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 32. Heading Rule 1: For the purposes of determining the origin of a good of textile materials of this heading, the rule applicable to that good shall only apply to the component that determines the tariff classification of the good and such component must satisfy the change of tariff classification requirements set out in the rule for that good.

(A) A change to a good of textile wadding of heading 9619 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311 or chapters 54 through 55; or

(B) A change to a good of textile materials other than wadding, of heading 9619 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308, or 5310 through 5311, chapter 54 or headings 5508 through 5516 or 6001 through 6006, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or both of the United States or Singapore; or

(C) A change to any other good of heading 9619 from any other heading.

33. A change to heading 9620 from any other subheading.

Chapter 97

1. A change to subheadings 9701.10 through 9701.90 from any other subheading, including another subheading within that group.

2. A change to headings 9702 through 9706 from any other heading, including another subheading within that group.

26. United States-Chile Free Trade Agreement.

(a) Originating goods under the terms of the United States-Chile Free Trade Agreement (UCFTA) are subject to duty as provided herein. For the purposes of this note, goods of Chile, as defined in subdivisions (b) through (n) of this note, that are imported into the customs territory of the United States and entered under a provision for which a rate of duty appears in the “Special” subcolumn of column 1 followed by the symbol “CL” in parentheses are eligible for the tariff treatment and quantitative limitations set forth in the “Special” subcolumn, in accordance with sections 201 and 202 of the United States-Chile Free Trade Agreement Implementation Act (Pub.L.108-78; 117 Stat. 948).

(b) For the purposes of this note, subject to the provisions of subdivisions (c), (d), (m) and (n) thereof, goods imported into the customs territory of the United States are eligible for treatment as originating goods of a UCFTA country under the terms of this note only if they–

(i) were wholly obtained or produced entirely in the territory of Chile or of the United States, or both;

(ii) were produced entirely in the territory of Chile or of the United States, or both, and--

(A) each nonoriginating material used in the production of the good undergoes an applicable change in tariff classification set out in subdivision (n) of this note; or

(B) the good otherwise satisfies any applicable regional value-content or other requirements set forth in such subdivision (n); and

satisfies all other applicable requirements of this note and of applicable regulations; or

(iii) the good is produced entirely in the territory of Chile or of the United States, or both, exclusively from materials described in subdivisions (i) or (ii), above.

For the purposes of this note, the term “UCFTA country” refers only to Chile or to the United States.

(c) (i) For purposes of subdivision (b)(i) of this note, except as otherwise provided in subdivision (d) of this note for textile and apparel articles, the expression “wholly obtained or produced” means–

(A) mineral goods extracted from the territory of Chile or of the United States, or both;

(B) vegetable goods (for purposes of the tariff schedule) harvested in the territory of Chile or of the United States, or both;
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    (C) live animals born and raised in the territory of Chile or of the United States, or both;

(D) goods obtained from hunting, trapping or fishing conducted in the territory of Chile or of the United States, or both;

(E) goods (fish, shellfish, and other marine life) taken from the sea by vessels registered or recorded with Chile or the United States and flying its flag;

(F) goods produced exclusively from products referred to in subdivision (E) on board factory ships registered or recorded with Chile or the United States and flying the flag of such country;

(G) goods taken by Chile or the United States, or a person of Chile or the United States, from the seabed or beneath the seabed outside territorial waters, if Chile or the United States has rights to exploit such seabed;

(H) goods taken from outer space, provided the goods are obtained by Chile or the United States or a person of Chile or the United States and are not processed in the territory of a country other than Chile or the United States;

(I) waste and scrap derived from–

(1) production in the territory of Chile or of the United States, or both; or

(2) used goods collected in such territory, if such goods are fit only for the recovery of raw materials;

(J) recovered goods derived in the territory of Chile or of the United States, or both, from used goods; or

(K) goods produced in the territory of Chile or of the United States, or both, exclusively from goods referred to in subdivisions (A) through (I) above, inclusive, or from the derivatives of such goods, at any stage of production.

