Alternative pathways to originating status under Step 2
Goods that fail to meet the applicable Product-Specific Rules may nevertheless be treated as originating goods if they meet the following criteria.
Cumulation (Article 3.4)
Goods and materials which comply with the origin requirements provided in Article 3.2 (Originating Goods), and which are used in another Party as materials in the production of another good or material, shall be considered as originating in the Party where working or processing of the finished good or material has taken place.
Example: Orange jam produced in Australia (Subheading 2007.91)
Materials: Oranges (Chapter 8), Sugar (Chapter 17), Lemon juice (Subheading 2009.89)
De Minimis (Article 3.7)
Even if the non-originating materials used in a given good fail to meet the applicable Product-Specific Rules for Change in Tariff Classification (CC, CTH or CTSH), provided that the use of said materials is insignificant, the good may nevertheless be considered the originating good of a Party under the RCEP Agreement.
Insignificance
(a) Products classified in Chapters 1 to 97: The value of non-originating materials that have been used in the production of a good and that did not undergo the applicable change in tariff classification does not exceed 10 per-cent of the FOB value of that good.
(b) Products classified in Chapters 50 to 63: The weight of all non-originating materials that have been used in the production of a good and that did not undergo the required change in tariff classification does not exceed 10 per-cent of the total weight of the good.
*In the consideration of applying De Minimis to the goods classified in HS Code Chapters 50 to 63, importers are allowed to elect between either criteria (a) or (b).
Example: Orange jam produced in Australia (Subheading 2007.91)
Materials: Oranges (Chapter 8), Sugar (Chapter 17), Lemon juice (Chapter 20)
