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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

NOTICE: RULES

DOCUMENT ACTION: Interim rule; solicitation of comments.

SUBJECT CATEGORY: DEPARTMENT OF THE TREASURY

DATES: Interim rule effective June 13, 2008; comments must be received by August 12, 2008.

DOCUMENT SUMMARY: This rule amends title 19 of the Code of Federal Regulations (``CFR'') on an interim basis to implement the preferential tariff treatment and other customsrelated provisions of the Dominican RepublicCentral AmericaUnited States Free Trade Agreement.

SUMMARY: Dominican RepublicCentral AmericaUnited States Free Trade Agreement,

DOCUMENT BODY 2: 19 CFR Parts 10, 24, 162, 163, and 178
[USCBP20080060; CBP Dec. 0822]
RIN 1505AB84

Dominican RepublicCentral AmericaUnited States Free Trade
Agreement

SUPPLEMENTAL INFORMATION

Public Participation

Interested persons are invited to participate in this rulemaking by [[Page 33674]]
submitting written data, views, or arguments on all aspects of the interim rule. CBP also invites comments that relate to the economic, environmental, or federalism effects that might result from this interim rule. Comments that will provide the most assistance to CBP in developing these regulations will reference a specific portion of the interim rule, explain the reason for any recommended change, and include data, information, or authority that support such recommended change. See ADDRESSES above for information on how to submit comments. Background

On August 5, 2004, the governments of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States signed the Dominican RepublicCentral AmericaUnited States Free Trade Agreement (``CAFTADR'' or ``Agreement''). The stated objectives of the CAFTADR include: strengthening the special bonds of friendship and cooperation among the signatory countries and promoting regional economic integration; contributing to the harmonious development and expansion of world trade and providing a catalyst to broader international cooperation; creating an expanded and secure market for goods and services produced in the region; establishing clear and mutually advantageous rules governing trade among the signatory countries; ensuring a predictable commercial framework for business planning and investment; seeking to facilitate regional trade by promoting efficient and transparent customs procedures that reduce costs and ensure predictability for importers and exporters; fostering creativity and innovation, and promoting trade in goods and services that are the subject of intellectual property rights; promoting transparency and eliminating bribery and corruption in international trade and investment; protecting, enhancing, and enforcing basic workers' rights; creating new employment opportunities and improving working conditions and living standards in the region; and implementing the Agreement in a manner consistent with environmental protection and conservation, promoting sustainable development, and strengthening cooperation on environmental matters.

The provisions of the CAFTADR were adopted by the United States with the enactment on August 2, 2005, of the Dominican Republic Central AmericaUnited States Free Trade Agreement Implementation Act (the ``Act''), Public Law 10953, 119 Stat. 462 (19 U.S.C. 4001 et seq.). Section 210 of the Act requires that regulations be prescribed as necessary to implement these provisions of the CAFTADR.

On February 28, 2006, the President signed Proclamation 7987 to implement the provisions of the CAFTADR with respect to El Salvador. The Proclamation, which was published in the Federal Register on March 2, 2006 (71 FR 10827), modified the Harmonized Tariff Schedule of the United States (``HTSUS'') as set forth in Annexes I and II of Publication 3829 of the U.S. International Trade Commission. The modifications to the HTSUS included the addition of new General Note 29, incorporating the relevant CAFTADR rules of origin as set forth in the Act, and the insertion throughout the HTSUS of the preferential duty rates applicable to individual products under the CAFTADR where the special program indicator ``P'' appears in parenthesis in the ``Special'' rate of duty subcolumn. Presidential Proclamation 7996 dated March 31, 2006, which was published in the Federal Register on April 4, 2006 (71 FR 16971), implemented the CAFTADR with respect to Honduras and Nicaragua. Presidential Proclamation 8034 dated June 30, 2006, published in the Federal Register on July 6, 2006 (71 FR 38509), implemented the CAFTADR with respect to Guatemala. Presidential Proclamation 8111 dated February 28, 2007, published in the Federal Register on March 6, 2007 (72 FR 10025), implemented the CAFTADR with respect to the Dominican Republic.

Customs and Border Protection (``CBP'') is responsible for administering the provisions of the CAFTADR and the Act that relate to the importation of goods into the United States from a CAFTADR Party for which the Agreement has entered into force. Those customsrelated CAFTADR provisions which require implementation through regulation include certain tariff and nontariff provisions within Chapter Two (General Definitions), Chapter Three (National Treatment and Market Access for Goods), and Chapter Four (Rules of Origin and Origin Procedures).

Certain general definitions set forth in Chapter Two of the CAFTA DR have been incorporated into the CAFTADR implementing regulations. The tariffrelated provisions within CAFTADR Chapter Three that are the subject of regulatory action in this interim rule are Article 3.6 (Goods Reentered after Repair or Alteration) and those relating specifically to textile and apparel goods are Article 3.24 (Customs Cooperation), Article 3.25 (Rules of Origin and Related Matters), Article 3.28 and Annex 3.28 (Preferential Tariff Treatment for Non Originating Apparel Goods of Nicaragua), and Article 3.29

(Definitions).

Section A of Chapter Four of the CAFTADR sets forth the rules for determining whether an imported good qualifies as an originating good of a Party and, as such, is therefore eligible for preferential tariff (dutyfree or reduced duty) treatment under the CAFTADR as provided for in the HTSUS. The basic rules of origin in Section A of Chapter Four are set forth in General Note 29, HTSUS. Under Article 4.1 of Chapter Four, originating goods may be grouped in three broad categories: (1) Goods that are wholly obtained or produced entirely in the territory of one or more of the Parties; (2) goods that are produced entirely in the territory of one or more of the Parties and that satisfy the specific rules of origin in CAFTADR Annex 4.1 (change in tariff classification requirement and/or regional value content requirement) and all other applicable requirements of Chapter Four; and (3) goods that are produced entirely in the territory of one or more of the Parties exclusively from materials that originate in those countries. Article 4.2 sets forth the methods for calculating the regional value content of a good. Articles 4.3 and 4.4 set forth the rules for determining the value of materials for purposes of calculating the regional value content of a good and applying the de minimis rule. Article 4.5 allows production that takes place in the territory of one or more of the Parties to be accumulated such that, provided other requirements are met, the resulting good is considered originating. Article 4.6 provides a de minimis criterion. The remaining Articles within Section A of Chapter Four consist of additional sub rules, applicable to the originating good concept, involving fungible goods and materials, accessories, spare parts, and tools, packaging materials, packing materials, indirect materials, transit and transshipment, sets, and consultation and modifications. All Articles within Section A are reflected in the CAFTADR implementing regulations, except for Article 4.14 (Consultation and Modifications).

