Everyone has the right to a nationality” – according to Article 15 of the Universal Declaration of Human Rights. That’s the first part; the article’s second part states: “No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality.”

So, does a good have a nationality? If so, what gives it that nationality? It all depends on how familiar you are with the three cornerstones of customs and excises. The second – origin – is of particular interest here. Spoiler alert: the answer is in the title – a good’s origin is considered its ‘economic nationality’. The country of origin defines where a good was made, grown, or produced – regardless of the port or country from which it was shipped.

When considering the ‘origin’ of a good, this tends to apply to a new good. Why else would one import or export a good in another condition? Keep that in mind.

On July 28, the World Customs Organisation (WCO) published its 34-page study, ‘Origin Determination of Remanufactured and Recycled Goods’, following approval at its 147th/148th council sessions.

A remanufactured good is a used good that has been completely disassembled, cleaned, tested and rebuilt using a mix of reused, repaired and new parts. It is restored to meet the original factory performance specifications, with a warranty equal to or better than that of a new item. A recycled good is an item or material collected from waste, processed into a new raw material or finished good.

Now that we are on the same recycled page, as it were, the study examines how rules of origin are currently applied to recycled and remanufactured goods in 19 countries: Albania, Armenia, Brazil, Canada, Colombia, the Dominican Republic, Ethiopia, Japan, South Korea, Kosovo, Malaysia, Namibia, Saudi Arabia, Switzerland, Thailand, Tunisia, Ukraine, Uruguay and Zimbabwe.

The study analyses free trade agreement (FTA) provisions related to recycled and remanufactured goods, offering insights into the challenges faced by customs administrations in applying rules of origin, which are primarily designed for new goods, to these categories of goods. While revealing significant gaps in FTAs’ origin-related provisions, the study formulates recommendations to unlock lower tariffs on these goods under FTAs. Rules of origin play a key role in unlocking lower tariffs under FTAs and can significantly influence production decisions. Properly designed, they can foster the development of entire supply chains among parties to preferential trade arrangements or market-access instruments.

The study’s findings reveal a lack of clear definitions, origin criteria, and procedures for recycled and remanufactured goods in many FTAs. An FTA is the second form and stage of economic integration that allows for the elimination of tariffs, quantitative restrictions, and non-tariff barriers between member countries, with each contracting member retaining its own external tariff.

The study highlights the need to strengthen origin-related policies and practices to support circular economy objectives. The primary objective of a circular economy is to replace the traditional linear ‘take-make-dispose’ model with a regenerative system. It aims to eliminate waste, keep goods and materials in use for as long as possible, and actively regenerate natural systems.

The study recommends the following: implementation of traceability systems to document how materials are moved from collection to final good, using methods such as mass balance, physical segregation, or controlled blending; development of clear specifications for input materials, and strict maintenance of records of waste origin as they have the potential to reduce or even eliminate doubt about the origin of materials; reliance on thirdparty certifications and standards to verify recycled content and good quality, thereby ensuring accurate and credible communication to stakeholders; development of technical standards or certification systems to assure consumers that remanufactured goods are safe and meet all technical requirements; and in collaboration with the WCO, exchange of best practices to guide the determination of origin for recycled and remanufactured goods.

For customs authorities, this is but the end of the beginning. Officials must still distinguish recycled and remanufactured goods from conventional goods at importation, verify the origin of the materials, determine whether recovered raw materials qualify as wholly obtained, and develop additional mechanisms for establishing origin. Resolving these questions will determine whether rules written for a linear economy can support the trade realities of a circular economy.