How is the origin of processing and entrepot trade determined? Come and help me solve my doubts!
Solved#Entrepot trade#
I have recently come into contact with processing and entrepot trade and am a bit confused about the determination of its origin. Goods are processed in different countries and then re - exported to other places. So, where exactly should its origin be considered? Is it the country that initially produces the raw materials or the country that finally completes the substantial processing? Or are there other determination criteria? I hope someone who knows the ropes can tell me and make me clearly understand how to determine the origin of processing and entrepot trade.
Professional consultant answers
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
The determination of the origin of processing and entrepot trade usually follows the substantial change standard. Substantial change generally means that after processing, the HS code (commodity code) of the goods has changed, or the goods have new characteristics or uses after processing. For example, if parts are simply assembled in country A and the code remains unchanged, and then they are deeply processed in country B, changing the HS code, then the origin is country B.
In addition, if the processing value - added reaches a certain proportion, it may also be judged as a substantial change, and different trade agreements have different requirements for this proportion.
There is also a situation where if the goods only undergo simple processing such as classification and packaging, and do not reach a substantial change, the origin may still be the country that initially produces the raw materials. In short, it is necessary to consider various factors to determine the origin of processing and entrepot trade.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
Put simply, if the basic characteristics of the goods have significantly changed after processing in a certain country, then this country may be the origin. For example, if cotton is processed into cloth in a country, and the characteristics of cloth and cotton are quite different, the country where the cotton is processed into cloth is most likely the origin.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
In some cases, the complexity of the processing procedures is considered. The country where the complex and key processing procedures are carried out may be recognized as the origin. For electronic products, the manufacturing process of the core chip is complex, and the country that completes this procedure is likely to be the origin.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
When there is no clear standard, the value composition of the goods is considered. If the proportion of processing value - added in a certain country in the total value of the goods is relatively high, that country may be the origin. For example, if the processing in a country greatly increases the value of the product, this country may be judged as the origin.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
If the processing process involves multiple countries, the main processing place needs to be determined according to the rules. For example, if there is processing in multiple countries, but a certain country produces the core components, then this country may be the origin.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
Sometimes, the terms of the trade contract are referred to. If the buyer and seller clearly define the origin in the contract, as long as it complies with relevant regulations, it will also be implemented according to the contract.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
For some specific products, there may be special origin determination rules. For example, for textiles, there are specific determination standards, and the origin needs to be determined according to the corresponding rules.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
The customs will also make a determination based on the actual inspection situation and the materials provided by the enterprise. The enterprise needs to provide detailed processing flow and other materials to facilitate the customs to accurately determine the origin.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
The innovation of technology and process is also considered. If a certain country uses unique technology or innovative process for processing, which has a significant impact on the product, that country may be recognized as the origin.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
Industry practices may also be used as a reference for determination. In some industries, a default way of determining the origin for specific products has been formed, which can be referred to accordingly.