Country of origin

Country of origin (abbreviated to COO, 원산지/原産地), is the country of manufacture, production, or growth where a product comes from. There are differing rules of origin under various national laws and international treaties.

When shipping products from one country to another, the products may have to be marked with country of origin such as "Made in X", "Product of X", "Manufactured in X", etc., and the country of origin will generally be required to be indicated in the export/import documents and governmental submissions. Country of origin will affect its admissibility, the rate of duty, its entitlement to special duty or trade preference programs, antidumping, and government procurement.

Many products are an outcome of a large number of parts and pieces that come from many different countries, and that may then be assembled together in a third country. In this case, it's hard to know exactly what is the country of origin, and different rules apply as to how to determine their "correct" country of origin. Generally, articles only change their country of origin if the work or material added to an article in the second country constitutes a substantial transformation, or, the article changes its name, tariff code, character or use (for instance from wheel to car). Value added in the second country may also be an issue.

Country of Origin principle
Initially, the country of origin principle is a principle in the law of the European Union for resolving conflict of laws between Member States. The principle states that, where an action or service is performed in one country but received in another, the applicable law is the law of the country where the action or service is performed. The opposing principle is the "country of reception principle". For example, if a sale of goods is made over the Internet from a website in France to a purchaser in Italy, the country of origin principle would be said to apply if French law applied to the transaction, and the country of reception principle if Italian law prevailed.

Directive 2000/31/EC, commonly known as the Electronic Commerce Directive, establishes that the country of origin principle shall prevail in European law for most, but not all, Information Society Services. Recital 22 of that Directive states:
 * Information society services should be supervised at the source of the activity, in order to ensure an effective protection of public interest objectives; to that end, it is necessary to ensure that the competent authority provides such protection not only for the citizens of its own country but for all Community citizens; in order to improve mutual trust between Member States, it is essential to state clearly this responsibility on the part of the Member State where the services originate; moreover, in order to effectively guarantee freedom to provide services and legal certainty for suppliers and recipients of services, such information society services should in principle be subject to the law of the Member State in which the service provider is established.

The extent to which the country of origin principle should be applied to provision of services generally was a main point of political controversy 2 in negotiation of the proposed Services Directive.

Rules of Origin
Rules of origin are used to determine the country of origin of a product for purposes of international trade. There are two common types of rules of origin depending upon application, the preferential and non-preferential rules of origin. The exact rules vary from country to country.

Non-preferential
Non-preferential rules of origin are used to determine the country of origin for certain purposes. These purposes may be for quotas, anti-dumping, anti-circumvention, statistics or origin labeling.

The basis for the non-preferential rules originates from the Kyoto Convention which states that if a product is wholly obtained or produced completely within one country the product shall be deemed having origin in that country. For a product which has been produced in more than one country the product shall be determined to have origin in the country where the last substantial transformation took place.

To determine exactly what was the last substantial transformation, three general rules are applied:
 * Change of tariff classification (on any level, though 4-digit level is the most common)
 * Value added-rule (ad valorem)
 * Special processing rule, the minimum transformation is described. For instance, in the EU non-preferential rules of origin for T-shirts (HS6109), the origin is supposed to be in the country where the complete making-up was done.

According to the non-preferential rules a product always has exactly one country of origin. However, the non-preferential rules may differ from country to country; the same product may have different origins depending on which country's scheme is applied. Usually it is the rules of the country into which a product is being imported that apply.

Preferential
Preferential RoO are part of a free trade area or preferential trade arrangement which includes tariff concessions. These trade arrangements might be unilateral, bilateral or regional (also sometimes called multilateral) trade arrangements. The rules of origin determine what products can benefit from the tariff concession or preference, in order to avoid transshipment.