§ 4033. Rules of origin
(a)
Application and interpretation
In this section:
(b)
Originating goods
For purposes of this chapter and for purposes of implementing the preferential tariff treatment provided for under the Agreement, except as otherwise provided in this section, a good is an originating good if—
(1)
the good is a good wholly obtained or produced entirely in the territory of one or more of the CAFTA–DR countries;
(c)
Regional value-content
(1)
In general
For purposes of subsection (b)(2), the regional value-content of a good referred to in Annex 4.1 of the Agreement, except for goods to which paragraph (4) applies, shall be calculated by the importer, exporter, or producer of the good, on the basis of the build-down method described in paragraph (2) or the build-up method described in paragraph (3).
(2)
Build-down method
(A)
In general
The regional value-content of a good may be calculated on the basis of the following build-down method:
| rvc | = | av–vnm | av | 100 | |||
|---|---|---|---|---|---|---|---|
(3)
Build-up method
(A)
In general
The regional value-content of a good may be calculated on the basis of the following build-up method:
| rvc | = | vom | av | 100 | |||
|---|---|---|---|---|---|---|---|
(4)
Special rule for certain automotive goods
(A)
In general
For purposes of subsection (b)(2), the regional value-content of an automotive good referred to in Annex 4.1 of the Agreement may be calculated by the importer, exporter, or producer of the good, on the basis of the following net cost method:
| rvc | = | nc–vnm | nc | 100 | |||
|---|---|---|---|---|---|---|---|
(B)
Definitions
In subparagraph (A):
(i)
Automotive good
The term “automotive good” means a good provided for in any of subheadings 8407.31 through 8407.34, subheading 8408.20, heading 8409, or in any of headings 8701 through 8708.
(C)
Motor vehicles
(i)
Basis of calculation
For purposes of determining the regional value-content under subparagraph (A) 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 contained in subparagraph (A), over the producer’s fiscal year—
(ii)
Categories
A category is described in this clause if it—
(I)
is the same model line of motor vehicles, is in the same class of vehicles, and is produced in the same plant in the territory of a CAFTA–DR country, as the good described in clause (i) for which regional value-content is being calculated;
(D)
Other automotive goods
For purposes of determining the regional value-content under subparagraph (A) for automotive goods provided for in any of subheadings 8407.31 through 8407.34, in subheading 8408.20, or in heading 8409, 8706, 8707, or 8708, that are produced in the same plant, an importer, exporter, or producer may—
(i)
average the amounts calculated under the formula contained in subparagraph (A) over—
if the goods were produced during the fiscal year, quarter, or month that is the basis for the calculation;
(E)
Calculating net cost
The importer, exporter, or producer shall, consistent with the provisions regarding allocation of costs set out in generally accepted accounting principles, determine the net cost of an automotive good under subparagraph (B) 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 nonallowable 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 that producer, 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 nonallowable 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 cost incurred with respect to the automotive good so that the aggregate of all such costs does not include any sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, or nonallowable interest costs.
(d)
Value of materials
(1)
In general
For the purpose of calculating the regional value-content of a good under subsection (c), and for purposes of applying the de minimis rules under subsection (f), the value of a material is—
(A)
in the case of a material that is imported by the producer of the good, the adjusted value of the material;
(B)
in the case of a material acquired in the territory in which the good is produced, the value, determined in accordance with Articles 1 through 8, Article 15, and the corresponding interpretive notes of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 referred to in section
3511
(d)(8) of this title, as set forth in regulations promulgated by the Secretary of the Treasury providing for the application of such Articles in the absence of an importation; or
(2)
Further adjustments to the value of materials
(A)
Originating material
The following expenses, if not included in the value of an originating material calculated under paragraph (1), 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 more of the CAFTA–DR countries to the location of the producer.
(B)
Nonoriginating material
The following expenses, if included in the value of a nonoriginating material calculated under paragraph (1), may be deducted from the value of the nonoriginating 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 more of the CAFTA–DR countries to the location of the producer.
