Monday, April 27, 2009

MADE IN ITALY, or NOT? Part II

In Part I (http://italiancyclingjournal.blogspot.com/2009/04/made-in-italy-or-not.html) we got into the subject of "transformation", in which a product isn't made in Italy but can be transformed to an extent that it meets the criteria for being labeled as being MADE IN ITALY.


Thanks to some readers we have additional insights but still not the full story.


First I was directed to "Euro-Lex" Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code. Here, in Article 24, is found the text "Goods whose production involved more than one country shall be deemed to originate in the country where they underwent their last, substantial, economically justified processing or working in an undertaking equipped for that purpose and resulting in the manufacture of a new product or representing an important stage of manufacture." http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31992R2913:EN:HTML

Until I read this it hadn't occurred to me that a product made in Asia, that underwent their last, substantial, economically justified processing or working in Italy would have the added benefit that it could also now be sold through the EU without customs duties in the EU markets. So not only is there an economic benefit to manufacturing where labor is cheaper but the ability to sell the product in Europe isn't hampered.

Unanswered for the moment are questions such as, What constitutes substantial? Economically justified? Representing an important stage of manufacture?

Next I was directed to a fairly recent EU case involving televisions (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62005J0447:EN:HTML.) In Item 6 there is a reference to Annex 11 to Regulation No 2454/93. It would appear that different product types have their own "CN code", "Product description", and "Working or processing carried out on non‑originating materials that confers the status of originating products"


Under "Working or processing carried out on non‑originating materials that confers the status of originating products" we see that for televisions:
a) Manufacture where the increase in value acquired as a result of assembly operations and, if applicable, the incorporation of parts originating in the country of assembly represents at least 45% of the ex-works price of the products
b)When the 45% rule is not met, the apparatus shall be treated as originating in the country of origin of parts whose ex-works price represents more than 35% of the ex-works price of the apparatus
c)When the 35% rule is met in two countries, the apparatus shall be treated as originating in the country of origin of parts representing the greater percentage value


What specific values apply to bikes remains to be determined.....a story for another day hopefully.


Stories, including cycling trip stories, for the Italian Cycling Journal welcome; contact veronaman@gmail.com

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