basic-guide-to-exporting_Latest_eg_main_086196

Buildup MethodRVC = (VOM / AV) × 100• RVC = The regional value content, expressed as a percentage• AV = The adjusted value (the value for customs purposes)• VOM = The value of originating materials that are acquired or self-produced andused by the producer in the production of the goodBuilddown MethodRVC = ((AV − VNM) / AV) × 100• RVC = The regional value content, expressed as a percentage• AV = The adjusted value (the value for customs purposes)• VNM = The value of nonoriginating materials that are acquired and used by theproducer in the production of the good. VNM does not include the value of amaterial that is self-produced.Regional Value Content–Based RuleThe RVC test allows the good to qualify using either one of two methods. These arethe builddown and buildup methods.Builddown MethodRVC = Adjusted value − Value of nonoriginating materials/Adjusted value × 100Buildup MethodRVC = (Originating materials / Adjusted value) × 100Using the example above, then:We will assume that the adjusted value for the piece of furniture in question is $1,000.The value of nonoriginating materials used in the production of the good excludes,according to Article 5.5:1. The costs of freight, insurance, packing, and all other costs incurred intransporting the material to the location of the producer2. Duties, taxes, and customs brokerage fees on the material paid in the territory ofone or both of the parties, other than duties and taxes that are waived, refunded,refundable, or otherwise recoverable, including credit against duty or tax paidor payable3. The cost of waste and spoilage resulting from the use of the material in theproduction of the good, less the value of renewable scrap or by-products4. The cost of processing incurred in the territory of a party in the production ofthe nonoriginating materials5. The cost of originating materials used in the production of the nonoriginatingmaterial in the territory of a party206U.S. Commercial Service • A Basic Guide to Exporting