(ii)
Duties, taxes, and customs brokerage fees on the material paid in the territory of one or more of the CAFTA–DR countries, other than duties or taxes that are waived, refunded, refundable, or otherwise recoverable, including credit against duty or tax paid or payable.
(e)
Accumulation
(1)
Originating materials used in production of goods of another country
Originating materials from the territory of one or more of the CAFTA–DR countries that are used in the production of a good in the territory of another CAFTA–DR country shall be considered to originate in the territory of that other country.
(f)
De minimis amounts of nonoriginating materials
(1)
In general
Except as provided in paragraphs (2) and (3), a good that does not undergo a change in tariff classification pursuant to Annex 4.1 of the Agreement is an originating good if—
(2)
Exceptions
Paragraph (1) does not apply to the following:
(A)
A nonoriginating material provided for in chapter 4, or a nonoriginating dairy preparation containing over 10 percent by weight of milk solids provided for in subheading 1901.90 or 2106.90, that is used in the production of a good provided for in chapter 4.
(B)
A nonoriginating material provided for in chapter 4, or a nonoriginating dairy preparation containing over 10 percent by weight of milk solids provided for in subheading 1901.90, that 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.
(ii)
Mixes and doughs, containing over 25 percent by weight of butterfat, not put up for retail sale, provided for in subheading 1901.20.
(C)
A nonoriginating material provided for in heading 0805, or any of subheadings 2009.11 through 2009.39, that is used in the production of a good provided for in any of subheadings 2009.11 through 2009.39, 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.
(D)
A nonoriginating material provided for in heading 0901 or 2101 that is used in the production of a good provided for in heading 0901 or 2101.
(E)
A nonoriginating material provided for in heading 1006 that is used in the production of a good provided for in heading 1102 or 1103 or subheading 1904.90.
(F)
A nonoriginating material provided for in chapter 15 that is used in the production of a good provided for in chapter 15.
(G)
A nonoriginating material provided for in heading 1701 that is used in the production of a good provided for in any of headings 1701 through 1703.
(H)
A nonoriginating material provided for in chapter 17 that is used in the production of a good provided for in subheading 1806.10.
(I)
Except as provided in subparagraphs (A) through (H) and Annex 4.1 of the Agreement, a nonoriginating material used in the production of a good provided for in any of chapters 1 through 24, unless the nonoriginating material is provided for in a different subheading than the good for which origin is being determined under this section.
(3)
Textile or apparel goods
(A)
In general
Except as provided in subparagraph (B), 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 Annex 4.1 of the Agreement, shall 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 those described in section
3203
(b)(3)(B)(vi)(IV) of this title (as in effect on August 2, 2005).
(g)
Fungible goods and materials
(1)
In general
(A)
Claim for preferential tariff treatment
A person claiming that a fungible good or fungible material is an originating good may base the claim either on the physical segregation of the fungible good or fungible material or by using an inventory management method with respect to the fungible good or fungible material.
(h)
Accessories, spare parts, or tools
(1)
In general
Subject to paragraphs (2) and (3), accessories, spare parts, or tools delivered with a good that form part of the good’s standard accessories, spare parts, or tools shall—
(i)
Packaging materials and containers for retail sale
Packaging materials and containers in which a good is packaged for retail sale, if classified with the good, shall be disregarded in determining whether all the nonoriginating materials used in the production of the good undergo the applicable change in tariff classification set out in Annex 4.1 of the Agreement, and, if the good is subject to a regional value-content requirement, the value of such packaging materials and containers shall be taken into account as originating or nonoriginating materials, as the case may be, in calculating the regional value-content of the good.
(j)
Packing materials and containers for shipment
Packing materials and containers for shipment shall be disregarded in determining whether a good is an originating good.
(k)
Indirect materials
An indirect material shall be treated as an originating material without regard to where it is produced.
