the good, shall be disregarded in determining whether all
the nonoriginating materials used in the production of the
good undergo an applicable change in tariff classification
set out in Annex 401 of the Agreement. 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 materials, as
the case may be, in calculating the regional value-content
of the good.
(j) PACKING MATERIALS
AND CONTAINERS
FOR
SHIPMENT.—Packing materials and containers in which
a good is packed for shipment shall be disregarded—
(1) in determining whether the nonoriginating
materials used in the production of the good under-
go an applicable change in tariff classification set
out in Annex 401 of the Agreement; and
(2) in determining whether the good satisfies a
regional value-content requirement.
(k) TRANSSHIPMENT.—A good shall not be consid-
ered to be an originating good by reason of having under-
gone production that satisfies the requirements of sub-
section (a) if, subsequent to that production, the good un-
dergoes further production or any other operation outside
the territories of the NAFTA countries, other than un-
loading, reloading, or any other operation necessary to
preserve it in good condition or to transport the good to
the territory of a NAFTA country.
(l) NONQUALIFYING OPERATIONS.—A good shall not
be considered to be an originating good merely by reason
of—
(1) mere dilution with water or another sub-
stance that does not materially alter the characteris-
tics of the good; or
(2) any production or pricing practice with re-
spect to which it may be demonstrated, by a prepon-
derance of evidence, that the object was to cir-
cumvent this section.
(m) INTERPRETATION AND APPLICATION.—For pur-
poses of this section:
(1) The basis for any tariff classification is the
HTS.
(2) Except as otherwise expressly provided,
whenever in this section there is a reference to a
heading or subheading such reference shall be a ref-
erence to a heading or subheading of the HTS.
(3) In applying subsection (a)(4), the deter-
mination of whether a heading or subheading under
the HTS provides for and specifically describes both
a good and its parts shall be made on the basis of
the nomenclature of the heading or subheading, the
rules of interpretation, or notes of the HTS.
(4) In applying the Customs Valuation Code—
(A) the principles of the Customs Valu-
ation Code shall apply to domestic transactions,
with such modifications as may be required by
the circumstances, as would apply to inter-
national transactions;
(B) the provisions of this section shall take
precedence over the Customs Valuation Code to
the extent of any difference; and
(C) the definitions in subsection (o) shall
take precedence over the definitions in the Cus-
toms Valuation Code to the extent of any dif-
ference.
(5) All costs referred to in this section shall be
recorded and maintained in accordance with the
Generally Accepted Accounting Principles applicable
in the territory of the NAFTA country in which the
good is produced.
(n) ORIGIN
OF
AUTOMATIC
DATA
PROCESSING
GOODS.—Notwithstanding any other provision of this sec-
tion, when the NAFTA countries apply the most-favored-
nation rate of duty described in paragraph 1 of section
A of Annex 308.1 of the Agreement to a good provided
for under the tariff provisions set out in Table 308.1.1
of such Annex, the good shall, upon importation from a
NAFTA country, be deemed to originate in the territory
of a NAFTA country for purposes of this section.
(o) SPECIAL RULE
FOR CERTAIN AGRICULTURAL
PRODUCTS.—Notwithstanding any other provision of this
section, for purposes of applying a rate of duty to a good
provided for in—
(1) heading 1202 that is exported from the ter-
ritory of Mexico, if the good is not wholly obtained
in the territory of Mexico,
(2) subheading 2008.11 that is exported from
the territory of Mexico, if any material provided for
in heading 1202 used in the production of that good
is not wholly obtained in the territory of Mexico, or
(3) subheading 1806.10.42 or 2106.90.12 that
is exported from the territory of Mexico, if any ma-
terial provided for in subheading 1701.99 used in
the production of that good is not a qualifying good,
such good shall be treated as a nonoriginating good and,
for purposes of this subsection, the terms ‘‘qualifying
good’’ and ‘‘wholly obtained in the territory of’’ have the
meaning given such terms in paragraph 26 of section A
of Annex 703.2 of the Agreement.
(p) DEFINITIONS.—For purposes of this section—
(1) 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, 
subheading 
8704.10,
8704.22, 8704.23, 8704.32, or 8704.90, or
heading 8705 or 8706, or motor vehicles de-
signed for the transport of 16 or more persons
provided for in subheading 8702.10.00 or
8702.90.00.
(B) Motor vehicles provided for in sub-
heading 8701.10, or subheadings 8701.30
through 8701.90.
(C) Motor vehicles for the transport of 15
or fewer persons provided for in subheading
8702.10.00 or 8702.90.00, or motor vehicles
provided for in subheading 8704.21 or 8704.31.
(D) Motor vehicles provided for in sub-
headings 8703.21 through 8703.90.
(2) CUSTOMS
VALUATION
CODE.—The term
‘‘Customs Valuation Code’’ means the Agreement on
Implementation of Article VII of the General Agree-
ment on Tariffs and Trade, including its interpreta-
tive notes.
(3) F.O.B.—The term ‘‘F.O.B.’’ means free on
board, regardless of the mode of transportation, at
the point of direct shipment by the seller to the
buyer.
(4) FUNGIBLE
GOODS
AND
FUNGIBLE
MATE-
RIALS.—The terms ‘‘fungible goods’’ and ‘‘fungible
materials’’ mean goods or materials that are inter-
changeable for commercial purposes and whose prop-
erties are essentially identical.
(5) GENERALLY ACCEPTED ACCOUNTING PRIN-
CIPLES.—The term ‘‘Generally Accepted Accounting
Principles’’ means the recognized consensus or sub-
stantial authoritative support in the territory of a
NAFTA country with respect to the recording of
revenues, expenses, costs, assets and liabilities, dis-
closure of information, and preparation of financial
statements. These standards may be broad guide-
lines of general application as well as detailed stand-
ards, practices, or procedures.
(6) GOODS WHOLLY OBTAINED OR PRODUCED
ENTIRELY IN THE TERRITORY OF ONE OR MORE OF
THE NAFTA COUNTRIES.—The term ‘‘goods wholly
obtained or produced entirely in the territory of one
or more of the NAFTA countries’’ means—