19 C.F.R. §§ 10.3013–10.3025

13 sections in range

§10.3013. Definitions.

19 C.F.R. § 10.3013

For purposes of §§ 10.3013 through 10.3025:

(a)

Adjusted value. “Adjusted value” means the value determined in accordance with Articles 1 through 8, Article 15, and the corresponding interpretative notes of the Customs Valuation Agreement, adjusted, if necessary, to exclude:

(1)

Any costs, charges, or expenses incurred for transportation, insurance and related services incident to the international shipment of the good from the country of exportation to the place of importation; and

(2)

The value of packing materials and containers for shipment as defined in paragraph (n) of this section;

(b)

Class of motor vehicles. “Class of motor vehicles” means any one of the following categories of motor vehicles:

(1)

Motor vehicles classified under subheading 8701.20, motor vehicles for the transport of 16 or more persons classified under 8702.10 or 8702.90, HTSUS, and motor vehicles classified under subheading under 8702.10, 8704.22, 8704.23, 8704.32, or 8704.90, or heading 8705 or 8706;

(2)

Motor vehicles classified under subheading 8701.10 or subheadings 8701.30 through 8701.90, HTSUS;

(3)

Motor vehicles for the transport of 15 or fewer persons classified under subheading 8702.10 or 8702.90, HTSUS, and motor vehicles of subheading 8704.21 or 8704.31, HTSUS; or

(4)

Motor vehicles classified under subheadings 8703.21 through 8703.90, HTSUS;

(c)

Exporter. “Exporter” means a person who exports goods from the territory of a Party;

(d)

Fungible good or material. “Fungible good or material” means a good or material, as the case may be, that is interchangeable with another good or material for commercial purposes and the properties of which are essentially identical to such other good or material;

(e)

Generally Accepted Accounting Principles. “Generally Accepted Accounting Principles” means the recognized consensus or substantial authoritative support in the territory of a Party, with respect to the recording of revenues, expenses, costs, assets, and liabilities, the disclosure of information, and the preparation of financial statements. These principles may encompass broad guidelines of general application as well as detailed standards, practices, and procedures;

(f)

Good. “Good” means any merchandise, product, article, or material;

(g)

Goods wholly obtained or produced entirely in the territory of one or both of the Parties. “Goods wholly obtained or produced entirely in the territory of one or both of the Parties” means:

(1)

Plants and plant products harvested or gathered in the territory of one or both of the Parties;

(2)

Live animals born and raised in the territory of one or both of the

Parties;

(3)

Goods obtained in the territory of one or both of the Parties from live animals;

(4)

Goods obtained from hunting, trapping, fishing, or aquaculture conducted in the territory of one or both of the Parties;

(5)

Minerals and other natural resources not included in paragraphs (g)(1) through (g)(4) of this section that are extracted or taken in the territory of one or both of the Parties;

(6)

Fish, shellfish, and other marine life taken from the sea, seabed, or subsoil outside the territory of the Parties by:

(i)

Vessels registered or recorded with Colombia and flying its flag; or

(ii)

Vessels documented under the laws of the United States;

(7)

Goods produced on board factory ships from the goods referred to in paragraph (g)(6) of this section, if such factory ships are:

(i)

Registered or recorded with Colombia and fly its flag; or

(ii)

Documented under the laws of the United States;

(8)

Goods taken by a Party or a person of a Party from the seabed or subsoil outside territorial waters, if a Party has rights to exploit such seabed or subsoil;

(9)

Goods taken from outer space, provided they are obtained by a Party or a person of a Party and not processed in the territory of a non-Party;

(10)

Waste and scrap derived from—

(i)

Manufacturing or processing operations in the territory of one or both of the Parties; or

(ii)

Used goods collected in the territory of one or both of the Parties, if such goods are fit only for the recovery of raw materials;

(11)

Recovered goods derived in the territory of one or both of the Parties from used goods, and used in the territory of one or both of the Parties in the production of remanufactured goods; and

(12)

Goods produced in the territory of one or both of the Parties exclusively from goods referred to in any of paragraphs (g)(1) through (g)(10) of this section, or from the derivatives of such goods, at any stage of production;

(h)

Indirect Material. “Indirect material” means a good used in the production, testing, or inspection of another good in the territory of one or both of the Parties but not physically incorporated into that other good, or a good used in the maintenance of buildings or the operation of equipment associated with the production of another good, including:

(1)

Fuel and energy;

(2)

Tools, dies, and molds;

(3)

Spare parts and materials used in the maintenance of equipment or buildings;

(4)

Lubricants, greases, compounding materials, and other materials used in production or used to operate equipment or buildings;

(5)

Gloves, glasses, footwear, clothing, safety equipment, and supplies;

(6)

Equipment, devices, and supplies used for testing or inspecting the good;

(7)

Catalysts and solvents; and

(8)

Any other good that is not incorporated into the other good but the use of which in the production of the other good can reasonably be demonstrated to be a part of that production.

