Appendix: Rules of Origin

Oracle Global Trade Management (GTM) downloads the following data as part of Rules of Origin download:

Trade Agreement: Details like trade agreement name, short name, partners, etc. are downloaded.
Rules of Origin
1. Region or Country: Details like rules of origin name, short name, trade agreement name, region or country, base rules, etc. are downloaded. The region or the country field identifies a specific region or country for which the rules of origin is applicable. If the fields are empty, the rules of origin is applicable to all the partners of the trade agreements.
2. Product Specific Rules (PSR): Identifies a rule or a set of rules applicable to any goods.
  1. Start and End Classification Codes define the range of harmonized classification code (goods) for which the rule is applicable.
  2. Expressions define a set of And/Or criteria that must pass for the goods to be qualified using the product specific rule.
  3. Suffix and Attributes: Suffix identifies the different product-specific rules applicable for the same classification code. You must select the attribute on the Qualify for Trade Agreement action screens to identify the appropriate suffix-based rule.
  4. Ex and Attributes: Ex allows GTM to apply a product-specific rule at a more general level than the current rule if the attribute provided on the action screen does not match with the attribute of the product-specific rule
3. Rules Codes: Product Specific Rule Expression can contain a set of rule codes (individual criteria). GTM applies different plugins based on the Rule Type of the rule code.

Here are few examples of a few Rule Types (plugins):

Tariff Shift: TS - CHAPTER, TS - HEADING, TS - SUBHEADING, TS - ITEM are four different rule types to check the tariff shift at 2,4, 6, or 8 digit level of classification codes.

Example: PSR on Classification Code 2202 > TS4_100EQ: Manufacture from materials of any heading, except that of the product. Here GTM expects that all the components of a finished product must have a classification code different from the 2202 heading to qualify the finished product.
HS Inclusion: This rule type defines an inclusive classification code range. The value of the non-originating content with a classification code from the inclusive classification range to be less than some threshold. Here, you must configure HS Inclusion rule type formula using ISMET filter to identify all the non-originating materials from the inclusive classification range, calculating their values and percentage out of the total to be compared against a threshold.

Example: INCL_30LE:17 = Manufacture in which the value of all the materials of Chapter 17 used does not exceed 30 % of the ex-works price of the product. Here GTM will qualify a finished product if the value of all the non-originating materials of chapter 17 is less than 30% of the total ex-works price.
HS Exclusion: This rule type requires the finished products to be not made of non-originating materials from few chapters or headings.

Example: EXCL:2207-2208 = Manufacture from materials of any heading, except those of heading 2207 or 2208.
Regional Value Content Method: GTM supports calculations of regional value content for 4 rule types (RVC - NC, RVC - TV, RVC - UP, RVC - DOWN). You must configure formulas for the applicable RVC types for each trade agreement. The formula expression should calculate region value percentage for the finished goods. The BelongsTo or NotBelongsTo filters can be used in the formula expression to filter the originating or non-originating lines as needed.

Example: RVCN_50GE OR RVCT_60GE = there is a regional value content of not less than:
(a) 60 percent where the transaction value method is used; or
(b) 50 percent where the net cost method is used.
Third Country Check: This rule type requires the value of the non-originating materials to be less than a threshold percentage of the ex-works price of the product. You can use the NotBelongsTo filter in the formula expression to filter and calculate the value of the total ex-work price and non-originating material.

Example: TCC_30LE = Manufacture in which the value of all the materials used does not exceed 30% of the ex-works price of the product.
Fifty-Fifty: This rule type requires you to calculate the value of originating as well as non-originating materials. The BelongsTo & NotBelongsTo filters can be used in the formula expression to filter appropriate lines and calculate the percentage of non-originating value out of both originating and non-originating content.

Fifty-Fifty = (VNM/(VOM+VNM)) * 100 is a sample formula provided for reference where VOM is the value of originating material and VNM is the value of non originating material. GTM will compare the result of such a fifty-fifty formula against 50% threshold.

Example: FF_50LE = Manufacture in which the value of all the non-originating materials used does not exceed the value of all the originating materials used.
No Tariff Shift: This rule expects the value of all the non-originating components, which does not have a tariff shift, to be less than a particular threshold. The ISMET filter can be used to identify the lines which has met the No Tariff Shift criteria.

Example: NTS_25LE : Manufacture from materials of any heading, except that of the product. However, materials of the same heading as the product may be used, provided that their total value does not exceed 20% of the ex-works price.
Condition: Cleaning, disinfecting, sorting and straightening of bristles and hair. Here a finished product (bristles and hair) will be qualified provided the 'cleaning, disinfecting, sorting, and straightening' operation has been performed on them. The qualification action screen will request you to provide input for such conditions if applicable.

A product specific rule may contain a set of rule codes (different rule types) with AND/OR criteria between them. GTM will evaluate all the rule codes of the product-specific rule to decide whether the finished product is qualified under a PSR rule or not.

Example of a PSR rule:
({TS6_100EQ} OR {COND:[10282]}) OR ({(RVCN_30GE OR RVCT_40GE)}) =
A change to subheading 2801.10 through 2853.00 from any other subheading, including another heading within that group; or
No required change in tariff classification to subheading 2801.10 through 2853.00, provided there is a regional value content of not less than:
(a)40 percent where the transaction value method is used; or(b)30 percent where the net cost method is used.

Note: The above examples are just for explanatory purposes and may change from time to time. GTM will mark a wholly obtained finished good as qualified without evaluating a product-specific rule.

Appendix: Rules of Origin

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