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  1. CCFTA Rules of Origin Regulations - SOR/97-340 (SCHEDULE VII : Value of Materials)
    Regulations Respecting the Uniform Interpretation, Application and Administration of the Rules of Origin under the Canada-Chile Free Trade Agreement

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    • 2 (1) Except as provided under subsections (2) and (3), the transaction value of a material under paragraph 7(1)(a) of these Regulations shall be the price actually paid or payable for the material determined in accordance with section 4 and adjusted in accordance with section 5.

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    • (8) A number of factors must be taken into consideration for the purpose of determining whether the transaction value of the identical materials or similar materials closely approximates the transaction value of the material being valued. These factors include the nature of the material, the nature of the industry itself, the season in which the material is sold, and whether the difference in values is commercially significant. Since these factors may vary from case to case, it would be impossible to apply an acceptable standardized difference such as a fixed amount or fixed percentage difference in each case. For an illustration of this, a small difference in value in a case involving one type of material could be unacceptable, while a large difference in a case involving another type of material might be acceptable for the purposes of determining whether the transaction value closely approximates a test value set out in subsection (4).

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    • 5 (1) In determining the transaction value of the material, the following shall be added to the price actually paid or payable:

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      • (b) the value, reasonably allocated in accordance with subsection (12), of the following elements where they are supplied directly or indirectly to the seller by the producer free of charge or at reduced cost for use in connection with the production and sale of the material, to the extent that the value is not included in the price actually paid or payable:

        • [...]

        • (iii) an indirect material, other than those referred to in subparagraph (ii) or in paragraphs (c), (e) or (f) of the definition indirect material in subsection 2(1) of these Regulations, used in the production of the material being valued, and

    • [...]

    • (12) The producer shall choose the method of allocating to the material the value of the elements referred to in subparagraphs (1)(b)(ii) through (iv), provided that the value is reasonably allocated to the material in a manner appropriate to the circumstances. The methods the producer may choose to allocate the value include allocating the value over the number of units produced up to the time of the first shipment or allocating the value over the entire anticipated production where contracts or firm commitments exist for that production. For an illustration of this, a producer provides the seller with a mould to be used in the production of the material and contracts with the seller to buy 10,000 units of that material. By the time the first shipment of 1,000 units arrives, the seller has already produced 4,000 units. In these circumstances, the producer may choose to allocate the value of the mould over 4,000 units or 10,000 units but shall not choose to allocate the value of the elements to the first shipment of 1,000 units. The producer may choose to allocate the entire value of the elements to a single shipment of material only where that single shipment comprises all of the units of the material acquired by the producer under the contract or commitment for that number of units of the material between the seller and the producer.

    • 6 (1) If there is no transaction value under subsection 2(2) or the transaction value is unacceptable under subsection 2(3), the value of the material, referred to in paragraph 7(1)(b) of these Regulations, shall be the transaction value of identical materials sold, at or about the same time as the material being valued was shipped to the producer, to a buyer located in the same country as the producer.

    • 7 (1) If there is no transaction value under subsection 2(2) or the transaction value is unacceptable under subsection 2(3), and the value of the material cannot be determined under section 6, the value of the material, referred to in paragraph 7(1)(b) of these Regulations, shall be the transaction value of similar materials sold, at or about the same time as the material being valued was shipped to the producer, to a buyer located in the same country as the producer.

    8 If there is no transaction value under subsection 2(2) or the transaction value is unacceptable under subsection 2(3), and the value of the material cannot be determined under section 6 or 7, the value of the material, referred to in paragraph 7(1)(b) of these Regulations, shall be determined under section 9 or, when the value cannot be determined under that section, under section 10 except that, at the request of the producer, the order of application of sections 9 and 10 shall be reversed.

    • 9 (1) Under this section, if identical materials or similar materials are sold in the territory of the CCFTA country in which the producer is located, in the same condition as the material was in when received by the producer, the value of the material, referred to in paragraph 7(1)(b) of these Regulations, shall be based on the unit price at which those identical materials or similar materials are sold, in the greatest aggregate quantity by the producer or, where the producer does not sell those identical materials or similar materials, by a person at the same trade level as the producer, at or about the same time as the material being valued is received by the producer, to persons located in that territory who are not related to the seller, subject to deductions for the following:

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    • 10 (1) Under this section, the value of a material, referred to in paragraph 7(1)(b) of these Regulations, shall be the sum of

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    • 11 (1) Where there is no transaction value under subsection 2(2) or the transaction value is unacceptable under subsection 2(3), and the value of the material cannot be determined under sections 6 through 10, the value of the material, referred to in paragraph 7(1)(b) of these Regulations, shall be determined under this section using reasonable means consistent with the principles and general provisions of this Schedule and on the basis of data available in the country in which the producer is located.

