SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘United States–Panama Trade Promotion Agreement Im-
plementation Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Purposes. 
Sec. 3. Definitions. 
TITLE I—APPROVAL OF, AND GENERAL PROVISIONS RELATING 
TO, THE AGREEMENT 
Sec. 101. Approval and entry into force of the Agreement. 
Sec. 102. Relationship of the Agreement to United States and State law. 
Sec. 103. Implementing actions in anticipation of entry into force and initial 
regulations. 
Sec. 104. Consultation and layover provisions for, and effective date of, pro-
claimed actions. 
Sec. 105. Administration of dispute settlement proceedings. 
Sec. 106. Arbitration of claims. 
Sec. 107. Effective dates; effect of termination. 
TITLE II—CUSTOMS PROVISIONS 
Sec. 201. Tariff modifications. 
Sec. 202. Additional duties on certain agricultural goods. 
Sec. 203. Rules of origin. 
Sec. 204. Customs user fees. 
Sec. 205. Disclosure of incorrect information; false certifications of origin; de-
nial of preferential tariff treatment. 
Sec. 206. Reliquidation of entries. 
Sec. 207. Recordkeeping requirements. 
Sec. 208. Enforcement relating to trade in textile or apparel goods. 
Sec. 209. Regulations. 
TITLE III—RELIEF FROM IMPORTS 
Sec. 301. Definitions. 
Subtitle A—Relief From Imports Benefitting From the Agreement 
Sec. 311. Commencing of action for relief. 
Sec. 312. Commission action on petition. 
Sec. 313. Provision of relief. 
Sec. 314. Termination of relief authority. 
Sec. 315. Compensation authority. 
Sec. 316. Confidential business information. 
Subtitle B—Textile and Apparel Safeguard Measures
Sec. 321. Commencement of action for relief. 
Sec. 322. Determination and provision of relief. 
Sec. 323. Period of relief. 
Sec. 324. Articles exempt from relief. 
Sec. 325. Rate after termination of import relief. 
Sec. 326. Termination of relief authority. 
Sec. 327. Compensation authority. 
Sec. 328. Confidential business information. 
Subtitle C—Cases Under Title II of the Trade Act of 1974 
Sec. 331. Findings and action on Panamanian articles. 
TITLE IV—MISCELLANEOUS 
Sec. 401. Eligible products. 
Sec. 402. Modification to the Caribbean Basin Economic Recovery Act. 
TITLE V—OFFSETS 
Sec. 501. Extension of customs user fees. 
Sec. 502. Time for payment of corporate estimated taxes. 
SEC. 2. PURPOSES. 
The purposes of this Act are— 
(1) to approve and implement the free trade 
agreement between the United States and Panama 
entered into under the authority of section 2103(b) 
of the Bipartisan Trade Promotion Authority Act of 
2002 (19 U.S.C. 3803(b)); 
(2) to strengthen and develop economic rela-
tions between the United States and Panama for 
their mutual benefit; 
(3) to establish free trade between the United 
States and Panama through the reduction and elimi-
nation of barriers to trade in goods and services and 
to investment; and
(4) to lay the foundation for further coopera-
tion to expand and enhance the benefits of the 
Agreement. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) 
AGREEMENT.—The 
term 
‘‘Agreement’’ 
means the United States–Panama Trade Promotion 
Agreement approved by Congress under section 
101(a)(1). 
(2) COMMISSION.—The term ‘‘Commission’’ 
means the United States International Trade Com-
mission. 
(3) HTS.—The term ‘‘HTS’’ means the Har-
monized Tariff Schedule of the United States. 
(4) TEXTILE
OR
APPAREL
GOOD.—The term 
‘‘textile or apparel good’’ means a good listed in the 
Annex to the Agreement on Textiles and Clothing 
referred to in section 101(d)(4) of the Uruguay 
Round Agreements Act (19 U.S.C. 3511(d)(4)), 
other than a good listed in Annex 3.30 of the Agree-
ment.
TITLE 
I—APPROVAL 
OF, 
AND 
GENERAL 
PROVISIONS 
RE-
LATING TO, THE AGREEMENT 
SEC. 101. APPROVAL AND ENTRY INTO FORCE OF THE 
AGREEMENT. 
