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(A) the accessories, spare parts or tools are classified with and not invoiced separately from the good, regardless of whether they appear specified or separately identified in the invoice for the good; and
(B) the quantities and value of the accessories, spare parts or tools are customary for the good.
(iii) If the good is subject to a regional value content requirement, the value of the accessories, spare parts or tools shall be taken into account as originating or nonoriginating materials, as the case may be, in calculating the regional value content of the good.
(h) Fungible goods and materials.
(i) 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. For purposes of this subdivision, the term “inventory management method” means:
(A) averaging,
(B) “last-in, first-out,”
(C) “first-in, first out,” or
(D) any other method that is recognized in the generally accepted accounting principles of the party to the Agreement in which the production is performed or otherwise accepted by that country.
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.
(ii) A person selecting an inventory management method under subdivision (h)(i) for a particular fungible good or fungible material shall continue to use that method for that fungible good or fungible material throughout the fiscal year of that person.
(i) Packaging or packing materials and containers.
(i) 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 subdivision (n) of this note 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.
(ii) For shipment.--Packing materials and containers for shipment shall be disregarded in determining whether a good is an originating good.
(j) Indirect materials.
An indirect material shall be treated as an originating material for purposes of this note without regard to where it is produced. 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–
(i) fuel and energy;
(ii) tools, dies and molds;
(iii) spare parts and materials used in the maintenance of equipment or buildings;
(iv) lubricants, greases, compounding materials and other materials used in production or used to operate equipment or buildings;
(v) gloves, glasses, footwear, clothing, safety equipment and supplies;
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(vi) equipment, devices and supplies used for testing or inspecting the good;
(vii) catalysts and solvents; and
(viii) any other goods that are not incorporated into the good but the use of which in the production of the good can reasonably be demonstrated to be a part of that production.
(k) For the purposes of this note, the term “generally accepted accounting principles” means the recognized consensus or substantial authoritative support in the territory of a party to the Agreement 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.
(l) Claims for preferential tariff treatment; record-keeping requirements and verification.
(i) Claims for preferential tariff treatment.--An importer may make a claim for the tariff and other treatment provided for under the terms of this note based on either--
(A) a written or electronic certification by the importer, exporter or producer; or
(B) the importer’s knowledge that the good is an originating good, including reasonable reliance on information in the importer’s possession that the good is an originating good;
in such form and manner as may be required in applicable regulations.
(ii) Record-keeping requirements.--An importer of a good, for which entry is claimed under the terms of this note, shall maintain, for a minimum of five years from the date of importation of the good, all records and documents necessary to demonstrate that the good qualified for the tariff and other treatment provided for under the terms of this note, in such form and manner as may be required in applicable regulations.
(iii) Verification.--For purposes of determining whether a good imported into the customs territory of the United States from the territory of another party to the Agreement qualifies as an originating good under the provisions of this note, the appropriate customs officer may conduct a verification as set forth in pertinent regulations.
(m) Interpretation and application of rules of origin.
(i) Unless otherwise specified, the requirements of any rule in subdivision (n) of this note that is set out adjacent to a heading or subheading of the tariff schedule and specifies a change of tariff classification applies only to nonoriginating materials. For purposes of this subdivision and subdivision (n) of this note, a tariff provision is a “heading” if its article description is not indented; a provision is a “subheading” if it is designated by 6 digits under the Harmonized Commodity Description and Coding System; and the terms “chapter” and “section” refer to a chapter or section, respectively, of the tariff schedule.
(ii) Where a specific rule in subdivision (n) of this note is defined using the criterion of a change in tariff classification, and the rule is written to exclude tariff provisions at the level of a chapter, heading or subheading of the tariff schedule, such rule shall be construed to require that materials classified in those excluded provisions be originating for the good to qualify as originating.
(iii) When a heading or subheading of the tariff schedule is subject to alternative specific rules in subdivision (n) of this note, the rule will be considered to be met if a good satisfies one of the alternatives.
(iv) When a single rule is applicable to a group of headings or subheadings, and that rule of origin specifies a change of heading or subheading, the requirement shall be interpreted so that the change of heading or subheading may occur within a single heading or subheading or between headings or subheadings of the group. When, however, a rule refers to a change in heading or subheading “outside that group,” such change in heading or subheading must occur from a heading or subheading that is outside the group of headings or subheadings set out in the rule.
