CUSMA Rules of Origin Regulations — 3
o make pocket bags. For the purpose of determining if the men’s suits are originating goods, Producer A should take into account Note 2 of Chapter 62 of Schedule 1, which indicates that the applicable rule will apply only to the component that determines the tariff classification of the good and that the component must satisfy the tariff change requirements set out in the rule for that good. The originating fabric used to make the outer part of the suit is the component of the suit that determines the tariff classification in subheading 6203.12 because it constitutes the predominant material by weight and makes up the largest surface area of the suit. The origin of the fabric used as visible lining is disregarded for the purpose of determining whether the suit is an originating good since that fabric is not considered the component that determines the tariff classification and there are no Chapter Notes related to visible lining for apparel goods. Additionally, Producer A uses a non-originating fabric of subheading 5513.21 for the pocket bags of the suits, so Producer A should take into account the second paragraph of Note 5 of Chapter 62 of Schedule 1, which requires that the pocket bag fabric must be formed and finished in the territory of one or more of the CUSMA countries from yarn wholly formed in one or more of the CUSMA countries. In this case, for the production of men’s suits, Producer A uses non-originating fabric for the pocket bag, and that fabric was not formed and finished in the territory of one or more of the CUSMA countries; therefore, the suits would be considered to be non-originating goods. Example 5 (subsection (7)): A wholesaler located in CUSMA Country A imports non-originating storage units provided for in subheading 8471.70 from outside the territory of the CUSMA countries. The wholesaler resells the storage units to a buyer in CUSMA Country B. While in the territory of Country A, the storage units do not undergo any production and therefore do not meet the rule in Schedule 1 for goods of subheading 8471.70 when imported into the territory of CUSMA Country B. Despite the rule in Schedule 1, the storage units of subheading 8471.70 are considered originating goods when they are imported into the territory of CUSMA Country B because they are referred to in Schedule 2 and were imported from the territory of another CUSMA country. The buyer in CUSMA Country B subsequently uses the storage units provided for in subheading 8471.70 as a material in the production of another good. For the purpose of determining whether the other good is originating, the buyer in CUSMA Country B may treat the storage units of subheading 8471.70 as originating materials. Example 6 (subsection (8)): Self-produced materials as materials for the purpose of determining whether non-originating materials undergo an applicable change in tariff classification Producer A, located in a CUSMA country, produces Good A. In the production process, Producer A uses the originating Material X and the non-originating Material Y to produce Material Z. Material Z is a self-produced material that will be used to produce Good A. The rule set out in Schedule 1 for the heading under which Good A is classified specifies a change in tariff classification from any other heading. In this case, both Good A and the non-originating Material Y are of the same heading. However, the self-produced Material Z is classified in a different heading than that of Good A. For the purpose of determining whether the non-originating materials that are used in the production of Good A undergo the applicable change in tariff classification, Producer A has the option of considering the self-produced Material Z to be the material that must undergo a change in tariff classification. As Material Z is classified in a different heading than that of Good A, Material Z satisfies the requirements of the applicable change in tariff classification and Good A would qualify as an originat