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Origin Management

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Using FTAs to their benefit, companies can establish considerable competitive advantages. Especially when anticipating long-term preferential duty rate changes or creating the ability to react quickly on new FTA developments, companies are likely to be ahead of the competition and further optimize supply chain operations. Origin Management is the all-encompassing approach to origin-related challenges and provides companies with a well-defined infrastructure and auditable process so the company can benefit from all preferential agreements available to them and not incur unreasonable compliance costs.


  • Preferential Treatment
  • Origin Program
  • Preferential Program
  • Exchange Rate Fluctuation
  • Preferential Trade Agreement

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  1. 1.

    Exception-based management is a methodology where only things “out of the ordinary” or items for which it is predetermined that intervention is needed are flagged. In this case, the exception can be exchange rate fluctuations over 5% or an exchange rate fluctuation that brings the RVC within 3% of the threshold, a change in supplier of a subcomponent that results in price change and/or origin change of the subcomponent, etc.

  2. 2.

    Text from this paragraph is based on van de Heetkamp (2009).

  3. 3.

    Clearly, when it comes to sourcing and manufacturing decisions it is not only preferential treatment that decides on where to manufacture. The broader concept of “total landed costs” will need to be considered (see Sect. 8.2).

  4. 4.

    See Chap. 8.

  5. 5.

    Other elements may be needed, but in most cases the RVC and/or Tariff Shift apply (see Chap. 5).

  6. 6.

    See Sect. 9.2 for a broader look at total landed costs.

  7. 7.

    At WCO seminar (2008), the following components were mentioned:

    • Make the case, get management buy-in

    • Identify internal team

    • Implement written internal controls over making claims (also to stay conform Sarbanes Oxley, etc.)

    • Conduct periodic reviews to test compliance

  8. 8.

    In fact, the whole organization and setup of the customs function should have visibility throughout the company.

  9. 9.

    Douglas Garfield (2006) points out the importance and capabilities of lobbyists in the presentation “The Proliferating FTAs: They Can Help or Hurt You,” April 6, 2006 for American Bar Association.

  10. 10.

    On average, logistics costs are around 9% of the value of the goods. With an average duty rate of 9%, sourcing from the right location impacts the go-to-market price for these costs elements.


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Correspondence to Anne van de Heetkamp .

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© 2011 Springer-Verlag Berlin Heidelberg

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van de Heetkamp, A., Tusveld, R. (2011). Origin Management. In: Origin Management. Springer, Berlin, Heidelberg.

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  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-19807-6

  • Online ISBN: 978-3-642-19808-3

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