Schedule II
List of Conditions to be Complied with as Provided
under Article 14 of the Annex to the Treaty and
the Rules Regarding Common Market Origin
1 January 1998
Caribbean Community Secretariat
(Continued)
(b)
RULES REGARDING COMMON MARKET ORIGIN
For the purpose of determining the
origin of goods under Article 14 of the Annex to the Treaty and for the
application of that Article and the List, the following Rules shall be applied.
RULE 1- Interpretative Provisions
1.
In determining the place of production of marine products and goods produced
there from, a vessel of a Member State shall be regarded as part of that State.
In determining the place from which goods have been consigned, marine products
taken from the sea or goods produced there from at sea shall be regarded as
having been consigned from a Member State if they were taken by or produced in a
vessel of a Member State and have been brought direct to the Common Market.
2.
For the purpose of these Rules a vessel shall be treated as a vessel of a Member
State only if
(a)
it is registered in a Member State;
(b)
it carries a complement (inclusive of the Master thereof) of which not less
than three fourths are nationals of Member States; and
(c)
it is majority owned and operated by
(i)
nationals of Member States, or
(ii)
a Government of a Member State, or
(iii)
a statutory Corporation of a Member State
In this
paragraph nationals of Member States shall have the same meaning as in paragraph
6 of Article 35 of the Annex to the Treaty.
3.
includes raw
materials, intermediate products, parts and components used in the process of
production, repair, renovation or improvement of the goods.
4.
Energy, fuel, plant, machinery and tools used in the production, repair,
renovation or improvement of goods within the Common Market and materials used
in the maintenance of such plant, machinery and tools, shall be regarded as
wholly produced within the Common Market when determining the origin of these
goods.
5.
Goods other than those to which paragraph 1 of Rule 2 of these Rules applies
shall not be treated as being of Common Market origin if they are produced by
any operation or process which consists only of one or more of the following,
whether or not there is a change of tariff heading
(a)
operations to ensure the preservation of goods during transport and storage
(ventilation, spreading out, drying, chilling, placing in salt, sulphur
dioxide or other aqueous solution, removal of damaged parts, and like
operations);
(b)
simple operations consisting of removal of dust, sifting or screening,
sorting, grading, classifying, matching (including the making up of sets of
articles), washing, painting and cutting up resulting in the mere reduction in
size;
(c)
(i)
changes of packing;
(ii)
simple placing in bottles, flasks, bags, cases, boxes, fixing on cards
or boards and other simple packing operations;
(d)
affixing marks, labels or other like distinguishing signs on goods or
their packaging;
(e)
simple mixing of materials imported from outside the Common Market or of
undetermined origin if the characteristics of the goods as a whole are not
essentially different from the characteristics of the materials which have
been mixed;
(f)
operations which consist solely of welding, soldering, fastening, riveting,
bolting and like operations, or otherwise putting together of all finished
parts or components to constitute a finished product.
6.
"Chapter" and "tariff heading" in article 14 or in this
Schedule shall mean the Chapters and headings of the Harmonized Commodity
Description and Coding System.
7.
For the purpose of sub-paragraph (f) of paragraph 5, the expression
"finished parts or components" refers to those articles which are
imported into the Common Market in a form or condition which does not require
any further fabrication, change in shape or form, resulting in a change in
identity or use or the application
of
permanent protective /decorative coating for the purposes of incorporation in
the finished product.
8.
Paragraphs 5(f) and 7 in this Rule shall take effect one year after the entry
into force of the amendment of this Schedule, pursuant to the decision of the
Council and its Special Meeting in July 1990.
RULE 2 -
Goods wholly produced within the Common Market
1.
The expression "wholly produced" when used with reference to goods
means:
(a)
mineral products extracted from the ground within the Common Market;
(b)
vegetable products harvested within the Common Market;
(c)
live animals born and raised within the Common Market;
(d)
products obtained within the Common Market from live animals;
(e)
products obtained by hunting or fishing conducted within the Common Market;
(f)
marine products taken from the sea by a vessel of a Member State;
(g)
goods produced within the Common Market exclusively from one or both of
the following
(i)
goods
referred to in sub-paragraphs (a) to (f) and (h) and (i) of this paragraph;
(ii)
goods
containing no materials imported from outside the Common Market or of
undetermined origin, or containing those materials but which would not be
regarded as such under paragraph 1 of Rule 3;
and
shall be taken to include -
(h)
used articles fit only for the recovery of materials provided that they have
been collected from users within the Common Market;
(i)
scrap and waste resulting from manufacturing operations within the Common
Market.
2.
