Product Classification and Rules of Origin Before Exporting

Overview

Classification drives the duty rate, import licences and certification; origin decides whether FTA preferences apply. Getting either wrong can lead to back duties, penalties or clearance delays.

Key concepts

• HS code: the first 6 digits are international; countries extend to 8 or 10 digits.
• MFN vs preferential rates: preferential rates apply only when rules of origin are met.
• Rules of origin: common tests are wholly obtained, change in tariff classification and regional value content.
• Proof of origin: certificates from an issuing body or approved-exporter declarations, per each agreement.

Steps

1. Determine the 6-digit HS code from composition, function and use.
2. Check the destination’s national code, duty rate and import controls with its customs.
3. Check certification, labelling and SPS requirements.
4. Identify FTAs both China and the destination belong to (e.g. ASEAN–China FTA, RCEP).
5. Test the product against the agreement’s product-specific rules.
6. Obtain a certificate or prepare a declaration, and keep cost and production records.

Documents

• Product description, composition and process flow
• Bill of materials and sourcing
• Cost records for value-content calculations

Common limitations

• National subheadings can differ between countries for the same product.
• Minimal processing usually does not confer origin.

Practical notes

Main FTAs per country are in Compare · Trade. For complex goods, consider an advance ruling from the destination’s customs.

Official resources

• Customs links in each handbook’s Trade & Customs chapter