CUSMA Rules of Origin Regulations (SOR/2020-155)

1 Unless otherwise stated, the following definitions apply in this Schedule.

buyer

buyer refers to a person who purchases a good from the producer. (acheteur)

producer

producer refers to the producer of the good being valued. (producteur)

• 2 (1) There is no transaction value for a good if the good is not the subject of a sale.

• (2) The transaction value of a good is unacceptable if

  • (a) there are restrictions on the disposal or use of the good by the buyer, other than restrictions that

    • (i) are imposed or required by law or by the public authorities in the territory of the CUSMA country in which the buyer is located,

    • (ii) limit the geographical area in which the good may be resold, or

    • (iii) do not substantially affect the value of the good;

  • (b) the sale or price actually paid or payable is subject to a condition or consideration for which a value cannot be determined with respect to the good;

  • (c) part of the proceeds of any subsequent resale, disposal or use of the good by the buyer will accrue directly or indirectly to the producer and an appropriate addition to the price actually paid or payable cannot be made in accordance with paragraph 4(1)(d) of Schedule 3; or

  • (d) the producer and the buyer are related persons and the relationship between them influenced the price actually paid or payable for the good.

• (3) The conditions or considerations referred to in paragraph (2)(b) include the following circumstances:

  • (a) the producer establishes the price actually paid or payable for the good on condition that the buyer will also buy other goods in specified quantities;

  • (b) the price actually paid or payable for the good is dependent on the price or prices at which the buyer sells other goods to the producer; and

  • (c) the price actually paid or payable is established on the basis of a form of payment extraneous to the good, such as when the good is a semi-finished good that is provided by the producer to the buyer on condition that the producer will receive a specified quantity of the finished good from the buyer.

• (4) For the purposes of paragraph (2)(b), conditions or considerations relating to the production or marketing of the good do not render the transaction value unacceptable, such as if the buyer undertakes on the buyer’s own account, even though by agreement with the producer, activities relating to the marketing of the good.

• (5) If objective and quantifiable data do not exist with regard to the additions required to be made to the price actually paid or payable under subsection 4(1) of Schedule 3, the transaction value cannot be determined under section 2 of that Schedule. For an illustration of this, a royalty is paid on the basis of the price actually paid or payable in a sale of a litre of a particular good that was purchased by the kilogram and made up into a solution. If the royalty is based partially on the purchased good and partially on other factors that have nothing to do with that good, such as when the purchased good is mixed with other ingredients and is no longer separately identifiable, or when the royalty cannot be distinguished from special financial arrangements between the producer and the buyer, it would be inappropriate to add the royalty and the transaction value of the good could not be determined. However, if the amount of the royalty is based only on the purchased good and can be readily quantified, an addition to the price actually paid or payable can be made and the transaction value can be determined.