(i)

Material. “Material” means a good that is used in the production of another good, including a part or an ingredient;

(j)

Model line. “Model line” means a group of motor vehicles having the same platform or model name;

(k)

Net cost. “Net cost” means total cost minus sales promotion, marketing, and after-sales service costs, royalties, shipping and packing costs, and non-allowable interest costs that are included in the total cost;

(l)

Non-allowable interest costs. “Non-allowable interest costs” means interest costs incurred by a producer that exceed 700 basis points above the applicable official interest rate for comparable maturities of the Party in which the producer is located;

(m)

Non-originating good or non-originating material. “Non-originating good” or “non-originating material” means a good or material, as the case may be, that does not qualify as originating under General Note 34, HTSUS, or this subpart;

(n)

Packing materials and containers for shipment. “Packing materials and containers for shipment” means the goods used to protect a good during its transportation to the United States, and does not include the packaging materials and containers in which a good is packaged for retail sale;

(o)

Producer. “Producer” means a person who engages in the production of a good in the territory of a Party;

(p)

Production. “Production” means growing, mining, harvesting, fishing, raising, trapping, hunting, manufacturing, processing, assembling, or disassembling a good;

(q)

Reasonably allocate. “Reasonably allocate” means to apportion in a manner that would be appropriate under Generally Accepted Accounting Principles;

(r)

Recovered goods. “Recovered goods” means materials in the form of individual parts that are the result of:

(1)

The disassembly of used goods into individual parts; and

(2)

The cleaning, inspecting, testing, or other processing that is necessary to improve such individual parts to sound working condition;

(s)

Remanufactured good. “Remanufactured good” means an industrial good assembled in the territory of one or both of the Parties that is classified in Chapter 84, 85, 87, or 90 or heading 9402, HTSUS, other than a good classified in heading 8418 or 8516, HTSUS, and that:

(1)

Is entirely or partially comprised of recovered goods as defined in paragraph (r) of this section; and

(2)

Has a similar life expectancy and enjoys a factory warranty similar to such new goods;

(t)

Royalties. “Royalties” means payments of any kind, including payments under technical assistance agreements or similar agreements, made as consideration for the use of, or right to use, any copyright, literary, artistic, or scientific work, patent, trademark, design, model, plan, secret formula or process, excluding those payments under technical assistance agreements or similar agreements that can be related to specific services such as:

(1)

Personnel training, without regard to where performed; and

(2)

If performed in the territory of one or both of the Parties, engineering, tooling, die-setting, software design and similar computer services;

(u)

Sales promotion, marketing, and after-sales service costs. “Sales promotion, marketing, and after-sales service costs” means the following costs related to sales promotion, marketing, and after-sales service:

(1)

Sales and marketing promotion; media advertising; advertising and market research; promotional and demonstration materials; exhibits; sales conferences, trade shows and conventions; banners; marketing displays; free samples; sales, marketing, and after-sales service literature (product brochures, catalogs, technical literature, price lists, service manuals, sales aid information); establishment and protection of logos and trademarks; sponsorships; wholesale and retail restocking charges; entertainment;

(2)

Sales and marketing incentives; consumer, retailer or wholesaler rebates; merchandise incentives;

(3)

Salaries and wages, sales commissions, bonuses, benefits (for example, medical, insurance, pension), traveling and living expenses, membership and professional fees, for sales promotion, marketing, and after-sales service personnel;

(4)

Recruiting and training of sales promotion, marketing, and after-sales service personnel, and after-sales training of customers' employees, where such costs are identified separately for sales promotion, marketing, and after-sales service of goods on the financial statements or cost accounts of the producer;

(5)

Product liability insurance;

(6)

Office supplies for sales promotion, marketing, and after-sales service of goods, where such costs are identified separately for sales promotion, marketing, and after-sales service of goods on the financial statements or cost accounts of the producer;

(7)

Telephone, mail and other communications, where such costs are identified separately for sales promotion, marketing, and after-sales service of goods on the financial statements or cost accounts of the producer;

(8)

Rent and depreciation of sales promotion, marketing, and after-sales service offices and distribution centers;

(9)

Property insurance premiums, taxes, cost of utilities, and repair and maintenance of sales promotion, marketing, and after-sales service offices and distribution centers, where such costs are identified separately for sales promotion, marketing, and after-sales service of goods on the financial statements or cost accounts of the producer; and

