19 C.F.R. §§ 10.769–10.777

9 sections in range

§10.769. Definitions.

19 C.F.R. § 10.769

For purposes of §§ 10.769 through 10.777:

(a)

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

(b)

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 standards may encompass broad guidelines of general application as well as detailed standards, practices, and procedures;

(c)

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

(d)

Goods wholly the growth, product, or manufacture of one or both of the Parties. “Goods wholly the growth, product, or manufacture of one or both of the Parties” means:

(1)

Mineral goods extracted in the territory of one or both of the Parties;

(2)

Vegetable goods, as such goods are defined in the HTSUS, harvested in the territory of one or both of the Parties;

(3)

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

(4)

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

(5)

Goods obtained from hunting, trapping, or fishing in the territory of one or both of the parties;

(6)

Goods (fish, shellfish, and other marine life) taken from the sea by vessels registered or recorded with a Party and flying its flag;

(7)

Goods produced from goods referred to in paragraph (d)(5) on board factory ships registered or recorded with that Party and flying its flag;

(8)

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

(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)

Production or manufacture 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, provided such goods are fit only for the recovery of raw materials;

(11)

Recovered goods derived in the territory of a Party from used goods, and utilized in the territory of that Party 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 paragraphs (d)(1) through (d)(10) of this section, or from their derivatives, at any stage of production;

(e)

Importer. Importer means a person who imports goods into the territory of a Party;

(f)

Indirect material. “Indirect material” means a good used in the growth, production, manufacture, testing, or inspection of a good but not physically incorporated into the good, or a good used in the maintenance of buildings or the operation of equipment associated with the growth, production, or manufacture of a good, including:

(1)

Fuel and energy;

(2)

Tools, dies, and molds;

(3)

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

(4)

Lubricants, greases, compounding materials, and other materials used in the growth, production, or manufacture of a good or used to operate equipment and 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 goods that are not incorporated into the good but the use of which in the growth, production, or manufacture of the good can reasonably be demonstrated to be a part of that growth, production, or manufacture;

(g)

Material. “Material” means a good, including a part or ingredient, that is used in the growth, production, or manufacture of another good that is a new or different article of commerce that has been grown, produced, or manufactured in one or both of the Parties;

(h)

Material produced in the territory of one or both of the Parties. “Material produced in the territory of one or both of the Parties” means a good that is either wholly the growth, product, or manufacture of one or both of the Parties, or a new or different article of commerce that has been grown, produced, or manufactured in the territory of one or both of the Parties;

(i)

New or different article of commerce. A “new or different article of commerce” exists when the country of origin of a good which is produced in a Party from foreign materials is determined to be that country under the provisions of §§ 102.1 through 102.21 of this chapter;

(j)

Non-originating material. “Non-originating material” means a material that does not qualify as originating under this subpart or General Note 27, HTSUS;

(k)

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;

(l)

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

(1)

The complete disassembly of used goods into individual parts; and

(2)

The cleaning, inspecting, testing, or other processing of those parts as necessary for improvement to sound working condition;

(m)

Remanufactured good. “Remanufactured good” means an industrial good that is assembled in the territory of a Party and that:

(1)

Is entirely or partially comprised of recovered goods;

(2)

Has a similar life expectancy to, and meets the similar performance standards as, a like good that is new; and

(3)

Enjoys the factory warranty similar to that of a like good that is new;

(n)

Simple combining or packaging operations. “Simple combining or packaging operations” means operations such as adding batteries to electronic devices, fitting together a small number of components by bolting, gluing, or soldering, or packing or repacking components together;

Notes, amendments, and revision history

Amendments

[CBP Dec. 07-51, 72 FR 35651, June 29, 2007, as amended at CBP Dec. 08-29, 73 FR 45354, Aug. 5, 2008]

Source

Source: CBP Dec. 07-51, 72 FR 35651, June 29, 2007, 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

[CBP Dec. 07-51, 72 FR 35651, June 29, 2007, as amended at CBP Dec. 08-29, 73 FR 45354, Aug. 5, 2008]

§10.770. Originating goods.

