production means growing, raising, mining, harvesting, fishing, aquaculture, trapping, hunting, manufacturing, processing, assembling or disassembling a good, and self-produced material means a material that is produced by the producer of a good and used in the production of that good.
Section A. Origin Determination
Article 3.2. Originating Goods
1. For the purposes of implementing this Agreement, goods shall be considered as originating in the territory of a Party, if those goods are:
(a) wholly obtained or produced there according to Article 3.3;
(b) not wholly obtained or produced entirely there, provided that the good has undergone sufficient transformation according to Article 3.4, or
(c) produced entirely there exclusively from materials that qualify as originating pursuant to the provisions of this Chapter.
2. In each case provided in paragraph 1, the goods shall also satisfy all other applicable requirements of this Chapter.
Article 3.3. Wholly Obtained or Produced Goods
For the purposes of Article 3.2(a), the following goods shall be deemed to be wholly obtained or produced in the territory of a Party:
(a) plants and plant products grown, collected and harvested there;
(b) live animals born and raised there;
(c) products obtained from live animals there;
(d) mineral products and natural resources extracted or taken from that Party’s soil, subsoil, waters, seabed or beneath the seabed;
(e) products obtained from hunting, trapping, collecting, capturing, fishing or aquaculture conducted there;
(f) products of sea fishing and other marine products taken from outside the territorial waters of the Parties by a vessel or produced or obtained by a factory ship registered, recorded, listed or licensed with a Party and flying its flag;
(g) products, other than products of sea fishing and other marine products, taken or extracted from the seabed, ocean floor or the subsoil of the continental shelf or the exclusive economic zone of any of the Parties, provided that the Party or person has the right to exploit such seabed, ocean floor, or subsoil in accordance to international law;
(h) raw materials recovered from used goods collected there;
(i) wastes or scraps resulting from utilization, consumption or manufacturing operations conducted there, fit only for recovery of raw materials, and
(j) products produced or obtained there exclusively from products referred to in subparagraphs (a) through (i), or from their derivatives, at any stage of production.
Article 3.4. Sufficient Working or Production
1. For the purposes of Article 3.2(b), a good shall be deemed to be originating if the good satisfies any of the following:
(a) a change in Tariff Heading (CTH), which means that all non-originating materials used in the production of the good have undergone a change in HS tariff classification at the 4-digit level;
(b) a Regional Value Content (RVC) not less than 40% of the FOB value, or
(c) a Regional Value Content (RVC) not less than 35% of the Ex-Works Value.
2. Notwithstanding paragraph 1, if the good falls within the classifications included in the list in Annex 3A then the good shall fulfil the specific rule detailed therein.
3. For the purposes of paragraph 1, the RVC shall be calculated using any of the following methods:
RVC = ExWorks Value or FOB Value - V.N.M. / ExWorks Value or FOB Value x 100
where:
(a) RVC is the regional value content of a good expressed as a percentage;
(b) FOB is the value of the good free on board, inclusive of the cost of transport (regardless of the mode of transport) to the port or site of final shipment abroad;
(c) Ex-Works Value is the price paid for the good Ex-Works to the manufacturer in the Party in whose undertaking the last working or processing is carried out, provided the price includes the value of all the materials used, minus any internal taxes which are, or may be, repaid when the good obtained is exported, and (a)
(d) V.N.M is the CIF/Customs value of the non-originating materials at the time of importation, or the earliest ascertained price paid or payable in the Party where the production takes place for all non-originating materials, parts or produce that are acquired by the producer in the production of the good. When the producer of a good acquires non-originating materials within that Party the value of such materials shall not include freight, insurance, packing costs and any other costs incurred in transporting the material from the supplier’s warehouse to the producer’s location.
Article 3.5. Intermediate Goods
1. For a non-originating material that undergoes sufficient production in the territory of a Party as provided in Article 3.4, the resulting good shall be considered as originating and no account shall be taken of the non-originating material contained therein when that good is used as an intermediate good in the subsequent production of another good.
2. The provisions of paragraph 1 shall not apply to self-produced materials.
Article 3.6. Accumulation
1. An originating good of a Party which is used in the processing or production in the territory of the other Party as material for finished goods shall be deemed as a material originating in the territory of the latter Party where the working or processing of the finished goods has taken place.
2. Notwithstanding paragraph 1, an originating good from a Party that does not undergo processing beyond the minimal or insufficient operations listed in Article 3.8 in the other Party shall retain its originating status of the former Party.
3. The Joint Committee may review this Article with a view to providing for other forms of accumulation for the purposes of qualifying goods as originating goods under this Agreement.
