Territoriality principle
Also called: territorial requirement
The rule that the conditions for acquiring originating status must be met without interruption in the partner country or countries, so goods that leave for processing elsewhere generally lose eligibility. Many agreements allow limited exceptions, such as certain outward processing operations.
In practice
Sending semi-finished goods abroad for a processing step can break origin unless the agreement expressly permits it.
Related terms
- Preferential origin
- Origin status under the rules of a specific free trade agreement or unilateral preference scheme that entitles goods to a reduced or zero duty. It is…
- Non-alteration rule
- A condition in many agreements that originating goods must reach the importing party without being altered or processed in a third country, other…
- Rules of origin
- The legal criteria that decide in which country goods are considered to have been produced. Preferential rules, set in each trade agreement or…