(v) References to weight in the rules set forth in subdivision (n) of this note for goods provided for in chapters 1 through 24 of the tariff schedule are to dry weight, unless otherwise specified in the tariff schedule.
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(vi) For purposes of applying this note to goods of chapters 6 through 14, inclusive, agricultural and horticultural goods shall be treated as originating in the territory of a party to the Agreement even if grown from seeds, bulbs, rootstock, cuttings, grafts, shoots, buds or other live parts of plants imported from a country other than a party to the Agreement.
(vii) This subdivision confers origin on the goods specified in the provisions below, except as otherwise specified herein. Notwithstanding the preceding sentence, a good is originating if it meets the applicable change in tariff classification rules specified in subdivision (n) of this note.
(A) A good of chapters 27 through 40, inclusive (except a good of heading 3823), of the tariff schedule, that is the product of a chemical reaction in the territory of one or more of the parties to the Agreement shall be treated as originating. For purposes of applying this subdivision to goods of the foregoing chapters, a “chemical reaction” is a process (including a biochemical process) that results in a molecule with a new structure by breaking intramolecular bonds and by forming new intramolecular bonds, or by altering the spatial arrangement of atoms in a molecule. The following are not considered to be chemical reactions for purposes of determining whether a good is originating:
(1) dissolution in water or in another solvent;
(2) the elimination of solvents, including solvent water; or
(3) the addition or elimination of water of crystallization.
(B) For the purposes of chapters 28 through 35 and chapters 38 and 39, a good that is subject to purification shall be treated as originating provided that one of the following occurs in the territory of one or more of the parties to the Agreement:
(1) the purification results in the elimination of 80 percent of the impurities; or
(2) the purification results in the reduction or elimination of impurities, rendering the good suitable:
(I) as a pharmaceutical, medicinal, cosmetic, veterinary or food grade substance;
(II) as a chemical good or reagent for analytical, diagnostic or laboratory uses;
(III) as an element or component for use in micro-elements;
(IV) for specialized optical uses;
(V) for non toxic uses for health and safety;
(VI) for biotechnical use;
(VII) as a carrier used in a separation process; or
(VIII)for nuclear grade uses.
(C) A good of chapters 30 or 31, heading 3302, subheading 3502.20, headings 3506 through 3507, inclusive, heading 3707 or chapters 39 or 40 shall be treated as originating if the deliberate and proportionally controlled mixing or blending (including dispersing) of materials to conform to predetermined specifications, resulting in the production of a good having physical or chemical characteristics which are relevant to the purposes or uses of the good and are different from the input materials, occurs in the territory of one or more of the parties to the Agreement.
(D) A good of chapter 30, 31 or 39 shall be treated as originating if the following occurs in the territory of one or more of the parties to the Agreement:
(1) the deliberate and controlled reduction in particle size of a good, other than by merely crushing (or pressing), resulting in a good having a defined particle size, defined particle size distribution or defined surface area, which are relevant to the purposes of the resulting good and have different physical or chemical characteristics from the input materials; or
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(2) the deliberate and controlled modification in particle size of a good, other than by merely pressing, resulting in a good having a defined particle size, defined particle size distribution or defined surface area, which are relevant to the purposes of the resulting good and have different physical or chemical characteristics from the input materials.
(E) A good of chapters 28 through 32, 35 or 38 shall be treated as originating if the production of standards materials occurs in the territory of one or more of the parties to the Agreement. For purposes of this subdivision, “standards materials” (including standards solutions) are preparations suitable for analytical, calibrating or referencing uses, having precise degrees of purity or proportions which are certified by the manufacturer.
(F) A good of chapters 28 through 32, 35 or 39 shall be treated as originating if the isolation or separation of isomers from mixtures of isomers occurs in the territory of one or more of the parties to the Agreement.
(G) A good of chapters 28 through 38 that undergoes a change from one tariff classification to another in the territory of one or more of the parties to the Agreement as the result of the separation of one or more individual materials from a man-made mixture shall not be treated as originating unless the isolated material underwent a chemical reaction in the territory of one or more of the parties to the Agreement.
(viii) (A) A textile good of chapters 50 through 60 of the tariff schedule and imported under heading 9822.05.01 of the tariff schedule shall be considered originating if it is wholly formed in the territory of one or more of the parties to the Agreement from--
(1) one or more fibers and yarns listed in U.S. note 20 to subchapter XXII of chapter 98; or
(2) a combination of the fibers and yarns listed in U.S. note 20 to such subchapter XXII and one or more fibers and yarns that originate under the terms of this note.
