GreatNorthCollective/greatnorth-canada-federal-laws-text huggingface dataset:
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Producer A, located in a CUSMA country, produces a chef set for retail sale using originating and non-originating materials. This set includes an apron, cooking gloves and a chef hat. The chef set is classified in heading 62.11 as a result of the application of Rule 3 of the General Rules for the Interpretation of the Harmonized System. For this reason, subsection (3) applies to this set. Both the apron and cooking gloves meet the product-specific rules of origin for their respective product categories and are therefore considered to be originating. The chef hat, which represents 9.7% of the value of the set, is produced in the territory of a non-CUSMA country and is therefore non-originating. The set is nonetheless an originating good because less than 10% of the value of the set is non-originating.
CUSMA Rules of Origin Regulations — 7
reign currency conversion of $10,000 and a loss on foreign currency conversion of $8,000, resulting in a net gain of $2,000. Producer A also determines that $7,000 of the gain on foreign currency conversion and $6,000 of the loss on foreign currency conversion is related to the purchase of non-originating materials used in the production of Good A and $3,000 of the gain on foreign currency conversion and $2,000 of the loss on foreign currency conversion is not related to the production of Good A. The producer determines that the total cost of Good A is $45,000 before deducting the $1,000 net gain on foreign currency conversion related to the production of Good A. The total cost of Good A is therefore $44,000. That $1,000 net gain is not included in the value of non-originating materials under subsection 8 (1). Example 10 (subsection (12)): Given the same facts as in Example 9, except that Producer A determines that $6,000 of the gain on foreign currency conversion and $7,000 of the loss on foreign currency conversion is related to the purchase of non-originating materials used in the production of Good A the total cost of Good A is $45,000, which includes the $1,000 net loss on foreign currency conversion related to the production of Good A. That $1,000 net loss is not included in the value of non-originating materials under subsection 8 (1).
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Example 1: Point of direct shipment (with respect to the definition adjusted to exclude any costs incurred in the international shipment of the good ) A producer has only one factory at which the producer manufactures office chairs. Because the factory is located close to transportation facilities, all units of the finished good are stored in a factory warehouse 200 m from the end of the production line. Goods are shipped worldwide from this warehouse. The point of direct shipment is the warehouse.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
A producer has only one factory at which the producer manufactures office chairs. Because the factory is located close to transportation facilities, all units of the finished good are stored in a factory warehouse 200 m from the end of the production line. Goods are shipped worldwide from this warehouse. The point of direct shipment is the warehouse.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Example 2: Point of direct shipment (with respect to the definition adjusted to exclude any costs incurred in the international shipment of the good ) A producer has six factories, all located within the territory of one of the CUSMA countries, at which the producer produces garden tools of various types. These tools are shipped worldwide and orders usually consist of bulk orders of various types of tools. Because different tools are manufactured at different factories, the producer decided to consolidate storage and shipping facilities and ships all finished products to a large warehouse located near the seaport from which all orders are shipped. The distance from the factories to the warehouse varies from 3 km to 130 km. The point of direct shipment for each of the goods is the warehouse.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
A producer has six factories, all located within the territory of one of the CUSMA countries, at which the producer produces garden tools of various types. These tools are shipped worldwide and orders usually consist of bulk orders of various types of tools. Because different tools are manufactured at different factories, the producer decided to consolidate storage and shipping facilities and ships all finished products to a large warehouse located near the seaport from which all orders are shipped. The distance from the factories to the warehouse varies from 3 km to 130 km. The point of direct shipment for each of the goods is the warehouse.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Example 3: Point of direct shipment (with respect to the definition adjusted to exclude any costs incurred in the international shipment of the good ) A producer has only one factory, located near the centre of one of the CUSMA countries, at which the producer manufactures office chairs. The office chairs are shipped from that factory to three warehouses leased by the producer, one on the west coast, one near the factory and one on the east coast. The office chairs are shipped to buyers from these warehouses, the shipping location depending on the shipping distance from the buyer. Buyers closest to the west coast warehouse are normally supplied by the west coast warehouse, buyers closest to the east coast are normally supplied by the warehouse located on the east coast and buyers closest to the warehouse near the factory are normally supplied by that warehouse. In this case, the point of direct shipment is the location of the warehouse from which the office chairs are normally shipped to customers in the location in which the buyer is located.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
