Regarding preferential origin, we purchase an EU produced, but not preferential origin (no supplier declaration) material under HTS 2921 and in the EU we use this material to manufacture a product with HTS 3908. Is it possible to claim preferential origin of the end-product? The origin rule for the end-product is:
RULE 1: Manufacture in which the value of all materials of Chapter 39 used does not exceed 20% of the ex-works price of the product. However, for products composed of materials classified in headings 3901 to 3906 on the one hand, and 3907 to 3911 on the other hand, this restriction only applies to that group of materials which predominates by weight in the product
RULE 2: manufacture in which the value of all the materials used does not exceed 25% of the ex-works price of the product.
A sense check is always a good idea when dealing with preference origin rules. Looking at the rules in reverse order, either, using Rule 2, you have to have less than 25% non-originating material of goods from any chapter of the Tariff or you can, under Rule 2, manufacture using Chapter 39 goods but you can only have 20% of ex-works value made up of Chapter 39 non-EU materials. Under this rule you do not need to count materials used that come under any other heading. If you have listed all materials in the situation below then yes the goods do qualify for preference under Rule 1 and could qualify under Rule 2 but you will have to check the values.
Source – Croners Wolters Kluwer Business
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