Example of the application Clause Samples
Example of the application of De Minimis for textile goods (Article 31 and subparagraph (e) (ii) in Part 1 of Annex 2) Company A produces silk yarn (HS5006.00) in Japan and plans to export them to Indonesia under the Agreement. The PSRs for silk yarn (HS5006.00)under the Agreement are: Silk yarn (HS5006.00) is made from Indian raw silk (HS5002.00) and Chinese silk thread (HS5006.00). Since silk thread does not undergo change in tariff classification, silk yarn does not meet the CTC rule. But if the weight of silk thread is equivalent to 7% of silk yarn or less, Company A is allowed to disregard the portion of silk thread for the purposes of the CTC rule pursuant to de minimis provision of Article 31.
Example of the application of De Minimis for goods other than textile goods (Article 30 and subparagraph (e) (i) in Section 1 of Annex 2) Company A produces baby carriages (HS8715.00) in Japan and plans to export them to Malaysia under the Agreement. The PSRs for baby carriage (HS8715.00) under the Agreement are: To prove that the baby carriage qualifies as an originating good, Company A decided to choose the CTC rule in this case. Baby carriage is made from Indian aluminum bar (HS7604.10) and Chinese handle grip (HS8715.00). Since handle grip does not undergo change in tariff classification from any other subheading, baby carriage does not meet the CTC rule. If the value of handle grip (HS8715.00) is equivalent to 10% of F.O.B. price of baby carriage or less, Company A is allowed to disregard the portion of handle grip for the purposes of the CTC rule pursuant to de minimis provision of Article 30.
Example of the application of De Minimis for goods other than textile goods (Article 31 and subparagraph (f) (i) in Section 1 of Annex 2) Company A produces a razor (HS8212.10) in Japan and plans to export them to the Philippines under the Agreement. The PSRs for the razor (HS8212.10) under the Agreement are: To prove that the razor qualifies as an originating good, Company A decided to choose the CTC rule in this case. The razor is made from Korean stainless steel(HS72.20) and Chinese handle grip of base metal(HS8212. 90). Since a handle grip does not undergo change in tariff classification from any other chapter, the razor does not meet the CTC rule. If the value of the handle grip (HS8212.90) is equivalent to 10% of F.O.B. price of the razor or less, Company A is allowed to disregard the portion of handle grip for the purposes of the CTC rule pursuant to de minimis provision of Article 31.
Example of the application of the De Minimis for textile goods (subparagraph 1(c) of Article 44 of the Agreement)