[Federal Register Volume 73, Number 115 (Friday, June 13, 2008)]
[Rules and Regulations]
[Pages 33673-33691]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-13252]


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DEPARTMENT OF HOMELAND SECURITY

Bureau of Customs and Border Protection

DEPARTMENT OF THE TREASURY

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

[USCBP-2008-0060; CBP Dec. 08-22]
RIN 1505-AB84


Dominican Republic--Central America--United States Free Trade 
Agreement

AGENCIES: Customs and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Interim rule; solicitation of comments.

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SUMMARY: This rule amends title 19 of the Code of Federal Regulations 
(``CFR'') on an interim basis to implement the preferential tariff 
treatment and other customs-related provisions of the Dominican 
Republic--Central America--United States Free Trade Agreement.

DATES: Interim rule effective June 13, 2008; comments must be received 
by August 12, 2008.

ADDRESSES: You may submit comments, identified by docket number, by one 
of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments via docket number 
USCBP-2008-0060.
     Mail: Trade and Commercial Regulations Branch, Regulations 
and Rulings, U.S. Customs and Border Protection, 1300 Pennsylvania 
Avenue, NW., (Mint Annex), Washington, DC 20229.
    Instructions: All submissions received must include the agency name 
and docket number for this rulemaking. All comments received will be 
posted without change to http://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 http://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, U.S. Customs and Border Protection, 799 9th 
Street, NW., 5th Floor, Washington, DC. Arrangements to inspect 
submitted comments should be made in advance by calling Mr. Joseph 
Clark at (202) 572-8768.

FOR FURTHER INFORMATION CONTACT: 
    Textile Operational Aspects: Robert Abels, Office of International 
Trade, (202) 344-1959.
    Other Operational Aspects: Lori Whitehurst, Office of International 
Trade, (202) 344-2722.
    Audit Aspects: Mark Hanson, Regulatory Audit, (202) 344-2977.
    Legal Aspects: Karen Greene, Office of International Trade, (202) 
572-8838.

SUPPLEMENTARY INFORMATION: 

Public Participation

    Interested persons are invited to participate in this rulemaking by

[[Page 33674]]