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  2. CCFTA Rules of Origin Regulations - SOR/97-340 (SCHEDULE VIII : Methods for Determining the Value of Non-Originating Materials That Are Identical Materials and That Are Used in the Production of a Good for Purposes of Subsections 5(10), 5(11) and 6(10) of)
    Regulations Respecting the Uniform Interpretation, Application and Administration of the Rules of Origin under the Canada-Chile Free Trade Agreement

    SCHEDULE VIIIMethods for Determining the Value of Non-Originating Materials That Are Identical Materials and That Are Used in the Production of a Good for Purposes of Subsections 5(10), 5(11) and 6(10) of These Regulations

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    1 For purposes of this Schedule,

    FIFO method

    FIFO method means the method by which the value of non-originating materials first received in materials inventory, determined in accordance with section 7 of these Regulations, is considered to be the value of non-originating materials used in the production of the good first shipped to the buyer of the good; (méthode PEPS)

    LIFO method

    LIFO method means the method by which the value of non-originating materials last received in materials inventory, determined in accordance with section 7 of these Regulations, is considered to be the value of non-originating materials used in the production of the good first shipped to the buyer of the good; (méthode DEPS)

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    2 For purposes of subsections 5(10) and (11) and 6(10) of these Regulations, the following are the methods for determining the value of non-originating materials that are identical materials and are used in the production of a good:

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    • 4 (1) The average value of non-originating materials that are identical materials and that are used in the production of a good that is shipped to the buyer of the good is calculated by dividing

      • (a) the total value of non-originating materials that are identical materials in materials inventory prior to the shipment of the good, determined in accordance with section 7 of these Regulations,

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    The following examples are based on the figures set out in the table below and on the following assumptions:

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    Example 3: Rolling average method

    The following table identifies the average value of non-originating Materials A as determined under the rolling average method. For purposes of this example, a new average value of non-originating Materials A is calculated after each receipt.

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  3. CCFTA Rules of Origin Regulations - SOR/97-340 (SCHEDULE VI : Reasonable Allocation of Costs)
    Regulations Respecting the Uniform Interpretation, Application and Administration of the Rules of Origin under the Canada-Chile Free Trade Agreement

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    1 For purposes of this Schedule,

    costs

    costs means any costs that are included in total cost and that need to be allocated pursuant to subsections 5(8), 6(11) and 7(6) of these Regulations, subsection 4(7) of Schedule II and subsections 5(7) and 10(2) of Schedule VII; (coûts)

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    • (2) In this Schedule, reference to “good” shall,

      • (a) for purposes of subsection 6(15) of these Regulations, be read as a reference to “identical goods or similar goods, or any combination thereof”;

      • (b) for purposes of subsection 7(6) of these Regulations, be read as a reference to “intermediate material”;

      • (c) for purposes of section 10 of these Regulations, be read as a reference to “category of vehicles that is chosen pursuant to subsection 10(1) of these Regulations”;

      • (d) for purposes of section 11 of these Regulations, be read as a reference to “category of goods chosen pursuant to subsection 11(1) of these Regulations”;

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    5 Any cost allocation method referred to in section 3 or 4 that is used by a producer for the purposes of these Regulations shall be used throughout the producer’s fiscal year.

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    Excluded Costs

    Under paragraph 6(11)(b) of these Regulations, where excluded costs are included in costs to be allocated to a good, the cost ratio used to allocate that cost to the good is used to determine the amount of excluded costs to be subtracted from the costs allocated to the good.

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    Excluded Costs

    Under paragraph 6(11)(b) of these Regulations, where excluded costs are included in overhead to be allocated to a good, the direct labour and direct material ratio used to allocate overhead to the good is used to determine the amount of excluded costs to be subtracted from the overhead allocated to the good.

    “Examples”

    Example 1

    The following example illustrates the application of the direct labour and direct material ratio method used by a producer of a good to allocate overhead where the producer chooses to calculate the net cost of the good in accordance with paragraph 6(11)(a) of these Regulations.

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    Example 2

    The following example illustrates the application of the direct labour and direct material ratio method used by a producer of a good to allocate overhead where the producer chooses to calculate the net cost of the good in accordance with paragraph 6(11)(b) of these Regulations and where excluded costs are included in overhead.

