United States-Panama Trade Promotion Agreement, 63052-63069 [2013-23897]
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63052
Federal Register / Vol. 78, No. 205 / Wednesday, October 23, 2013 / Rules and Regulations
By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2013–24828 Filed 10–22–13; 8:45 am]
BILLING CODE 6717–01–P
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
U.S. Customs and Border
Protection, Department of Homeland
Security; Department of the Treasury.
ACTION: Interim regulations; solicitation
of comments.
AGENCY:
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
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SUMMARY:
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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 StatesPanama Trade Promotion Agreement
(‘‘PANTPA’’ or ‘‘Agreement’’).
On October 21, 2011, the President
signed into law the United StatesPanama 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
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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
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Federal Register / Vol. 78, No. 205 / Wednesday, October 23, 2013 / Rules and Regulations
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 subrules 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
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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
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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.
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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
§ 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 § 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.
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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 § 10.2014 apply both to
the determination of the status of an
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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 § 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)
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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 § 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 nonoriginating 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.
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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 § 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.
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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
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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 § 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 crossreference is added to § 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
§ 163.1 (19 CFR 163.1) to include, as
required by PANTPA Article 4.19, the
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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 § 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
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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.
tkelley on DSK3SPTVN1PROD with RULES
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 §§ 10.2003,
10.2004, and 10.2007. This information
is required in connection with general
recordkeeping requirements (§ 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
(§§ 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.
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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
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.
Frm 00098
Fmt 4700
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.
*
*
Sfmt 4700
*
*
*
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).
2. In § 10.31(f), the last sentence is
revised to read as follows:
■
§ 10.31
This document is being issued in
accordance with § 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.
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PART 10—ARTICLES CONDITIONALLY
FREE, SUBJECT TO A REDUCED
RATE, ETC.
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.
■ 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.
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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.
§ 10.2002
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
tkelley on DSK3SPTVN1PROD with RULES
§ 10.2001
Scope.
This subpart implements the duty
preference and related customs
provisions applicable to imported and
exported goods under the United StatesPanama 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.
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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,
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63057
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
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(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
§ 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 § 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
§§ 10.2031 and 10.2033).
tkelley on DSK3SPTVN1PROD with RULES
§ 10.2004
Certification.
(a) General. An importer who makes
a claim pursuant to § 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;
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(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 ll 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
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Sfmt 4700
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.
§ 10.2005
Importer obligations.
(a) General. An importer who makes
a claim for preferential tariff treatment
under § 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 § 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.
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(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 § 10.2031 through 10.2033).
§ 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
§ 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 § 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.
tkelley on DSK3SPTVN1PROD with RULES
§ 10.2007
Maintenance of records.
(a) General. An importer claiming
preferential tariff treatment for a good
imported into the United States under
§ 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 § 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
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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
§ 163.5 of this chapter.
§ 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 § 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 § 10.2025(a)
were met.
Export Requirements
§ 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 §§ 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
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63059
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 § 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
§ 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 § 10.2011. Subject to the
provisions of § 10.2008, CBP may refund
any excess duties by liquidation or
reliquidation of the entry covering the
good in accordance with § 10.2012(c).
§ 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 postimportation 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 postimportation 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 § 10.2004 if a certification forms
the basis for the claim, or other
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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.
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§ 10.2012
CBP processing procedures.
(a) Status determination. After receipt
of a post-importation claim pursuant to
§ 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 § 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
§ 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 § 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 § 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 § 10.2011.
(d) Denial of claim—(1) General. The
port director may deny a claim for a
refund filed under § 10.2011 if the claim
was not filed timely, if the importer has
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not complied with the requirements of
§§ 10.2008 and 10.2011, or if, following
an origin verification under § 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 § 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
§ 10.2013
Definitions.
For purposes of §§ 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
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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 § 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:
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(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
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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 nonallowable 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 nonoriginating 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;
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(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 aftersales service personnel;
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(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 aftersales 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. ‘‘Selfproduced 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
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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.
§ 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.
§ 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) × 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 nonoriginating materials that are acquired
and used by the producer in the
production of the good, but does not
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include the value of a material that is
self-produced.
(c) Build-up method. Under the buildup method, the regional value content
must be calculated on the basis of the
formula RVC = (VOM/AV) × 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) × 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
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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
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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.
§ 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 § 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
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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 nonoriginating material:
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(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 nonoriginating 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.
§ 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 § 10.2014 and all other
applicable requirements of General Note
35, HTSUS.
tkelley on DSK3SPTVN1PROD with RULES
§ 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.
