cessories, spare parts, or tools are specified or 
are separately identified in the invoice for the 
good; and 
(B) the quantities and value of the acces-
sories, spare parts, or tools are customary for 
the good. 
(3) REGIONAL VALUE-CONTENT.—If the good is 
subject to a regional value-content requirement, the 
value of the accessories, spare parts, or tools shall 
be taken into account as originating or nonorigi-
nating materials, as the case may be, in calculating 
the regional value-content of the good. 
(i) PACKAGING MATERIALS AND CONTAINERS FOR 
RETAIL SALE.—Packaging materials and containers in 
which a good is packaged for retail sale, if classified with 
the good, shall be disregarded in determining whether all 
the nonoriginating materials used in the production of the 
good undergo the applicable change in tariff classification 
set forth in Annex 4.1 of the Agreement, and, if the good 
is subject to a regional value-content requirement, the 
value of such packaging materials and containers shall be 
taken into account as originating or nonoriginating mate-
rials, as the case may be, in calculating the regional value- 
content of the good. 
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(j) PACKING MATERIALS
AND CONTAINERS
FOR 
SHIPMENT.—Packing materials and containers for ship-
ment shall be disregarded in determining whether a good 
is an originating good. 
(k) INDIRECT MATERIALS.—An indirect material 
shall be treated as an originating material without regard 
to where it is produced. 
(l) TRANSIT AND TRANSHIPMENT.—A good that has 
undergone production necessary to qualify as an origi-
nating good under subsection (b) shall not be considered 
to be an originating good if, subsequent to that produc-
tion, the good— 
(1) undergoes further production or any other 
operation outside the territory of Panama or the 
United States, other than unloading, reloading, or 
any other operation necessary to preserve the good 
in good condition or to transport the good to the ter-
ritory of Panama or the United States; or 
(2) does not remain under the control of cus-
toms authorities in the territory of a country other 
than Panama or the United States. 
(m) GOODS CLASSIFIABLE AS GOODS PUT UP IN 
SETS.—Notwithstanding the rules set forth in Annex 4.1 
of the Agreement, goods classifiable as goods put up in 
sets for retail sale as provided for in General Rule of Inter-
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pretation 3 of the HTS shall not be considered to be origi-
nating goods unless— 
(1) each of the goods in the set is an origi-
nating good; or 
(2) the total value of the nonoriginating goods 
in the set does not exceed— 
(A) in the case of textile or apparel goods, 
10 percent of the adjusted value of the set; or 
(B) in the case of goods, other than textile 
or apparel goods, 15 percent of the adjusted 
value of the set. 
(n) DEFINITIONS.—In this section: 
(1) ADJUSTED
VALUE.—The term ‘‘adjusted 
value’’ means the value determined in accordance 
with Articles 1 through 8, Article 15, and the cor-
responding interpretive notes, of the Agreement on 
Implementation of Article VII of the General Agree-
ment on Tariffs and Trade 1994 referred to in sec-
tion 101(d)(8) of the Uruguay Round Agreements 
Act (19 U.S.C. 3511(d)(8)), adjusted, if necessary, 
to exclude any costs, charges, or expenses incurred 
for transportation, insurance, and related services 
incident to the international shipment of the mer-
chandise from the country of exportation to the 
place of importation. 
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(2) CLASS
OF
MOTOR
VEHICLES.—The term 
‘‘class of motor vehicles’’ means any one of the fol-
lowing categories of motor vehicles: 
(A) Motor vehicles provided for in sub-
heading 8701.20, 8704.10, 8704.22, 8704.23, 
8704.32, or 8704.90, or heading 8705 or 8706, 
or motor vehicles for the transport of 16 or 
more persons provided for in subheading 
8702.10 or 8702.90. 
(B) Motor vehicles provided for in sub-
heading 
8701.10 
or 
any 
of 
subheadings 
8701.30 through 8701.90. 
(C) Motor vehicles for the transport of 15 
or fewer persons provided for in subheading 
8702.10 or 8702.90, or motor vehicles provided 
for in subheading 8704.21 or 8704.31. 
(D) Motor vehicles provided for in any of 
subheadings 8703.21 through 8703.90. 
(3) FUNGIBLE
GOOD
OR
FUNGIBLE
MATE-
RIAL.—The term ‘‘fungible good’’ or ‘‘fungible mate-
rial’’ means a good or material, as the case may be, 
that is interchangeable with another good or mate-
rial for commercial purposes and the properties of 
which are essentially identical to such other good or 
material. 
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(4) GENERALLY ACCEPTED ACCOUNTING PRIN-
CIPLES.—The term ‘‘generally accepted accounting 
principles’’— 
(A) means the recognized consensus or 
substantial authoritative support given in the 
territory of Panama or the United States, as 
the case may be, with respect to the recording 
of revenues, expenses, costs, assets, and liabil-
ities, the disclosure of information, and the 
preparation of financial statements; and 
(B) may encompass broad guidelines for 
general application as well as detailed stand-
ards, practices, and procedures. 
