Rules of origin under the ASEAN Trade in Goods Agreement (ATIGA)

Rules of origin under the ASEAN Trade in Goods Agreement (ATIGA)
Rules of origin under the ASEAN Trade in Goods Agreement (ATIGA)

In order to enjoy tax incentives, entities importing goods from an ASEAN Member State must comply with the Rules of Origin under the ASEAN Trade in Goods Agreement (hereinafter referred to as the “ATIGA”).

1. Origin of goods

Origin of goods refers to the country or territory where the goods are entirely produced or the final basic processing stages of the whole process are undertaken.

When an importer carries out importing procedures, he/she must submit the Certificate of Origin (Form D) to the Customs Department of the importing country along with declarations, evidence records, and other documents in compliance with the regulations of the importing Member State.

The entity requesting to obtain a Certificate of Origin Form D (C/O) must be an exporter, a manufacturer, or an attorney lawfully authorized by a valid letter of attorney from exporters or manufacturers.

The goods imported into the territory of a Member State from another Member State are deemed to have an origin and eligible for preferential tariff treatment if they conform to any of the following origin requirements:

  • Having pure origin or being wholly produced in an exporting Member State.
  • Not having pure origin or not being wholly produced in an exporting Member State, provided that the said products satisfy several requirements on the regional value content, materials, etc. A Member State shall permit the exporter to decide on applying either of the following criteria to attest the origin of goods: (1) The Regional Value Content (hereinafter referred to as “RVC”) of the goods must not be lower than 40%; or (2) All non-originating materials used in the production of the goods have undergone a change in tariff classification (hereinafter referred to as “CTC”) at the four-digit level.

2. Product Specification Rule

Product Specification Rules are applied as follows:

  • With respect to the goods exempt from being specified by the abovementioned general origin criterion, the goods listed in a specific annex shall be deemed originating goods if satisfying the criteria set out correspondingly for them.
  • Where a Product Specification Rule provides a choice of criterion from RVC, CTC, a specific manufacturing or processing operation (hereinafter referred to as “SP”), or a combination of any of these criteria, each Member State shall permit the exporter of the goods to decide on the corresponding criterion used to determine the origin of the goods.
  • When a Product Specification Rule requires a certain RVC, the formula for calculating RVC is as follows:

a) Direct method:

Rules of origin under the ASEAN Trade in Goods Agreement (ATIGA)

or  b) Indirect method:

Rules of origin under the ASEAN Trade in Goods Agreement (ATIGA)

  •  Enterprises should stay informed that the criteria of CTC and SP only apply to non-originating materials.

Unless otherwise provided for in the ATIGA, goods originating from a Member State, which are used as materials in another Member State to produce the finished goods eligible for preferential tariff treatment, shall be considered to be originating in the latter Member State where the manufacturing or processing of the finished goods has taken place. If the RVC of the materials is less than 40%, it will be cumulated in accordance with the law.

The article is based on applicable law at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable law has changed and the specific case that the reader wishes to apply. Therefore, the article is only for reference.