United States-Panama Trade Promotion Agreement, 63052-63069 [2013-23897]

Agencies

• DEPARTMENT OF HOMELAND SECURITY
• U.S. Customs and Border Protection
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 78, Number 205 (Wednesday, October 23, 2013)]
[Rules and Regulations]
[Pages 63052-63069]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-23897]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Parts 10, 24, 162, 163, and 178

[USCBP-2013-0040; CBP Dec. 13-17]
RIN 1515-AD93


United States-Panama Trade Promotion Agreement

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Interim regulations; solicitation of comments.

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SUMMARY: This rule amends the U.S. Customs and Border Protection (CBP) 
regulations on an interim basis to implement the preferential tariff 
treatment and other customs-related provisions of the United States-
Panama Trade Promotion Agreement entered into by the United States and 
the Republic of Panama.

DATES: Interim rule effective October 23, 2013; comments must be 
received by December 23, 2013.

ADDRESSES: You may submit comments, identified by docket number, by one 
of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments via docket number 
USCBP-2013-0040.
     Mail: Trade and Commercial Regulations Branch, Regulations 
and Rulings, Office of International Trade, U.S. Customs and Border 
Protection, 90 K Street NE., 10th Floor, Washington, DC 20229-1177.
    Instructions: All submissions received must include the agency name 
and docket number for this rulemaking. All comments received will be 
posted without change to https://www.regulations.gov, including any 
personal information provided. For detailed instructions on submitting 
comments and additional information on the rulemaking process, see the 
``Public Participation'' heading of the SUPPLEMENTARY INFORMATION 
section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to https://www.regulations.gov. Submitted comments 
may also be inspected during regular business days between the hours of 
9 a.m. and 4:30 p.m. at the Trade and Commercial Regulations Branch, 
Regulations and Rulings, Office of International Trade, U.S. Customs 
and Border Protection, 90 K Street NE., 10th Floor, Washington, DC. 
Arrangements to inspect submitted comments should be made in advance by 
calling Mr. Joseph Clark at (202) 325-0118.

FOR FURTHER INFORMATION CONTACT: Textile Operational Aspects: Diane 
Liberta, Textile Operations Branch, Office of International Trade, 
(202) 863-6241.
    Other Operational Aspects: Katrina Chang, Trade Policy and 
Programs, Office of International Trade, (202) 863-6532.
    Legal Aspects: Karen Greene, Regulations and Rulings, Office of 
International Trade, (202) 325-0041.

SUPPLEMENTARY INFORMATION:

Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of the 
interim rule. U.S. Customs and Border Protection (CBP) also invites 
comments that relate to the economic, environmental, or federalism 
effects that might result from this interim rule. Comments that will 
provide the most assistance to CBP in developing these regulations will 
reference a specific portion of the interim rule, explain the reason 
for any recommended change, and include data, information, or authority 
that support such recommended change. See ADDRESSES above for 
information on how to submit comments.

Background

    On June 28, 2007, the United States and the Republic of Panama (the 
``Parties'') signed the United States-Panama Trade Promotion Agreement 
(``PANTPA'' or ``Agreement'').
    On October 21, 2011, the President signed into law the United 
States-Panama Trade Promotion Agreement Implementation Act (the 
``Act''), Public Law 112-43, 125 Stat. 497 (19 U.S.C. 3805 note), which 
approved and made statutory changes to implement the PANTPA. Section 
103 of the Act requires that regulations be prescribed as necessary to 
implement the provisions of the PANTPA.
    On October 29, 2012, the President signed Proclamation 8894 to 
implement the PANTPA. The Proclamation, which was published in the 
Federal Register on November 5, 2012, (77 FR 66507), modified the 
Harmonized Tariff Schedule of the United States (``HTSUS'') as set 
forth in Annexes I and II of Publication 4349 of the U.S. International 
Trade Commission. The modifications to the HTSUS included the addition 
of new General Note 35, incorporating the relevant PANTPA rules of 
origin as set forth in the Act, and the insertion throughout the HTSUS 
of the preferential duty rates applicable to individual products under 
the PANTPA where the special program indicator ``PA'' appears in 
parenthesis in the ``Special'' rate of duty subcolumn. The 
modifications to the HTSUS also included a new Subchapter XIX to 
Chapter 99 to provide for temporary tariff-rate quotas and applicable 
safeguards implemented by the PANTPA, as well as modifications to 
Subchapter XXII of Chapter 98. After the Proclamation was signed, CBP 
issued instructions to the field and the public implementing the 
Agreement by allowing the trade to receive the benefits under the 
PANTPA effective on or after October 31, 2012.
    CBP is responsible for administering the provisions of the PANTPA 
and the Act that relate to the importation of goods into the United 
States from the Republic of Panama (``Panama''). Those customs-related 
PANTPA provisions, which require implementation through regulation, 
include certain tariff and non-tariff provisions within Chapter One 
(Initial Provisions), Chapter Two (General Definitions), Chapter Three 
(National Treatment and Market Access for Goods), Chapter Four (Rules 
of Origin and Origin Procedures), and Chapter Five (Customs 
Administration and Trade Facilitation).
    Certain general definitions set forth in Chapter Two of the PANTPA 
have been incorporated into the PANTPA implementing regulations. These 
regulations also implement Article 3.6 (Goods Re-entered after Repair 
or Alteration) of the PANTPA.
    Chapter Three of the PANTPA sets forth provisions relating to trade 
in textile and apparel goods between Panama and the United States. The 
provisions within Chapter Three that require regulatory action by CBP 
are Articles 3.21 (Customs Cooperation), Article 3.25 (Rules of Origin 
and Related Matters), and Article 3.30 (Definitions).
    Chapter Four of the PANTPA sets forth the rules for determining 
whether an imported good is an originating good of a Party and, as 
such, is therefore eligible for preferential tariff (duty-free or 
reduced duty) treatment under the PANTPA as specified in the Agreement

[[Page 63053]]

and the HTSUS. The basic rules of origin in Section A of Chapter Four 
are set forth in General Note 35, HTSUS.
    Under Article 4.1 of Chapter Four and section 203(b) of the Act, 
originating goods may be grouped in three broad categories: (1) Goods 
that are wholly obtained or produced entirely in the territory of one 
or both of the Parties; (2) goods that are produced entirely in the 
territory of one or both of the Parties and that satisfy the product-
specific rules of origin in PANTPA Annex 4.1 (Specific Rules of Origin) 
and all other applicable requirements of Chapter Four; and (3) goods 
that are produced entirely in the territory of one or both of the 
Parties exclusively from originating materials. Article 4.2 (section 
203(c) of the Act) sets forth the methods for calculating the regional 
value content of a good. Articles 4.3 and 4.4 (section 203(d) of the 
Act) set forth the rules for determining the value of materials for 
purposes of calculating the regional value content of a good. Article 
4.5 (section 203(e) of the Act) provides that production that takes 
place in the territory of one or both of the Parties may be accumulated 
such that, provided other requirements are met, the resulting good is 
considered originating. Article 4.6 (section 203(f) of the Act) 
provides a de minimis criterion. The remaining Articles within Section 
A of Chapter Four consist of additional sub-rules applicable to the 
originating good concept involving: fungible goods and materials 
(Article 4.7; section 203(g) of the Act); accessories, spare parts, and 
tools (Article 4.8; section 203(h) of the Act); packaging materials and 
containers for retail sale (Article 4.9; section 203(i) of the Act); 
packing materials and containers for shipment (Article 4.10; section 
203(j) of the Act); indirect materials used in production (Article 
4.11; section 203(k) of the Act); transit and transshipment (Article 
4.12; section 203(l) of the Act); sets of goods (Article 4.13; section 
203(m) of the Act); and consultation and modifications (Article 4.14). 
All Articles within Section A are reflected in the PANTPA implementing 
regulations, except for Article 4.14 (Consultation and Modifications).
    Section B of Chapter Four sets forth procedures that apply under 
the PANTPA in regard to claims for preferential tariff treatment. 
Specifically, Section B includes provisions concerning: claims of 
origin (Article 4.15); obligations relating to importations (Article 
4.16) and exportations (Article 4.18); exceptions to the certification 
requirement (Article 4.17); recordkeeping requirements (Article 4.19); 
verification of preference claims (Article 4.20); common guidelines 
(Article 4.21); application of certain provisions (Article 4.22); and 
definitions of terms used within the context of the rules of origin 
(Article 4.23). All Articles within Section B, except for Articles 4.21 
(Common Guidelines) and 4.22 (Application of Certain Provisions) are 
reflected in these implementing regulations.
    Chapter Five sets forth operational provisions related to customs 
administration and trade facilitation under the PANTPA. Article 5.9 
(section 205 of the Act), concerning the general application of 
penalties to PANTPA transactions, is the only provision within Chapter 
Five that is reflected in the PANTPA implementing regulations.
    The majority of the PANTPA implementing regulations set forth in 
this document have been included within a new Subpart S in Part 10 of 
the CBP regulations (19 CFR Part 10). However, in those cases in which 
PANTPA implementation is more appropriate in the context of an existing 
regulatory provision, the PANTPA regulatory text has been incorporated 
in an existing Part within the CBP regulations. In addition, this 
document sets forth several cross-references and other consequential 
changes to existing regulatory provisions to clarify the relationship 
between those existing provisions and the new PANTPA implementing 
regulations. The regulatory changes are discussed below in the order in 
which they appear in this document.

Discussion of Amendments

Part 10

    Section 10.31(f) concerns temporary importations under bond. It is 
amended by adding references to certain goods originating in Panama for 
which, as in the case of goods originating in Canada, Mexico, 
Singapore, Chile, Morocco, El Salvador, Guatemala, Honduras, Nicaragua, 
the Dominican Republic, Costa Rica, Bahrain, Oman, Peru, the Republic 
of Korea, or Colombia, no bond or other security will be required when 
imported temporarily for prescribed uses. The provisions of PANTPA 
Article 3.5 (Temporary Admission of Goods) are already reflected in 
existing temporary importation bond or other provisions contained in 
Part 10 of the CBP regulations and in Chapter 98 of the HTSUS.

Part 10, Subpart S

General Provisions
    Section 10.2001 outlines the scope of Subpart S, Part 10 of the CBP 
regulations. This section also clarifies that, except where the context 
otherwise requires, the requirements contained in Subpart S, Part 10 
are in addition to general administrative and enforcement provisions 
set forth elsewhere in the CBP regulations. Thus, for example, the 
specific merchandise entry requirements contained in Subpart S, Part 10 
are in addition to the basic entry requirements contained in Parts 141-
143 of the CBP regulations.
    Section 10.2002 sets forth definitions of common terms used within 
Subpart S, Part 10. Although the majority of the definitions in this 
section are based on definitions contained in Article 2.1 and Annex 2.1 
of the PANTPA, other definitions have also been included to clarify the 
application of the regulatory texts. Additional definitions that apply 
in a more limited Subpart S, Part 10 context are set forth elsewhere 
with the substantive provisions to which they relate.
Import Requirements
    Section 10.2003 sets forth the procedure for claiming PANTPA 
preferential tariff treatment at the time of entry and, as provided in 
PANTPA Article 4.15.1, states that an importer may make a claim for 
PANTPA preferential tariff treatment based on a certification by the 
importer, exporter, or producer or the importer's knowledge that the 
good is an originating good. Section 10.2003 also provides, consistent 
with PANTPA Article 4.16.4(d), that when an importer has reason to 
believe that a claim is based on inaccurate information, the importer 
must correct the claim and pay any duties that may be due.
    Section 10.2004, which is based on PANTPA Articles 4.15 and 4.16.4, 
requires a U.S. importer, upon request, to submit a copy of the 
certification of the importer, exporter, or producer if the 
certification forms the basis for the claim. Section 10.2004 specifies 
the information that must be included on the certification, sets forth 
the circumstances under which the certification may be prepared by the 
exporter or producer of the good, and provides that the certification 
may be used either for a single importation or for multiple 
importations of identical goods.
    Section 10.2005 sets forth certain importer obligations regarding 
the truthfulness of information and documents submitted in support of a 
claim for preferential tariff treatment. Section 10.2006, which is 
based on PANTPA Article 4.17, provides that the certification is not 
required for certain non-commercial or low-value importations.

