CUSMA Rules of Origin Regulations — 5
sewing thread, narrow elastic bands or pocket bag fabric that is subject to the requirements set out in Chapter 61, Notes 2 through 4, Chapter 62, Notes 3 through 5 or for coated fabric as set out in Chapter 63, Note 2 of Schedule 1. Calculation of total cost — choice of methods (11) For the purposes of subparagraphs (1)(a)(ii) and (4)(a)(ii), the total cost of a good is, at the choice of the producer of the good, (a) the total cost incurred with respect to all goods produced by the producer that can be reasonably allocated to that good in accordance with Schedule 5; or (b) the aggregate of each cost that forms part of the total cost incurred with respect to that good that can be reasonably allocated to that good in accordance with Schedule 5. Calculation of total cost (12) The 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). Value of non-originating materials — other methods (13) For the purpose of determining the value under subsection (1) of non-originating materials that do not undergo an applicable change in tariff classification, if an inventory management method recognized in the Generally Accepted Accounting Principles of the CUSMA country where the production was performed or a method set out in Schedule 8 is not used to determine the value of those non-originating materials, the following methods are to be used: (a) if the value of those non-originating materials is determined as a percentage of the transaction value of the good and the producer chooses under subsection 7 (10) to use one of the methods recognized in the Generally Accepted Accounting Principles of the CUSMA country where the material was produced or one of the methods set out in Schedule 7 to determine the value of those non-originating materials for the purpose of calculating the regional value content of the good, the value of those non-originating materials must be determined in accordance with that method; (b) if the following conditions are met and the value of those non-originating materials is equal to the sum of the values of non-originating materials, determined in accordance with the election under subparagraph (iv), divided by the number of units of the goods with respect to which the election is made (i) the value of those non-originating materials is determined as a percentage of the total cost of the good, (ii) under the rule in which the applicable change in tariff classification is specified, the good is also subject to a regional value content requirement and paragraph (4)(a) does not apply with respect to that good, (iii) the regional value content of the good is calculated on the basis of the net cost method, and (iv) the producer elects under subsection 7 (15), 16 (1) or (10) that the regional value content of the good be calculated over a period; (c) if the following conditions are met, the value of those non-originating materials is the sum of the values of the non-originating materials divided by the number of units produced during the period under subparagraph (iii): (i) the value of those non-originating materials is determined as a percentage of the total cost of the good, (ii) under the rule in which the applicable change in tariff classification is specified, the good is not also subject to a regional value content requirement or paragraph (4)(a) applies with respect to that good, and (iii) the producer elects under paragraph 1 (7)(b) that, for the purposes of subsection (11), the total cost of the good be calculated over a given period; and (d) in any other case, the value of those non-originating materials may, at the choice of the producer, be determined in accordance with an inventory management method recognized in the Generally Accepted Accounting Principles of the CUSMA country where the production was performed or one of the methods set out in Schedule 7. Value of non-originating materials — production of