submitting written data, views, or arguments on all aspects of the 
interim rule. 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 August 5, 2004, the governments of Costa Rica, the Dominican 
Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United 
States signed the Dominican Republic--Central America--United States 
Free Trade Agreement (``CAFTA-DR'' or ``Agreement''). The stated 
objectives of the CAFTA-DR include: strengthening the special bonds of 
friendship and cooperation among the signatory countries and promoting 
regional economic integration; contributing to the harmonious 
development and expansion of world trade and providing a catalyst to 
broader international cooperation; creating an expanded and secure 
market for goods and services produced in the region; establishing 
clear and mutually advantageous rules governing trade among the 
signatory countries; ensuring a predictable commercial framework for 
business planning and investment; seeking to facilitate regional trade 
by promoting efficient and transparent customs procedures that reduce 
costs and ensure predictability for importers and exporters; fostering 
creativity and innovation, and promoting trade in goods and services 
that are the subject of intellectual property rights; promoting 
transparency and eliminating bribery and corruption in international 
trade and investment; protecting, enhancing, and enforcing basic 
workers' rights; creating new employment opportunities and improving 
working conditions and living standards in the region; and implementing 
the Agreement in a manner consistent with environmental protection and 
conservation, promoting sustainable development, and strengthening 
cooperation on environmental matters.
    The provisions of the CAFTA-DR were adopted by the United States 
with the enactment on August 2, 2005, of the Dominican Republic--
Central America--United States Free Trade Agreement Implementation Act 
(the ``Act''), Public Law 109-53, 119 Stat. 462 (19 U.S.C. 4001 et 
seq.). Section 210 of the Act requires that regulations be prescribed 
as necessary to implement these provisions of the CAFTA-DR.
    On February 28, 2006, the President signed Proclamation 7987 to 
implement the provisions of the CAFTA-DR with respect to El Salvador. 
The Proclamation, which was published in the Federal Register on March 
2, 2006 (71 FR 10827), modified the Harmonized Tariff Schedule of the 
United States (``HTSUS'') as set forth in Annexes I and II of 
Publication 3829 of the U.S. International Trade Commission. The 
modifications to the HTSUS included the addition of new General Note 
29, incorporating the relevant CAFTA-DR 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 CAFTA-DR where 
the special program indicator ``P'' appears in parenthesis in the 
``Special'' rate of duty subcolumn. Presidential Proclamation 7996 
dated March 31, 2006, which was published in the Federal Register on 
April 4, 2006 (71 FR 16971), implemented the CAFTA-DR with respect to 
Honduras and Nicaragua. Presidential Proclamation 8034 dated June 30, 
2006, published in the Federal Register on July 6, 2006 (71 FR 38509), 
implemented the CAFTA-DR with respect to Guatemala. Presidential 
Proclamation 8111 dated February 28, 2007, published in the Federal 
Register on March 6, 2007 (72 FR 10025), implemented the CAFTA-DR with 
respect to the Dominican Republic.
    Customs and Border Protection (``CBP'') is responsible for 
administering the provisions of the CAFTA-DR and the Act that relate to 
the importation of goods into the United States from a CAFTA-DR Party 
for which the Agreement has entered into force. Those customs-related 
CAFTA-DR provisions which require implementation through regulation 
include certain tariff and non-tariff provisions within Chapter Two 
(General Definitions), Chapter Three (National Treatment and Market 
Access for Goods), and Chapter Four (Rules of Origin and Origin 
Procedures).
    Certain general definitions set forth in Chapter Two of the CAFTA-
DR have been incorporated into the CAFTA-DR implementing regulations. 
The tariff-related provisions within CAFTA-DR Chapter Three that are 
the subject of regulatory action in this interim rule are Article 3.6 
(Goods Re-entered after Repair or Alteration) and those relating 
specifically to textile and apparel goods are Article 3.24 (Customs 
Cooperation), Article 3.25 (Rules of Origin and Related Matters), 
Article 3.28 and Annex 3.28 (Preferential Tariff Treatment for Non-
Originating Apparel Goods of Nicaragua), and Article 3.29 
(Definitions).
    Section A of Chapter Four of the CAFTA-DR sets forth the rules for 
determining whether an imported good qualifies as an originating good 
of a Party and, as such, is therefore eligible for preferential tariff 
(duty-free or reduced duty) treatment under the CAFTA-DR as provided 
for in the HTSUS. The basic rules of origin in Section A of Chapter 
Four are set forth in General Note 29, HTSUS. Under Article 4.1 of 
Chapter Four, originating goods may be grouped in three broad 
categories: (1) Goods that are wholly obtained or produced entirely in 
the territory of one or more of the Parties; (2) goods that are 
produced entirely in the territory of one or more of the Parties and 
that satisfy the specific rules of origin in CAFTA-DR Annex 4.1 (change 
in tariff classification requirement and/or regional value content 
requirement) and all other applicable requirements of Chapter Four; and 
(3) goods that are produced entirely in the territory of one or more of 
the Parties exclusively from materials that originate in those 
countries. Article 4.2 sets forth the methods for calculating the 
regional value content of a good. Articles 4.3 and 4.4 set forth the 
rules for determining the value of materials for purposes of 
calculating the regional value content of a good and applying the de 
minimis rule. Article 4.5 allows production that takes place in the 
territory of one or more of the Parties to be accumulated such that, 
provided other requirements are met, the resulting good is considered 
originating. Article 4.6 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, accessories, spare parts, and tools, packaging 
materials, packing materials, indirect materials, transit and 
transshipment, sets, and consultation and modifications. All Articles 
within Section A are reflected in the CAFTA-DR implementing 
regulations, except for Article 4.14 (Consultation and Modifications).
    Section B of Chapter Four sets forth procedures that apply under 
the CAFTA-DR in regard to claims for preferential tariff treatment. 
Specifically, Section B includes provisions concerning obligations 
related to importations and exportations, claims for preferential 
tariff treatment, record keeping

