RCEP rules of origin decide whether a shipment earns the reduced duty under the new trade deal. The agreement began on January 1, 2022 for ten of its members. If your goods do not meet the origin rules, or you cannot prove it, you pay the normal duty. This guide explains the three ways goods qualify, what proof to carry and where exporters slip.
What RCEP covers and who it covers first
The Regional Comprehensive Economic Partnership links the ten ASEAN countries with Australia, China, Japan, New Zealand and Korea. It entered into force on January 1, 2022 for Brunei, Cambodia, Laos, Singapore, Thailand, Vietnam, Australia, China, Japan and New Zealand. The other signatories join their own start dates once they finish ratification.
That detail matters for exporters. A buyer in a member country can only grant the RCEP rate if both the exporting and importing country have the agreement in force between them. Check the status of your destination before you quote a price.
The three routes to origin
Under Chapter 3 of the agreement, a product qualifies as originating in one of three ways. You only need one.
- Wholly obtained or produced. The goods come entirely from one RCEP country. Think of crops grown there or minerals dug there.
- Made only from originating materials. Every input already counts as originating in an RCEP country. Inputs from any member can count, not only your own country.
- Meets the product-specific rule. The goods use some imported inputs, but they pass the test listed for that product in the agreement.
Most manufactured goods fall into the third route. That is where the detailed work sits.
How the product-specific rules work
Each product has its own rule in the agreement's annex. Look up the rule by tariff code. Two main kinds of test appear.
The first is a change in tariff classification. The imported inputs must sit in a different chapter, heading or subheading from the finished good. A rule that asks for a change of heading is stricter than one that asks for a change of subheading, because the inputs must differ more from the final product.
The second is regional value content. Here a set share of the product's value must come from the region. The agreement allows two ways to calculate it, a build-up formula that adds originating materials and a build-down formula that subtracts non-originating ones. A rule may say, for example, a minimum percentage such as 40. Read the exact figure for your code rather than assuming.
Some rules give you a choice between the two tests. Run the numbers for both and keep the working.
Small amounts and shared inputs
Two features help exporters with mixed supply chains. The first is a tolerance. If a good fails a tariff-change rule only because a few inputs changed class the wrong way, it can still qualify when those inputs are worth no more than 10 percent of the free-on-board value. For textile chapters 50 to 63, the importer can use either that value test or a limit of 10 percent of the total weight.
The second is cumulation. Inputs that originate in any RCEP member count as originating when you use them in another member. A factory in Thailand can use Japanese parts and still count them toward origin. This is the main reason a regional supply chain can gain from one agreement instead of many.
Keep the supplier papers that show where each input came from. Without them, a cumulated input is just a claim.
Proving origin: certificate or declaration
Meeting the rule is half the job. You must also prove it to the importing customs office. Singapore Customs describes three kinds of preferential proof across its trade deals, and which one applies depends on the agreement.
- A preferential certificate of origin issued by customs.
- A declaration of origin made by an approved or certified exporter.
- A declaration by the exporter, producer or importer, where a deal allows it.
In Singapore, a company that wants a certificate applies to Singapore Customs for it. Plan for that step before the first shipment, and keep your supporting documents for at least five years.
Singapore also runs an approved exporter scheme under RCEP. An approved exporter can write its own declaration of origin for the goods it is authorised to cover. Applicants need to understand the RCEP rules, have solid export experience, keep good records and have no record of origin fraud. Customs tells applicants the outcome after it reviews the application. Companies already certified under the ASEAN self-certification scheme are approved automatically.
Mistakes that cost exporters the tariff cut
- Wrong tariff code. Each product-specific rule is tied to one code, so a misclassified item gets tested against the wrong rule and fails.
- No working on file. Keep the cost sheet or the classification comparison that shows how you passed the rule.
- Assuming every member applies the deal. Confirm the importing country has it in force.
- Leaning on the 10 percent tolerance without checking the base. It uses free-on-board value for most goods and weight for textiles.
- Self-declaring without authority. In Singapore, the exporter declaration route is for approved exporters. Everyone else applies for a certificate.
Before you ship, check each product against the annex rule, store the evidence and confirm the right proof for your route. Rules are applied by each customs office, so confirm details with your own customs authority.
Sources
- Enterprise Singapore, RCEP: https://www.enterprisesg.gov.sg/grow-your-business/go-global/international-agreements/free-trade-agreements/find-an-fta/RCEP
- Singapore Customs, Origin Documentation: https://www.customs.gov.sg/businesses/rules-of-origin/origin-documentation/
- Japan Customs, RCEP cumulation and de minimis: https://www.customs.go.jp/english/epa/rcep/rcep2_1.html
- Singapore Customs, Approved Exporter Scheme: https://www.customs.gov.sg/doing-business/rules-of-origin/origin-documentation/approved-exporter-and-certified-exporter-scheme/
- New Zealand MFAT, RCEP Tariff Finder: https://tariff-finder.govt.nz/RCEP