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Chapter 96.
Heading Rule: For purposes of determining whether a good of this heading other than of textile wadding is originating, the rule applicable to that good shall only apply to the component that determines the tariff classification of the good and such component must satisfy the tariff change requirements set out in the rule for that good.
1. (A) A change to sanitary towels (pads) and tampons and similar articles of textile wadding of heading 9619 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311 or chapters 54 through 55; or
(B) A change to a good of textile materials other than of wadding, knitted or crocheted, of heading 9619 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54 or headings 5508 through 5516 or 6001 through 6006, provided that the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of Bahrain or of the United States, or both; or
(C) A change to a good of textile materials other than of wadding, not knitted or crocheted, of heading 9619 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54, or headings 5508 through 5516, 5801 through 5802 or 6001 through 6006, provided that the good is both cut and sewn or otherwise assembled in the territory of Bahrain or of the United States; or both.
31. United States-Oman Free Trade Agreement Implementation Act.
(a) Originating goods under the terms of the United States-Oman Free Trade Agreement (UOFTA) are subject to duty as provided for herein. For the purposes of this note, goods of Oman, as defined in subdivisions (b) through (h) of this note, that are imported into the customs territory of the United States and entered under a provision for which a rate of duty appears in the “Special” subcolumn of column 1 followed by the symbol “OM” in parentheses are eligible for the tariff treatment and quantitative limitations set forth in the “Special” subcolumn, in accordance with sections 201 through 203, inclusive, of the United States-Oman Free Trade Agreement Implementation Act (Pub. L. 109-283). For the purposes of this note, the term “UOFTA country” refers only to Oman or to the United States.
(b) For the purposes of this note, subject to the provisions of subdivisions (c), (d), (e), (g) and (h) thereof, a good imported into the United States is eligible for treatment as an originating good of a UOFTA country under the terms of this note only if --
(i) the good is a good wholly the growth, product or manufacture of Oman or of the United States, or both;
(ii) for goods not covered by subdivision (iii) below, the good is a new or different article of commerce that has been grown, produced or manufactured in the territory of Oman or of the United States, or both, and the sum of--
(A) the value of each material produced in the territory of Oman or of the United States, or both, and
(B) the direct costs of processing operations performed in the territory of Oman or of the United States, or both,
is not less than 35 percent of the appraised value of the good at the time the good is entered into the territory of the United States; or
(iii) the good falls in a heading or subheading covered by a provision set forth subdivision (h) of this note and--
(A) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in such subdivision (h) as a result of production occurring entirely in the territory of Oman or of the United States, or both; or
(B) the good otherwise satisfies the requirements specified in such subdivision (h);
and is imported directly into the territory of the United States from the territory of Oman and meets all other applicable requirements of this note. For purposes of this note, the term “good” means any merchandise, product, article or material. For purposes of subdivision (b)(ii), the formula for calculating whether the value of materials produced in the territory of one or both of the parties plus the direct costs of processing operations performed in the territory of one or both of the parties is not less than 35 percent of the appraised value of the good is (VOM + DCP)/AV X 100, where VOM is the value of a material produced in the territory of one
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or both of the parties as set forth in subdivision (c) of this note, DCP is the direct cost of processing operations as defined in subdivision (d)(iv)(A) of this note, and AV is the appraised value of the good.
(c) Value of materials.
(i) Except as provided in subdivision (c)(ii) of this note, the value of a material produced in the territory of Oman or of the United States, or both, includes the following:
(A) the price actually paid or payable by the producer of the good for the material;
(B) when not included in the price actually paid or payable by the producer of the good for the material, the freight, insurance, packing and all other costs incurred in transporting the material to the producer’s plant;
(C) the cost of waste or spoilage, less the value of recoverable scrap; and
(D) taxes or customs duties imposed on the material by Oman or by the United States, or both, provided the taxes or customs duties are not remitted upon exportation.
(ii) Where the relationship between the producer of the good and the seller of the material influenced the price actually paid or payable for the material, or if subdivision (c)(i)(A) of this note is otherwise not applicable, the value of the material produced in the territory of Oman or of the United States, or both, includes the following:
(A) all expenses incurred in the growth, production or manufacture of the material, including general expenses;
(B) a reasonable amount for profit; and
(C) freight, insurance, packing and all other costs incurred in transporting the material to the producer’s plant.