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requirements, verification of preference claims, common guidelines, and 
definitions of terms used within the context of the rules of origin. 
All Articles within Section B, except for Article 4.21 (Common 
Guidelines), are reflected in these implementing regulations.
    In order to provide transparency and facilitate their use, the 
majority of the CAFTA-DR implementing regulations set forth in this 
document have been included within Subpart J in part 10 of the CBP 
regulations (19 CFR part 10). However, implementation of the tariff 
preference and related provisions of CAFTA-DR has also been effected 
through amendments to a number of other regulatory provisions outside 
of Subpart J, part 10 within the CBP 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 a CAFTA-DR 
Party for which, like goods originating in Canada, Mexico, Singapore, 
Chile, Morocco, and Bahrain, no bond or other security will be required 
when imported temporarily for prescribed uses. The provisions of CAFTA-
DR 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 J

General Provisions
    Section 10.581 outlines the scope of Subpart J, Part 10 of the CBP 
regulations. This section also clarifies that, except where the context 
otherwise requires, the requirements contained in Subpart J, 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 J, Part 10 
are in addition to the basic entry requirements contained in Parts 141-
143 of the CBP regulations.
    Section 10.582 sets forth definitions of common terms used in 
multiple contexts or places within Subpart J, Part 10. Although the 
majority of the definitions in this section are based on definitions 
contained in Article 2.1, Annex 2.1, and Article 3.29 of the CAFTA-DR, 
and Sec.  3 of the Act, other definitions have also been included to 
clarify the application of the regulatory texts. Additional definitions 
that apply in a more limited Subpart J, Part 10 context are set forth 
elsewhere with the substantive provisions to which they relate.
Import Requirements
    Section 10.583 sets forth the procedure for claiming CAFTA-DR 
preferential tariff treatment at the time of entry and, as provided in 
CAFTA-DR Article 4.16.1, states that an importer may make a claim for 
CAFTA-DR preferential tariff treatment based on a certification by the 
importer, exporter, or producer or the importer's knowledge that the 
good qualifies as an originating good. Section 10.583 also provides, 
consistent with CAFTA-DR Article 4.15.4(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 10.584, which is based on CAFTA-DR Articles 4.15.4 and 
4.16, 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 10.584 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 10.585 sets forth certain importer obligations regarding 
the truthfulness of information and documents submitted in support of a 
claim for preferential tariff treatment. Section 10.586, which is based 
on CAFTA-DR Article 4.17, provides that the certification is not 
required for certain non-commercial or low-value importations.
    Section 10.587 implements CAFTA-DR Article 4.19 concerning the 
maintenance of relevant records regarding the imported good.
    Section 10.588, which reflects CAFTA-DR Article 4.15.2, authorizes 
the denial of CAFTA-DR tariff benefits if the importer fails to comply 
with any of the requirements under Subpart J, Part 10, CBP regulations.
Export Requirements
    Section 10.589, which implements CAFTA-DR Articles 4.18 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 a Party. 
Paragraphs (a) and (b) of Sec.  10.589, reflecting CAFTA-DR 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.  10.589 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 a Party.
Post-Importation Duty Refund Claims
    Sections 10.590 through 10.592 implement CAFTA-DR Article 4.15.5, 
which allows an importer who did not claim CAFTA-DR 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 10.593 through 10.605 provide the implementing regulations 
regarding the rules of origin provisions of General Note 29, HTSUS, 
Chapter Four and Article 3.25 of the CAFTA-DR, and section 203 of the 
Act.

Definitions

    Section 10.593 sets forth terms that are defined for purposes of 
the rules of origin.