(a) APPROVAL OF AGREEMENT AND STATEMENT OF 
ADMINISTRATIVE ACTION.—Pursuant to section 2105 of 
the Bipartisan Trade Promotion Authority Act of 2002 
(19 U.S.C. 3805) and section 151 of the Trade Act of 
1974 (19 U.S.C. 2191), Congress approves— 
(1) the United States–Panama Trade Pro-
motion Agreement entered into on June 28, 2007, 
with the Government of Panama and submitted to 
Congress on October 3, 2011; and 
(2) the statement of administrative action pro-
posed to implement the Agreement that was sub-
mitted to Congress on October 3, 2011. 
(b) CONDITIONS FOR ENTRY INTO FORCE OF THE 
AGREEMENT.—At such time as the President determines 
that Panama has taken measures necessary to comply 
with those provisions of the Agreement that are to take 
effect on the date on which the Agreement enters into 
force, the President is authorized to exchange notes with 
the Government of Panama providing for the entry into
force, on or after January 1, 2012, of the Agreement with 
respect to the United States. 
SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED 
STATES AND STATE LAW. 
(a) RELATIONSHIP
OF AGREEMENT
TO UNITED 
STATES LAW.— 
(1) UNITED STATES LAW TO PREVAIL IN CON-
FLICT.—No provision of the Agreement, nor the ap-
plication of any such provision to any person or cir-
cumstance, which is inconsistent with any law of the 
United States shall have effect. 
(2) CONSTRUCTION.—Nothing in this Act shall 
be construed— 
(A) to amend or modify any law of the 
United States, or 
(B) to limit any authority conferred under 
any law of the United States, 
unless specifically provided for in this Act. 
(b) RELATIONSHIP
OF
AGREEMENT
TO
STATE 
LAW.— 
(1) LEGAL CHALLENGE.—No State law, or the 
application thereof, may be declared invalid as to 
any person or circumstance on the ground that the 
provision or application is inconsistent with the 
Agreement, except in an action brought by the
United States for the purpose of declaring such law 
or application invalid. 
(2) DEFINITION OF STATE LAW.—For purposes 
of this subsection, the term ‘‘State law’’ includes— 
(A) any law of a political subdivision of a 
State; and 
(B) any State law regulating or taxing the 
business of insurance. 
(c) EFFECT OF AGREEMENT WITH RESPECT TO PRI-
VATE REMEDIES.—No person other than the United 
States— 
(1) shall have any cause of action or defense 
under the Agreement or by virtue of congressional 
approval thereof; or 
(2) may challenge, in any action brought under 
any provision of law, any action or inaction by any 
department, agency, or other instrumentality of the 
United States, any State, or any political subdivision 
of a State, on the ground that such action or inac-
tion is inconsistent with the Agreement. 
SEC. 103. IMPLEMENTING ACTIONS IN ANTICIPATION OF 
ENTRY INTO FORCE AND INITIAL REGULA-
TIONS. 
(a) IMPLEMENTING ACTIONS.—
(1) PROCLAMATION
AUTHORITY.—After the 
date of the enactment of this Act— 
(A) the President may proclaim such ac-
tions, and 
(B) other appropriate officers of the 
United States Government may issue such reg-
ulations, 
as may be necessary to ensure that any provision of 
this Act, or amendment made by this Act, that takes 
effect on the date on which the Agreement enters 
into force is appropriately implemented on such 
date, but no such proclamation or regulation may 
have an effective date earlier than the date on which 
the Agreement enters into force. 
(2) EFFECTIVE DATE OF CERTAIN PROCLAIMED 
ACTIONS.—Any action proclaimed by the President 
under the authority of this Act that is not subject 
to the consultation and layover provisions under sec-
tion 104 may not take effect before the 15th day 
after the date on which the text of the proclamation 
is published in the Federal Register. 
(3) WAIVER OF 15-DAY RESTRICTION.—The 15- 
day restriction contained in paragraph (2) on the 
taking effect of proclaimed actions is waived to the 
extent that the application of such restriction would
prevent the taking effect on the date the Agreement 
enters into force of any action proclaimed under this 
section. 
(b) INITIAL REGULATIONS.—Initial regulations nec-
essary or appropriate to carry out the actions required by 
or authorized under this Act or proposed in the statement 
of 
administrative 
action 
submitted 
under 
section 
101(a)(2) to implement the Agreement shall, to the max-
imum extent feasible, be issued within 1 year after the 
date on which the Agreement enters into force. In the case 
of any implementing action that takes effect on a date 
after the date on which the Agreement enters into force, 
initial regulations to carry out that action shall, to the 
maximum extent feasible, be issued within 1 year after 
such effective date. 