[[Page 63054]]

    Section 10.2007 implements PANTPA Article 4.19 concerning the 
maintenance of relevant records regarding the imported good.
    Section 10.2008, which reflects PANTPA Article 4.16.2, authorizes 
the denial of PANTPA tariff benefits if the importer fails to comply 
with any of the requirements under Subpart S, Part 10, CBP regulations.
Export Requirements
    Section 10.2009, which implements PANTPA Articles 4.18.1 and 
4.19.1, sets forth certain obligations of a person who completes and 
issues a certification for a good exported from the United States to 
Panama. Paragraphs (a) and (b) of Sec.  10.2009, reflecting PANTPA 
Article 4.18.1, require a person who completes such a certification to 
provide a copy of the certification to CBP upon request and to give 
prompt notification of any errors in the certification to every person 
to whom the certification was given. Paragraph (c) of Sec.  10.2009 
reflects Article 4.19.1, concerning the recordkeeping requirements that 
apply to a person who completes and issues a certification for a good 
exported from the United States to Panama.
Post-Importation Duty Refund Claims
    Sections 10.2010 through 10.2012 implement PANTPA Article 4.16.5 
and section 206 of the Act, which allow an importer who did not claim 
PANTPA tariff benefits on a qualifying good at the time of importation 
to apply for a refund of any excess duties at any time within one year 
after the date of importation. Such a claim may be made even if 
liquidation of the entry would otherwise be considered final under 
other provisions of law.
Rules of Origin
    Sections 10.2013 through 10.2025 provide the implementing 
regulations regarding the rules of origin provisions of General Note 
35, HTSUS, Chapter Four and Article 3.25 of the PANTPA, and section 203 
of the Act.
Definitions
    Section 10.2013 sets forth terms that are defined for purposes of 
the rules of origin as found in section 203(n) of the Act and other 
definitions have been included to clarify the application of the 
regulatory texts.
General Rules of Origin
    Section 10.2014 sets forth the basic rules of origin established in 
Article 4.1 of the PANTPA, section 203(b) of the Act, and General Note 
35, HTSUS. The provisions of Sec.  10.2014 apply both to the 
determination of the status of an imported good as an originating good 
for purposes of preferential tariff treatment and to the determination 
of the status of a material as an originating material used in a good 
which is subject to a determination under General Note 35, HTSUS.
    Section 10.2014(a), reflecting section 203(b)(1) of the Act, 
specifies those goods that are originating goods because they are 
wholly obtained or produced entirely in the territory of one or both of 
the Parties.
    Section 10.2014(b), reflecting section 203(b)(2) of the Act, 
provides that goods that have been produced entirely in the territory 
of one or both of the Parties from non-originating materials, each of 
which undergoes an applicable change in tariff classification and 
satisfies any applicable regional value content or other requirement 
set forth in General Note 35, HTSUS, are originating goods. Essential 
to the rules in Sec.  10.2014(b) are the specific rules of General Note 
35, HTSUS.
    Section 10.2014(c), reflecting section 203(b)(3) of the Act, 
provides that goods that have been produced entirely in the territory 
of one or both of the Parties exclusively from originating materials 
are originating goods.
Value Content
    Section 10.2015 reflects PANTPA Article 4.2 and section 203(c) of 
the Act concerning the basic rules that apply for purposes of 
determining whether an imported good satisfies a minimum regional value 
content (``RVC'') requirement. Section 10.2016, reflecting PANTPA 
Articles 4.3 and 4.4, and section 203(d) of the Act, sets forth the 
rules for determining the value of a material for purposes of 
calculating the regional value content of a good as well as for 
purposes of applying the de minimis rules.
Accumulation
    Section 10.2017, which is derived from PANTPA Article 4.5 and 
section 203(e) of the Act, sets forth the rule by which originating 
materials from the territory of a Party that are used in the production 
of a good in the territory of the other Party will be considered to 
originate in the territory of that other country. In addition, this 
section also establishes that a good that is produced by one or more 
producers in the territory of one or both of the Parties is an 
originating good if the good satisfies all of the applicable 
requirements of the rules of origin of the PANTPA.
De Minimis
    Section 10.2018, as provided for in PANTPA Article 4.6 and section 
203(f) of the Act, sets forth de minimis rules for goods that may be 
considered to qualify as originating goods even though they fail to 
qualify as originating goods under the rules specified in Sec.  
10.2014. There are a number of exceptions to the de minimis rule set 
forth in PANTPA Annex 4.6 (Exceptions to Article 4.6) as well as a 
separate rule for textile and apparel goods.
Fungible Goods and Materials
    Section 10.2019, as provided for in PANTPA Article 4.7 and section 
203(g) of the Act, sets forth the rules by which ``fungible'' goods or 
materials may be claimed as originating.
Accessories, Spare Parts, or Tools
    Section 10.2020, as provided for in PANTPA Article 4.8 and section 
203(h) of the Act, specifies the conditions under which a good's 
standard accessories, spare parts, or tools are: (1) treated as 
originating goods; and (2) disregarded in determining whether all non-
originating materials used in the production of the good undergo an 
applicable change in tariff classification under General Note 35, 
HTSUS.
Goods Classifiable as Goods Put Up in Sets
    Section 10.2021, as provided for in PANTPA Articles 3.25.9 and 
4.13, and section 203(m) of the Act, provides that, notwithstanding the 
specific rules of General Note 35, HTSUS, goods classifiable as goods 
put up in sets for retail sale as provided for in General Rule of 
Interpretation 3, HTSUS, will not qualify as originating goods unless: 
(1) Each of the goods in the set is an originating good; or (2) the 
total value of the non-originating goods in the set does not exceed 15 
percent of the adjusted value of the set, or 10 percent of the adjusted 
value of the set in the case of textile or apparel goods.
Packaging Materials and Packing Materials
    Sections 10.2022 and 10.2023, as provided for in PANTPA Articles 
4.9 and 4.10, and sections 203(i) and (j) of the Act, respectively, 
provide that retail packaging materials and packing materials for 
shipment are to be disregarded with respect to their actual origin in 
determining whether non-originating materials undergo an applicable 
change in tariff classification under General Note 35, HTSUS. These 
sections also set forth the treatment of packaging and packing 
materials for purposes of the regional value content requirement of the 
note.

[[Page 63055]]

Indirect Materials
    Section 10.2024, as provided for in PANTPA Article 4.11 and section 
203(k) of the Act, provides that indirect materials, as defined in 
Sec.  10.2013(i), are considered to be originating materials without 
regard to where they are produced.
Transit and Transshipment
    Section 10.2025, as provided for in PANTPA Article 4.12 and section 
203(l) of the Act, sets forth the rule that an originating good loses 
its originating status and is treated as a non-originating good if, 
subsequent to production in the territory of one or both of the Parties 
that qualifies the good as originating, the good: (1) Undergoes 
production outside the territories of the Parties, other than certain 
specified minor operations; or (2) does not remain under the control of 
customs authorities in the territory of a non-Party.
Origin Verifications and Determinations
    Section 10.2026 implements PANTPA Article 4.20 which concerns the 
conduct of verifications to determine whether imported goods are 
originating goods entitled to PANTPA preferential tariff treatment. 
This section also governs the conduct of verifications directed to 
producers of materials that are used in the production of a good for 
which PANTPA preferential duty treatment is claimed.
    Section 10.2027, as provided for in PANTPA Article 3.21 and section 
208 of the Act, sets forth the verification and enforcement procedures 
specifically relating to trade in textile and apparel goods.
    Section 10.2028 also implements PANTPA Articles 3.21 and 4.20, and 
sections 205 and 208 of the Act and provides the procedures that apply 
when preferential tariff treatment is denied on the basis of an origin 
verification conducted under Subpart S, Part 10 of the CBP regulations.
    Section 10.2029 implements PANTPA Article 4.20.5 and section 205(b) 
of the Act, concerning the denial of preferential tariff treatment in 
situations in which there is a pattern of conduct by an importer, 
exporter, or producer of false or unsupported PANTPA preference claims.
Penalties
    Section 10.2030 concerns the general application of penalties to 
PANTPA transactions and is based on PANTPA Article 5.9 and section 205 
of the Act.
    Section 10.2031 implements PANTPA Article 4.16.3 and section 205 of 
the Act with regard to an exception to the application of penalties in 
the case of an importer who promptly and voluntarily makes a corrected 
claim and pays any duties owing.
    Section 10.2032 implements PANTPA Article 4.18.2 and section 205 of 
the Act, concerning an exception to the application of penalties in the 
case of a U.S. exporter or producer who promptly and voluntarily 
provides notification of the making of an incorrect certification with 
respect to a good exported to Panama.
    Section 10.2033 sets forth the circumstances under which the making 
of a corrected claim or certification by an importer or the providing 
of notification of an incorrect certification by a U.S. exporter or 
producer will be considered to have been done ``promptly and 
voluntarily''. Corrected claims or certifications that fail to meet 
these requirements are not excepted from penalties, although the U.S. 
importer, exporter, or producer making the corrected claim or 
certification may, depending on the circumstances, qualify for a 
reduced penalty as a prior disclosure under 19 U.S.C. 1592(c)(4). 
Section 10.2033(c) also specifies the content of the statement that 
must accompany each corrected claim or certification, including any 
certifications and records demonstrating that a good is an originating 
good.
Goods Returned After Repair or Alteration
    Section 10.2034 implements PANTPA Article 3.6 regarding duty-free 
treatment for goods re-entered after repair or alteration in Panama.

Other Amendments

Part 24

    An amendment is made to Sec.  24.23(c) (19 CFR 24.23(c)), which 
concerns the merchandise processing fee, to implement section 204 of 
the Act, providing that the merchandise processing fee is not 
applicable to goods that qualify as originating goods under the PANTPA.

Part 162

    Part 162 contains regulations regarding the inspection and 
examination of, among other things, imported merchandise. A cross-
reference is added to Sec.  162.0 (19 CFR 162.0), which is the scope 
section of the part, to refer readers to the additional PANTPA records 
maintenance and examination provisions contained in Subpart S, Part 10, 
CBP regulations.

Part 163

    A conforming amendment is made to Sec.  163.1 (19 CFR 163.1) to 
include, as required by PANTPA Article 4.19, the maintenance by the 
importer, whose claim for preferential tariff treatment is based on 
either the importer's certification or its knowledge, of all records 
and documents necessary to support a claim for preferential tariff 
treatment under the PANTPA, including a PANTPA importer's 
certification. Also, based on PANTPA Article 4.19, the conforming 
amendment includes the maintenance by the importer, whose claim for 
preferential tariff treatment is based on the certification issued by 
the exporter or producer, of the certification issued by the exporter 
or producer. The list of records and information required for the entry 
of merchandise appearing in the Appendix to Part 163 (commonly known as 
the ``(a)(1)(A) list'') is also amended to add the records and 
documents necessary to support a PANTPA claim for preferential tariff 
treatment, including, where applicable, the importer's certification or 
the exporter's or producer's certification.

Part 178

    Part 178 sets forth the control numbers assigned to information 
collections of CBP by the Office of Management and Budget (OMB), 
pursuant to the Paperwork Reduction Act of 1995, Public Law 104-13. The 
list contained in Sec.  178.2 (19 CFR 178.2) is amended to add the 
information collections used by CBP to determine eligibility for 
preferential tariff treatment under the PANTPA and the Act.

Inapplicability of Notice and Delayed Effective Date Requirements

    Under the Administrative Procedure Act (``APA'') (5 U.S.C. 553), 
agencies generally are required to publish a notice of proposed 
rulemaking in the Federal Register that solicits public comment on the 
proposed regulatory amendments, consider public comments in deciding on 
the content of the final amendments, and publish the final amendments 
at least 30 days prior to their effective date. However, section 
553(a)(1) of the APA provides that the standard prior notice and 
comment procedures do not apply to an agency rulemaking to the extent 
that it involves a foreign affairs function of the United States. CBP 
has determined that these interim regulations involve a foreign affairs 
function of the United States because they implement preferential 
tariff treatment and related provisions of the PANTPA. Therefore, the 
rulemaking requirements under the APA do not apply and this interim 
rule will be effective upon publication. However, CBP is soliciting 
comments in this interim rule and will consider all

[[Page 63056]]

comments received before issuing a final rule.

Executive Order 12866 and Regulatory Flexibility Act

    CBP has determined that this document is not a regulation or rule 
subject to the provisions of Executive Order 12866 of September 30, 
1993 (58 FR 51735, October 4, 1993), because it pertains to a foreign 
affairs function of the United States and implements an international 
agreement, as described above, and therefore is specifically exempted 
by section 3(d)(2) of Executive Order 12866. Because a notice of 
proposed rulemaking is not required under section 553(b) of the APA for 
the reasons described above, the provisions of the Regulatory 
Flexibility Act, as amended (5 U.S.C. 601 et seq.), do not apply to 
this rulemaking. Accordingly, this interim rule is not subject to the 
regulatory analysis requirements or other requirements of 5 U.S.C. 603 
and 604.

