In accordance with Order No. 255 of the General Administration of Customs of the People's Republic of China and Announcement No. 106 of 2021 of the General Administration of Customs, the Regional Comprehensive Economic Partnership Agreement (RCEP) came into force on 1 January 2022.
After reading the instructions on the back page of the RCEP Certificate of Origin, many certificate of origin applicants have said that they do not understand the origin standard of RCEP.
Applicant:
There are so many RCEP origin standards: WO, PE, CTC, RVC, CR, ACU, DMI.... It's also too complicated!
In fact, the determination of the RCEP origin standard is not so difficult
Let the editor talk to everyone
As with other FTAs
First look at whether the goods contain non-originating ingredients.
Does not contain non-originating ingredients
Consider applying WO or PE
"WO" standard
Goods subject to the "WO" standard: Goods that are fully acquired or produced by a RCEP member and comply with Article 4 of the Measures for the Administration of Origin of Imported and Exported Goods under the Agreement of the Customs of the People's Republic of China under the Agreement on regional comprehensive economic partnerships (hereinafter referred to as the "Administrative Measures"), and are generally used for primary products, such as fruits, animal products, primary mineral products, etc.
"PE" standard
Goods subject to the "PE" standard: Goods produced in an RCEP member using exclusively raw materials that comply with the provisions of Article 3 (2) of the Administrative Measures. It is generally used in industrial products or processed manufactured products.
Knock on the chalkboard to draw the point
If non-originating ingredients are included, the product's first 6-digit HS code should be used to check which criteria apply against the product-specific Rules of Origin (PSR), and fill in the CTC, RVC or CR in the Origin Criteria column accordingly according to the applicable criteria.
Warm reminder: Product Specific Rules of Origin (PSR) can be found in Annex I of GAC Announcement No. 106 of 2021.
The PSR stipulates that there are three kinds of origin standards applicable to goods
1. Tariff Classification Change Criteria (CTC)
01
When the goods and the non-originating materials produced in the goods are classified under the different tax codes in the International Convention on the Harmonized System of Trade Names and Codes (HS codes), the goods can be considered to have undergone substantial changes in manufacturing and meet the criteria for change in tariff classification. Tariff classification changes include chapter changes (2-digit tax number change), item change (4-digit tax number change) and sub-item change (6-digit tax number change)
Let me give you an example
The Chinese company produces concrete pellets (HS 2517.49, applicable origin standard "item change"), uses construction stone imported from Russia (HS 2515.20), imported construction stone is processed to make finished concrete pellets, the item change occurs, the product has RCEP origin qualification, and the origin standard is filled in "CTC".
Regional Value Ingredient Standard (RVC)
02
The regional value component standard is a kind of value-added standard, which determines whether the non-original material has changed substantially by comparing the proportion of the value component of the goods such as various raw materials, non-originating materials, and costs. The regional value component can be calculated using one of the following formulas:
formula
Deduction formula RVC = (FOB price of goods - price of non-originating materials) / fob price of goods * 100%
or
Additive formula RVC = (original material price + direct labor cost + direct operating expense cost + profit + other cost) / fob price of goods * 100%
The PSR stipulates that the "regional value component 40" standard applies to the goods, and when the calculated regional value component is not less than 40%, the goods can obtain RCEP origin qualification.
A Chinese manufacturer produced garden umbrellas (HS 6601.10) for export to Singapore at a FOB price of US$5.30 per stick, and the production process was completed in China. The raw materials for courtyard umbrellas are as follows:
(1) Calculated according to the deduction formula, the regional value component of the courtyard umbrella is:
（5.3-0.32）/5.3×100="94"
(2) Calculated according to the accumulation formula, the regional value component of the courtyard umbrella is:
（3.55+0.05+0.94+0.035+0.405）/5.3×100="94"
The regional value component calculated using either of the above formulas satisfies the requirements of the regional value component 40. The garden umbrella can be judged to have RCEP origin qualification, and the origin standard is filled in "RVC".
Processing Process Standards (Chemical Reaction CR)
03
RCEP uses only the "chemical reaction" process standard. Goods to which the chemical reaction standard applies, if prepared by chemical reaction in a Party, shall be regarded as originating goods, and the origin standard shall be filled in "CR". Shipments applying chemical reaction criteria are concentrated in Chapters 29 (Organic Chemicals) and 38 (Miscellaneous Chemicals). It should be noted that dissolving in water or other solvents, removing solvents including water, and adding or removing crystalline water are not chemical reactions.
Tips:
If the product-specific rules of origin corresponding to a good contain any combination of the above three criteria, and the relationship between the standards is or, then it is sufficient to choose one of the applicable criteria to fill in the corresponding criteria.
If the product-specific rules of origin corresponding to the goods are "fully acquired", it means that the goods can only be subject to the full access criterion, and no other criterion can qualify the goods for origin.
Applicant: I finally understand it. But wait, there are ACU and DMI, which look very strange, what does it mean?
ACU and DMI
04
ACU and DMI represent complementary rules in RCEP's Rules of Origin: cumulative rules and tiny content.
Cumulative rules are prescribed
The cumulative rule stipulates that the originating goods or originating materials from other RCEP members used in production can be regarded as materials originating in China. In this case, the "ACU" should also be indicated when filling in the origin standard.
Fillable fields include: "PE ACU", "CTC ACU", "RVC ACU", "CR ACU".
But "WO ACU" can not appear Oh, because full origin can not use the cumulative rule.
Tiny content regulations
The micro content provision provides that, in the production of non-originating materials that do not meet the requirements for a change in tariff classification, as long as the price does not exceed 10% of the FOB price of the goods (for goods in Chapters 50-63, the weight of non-originating materials that do not meet the requirements for change in tariff classification may also be calculated, as long as it does not exceed 10% of the total weight of the goods), eligibility for origin may still be obtained. In this case, the "DMI" should also be indicated when filling in the criteria of origin. The micro content provisions are changed for the tax rules, so only "CTC DMI", "CTC ACU DMI" (using both the accumulation rule and the micro content rule) can appear.
brief summary
WO, PE, CTC, RVC, CR are filled in according to the applicable origin standards for the goods and can be used separately, while the ACU and DMI must be used together with the origin standards applicable to the goods.
Contributed by / Department of Customs Collection and Administration, Guangzhou Customs
Producer / Tao Yong
Reviewer / Liu Chang