Transcript CPC2 scope and concepts

Scope and boundary
Structure
Changes and new concepts
Application rules
CPC Ver.2
Scope and boundary, concepts,
application rules
Scope and boundary
Structure
Changes and new concepts
Application rules
CPC Ver.2
Scope and boundary
Scope and boundary
Structure
Changes and new concepts
Application rules
Purpose of the CPC
CPC has three functions:
 Serve as a “central” classification of products
Requires links to other product
classifications, such as HS, SITC, BOP, EBOPS
 Provide classification of all outputs of
economic activities (production), as defined in
the SNA
 Provide definitions of services (reference
classification)
Scope and boundary
Structure
Changes and new concepts
Application rules
Scope and boundary
CPC covers “products”, i.e. the output of
economic activities
Market value not a criterion:
 By-products and waste are also included
 These are output of economic activities
Produced assets included as output of a
production process.
Scope and boundary
Structure
Changes and new concepts
Application rules
Scope and boundary (cont.)
 SNA refers to products as “goods and services”
 However: there are outputs of economic activities,
i.e. “products”, that do not fit the SNA definition of
goods or services
Goods
•physical objects
•demand exist
•ownership can be established
and transferred
•production and sale are
separable activities
Services
•Not separate entities for which
ownership can be established
•Produced by order
•Changes the condition of the
consuming units
• when production is completed,
the product has already been
delivered
Scope and boundary
Structure
Changes and new concepts
Application rules
Scope and boundary (cont.)
 Other outcomes from economic
activities:
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Original manuscripts, sound and video recordings
Results of research activities
Results from geological surveying activities
Product design specifications
Trademarks and franchises
 Neither “goods” nor “services”
 Still considered products, and covered in CPC
Ver.2
 These are intellectual property (IP) products
and similar products
Scope and boundary
Structure
Changes and new concepts
Application rules
Important new concept:
ORIGINALS
 As we saw earlier, intellectual property (IP)
products are output of economic activities and
within scope of CPC.
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research results
product design
sound/video recordings
trademarks/franchises
computer software
 Value lies in information content, not physical
form
 In the CPC, we talk about originals and
content
Scope and boundary
Structure
Changes and new concepts
Application rules
Important new concept:
ORIGINALS
 Originals are outcomes of intellectual or creative activities
(before copying or distribution). Value lie in information
content.
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When intellectual/creative activity carried out on own account:
the original is considered the output of that activity.
However, when carried out for someone else (“fee/contract
basis”), the output of the activity is considered a service.
 The original, in this case, is considered output of the client.
 Originals are not services
 Originals are not copies
 There is by definition never produced more than one
original.
 Copying an original is an act of production. A new
product (the copy) is being made.
 The copies are not originals, but they are often content
products (as identified in the alternative aggregation).
Scope and boundary
Structure
Changes and new concepts
Application rules
Classification of intellectual
property products
 Originals
 are neither goods nor services
 are classified in part 5-9 of the CPC (i.e., the “services”
part), close to the services with whom they are related
 e.g. research and development originals found in division 81
– “Research and development services”
 Content
 Can be presented on physical media (disks, books, etc.),
in which case the products are classified in CPC part 0-4
as tradeable goods.
 Can be provided in a non-physical way over the internet,
in which case the products are found in group 843 – “Online content”
Other scope issues
 One of the functions of the CPC is to
serve as a “central” classification of
products
 Other product classifications may
cover products that are not produced
 e.g. some forms of waste, used products
 CPC covers these products as well
 Allows measurement of inputs for certain
industries (proxy for output in physical
terms)
Scope and boundary
Structure
Changes and new concepts
CPC Ver.2
Application Rules
Application rules
Scope and boundary
Structure
Changes and new concepts
Application rules
Application rules for section 04 (transportable goods):
 Within the scope of the Harmonized System – links
exist
 Classify according to HS and identify the
corresponding CPC class(es).
 HS has a comprehensive system of
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Section and Chapter notes
Explanatory notes
Index
“General Rules for the Interpretation of the
Harmonized System”
 If the relevant HS code links to more than one CPC
class, CPC explanatory notes are provided.
 CPC index can also be helpful.
 Explanatory notes only in the case of split link, not
provided for 1-1 cases.
Scope and boundary
Structure
Changes and new concepts
Application rules
Application rules for section 0-4:
EXAMPLE
 Where in the CPC do we classify unroasted
chicory roots?
 HS code: 1212.99. Where in the CPC does it link?
 01391 – Locust beans
 01690 – Stimulant, spice and aromatic crops
n.e.c.
 01802 – Sugar cane
 01809 – Other sugar crops n.e.c.
 01990 – Other raw vegetable materials, n.e.c.
 We must consult the CPC Explanatory Notes
Scope and boundary
Structure
Changes and new concepts
Application rules
Scope and boundary
Structure
Changes and new concepts
Application rules
Application rules for section 5-9
 Mainly concerns services
 Determine correct subclass using the
provided descriptions (explanatory
notes) of divisions, groups, classes
and subclasses. The CPC index may
also provide support.
Scope and boundary
Structure
Changes and new concepts
Application rules
Application rules for section 5-9
 If more than one CPC subclass seems
appropriate:
 Prefer subclass with the more specific description
 Composite services classified according to the
service component which gives them their essential
character.
 If still ambiguous, choose category occurring last in
numerical order
 Products making up a bundle of goods and
services are classified to main component
(according to value added).
 But breaking up product into homogeneous
components should be considered first
END OF PRESENTATION