Country of Origin
Country of origin determination through change in tariff heading
Change in tariff heading (CTH) means if the tariff heading or HS code of a non-originating material is changed as it is processed in the region, the non-originating material is recognized as an originating good. It is important to decide to what degree of CTH meets the country of origin determination standard. There are three types of CTH: 6 digits, 4 digits and 2 digits.
Example of country of origin determination through CTH
Example of country of origin determination through CTH Classification Product name Country of origin Country of origin certificate HS Code HS Code ABS resin China X 3926.10 HAC8270 KR O 3926.10 PP resin KR O 3902.10 HSP-375 Unknown X 3902.10 HDC HL125 KR O 3902.10 M1252 Unknown X 3902.10
The 4 digits in the tariff heading of an unknown or non-originating raw material are different from those of a finished product.
When a car door trim made of six kinds of raw materials meets the CTH, it is recognized as an originating product.
The HS code management is critical for the CTH. It is desirable to commission an expert including a customs agent to handle the task and in case there are different views in confirming the CTH, it is recommended to prepare evidence documents through the pre-confirmation of tariff conducted by the Customs Valuation and Classification Institute.
Country of origin determination through value-added standard
If a certain level of added value has been created in the region, the entitlement as an originating good is granted. Depending on the calculation method, the determination can be based on build-down method, build-up method, net cost method or MC (value of import content) method.
Example of country of origin determination through value-added standard
The country of origin determination through value-added standard can be responded to the future verification only with the information of raw material receipts and payments, product receipts and payments and company’s internal cost policy.
Country of origin determination through specific manufacturing or processing operation standard
If the raw materials are processed in the region in the process defined by the Agreement, the entitlement of originating good is granted. The standard is usually applied to petroleum, chemical, plastic, and textile products. To meet the standard, there should be a supporting document proving the raw material has been handled through a defined process including a production journal and list of facilities capable of performing the process.