General Rules of Origin

    Section 10.594 sets forth the basic rules of origin established in 
Article 4.1 of the CAFTA-DR, section 203(b) of the Act, and General 
Note 29(b), HTSUS. The provisions of Sec.  10.594 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 29, HTSUS. 
Section 10.594(a) specifies those goods that are originating goods 
because they are wholly obtained or produced entirely in the territory 
of one or more of the Parties.
    Section 10.594(b) provides that goods that have been produced 
entirely in the territory of one or more of the Parties so that each 
non-originating material undergoes an applicable change in tariff 
classification and satisfies any applicable regional value content or 
other requirement set forth in General Note 29, HTSUS, are originating 
goods.

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Essential to the rules in Sec.  10.594(b) are the specific rules of 
General Note 29(n), HTSUS, which are incorporated by reference.
    Section 10.594(c) provides that goods that have been produced 
entirely in the territory of one or more of the Parties exclusively 
from originating materials are originating goods.
Value Content
    Section 10.595 reflects CAFTA-DR Article 4.2 concerning the basic 
rules that apply for purposes of determining whether an imported good 
satisfies a minimum regional value content (``RVC'') requirement. 
Section 10.596, reflecting CAFTA-DR Articles 4.3 and 4.4, 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 10.597, which is derived from CAFTA-DR Article 4.5, sets 
forth the rule by which originating materials from the territory of one 
or more of the Parties 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 country. In addition, this section also 
establishes that a good that is produced by one or more producers in 
the territory of one or more of the Parties is an originating good if 
the good satisfies all of the applicable requirements of the rules of 
origin of the CAFTA-DR.
De Minimis
    Section 10.598, as provided for in CAFTA-DR Article 4.6, 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.  10.594. There are a number of 
exceptions to the de minimis rule as well as a separate rule for 
textile and apparel goods.
Fungible Goods and Materials
    Section 10.599, as provided for in CAFTA-DR Article 4.7, sets forth 
the rules by which ``fungible'' goods or materials may be claimed as 
originating.
Accessories, Spare Parts, or Tools
    Section 10.600, as set forth in CAFTA-DR Article 4.8, 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 undergo an applicable 
change in tariff classification under General Note 29(n), HTSUS.
Packaging Materials and Packing Materials
    Sections 10.601 and 10.602, which are derived from CAFTA-DR 
Articles 4.9 and 4.10, 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 29(n), HTSUS. These sections also set forth the treatment 
of packaging and packing materials for purposes of the regional value 
content requirement of the note.
Indirect Materials
    Section 10.603, as set forth in CAFTA-DR Article 4.11, provides 
that indirect materials, as defined in Sec.  10.582(m), are considered 
to be originating materials without regard to where they are produced.
Transit and Transshipment
    Section 10.604, which is derived from CAFTA-DR Article 4.12, 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 more 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.
Goods Classifiable as Goods Put Up in Sets
    Section 10.605, which is based on CAFTA-DR Articles 3.25.9 (Rules 
of Origin and Related Matters) and 4.13 (Sets of Goods), provides that, 
notwithstanding the specific rules of General Note 29(n), 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 10 percent of the adjusted value of the set 
in the case of textile or apparel goods, or 15 percent of the adjusted 
value of the set in the case of goods other than textile or apparel 
goods.
Tariff Preference Level
    Section 10.606 sets forth procedures for claiming CAFTA-DR tariff 
benefits for certain non-originating cotton or man-made fiber apparel 
goods of Nicaragua that are entitled to preference under an applicable 
tariff preference level (``TPL'').
    Section 10.607, which is based on CAFTA-DR Article 3.28 and Annex 
3.28, describes the non-originating cotton or man-made fiber apparel 
goods of Nicaragua that are eligible for TPL claims under the CAFTA-DR.
    Section 10.608, as authorized by Sec.  1634(c)(1) of the Pension 
Protection Act of 2006 (Pub. L. 109-280, 120 Stat. 1163), requires an 
importer claiming preferential tariff treatment on a non-originating 
cotton or man-made fiber apparel good of Nicaragua specified in Sec.  
10.607 to submit a certificate of eligibility issued by the Government 
of Nicaragua.
    Consistent with Sec.  10.604, Sec.  10.609 provides that a good of 
Nicaragua that is otherwise eligible for preferential tariff treatment 
under an applicable TPL will not be considered eligible for preference 
if it: (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.
    Section 10.610 provides for the denial of a TPL claim if the 
importer fails to comply with any applicable requirement under Subpart 
J, Part 10, CBP regulations, including the failure to provide 
documentation, when requested by CBP, establishing that the good met 
the conditions relating to transshipment set forth in Sec.  10.609(a).
Origin Verifications and Determinations
    Section 10.616 implements CAFTA-DR Article 4.20 which concerns the 
conduct of verifications to determine whether imported goods are 
originating goods entitled to CAFTA-DR 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 CAFTA-DR preferential duty treatment is claimed.
    Section 10.617, which reflects CAFTA-DR Article 3.24, sets forth 
the verification and enforcement procedures specifically relating to 
trade in textile and apparel goods.
    Section 10.618 provides the procedures that apply when preferential 
tariff treatment is denied on the basis of an origin verification 
conducted under this subpart.
    Section 10.619 implements CAFTA-DR Article 4.20.5 and Sec.  206(b) 
of the Act, concerning the denial of preferential tariff treatment in 
situations in which there is a pattern of conduct

