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• 6 (1) Except as otherwise provided in subsection (6), the regional value content of a good shall be calculated, at the choice of the exporter or producer of the good, on the basis of either the transaction value method or the net cost method.

• (2) The transaction value method for calculating the regional value content of a good is as follows:

  RVC = TV – VNM / TV × 100

  where

  RVC 

  is the regional value content of the good, expressed as a percentage;

• (3) The net cost method for calculating the regional value content of a good is as follows:

  RVC = NC – VNM / NC × 100

  where

  RVC 

  is the regional value content of the good, expressed as a percentage;

• (4) For purposes of calculating the regional value content of a good under subsection (2) or (3), the value of non-originating materials used by a producer in the production of the good shall not include

  • [...]

  • (b) the value of any non-originating materials used by the producer in the production of a self-produced material that is an originating material and is designated as an intermediate material.

• (5) For purposes of subsection (4),

  • (a) in the case of any self-produced material that is not designated as an intermediate material, only the value of any non-originating materials used in the production of the self-produced material shall be included in the value of non-originating materials used in the production of the good; and

  • (b) where a self-produced material that is designated as an intermediate material and is an originating material is used by the producer of the good with non-originating materials (whether or not those non-originating materials are produced by that producer) in the production of the good, the value of those non-originating materials shall be included in the value of non-originating materials.

• (6) The regional value content of a good shall be calculated only on the basis of the net cost method where

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  • (d) the good is

    • [...]

    • (ii) a good of a tariff provision listed in Schedule IV and is for use in a motor vehicle, either as original equipment or as an after-market part, or

• (7) If the exporter or producer of a good calculates the regional value content of the good on the basis of the transaction value method and the customs administration of a CCFTA country subsequently notifies that exporter or producer in writing, during the course of a verification of origin, that

  • (a) the transaction value of the good, as determined by the exporter or producer, is required to be adjusted under section 4 of Schedule II or is unacceptable under subsection 2(2) of Schedule III, there is no transaction value for the good under subsection 2(1) of Schedule III or the transaction value method may not be used because of the application of paragraph (6)(c), or

  • (b) the value of any material used in the production of the good, as determined by the exporter or producer, is required to be adjusted under section 5 of Schedule VII or is unacceptable under subsection 2(3) of Schedule VII, or there is no transaction value for the material under subsection 2(2) of Schedule VII or the transaction value method may not be used to calculate the regional value content of the material because of the application of paragraph (6)(c),

  the exporter or producer may choose that the regional value content of the good be calculated on the basis of the net cost method, in which case the calculation must be made within 60 days after the producer receives the notification, or such longer period as that customs administration specifies.

• [...]

• (9) Nothing in subsection (7) shall be construed as preventing any review and appeal under sections 57.1 through 70 of the Customs Act, of an adjustment to or a rejection of

  [...]

• (10) For purposes of the transaction value method, where non-originating materials that are the same as one another in all respects, including physical characteristics, quality and reputation but excluding minor differences in appearance, are used in the production of a good, the value of those non-originating materials may, at the choice of the producer of the good, be determined in accordance with one of the methods set out in Schedule VIII.

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• (15) For purposes of the net cost method, the regional value content of the good, other than a good with respect to which an election to average may be made under subsection 10(1), (3) or (6) or 11(1), may be calculated, where the producer elects to do so, by

  • [...]

  • (b) using the sums referred to in paragraph (a) as the net cost and the value of non-originating materials, respectively.

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• (20) Except as otherwise provided in subsections 10(10) and 11(9), the producer of a good may calculate the regional value content of the good under the net cost method over the period chosen under paragraph (15)(a) on the basis of estimated costs, including standard costs, budgeted forecasts or other similar estimating procedures.

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• (22) For purposes of calculating the regional value content of a good, the producer of that good may choose to treat any material used in the production of that good as a non-originating material.

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

  Example 1: Subsection 6(3), Net Cost Method

  [...]

  Therefore, under the net cost method, Good A qualifies as an originating good, with a regional value content of 54.5 per cent.

  [...]

  Example 7: Subsection 6(12)

  Given the same facts as in example 6, except that Producer A determines that $6,000 of the gain on currency conversion and $7,000 of the loss on currency conversion are related to the purchase of non-originating materials used in the production of Good A. The total cost of Good A is $45,000, before taking into account the $1,000 net loss on currency conversion related to the production of Good A. The total cost of Good A is therefore $46,000. The $1,000 net loss is not included in the value of non-originating materials under subsections 7(1) and (2).

[...]

• 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,

  [...]

