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  1. CUSMA Rules of Origin Regulations - SOR/2020-155 (Section 5)
    CUSMA Rules of Origin Regulations
    Marginal note:De minimis rule — non-originating materials

    • 5 (1) Except as otherwise provided in subsection (3), a good is originating in the territory of a CUSMA country if

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      • (c) 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 is originating in the territory of a CUSMA country and is not required to satisfy that requirement if

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

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    • (6) A good of any of Chapters 50 through 60 or heading 96.19 that contains non-originating materials that do not satisfy the applicable change in tariff classification requirements is considered originating in the territory of a CUSMA country if

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

    • (7) A good of any of Chapters 61 through 63 that contains non-originating fibres or yarns in the component of the good that determines the tariff classification that do not satisfy the applicable change in tariff classification requirements is considered originating in the territory of a CUSMA country if

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

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    • (15) Each of the following examples is an “Example” as referred to in subsection 1(4).

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        Producer A, located in a CUSMA country, produces barbers’ chairs of subheading 9402.10. The product-specific rule of origin set out in Schedule 1 for goods of subheading 9402.10 specifies a change in tariff classification from any other subheading. 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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        Producer A, located in a CUSMA country, manufactures an infant diaper, classified in heading 96.19, consisting of an outer shell of 94% nylon and 6% elastomeric fabric by weight and a terry knit cotton absorbent crotch. All materials used are produced in a CUSMA country, except for the elastomeric fabric, which is from a non-CUSMA country. The elastomeric fabric is only 6% of the total weight of the diaper. The good satisfies all other applicable requirements of these Regulations. Therefore, the product is considered originating from a CUSMA country as per subsection (6).

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        Producer A, located in a CUSMA country, manufactures women’s knit sweaters, which have knit bodies and woven sleeves. The knit body is composed of 95% polyester and 5% spandex, by weight. The sleeves are made of non-CUSMA woven fabric that is 100% polyester. All materials of the knit body are from a CUSMA country, except for the spandex, which is from a non-CUSMA country. The sweater is cut and sewn in a CUSMA country. Since the knit body gives the garment its essential character, the sweater is classified in subheading 6110.30. The product-specific rule of origin set out in Schedule 1 for subheading 6110.30 is that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the CUSMA countries. The sleeves are disregarded in determining whether the sweater originates in a CUSMA country because only the component that determines the tariff classification of the good must be originating and the de minimis provision is applied to that component. Moreover, the total weight of the spandex is less than 10% of the total weight of the knit body fabric, which is the component that determines the tariff classification of the sweater and the spandex does not exceed 7% of the total weight of good. Assuming that the women’s knit sweater satisfies all other applicable requirements of these Regulations, the women’s knit sweater is originating from the CUSMA country.

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        A men’s shirt of Chapter 61 is made using two different fabrics; one for the body and another for the sleeves. The component that determines the tariff classification of the men’s shirt is the fabric used for the body, as it constitutes the material that predominates by weight and makes up the largest surface area of the shirt’s exterior. If this fabric is produced using non-originating fibres and yarns that do not satisfy a tariff change rule, the de minimis provision is calculated on the basis of the total weight of the non-originating fibres or yarns used in the production of the fabric that makes up the body of the shirt. The weight of these non-originating fibres or yarns must be 10% or less of the total weight of that fabric and any elastomeric content must be 7% or less of the total weight of that fabric.

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        However, according to subsection (7), a textile or apparel good classified in any of Chapters 61 through 63 that contains non-originating fibres or yarns in the component of the good that determines its tariff classification that do not satisfy the applicable change in tariff classification, is nonetheless considered an originating good if the total weight of all those fibres or yarns is not more than 10% of the total weight of that component, of which the total weight of elastomeric content may not exceed 7% of the total weight of the component, and such good meets all the other applicable requirements of these Regulations.

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  2. CUSMA Rules of Origin Regulations - SOR/2020-155 (Section 1)
    CUSMA Rules of Origin Regulations
    Marginal note:Definitions

    • 1 (1) The following definitions apply in these Regulations.

      non-originating good

      non-originating good  means a good that does not qualify as originating under these Regulations. (produit non originaire)

      non-originating material

      non-originating material  means a material that does not qualify as originating under these Regulations. (matière non originaire)

      originating good

      originating good  means a good that qualifies as originating under these Regulations. (produit originaire)

      originating material

      originating material  means a material that qualifies as originating under these Regulations. (matière originaire)

      subject to a regional value content requirement

      subject to a regional value content requirement  means, with respect to a good, that the provisions of these Regulations that are applied to determine whether the good is an originating good include a regional value content requirement. (assujetti à une prescription de teneur en valeur régionale)

      value

      value  means the value of a good or material for the purpose of calculating customs duties or for the purpose of applying these Regulations. (valeur)

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    • Marginal note:Other definitions

      (3) For the purposes of these Regulations,

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      • (e) any reference to a tariff item in Chapter 4 of the Agreement or in these Regulations that includes letters is to be read as the appropriate eight-digit number in the Harmonized System as implemented in each CUSMA country; and

    • Marginal note:Examples

      (4) If an example, referred to as an “Example”, is set out in these Regulations, the example is for the purpose of illustrating the application of a provision and, if there is any inconsistency between the example and the provision, the provision prevails to the extent of the inconsistency.