Article 3.7. Tolerance (De Minimis)
1. Notwithstanding Article 3.4, a good will be considered to have undergone a change in tariff classification if the value of all non-originating materials that are used in the production of the good and that do not undergo the applicable change in tariff classification does not exceed 15% of the Ex-Works value of the good.
2. The value of non-originating materials referred to in paragraph 1 shall be included in the value of the non-originating materials for any applicable value-added content requirement.
Article 3.8. Insufficient Operations and Processes (Minimum Operations and Processes)
1. Whether or not the requirements of Article 3.4 are satisfied, a good shall not be considered to be originating in the territory of a Party if the following operations are undertaken exclusively by itself or in combination in the territory of that Party:
(a) slaughter of animals;
(b) operations to ensure the preservation of products in good condition during transport and storage such as drying, freezing, ventilation, chilling and like operations;
(c) sifting, simple classifying or sorting, washing, cutting, slitting, bending, coiling or uncoiling, sharpening, simple grinding, slicing;
(d) cleaning, including removal of oxide, oil, paint or other coverings;
(e) simple painting and polishing operations;
(f) testing or calibration;
(g) placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
(h) simple mixing of goods, whether or not of different kinds;
(i) simple assembly of parts of products to constitute a complete good or disassembly of products into parts;
(j) changes of packing, unpacking or repacking operations, and breaking up and assembly of consignments;
(k) affixing or printing marks, labels, logos and other like distinguishing signs on goods or their packaging;
(l) husking, partial, or total bleaching, polishing and glazing of cereals and rice, and (a)
(m) mere dilution with water or another substance that does not materially alter the characteristics of the goods.
2. For the purposes of paragraph 1, the term “simple” will be defined as follows:
(a) “simple” generally describes an activity which does not need special skills, machines, apparatus or equipment specially produced or installed for carrying out the activity.
(b) “simple mixing” generally describes an activity which does not need special skills, machine, apparatus or equipment specially produce or install for carrying out the activity. However, simple mixing does not include chemical reaction. Chemical reaction means a process, including a biochemical process, which results in a molecule with a new structure by breaking intramolecular bonds and by forming new intramolecular bonds, or by altering the spatial arrangement of atoms in a molecule.
Article 3.9. Indirect Materials
In order to determine whether a good originates, the following material used in the production of a good shall be treated as originating material, irrespective of whether such material is originated:
(a) energy and fuel;
(b) plant and equipment;
(c) machines and tools, and
(d) any other materials or goods which are not incorporated into the good but whose use in the production of the good can reasonably be demonstrated to be a part of that production, testing or inspection of a good.
Article 3.10. Accessories, Spare Parts, Tools
1. Accessories, spare parts, tools, and instructional or other information materials delivered with a good that form part of the good’s standard accessories, spare parts, tools, and instructional or other information materials, shall be regarded as a part of the good, and shall be disregarded in determining whether or not all the non-originating materials used in the production of the originating goods undergo the applicable change in tariff classification provided that:
(a) the accessories, spare parts, tools, and instructional or other information materials are classified with and not invoiced separately from the good, and
(b) the quantities and value of the accessories, spare parts, tools, and instructional or other information materials presented with the good are customary for the good.
2. Notwithstanding paragraph 1, if the goods are subject to RVC requirement, the value of the accessories, spare parts, tools and instructional or other information materials shall be taken into account as originating or non-originating materials, as the case may be, in calculating the regional value content of the goods.
Article 3.11. Packaging Materials and Containers for Retail Sale
1. Each Party shall provide that packaging materials and containers in which a good is packaged for retail sale, if classified with the good, according to Rule 5 of the General rules for the interpretation of the HS, shall be disregarded in determining whether all the non-originating materials used in the production of the good undergo the applicable change in tariff classification set out in any applicable product-specific rules.
2. If the good is subject to regional value content requirement, the value of such packaging materials and containers shall be taken into account as originating or non-originating materials, as the case may be, in calculating the regional value content of the good.
Article 3.12. Packaging Materials and Containers for Transportation and Shipment
Each Party shall provide that packing materials and containers for transportation and shipment are disregarded in determining whether a good is originating.
Article 3.13. Fungible Goods and Materials
1. Each Party shall provide that the determination of whether fungible goods or materials are originating shall be made through physical segregation of each good or material, or, in case of any difficulty, through the use of any inventory management method, such as averaging, last-in, first-out, or first-in, first out, recognised in the generally accepted accounting principles of the Party in which the production is performed, or otherwise accepted by the Party in which the production is performed.
2. Each Party shall provide that an inventory management method selected under paragraph 1 for particular fungible goods or materials shall continue to be used for those fungible goods or materials throughout the fiscal year of the Party that selected the inventory management method.