SEC. 104. CONSULTATION AND LAYOVER PROVISIONS FOR, 
AND EFFECTIVE DATE OF, PROCLAIMED AC-
TIONS. 
If a provision of this Act provides that the implemen-
tation of an action by the President by proclamation is 
subject to the consultation and layover requirements of 
this section, such action may be proclaimed only if— 
(1) the President has obtained advice regarding 
the proposed action from—
(A) the appropriate advisory committees 
established under section 135 of the Trade Act 
of 1974 (19 U.S.C. 2155); and 
(B) the Commission; 
(2) the President has submitted to the Com-
mittee on Finance of the Senate and the Committee 
on Ways and Means of the House of Representatives 
a report that sets forth— 
(A) the action proposed to be proclaimed 
and the reasons therefor; and 
(B) the advice obtained under paragraph 
(1); 
(3) a period of 60 calendar days, beginning on 
the first day on which the requirements set forth in 
paragraphs (1) and (2) have been met, has expired; 
and 
(4) the President has consulted with the com-
mittees referred to in paragraph (2) regarding the 
proposed action during the period referred to in 
paragraph (3). 
SEC. 105. ADMINISTRATION OF DISPUTE SETTLEMENT PRO-
CEEDINGS. 
(a) ESTABLISHMENT OR DESIGNATION OF OFFICE.— 
The President is authorized to establish or designate with-
in the Department of Commerce an office that shall be
responsible for providing administrative assistance to pan-
els established under chapter 20 of the Agreement. The 
office shall not be considered to be an agency for purposes 
of section 552 of title 5, United States Code. 
(b) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated for each fiscal year after 
fiscal year 2011 to the Department of Commerce up to 
$150,000 for the establishment and operations of the of-
fice established or designated under subsection (a) and for 
the payment of the United States share of the expenses 
of panels established under chapter 20 of the Agreement. 
SEC. 106. ARBITRATION OF CLAIMS. 
The United States is authorized to resolve any claim 
against 
the 
United 
States 
covered 
by 
article 
10.16.1(a)(i)(C) or article 10.16.1(b)(i)(C) of the Agree-
ment, pursuant to the Investor-State Dispute Settlement 
procedures set forth in section B of chapter 10 of the 
Agreement. 
SEC. 107. EFFECTIVE DATES; EFFECT OF TERMINATION. 
(a) EFFECTIVE DATES.—Except as provided in sub-
section (b), this Act and the amendments made by this 
Act take effect on the date on which the Agreement enters 
into force. 
(b) EXCEPTIONS.—
(1) IN GENERAL.—Sections 1 through 3, this 
title, and title V take effect on the date of the enact-
ment of this Act. 
(2) CERTAIN AMENDATORY PROVISIONS.—The 
amendments made by sections 204, 205, 207, and 
401 of this Act take effect on the date of the enact-
ment of this Act and apply with respect to Panama 
on the date on which the Agreement enters into 
force. 
(c) TERMINATION
OF
THE AGREEMENT.—On the 
date on which the Agreement terminates, this Act (other 
than this subsection and title V) and the amendments 
made by this Act (other than the amendments made by 
title V) shall cease to have effect. 
TITLE II—CUSTOMS PROVISIONS 
SEC. 201. TARIFF MODIFICATIONS. 
(a) TARIFF MODIFICATIONS PROVIDED FOR IN THE 
AGREEMENT.— 
(1) PROCLAMATION
AUTHORITY.—The Presi-
dent may proclaim— 
(A) such modifications or continuation of 
any duty, 
(B) such continuation of duty-free or ex-
cise treatment, or 
(C) such additional duties,
as the President determines to be necessary or ap-
propriate to carry out or apply articles 3.3, 3.5, 3.6, 
3.26, 3.27, 3.28, and 3.29, and Annex 3.3, of the 
Agreement. 
(2) EFFECT ON GSP STATUS.—Notwithstanding 
section 502(a)(1) of the Trade Act of 1974 (19 
U.S.C. 2462(a)(1)), the President shall, on the date 
on which the Agreement enters into force, terminate 
the designation of Panama as a beneficiary devel-
oping country for purposes of title V of the Trade 
Act of 1974 (19 U.S.C. 2461 et seq.). 