(ii) (A) For the purposes of subdivision (i)(J), the term “recovered goods” means materials in the form of individual parts that are the result of:

(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 by one or more of the following processes: welding, flame spraying, surface machining, knurling, plating, sleeving, and rewinding; the foregoing in order for such parts to be assembled with other parts, including other recovered parts, in the production of a remanufactured good as defined in subdivision (ii)(B).

(B) The term “remanufactured good” for purposes of this note means an industrial good assembled in the territory of Chile or of the United State that is classified in the provisions of the tariff schedule enumerated below (except for those designed principally for use in automotive goods of headings 8702, 8703, 8706 and 8707 or subheadings 8704.21, 8704.31 and 8704.32):

8408.10, 8408.20, 8408.90, 8409.91, 8409.99, 8412.21, 8412.29, 8412.39, 8412.90, 8413.30, 8413.50, 8413.60, 8413.91, 8414.30, 8414.80, 8414.90, 8419.89, 8431.20, 8431.49, 8481.20, 8481.40, 8481.80, 8481.90, 8483.10, 8483.30, 8483.40, 8483.50, 8483.60, 8483.90, 8503, 8511.40, 8511.50, 8526.10, 8537.10, 8542.21, 8708.31, 8708.39, 8708.40, 8708.60, 8708.70, 8708.93, 8708.99 or 9031.49;

when such industrial good–

(1) is entirely or partially comprised of recovered goods;

(2) has the same life expectancy and meets the same performance standards as a new good; and

(3) enjoys the same factory warranty as such a new good.

(C) For the purposes of this note–
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     (1) the term “material” means a good that is used in the production of another good, including a part, ingredient or indirect material;

(2) the term “material that is self-produced” means a material that is an originating good produced by a producer of a good and used in the production of that good; and

(3) a “nonoriginating good or material” is a good or material, as the case may be, that does not qualify as an originating good under this note.

(D) For the purposes of this note, the term “production” means growing, raising, mining, harvesting, fishing, trapping, hunting, manufacturing, processing, assembling or disassembling a good; and the term “producer” means a person who engages in the production of a good in the territory of Chile or of the United States.

(iii) A good that has undergone production necessary to qualify as an originating good under this note shall not be considered to be an originating good if, subsequent to that production, the good undergoes further production or any other operation outside the territory of Chile or of the United States, other than unloading, reloading or any other process necessary to preserve the good in good condition or to transport the good to the territory of Chile or of the United States.

(d) Textile and apparel articles.

(i) Except as provided in subdivision (ii) below, a good provided for in chapters 50 through 63 of the tariff schedule that is not an originating good under the terms of this note, 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 subdivision (n) of this note, shall nonetheless be considered to be an originating good if the total weight of all such fibers or yarns in that component is not more than seven percent of the total weight of that component. Notwithstanding the preceding sentence, a textile or apparel good containing elastomeric yarns in the component of the good that determines the tariff classification of the good shall be considered to be an originating good only if such yarns are wholly formed in the territory of Chile or of the United States.

(ii) Notwithstanding the rules set forth in subdivision (n) of this note, textile and apparel goods classifiable as goods put up in sets for retail sale as provided under general rule of interpretation 3 to the tariff schedule shall not be considered to be originating goods unless each of the goods in the set is an originating good or the total value of the nonoriginating goods in the set does not exceed 10 percent of the value of the set determined for purposes of assessing customs duties.

(e) De minimis.

(i) Except as provided in subdivision (ii) below, a good (other than a textile or apparel good described in subdivision (d) above) that does not undergo a change in tariff classification pursuant to subdivision (n) of this note shall nonetheless be considered to be an originating good if–

(A) the value of all nonoriginating materials that are used in the production of the good and do not undergo the applicable change in tariff classification does not exceed 10 percent of the adjusted value of the good;

(B) the value of such nonoriginating materials is included in calculating the value of nonoriginating materials for any applicable regional value-content requirement under this note; and

(C) the good meets all other applicable requirements of this note.

