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Products are deemed originating and eligible for preferential treatment if they conform to the origin requirement under any of the following conditions:
| (a) |
Products wholly produced or obtained in the territory of the exporting Party, or |
| (b) |
Products not wholly produced or obtained in the territory of the exporting Party, provided that the said products are eligible under Article 3.4 under CECA |
For products not wholly owned, it could be considered as originating if:
| (a) |
| (i) |
the total value of the materials, parts or produce originating from countries other than the Parties or of undetermined origin used in the manufacture of the product does not exceed 60% of the FOB value of the product so produced or obtained; and, |
| (ii) |
the product so produced or obtained is classified in a heading, at the four digit level, of the Harmonised System different from those in which all the non-originating materials used in its manufacture are classified; or | |
| (b) |
the product satisfies the Product Specific Rules as specified in Annex 3B. |
For the purposes of calculating the local value added content, either of the following methods can be applied:
| (a) |
Value of Originating Materials + Direct Labour Cost +
Direct Overhead Cost + Profit
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FOB Price |
x 100% |
>= 40% | |
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| (b) |
Value of Non - Originating Materials
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FOB Price |
x 100% |
<= 40% | |
Product Specific
About 500 products have been given alternative product-specific rules of origin which has a more liberal rule of origin than the general one. Examples of some products having product-specific rules include cocoa butter, soya sauce, sewing machines, and static converters among others.
Annex 3A of the agreement contains the full list of products having product-specific rules of origin. |
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