H. R. 3079—11 
(ii) CATEGORIES.—A category is described in this 
clause if it— 
(I) is the same model line of motor vehicles, 
is in the same class of motor vehicles, and is 
produced in the same plant in the territory of 
Panama or the United States, as the good 
described in clause (i) for which regional value- 
content is being calculated; 
(II) is the same class of motor vehicles, and 
is produced in the same plant in the territory 
of Panama or the United States, as the good 
described in clause (i) for which regional value- 
content is being calculated; or 
(III) is the same model line of motor vehicles 
produced in the territory of Panama or the United 
States as the good described in clause (i) for which 
regional value-content is being calculated. 
(D) OTHER AUTOMOTIVE GOODS.—For purposes of deter-
mining the regional value-content under subparagraph (A) 
for automotive materials provided for in any of subheadings 
8407.31 through 8407.34, in subheading 8408.20, or in 
heading 8409, 8706, 8707, or 8708, that are produced in 
the same plant, an importer, exporter, or producer may— 
(i) average the amounts calculated under the net 
cost formula contained in subparagraph (A) over— 
(I) the fiscal year of the motor vehicle producer 
to whom the automotive goods are sold, 
(II) any quarter or month, or 
(III) the fiscal year of the producer of such 
goods, 
if the goods were produced during the fiscal year, 
quarter, or month that is the basis for the calculation; 
(ii) determine the average referred to in clause 
(i) separately for such goods sold to 1 or more motor 
vehicle producers; or 
(iii) make a separate determination under clause 
(i) or (ii) for such goods that are exported to the terri-
tory of Panama or the United States. 
(E) CALCULATING NET COST.—The importer, exporter, 
or producer of an automotive good shall, consistent with 
the provisions regarding allocation of costs provided for 
in generally accepted accounting principles, determine the 
net cost of the automotive good under subparagraph (B) 
by— 
(i) calculating the total cost incurred with respect 
to all goods produced by the producer of the automotive 
good, subtracting any sales promotion, marketing, and 
after-sales service costs, royalties, shipping and 
packing costs, and nonallowable interest costs that are 
included in the total cost of all such goods, and then 
reasonably allocating the resulting net cost of those 
goods to the automotive good; 
(ii) calculating the total cost incurred with respect 
to all goods produced by that producer, reasonably 
allocating the total cost to the automotive good, and 
then subtracting any sales promotion, marketing, and 
after-sales service costs, royalties, shipping and
H. R. 3079—12 
packing costs, and nonallowable interest costs that are 
included in the portion of the total cost allocated to 
the automotive good; or 
(iii) reasonably allocating each cost that forms part 
of the total cost incurred with respect to the automotive 
good so that the aggregate of these costs does not 
include any sales promotion, marketing, and after-sales 
service costs, royalties, shipping and packing costs, 
or nonallowable interest costs. 
(d) VALUE OF MATERIALS.— 
(1) IN
GENERAL.—For the purpose of calculating the 
regional value-content of a good under subsection (c), and for 
purposes of applying the de minimis rules under subsection 
(f), the value of a material is— 
(A) in the case of a material that is imported by the 
producer of the good, the adjusted value of the material; 
(B) in the case of a material acquired in the territory 
in which the good is produced, the value, determined in 
accordance with Articles 1 through 8, Article 15, and the 
corresponding interpretive notes, of the Agreement on 
Implementation of Article VII of the General Agreement 
on Tariffs and Trade 1994 referred to in section 101(d)(8) 
of the Uruguay Round Agreements Act (19 U.S.C. 
3511(d)(8)), as set forth in regulations promulgated by the 
Secretary of the Treasury providing for the application 
of such Articles in the absence of an importation by the 
producer; or 
(C) in the case of a material that is self-produced, 
the sum of— 
(i) all expenses incurred in the production of the 
material, including general expenses; and 
(ii) an amount for profit equivalent to the profit 
added in the normal course of trade. 
(2) FURTHER ADJUSTMENTS TO THE VALUE OF MATERIALS.— 
(A) ORIGINATING MATERIAL.—The following expenses, 
if not included in the value of an originating material 
calculated under paragraph (1), may be added to the value 
of the originating material: 
(i) The costs of freight, insurance, packing, and 
all other costs incurred in transporting the material 
within or between the territory of Panama, the United 
States, or both, to the location of the producer. 
