(i)

carrier refers to any vehicle for air, sea, and land transport;

(ii)

CIF price or CIF value refers to the price actually paid or payable to the exporter for the good when the good is loaded out of the carrier, at the port of importation. The price value includes the cost of the good, insurance and freight necessary to deliver the good to the named port of destination;

(iii)

Customs Valuation Agreement means the WTO Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994;

(iv)

FOB price or FOB value refers to the price actually paid or payable to the exporter for the good when the good is loaded onto the carrier at the named port of exportation. The value includes the cost of the good and all costs necessary to bring the good onto the carrier;

(v)

Generally accepted accounting principles refers to the recognised consensus or substantial authoritative support in the territory of a Party at a particular time as to which economic resources and obligations should be recorded as assets and liabilities, which changes in assets and liabilities should be recorded, how the assets and liabilities and changes in them should be measured, what information should be disclosed and how it should be disclosed, and which financial statements should be prepared.  These standards may be broad guidelines of general application as well as detailed practices, and procedures;

(vi)

Harmonised System means the Harmonised Commodity Description and Coding System

(vii)

identical and interchangeable materials means materials being of the same kind and commercial quality, possessing the same technical and physical characteristics, and which once they are incorporated into the finished product cannot be distinguished from one another for origin purposes by virtue of any markings etc;

(viii)

indirect material means a good used in the production, testing or inspection of a good but not physically incorporated into the good, or a good used in the maintenance of buildings or the operation of equipment associated with the production of a good, including:

(a)   

fuel and energy;

(b) 

tools, dies, and moulds;

(c)

parts and materials used in the maintenance of equipment and buildings;

(d)

lubricants, greases, compounding materials, and other materials used in production or used to operate equipment and buildings;

(e)

gloves, glasses, footwear, clothing, safety equipment, and supplies;

(f) 

equipment, devices, and supplies used for testing or inspecting the goods;

(g)

catalysts and solvents; and any other goods that are not incorporated into the good but whose use in the production of the good can reasonably be demonstrated to be part of that production;

(ix)

material means ingredients, raw materials, parts, components, subassemblies and goods that were physically incorporated into another good or were subject to a process in the production of another good;

(x)

non-originating material used in production means any material whose country of origin is other than the Parties (imported non-originating) and any material whose origin cannot be determined (undetermined origin);

(xi)

originating material means a material that fulfils the criteria set out in either Rule 4 or Rule 5.

(xii)

production means methods of obtaining goods including manufacturing, producing, assembling, processing, raising, growing, breeding, mining, extracting, harvesting, fishing, trapping, gathering, collecting, hunting and capturing.

(a)

a raw or mineral good [2] product  extracted from its soil, waters, seabed, or beneath the seabed;

(b)

a vegetable good [3]  harvested or produced there;

(c)

an animal born and raised there;

(d)

a good obtained from animals referred to in (c) above;

(e)

a good obtained from hunting, trapping, fishing or aquaculture conducted there;

(f)

a good of sea fishing and other marine goods taken from outside its territory/territorial waters and Exclusive Economic Zone (EEZ) by vessels registered with Party and flying its Flag;

(g)

a good processed and/or made on board factory ships registered with a Party and flying its Flag exclusively from products referred to in paragraph (f) above;

(h)

a good taken by a Party, or a person of a Party, from the sea bed or beneath the sea bed outside the territorial waters/sea of that Party, in accordance with the provisions of the United Nations Convention on the Law of the Sea;

(i)

articles collected there which can no longer perform their original purpose nor are capable of being restored or repaired and are fit only for disposal or recovery of parts or raw materials, or for recycling purposes[4]  and

(j)

a good produced there exclusively from goods referred to in (a) through (i), or from their derivatives, at any stage of production.

Value of Originating materials

+

Direct Labour Cost

+

Direct Overhead Cost

+

Profit

x 100 % ≥ 40%

FOB Price

(a)

operations to ensure the preservation of products in good condition during transport and storage (such as drying, freezing, keeping in brine, ventilation, spreading out, chilling, placing in salt, sulphur dioxide or other aqueous solutions, removal of damaged parts, and like operations);

(b)

simple operations consisting of removal of dust, sifting or screening, sorting, classifying, matching (including the making-up of sets of articles), washing, painting, cutting;

(c)

changes of packing and breaking up and assembly of consignments;

(d)

simple cutting,  slicing and repacking or placing in bottles, flasks, bags, boxes, fixing on cards or boards, and all other simple packing operations;

(e)

affixing of marks, labels or other like distinguishing signs on products or their packaging;

(f)  

simple mixing of products whether or not of different kinds, where one or more components of the mixture do not meet the conditions laid down in this Chapter to enable them to be considered as originating products;

(g)

simple assembly of parts of products to constitute a complete product;

(h)

disassembly;

(i)

slaughter of animals;

(j)

mere dilution with water or another substance that does not materially alter the characteristics of the goods; and

(k)

a combination of two or more operations referred to in paragraphs (a) to (j).

a)

Packages and packing materials for retail sale:

i)

Packages and packing materials for retail sale, when classified together with the packaged product, according to General Rule 5(b) of the Harmonised System, shall not be taken into account for considering whether all non-originating materials used in the manufacture of a product fulfil the criterion corresponding to a change of tariff classification of the said product.

ii)

If the product is subject to an ad valorem percentage criterion, the value of the packages and packing materials for retail sale shall be taken into account in its origin assessment, in case they are treated as being one for customs purposes with the products in question.

b)

Containers and packing materials for transport:

The containers and packing materials exclusively used for the transport of a product shall not be taken into account for determining the origin of any product, in accordance with General Rule 5(b) of the Harmonised System.