Paperwork Reduction Act

    The collections of information contained in these regulations are 
under the review of OMB in accordance with the requirements of the 
Paperwork Reduction Act (44 U.S.C. 3507) under control numbers 1651-
0117, which covers many of the free trade agreement requirements that 
CBP administers, and 1651-0076, which covers general recordkeeping 
requirements. The addition of the PANTPA requirements will result in an 
increase in the number of respondents and burden hours for this 
information collection. Under the Paperwork Reduction Act, an agency 
may not conduct or sponsor, and an individual is not required to 
respond to, a collection of information unless it displays a valid OMB 
control number.
    The collections of information in these regulations are in 
Sec. Sec.  10.2003, 10.2004, and 10.2007. This information is required 
in connection with general recordkeeping requirements (Sec.  10.2007), 
as well as claims for preferential tariff treatment under the PANTPA 
and the Act and will be used by CBP to determine eligibility for tariff 
preference under the PANTPA and the Act (Sec. Sec.  10.2003 and 
10.2004). The likely respondents are business organizations including 
importers, exporters and manufacturers. The burdens imposed by these 
regulations are:
    Estimated total annual burden: 500 hours.
    Estimated number of respondents: 2,500.
    Estimated annual frequency of responses per respondent: 1.
    Estimated average annual burden per response: .2 hours.
    Comments concerning these collections of information and the 
accuracy of the estimated annual burden, and suggestions for reducing 
that burden, should be directed to the Office of Management and Budget, 
Attention: Desk Officer for the Department of the Treasury, Office of 
Information and Regulatory Affairs, Washington, DC 20503. A copy should 
also be sent to the Trade and Commercial Regulations Branch, 
Regulations and Rulings, Office of International Trade, U.S. Customs 
and Border Protection, 90 K Street NE., 10th Floor, Washington, DC 
20229-1177.

Signing Authority

    This document is being issued in accordance with Sec.  0.1(a)(1) of 
the CBP regulations (19 CFR 0.1(a)(1)) pertaining to the authority of 
the Secretary of the Treasury (or his/her delegate) to approve 
regulations related to certain customs revenue functions.

List of Subjects

19 CFR Part 10

    Alterations, Bonds, Customs duties and inspection, Exports, 
Imports, Preference programs, Repairs, Reporting and recordkeeping 
requirements, Trade agreements.

19 CFR Part 24

    Accounting, Customs duties and inspection, Financial and accounting 
procedures, Reporting and recordkeeping requirements, Trade agreements, 
User fees.

19 CFR Part 162

    Administrative practice and procedure, Customs duties and 
inspection, Penalties, Trade agreements.

19 CFR Part 163

    Administrative practice and procedure, Customs duties and 
inspection, Exports, Imports, Reporting and recordkeeping requirements, 
Trade agreements.

19 CFR Part 178

    Administrative practice and procedure, Exports, Imports, Reporting 
and recordkeeping requirements.

Amendments to the Regulations

    Accordingly, chapter I of title 19, Code of Federal Regulations (19 
CFR chapter I), is amended as set forth below.

PART 10--ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE, 
ETC.

0
1. The general authority citation for Part 10 continues to read, and 
the specific authority for new Subpart S is added, to read as follows:

    Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized 
Tariff Schedule of the United States), 1321, 1481, 1484, 1498, 1508, 
1623, 1624, 3314.
* * * * *
    Sections 10.2001 through 10.2034 also issued under 19 U.S.C. 
1202 (General Note 35, HTSUS), 19 U.S.C. 1520(d), and Pub. L. 112-
43, 125 Stat. 497 (19 U.S.C. 3805 note).
0
2. In Sec.  10.31(f), the last sentence is revised to read as follows:


Sec.  10.31  Entry; bond.

* * * * *
    (f) * * * In addition, notwithstanding any other provision of this 
paragraph, in the case of professional equipment necessary for carrying 
out the business activity, trade or profession of a business person, 
equipment for the press or for sound or television broadcasting, 
cinematographic equipment, articles imported for sports purposes and 
articles intended for display or demonstration, if brought into the 
United States by a resident of Canada, Mexico, Singapore, Chile, 
Morocco, El Salvador, Guatemala, Honduras, Nicaragua, the Dominican 
Republic, Costa Rica, Bahrain, Oman, Peru, the Republic of Korea, 
Colombia, or Panama and entered under Chapter 98, Subchapter XIII, 
HTSUS, no bond or other security will be required if the entered 
article is a good originating, within the meaning of General Note 12, 
25, 26, 27, 29, 30, 31, 32, 33, 34, and 35, HTSUS, in the country of 
which the importer is a resident.

0
3. Add Subpart S to Part 10 to read as follows:
Subpart S--United States-Panama Trade Promotion Agreement

General Provisions

Sec.
10.2001 Scope.
10.2002 General definitions.

Import Requirements

10.2003 Filing of claim for preferential tariff treatment upon 
importation.
10.2004 Certification.
10.2005 Importer obligations.
10.2006 Certification not required.
10.2007 Maintenance of records.
10.2008 Effect of noncompliance; failure to provide documentation 
regarding transshipment.

Export Requirements

10.2009 Certification for goods exported to Panama.

[[Page 63057]]

Post-Importation Duty Refund Claims

10.2010 Right to make post-importation claim and refund duties.
10.2011 Filing procedures.
10.2012 CBP processing procedures.

Rules of Origin

10.2013 Definitions.
10.2014 Originating goods.
10.2015 Regional value content.
10.2016 Value of materials.
10.2017 Accumulation.
10.2018 De minimis.
10.2019 Fungible goods and materials.
10.2020 Accessories, spare parts, or tools.
10.2021 Goods classifiable as goods put up in sets.
10.2022 Retail packaging materials and containers.
10.2023 Packing materials and containers for shipment.
10.2024 Indirect materials.
10.2025 Transit and transshipment.

Origin Verifications and Determinations

10.2026 Verification and justification of claim for preferential 
tariff treatment.
10.2027 Special rule for verifications in Panama of U.S. imports of 
textile and apparel goods.
10.2028 Issuance of negative origin determinations.
10.2029 Repeated false or unsupported preference claims.

Penalties

10.2030 General.
10.2031 Corrected claim or certification by importers.
10.2032 Corrected certification by U.S. exporters or producers.
10.2033 Framework for correcting claims or certifications.

Goods Returned After Repair or Alteration

10.2034 Goods re-entered after repair or alteration in Panama.

Subpart S--United States-Panama Trade Promotion Agreement

General Provisions


Sec.  10.2001  Scope.

    This subpart implements the duty preference and related customs 
provisions applicable to imported and exported goods under the United 
States-Panama Trade Promotion Agreement (the PANTPA) signed on June 28, 
2007, and under the United States-Panama Trade Promotion Agreement 
Implementation Act (``the Act''), Public Law 112-43, 125 Stat. 497 (19 
U.S.C. 3805 note). Except as otherwise specified in this subpart, the 
procedures and other requirements set forth in this subpart are in 
addition to the customs procedures and requirements of general 
application contained elsewhere in this chapter. Additional provisions 
implementing certain aspects of the PANTPA and the Act are contained in 
Parts 24, 162, and 163 of this chapter.


Sec.  10.2002  General definitions.

    As used in this subpart, the following terms will have the meanings 
indicated unless either the context in which they are used requires a 
different meaning or a different definition is prescribed for a 
particular section of this subpart:
    (a) Claim for preferential tariff treatment. ``Claim for 
preferential tariff treatment'' means a claim that a good is entitled 
to the duty rate applicable under the PANTPA to an originating good and 
to an exemption from the merchandise processing fee;
    (b) Claim of origin. ``Claim of origin'' means a claim that a 
textile or apparel good is an originating good or satisfies the non-
preferential rules of origin of a Party;
    (c) Customs authority. ``Customs authority'' means the competent 
authority that is responsible under the law of a Party for the 
administration of customs laws and regulations;
    (d) Customs duty. ``Customs duty'' includes any customs or import 
duty and a charge of any kind imposed in connection with the 
importation of a good, including any form of surtax or surcharge in 
connection with such importation, but does not include any:
    (1) Charge equivalent to an internal tax imposed consistently with 
Article III:2 of the GATT 1994 in respect of like, directly 
competitive, or substitutable goods of the Party, or in respect of 
goods from which the imported good has been manufactured or produced in 
whole or in part;
    (2) Antidumping or countervailing duty that is applied pursuant to 
a Party's domestic law; or
    (3) Fee or other charge in connection with importation commensurate 
with the cost of services rendered;
    (e) Customs Valuation Agreement. ``Customs Valuation Agreement'' 
means the Agreement on Implementation of Article VII of the General 
Agreement on Tariffs and Trade 1994, contained in Annex 1A to the WTO 
Agreement;
    (f) Days. ``Days'' means calendar days;
    (g) Enterprise. ``Enterprise'' means any entity constituted or 
organized under applicable law, whether or not for profit, and whether 
privately-owned or governmentally-owned, including any corporation, 
trust, partnership, sole proprietorship, joint venture, or other 
association;
    (h) Enterprise of a Party. ``Enterprise of a Party'' means an 
enterprise constituted or organized under a Party's law;
    (i) Goods of a Party. ``Goods of a Party'' means domestic products 
as these are understood in the GATT 1994 or such goods as the Parties 
may agree, and includes originating goods of that Party;
    (j) GATT 1994. ``GATT 1994'' means the General Agreement on Tariffs 
and Trade 1994, which is part of the WTO Agreement;
    (k) Harmonized System. ``Harmonized System'' means the Harmonized 
Commodity Description and Coding System, including its General Rules of 
Interpretation, Section Notes, and Chapter Notes, as adopted and 
implemented by the Parties in their respective tariff laws;
    (l) Heading. ``Heading'' means the first four digits in the tariff 
classification number under the Harmonized System;
    (m) HTSUS. ``HTSUS'' means the Harmonized Tariff Schedule of the 
United States as promulgated by the U.S. International Trade 
Commission;
    (n) Identical goods. ``Identical goods'' means goods that are the 
same in all respects relevant to the rule of origin that qualifies the 
goods as originating goods;
    (o) Originating. ``Originating'' means qualifying for preferential 
tariff treatment under the rules of origin set out in Article 3.25 
(Rules of Origin and Related Matters) or Chapter Four (Rules of Origin 
and Origin Procedures) of the PANTPA, and General Note 35, HTSUS;
    (p) Party. ``Party'' means the United States or Panama;
    (q) Person. ``Person'' means a natural person or an enterprise;
    (r) Preferential tariff treatment. ``Preferential tariff 
treatment'' means the duty rate applicable under the PANTPA to an 
originating good, and an exemption from the merchandise processing fee;
    (s) Subheading. ``Subheading'' means the first six digits in the 
tariff classification number under the Harmonized System;
    (t) Textile or apparel good. ``Textile or apparel good'' means a 
good listed in the Annex to the Agreement on Textiles and Clothing 
(commonly referred to as ``the ATC''), which is part of the WTO 
Agreement, except for those goods listed in Annex 3.30 of the PANTPA;
    (u) Territory. ``Territory'' means:
    (1) With respect to Panama, the land, maritime, and the air space 
under Panama's sovereignty and the exclusive economic zone and the 
continental shelf within which it exercises sovereign rights and 
jurisdiction in accordance with international law and its domestic law;
    (2) With respect to the United States:
    (i) The customs territory of the United States, which includes the 
50 states, the District of Columbia, and Puerto Rico;
    (ii) The foreign trade zones located in the United States and 
Puerto Rico; and

[[Page 63058]]

    (iii) Any areas beyond the territorial seas of the United States 
within which, in accordance with international law and its domestic 
law, the United States may exercise rights with respect to the seabed 
and subsoil and their natural resources;
    (v) WTO. ``WTO'' means the World Trade Organization; and
    (w) WTO Agreement. ``WTO Agreement'' means the Marrakesh Agreement 
Establishing the World Trade Organization of April 15, 1994.

Import Requirements


Sec.  10.2003  Filing of claim for preferential tariff treatment upon 
importation.

