Here is a case study of “CTC” & “VA” method combined pattern.
Company A manufactures Doors of copper plate (HS code:74.19)
Doors of copper plate of heading (HS code:74.19) are manufactured from
the following non-originating materials:
| Final product | non-originating materials |
HS code | Value (Total 115 €) |
|
Doors of copper plate
|
Copper plate: | 74.09 | € 60.- |
| Lock etc.: | 83.01 | € 37- | |
| Pressed parts: | 74.19 | € 18.- |
Example PSR for goods of heading Doors of copper plate(HS code:74.19) is:
It states :
“Manufacture
• from materials of any heading, except that of the product, and
• in which the value of all the materials used does not exceed 50 % of the exworks
price of the product”.
*This rule (PSR) varies depending on the each FTA agreement
The rule contains two conditions. Both of them must be fulfilled. If not, the
product does not acquire originating status.
The first condition
“Manufacture from materials of any heading, except that of the product, and”.
As the doors are classified in heading 74.19, the change of tariff heading
requirement is only fulfilled for the copper plate and the locks but not for the
pressed parts.
The second condition
“Manufacture in which the value of all the materials used does not exceed 50 %
of the exworks price of the product””.
As the total value of the non-originating materials used for one door (115 €)
exceeds 50 % of the ex-works price of one door (200 €), the second requirements
is not fulfilled.
Conclusion
The doors are regarded as non-originating products.
The “general tolerance rule” cannot help to confer originating status as this rule
contains a limitation stipulating that any of the percentages given in the list for the
maximum value of non-originating materials must not be exceeding the threshold
given in the rule.
Although the value of the pressed parts of 18 € is less than 10 % of the ex-works
price, the total value of all non-originating materials would exceed 50 % of the
limits required in the rule and the second part would not be fulfilled.
Text of the general tolerance rule:
Non-originating materials may be used in the manufacture of a given product,
provided that their total value does not exceed 10 % of the ex-works price of the
product. Where, in the list, one or several percentages are given for the maximum
value of the non-originating materials, such percentages must not be exceeded
through the application of the first subparagraph.