(l)
Transit and transhipment
A good that has undergone production necessary to qualify as an originating good under subsection (b) shall not be considered to be an originating good if, subsequent to that production, the good—
(m)
Goods classifiable as goods put up in sets
Notwithstanding the rules set forth in Annex 4.1 of the Agreement, goods classifiable as goods put up in sets for retail sale as provided for in General Rule of Interpretation 3 of the HTS shall not be considered to be originating goods unless—
(n)
Definitions
In this section:
(1)
Adjusted value
The term “adjusted value” means the value determined in accordance with Articles 1 through 8, Article 15, and the corresponding interpretive notes of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 referred to in section
3511
(d)(8) of this title, adjusted, if necessary, to exclude any costs, charges, or expenses incurred for transportation, insurance, and related services incident to the international shipment of the merchandise from the country of exportation to the place of importation.
(3)
Class of motor vehicles
The term “class of motor vehicles” means any one of the following categories of motor vehicles:
(A)
Motor vehicles provided for in subheading 8701.20, 8704.10, 8704.22, 8704.23, 8704.32, or 8704.90, or heading 8705 or 8706, or motor vehicles for the transport of 16 or more persons provided for in subheading 8702.10 or 8702.90.
(B)
Motor vehicles provided for in subheading 8701.10 or any of subheadings 8701.30 through 8701.90.
(4)
Fungible good or fungible material
The term “fungible good” or “fungible 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.
(5)
Generally accepted accounting principles
The term “generally accepted accounting principles” means the recognized consensus or substantial authoritative support in the territory of a CAFTA–DR country with respect to the recording of revenues, expenses, costs, assets, and liabilities, the disclosure of information, and the preparation of financial statements. The principles may encompass broad guidelines of general application as well as detailed standards, practices, and procedures.
(6)
Goods wholly obtained or produced entirely in the territory of one or more of the CAFTA–DR countries
The term “goods wholly obtained or produced entirely in the territory of one or more of the CAFTA–DR countries” means—
(A)
plants and plant products harvested or gathered in the territory of one or more of the CAFTA–DR countries;
(D)
goods obtained from hunting, trapping, fishing or aquaculture conducted in the territory of one or more of the CAFTA–DR countries;
(E)
minerals and other natural resources not included in subparagraphs (A) through (D) that are extracted or taken in the territory of one or more of the CAFTA–DR countries;
(F)
fish, shellfish, and other marine life taken from the sea, seabed, or subsoil outside the territory of one or more of the CAFTA–DR countries by vessels registered or recorded with a CAFTA–DR country and flying the flag of that country;
(G)
goods produced on board factory ships from the goods referred to in subparagraph (F), if such factory ships are registered or recorded with that CAFTA–DR country and fly the flag of that country;
(H)
goods taken by a CAFTA–DR country or a person of a CAFTA–DR country from the seabed or subsoil outside territorial waters, if a CAFTA–DR country has rights to exploit such seabed or subsoil;
(I)
goods taken from outer space, if the goods are obtained by a CAFTA–DR country or a person of a CAFTA–DR country and not processed in the territory of a country other than a CAFTA–DR country;
(J)
waste and scrap derived from—
(8)
Indirect material
The term “indirect material” means a good used in the production, 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 production of a good, including—
(9)
Material
The term “material” means a good that is used in the production of another good, including a part or an ingredient.
(10)
Material that is self-produced
The term “material that is self-produced” means an originating material that is produced by a producer of a good and used in the production of that good.
(11)
Model line
The term “model line” means a group of motor vehicles having the same platform or model name.
(12)
Net cost
The term “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.
(13)
Nonallowable interest costs
The term “nonallowable 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 CAFTA–DR country in which the producer is located.
(14)
Nonoriginating good or nonoriginating material
The terms “nonoriginating good” and “nonoriginating material” mean a good or material, as the case may be, that does not qualify as originating under this section.
(15)
Packing materials and containers for shipment
The term “packing materials and containers for shipment” means the goods used to protect a good during its transportation and does not include the packaging materials and containers in which a good is packaged for retail sale.