(10)

Payments by the producer to other persons for warranty repairs;

(v)

Self-produced material. “Self-produced material” means an originating material that is produced by a producer of a good and used in the production of that good;

(w)

Shipping and packing costs. “Shipping and packing costs” means the costs incurred in packing a good for shipment and shipping the good from the point of direct shipment to the buyer, excluding the costs of preparing and packaging the good for retail sale;

(x)

Total cost. “Total cost” means all product costs, period costs, and other costs for a good incurred in the territory of one or both of the Parties. Product costs are costs that are associated with the production of a good and include the value of materials, direct labor costs, and direct overhead. Period costs are costs, other than product costs, that are expensed in the period in which they are incurred, such as selling expenses and general and administrative expenses. Other costs are all costs recorded on the books of the producer that are not product costs or period costs, such as interest. Total cost does not include profits that are earned by the producer, regardless of whether they are retained by the producer or paid out to other persons as dividends, or taxes paid on those profits, including capital gains taxes;

(y)

Used. “Used” means utilized or consumed in the production of goods; and

(z)

Value. “Value” means the value of a good or material for purposes of calculating customs duties or for purposes of applying this subpart.

Notes, amendments, and revision history

Amendments

[77 FR 59069, Sept. 26, 2012, as amended at 78 FR 60193, Oct. 1, 2013]

Source

Source: 77 FR 59069, Sept. 26, 2012, unless otherwise noted.

Authority

Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized Tariff Schedule of the United States (HTSUS)), 1321, 1481, 1484, 1498, 1508, 1623, 1624, 4513. Section 10.17 also issued under 19 U.S.C. 1401a, 1402; Sections 10.25 and 10.26 also issued under 19 U.S.C. 3592; Sections 10.41, 10.41a, 10.107 also issued under 19 U.S.C. 1322; Section 10.41b also issued under 19 U.S.C. 1202 (Chapter 98, Subchapter III, U.S. Note 3, HTSUS); Section 10.53 also issued under 16 U.S.C. 1521, et seq.; Section 10.59 also issued under 19 U.S.C. 1309, 1317; Sections 10.61, 10.62, 10.63, 10.64, 10.64a also issued under 19 U.S.C. 1309; Sections 10.62a, 10.65 also issued under 19 U.S.C. 1309, 1317, 1555, 1556, 1557, 1646a; § 10.62b also issued under 19 U.S.C. 1557; Sections 10.70, 10.71 also issued under 19 U.S.C. 1486; Sections 10.80, 10.81, 10.82, 10.83 also issued under 19 U.S.C. 1313 (e) and (i); Section 10.91 also issued under Pub. L. 106-476 (114 Stat. 2101), sections 1434, 1435; Section 10.121 also issued under 19 U.S.C. 2501. Sections 10.171 through 10.178a also issued under 19 U.S.C. 2461 et seq.; Section 10.183 also issued under 19 U.S.C. 1202 (General Note 6, HTSUS); Sections 10.191 through 10.199 also issued under 19 U.S.C. 2701 et seq.; Sections 10.201 through 10.207 also issued under 19 U.S.C. 3203; Sections 10.211 through 10.217 also issued under 19 U.S.C. 3721; Sections 10.221 through 10.228 and §§ 10.231 through 10.237 also issued under 19 U.S.C. 2701 et seq. Sections 10.241 through 10.248 and §§ 10.251 through 10.257 also issued under 19 U.S.C. 3203. Sections 10.401 through 10.490 also issued under Pub. L. 108-77, 117 Stat. 909 (19 U.S.C. 3805 note). Sections 10.501 through 10.570 also issued under 19 U.S.C. 1202 (General Note 25, HTSUS) and Pub. L. 108-78, 117 Stat. 948 (19 U.S.C. 3805 note). Sections 10.581 through 10.625 also issued under 19 U.S.C. 1202 (General Note 29, HTSUS), 19 U.S.C. 1520(d), and Pub. L. 109-53, 119 Stat. 462 (19 U.S.C. 4001 note). Section 10.699 also issued under Pub. L. 109-53, 119 Stat. 462. Sections 10.701 through 10.712 also issued under 19 U.S.C. 1202 (General Note 18, HTSUS) and Pub. L. 107-43, 115 Stat. 243 (19 U.S.C. 2112 note). Sections 10.721 through 10.748 also issued under 19 U.S.C. 1202 (General Note 28, HTSUS) and Pub. L. 108-286, 118 Stat. 919 (19 U.S.C. 3805 note). Sections 10.761 through 10.789 also issued under Pub. L. 108-302, 118 Stat. 1103 (19 U.S.C. 3805 note). Sections 10.801 through 10.829 also issued under 19 U.S.C. 1202 (General Note 30, HTSUS) and Pub. L. 109-169, 119 Stat. 3581 (19 U.S.C. 3805 note). Sections 10.841 through 10.850 also issued under 19 U.S.C. 2703A. Sections 10.861 through 10.890 also issued under 19 U.S.C. 1202 (General Note 31, HTSUS) and Pub. L. 109-283, 120 Stat. 1191 (19 U.S.C. 3805 note). Sections 10.901 through 10.934 also issued under 19 U.S.C. 1202 (General Note 32, HTSUS), 19 U.S.C. 1520(d), and Pub. L. 110-138, 121 Stat. 1455 (19 U.S.C. 3805 note). Sections 10.1001 through 10.1034 also issued under 19 U.S.C. 1202 (General Note 33, HTSUS), 19 U.S.C. 1520(d), and Pub. L. 112-41, 125 Stat. 428 (19 U.S.C. 3805 note). Sections 10.2001 through 10.2034 also issued under 19 U.S.C. 1202 (General Note 35, HTSUS), 19 U.S.C. 1520(d), and Pub. L. 112-43, 125 Stat. 497 (19 U.S.C. 3805 note). Sections 10.3001 through 10.3034 also issued under 19 U.S.C. 1202 (General Note 34, HTSUS), 19 U.S.C. 1520(d), and Pub. L. 112-42, 125 Stat. 462 (19 U.S.C. 3805 note).