(5) GOOD WHOLLY OBTAINED OR PRODUCED 
ENTIRELY
IN
THE
TERRITORY
OF
PANAMA, THE 
UNITED STATES, OR BOTH.—The term ‘‘good wholly 
obtained or produced entirely in the territory of 
Panama, the United States, or both’’ means any of 
the following: 
(A) Plants and plant products harvested or 
gathered in the territory of Panama, the United 
States, or both. 
(B) Live animals born and raised in the 
territory of Panama, the United States, or 
both. 
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(C) Goods obtained in the territory of Pan-
ama, the United States, or both from live ani-
mals. 
(D) Goods obtained from hunting, trap-
ping, fishing, or aquaculture conducted in the 
territory of Panama, the United States, or 
both. 
(E) Minerals and other natural resources 
not included in subparagraphs (A) through (D) 
that are extracted or taken from the territory 
of Panama, the United States, or both. 
(F) Fish, shellfish, and other marine life 
taken from the sea, seabed, or subsoil outside 
the territory of Panama or the United States 
by— 
(i) a vessel that is registered or re-
corded with Panama and flying the flag of 
Panama; or 
(ii) a vessel that is documented under 
the laws of the United States. 
(G) Goods produced on board a factory 
ship from goods referred to in subparagraph 
(F), if such factory ship— 
(i) is registered or recorded with Pan-
ama and flies the flag of Panama; or 
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(ii) is a vessel that is documented 
under the laws of the United States. 
(H)(i) Goods taken by Panama or a person 
of Panama from the seabed or subsoil outside 
the territorial waters of Panama, if Panama 
has rights to exploit such seabed or subsoil. 
(ii) Goods taken by the United States or a 
person of the United States from the seabed or 
subsoil outside the territorial waters of the 
United States, if the United States has rights 
to exploit such seabed or subsoil. 
(I) Goods taken from outer space, if the 
goods are obtained by Panama or the United 
States or a person of Panama or the United 
States and not processed in the territory of a 
country other than Panama or the United 
States. 
(J) Waste and scrap derived from— 
(i) manufacturing or processing oper-
ations in the territory of Panama, the 
United States, or both; or 
(ii) used goods collected in the terri-
tory of Panama, the United States, or 
both, if such goods are fit only for the re-
covery of raw materials. 
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(K) Recovered goods derived in the terri-
tory of Panama, the United States, or both 
from used goods, and used in the territory of 
Panama, the United States, or both, in the pro-
duction of remanufactured goods. 
(L) Goods, at any stage of production, pro-
duced in the territory of Panama, the United 
States, or both, exclusively from— 
(i) goods referred to in any of sub-
paragraphs (A) through (J), or 
(ii) the derivatives of goods referred 
to in clause (i). 
(6) IDENTICAL
GOODS.—The term ‘‘identical 
goods’’ means goods that are the same in all re-
spects relevant to the rule of origin that qualifies the 
goods as originating goods. 
(7) INDIRECT MATERIAL.—The term ‘‘indirect 
material’’ means a good used in the production, test-
ing, or inspection of another good but not physically 
incorporated into that other good, or a good used in 
the maintenance of buildings or the operation of 
equipment associated with the production of another 
good, including— 
(A) fuel and energy; 
(B) tools, dies, and molds; 
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(C) spare parts and materials used in the 
maintenance of equipment or buildings; 
(D) lubricants, greases, compounding ma-
terials, and other materials used in production 
or used to operate equipment or buildings; 
(E) gloves, glasses, footwear, clothing, 
safety equipment, and supplies; 
(F) equipment, devices, and supplies used 
for testing or inspecting the good; 
(G) catalysts and solvents; and 
(H) any other good that is not incor-
porated into the other good but the use of 
which in the production of the other good can 
reasonably be demonstrated to be a part of that 
production. 
(8) MATERIAL.—The term ‘‘material’’ means a 
good that is used in the production of another good, 
including a part or an ingredient. 
(9) MATERIAL THAT IS SELF-PRODUCED.—The 
term ‘‘material that is self-produced’’ means an orig-
inating material that is produced by a producer of 
a good and used in the production of that good. 
(10) MODEL LINE OF MOTOR VEHICLES.—The 
term ‘‘model line of motor vehicles’’ means a group 
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of motor vehicles having the same platform or model 
name. 
(11) NET COST.—The term ‘‘net cost’’ means 
total cost minus sales promotion, marketing, and 
after-sales service costs, royalties, shipping and 
packing costs, and nonallowable interest costs that 
are included in the total cost. 