Section B of Chapter Four sets forth procedures that apply under the CAFTADR in regard to claims for preferential tariff treatment. Specifically, Section B includes provisions concerning obligations related to importations and exportations, claims for preferential tariff treatment, record keeping
[[Page 33675]]
requirements, verification of preference claims, common guidelines, and definitions of terms used within the context of the rules of origin. All Articles within Section B, except for Article 4.21 (Common Guidelines), are reflected in these implementing regulations.

In order to provide transparency and facilitate their use, the majority of the CAFTADR implementing regulations set forth in this document have been included within Subpart J in part 10 of the CBP regulations (19 CFR part 10). However, implementation of the tariff preference and related provisions of CAFTADR has also been effected through amendments to a number of other regulatory provisions outside of Subpart J, part 10 within the CBP regulations. The regulatory changes are discussed below in the order in which they appear in this document.
Discussion of Amendments

Part 10

Section 10.31(f) concerns temporary importations under bond. It is amended by adding references to certain goods originating in a CAFTADR Party for which, like goods originating in Canada, Mexico, Singapore, Chile, Morocco, and Bahrain, no bond or other security will be required when imported temporarily for prescribed uses. The provisions of CAFTA DR Article 3.5 (Temporary Admission of Goods) are already reflected in existing temporary importation bond or other provisions contained in Part 10 of the CBP regulations and in Chapter 98 of the HTSUS. Part 10, Subpart J

General Provisions

Section 10.581 outlines the scope of Subpart J, Part 10 of the CBP regulations. This section also clarifies that, except where the context otherwise requires, the requirements contained in Subpart J, Part 10 are in addition to general administrative and enforcement provisions set forth elsewhere in the CBP regulations. Thus, for example, the specific merchandise entry requirements contained in Subpart J, Part 10 are in addition to the basic entry requirements contained in Parts 141 143 of the CBP regulations.

Section 10.582 sets forth definitions of common terms used in multiple contexts or places within Subpart J, Part 10. Although the majority of the definitions in this section are based on definitions contained in Article 2.1, Annex 2.1, and Article 3.29 of the CAFTADR, and Sec. 3 of the Act, other definitions have also been included to clarify the application of the regulatory texts. Additional definitions that apply in a more limited Subpart J, Part 10 context are set forth elsewhere with the substantive provisions to which they relate. Import Requirements

Section 10.583 sets forth the procedure for claiming CAFTADR preferential tariff treatment at the time of entry and, as provided in CAFTADR Article 4.16.1, states that an importer may make a claim for CAFTADR preferential tariff treatment based on a certification by the importer, exporter, or producer or the importer's knowledge that the good qualifies as an originating good. Section 10.583 also provides, consistent with CAFTADR Article 4.15.4(d), that when an importer has reason to believe that a claim is based on inaccurate information, the importer must correct the claim and pay any duties that may be due.

Section 10.584, which is based on CAFTADR Articles 4.15.4 and 4.16, requires a U.S. importer, upon request, to submit a copy of the certification of the importer, exporter, or producer if the certification forms the basis for the claim. Section 10.584 specifies the information that must be included on the certification, sets forth the circumstances under which the certification may be prepared by the exporter or producer of the good, and provides that the certification may be used either for a single importation or for multiple importations of identical goods.

Section 10.585 sets forth certain importer obligations regarding the truthfulness of information and documents submitted in support of a claim for preferential tariff treatment. Section 10.586, which is based on CAFTADR Article 4.17, provides that the certification is not required for certain noncommercial or lowvalue importations.

Section 10.587 implements CAFTADR Article 4.19 concerning the maintenance of relevant records regarding the imported good.

Section 10.588, which reflects CAFTADR Article 4.15.2, authorizes the denial of CAFTADR tariff benefits if the importer fails to comply with any of the requirements under Subpart J, Part 10, CBP regulations. Export Requirements

Section 10.589, which implements CAFTADR Articles 4.18 and 4.19.1, sets forth certain obligations of a person who completes and issues a certification for a good exported from the United States to a Party. Paragraphs (a) and (b) of Sec. 10.589, reflecting CAFTADR Article 4.18.1, require a person who completes such a certification to provide a copy of the certification to CBP upon request and to give prompt notification of any errors in the certification to every person to whom the certification was given. Paragraph (c) of Sec. 10.589 reflects Article 4.19.1, concerning the recordkeeping requirements that apply to a person who completes and issues a certification for a good exported from the United States to a Party.

PostImportation Duty Refund Claims

Sections 10.590 through 10.592 implement CAFTADR Article 4.15.5, which allows an importer who did not claim CAFTADR tariff benefits on a qualifying good at the time of importation to apply for a refund of any excess duties at any time within one year after the date of importation. Such a claim may be made even if liquidation of the entry would otherwise be considered final under other provisions of law. Rules of Origin

Sections 10.593 through 10.605 provide the implementing regulations regarding the rules of origin provisions of General Note 29, HTSUS, Chapter Four and Article 3.25 of the CAFTADR, and section 203 of the Act.

Definitions

Section 10.593 sets forth terms that are defined for purposes of the rules of origin.

General Rules of Origin

Section 10.594 sets forth the basic rules of origin established in Article 4.1 of the CAFTADR, section 203(b) of the Act, and General Note 29(b), HTSUS. The provisions of Sec. 10.594 apply both to the determination of the status of an imported good as an originating good for purposes of preferential tariff treatment and to the determination of the status of a material as an originating material used in a good which is subject to a determination under General Note 29, HTSUS. Section 10.594(a) specifies those goods that are originating goods because they are wholly obtained or produced entirely in the territory of one or more of the Parties.

Section 10.594(b) provides that goods that have been produced entirely in the territory of one or more of the Parties so that each nonoriginating material undergoes an applicable change in tariff classification and satisfies any applicable regional value content or other requirement set forth in General Note 29, HTSUS, are originating goods.
[[Page 33676]]
Essential to the rules in Sec. 10.594(b) are the specific rules of General Note 29(n), HTSUS, which are incorporated by reference.

Section 10.594(c) provides that goods that have been produced entirely in the territory of one or more of the Parties exclusively from originating materials are originating goods.

Value Content

Section 10.595 reflects CAFTADR Article 4.2 concerning the basic rules that apply for purposes of determining whether an imported good satisfies a minimum regional value content (``RVC'') requirement. Section 10.596, reflecting CAFTADR Articles 4.3 and 4.4, sets forth the rules for determining the value of a material for purposes of calculating the regional value content of a good as well as for purposes of applying the de minimis rules.