(d)
(i) For purposes of subdivision (b)(i) of this note, except as otherwise provided in subdivision (e) of this note for textile and apparel articles, the expression “goods wholly the growth, product or manufacture of Oman or of the United States, or both” means--
(A) mineral goods extracted in the territory of Oman or of the United States, or both;
(B) vegetable goods, as such a good is provided for in the tariff schedule, harvested in the territory of Oman or of the United States, or both;
(C) live animals born and raised in the territory of Oman or of the United States, or both;
(D) goods obtained from live animals raised in the territory of Oman or of the United States, or both;
(E) goods obtained from hunting, trapping or fishing in the territory of Oman or of the United States, or both;
(F) goods (fish, shellfish and other marine life) taken from the sea by vessels registered or recorded with Oman or with the United States and flying its flag;
(G) goods produced on board factory ships from the goods referred to in subdivision (F), provided such factory ships are registered or recorded with Oman or with the United States and flying its flag;
(H) goods taken by Oman or the United States, or a person of Oman or of the United States, from the seabed or beneath the seabed outside territorial waters, provided that Oman or the United States has rights to exploit such seabed;
(I) goods taken from outer space, provided such goods are obtained by Oman or the United States, or a person of Oman or of the United States, and are not processed in the territory of a country other than Oman or the United States;
(J) waste and scrap derived from–
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(1) production or manufacture in the territory of Oman or of the United States, or both; or
(2) used goods collected in the territory of Oman or of the United States, or both, if such goods are fit only for the recovery of raw materials;
(K) recovered goods derived in the territory of Oman or of the United States from used goods, and utilized in the territory of that country in the production of remanufactured goods; and
(L) goods produced in the territory of Oman or of the United States, or both, exclusively--
(1) from goods referred to in subdivisions (A) through (J) above, inclusive, or
(2) from the derivatives of goods referred to in such subdivisions,
at any stage of production.
(ii) Cumulation.
(A) An originating good or a material produced in the territory of Oman or of the United States, or both, that is incorporated into a good in the territory of the other country shall be considered to originate in the territory of the other country.
(B) A good that is grown, produced or manufactured in the territory of Oman or of the United States, or both, by one or more producers, is an originating good if the good satisfies the requirements of subdivision (b) of this note and all other applicable requirements of this note.
(C) Direct costs of processing operations performed in the territory of Oman or of the United States, or both, as well as the value of materials produced in the territory of Oman or of the United States, or both, may be counted without limitation toward satisfying the 35 percent value-content requirement specified in subdivision (b)(ii) of this note.
(iii) Packaging and packing materials and containers in which a good is packaged for retail sale and for shipment, if classified with the good, shall be disregarded in determining whether a good qualifies as an originating good, except that the value of originating packaging and packing materials and containers may be counted toward satisfying, where applicable, the 35 percent value-content requirement specified in subdivision (b)(ii) of this note.
(iv) Definitions. For the purposes of this note:
(A) The term “direct costs of processing operations” means those costs either directly incurred in, or that can reasonably be allocated to, the growth, production or manufacture of the good, including the following, to the extent they are includable in the appraised value of goods when imported into Oman or the United States, as the case may be, the following:
(1) all actual labor costs involved in the growth, production or manufacture of the good, including fringe benefits, on-the-job training and the cost of engineering, supervisory, quality control and similar personnel;
(2) tools, dies, molds and other indirect materials, and depreciation on machinery and equipment that are allocable to the specific good;
(3) research, development, design, engineering and blueprint costs, to the extent that they are allocable to the specific good;
(4) costs of inspecting and testing the specific good; and
(5) costs of packaging the specific good for export to the territory of the other country.
The term “direct costs of processing operations” does not include costs that are not directly attributable to the good or are not costs of growth, production or manufacture of the good, such as: (I) profit, and (II) general expenses of doing business that are either not allocable to the specific good or are not related to the growth, production or manufacture of the good, such as administrative salaries, casualty and liability insurance, advertising and salesmen’s staff salaries, commissions or expenses.
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(B) The term “material” means a good, including a part or ingredient, that is used in the growth, production or manufacture of another good that is a new or different article of commerce that has been grown, produced or manufactured in Oman or of the United States, or both.
(C) The term “material produced in the territory of Oman or of the United States, or both” means a good that is either wholly the growth, product or manufacture of Oman or of the United States, or both, or a new or different article of commerce that has been grown, produced or manufactured in the territory of Oman or of the United States, or both.
