To enjoy the tariff concessions or preferential nil duty, ASEAN Member States must ensure that the products exported to the other ASEAN Member States under ATIGA comply with the rules of origin. In determining whether a product is of Malaysian origin, an Ordinary Certificate of Origin or a Preferential Certificate of Origin can be issued if they meet the relevant criteria of being locally manufactured.

Under ATIGA, products shall be eligible for preferential tariff treatment if they conform to the origin requirements under any one of the following conditions:

i) A good which is wholly obtained or produced in the exporting Member State as set out and defined in Article 27 of the ATIGA; or

- The following shall be considered as wholly obtained or produced in the exporting Member State: Plant and plant products grown and harvested, picked or gathered there; Live animals born and raised there; Goods obtained from hunting, trapping, fishing, aquaculture, gathering or capturing conducted there; Minerals and other naturally occurring substances, not included in subparagraphs etc.

ii) A good not wholly obtained or produced in the exporting Member State, provided that the said products are eligible under Article 28 or Article 29 of ATIGA.

- A good shall be deemed to be originating in the Member State where working or processing of the good has taken place:

a) If at least 40% of its content (ASEAN Value Content or the "Regional Value Content (RVC)) originates from that Member State or it has undergone a change in tariff classification at four-digit level (change in tariff heading) of the Harmonised System.

b) The formula for calculating ASEAN Value Content or RVC is as follows:

 

Direct Method


RVC =

ASEAN
Material
Cost

+

Direct
Labour
Cost

+

Direct
Overhead
Cost

+

Other
Cost

+

Profit

X

100%

_____________________________________________________

FOB Price

 

Indirect Method

RVC =

FOB Price

-

Non-Originating
Materials, Parts or Produce

X

100%

_____________________________________________________

FOB Price

 

The exporter of the good can choose whether to use the way RVC of not less than 40% or the CTC rule when determining the goods qualify as originating goods of the Member States. Refer to the Product Specific Rules (PSR) list and check with its specific rule, i.e.: change in tariff classification or specific RVC requirement. If the goods are not in the list, it will be processed by calculating Regional Value Content (RVC) of 40%. Exporters/Manufacturers must ensure that the information provided in the application form is accurate and complete.

 

Examples of Calculating ASEAN Value Content/Regional Value Content under ATIGA or Change in Tariff Classification (CTC)

Example 1: Wholly-obtained (WO)
HS Code: 0604.91.000

Material Used

HS Code

Origin Country/Supplier

Value (RM)

%

Dracaena

0604.91.000

Malaysia/Own factory

0.50

45.5

Total

 

 

0.50

45.5

Labour Cost

 

 

0.10

9.1

Liability Cost

 

 

0.10

9.1

Other Cost (If any)

 

 

0.15

13.6

Profit

 

 

0.25

22.7

FOB

 

 

1.10

100.0

 

  • Product fulfil rules of origin

--> 'Manufactured in Malaysia and use 100% of local material'.

  • Qualified for as wholly obtained/produced.

 

Example 2: Regional Value Content (RVC)
Other Furniture HS Code: 9403.60.900

Material Used

HS Code

Origin Country/Supplier

Value (RM)

%

Chipboard

4410.90.000

Malaysia/ES SB

4.00

13.9

Fibreboard

4421.21.000

Belgium/ABC SB

5.30

18.5

Decorative Paper

4811.90.000

France/DEF SB

4.40

15.4

Bugle

7318.15.000

USA/GHI SB

6.50

22.6

Total

 

 

20.20

70.4

Labour Cost

 

 

4.00

13.9

Liability Cost

 

 

 

 

Other Cost (If any)

 

 

1.50

5.2

Profit

 

 

3.00

10.5

FOB

 

 

28.70

100.0

 

  • Calculation % of local content – Contain at least 40% of local material.
28.70 -16.20    x 100%       = 43%
                    28.70
  • Qualified for Regional Value Content (RVC 43%).

 

Example 3: Change in Chapter – 2-digit level (CC)
Palm Oil Product HS Code: 1512.90.990

Material Used

HS Code

Origin Country/Supplier

Value (RM)

%

Palm Olein

3824.90.900

Indonesia/XYZ Farm

0.50

45.5

Total

 

 

0.50

45.5

Labour Cost

 

 

0.10

9.1

Liability Cost

 

 

0.10

9.1

Other Cost (If any)

 

 

0.15

13.6

Profit

 

 

0.25

22.7

FOB

 

 

1.10

100.0

 

  • The Product Specific Rule for product - HS 1512.90.990 under the Agreement:

--> A change to heading 15.12 from any other Chapter.

  • The product qualifies as an originating good – change in tariff classification at two digit level (CC).
  • Raw materials are sourced from other country.
 

 

Example 4: Change in Tariff Heading – 4-digit level (CTH)
Chemical HS Code: 3802.10.000

Material Used

HS Code

Origin Country/Supplier

Value (RM)

%

Acid

2917.36.000

Malaysia/ES SB

5.50

26.4

Butanediol

2905.35.000

Malaysia/ABC SB

1.30

6.3

Titanium

3815.19.000

USA/DEF Pt. Ltd.

3.70

17.7

Total

 

 

10.50

50.3

Labour Cost

 

 

5.00

24.0

Liability Cost

 

 

 

 

Other Cost (If any)

 

 

1.50

7.3

Profit

 

 

3.80

13.3

FOB

 

 

20.80

100.0

 

  • The Product Specific Rule for product - HS 3802.10.000 under the Agreement are:

--> A change to heading 38.02 through 38.04 from any other heading; or provided there is a qualifying value content of not less than 40%.

  • The product qualifies as an originating good – change in tariff classification at four digit level (CTH).
  • Raw materials are sourced from other country.

 

Example 5: Change in Tariff Heading – 6-digit level (CTSH)
Wire HS Code: 7408.21.000

Material Used

HS Code

Origin Country/Supplier

Value (RM)

%

Brass Wire

7408.10.000

Taiwan/MNO Co.

3.90

25.5

Spool

3923.40.900

China/PQR Co.

0.15

6.2

Plastic Gasket

8484.10.000

Malaysia/STU S/B

0.40

2.6

Polypropylene

3903.30.100

Thailand/VWX Co.

0.40

2.6

Total

 

 

4.85

31.7

Labour Cost

 

 

2.00

13.1

Liability Cost

 

 

4.50

29.5

Other Cost (If any)

 

 

1.40

9.3

Profit

 

 

2.50

16.4

FOB

 

 

15.25

100.0

 

  • The Product Specific Rule for product HS 7408.21.000 under the Agreement are:

--> A change to subheading 7405.00 through 7419.99 from any other subheading; or provided there is a qualifying value content of not less than 40%.

  • The product qualifies as an originating good – change in tariff classification at six digit level (CTSH).
  • Raw materials are sourced from Malaysia, China & Other countries.