A producer has only one factory, located near the centre of one of the CUSMA countries, at which the producer manufactures office chairs. The office chairs are shipped from that factory to three warehouses leased by the producer, one on the west coast, one near the factory and one on the east coast. The office chairs are shipped to buyers from these warehouses, the shipping location depending on the shipping distance from the buyer. Buyers closest to the west coast warehouse are normally supplied by the west coast warehouse, buyers closest to the east coast are normally supplied by the warehouse located on the east coast and buyers closest to the warehouse near the factory are normally supplied by that warehouse. In this case, the point of direct shipment is the location of the warehouse from which the office chairs are normally shipped to customers in the location in which the buyer is located.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Example 4 (subsection (3)): Net cost method A producer located in CUSMA country A sells Good A that is subject to a regional value content requirement to a buyer located in CUSMA country B. The producer of Good A chooses to calculate the regional value content of that good using the net cost method. All applicable requirements of these Regulations, other than the regional value content requirement, have been met. The applicable regional value content requirement is 50%. In order to calculate the regional value content of Good A, the producer first calculates the net cost of Good A. Under paragraph (11)(a), the net cost is the total cost of Good A (the aggregate of the product costs, period costs and other costs) per unit, minus the excluded costs (the aggregate of the sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs and non-allowable interest costs) per unit. The producer uses the following figures to calculate the net cost: Product costs: Value of originating materials $30.00 Value of non-originating materials $40.00 Other product costs $20.00 Period costs: $10.00 Other costs: $0.00 Total cost of Good A, per unit: $100.00 Excluded costs: Sales promotion, marketing and after-sales service costs $5.00 Royalties $2.50 Shipping and packing costs $3.00 Non-allowable interest costs $1.50 Total excluded costs: $12.00 The net cost is the total cost of Good A, per unit, minus the excluded costs. Total cost of Good A, per unit: $100.00 Excluded costs: - $12.00 Net cost of Good A, per unit: $88.00 The net cost ($88) and the value of non-originating materials ($40) are needed in order to calculate the regional value content. The producer calculates the regional value content of Good A under the net cost method in the following manner: RVC = (NC − VNM) ÷ NC × 100 = (88 - 40) ÷ 88 × 100 = 54.5% Therefore, under the net cost method, Good A qualifies as an originating good, with a regional value content of 54.5%.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
A producer located in CUSMA country A sells Good A that is subject to a regional value content requirement to a buyer located in CUSMA country B. The producer of Good A chooses to calculate the regional value content of that good using the net cost method. All applicable requirements of these Regulations, other than the regional value content requirement, have been met. The applicable regional value content requirement is 50%.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
In order to calculate the regional value content of Good A, the producer first calculates the net cost of Good A. Under paragraph (11)(a), the net cost is the total cost of Good A (the aggregate of the product costs, period costs and other costs) per unit, minus the excluded costs (the aggregate of the sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs and non-allowable interest costs) per unit. The producer uses the following figures to calculate the net cost: Product costs: Value of originating materials $30.00 Value of non-originating materials $40.00 Other product costs $20.00 Period costs: $10.00 Other costs: $0.00 Total cost of Good A, per unit: $100.00 Excluded costs: Sales promotion, marketing and after-sales service costs $5.00 Royalties $2.50 Shipping and packing costs $3.00 Non-allowable interest costs $1.50 Total excluded costs: $12.00 The net cost is the total cost of Good A, per unit, minus the excluded costs. Total cost of Good A, per unit: $100.00 Excluded costs: - $12.00 Net cost of Good A, per unit: $88.00 The net cost ($88) and the value of non-originating materials ($40) are needed in order to calculate the regional value content. The producer calculates the regional value content of Good A under the net cost method in the following manner: RVC = (NC − VNM) ÷ NC × 100 = (88 - 40) ÷ 88 × 100 = 54.5% Therefore, under the net cost method, Good A qualifies as an originating good, with a regional value content of 54.5%.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Product costs: Value of originating materials $30.00 Value of non-originating materials $40.00 Other product costs $20.00
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Value of non-originating materials $40.00
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Excluded costs: Sales promotion, marketing and after-sales service costs $5.00 Royalties $2.50 Shipping and packing costs $3.00 Non-allowable interest costs $1.50