Accumulation

Section 10.597, which is derived from CAFTADR Article 4.5, sets forth the rule by which originating materials from the territory of one or more of the Parties that are used in the production of a good in the territory of another Party will be considered to originate in the territory of that other country. In addition, this section also establishes that a good that is produced by one or more producers in the territory of one or more of the Parties is an originating good if the good satisfies all of the applicable requirements of the rules of origin of the CAFTADR.

De Minimis

Section 10.598, as provided for in CAFTADR Article 4.6, sets forth de minimis rules for goods that may be considered to qualify as originating goods even though they fail to qualify as originating goods under the rules specified in Sec. 10.594. There are a number of exceptions to the de minimis rule as well as a separate rule for textile and apparel goods.

Fungible Goods and Materials

Section 10.599, as provided for in CAFTADR Article 4.7, sets forth the rules by which ``fungible'' goods or materials may be claimed as originating.

Accessories, Spare Parts, or Tools

Section 10.600, as set forth in CAFTADR Article 4.8, specifies the conditions under which a good's standard accessories, spare parts, or tools are: (1) Treated as originating goods; and (2) disregarded in determining whether all nonoriginating materials undergo an applicable change in tariff classification under General Note 29(n), HTSUS. Packaging Materials and Packing Materials

Sections 10.601 and 10.602, which are derived from CAFTADR Articles 4.9 and 4.10, respectively, provide that retail packaging materials and packing materials for shipment are to be disregarded with respect to their actual origin in determining whether nonoriginating materials undergo an applicable change in tariff classification under General Note 29(n), HTSUS. These sections also set forth the treatment of packaging and packing materials for purposes of the regional value content requirement of the note.

Indirect Materials

Section 10.603, as set forth in CAFTADR Article 4.11, provides that indirect materials, as defined in Sec. 10.582(m), are considered to be originating materials without regard to where they are produced. Transit and Transshipment

Section 10.604, which is derived from CAFTADR Article 4.12, sets forth the rule that an originating good loses its originating status and is treated as a nonoriginating good if, subsequent to production in the territory of one or more of the Parties that qualifies the good as originating, the good: (1) Undergoes production outside the territories of the Parties, other than certain specified minor operations; or (2) does not remain under the control of customs authorities in the territory of a nonParty.

Goods Classifiable as Goods Put Up in Sets

Section 10.605, which is based on CAFTADR Articles 3.25.9 (Rules of Origin and Related Matters) and 4.13 (Sets of Goods), provides that, notwithstanding the specific rules of General Note 29(n), HTSUS, goods classifiable as goods put up in sets for retail sale as provided for in General Rule of Interpretation 3, HTSUS, will not qualify as originating goods unless: (1) Each of the goods in the set is an originating good; or (2) the total value of the nonoriginating goods in the set does not exceed 10 percent of the adjusted value of the set in the case of textile or apparel goods, or 15 percent of the adjusted value of the set in the case of goods other than textile or apparel goods.

Tariff Preference Level

Section 10.606 sets forth procedures for claiming CAFTADR tariff benefits for certain nonoriginating cotton or manmade fiber apparel goods of Nicaragua that are entitled to preference under an applicable tariff preference level (``TPL'').

Section 10.607, which is based on CAFTADR Article 3.28 and Annex 3.28, describes the nonoriginating cotton or manmade fiber apparel goods of Nicaragua that are eligible for TPL claims under the CAFTADR.

Section 10.608, as authorized by Sec. 1634(c)(1) of the Pension Protection Act of 2006 (Pub. L. 109280, 120 Stat. 1163), requires an importer claiming preferential tariff treatment on a nonoriginating cotton or manmade fiber apparel good of Nicaragua specified in Sec. 10.607 to submit a certificate of eligibility issued by the Government of Nicaragua.

Consistent with Sec. 10.604, Sec. 10.609 provides that a good of Nicaragua that is otherwise eligible for preferential tariff treatment under an applicable TPL will not be considered eligible for preference if it: (1) Undergoes production outside the territories of the Parties, other than certain specified minor operations; or (2) does not remain under the control of customs authorities in the territory of a non Party.

Section 10.610 provides for the denial of a TPL claim if the importer fails to comply with any applicable requirement under Subpart J, Part 10, CBP regulations, including the failure to provide documentation, when requested by CBP, establishing that the good met the conditions relating to transshipment set forth in Sec. 10.609(a). Origin Verifications and Determinations

Section 10.616 implements CAFTADR Article 4.20 which concerns the conduct of verifications to determine whether imported goods are originating goods entitled to CAFTADR preferential tariff treatment. This section also governs the conduct of verifications directed to producers of materials that are used in the production of a good for which CAFTADR preferential duty treatment is claimed.

Section 10.617, which reflects CAFTADR Article 3.24, sets forth the verification and enforcement procedures specifically relating to trade in textile and apparel goods.

Section 10.618 provides the procedures that apply when preferential tariff treatment is denied on the basis of an origin verification conducted under this subpart.

Section 10.619 implements CAFTADR Article 4.20.5 and Sec. 206(b) of the Act, concerning the denial of preferential tariff treatment in situations in which there is a pattern of conduct
[[Page 33677]]
by an importer, exporter, or producer of false or unsupported CAFTADR preference claims.

Penalties

Section 10.620 concerns the general application of penalties to CAFTADR transactions and is based on CAFTADR Article 5.9.

Section 10.621 reflects CAFTADR Article 4.15.3 and Sec. 206(a)(1) of the Act with regard to an exception to the application of penalties in the case of an importer who promptly and voluntarily makes a corrected claim and pays any duties owing.

Section 10.622 implements CAFTADR Article 4.18.2 and Sec. 206(a)(2) of the Act, concerning an exception to the application of penalties in the case of a U.S. exporter or producer who promptly and voluntarily provides notification of the making of an incorrect certification with respect to a good exported to a Party.

Section 10.623 sets forth the circumstances under which the making of a corrected claim or certification by an importer or the providing of notification of an incorrect certification by a U.S. exporter or producer will be considered to have been done ``promptly and voluntarily''. Corrected claims or certifications that fail to meet these requirements are not excepted from penalties, although the U.S. importer, exporter, or producer making the corrected claim or certification may, depending on the circumstances, qualify for a reduced penalty as a prior disclosure under 19 U.S.C. 1592(c)(4). Section 10.623 also specifies the content of the statement that must accompany each corrected claim or certification.

