Common use of Calculation of Regional Value Content Clause in Contracts

Calculation of Regional Value Content. 1. For the purposes of Article 2, if Annex 3-B requires a good to meet a regional value requirement, the formula for calculating the regional value content will be: RVC = V – VNM x 100 where: 2. The value of the good referred to in paragraph 1 shall be, for exported goods, the FOB value of the good. 3. The value of non-originating materials or materials of undetermined origin referred to in paragraph 1 shall be: (a) for imported materials, the CIF value at the time of importation of the materials; or (b) for materials acquired within the territory of the Party in which the good is produced the earliest ascertainable price paid or payable for the materials in the territory of the Party. 4. The value of goods under this Chapter will be determined in accordance with the Agreement on Customs Valuation. 5. Each Party shall provide that, for a non-originating material or material of undetermined origin included under paragraph 1, the following expenses may be deducted from the value of the material: (a) the costs of freight, insurance, packing and all other costs incurred in transporting the material within or between the Parties’ territories to the location of the producer; (b) duties, taxes and customs brokerage fees on the material paid in the territories of one or more of the Parties, other than duties and taxes that are waived, refunded, refundable or otherwise recoverable, including credit against duty or tax paid or payable; (c) the cost of waste and spoilage resulting from the use of the material in the production of the good, less the value of renewable scrap or by-product; (d) the cost of processing incurred in the territory of one or more of the Parties in the production of the non-originating material; and (e) the cost of originating materials used or consumed in the production of the non- originating material in the territory of one or more of the Parties. 6. If the cost or expense of a deduction listed in paragraph 5 is unknown or documentary evidence of the amount of the deduction is not available, then no deduction is allowable for that particular cost. 7. For the purposes of this Chapter, all costs shall be recorded and maintained in accordance with the generally accepted accounting principles applicable in the territory of the Party in which the good is produced or manufactured.

Calculation of Regional Value Content. 1. For the purposes of Article 2, if Annex 3-B requires a good to meet a The regional value requirementcontent of a good, specified in Annex 3A (Product-Specific Rules), shall be calculated by using either of the formula for calculating following formulas: Indirect/Build-Down Formula FOB – VNM RVC = _____________________ x 100 FOB or Direct/Build-Up Formula Direct Direct Labour Overhead Other RVC = VOM + Cost + Cost + Profit + Cost __________________________________________________ x 100 FOB where: RVC is the regional value content will be: RVC = V – of a good, expressed as a percentage; FOB is the FOB value as defined in subparagraph (e) of Article 3.1 (Definitions); VOM is the value of originating materials, parts, or produce acquired or self-produced, and used in the production of the good; VNM x 100 where: 2is the value of non-originating materials used in the production of the good; Direct Labour Cost includes wages, remuneration, and other employee benefits; and Direct Overhead Cost is the total overhead expense. The value of goods under this Chapter shall be calculated, mutatis mutandis, in accordance with Article VII of GATT 1994 and the good referred to Customs Valuation Agreement. All costs shall be recorded and maintained in paragraph 1 accordance with the Generally Accepted Accounting Principles applicable in the Party where the goods are produced. The value of non-originating materials shall be, : for exported goodsimported materials, the FOB CIF value of the good. 3materials at the time of importation; and for materials obtained within a Party, the earliest ascertainable price paid or payable. A material of undetermined origin shall be treated as a non-originating material. The following expenses may be deducted from the value of non-originating materials or materials of undetermined origin referred to in paragraph 1 shall be: (a) for imported materials, the CIF value at the time of importation of the materials; or (b) for materials acquired within the territory of the Party in which the good is produced the earliest ascertainable price paid or payable for the materials in the territory of the Party. 4. The value of goods under this Chapter will be determined in accordance with the Agreement on Customs Valuation. 5. Each Party shall provide that, for a non-originating material or material of undetermined origin included under paragraph 1, the following expenses may be deducted from the value of the material: (a) origin: the costs of freight, insurance, packing packing, and all other transport-related costs incurred in transporting the material within or between the Parties’ territories goods to the location of the producer; (b) ; duties, taxes taxes, and customs brokerage fees on the material paid in the territories of one or more of the Partiesfees, other than duties and taxes that are waived, refunded, refundable or otherwise recoverable, including credit against duty or tax paid or payable; (c) the cost recovered; and costs of waste and spoilage resulting from the use of the material in the production of the goodspillage, less the value of any renewable scrap or by-product; (d) products. Where the cost of processing incurred in the territory of one or more of the Parties in the production of the non-originating material; and (e) the cost of originating materials used or consumed in the production of the non- originating material in the territory of one or more of the Parties. 6. If the cost or expense of a deduction expenses listed in paragraph 5 is subparagraphs (a) through (c) are unknown or documentary evidence of the amount of the deduction is not available, then no deduction is allowable allowed for that particular costthose expenses. 7. For the purposes of this Chapter, all costs shall be recorded and maintained in accordance with the generally accepted accounting principles applicable in the territory of the Party in which the good is produced or manufactured.