Non-qualifying operations |
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Also known as insufficient processing/transformation or minimal operations.
Non-qualifying operations are operations which do not confer origin. They are considered below the threshold of sufficient production / processing. In order to obtain preferential status the good would need to go undergo more than the processing listed on the non-qualifying operations list in the territory of the FTA. A good that has undergone only non-qualifying operations (or several of them) will not be considered originating even if in theory it meets the change in tariff classification rule of origin.
A list of non-qualifying operation is included in each agreement and can differ between agreements.
All exporters wishing to supply goods of preferential origin need to ensure that their goods have undergone processing that exceeds that on the list within the territory of the FTAs.
Example:
A product is subject to a CTC rule of origin. It is made up of a machine and a frame, both of which are non-originating. The assembly process in the FTA member country consists of putting the two parts together. The final product meets the CTC rule as it is classified under a different heading than the two parts. However, simple assembly defined as assembly not requiring special tools or technical knowledge, is listed on the non-qualifying operations lists. The assembly of the two parts is considered to be simple assembly and therefore the final product cannot be considered originating.
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