THE EU-JAPAN EPAPREFERENTIAL ORIGIN OF GOODS
General TolerancesThis presentation has been prepared with the sole purpose of simplifying the understanding of some parts of the EU-Japan EPA
and bears no legal standing.

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Table of contents
1. Check of preferential origin
2. General tolerances – Legal basis
3. General tolerances – Main requirements + Examples
4. General tolerances for wholly obtained products
5. Particularity

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1. Preferential origin ????
Whollyobtained?
YesPreferentialorigin

No

Working on non-EU materialsbeyond insufficient working?

NoNo possibility ofpreferential origin

YesWorking fulfils the requirementsof Annex 3-B?

NoNo possibility ofpreferential origin

Yes
Preferentialorigin
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But perhaps
possibility oftolerance rule
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2. General tolerances – Legal basis

OJ – L330 – 27.12.2018

Requirements
to be fulfilled
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2. General tolerances – Legal basis

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3. General tolerances – Main requirements
3.1

The General Tolerances apply only to chapters 1 to 49 and
64 to 97 of the Harmonised System.
Textiles are excluded (chapters 50 to 63).
Specific tolerances for textiles in Notes 6 to 8 of Annex 3-A.

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3. General tolerances – Main requirements
3.2

If non-originating materials used do not satisfy the requirements
set out in Annex 3-B, these materials are nevertheless allowed tobe used and the finished product shall be considered asoriginating in a Party, provided that:a. the value of all those non-originating materials does not exceed
10% of the ex-works or FOB price of the product;b. the value of the non-originating materials used does not exceed
any of the percentages for the maximum value of non-originating
materials already specified in the rules set out in Annex 3-B.

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3. General tolerances – Main requirements
Example 1 (3.2.a)
Manufacture of vacuum cleaners - 8508
Product specific rules of origin - 8503  8518
 Change in tariff heading; or Maximum NOM  50% of EXW price; or Minimal RVC  55% of FOB price
My Choice  CTH
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3. General tolerances – Main requirements
Example 1 (3.2.a)
Spare parts
EU

Finished product

Non-EU
Spare parts # from 8508
Value: 49,00 €Spare parts  8508
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Vacuum cleaners
8508
Ex works price: 100,00 €FOB price: 105,00 €Under the supervision of9

3. General tolerances – Main requirements
Example 1 (3.2.a)Value of spare parts of heading 8508

≤10% of the ex-works or FOB price of the productThanks to the general tolerance rule,the vacuum cleaner can benefit from the preferential origin.

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3. General tolerances – Main requirements
Example 2 (3.2.b)
It is not allowed to add the 10% general tolerance rule to a percentage
already specified in the sufficient working rules !

No tolerance possible, neither with CTH rule, nor with MaxNOM
rule, nor with RVC rule !
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3. General tolerances – Main requirements
Conclusion
The 10% general tolerance rule can only be applied with simple:
 CC rule (Change in Chapter); CTH rule (Change in tariff heading); CTSH rule (Change in subheading).

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4. General tolerances – Wholly obtained products
4.1

The general tolerance for wholly obtained products :a. Not allowed within the meaning of article 3.3
b. Allowed if requirement in sufficient working rule set out inAnnex 3-B

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4. General tolerances – Wholly obtained products
Example 1 (4.1.a)
Export from the EU of plants or plant products, grown, cultivated,harvested, picked or gathered in the EU territory
No tolerance is allowed
The whole shipment has to be wholly obtained

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4. General tolerances – Wholly obtained products
Example 2 (4.1.b)
Production of Olive oil (1509) in the EU

Tolerance to use vegetable materials thatare not wholly obtained, provided that theirvalue does not exceed 10% of the ex-works
or FOB price of the product.

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5. Particularity
The general tolerance of 10 % by value may apply even when the list
rule limits the use of non-originating materials by weight.
Consequence:
The limits expressed by weight in the list rule may be
exceeded by application of the general tolerance rule of
10% by value.

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Thank you for your attention!
Additional questions ?
Mail them to the EU-Japan helpdesk

This presentation has been prepared with the sole purpose of simplifying the understanding of some parts of the EU-Japan EPA
and bears no legal standing.

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