[[Page 33677]]

by an importer, exporter, or producer of false or unsupported CAFTA-DR 
preference claims.
Penalties
    Section 10.620 concerns the general application of penalties to 
CAFTA-DR transactions and is based on CAFTA-DR Article 5.9.
    Section 10.621 reflects CAFTA-DR Article 4.15.3 and Sec.  206(a)(1) 
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 10.622 implements CAFTA-DR Article 4.18.2 and Sec.  
206(a)(2) 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 a Party.
    Section 10.623 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 10.623 also specifies the content of the statement that must 
accompany each corrected claim or certification.
Goods Returned After Repair or Alteration
    Section 10.624 implements CAFTA-DR Article 3.6 regarding duty-free 
treatment for goods re-entered after repair or alteration in a CAFTA-DR 
Party.
Retroactive Preferential Tariff Treatment for Textile and Apparel Goods
    Current Sec.  10.699 of the CBP regulations, which sets forth the 
conditions and requirements that apply for purposes of submitting 
requests for refunds of any excess customs duties paid with respect to 
entries of textile or apparel goods entitled to retroactive tariff 
treatment under the CAFTA-DR (see CAFTA-DR Article 3.20 and Sec.  205 
of the Act), is redesignated as Sec.  10.625 so as to conform 
numerically to the new provisions added to Subpart J, Part 10, by this 
interim rule. In addition, paragraph (a) of redesignated Sec.  10.625, 
relating to the applicability of this section, is revised by deleting 
certain redundant language set forth in new Sec.  10.581 (Scope) of 
Subpart J, Part 10.

Part 24

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

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, which is the scope section of the 
part, to refer readers to the additional CAFTA-DR records maintenance 
and examination provisions contained in Subpart J, Part 10, CBP 
regulations.

Part 163

    A conforming amendment is made to Sec.  163.1 to include the 
maintenance of any documentation that the importer may have in support 
of a claim for preference under the CAFTA-DR as an activity for which 
records must be maintained. Also, 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 
documentation in the importer's possession supporting an CAFTA-DR claim 
for preferential tariff treatment.

Part 178

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

    These regulations are being issued without prior notice and public 
procedure pursuant to the APA, as described above. For this reason, the 
collections of information contained in these regulations have been 
reviewed and, pending receipt and evaluation of public comments, 
approved by the Office of Management and Budget in accordance with the 
requirements of the Paperwork Reduction Act (44 U.S.C. 3507) under 
control number 1651-0125.
    The collections of information in these regulations are in 
Sec. Sec.  10.583 and 10.584. This information is required in 
connection with claims for preferential tariff treatment under the 
CAFTA-DR and the Act and will be used by CBP to determine eligibility 
for tariff preference under the CAFTA-DR and the Act. The likely 
respondents are business organizations including importers, exporters 
and manufacturers.
    Estimated total annual reporting burden: 4,000 hours.