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• (3) Subsections (1) and (2) do not apply to

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  • (i) a printed circuit assembly, including a part that incorporates a printed circuit assembly, that is a non-originating material used in the production of a good where the applicable change in tariff classification for the good, as set out in Schedule I, places restrictions on the use of such non-originating material;

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• (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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• (10) For purposes of determining the value under subsection (1) of non-originating materials that do not undergo an applicable change in tariff classification, where Schedule IX is not being used to determine the value of those non-originating materials,

  • (a) if the value of those non-originating materials is being determined as a percentage of the transaction value of the good and the producer chooses under subsection 6(10) that one of the methods set out in Schedule VIII be used to determine the value of those non-originating materials for purposes of calculating the regional value content of the good, the value of those non-originating materials shall be determined in accordance with that method;

  • (b) if

    • (i) the value of those non-originating materials is being determined as a percentage of the total cost of the good,

    [...]

  • (c) if

    • (i) the value of those non-originating materials is being determined as a percentage of the total cost of the good,

    [...]

• [...]

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

  Example 1: Subsection 5(1)

  Producer A, located in a CCFTA country, uses originating materials and non-originating materials in the production of copper anodes of heading 74.02. The rule set out in Schedule I for heading 74.02 specifies a change in tariff classification from any other chapter. There is no applicable regional value-content requirement for this heading. Therefore, in order for the copper anode to qualify as an originating good under the rule set out in Schedule I, Producer A may not use in the production of the copper anode any non-originating material of Chapter 74.

  All of the materials used in the production of the copper anode are originating materials, with the exception of a small amount of copper scrap of heading 74.04, that is in the same chapter as the copper anode. Under subsection 5(1), if the value of the non-originating copper scrap does not exceed nine per cent of the transaction value of the copper anode or the total cost of the copper anode, whichever is applicable, the copper anode would be considered an originating good.

  Example 2: Subsection 5(2)

  Producer A, located in a CCFTA country, uses originating materials and non-originating materials in the production of ceiling fans of subheading 8414.51. There are two alternative rules set out in Schedule I for subheading 8414.51, one of which specifies a change in tariff classification from any other heading. The other rule specifies both a change in tariff classification from the subheading under which parts of the ceiling fans are classified and a regional value-content requirement. Therefore, in order for the ceiling fan to qualify as an originating good under the first of the alternative rules, all of the materials that are classified under the subheading for parts of ceiling fans and used in the production of the completed ceiling fan must be originating materials.

  [...]

  Example 3: Subsection 5(2)

  Producer A, located in a CCFTA country, uses originating materials and non-originating materials in the production of plastic bags of subheading 3923.29. The rule set out in Schedule I for subheading 3923.29 specifies both a change in tariff classification from any other heading, except from subheading 3920.20 or 3920.71, under which certain plastic materials are classified, and a regional value-content requirement. Therefore, with respect to that part of the rule that specifies a change in tariff classification, in order for the plastic bag to qualify as an originating good, any plastic materials that are classified under subheading 3920.20 or 3920.71 and that are used in the production of the plastic bag must be originating materials.

  [...]

  However, the rule set out in Schedule I for subheading 3923.29 specifies both a change in tariff classification and a regional value-content requirement. Therefore, under paragraph 5(1)(a), in order to be considered an originating good, the plastic bag must also, except as otherwise provided in subsection 5(4), satisfy the regional value-content requirement specified in that rule. As provided in paragraph 5(1)(a), the value of the non-originating materials that do not satisfy the specified change in tariff classification, together with the value of all other non-originating materials used in the production of the plastic bag, will be taken into account in calculating the regional value content of the plastic bag.

  [...]

  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.

  Although Producer A’s barbers’ chairs do not qualify as originating goods under the rule set out in Schedule I, paragraph 4(4)(b) provides, among other things, that, where there is no change in tariff classification from the non-originating materials to the goods because the subheading under which the goods are classified provides for both the goods and their parts, the goods shall qualify as originating goods if they satisfy a specified regional value-content requirement.

  [...]

  Example 6: Subsections 5(5) and (6)

  [...]

  Therefore, with respect to that part of the rule that specifies a change in tariff classification, in order for the dress to qualify as an originating good, the combed wool yarn and the fine wool fabric made therefrom that are used by Producer A in the production of the dress must be originating materials.

  [...]

[...]

• 4 (1) A good originates in the territory of a CCFTA country where the good is

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  • (f) a good produced on board a factory ship from a good referred to in paragraph (e), where the factory ship is registered or recorded with the same CCFTA country as the vessel that took that good and flies that country’s flag;

• (2) A good originates in the territory of a CCFTA country where

  • (a) each of the non-originating materials used in the production of the good undergoes the applicable change in tariff classification as a result of production that occurs entirely in the territory of one or both of the CCFTA countries, where the applicable rule in Schedule I for the tariff provision under which the good is classified specifies only a change in tariff classification, and the good satisfies all other applicable requirements of these Regulations;

  • (b) each of the non-originating materials used in the production of the good undergoes the applicable change in tariff classification as a result of production that occurs entirely in the territory of one or both of the CCFTA countries and the good satisfies the applicable regional value-content requirement, where the applicable rule in Schedule I for the tariff provision under which the good is classified specifies both a change in tariff classification and a regional value-content requirement, and the good satisfies all other applicable requirements of these Regulations; or

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• (4) A good originates in the territory of a CCFTA country where

  • (a) except in the case of a good of any of Chapters 61 through 63,

    • [...]

