Here is a case study of Value Added method.
Company A manufactures Plastic Boxes (HS heading 3923)
from Non-originating granules of plastics (heading 3901).
Non-originating granules of plastics are imported from country B where
is not a Party of the FTA;
The unit price of a single Plastic Boxes is priced as:
Ex-works price of the boxes: € 10.- per box.
Value of granules used: € 4.- per box.
Example PSR for goods of subheading 3923 is:
“Manufacture in which the value of all the materials used does not exceed
50 % of the ex-works price of the product”.
As the value of the granules needed for the manufacture of one box (€ 4.-) is less
than 50 % of the value of the final box (€ 10.-), the condition to acquire originating
status is fulfilled.
Therefore, the boxes can be regarded as originating products.
But when the price of the granules soars to (€ 6.-), it’s price becomes more than
50% of the ex-works price of one box (€ 10.-).
In this situation, the condition to acquire originating status is not fulfilled.
The boxes, therefore, cannot be regarded as originating products.
Personally I do not recommend to adopt the VA method because foreseeing the
future price of the material is almost impossible.
If it’s possible, I would recommend adopting the CTC method rather than The
VA method.
