HR 3045 PCS 
130 percent of the volume that is set out for that 
safeguard good in the corresponding year in the 
table for that country contained in Appendix I of the 
General Notes to the Schedule of the United States 
to Annex 3.3 of the Agreement. For purposes of this 
subsection, year 1 in that table corresponds to the 
calendar year in which the Agreement enters into 
force. 
(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 
1202.10.80, 
1202.20.80, 
2008.11.15, 2008.11.35, or 2008.11.60 of the 
HTS—
(i) in years 1 through 5, an amount 
equal to 100 percent of the excess of the 
applicable NTR (MFN) rate of duty over 
the schedule rate of duty; 
(ii) in years 6 through 10, an amount 
equal to 75 percent of the excess of the ap-
plicable NTR (MFN) rate of duty over the 
schedule rate of duty; and 
(iii) in years 11 through 14, an 
amount equal to 50 percent of the excess
HR 3045 PCS 
of the applicable NTR (MFN) rate of duty 
over the schedule rate of duty; and 
(B) in the case of any other safeguard 
good—
(i) in years 1 through 14, an amount 
equal to 100 percent of the excess of the 
applicable NTR (MFN) rate of duty over 
the schedule rate of duty; 
(ii) in years 15 through 17, an 
amount equal to 75 percent of the excess 
of the applicable NTR (MFN) rate of duty 
over the schedule rate of duty; and 
(iii) in years 18 and 19, an amount 
equal to 50 percent of the excess of the ap-
plicable NTR (MFN) rate of duty over the 
schedule rate of duty. 
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.
HR 3045 PCS 
(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 the 
United States or another CAFTA–DR country). 
(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 one or more of the 
CAFTA–DR countries; 
(2) the good—
(A) is produced entirely in the territory of 
one or more of the CAFTA–DR countries, 
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
HR 3045 PCS 
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 one or more of the CAFTA–DR countries, 
exclusively 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):
HR 3045 PCS 
(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
HR 3045 PCS 
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 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 in 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
HR 3045 PCS 
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 formula contained in 
subparagraph (A), over the producer’s fis-
cal year—
(I) with respect to all motor vehi-
cles in any 1 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 one or 
more of the CAFTA–DR countries. 
(ii) CATEGORIES.—A category is de-
scribed in this clause if it—
HR 3045 PCS 
(I) is the same model line of 
motor vehicles, is in the same class of 
vehicles, and is produced in the same 
plant in the territory of a CAFTA–
DR country, 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 a CAFTA–
DR country, 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 terri-
tory of a CAFTA–DR country as the 
good described in clause (i) for which 
regional value-content is being cal-
culated. 
(D) OTHER
AUTOMOTIVE
GOODS.—For 
purposes of determining the regional value-con-
tent under subparagraph (A) for automotive 
goods provided for in any of subheadings 
8407.31 
through 
8407.34, 
in 
subheading 
8408.20, or in heading 8409, 8706, 8707, or
HR 3045 PCS 
8708, that are produced in the same plant, an 
importer, exporter, or producer may—
(i) average the amounts calculated 
under the formula contained in subpara-
graph (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) its own fiscal year, 
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 automotive 
goods that are exported to the territory of 
one or more of the CAFTA–DR countries. 
(E) CALCULATING
NET
COST.—The im-
porter, exporter, or producer shall, consistent 
with the provisions regarding allocation of costs 
set out in generally accepted accounting prin-
HR 3045 PCS 
ciples, determine the net cost of an 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, 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
HR 3045 PCS 
the aggregate of all such 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 Implemen-
tation of Article VII of the General Agreement 
on Tariffs and Trade 1994 referred to in sec-
tion 101(d)(8) of the Uruguay Round Agree-
ments Act, as set forth in regulations promul-
gated by the Secretary of the Treasury pro-
HR 3045 PCS 
viding for the application of such Articles in the 
absence of an importation; 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 one or more of the 
CAFTA–DR countries to the location of 
the producer. 
(ii) Duties, taxes, and customs broker-
age fees on the material paid in the terri-
HR 3045 PCS 
tory of one or more of the CAFTA–DR 
countries, other than duties or taxes that 
are waived, refunded, refundable, or other-
wise 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 one or more of the 
CAFTA–DR countries to the location of 
the producer. 
(ii) Duties, taxes, and customs broker-
age fees on the material paid in the terri-
tory of one or more of the CAFTA–DR 
countries, other than duties or taxes that 
are waived, refunded, refundable, or other-
HR 3045 PCS 
wise 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 one or 
more of the CAFTA–DR countries. 
(e) ACCUMULATION.—
(1) ORIGINATING MATERIALS USED IN PRODUC-
TION
OF
GOODS
OF
ANOTHER
COUNTRY.—Origi-
nating materials from the territory of one or more 
of the CAFTA–DR countries that are used in the 
production of a good in the territory of another 
CAFTA–DR country shall be considered to originate 
in the territory of that other country. 
(2) MULTIPLE PROCEDURES.—A good that is 
produced in the territory of one or more of the 
CAFTA–DR countries by 1 or more producers is an 
originating good if the good satisfies the require-
ments of subsection (b) and all other applicable re-
quirements of this section.
HR 3045 PCS 
(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 out 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-
HR 3045 PCS 
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.