If a product is not "wholly obtained" (see point 7) and is produced using imported material, the first thing to check is if the imported material has only undergone one of the so-called MINIMAL or INSUFFICIENT operations listed below:

Operations to ensure the preservation of products in good condition during transport and storage (ventilation; spreading out; drying; chilling; placing in salt, sulphur dioxide or other aqueous solutions; removal of damaged parts, and like operations);

Simple operations consisting of removal of dust, sifting or screening, sorting, classifying, matching (including the making-up of sets of articles), washing, painting, cutting up;

Simple placing in bottles, flasks, bags, cases, boxes, fixing on cards or boards, etc., and all other simple packing operations;

The affixing of marks, labels or other like distinguishing signs on products or their packaging

Simple mixing of products, whether or. not of different kinds, where one or more components of the mixture do not meet the conditions laid .down in the rules to enable them to be considered as originating products;

Slaughter of animals except in case of Japan, which considers slaughter of animals as sufficient process.

If above (point 9.1) is the case, the product is not originating, because it has been substantially obtained in a third country.

However, it has to be noted that complex operations of mixing, blending or assembling may confer origin, when they go beyond the simple ones mentioned at 9.1 above.

The difference between simple and complex operations may be determined in general on the basis of the special skill, equipment, control and precision needed-or otherwise-to carry them out. For example, mixing salt and water to obtain a saline solution is a simple operation, while mixing pharmaceutically active elements under controlled temperature, pressure and sterile conditions may be quite a complex process.

SUPPLEMENTARY RULES

Following supplementary rules are of importance as they may have a bearing on the origin of the final product; namely

Returned Articles,

Neutral Elements and

Under DONOR COUNTRY CONTENT RULE, raw materials, parts and components originating in a donor country and used in the manufacture o'f export goods meant for the same donor country are treated as though they have originated in the beneficiary country (say India) provided such raw materials, parts and components are subjected to working or processing going beyond that described as minimal operations (see point 9). Value of such products is added on to the domestic content for determining the origin. . Australia, Canada, EU, Japan, New Zealand, Norway, Poland, Switzerland,-. Belarus, Bulgaria, Czech Republic, Hungary, Russian Federation and Slovakia apply this rule. Some of the donor countries like EU, Japan, Norway, Poland and Switzerland may require documentary evidence of originating status of materials imported from them.

CUMULATION allows a product to be manufactured and finished in a beneficiary country (say India) with labour, materials, parts and components from other beneficiary countries without affecting the originating status. Cumulation is applied in two different manners by the preference giving countries.

Under GLOBAL CUMULATION, all beneficiary countries are regarded as one ;single area for determining origin. In other words value added and / or manufacturing-process performed, in various beneficiary countries are added together in order to meet the origin requirement for products being exported by the country where the last working or processing was carried out (say India). Value of products added / manufacturing process performed in other beneficiary countries is added on lo the domestic content for determining the origin.

Australia, Canada, New Zealand, Poland, Belarus, Bulgaria, Czech Republic, Hungary, Russian Federation and Slovakia allow Global Cumulation.

Under REGIONAL CUMULATION, member countries of a recognised regional group are regarded as one for determining origin. Accordingly, products originating in any of the member countries of the recognised regional group, if used in further manufacture in other member countries of the same regional group, are treated as originating in the country of further manufacture. In other words, goods finally exported by one beneficiary member country (say India) are considered to be originating even if value, is added and / or manufacturing process are performed in other member countries of the same regional group.

EU, Japan, Norway, United States and Switzerland apply this rule. Some of the examples of the regional groupings that are eligible are:

(ii)

The Central American Common Market (CACM) comprising Costa Rica, Honduras, Guatemala, Nicaragua, Panama and El Salvador;

Caribbe an Common Market (CARICOM) comprising Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Montserrat, St.Christopher-Nevis, St. Lucia, St. Vincent and the Grenadines, and Trinidad and Tobago;

The South Asian Association for Regional Cooperation (SAARC) comprising Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.

THE "TWO STEPS" RULE

When an imported material A istransformed in India into another product B in accordance with the origin rule for B, and then B is embodied into still another product C, the whole product B is considered originating when the origin of C has to be determined.

RETURNED ARTICLES

If originating goods exported from India to a country are returned back to India, they are to be treated as imported (or non-originating) unless it can be satisfactorily demonstrated that

- the goods returned are the same as those exported, and

- the goods returned have not undergone any operation beyond what was necessary to preserve them in good condition in that country.

NEUTRAL ELEMENTS

Goods which do not enter, and which are not intended to enter, into the final composition of a product, do not affect origin of that product. In other words, origin of Power, Fuel, Plant, Equipment, Machines or Tools used to obtain a product are not to be taken into account while determining the origin of the product;

For the purpose of determining the origin of goods, EACH ARTICLE in a consignment is to be considered separately except that -

where a group, set or assembly of articles is classified in a tariff item or code, the group, set or assembly is considered to be one article, and

tools, parts and accessories - that are imported with an article, that constitute the standard equipment customarily included In the sale of articles of that kind, and the price of which is included in that of the article and for which no separate charge is made are considered as forming a whole with the article.

An UNASSEMBLED .article that is despatched in more than one shipment because it is not feasible for transport or production reasons of the importer is considered as one article.

SETS OF ARTICLES as defined in General Rule 3 of the Harmonised System are regarded as originating when the component articles are originating products. If a set is composed of originating and non-originating articles, the set as a whole shall be regarded as originating provided the value of the non-originating articles does not exceed 15% of the ex-works price of the set.