Substantial Transformation

The change that gives goods a new origin: a new name, character or use.

Where materials from several countries are combined, origin sits where the last substantial transformation happened. The general test is whether the process produced an article with a new name, character or use.

In practice it is applied through a tariff-shift rule or a value-added threshold set per heading, which is more predictable than the general test and is what a customs authority will actually check.

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