Source

Source: 28 FR 14663, Dec. 31, 1963, unless otherwise noted.

Amendments

[77 FR 59069, Sept. 26, 2012, as amended at 78 FR 60193, Oct. 1, 2013]

§10.3014. Originating goods.

19 C.F.R. § 10.3014

Except as otherwise provided in this subpart and General Note 34, HTSUS, a good imported into the customs territory of the United States will be considered an originating good under the CTPA only if:

(a)

The good is wholly obtained or produced entirely in the territory of one or both of the Parties;

(b)

The good is produced entirely in the territory of one or both of the Parties and—

(1)

Each non-originating material used in the production of the good undergoes an applicable change in tariff classification specified in General Note 34, HTSUS, and the good satisfies all other applicable requirements of General Note 34, HTSUS; or

(2)

The good otherwise satisfies any applicable regional value content or other requirements specified in General Note 34, HTSUS, and satisfies all other applicable requirements of General Note 34, HTSUS; or

(c)

The good is produced entirely in the territory of one or both of the Parties exclusively from originating materials.

Notes, amendments, and revision history

Source

Source: 77 FR 59069, Sept. 26, 2012, unless otherwise noted.

Authority

Source

Source: 28 FR 14663, Dec. 31, 1963, unless otherwise noted.

§10.3015. Regional value content.

19 C.F.R. § 10.3015

(a)

General. Except for goods to which paragraph (d) of this section applies, where General Note 34, HTSUS, sets forth a rule that specifies a regional value content test for a good, the regional value content of such good must be calculated by the importer, exporter, or producer of the good on the basis of the build-down method described in paragraph (b) of this section or the build-up method described in paragraph (c) of this section.

(b)

Build-down method. Under the build-down method, the regional value content must be calculated on the basis of the formula RVC = ((AV−VNM)/AV) × 100, where RVC is the regional value content, expressed as a percentage; AV is the adjusted value of the good; and VNM is the value of non-originating materials that are acquired and used by the producer in the production of the good, but does not include the value of a material that is self-produced.

(c)

Build-up method. Under the build-up method, the regional value content must be calculated on the basis of the formula RVC = (VOM/AV) × 100, where RVC is the regional value content, expressed as a percentage; AV is the adjusted value of the good; and VOM is the value of originating materials that are acquired or self-produced and used by the producer in the production of the good.

(d)

Special rule for certain automotive goods—

(1)

General. Where General Note 34, HTSUS, sets forth a rule that specifies a regional value content test for an automotive good provided for in any of subheadings 8407.31 through 8407.34 (engines), subheading 8408.20 (diesel engine for vehicles), heading 8409 (parts of engines), or headings 8701 through 8705 (motor vehicles), and headings 8706 (chassis), 8707 (bodies), and 8708 (motor vehicle parts), HTSUS, the regional value content of such good shall be calculated by the importer, exporter, or producer of the good on the basis of the net cost method described in paragraph (d)(2) of this section.