Article 3.14. Sets of Goods
Sets, as defined in General Rule 3 of the HS, shall be regarded as originating when all component goods are originating. However, when a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating, provided that the value of non-originating products does not exceed 15% of the Ex-Works Value of the set.
Section B. Territoriality and Transit
Article 3.15. Principle of Territoriality
1. The conditions for acquiring originating status set out in Article 3.2 must be fulfilled without interruption in the territory of one or both Parties.
2. Where originating goods exported from the territory of a Party to a non-Party, return to the exporting Party, they must be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authorities that:
(a) the returning goods are the same as those exported, and
(b) the non-Party has not undergone any operation beyond that necessary to preserve them in good condition while in that non-Party or while being exported.
Article 3.16. Outward Processing
1. Notwithstanding Article 3.15, the acquisition of originating status set out in Article 3.2 shall not be affected by working or processing done outside a Party on materials exported from a Party and subsequently re-imported there, provided that:
(a) those materials are wholly obtained in any of the Parties or have undergone working or processing beyond the operations referred to in Article 3.8 prior to being exported;
(b) it can be demonstrated to the satisfaction of the customs authorities that:
(i) the re-imported goods have been obtained by working or processing the exported materials, and
(ii) the total added value acquired outside a Party by applying the provisions of this Article does not exceed 15% of the Ex-Works Value of the end product for which originating status is claimed;
(c) the conditions set out in Article 3.7 shall not apply to the said material as referred to in subparagraph (a) when determining the origin of the final product, and
(d) factual information relevant to this Article will be indicated in the certificate of Origin, in accordance with Annex 3B.
2. For the purposes of applying the provisions of paragraph 1, “total added value” means all costs arising outside the Parties, including the value of the materials incorporated there.
3. Any working or processing of the kind covered by the provisions of this Article and done outside the exporting Party shall be done under the outward processing arrangements, or similar arrangements.
Article 3.17. Transit and Transshipment
1. Each Party shall provide that an originating good retains its originating status if the good has been transported directly to the importing Party without passing through the territory of a non-Party.
2. Notwithstanding paragraph 1, each Party shall provide that an originating good retains its originating status if transited or is stored in a temporary warehousing through one or more intermediate non-Parties, provided that the good:
(a) remained under customs control in the territory of a non-Party, and
(b) have not undergone any operation there other than unloading, reloading, labelling, split from bulk or any operation required to keep them in good condition. (a)
3. Upon request of the customs authorities of the importing Party, an importer shall supply appropriate evidence that the conditions set out in paragraph 2 have been fulfilled, taking into consideration whether the good is stored or not.
Article 3.18. Free Economic Zones or Free Zones
1. Each Party shall take all necessary steps to ensure that originating goods traded under cover of a proof of origin which in the course of transport use a free zone situated in their territory, are not substituted by other goods, and do not undergo handling other than normal operations designed to prevent their deterioration.
2. Goods produced or manufactured in a free zone situated within a Party shall be considered as originating goods in that Party when exported to the other Party, provided that the treatment or processing is in conformity with the provisions of this Chapter and supported by a proof or origin.
Article 3.19. Third Party Invoicing
1. The customs authority in the importing Party shall not reject a certificate of origin only for the reason that the invoice was not issued by the exporter or producer of a good, provided that the good meets the requirements in this Chapter.
2. The exporter of the goods shall indicate “third party invoicing” and such information as name and country of the company issuing the invoice shall appear in the appropriate field as detailed in Annex 3B.
Section C. Origin Certification
Article 3.20. Proof of Origin
1. Goods originating in a Party shall, on importation into the other Party, benefit from preferential tariff treatment under this Agreement on the basis of presenting a proof of origin at the time of importation.
2. Any of the following shall be considered as a proof of origin:
(a) a paper format certificate of origin in scanned or hard copy issued by a competent authority as per Article 3.21; (a)
(b) an electronic certificate of origin (E-Certificate) issued by a competent authority and exchanged by a mutually developed electronic system as per Article 3.22;
(c) an origin declaration made out by an approved exporter as per Article 3.23, or (d) self-certification of origin made out by the exporter, as per Article 3.24.
3. Each Party shall provide that a proof of origin shall be completed in the English language and shall remain valid for one year from the date on which it is issued.
Article 3.21. Certificate of Origin In Paper Format
1. A certificate of origin in paper format:
(a) shall be issued on International Organization for Standarization (ISO) A4 or letter size paper as per the attached Form set out in Annex 3B;
(b) may cover one or more goods under one consignment, and
(c) shall be in a printed format or such other medium including electronic format.
