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Paragraph 11 Principle of territoriality

Original text. Later amendments are not shown.

1.

Except as provided for in Article 2(1)(c), Article 3 and paragraph 3 of this Article, the conditions for acquiring originating status set out in Title II shall be fulfilled without interruption in the exporting Contracting Party.

2.

Except as provided for in Article 3, where originating goods exported from a Contracting Party to another country return, they shall be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authorities that:

(a)

the returning goods are the same as those exported; and

(b)

they have not undergone any operation beyond that necessary to preserve them in good condition while in that country or while being exported.

3.

The acquisition of originating status in accordance with the conditions set out in Title II shall not be affected by working or processing done outside the exporting Contracting Party on materials exported from the latter Contracting Party and subsequently re-imported there, provided:

(a)

the said materials are wholly obtained in the exporting Contracting Party or have undergone working or processing beyond the operations referred to in Article 6 prior to being exported; and

(b)

it can be demonstrated to the satisfaction of the customs authorities that:

  1. (i)

    the re-imported goods have been obtained by working or processing the exported materials; and

  2. (ii)

    the total added value acquired outside the exporting Contracting Party by applying the provisions of this Article does not exceed 10 % of the ex-works price of the end product for which originating status is claimed.

4.

For the purposes of paragraph 3, the conditions for acquiring originating status set out in Title II shall not apply to working or processing done outside the exporting Contracting Party. However, where, in the list in Annex II, a rule setting a maximum value for all the non-originating materials incorporated is applied in determining the originating status of the end product, the total value of the non-originating materials incorporated in the territory of the exporting Contracting Party, taken together with the total added value acquired outside this Contracting Party by applying the provisions of this Article, shall not exceed the stated percentage.

5.

For the purposes of applying the provisions of paragraphs 3 and 4, ‘total added value’ means all costs arising outside the exporting Contracting Party, including the value of the materials incorporated there.

6.

The provisions of paragraphs 3 and 4 shall not apply to products which do not fulfil the conditions set out in the list in Annex II or which can be considered sufficiently worked or processed only if the general tolerance fixed in Article 5(2) is applied.

7.

The provisions of paragraphs 3 and 4 shall not apply to products of Chapters 50 to 63 of the Harmonised System.

8.

Any working or processing of the kind covered by the provisions of this Article and done outside the exporting Contracting Party shall be done under the outward processing arrangements, or similar arrangements.