Diapositiva 1

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Rules of Origin for the Application of Tariff
Preferences
DR-CAFTA
Eduardo Rodríguez Apolinario Technical Deputy
Director of Customs
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Outline of the Presentation

• General aspects and background
• DR-CAFTA Rules of Origin
• Principal Criteria
• Secondary Criteria
• Direct expedition clause
• Customs procedures pertaining to origin
• How to import utilizing DR-CAFTA tariff
  preferences

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Commitments made by Customs under DR-CAFTA
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Customs Commitments under DR-CAFTA

• Chapter 3, National Treatment and Market access,
  Customs Cooperation in the textile matters
  (3.24), Special Procedures in textile matters
  (3.25).
• Chapter 4, Rules of Origin and Origin Procedures
  (Articles 4.15 and 4.21).
• Chapter 5, Customs Administration and Trade
  Facilitation
• Chapter 15, Intellectual Property

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The Rules of Origin (Basic Aspects)

• Concept of Origin
• Country of origin vs. Port of Origin
• Country of origin vs. Country of fabrication/
  production/ manufacture/ assembly

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Preferential Rules of Origin in Free Trade
Agreements

• Market Access Negotiations Countries provide
  each other with mutually diverse preferential
  treatment in the commercial exchange of goods.
• Rules of origin It is necessary to define the
  origin of the products subject to tariff
  preferences in order to ensure that only
  qualifying goods receive the preferences.

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Objective of Preferential Rules of Origin

• Avoid the Triangulation of Origen
• Triangulation Occurs when goods originating
  from third party countries take advantage of the
  benefits provided by FTAs.

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Triangulation of Origin
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DR-CAFTA0
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Criteria to determine Origin What are the
Alternatives?

• Good which are Wholly Obtained or Produced
  Entirely (PTO)
• Change in HS Classification or Jump in
  Classification (CCA)
• Regional Value Content (VCR)
• Mixed
• CCA or VCR
• CCA and VCR

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1. Wholly Obtained or Entirely Produced Goods

• Concept Merchandise that does not contain
  materials from third countries - 100 originating
  from the parties

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• Wholly obtained Goods
• Plants or products made from plants, harvested or
  collected
• Live animals born and raised
• Products obtained from live animals
• Products obtained from hunting, fishing, or
  aquaculture
• Minerals and other natural resources extracted or
  taken

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Wholly Obtained Goods or Entirely Produced (Cont.)

• Fish, crustaceans and other marine species
  obtained from the ocean, sea bottom, or marine
  subsoil outside of the territorial waters by
  ships registered or entitled to fly the flag of a
  party.
• Good obtained by factory ships outside of the
  territorial waters as long as the ships are
  registered or entitled to fly the flag of a
  party.
• Good obtained fro the sea bottom or subsoil
  outside of the territorial waters as long as the
  country has exploitation rights.

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• Waste and Refuse
• Recovered Merchandise
• Remanufactured Goods

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Originating Goods

• Only originating materials
• From originating and non-originating materials
• Goods produced from materials which classify as
  originating

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• 2. Criteria for Change of Tariff
  Classification
• Consists in determining if the tariff
  classification of the final product changes with
  respect to the classification of the raw
  materials or goods imported from third countries

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Dominican Republic Tariff
INTERNATIONAL

• 2009.69.10
• Chapter
• Heading
• Subheading
• RD/CA
• Subheading split

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• Levels of Change in Change of Tariff
  Classification
• Chapter (2 digits)
• Heading (4 digits)
• Subheading (6 digits)
• Other minor changes inside a subheading expressed
  in the body of the specific rule of origin.

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Change in HS classification at Heading level
Specific Rule of Origin A change from heading
17.04 from any other heading
Sugar (17.01) Brasil
Glucose syrup (17.02) México
Coloring (32.04) Chile
17.04 Candy
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Specific Rules of Origin DR-CAFTA
1/ Del capítulo 63 al 83 del SA se localizan
21 reglas bajo estos criterios. Del
capítulo 84 al 97 del SA se localizan 125 reglas.
Capítulo 84 (25) Capítulo 85 (25)
Capítulo 90 (35) Capítulo 91 (14) Los demás
(26).
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• INDUSTRIAL Sector
• Electric Cable
• Specific Rule of Origin
• 8544.51 8544.59
• Change of subheading 8544.51 a 8544.59 from any
  other heading
• Implication Origin is conferred by the
  manufacture of the cable regardless of the origin
  of the raw materials used in production,
  therefore industrial gauge copper wire can be
  imported from any other country.

