Technical Improvements to Rules of Origin under the Developing Countries Trading Scheme (DCTS)

Introduction
This post examines the technical detail behind the recent guidance on improvements to rules of origin under the Developing Countries Trading Scheme (DCTS). The guidance is designed to enhance transparency, streamline compliance and provide clearer pathways for developing countries to maximise the benefits of preferential access. By laying out precise criteria, verification approaches and documentation requirements, the guidance helps exporters, manufacturers and authorities navigate origin determination with greater confidence.

Key elements of the improvements
– Scope and definition of origin
– Clarified criteria for products to qualify as originating goods, including which inputs count towards origin status and how non-originating inputs are treated.
– Distinction between finished goods and components, with explicit thresholds for symbolic or incidental materials.

– Tariff shift and origin criteria
– Updated rules specifying the tariff classification changes required for a product to be considered originating.
– Introduction or refinement of acceptable tariff shift rules to align with domestic production capabilities in developing countries.
– Clear examples illustrating how to apply tariff shift to common product families.

– Regional value content and cumulation
– Revised methods for calculating regional value content (RVC) to determine eligibility for preferential treatment.
– Expanded cumulation provisions allowing inputs from partner countries to count towards origin, subject to agreed terminology and rules.
– Guidance on treating processing operations that add value without changing tariff classification.

– Verification, compliance and enforcement
– Enhanced procedures for origin verification by authorities, including documentation trails and audit mechanisms.
– Streamlined risk-based approaches to verification to minimise disruption for compliant traders.
– Clear responsibilities for exporters, suppliers and authorities in the verification process.

– Documentation and certification
– Transition to digital or electronic certificates of origin where feasible, with standardised data fields and machine-readable formats.
– Standardised documentation to reduce duplication and improve consistency across partner countries.
– Timelines and validity periods for certificates to support predictable trade flows.

– Transitional arrangements and timelines
– Phased implementation schedules to ease the transition for businesses adapting to new rules.
– Guidance on handling existing contracts and ongoing shipments during the transition period.
– Provisions for small and mediumsized enterprises (SMEs) to access simplified procedures.

– SME facilitation and capacity building
– Tailored guidance and checklists to assist SMEs in understanding origin requirements.
– Access to support services, training materials and user-friendly tools to calculate and document origin.
– Emphasis on reducing administrative burdens while maintaining rigour in compliance.

– Sector-specific considerations
– Noted implications for key sectors such as textiles, agro-processing, manufacturing and agrochemicals.
– Sectoral exemplars demonstrating how origin rules apply to typical supply chains in these industries.

Practical implications for businesses
– Supply chain mapping and readiness
– Businesses should map their entire supply chain to identify origin-relevant inputs and potential non-originating inputs.
– Identify inputs that may require substitution or value addition to meet origin criteria.

– Compliance planning
– Establish robust record-keeping practices to document sourcing, processing steps and value additions.
– Prepare for digital certificates and data-sharing requirements where applicable.

– Calculation approaches
– Use the specified methods for calculating regional value content and apply the accepted tariff shift rules consistently.
– Document the methodology used for origin determinations to facilitate verification by authorities.

– Documentation and communication
– Maintain clear certificates of origin and supporting documents, with easy access for audits.
– Communicate origin requirements to suppliers to ensure inputs meet the defined criteria.

– Transition management
– Plan for phased implementation, allowing time to adapt production and sourcing strategies.
– Review existing contracts to determine whether amendments are needed for compliant origin status.

A hypothetical example
Consider a garment producer in a developing country that imports fabric from a regional supplier and sews the final product domestically. Under the updated rules, the company would:
– Verify whether the fabric input qualifies as originating under the tariff shift or regional value content criteria.
– Apply the agreed cumulation provisions if inputs originate from an approved partner country.
– Compile the necessary documentation, including an electronic certificate of origin, detailing the value added within the domestic processing stage.
– Retain records of sourcing, processing steps and calculations for verification by authorities if requested.

Implementation considerations for policymakers and traders
– Clarity and consistency
– The guidance should be accessible and practical, with illustrative examples across common product categories.
– Regular updates and clear communication channels help traders stay compliant as rules evolve.

– Technical infrastructure
– Supporting digital certification requires reliable data standards and interoperable systems across partner countries.
– Training and capacity-building measures ensure users understand how to apply the new rules correctly.

– Economic and developmental impact
– The reforms are intended to improve predictability and reduce non-tariff barriers for developing countries.
– Ongoing monitoring is important to assess whether the improvements translate into tangible benefits such as enhanced exports and job creation.

Getting ready: a practical checklist
– Review product classifications to determine applicable origin criteria.
– Map inputs and suppliers to identify which components contribute to origin calculations.
– Decide on the origin calculation method (RVC, tariff shift, or other specified criteria) and apply it consistently.
– Establish a documentation routine for certificates of origin and supporting records.
– Build internal processes for supplier engagement to ensure inputs meet origin requirements.
– Plan for digital certificates where available and align with data standards.
– Stay informed about transition timelines and any sector-specific guidance.

Conclusion
The technical improvements to rules of origin under the DCTS aim to deliver clearer, more predictable and more accessible pathways for developing countries to leverage preferential trade arrangements. By detailing eligibility criteria, calculation methods, verification approaches and documentation standards, the guidance supports traders in building compliant, efficient and resilient supply chains. As businesses adapt to these enhancements, a focus on thorough planning, robust record-keeping and proactive supplier collaboration will be key to maximising the benefits of the DCTS for growth and opportunity.

January 19, 2026 at 12:49PM
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