Goods Returned After Repair or Alteration

Section 10.624 implements CAFTADR Article 3.6 regarding dutyfree treatment for goods reentered after repair or alteration in a CAFTADR Party.
Retroactive Preferential Tariff Treatment for Textile and Apparel Goods

Current Sec. 10.699 of the CBP regulations, which sets forth the conditions and requirements that apply for purposes of submitting requests for refunds of any excess customs duties paid with respect to entries of textile or apparel goods entitled to retroactive tariff treatment under the CAFTADR (see CAFTADR Article 3.20 and Sec. 205 of the Act), is redesignated as Sec. 10.625 so as to conform numerically to the new provisions added to Subpart J, Part 10, by this interim rule. In addition, paragraph (a) of redesignated Sec. 10.625, relating to the applicability of this section, is revised by deleting certain redundant language set forth in new Sec. 10.581 (Scope) of Subpart J, Part 10.

Part 24

An amendment is made to Sec. 24.23(c), which concerns the merchandise processing fee, to implement Sec. 204 of the Act, providing that the merchandise processing fee is not applicable to goods that qualify as originating goods under the CAFTADR.

Part 162

Part 162 contains regulations regarding the inspection and examination of, among other things, imported merchandise. A cross reference is added to Sec. 162.0, which is the scope section of the part, to refer readers to the additional CAFTADR records maintenance and examination provisions contained in Subpart J, Part 10, CBP regulations.

Part 163

A conforming amendment is made to Sec. 163.1 to include the maintenance of any documentation that the importer may have in support of a claim for preference under the CAFTADR as an activity for which records must be maintained. Also, the list of records and information required for the entry of merchandise appearing in the Appendix to Part 163 (commonly known as the (a)(1)(A) list) is also amended to add the documentation in the importer's possession supporting an CAFTADR claim for preferential tariff treatment.

Part 178

Part 178 sets forth the control numbers assigned to information collections of CBP by the Office of Management and Budget, pursuant to the Paperwork Reduction Act of 1995, Public Law 10413. The list contained in Sec. 178.2 is amended to add the information collections used by CBP to determine eligibility for preferential tariff treatment under the CAFTADR and the Act.
Inapplicability of Notice and Delayed Effective Date Requirements

Under the Administrative Procedure Act (``APA'') (5 U.S.C. 553), agencies generally are required to publish a notice of proposed rulemaking in the Federal Register that solicits public comment on the proposed regulatory amendments, consider public comments in deciding on the content of the final amendments, and publish the final amendments at least 30 days prior to their effective date. However, section 553(a)(1) of the APA provides that the standard prior notice and comment procedures do not apply to an agency rulemaking to the extent that it involves a foreign affairs function of the United States. CBP has determined that these interim regulations involve a foreign affairs function of the United States because they implement preferential tariff treatment and related provisions of the CAFTADR. Therefore, the rulemaking requirements under the APA do not apply and this interim rule will be effective upon publication. However, CBP is soliciting comments in this interim rule and will consider all comments received before issuing a final rule.

Executive Order 12866 and Regulatory Flexibility Act

CBP has determined that this document is not a regulation or rule subject to the provisions of Executive Order 12866 of September 30, 1993 (58 FR 51735, October 1993), because it pertains to a foreign affairs function of the United States and implements an international agreement, as described above, and therefore is specifically exempted by section 3(d)(2) of Executive Order 12866. Because a notice of proposed rulemaking is not required under section 553(b) of the APA for the reasons described above, the provisions of the Regulatory Flexibility Act, as amended (5 U.S.C. 601 et seq.), do not apply to this rulemaking. Accordingly, this interim rule is not subject to the regulatory analysis requirements or other requirements of 5 U.S.C. 603 and 604.

Paperwork Reduction Act

These regulations are being issued without prior notice and public procedure pursuant to the APA, as described above. For this reason, the collections of information contained in these regulations have been reviewed and, pending receipt and evaluation of public comments, approved by the Office of Management and Budget in accordance with the requirements of the Paperwork Reduction Act (44 U.S.C. 3507) under control number 16510125.

The collections of information in these regulations are in Sec. Sec. 10.583 and 10.584. This information is required in connection with claims for preferential tariff treatment under the CAFTADR and the Act and will be used by CBP to determine eligibility for tariff preference under the CAFTADR and the Act. The likely respondents are business organizations including importers, exporters and manufacturers.

Estimated total annual reporting burden: 4,000 hours. [[Page 33678]]

Estimated average annual burden per respondent: .2 hours.

Estimated number of respondents: 20,000.

Estimated annual frequency of responses: 1.

Comments concerning the collections of information and the accuracy of the estimated annual burden, and suggestions for reducing that burden, should be directed to the Office of Management and Budget, Attention: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503. A copy should also be sent to the Trade and Commercial Regulations Branch, Regulations and Rulings, U.S. Customs and Border Protection, 1300 Pennsylvania Avenue, NW. (Mint Annex), Washington, DC 20229. Signing Authority

This document is being issued in accordance with Sec. 0.1(a)(1) of the CBP regulations (19 CFR 0.1(a)(1)) pertaining to the authority of the Secretary of the Treasury (or his/her delegate) to approve regulations related to certain customs revenue functions.
List of Subjects

19 CFR Part 10

Alterations, Bonds, Customs duties and inspection, Exports, Imports, Preference programs, Repairs, Reporting and recordkeeping requirements, Trade agreements.

19 CFR Part 24

Accounting, Customs duties and inspection, Financial and accounting procedures, Reporting and recordkeeping requirements, Trade agreements, User fees.

19 CFR Part 162

Administrative practice and procedure, Customs duties and inspection, Penalties, Trade agreements.

19 CFR Part 163

Administrative practice and procedure, Customs duties and inspection, Exports, Imports, Reporting and recordkeeping requirements, Trade agreements.

19 CFR Part 178

Administrative practice and procedure, Exports, Imports, Reporting and recordkeeping requirements.
Amendments to the Regulations
Accordingly, chapter I of title 19, Code of Federal Regulations (19 CFR chapter I), is amended as set forth below.
PART 10ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE, ETC.