    (a) Basis of claim. An importer may make a claim for PANTPA 
preferential tariff treatment, including an exemption from the 
merchandise processing fee, based on either:
    (1) A written or electronic certification, as specified in Sec.  
10.2004, that is prepared by the importer, exporter, or producer of the 
good; or
    (2) The importer's knowledge that the good is an originating good, 
including reasonable reliance on information in the importer's 
possession that the good is an originating good.
    (b) Making a claim. The claim is made by including on the entry 
summary, or equivalent documentation, the letters ``PA'' as a prefix to 
the subheading of the HTSUS under which each qualifying good is 
classified, or by the method specified for equivalent reporting via an 
authorized electronic data interchange system.
    (c) Corrected claim. If, after making the claim specified in 
paragraph (b) of this section, the importer has reason to believe that 
the claim is based on inaccurate information or is otherwise invalid, 
the importer must, within 30 calendar days after the date of discovery 
of the error, correct the claim and pay any duties that may be due. The 
importer must submit a statement either in writing or via an authorized 
electronic data interchange system to the CBP office where the original 
claim was filed specifying the correction (see Sec. Sec.  10.2031 and 
10.2033).


Sec.  10.2004  Certification.

    (a) General. An importer who makes a claim pursuant to Sec.  
10.2003(b) based on a certification by the importer, exporter, or 
producer that the good is originating must submit, at the request of 
the port director, a copy of the certification. The certification:
    (1) Need not be in a prescribed format but must be in writing or 
must be transmitted electronically pursuant to any electronic means 
authorized by CBP for that purpose;
    (2) Must be in the possession of the importer at the time the claim 
for preferential tariff treatment is made if the certification forms 
the basis for the claim;
    (3) Must include the following information:
    (i) The legal name, address, telephone number, and email address of 
the certifying person;
    (ii) If not the certifying person, the legal name, address, 
telephone number, and email address of the importer of record, the 
exporter, and the producer of the good, if known;
    (iii) The legal name, address, telephone number, and email address 
of the responsible official or authorized agent of the importer, 
exporter, or producer signing the certification (if different from the 
information required by paragraph (a)(3)(i) of this section);
    (iv) A description of the good for which preferential tariff 
treatment is claimed, which must be sufficiently detailed to relate it 
to the invoice and the HS nomenclature;
    (v) The HTSUS tariff classification, to six or more digits, as 
necessary for the specific change in tariff classification rule for the 
good set forth in General Note 35, HTSUS;
    (vi) The applicable rule of origin set forth in General Note 35, 
HTSUS, under which the good qualifies as an originating good;
    (vii) Date of certification; and
    (viii) In case of a blanket certification issued with respect to 
multiple shipments of identical goods within any period specified in 
the written or electronic certification, not exceeding 12 months from 
the date of certification, the period that the certification covers; 
and
    (4) Must include a statement, in substantially the following form:
    ``I certify that:
    The information on this document is true and accurate and I assume 
the responsibility for proving such representations. I understand that 
I am liable for any false statements or material omissions made on or 
in connection with this document;
    I agree to maintain and present upon request, documentation 
necessary to support these representations;
    The goods comply with all requirements for preferential tariff 
treatment specified for those goods in the United States-Panama Trade 
Promotion Agreement; and
    This document consists of ---- pages, including all attachments.''
    (b) Responsible official or agent. The certification provided for 
in paragraph (a) of this section must be signed and dated by a 
responsible official of the importer, exporter, or producer, or by the 
importer's, exporter's, or producer's authorized agent having knowledge 
of the relevant facts.
    (c) Language. The certification provided for in paragraph (a) of 
this section must be completed in either the English or Spanish 
language. In the latter case, the port director may require the 
importer to submit an English translation of the certification.
    (d) Certification by the exporter or producer. (1) A certification 
may be prepared by the exporter or producer of the good on the basis 
of:
    (i) The exporter's or producer's knowledge that the good is 
originating; or
    (ii) In the case of an exporter, reasonable reliance on the 
producer's certification that the good is originating.
    (2) The port director may not require an exporter or producer to 
provide a written or electronic certification to another person.
    (e) Applicability of certification. The certification provided for 
in paragraph (a) of this section may be applicable to:
    (1) A single shipment of a good into the United States; or
    (2) Multiple shipments of identical goods into the United States 
that occur within a specified blanket period, not exceeding 12 months, 
set out in the certification.
    (f) Validity of certification. A certification that is properly 
completed, signed, and dated in accordance with the requirements of 
this section will be accepted as valid for four years following the 
date on which it was issued.


Sec.  10.2005  Importer obligations.

    (a) General. An importer who makes a claim for preferential tariff 
treatment under Sec.  10.2003(b):
    (1) Will be deemed to have certified that the good is eligible for 
preferential tariff treatment under the PANTPA;
    (2) Is responsible for the truthfulness of the claim and of all the 
information and data contained in the certification provided for in 
Sec.  10.2004; and
    (3) Is responsible for submitting any supporting documents 
requested by CBP, and for the truthfulness of the information contained 
in those documents. When a certification prepared by an exporter or 
producer forms the basis of a claim for preferential tariff treatment, 
and CBP requests the submission of supporting documents, the importer 
will provide to CBP, or arrange for the direct submission by the 
exporter or producer of, all information relied on by the exporter or 
producer in preparing the certification.

[[Page 63059]]

    (b) Information provided by exporter or producer. The fact that the 
importer has made a claim or submitted a certification based on 
information provided by an exporter or producer will not relieve the 
importer of the responsibility referred to in paragraph (a) of this 
section.
    (c) Exemption from penalties. An importer will not be subject to 
civil or administrative penalties under 19 U.S.C. 1592 for making an 
incorrect claim for preferential tariff treatment or submitting an 
incorrect certification, provided that the importer promptly and 
voluntarily corrects the claim or certification and pays any duty owing 
(see Sec.  10.2031 through 10.2033).


Sec.  10.2006  Certification not required.

    (a) General. Except as otherwise provided in paragraph (b) of this 
section, an importer will not be required to submit a copy of a 
certification under Sec.  10.2004 for:
    (1) A non-commercial importation of a good; or
    (2) A commercial importation for which the value of the originating 
goods does not exceed U.S. $2,500.
    (b) Exception. If the port director determines that an importation 
described in paragraph (a) of this section is part of a series of 
importations carried out or planned for the purpose of evading 
compliance with the certification requirements of Sec.  10.2004, the 
port director will notify the importer that for that importation the 
importer must submit to CBP a copy of the certification. The importer 
must submit such a copy within 30 days from the date of the notice. 
Failure to timely submit a copy of the certification will result in 
denial of the claim for preferential tariff treatment.


Sec.  10.2007  Maintenance of records.

    (a) General. An importer claiming preferential tariff treatment for 
a good imported into the United States under Sec.  10.2003(b) based on 
either the importer's certification or its knowledge must maintain, for 
a minimum of five years after the date of importation of the good, all 
records and documents necessary to demonstrate that the good qualifies 
for preferential tariff treatment under the PANTPA. An importer 
claiming preferential tariff treatment for a good imported into the 
United States under Sec.  10.2003(b) based on the certification issued 
by the exporter or producer must maintain, for a minimum of five years 
after the date of importation of the good, the certification issued by 
the exporter or producer. These records are in addition to any other 
records that the importer is required to prepare, maintain, or make 
available to CBP under Part 163 of this chapter.
    (b) Method of maintenance. The records and documents referred to in 
paragraph (a) of this section must be maintained by importers as 
provided in Sec.  163.5 of this chapter.


Sec.  10.2008  Effect of noncompliance; failure to provide 
documentation regarding transshipment.

    (a) General. If the importer fails to comply with any requirement 
under this subpart, including submission of a complete certification 
prepared in accordance with Sec.  10.2004 of this subpart, when 
requested, the port director may deny preferential tariff treatment to 
the imported good.
    (b) Failure to provide documentation regarding transshipment. Where 
the requirements for preferential tariff treatment set forth elsewhere 
in this subpart are met, the port director nevertheless may deny 
preferential tariff treatment to an originating good if the good is 
shipped through or transshipped in a country other than a Party to the 
PANTPA, and the importer of the good does not provide, at the request 
of the port director, evidence demonstrating to the satisfaction of the 
port director that the conditions set forth in Sec.  10.2025(a) were 
met.

Export Requirements


Sec.  10.2009  Certification for goods exported to Panama.

    (a) Submission of certification to CBP. Any person who completes 
and issues a certification for a good exported from the United States 
to Panama must provide a copy of the certification (written or 
electronic) to CBP upon request.
    (b) Notification of errors in certification. Any person who 
completes and issues a certification for a good exported from the 
United States to Panama and who has reason to believe that the 
certification contains or is based on incorrect information must 
promptly notify every person to whom the certification was provided of 
any change that could affect the accuracy or validity of the 
certification. Notification of an incorrect certification must also be 
given either in writing or via an authorized electronic data 
interchange system to CBP specifying the correction (see Sec. Sec.  
10.2032 and 10.2033).
    (c) Maintenance of records--(1) General. Any person who completes 
and issues a certification for a good exported from the United States 
to Panama must maintain, for a period of at least five years after the 
date the certification was issued, all records and supporting documents 
relating to the origin of a good for which the certification was 
issued, including the certification or copies thereof and records and 
documents associated with:
    (i) The purchase, cost, and value of, and payment for, the good;
    (ii) The purchase, cost, and value of, and payment for, all 
materials, including indirect materials, used in the production of the 
good; and
    (iii) The production of the good in the form in which the good was 
exported.
    (2) Method of maintenance. The records referred to in paragraph 
(c)(1) of this section must be maintained as provided in Sec.  163.5 of 
this chapter.
    (3) Availability of records. For purposes of determining compliance 
with the provisions of this part, the records required to be maintained 
under this section must be stored and made available for examination 
and inspection by the port director or other appropriate CBP officer in 
the same manner as provided in Part 163 of this chapter.

Post-Importation Duty Refund Claims


Sec.  10.2010  Right to make post-importation claim and refund duties.

    Notwithstanding any other available remedy, where a good would have 
qualified as an originating good when it was imported into the United 
States but no claim for preferential tariff treatment was made, the 
importer of that good may file a claim for a refund of any excess 
duties at any time within one year after the date of importation of the 
good in accordance with the procedures set forth in Sec.  10.2011. 
Subject to the provisions of Sec.  10.2008, CBP may refund any excess 
duties by liquidation or reliquidation of the entry covering the good 
in accordance with Sec.  10.2012(c).


Sec.  10.2011  Filing procedures.

    (a) Place of filing. A post-importation claim for a refund must be 
filed with the director of the port at which the entry covering the 
good was filed. The post-importation claim may be filed by paper or by 
the method specified for equivalent reporting via an authorized 
electronic data interchange system.
    (b) Contents of claim. A post-importation claim for a refund must 
be filed by presentation of the following:
    (1) A written or electronic declaration or statement stating that 
the good was an originating good at the time of importation and setting 
forth the number and date of the entry or entries covering the good;
    (2) A copy of a written or electronic certification prepared in 
accordance with Sec.  10.2004 if a certification forms the basis for 
the claim, or other

[[Page 63060]]

information demonstrating that the good qualifies for preferential 
tariff treatment;
    (3) A written statement indicating whether the importer of the good 
provided a copy of the entry summary or equivalent documentation to any 
other person. If such documentation was so provided, the statement must 
identify each recipient by name, CBP identification number, and address 
and must specify the date on which the documentation was provided; and
    (4) A written statement indicating whether any person has filed a 
protest relating to the good under any provision of law; and if any 
such protest has been filed, the statement must identify the protest by 
number and date.


Sec.  10.2012  CBP processing procedures.

    (a) Status determination. After receipt of a post-importation claim 
pursuant to Sec.  10.2011, the port director will determine whether the 
entry covering the good has been liquidated and, if liquidation has 
taken place, whether the liquidation has become final.
    (b) Pending protest or judicial review. If the port director 
determines that any protest relating to the good has not been finally 
decided, the port director will suspend action on the claim filed 
pursuant to Sec.  10.2011 until the decision on the protest becomes 
final. If a summons involving the tariff classification or dutiability 
of the good is filed in the Court of International Trade, the port 
director will suspend action on the claim filed pursuant to Sec.  
10.2011 until judicial review has been completed.
    (c) Allowance of claim--(1) Unliquidated entry. If the port 
director determines that a claim for a refund filed pursuant to Sec.  
10.2011 should be allowed and the entry covering the good has not been 
liquidated, the port director will take into account the claim for 
refund in connection with the liquidation of the entry.
    (2) Liquidated entry. If the port director determines that a claim 
for a refund filed pursuant to Sec.  10.2011 should be allowed and the 
entry covering the good has been liquidated, whether or not the 
liquidation has become final, the entry must be reliquidated in order 
to effect a refund of duties under this section. If the entry is 
otherwise to be reliquidated based on administrative review of a 
protest or as a result of judicial review, the port director will 
reliquidate the entry taking into account the claim for refund pursuant 
to Sec.  10.2011.
    (d) Denial of claim--(1) General. The port director may deny a 
claim for a refund filed under Sec.  10.2011 if the claim was not filed 
timely, if the importer has not complied with the requirements of 
Sec. Sec.  10.2008 and 10.2011, or if, following an origin verification 
under Sec.  10.2026, the port director determines either that the 
imported good was not an originating good at the time of importation or 
that a basis exists upon which preferential tariff treatment may be 
denied under Sec.  10.2026.
    (2) Unliquidated entry. If the port director determines that a 
claim for a refund filed under this subpart should be denied and the 
entry covering the good has not been liquidated, the port director will 
deny the claim in connection with the liquidation of the entry, and 
notice of the denial and the reason for the denial will be provided to 
the importer in writing or via an authorized electronic data 
interchange system.
    (3) Liquidated entry. If the port director determines that a claim 
for a refund filed under this subpart should be denied and the entry 
covering the good has been liquidated, whether or not the liquidation 
has become final, the claim may be denied without reliquidation of the 
entry. If the entry is otherwise to be reliquidated based on 
administrative review of a protest or as a result of judicial review, 
such reliquidation may include denial of the claim filed under this 
subpart. In either case, the port director will provide notice of the 
denial and the reason for the denial to the importer in writing or via 
an authorized electronic data interchange system.

