CPC Ver.2 Scope and boundary, concepts, application rules Scope and boundaryStructureChanges and new conceptsApplication rules StructureChanges and new

CPC Ver.2

Scope and boundary, concepts, application rules

Scope and boundary Structure Changes and new concepts Application rulesApplication rulesStructure Changes and new concepts Application rulesScope and boundary Structure Changes and new concepts Application rulesScope and boundary Structure Changes and new concepts Application rules

CPC Ver.2

Scope and boundary


Purpose of the CPCCPC has three functions:

Serve as a “central” classification of productsRequires links to other product

classifications, such as HS, SITC, BOP, EBOPSProvide classification of all outputs of

economic activities (production), as defined in the SNA

Provide definitions of services (reference classification)


Scope and boundary

CPC covers “products”, i.e. the output of economic activities

Market value not a criterion:By-products and waste are also includedThese are output of economic activities

Produced assets included as output of a production process.


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 Services•physical objects•demand exist•ownership can be established and transferred•production and sale are separable activities

•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


Other outcomes from economic activities: 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 (cont.)


Important new concept:ORIGINALS

As we saw earlier, intellectual property (IP) products are output of economic activities and within scope of CPC. 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


Important new concept:ORIGINALS

Originals are outcomes of intellectual or creative activities (before copying or distribution). Value lie in information content. 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).


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 – “On-line 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)

CPC Ver.2

Application Rules

Scope and boundary Structure Application rulesApplication rulesStructure Application rulesScope and boundary Structure Application rulesScope and boundary Structure Changes and new concepts Application rules

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

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.

Application rules for section 0-4 (transportable goods):


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

Application rules for section 0-4: EXAMPLE



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.

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

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CPC Ver.2 Scope and boundary, concepts, application rules Scope and boundaryStructureChanges and new conceptsApplication rules StructureChanges and new