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    Excluded Costs

    Under paragraph 6(11)(b) of these Regulations, where excluded costs are included in

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    “Examples”

    Example 1

    The following example illustrates the application of the direct cost ratio method used by a producer of a good to allocate indirect overhead where the producer chooses to calculate the net cost of the good in accordance with paragraph 6(11)(a) of these Regulations.

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    Example 2

    The following example illustrates the application of the direct cost ratio method used by a producer of a good to allocate indirect overhead where the producer has chosen to calculate the net cost of the good in accordance with paragraph 6(11)(b) of these Regulations and where excluded costs are included in indirect overhead.

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  4. CCFTA Rules of Origin Regulations - SOR/97-340 (SCHEDULE I : Specific Rules of Origin)
    Regulations Respecting the Uniform Interpretation, Application and Administration of the Rules of Origin under the Canada-Chile Free Trade Agreement

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    • Return to footnote 1If the good is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 2If the good is for use in a motor vehicle, section 9 of these Regulations may apply.

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    Chapter 61 Articles of Apparel and Clothing Accessories, Knitted or Crocheted
    6103.21-6103.29

    A change to subheadings 6103.21 through 6103.29 from any other chapter, except from headings 51.06 through 51.13, 52.04 through 52.12, 53.07 through 53.08 or 53.10 through 53.11, Chapter 54 or headings 55.08 through 55.16 or 60.01 through 60.06, provided that:

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    • (b) with respect to a garment described in heading 61.01 or a jacket or a blazer described in heading 61.03, of wool, fine animal hair, cotton or man-made fibres, imported as part of an ensemble of these subheadings, the visible lining fabric listed in Note 1 to Chapter 61 satisfies the tariff change requirements provided therein.
    6104.21-6104.29

    A change to subheadings 6104.21 through 6104.29 from any other chapter, except from headings 51.06 through 51.13, 52.04 through 52.12, 53.07 through 53.08 or 53.10 through 53.11, Chapter 54 or headings 55.08 through 55.16 or 60.01 through 60.06, provided that:

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    • (b) with respect to a garment described in heading 61.02, a jacket or a blazer described in heading 61.04 or a skirt described in heading 61.04, of wool, fine animal hair, cotton or man-made fibres, imported as part of an ensemble of these subheadings, the visible lining fabric listed in Note 1 to Chapter 61 satisfies the tariff change requirements provided therein.

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    Chapter 62 Articles of Apparel and Clothing Accessories, Not Knitted or Crocheted
    6203.21-6203.29

    A change to subheadings 6203.21 through 6203.29 from any other chapter, except from headings 51.06 through 51.13, 52.04 through 52.12, 53.07 through 53.08 or 53.10 through 53.11, Chapter 54 or headings 55.08 through 55.16, 58.01 through 58.02 or 60.01 through 60.06, provided that:

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    • (b) with respect to a garment described in heading 62.01 or a jacket or a blazer described in heading 62.03, of wool, fine animal hair, cotton or man-made fibres, imported as part of an ensemble of these subheadings, the visible lining fabric listed in Note 1 to Chapter 62 satisfies the tariff change requirements provided therein.
    6204.21-6204.29

    A change to subheadings 6204.21 through 6204.29 from any other chapter, except from headings 51.06 through 51.13, 52.04 through 52.12, 53.07 through 53.08 or 53.10 through 53.11, Chapter 54 or headings 55.08 through 55.16, 58.01 through 58.02 or 60.01 through 60.06, provided that:

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    • (b) with respect to a garment described in heading 62.02, a jacket or a blazer described in heading 62.04 or a skirt described in heading 62.04, of wool, fine animal hair, cotton or man-made fibres, imported as part of an ensemble of these subheadings, the visible lining fabric listed in Note 1 to Chapter 62 satisfies the tariff change requirements provided therein.

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    Chapter 74 Copper and Articles Thereof
    74.04 No required change in tariff classification to heading 74.04, provided the waste and scrap are as described in paragraph 4(1)(i) or (j) of these Regulations.

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    • Return to footnote 4If the good of subheading 8301.20 is for use in a motor vehicle, section 9 of these Regulations apply.

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    • Return to footnote 5If the good is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 6If the good is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 7If the good is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 8If the good is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 9If the good of subheading 8413.30 or 8413.60 is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 10If the good of subheading 8414.59 or 8414.80 is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 11If the good of subheading 8415.20 is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 12If the good of subheading 8421.23, 8421.31 or 8421.39 is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 13If the good of subheading 8425.39, 8425.42 or 8425.49 is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 14If the good of subheading 8431.10 is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 15If the good of subheading 8481.20, 8481.30 or 8481.80 is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 16If the good is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 17If the good is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 18If the good is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 19If the good is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 20If the good is for use in a motor vehicle, section 9 of these Regulations may apply.