    • (ii) one or more of the non-originating materials used in the production of the good do not undergo an applicable change in tariff classification because the materials were imported together, whether or not with originating materials, into the territory of a CCFTA country as an unassembled or disassembled good, and were classified as an assembled good pursuant to Rule 2(a) of the General Rules for the Interpretation of the Harmonized System,

  • (b) except in the case of a good of any of Chapters 61 through 63,

    • [...]

    • (ii) one or more of the non-originating materials used in the production of the good do not undergo an applicable change in tariff classification because

      • (A) those materials are provided for under the Harmonized System as parts of the good, and

    • (iii) the non-originating materials that do not undergo a change in tariff classification in the circumstances described in subparagraph (ii) and the good are not both classified as parts of goods under the heading or subheading referred to in clause (ii)(B),

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• (6) For purposes of subsection (2), where Schedule I sets out two or more alternative rules for the tariff provision under which a good is classified, if the good satisfies the requirements of one of those rules, it need not satisfy the requirements of another of the rules in order to qualify as an originating good.

• (7) For purposes of determining whether non-originating materials undergo an applicable change in tariff classification, a self-produced material may, at the choice of the producer of that material, be considered as a material used in the production of a good into which the self-produced material is incorporated.

• (8) The following example is an “Example” as referred to in subsection 2(4).

  Example: Self-produced Materials as Materials for Purposes of Determining Whether Non-originating Materials Undergo an Applicable Change in Tariff Classification

  [...]

  For purposes of determining whether the non-originating materials that are used in the production of Good A undergo the applicable change in tariff classification, Producer A has the option to consider the self-produced Material Z as the material that must undergo a change in tariff classification. As Material Z is of a heading different than that of Good A, Material Z satisfies the applicable change in tariff classification and Good A would qualify as an originating good.

• 2 (1) For purposes of these Regulations,

  accessories, spare parts or tools that are delivered with a good and form part of the good’s standard accessories, spare parts or tools

  accessories, spare parts or tools that are delivered with a good and form part of the good’s standard accessories, spare parts or tools means goods that are delivered with a good, whether or not they are physically affixed to that good, and that are used for the transport, protection, maintenance or cleaning of the good, for instruction in the assembly, repair or use of that good, or as replacements for consumable or interchangeable parts of that good; (accessoires, pièces de rechange ou outils qui sont livrés avec le produit et qui en font normalement partie)

  after-market parts

  after-market parts means goods that are not for use as original equipment in the production of motor vehicles and that are goods of a tariff provision listed in Schedule IV; (pièces destinées au marché du service après-vente)

  Harmonized System

  Harmonized System means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes and Chapter Notes, as set out in

  [...]

  identical goods

  identical goods means, with respect to a good, goods that

  • (a) are the same as that good in all respects, including physical characteristics, quality and reputation but excluding minor differences in appearance,

  • (b) were produced in the same country as that good, and

  identical materials

  identical materials means, with respect to a material, materials that

  • (a) are the same as that material in all respects, including physical characteristics, quality and reputation but excluding minor differences in appearance,

  • (b) were produced in the same country as that material, and

  intermediate material

  intermediate material means a self-produced material that is used in the production of a good and is designated as an intermediate material under subsection 7(4); (matière intermédiaire)

  national

  national has the same meaning as in Article B-01 of the Agreement; (ressortissant)

  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)

  person of a CCFTA country

  person of a CCFTA country has the same meaning as person of a Party in Article B-01 of the Agreement; (personne d’un pays ALÉCC)

  royalties

  royalties means payments of any kind, including payments under technical assistance agreements or similar agreements, made as consideration for the use of, or right to use, any copyright, literary, artistic, or scientific work, patent, trademark, design, model, plan, secret formula or process, excluding those payments under technical assistance agreements or similar agreements that can be related to specific services such as

  [...]

  similar goods

  similar goods means, with respect to a good, goods that

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  • (b) were produced in the same country as that good, and

  similar materials

  similar materials means, with respect to a material, materials that

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  • (b) were produced in the same country as that material, and

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• (3) In these Regulations,

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  • (e) any reference to a tariff item in Chapter D of the Agreement that includes letters shall be reflected as the appropriate eight-digit number

    [...]

• (4) Where an example, referred to as an Example , is set out in these Regulations, the example is for purposes of illustrating the application of a provision, and where there is any inconsistency between the example and the provision, the provision prevails to the extent of the inconsistency.

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

• (6) For purposes of subsections 5(8), 6(11) and 7(6),

  • (a) total cost consists of all product costs, period costs and other costs that are recorded, except as otherwise provided in subparagraphs (b)(i) and (ii), on the books of the producer without regard to the location of the persons to whom payments with respect to those costs are made;

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  • (c) total cost does not include profits that are earned by the producer, regardless of whether they are retained by the producer or paid out to other persons as dividends, or taxes paid on those profits, including capital gains taxes;