As a main rule, a product must be either wholly obtained or sufficient processed in a GSP-country in order to achieve originating status and in turn preferential treatment. Goods containing non-originating products may thus obtain tariff treatment if certain criteria regarding the level of processing are fulfilled.
An originating GSP-product may contain non-originating materials and still be granted preferential treatment.
Wholly obtained products
The products which are considered to be "wholly obtained" in an GSP-country are mainly products from agriculture, hunting and fishing, mineral products extracted form the soil or seabed of the country concerned and products from sea fishing etc. The products are defined in the Customs Regulations § 8-4-32.
Sufficiently worked or processed products
As a main rule, a product is considered to be sufficiently worked or processed when all the non-originating materials used in the production in the GSP-country concerned are classified in a HS tariff heading (first four digits) different from the tariff heading of the product to be exported. The input materials have changed position in the HS, and hence their tariff classification.
However, if the product obtained is referred to in columns 1 and 2 of the "List of working and processing operations," (product-specific rules or "list-rules"), the specific rules laid down for the individual product in the list shall apply when determining the level of processing instead of the general rule of change in tariff classification. A product mentioned here is thus considered as being sufficiently worked or processed when all the conditions laid down for the product concerned in column(s) 3 and/or 4 are fulfilled. The list of processing operations also includes a set of Introductory Notes.
There are however exceptions to the main rule. These are outlined below.
Exception I: the tolerance rule
From the main requirements outlined above, i.e. change in tariff classification and terms laid down in processing operations, exceptions are made for small quantities of non-originating materials for which the value does not exceed 10% (or 15 %) of the ex-works price of the product.
Please note: the tolerance rule does not apply however for textile products of HS-chapters 50-63. Also, the rule is not applicable in such a manner that a maximum limitation of the value of non-originating materials allowed, as laid down for a product in the list of product-specific rules, is exceeded.
Exception II: insufficient working or processing
A number of simple operations, referred to as "minimal operations," are considered to be insufficient working or processing. A product which has been subjected to only one or more of these insufficient processes will not – single or added together - obtain originating status even if it satisfies the change of tariff classification rule or any percentage rule for the product in the List of product-specific rules.
Exception III: cumulation
Cumulation of origin allows an exporter in a GSP-country to make use of materials with originating status imported from another GSP-approved country in a production process, contrary to the main requirements regarding change in tariff classification or possible "list rules" outlined above.
In the Norwegian GSP-scheme, the three following types of cumulation are provided for:
- Regional cumulation
- Bilateral cumulation
- Diagonal cumulation
This refers to the possibility of cumulation of origin between developing countries forming regional economic groups. This provision makes it possible for a GSP-country to cumulate with originating materials from another country within the same regional economic group.
As of October 2012, regional cumulation is implemented for the ASEAN economic group, allowing cumulation of origin between Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. Regional cumulation is also implemented for the SAARC economic group, allowing cumulation between Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.
Please note: a precondition for the use of regional cumulation that is that the trade in such materials between the countries concerned is governed by rules of origin identical to those laid down in the Norwegian GSP-scheme. Further, it is a requirement that GSP-countries wishing to benefit from such regional cumulation have been authorised by the Norwegian authorities in advance.
Bilateral cumulation makes it possible to use, without restrictions, Norwegian originating materials and input-products in the production process in a GSP-country, in the same manner as materials from the GSP-country itself, when the finished product is exported to Norway. This means, in practical terms, that the materials used in the production in a GSP-country having "originating status" from the GSP-country concerned or from Norway, may be used without restrictions with regards to production criteria that may apply for the finished product or any specific requirements laid down for the product in the List of product-specific rules.
Please note: when making use of Norwegian materials in the production in a GSP-country for cumulation purposes, originating status must be documented by a statement of origin issued by the Norwegian exporter in question in order to obtain preferential treatment.
Diagonal cumulation (with the European Union and Switzerland) makes it possible to use materials and input-products originating in Norway, the European Union or Switzerland in addition to the GSP-country itself, in goods produced in a GSP-country, when the final product is exported to either Norway, the European Union or Switzerland. As with bilateral cumulation, restrictions with regards to production criteria that may apply for finished products or any specific requirements laid down for the product in the List of product-specific rules do not apply. The final product may be exported as a GSP-originating product to Norway, the European Union or Switzerland.
Please note: all commodities classified under chapters 1-24 in the HS nomenclature are excluded from this cumulation arrangement. As with bilateral cumulation, originating status must be documented by a statement of origin issued by the Norwegian exporter in question in order to obtain preferential treatment.
When considering the originating status of a product, each product unit must be assessed individually. Concerning a shipment of goods, the rules of origin requirements must be fulfilled for each individual product. It is thus not allowed to consider the whole shipment as a single unit, except in cases where the HS nomenclature classifies a group, set or an assembly of products as one unit under a single tariff heading.
- Packing materials, which are included together with the product for classification purposes, shall be included (as in cases of other materials and parts) when determining the originating status of a product.
- Accessories, spare parts and tools, constituting standard equipment dispatched with the product and included in the price, shall form an integral part of the product concerned (the main product).
- Sets, as defined in the General Interpretative Rules of the HS-nomenclature, are considered to be originating in a GSP-country if all the components of the set are originating products. Alternatively, a set is also considered as originating in a GSP-country if the value of all non-originating materials (components) used do not exceed 15% of the ex-works price of the set.
- "Neutral elements", such as energy, fuel, machinery and tools, used during the production, or materials/ingredients which are not entering or incorporated in the final product and which are not intended to be so, shall not be taken into consideration when assessing the originating status of a product.