(2)

Net cost method. Under the net cost method, the regional value content is calculated on the basis of the formula RVC = ((NC−VNM)/NC) × 100, where RVC is the regional value content, expressed as a percentage; NC is the net cost of the good; and VNM is the value of non-originating materials that are acquired and used by the producer in the production of the good, but does not include the value of a material that is self-produced. Consistent with the provisions regarding allocation of costs set out in Generally Accepted Accounting Principles, the net cost of the good must be determined by:

(i)

Calculating the total cost incurred with respect to all goods produced by the producer of the automotive good, subtracting any sales promotion, marketing, and after-sales service costs, royalties, shipping and packing costs, and non-allowable interest costs that are included in the total cost of all such goods, and then reasonably allocating the resulting net cost of those goods to the automotive good;

(ii)

Calculating the total cost incurred with respect to all goods produced by the producer of the automotive good, reasonably allocating the total cost to the automotive good, and then subtracting any sales promotion, marketing, and after-sales service costs, royalties, shipping and packing costs, and non-allowable interest costs that are included in the portion of the total cost allocated to the automotive good; or

(iii)

Reasonably allocating each cost that forms part of the total costs incurred with respect to the automotive good so that the aggregate of these costs does not include any sales promotion, marketing, and after-sales service costs, royalties, shipping and packing costs, or non-allowable interest costs.

(3)

Motor vehicles—

(i)

General. For purposes of calculating the regional value content under the net cost method for an automotive good that is a motor vehicle provided for in any of headings 8701 through 8705, an importer, exporter, or producer may average the amounts calculated under the formula set forth in paragraph (d)(2) of this section over the producer's fiscal year using any one of the categories described in paragraph (d)(3)(ii) of this section either on the basis of all motor vehicles in the category or those motor vehicles in the category that are exported to the territory of one or both Parties.

(ii)

Categories. The categories referred to in paragraph (d)(3)(i) of this section are as follows:

(A)

The same model line of motor vehicles, in the same class of vehicles, produced in the same plant in the territory of a Party, as the motor vehicle for which the regional value content is being calculated;

(B)

The same class of motor vehicles, and produced in the same plant in the territory of a Party, as the motor vehicle for which the regional value content is being calculated; and

(C)

The same model line of motor vehicles produced in the territory of a Party as the motor vehicle for which the regional value content is being calculated.

(4)

Other automotive goods—

(i)

General. For purposes of calculating the regional value content under the net cost method for automotive goods provided for in any of subheadings 8407.31 through 8407.34, subheading 8408.20, heading 8409, 8706, 8707, or 8708, HTSUS, that are produced in the same plant, an importer, exporter, or producer may:

(A)

Average the amounts calculated under the formula set forth in paragraph (d)(2) of this section over any of the following: the fiscal year, or any quarter or month, of the motor vehicle producer to whom the automotive good is sold, or the fiscal year, or any quarter or month, of the producer of the automotive good, provided the goods were produced during the fiscal year, quarter, or month that is the basis for the calculation;

(B)

Determine the average referred to in paragraph (d)(4)(i)(A) of this section separately for such goods sold to one or more motor vehicle producers; or

(C)

Make a separate determination under paragraph (d)(4)(i)(A) or (d)(4)(i)(B) of this section for automotive goods that are exported to the territory of Colombia or the United States.

(ii)

Duration of use. A person selecting an averaging period of one month or quarter under paragraph (d)(4)(i)(A) of this section must continue to use that method for that category of automotive goods throughout the fiscal year.

Notes, amendments, and revision history

Source

Source: 77 FR 59069, Sept. 26, 2012, unless otherwise noted.

Authority

Source

Source: 28 FR 14663, Dec. 31, 1963, unless otherwise noted.

§10.3016. Value of materials.

19 C.F.R. § 10.3016

(a)

Calculating the value of materials. For purposes of calculating the regional value content of a good under General Note 34, HTSUS, and for purposes of applying the de minimis (see § 10.3018) provisions of General Note 34, HTSUS, the value of a material is:

(1)

In the case of a material imported by the producer of the good, the adjusted value of the material;

(2)

In the case of a material acquired by the producer in the territory where the good is produced, the value, determined in accordance with Articles 1 through 8, Article 15, and the corresponding interpretative notes of the Customs Valuation Agreement, of the material, i.e., in the same manner as for imported goods, with reasonable modifications to the provisions of the Customs Valuation Agreement as may be required due to the absence of an importation by the producer (including, but not limited to, treating a domestic purchase by the producer as if it were a sale for export to the country of importation); or

(3)

In the case of a self-produced material, the sum of—

(i)

All expenses incurred in the production of the material, including general expenses; and

(ii)

An amount for profit equivalent to the profit added in the normal course of trade.