(3) EFFECT ON CBERA STATUS.— 
(A) IN
GENERAL.—Notwithstanding sec-
tion 212(a) of the Caribbean Basin Economic 
Recovery Act (19 U.S.C. 2702(a)), the Presi-
dent shall, on the date on which the Agreement 
enters into force, terminate the designation of 
Panama as a beneficiary country for purposes 
of that Act. 
(B) EXCEPTION.—Notwithstanding sub-
paragraph (A), Panama shall be considered a 
beneficiary country under section 212(a) of the 
Caribbean Basin Economic Recovery Act, for 
purposes of—
(i) sections 771(7)(G)(ii)(III) and 
771(7)(H) of the Tariff Act of 1930 (19 
U.S.C. 
1677(7)(G)(ii)(III) 
and 
1677(7)(H)); 
(ii) the duty-free treatment provided 
under paragraph 4 of the General Notes to 
the Schedule of the United States to 
Annex 3.3 of the Agreement; and 
(iii) section 274(h)(6)(B) of the Inter-
nal Revenue Code of 1986. 
(b) OTHER TARIFF MODIFICATIONS.—Subject to the 
consultation and layover provisions of section 104, the 
President may proclaim— 
(1) such modifications or continuation of any 
duty, 
(2) such modifications as the United States 
may agree to with Panama regarding the staging of 
any duty treatment set forth in Annex 3.3 of the 
Agreement, 
(3) such continuation of duty-free or excise 
treatment, or 
(4) such additional duties, 
as the President determines to be necessary or appropriate 
to maintain the general level of reciprocal and mutually
advantageous concessions with respect to Panama pro-
vided for by the Agreement. 
(c) CONVERSION TO AD VALOREM RATES.—For pur-
poses of subsections (a) and (b), with respect to any good 
for which the base rate in the Schedule of the United 
States to Annex 3.3 of the Agreement is a specific or com-
pound rate of duty, the President may substitute for the 
base rate an ad valorem rate that the President deter-
mines to be equivalent to the base rate. 
(d) TARIFF RATE QUOTAS.—In implementing the 
tariff rate quotas set forth in Appendix I to the General 
Notes to the Schedule of the United States to Annex 3.3 
of the Agreement, the President shall take such action as 
may be necessary to ensure that imports of agricultural 
goods do not disrupt the orderly marketing of commodities 
in the United States. 
SEC. 202. ADDITIONAL DUTIES ON CERTAIN AGRICUL-
TURAL GOODS. 
(a) DEFINITIONS.—In this section: 
(1) APPLICABLE NTR (MFN) RATE OF DUTY.— 
The term ‘‘applicable NTR (MFN) rate of duty’’ 
means, with respect to a safeguard good, a rate of 
duty equal to the lowest of— 
(A) the base rate in the Schedule of the 
United States to Annex 3.3 of the Agreement;
(B) the column 1 general rate of duty that 
would, on the day before the date on which the 
Agreement enters into force, apply to a good 
classifiable in the same 8-digit subheading of 
the HTS as the safeguard good; or 
(C) the column 1 general rate of duty that 
would, at the time the additional duty is im-
posed under subsection (b), apply to a good 
classifiable in the same 8-digit subheading of 
the HTS as the safeguard good. 
(2) SAFEGUARD GOOD.—The term ‘‘safeguard 
good’’ means a good— 
(A) that is included in the Schedule of the 
United States to Annex 3.17 of the Agreement; 
(B) that qualifies as an originating good 
under section 203; and 
(C) for which a claim for preferential tariff 
treatment under the Agreement has been made. 
(3) SCHEDULE
RATE
OF
DUTY.—The term 
‘‘schedule rate of duty’’ means, with respect to a 
safeguard good, the rate of duty for that good that 
is set forth in the Schedule of the United States to 
Annex 3.3 of the Agreement. 
(4) TRIGGER LEVEL.—
(A) IN
GENERAL.—The term ‘‘trigger 
level’’ means— 
(i) in the case of a safeguard good 
classified under subheading 0201.10.50, 
0201.20.80, 
0201.30.80, 
0202.10.50, 
0202.20.80, or 0202.30.80 of the HTS— 
(I) in year 1 of the Agreement, 
330 metric tons; and 
(II) in year 2 of the Agreement 
through year 14 of the Agreement, a 
quantity equal to 110 percent of the 
trigger level for that safeguard good 
for the preceding calendar year; and 
(ii) in the case of any other safeguard 
good, 115 percent of the quantity that is 
provided for that safeguard good in the 
corresponding calendar year in the applica-
ble table contained in Appendix I to the 
General Notes to the Schedule of the 
United States to Annex 3.3 of the Agree-
ment. 