(16)
Preferential tariff treatment
The term “preferential tariff treatment” means the customs duty rate, and the treatment under article 3.10.4 of the Agreement, that are applicable to an originating good pursuant to the Agreement.
(17)
Producer
The term “producer” means a person who engages in the production of a good in the territory of a CAFTA–DR country.
(18)
Production
The term “production” means growing, mining, harvesting, fishing, raising, trapping, hunting, manufacturing, processing, assembling, or disassembling a good.
(19)
Reasonably allocate
The term “reasonably allocate” means to apportion in a manner that would be appropriate under generally accepted accounting principles.
(20)
Recovered goods
The term “recovered goods” means materials in the form of individual parts that are the result of—
(21)
Remanufactured good
The term “remanufactured good” means a good that is classified under chapter 84, 85, or 87, or heading 9026, 9031, or 9032, other than a good classified under heading 8418 or 8516, and that—
(o)
Presidential proclamation authority
(2)
Fabrics and yarns not available in commercial quantities in the United States
The President is authorized to proclaim that a fabric or yarn is added to the list in Annex 3.25 of the Agreement in an unrestricted quantity, as provided in article 3.25.4(e) of the Agreement.
(3)
Modifications
(A)
In general
Subject to the consultation and layover provisions of section
4014 of this title, the President may proclaim modifications to the provisions proclaimed under the authority of paragraph (1)(A), other than provisions of chapters 50 through 63, as included in Annex 4.1 of the Agreement.
(B)
Additional proclamations
Notwithstanding subparagraph (A), and subject to the consultation and layover provisions of section
4014 of this title, the President may proclaim before the end of the 1-year period beginning on August 2, 2005, modifications to correct any typographical, clerical, or other nonsubstantive technical error regarding the provisions of chapters 50 through 63, as included in Annex 4.1 of the Agreement.
(4)
Fabrics, yarns, or fibers not available in commercial quantities in the CAFTA–DR countries
(A)
In general
Notwithstanding paragraph 3(A), the list of fabrics, yarns, and fibers set out in Annex 3.25 of the Agreement may be modified as provided for in this paragraph.
(B)
Definitions
In this paragraph:
(C)
Requests to add fabrics, yarns, or fibers
(i)
An interested entity may request the President to determine that a fabric, yarn, or fiber is not available in commercial quantities in a timely manner in the CAFTA–DR countries and to add that fabric, yarn, or fiber to the list in Annex 3.25 of the Agreement in a restricted or unrestricted quantity.
(ii)
After receiving a request under clause (i), the President may determine whether—
(iii)
The President may, within the time periods specified in clause (iv), proclaim that a fabric, yarn, or fiber that is the subject of a request submitted under clause (i) is added to the list in Annex 3.25 of the Agreement in an unrestricted quantity, or in any restricted quantity that the President may establish, if the President determines under clause (ii) that—
(v)
Notwithstanding section
4013
(a)(2) of this title, a proclamation made under clause (iii) shall take effect on the date on which the text of the proclamation is published in the Federal Register.
(vi)
Not later than 6 months after proclaiming under clause (iii) that a fabric, yarn, or fiber is added to the list in Annex 3.25 of the Agreement in a restricted quantity, the President may eliminate the restriction if the President determines that the fabric, yarn, or fiber is not available in commercial quantities in a timely manner in the CAFTA–DR countries.
(D)
Deemed approval of request
If, after an interested entity submits a request under subparagraph (C)(i), the President does not, within the applicable time period specified in subparagraph (C)(iv), make a determination under subparagraph (C)(ii) regarding the request, the fabric, yarn, or fiber that is the subject of the request shall be considered to be added, in an unrestricted quantity, to the list in Annex 3.25 of the Agreement beginning—
(E)
Requests to restrict or remove fabrics, yarns, or fibers
(i)
Subject to clause (ii), an interested entity may request the President to restrict the quantity of, or remove from the list in Annex 3.25 of the Agreement, any fabric, yarn, or fiber—