1. The general authority citation for part 10 continues to read, the specific authority for Sec. 10.699 is removed, and the specific authority for Sec. Sec. 10.581 through 10.625 is added, to read as follows:

Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized Tariff Schedule of the United States), 1321, 1481, 1484, 1498, 1508, 1623, 1624, 3314;

* * * * *

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. 10953, 119 Stat. 462 (19 U.S.C. 4001 note).
* * * * *
2. In Sec. 10.31, paragraph (f), the last sentence is revised to read as follows:
Sec. 10.31 Entry; bond.
* * * * *
(f) * * * In addition, notwithstanding any other provision of this paragraph, in the case of professional equipment necessary for carrying out the business activity, trade or profession of a business person, equipment for the press or for sound or television broadcasting, cinematographic equipment, articles imported for sports purposes and articles intended for display or demonstration, if brought into the United States by a resident of Canada, Mexico, Singapore, Chile, Morocco, Bahrain, El Salvador, Guatemala, Honduras, Nicaragua, or the Dominican Republic and entered under Chapter 98, Subchapter XIII, HTSUS, no bond or other security will be required if the entered article is a good originating, within the meaning of General Note 12, 25, 26, 27, or 29, HTSUS, in the country of which the importer is a resident.
* * * * *
3. Part 10, CBP regulations, is amended by revising Subpart J to read as follows:
Subpart JDominican RepublicCentral AmericaUnited States Free Trade Agreement
Sec.
General Provisions
10.581 Scope.
10.582 General definitions.
Import Requirements
10.583 Filing of claim for preferential tariff treatment upon importation.
10.584 Certification.
10.585 Importer obligations.
10.586 Certification not required.
10.587 Maintenance of records.
10.588 Effect of noncompliance; failure to provide documentation regarding transshipment.
Export Requirements
10.589 Certification for goods exported to a Party.
PostImportation Duty Refund Claims
10.590 Right to make postimportation claim and refund duties. 10.591 Filing procedures.
10.592 CBP processing procedures.
Rules of Origin
10.593 Definitions.
10.594 Originating goods.
10.595 Regional value content.
10.596 Value of materials.
10.597 Accumulation.
10.598 De minimis.
10.599 Fungible goods and materials.
10.600 Accessories, spare parts, or tools.
10.601 Retail packaging materials and containers.
10.602 Packing materials and containers for shipment.
10.603 Indirect materials.
10.604 Transit and transshipment.
10.605 Goods classifiable as goods put up in sets.
Tariff Preference Level
10.606 Filing of claim for tariff preference level.
10.607 Goods eligible for tariff preference level claims.
10.608 Submission of certificate of eligibility.
10.609 Transshipment of nonoriginating cotton or manmade fiber apparel goods.
10.610 Effect of noncompliance; failure to provide documentation regarding transshipment of nonoriginating cotton or manmade fiber apparel goods.
Origin Verifications and Determinations
10.616 Verification and justification of claim for preferential tariff treatment.
10.617 Special rule for verifications in a Party of U.S. imports of textile and apparel goods.
10.618 Issuance of negative origin determinations.
10.619 Repeated false or unsupported preference claims.
Penalties
10.620 General.
10.621 Corrected claim or certification by importers.
10.622 Corrected certification by exporters or producers.
10.623 Framework for correcting claims or certifications.
Goods Returned After Repair or Alteration
10.624 Goods reentered after repair or alteration in a Party. Retroactive Preferential Tariff Treatment for Textile and Apparel Goods 10.625 Refunds of excess customs duties.
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Subpart JDominican RepublicCentral AmericaUnited States Free Trade Agreement
General Provisions

Sec. 10.581 Scope.

This subpart implements the duty preference and related customs provisions applicable to imported and exported goods under the Dominican RepublicCentral AmericaUnited States Free Trade Agreement (the CAFTADR) signed on August 5, 2004, and under the Dominican RepublicCentral AmericaUnited States Free Trade Agreement
Implementation Act (the Act; Pub. L. 10953, 119 Stat. 462 (19 U.S.C. 4001 et seq.), as amended by section 1634 of the Pension Protection Act of 2006 (Pub. L. 109280, 120 Stat. 1167). Except as otherwise specified in this subpart, the procedures and other requirements set forth in this subpart are in addition to the customs procedures and requirements of general application contained elsewhere in this chapter. Additional provisions implementing certain aspects of the CAFTADR and the Act are contained in parts 24, 162, and 163 of this chapter.

Sec. 10.582 General definitions.

