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CCFTA Rules of Origin Regulations (SOR/97-340)

Regulations are current to 2020-09-09

PART IGeneral (continued)

Currency Conversion

  •  (1) Where the value of a good or a material is expressed in a currency other than the currency of the country in which the producer of the good is located, that value shall be converted to the currency of the country in which that producer is located on the basis of

    • (a) in the case of the sale of that good or the purchase of that material, the rate of exchange used by the producer for purposes of recording that sale or purchase, as the case may be; and

    • (b) in the case of a material that is acquired by the producer other than by a purchase,

      • (i) where the producer used a rate of exchange for purposes of recording another transaction in that other currency that occurred within the period of 30 days before or after the date on which the producer acquired the material, that rate, and

      • (ii) in any other case,

        • (A) with respect to a producer located in Canada, the rate of exchange referred to in section 5 of the Currency Exchange for Customs Valuation Regulations for the date on which the material was shipped directly to the producer, and

        • (B) with respect to a producer located in Chile, the rate of exchange established under the second paragraph of section 44 contained in the first section of the Ley 18.840 (Ley Organica Constitucional del Banco Central de Chile) for the date on which the material was shipped directly to the producer.

  • (2) Where a producer of a good has a statement referred to in section 12 that includes information in a currency other than the currency of the country in which that producer is located, the currency shall be converted to the currency of the country in which the producer is located on the basis of

    • (a) if the material was purchased by the producer in the same currency as the currency in which the information in the statement is provided, the rate of exchange used by the producer for purposes of recording the purchase;

    • (b) if the material was purchased by the producer in a currency other than the currency in which the information in the statement is provided,

      • (i) where the producer used a rate of exchange for purposes of recording a transaction in that other currency that occurred within the period of 30 days before or after the date on which the producer acquired the material, that rate, and

      • (ii) in any other case, the rate of exchange referred to in clause (1)(b)(ii)(A) or (B); and

    • (c) if the material was acquired by the producer other than by a purchase,

      • (i) where the producer used a rate of exchange for purposes of recording a transaction in that other currency that occurred within the period of 30 days before or after the date on which the producer acquired the material, that rate, and

      • (ii) in any other case, the rate of exchange referred to in clause (1)(b)(ii)(A) or (B).

PART IIOriginating Goods

General

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

    • (a) a mineral good extracted in the territory of one or both of the CCFTA countries;

    • (b) a vegetable or other good harvested in the territory of one or both of the CCFTA countries;

    • (c) a live animal born and raised in the territory of one or both of the CCFTA countries;

    • (d) a good obtained from hunting, trapping or fishing in the territory of one or both of the CCFTA countries;

    • (e) fish, shellfish or other marine life taken from the sea by a vessel registered or recorded with a CCFTA country and flying its flag;

    • (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;

    • (g) a good taken by a CCFTA country or a person of a CCFTA country from or beneath the seabed outside the territorial waters of that country, where a CCFTA country has the right to exploit that seabed;

    • (h) a good taken from outer space, where the good is obtained by a CCFTA country or a person of a CCFTA country and is not processed outside the territories of the CCFTA countries;

    • (i) waste and scrap derived from production in the territory of one or both of the CCFTA countries;

    • (j) waste and scrap derived from used goods collected in the territory of one or both of the CCFTA countries, where that waste and scrap is fit only for the recovery of raw materials; or

    • (k) a good produced in the territory of one or both of the CCFTA countries exclusively from a good referred to in any of paragraphs (a) through (j), or from the derivatives of such a good, at any stage of production.

  • (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

    • (c) 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 only a regional value-content requirement, and the good satisfies all other applicable requirements of these Regulations.

  • (3) A good originates in the territory of a CCFTA country where the good is produced entirely in the territory of one or both of the CCFTA countries exclusively from originating materials.

  • (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,

      • (i) the good is produced entirely in the territory of one or both of the CCFTA countries,

      • (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,

      • (iii) the regional value content of the good, calculated in accordance with section 6, is not less than 35 per cent where the transaction value method is used, or is not less than 25 per cent where the net cost method is used, unless the applicable rule in Schedule I for the tariff provision under which the good is classified specifies a different regional value-content requirement, in which case that regional value-content requirement shall apply, and

      • (iv) the good satisfies all other applicable requirements of these Regulations; or

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

      • (i) the good is produced entirely in the territory of one or both of the CCFTA countries,

      • (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

        • (B) the heading for the good provides for both the good and its parts and is not further subdivided into subheadings, or the subheading for the good provides for both the good and its parts,

      • (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),

      • (iv) each of the non-originating materials that is used in the production of the good and is not referred to in subparagraph (iii) undergoes an applicable change in tariff classification or satisfies any other applicable requirement set out in Schedule I,

      • (v) the regional value content of the good, calculated in accordance with section 6, is not less than 35 per cent where the transaction value method is used, or is not less than 25 per cent where the net cost method is used, unless the applicable rule in Schedule I for the tariff provision under which the good is classified specifies a different regional value-content requirement, in which case that regional value-content requirement shall apply, and

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

  • (5) For purposes of paragraph (4)(b),

    • (a) the determination of whether a heading or subheading provides for a good and its parts shall be made on the basis of the nomenclature of the heading or subheading and the relevant Section Notes or Chapter Notes, in accordance with the General Rules for the Interpretation of the Harmonized System; and

    • (b) where, in accordance with the Harmonized System, a heading includes parts of goods by application of a Section Note or Chapter Note of the Harmonized System and the subheadings under that heading do not include a subheading designated “Parts”, a subheading designated “Other” under that heading shall be considered to cover only the goods and parts of the goods that are themselves classified under that subheading.

  • (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

    Producer A, located in a CCFTA country, produces Good A. In the production process, Producer A uses originating Material X and non-originating Material Y to produce Material Z. Material Z is a self-produced material that will be used to produce Good A.

    The rule set out in Schedule I for the heading under which Good A is classified specifies a change in tariff classification from any other heading. In this case, both Good A and the non-originating Material Y are of the same heading. However, the self-produced Material Z is of a heading different than that of Good A.

    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.

 
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