“(a) Originating Goods.—For purposes of this Act and for purposes of implementing the tariff treatment provided for under the Agreement, except as otherwise provided in this section, a good is an originating good if—“(1) the good is wholly obtained or produced entirely in the territory of Singapore, the United States, or both;
“(2) each nonoriginating material used in the production of the good—“(A) undergoes an applicable change in tariff classification set out in Annex 3A of the Agreement as a result of production occurring entirely in the territory of Singapore, the United States, or both; or
“(B) if no change in tariff classification is required, the good otherwise satisfies the applicable requirements of such Annex; or
“(3) the good itself, as imported, is listed in Annex 3B of the Agreement and is imported into the territory of the United States from the territory of Singapore.
“(b) De Minimis Amounts of Nonoriginating Materials.—“(1) In general.—Except as provided for in paragraphs (2) and (3), a good shall be considered to be an originating good if—“(A) the value of all nonoriginating materials used in the production of the good that do not undergo the required change in tariff classification under Annex 3A of the Agreement does not exceed 10 percent of the adjusted value of the good;
“(B) if the good is subject to a regional value-content requirement, the value of such nonoriginating materials is taken into account in calculating the regional value-content of the good; and
“(C) the good satisfies all other applicable requirements of this section.
“(2) Exceptions.—Paragraph (1) does not apply to the following:“(A) A nonoriginating material provided for in chapter 4 of the HTS or in subheading 1901.90 of the HTS that is used in the production of a good provided for in chapter 4 of the HTS.
“(B) A nonoriginating material provided for in chapter 4 of the HTS or in subheading 1901.90 of the HTS that is used in the production of a good provided for in heading 2105 or in any of subheadings 1901.10, 1901.20, 1901.90, 2106.90, 2202.90, and 2309.90 of the HTS.
“(C) A nonoriginating material provided for in heading 0805, or any of subheadings 2009.11.00 through 2009.39, of the HTS, that is used in the production of a good provided for in any of subheadings 2009.11.00 through 2009.39 or in subheading 2106.90 or 2202.90 of the HTS.
“(D) A nonoriginating material provided for in chapter 15 of the HTS that is used in the production of a good provided for in any of headings 1501.00.00 through 1508, 1512, 1514, and 1515 of the HTS.
“(E) A nonoriginating material provided for in heading 1701 of the HTS that is used in the production of a good provided for in any of headings 1701 through 1703 of the HTS.
“(F) A nonoriginating material provided for in chapter 17 of the HTS or heading 1805.00.00 of the HTS that is used in the production of a good provided for in subheading 1806.10 of the HTS.
“(G) A nonoriginating material provided for in any of headings 2203 through 2208 of the HTS that is used in the production of a good provided for in heading 2207 or 2208 of the HTS.
“(H) A nonoriginating material used in the production of a good provided for in any of chapters 1 through 21 of the HTS, unless the nonoriginating material is provided for in a different subheading than the good for which origin is being determined under this section.
“(3) Goods provided for in chapters 50 through 63 of the hts.—“(A) In general.—Except as provided in subparagraph (B), a good provided for in any of chapters 50 through 63 of the HTS 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 Annex 3A of the Agreement shall be considered to be an originating good if the total weight of all such fibers or yarns in that component is not more than 7 percent of the total weight of that component.
“(B) Certain textile or apparel goods.—“(i) Treatment as originating good.—A textile or apparel good containing elastomeric yarns in the component of the good that determines the tariff classification of the good shall be considered to be an originating good only if such yarns are wholly formed in the territory of Singapore or the United States.
“(ii) Definition of textile or apparel good.—For purposes of this subparagraph, the term ‘textile or apparel good’ means a product listed in the Annex to the Agreement on Textiles and Clothing referred to in section 101(d)(4) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)).
“(c) Accumulation.—“(1) Originating goods incorporated in goods of other country.—Originating materials from the territory of either Singapore or the United States that are used in the production of a good in the territory of the other country shall be considered to originate in the territory of the other country.
“(2) Multiple procedures.—A good that is produced in the territory of Singapore, the United States, or both, by 1 or more producers is an originating good if the good satisfies the requirements of subsection (a) and all other applicable requirements of this section.
“(d) Regional Value-Content.—“(1) In general.—For purposes of subsection (a)(2), the regional value-content of a good referred to in Annex 3A of the Agreement shall be calculated, at the choice of the person claiming preferential tariff treatment for the good, on the basis of the build-down method described in paragraph (2) or the build-up method described in paragraph (3), unless otherwise provided in Annex 3A of the Agreement.
