When performing an RVC computation, the value of de minimis materials is included in the total value of the non- originating materials. Under the non-textile de minimis rule, a good containing a non-originating material that does not undergo the tariff classification change specified in GN 33(o) may still originate if the value of all such non-originating materials does not exceed 10 percent of the adjusted value of the good. The KORUS has a 10 percent de minimis provision for most goods, with exceptions for textiles in GN 33(d) and other goods enumerated in GN 33(e)(ii). Motor Vehicles, Chassis, Bodies and Parts Net Cost Method for Automotive Goodsįor the automotive goods indicated below, the net cost method, based on all production costs less those of the non-originating materials, may be used. This is an important distinction when applying the build-up method, as it will have a direct effect on the whether a good meets the required threshold. Unlike our other FTAs that use the build-up method, under KORUS build-up, an indirect material is disregarded rather than being included as part of the “value of originating materials” (VOM). For certain automotive goods, the net cost method, based on the production costs, may also be used. Regional Value Content (RVC) Calculation Methodsįor most goods that are subject to an RVC requirement, the Agreement provides for two calculation methods: (1) the build-up method based on the value of originating materials and (2) the build-down method, based on the value of non-originating materials. The originating status is lost if a good enters into the commerce of another country or undergoes processing other than unloading, reloading or other processes to preserve the condition of the good or to transport the good to the territory of Korea or the United States
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