(12) NONALLOWABLE INTEREST COSTS.—The 
term ‘‘nonallowable interest costs’’ means interest 
costs incurred by a producer that exceed 700 basis 
points above the applicable official interest rate for 
comparable maturities of the country in which the 
producer is located. 
(13) NONORIGINATING
GOOD
OR
NONORIGI-
NATING
MATERIAL.—The 
term 
‘‘nonoriginating 
good’’ or ‘‘nonoriginating material’’ means a good or 
material, as the case may be, that does not qualify 
as originating under this section. 
(14) PACKING
MATERIALS
AND
CONTAINERS 
FOR SHIPMENT.—The term ‘‘packing materials and 
containers for shipment’’ means goods used to pro-
tect another good during its transportation and does 
not include the packaging materials and containers 
in which the other good is packaged for retail sale. 
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(15) PREFERENTIAL
TARIFF
TREATMENT.— 
The term ‘‘preferential tariff treatment’’ means the 
customs duty rate, and the treatment under article 
3.10.4 of the Agreement, that are applicable to an 
originating good pursuant to the Agreement. 
(16) PRODUCER.—The term ‘‘producer’’ means 
a person who engages in the production of a good 
in the territory of Panama or the United States. 
(17) PRODUCTION.—The term ‘‘production’’ 
means growing, mining, harvesting, fishing, raising, 
trapping, hunting, manufacturing, processing, as-
sembling, or disassembling a good. 
(18) REASONABLY ALLOCATE.—The term ‘‘rea-
sonably allocate’’ means to apportion in a manner 
that would be appropriate under generally accepted 
accounting principles. 
(19) RECOVERED
GOODS.—The term ‘‘recov-
ered goods’’ means materials in the form of indi-
vidual parts that are the result of— 
(A) the disassembly of used goods into in-
dividual parts; and 
(B) the cleaning, inspecting, testing, or 
other processing that is necessary for improve-
ment to sound working condition of such indi-
vidual parts. 
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(20) REMANUFACTURED GOOD.—The term ‘‘re-
manufactured good’’ means a good that is classified 
under chapter 84, 85, 87, or 90, or heading 9402, 
other than a good classified under heading 8418 or 
8516, and that— 
(A) is entirely or partially comprised of re-
covered goods; and 
(B) has a similar life expectancy and en-
joys a factory warranty similar to such a good 
that is new. 
(21) TOTAL
COST.—The term ‘‘total cost’’ 
means all product costs, period costs, and other 
costs for a good incurred in the territory of Panama, 
the United States, or both. 
(22) USED.—The term ‘‘used’’ means utilized 
or consumed in the production of goods. 
(o) PRESIDENTIAL PROCLAMATION AUTHORITY.— 
(1) IN GENERAL.—The President is authorized 
to proclaim, as part of the HTS— 
(A) the provisions set forth in Annex 4.1 
of the Agreement; and 
(B) any additional subordinate category 
that is necessary to carry out this title con-
sistent with the Agreement. 
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(2) FABRICS, YARNS, OR FIBERS NOT AVAIL-
ABLE IN COMMERCIAL QUANTITIES IN THE UNITED 
STATES.—The President is authorized to proclaim 
that a fabric, yarn, or fiber is added to the list in 
Annex 3.25 of the Agreement in an unrestricted 
quantity, as provided in article 3.25.4(e) of the 
Agreement. 
(3) MODIFICATIONS.— 
(A) IN GENERAL.—Subject to the consulta-
tion and layover provisions of section 104, the 
President may proclaim modifications to the 
provisions proclaimed under the authority of 
paragraph (1)(A), other than provisions of 
chapters 50 through 63 (as included in Annex 
4.1 of the Agreement). 
(B) ADDITIONAL
PROCLAMATIONS.—Not-
withstanding subparagraph (A), and subject to 
the consultation and layover provisions of sec-
tion 104, the President may proclaim before the 
end of the 1-year period beginning on the date 
on which the Agreement enters into force, 
modifications to correct any typographical, cler-
ical, or other nonsubstantive technical error re-
garding the provisions of chapters 50 through 
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63 (as included in Annex 4.1 of the Agree-
ment). 
(4) FABRICS, YARNS, OR FIBERS NOT AVAIL-
ABLE IN COMMERCIAL QUANTITIES IN PANAMA AND 
THE UNITED STATES.— 
(A) IN GENERAL.—Notwithstanding para-
graph (3)(A), the list of fabrics, yarns, and fi-
bers set forth in Annex 3.25 of the Agreement 
may be modified as provided for in this para-
graph. 
(B) DEFINITIONS.—In this paragraph: 
(i) INTERESTED ENTITY.—The term 
‘‘interested entity’’ means the Government 
of Panama, a potential or actual purchaser 
of a textile or apparel good, or a potential 
or actual supplier of a textile or apparel 
good. 
