What is a tariff shift rule?
A tariff shift rule, or change in tariff classification, says every imported material has to end up under a different code than it came in with. If the code changed, the material was worked on enough to count.
An example
Say you make wooden chairs, heading 9401, from imported sawn timber, heading 4407. The timber changes heading, so a change-of-heading rule is met.
Now say you import finished chair parts instead. Chair parts sit in 9401 as well, so there's no change of heading and the rule isn't met, however much work you put into assembly.
Chapter, heading or subheading
The rule says how big the change has to be. A change of chapter looks at the first two digits of the code, a change of heading at the first four and a change of subheading at the first six. The bigger the jump, the stricter the rule.
Things to watch
Rules often name headings the materials can't come from, even with a change. Materials that already originate don't need to change code at all. And a small share of materials that miss the change can often be let through under de minimis.
Where you'll find it. The article it's in, agreement by agreement.
- USMCAProduct-specific rules, Article 4.2
- CAFTA-DRProduct-specific rules, Article 4.1
- CPTPPProduct-specific rules, Article 3.2
- RCEPProduct-specific rules, Article 3.2
- ATIGAProduct-specific rules, Article 28
- ACFTAProduct-specific rules, Article 4
- PEM ConventionProduct-specific rules, Article 4
- CETAProduct-specific rules, Article 5
- EU–Japan EPAProduct-specific rules, Article 3.2
- EU–Korea FTAProduct-specific rules, Article 5
- EU–Mercosur iTAProduct-specific rules, Article 3.2
- EU–SADC EPAProduct-specific rules, Article 8
- EU–UK TCAProduct-specific rules, Article 39
- EU–Vietnam FTAProduct-specific rules, Article 5
- UK–Canada TCAProduct-specific rules, Article 5
- UK–Japan CEPAProduct-specific rules, Article 3.2
- UK–SACUM EPAProduct-specific rules, Article 8
- UK–Vietnam FTAProduct-specific rules, Article 5
- US–Australia FTAProduct-specific rules, Article 5.1
- KORUSProduct-specific rules, Article 6.1
- US–Singapore FTAProduct-specific rules, Article 3.1
- Canada–Colombia FTAProduct-specific rules, Article 301
- Canada–Indonesia CEPAProduct-specific rules, Article 3.2
- Canada–Korea FTAProduct-specific rules, Article 3.3
- Canada–Ukraine FTAProduct-specific rules, Article 3.5
- EU GSPProduct-specific rules, Article 45
- UK DCTSProduct-specific rules, Regulation 8
- Canada GPTProduct-specific rules, Section 3(1)