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(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;
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(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 nonoriginating 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.
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§ 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.
§ 10.2020
tools.
Accessories, spare parts, or
(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 nonoriginating materials, as the case may
be, in calculating the regional value
content of the good under § 10.2015.
tkelley on DSK3SPTVN1PROD with RULES
§ 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
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(b) The total value of the nonoriginating 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.
§ 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 nonoriginating 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
§ 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) × 100 (see
§ 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 nonoriginating. 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) × 100 (see
§ 10.2015(c)), the adjusted value of the
blister packaging would be included as
part of the VOM, value of originating
materials.
§ 10.2023 Packing materials and
containers for shipment.
(a) Effect on tariff shift rule. Packing
materials and containers for shipment,
as defined in § 10.2013(o), are to be
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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 nonoriginating.
(b) Effect on regional value content
calculation. Packing materials and
containers for shipment, as defined in
§ 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 nonoriginating) 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
§ 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) × 100 (see § 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.
§ 10.2024
Indirect materials.
An indirect material, as defined in
§ 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 nonoriginating rubber gloves for use by
workers in the production of good C.
Good C is subject to a tariff shift
requirement. As provided in
§ 10.2014(b)(1) and General Note 35,
each of the non-originating materials in
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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.
§ 10.2025
Transit and transshipment.
(a) General. A good that has
undergone production necessary to
qualify as an originating good under
§ 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
tkelley on DSK3SPTVN1PROD with RULES
§ 10.2026 Verification and justification of
claim for preferential tariff treatment.
(a) Verification. A claim for
preferential tariff treatment made under
§ 10.2003(b) or § 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
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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 § 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.
§ 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.
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(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
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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.
tkelley on DSK3SPTVN1PROD with RULES
§ 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
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in §§ 10.2013 through 10.2025, the legal
basis for the determination.
§ 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
§ 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.
§ 10.2031 Corrected claim or certification
by importers.
An importer who makes a corrected
claim under § 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.
§ 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
§ 10.2009(b) with respect to the making
of an incorrect certification.
§ 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
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meaning of § 162.74(g) of this chapter;
or
(ii) Done before any of the events
specified in § 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
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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
tkelley on DSK3SPTVN1PROD with RULES
§ 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, resterilizing, 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 § 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
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16:30 Oct 22, 2013
Jkt 232001
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
4. The general authority citation for
Part 24 and specific authority for § 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.).
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
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.
Section 24.23 also issued under 19 U.S.C.
3332;
*
*
*
*
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:
*
§ 163.1
*
*
*
*
*
*
*
*
*
5. Section 24.23 is amended by adding
paragraph (c)(14) to read as follows:
■
§ 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
6. The authority citation for Part 162
continues to read in part as follows:
■
*
■
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.
*
*
*
*
*
■ 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. * * *
*
§ 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.
■
*
§ 162.0
PART 178—APPROVAL OF
INFORMATION COLLECTION
REQUIREMENTS
Authority: 5 U.S.C. 301; 19 U.S.C. 66,
1592, 1593a, 1624.
*
*
*
*
7. Section 162.0 is amended by
revising the last sentence to read as
follows:
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.-
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*
*
*
*
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.
12. Section 178.2 is amended by
adding new listings for ‘‘§§ 10.2003 and
10.2004’’ to the table in numerical order
to read as follows:
■
§ 178.2
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19 CFR Section
Description
OMB Control
No.
*
*
§§ 10.2003 and 10.2004 ...........................
*
*
*
*
Claim for preferential tariff treatment under the US-Panama Trade Promotion
Agreement.
*
1651–0117
*
*
*
*
*
*
*
*
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
DEPARTMENT OF THE INTERIOR
National Park Service
[NPS–IMR–YELL–13706; PPWONRADE2,
PMP00EI05.YP0000]
36 CFR Part 7
RIN 1024–AE15
Special Regulations; Areas of the
National Park System; Yellowstone
National Park; Winter Use
National Park Service, Interior.
Final rule.
AGENCY:
ACTION:
The National Park Service is
promulgating this rule to establish a
management framework that allows the
public to experience the unique winter
resources and values at Yellowstone
National Park. This rule includes
provisions that allow greater flexibility
for commercial tour operators, provide
mechanisms to make the park cleaner
and quieter than what has been allowed
during the previous four winter seasons,
reward oversnow vehicle innovations
and technologies, and allow increases in
visitation. It also requires snowmobiles
and snowcoaches operating in the park
to meet air and sound emission
requirements and be accompanied by a
guide.
