New Zealand-Korea FTA (KNZFTA)

Rules of Origin

The final product must meet the KNZFTA rules of origin in order to qualify for the preferential tariff treatment under KNZFTA. The exported product must be either

(a) 'wholly obtained or produced' in New Zealand;

(b) produced entirely in the territory of either Korea or New Zealand exclusively from materials originating in Korea or New Zealand; or

(c) if it contains any imported materials that are not originating in Korea or New Zealand, it must meet the Product-Specific Rule of Origin (PSR) listed for the good.

Explanations

(i) Wholly Obtained Or Produced Goods (WO) means that the good must be wholly produced or obtained in accordance with Article 3 of Chapter 3 (Rules of Origin and Origin Procedures);

(ii) Change of Chapter (CC) means that all non-originating materials used directly in the production of the final good must be classified in a different chapter from the final good;

(iii) Change of Tariff Heading (CTH) means that all non-originating materials used directly in the production of the final good must be classified in a different heading from the final good;

(iv) Change of Tariff Subheading (CTSH) means that all non-originating materials used directly in the production of the final good must be classified in a different subheading from the final good;

(v) RVC(35) or RVC (40) means that the good must have a Regional Value Content of not less than 35 (40) percent using the build-down method as calculated under Article 4 of Chapter 3 (Rules of Origin and Origin Procedures);

(vi) RVC(30/40) means that the good must have a Regional Value Content of not less than 30 percent using the build-up method or not less than 40 percent using the build-down method as calculated under Article 4 of Chapter 3 (Rules of Origin and Origin Procedures).

NOTE: If a rule has other exclusions, e.g. 'Change of chapter excluding Chapter XX', this means that the goods excluded (those classified in Chapter XX) must be originating in either Korea or New Zealand.

Tolerance provision

If a good fails to meet a tariff shift requirement, but the value of the materials that do not meet the tariff shift is less than 10% of the value of the good, the good shall be regarded as originating.

  • For goods that are classified in chapter 1 -14 the 10% value tolerance applies only if the non-originating material is used or consumed in the production of another good and the process involves more than simple mixing.
  • For textile goods classified in chapters 50 to 63 the producer/exporter can choose between a 10% value or a 10% weight based tolerance.