Qualification Engine Flow

When qualifying a finished good for a trade agreement, the following steps occur in the qualification engine:

1. The matching item structure for the item origin is determined as follows:
   1. GTM gets all of the trade item structures related to the item.
   2. For each trade item structure, GTM matches the inventory organization, partner, partner site, and country of origin of the item origin and the item structure. If the item structure is matched, then GTM qualifies the item origin for each matched item structure.
      Note: If the item origin already has an item structure defined on it, that item structure will be used in the qualification engine.)
2. The BOM hierarchy is loaded into the logic including required details. Then:
   1. GTM retrieves the product classification codes from the items and only classification codes that are in a '"Classification Created" or "Classification Approved" status are considered. (Note: The Product Classification Type and Product Classification Code defined on the trade item structure and trade item structure components are not used by the qualification engine. Classification information must be defined in the Product Classification grid on the Items > Trade Details tab.) If multiple product classification codes apply, GTM prioritizes the use of the classification codes based on the following:
      1. Country of import 
      2. Default country of origin on the item
      3. Country of origin of the item origin
      4. Trade agreement partner country/region
      5. Any approved/created product classification code
   2. To identify the item origin of each component, the matching item origins are retrieved based on the constraint set in the logic configuration. Of the item origins returned, one item origin is considered based on the following conditions:
      1. When the item structure component has a country of origin specified, the item origin with the same country of origin is retrieved and GTM checks if it is qualified so that the originating status on the component can be set.
      2. If the item structure component does not have a country of origin, the matching item origin returned by the constraint set in the logic configuration is used.
      3. If GTM cannot find a matching item origin on the intermediate sub-assembly level, an item origin is created with the country of origin based on:
         1. Country of origin of the related item structure component
         2. Country of origin on the intermediate sub-assembly related item
         3. Country of origin of the finished good
   3. After the item origin is identified:
      1. If the component is qualified with the specific trade agreement, it is updated to show that it is originating (Note: the product classification type and/or country of import are not considered)
      2. If the intermediate sub-assembly belongs to the trade agreement region, it is updated to show that it is originating. Qualification is not run at this time.
   4. The values and quantities of the components are loaded. The quantity is defined on the component. The values are either on trade item structure component or on the trade values tab of the item. (NOTE: It is recommended you configure the value data on the Trade Values tab in the Item associated with the component.) 
   5. Then, the values and quantities of the intermediate sub-assemblies are loaded. The quantity is defined on the trade item structure. The values are either on trade item structure or on the trade values tab of the item. (NOTE: It is recommended you configure the value data on the Trade Values tab in the Item associated with the intermediate sub-assembly.)
   6. The EXTENDED AMOUNT(s) of the components are calculated based on the formula specified against the Trade Agreement Reference Number Qualifier = RVC METHOD1-COMPONENT EXTENDED VALUE FORMULA.
   7. The EXTENDED AMOUNT(s) of the finished good and intermediate sub-assemblies are calculated based on the formula specified against the Trade Agreement Reference Number Qualifier = RVC METHOD1-EXTENDED VALUE FORMULA.
   8. The VALUE ADD of each component is calculated based on the EXTENDED AMOUNT.
3. Once all the details of the trade item structure components in the BOM hierarchy are determined, the details are passed to the Rules of Origin Engine.  
4. In the Rules of Origin Engine:
   1. In the ‘bottom-up’ approach, GTM gets the intermediate sub-assemblies starting at the lowest level of the BOM.
      1. If the intermediate sub-assembly is already qualified, then the qualification information is used and the intermediate sub-assembly is not re-qualified.
      2. If the intermediate sub-assembly is originating but is not qualified, then qualification is run against the intermediate sub-assembly. 
   2. When qualifying any item, the rules of origin product specific rule is (PSR) evaluated based on the rules of origin and classification code.
   3. When evaluating the PSR, based on the details of the PSR such as tariff shift, regional value content methods, no tariff shift, etc. each applicable rule is evaluated, and the status is updated based on whether the rule is met or not met.
      1. Values such as Value of Originating Material, Value of Non-originating Material, NTS Value of Non-originating Material, and HSIncluded Value of Non-Originating Material are calculated based on the rules in the PSR. 
   4. If the PSR evaluation fails:
      1. GTM checks if the item is wholly originating and if so, qualifies the item and sets the status of the item qualification record to "QUALIFIED".
      2. If the item is not wholly originating, then a base rule such as de minimis is executed. If the base rule qualifies the item, the status of the item qualification record is set to "QUALIFIED".
         
         Note: The order of execution of a product specific rule and the wholly originating logic can be controlled via the optional feature "PERFORM WHOLLY ORIGINATING BEFORE PSR". If opted out, the product specific rule is evaluated first during item qualification. If this evaluation fails, the application checks if the item is wholly originating. If opted in, wholly originating logic will be applied before evaluating a product specific rule.
   5. If the item is not qualified based on a PSR, wholly originating or a base rule, the Rules of Origin engine then checks if the ‘Rollup Allowed’ check box on the trade agreement is selected. If yes, the item then runs through qualification again based on the rollup logic. The rollup logic enables you to take advantage of the full value of an intermediate sub-assembly if that sub-assembly is originating and qualifies for a trade agreement.
      
      Note: The order of execution of the rollup logic during qualification can be controlled via the property gtm.roo.qualification.performRollupFirst. The default value of the property is false. In this case, the application executes the existing behavior, i.e. rollup (at the component level or the item level) is carried out if the item fails to qualify through a product specific rule and the wholly originating logic.
      
      If only the property gtm.roo.qualification.performRollupFirst is true, rollup is carried out directly to perform qualification both at the component level and the item level.
      
      
      If the property gtm.roo.qualification.performRollupFirst and the optional feature "PERFORM WHOLLY ORIGINATING BEFORE PSR" are true, then the wholly originating logic is applied first to perform qualification both at the component level and the item level. If the component or the item fails to qualify using the wholly originating logic, then qualification is carried out using the rollup logic instead of trying with a product specific rule.
5. After the item status is set to "QUALIFIED", "NOT QUALIFIED", or "REQUIRES REVIEW", the Item Structure ID and calculated values are updated on the item qualification record. If configured, justification codes and the preference criteria are also updated on the item qualification record. 

Note: If a finished good cannot be fully qualified due to missing information, the item qualification status is set to REQUIRES REVIEW and the Justification Code and Justification Description are populated, enabling you to follow up and resolve any issues.