(B) RELATIONSHIP TO TABLE.—For pur-
poses of subparagraph (A)(ii), year 1 in the ap-
plicable table contained in Appendix I to the 
General Notes to the Schedule of the United
States to Annex 3.3 of the Agreement cor-
responds to year 1 of the Agreement. 
(5) YEAR 1 OF THE AGREEMENT.—The term 
‘‘year 1 of the Agreement’’ means the period begin-
ning on the date, in a calendar year, on which the 
Agreement enters into force and ending on Decem-
ber 31 of that calendar year. 
(6) YEARS
OTHER
THAN
YEAR
OF
THE 
AGREEMENT.—Any reference to a year of the Agree-
ment subsequent to year 1 of the Agreement shall 
be deemed to be a reference to the corresponding 
calendar year in which the Agreement is in force. 
(b) ADDITIONAL DUTIES ON SAFEGUARD GOODS.— 
(1) IN GENERAL.—In addition to any duty pro-
claimed under subsection (a) or (b) of section 201, 
the Secretary of the Treasury shall assess a duty, in 
the amount determined under paragraph (2), on a 
safeguard good imported into the United States in 
a calendar year if the Secretary determines that, 
prior to such importation, the total volume of that 
safeguard good that is imported into the United 
States in that calendar year exceeds the trigger level 
for that good for that calendar year.
(2) CALCULATION OF ADDITIONAL DUTY.—The 
additional duty on a safeguard good under this sub-
section shall be— 
(A) in the case of a good classified under 
subheading 
0201.10.50, 
0201.20.80, 
0201.30.80, 
0202.10.50, 
0202.20.80, 
or 
0202.30.80 of the HTS— 
(i) in year 1 of the Agreement 
through year 6 of the Agreement, an 
amount equal to 100 percent of the excess 
of the applicable NTR (MFN) rate of duty 
over the schedule rate of duty; and 
(ii) in year 7 of the Agreement 
through year 14 of the Agreement, an 
amount equal to 50 percent of the excess 
of the applicable NTR (MFN) rate of duty 
over the schedule rate of duty; 
(B) in the case of a good classified under 
subheading 
0406.10.08, 
0406.10.88, 
0406.20.91, 
0406.30.91, 
0406.90.97, 
or 
2105.00.20 of the HTS— 
(i) in year 1 of the Agreement 
through year 11 of the Agreement, an 
amount equal to 100 percent of the excess
of the applicable NTR (MFN) rate of duty 
over the schedule rate of duty; and 
(ii) in year 12 of the Agreement 
through year 14 of the Agreement, an 
amount equal to 50 percent of the excess 
of the applicable NTR (MFN) rate of duty 
over the schedule rate of duty; and 
(C) in the case of any other safeguard 
good— 
(i) in year 1 of the Agreement 
through year 13 of the Agreement, an 
amount equal to 100 percent of the excess 
of the applicable NTR (MFN) rate of duty 
over the schedule rate of duty; and 
(ii) in year 14 of the Agreement 
through year 16 of the Agreement, an 
amount equal to 50 percent of the excess 
of the applicable NTR (MFN) rate of duty 
over the schedule rate of duty. 
(3) NOTICE.—Not later than 60 days after the 
date on which the Secretary of the Treasury first as-
sesses an additional duty in a calendar year on a 
good under this subsection, the Secretary shall no-
tify the Government of Panama in writing of such
action and shall provide to that Government data 
supporting the assessment of the additional duty. 
(c) EXCEPTIONS.—No additional duty shall be as-
sessed on a good under subsection (b) if, at the time of 
entry, the good is subject to import relief under— 
(1) subtitle A of title III of this Act; or 
(2) chapter 1 of title II of the Trade Act of 
1974 (19 U.S.C. 2251 et seq.). 
(d) TERMINATION.—The assessment of an additional 
duty on a good under subsection (b) shall cease to apply 
to that good on the date on which duty-free treatment 
must be provided to that good under the Schedule of the 
United States to Annex 3.3 of the Agreement. 
SEC. 203. RULES OF ORIGIN. 
(a) APPLICATION
AND INTERPRETATION.—In this 
section: 
(1) TARIFF
CLASSIFICATION.—The basis for 
any tariff classification is the HTS. 