19 C.F.R. § 10.770

(a)

General. A good will be considered an originating good under the MFTA when imported directly from the territory of a Party into the territory of the other Party only if:

(1)

The good is wholly the growth, product, or manufacture of one or both of the Parties;

(2)

The good is a new or different article of commerce, as defined in § 10.769(i) of this subpart, that has been grown, produced, or manufactured in the territory of one or both of the Parties, is provided for in a heading or subheading of the HTSUS that is not covered by the product-specific rules set forth in General Note 27(h), HTSUS, and meets the value-content requirement specified in paragraph (b) of this section; or

(3)

The good is provided for in a heading or subheading of the HTSUS covered by the product-specific rules set forth in General Note 27(h), HTSUS, and:

(i)

(A)

Each of the non-originating materials used in the production of the good undergoes an applicable change in tariff classification specified in General Note 27(h), HTSUS, as a result of production occurring entirely in the territory of one or both of the Parties; or

(B)

The good otherwise satisfies the requirements specified in General Note 27(h), HTSUS; and

(ii)

The good meets any other requirements specified in General Note 27, HTSUS.

(b)

Value-content requirement. A good described in paragraph (a)(2) of this section will be considered an originating good under the MFTA only if the sum of the value of materials produced in one or both of the Parties, plus the direct costs of processing operations (see § 10.774 of this subpart) performed in one or both of the Parties, is not less than 35 percent of the appraised value of the good at the time the good is entered into the territory of the United States.

(c)

Combining, packaging, and diluting operations. For purposes of this subpart, a good will not be considered a new or different article of commerce by virtue of having undergone simple combining or packaging operations, or mere dilution with water or another substance that does not materially alter the characteristics of the good. The principles and examples set forth in § 10.195(a)(2) of this part will apply equally for purposes of this paragraph.

Notes, amendments, and revision history

Amendments

[CBP Dec. 07-51, 72 FR 35651, June 29, 2007, as amended at CBP Dec. 08-29, 73 FR 45354, Aug. 5, 2008]

Source

Source: CBP Dec. 07-51, 72 FR 35651, June 29, 2007, unless otherwise noted.

Authority

Source

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

Amendments

[CBP Dec. 07-51, 72 FR 35651, June 29, 2007, as amended at CBP Dec. 08-29, 73 FR 45354, Aug. 5, 2008]

§10.771. Textile or apparel goods.

19 C.F.R. § 10.771

(a)

De minimis. Except as provided in paragraph (a)(1) of this section, a textile or apparel good that is not an originating good under the MFTA 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 27(h), HTSUS, will be considered to be an originating good if the total weight of all such fibers is not more than seven percent of the total weight of that component.

(1)

Exception. A textile or apparel good containing elastomeric yarns in the component of the good that determines the tariff classification of the good will be considered to be an originating good only if such yarns are wholly formed in the territory of a Party.

(2)

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

(b)

Textile or apparel goods put up in sets. Notwithstanding the specific rules specified in General Note 27(h), HTSUS, textile or apparel 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 under the MFTA unless each of the goods in the set is an originating good or the total value of the non-originating goods in the set does not exceed ten percent of the appraised value of the set.

Notes, amendments, and revision history

Source

Source: CBP Dec. 07-51, 72 FR 35651, June 29, 2007, unless otherwise noted.

Authority

Source

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

§10.772. Accumulation.

19 C.F.R. § 10.772

(a)

An originating good or material produced in the territory of one or both of the Parties that is incorporated into a good in the territory of the other Party will be considered to originate in the territory of the other Party.

(b)

A good that is grown, produced, or manufactured 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 § 10.770 of this subpart and all other applicable requirements of General Note 27, HTSUS.

Notes, amendments, and revision history

Source

Source: CBP Dec. 07-51, 72 FR 35651, June 29, 2007, unless otherwise noted.

Authority

Source

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

§10.773. Value of materials.

19 C.F.R. § 10.773

(a)

General. For purposes of § 10.770(b) of this subpart and, except as provided in paragraph (b) of this section, the value of a material produced in the territory of one or both of the Parties includes the following:

(1)

The price actually paid or payable for the material by the producer of the good;

(2)

The freight, insurance, packing and all other costs incurred in transporting the material to the producer's plant, if such costs are not included in the price referred to in paragraph (a)(1) of this section;

(3)

The cost of waste or spoilage resulting from the use of the material in the growth, production, or manufacture of the good, less the value of recoverable scrap; and

(4)

Taxes or customs duties imposed on the material by one or both of the Parties, if the taxes or customs duties are not remitted upon exportation from the territory of a Party.

