Here is a case study of De Minimis method.
Company A produces (HS5006.00) in Japan and plans to export
them to Chile under Agreement between Japan and Chile.
The product specific rule for silk yarn under the Agreement is:
A change to heading 50.05 through 50.06 from any heading outside that group.
Silk yarn (HS5006.00) is made from Indian raw silk (HS5002.00) and
Chinese silk thread (HS5006.00).
Since silk thread does not undergo change in tariff classification, silk yarn does not
meet the CTC rule. But if the weight of silk thread is equivalent to 7%
of silk yarn or less, Company A is allowed to disregard the portion of silk thread for
the purposes of the CTC rule pursuant to De Minimis provision of Article 32.
Specific percentages referred to in Article 32(De Minimis)is here.