    • Marginal note:References to domestic laws

      (5) Except as otherwise provided, references in these Regulations to domestic laws of the CUSMA countries apply to those laws as they are currently in effect and as they may be amended or superseded.


  3. CUSMA Rules of Origin Regulations - SOR/2020-155 (Section 7)
    CUSMA Rules of Origin Regulations
    Marginal note:Calculation

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    • (22) Each of the following examples is an “Example” as referred to in subsection 1(4).

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        A producer has six factories, all located within the territory of one of the CUSMA countries, at which the producer produces garden tools of various types. These tools are shipped worldwide and orders usually consist of bulk orders of various types of tools. Because different tools are manufactured at different factories, the producer decided to consolidate storage and shipping facilities and ships all finished products to a large warehouse located near the seaport from which all orders are shipped. The distance from the factories to the warehouse varies from 3 km to 130 km. The point of direct shipment for each of the goods is the warehouse.

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        A producer has only one factory, located near the centre of one of the CUSMA countries, at which the producer manufactures office chairs. The office chairs are shipped from that factory to three warehouses leased by the producer, one on the west coast, one near the factory and one on the east coast. The office chairs are shipped to buyers from these warehouses, the shipping location depending on the shipping distance from the buyer. Buyers closest to the west coast warehouse are normally supplied by the west coast warehouse, buyers closest to the east coast are normally supplied by the warehouse located on the east coast and buyers closest to the warehouse near the factory are normally supplied by that warehouse. In this case, the point of direct shipment is the location of the warehouse from which the office chairs are normally shipped to customers in the location in which the buyer is located.

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        A producer located in CUSMA country A sells Good A that is subject to a regional value content requirement to a buyer located in CUSMA country B. The producer of Good A chooses to calculate the regional value content of that good using the net cost method. All applicable requirements of these Regulations, other than the regional value content requirement, have been met. The applicable regional value content requirement is 50%.

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  4. CUSMA Rules of Origin Regulations - SOR/2020-155 (SCHEDULE 6 : Value of Materials)
    CUSMA Rules of Origin Regulations

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    • 2 (1) Except as otherwise provided in subsection (2), the transaction value of a material under paragraph 8(1)(b) of these Regulations is the price actually paid or payable for the material determined in accordance with section 3 and adjusted in accordance with section 4.

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

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      • (b) the value, reasonably allocated in accordance with subsection (13), of the following elements if 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:

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

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    • (13) The producer must choose the method of allocating to the material the value of the elements referred to in subparagraphs (1)(b)(ii) to (iv), provided that the value is reasonably allocated. 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 if 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 must 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 if 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.

    • 5 (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 subparagraph 8(1)(b)(ii) of these Regulations, is 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.

    • 6 (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 5, the value of the material, referred to in subparagraph 8(1)(b)(ii) of these Regulations is 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.

    7 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 5 or 6, the value of the material, referred to in subparagraph 8(1)(b)(ii) of these Regulations must be determined under section 8 or, if the value cannot be determined under that section, under section 10 unless, at the request of the producer, the order of application of sections 8 and 9 must be reversed.

    • 8 (1) Under this section, if identical materials or similar materials are sold in the territory of the CUSMA 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 subparagraph 8(1)(b)(ii) of these Regulations must 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, if the producer does not sell those identical materials or similar materials, by a person at the same commercial 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 persons to the seller, subject to deductions for the following:

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    • 9 (1) Under this section, the value of a material, referred to in subparagraph 8(1)(b)(ii) of these Regulations, is the sum of

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    • 10 (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 sections 5 to 9, the value of the material, referred to in subparagraph 8(1)(b)(ii) of these Regulations, must 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.


  5. CUSMA Rules of Origin Regulations - SOR/2020-155
    CUSMA Rules of Origin Regulations

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    Note: The following table sets out the parts and components applicable to Table A.2 and their related tariff provisions, to facilitate implementation of the core parts requirement pursuant to Article 3.7 of the Appendix to the Annex 4-B of the Agreement. These parts, and components used to produce such parts, are for the production of a passenger vehicle or light truck in order to meet the requirements under Section 14. The prefix “ex” is used to indicate that only the parts described in the components column and used in the production of parts for use as original equipment in a passenger vehicle or light truck are taken into consideration when performing the calculation.

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    Note: The following table lists the HS subheadings for steel and aluminum subject to the CUSMA steel and aluminum purchasing requirements set out in Section 17 to facilitate implementation of the steel and aluminum purchasing requirement, pursuant to Article 6.3 of the Appendix to Annex 4-B of the Agreement. The prefix “ex” is used to indicate that only goods described in the “Description” column are taken into consideration when performing the calculation. These descriptions cover structural steel or aluminum purchases by vehicle producers used in the production of passenger vehicles, light trucks, or heavy trucks, including all steel or aluminum purchases used for the production of major stampings that form the “body in white” or chassis frame as defined in Table A.2 (Parts and Components for Passenger Vehicles and Light Trucks). The descriptions do not cover structural steel or aluminum purchased by parts producers or suppliers used in the production of other automotive parts.


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