1. GENERAL CRITERIA FOR THE QUALIFICATION OF GOODS AS ORIGINATING
   
   1.1 Wholly Obtained
   
   The following goods shall be considered as wholly obtained in the territory of one or more of the Parties:
   
   
   1. mineral goods and other non-living natural resources extracted or taken from there;
      
      
   2. vegetable goods harvested there;
      
      
   3. live animals born and entirely raised there;
      
      
      
   4. goods obtained from live animals there;
      
      
      
   5. goods obtained from hunting, fishing or trapping conducted there;
      
      
      
   6. fish, shellfish and other marine life taken from the sea, seabed or subsoil outside the territory of one or more of the Parties by a vessel registered, recorded or listed with a Party and flying its flag or by a vessel not exceeding 15 tons gross tonnage that is licensed by a Party;
      
      
      
   7. goods produced on board a factory ship from the fish, shellfish or other marine life referred to in sub-paragraph (f), provided such factory ship is registered, recorded or listed with a Party and flying its flag;
      
      
      
   8. goods, other than fish, shellfish and other marine life, taken or extracted from the seabed or the subsoil of the continental shelf or the exclusive economic zone of any of the Parties;
      
      
      
   9. goods, other than fish, shellfish and other marine life, taken or extracted from the seabed or the subsoil, in the Area outside the continental shelf and the exclusive economic zone of any of the Parties or of any other State as defined in the United Nations Convention on the Law of the Sea, by a vessel registered, recorded or listed with a Party and flying its flag, or by a Party or person of a Party;
      
      
      
   10. goods taken from outer space, provided they are obtained by a Party or a person of a Party and not processed in a non-Party;
       
       
       
   11. waste and scrap resulting from production conducted there;
       
       
       
   12. used goods collected there, fit only for the recovery of raw materials; and
       
       
       
   13. goods produced there exclusively from goods referred to in this Article or from their derivatives, at any stage of production.
       
       

   1.2 Produced from Originating Materials
   
   
   A good shall be considered as originating if it is produced entirely in the territory of one or more of the Parties exclusively from originating materials.
   
   
   1.3 Sufficient Production
   
   

   1.3.1	Subject to Article 6, a good shall be considered to have undergone sufficient production when the conditions set out for that good in Annex 1.3 (product-specific rules) are fulfilled.
   1.3.2	Except as provided in Annex 1.3 or except for a good of Chapter _______ of the Harmonized System, where a good and one or more of the non-originating materials used in the production of that good cannot satisfy the conditions in Annex 1.3 because both the good and the non-originating materials are classified in the same subheading, or heading that is not further subdivided into subheadings, the good shall be considered to have undergone sufficient production, provided that the value of the non-originating materials classified as or with the good does not exceed __ per cent of the transaction value of the good.
   1.3.3	Fish, shellfish or other marine life that has been taken from the sea, seabed or subsoil by a vessel of a non-Party and that has undergone sufficient production on board a factory ship outside the territory of one or more of the Parties shall be considered as originating, provided that such factory ship is registered, recorded or listed with a Party and flying its flag.

2. N/A
   
   
3. ACCUMULATION
   
   For purposes of determining whether a good is an originating good, the production of the good in the territory of one or more of the Parties by one or more producers shall, at the choice of the exporter or producer of the good for which preferential tariff treatment is claimed, be considered to have been performed in the territory of any of the Parties by that exporter or producer, provided that:
   
   
   1. all non-originating materials used in the production of the good undergo sufficient production within the meaning of Article 1.3 of this Chapter, entirely in the territory of one or more of the Parties; and
      
      
      
   2. the good satisfies all other applicable requirements of this Chapter.
      

4. QUALIFICATION OF SPECIFIC TYPES OF GOODS AND MATERIALS
   
   4.1 De Minimis
   
   

   4.1.1

   Notwithstanding Article 1.3 and except for a good of Chapter 50 through 63, a good shall be considered as originating, where the value of all non-originating materials used in the production of the good, which do not undergo the applicable change in tariff classification or fulfil any other condition set out in Annex 1.3, does not exceed __ per cent of the transaction value of the good, provided that:  if the rule of Annex 1.3 applicable to the good contains a percentage for the maximum value of non-originating materials, the value of such non-originating materials shall be included in calculating the value of non-originating materials; and the good satisfies all other applicable requirements of this Chapter.

   4.1.2

   A good of any of Chapters 50 through 63 of the Harmonized System, that does not originate because certain non-originating fibres or yarns used in the production of the component of the good that determines the tariff classification of that good do not fulfil the conditions set out for that good in Annex1.3, shall nonetheless be considered to originate if the total weight of all such fibres or yarns in that component does not exceed __ per cent of the total weight of that component.

     
   
   4.2 Fungible materials and goods
   
   For purposes of determining the origin of a good:
   
   

   1. where originating and non-originating fungible materials are used in the production of a the good, the determination of whether the materials are originating materials may be made on the basis of any of the applicable inventory management methods set out in this Agreement, and
      
      
      
   2. where originating and non-originating fungible goods are physically combined or mixed in inventory in a Party and exported in the same form to another Party, the determination of whether the good is an originating good may be made on the basis of any of the applicable inventory management methods set out in this Agreement.
      