(ii) DAY; DAYS.—All references to 
‘‘day’’ and ‘‘days’’ exclude Saturdays, Sun-
days, and legal holidays observed by the 
Government of the United States. 
(C) REQUESTS TO ADD FABRICS, YARNS, 
OR FIBERS.— 
(i) IN GENERAL.—An interested entity 
may request the President to determine 
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that a fabric, yarn, or fiber is not available 
in commercial quantities in a timely man-
ner in Panama and the United States and 
to add that fabric, yarn, or fiber to the list 
in Annex 3.25 of the Agreement in a re-
stricted or unrestricted quantity. 
(ii) DETERMINATIONS.—After receiv-
ing a request under clause (i), the Presi-
dent may determine whether— 
(I) the fabric, yarn, or fiber is 
available in commercial quantities in a 
timely manner in Panama or the 
United States; or 
(II) any interested entity objects 
to the request. 
(iii) PROCLAMATION
AUTHORITY.— 
The President may, within the time peri-
ods specified in clause (iv), proclaim that 
the fabric, yarn, or fiber that is the subject 
of the request is added to the list in Annex 
3.25 of the Agreement in an unrestricted 
quantity, or in any restricted quantity that 
the President may establish, if the Presi-
dent has determined under clause (ii) 
that— 
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(I) the fabric, yarn, or fiber is 
not available in commercial quantities 
in a timely manner in Panama and 
the United States; or 
(II) no interested entity has ob-
jected to the request. 
(iv) TIME PERIODS.—The time peri-
ods within which the President may issue 
a proclamation under clause (iii) are— 
(I) not later than 30 days after 
the date on which a request is sub-
mitted under clause (i); or 
(II) not later than 44 days after 
the request is submitted, if the Presi-
dent determines, within 30 days after 
the date on which the request is sub-
mitted, that the President does not 
have sufficient information to make a 
determination under clause (ii). 
(v) 
EFFECTIVE
DATE.—Notwith-
standing section 103(a)(2), a proclamation 
made under clause (iii) shall take effect on 
the date on which the text of the proclama-
tion is published in the Federal Register. 
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(vi) ELIMINATION OF RESTRICTION.— 
Not later than 6 months after proclaiming 
under clause (iii) that a fabric, yarn, or 
fiber is added to the list in Annex 3.25 of 
the Agreement in a restricted quantity, the 
President may eliminate the restriction if 
the President determines that the fabric, 
yarn, or fiber is not available in commer-
cial quantities in a timely manner in Pan-
ama and the United States. 
(D) DEEMED APPROVAL OF REQUEST.—If, 
after an interested entity submits a request 
under subparagraph (C)(i), the President does 
not, within the applicable time period specified 
in subparagraph (C)(iv), make a determination 
under subparagraph (C)(ii) regarding the re-
quest, the fabric, yarn, or fiber that is the sub-
ject of the request shall be considered to be 
added, in an unrestricted quantity, to the list in 
Annex 3.25 of the Agreement beginning— 
(i) 45 days after the date on which 
the request is submitted; or 
(ii) 60 days after the date on which 
the request is submitted, if the President 
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made a determination under subparagraph 
(C)(iv)(II). 
(E) REQUESTS TO RESTRICT OR REMOVE 
FABRICS, YARNS, OR FIBERS.— 
(i) IN
GENERAL.—Subject to clause 
(ii), an interested entity may request the 
President to restrict the quantity of, or re-
move from the list in Annex 3.25 of the 
Agreement, any fabric, yarn, or fiber— 
(I) that has been added to that 
list in an unrestricted quantity pursu-
ant to paragraph (2) or subparagraph 
(C)(iii) or (D) of this paragraph; or 
(II) with respect to which the 
President has eliminated a restriction 
under subparagraph (C)(vi). 
(ii) TIME PERIOD FOR SUBMISSION.— 
An interested entity may submit a request 
under clause (i) at any time beginning on 
the date that is 6 months after the date of 
the action described in subclause (I) or (II) 
of that clause. 
(iii) PROCLAMATION
AUTHORITY.— 
Not later than 30 days after the date on 
which a request under clause (i) is sub-
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mitted, the President may proclaim an ac-
tion provided for under clause (i) if the 
President determines that the fabric, yarn, 
or fiber that is the subject of the request 
is available in commercial quantities in a 
timely manner in Panama or the United 
States. 
(iv) EFFECTIVE DATE.—A proclama-
tion issued under clause (iii) may not take 
effect earlier than the date that is 6 
months after the date on which the text of 
the proclamation is published in the Fed-
eral Register. 
(F) PROCEDURES.—The President shall 
establish procedures— 
(i) governing the submission of a re-
quest under subparagraphs (C) and (E); 
and 
(ii) providing an opportunity for inter-
ested entities to submit comments and sup-
porting evidence before the President 
makes a determination under subpara-
graph (C) (ii) or (vi) or (E)(iii). 
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