Page 35 - Regional Comprehensive Economic Partnership (RCEP)

Direct Labour Cost includes wages, remuneration, and other Article 3.6: Minimal Operations and Processes
employee benefits; and
Notwithstanding any provisions of this Chapter, the following operations
Direct Overhead Cost is the total overhead expense. when undertaken on non-originating materials to produce a good shall
be considered as insufficient working or processing to confer on that
2. The value of goods under this Chapter shall be calculated, mutatis good the status of an originating good:
mutandis, in accordance with Article VII of GATT 1994 and the
Customs Valuation Agreement. All costs shall be recorded and (a) preserving operations to ensure that the good remains in
maintained in accordance with the Generally Accepted good condition for the purposes of transport or storage;
Accounting Principles applicable in the Party where the goods are
produced. (b) packaging or presenting goods for transportation or sale;

3. The value of non-originating materials shall be: (c) simple processes, consisting of sifting, screening, sorting,
3
classifying, sharpening, cutting, slitting, grinding, bending,
(a) for imported materials, the CIF value of the materials at the coiling, or uncoiling;
time of importation; and
(d) affixing or printing of marks, labels, logos, or other like
(b) for materials obtained within a Party, the earliest distinguishing signs on goods or their packaging;
ascertainable price paid or payable.
(e) mere dilution with water or another substance that does not
4. A material of undetermined origin shall be treated as a non- materially alter the characteristics of the good;
originating material.
(f) disassembly of products into parts;
5. The following expenses may be deducted from the value of non-
originating materials or materials of undetermined origin: (g) slaughtering of animals;
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(a) the costs of freight, insurance, packing, and other (h) simple painting and polishing operations;
transport-related costs incurred in transporting the goods
to the producer; (i) simple peeling, stoning, or shelling;

(b) duties, taxes, and customs brokerage fees, other than (j) simple mixing of goods, whether or not of different kinds;
duties that are waived, refunded, or otherwise recovered; or
and
(k) any combination of two or more operations referred to in
(c) costs of waste and spillage, less the value of any subparagraphs (a) through (j).
renewable scrap or by-products.

Where the expenses listed in subparagraphs (a) through (c) are
unknown or evidence is not available, then no deduction is
allowed for those expenses.

3 For the purposes of this Article, “simple” describes an activity which does not need
special skills, or machines, apparatus, or equipment especially produced or installed
for carrying out the activity.

4 For the purposes of this Article, “slaughtering” means the mere killing of animals.

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