CUSMA Rules of Origin Regulations — 7
be calculated on the basis of the net cost method, in which case the calculation must be made within 30 days after the producer receives the notification, or such longer period as that customs administration specifies. Net cost method — no change permitted (8) If the importer, exporter or producer of a good calculates the regional value content of the good on the basis of the net cost method and the customs administration of a CUSMA country subsequently notifies that importer, exporter or producer in writing, during the course of a verification of origin, that the good does not satisfy the applicable regional value content requirement, the importer, exporter or producer of the good may not recalculate the regional value content on the basis of the transaction value method. Clarification (9) Nothing in subsection (7) is to be construed as preventing any review or appeal under Article 5.15 of the Agreement, as implemented in each CUSMA country, of an adjustment to or a rejection of (a) the transaction value of the good; or (b) the value of any material used in the production of the good. Value of identical non-originating materials (10) For the purposes of the transaction value method, if non-originating materials that are the same as one another in all respects, including physical characteristics, quality and reputation but excluding minor differences in appearance, are used in the production of a good, the value of those non-originating materials may, at the choice of the producer of the good, be determined in accordance with one of the methods set out in Schedule 7. Calculating net cost of good (11) For the purposes of subsection (3), the net cost of a good may be calculated, at the choice of the producer of the good, by (a) calculating the total cost incurred with respect to all goods produced by that producer, subtracting any excluded costs that are included in that total cost, and reasonably allocating, in accordance with Schedule 5, the remainder to the good; (b) calculating the total cost incurred with respect to all goods produced by that producer, reasonably allocating, in accordance with Schedule 5, that total cost to the good, and subtracting any excluded costs that are included in the amount allocated to that good; or (c) reasonably allocating, in accordance with Schedule 5, each cost that forms part of the total cost incurred with respect to the good so that the aggregate of those costs does not include any excluded costs. Calculation of total cost (12) Total cost under subsection (11) consists of the costs referred to in subsection 1 (6) and is calculated in accordance with that subsection and subsection 1 (7). Calculation of net cost of good (13) For the purpose of calculating the net cost under subsection (11), (a) excluded costs are the excluded costs that are recorded on the books of the producer of the good; (b) excluded costs that are included in the value of a material that is used in the production of the good are not to be subtracted from or otherwise excluded from the total cost; and (c) excluded costs do not include any amount paid for research and development services performed in the territory of a CUSMA country. Non-allowable interest (14) For the purpose of calculating non-allowable interest costs, the determination of whether interest costs incurred by a producer are more than 700 basis points above the interest rate of comparable maturities issued by the federal government of the country in which the producer is located is to be made in accordance with Schedule 9. Use of averaging over a period (15) For the purposes of the net cost method, the regional value content of the good, other than a good with respect to which an election to average may be made under subsection 16 (1) or (10), may be calculated, if the producer elects to do so, by (a) calculating the sum of the net costs incurred and the sum of the values of non-originating materials used by the producer of the good with respect to the goo