GLOBAL VALUE CHAINS AND NON- PREFERENTIAL RULES OF … · Bosch – a global network The 375,0001...

GLOBAL VALUE CHAINS AND NON-PREFERENTIAL RULES OF ORIGIN

Committee on Rules of Origin Information Session on Non-Preferential

Rules of Origin 21 September 2016

Global Value Chains and Non-Preferential Rules of Origin

Michael Kistner

Robert Bosch GmbH

Corporate Department Customs, Excise Tax and Export Control

C/TXC1 C/TXC11 | 06/09/2016

© Robert Bosch GmbH 2016. All rights reserved, also regarding any disposal, exploitation, reproduction, editing, distribution, as well as in the event of applications for industrial property rights. 3

Topic: Global Value Chains and Non-Preferential Rules of Origin

1. and

or Alternative Title:

What Michael Kistner has in common with ?

C/CCB | 06/09/2016


Agenda

1. Short introduction of Bosch

2. Bosch Customs Network and result of the survey concerning national non-preferential rules of origin

3. Concerned products and dimensions of international networks

4. Current status

5. Answer to the initial question

6. Short resume and proposal for further discussions

7. Questions and answers

Bosch – a global network

The 375,0001 Bosch associates make

these solutions possible.

Bosch has four business sectors, with

more than 4401 subsidiary companies

and regional subsidiaries in some 601

countries.

Including its sales and service

partners, Bosch is represented in some

1501 countries.

C/CCB, C/CCD | 06/09/2016 5 C/CCB; C/CCD | April 2016

© Robert Bosch GmbH 2016. All rights reserved, also regarding any disposal, exploitation, reproduction, editing, distribution, as well as in the event of applications for industrial property rights. © Robert Bosch GmbH 2016. All rights reserved, also regarding any disposal, exploitation, reproduction, editing, distribution, as well as in the event of applications for industrial property rights. 5

1 As of 12.15

Bosch – a Global Network Four business sectors

C/CCB, C/CCD | 06/09/2016


Mobility Solutions

Industrial

Technology

Energy and

Building

Technology

Consumer Goods

Bosch – Four Business Sectors Key Figures 2015*

C/CCB, C/CCD | 06/09/2016


Bosch Group 70.6 billion euros in sales

374,778 associates

Mobility Solutions

One of the world’s largest suppliers of automotive technology

Industrial Technology

Leading in drive and control technology, packaging,

and process technology

Energy and Building Technology

Leading manufacturer of security technology Global market leader of energie-efficent heating products

and hot-water solutions

Consumer Goods

Leading supplier of power tools and accessories

Leading supplier of household appliances

59% share of sales

41% share of sales

* As of 12.15

Bosch – Four Business Sectors Markets and Figures for 2015*

C/CCB, C/CCD | 06/09/2016


20% share of sales

41,037 associates

39 manufacturing sites

27% share of sales

104,142 associates


53% share of sales

229,599 associates


Bosch Group

Europe Americas Asia Pacific1

70.6 billion Euros in sales

374,778 associates

* As of 12.15 1 including other countries


Customs Network of Regional Organisations

C/TXC1 C/TXC11 | 06/09/2016


• Governance Function

• Consulting & Services

• FT strategy / FT

Projects

• Center of

Competences

• Exchange of

Experiences & Best

Practices

C/TXC

RBCN/TAX-C

RBIN/TAX2

RBLA/TAX-C

RBMX/TAX-C

RBNA/ITR

RBRU/TAX-C

RBIB/TAX

RBAS/TAX-C

RBJP/TAX-C

RBFR/TAX

RBCH/TAX-C

RBGB/LEG-ITO

RBOS/TAX-C

RBKR/ITR

RBTR/TAX-C

RBAF/TAX-C

C/TXC1 C/TXC11 | 06/09/2016


Collection of Non-Preferential Rules of Origin Manufactured in through a transformation process which changes the tariff code classification at six (6) digit level; or

Change in tariff classification of goods": a change in four-digit HS heading of a goods

1. Substantial transformation as a rule; 2. Value Added Percentage Test; 3. Specified Processes; and 4. Change in Tariff Classification.

1) In case tariff change does not apply, rule of local content and manufacturing process can apply; however this rule only applies to a list of products

published by Customs 2) 4-digit tariff change as the primary rule

Last substantial transformation

C/TXC1 C/TXC11 | 06/09/2016


Mass market products -> Country of destination unknown

Individual projects

-> Country of destination known

Customer-specified products

-> Expected country of destination known

Product Sectors

First Dimension of Networks

C/TXC1 C/TXC11 | 06/09/2016


Parallel production in different countries

Plant A

Plant B

Plant C

Second Dimension of Networks

RtP1/CLP9 | 06/09/2016


Subcontracting V. 1

Step 1

components1

DE

Step 1

components2

DE

US

IT

SG

TW

Step 2

DE

Step 3

KR

PH

MY

ID

Step 4

DE

CN

HU

Warehouse

DE

CN

HU

Second Dimension of Networks

C/TXC1 C/TXC11 | 06/09/2016


Subcontracting V. 2

Step 1

DE1

IT

SG

US

Step 2

DE1

IT

SG

US

Step 3

KR

PH

MY

MY

CN

MA

MT

MY

TH

Step 4

DE1

CN1

HU

MY2

CN2

MA

TW

PH2

Warehouse

DE2

DE3

CN1

HU

Third Dimension of Networks

C/TXC1 C/TXC11 | 06/09/2016


Combination of first and second dimension

Plant A

Plant B

Plant C

C/TXC1 C/TXC11 | 06/09/2016


Current State of_1 Working Conditions_1

ERP-Systems are not configured to handle a wide range of different non-

preferential rules of origin and different states

Production control systems and Foreign Trade systems must be linked to

ERP-Systems; no standard solutions available

Ad valorem and/or CTH regulations need support from concerned

suppliers; in some cases trade secrets have to be disclosed

No international standards for FT related communication defined

No standardized electronic platforms available

A lot of manual work has to be done to satisfy the requirements of the

destination countries

C/TXC1 C/TXC11 | 06/09/2016


Current State of Working Conditions_2

Serious impacts for procurement and distribution processes with significant

financial burdens and administrative costs

Effort to meet the requirements of non-preferential rules of origin can be

higher than for preferential matters

C/TXC1 C/TXC11 | 06/09/2016


What Michael Kistner has in common with TIGER BALM?

Resume

C/CCB | 06/09/2016


Complex environments need simple and standardized rules

One worldwide general standard, which is simple to handle, is necessary

Specific rules should only be considered for sensible products in case of

quotas, anti-dumping, anti-circumvention

“Last substantial transformation > minimal operation” is a real-world

solution!

@ proposal

THANK YOU

GLOBAL VALUE CHAINS AND NON- PREFERENTIAL RULES OF … · Bosch – a global network The 375,0001...

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