Rules of Origin


Sec.  10.2013  Definitions.

    For purposes of Sec. Sec.  10.2013 through 10.2025:
    (a) Adjusted value. ``Adjusted value'' means the value determined 
in accordance with Articles 1 through 8, Article 15, and the 
corresponding interpretative notes of the Customs Valuation Agreement, 
adjusted, if necessary, to exclude:
    (1) Any costs, charges, or expenses incurred for transportation, 
insurance and related services incident to the international shipment 
of the good from the country of exportation to the place of 
importation; and
    (2) The value of packing materials and containers for shipment as 
defined in paragraph (o) of this section;
    (b) Class of motor vehicles. ``Class of motor vehicles'' means any 
one of the following categories of motor vehicles:
    (1) Motor vehicles classified under subheading 8701.20, motor 
vehicles for the transport of 16 or more persons classified under 
subheading 8702.10 or 8702.90, and motor vehicles classified under 
subheading 8704.10, 8704.22, 8704.23, 8704.32, or 8704.90, or heading 
8705 or 8706, HTSUS;
    (2) Motor vehicles classified under subheading 8701.10 or any of 
subheadings 8701.30 through 8701.90, HTSUS;
    (3) Motor vehicles for the transport of 15 or fewer persons 
classified under subheading 8702.10 or 8702.90, HTSUS, or motor 
vehicles classified under subheading 8704.21 or 8704.31, HTSUS; or
    (4) Motor vehicles classified under subheadings 8703.21 through 
8703.90, HTSUS;
    (c) Enterprise. ``Enterprise'' means an enterprise as defined in 
Sec.  10.2002(g), and includes an enterprise involved in:
    (1) Production, processing, or manipulation of textile or apparel 
goods in the territory of Panama, including in any free trade zone, 
foreign trade zone, or export processing zone;
    (2) Importation of textile or apparel goods into the territory of 
Panama, including into any free trade zone, foreign trade zone, or 
export processing zone; or
    (3) Exportation of textile or apparel goods from the territory of 
Panama, including from any free trade zone, foreign trade zone, or 
export processing zone;
    (d) Exporter. ``Exporter'' means a person who exports goods from 
the territory of a Party;
    (e) Fungible good or material. ``Fungible good or material'' means 
a good or material, as the case may be, that is interchangeable with 
another good or material for commercial purposes and the properties of 
which are essentially identical to such other good or material;
    (f) Generally Accepted Accounting Principles. ``Generally Accepted 
Accounting Principles'' means the recognized consensus or substantial 
authoritative support in the territory of a Party, with respect to the 
recording of revenues, expenses, costs, assets, and liabilities, the 
disclosure of information, and the preparation of financial statements. 
These principles may encompass broad guidelines of general application, 
as well as detailed standards, practices, and procedures;
    (g) Good. ``Good'' means any merchandise, product, article, or 
material;
    (h) Goods wholly obtained or produced entirely in the territory of 
one or both of the Parties. ``Goods wholly obtained or produced 
entirely in the territory of one or both of the Parties'' means:

[[Page 63061]]

    (1) Plants and plant products harvested or gathered in the 
territory of one or both of the Parties;
    (2) Live animals born and raised in the territory of one or both of 
the Parties;
    (3) Goods obtained in the territory of one or both of the Parties 
from live animals;
    (4) Goods obtained from hunting, trapping, fishing, or aquaculture 
conducted in the territory of one or both of the Parties;
    (5) Minerals and other natural resources not included in paragraphs 
(h)(1) through (h)(4) of this section that are extracted or taken in 
the territory of one or both of the Parties;
    (6) Fish, shellfish, and other marine life taken from the sea, 
seabed, or subsoil outside the territory of the Parties by:
    (i) Vessels registered or recorded with Panama and flying its flag; 
or
    (ii) Vessels documented under the laws of the United States;
    (7) Goods produced on board factory ships from the goods referred 
to in paragraph (h)(6) of this section, if such factory ships are:
    (i) Registered or recorded with Panama and flying its flag; or
    (ii) Documented under the laws of the United States;
    (8) Goods taken by a Party or a person of a Party from the seabed 
or subsoil outside territorial waters, if a Party has rights to exploit 
such seabed or subsoil;
    (9) Goods taken from outer space, provided they are obtained by a 
Party or a person of a Party and not processed in the territory of a 
non-Party;
    (10) Waste and scrap derived from:
    (i) Manufacturing or processing operations in the territory of one 
or both of the Parties; or
    (ii) Used goods collected in the territory of one or both of the 
Parties, if such goods are fit only for the recovery of raw materials;
    (11) Recovered goods derived in the territory of one or both of the 
Parties from used goods, and used in the territory of one or both of 
the Parties in the production of remanufactured goods; and
    (12) Goods produced in the territory of one or both of the Parties 
exclusively from goods referred to in any of paragraphs (h)(1) through 
(h)(10) of this section, or from the derivatives of such goods, at any 
stage of production;
    (i) Indirect material. ``Indirect material'' means a good used in 
the production, testing, or inspection of another good in the territory 
of one or both of the Parties 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:
    (1) Fuel and energy;
    (2) Tools, dies, and molds;
    (3) Spare parts and materials used in the maintenance of equipment 
or buildings;
    (4) Lubricants, greases, compounding materials, and other materials 
used in production or used to operate equipment or buildings;
    (5) Gloves, glasses, footwear, clothing, safety equipment, and 
supplies;
    (6) Equipment, devices, and supplies used for testing or inspecting 
the good;
    (7) Catalysts and solvents; and
    (8) Any other good that is not incorporated 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;
    (j) Material. ``Material'' means a good that is used in the 
production of another good, including a part or an ingredient;
    (k) Model line. ``Model line'' means a group of motor vehicles 
having the same platform or model name;
    (l) Net cost. ``Net cost'' means total cost minus sales promotion, 
marketing, and after-sales service costs, royalties, shipping and 
packing costs, and non-allowable interest costs that are included in 
the total cost;
    (m) Non-allowable interest costs. ``Non-allowable 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 Party in which the producer is located;
    (n) Non-originating good or non-originating material. ``Non-
originating good'' or ``non-originating material'' means a good or 
material, as the case may be, that does not qualify as originating 
under General Note 35, HTSUS, or this subpart;
    (o) Packing materials and containers for shipment. ``Packing 
materials and containers for shipment'' means the goods used to protect 
a good during its transportation to the United States, and does not 
include the packaging materials and containers in which a good is 
packaged for retail sale;
    (p) Producer. ``Producer'' means a person who engages in the 
production of a good in the territory of a Party;
    (q) Production. ``Production'' means growing, mining, harvesting, 
fishing, raising, trapping, hunting, manufacturing, processing, 
assembling, or disassembling a good;
    (r) Reasonably allocate. ``Reasonably allocate'' means to apportion 
in a manner that would be appropriate under Generally Accepted 
Accounting Principles;
    (s) Recovered goods. ``Recovered goods'' means materials in the 
form of individual parts that are the result of:
    (1) The disassembly of used goods into individual parts; and
    (2) The cleaning, inspecting, testing, or other processing that is 
necessary to improve such individual parts to sound working condition;
    (t) Remanufactured good. ``Remanufactured good'' means a good 
classified in Chapter 84, 85, 87, or 90 or heading 9402, HTSUS, other 
than a good classified in heading 8418 or 8516, HTSUS, and that:
    (1) Is entirely or partially comprised of recovered goods as 
defined in paragraph (s) of this section; and
    (2) Has a similar life expectancy and enjoys a factory warranty 
similar to such a good that is new;
    (u) Royalties. ``Royalties'' means payments of any kind, including 
payments under technical assistance agreements or similar agreements, 
made as consideration for the use of, or right to use, any copyright, 
literary, artistic, or scientific work, patent, trademark, design, 
model, plan, secret formula or process, excluding those payments under 
technical assistance agreements or similar agreements that can be 
related to specific services such as:
    (1) Personnel training, without regard to where performed; and
    (2) If performed in the territory of one or both of the Parties, 
engineering, tooling, die-setting, software design and similar computer 
services;
    (v) Sales promotion, marketing, and after-sales service costs. 
``Sales promotion, marketing, and after-sales service costs'' means the 
following costs related to sales promotion, marketing, and after-sales 
service:
    (1) Sales and marketing promotion; media advertising; advertising 
and market research; promotional and demonstration materials; exhibits; 
sales conferences, trade shows and conventions; banners; marketing 
displays; free samples; sales, marketing, and after-sales service 
literature (product brochures, catalogs, technical literature, price 
lists, service manuals, sales aid information); establishment and 
protection of logos and trademarks; sponsorships; wholesale and retail 
restocking charges; entertainment;
    (2) Sales and marketing incentives; consumer, retailer or 
wholesaler rebates; merchandise incentives;
    (3) Salaries and wages, sales commissions, bonuses, benefits (for 
example, medical, insurance, pension), traveling and living expenses, 
membership and professional fees, for sales promotion, marketing, and 
after-sales service personnel;

[[Page 63062]]

    (4) Recruiting and training of sales promotion, marketing, and 
after-sales service personnel, and after-sales training of customers' 
employees, where such costs are identified separately for sales 
promotion, marketing, and after-sales service of goods on the financial 
statements or cost accounts of the producer;
    (5) Product liability insurance;
    (6) Office supplies for sales promotion, marketing, and after-sales 
service of goods, where such costs are identified separately for sales 
promotion, marketing, and after-sales service of goods on the financial 
statements or cost accounts of the producer;
    (7) Telephone, mail and other communications, where such costs are 
identified separately for sales promotion, marketing, and after-sales 
service of goods on the financial statements or cost accounts of the 
producer;
    (8) Rent and depreciation of sales promotion, marketing, and after-
sales service offices and distribution centers;
    (9) Property insurance premiums, taxes, cost of utilities, and 
repair and maintenance of sales promotion, marketing, and after-sales 
service offices and distribution centers, where such costs are 
identified separately for sales promotion, marketing, and after-sales 
service of goods on the financial statements or cost accounts of the 
producer; and
    (10) Payments by the producer to other persons for warranty 
repairs;
    (w) Self-produced material. ``Self-produced material'' means an 
originating material that is produced by a producer of a good and used 
in the production of that good;
    (x) Shipping and packing costs. ``Shipping and packing costs'' 
means the costs incurred in packing a good for shipment and shipping 
the good from the point of direct shipment to the buyer, excluding the 
costs of preparing and packaging the good for retail sale;
    (y) Total cost. ``Total cost'' means all product costs, period 
costs, and other costs for a good incurred in the territory of one or 
both of the Parties. Product costs are costs that are associated with 
the production of a good and include the value of materials, direct 
labor costs, and direct overhead. Period costs are costs, other than 
product costs, that are expensed in the period in which they are 
incurred, such as selling expenses and general and administrative 
expenses. Other costs are all costs recorded on the books of the 
producer that are not product costs or period costs, such as interest. 
Total cost does not include profits that are earned by the producer, 
regardless of whether they are retained by the producer or paid out to 
other persons as dividends, or taxes paid on those profits, including 
capital gains taxes;
    (z) Used. ``Used'' means utilized or consumed in the production of 
goods; and
    (aa) Value. ``Value'' means the value of a good or material for 
purposes of calculating customs duties or for purposes of applying this 
subpart.


Sec.  10.2014  Originating goods.

