19 U.S.C. § 4033 Rules of Origin

• Library: United States Statutes
• Edition: 2023
• Currency: Current through P.L. 118-34 (published on www.congress.gov on 12/26/2023), except for [P. L. 118-31]
• Year: 2023
• Citation: 19 U.S.C. § 4033

(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).

(b) Originating goods

For purposes of this chapter and for purposes of implementing the preferential tariff treatment provided for under the Agreement, except as otherwise provided in this section, a good is an originating good if-

(1) the good is a good wholly obtained or produced entirely in the territory of one or more of the CAFTA-DR countries;

(2) the good-

(A) is produced entirely in the territory of one or more of the CAFTA-DR countries, and-

(i) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in Annex 4.1 of the Agreement; or

(ii) the good otherwise satisfies any applicable regional value-content or other requirements specified in Annex 4.1 of the Agreement; and

(B) satisfies all other applicable requirements of this section; or

(3) the good is produced entirely in the territory of one or more of the CAFTA-DR countries, exclusively from materials described in paragraph (1) or (2).

(c) Regional value-content

(1) In general

For purposes of subsection (b)(2), the regional value-content of a good referred to in Annex 4.1 of the Agreement, except for goods to which paragraph (4) applies, shall be calculated by the importer, exporter, or producer of the good, on the basis of the build-down method described in paragraph (2) or the build-up method described in paragraph (3).

(2) Build-down method

(A) In general

The regional value-content of a good may be calculated on the basis of the following build-down method:

<TABLE> <TR> <TD rowspan="2"> </TD> <TD rowspan="2"> RVC</TD> <TD rowspan="2">=</TD> <TD>AV-VNM</TD> <TD rowspan="2"> x </TD> <TD rowspan="2">100 </TD> <TD rowspan="2"> </TD> </TR> <TR> <TD>AV</TD> </TR> </TABLE>

(B) Definitions

In subparagraph (A):

(i) RVC

The term "RVC" means the regional value-content of the good, expressed as a percentage.

(ii) AV

The term "AV" means the adjusted value of the good.

(iii) VNM

The term "VNM" means the value of nonoriginating materials that are acquired and used by the producer in the production of the good, but does not include the value of a material that is self-produced.

(3) Build-up method

(A) In general

The regional value-content of a good may be calculated on the basis of the following build-up method:

<TABLE> <TR> <TD rowspan="2"> </TD> <TD rowspan="2"> RVC</TD> <TD rowspan="2">=</TD> <TD>VOM</TD> <TD rowspan="2"> x </TD> <TD rowspan="2">100 </TD> <TD rowspan="2"> </TD> </TR> <TR> <TD>AV</TD> </TR> </TABLE>

(B) Definitions

In subparagraph (A):

(i) RVC

The term "RVC" means the regional value-content of the good, expressed as a percentage.

(ii) AV

The term "AV" means the adjusted value of the good.

(iii) VOM

The term "VOM" means the value of originating materials that are acquired or self-produced, and used by the producer in the production of the good.

(4) Special rule for certain automotive goods

(A) In general

For purposes of subsection (b)(2), the regional value-content of an automotive good referred to in Annex 4.1 of the Agreement may be calculated by the importer, exporter, or producer of the good, on the basis of the following net cost method:

<TABLE> <TR> <TD rowspan="2"> </TD> <TD rowspan="2"> RVC</TD> <TD rowspan="2">=</TD> <TD>NC-VNM</TD> <TD rowspan="2"> x </TD> <TD rowspan="2">100 </TD> <TD rowspan="2"> </TD> </TR> <TR> <TD>NC</TD> </TR> </TABLE>

(B) Definitions

In subparagraph (A):

(i) Automotive good

The term "automotive good" means a good provided for in any of subheadings 8407.31 through 8407.34, subheading 8408.20, heading 8409, or in any of headings 8701 through 8708.

(ii) RVC

The term "RVC" means the regional value-content of the automotive good, expressed as a percentage.

(iii) NC

The term "NC" means the net cost of the automotive good.

(iv) VNM

The term "VNM" means the value of nonoriginating materials that are acquired and used by the producer in the production of the automotive good, but does not include the value of a material that is self-produced.

(C) Motor vehicles

(i) Basis of calculation

For purposes of determining the regional value-content under subparagraph (A) for an automotive good that is a motor vehicle provided for in any of headings 8701 through 8705, an importer, exporter, or producer may average the amounts calculated under the formula contained in subparagraph (A), over the producer's fiscal year-

(I) with respect to all motor vehicles in any 1 of the categories described in clause (ii); or

(II) with respect to all motor vehicles in any such category that are exported to the territory of one or more of the CAFTA-DR countries.

(ii) Categories

A category is described in this clause if it-

(I) is the same model line of motor vehicles, is in the same class of vehicles, and is produced in the same plant in the territory of a CAFTA-DR country, as the good described in clause (i) for which regional value-content is being calculated;

(II) is the same class of motor vehicles, and is produced in the same plant in the territory of a CAFTA-DR country, as the good described in clause (i) for which regional value-content is being calculated; or

(III) is the same model line of motor vehicles produced in the territory of a CAFTA-DR country as the good described in clause (i) for which regional value-content is being calculated.

(D) Other automotive goods

For purposes of determining the regional value-content under subparagraph (A) for automotive goods provided for in any of subheadings 8407.31 through 8407.34, in subheading 8408.20, or in heading 8409, 8706, 8707, or 8708, that are produced in the same plant, an importer, exporter, or producer may-

(i) average the amounts calculated under the formula contained in subparagraph (A) over-

(I) the fiscal year of the motor vehicle producer to whom the automotive goods are sold,

(II) any quarter or month, or

(III) its own fiscal year,

if the goods were produced during the fiscal year, quarter, or month that is the basis for the calculation;

(ii) determine the average referred to in clause (i) separately for such goods sold to 1 or more motor vehicle producers; or

(iii) make a separate determination under clause (i) or (ii) for automotive goods that are exported to the territory of one or more of the CAFTA-DR countries.

(E) Calculating net cost

The importer, exporter, or producer shall, consistent with the provisions regarding allocation of costs set out in generally accepted accounting principles, determine the net cost of an automotive good under subparagraph (B) by-

(i) calculating the total cost incurred with respect to all goods produced by the producer of the automotive good, subtracting any sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, and nonallowable interest costs that are included in the total cost of all such goods, and then reasonably allocating the resulting net cost of those goods to the automotive good;

(ii) calculating the total cost incurred with respect to all goods produced by that producer, reasonably allocating the total cost to the automotive good, and then subtracting any sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, and nonallowable interest costs that are included in the portion of the total cost allocated to the automotive good; or

(iii) reasonably allocating each cost that forms part of the total cost incurred with respect to the automotive good so that the aggregate of all such costs does not include any sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, or nonallowable interest costs.