Rules of Origin- TIG Agreement

The Rules of Origin and the Operational Certification Procedures applicable tothe products covered under Agreement on TIG and the Early Harvest Programmeof the Framework Agreement are set out in Annex 3 of Agreement on TIG. 

In  determining  the  origin  of  products  eligible  for  the  preferential  tariff concession  pursuant  to  the  Framework  Agreement  on  Comprehensive Economic Co-operation between the Association of Southeast Asian Nations and  the  People’s  Republic  of  China  (hereinafter  referred  to  as  “the Agreement”), the following Rules shall be applied:  

Rule 1:  Definitions

For the purpose of this Annex:

        (a)  “a  Party”  means  the  individual  parties  to  the  Agreement  i.e.  Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao People’s Democratic Republic (“Lao PDR”), Malaysia, the Union of Myanmar,  the  Republic  of  the  Philippines,  the  Republic  of  Singapore, the  Kingdom  of  Thailand,  the  Socialist  Republic  of  Vietnam  and  the People’s Republic of China (”China”).

        (b)  “materials”  shall  include  ingredients,  parts,  components,  subassembly and/or  goods  that  were  physically  incorporated  into  another  good  or were subject to a process in the production of another good.

       (c)  "Originating  goods"  means  products  that  qualify  as  originating  in accordance with the provisions of Rule 2.

       (d)  "production"  means  methods  of  obtaining  goods  including  growing, mining,  harvesting,  raising,  breeding,  extracting,  gathering,  collecting, capturing,  fishing,  trapping,  hunting,  manufacturing,  producing,

processing or assembling a good.

        (e)  “Product  Specific  Rules”  are  rules  that  specify  that  the  materials  have undergone  a  change  in  tariff  classification  or  a  specific  manufacturing or  processing  operation,  or  satisfy  an  ad  valorem  criterion  or  a combination of any of these criteria.

Rule 2:   Origin Criteria  

For  the  purposes  of  this  Agreement,  products  imported  by  a  Party  shall  be deemed  to  be  originating  and  eligible  for  preferential  concessions  if  they conform to the origin requirements under any one of the following:

in Rule 3; or

(b)  Products  not  wholly  produced  or  obtained  provided  that  the  said products are eligible under Rule
4, Rule 5 or Rule 6. 

Rule 3:  Wholly Obtained Products

Within the meaning of Rule 2 (a), the following shall be considered as wholly produced or obtained in a Party:

        (a)  Plant  and plant products harvested, picked or gathered there;

        (b)  Live animals  born a nd raised there;

        (c)  Product  obtained from live animals referred to in paragraph (b) above;
       (d)  Products  obtained  from  hunting,  trapping,  fishing,  aquaculture, gathering or capturing conducted there;

        (e)  Minerals  and  other  naturally  occurring  substances,  not  included  in paragraphs (a) to (d), extracted or taken from its soil, waters, seabed or beneath their seabed;

        (f)  Products taken from the waters, seabed or beneath the seabed outside the  territorial  waters  of  that  Party,  provided  that  that  Party  has  the rights  to  exploit  such  waters,  seabed  and  beneath  the  seabed  in accordance with international law;

        (g)  Products of sea fishing and other marine products taken from the high seas by vessels registered with a Party  or entitled to fly the flag of that Party;  

        (h)  Products  processed  and/or  made  on  board  factory  ships  registered with a Party  or  entitled  to  fly  the  flag  of  that  Party,  exclusively  from products referred to in paragraph (g) above;

        (i)  Articles  collected  there  which  can  no  longer  perform  their  original purpose nor are capable of being restored or repaired and are fit only for  disposal  or  recovery  of  parts  of  raw  materials,  or  for  recycling purposes; and

        (j)  Goods obtained or produced in a Party solely from products referred to

in paragraphs (a) to (i) above.

Rule 4:   Not Wholly Produced or Obtained

        (a)  For  the  purposes  of  Rule  2(b),  a  product  shall  be  deemed  to  be originating if:

               (i)  Not less than 40% of its content originates from any Party; or

               (ii)  If  the  total  value  of  the  materials,  part  or  produce  originating from outside of the territory of a Party (i.e. non-ACFTA) does not exceed  60%  of  the  FOB  value  of  the  product  so  produced  or obtained  provided  that  the  final  process  of  the  manufacture  is performed within the territory of the Party.  