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Sales promotion, marketing and after-sales service costs $5.00
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
The net cost is the total cost of Good A, per unit, minus the excluded costs.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
The net cost ($88) and the value of non-originating materials ($40) are needed in order to calculate the regional value content. The producer calculates the regional value content of Good A under the net cost method in the following manner: RVC = (NC − VNM) ÷ NC × 100 = (88 - 40) ÷ 88 × 100 = 54.5%
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Therefore, under the net cost method, Good A qualifies as an originating good, with a regional value content of 54.5%.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Example 5 (paragraph (11)(a)): A producer in a CUSMA country produces Good A and Good B during the producer’s fiscal year. The producer uses the following figures, which are recorded on the producer’s books and represent all of the costs incurred with respect to both Good A and Good B, to calculate the net cost of those goods: Product costs: Value of originating materials $2,000 Value of non-originating materials $1,000 Other product costs $2,400 Period costs (including $1,200 in excluded costs): $3,200 Other costs: $400 Total cost of Good A and Good B: $9,000 The net cost is the total cost of Good A and Good B, minus the excluded costs incurred with respect to those goods. Total cost of Good A and Good B: $9,000 Excluded costs: - $1,200 Net cost of Good A and Good B: $7,800 The net cost must then be reasonably allocated, in accordance with Schedule 5, to Good A and Good B.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
A producer in a CUSMA country produces Good A and Good B during the producer’s fiscal year.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
The producer uses the following figures, which are recorded on the producer’s books and represent all of the costs incurred with respect to both Good A and Good B, to calculate the net cost of those goods: Product costs: Value of originating materials $2,000 Value of non-originating materials $1,000 Other product costs $2,400 Period costs (including $1,200 in excluded costs): $3,200 Other costs: $400 Total cost of Good A and Good B: $9,000
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Product costs: Value of originating materials $2,000 Value of non-originating materials $1,000 Other product costs $2,400
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Value of non-originating materials $1,000
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Period costs (including $1,200 in excluded costs): $3,200
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
The net cost is the total cost of Good A and Good B, minus the excluded costs incurred with respect to those goods.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
The net cost must then be reasonably allocated, in accordance with Schedule 5, to Good A and Good B.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Example 6 (paragraph (11)(b)): A producer in a CUSMA country produces Good A and Good B during the producer’s fiscal year. In order to calculate the regional value content of Good A and Good B, the producer uses the following figures that are recorded on the producer’s books and incurred with respect to those goods: Product costs: Value of originating materials $2,000 Value of non-originating materials $1,000 Other product costs $2,400 Period costs (including $1,200 in excluded costs): $3,200 Other costs: $400 Total cost of Good A and Good B: $9,000 Under paragraph (11)(b), the total cost of Good A and Good B is then reasonably allocated, in accordance with Schedule 5, to those goods. The costs are allocated in the following manner: Allocated to Good A Allocated to Good B Total cost ($9,000 for both Good A and Good B) $5,220 $3,780 The excluded costs ($1,200) that are included in the total cost allocated to Good A and Good B, in accordance with Schedule 5, are subtracted from that amount. Total excluded costs: Excluded cost allocated to Good A ($) Excluded cost allocated to Good B ($) Sales promotion, marketing and after-sale service costs $500 290 210 Royalties $200 116 84 Shipping and packing costs $500 290 210 Net cost (total cost minus excluded costs): $4,524 $3,276 Therefore the net cost of Good A is $4,524 and the net cost of Good B is $3,276.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
In order to calculate the regional value content of Good A and Good B, the producer uses the following figures that are recorded on the producer’s books and incurred with respect to those goods: Product costs: Value of originating materials $2,000 Value of non-originating materials $1,000 Other product costs $2,400 Period costs (including $1,200 in excluded costs): $3,200 Other costs: $400 Total cost of Good A and Good B: $9,000 Under paragraph (11)(b), the total cost of Good A and Good B is then reasonably allocated, in accordance with Schedule 5, to those goods. The costs are allocated in the following manner: Allocated to Good A Allocated to Good B Total cost ($9,000 for both Good A and Good B) $5,220 $3,780
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Under paragraph (11)(b), the total cost of Good A and Good B is then reasonably allocated, in accordance with Schedule 5, to those goods. The costs are allocated in the following manner: Allocated to Good A Allocated to Good B Total cost ($9,000 for both Good A and Good B) $5,220 $3,780
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
