ruleoforigin

Rule of origin refers to the criteria used to determine the national source of a product. This determination is crucial for various trade and customs purposes, including the application of preferential tariffs, quantitative restrictions, trade statistics, and government procurement. In essence, it answers the question of which country a good "belongs to."

There are generally two main types of rules of origin: preferential and non-preferential. Preferential rules of origin are used within the framework of free trade agreements or other preferential trade arrangements. They are designed to grant preferential treatment, such as lower tariffs, only to goods that meet specific origin criteria agreed upon by the participating countries. Non-preferential rules of origin are applied in the absence of preferential agreements and are used for general trade policy measures.

The criteria for determining origin can vary significantly depending on the product and the specific trade agreement or regulation. Common tests include the "wholly obtained" criterion, which applies to goods entirely produced in a single country. If a product is made using materials or components from multiple countries, the "substantial transformation" criterion is often applied. This means that the product must have undergone a significant change in its form, appearance, or function to be considered originating in a particular country. The World Customs Organization (WCO) plays a role in harmonizing rules of origin.