Rules of origin (ROO) are the criteria needed to determine the of a product for purposes of international trade. Their importance is derived from the fact that duties and restrictions in several cases depend upon the source of imports. Rules of origin are used:
- To implement measures and instruments of commercial policy such as antidumping duties and safeguard measures;
- To determine whether imported products shall receive most-favoured-nation (MFN) treatment or preferential treatment;
- For the purpose of trade statistics;
- For the application of labelling and marking requirements; and
- For government procurement.
Rules of Origin enforced in an FTA – The rules of origin are enforced through a certificate of origin that is issued by authorised agencies of the trading partner. An exporter cannot avail of the customs tariff preferences under the FTA without submitting this certificate of origin from the authorised agency.