DATES: This rule is effective November
22, 2013.
FOR FURTHER INFORMATION CONTACT:
Wade Vagias, Management Assistant’s
Office, Headquarters Building,
Yellowstone National Park, 307–344–
2035.
SUPPLEMENTARY INFORMATION:
tkelley on DSK3SPTVN1PROD with RULES
SUMMARY:
Executive Summary
This rule establishes a new and more
flexible method for managing oversnow
vehicle (OSV) access to the park.
VerDate Mar<15>2010
16:30 Oct 22, 2013
Jkt 232001
*
*
Under 36 CFR 2.18(c), the use of
snowmobiles is prohibited in parks
unless a special regulation allowing
such use is promulgated. In order to
allow OSV use for the upcoming and
future winter seasons, a special
regulation must be in place. This rule
authorizes snowmobile and snowcoach
use.
Beginning with the 2014–2015 winter
season, this rule replaces the former
concept of a fixed maximum number of
vehicles allowed in the park each day
with a new, more flexible concept of
transportation events. Within an
allowable number of transportation
events, commercial tour operators have
the opportunity to combine snowcoach
and snowmobile trips in a way that
protects park resources and provides
flexibility to respond to fluctuations in
visitation demand. By relying upon user
demand to determine the best mix of
OSV use and focusing on the impacts of
OSV use upon park resources, the
transportation event concept strikes a
common-sense balance between
allowing adequate access and protecting
park resources. This rule also requires
snowmobiles and snowcoaches to meet
new sound and air emissions standards
established by the National Park Service
(NPS) under the authority granted by
the NPS Organic Act (16 U.S.C. 1 et
seq.), which authorizes the Secretary of
the Interior to ‘‘promote and regulate’’
the use of national parks.
The new approach allows commercial
tour operators to exchange
transportation event allocations within
the same entrance, adjust the proportion
of snowcoaches or snowmobiles in the
park each day, increase the size of
snowmobile groups to meet demand on
peak days, and increase the vehicle
group size per transportation event if
voluntary enhanced emission standards
are met.
Some specific key elements of the
final rule include:
• A transportation event equals one
group of snowmobiles (maximum group
size of 10, seasonal average of 7
beginning in the 2015–2016 season) or
one snowcoach. The group size of
transportation events may increase from
a seasonal average of 7 to 8 for
snowmobiles and from a maximum of 1
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Fmt 4700
Sfmt 4700
*
*
to 2 for snowcoaches, not to exceed a
seasonal average of 1.5 snowcoaches, if
commercial tour operators use vehicles
that meet voluntary enhanced emission
standards. This is intended to encourage
the adoption of improved OSV
innovations and technologies.
• Up to 110 total transportation
events are authorized each day.
Commercial tour operators may decide
whether to use their daily allocation for
snowmobiles or snowcoaches, but no
more than 50 transportation events each
day may be comprised of snowmobiles.
• OSV use continues to be 100%
guided. The rule allows up to 46
commercially guided snowmobile
transportation events per day. Four noncommercially guided snowmobile
transportation events of up to 5
snowmobiles per group are also
permitted daily, one from each park
entrance.
• Sound and air emission
requirements for new and existing
snowmobiles continue unchanged until
the 2015–2016 winter season, when the
maximum allowable sound and carbon
monoxide (CO) emissions are lowered.
• Sound and air emission
requirements begin in the 2016–2017
winter season for existing snowcoaches,
and apply to all new snowcoaches
brought into service starting in the
2014–2015 winter season.
Background
The National Park Service (NPS) has
been managing winter use in
Yellowstone National Park for several
decades. A detailed history of the winter
use issue, past planning efforts, and
litigation is provided in the background
section of the 2013 Final Winter Use
Plan/Supplemental Environmental
Impact Statement (Plan/SEIS). The
Notice of Availability for the Plan/SEIS
was published in the Federal Register
on March 15, 2013 (78 FR 16500). The
Plan/SEIS is available online at https://
parkplanning.nps.gov/yell, by clicking
on the link entitled ‘‘2012/2013
Supplemental Winter Use Plan EIS,’’
and then clicking on the link entitled
‘‘Document List.’’ Additional
information about the history of winter
use at Yellowstone National Park is
E:\FR\FM\23OCR1.SGM
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Agencies
[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]
=======================================================================
-----------------------------------------------------------------------
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.
-----------------------------------------------------------------------
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