Origin Calculation - Free Trade Agreement Management

Overview

There are more than 500 notified free trade agreements (FTAs) around the world to enhance trade among the participants and offer potential duty savings to companies yielding a competitive advantage. However, companies can only leverage such potential savings and competitive advantages by complying with a number of complex rules of origin and maintaining detailed documentation. FTAs should be used as a strategic management tool. This requires companies to establish processes for the calculation of the origin of goods which conform to applicable laws and auditing requirements in order to avoid possible fines and future unplanned costs.

This is where MIC's Origin Calculation System (MIC OCS) supports you! It provides the necessary tools for an optimized free trade agreement management along the entire process for a multitude of FTAs worldwide (e.g. CETA, NAFTA / USMCAJEFTA, ASEANEU-MERCOSUR, etc.). Starting with automated solicitation of supplier declarations using an innovative supplier web portal followed by an optimized calculation of the origin of goods based on multi-level bills of materials, resulting in the creation of the appropriate certificate of origin documentation. Each process step is traceable via a complete audit trail.  Changes in the originating status of the goods are reliably detected, affected goods are recalculated and thus compliance is maintained, all on an ongoing basis.

MIC OCS helps to ensure that you enjoy the benefits offered by FTAs in order to keep or improve your competitive position.

Efficient management of supplier declarations

  • Long-term and purchase order-based supplier declarations
  • Easy assignment and maintenance of suppliers as well as workflow-based allocation of suppliers to selected team members
  • Global standardization of the supplier declaration management process
  • Automatic collection of key information for supplier declarations through ERP/host system(s) integration
  • Manual and/or automated requests for supplier declarations - via web, e-mail or paper
  • Web portal for direct data entry and/or file uploads by the supplier, including the option for the supplier to expire or modify specific part origin information and to enter additional key information (e.g. export control classification, tariff number)
  • Automated, intelligent follow-up process that includes a reminder mechanism
  • Prioritization of supplier requests based on the part value and/or frequency of use in different bills of material

Compliant eligibility for free trade agreements

  • User accessible configuration of the specific rules of origin for individual FTAs
  • Automatic application of the tolerance (“de minimis”) for tariff shift rules
  • Option for use of accumulation rules, as allowed by the individual agreements
  • Multiple of FTAs (CETA, NAFTA / USMCA, JEFTAASEAN, EU-MERCOSUR, EU, Asia-Pacific region, South America, etc.) already in productive use for the origin calculation process
  • Support of the American Automobile Labelling Act (AALA)
  • Bundling of FTAs in the form of a master FTA (e.g. one EU master FTA for many similar EU FTAs) allowing one calculation to cover multiple agreements
  • Flexible and customized adjustment of rules of origin (e.g. increase of the percentage of the regional value rule for risk reduction)

Optimized origin of goods calculation

  • Top-down, bottom-up and accumulation (advantage calculation)
  • Determination of the preferential origin of goods as well as the origin under commercial law (for individual products or product ranges)
  • High performance calculation of the origin of goods for both flat and multi-level bill of materials
  • Configurable defaults and tolerance thresholds are available
  • Calculation of the threshold value (minimum sales price)
  • Support of min/max price logic
  • Cross-plant and cross-system calculation for the origin of goods

Automated issuance of supplier declarations for customers

  • Automatic re-calculation in the event of changes to supplier declarations, including reissuing documents when a change to originating status occurs
  • Transaction-based calculation for configurable bill of materials
  • Consideration of different validity periods for documents under different agreements
Reduction of manual data collection & process redundancy
  • Direct transfer of multi-level bills of materials from ERP systems as well as from engineering or production systems
  • Upload of supplier information, part data and prices directly from purchasing, ERP and/or warehouse management systems (e.g. SAP S/4HANA)
  • Integration with other MIC modules for full process functionality
  • Return interfaces of the calculation results to ERP systems for subsequent processes (e.g. invoice printing)
  • Preference copy solution for intra-company shipments
Detailed documentation
  • Detailed reports for each origin calculation
  • Search and analysis of non-certified products
  • Complete archive for audit purposes
  • Data & predictive analytics to identify cost saving opportunities
  • Manufacturing site and sourcing simulations to support cost optimization and competitive advantage
Benefits of optimized free trade agreement management
01 More than 250 FTAs

already in productive usage for origin calculation to  benefit from saving potentials and competitive advantage

04 Supports management decisions

with respect to cost optimization and competitive advantages using simulations

02 Compliant origin calculation

processes that avoid possible fines and unplanned costs in advance

05 Full process functionality

due to Integration in MIC's central classification system, global customs management and global trade content service modules

03 Innovative supplier web portal

for automated obtaining of supplier declarations with direct data entry by the suppliers themselves

06 Optimized origin calculation

due to an efficient management of supplier declarations and correct use of FTAs

Resources
Industry News | | MIC Customs Solutions |
Industry News | | MIC Customs Solutions |
Industry News | | MIC Customs Solutions |
Industry News | | MIC Customs Solutions |
Customer Case | Origin Calculation | 18 August 2021
News | Origin Calculation | 21 April 2021
Customer Case | Origin Calculation | 12 April 2021
News | Export Controls | Central Classification | Customs Filing | Origin Calculation | 8 March 2021
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