For the purposes of this Agreement, goods wholly obtained or produced entirely in a Party shall be treated as originating goods of that Party.

Product-specific rules using the value-added method require that:

(i)	it is determined in accordance with qualifying value content of a good and is not less than the percentage specified by the rule for the good in Annex IIA; and
(ii)	the good has undergone its last production or operation which satisfies the requirement of sub-paragraph (i) above in the territory of either Party.

For the purpose of calculating the qualifying value content of a good, the following formula shall be applied:

Method of calculation under the JSEPA:

F.O.B value of good - N.Q.M ----------------------------------------- F.O.B value of good

X 100%

where
Q.V.C is the qualifying value content of a good
N.Q.M. is the value of non-qualifying materials
F.O.B is the free-on-board value of a good

N.Q.M = T.V.M. - Q.V.M.

where
T.V.M. is the total value of materials
Q.V.M. is the qualifying value of materials (See Article 23.5)

Product Specific

Product-specific rules requiring that the materials used undergo a change in tariff classification or a specific manufacturing or processing operation shall apply only to non-originating materials.