Wherever in paragraph 1 of Article 14 of the Annex to the Treaty goods are
required to be wholly produced, the use of small quantities of preservatives,
vitamins, colouring and similar materials imported from outside the Common
Market or of undetermined origin shall not affect their eligibility for Common
Market
treatment as wholly produced.
RULE 3
-
Application of the criterion of substantial transformation
1.
Where materials containing any element imported from outside the Common
Market meet the conditions specified in Article 14, those materials shall be
regarded as containing no such element.
2.
For the purpose of Article 14 -
(a)
the value of any materials imported from outside the Common Market shall be
the customs value determined for them by the Customs Authority in the Member
State where they were used in a process of production, less the amount of any
transport costs incurred in transit through other Member States;
(b)
if the origin of any materials cannot be determined, such materials shall be
deemed to have been imported from outside the Common Market;
(c)
the export price of the goods shall be the value accepted for this purpose by
the Customs Authority in the Member State in which they were produced. It
shall be based, mutatis mutandis, on
the provision set out in sub-paragraph (a), but shall not include the amounts
of transport and insurance costs incurred after the exportation of the goods.
3.
In the application of the List the conditions to be complied with other than a
percentage value-added condition applicable to any goods shall be fulfilled in
respect of the whole of the goods, excluding any packing.
4.
The expressions appearing in the columns headed "conditions to be complied
with" in Parts A and B of the List and set out below shall be applied in
the following manner:
(a)
"Produced from regional materials of" - the materials falling
within the tariff headings or Chapters named may be used only if they qualify
to be treated as of Common Market origin within the meaning of Article 14.
This does not preclude the use of regional materials in an earlier stage of
production;
(b)
"produced from materials of" and "produced from" - the
materials named or designated as the case may be must be used in the condition
in which they are described. This does not preclude the use of the materials
in an earlier stage of production;
(c)
"Produced from materials not included in" - the materials which fall
in the tariff headings named may not be used if they are imported from outside
the Common Market or are of undetermined origin;
(d)
"extra regional materials" shall mean materials imported from
outside the Common Market or of undetermined origin;
(e)
"chemical transformation" shall mean the forming of the molecule of
the finished product by
(i)
the
combination of two or more elements; or
(ii)
any modification of the structure of the molecule of a compound with the
exception of ionisation and the addition or removal of water of
crystallisation.
RULE 4 - Unit of Qualification
Each article
in a consignment shall be considered separately.
2.
For the purposes of paragraph 1 of this Rule -
(a)
where the Harmonised Commodity Description and Coding System specifies that a
group, set or assembly of articles is to be classified within a single
heading, such a group, set or assembly shall be treated as one article;
(b)
tools, parts and accessories which are imported with an article, and the price
of which is included in that of the article or for which no separate charge is
made, shall be considered as forming a whole with the article, provided that
they constitute the standard equipment customarily included on the sale of
articles of that kind;
(c)
in cases not within sub-paragraphs (a) and (b), goods shall be treated as a
single article if they are so treated for purposes of assessing Customs duties
by the importing Member State.
3.
An unassembled or disassembled article which is imported in more
than one consignment because it isnot feasible for transport or production reasons to import it in a single
consignment shall, if the importer so requests, be treated as one article.
RULE
5 -
Segregation of materials
1.
For those products or industries where it would be impracticable for the
producer physically to segregate materials of similar character but different
origin used in the production of goods, such segregation may be replaced by an
appropriate accounting system, which ensures that no more goods received Common
Market tariff treatment, than would have been the case, if the producer had been
able physically to segregate the materials.
2.
Any such accounting system shall conform to such conditions as may be agreed
upon by Member States concerned in order to ensure that adequate control
measures will be applied.
RULE 6 - Treatment of repaired goods
1.
For the purposes of paragraph 4 of Article 14, goods shall
be treated as having undergone a process of repair,
renovation
or improvement if the performance of such process within the Common Market does
not result in a change of the form or character of the goods.
2.
The cost of repair, renovation or improvement shall refer to the cost of all
materials which are used plus the costs involved in effecting the repair,
renovation or improvement, excluding freight, other transport charges, insurance
and other shipping costs.
RULE 7 - Treatment of Packing
1.
Where for purposes of assessing Customs duties a Member State treats goods
separately from their packing, it may also, in respect of its imports consigned
from another Member State, determine separately the origin or such packing.
2.
where paragraph 1 of this Rule is not applied, packing of any sort shall be
considered as forming a whole with the goods for the purposes only of the
application of the percentage value-added conditions. No part of any packing
required for the transport or storage of goods shall he considered as having
been imported from
outside
the Common Market when determining the origin of the goods as a whole.