As used in this subpart, the following terms will have the meanings indicated unless either the context in which they are used requires a different meaning or a different definition is prescribed for a particular section of this subpart:
(a) Claim for preferential tariff treatment. ``Claim for preferential tariff treatment'' means a claim that a good is entitled to the duty rate applicable under the CAFTADR to an originating good or other good specified in the CAFTADR, and to an exemption from the merchandise processing fee;
(b) Claim of origin. ``Claim of origin'' means a claim that a textile or apparel good is an originating good or a good of a Party; (c) Customs authority. ``Customs authority'' means the competent governmental unit that is responsible under the law of a Party for the administration of customs laws and regulations;
(d) Customs duty. ``Customs duty'' includes any customs or import duty and a charge of any kind imposed in connection with the importation of a good, including any form of surtax or surcharge in connection with such importation, but, for purposes of implementing the CAFTADR, does not include any:
(1) Charge equivalent to an internal tax imposed consistently with Article III:2 of GATT 1994 in respect of like, directly competitive, or substitutable goods of the Party, or in respect of goods from which the imported good has been manufactured or produced in whole or in part; (2) Antidumping or countervailing duty that is applied pursuant to a Party's Domestic law; or
(3) Fee or other charge in connection with importation commensurate with the cost of services rendered;
(e) Customs Valuation Agreement. ``Customs Valuation Agreement'' means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
(f) Days. ``Days'' means calendar days;
(g) Enterprise. ``Enterprise'' means any entity constituted or organized under applicable law, whether or not for profit, and whether privately owned or governmentally owned, including any corporation, trust, partnership, sole proprietorship, joint venture, or other association;
(h) GATT 1994. ``GATT 1994'' means the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
(i) Harmonized System. ``Harmonized System'' means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, and Chapter Notes, as adopted and implemented by the Parties in their respective tariff laws; (j) Heading. ``Heading'' means the first four digits in the tariff classification number under the Harmonized System;
(k) HTSUS. ``HTSUS'' means the Harmonized Tariff Schedule of the United States as promulgated by the U.S. International Trade Commission;
(l) Identical goods. ``Identical goods'' means goods that are produced in the same country and are the same in all respects, including physical characteristics, quality, and reputation, but excluding minor differences in appearance.
(m) Indirect material. ``Indirect material'' means a good used in the production, testing, or inspection of a good in the territory of one or more of the Parties 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 in the territory of one or more of the Parties, including:
(1) Fuel and energy;
(2) Tools, dies, and molds;
(3) Spare parts and materials used in the maintenance of equipment or buildings;
(4) Lubricants, greases, compounding materials, and other materials used in production or used to operate equipment or 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 production of the good can reasonably be demonstrated to be a part of that production;
(n) Originating. ``Originating'' means qualifying for preferential tariff treatment under the rules of origin set out in CAFTADR Chapter Four (Rules of Origin and Origin Procedures) and General Note 29, HTSUS;
(o) Party. ``Party'' means:
(1) The United States; and
(2) Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, or Nicaragua, for such time as the CAFTADR is in force between the United States and that country;
(p) Person. ``Person'' means a natural person or an enterprise; (q) Preferential tariff treatment. ``Preferential tariff treatment'' means the duty rate applicable under the CAFTADR to an originating good or other good specified in the CAFTADR, and an exemption from the merchandise processing fee;
(r) Subheading. ``Subheading'' means the first six digits in the tariff classification number under the Harmonized System;
(s) Tariff preference level. ``Tariff preference level'' means a quantitative limit for certain nonoriginating apparel goods that may be entitled to preferential tariff treatment based on the goods meeting the requirements set forth in Sec. Sec. 10.606 through 10.610 of this subpart.
(t) Textile or apparel good. ``Textile or apparel good'' means a good listed in the Annex to the Agreement on Textiles and Clothing (commonly referred to as ``the ATC''), which is part of the WTO Agreement, except for those goods listed in Annex 3.29 of the CAFTADR; (u) Territory. ``Territory'' means:
(1) With respect to each Party other than the United States, the land, maritime, and air space under its sovereignty and the exclusive economic zone and the continental shelf within which it exercises sovereign rights and jurisdiction in accordance with international law and its domestic law;
(2) With respect to the United States:
(i) The customs territory of the United States, which includes the 50 states, the District of Columbia, and Puerto Rico;
(ii) The foreign trade zones located in the United States and Puerto Rico; and
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(iii) Any areas beyond the territorial seas of the United States within which, in accordance with international law and its domestic law, the United States may exercise rights with respect to the seabed and subsoil and their natural resources;
(v) WTO. ``WTO'' means the World Trade Organization; and (w) WTO Agreement. ``WTO Agreement'' means the Marrakesh Agreement Establishing the World Trade Organization of April 15, 1994. Import Requirements
Sec. 10.583 Filing of claim for preferential tariff treatment upon importation.
(a) Basis of claim. An importer may make a claim for CAFTADR preferential tariff treatment, including an exemption from the merchandise processing fee, based on:
(1) A certification, as specified in Sec. 10.584 of this subpart, that is prepared by the importer, exporter, or producer of the good; or (2) The importer's knowledge that the good qualifies as an originating good, including reasonable reliance on information in the importer's possession that the good is an originating good. (b) Making a claim. The claim is made by including on the entry summary, or equivalent documentation, the letter ``P'' or ``P+'' as a prefix to the subheading of the HTSUS under which each qualifying good is classified, or by the method specified for equivalent reporting via an authorized electronic data interchange system.
(c) Corrected claim. If, after making the claim specified in paragraph (a) of this section, the importer has reason to believe that the claim is based on inaccurate information or is otherwise invalid, the importer must, within 30 calendar days after the date of discovery of the error, correct the claim and pay any duties that may be due. The importer must submit a statement either in writing or via an authorized electronic data interchange system to the CBP office where the original claim was filed specifying the correction (see Sec. Sec. 10.621 and 10.623 of this subpart).
Sec. 10.584 Certification.
(a) General. An importer who makes a claim under Sec. 10.583(b) of this subpart based on a certification of the importer, exporter, or producer that the good qualifies as originating must submit, at the request of the port director, a copy of the certification. The certification:
(1) Need not be in a prescribed format but must be in writing or must be transmitted electronically pursuant to any electronic means authorized by CBP for that purpose;
(2) Must be in the possession of the importer at the time the claim for preferential tariff treatment is made if the certification forms the basis for the claim;
(3) Must include the following information:
(i) The legal name, address, telephone, and email address (if any) of the importer of record of the good, the exporter of the good (if different from the producer), and the producer of the good; (ii) The legal name, address, telephone, and email address (if any) of the responsible official or authorized agent of the importer, exporter, or producer signing the certification (if different from the information required by paragraph (a)(3)(i) of this section); (iii) A description of the good for which preferential tariff treatment is claimed, which must be sufficiently detailed to relate it to the invoice and the HS nomenclature;
(iv) The HTSUS tariff classification, to six or more digits, as necessary for the specific change in tariff classification rule for the good set forth in General Note 29(n), HTSUS; and
(v) The applicable rule of origin set forth in General Note 29, HTSUS, under which the good qualifies as an originating good; and (4) Must include a statement, in substantially the following form: ``I certify that:

The information on this document is true and accurate and I assume the responsibility for proving such representations. I understand that I am liable for any false statements or material omissions made on or in connection with this document;

I agree to maintain and present upon request, documentation necessary to support these representations;

The goods originated or are considered to have originated in the territory of one or more of the Parties, and comply with the origin requirements specified for those goods in the Dominican Republic Central AmericaUnited States Free Trade Agreement; there has been no further production or any other operation outside the territories of the Parties, other than unloading, reloading, or any other operation necessary to preserve the goods in good condition or to transport the goods to the United States; the goods remained under the control of customs authorities while in the territory of a non Party; and