    Except as otherwise provided in this subpart and General Note 35, 
HTSUS, a good imported into the customs territory of the United States 
will be considered an originating good under the PANTPA only if:
    (a) The good is wholly obtained or produced entirely in the 
territory of one or both of the Parties;
    (b) The good is produced entirely in the territory of one or both 
of the Parties and:
    (1) Each non-originating material used in the production of the 
good undergoes an applicable change in tariff classification specified 
in General Note 35, HTSUS, and the good satisfies all other applicable 
requirements of General Note 35, HTSUS; or
    (2) The good otherwise satisfies any applicable regional value 
content or other requirements specified in General Note 35, HTSUS, and 
satisfies all other applicable requirements of General Note 35, HTSUS; 
or
    (c) The good is produced entirely in the territory of one or both 
of the Parties exclusively from originating materials.


Sec.  10.2015  Regional value content.

    (a) General. Except for goods to which paragraph (d) of this 
section applies, where General Note 35, HTSUS, sets forth a rule that 
specifies a regional value content test for a good, the regional value 
content of such good must be calculated by the importer, exporter, or 
producer of the good on the basis of the build-down method described in 
paragraph (b) of this section or the build-up method described in 
paragraph (c) of this section.
    (b) Build-down method. Under the build-down method, the regional 
value content must be calculated on the basis of the formula RVC = ((AV 
- VNM)/AV) x 100, where RVC is the regional value content, expressed as 
a percentage; AV is the adjusted value of the good; and VNM is the 
value of non-originating 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.
    (c) Build-up method. Under the build-up method, the regional value 
content must be calculated on the basis of the formula RVC = (VOM/AV) x 
100, where RVC is the regional value content, expressed as a 
percentage; AV is the adjusted value of the good; and VOM is the value 
of originating materials that are acquired or self-produced and used by 
the producer in the production of the good.
    (d) Special rule for certain automotive goods.
    (1) General. Where General Note 35, HTSUS, sets forth a rule that 
specifies a regional value content test for an automotive good provided 
for in any of subheadings 8407.31 through 8407.34 (engines), subheading 
8408.20 (diesel engine for vehicles), heading 8409 (parts of engines), 
or any of headings 8701 through 8705 (motor vehicles), and headings 
8706 (chassis), 8707 (bodies), and 8708 (motor vehicle parts), HTSUS, 
the regional value content of such good may be calculated by the 
importer, exporter, or producer of the good on the basis of the net 
cost method described in paragraphs (d)(2) through (d)(4) of this 
section.
    (2) Net cost method. Under the net cost method, the regional value 
content is calculated on the basis of the formula RVC = ((NC - VNM)/NC) 
x 100, where RVC is the regional value content, expressed as a 
percentage; NC is the net cost of the good; and VNM is the value of 
non-originating 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. Consistent with the provisions 
regarding allocation of costs set out in Generally Accepted Accounting 
Principles, the net cost of the good must be determined 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 non-allowable 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 the producer of the automotive good, reasonably allocating 
the total cost to the automotive good, and then subtracting any sales 
promotion, marketing, and after-sales service costs, royalties, 
shipping and packing costs, and non-allowable interest costs that are

[[Page 63063]]

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 
costs 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 non-allowable interest costs.
    (3) Motor vehicles--(i) General. For purposes of calculating the 
regional value content under the net cost method 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 
calculated under the formula set forth in paragraph (d)(2) of this 
section over the producer's fiscal year using any one of the categories 
described in paragraph (d)(3)(ii) of this section either on the basis 
of all motor vehicles in the category or those motor vehicles in the 
category that are exported to the territory of one or both Parties.
    (ii) Categories. The categories referred to in paragraph (d)(3)(i) 
of this section are as follows:
    (A) The same model line of motor vehicles, in the same class of 
vehicles, produced in the same plant in the territory of a Party, as 
the motor vehicle for which the regional value content is being 
calculated;
    (B) The same class of motor vehicles, and produced in the same 
plant in the territory of a Party, as the motor vehicle for which the 
regional value content is being calculated; and
    (C) The same model line of motor vehicles produced in the territory 
of a Party as the motor vehicle for which the regional value content is 
being calculated.
    (4) Other automotive goods--(i) General. For purposes of 
calculating the regional value content under the net cost method for 
automotive goods provided for in any of subheadings 8407.31 through 
8407.34, subheading 8408.20, heading 8409, 8706, 8707, or 8708, HTSUS, 
that are produced in the same plant, an importer, exporter, or producer 
may:
    (A) Average the amounts calculated under the formula set forth in 
paragraph (d)(2) of this section over any of the following: the fiscal 
year, or any quarter or month, of the motor vehicle producer to whom 
the automotive good is sold, or the fiscal year, or any quarter or 
month, of the producer of the automotive good, provided the goods were 
produced during the fiscal year, quarter, or month that is the basis 
for the calculation;
    (B) Determine the average referred to in paragraph (d)(4)(i)(A) of 
this section separately for such goods sold to one or more motor 
vehicle producers; or
    (C) Make a separate determination under paragraph (d)(4)(i)(A) or 
(d)(4)(i)(B) of this section for automotive goods that are exported to 
the territory of Panama or the United States.
    (ii) Duration of use. A person selecting an averaging period of one 
month or quarter under paragraph (d)(4)(i)(A) of this section must 
continue to use that method for that category of automotive goods 
throughout the fiscal year.


Sec.  10.2016  Value of materials.

    (a) Calculating the value of materials. For purposes of calculating 
the regional value content of a good under General Note 35, HTSUS, and 
for purposes of applying the de minimis (see Sec.  10.2018) provisions 
of General Note 35, HTSUS, the value of a material is:
    (1) In the case of a material imported by the producer of the good, 
the adjusted value of the material;
    (2) In the case of a material acquired by the producer in the 
territory where the good is produced, the value, determined in 
accordance with Articles 1 through 8, Article 15, and the corresponding 
interpretative notes of the Customs Valuation Agreement, i.e., in the 
same manner as for imported goods, with reasonable modifications to the 
provisions of the Customs Valuation Agreement as may be required due to 
the absence of an importation by the producer (including, but not 
limited to, treating a domestic purchase by the producer as if it were 
a sale for export to the country of importation); or
    (3) In the case of a self-produced material, 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.
    (b) Examples. The following examples illustrate application of the 
principles set forth in paragraph (a)(2) of this section:
    Example 1. A producer in Panama purchases material x from an 
unrelated seller in Panama for $100. Under the provisions of Article 1 
of the Customs Valuation Agreement, transaction value is the price 
actually paid or payable for the goods when sold for export to the 
country of importation adjusted in accordance with the provisions of 
Article 8. In order to apply Article 1 to this domestic purchase by the 
producer, such purchase is treated as if it were a sale for export to 
the country of importation. Therefore, for purposes of determining the 
adjusted value of material x, Article 1 transaction value is the price 
actually paid or payable for the goods when sold to the producer in 
Panama ($100), adjusted in accordance with the provisions of Article 8. 
In this example, it is irrelevant whether material x was initially 
imported into Panama by the seller (or by anyone else). So long as the 
producer acquired material x in Panama, it is intended that the value 
of material x will be determined on the basis of the price actually 
paid or payable by the producer adjusted in accordance with the 
provisions of Article 8.
    Example 2. Same facts as in Example 1, except that the sale between 
the seller and the producer is subject to certain restrictions that 
preclude the application of Article 1. Under Article 2 of the Customs 
Valuation Agreement, the value is the transaction value of identical 
goods sold for export to the same country of importation and exported 
at or about the same time as the goods being valued. In order to permit 
the application of Article 2 to the domestic acquisition by the 
producer, it should be modified so that the value is the transaction 
value of identical goods sold within Panama at or about the same time 
the goods were sold to the producer in Panama. Thus, if the seller of 
material x also sold an identical material to another buyer in Panama 
without restrictions, that other sale would be used to determine the 
adjusted value of material x.
    (c) Permissible additions to, and deductions from, the value of 
materials--(1) Additions to originating materials. For originating 
materials, the following expenses, if not included under paragraph (a) 
of this section, 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 one or both of the Parties to the location of the producer;
    (ii) Duties, taxes, and customs brokerage fees on the material paid 
in the territory of one or both of the Parties, other than duties and 
taxes that are waived, refunded, refundable, or otherwise recoverable, 
including credit against duty or tax paid or payable; and
    (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.
    (2) Deductions from non-originating materials. For non-originating 
materials, if included under paragraph (a) of this section, the 
following expenses may be deducted from the value of the non-
originating material:

[[Page 63064]]

    (i) The costs of freight, insurance, packing, and all other costs 
incurred in transporting the material within or between the territory 
of one or both of the Parties to the location of the producer;
    (ii) Duties, taxes, and customs brokerage fees on the material paid 
in the territory of one or both of the Parties, other than duties and 
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 by-products; and
    (iv) The cost of originating materials used in the production of 
the non-originating material in the territory of one or both of the 
Parties.
    (d) Accounting method. Any cost or value referenced in General Note 
35, HTSUS, and this subpart, must be recorded and maintained in 
accordance with the Generally Accepted Accounting Principles applicable 
in the territory of the Party in which the good is produced.


Sec.  10.2017  Accumulation.

    (a) Originating materials from the territory of a Party that are 
used in the production of a good in the territory of another Party will 
be considered to originate in the territory of that other Party.
    (b) A good that is produced in the territory of one or both of the 
Parties by one or more producers is an originating good if the good 
satisfies the requirements of Sec.  10.2014 and all other applicable 
requirements of General Note 35, HTSUS.


Sec.  10.2018  De minimis.

    (a) General. Except as provided in paragraphs (b) and (c) of this 
section, a good that does not undergo a change in tariff classification 
pursuant to General Note 35, HTSUS, is an originating good if:
    (1) The value of all non-originating materials used in the 
production of the good that do not undergo the applicable change in 
tariff classification does not exceed 10 percent of the adjusted value 
of the good;
    (2) The value of the non-originating materials described in 
paragraph (a)(1) of this section is included in the value of non-
originating materials for any applicable regional value content 
requirement for the good under General Note 35, HTSUS; and
    (3) The good meets all other applicable requirements of General 
Note 35, HTSUS.
    (b) Exceptions. Paragraph (a) of this section does not apply to:
    (1) A non-originating material provided for in Chapter 4, HTSUS, or 
a non-originating dairy preparation containing over 10 percent by 
weight of milk solids provided for in subheading 1901.90 or 2106.90, 
HTSUS, that is used in the production of a good provided for in Chapter 
4, HTSUS;
    (2) A non-originating material provided for in Chapter 4, HTSUS, or 
a non-originating dairy preparation containing over 10 percent by 
weight of milk solids provided for in subheading 1901.90, HTSUS, which 
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, HTSUS;
    (ii) Mixes and doughs, containing over 25 percent by weight of 
butterfat, not put up for retail sale, provided for in subheading 
1901.20, HTSUS;
    (iii) Dairy preparations containing over 10 percent by weight of 
milk solids provided for in subheading 1901.90 or 2106.90, HTSUS;
    (iv) Goods provided for in heading 2105, HTSUS;
    (v) Beverages containing milk provided for in subheading 2202.90, 
HTSUS; or
    (vi) Animal feeds containing over 10 percent by weight of milk 
solids provided for in subheading 2309.90, HTSUS;
    (3) A non-originating material provided for in heading 0805, HTSUS, 
or any of subheadings 2009.11 through 2009.39, HTSUS, that is used in 
the production of a good provided for in any of subheadings 2009.11 
through 2009.39, HTSUS, 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, 
HTSUS;
    (4) A non-originating material provided for in heading 0901 or 
2101, HTSUS, that is used in the production of a good provided for in 
heading 0901 or 2101, HTSUS;
    (5) A non-originating material provided for in heading 1006, HTSUS, 
that is used in the production of a good provided for in heading 1102 
or 1103 or subheading 1904.90, HTSUS;
    (6) A non-originating material provided for in Chapter 15, HTSUS, 
that is used in the production of a good provided for in Chapter 15, 
HTSUS;
    (7) A non-originating material provided for in heading 1701, HTSUS, 
that is used in the production of a good provided for in any of 
headings 1701 through 1703, HTSUS;
    (8) A non-originating material provided for in Chapter 17, HTSUS, 
that is used in the production of a good provided for in subheading 
1806.10, HTSUS; or
    (9) Except as provided in paragraphs (b)(1) through (b)(8) of this 
section and General Note 35, HTSUS, a non-originating material used in 
the production of a good provided for in any of Chapters 1 through 24, 
HTSUS, unless the non-originating material is provided for in a 
different subheading than the good for which origin is being determined 
under this subpart.
    (c) Textile and apparel goods--(1) General. Except as provided in 
paragraph (c)(2) of this section, 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 out in General Note 35, HTSUS, will 
nevertheless 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 nylon filament yarns (other than elastomeric 
yarns) that are provided for in subheading 5402.11.30, 5402.11.60, 
5402.19.30, 5402.19.60, 5402.31.30, 5402.31.60, 5402.32.30, 5402.32.60, 
5402.45.10, 5402.45.90, 5402.51.00 or 5402.61.00, HTSUS, and that are 
products of Canada, Mexico, or Israel.
    (2) Exception for goods containing elastomeric yarns. A textile or 
apparel good containing elastomeric yarns (excluding latex) in the 
component of the good that determines the tariff classification of the 
good will be considered an originating good only if such yarns are 
wholly formed and finished in the territory of a Party. For purposes of 
this paragraph, ``wholly formed and finished'' means that all the 
production processes and finishing operations, starting with the 
extrusion of filaments, strips, film, or sheet, and including drawing 
to fully orient a filament or slitting a film or sheet into strip, or 
the spinning of all fibers into yarn, or both, and ending with a 
finished yarn or plied yarn.
    (3) Yarn, fabric, or fiber. For purposes of paragraph (c) of this 
section, in the case of a textile or apparel good that is a yarn, 
fabric, or fiber, the term ``component of the good that determines the 
tariff classification of the good'' means all of the fibers in the 
good.