[[Page 33678]]

    Estimated average annual burden per respondent: .2 hours.
    Estimated number of respondents: 20,000.
    Estimated annual frequency of responses: 1.
    Comments concerning the 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, U.S. Customs and Border Protection, 1300 
Pennsylvania Avenue, NW. (Mint Annex), Washington, DC 20229.

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

0
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.

    1. The general authority citation for part 10 continues to read, 
the specific authority for Sec.  10.699 is removed, and the specific 
authority for Sec. Sec.  10.581 through 10.625 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 10.581 through 10.625 also issued under 19 U.S.C. 1202 
(General Note 29, HTSUS), 19 U.S.C. 1520(d), and Pub. L. 109-53, 119 
Stat. 462 (19 U.S.C. 4001 note).
* * * * *

0
2. In Sec.  10.31, paragraph (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, Bahrain, El Salvador, Guatemala, Honduras, Nicaragua, or the 
Dominican Republic 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, or 29, HTSUS, in the country of which the importer is a 
resident.
* * * * *

0
3. Part 10, CBP regulations, is amended by revising Subpart J to read 
as follows:

Subpart J--Dominican Republic--Central America--United States Free 
Trade Agreement

Sec.

General Provisions

10.581 Scope.
10.582 General definitions.

Import Requirements

10.583 Filing of claim for preferential tariff treatment upon 
importation.
10.584 Certification.
10.585 Importer obligations.
10.586 Certification not required.
10.587 Maintenance of records.
10.588 Effect of noncompliance; failure to provide documentation 
regarding transshipment.

Export Requirements

10.589 Certification for goods exported to a Party.

Post-Importation Duty Refund Claims

10.590 Right to make post-importation claim and refund duties.
10.591 Filing procedures.
10.592 CBP processing procedures.

Rules of Origin

10.593 Definitions.
10.594 Originating goods.
10.595 Regional value content.
10.596 Value of materials.
10.597 Accumulation.
10.598 De minimis.
10.599 Fungible goods and materials.
10.600 Accessories, spare parts, or tools.
10.601 Retail packaging materials and containers.
10.602 Packing materials and containers for shipment.
10.603 Indirect materials.
10.604 Transit and transshipment.
10.605 Goods classifiable as goods put up in sets.

Tariff Preference Level

10.606 Filing of claim for tariff preference level.
10.607 Goods eligible for tariff preference level claims.
10.608 Submission of certificate of eligibility.
10.609 Transshipment of non-originating cotton or man-made fiber 
apparel goods.
10.610 Effect of noncompliance; failure to provide documentation 
regarding transshipment of non-originating cotton or man-made fiber 
apparel goods.

Origin Verifications and Determinations

10.616 Verification and justification of claim for preferential 
tariff treatment.
10.617 Special rule for verifications in a Party of U.S. imports of 
textile and apparel goods.
10.618 Issuance of negative origin determinations.
10.619 Repeated false or unsupported preference claims.

Penalties

10.620 General.
10.621 Corrected claim or certification by importers.
10.622 Corrected certification by exporters or producers.
10.623 Framework for correcting claims or certifications.

Goods Returned After Repair or Alteration

10.624 Goods re-entered after repair or alteration in a Party.

Retroactive Preferential Tariff Treatment for Textile and Apparel Goods

10.625 Refunds of excess customs duties.

[[Page 33679]]

Subpart J--Dominican Republic--Central America--United States Free 
Trade Agreement

General Provisions


Sec.  10.581  Scope.

