Here is a case study of Change in classification(CTC) method.
Company A manufactures Steel wire (HS Heading 72.17)
The Steel wire is manufactured from non-originating bars of steel
of heading 72.13.
From a bar of steel of a value of € 24, steel wire for € 40 is manufactured.
Example PSR for goods of heading 72.17(Steel wire) is:
“Manufacture from semi-finished materials of heading 72.07”.
*This rule (PSR) varies depending on the agreement
As less working or processing than required is carried out when the
manufacture process is done from bars classified in heading 72.13,
the wire does not obtain originating status.
Another way of saying: The Steel wire has to be manufactured at least
from Semi-finished products of iron or non-alloy steel(Heading 72.07) if
non-originating material is to be used in the manufacturing process.
This is in accordance with the Introductory Notes 3.2 to the working or processing list:
The rule in the list represents the minimum amount of working or processing
required and the carrying out of more working or processing also confers
originating status; conversely, the carrying out of less working or processing cannot
confer originating status. Thus if a rule provides that non-originating material at a
certain level of manufacture may be used, the use of such material at an earlier
stage of manufacture is allowed and the use of such material at a later stage is not.
Moreover, the “general tolerance rule” cannot help to confer origin as the value of
the bar used (€ 24) is higher than 10 % of the ex-works price of the steel wire made
from that bar (€ 40.-).
Retrieved from:WCO document