[[Page 63065]]

Sec.  10.2019  Fungible goods and materials.

    (a) General. A person claiming that a fungible good or material is 
an originating good may base the claim either on the physical 
segregation of the fungible good or material or by using an inventory 
management method with respect to the fungible good or material. For 
purposes of this section, the term ``inventory management method'' 
means:
    (1) Averaging;
    (2) ``Last-in, first-out;''
    (3) ``First-in, first-out;'' or
    (4) Any other method that is recognized in the Generally Accepted 
Accounting Principles of the Party in which the production is performed 
or otherwise accepted by that country.
    (b) Duration of use. A person selecting an inventory management 
method under paragraph (a) of this section for a particular fungible 
good or material must continue to use that method for that fungible 
good or material throughout the fiscal year of that person.


Sec.  10.2020  Accessories, spare parts, or tools.

    (a) General. Accessories, spare parts, or tools that are delivered 
with a good and that form part of the good's standard accessories, 
spare parts, or tools will be treated as originating goods if the good 
is an originating good, and will be disregarded in determining whether 
all the non-originating materials used in the production of the good 
undergo an applicable change in tariff classification specified in 
General Note 35, HTSUS, provided that:
    (1) The accessories, spare parts, or tools are classified with, and 
not invoiced separately from, the good, regardless of whether they are 
specified or separately identified in the invoice for the good; and
    (2) The quantities and value of the accessories, spare parts, or 
tools are customary for the good.
    (b) Regional value content. If the good is subject to a regional 
value content requirement, the value of the accessories, spare parts, 
or tools is taken into account as originating or non-originating 
materials, as the case may be, in calculating the regional value 
content of the good under Sec.  10.2015.


Sec.  10.2021  Goods classifiable as goods put up in sets.

    Notwithstanding the specific rules set forth in General Note 35, 
HTSUS, goods classifiable as goods put up in sets for retail sale as 
provided for in General Rule of Interpretation 3, HTSUS, will not be 
considered to be originating goods unless:
    (a) Each of the goods in the set is an originating good; or
    (b) The total value of the non-originating goods in the set does 
not exceed;
    (1) In the case of textile or apparel goods, 10 percent of the 
adjusted value of the set; or
    (2) In the case of a good other than a textile or apparel good, 15 
percent of the adjusted value of the set.


Sec.  10.2022  Retail packaging materials and containers.

    (a) Effect on tariff shift rule. Packaging materials and containers 
in which a good is packaged for retail sale, if classified with the 
good for which preferential tariff treatment under the PANTPA is 
claimed, will be disregarded in determining whether all non-originating 
materials used in the production of the good undergo the applicable 
change in tariff classification set out in General Note 35, HTSUS.
    (b) Effect on regional value content calculation. If the good is 
subject to a regional value content requirement, the value of such 
packaging materials and containers will be taken into account as 
originating or non-originating materials, as the case may be, in 
calculating the regional value content of the good.
    Example 1. Panamanian Producer A of good C imports 100 non-
originating blister packages to be used as retail packaging for good C. 
As provided in Sec.  10.2016(a)(1), the value of the blister packages 
is their adjusted value, which in this case is $10. Good C has a 
regional value content requirement. The United States importer of good 
C decides to use the build-down method, RVC=((AV-VNM)/AV) x 100 (see 
Sec.  10.2015(b)), in determining whether good C satisfies the regional 
value content requirement. In applying this method, the non-originating 
blister packages are taken into account as non-originating. As such, 
their $10 adjusted value is included in the VNM, value of non-
originating materials, of good C.
    Example 2. Same facts as in Example 1, except that the blister 
packages are originating. In this case, the adjusted value of the 
originating blister packages would not be included as part of the VNM 
of good C under the build-down method. However, if the U.S. importer 
had used the build-up method, RVC=(VOM/AV) x 100 (see Sec.  
10.2015(c)), the adjusted value of the blister packaging would be 
included as part of the VOM, value of originating materials.


Sec.  10.2023  Packing materials and containers for shipment.

    (a) Effect on tariff shift rule. Packing materials and containers 
for shipment, as defined in Sec.  10.2013(o), are to be disregarded in 
determining whether the non-originating materials used in the 
production of the good undergo an applicable change in tariff 
classification set out in General Note 35, HTSUS. Accordingly, such 
materials and containers are not required to undergo the applicable 
change in tariff classification even if they are non-originating.
    (b) Effect on regional value content calculation. Packing materials 
and containers for shipment, as defined in Sec.  10.2013(o), are to be 
disregarded in determining the regional value content of a good 
imported into the United States. Accordingly, in applying the build-
down, build-up, or net cost method for determining the regional value 
content of a good imported into the United States, the value of such 
packing materials and containers for shipment (whether originating or 
non-originating) is disregarded and not included in AV, adjusted value, 
VNM, value of non-originating materials, VOM, value of originating 
materials, or NC, net cost of a good.
    Example. Panamanian producer A produces good C. Producer A ships 
good C to the United States in a shipping container that it purchased 
from Company B in Panama. The shipping container is originating. The 
value of the shipping container determined under Sec.  10.2016(a)(2) is 
$3. Good C is subject to a regional value content requirement. The 
transaction value of good C is $100, which includes the $3 shipping 
container. The U.S. importer decides to use the build-up method, RVC= 
(VOM/AV) x 100 (see Sec.  10.2015(c))), in determining whether good C 
satisfies the regional value content requirement. In determining the 
AV, adjusted value, of good C imported into the U.S., paragraph (b) of 
this section and the definition of AV require a $3 deduction for the 
value of the shipping container. Therefore, the AV is $97 ($100-$3). In 
addition, the value of the shipping container is disregarded and not 
included in the VOM, value of originating materials.


Sec.  10.2024  Indirect materials.

    An indirect material, as defined in Sec.  10.2013(i), will be 
considered to be an originating material without regard to where it is 
produced.
    Example. Panamanian Producer A produces good C using non-
originating material B. Producer A imports non-originating rubber 
gloves for use by workers in the production of good C. Good C is 
subject to a tariff shift requirement. As provided in Sec.  
10.2014(b)(1) and General Note 35, each of the non-originating 
materials in

[[Page 63066]]

good C must undergo the specified change in tariff classification in 
order for good C to be considered originating. Although non-originating 
material B must undergo the applicable tariff shift in order for good C 
to be considered originating, the rubber gloves do not because they are 
indirect materials and are considered originating without regard to 
where they are produced.


Sec.  10.2025  Transit and transshipment.

    (a) General. A good that has undergone production necessary to 
qualify as an originating good under Sec.  10.2014 will not be 
considered an originating good if, subsequent to that production, the 
good:
    (1) Undergoes further production or any other operation outside the 
territories of the Parties, other than unloading, reloading, or any 
other operation necessary to preserve the good in good condition or to 
transport the good to the territory of a Party; or
    (2) Does not remain under the control of customs authorities in the 
territory of a non-Party.
    (b) Documentary evidence. An importer making a claim that a good is 
originating may be required to demonstrate, to CBP's satisfaction, that 
the conditions and requirements set forth in paragraph (a) of this 
section were met. An importer may demonstrate compliance with this 
section by submitting documentary evidence. Such evidence may include, 
but is not limited to, bills of lading, airway bills, packing lists, 
commercial invoices, receiving and inventory records, and customs entry 
and exit documents.

Origin Verifications and Determinations


Sec.  10.2026  Verification and justification of claim for preferential 
tariff treatment.

    (a) Verification. A claim for preferential tariff treatment made 
under Sec.  10.2003(b) or Sec.  10.2011, including any statements or 
other information submitted to CBP in support of the claim, will be 
subject to such verification as the port director deems necessary. In 
the event that the port director is provided with insufficient 
information to verify or substantiate the claim, or the port director 
finds a pattern of conduct, indicating that an importer, exporter, or 
producer has provided false or unsupported declarations or 
certifications, or the exporter or producer fails to consent to a 
verification visit, the port director may deny the claim for 
preferential treatment. A verification of a claim for preferential 
tariff treatment under PANTPA for goods imported into the United States 
may be conducted by means of one or more of the following:
    (1) Written requests for information from the importer, exporter, 
or producer;
    (2) Written questionnaires to the importer, exporter, or producer;
    (3) Visits to the premises of the exporter or producer in the 
territory of Panama, to review the records of the type referred to in 
Sec.  10.2009(c)(1) or to observe the facilities used in the production 
of the good, in accordance with the framework that the Parties develop 
for conducting verifications; and
    (4) Such other procedures to which the Parties may agree.
    (b) Applicable accounting principles. When conducting a 
verification of origin to which Generally Accepted Accounting 
Principles may be relevant, CBP will apply and accept the Generally 
Accepted Accounting Principles applicable in the country of production.


Sec.  10.2027  Special rule for verifications in Panama of U.S. imports 
of textile and apparel goods.

    (a) Procedures to determine whether a claim of origin is accurate--
(1) General. For the purpose of determining that a claim of origin for 
a textile or apparel good is accurate, CBP may request that the 
Government of Panama conduct a verification, regardless of whether a 
claim is made for preferential tariff treatment.
    (2) Actions during a verification. While a verification under this 
paragraph is being conducted, CBP, if directed by the President, may 
take appropriate action, which may include:
    (i) Suspending the application of preferential tariff treatment to 
the textile or apparel good for which a claim for preferential tariff 
treatment has been made, if CBP determines there is insufficient 
information to support the claim;
    (ii) Denying the application of preferential tariff treatment to 
the textile or apparel good for which a claim for preferential tariff 
treatment has been made that is the subject of a verification if CBP 
determines that an enterprise has provided incorrect information to 
support the claim;
    (iii) Detention of any textile or apparel good exported or produced 
by the enterprise subject to the verification if CBP determines there 
is insufficient information to determine the country of origin of any 
such good; and
    (iv) Denying entry to any textile or apparel good exported or 
produced by the enterprise subject to the verification if CBP 
determines that the enterprise has provided incorrect information as to 
the country of origin of any such good.
    (3) Actions following a verification. On completion of a 
verification under this paragraph, CBP, if directed by the President, 
may take appropriate action, which may include:
    (i) Denying the application of preferential tariff treatment to the 
textile or apparel good for which a claim for preferential tariff 
treatment has been made that is the subject of a verification if CBP 
determines there is insufficient information, or that the enterprise 
has provided incorrect information, to support the claim; and
    (ii) Denying entry to any textile or apparel good exported or 
produced by the enterprise subject to the verification if CBP 
determines there is insufficient information to determine, or that the 
enterprise has provided incorrect information as to, the country of 
origin of any such good.
    (b) Procedures to determine compliance with applicable customs laws 
and regulations of the United States--(1) General. For purposes of 
enabling CBP to determine that an exporter or producer is complying 
with applicable customs laws, regulations, and procedures regarding 
trade in textile and apparel goods, CBP may request that the government 
of Panama conduct a verification.
    (2) Actions during a verification. While a verification under this 
paragraph is being conducted, CBP, if directed by the President, may 
take appropriate action, which may include:
    (i) Suspending the application of preferential tariff treatment to 
any textile or apparel good exported or produced by the enterprise 
subject to the verification if CBP determines there is insufficient 
information to support a claim for preferential tariff treatment with 
respect to any such good;
    (ii) Denying the application of preferential tariff treatment to 
any textile or apparel good exported or produced by the enterprise 
subject to the verification if CBP determines that the enterprise has 
provided incorrect information to support a claim for preferential 
tariff treatment with respect to any such good;
    (iii) Detention of any textile or apparel good exported or produced 
by the enterprise subject to the verification if CBP determines there 
is insufficient information to determine the country of origin of any 
such good; and
    (iv) Denying entry to any textile or apparel good exported or 
produced by the enterprise subject to the verification if CBP 
determines that the enterprise has provided incorrect information as to 
the country of origin of any such good.
    (3) Actions following a verification. On completion of a 
verification under