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INDUSTRIAL Sector

• Iron Profiles
• Specific Rule of Origin
• 72.08-72.29
• A change from heading 7208 thru 7229 from any
  other heading
• Implication Origin is conferred by the
  manufacture of the profile in one or more
  DR-CAFTA countries regardless of the origin of
  the raw materials

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3. Test of Regional Value Content (RVC)

• Requisites of the Regional Value Content
  (build-down or build-up or Net Cost method
  (applicable to a reduced number of HS headings)
• Methods may be alternated upon request of the
  importer, exporter, or manufacturer.

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The Build down Method


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Build-up Method

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Net Cost Method
Optional for the Automotive Industry
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• 4. Mixed Rules
• Criteria is a change in tariff classification or
  Regional Value Content
• Criteria is a change in tariff classification and
  Regional Value Content

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Origin Accumulation concept and practical
application

• Concept A good originating of a country member
  to the agreement utilized in a manufacturing
  process in another member country will be
  considered originating in the last country-
  acquiring the character of national origin.

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• Accumulation of origin
• USA
• Costa Rica
• Honduras
• El Salvador
• Guatemala
• Nicaragua
• Dominican Republic

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• Other concepts
• De minimis
• Fungible Goods
• Accessories, parts and tools
• Packaging and packaging material for retail sale
• Crates and shipping materials
• Indirect Materials

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Transit y Transshipment

• A good will loose its originating status if
• Suffers an ulterior process or is object to any
  operation outside of the territory of the
  parties, expect the unloading, reloading, or any
  other movement necessary to maintain the
  merchandise un good condition or for its
  transport.
• Is not under control of the customs of a
  non-member country

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Summary What you should know about rules of
Origin

• The final product must be the result of one or
  various production (ex harvest, processing,
  manufacturing, etc.)
• The raw materials imported from third countries
  (Non-DR-CAFTA) must be subjected to a process
  that involves sufficient transformation to comply
  with the Specific Rules of Origin for each
  product.
• The final product must be shipped directly to the
  territory of the member country without
  undergoing further processes or be subject to
  customs clearance in non-member countries
• The final product must comply with the necessary
  customs formalities at the time of importation.

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-Part II- How to Import with DR-CAFTA Tariff
Preferences (On-line)
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• PROCESS FOR THE APLICATION OF ORIGIN BASED ON
  DR-CAFTA PREFENCES VIA WEB

• This innovative system expedites the customs
  clearance process and depersonalizes customs
  procedures, allowing users to register
  certificates of origin online. To access these
  services users must complete a registration
  process and request the corresponding privileges,
  this is done by completing an application form.

How is the Certificate of Origin Registry
Filled-out?
1st STEP
Click on ONLINE SERVICES OPERATIONS
REGISTRATION OF ORIGIN CERTIFICATES
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To register a certificate, click on New and
then fill-out the requested information, as shown
below.
2ND STEP
DESCRIPTION OF FIELDS
Number This field identifies the number of the
Certificate of Origin, which is automatically
generated, once all the information is filled-out
and Insert is clicked. Coverage Period From
To specifies the period of time the
Certificate is valid for. Type of Use Single,
only one importation , Prolonged to cover various
importations in a one year period. Issuer Who
issues the certificate of origin. Type of
Identification The type of tax identification of
the importer.
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Tax ID Number of Importer In our countrys case
the RNC number. This number will be displayed
automatically for registered users. Afterwards
the information regarding the issuer is
registered, if the issuer is a Exporter, only the
information about the exporter is required, the
same occurs when selection Manufacturer
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Once the information relating to the Issuer is
captured, the next step is to register the
information pertaining to the classification and
tariff of the goods being imported with the
DR-CAFTA preferences.
Click on Add to activate the window which
captures the details pertaining to the goods
being imported tariff classification,
description, etc.
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The criteria by which origin is sustained
El método,

And finally, select the country of origin of the
goods, Click on Update, then the field to enter a
new item is activated. All the items pertaining
the certificate of origin may be added.
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3rd STEP
Once all the details pertaining to the
certificate of origin are registered, the data
will be saved by clicking on Insert, once this is
done the system will assign a sequential number
to the electronic certification of origin.
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The Certificate can then be visualized in the
next window which will present all the
Certificates issued by your company. You may do a
search typing in the range of certificates in the
Number field, for example if you were to type
11-15, certificates 11-15 would be displayed.
4th STEP
5to PASO
Proceed to print the Certificate. At this window
the certificate may be edited or corrected, once
the changes are done click on Update to save the
changes made.
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6th STEP
Once Print is clicked a report will be generated,
which you may save on your hard drive o preferred
storage device, on the format you desire. By
default, reports are made in PDF format. Then you
may proceed to print the report.
Afterwards the tariff preference will be applied
to the corresponding declaration(s).
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How preferences are applied in the Single Customs
Declaration System (DUA)
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How preferences are applied in the Single Customs
Declaration System (DUA)
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How preferences are applied in the Single Customs
Declaration System (DUA)
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Thank You www.dga.gov.do e.rodriguez_at_dga.gov.
do