The excluded costs ($1,200) that are included in the total cost allocated to Good A and Good B, in accordance with Schedule 5, are subtracted from that amount. Total excluded costs: Excluded cost allocated to Good A ($) Excluded cost allocated to Good B ($) Sales promotion, marketing and after-sale service costs $500 290 210 Royalties $200 116 84 Shipping and packing costs $500 290 210 Net cost (total cost minus excluded costs): $4,524 $3,276
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Sales promotion, marketing and after-sale service costs $500
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Therefore the net cost of Good A is $4,524 and the net cost of Good B is $3,276.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Example 7 (paragraph (11)(c)): A producer located in a CUSMA country produces Good C and Good D. The following costs are recorded on the producer’s books for the months of January, February and March, and each cost that forms part of the total cost is reasonably allocated, in accordance with Schedule 5, to Good C and Good D. Total cost: Good C and Good D (in thousands of dollars) Allocated to Good C (in thousands of dollars) Allocated to Good D (in thousands of dollars) Product costs: Value of originating materials 100 0 100 Value of non-originating materials 900 800 100 Other product costs 500 300 200 Period costs (including $420 in excluded costs): 5,679 3,036 2,643 Minus excluded costs 420 300 120 Other costs: 0 0 0 Total cost (aggregate of product costs, period costs and other costs): 6,759 3,836 2,923
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
A producer located in a CUSMA country produces Good C and Good D. The following costs are recorded on the producer’s books for the months of January, February and March, and each cost that forms part of the total cost is reasonably allocated, in accordance with Schedule 5, to Good C and Good D. Total cost: Good C and Good D (in thousands of dollars) Allocated to Good C (in thousands of dollars) Allocated to Good D (in thousands of dollars) Product costs: Value of originating materials 100 0 100 Value of non-originating materials 900 800 100 Other product costs 500 300 200 Period costs (including $420 in excluded costs): 5,679 3,036 2,643 Minus excluded costs 420 300 120 Other costs: 0 0 0 Total cost (aggregate of product costs, period costs and other costs): 6,759 3,836 2,923
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Example 8 (subsection (12)): Producer A, located in a CUSMA country, produces Good A that is subject to a regional value content requirement. The producer chooses to calculate the regional value content of that good using the net cost method. Producer A buys Material X from Producer B, located in a CUSMA country. Material X is a non-originating material and is used in the production of Good A. Producer A provides Producer B, at no charge, with moulds to be used in the production of Material X. The cost of the moulds that is recorded on the books of Producer A has been expensed in the current year. Pursuant to subparagraph 4(1)(b)(ii) of Schedule 6, the value of the moulds is included in the value of Material X. Therefore, the cost of the moulds that is recorded on the books of Producer A and that has been expensed in the current year cannot be included as a separate cost in the net cost of Good A because it has already been included in the value of Material X.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Producer A, located in a CUSMA country, produces Good A that is subject to a regional value content requirement. The producer chooses to calculate the regional value content of that good using the net cost method. Producer A buys Material X from Producer B, located in a CUSMA country. Material X is a non-originating material and is used in the production of Good A. Producer A provides Producer B, at no charge, with moulds to be used in the production of Material X. The cost of the moulds that is recorded on the books of Producer A has been expensed in the current year. Pursuant to subparagraph 4(1)(b)(ii) of Schedule 6, the value of the moulds is included in the value of Material X. Therefore, the cost of the moulds that is recorded on the books of Producer A and that has been expensed in the current year cannot be included as a separate cost in the net cost of Good A because it has already been included in the value of Material X.
CUSMA Rules of Origin Regulations — CUSMA Rules of Origin Regulations
Example 9 (subsection (12)): Producer A, located in a CUSMA country, produces Good A that is subject to a regional value content requirement. The producer chooses to calculate the regional value content of that good using the net cost method and averages the calculation over the producer’s fiscal year under subsection (15). Producer A determines that during that fiscal year Producer A incurred a gain on foreign currency conversion of $10,000 and a loss on foreign currency conversion of $8,000, resulting in a net gain of $2,000. Producer A also determines that $7,000 of the gain on foreign currency conversion and $6,000 of the loss on foreign currency conversion is related to the purchase of non-originating materials used in the production of Good A and $3,000 of the gain on foreign currency conversion and $2,000 of the loss on foreign currency conversion is not related to the production of Good A. The producer determines that the total cost of Good A is $45,000 before deducting the $1,000 net gain on foreign currency conversion related to the production of Good A. The total cost of Good A is therefore $44,000. That $1,000 net gain is not included in the value of non-originating materials under subsection 8 (1).