When manufacturers determine the regional value of goods, the total value of materials used in the manufacture of goods obtained from suppliers shall be considered wholly originating or wholly non-originating goods. In addition to the above rules of origin, there may be other ways to qualify your product: Once an exporter determines that the exported goods comply with the NAFTA rules of origin, a NAFTA Certificate of Origin must be completed accurately and legibly. The exporter must then send the certificate to the importer. Although the certificate does not have to accompany the shipment, the importer must have a copy of the certificate on hand before they can apply to customs for the NAFTA tariff preference. Certificates of origin may, at the discretion of the exporter, cover one or more imports of identical goods. The U.S. website The International Trade Commission is part of the U.S. Harmonized Tariff Schedule. Open last year`s By Chapter document. ROOs are listed in the “General Notes; general rules of interpretation; General statistical notes. The rules of interest for all free trade agreements are contained in one voluminous document. The FTA is listed at the top of the page below the page number.
The JTI lists the most recent rules (taking into account revisions to HS codes). The rule of origin for HTS 41.04 is: “A change of heading 41.04 from any other heading, except headings 41.05 to 41.15.” General Note 12 The origin criterion for HSH 9401.69 is as follows: The rules for determining the country of origin can be very simple when a product is wholly grown or mainly manufactured and assembled in a country. However, if a finished product contains components from many countries, determining origin may be more complex. Rules of origin can be very detailed and specific, varying from agreement to agreement and product to product. Two methods give producers more than one way to prove that the rule of origin is met. De minimis rule: The de minimis rule provides an additional possibility of being considered as originating in a good that cannot satisfy the required “tariff change”. Even if a good is not subject to the established duty transfer, it may still be originating if the value of the non-originating materials not subject to tariff classification does not exceed 7% of the corrected value of the good. The value of these non-originating materials must also be included in the “value of non-originating materials” for all applicable regional value requirements and the good must comply with all other applicable requirements. There are exceptions to the application of the de minimis rule and are found in Article 405 of NAFTA. An electric curling iron (HTS 8516.32) is made in Mexico from Japanese curler parts (HTS 8516.90).
Each curling iron sells for $4.40. The value of non-originating curling coins is $1.80. The rule of origin set out in General Note 12 for HSS 8516.32 states: There are essentially five ways in which goods are considered originating under the NAFTA rules of origin. These five pathways are called preferential criteria and are designated by the letters below: The rules of origin listed in Chapter 4 of NAFTA are used to determine whether goods originate in a NAFTA area (United States, Canada or Mexico). NAFTA rules of origin take into account where goods are manufactured and the materials from which they are made. Only originating goods within the meaning of NAFTA are eligible for duty-free or reduced customs treatment. (These rules should not be confused with the country of origin used for labelling, quotas, anti-dumping duties, or countervailing duty cases.) In NAFTA, rules of origin refer to commodity-specific rules that specify what must be done with inputs from non-NAFTA countries in order for the final exported product to qualify for NAFTA benefits. The rules are listed in HTSUS General Note 12(t) by heading or subheading of the HS code and may require a transfer of duties, which means that the foreign input must have a heading or subheading different from that of the exported product. Rules of origin may also require that exported goods containing foreign inputs contain at least some value added from the United States or other NAFTA countries. For example, Mexican company X supplies clips to aircraft manufacturers across North America. Some of the clips X delivers are from Mexico, others from China. All clips are identical and mixed together in X`s warehouse.
On January 1, Company X purchases 3,000 clips of Mexican origin; On January 3, she bought 1,000 clips of Chinese origin. When Company X uses FIFO inventory procedures, the first 3,000 clips it used to fulfill an order are considered Mexican, regardless of their actual origin. Rules of origin are used to determine whether goods qualify for duty-free, reduced-duty or reduced-duty entry under FTA rules, even though they may contain non-originating components (not covered by an FTA). Where a single manufacturer designates intermediate products that are considered originating only as a result of a tariff change (i.e. without the need to comply with a regional value requirement), subsequent designations may be made with the intermediate products described above.