“(2) Build-down method.—“(A) In general.—The regional value-content of a good may be calculated on the basis of the following build-down method:
rvc=av–vnm×100
av
“(B) Definitions.—For purposes of subparagraph (A):“(i) The term ‘RVC’ means the regional value-content, expressed as a percentage.
“(ii) The term ‘AV’ means the adjusted value.
“(iii) The term ‘VNM’ means the value of nonoriginating materials that are acquired and used by the producer in the production of the good.
“(3) Build-up method.—“(A) In general.—The regional value-content of a good may be calculated on the basis of the following build-up method:
rvc=vom×100
av
“(B) Definitions.—For purposes of subparagraph (A):“(i) The term ‘RVC’ means the regional value-content, expressed as a percentage.
“(ii) The term ‘AV’ means the adjusted value.
“(iii) The term ‘VOM’ means the value of originating materials that are acquired or self-produced and are used by the producer in the production of the good.
“(e) Value of Materials.—“(1) In general.—For purposes of calculating the regional value-content of a good under subsection (d), and for purposes of applying the de minimis rules under subsection (b), the value of a material is—“(A) in the case of a material imported by the producer of the good, the adjusted value of the material;
“(B) in the case of a material acquired in the territory in which the good is produced, except for a material to which subparagraph (C) applies, the adjusted value of the material; or
“(C) in the case of a material that is self-produced, or in a case in which the relationship between the producer of the good and the seller of the material influenced the price actually paid or payable for the material, including a material obtained without charge, the sum of—“(i) all expenses incurred in the production of the material, including general expenses; and
“(ii) an amount for profit.
“(2) Further adjustments to the value of materials.—“(A) Originating materials.—The following expenses, if not included in the value of an originating material calculated under paragraph (1), may be added to the value of the originating material:“(i) The costs of freight, insurance, packing, and all other costs incurred in transporting the material to the location of the producer.
“(ii) Duties, taxes, and customs brokerage fees on the material paid in the territory of Singapore, the United States, or both, 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-product.
“(B) Nonoriginating materials.—The following expenses, if included in the value of a nonoriginating material calculated under paragraph (1), may be deducted from the value of the nonoriginating material:“(i) The costs of freight, insurance, packing, and all other costs incurred in transporting the material to the location of the producer.
“(ii) Duties, taxes, and customs brokerage fees on the material paid in the territory of Singapore, the United States, or both, 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-product.
“(iv) The cost of processing incurred in the territory of Singapore or the United States in the production of the nonoriginating material.
“(v) The cost of originating materials used in the production of the nonoriginating material in the territory of Singapore or the United States.
“(f) Accessories, Spare Parts, or Tools.—“(1) In general.—Subject to paragraph (2), accessories, spare parts, or tools delivered with the good that form part of the good’s standard accessories, spare parts, or tools shall—“(A) be treated as originating goods if the good is an originating good; and
“(B) be disregarded in determining whether all the nonoriginating materials used in the production of the good undergo an applicable change in tariff classification set out in Annex 3A of the Agreement.
“(2) Conditions.—Paragraph (1) shall apply only if—“(A) the accessories, spare parts, or tools are not invoiced separately from the good;
“(B) the quantities and value of the accessories, spare parts, or tools are customary for the good; and
“(C) 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.
“(g) Fungible Goods and Materials.—“(1) In general.—“(A) Claim for preferential treatment.—A person claiming preferential tariff treatment for a good may claim that a fungible good or material is originating either based on the physical segregation of each fungible good or material or by using an inventory management method.
“(B) Inventory management method.—In this subsection, the term ‘inventory management method’ means—“(i) averaging;
“(ii) ‘last-in, first-out’;
“(iii) ‘first-in, first-out’; or
“(iv) any other method— “(I) recognized in the generally accepted accounting principles of the country in which the production is performed (whether Singapore or the United States); or
“(II) otherwise accepted by that country.
“(2) Election of inventory method.—A person selecting an inventory management method under paragraph (1) for particular fungible goods or materials shall continue to use that method for those fungible goods or materials throughout the fiscal year of that person.
“(h) Packaging Materials and Containers for Retail Sale.—Packaging materials and containers in which a good is packaged for retail sale, if classified with the good, shall be disregarded in determining whether all the nonoriginating materials used in the production of the good undergo the applicable change in tariff classification set out in Annex 3A of the Agreement and, if the good is subject to a regional value-content requirement, the value of such packaging materials and containers shall be taken into account as originating or nonoriginating materials, as the case may be, in calculating the regional value-content of the good.
