Document ID: chunk:federal_register_of_legislation:C2005C00021:clause:1_153yh:p2
Version: federal_register_of_legislation:C2005C00021
Segment Type: clause
Provision Reference: sch 1 cl 153YH (pt 2/2)
Character Range: 29373–31381

goods are classified in accordance with Rule 3 of the Interpretation Rules;
the goods are US originating goods only if:
 (c) all of the goods in the set are US originating goods under this Division; or
 (d) the total value of the goods in the set that are not US originating goods under this Division does not exceed 10% of the customs value of the set of goods.

Note: The value of the goods in the set is to be worked out in accordance with the regulations: see subsection 153YA(2).

 (6) In applying paragraph (5)(c), assume the goods were not part of a set.

Example: A skirt and a belt are put up in a set for retail sale. The skirt and the belt have been classified under Rule 3 of the Interpretation Rules according to the tariff classification applicable to skirts.

 The effect of subsection (6) is that the origin of the belt must now be determined according to the tariff classification applicable to belts.

Transformation test

 (7) A non‑originating material satisfies the transformation test if:
 (a) it satisfies the change in tariff classification that is specified in column 3 of the Schedule 2 tariff table opposite the final classification for the goods; or
 (b) it does not satisfy the change in tariff classification mentioned in paragraph (a), but it was produced entirely in the US, or entirely in the US and Australia, from other non‑originating materials, and each of those materials satisfies the transformation test (including by one or more applications of this subsection).

Note 1: Paragraph (7)(b) relates to paragraph 2 of Article 5.3 (Accumulation) of the Agreement.

Note 2: Subsection (7) operates in a recursive manner: a non‑originating material may satisfy the transformation test in its own right, or it may satisfy it because each non‑originating material used to produce it satisfies the transformation test (whether because each of those materials does so in its own right, or because each non‑originating material used to produce the material does so), and so on.