    This subpart implements the duty preference and related customs 
provisions applicable to imported and exported goods under the 
Dominican Republic--Central America--United States Free Trade Agreement 
(the CAFTA-DR) signed on August 5, 2004, and under the Dominican 
Republic--Central America--United States Free Trade Agreement 
Implementation Act (the Act; Pub. L. 109-53, 119 Stat. 462 (19 U.S.C. 
4001 et seq.), as amended by section 1634 of the Pension Protection Act 
of 2006 (Pub. L. 109-280, 120 Stat. 1167). 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 
CAFTA-DR and the Act are contained in parts 24, 162, and 163 of this 
chapter.


Sec.  10.582  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 CAFTA-DR to an originating good 
or other good specified in the CAFTA-DR, 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 a good of a Party;
    (c) Customs authority. ``Customs authority'' means the competent 
governmental unit 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, for purposes of implementing the 
CAFTA-DR, does not include any:
    (1) Charge equivalent to an internal tax imposed consistently with 
Article III:2 of 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, which is part of 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) GATT 1994. ``GATT 1994'' means the General Agreement on Tariffs 
and Trade 1994, which is part of the WTO Agreement;
    (i) 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;
    (j) Heading. ``Heading'' means the first four digits in the tariff 
classification number under the Harmonized System;
    (k) HTSUS. ``HTSUS'' means the Harmonized Tariff Schedule of the 
United States as promulgated by the U.S. International Trade 
Commission;
    (l) Identical goods. ``Identical goods'' means goods that are 
produced in the same country and are the same in all respects, 
including physical characteristics, quality, and reputation, but 
excluding minor differences in appearance.
    (m) Indirect material. ``Indirect material'' means a good used in 
the production, testing, or inspection of a good in the territory of 
one or more of the Parties 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 in the territory 
of one or more of the Parties, 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 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;
    (n) Originating. ``Originating'' means qualifying for preferential 
tariff treatment under the rules of origin set out in CAFTA-DR Chapter 
Four (Rules of Origin and Origin Procedures) and General Note 29, 
HTSUS;
    (o) Party. ``Party'' means:
    (1) The United States; and
    (2) Costa Rica, the Dominican Republic, El Salvador, Guatemala, 
Honduras, or Nicaragua, for such time as the CAFTA-DR is in force 
between the United States and that country;
    (p) Person. ``Person'' means a natural person or an enterprise;
    (q) Preferential tariff treatment. ``Preferential tariff 
treatment'' means the duty rate applicable under the CAFTA-DR to an 
originating good or other good specified in the CAFTA-DR, and an 
exemption from the merchandise processing fee;
    (r) Subheading. ``Subheading'' means the first six digits in the 
tariff classification number under the Harmonized System;
    (s) Tariff preference level. ``Tariff preference level'' means a 
quantitative limit for certain non-originating apparel goods that may 
be entitled to preferential tariff treatment based on the goods meeting 
the requirements set forth in Sec. Sec.  10.606 through 10.610 of this 
subpart.
    (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 3.29 of the CAFTA-DR;
    (u) Territory. ``Territory'' means:
    (1) With respect to each Party other than the United States, the 
land, maritime, and air space under its 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 33680]]

    (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.  10.583  Filing of claim for preferential tariff treatment upon 
importation.

    (a) Basis of claim. An importer may make a claim for CAFTA-DR 
preferential tariff treatment, including an exemption from the 
merchandise processing fee, based on:
    (1) A certification, as specified in Sec.  10.584 of this subpart, 
that is prepared by the importer, exporter, or producer of the good; or
    (2) The importer's knowledge that the good qualifies as 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 letter ``P'' or ``P+'' 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 (a) 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.  10.621 and 
10.623 of this subpart).


Sec.  10.584  Certification.

