CUSMA Rules of Origin Regulations — 9
B a statement described in paragraph (2)(b) that specifies an amount equal to the net cost minus the value of non-originating materials used to produce the finished bearing rings ($1.40 - $0.75 = $0.65). The net cost of the bearings (per unit) is calculated as follows: Product costs: Value of originating materials ($0.45 + $0.65) $1.10 Value of non-originating materials ($1.50 − $0.65) $0.85 Other product costs $0.75 Period costs (including $0.05 in excluded costs): $0.15 Other costs: $0.05 Total cost of the bearings, per unit: $2.90 Excluded costs (included in period costs): $0.05 Net cost of the bearings, per unit: $2.85 Under the net cost method, the regional value content of the bearings is RVC = (NC − VNM) ÷ NC × 100 = ($2.85 − $0.85) ÷ $2.85× 100 = 70.2% Therefore, the bearings are originating goods. Situation D Producer B chooses to accumulate costs incurred by Producer A with respect to the bearing rings used in the production of the bearings. Producer A provides to Producer B a statement described in paragraph (2)(b) that specifies an amount equal to the value of other product costs used in the production of the finished bearing rings ($0.35). The net cost of the bearings (per unit) is calculated as follows: Product costs: Value of originating materials $0.45 Value of non-originating materials ($1.50 − $0.35) $1.15 Other product costs ($0.75 + $0.35) $1.10 Period costs (including $0.05 in excluded costs): $0.15 Other costs: $0.05 Total cost of the bearings per unit: $2.90 Excluded costs (included in period costs): $0.05 Net cost of the bearings, per unit: $2.85 Under the net cost method, the regional value content of the bearing is RVC = (NC − VNM) ÷ NC × 100 = ($2.85 − $1.15) ÷ $2.85 × 100 = 59.6% Therefore, the bearings are originating goods. Situation E Producer B chooses to accumulate costs incurred by Producer A with respect to the bearing rings used in the production of the bearings. Producer A provides to Producer B a signed statement described in subsection (3) that specifies the value of non-originating materials used in the production of the finished bearing rings ($0.75). Producer B chooses to calculate the regional value content of the bearings under the transaction value method. The regional value content of the bearings (per unit) is calculated as follow: Product costs: Transaction value of the bearings, per unit $3.15 Costs incurred, per unit, in the international shipment of the good (included in transaction value of the bearings) $0.15 Transaction value, per unit, adjusted to exclude any costs incurred in the international shipment of the good $3.00 Value of non-originating materials (value, per unit, of the unfinished bearing rings imported by Producer A) $0.75 Under the transaction value method, the regional value content of the bearing is RVC = (TV − VNM) ÷ TV × 100 = ($3.00 − $0.75) ÷ $3.00 × 100 = 75% Therefore, because the bearings have a regional value content of at least 60% under transaction value method, the bearings are originating goods. Example 2 (subsection (1)): Producer A, located in CUSMA country A, imports non-originating cotton, carded or combed, provided for in heading 52.03 for use in the production of cotton yarn provided for in heading 52.05. Because the change from cotton, carded or combed, to cotton yarn is a change within the same Chapter, the cotton does not satisfy the applicable change in tariff classification for heading 52.05, which is a change from any other Chapter, with certain exceptions. Therefore, the cotton yarn that Producer A produces from non-originating cotton is a non-originating good. Producer A then sells the non-originating cotton yarn to Producer B, also located in CUSMA country A, who uses the cotton yarn in the production of woven fabric of cotton provided for in heading 52.08. The change from non-originating cotton yarn to woven fabric of cotton is insufficient to satisfy the applicable change in tariff classification for heading 52.08, which is a chan