(ii) Subdivision (e)(i) does not apply to–

(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:
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      (1) infant preparations containing over 10 percent by weight of milk solids, the foregoing provided for in subheading        1901.10;

(2) mixes and doughs, containing over 25 percent by weight of butterfat, not put up for retail sale, the foregoing provided for in subheading 1901.20;

(3) dairy preparations containing over 10 percent by weight of milk solids, the foregoing provided for in subheading 1901.90 or 2106.90;

(4) goods provided for in heading 2105;

(5) beverages containing milk, the foregoing provided for in subheading 2202.90; or

(6) animal feeds containing over 10 percent by weight of milk solids, the foregoing provided for in subheading 2309.90;

(C) a nonoriginating material provided for in heading 0805 or subheadings 2009.11 through 2009.39 that is used in the production of a good provided for in 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 chapter 15 that is used in the production of a good provided for in headings 1501 through 1508, 1512, 1514 or 1515;

(E) a nonoriginating material provided for in heading 1701 that is used in the production of a good provided for in headings 1701 through 1703;

(F) a nonoriginating material provided for in chapter 17 or heading 1805 that is used in the production of a good provided for in subheading 1806.10;

(G) a nonoriginating material provided for in headings 2203 through 2208 that is used in the production of a good provided for in headings 2207 or 2208; and

(H) a nonoriginating material used in the production of a good provided for in chapters 1 through 21, inclusive, unless the nonoriginating material is provided for in a different subheading than the good for which origin is being determined under this note.

(iii) For the purposes of this note, the term “adjusted value” means the value determined under 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 (the Customs Valuation Agreement), except that such value may be adjusted 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.

(f) Accumulation.

(i) For purposes of this note, originating goods or materials from the territory of either Chile or the United States that are used in the production of a good in the territory of the other country shall be considered to originate in the territory of such other country.

(ii) A good that is produced in the territory of Chile or of the United States, or both, by one or more producers, is an originating good if the good satisfies all of the applicable requirements of this note.

(g) Regional value content.

(i) Where a rule set forth in subdivision (n) of this note specifies a regional value content for a good, the regional value content of such good shall be calculated, at the choice of the person claiming the tariff treatment authorized by this note for such good, on the basis of the build-down method or the build-up method described below, unless otherwise specified in this note:
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  (A) For the build-down method, the regional value content may be calculated on the basis of the formula RVC = ((AV -    VNM)/AV) x 100, where RVC is the regional value content, expressed as a percentage; AV is the adjusted value; and    VNM is the value of nonoriginating materials used by the producer in the production of the good; or

(B) For the build-up method, the regional value content may be calculated on the basis of the formula RVC = (VOM /AV) x 100, where RVC is the regional value content, expressed as a percentage; AV is the adjusted value; and VOM is the value of originating materials used by the producer in the production of the good.

(ii) Value of materials.

(A) For purposes of calculating the regional value content of a good under subdivision (i) and for purposes of applying the de minimis provisions of subdivision (e) of this note, 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 in the territory where the good is produced, except for a material to which subdivision (3) below applies, the producer’s price actually paid or payable for the material;

(3) in the case of a material provided to the producer without charge, or at a price reflecting a discount or similar reduction, the sum of:

(I) all expenses incurred in the growth, production or manufacture of the material, including general expenses, and

(II) an amount for profit; or

(4) in the case of a material that is self-produced, the sum of–

(I) all expenses incurred in the production of the material, including general expenses, and

(II) an amount for profit.

(B) The value of materials may be adjusted as follows:

(1) for originating materials, the following expenses, if not included under subdivision (A) above, 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 to the location of the producer;

(II) duties, taxes and customs brokerage fees on the material paid in the territory of Chile or of the United States, or both, 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 by-product; and

(2) for non-originating materials, if included under subdivision (A) above, the following expenses 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 to the location of the producer;

(II) duties, taxes and customs brokerage fees on the material paid in the territory of Chile or of the United States, or both, other than duties and taxes that are waived, refunded, refundable or otherwise recoverable, including credit against duty or tax paid or payable;