(b)

Exception. If the relationship between the producer of a good and the seller of a material influenced the price actually paid or payable for the material, or if there is no price actually paid or payable by the producer for the material, the value of the material produced in the territory of one or both of the Parties, includes the following:

(1)

All expenses incurred in the growth, production, or manufacture of the material, including general expenses;

(2)

A reasonable amount for profit; and

(3)

The freight, insurance, packing, and all other costs incurred in transporting the material to the producer's plant.

Notes, amendments, and revision history

Source

Source: CBP Dec. 07-51, 72 FR 35651, June 29, 2007, unless otherwise noted.

Authority

Source

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

§10.774. Direct costs of processing operations.

19 C.F.R. § 10.774

(a)

Items included. For purposes of § 10.770(b) of this subpart, the words “direct costs of processing operations”, with respect to a good, mean those costs either directly incurred in, or that can be reasonably allocated to, the growth, production, or manufacture of the good in the territory of one or both of the Parties. Such costs include, to the extent they are includable in the appraised value of the good when imported into a Party, the following:

(1)

All actual labor costs involved in the growth, production, or manufacture of the specific good, including fringe benefits, on-the-job training, and the costs of engineering, supervisory, quality control, and similar personnel;

(2)

Tools, dies, molds, and other indirect materials, and depreciation on machinery and equipment that are allocable to the specific good;

(3)

Research, development, design, engineering, and blueprint costs, to the extent that they are allocable to the specific good;

(4)

Costs of inspecting and testing the specific good; and

(5)

Costs of packaging the specific good for export to the territory of the other Party.

(b)

Items not included. For purposes of § 10.770(b) of this subpart, the words “direct costs of processing operations” do not include items that are not directly attributable to the good or are not costs of growth, production, or manufacture of the good. These include, but are not limited to:

(1)

Profit; and

(2)

General expenses of doing business that are either not allocable to the good or are not related to the growth, production, or manufacture of the good, such as administrative salaries, casualty and liability insurance, advertising, and salesmen's salaries, commissions, or expenses.

Notes, amendments, and revision history

Source

Source: CBP Dec. 07-51, 72 FR 35651, June 29, 2007, unless otherwise noted.

Authority

Source

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

§10.775. Packaging and packing materials and containers for retail sale and for shipment.

19 C.F.R. § 10.775

Packaging materials and containers in which a good is packaged for retail sale and packing materials and containers for shipment are to be disregarded in determining whether a good qualifies as an originating good under § 10.770 of this subpart and General Note 27, HTSUS, except to the extent that the value of such packaging and packing materials and containers may be included in meeting the value-content requirement specified in § 10.770(b) of this subpart.

Notes, amendments, and revision history

Source

Source: CBP Dec. 07-51, 72 FR 35651, June 29, 2007, unless otherwise noted.

Authority

Source

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

§10.776. Indirect materials.

19 C.F.R. § 10.776

Indirect materials are to be disregarded in determining whether a good qualifies as an originating good under § 10.770 of this subpart and General Note 27, HTSUS, except that the cost of such indirect materials may be included in meeting the value-content requirement specified in § 10.770(b) of this subpart.

Notes, amendments, and revision history

Source

Source: CBP Dec. 07-51, 72 FR 35651, June 29, 2007, unless otherwise noted.

Authority

Source

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

§10.777. Imported directly.

19 C.F.R. § 10.777

(a)

General. To qualify as an originating good under the MFTA, a good must be imported directly from the territory of a Party into the territory of the other Party. For purposes of this subpart, the words “imported directly” mean:

(1)

Direct shipment from the territory of a Party into the territory of the other Party without passing through the territory of a non-Party; or

(2)

If the shipment passed through the territory of a non-Party, the good, upon arrival in the territory of a Party, will be considered to be “imported directly” only if the good did not undergo production, manufacturing, 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. Operations that may be performed outside the territories of the Parties include inspection, removal of dust that accumulates during shipment, ventilation, spreading out or drying, chilling, replacing salt, sulfur dioxide, or aqueous solutions, replacing damaged packing materials and containers, and removal of units of the good that are spoiled or damaged and present a danger to the remaining units of the good, or to transport the good to the territory of a Party.

(b)

Documentary evidence. An importer making a claim for preferential tariff treatment under the MFTA for an originating good may be required to demonstrate, to CBP's satisfaction, that the good was “imported directly” from the territory of a Party into the territory of the other Party, as that term is defined in paragraph (a) of this section. 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: CBP Dec. 07-51, 72 FR 35651, June 29, 2007, unless otherwise noted.

Authority

Source

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