The Concept of "Substantial Transformation" in Rules of Origin, with a Focus on the World Trade Organization (Wto) Agreement On Rules of Origin

Document Type : Scientific research

Authors

• gholamnabi feizi chekab ¹
• vahid raja ²

¹ Department of private law, Law and political science faculty, Allame Tabatabaei university

² Department of private law, law and political science faculty, Allame tabatabaei university

10.22067/economlaw.2024.88839.1382

Abstract

The concept of "substantial transformation" plays a vital role in determining the origin of goods produced in multiple countries, significantly impacting the granting of trade preferences and the application of various government measures to these goods. This concept lies at the core of rules of origin, serving as a tool to identify the country where a good is truly manufactured. In the complex world of global trade, where global supply chains and multinational production are commonplace, determining the origin of goods has become a significant challenge. The concept of substantial transformation, by emphasizing fundamental changes in the production process, helps address this challenge and promotes transparency and fairness in international trade.Several subsidiary or complementary criteria, including changes in tariff classification, value-added tests, and specific production process criteria, are employed in different legal systems and trade agreements to assess whether a product has undergone substantial transformation and qualifies for origin status.This research aims to examine the concept and application of these criteria in rules of origin systems, with a particular focus on the legal approach in Iran. It will also explore how the concept of substantial transformation and its subsidiary criteria are applied in the World Trade Organization's Agreement on Rules of Origin and the latest draft consolidated text of the Harmonization Work Programme.By analyzing these dimensions, this research will provide a comprehensive insight into how substantial transformation impacts international trade, the determination of the origin of goods, and its broader implications for global trade regulations. The findings of this research can serve as a basis for reforming and improving the laws and regulations related to rules of origin in Iran and other countries.

Keywords

• Substantial Transformation
• International trade law
• Customs Law
• World Trade Organization
• Rules of Origin

References

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