Customs Issues RCEP Rules of Origin for Import and Export Goods

Recently, the General Administration of Customs (GACC) issued Decree No. 255, officially releasing the "Administrative Measures of the Customs of the People's Republic of China on the Origin of Import and Export Goods under the Regional Comprehensive Economic Partnership (RCEP)," effective from January 1, 2022. Below is a core interpretation of the RCEP rules of origin:

I. Criteria for Determining Originating Goods

Goods meeting any of the following conditions possess originating status under RCEP:

1. Wholly Obtained or Produced: Wholly obtained or produced within a member state (e.g., plants harvested or animals born in that country).
2. Produced Wholly from Originating Materials: Produced in a member state exclusively from originating materials.
3. Processing of Non-Originating Materials: Produced using non-originating materials but meeting the Product Specific Rules (PSR) (including tariff classification change, regional value content, or specific processing requirements).

II. "Simple Processing" Not Deemed as Originating

If non-originating materials undergo only the following simple processing in a member state, they do not gain originating status:

• Preservation operations to keep goods in good condition during transport or storage (e.g., freezing, drying).
• Simple packaging, display, screening, sorting, cutting, or simple mixing.
• Affixing marks, labels, or dilution with water or other substances.
• Disassembly, slaughtering of animals, simple painting, or peeling.

III. Accumulation Rule

Originating goods or materials obtained in one member state and used for production in another member state shall be considered as originating materials of the latter. This rule significantly facilitates supply chain integration within the region.

IV. Regional Value Content (RVC) Calculation

RVC can be calculated using the following formulas:

• Build-down Method: RVC = (FOB Price - Value of Non-Originating Materials) ÷ FOB Price × 100%
• Build-up Method: RVC = (Value of Originating Materials + Direct Labor + Direct Overhead + Profit + Other Costs) ÷ FOB Price × 100%

V. De Minimis Rule

For goods not meeting the tariff classification change requirement, if the value of non-originating materials does not exceed 10% of the FOB price (or for specific chapters, the weight does not exceed 10% of the total weight), they can still be considered originating.

Note: These measures are intended to promote trade between China and other RCEP members. Enterprises should check the detailed PSR based on specific HS codes.