FTA Regional Value Content and Sourcing Threshold Calculator
Review an agreement-specific RVC threshold, BOM origin evidence, maximum non-originating value or minimum originating value, and equal-value sourcing substitutions using a verified formula.
Use regional value content to prepare a sourcing decision
Regional value content, or RVC, measures a treaty-defined regional value against a product value or net cost. Before replacing a component or signing with a cheaper supplier, a manufacturer needs to check both price and the remaining margin under the applicable origin rule. This calculator reviews a verified agreement, HS classification and product-specific numerical requirement.
The experience is based on Korean FTA practice and official sources checked in 2026. A favorable number cannot establish origin without evidence, so the calculator separates the numerical test from verification status. Use the BOM review to discuss values with your broker and renegotiate sourcing quotes.
Functions and supported scope
Review the current margin
See RVC, the percentage-point margin and the material-value threshold. Build-down and net cost show the VNM limit; build-up shows minimum VOM and its shortfall.
Review substitutions and evidence
Compare an equal-value replacement assumption and the amount required to close a gap. Download the entered BOM, verification notes and results as a TXT review.
Only the three algebraic forms shown under Korea–US FTA Article 6.2 are supported. Use another agreement only after a qualified reviewer confirms that its entire formula is identical. An agreement name does not establish permission to use a method, and different methods can have different minimum thresholds for the same product.
Input meanings: value, origin and evidence
Agreement, HS and rule note: Record the trading agreement, verified 6–10-digit HS code, product rule, source and verification date. If classification is unresolved, obtain classification advice before using a numerical origin test.
B or NC: Use the adjusted value or adjusted net cost required by the selected method. Do not interchange FOB, ex-works and adjusted value without checking treaty definitions and included costs.
VOM: Include only materials whose originating status is established for this agreement. Buying from a Korean supplier or holding a domestic tax invoice alone does not establish preferential origin.
VNM: The conservative review combines known non-originating materials and unverified materials. Unverified value is disclosed separately in results and the saved report.
Currency, unit and period: Use one currency and the same product unit and valuation period throughout. Do not mix a per-product selling price with a full month of material purchases.
Enter treaty-valued material amounts, rather than assuming invoice prices always suffice. Check incidental freight, insurance, packaging, indirect materials, self-produced inputs and accumulation, and avoid adding an adjustment twice.
Build-down, build-up and net-cost formulas
Build-down BD
RVC = (B − VNM) / B × 100
For threshold t, the VNM limit is B × (1 − t / 100). The difference between that limit and current VNM is additional sourcing headroom only while B remains fixed.
Build-up BU
RVC = VOM / B × 100
Minimum VOM is B × t / 100. The residual B − VOM may include labor, profit and other non-material values, so it is not presented as a maximum total VNM.
Net cost NC
RVC = (NC − VNM) / NC × 100
Enter NC only after verifying method applicability, cost exclusions and period allocation. The calculator does not convert total manufacturing cost into NC, perform vehicle-specific adjustments or select an averaging period.
Build-up formulas that add labor, direct expenses or profit are different and unsupported. MC maximum non-originating-content tests and Canadian VNM/NC maximum tests must not be entered as this calculator’s minimum-RVC NC test.
Step-by-step workflow
Confirm the destination, agreement, HS product rule, permitted method and that method’s minimum threshold.
Record the price definition and valuation period, then enter the base value or adjusted NC in a consistent currency and product unit.
Enter material names, reviewed values and origin-evidence status for up to 30 BOM rows. Larger BOMs may be aggregated only where valuation and evidence categories remain consistent.
Check the formula and evidence confirmations after reviewing your inputs. Relevant edits to method, threshold and material values clear the corresponding confirmation.
Compare the current result with an equal-value substitution assumption, save the TXT review and take it to a customs broker with supporting records.
Blank amounts are not treated as verified zero values and hide results until corrected. Amounts accept two decimals; the 1-trillion input cap is a software limit, not a legal threshold. New rows start unverified, so establish their origin status from evidence before changing the selection.
Worked example: one BOM, different numerical tests
Assume B = 1,000 USD, verified originating materials of 350 USD, known non-originating materials of 500 USD and unverified materials of 50 USD. Conservative VNM is 550 USD. Every threshold below is fictional practice data, not a product-specific legal rate.
Fictional BOM method comparisons and material thresholds
Method and denominator
Example minimum
RVC
Threshold (USD)
BD, B 1,000
40%
45%
VNM maximum 600
BU, B 1,000
40%
35%
VOM minimum 400
NC 800
35%
31.25%
VNM maximum 520
BD has 5 percentage points and 50 USD of headroom, but the unverified row still withholds a verdict. BU needs 50 USD more VOM; NC needs VNM reduced by 30 USD to reach the fictional threshold. Pair each permitted method with its own threshold instead of choosing the largest displayed percentage.