        (b)  For  the  purposes  of  this  Annex,  the  originating  criteria  set  out  in  Rule 4(a)(ii) shall be referred to as the “ACFTA content”. The formula for the 40% ACFTA content is calculated as follows:

        (c)  The value of the non-originating materials shall be:

                (i)  the CIF value at the time of importation of the materials; or

             (ii)  the  earliest  ascertained  price  paid  for  the  materials  of undetermined  origin  in  the  territory  of  the  Party  where  the working or processing takes place.

        (d)  For the purpose of this Rule, "originating material" shall be deemed to be a material whose country of origin, as determined under these rules, is  the  same  country  as  the  country  in  which  the  material  is  used  in production.

Rule 5:   Cumulative Rule of Origin

Unless  otherwise  provided  for,  products  which  comply  with  origin requirements  provided  for  in  Rule  2  and  which  are  used  in  the  territory  of  a Party  as  materials  for  a  finished  product  eligible  for  preferential  treatment under  the  Agreement  shall  be  considered  as  products  originating  in  the territory of the Party where working or processing of the finished product hastaken  place  provided  that  the  aggregate  ACFTA  content  (i.e. full cumulation, applicable among all Parties) on the final product is not less than 40%.

Rule 6:  Product Specific Criteria

Products  which  have  undergone  sufficient  transformation  in  a  Party  shall  be treated as originating goods of that Party. Products which satisfy the Product Specific Rules provided for in Attachment B shall be considered as goods to which sufficient transformation has been carried out in a Party.

Rule 7:  Minimal Operations and Processes

Operations  or  processes  undertaken,  by  themselves  or  in  combination  with each  other  for  the  purposes  listed  below,  are  considered  to  be  minimal  and shall  not  be  taken  into  account  in  determining  whether  a  good  has  been wholly obtained in one country:

        (a)  ensuring  preservation  of  goods  in  good  condition  for  the  purposes  of transport or storage;

        (b)  facilitating shipment or transportation;

        (c)  packaging or presenting goods for sale. 

Rule 8:   Direct Consignment

The  following  shall  be  considered  as  consigned  directly  from  the  exporting Party to the importing Party:

        (a)  If  the  products  are  transported  passing  through  the  territory  of  any other ACFTA member states;

        (b)  If the products are transported without passing through the territory of any non-ACFTA member states;

        (c)  The  products  whose  transport  involves  transit  through  one  or  more intermediate  non-ACFTA member states  with or without transshipment or temporary storage in such countries, provided that:

                (i)  the  transit  entry  is  justified  for  geographical  reason  or  by consideration related exclusively to transport requirements;

               (ii)  the  products  have  not  entered  into  trade  or  consumption  there; and

             (iii)  the products have not undergone any operation there other than unloading and reloading or any operation required to keep them in good condition.

Rule 9:  Treatment of Packing  

        (a)  Where  for  purposes  of  assessing  customs  duties,  a  Party  treats products  separately  from  their  packing,  it  may  also,  in  respect  of  its imports consigned from another Party, determine separately the origin of such packing.

        (b)  Where paragraph (a) above is not applied, packing shall be considered as  forming  a  whole  with  the  products  and  no  part  of  any  packing required  for  their  transport  or  storage  shall  be  considered  as  having been imported from outside the ACFTA when determining the origin of the products as a whole.

Rule 10:  Accessories, Spare Parts and Tools  

The  origin  of  accessories,  spare  parts,  tools  and  instructional  or  other information materials presented with the goods therewith shall be neglected in determining  the  origin  of  the  goods,  provided  that  such  accessories,  spare parts,  tools  and  information  materials  are  classified  and  collected  customs duties with the goods by the importing member state.  

Rule 11:  Neutral Elements  

Unless otherwise provided, for the purpose of determining the origin of goods, the origin of power and fuel, plant and equipment, or machines and tools used to  obtain  the  goods,  or  the  materials  used  in  its  manufacture  which  do  not remain in the goods or form part of the goods, shall not be taken into account.

Rule 12:  Certificate of Origin

A claim that products shall be accepted as eligible for preferential concession shall be supported by a Certificate of Origin issued by a government authority designated  by  the  exporting  Party  and  notified  to  the  other  Parties  to  the Agreement  in  accordance  with  the  Operational  Certification  Procedures,  as set out in Attachment A.

Rule 13:  Review and Modification  

These  rules  may  be  reviewed  and  modified  as  and  when  necessary  upon request  of  a  Member  State  and  may  be  open  to  such  reviews  and modifications as may be agreed upon by the AEM-MOFCOM.

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