[[Page 63067]]

this paragraph, CBP, if directed by the President, may take appropriate 
action, which may include:
    (i) Denying the application of preferential tariff treatment to any 
textile or apparel good exported or produced by the enterprise subject 
to the verification if CBP determines there is insufficient or 
incorrect information, or that the enterprise has provided incorrect 
information, to support a claim for preferential tariff treatment with 
respect to any such good; and
    (ii) Denying entry to any textile or apparel good exported or 
produced by the enterprise subject to the verification if CBP 
determines there is insufficient information to determine, or that the 
enterprise has provided incorrect information as to, the country of 
origin of any such good.
    (c) Action by U.S. officials in conducting a verification abroad. 
U.S. officials may undertake or assist in a verification under this 
section by conducting visits in the territory of Panama, along with the 
competent authorities of Panama, to the premises of an exporter, 
producer, or any other enterprise involved in the movement of textile 
or apparel goods from Panama to the United States.
    (d) Denial of permission to conduct a verification. If an 
enterprise does not consent to a verification under this section, CBP 
may deny entry of textile or apparel goods produced or exported by the 
enterprise.
    (e) Continuation of appropriate action. CBP may continue to take 
appropriate action under paragraph (a) or (b) of this section until it 
receives information sufficient to enable it to make the determination 
described in paragraphs (a) and (b) of this section.


Sec.  10.2028  Issuance of negative origin determinations.

    If, as a result of an origin verification initiated under this 
subpart, CBP determines that a claim for preferential tariff treatment 
under this subpart should be denied, it will issue a determination in 
writing or via an authorized electronic data interchange system to the 
importer that sets forth the following:
    (a) A description of the good that was the subject of the 
verification together with the identifying numbers and dates of the 
import documents pertaining to the good;
    (b) A statement setting forth the findings of fact made in 
connection with the verification and upon which the determination is 
based; and
    (c) With specific reference to the rules applicable to originating 
goods as set forth in General Note 35, HTSUS, and in Sec. Sec.  10.2013 
through 10.2025, the legal basis for the determination.


Sec.  10.2029  Repeated false or unsupported preference claims.

    Where verification or other information reveals a pattern of 
conduct by an importer, exporter, or producer of false or unsupported 
representations that goods qualify under the PANTPA rules of origin set 
forth in General Note 35, HTSUS, CBP may suspend preferential tariff 
treatment under the PANTPA to entries of identical goods covered by 
subsequent representations by that importer, exporter, or producer 
until CBP determines that representations of that person are in 
conformity with General Note 35, HTSUS.

Penalties


Sec.  10.2030  General.

    Except as otherwise provided in this subpart, all criminal, civil, 
or administrative penalties which may be imposed on U.S. importers, 
exporters, and producers for violations of the customs and related laws 
and regulations will also apply to U.S. importers, exporters, and 
producers for violations of the laws and regulations relating to the 
PANTPA.


Sec.  10.2031  Corrected claim or certification by importers.

    An importer who makes a corrected claim under Sec.  10.2003(c) will 
not be subject to civil or administrative penalties under 19 U.S.C. 
1592 for having made an incorrect claim or having submitted an 
incorrect certification, provided that the corrected claim is promptly 
and voluntarily made.


Sec.  10.2032  Corrected certification by U.S. exporters or producers.

    Civil or administrative penalties provided for under 19 U.S.C. 1592 
will not be imposed on an exporter or producer in the United States who 
promptly and voluntarily provides written notification pursuant to 
Sec.  10.2009(b) with respect to the making of an incorrect 
certification.


Sec.  10.2033  Framework for correcting claims or certifications.

    (a) ``Promptly and voluntarily'' defined. Except as provided for in 
paragraph (b) of this section, for purposes of this subpart, the making 
of a corrected claim or certification by an importer or the providing 
of written notification of an incorrect certification by an exporter or 
producer in the United States will be deemed to have been done promptly 
and voluntarily if:
    (1)(i) Done before the commencement of a formal investigation, 
within the meaning of Sec.  162.74(g) of this chapter; or
    (ii) Done before any of the events specified in Sec.  162.74(i) of 
this chapter have occurred; or
    (iii) Done within 30 days after the importer, exporter, or producer 
initially becomes aware that the claim or certification is incorrect; 
and
    (2) Accompanied by a statement setting forth the information 
specified in paragraph (c) of this section; and
    (3) In the case of a corrected claim or certification by an 
importer, accompanied or followed by a tender of any actual loss of 
duties and merchandise processing fees, if applicable, in accordance 
with paragraph (d) of this section.
    (b) Exception in cases involving fraud or subsequent incorrect 
claims--(1) Fraud. Notwithstanding paragraph (a) of this section, a 
person who acted fraudulently in making an incorrect claim or 
certification may not make a voluntary correction of that claim or 
certification. For purposes of this paragraph, the term ``fraud'' will 
have the meaning set forth in paragraph (C)(3) of Appendix B to Part 
171 of this chapter.
    (2) Subsequent incorrect claims. An importer who makes one or more 
incorrect claims after becoming aware that a claim involving the same 
merchandise and circumstances is invalid may not make a voluntary 
correction of the subsequent claims pursuant to paragraph (a) of this 
section.
    (c) Statement. For purposes of this subpart, each corrected claim 
or certification must be accompanied by a statement, submitted in 
writing or via an authorized electronic data interchange system, which:
    (1) Identifies the class or kind of good to which the incorrect 
claim or certification relates;
    (2) In the case of a corrected claim or certification by an 
importer, identifies each affected import transaction, including each 
port of importation and the approximate date of each importation;
    (3) Specifies the nature of the incorrect statements or omissions 
regarding the claim or certification; and
    (4) Sets forth, to the best of the person's knowledge, the true and 
accurate information or data which should have been covered by or 
provided in the claim or certification, and states that the person will 
provide any additional information or data which is unknown at the time 
of making the corrected claim or certification within 30 days or within 
any extension of that 30-day period as CBP may permit

[[Page 63068]]

in order for the person to obtain the information or data.
    (d) Tender of actual loss of duties. A U.S. importer who makes a 
corrected claim must tender any actual loss of duties at the time of 
making the corrected claim, or within 30 days thereafter, or within any 
extension of that 30-day period as CBP may allow in order for the 
importer to obtain the information or data necessary to calculate the 
duties owed.

Goods Returned After Repair or Alteration


Sec.  10.2034  Goods re-entered after repair or alteration in Panama.

    (a) General. This section sets forth the rules which apply for 
purposes of obtaining duty-free treatment on goods returned after 
repair or alteration in Panama as provided for in subheadings 
9802.00.40 and 9802.00.50, HTSUS. Goods returned after having been 
repaired or altered in Panama, regardless of whether such repair or 
alteration could be performed in the territory of the Party from which 
the good was exported for repair or alteration, are eligible for duty-
free treatment, provided that the requirements of this section are met. 
For purposes of this section, ``repair or alteration'' means 
restoration, addition, renovation, re-dyeing, cleaning, re-sterilizing, 
or other treatment that does not destroy the essential characteristics 
of, or create a new or commercially different good from, the good 
exported from the United States. The term ``repair or alteration'' does 
not include an operation or process that transforms an unfinished good 
into a finished good.
    (b) Goods not eligible for duty-free treatment after repair or 
alteration. The duty-free treatment referred to in paragraph (a) of 
this section will not apply to goods which, in their condition as 
exported from the United States to Panama, are incomplete for their 
intended use and for which the processing operation performed in Panama 
constitutes an operation that is performed as a matter of course in the 
preparation or manufacture of finished goods.
    (c) Documentation. The provisions of paragraphs (a), (b), and (c) 
of Sec.  10.8, relating to the documentary requirements for goods 
entered under subheading 9802.00.40 or 9802.00.50, HTSUS, will apply in 
connection with the entry of goods which are returned from Panama after 
having been exported for repairs or alterations and which are claimed 
to be duty free.

PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE

0
4. The general authority citation for Part 24 and specific authority 
for Sec.  24.23 continue to read as follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 58a-58c, 66, 1202 (General 
Note 3(i), Harmonized Tariff Schedule of the United States), 1505, 
1520, 1624; 26 U.S.C. 4461, 4462; 31 U.S.C. 9701; Pub. L. 107-296, 
116 Stat. 2135 (6 U.S.C. 1 et seq.).
* * * * *
    Section 24.23 also issued under 19 U.S.C. 3332;
* * * * *

0
5. Section 24.23 is amended by adding paragraph (c)(14) to read as 
follows:


Sec.  24.23  Fees for processing merchandise.

* * * * *
    (c) * * *
    (14) The ad valorem fee, surcharge, and specific fees provided 
under paragraphs (b)(1) and (b)(2)(i) of this section will not apply to 
goods that qualify as originating goods under section 203 of the United 
States-Panama Trade Promotion Agreement Implementation Act (see also 
General Note 35, HTSUS) that are entered, or withdrawn from warehouse 
for consumption, on or after October 29, 2012.

PART 162--INSPECTION, SEARCH, AND SEIZURE

0
6. The authority citation for Part 162 continues to read in part as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1592, 1593a, 1624.
* * * * *

0
7. Section 162.0 is amended by revising the last sentence to read as 
follows:


Sec.  162.0  Scope.

    * * * Additional provisions concerning records maintenance and 
examination applicable to U.S. importers, exporters and producers under 
the U.S.-Chile Free Trade Agreement, the U.S.-Singapore Free Trade 
Agreement, the Dominican Republic-Central America-U.S. Free Trade 
Agreement, the U.S.-Morocco Free Trade Agreement, the U.S.-Peru Trade 
Promotion Agreement, the U.S.-Korea Free Trade Agreement, the U.S.-
Panama Trade Promotion Agreement, and the U.S.-Colombia Trade Promotion 
Agreement are contained in Part 10, Subparts H, I, J, M, Q, R, S and T 
of this chapter, respectively.

PART 163--RECORDKEEPING

0
8. The authority citation for Part 163 continues to read as follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1484, 1508, 1509, 1510, 
1624.
* * * * *

0
9. Section 163.1 is amended by redesignating paragraph (a)(2)(xvi) as 
(a)(2)(xvii) and adding a new paragraph (a)(2)(xvi) to read as follows:


Sec.  163.1  Definitions.

* * * * *
    (a) * * *
    (2) * * *
    (xvi) The maintenance of any documentation that the importer may 
have in support of a claim for preferential tariff treatment under the 
United States-Panama Trade Promotion Agreement (PANTPA), including a 
PANTPA importer's certification.
* * * * *

0
10. The Appendix to Part 163 is amended by adding a new listing under 
section IV in numerical order to read as follows:

Appendix to Part 163--Interim (a)(1)(A) List

* * * * *
    IV. * * *


Sec.  10.2003-10.2007  PANTPA records that the importer may have in 
support of a PANTPA claim for preferential tariff treatment, including 
an importer's certification.

* * * * *

PART 178--APPROVAL OF INFORMATION COLLECTION REQUIREMENTS

0
11. The authority citation for Part 178 continues to read as follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 1624; 44 U.S.C. 3501 et seq.


0
12. Section 178.2 is amended by adding new listings for ``Sec. Sec.  
10.2003 and 10.2004'' to the table in numerical order to read as 
follows:


Sec.  178.2  Listing of OMB control numbers.

[[Page 63069]]



------------------------------------------------------------------------
         19 CFR Section                Description       OMB Control No.
------------------------------------------------------------------------
 
                              * * * * * * *
Sec.  Sec.   10.2003 and         Claim for preferential       1651-0117
 10.2004.                         tariff treatment
                                  under the US-Panama
                                  Trade Promotion
                                  Agreement.
 
                              * * * * * * *
------------------------------------------------------------------------

* * * * *

Thomas S. Winkowski,
Acting Commissioner.
    Approved: September 25, 2013.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2013-23897 Filed 10-22-13; 8:45 am]
BILLING CODE 9111-14-P