Designing Compliant Value-Add Processes
When establishing operations in Southeast Asia, the question isn't just "what can we do here?" but "what value-add will be recognized for origin purposes?"
Understanding Rules of Origin Requirements
Different trade frameworks have different requirements for what constitutes "substantial transformation" or sufficient value-add. Key factors include:
- Change in tariff classification: Does the finished product fall under a different HS code than its inputs?
- Value content requirements: What percentage of value is added locally?
- Specific processing rules: For some products, specific operations are required
Value-Add Activities to Consider
Manufacturing Operations - Assembly of components - Testing and quality assurance - Calibration and configuration - Packaging and labeling
Design and Engineering - Product customization - Local adaptation - Quality engineering
Logistics Operations - Final configuration - Kitting and bundling - Distribution preparation
What Doesn't Typically Qualify
Be cautious about activities that may not meet substantial transformation standards: - Simple assembly with minimal tools - Repackaging without meaningful work - Testing without other processing - Transshipment without value addition
Our Design Approach
We assess your products and supply chain against applicable rules of origin, then design operating models that achieve meaningful, documentable value-add. When sufficient transformation isn't achievable, we advise against proceeding.
