About Preference Handling
There are several possibilities for qualifying your product as originating in your country or economic zone. In NAFTA, for example, these methods include:
Tariff shift (rules of origin)
Tariff shifting means you apply enough labor to the product or its components to change its commodity code.
De minimus rule (maximum of 7% non-originating goods)
The de minimus rule allows a product to qualify for preference if no more than 7% of the product is composed of non-originating goods.
Certificate of origin (vendor declaration)
Your vendors give you a document certifying that the product or its components originate in your country or economic zone.
To determine the origin of a part manufactured in-house in the EU, for example, you must first determine the whole value of all component parts in the structure list according to the following places of origin:
European Union
EFTA
Third country
Associated countries
You should make sure that, in the case of components that are also parts in a single-level bill of material, the valuation prices (that is, the value of the exploded structure) are considered.
Example
On the basis of existing preference agreements between the EU and Poland, the Czech Republic, and Switzerland, the goods movements shown in the following graphic are relevant for preference processing.