(b)

Examples. The following examples illustrate application of the principles set forth in paragraph (a)(2) of this section:

(c)

Permissible additions to, and deductions from, the value of materials—

(1)

Additions to originating materials. For originating materials, the following expenses, if not included under paragraph (a) of this section, may be added to the value of the originating material:

(i)

The costs of freight, insurance, packing, and all other costs incurred in transporting the material within or between the territory of one or both of the Parties to the location of the producer;

(ii)

Duties, taxes, and customs brokerage fees on the material paid in the territory of one or both of the Parties, other than duties and taxes that are waived, refunded, refundable, or otherwise recoverable, including credit against duty or tax paid or payable; and

(iii)

The cost of waste and spoilage resulting from the use of the material in the production of the good, less the value of renewable scrap or byproducts.

(2)

Deductions from non-originating materials. For non-originating materials, if included under paragraph (a) of this section, the following expenses may be deducted from the value of the non-originating material:

(i)

The costs of freight (“cost of freight” includes the costs of all types of freight, including in-land freight incurred within a Party's territory, regardless of the mode of transportation), insurance, packing, and all other costs incurred in transporting the material within or between the territory of one or both of the Parties to the location of the producer;

(ii)

(iii)

The cost of waste and spoilage resulting from the use of the material in the production of the good, less the value of renewable scrap or by-products; and

(iv)

The cost of originating materials used in the production of the non-originating material in the territory of one or both of the Parties.

(d)

Accounting method. Any cost or value referenced in General Note 34, HTSUS, and this subpart, must be recorded and maintained in accordance with the Generally Accepted Accounting Principles applicable in the territory of the Party in which the good is produced.

Notes, amendments, and revision history

Amendments

[77 FR 59069, Sept. 26, 2012, as amended at 78 FR 60193, Oct. 1, 2013]

Source

Source: 77 FR 59069, Sept. 26, 2012, unless otherwise noted.

Authority

Source

Source: 28 FR 14663, Dec. 31, 1963, unless otherwise noted.

Amendments

[77 FR 59069, Sept. 26, 2012, as amended at 78 FR 60193, Oct. 1, 2013]

§10.3017. Accumulation.

19 C.F.R. § 10.3017

(a)

Originating materials from the territory of a Party that are used in the production of a good in the territory of another Party will be considered to originate in the territory of that other Party.

(b)

A good that is produced in the territory of one or both of the Parties by one or more producers is an originating good if the good satisfies the requirements of § 10.3014 and all other applicable requirements of General Note 34, HTSUS.

Notes, amendments, and revision history

Source

Source: 77 FR 59069, Sept. 26, 2012, unless otherwise noted.

Authority

Source

Source: 28 FR 14663, Dec. 31, 1963, unless otherwise noted.

§10.3018. De minimis.

19 C.F.R. § 10.3018

(a)

General. Except as provided in paragraphs (b) and (c) of this section, a good that does not undergo a change in tariff classification pursuant to General Note 34, HTSUS, is an originating good if:

(1)

The value of all non-originating materials used in the production of the good that do not undergo the applicable change in tariff classification does not exceed 10 percent of the adjusted value of the good;

(2)

The value of the non-originating materials described in paragraph (a)(1) of this section is included in the value of non-originating materials for any applicable regional value content requirement for the good under General Note 34, HTSUS; and

(3)

The good meets all other applicable requirements of General Note 34, HTSUS.

(b)

Exceptions. Paragraph (a) of this section does not apply to:

(1)

A non-originating material provided for in Chapter 4, HTSUS, or a non-originating dairy preparation containing over 10 percent by weight of milk solids provided for in subheading 1901.90 or 2106.90, HTSUS, that is used in the production of a good provided for in Chapter 4, HTSUS;

(2)

A non-originating material provided for in Chapter 4, HTSUS, or a non-originating dairy preparation containing over 10 percent by weight of milk solids provided for in subheading 1901.90, HTSUS, which is used in the production of the following goods:

(i)

Infant preparations containing over 10 percent by weight of milk solids provided for in subheading 1901.10, HTSUS;

(ii)

Mixes and doughs, containing over 25 percent by weight of butterfat, not put up for retail sale, provided for in subheading 1901.20, HTSUS;

(iii)

Dairy preparations containing over 10 percent by weight of milk solids provided for in subheading 1901.90 or 2106.90, HTSUS;

(iv)

Goods provided for in heading 2105, HTSUS;

(v)

Beverages containing milk provided for in subheading 2202.90, HTSUS; or

(vi)

Animal feeds containing over 10 percent by weight of milk solids provided for in subheading 2309.90, HTSUS;

(3)