This document consists of pages, including all attachments.''
(b) Responsible official or agent. The certification provided for in paragraph (a) of this section must be signed and dated by a responsible official of the importer, exporter, or producer, or by the importer's, exporter's, or producer's authorized agent having knowledge of the relevant facts.
(c) Language. The certification provided for in paragraph (a) of this section must be completed in either the English language or the language of the exporting Party. In the latter case, the port director may require the importer to submit an English translation of the certification.
(d) Certification by the exporter or producer. A certification may be prepared by the exporter or producer of the good on the basis of: (1) The exporter's or producer's knowledge that the good is originating; or
(2) In the case of an exporter, reasonable reliance on the producer's certification that the good is originating.
(e) Applicability of certification. The certification provided for in paragraph (a) of this section may be applicable to:
(1) A single shipment of a good into the United States; or (2) Multiple shipments of identical goods into the United States that occur within a specified blanket period, not exceeding 12 months, set out in the certification.
(f) Validity of certification. A certification that is properly completed, signed, and dated in accordance with the requirements of this section will be accepted as valid for four years following the date on which it was signed.
Sec. 10.585 Importer obligations.
(a) General. An importer who makes a claim for preferential tariff treatment under Sec. 10.583(b) of this subpart:
(1) Will be deemed to have certified that the good is eligible for preferential tariff treatment under the CAFTADR;
(2) Is responsible for the truthfulness of the claim and of all the information and data contained in the certification provided for in Sec. 10.584 of this subpart;
(3) Is responsible for submitting any supporting documents requested by CBP, and for the truthfulness of the information contained in those documents. When a certification prepared by an exporter or producer forms the basis of a claim for preferential tariff treatment, and CBP requests the submission of supporting documents, the importer will provide to CBP, or arrange for the direct submission by the exporter or producer, all information relied on by the exporter or producer in preparing the certification.
(b) Information provided by exporter or producer. The fact that the importer has made a claim or submitted a certification based on information provided by an exporter or producer will not relieve the importer of the
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responsibility referred to in paragraph (a) of this section. (c) Exemption from penalties. An importer will not be subject to civil or administrative penalties under 19 U.S.C. 1592 for making an incorrect claim for preferential tariff treatment or submitting an incorrect certification, provided that the importer promptly and voluntarily corrects the claim or certification and pays any duty owing (see Sec. Sec. 10.621 and 10.623 of this subpart).
Sec. 10.586 Certification not required.
(a) General. Except as otherwise provided in paragraph (b) of this section, an importer will not be required to submit a copy of a certification under Sec. 10.584 of this subpart for:
(1) A noncommercial importation of a good; or
(2) A commercial importation for which the value of the originating goods does not exceed U.S. $2,500.
(b) Exception. If the port director determines that an importation described in paragraph (a) of this section is part of a series of importations carried out or planned for the purpose of evading compliance with the certification requirements of Sec. 10.584 of this subpart, the port director will notify the importer that for that importation the importer must submit to CBP a copy of the
certification. The importer must submit such a copy within 30 days from the date of the notice. Failure to timely submit a copy of the certification will result in denial of the claim for preferential tariff treatment.
Sec. 10.587 Maintenance of records.
(a) General. An importer claiming preferential tariff treatment for a good imported into the United States under Sec. 10.583(b) of this subpart must maintain, for a minimum of five years after the date of importation of the good, all records and documents that the importer has demonstrating that the good qualifies for preferential tariff treatment under the CAFTADR. These records are in addition to any other records that the importer is required to prepare, maintain, or make available to CBP under part 163 of this chapter.
(b) Method of maintenance. The records and documents referred to in paragraph (a) of this section must be maintained by importers as provided in Sec. 163.5 of this chapter.
Sec. 10.588 Effect of noncompliance; failure to provide documentation regarding transshipment.
(a) General. If the importer fails to comply with any requirement under this subpart, including submission of a complete certification prepared in accordance with Sec. 10.584 of this subpart, when requested, the port director may deny preferential tariff treatment to the imported good.
(b) Failure to provide documentation regarding transshipment. Where the requirements for preferential tariff treatment set forth elsewhere in this subpart are met, the port director nevertheless may deny preferential tariff treatment to an originating good if the good is shipped through or transshipped in a country other than a Party to the CAFTADR, and the importer of the good does not provide, at the request of the port director, evidence demonstrating to the satisfaction of the port director that the conditions set forth in Sec. 10.604(a) of this subpart were met.
Export Requirements
Sec. 10.589 Certification for goods exported to a Party.
(a) Submission of certification to CBP. Any person who completes and issues a certification for a good exported from the United States to a Party must provide a copy of the certification (or such other medium or format approved by the Party's customs authority for that purpose) to CBP upon request.
(b) Notification of errors in certification. Any person who completes and issues a certification for a good exported from the United States to a Party and who has reason to believe that the certification contains or is based on incorrect information must promptly notify every person to whom the certification was provided of any change that could affect the accuracy or validity of the certification. Notification of an incorrect certification must also be given either in writing or via an authorized electronic data interchange system to CBP specifying the correction (see Sec. Sec. 10.622 and 10.623 of this subpart).
(c) Maintenance of records(1) General. Any person who completes and issues a certification for a good exported from the United States to a Party must maintain, for a period of at least five years after the date the certification was signed, all records and supporting documents relating to the origin of a good for which the certification was issued, including the certification or copies thereof and records and documents associated with:
(i) The purchase, cost, and value of, and payment for, the good; (ii) The purchase, cost, and value of, and payment for, all materials, including indirect materials, used in the production of the good; and
(iii) The production of the good in the form in which the good was exported.
(2) Method of maintenance. The records referred to in paragraph (c) of this section must be maintained as provided in Sec. 163.5 of this chapter.
(3) Availability of records. For purposes of determining compliance with the provisions of this part, the records required to be maintained under this section must be stored and made available for examination and inspection by the port director or other appropriate CBP officer in the same manner as provided in Part 163 of this chapter.
PostImportation Duty Refund Claims
Sec. 10.590 Right to make postimportation claim and refund duties.