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    Chapter 85 Electrical Machinery and Equipment and Parts Thereof; Sound Recorders and Reproducers, Television Image and Sound Recorders and Reproducers, and Parts and Accessories of Such Articles
    8541.10-8542.90

    • Note : Notwithstanding section 14 (Transshipment) of these Regulations, a good of subheadings 8541.10 through 8541.60 or 8542.10 through 8542.70 qualifying under the rule below as an originating good may undergo further production outside the territory of the CCFTA countries and, when imported into the territory of a CCFTA country, will originate in the territory of a CCFTA country, provided that such further production did not result in a change to a subheading outside of that group.

    • Return to footnote 21If the good of subheading 8501.10, 8501.20, 8501.31 or 8501.32 is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 22If the good is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 23If the good is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 24If the good of subheading 8512.20, 8512.30 or 8512.40 is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 25If the good of subheading 8516.10 is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 26If the good of subheading 8536.41, 8536.50 or 8536.90 is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 27If the good of subheading 8537.10 is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 28If the good of subheading 8539.10, 8539.21 or 8539.29 is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 29If the good of subheading 8544.30 or 8544.41 is for use in a motor vehicle, section 9 of these Regulations may apply.

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    Chapter 87 Vehicles Other Than Railway or Tramway Rolling-Stock, and Parts and Accessories Thereof

    • Note: Sections 9 through 11 of these Regulations apply to a good of headings 87.01 through 87.02, subheadings 8703.21 through 8703.90 or headings 87.04 through 87.08.

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    • Return to footnote 30If the good of subheading 9017.80 is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 31If the good of subheading 9026.10 is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 32If the good is for use in a motor vehicle, section 9 of these Regulations may apply.

    • Return to footnote 33If the good of subheading 9032.10, 9032.20 or 9032.89 is for use in a motor vehicle, section 9 of these Regulations may apply.

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    • Return to footnote 34If the good of heading 91.04 is for use in a motor vehicle, section 9 of these Regulations may apply.

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    • Return to footnote 35If the good of subheading 9401.20 is for use in a motor vehicle, section 9 of these Regulations may apply.

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  5. CCFTA Rules of Origin Regulations - SOR/97-340 (Section 5)
    Regulations Respecting the Uniform Interpretation, Application and Administration of the Rules of Origin under the Canada-Chile Free Trade Agreement

    • 5 (1) A good shall be considered to originate in the territory of a CCFTA country where the value of all non-originating materials that are used in the production of the good and that do not undergo an applicable change in tariff classification as a result of production occurring entirely in the territory of one or both of the CCFTA countries is not more than nine per cent of the transaction value of the good determined in accordance with Schedule II with respect to the transaction in which the producer of the good sold the good, adjusted to an F.O.B. basis, or of the total cost of the good, where there is no transaction value for the good under subsection 2(1) of Schedule III or the transaction value of the good is unacceptable under subsection 2(2) of that Schedule, provided that,

      • [...]

      • (b) the good satisfies all other applicable requirements of these Regulations.

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    • (4) A good that is subject to a regional value-content requirement shall be considered to originate in the territory of a CCFTA country and shall not be required to satisfy that requirement where

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      • (b) the good satisfies all other applicable requirements of these Regulations.

    • (5) A good of any of Chapters 50 through 63 that does not originate in the territory of a CCFTA country because certain fibres or yarns that are used in the production of the component of the good that determines the tariff classification of the good do not undergo an applicable change in tariff classification as a result of production occurring entirely in the territory of one or both of the CCFTA countries shall be considered to originate in the territory of a CCFTA country if

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      • (b) the good satisfies all other applicable requirements of these Regulations.

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    • (12) Each of the following examples is an “Example” as referred to in subsection 2(4).

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      Example 5: Subsection 5(4)

      Producer A, located in a CCFTA country, produces barbers’ chairs of subheading 9402.10. The rule set out in Schedule I for goods of heading 94.02 specifies a change in tariff classification from any other chapter. All of the materials used in the production of these chairs are originating materials, with the exception of a small quantity of non-originating materials that are classified as parts of barbers’ chairs. These parts undergo no change in tariff classification because subheading 9402.10 provides for both barbers’ chairs and their parts.

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