatment under trade agreements in force or to assess whether imports are subject to other trade measures, such as:

• Most-favored-nation treatment.
• Trade remedies.
• Origin marking requirements.
• Quantitative restrictions or tariff quotas.
• Government procurement.
• Trade statistics.

Visit the World Trade Organization (WTO) and International Trade Centre (ITC) Websites to learn more.

What are the different types of origin criteria?

When making customs declarations, businesses must present proof of origin which determines whether their imported products are subject to preferential or non-preferential market access terms. If imported goods were manufactured in multiple countries as part of a global or regional value chain, the country where the latest production process took place typically determines the origin of good, depending on the criteria defined in the rules of origin. These can include:

1. Preferential origin: This determines whether products are eligible for preferential (lower or zero) tariffs and other benefits provided under trade agreements. Qualifying under preferential origin may require imports to be completely or partially produced in a country that is a party to the relevant trade agreement, according to the specific conditions identified under that agreement.
2. Non-preferential origin: This is not linked to trade agreements and may determine if businesses must comply with non-tariff requirements, such as trade remedies and quotas.

What do I need to do to verify the origin of my products?

You may have to follow a different process depending on whether you export, import, or do both. The Rules of Origin Facilitator An online database outlines practical steps you can take according to your trade transactions. Advance rulings can also be requested in some economies for a binding decision on a good’s origin.

• Exporters: They need to classify products into an appropriate HS (See Trade4MSMEs guide on How do I Determine My Product’s HS Code)(Harmonized System) code and verify if these qualify for preferential market access. Non-preferential market access is always available in case an exporter prefers not to claim any preferential benefits. If exporters are not the manufacturers of products, they need to confirm the origin of inputs with their suppliers and retain the appropriate declarations and documentation proving this origin. Based on this documentation, exporters can either self-issue an ROO certificate for their product (self-certification) of origin, or receive a document provided by a designated competent authority (third-party certification).
• Importers: They should present declarations and request exporters’ self-issued or authority-generated certificates of origin to declare whether their imports comply with preferential rules of origin. Sometimes an importing country may also request a certificate of origin for non-preferential purposes – i.e., even when no tariff preferences are being claimed.

Do I need to obtain a certificate of origin?

If you are seeking to claim preferential tariffs under a trade agreement, then you will need a certificate that attests that your products comply with the origin requirements stated in that specific agreement. A certificate of origin states whether imported goods in a particular export shipment are wholly obtained, produced, manufactured, or processed or whether these goods have been substantially or sufficiently transformed in a specific country.

Certificates confirm the nationality of products and can exist in paper or digital format. If you are the exporter, you will have to provide your importing partner with the certificate (if you are the importer, it is your responsibility to ensure your exporting partners obtain the certificate prescribed by the authorities of the importing country). The International Chamber of Commerce (ICC) and the Rules of Origin Facilitator provide more information on certificates of origin.

How do I start identifying the origin of goods?

Trade agencies, chambers of commerce, and industry, and other business support organizations may indicate which products may be subject to rules of origin and preferential tariffs. Businesses can also visit the following online tools:

• The Rules of Origin Facilitator: As described above, this tool assists businesses in identifying whether their products are subject to zero or lower tariffs and other preferential market access terms under trade agreements. The ROO Facilitator can also help you determine if you need to get a certificate of origin to verify your eligibility for preferential market access. It explains how you can get the certificate, if needed.
• Market Access Map: Businesses can use this tool to determine if their products will be subject to non-preferential origin.

Where can I learn more?

The WTO has an e-Learning course that provides ROO training. While access is open to all, registration is required. Visit the WTO E-Learning (csod.com).

Links to Supporting Information

Trade4MSMEs guide Tariffs and Taxes at the Border

WTO   WTO | Rules of origin – Technical Information

ITC Rules of Origin Facilitator

United Nations  Advance ruling

ITC  ITC SME Trade Academy – Catalogue

Trade4MSMEs guide   How Do I Determine My Product’s HS Code?

International Chambers of Commerce  Certificates of Origin – ICC – International Chamber of Commerce

ITC Market Access Map – Market Access Map

WTO  WTO e-Learning Platform: All courses