A non-originating material provided for in heading 0805, HTSUS, or any of subheadings 2009.11 through 2009.39, HTSUS, that is used in the production of a good provided for in any of subheadings 2009.11 through 2009.39, HTSUS, or in fruit or vegetable juice of any single fruit or vegetable, fortified with minerals or vitamins, concentrated or unconcentrated, provided for in subheading 2106.90 or 2202.90, HTSUS;

(4)

A non-originating material provided for in heading 0901 or 2101, HTSUS, that is used in the production of a good provided for in heading 0901 or 2101, HTSUS;

(5)

A non-originating material provided for in headings 1501 through 1508, HTSUS, or headings 1511 through 1515, HTSUS;

(6)

A non-originating material provided for in heading 1701, HTSUS, that is used in the production of a good provided for in any of headings 1701 through 1703, HTSUS;

(7)

A non-originating material provided for in Chapter 17, HTSUS, that is used in the production of a good provided for in subheading 1806.10, HTSUS; or

(8)

Except as provided in paragraphs (b)(1) through (b)(7) of this section and General Note 34, HTSUS, a non-originating material used in the production of a good provided for in any of Chapters 1 through 24, HTSUS, unless the non-originating material is provided for in a different subheading than the good for which origin is being determined under this subpart.

(c)

Textile and apparel goods—

(1)

General. Except as provided in paragraph (c)(2) of this section, a textile or apparel good that is not an originating good because certain fibers or yarns used in the production of the component of the good that determines the tariff classification of the good do not undergo an applicable change in tariff classification set out in General Note 34, HTSUS, will nevertheless be considered to be an originating good if:

(i)

The total weight of all such fibers or yarns in that component is not more than 10 percent of the total weight of that component; or

(ii)

The yarns are nylon filament yarns (other than elastomeric yarns) that are provided for in subheading 5402.11.30, 5402.11.60, 5402.19.30, 5402.19.60, 5402.31.30, 5402.31.60, 5402.32.30, 5402.32.60, 5402.45.10, 5402.45.90, 5402.51.00, or 5402.61.00, HTSUS, and that are products of Canada, Mexico, or Israel.

(2)

Exception for goods containing elastomeric yarns. A textile or apparel good containing elastomeric yarns (excluding latex) in the component of the good that determines the tariff classification of the good will be considered an originating good only if such yarns are wholly formed in the territory of a Party. For purposes of this paragraph, “wholly formed” means that all the production processes and finishing operations, starting with the extrusion of all filaments, strips, films, or sheets, or the spinning of all fibers into yarn, or both, and ending with a finished yarn or plied yarn, took place in the territory of a Party.

(3)

Yarn, fabric, or fiber. For purposes of paragraph (c) of this section, in the case of a textile or apparel good that is a yarn, fabric, or fiber, the term “component of the good that determines the tariff classification of the good” means all of the fibers in the good.

Notes, amendments, and revision history

Source

Source: 77 FR 59069, Sept. 26, 2012, unless otherwise noted.

Authority

Source

Source: 28 FR 14663, Dec. 31, 1963, unless otherwise noted.

§10.3019. Fungible goods and materials.

19 C.F.R. § 10.3019

(a)

General. A person claiming that a fungible good or material is an originating good may base the claim either on the physical segregation of the fungible good or material or by using an inventory management method with respect to the fungible good or material. For purposes of this section, the term “inventory management method” means:

(1)

Averaging;

(2)

“Last-in, first-out;”

(3)

“First-in, first-out;” or

(4)

Any other method that is recognized in the Generally Accepted Accounting Principles of the Party in which the production is performed or otherwise accepted by that country.

(b)

Duration of use. A person selecting an inventory management method under paragraph (a) of this section for a particular fungible good or material must continue to use that method for that fungible good or material throughout the fiscal year of that person.

Notes, amendments, and revision history

Source

Source: 77 FR 59069, Sept. 26, 2012, unless otherwise noted.

Authority

Source

Source: 28 FR 14663, Dec. 31, 1963, unless otherwise noted.

§10.3020. Accessories, spare parts, or tools.

19 C.F.R. § 10.3020

(a)

General. Accessories, spare parts, or tools that are delivered with a good and that form part of the good's standard accessories, spare parts, or tools will be treated as originating goods if the good is an originating good, and will be disregarded in determining whether all the non-originating materials used in the production of the good undergo an applicable change in tariff classification specified in General Note 34, HTSUS, provided that:

(1)

The accessories, spare parts, or tools are classified with, and not invoiced separately from, the good, regardless of whether they are specified or separately identified in the invoice for the good; and

(2)

The quantities and value of the accessories, spare parts, or tools are customary for the good.