Sourcing scenario: equal-value substitution
Replace 100 USD of known non-originating material with originating material at equal value. VOM becomes 450 USD and VNM becomes 450 USD. With B fixed at 1,000 USD, BD RVC becomes 55% and BU RVC becomes 45%. The unverified 50 USD remains unresolved in both cases.
Substitution X cannot exceed known non-originating value; unverified rows do not fund the replacement. Obtain the replacement supplier’s origin records rather than simply reclassifying an unknown row. If prices, freight, exchange rates or adjusted costs change, re-enter all affected values because fixed B/NC may no longer hold. The model does not estimate a price premium, delay losses or tariff savings.
Interpret percentages, amounts and status together
A 45% RVC compared with a 40% minimum has a 5-percentage-point margin. That is not permission for costs to rise by 5%. Material-value headroom applies only while the denominator and valuation assumptions remain fixed.
Numerically meets: The entered formula meets the entered minimum, without establishing every other origin condition.
Numerically below: Compare the required replacement amount with known non-originating capacity. Insufficient capacity means simple substitution cannot close the gap under this assumption.
Pending: Method, valuation evidence, net-cost applicability or an unverified material remains unresolved. A favorable reference number is not approval of preferential origin.
Maximum VNM is rounded down and minimum VOM rounded up to a currency’s two-decimal input precision. For B = 1,000.01 and a fictional 40% minimum, BD allows 600.00 VNM and BU requires 400.01 VOM. Integer cross-products determine the numerical test before display rounding; a four-decimal RVC can appear equal to the threshold while still being below it.
Use the review before purchasing and shipping
Before negotiating a quote
Request origin evidence from current and alternative suppliers and reconcile material values. Review the substitution gap and available capacity alongside prices.
Before committing to delivery terms
Confirm that the customer’s required agreement matches the actual export agreement. Produce a new review if composition, product units or production periods differ instead of copying an older BOM result.
Check confidentiality requirements before sharing material names and prices in the TXT report. The file is a calculation record for consultation, not an origin declaration or official certificate. Keep reviewer details and verification dates in your internal records to trace later sourcing changes.
Limits and practical cautions
Tariff shift, specific processing, insufficient processing, direct transport, accumulation, de minimis and evidence authenticity require separate review. A high RVC can coexist with failure of another mandatory process or material condition. Check alternative versus combined origin requirements and approved-exporter status or authority to issue declarations separately.
Material totals above B are not automatically reduced. Check units, periods, valuation and possible loss-making transactions. VNM above the denominator can yield negative RVC, and VOM above it can yield RVC over 100%; the calculator does not clamp those values. Changing a number to fit the display cannot repair valuation that conflicts with treaty rules.
Frequently asked questions
Do all FTAs use 40%?
No. The initial 40% is fictional practice data. Verify the agreement, HS and threshold for the selected method.
Does buying in Korea establish origin?
No. Purchase location and preferential origin are different. Check agreement-specific declarations against the actual materials and period.
Does a zero-valued unknown row stop the hold?
No. An unverified row remains unresolved even at zero value. Remove an unnecessary row or establish its classification and amount from evidence.
Why does BU omit the VNM limit?
VOM/B does not prove that the rest of B consists entirely of material value. The tool shows minimum VOM and equal-value replacement needs instead.
Is NC the same as total manufacturing cost?
Do not assume so. Check treaty cost exclusions, allocations, period adjustments and applicability for the product first.
Can I choose whichever method gives the largest RVC?
Only if that method is permitted, using its own required minimum. Do not carry the threshold from another method across unchanged.
Does a successful substitution scenario authorize an order?
No. Verify replacement origin, actual quotes, denominator changes, transport and other origin conditions. The scenario is hypothetical.
Why is a displayed RVC equal to the threshold still below?
The display rounds to four decimals but the test uses integer cross-products before rounding. Compare exact entered values with the material limit or minimum.
Official sources, rule dates and next steps
Official evidence was checked on 2026-10-27 through the Korean National Law Information OPEN API and official trade sources. FTA Customs Act Article 7, MST276141, is effective 2026-01-02; Decree Article 2, MST282485, is in the edition effective 2026-05-01. Rule Article 4, MST285861, has an article-effective date of 2026-01-06 and links to agreement-specific annexes, including Annex 8 for Korea–US. Recheck the current product-specific HS, annex, treaty amendments and applicable transaction date each time.
The roadmap’s 2014 KCS verification handbook is evidence-preparation context, not authority for 2026 product thresholds. Save the TXT review with the BOM, origin declarations and valuation records, ask your broker to confirm the permitted formula and evidence, and then renegotiate supplier quotes.