(ii) Duties, taxes, and customs brokerage fees on 
the material paid in the territory of Panama, the 
United States, or both, other than duties or taxes 
that are waived, refunded, refundable, or otherwise 
recoverable, including credit against duty or tax paid 
or payable. 
(iii) The cost of waste and spoilage resulting from 
the use of the material in the production of the good, 
less the value of renewable scrap or byproducts. 
(B) 
NONORIGINATING
MATERIAL.—The 
following 
expenses, if included in the value of a nonoriginating mate-
rial calculated under paragraph (1), may be deducted from 
the value of the nonoriginating material: 
(i) The costs of freight, insurance, packing, and 
all other costs incurred in transporting the material
H. R. 3079—13 
within or between the territory of Panama, the United 
States, or both, to the location of the producer. 
(ii) Duties, taxes, and customs brokerage fees on 
the material paid in the territory of Panama, the 
United States, or both, other than duties or taxes 
that are waived, refunded, refundable, or otherwise 
recoverable, including credit against duty or tax paid 
or payable. 
(iii) The cost of waste and spoilage resulting from 
the use of the material in the production of the good, 
less the value of renewable scrap or byproducts. 
(iv) The cost of originating materials used in the 
production of the nonoriginating material in the terri-
tory of Panama, the United States, or both. 
(e) ACCUMULATION.— 
(1) ORIGINATING MATERIALS USED IN PRODUCTION OF GOODS 
OF THE OTHER COUNTRY.—Originating materials from the terri-
tory of Panama or the United States that are used in the 
production of a good in the territory of the other country shall 
be considered to originate in the territory of such other country. 
(2) MULTIPLE PRODUCERS.—A good that is produced in the 
territory of Panama, the United States, or both, by 1 or more 
producers, is an originating good if the good satisfies the 
requirements of subsection (b) and all other applicable require-
ments of this section. 
(f) DE MINIMIS AMOUNTS OF NONORIGINATING MATERIALS.— 
(1) IN
GENERAL.—Except as provided in paragraphs (2) 
and (3), a good that does not undergo a change in tariff classi-
fication pursuant to Annex 4.1 of the Agreement is an origi-
nating good if— 
(A) the value of all nonoriginating materials that— 
(i) are used in the production of the good, and 
(ii) do not undergo the applicable change in tariff 
classification (set forth in Annex 4.1 of the Agreement), 
does not exceed 10 percent of the adjusted value of the 
good; 
(B) the good meets all other applicable requirements 
of this section; and 
(C) the value of such nonoriginating materials is 
included in the value of nonoriginating materials for any 
applicable regional value-content requirement for the good. 
(2) EXCEPTIONS.—Paragraph (1) does not apply to the fol-
lowing: 
(A) A nonoriginating material provided for in chapter 
4, or a nonoriginating dairy preparation containing over 
10 percent by weight of milk solids provided for in sub-
heading 1901.90 or 2106.90, that is used in the production 
of a good provided for in chapter 4. 
(B) A nonoriginating material provided for in chapter 
4, or a nonoriginating dairy preparation containing over 
10 percent by weight of milk solids provided for in sub-
heading 1901.90, that is used in the production of the 
following goods: 
(i) Infant preparations containing over 10 percent 
by weight of milk solids provided for in subheading 
1901.10.
H. R. 3079—14 
(ii) Mixes and doughs, containing over 25 percent 
by weight of butterfat, not put up for retail sale, pro-
vided for in subheading 1901.20. 
(iii) Dairy preparations containing over 10 percent 
by weight of milk solids provided for in subheading 
1901.90 or 2106.90. 
(iv) Goods provided for in heading 2105. 
(v) Beverages containing milk provided for in sub-
heading 2202.90. 
(vi) Animal feeds containing over 10 percent by 
weight of milk solids provided for in subheading 
2309.90. 
(C) A nonoriginating material provided for in heading 
0805, or any of subheadings 2009.11 through 2009.39, that 
is used in the production of a good provided for in any 
of subheadings 2009.11 through 2009.39, or in fruit or 
vegetable juice of any single fruit or vegetable, fortified 
with minerals or vitamins, concentrated or unconcentrated, 
provided for in subheading 2106.90 or 2202.90. 