“(i) Packing Materials and Containers for Shipment.—Packing materials and containers in which a good is packed for shipment shall be disregarded in determining whether—“(1) the nonoriginating materials used in the production of a good undergo an applicable change in tariff classification set out in Annex 3A of the Agreement; and
“(2) the good satisfies a regional value-content requirement.
“(j) Indirect Materials.—An indirect material shall be considered to be an originating material without regard to where it is produced, and its value shall be the cost registered in the accounting records of the producer of the good.
“(k) Third Country Operations.—A good shall not be considered to be an originating good by reason of having undergone production that satisfies the requirements of subsection (a) if, subsequent to that production, the good undergoes further production or any other operation outside the territories of Singapore and the United States, other than unloading, reloading, or any other operation necessary to preserve it in good condition or to transport the good to the territory of Singapore or the United States.
“(l) Special Rule for Apparel Goods Listed in Chapter 61 or 62 of the HTS.—“(1) In general.—An apparel good listed in chapter 61 or 62 of the HTS shall be considered to be an originating good if it is both cut (or knit to shape) and sewn or otherwise assembled in the territory of Singapore, the United States, or both, from fabric or yarn, regardless of origin, designated in the manner described in paragraph (2) as fabric or yarn not available in commercial quantities in a timely manner in the United States.
“(2) Designation of certain fabric and yarn.—The designation referred to in paragraph (1) means a designation made in a notice published in the Federal Register on or before November 15, 2002, identifying apparel goods made from fabric or yarn eligible for entry into the United States under subheading 9819.11.24 or 9820.11.27 of the HTS. For purposes of this subsection, a reference in the notice to fabric or yarn formed in the United States is deemed to include fabric or yarn formed in Singapore.
“(m) Application and Interpretation.—In this section:“(1) The basis for any tariff classification is the HTS.
“(2) Any cost or value referred to in this section shall be recorded and maintained in accordance with the generally accepted accounting principles applicable in the territory of the country in which the good is produced (whether Singapore or the United States).
“(n) Definitions.—In this section:“(1) Adjusted value.—The term ‘adjusted value’ means the value of a good determined under articles 1 through 8, article 15, and the corresponding interpretative notes of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 referred to in section 101(d)(8) of the Uruguay Round Agreements Act [19 U.S.C. 3511(d)(8)], except that such value may be adjusted to exclude 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.
“(2) Fungible goods and fungible materials.—The terms ‘fungible goods’ and ‘fungible materials’ mean goods or materials, as the case may be, that are interchangeable for commercial purposes and the properties of which are essentially identical.
“(3) Generally accepted accounting principles.—The term ‘generally accepted accounting principles’ means the recognized consensus or substantial authoritative support in the territory of Singapore or the United States, as the case may be, with respect to the recording of revenues, expenses, costs, and assets and liabilities, the disclosure of information, and the preparation of financial statements. The standards may encompass broad guidelines of general application as well as detailed standards, practices, and procedures.
“(4) Goods wholly obtained or produced entirely in the territory of singapore, the united states, or both.—The term ‘goods wholly obtained or produced entirely in the territory of Singapore, the United States, or both’ means—“(A) mineral goods extracted in the territory of Singapore, the United States, or both;
“(B) vegetable goods, as such goods are defined in the Harmonized System, harvested in the territory of Singapore, the United States, or both;
“(C) live animals born and raised in the territory of Singapore, the United States, or both;
“(D) goods obtained from hunting, trapping, fishing, or aquaculture conducted in the territory of Singapore, the United States, or both;
“(E) goods (fish, shellfish, and other marine life) taken from the sea by vessels registered or recorded with Singapore or the United States and flying the flag of that country;
“(F) goods produced exclusively from products referred to in subparagraph (E) on board factory ships registered or recorded with Singapore or the United States and flying the flag of that country;
“(G) goods taken by Singapore or the United States, or a person of Singapore or the United States, from the seabed or beneath the seabed outside territorial waters, if Singapore or the United States has rights to exploit such seabed;
“(H) goods taken from outer space, if the goods are obtained by Singapore or the United States or a person of Singapore or the United States and not processed in the territory of a country other than Singapore or the United States;
“(I) waste and scrap derived from—“(i) production in the territory of Singapore, the United States, or both; or
“(ii) used goods collected in the territory of Singapore, the United States, or both, if such goods are fit only for the recovery of raw materials;
“(J) recovered goods derived in the territory of Singapore, the United States, or both, from used goods; or
“(K) goods produced in the territory of Singapore, the United States, or both, exclusively—“(i) from goods referred to in any of subparagraphs (A) through (I); or
“(ii) from the derivatives of goods referred to in clause (i).