2. Each certificate of origin shall bear a unique serial reference number separately given by each place or office of issuance.
3. A certificate of origin shall bear an official seal of the competent authority. The official seal may be applied electronically.
4. In case the official seal is applied electronically, an authentication mechanism, such as QR code or a secured website, shall be included in the certificate for the certificate to be deemed as an original copy.
Article 3.22. Electronic Data Origin Exchange System
For the purposes of Article 3.20.2(b), the Parties shall endeavour to develop an electronic system for origin information exchange to ensure the effective and efficient implementation of this Chapter, particularly on transmission of electronic certificate of origin.
Article 3.23. Origin Declaration
1. For the purposes of Article 3.20.2(c) the Parties shall, within one year from the date of entry into force of this Agreement, implement provisions allowing their competent authorities to recognize an origin declaration made by an approved exporter.
2. The customs or competent authorities of the exporting Party may authorise any exporter (hereinafter referred to as “approved exporter”) who exports goods under this Agreement, to make out Origin Declarations, a specimen of which appears in Annex 3C, irrespective of the value of the goods concerned.
3. An exporter seeking such authorisation must offer to the satisfaction of the customs or competent authorities of the exporting Party all guarantees necessary to verify the originating status of the goods as well as the fulfilment of the other requirements of this Chapter.
4. The customs or competent authorities of the exporting Party may grant the status of approved exporter, subject to any conditions which they consider appropriate.
5. The customs or competent authorities of the exporting Party shall share or publish the list of approved exporters and periodically update it.
6. An Origin Declaration, the text of which appears in Annex 3C, shall be made out by the approved exporter by typing, stamping or printing the declaration on the invoice, the delivery note or another commercial document which describes the products concerned in sufficient detail to enable them to be identified. The declaration may also be hand-written. If the declaration is hand-written, it shall be written in permanent ink in legible printed characters.
7. The approved exporter making out an Origin Declaration shall be prepared to submit at any time, at the request of the customs or competent authorities of the exporting Party, all appropriate documents proving the originating status of the goods concerned, as well as the fulfilment of the other requirements of this Chapter.
Article 3.24. Self-Certification of Origin
For the purposes of Article 3.20.2 (d), the Parties shall endeavour to develop and implement a self-certification system based on exporter knowledge, to be approved by the Joint Committee.
Article 3.25. Application and Examination of Application for a Certificate of Origin
1. Certificates of Origin shall be issued by the competent authority of the exporting Party, either upon an electronic application or an application in paper form, having been made by the exporter or under the exporter's responsibility by his or her authorized representative, in accordance with the laws and regulations of the exporting Party.
2. The exporter applying for the issuance of a Certificate of Origin shall be prepared to submit at any time, at the request of the competent authority of the exporting Party, all appropriate documents proving the originating status of the goods concerned, as well as the fulfilment of the other requirements of this Chapter.
3. The competent authority shall, to the best of its competence and ability, carry out proper examination to ensure that: (a) the application and the Certificate of Origin is duly completed and signed by the authorised signatory; (b) the origin of the good is in conformity with the provisions of this Chapter, and (c) HS Code, description, gross weight or other quantity and value conform to the good to be exported.
Article 3.26. Certificate of Origin Issued Retrospectively
1. The Certificate of Origin shall be issued by the competent authority of the exporting Party prior to or at the time of shipment.
2. In exceptional cases where a Certificate of Origin has not been issued prior to or at the time of shipment, due to involuntary errors or omissions or other valid causes, the Certificate of Origin may be issued retroactively, but with a validity no longer than one year from the date of shipment, in which case it is necessary to indicate “Issued Retroactively” in the appropriate field as detailed in Annex 3B.
3. This Article shall be applied to goods which comply with the provisions of this Agreement, and which on the date of its entry into force, are either in transit or are in the territory of the Parties in temporary storage under customs control. This shall be subject to the submission to the customs authorities of the importing Party, within six months from the said date, of a Certificate of Origin issued retrospectively by the competent authority of the exporting Party together with documents, showing that the goods have been transported directly in accordance with the provisions of Article 3.17.
Article 3.27. Loss of the Certificate of Origin
1. The certified true copy of the original certificate of origin shall be endorsed with an official signature and seal and bear the words “Certified True Copy” and the date of issuance of the original certificate of origin in appropriate field as detailed in Annex 3B, the certified true copy of a certificate of origin shall be issued within the same validity period of the original certificate of origin.
2. The exporter shall immediately notify the loss to the competent authority and undertake not to use the original certificate of origin for exports under this Agreement.