TEXTILES AND CLOTHING IN THE REVISION OF
THE LIST RULES OF ORIGIN OF THE PEM
CONVENTION
April 2013
Albert HENDRIKS
DG TAXUD – Unit B3
Rules of origin
Content
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1)
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8)
9)
Introduction
Origin rules for Textiles and Clothing
Modernisation
Tolerances
The Printing rule
What about dyeing
EU perspective
Position of other PEM partners
Way forward
1) Introduction
Present policy orientations for textiles and clothing for
the revision of the Convention
Perspective is the need to modernise the PEM rules to
reflect current –and future- market realities.
Reflections on the printing rule and further
orientations on dyeing as an origin conferring
operation.
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2) Origin rules for Textiles and Clothing
• For a preferential arrangement to be applicable to a
given product, the latter should have originating
status.
• Products have originating status if they are either
'wholly obtained' or 'sufficiently worked or
processed'.
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• 'Wholly obtained' refers mainly to natural products
grown, harvested etc., in a Party (country or
territory) and to products made entirely from them.
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Example: Fibres:
• (Silk, Horse hair, Wool, Cotton, other vegetable fibres)
• Although such products could normally qualify under a wholly
obtained rule their origin is also defined in a Product Specific Rule
of Origin (PSRO):
• Manufacture from materials of any heading except that of the
product.
• The effect of this rule is twofold:
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all the fibres (beyond the tolerance threshold) should be wholly
obtained (as one cannot make wool from a product classified in a
(4-digit) heading different from wool itself)
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other materials used in the production of a product which is
classified as silk, wool etc. may be non-originating
• 'Sufficiently worked or processed' means that the nonoriginating materials or components must be sufficiently
worked in order for the final product to obtain origin.
• Sufficiently worked means sufficiently worked according to
the specifications of the list rules.
• criteria:
• - the sufficient transformation/ change of heading criterion
• - the maximum non-originating material value threshold
criterion
• - the specific process criterion
• Example: Wovens
• (example from EU GSP reformed RoO)
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• Spinning of natural and/or man- made staple
fibres or extrusion of man-made filament yarn or
twisting, in each case accompanied by weaving
• or
• Weaving accompanied by dyeing
• or
• Yarn dyeing accompanied by weaving
• or
Printing accompanied by at least two preparatory or
finishing operations (such as scouring, bleaching,
mercerising, heat setting, raising, calendering,
shrink resistance processing, permanent finishing,
decatising, impregnating, mending and burling),
provided that the value of the unprinted fabric used
does not exceed 47,5 % of the ex-works price of
the product.
3) Modernisation
• The current standard PEM rule defines the
origin of the final product by taking into
account the manufacturing process in relation
to the non-originating materials used at the
start of the processing.
• The manufacturing process changes the
characteristics of materials used in the
production resulting in a new or different
product.
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• Current PEM rule for yarn:
• Manufacture from:
• - raw silk or silk waste, carded or combed or
otherwise prepared for spinning,
• - other natural fibres, not carded or combed or
otherwise prepared for spinning,
• - chemical materials or textile pulp, or
• - paper-making materials
• New approach has been used for the reform of
EU GSP RoO
• Identification of key manufacturing processes
carried out in relation to the final product
• The origin of the materials used in these
manufacturing processes should not be taken
into account.
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GSP rule for yarn:
Spinning of natural fibres
or
extrusion of man-made fibres accompanied by
spinning or twisting
• The EU proposal for PEM adds additional process
as compared to EU GSP reformed RoO.
• EU proposal for PEM rule for yarns:
• Spinning of natural fibres
• or
• Extrusion of man-made fibres combined with
spinning
• or
• Twisting combined with gimping
4) Tolerances
• The tolerance rule permits manufacturers to
use non-originating materials up to a specific
limit.
• For textiles and clothing specific tolerance rules
apply which are included in the introductory
notes to the list rules.
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• The standard PEM tolerance rules for Chapters
50-63:
• when referring to the Explanatory Note 5: Allows
for a tolerance up to 10% in weight of all the
basic textile materials used, provided that the
product is made from two or more basic textile
materials.
• when referring to the Explanatory Note 6: Allows
a tolerance for materials, with the exception of
linings and interlinings (of 8% in value and
provided that the materials have undergone a
change of tariff heading).
5) The Printing rule
• The printing of fabrics or clothing articles
represents an important manufacturing process
and has been recognised as origin conferring
when combined with specific additional
processes and fulfils a value added criterion.
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• The modernisation of the printing rule is one of
the cornerstones of the EU proposal for the
revision of the origin rules for the PEM.
• The modernisation concerns the following
elements:
• 1: the creation of a simple printing rule which
needs to be combined with another process
• Printing (when combined with Weaving, Knitting/
Crocheting, Tufting or Flocking) is defined as:
• a technique by which an objectively assessed
function, like colour, design, technical
performance, is given to a textile substrate with
a permanent character, using screen, roller,
digital or transfer techniques.
2: the creation of a standalone printing rule
Printing (as standalone operation) is defined as a technique by
which an objectively assessed function, like colour, design,
technical performance, is given to a textile substrate with a
permanent character, using screen, roller, digital or transfer
techniques combined with at least two preparatory/finishing
operations (such as scouring, bleaching, mercerizing, heat
setting, raising, calendaring, shrink resistance processing,
permanent finishing, decatising, impregnating, mending and
burling), provided that the value of all the materials used does
not exceed 50% of the ex-works price of the product.
• The following operations do not qualify under this
rule:
• The adding of fugitive/non-permanent
functionalities (including colour, design, technical
performance)
• The adding of logos whenever they are not
integral part of the design
• Printing on the selvedge in case this is the origin
qualifying characteristic
• The following operations: washing or dressing
6) WHAT ABOUT DYEING?
• Similarities and differences as compared to the
printing rule..
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7) EU PERSPECTIVE ON RULES OF ORIGIN FOR
TEXTILES AND CLOTHING
• - 'double transformation' !
• - strike the balance between the needs of more
traditional and more innovative textile
industries.
• - allows more flexibility; allows more qualifying
processes and processes at a higher
transformation level; provides simplification;
increases legal certainty.
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8) POSITION OF OTHER PEM PARTNERS
• - provide for a full relaxation, by allowing the
manufacture from materials of any heading;
• - provide for manufacture from materials of any
heading except that of the product;
• - provide for the current PEM rules;
• - provide for the current PEM rules, while
introducing a dyeing rule for a wide range of
products.
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9) The way forward
• Given the divergent views which have been
presented during consultations, no Party can
escape making concessions or face the
consequences of a status quo.
• Revision of PEM rules without an agreement on
new list rules for Chapters 50-63 would
seriously diminish the significance of the
exercise as a whole.
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• Unit B3 – Origin of goods
• European Commission
DG Taxation and Customs Union
• TAXUD-UNIT-B3@ec.europa.eu
•
http://ec.europa.eu/taxation_customs/customs/customs_duti
es/rules_origin/preferential/index_en.htm