“(5) Harmonized system.—The term ‘Harmonized System’ means the Harmonized Commodity Description and Coding System.
“(6) Indirect material.—The term ‘indirect material’ means a good used in the production, testing, or inspection of a good but not physically incorporated into the good, or a good used in the maintenance of buildings or the operation of equipment associated with the production of a good, including—“(A) fuel and energy;
“(B) tools, dies, and molds;
“(C) spare parts and materials used in the maintenance of equipment or buildings;
“(D) lubricants, greases, compounding materials, and other materials used in production or used to operate equipment or buildings;
“(E) gloves, glasses, footwear, clothing, safety equipment, and supplies;
“(F) equipment, devices, and supplies used for testing or inspecting the good;
“(G) catalysts and solvents; and
“(H) any other goods that are not incorporated into the good but the use of which in the production of the good can reasonably be demonstrated to be a part of that production.
“(7) Material.—The term ‘material’ means a good that is used in the production of another good.
“(8) Material that is self-produced.—The term ‘material that is self-produced’ means a material, such as a part or ingredient, produced by a producer of a good and used by the producer in the production of another good.
“(9) Nonoriginating material.—The term ‘nonoriginating material’ means a material that does not qualify as an originating good under the rules set out in this section.
“(10) Preferential tariff treatment.—The term ‘preferential tariff treatment’ means the customs duty rate that is applicable to an originating good pursuant to chapter 2 of the Agreement.
“(11) Producer.—The term ‘producer’ means a person who grows, raises, mines, harvests, fishes, traps, hunts, manufactures, processes, assembles, or disassembles a good.
“(12) Production.—The term ‘production’ means growing, mining, harvesting, fishing, raising, trapping, hunting, manufacturing, processing, assembling, or disassembling a good.
“(13) Recovered goods.—“(A) In general.—The term ‘recovered goods’ means materials in the form of individual parts that are the result of—“(i) the complete disassembly of used goods into individual parts; and
“(ii) the cleaning, inspecting, testing, or other processing of those parts as necessary for improvement to sound working condition by one or more of the processes described in subparagraph (B), in order for such parts to be assembled with other parts, including other parts that have undergone the processes described in this paragraph, in the production of a remanufactured good described in Annex 3C of the Agreement.
“(B) Processes.—The processes referred to in subparagraph (A)(ii) are welding, flame spraying, surface machining, knurling, plating, sleeving, and rewinding.
“(14) Remanufactured good.—The term ‘remanufactured good’ means an industrial good assembled in the territory of Singapore or the United States, that is listed in Annex 3C of the Agreement, and—“(A) is entirely or partially comprised of recovered goods;
“(B) has the same life expectancy and meets the same performance standards as a new good; and
“(C) enjoys the same factory warranty as such a new good.
“(15) Territory.—The term ‘territory’ has the meaning given that term in Annex 1A of the Agreement.
“(16) Used.—The term ‘used’ means used or consumed in the production of goods.
“(o) Presidential Proclamation Authority.—“(1) In general.—The President is authorized to proclaim, as part of the HTS—“(A) the provisions set out in Annexes 3A, 3B, and 3C of the Agreement; and
“(B) any additional subordinate category necessary to carry out this title consistent with the Agreement.
“(2) Modifications.—“(A) In general.—Subject to the consultation and layover provisions of section 103(a), the President may proclaim modifications to the provisions proclaimed under the authority of paragraph (1)(A), other than—“(i) the provisions of Annex 3B of the Agreement; and
“(ii) provisions of chapters 50 through 63 of the HTS, as included in Annex 3A of the Agreement.
“(B) Additional proclamations.—Notwithstanding subparagraph (A), and subject to the consultation and layover provisions of section 103(a), the President may proclaim—“(i) modifications to the provisions proclaimed under the authority of paragraph (1)(A) that are necessary to implement an agreement with Singapore pursuant to article 3.18.4(c) of the Agreement; and
“(ii) before the 1st anniversary of the date of enactment of this Act [Sept. 3, 2003], modifications to correct any typographical, clerical, or other nonsubstantive technical error regarding the provisions of chapters 50 through 63 of the HTS, as included in Annex 3A of the Agreement.