RULE 8 -
Documentary Evidence
1.
A claim that goods shall be accepted as eligible for Common Market tariff
treatment shall be supported by appropriate documentary evidence or origin and
consignment. The evidence of origin shall consist of a certificate given by a Governmental authority or authorized
body nominated by the exporting Member State and notified to the other Member
States together with a declaration completed by the exporter of the goods.
2.
The governmental authority or the authorized body shall obtain a declaration as
to the origin of the goods given by the last producer of the goods within the
Common Market. The authority or body shall satisfy themselves as to the accuracy
of the evidence provided; where necessary
they shall require the production of
additional
information, and shall carry out any suitable check. If the authorities of the
importing Member State so require, a confidential indication of the producer of
the goods shall be given.
3.
Nominations of authorized bodies for the purpose of this Rule may be
withdrawn by the exporting Member State
if the need arises. Each member State shall retain, in regard to its imports,
the right of refusing to accept certificates from any authorized body which is
shown to have repeatedly issued certificates in an improper manner, but such
action shall not be taken without adequate prior notification to the exporting
Member State of the grounds for dissatisfaction.
4.
In cases where the Member States concerned recognize that it is impracticable
for t he producer to make the declaration of origin specified in paragraph 2 of
this Rule, the exporter may make that declaration in such form as those Member
States may for the purpose specify.
5.
The certificate and declaration provided for in this Rule shall be in the form
prescribed by the Council from time to time.
6.
The Council may decide that further or different provisions concerning evidence
of origin or of consignment shall apply to particular categories of goods or
classes or transactions.
RULE
9 - Verification of Evidence of Origin
1.
The importing Member State may as necessary require further evidence to support
any declaration or certificate of origin furnished under Rule 8.
2.
The importing Member State shall not prevent the importer from taking delivery
of the goods solely on the grounds that it requires such further evidence, but
may require security for any duty or other charge which may be payable; provided
that where goods are subject to any import restrictions or prohibitions, the
stipulation for delivery under security shall not apply.
3.
Where, under paragraph 1 of this Rule, a Member State has required further
evidence to be furnished, those concerned in another Member State shall be free
to produce it to a governmental authority or an authorized body of the latter
State, who shall, after thorough verification of the evidence, furnish an
appropriate report to the importing Member State.
4.
Where it is necessary to do so by reason of its legislation, a Member State
may prescribe that requests by the
authorities
of importing Member States for further evidence from those concerned in the
Member State shall be addressed to a specified governmental
authority, who shall after thorough verification of the evidence furnish
an appropriate report to the importing Member State.
5.
If the importing Member State wishes an investigation to be made into the
accuracy of the evidence which it has received it may make a request to that
effect to the other Member State or States concerned.
6.
Information obtained under the provisions of this Rule by the importing Member
State shall be treated as confidential.
RULE 10 - Application of the Safeguard Mechanism
1.
The information required pursuant to paragraph 4 of Article 14 shall be rendered
in writing and shall be such as the Competent Authority may require.
2.
For the purposes of carrying out his investigations, the Secretary General may
seek such additional information as he considers to be relevant. Replies to the
enquiries by the Secretary General should
be sent by telex, telefax or other similar means of communication.
3.
The Competent Authority shall ensure that no more extra regional materials are
used in production for purposes of Common Market treatment than are authorized
by the Secretary� General. The Competent
Authority shall make available to the Governmental authority or authorized body
nominated for his State under paragraph 1 of Rule 8 such information as may be
necessary for this purpose.
4.
The Member States agree to cooperate fully with the Secretary General in the
foregoing provisions of this Rule.
RULE 11 - Sanctions
1.
Member States undertake to introduce legislation, making such provision as may
be necessary for penalties against persons who, in their State, furnish or cause
to be furnished a document which is untrue in a material particular in support
of a claim in another Member State that goods should be accepted as eligible for
Common
market tariff treatment. The penalties applicable shall be similar to those
applicable in case of untrue declarations in regard to payment of duty on
imports.
2.
A Member State may deal with the offence out of court, if it can be
more appropriately dealt with by a compromise penalty or similar
administrative procedure.
3.
A Member State shall be under no obligation to institute or continue court
proceedings, or action under paragraph 2 of this Rule:
(a)
if it has not been requested to do so by the importing Member State to which
the untrue claim was made; or
(b)
if, on the evidence available, the proceedings would not be justified.
Continue on to Schedule IV: Transitional Arrangements for the Removal of the Protective
Element in Revenue Duties by the Less Developed Countries
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