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The
Andean Community has its own provisions
for determining the origin of goods,
which were adopted by means of Decision
416 in July 1997. These provisions
specify the conditions products must
meet in order to be considered of
subregional origin and thereby benefit
from the enlarged market.
If the Special Provisions for Determining
and Certifying the Origin of the Goods
(Decision 416) are not applicable
in certain cases, Specific Requirements
of Origin may be established, using
regulations provided for in Decision
417.
IMPORTANCE
Rules
of origin are essential to
ensure that the benefits of
the liberalization of trade
or reciprocal economic opening
extend only to the products
originating in the territory
of any of the countries committed
to the integration process.
It is through them that minimum
preconditions are established
for considering merchandise
as native -having originated
in the given territory.
BACKGROUND DATA
Trade
among the Andean countries was governed
for almost two decades by the provisions
of origin of the Latin American
Free Trade Association (LAFTA),
in force since 1960.
The rules of origin for the Andean
Community were approved in December
1987 through Decision 231. Subsequently,
in March 1991, amendments were introduced
through Decision 293.
The rapid advances in trade integration,
particularly the formation of a
customs union, generated the need
for an effort at updating in order
to establish precise criteria of
origin, clarify, simplify and organize
the procedures, and shore up the
sanctioning mechanisms.
That updating was accomplished on
July 30, 1997 by means of Andean
Community Commission Decision 416.
CRITERIA
The criteria established
by Decision 416 to determine
the origin of the goods
may be classified into
the following categories:
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Goods called fully
produced, which consist
of natural products
(mining, agricultural,
and fishing) and those
manufactured entirely
from such natural
products in the territory
of any Member Country.
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Goods manufactured
entirely from materials
native to any Member
Country.
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Goods in whose manufacture
non-native materials
were used. The basic
criterion used for
this type of goods
is that the materials
of non-native origin
must have undergone
processing, as reflected
in the change in tariff
heading. Otherwise,
the CIF value of non-native
materials should not
exceed 50 percent
of the FOB value of
the final products
in the cases of Colombia,
Venezuela and Peru,
and 60 percent in
those of Bolivia and
Ecuador.
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Goods resulting from
an assembly operation
in which materials
native to the Subregion
have been used, for
which the requirement
is also that of value
added as indicated
above.
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Goods that are subject
to Specific Requirements
of Origin (SROs) established
by the General Secretariat
on its own initiative
or at the request
of any of the Member
Countries. These are
used when other criteria
are not appropriate
for given products
and prevail over any
other criterion.
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COMPLEMENTARY ASPECTS
The
Decision establishes complementary
aspects for its best possible implementation,
such as those referring to the concept
of direct shipment of the merchandise,
permitting the invoicing from a
third country for the trade in native
products, and the case of re-exports.
It also stipulates that the containers
and packaging, under certain conditions,
do not alter the origin, and provides
for cumulative origin by which,
in determining the origin of merchandise,
imported native materials from the
other Member Countries are considered
as native of the Member Country.
Declaration and certification procedures
for the fulfillment of the provisions
of Decision 416 are regulated. Also
regulated are the use of certificates
of origin, the responsibility of
the institutions designated by the
respective governments, and the
control that should be exercised,
as well as the procedures to be
followed in the cases of differences. |
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