The rule of origin is in relation to the LDCT in importing goods to Canada, which defines whether the goods imported to Canada are from LDCs or not. LDCs are the poorest countries who are encouraged to do business in the Canadian market without any tariff or duty and other business-related benefits. However, as per the rule of origin, the products of the LCDs have to be certified that they have been originated or produced and processed in the countries which are enlisted by the Government of Canada as one of the parties for the free trade agreement. Know everything about the rule of origin and get all the necessary assistance for your business in Canada from Clearit customs clearance.
The rule of origin has been elaborated in CETA through the protocol on “rules of origin and origin procedure”. As per section B article 2 of the protocol, a product will be considered originated in the territory of the party if the last production took place in the place of the party. This is further defined in three different ways, the product is wholly obtained in the place of the party, or the product has been manufactured exclusively from the originating goods, or has been exclusively processed in the place of the party.
The wholly obtained products as per article 4 of the protocol, are articulated as follows:
- Any non-living natural materials extracted ore and mineral products gathered in the place of the party.
- Plants and plant products and vegetables harvested in the place of the party.
- Any living animal born and raised in the place of the party.
- Any animal products collected from live animals or after the slaughter of the animal in the place of the party.
- Any sea products or products that are gathered b hunting or trapping but at the places which are not the territory of the party.
- Aquaculture products in the territory of the party.
- Marine products including fish and shellfish gathered by a vessel in the outer territory of the sea of a party.
- Mineral products along with the non-living natural materials extracted from the ocean floor, seabed or subsoil exclusively in the Canadian economic zone or the member states of European Union etc.
If a product is not wholly obtained, still can be considered in the rue of origin as per article 5 of sufficient production. The sufficient production defines that if a non-originating material undergoes sufficient production, is considered to be originating.