(b)

Regional value content. If the good is subject to a regional value content requirement, the value of the accessories, spare parts, or tools is taken into account as originating or non-originating materials, as the case may be, in calculating the regional value content of the good under § 10.3015.

Notes, amendments, and revision history

Source

Source: 77 FR 59069, Sept. 26, 2012, unless otherwise noted.

Authority

Source

Source: 28 FR 14663, Dec. 31, 1963, unless otherwise noted.

§10.3021. Goods classifiable as goods put up in sets.

19 C.F.R. § 10.3021

Notwithstanding the specific rules set forth in General Note 34, HTSUS, goods classifiable as goods put up in sets for retail sale as provided for in General Rule of Interpretation 3, HTSUS, will not be considered to be originating goods unless:

(a)

Each of the goods in the set is an originating good; or

(b)

The total value of the non-originating goods in the set does not exceed;

(1)

In the case of textile or apparel goods, 10 percent of the adjusted value of the set; or

(2)

In the case of a good other than a textile or apparel good, 15 percent of the adjusted value of the set.

Notes, amendments, and revision history

Source

Source: 77 FR 59069, Sept. 26, 2012, unless otherwise noted.

Authority

Source

Source: 28 FR 14663, Dec. 31, 1963, unless otherwise noted.

§10.3022. Retail packaging materials and containers.

19 C.F.R. § 10.3022

(a)

Effect on tariff shift rule. Packaging materials and containers in which a good is packaged for retail sale, if classified with the good for which preferential tariff treatment under the CTPA is claimed, will be disregarded in determining whether all non-originating materials used in the production of the good undergo the applicable change in tariff classification set out in General Note 34, HTSUS.

(b)

Effect on regional value content calculation. If the good is subject to a regional value content requirement, the value of such packaging materials and containers will be taken into account as originating or non-originating materials, as the case may be, in calculating the regional value content of the good.

Notes, amendments, and revision history

Source

Source: 77 FR 59069, Sept. 26, 2012, unless otherwise noted.

Authority

Source

Source: 28 FR 14663, Dec. 31, 1963, unless otherwise noted.

§10.3023. Packing materials and containers for shipment.

19 C.F.R. § 10.3023

(a)

Effect on tariff shift rule. Packing materials and containers for shipment, as defined in § 10.3013(n), are to be disregarded in determining whether the non-originating materials used in the production of the good undergo an applicable change in tariff classification set out in General Note 34, HTSUS. Accordingly, such materials and containers are not required to undergo the applicable change in tariff classification even if they are non-originating.

(b)

Effect on regional value content calculation. Packing materials and containers for shipment, as defined in § 10.3013(n), are to be disregarded in determining the regional value content of a good imported into the United States. Accordingly, in applying the build-down, build-up, or net cost method for determining the regional value content of a good imported into the United States, the value of such packing materials and containers for shipment (whether originating or non-originating) is disregarded and not included in AV, adjusted value, VNM, value of non-originating materials, VOM, value of originating materials, or NC, net cost of a good.

Notes, amendments, and revision history

Source

Source: 77 FR 59069, Sept. 26, 2012, unless otherwise noted.

Authority

Source

Source: 28 FR 14663, Dec. 31, 1963, unless otherwise noted.

§10.3024. Indirect materials.

19 C.F.R. § 10.3024

An indirect material, as defined in § 10.3013(h), will be considered to be an originating material without regard to where it is produced.

Notes, amendments, and revision history

Source

Source: 77 FR 59069, Sept. 26, 2012, unless otherwise noted.

Authority

Source

Source: 28 FR 14663, Dec. 31, 1963, unless otherwise noted.

§10.3025. Transit and transshipment.

19 C.F.R. § 10.3025

(a)

General. A good that has undergone production necessary to qualify as an originating good under § 10.3014 will not be considered an originating good if, subsequent to that production, the good:

(1)

Undergoes further production or any other operation outside the territories of the Parties, other than unloading, reloading, or any other operation necessary to preserve the good in good condition or to transport the good to the territory of a Party; or

(2)

Does not remain under the control of customs authorities in the territory of a non-Party.

(b)

Documentary evidence. An importer making a claim that a good is originating may be required to demonstrate, to CBP's satisfaction, that the conditions and requirements set forth in paragraph (a) of this section were met. An importer may demonstrate compliance with this section by submitting documentary evidence. Such evidence may include, but is not limited to, bills of lading, airway bills, packing lists, commercial invoices, receiving and inventory records, and customs entry and exit documents.

Notes, amendments, and revision history

Source

Source: 77 FR 59069, Sept. 26, 2012, unless otherwise noted.

Authority

Source

Source: 28 FR 14663, Dec. 31, 1963, unless otherwise noted.