(a)
Application and interpretation
In this section:
(1)
Tariff classification
The basis for any tariff classification is the HTS.
(2)
Reference to HTS
Whenever in this section there is a reference to a chapter, heading, or subheading, such reference shall be a reference to a chapter, heading, or subheading of the HTS.
(3)
Cost or value
Any cost or value referred to in this section shall be recorded and maintained in accordance with the generally accepted accounting principles applicable in the territory of the country in which the good is produced (whether the United States or another CAFTA–DR country).
(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—
(A)
be treated as originating goods if the good is an originating good; and
(B)
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.
(2)
Conditions
Paragraph (1) shall apply only if—
(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.
(3)
Regional value-content
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.
(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.
(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.
(2)
CAFTA–DR country
The term “CAFTA–DR country” means—
(A)
the United States; and
(B)
Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, or Nicaragua, for such time as the Agreement is in force between the United States and that country.
(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.
(C)
Motor vehicles for the transport of 15 or fewer persons provided for in subheading 8702.10 or 8702.90, or motor vehicles provided for in subheading 8704.21 or 8704.31.
(D)
Motor vehicles provided for in any of subheadings 8703.21 through 8703.90.
(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;
(B)
live animals born and raised in the territory of one or more of the CAFTA–DR countries;
(C)
goods obtained in the territory of one or more of the CAFTA–DR countries from live animals;
(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—
(i)
manufacturing or processing operations in the territory of one or more of the CAFTA–DR countries; or
(ii)
used goods collected in the territory of one or more of the CAFTA–DR countries, if such goods are fit only for the recovery of raw materials;
(K)
recovered goods derived in the territory of one or more of the CAFTA–DR countries from used goods, and used in the territory of a CAFTA–DR country in the production of remanufactured goods; and
(L)
goods produced in the territory of one or more of the CAFTA–DR countries exclusively from—
(i)
goods referred to in any of subparagraphs (A) through (J), or
(ii)
the derivatives of goods referred to in clause (i),
at any stage of production.
(7)
Identical goods
The term “identical goods” means identical goods as defined in 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;
(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—
(B)
tools, dies, and molds;
(C)
spare parts and materials used in the maintenance of equipment or buildings;
(D)
lubricants, greases, compounding materials, and other materials used in production or used to operate equipment or buildings;
(E)
gloves, glasses, footwear, clothing, safety equipment, and supplies;
(F)
equipment, devices, and supplies used for testing or inspecting the good;
(G)
catalysts and solvents; and
(H)
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.
(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—
(A)
the disassembly of used goods into individual parts; and
(B)
the cleaning, inspecting, testing, or other processing that is necessary for improvement to sound working condition of such individual parts.
(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—
(A)
is entirely or partially comprised of recovered goods; and
(B)
has a similar life expectancy and enjoys a factory warranty similar to such a new good.
(22)
Total cost
The term “total cost” means all product costs, period costs, and other costs for a good incurred in the territory of one or more of the CAFTA–DR countries.
(23)
Used
The term “used” means used or consumed in the production of goods.