      

   4.3 Sets
   
   Except as provided in Annex 1.3, a set, as referred to in General Rule 3 of the Harmonized System, shall be regarded as originating, provided that:
   
   

   1. all the component goods, including packaging materials and containers, are originating; or
      
      
      
   2. where the set contains non-originating component goods, including packaging materials and containers,
      
      
      1. at least one of the component goods, or all the packaging materials and containers for the set, is originating, and
         
         
         
      2. the value of the non-originating component goods, including any non-originating packaging materials and containers for the set, does not exceed __ per cent of the transaction value of the set.
         
         

   4.4 Accessories, spare parts and tools
   
   Accessories, spare parts and tools delivered with a good that form part of its standard accessories, spare parts or tools shall be considered as originating if the good originates and shall be disregarded in determining whether all the non-originating materials undergo the applicable change of tariff classification set out in Annex 1.3, provided that:
   
   

   1. the accessories, spare parts or tools are not invoiced separately from the good;
      
      
      
   2. the quantities and value of the accessories, spare parts or tools are customary for the good; and
      
      
      
   3. if the rule of Annex 1.3 applicable to the good contains a percentage for the maximum value of non-originating materials, the value of any non-originating accessories, spare parts or tools shall be included in calculating the value of non-originating materials.
      
      

   4.5 Packaging materials and containers for retail sale
   
   Packaging materials and containers in which a good is packaged for sale shall be disregarded in determining whether all the non-originating materials undergo the applicable change in tariff classification as set out in Annex 1.3. However, if the rule of Annex 1.3 applicable to the good contains a percentage for the maximum value of non-originating materials, the value of any non-originating packaging materials and containers shall be included in calculating the value of non-originating materials.
   
   
   4.6 Packing materials and containers for shipment 
   
   Packing materials and containers in which a good is packed for shipment shall be disregarded in determining the origin of that good.
   
   
   4.7 Indirect materials used in production
   
   In order to determine whether a good originates, it shall not be necessary to determine the origin of indirect materials used in production, testing or inspection of that good, but which have not entered into the final composition of the good or which have been used in the maintenance of equipment and buildings or the operation of equipment associated with the production of a good, including, but not limited to:
   
   

   1. energy and fuel;
      
      
      
   2. machines, tools, dies and moulds;
      
      
      
   3. spare parts and materials used in the maintenance of equipment and buildings;
      
      
      
   4. lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings;
      
      
      
   5. gloves, glasses, footwear, clothing, safety equipment and safety supplies;
      
      
      
   6. equipment, devices and supplies used for testing or inspecting goods; and
      
      
      
   7. catalysts and solvents.
      
      
      

   4.8 Intermediate materials used in production 
   
   
   

   4.8.1	If a non-originating material undergoes sufficient production in the territory of one or more of the Parties, the resulting good shall be considered as originating and no account shall be taken of the non-originating material contained therein when that good is used in the subsequent production of another good.
   4.8.2	For purposes of determining the origin of a good, a producer of a good may, at the producer's choice, designate any self-produced material used in the production of the good as a material to be taken into account as an originating or non-originating material, as the case may be, in determining whether the good satisfies the applicable requirements of the rules of origin.

5. OPERATIONS THAT DO NOT CONFER ORIGIN
   
   For the purposes of Article 1.3 and except for sets of Article 4.3 or of Annex 1.3, a good shall not be considered as having undergone sufficient production merely by reason of a change in tariff classification that is the result of:
   
   
   1. disassembly of the good into its parts; 
      
      
      
   2. a change in the end use of the good; 
      
      
      
   3. the mere separation of one or more individual materials or components from an artificial mixture; or
      
      
      
   4. packaging or repackaging of the good.
      
      
6. DIRECT SHIPMENT, TRANSIT AND TRANSSHIPMENT
   
   An originating good that is transported through the territory of a non-Party shall be considered as non-originating unless it can be demonstrated that:
   
   
   1. the good undergoes no further production or other operation in the territory of that non-Party, other than unloading, splitting up of loads for transport reasons, reloading or any other operation necessary to preserve it in good condition; and
      
      
      
   2. the good remains under the customs control while outside the territory of one or more of the Parties.
      
7. N/A
   
   
8. N/A

1. the transaction value of a good when sold by the producer at the place of production; or 
   
   
   
2. the customs value of that good;
   

adjusted, if necessary, to exclude any costs incurred subsequent to the good leaving the place of production such as freight and insurance; and

value of non-originating materials, including for purposes of this definition non-originating component goods as referred to in Article 4.3 and in Annex 1.3, non-originating accessories, spare parts and tools as referred to in Article 4.4, non-originating packaging materials and containers as referred to in Article 4.5 and non-originating ____________ as referred to in Annex 1.3, means:

1. the transaction value or the customs value of the materials at the time of their importation into a Party, adjusted, if necessary, to include freight, insurance, packing and all other costs incurred in transporting the materials to the place of importation; or
   
   
   
2. in the case of domestic transactions, the value of the materials determined in accordance with the principles of the WTO Agreement on Customs Valuation in the same manner as international transactions, with such modifications as may be required by the circumstances.