CUSMA Rules of Origin Regulations — 2
2 (1) Except as otherwise provided in subsection (2), the transaction value of a material under paragraph 8 (1)(b) of these Regulations is the price actually paid or payable for the material determined in accordance with section 3 and adjusted in accordance with section 4. (2) There is no transaction value for a material if the material is not the subject of a sale. (3) The transaction value of a material is unacceptable if (a) there are restrictions on the disposal or use of the material by the producer, other than restrictions that (i) are imposed or required by law or by the public authorities in the territory of the CUSMA country in which the producer of the good or the seller of the material is located, (ii) limit the geographical area in which the material may be used, or (iii) do not substantially affect the value of the material; (b) the sale or price actually paid or payable is subject to a condition or consideration for which a value cannot be determined with respect to the material; (c) part of the proceeds of any subsequent disposal or use of the material by the producer will accrue directly or indirectly to the seller and an appropriate addition to the price actually paid or payable cannot be made in accordance with paragraph 4(1)(d); or (d) the producer and the seller are related persons and the relationship between them influenced the price actually paid or payable for the material. (4) The conditions or considerations referred to in paragraph (3)(b) include the following circumstances: (a) the seller establishes the price actually paid or payable for the material on condition that the producer will also buy other materials or goods in specified quantities; (b) the price actually paid or payable for the material is dependent on the price or prices at which the producer sells other materials or goods to the seller of the material; and (c) the price actually paid or payable is established on the basis of a form of payment extraneous to the material, such as if the material is a semi-finished material that is provided by the seller to the producer on condition that the seller will receive a specified quantity of the finished material from the producer. (5) For the purposes of paragraph (3)(b), conditions or considerations relating to the use of the material must not render the transaction value unacceptable, such as if the producer undertakes on the producer’s own account, even though by agreement with the seller, activities relating to the warranty of the material used in the production of a good. (6) If objective and quantifiable data do not exist with regard to the additions required to be made to the price actually paid or payable under subsection 4(1), the transaction value cannot be determined under the provisions of subsection 2(1). For an illustration of this, a royalty is paid on the basis of the price actually paid or payable in a sale of a litre of a particular good that is produced by using a material that was purchased by the kilogram and made up into a solution. If the royalty is based partially on the purchased material and partially on other factors that have nothing to do with that material, such as when the purchased material is mixed with other ingredients and is no longer separately identifiable, or when the royalty cannot be distinguished from special financial arrangements between the seller and the producer, it would be inappropriate to add the royalty and the transaction value of the material could not be determined. However, if the amount of the royalty is based only on the purchased material and can be readily quantified, an addition to the price actually paid or payable can be made and the transaction value can be determined.