WTO members have agreed to harmonise the non-preferential rules of origin. For that purpose the Agreement on Rules of Origin of Marrakesh (1994) established a work programme (HWP).
As part of the WTO Uruguay Round of Multilateral Trade Negotiations, it was agreed between WTO members to harmonise the non-preferential rules of origin. For that purpose the Agreement on Rules of Origin of Marrakech (1994) established a work programme (HWP). In the negotiations under the HWP for each subheading in the Harmonised System of the WCO a rule has to be established that reflects the last substantial transformation carried out on the non-originating materials. If this rule is fulfilled the product obtained will acquire the non-preferential origin. If the rule is not fulfilled, general residual rules or residual rules per Chapter or Heading allow the origin of a product to be determined.
These rules can be found on the web-site of the WTO under Integrated Negotiation Text documents. As soon as there is consensus amongst all members about a rule it will be transferred into the status "endorsed". For those subheadings where no consensus on a rule is reached yet, the different positions of members are reflected in the relevant documents.
Last substantial transformation
The basis for determining the non-preferential origin of all products not wholly obtained in a single country is Article 24 CCC. For textiles and some other products this criterion is translated into specific working or processing as mentioned in Annexes 10 and 11 CCIP. For the majority of products however, no specification of what is understood by last substantial transformation has been given. Therefore, for these products the following applies in determining the non-preferential origin.
In the HWP the EC has taken positions for all products in the HS nomenclature after extensive consultation. Apart from textiles of Section XI and some specific products, as defined in Annex 11 IPC, these positions are taken as the basis for the interpretation of the criteria of Article 24 CC, namely that of last substantial transformation.
As soon as the HWP is finalised and the members of the WTO have accepted the results, these harmonised rules will have to be transposed into a Community legal framework for determining the non-preferential origin of all products.