CHAPTER 6
COUNTRY OF ORIGIN
POLICY
F-M personnel are responsible for determining the origin of every product they import and declaring it correctly to Customs. A failure to exercise reasonable care in determining origin can result in the payment of additional duties and penalties. F-M personnel are encouraged to consult with the Global Trade Compliance Manager whenever there is the slightest doubt about the correct country of origin. Any identified errors should be reported to Customs. In addition, F-M will keep apprised of changes to the Customs requirements for determining the country of origin of its imported products.
INTRODUCTION
"Country of origin" refers to the country that is designated as the source of goods for purposes of international trade regulation. It means the country of manufacture, production, or growth of any article of foreign origin entering the country of import. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin."
Substantial transformation occurs when, as a result of a manufacturing process, the finished article has a name, character, or use different from that of the original article. In other words, it occurs when a new article of commerce is created. Generally, the country of origin of an imported article is the last country in which a substantial transformation took place.
Customs will consider the significance of processing operations when deciding whether a good is substantially transformed. Processing which is more time consuming, costly and requires a great deal of skill is more likely to substantially transform an article than processing which requires little time or skill and is relatively inexpensive.
The country of origin impacts the customs duty calculation in various ways. For instance, the country of origin governs whether merchandise will be subject to which rates of duty. The country of origin is essential for determining eligibility for preferential duty programs such as:
ASEAN Trade in Goods Agreement
ASEAN – Japan
ASEAN – Korea
ASEAN – India
ASEAN – China
ASEAN – Australia New Zealand
Thai – Australia
Thai – New Zealand
Thai – Japan EPA
Thai – India
Generalized System of Preferences
The country of origin requirements under preferential duty programs are covered elsewhere in this Policy.