(D) A nonoriginating material provided for in heading 
0901 or 2101 that is used in the production of a good 
provided for in heading 0901 or 2101. 
(E) A nonoriginating material provided for in heading 
1006 that is used in the production of a good provided 
for in heading 1102 or 1103 or subheading 1904.90. 
(F) A nonoriginating material provided for in chapter 
15 that is used in the production of a good provided for 
in chapter 15. 
(G) A nonoriginating material provided for in heading 
1701 that is used in the production of a good provided 
for in any of headings 1701 through 1703. 
(H) A nonoriginating material provided for in chapter 
17 that is used in the production of a good provided for 
in subheading 1806.10. 
(I) Except as provided in subparagraphs (A) through 
(H) and Annex 4.1 of the Agreement, a nonoriginating 
material used in the production of a good provided for 
in any of chapters 1 through 24, unless the nonoriginating 
material is provided for in a different subheading than 
the good for which origin is being determined under this 
section. 
(3) TEXTILE OR APPAREL GOODS.— 
(A) IN GENERAL.—Except as provided in subparagraph 
(B), a textile or apparel good that is not an originating 
good because certain fibers or yarns used in the production 
of the component of the good that determines the tariff 
classification of the good do not undergo an applicable 
change in tariff classification, set forth in Annex 4.1 of 
the Agreement, shall be considered to be an originating 
good if— 
(i) the total weight of all such fibers or yarns 
in that component is not more than 10 percent of 
the total weight of that component; or 
(ii) the yarns are those described in section 
204(b)(3)(B)(vi)(IV) of the Andean Trade Preference Act 
(19 U.S.C. 3203(b)(3)(B)(vi)(IV)) (as in effect on Feb-
ruary 12, 2011).
H. R. 3079—15 
(B) CERTAIN TEXTILE OR APPAREL GOODS.—A textile 
or apparel good containing elastomeric yarns in the compo-
nent of the good that determines the tariff classification 
of the good shall be considered to be an originating good 
only if such yarns are wholly formed and finished in the 
territory of Panama, the United States, or both. 
(C) FABRIC, YARN, OR FIBER.—For purposes of this para-
graph, in the case of a good that is a fabric, yarn, or 
fiber, the term ‘‘component of the good that determines 
the tariff classification of the good’’ means all of the fibers 
in the good. 
(g) FUNGIBLE GOODS AND MATERIALS.— 
(1) IN GENERAL.— 
(A) CLAIM FOR PREFERENTIAL TARIFF TREATMENT.—A 
person claiming that a fungible good or fungible material 
is an originating good may base the claim either on the 
physical segregation of the fungible good or fungible mate-
rial or by using an inventory management method with 
respect to the fungible good or fungible material. 
(B) INVENTORY
MANAGEMENT
METHOD.—In this sub-
section, the term ‘‘inventory management method’’ means— 
(i) averaging; 
(ii) ‘‘last-in, first-out’’; 
(iii) ‘‘first-in, first-out’’; or 
(iv) any other method— 
(I) recognized in the generally accepted 
accounting principles of the country in which the 
production is performed (whether Panama or the 
United States); or 
(II) otherwise accepted by that country. 
(2) ELECTION OF INVENTORY METHOD.—A person selecting 
an inventory management method under paragraph (1) for 
a particular fungible good or fungible material shall continue 
to use that method for that fungible good or fungible material 
throughout the fiscal year of such person. 
(h) ACCESSORIES, SPARE PARTS, OR TOOLS.— 
(1) IN GENERAL.—Subject to paragraphs (2) and (3), acces-
sories, spare parts, or tools delivered with a good that form 
part of the good’s standard accessories, spare parts, or tools 
shall— 
(A) be treated as originating goods if the good is an 
originating good; and 
(B) be disregarded in determining whether all the non-
originating materials used in the production of the good 
undergo the applicable change in tariff classification set 
forth in Annex 4.1 of the Agreement. 
(2) CONDITIONS.—Paragraph (1) shall apply only if— 
(A) the accessories, spare parts, or tools are classified 
with and not invoiced separately from the good, regardless 
of whether such accessories, spare parts, or tools are speci-
fied or are separately identified in the invoice for the good; 
and 
(B) the quantities and value of the accessories, 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 acces-
sories, spare parts, or tools shall be taken into account as