(2) REFERENCE
TO
HTS.—Whenever in this 
section there is a reference to a chapter, heading, or 
subheading, such reference shall be a reference to a 
chapter, heading, or subheading of the HTS. 
(3) COST OR VALUE.—Any cost or value re-
ferred to in this section shall be recorded and main-
tained in accordance with the generally accepted ac-
counting principles applicable in the territory of the 
country in which the good is produced (whether 
Panama or the United States). 
(b) ORIGINATING GOODS.—For purposes of this Act 
and for purposes of implementing the preferential tariff 
treatment provided for under the Agreement, except as 
otherwise provided in this section, a good is an originating 
good if— 
(1) the good is a good wholly obtained or pro-
duced entirely in the territory of Panama, the 
United States, or both; 
(2) the good— 
(A) is produced entirely in the territory of 
Panama, the United States, or both, and— 
(i) each of the nonoriginating mate-
rials used in the production of the good 
undergoes an applicable change in tariff 
classification specified in Annex 4.1 of the 
Agreement; or 
(ii) the good otherwise satisfies any 
applicable regional value-content or other 
requirements specified in Annex 4.1 of the 
Agreement; and 
(B) satisfies all other applicable require-
ments of this section; or
(3) the good is produced entirely in the terri-
tory of Panama, the United States, or both, exclu-
sively from materials described in paragraph (1) or 
(2). 
(c) REGIONAL VALUE-CONTENT.— 
(1) IN GENERAL.—For purposes of subsection 
(b)(2), the regional value-content of a good referred 
to in Annex 4.1 of the Agreement, except for goods 
to which paragraph (4) applies, shall be calculated 
by the importer, exporter, or producer of the good, 
on the basis of the build-down method described in 
paragraph (2) or the build-up method described in 
paragraph (3). 
(2) BUILD-DOWN METHOD.— 
(A) IN GENERAL.—The regional value-con-
tent of a good may be calculated on the basis 
of the following build-down method: 
AV–VNM 
RVC = ————— × 100 
AV 
(B) DEFINITIONS.—In subparagraph (A): 
(i) RVC.—The term ‘‘RVC’’ means 
the regional value-content of the good, ex-
pressed as a percentage. 
(ii) AV.—The term ‘‘AV’’ means the 
adjusted value of the good.
(iii) VNM.—The term ‘‘VNM’’ means 
the value of nonoriginating materials that 
are acquired and used by the producer in 
the production of the good, but does not 
include the value of a material that is self- 
produced. 
(3) BUILD-UP METHOD.— 
(A) IN GENERAL.—The regional value-con-
tent of a good may be calculated on the basis 
of the following build-up method: 
VOM 
RVC = ————— × 100 
AV 
(B) DEFINITIONS.—In subparagraph (A): 
(i) RVC.—The term ‘‘RVC’’ means 
the regional value-content of the good, ex-
pressed as a percentage. 
(ii) AV.—The term ‘‘AV’’ means the 
adjusted value of the good. 
(iii) VOM.—The term ‘‘VOM’’ means 
the value of originating materials that are 
acquired or self-produced, and used by the 
producer in the production of the good. 
(4) SPECIAL RULE FOR CERTAIN AUTOMOTIVE 
GOODS.— 
(A) IN GENERAL.—For purposes of sub-
section (b)(2), the regional value-content of an
automotive good referred to in Annex 4.1 of the 
Agreement may be calculated by the importer, 
exporter, or producer of the good on the basis 
of the build-down method described in para-
graph (2), the build-up method described in 
paragraph (3), or the following net cost method: 
NC¥VNM 
RVC = ————— × 100 
NC 
(B) DEFINITIONS.—In subparagraph (A): 
(i) AUTOMOTIVE
GOOD.—The term 
‘‘automotive good’’ means a good provided 
for in any of subheadings 8407.31 through 
8407.34, subheading 8408.20, heading 
8409, or any of headings 8701 through 
8708. 
(ii) RVC.—The term ‘‘RVC’’ means 
the regional value-content of the auto-
motive good, expressed as a percentage. 
(iii) NC.—The term ‘‘NC’’ means the 
net cost of the automotive good. 
(iv) VNM.—The term ‘‘VNM’’ means 
the value of nonoriginating materials that 
are acquired and used by the producer in 
the production of the automotive good, but 
does not include the value of a material 
that is self-produced.