Notwithstanding any other available remedy, where a good would have qualified as an originating good when it was imported into the United States but no claim for preferential tariff treatment was made, the importer of that good may file a claim for a refund of any excess duties at any time within one year after the date of importation of the good in accordance with the procedures set forth in Sec. 10.591 of this subpart. Subject to the provisions of Sec. 10.588 of this subpart, CBP may refund any excess duties by liquidation or reliquidation of the entry covering the good in accordance with Sec. 10.592(c) of this subpart.
Sec. 10.591 Filing procedures.
(a) Place of filing. A postimportation claim for a refund must be filed with the director of the port at which the entry covering the good was filed.
(b) Contents of claim. A postimportation claim for a refund must be filed by presentation of the following:
(1) A written declaration stating that the good qualified as an originating good at the time of importation and setting forth the number and date of the entry or entries covering the good;
(2) A copy of a certification prepared in accordance with Sec. 10.584 of this subpart if a certification forms the basis for the claim, or other information demonstrating that the good qualifies for preferential tariff treatment;
(3) A written statement indicating whether the importer of the good provided a copy of the entry summary or equivalent documentation to any other person. If such documentation was so provided, the statement must identify each recipient by name, CBP identification number, and address and must specify the date on which the documentation was provided; and (4) A written statement indicating whether or not any person has filed a
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protest relating to the good under any provision of law; and if any such protest has been filed, the statement must identify the protest by number and date.
Sec. 10.592 CBP processing procedures.
(a) Status determination. After receipt of a postimportation claim under Sec. 10.591 of this subpart, the port director will determine whether the entry covering the good has been liquidated and, if liquidation has taken place, whether the liquidation has become final. (b) Pending protest or judicial review. If the port director determines that any protest relating to the good has not been finally decided, the port director will suspend action on the claim filed under Sec. 10.591 of this subpart until the decision on the protest becomes final. If a summons involving the tariff classification or dutiability of the good is filed in the Court of International Trade, the port director will suspend action on the claim filed under Sec. 10.591 of this subpart until judicial review has been completed.
(c) Allowance of claim. (1) Unliquidated entry. If the port director determines that a claim for a refund filed under Sec. 10.591 of this subpart should be allowed and the entry covering the good has not been liquidated, the port director will take into account the claim for refund in connection with the liquidation of the entry. (2) Liquidated entry. If the port director determines that a claim for a refund filed under Sec. 10.591 of this subpart should be allowed and the entry covering the good has been liquidated, whether or not the liquidation has become final, the entry must be reliquidated in order to effect a refund of duties under this section. If the entry is otherwise to be reliquidated based on administrative review of a protest or as a result of judicial review, the port director will reliquidate the entry taking into account the claim for refund under Sec. 10.591 of this subpart.
(d) Denial of claim. (1) General. The port director may deny a claim for a refund filed under Sec. 10.591 of this subpart if the claim was not filed timely, if the importer has not complied with the requirements of Sec. 10.591 of this subpart, or if, following initiation of an origin verification under Sec. 10.616 of this subpart, the port director determines either that the imported good did not qualify as an originating good at the time of importation or that a basis exists upon which preferential tariff treatment may be denied under Sec. 10.616 of this subpart.
(2) Unliquidated entry. If the port director determines that a claim for a refund filed under this subpart should be denied and the entry covering the good has not been liquidated, the port director will deny the claim in connection with the liquidation of the entry, and notice of the denial and the reason for the denial will be provided to the importer in writing or via an authorized electronic data interchange system.
(3) Liquidated entry. If the port director determines that a claim for a refund filed under this subpart should be denied and the entry covering the good has been liquidated, whether or not the liquidation has become final, the claim may be denied without reliquidation of the entry. If the entry is otherwise to be reliquidated based on administrative review of a protest or as a result of judicial review, such reliquidation may include denial of the claim filed under this subpart. In either case, the port director will provide notice of the denial and the reason for the denial to the importer in writing or via an authorized electronic data interchange system.
Rules of Origin

Sec. 10.593 Definitions.

For purposes of Sec. Sec. 10.593 through 10.605: (a) Adjusted value. ``Adjusted value'' means the value determined in accordance with Articles 1 through 8, Article 15, and the corresponding interpretative notes of the Customs Valuation Agreement, adjusted, if necessary, to exclude:
(1) Any costs, charges, or expenses incurred for transportation, insurance and related services incident to the international shipment of the good from the country of exportation to the place of importation; and
(2) The value of packing materials and containers for shipment as defined in paragraph (m) of this section;
(b) Class of motor vehicles. ``Class of motor vehicles'' means any one of the following categories of motor vehicles:
(1) Motor vehicles provided for in subheading 8701.20, 8704.10, 8704.22, 8704.23, 8704.32, or 8704.90, or heading 8705 or 8706, HTSUS, or motor vehicles for the transport of 16 or more persons provided for in subheading 8702.10 or 8702.90, HTSUS;
(2) Motor vehicles provided for in subheading 8701.10 or any of subheadings 8701.30 through 8701.90, HTSUS;
(3) Motor vehicles provided for the transport of 15 or fewer persons provided for in subheading 8702.10 or 8702.90, HTSUS, or motor vehicles provided for in subheading 8704.21 or 8704.31, HTSUS; or (4) Motor vehicles provided for in subheadings 8703.21 through 8703.90, HTSUS;
(c) Exporter. ``Exporter'' means a person who exports goods from the territory of a Party;
(d) Fungible good or material. ``Fungible good or 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; (e) 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 principles may encompass broad guidelines of general application as well as detailed standards, practices, and procedures;
(f) Good. ``Good'' means any merchandise, product, article, or material;
(g) Goods wholly obtained or produced entirely in the territory of one or more of the Parties. ``Goods wholly obtained or produced entirely in the territory of one or more of the Parties'' means: (1) Plants and plant products harvested or gathered in the territory of one or more of the Parties;
(2) Live animals born and raised in the territory of one or more of the Parties;
(3) Goods obtained in the territory of one or more of the Parties from live animals;
(4) Goods obtained from hunting, trapping, fishing, or aquaculture conducted in the territory of one or more of the Parties;
(5) Minerals and other natural resources not included in paragraphs (g)(1) through (g)(4) of this section that are extracted or taken in the territory of one or more of the Parties;
(6) Fish, shellfish, and other marine life taken from the sea, seabed, or subsoil outside the territory of one or more of the Parties by vessels registered or recorded with a Party and flying its flag; (7) Goods produced on board factory ships from the goods referred to in paragraph (g)(6) of this section, if such factory ships are registered or recorded with a Party and flying its flag;
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(8) Goods taken by a Party or a person of a Party from the seabed or subsoil outside territorial waters, if a Party has rights to exploit such seabed or subsoil;
(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 nonParty;
(10) Waste and scrap derived from:
(i) Manufacturing or processing operations in the territory of one or more of the Parties; or
(ii) Used goods collected in the territory of one or more of the Parties, if such goods are fit only for the recovery of raw materials; (11) Recovered goods derived in the territory of one or more of the Parties from used goods, and used in the territory of a Party in the production of remanufactured goods; and
(12) Goods produced in the territory of one or more of the Parties exclusively from goods referred to in any of paragraphs (g)(1) through (g)(10) of this section, or from the derivatives of such goods, at any stage of production;
(h) Material. ``Material'' means a good that is used in the production of another good, including a part or an ingredient; (i) Model line. ``Model line'' means a group of motor vehicles having the same platform or model name;
(j) Net cost. ``Net cost'' means total cost minus sales promotion, marketing, and aftersales service costs, royalties, shipping and packing costs, and nonallowable inter

FOR FURTHER INFORMATION CONTACT

Textile Operational Aspects: Robert Abels, Office of International Trade, (202) 3441959.

Other Operational Aspects: Lori Whitehurst, Office of International Trade, (202) 3442722.

Audit Aspects: Mark Hanson, Regulatory Audit, (202) 3442977.

Legal Aspects: Karen Greene, Office of International Trade, (202) 5728838.