CUSMA Rules of Origin Regulations — 5
ich certain copper materials are classified and a regional value content requirement. Therefore, with respect to that part of the rule that specifies a change in tariff classification, in order for the copper anode to qualify as an originating good, any copper materials that are classified under heading 74.02 or 74.04 and that are used in the production of the copper anode must be originating materials. In this case, all of the non-originating materials used in the production of the copper anode satisfy the specified change in tariff classification, with the exception of a small amount of copper materials classified under heading 74.04. Subsection (1) provides that the copper anode can be considered an originating good if the value of the non-originating copper materials that do not satisfy the specified change in tariff classification does not exceed 10% of the transaction value of the copper anode or the total cost of the copper anode, whichever is applicable. In this case, the value of those non-originating materials that do not satisfy the specified change in tariff classification does not exceed the 10% limit. However, the rule set out in Schedule 1 for heading 74.02 specifies both a change in tariff classification and a regional value content requirement. Under paragraph (1)(b), in order to be considered an originating good, the copper anode must also, except as otherwise provided in subsection (4), satisfy the regional value content requirement specified in that rule. As provided in paragraph (1)(b), the value of the non-originating materials that do not satisfy the specified change in tariff classification, together with the value of all other non-originating materials used in the production of the copper anode, will be taken into account in calculating the regional value content of the copper anode. Example 4 (subsection (4)): Producer A, located in a CUSMA country, primarily uses originating materials in the production of shoes of heading 64.05. The product-specific rule of origin set out in Schedule 1 for heading 64.05 specifies both a change in tariff classification from any heading other than headings 64.01 through 64.05 or subheading 6406.10 and a regional value content requirement. With the exception of a small amount of materials of Chapter 39, all of the materials used in the production of the shoes are originating materials. Under subsection (4), if the value of all of the non-originating materials used in the production of the shoes does not exceed 10% of the transaction value of the shoes or the total cost of the shoes, whichever is applicable, the shoes are not required to satisfy the regional value content requirement specified in the rule set out in Schedule 1 in order to be considered originating goods. Example 5 (subsection (4)): Producer A, located in a CUSMA country, produces barbers’ chairs of subheading 9402.10. The product-specific rule of origin set out in Schedule 1 for goods of subheading 9402.10 specifies a change in tariff classification from any other subheading. All of the materials used in the production of these chairs are originating materials, with the exception of a small quantity of non-originating materials that are classified as parts of barbers’ chairs. These parts undergo no change in tariff classification because subheading 9402.10 provides for both barbers’ chairs and their parts. Although Producer A’s barbers’ chairs do not qualify as originating goods under the rule set out in Schedule 1, paragraph 3(4)(a) provides, among other things, that, if there is no change in tariff classification from the non-originating materials to the goods because the subheading under which the goods are classified provides for both the goods and their parts, the goods will qualify as originating goods if they satisfy the specified regional value content requirement. However, under subsection (4), if the value of the non-originating materials does not exceed 10% of the transaction value of the barb