(C) MOTOR VEHICLES.— 
(i) BASIS
OF
CALCULATION.—For 
purposes of determining the regional value- 
content under subparagraph (A) for an 
automotive good that is a motor vehicle 
provided for in any of headings 8701 
through 8705, an importer, exporter, or 
producer may average the amounts cal-
culated under the net cost formula con-
tained in subparagraph (A), over the pro-
ducer’s fiscal year— 
(I) with respect to all motor vehi-
cles in any one of the categories de-
scribed in clause (ii); or 
(II) with respect to all motor ve-
hicles in any such category that are 
exported to the territory of Panama 
or the United States. 
(ii) CATEGORIES.—A category is de-
scribed 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 de-
scribed 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 de-
scribed in clause (i) for which regional 
value-content is being calculated; or 
(III) is the same model line of 
motor vehicles produced in the terri-
tory 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 determining the regional value-con-
tent 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 auto-
motive goods are sold, 
(II) any quarter or month, or 
(III) the fiscal year of the pro-
ducer of such goods, 
if the goods were produced during the fis-
cal 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 territory of Panama or 
the United States. 
(E) CALCULATING
NET
COST.—The im-
porter, exporter, or producer of an automotive 
good shall, consistent with the provisions re-
garding allocation of costs provided for in gen-
erally accepted accounting principles, determine 
the net cost of the automotive good under sub-
paragraph (B) by— 
(i) calculating the total cost incurred 
with respect to all goods produced by the
producer of the automotive good, sub-
tracting any sales promotion, marketing, 
and after-sales service costs, royalties, 
shipping and packing costs, and nonallow-
able interest costs that are included in the 
total cost of all such goods, and then rea-
sonably 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 sub-
tracting any sales promotion, marketing, 
and after-sales service costs, royalties, 
shipping and packing costs, and nonallow-
able 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 in-
clude 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 calcu-
lating 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 im-
ported by the producer of the good, the ad-
justed 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 in-
terpretive notes, of the Agreement on Imple-
mentation of Article VII of the General Agree-
ment on Tariffs and Trade 1994 referred to in 
section 101(d)(8) of the Uruguay Round Agree-
ments 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 pro-
duction 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 fol-
lowing expenses, if not included in the value of 
an originating material calculated under para-
graph (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 be-
tween the territory of Panama, the United 
States, or both, to the location of the pro-
ducer. 
(ii) Duties, taxes, and customs broker-
age fees on the material paid in the terri-
tory 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 re-
sulting 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 material calculated under para-
graph (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 within or be-
tween the territory of Panama, the United 
States, or both, to the location of the pro-
ducer. 
(ii) Duties, taxes, and customs broker-
age fees on the material paid in the terri-
tory 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 re-
sulting 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 nonorigi-
nating material in the territory of Panama, 
the United States, or both. 
(e) ACCUMULATION.— 
(1) ORIGINATING MATERIALS USED IN PRODUC-
TION OF GOODS OF THE OTHER COUNTRY.—Origi-
nating materials from the territory 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 origi-
nating good if the good satisfies the requirements of 
subsection (b) and all other applicable requirements 
of this section. 
(f) DE MINIMIS AMOUNTS OF NONORIGINATING MA-
TERIALS.—
(1) IN GENERAL.—Except as provided in para-
graphs (2) and (3), a good that does not undergo a 
change in tariff classification pursuant to Annex 4.1 
of the Agreement is an originating good if— 
(A) the value of all nonoriginating mate-
rials 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 re-
quirements of this section; and 
(C) the value of such nonoriginating mate-
rials is included in the value of nonoriginating 
materials for any applicable regional value-con-
tent requirement for the good. 
(2) EXCEPTIONS.—Paragraph (1) does not 
apply to the following: 
(A) A nonoriginating material provided for 
in chapter 4, or a nonoriginating dairy prepara-
tion containing over 10 percent by weight of 
milk solids provided for in subheading 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 prepara-
tion containing over 10 percent by weight of 
milk solids provided for in subheading 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. 
(ii) Mixes and doughs, containing over 
25 percent by weight of butterfat, not put 
up for retail sale, provided for in sub-
heading 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 pro-
vided for in subheading 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 sub-
headings 2009.11 through 2009.39, or in fruit 
or vegetable juice of any single fruit or vege-
table, fortified with minerals or vitamins, con-
centrated 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
(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. 
(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,