KORUS FTA: Calculating and Applying the 50% Originating Constituent Polymer Rule for HS 3901–3915 Released

Regarding your inquiry about the Rules of Origin (RoO) for HS codes 3901 through 3915 under the KORUS FTA, we provide a detailed explanation of the specific proviso requiring that originating constituent polymers account for at least 50% of the total polymer weight. Understanding this calculation is critical for companies in the plastics and chemical sectors to ensure compliance.

1. General Rules of Origin for HS 3901 to 3915

The primary origin criterion for products classified under HS 3901 through 3915 is the Change in Tariff Classification (CTC). Specifically, the rule generally requires a change from any other heading. This means that non-originating materials must undergo sufficient processing or transformation within the territory of the parties (Korea or the U.S.) to result in a change in the 4-digit HS heading.

2. Detailed Interpretation of the '50% Originating Constituent Polymer' Proviso

The proviso you mentioned acts as a supplementary requirement and restriction to the CTC rule. It states that the rule is met "provided that the originating constituent polymers of headings 3901 through 3915 constitute not less than 50 percent by weight of the total polymer content." This reflects the specialized nature of plastic products, requiring not just a tariff shift, but a significant degree of regional value in the core polymer materials.

A. Understanding 'Constituent Polymer'
The term 'constituent polymer' refers to the primary polymer raw materials used to form the final plastic product. Examples include polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC), and polystyrene (PS) classified under HS 3901–3915. Crucially, non-polymeric substances such as additives, fillers, pigments, and reinforcing fibers are excluded from the definition of 'constituent polymer' and must be omitted from the 50% weight calculation.

B. Meaning of 'Originating Constituent Polymer'
'Originating constituent polymers' are raw polymer materials that independently satisfy the KORUS FTA Rules of Origin. This means they must either be wholly obtained/produced in the U.S. or Korea, or have satisfied the specific origin criteria (such as a CTC) for their own HS heading to be classified as originating. Polymers made from non-originating materials that do not meet their specific RoO cannot be counted as originating constituent polymers.

C. Definition of 'Total Constituent Polymer'
'Total constituent polymer' represents the total weight of all polymer raw materials used in the production of the final product. This includes both originating and non-originating polymers. Again, additives and fillers are not included in this total weight for the purpose of this specific calculation.

D. Calculation Formula and Application
The proviso requires that the weight of the originating constituent polymers must be 50% or more of the total constituent polymer weight. The formula is as follows:

(Total Weight of Originating Constituent Polymers in HS 3901–3915)
------------------------------------------------------------------------- ≥ 50%
(Total Weight of ALL Constituent Polymers in HS 3901–3915)

[Calculation Example]
Suppose a company produces plastic film (HS 3920) using Polyethylene (PE, HS 3901) and a slip agent (HS 38).

• Total Input Materials: 100kg
• Polyethylene (PE) Used: 97kg (Consisting of 45kg Originating PE and 52kg Non-originating PE)
• Slip Agent Used: 3kg (Non-originating, HS 38)

In this scenario, only the PE is considered a 'constituent polymer.' The slip agent is excluded from the calculation.

• Originating Constituent Polymer: 45kg
• Total Constituent Polymer: 45kg + 52kg = 97kg

Calculation: (45kg / 97kg) * 100% ≈ 46.39%

In this case, because the ratio of originating constituent polymer is less than 50%, the final product fails to qualify as an originating good under the KORUS FTA, even if the HS code changed from the raw materials.

3. Practical Considerations and Compliance

Adhering to this proviso requires rigorous data management beyond simple HS code verification.

• Traceability of Raw Materials: You must verify the originating status of all constituent polymers (HS 3901–3915) through formal documentation, such as a Certificate of Origin or a Manufacturer's Declaration (Supplier's Affidavit).
• Accuracy of Bill of Materials (BOM): Maintain a detailed BOM that specifies the exact weight, HS code, and origin status for every ingredient. It is essential to clearly distinguish between polymeric and non-polymeric materials.
• Process-Specific Management: If you produce the polymers in-house, you must first determine their origin status before calculating the final product's origin ratio. If blending multiple polymers, each must be assessed individually.

Due to the complexity of these calculations and the evidentiary requirements, origin determination for plastic products requires high-level expertise. Constant monitoring of raw material sourcing and consultation with customs experts are highly recommended to ensure valid FTA claims.