(D) The term “new or different article of commerce” means, except as provided in this subdivision, a good that--
(1) has been substantially transformed from a good or material that is not wholly the growth, product or manufacture of Oman, the United States, or both; and
(2) has a new name, character or use distinct from the good or material from which it was transformed,
but a good shall not be considered a new or different article of commerce by virtue of having merely undergone (I) simple combining or packaging operations, or (II) mere dilution with water or another substance that does not materially alter the characteristics of the good.
(E) The term “simple combining or packaging operations” means operations such as adding batteries to devices, fitting together a small number of components by bolting, gluing or soldering, and repacking or packaging components together.
(F) The term “recovered goods” means materials in the form of individual parts that result from--
(1) the complete disassembly of used goods into individual parts; and
(2) the cleaning, inspecting, testing or other processing of those parts as necessary for improvement to sound working condition.
(G) The term “remanufactured goods” means industrial goods that are assembled in the territory of Oman or of the United State and that--
(1) are entirely or partially comprised of recovered goods;
(2) have similar life expectancies as new goods; and
(3) enjoy similar factory warranties as such new goods.
(H) The term “substantially transformed” means, with respect to a good or a material, changed as the result of a manufacturing or processing operation so that--
(1) (aa) the good or material has multiple uses and is converted into a good with limited uses;
(bb) the physical properties of the good or material are changed to a significant extent; or
(cc) the operation undergone by the good or material is complex in terms of the number of different processes and materials involved, as well as the time and level of skill required to perform those processes; and
(2) the good or material loses its separate identity in the resulting, new good or material.
(v) A good shall not be considered to be imported directly into the territory of the United States from the territory of Oman for purposes of this note if the good undergoes production, manufacturing or any other operation outside the territory of Oman or of the United States, 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 Oman or of the United States.
(e) Textile and apparel articles.
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(i) Except as provided in subdivision (ii) below, a textile or apparel good that is not an originating good under the terms of this note, 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 subdivision (h) of this note, 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 seven percent of the total weight of that component. Notwithstanding the preceding sentence, a textile or apparel goodcontaining 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 Oman or of the United States. For purposes of this note, in the case of a textile or apparel good that is a yarn, fabric or group of fibers, the term “component of the good that determines the tariff classification of the good” means all of the fibers in the yarn, fabric or group of fibers.
(ii) Notwithstanding the rules set forth in subdivision (h) of this note, textile and apparel goods classifiable under general rule of interpretation 3 to the tariff schedule as goods put up in sets for retail sale shall not be considered to be originating goods unless each of the goods in the set is an originating good or the total value of the nonoriginating goods in the set does not exceed ten percent of the customs value of the set.
(iii) For purposes of this note, the term “textile or apparel good” means a good listed in the Annex to the Agreement on Textiles and Clothing referred to in section 101(d)(4) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)).
(iv) [Subdivision deleted.]
(f) Indirect materials.
Indirect materials shall be disregarded in determining whether a good qualifies as an originating good, except that the cost of such indirect materials may be included in meeting the 35 percent value-content requirement of subdivision (b)(ii) of this note, where applicable. An “indirect material” means a good used in the growth, production, manufacture, 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 growth, production or manufacture of a good, including–
(i) fuel and energy;
(ii) tools, dies and molds;
(iii) spare parts and materials used in the maintenance of equipment and buildings;
(iv) lubricants, greases, compounding materials and other materials used in the growth, production or manufacture of a good or used to operate equipment and buildings;
(v) gloves, glasses, footwear, clothing, safety equipment and supplies;
(vi) equipment, devices and supplies used for testing or inspecting the good;
(vii) catalysts and solvents; and
(viii) any other goods that are not incorporated into the good but the use of which in the growth, production or manufacture of the good can reasonably be demonstrated to be a part of that growth, production or manufacture.
(g) Interpretation of rules of origin.
For purposes of interpreting the rules of origin set forth in subdivision (h) of this note--
(i) the specific rule, or specific set of rules, that applies to a particular heading or subheading is set out immediately adjacent to the heading or subheading;
(ii) a rule applicable to a subheading shall take precedence over a rule applicable to the heading which is parent to that subheading;
(iii) a requirement of a change in tariff classification applies only to non-originating materials; and