The originating fibers and yarns referred to in subdivision (A)(2) may contain up to 10 percent by weight of fibers or yarns that do not undergo an applicable change in tariff classification set out in subdivision (n) of this note. Any elastomeric yarn (except latex) contained in the originating yarns referred to in subdivision (A)(2) must be formed in the territory of one or more of the parties to the Agreement.
(B) An apparel good of chapter 61 or 62 of the tariff schedule and imported under heading 9822.05.01 of the tariff schedule shall be considered originating if it is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties to the Agreement, and if the fabric of the outer shell, exclusive of collars, cuffs and ribbed waistbands (only if the ribbed waistband is present in combination with cuffs and identical in fabric construction to the cuffs) where applicable, is wholly of--
(1) one or more fabrics listed in U.S. note 20 to subchapter XXII of chapter 98; or
(2) one or more fabrics or knit to shape components formed in the territory of one or more of the parties to the Agreement from one or more of the yarns listed in U.S. note 20 to such subchapter XXII; or
(3) any combination of the fabrics referred to in subdivision (B)(1), the fabrics or knit to shape components referred to in subdivision (B)(2), or one or more fabrics originating under this note.
The originating fabrics referred to in subdivision (B)(3) may contain up to 10 percent by weight of fibers or yarns that do not undergo an applicable change in tariff classification set out in subdivision (n) of this note. Any elastomeric yarn (except latex) contained in an originating fabric or knit to shape component referred to in subdivision (B)(3) must be formed in the territory of one or more of the parties to the Agreement.
(C) A textile good of chapter 63 or 94 of the tariff schedule and imported under heading 9822.05.01 of the tariff schedule shall be considered originating if it is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties to the Agreement, and if the component that determines the tariff classification of the good is wholly of--
(1) one or more fabrics listed in U.S. note 20 to subchapter XXII of chapter 98; or
(2) one or more fabrics or knit to shape components formed in the territory of one or more of the parties to the Agreement from one or more of the yarns listed in U.S. note 20 to such subchapter XXII; or
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(3) any combination of the fabrics referred to in subdivision (C)(1), the fabrics or knit to shape components referred to in subdivision (C)(2) or one or more fabrics or knit to shape components originating under this note.
The originating fabrics referred to in subdivision (C)(3) may contain up to 10 percent by weight of fibers or yarns that do not undergo an applicable change in tariff classification set out in subdivision (n) of this note. Any elastomeric yarn (except latex) contained in an originating fabric or knit to shape component referred to in subdivision (C)(3) must be formed in the territory of one or more of the parties to the Agreement.
(n) Change in tariff classification rules. [UPDATED FOR HS CHANGES THROUGH 2017]
Chapter 1.
1. A change to headings 0101 through 0106 from any other chapter.
Chapter 2.
1. A change to headings 0201 through 0206 from any other chapter.
2. A change to heading 0207 from any other chapter, except from heading 0105.
3. A change to headings 0208 through 0209 from any other chapter.
4. A change to heading 0210 from any other chapter, except from heading 0105.
Chapter 3.
Note: The fish, crustaceans, molluscs, and other aquatic invertebrates shall be deemed originating even if they were cultivated from nonoriginating fry (immature fish at a post-larval stage, including fingerlings, parr, smolts, and elvers) or larvae.
1. A change to headings 0301 through 0305 from any other chapter.
2. (A) A change to smoked goods of headings 0306 through 0308 from goods that are not smoked of headings 0306 through 0308; or
(B) A change to any other good of headings 0306 through 0308 from any other chapter.
Chapter 4.
1. A change to headings 0401 through 0404 from any other chapter, except from subheading 1901.90.
2. A change to heading 0405 from any other chapter, except from subheadings 1901.90 or 2106.90.
3. A change to heading 0406 from any other chapter, except from subheading 1901.90.
4. A change to headings 0407 through 0410 from any other chapter.
Chapter 5.
1. A change to headings 0501 through 0511 from any other chapter.
Chapter 6.
1. A change to headings 0601 through 0604 from any other chapter.
Chapter 7.
1. A change to headings 0701 through 0714 from any other chapter.