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Taichi Kawazoe

Case study of Change in classification(CTC) e.g.”– Wheels for toy tricycles”

2019-12-07 By Taichi Kawazoe

Here is a case study of Change in classification(CTC) method.

Company A manufactures Wheels for toy tricycles (HS Heading 9503)

 

Wheels for toy tricycles of Heading 9503 are manufactured from
the following non-originating materials:

Item name HS code
Iron plate 7209
Steel strip 7212
Bushing 3926
Solid tyres 4012
Varnish 3208

The list rule(PSR) for heading 9503 requires the following working or processing to
be carried out on non-originating material:

“Manufacture from materials of any heading, except that of the product”.

The wheels are classified in heading 95.03 and none of the materials used are
classified in heading 95.03.
Therefore, the conditions to acquire originating status are fulfilled and the
products can be regarded as originating.

Another way of saying: “Change of Tariff Heading” (CTH)
A product is considered to be sufficiently worked or processed when it is classified in a
4-digit level of the Harmonized System, i.e. heading, which is different from those in
which all the non-originating materials used in its manufacture are classified.

Filed Under: Case Study

Case study of Change in classification(CTC) e.g.”Iron nails”

2019-12-03 By Taichi Kawazoe

Here is a case study of Change in classification method.

Company A manufactures ”Iron nails”(HS heading 7317)


from Non-originating iron wire (HS heading 7217).

Non-originating iron wires are imported from country B where
is not a  Party of the FTA;

Example PSR for goods of heading 7317(Iron nails) is:

“Manufacture from materials of any heading, except that of the product”.

Iron wire is classified in heading 72.17 which is a heading other than that of iron
nails (heading 73.17). Therefore, the conditions to acquire originating status are
fulfilled.

The nails can be regarded as originating products.

Filed Under: Case Study

Case study of Value Added method(VA) e.g.”Table lamps”

2019-11-29 By Taichi Kawazoe

Here is a case study of Value Added method.

Company A manufactures Table lamps (HS SubHeading 9405.20)

Table lamps of SubHeading 9405.20 are manufactured from the following
non-originating materials:

Tubes of brass € 3.00
Plates of brass € 2.00
Switch € 1.00
Cable: € 0.30
Contact € 0.20
Steel wire € 0.15
Plastics components € 0.25
Textile fabrics €1.20
Light bulb € 0.30
Lamp holder: € 0.50
Screws €0.05
Varnish: € 0.03
Various materials €0.40
Total value € 9.38

 

The lamps are sold at an ex-works price of € 20.-

 

The list rule for heading 94.05 requires the following working or processing to
be carried out on non-originating material:

“Manufacture in which the value of all the materials used does not exceed 50 %
of the ex-works price of the product”.

The total value of the non-originating materials used in the manufacture of one
lamp (€ 9.38) is less than 50 % of the ex-works price of one lamp (€ 20.-).

The origin requirements are fulfilled and the lamps can be regarded as
originating products.

Filed Under: Case Study

Case study of Value Added method(VA) e.g.”Plastic Boxes”

2019-11-25 By Taichi Kawazoe

Here is a case study of Value Added method.

Company A manufactures Plastic Boxes (HS heading 3923)

from Non-originating granules of plastics (heading 3901).

Non-originating granules of plastics are imported from country B where
is not a  Party of the FTA;

 

The unit price of a single Plastic Boxes is priced as:
Ex-works price of the boxes: € 10.- per box.
Value of granules used: € 4.- per box.

 

Example PSR for goods of subheading 3923 is:

“Manufacture in which the value of all the materials used does not exceed
50 % of the ex-works price of the product”.

As the value of the granules needed for the manufacture of one box (€ 4.-) is less
than 50 % of the value of the final box (€ 10.-), the condition to acquire originating
status is fulfilled.

Therefore, the boxes can be regarded as originating products.

But when the price of the granules soars to (€ 6.-), it’s price becomes more than
50% of the ex-works price of one box (€ 10.-).

In this situation, the condition to acquire originating status is not fulfilled.
The boxes, therefore, cannot be regarded as originating products.

Personally I do not recommend to adopt the VA method because foreseeing the
future price of the material is almost impossible.

If it’s possible, I would recommend adopting the CTC method rather than The
VA method.

Filed Under: Case Study

What is “CTSH” under the FTA

2019-10-25 By Taichi Kawazoe

CTSH is the abbreviation of “Change of Tariff SubHeading”

A product is considered to be sufficiently worked or processed when it is
classified in a 6-digit level of the Harmonized System,
i.e. sub-heading, which is different from those in which all the non-originating
materials used in its manufacture are classified.

Example : CETA – Roasted coffee (HS sub-heading 0901.21)
The rule for roasted coffee (HS sub-heading 0901.21) requires:

“A change from any other subheading”

The manufacturer uses the following non-originating materials:
– coffee, not roasted (HS sub-heading 0901.11)

Coffee roasted in the EU is exported to Canada as EU originating since the
CTSH rule is fulfilled, namely, all materials used in the production of the final
product are classified under a tariff sub-heading different from the tariff
sub-heading of the roasted coffee.

Filed Under: General

What is “CTH” under the FTA

2019-10-18 By Taichi Kawazoe

CTH is the abbreviation of “Change of Tariff Heading”

A product is considered to be sufficiently worked or processed when it is classified in a
4-digit level of the Harmonized System, i.e. heading, which is different from those in
which all the non-originating materials used in its manufacture are classified.

Example: PEM Convention – Seats HS heading 94.01
A rule for the seats (HS heading 94.01) requires:

“Manufacture from materials of any heading, except that of the product”

The manufacturer uses the following non-originating materials:
– sawn wood (HS heading 44.07)
– fabrics (HS heading 52.08)
– foam/porolone (HS heading 39.03).
The seats are exported to Switzerland as EU originating since the CTH rule is fulfilled,
namely all non-originating materials used in the production of the final product are
classified under tariff headings different from the tariff heading of the seats.

Filed Under: General

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