Rule of Origin
The CEPT only applies to goods originating within ASEAN. The general rule is that local ASEAN content must be at least 40% of the FOB value of the good. The local ASEAN content can be cumulative, that is, the value of inputs from various ASEAN members can be combined to meet the 40% requirement. The following formula is applied:
- ( Raw material cost
- + Direct labor cost
- + Direct overhead cost
- + Profit
- + Inland transport cost )
- x 100% FOB value
However, for certain products, special rules apply:
- Change in Chapter Rule for Wheat Flour;
- Change of Tariff Sub-Heading for Wood-Based Products;
- Change in Tariff Classification for Certain Aluminum and Articles thereof.
The exporter must obtain a “Form D” certification from its national government attesting that the good has met the 40% requirement. The Form D must presented to the customs authority of the importing government to qualify for the CEPT rate. Difficulties have sometimes arisen regarding the evidentiary proof to support the claim, as well how ASEAN national customs authorities can verify Form D submissions. These difficulties arise because each ASEAN national customs authority interprets and implements the Form D requirements without much coordination.
Read more about this topic: ASEAN Free Trade Area
Famous quotes containing the words rule of, rule and/or origin:
“It seems to be a rule of wisdom never to rely on your memory alone, scarcely even in acts of pure memory, but to bring the past for judgment into the thousand-eyed present, and live ever in a new day.”
—Ralph Waldo Emerson (1803–1882)
“If all political power be derived only from Adam, and be to descend only to his successive heirs, by the ordinance of God and divine institution, this is a right antecedent and paramount to all government; and therefore the positive laws of men cannot determine that, which is itself the foundation of all law and government, and is to receive its rule only from the law of God and nature.”
—John Locke (1632–1704)
“Good resolutions are useless attempts to interfere with scientific laws. Their origin is pure vanity. Their result is absolutely nil. They give us, now and then, some of those luxurious sterile emotions that have a certain charm for the weak.... They are simply cheques that men draw on a bank where they have no account.”
—Oscar Wilde (1854–1900)