Common use of Regional value Clause in Contracts

Regional value. content (rvc) 1. The regional value content of a good shall be calculated on the basis of one of the following methods: (a) Method Based on Value of Non-Originating Materials (Build-down Method) FOB – VNM RVC = x 100 FOB (b) Method Based on Value of Originating Materials (Build-up Method) VOM RVC = x 100 FOB where, RVC is the regional value content, 2. The value of the non-originating materials shall be: (a) in the case of a material imported directly by the producer of a good, the CIF value at the time of importation of the material; (b) in the case of a material acquired by the producer in the territory where the good is produced, the transaction value, without considering the costs of freight, insurance, packing, and the other costs incurred in the transportation of the material from the warehouse of the supplier to the place where the producer is; or (c) in the case of a self-produced material or where the relationship between the producer of the good and the seller of the material influences the price actually paid or payable for the material, the sum of all costs incurred in the production of the material, including general expenses. Additionally, it will be possible to add an amount for profit equivalent to the profit added in the normal course of trade. 3. The values referred to in this Article shall be determined in accordance with the Customs Valuation Agreement.