    (a) General. An importer who makes a claim under Sec.  10.583(b) of 
this subpart based on a certification of the importer, exporter, or 
producer that the good qualifies as 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, and e-mail address (if any) 
of the importer of record of the good, the exporter of the good (if 
different from the producer), and the producer of the good;
    (ii) The legal name, address, telephone, and e-mail address (if 
any) 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);
    (iii) 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;
    (iv) 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 29(n), HTSUS; and
    (v) The applicable rule of origin set forth in General Note 29, 
HTSUS, under which the good qualifies as an originating good; 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 originated or are considered to have originated in the 
territory of one or more of the Parties, and comply with the origin 
requirements specified for those goods in the Dominican Republic--
Central America--United States Free Trade Agreement; there has been 
no further production or any other operation outside the territories 
of the Parties, other than unloading, reloading, or any other 
operation necessary to preserve the goods in good condition or to 
transport the goods to the United States; the goods remained under 
the control of customs authorities while in the territory of a non-
Party; 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 language or the 
language of the exporting Party. 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. A certification may 
be prepared by the exporter or producer of the good on the basis of:
    (1) The exporter's or producer's knowledge that the good is 
originating; or
    (2) In the case of an exporter, reasonable reliance on the 
producer's certification that the good is originating.
    (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 signed.


Sec.  10.585  Importer obligations.

    (a) General. An importer who makes a claim for preferential tariff 
treatment under Sec.  10.583(b) of this subpart:
    (1) Will be deemed to have certified that the good is eligible for 
preferential tariff treatment under the CAFTA-DR;
    (2) Is responsible for the truthfulness of the claim and of all the 
information and data contained in the certification provided for in 
Sec.  10.584 of this subpart;
    (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, all information relied on by the exporter or 
producer in preparing the certification.
    (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

[[Page 33681]]

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. Sec.  10.621 and 10.623 of this subpart).


Sec.  10.586  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.  10.584 of this subpart 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.  10.584 of this 
subpart, 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.  10.587  Maintenance of records.

    (a) General. An importer claiming preferential tariff treatment for 
a good imported into the United States under Sec.  10.583(b) of this 
subpart must maintain, for a minimum of five years after the date of 
importation of the good, all records and documents that the importer 
has demonstrating that the good qualifies for preferential tariff 
treatment under the CAFTA-DR. 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.  10.588  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.  10.584 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 
CAFTA-DR, 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.  10.604(a) of this 
subpart were met.

Export Requirements


Sec.  10.589  Certification for goods exported to a Party.

    (a) Submission of certification to CBP. Any person who completes 
and issues a certification for a good exported from the United States 
to a Party must provide a copy of the certification (or such other 
medium or format approved by the Party's customs authority for that 
purpose) 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 a Party 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.  
10.622 and 10.623 of this subpart).
    (c) Maintenance of records--(1) General. Any person who completes 
and issues a certification for a good exported from the United States 
to a Party must maintain, for a period of at least five years after the 
date the certification was signed, 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) 
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.  10.590  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.  10.591 of 
this subpart. Subject to the provisions of Sec.  10.588 of this 
subpart, CBP may refund any excess duties by liquidation or 
reliquidation of the entry covering the good in accordance with Sec.  
10.592(c) of this subpart.


Sec.  10.591  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.
    (b) Contents of claim. A post-importation claim for a refund must 
be filed by presentation of the following:
    (1) A written declaration stating that the good qualified as 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 certification prepared in accordance with Sec.  
10.584 of this subpart if a certification forms the basis for the 
claim, or other 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 or not any person has 
filed a

[[Page 33682]]

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.  10.592  CBP processing procedures.

    (a) Status determination. After receipt of a post-importation claim 
under Sec.  10.591 of this subpart, 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 under 
Sec.  10.591 of this subpart 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 under Sec.  10.591 of 
this subpart 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 under Sec.  10.591 
of this subpart 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 under Sec.  10.591 of this subpart 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 under 
Sec.  10.591 of this subpart.
    (d) Denial of claim. (1) General. The port director may deny a 
claim for a refund filed under Sec.  10.591 of this subpart if the 
claim was not filed timely, if the importer has not complied with the 
requirements of Sec.  10.591 of this subpart, or if, following 
initiation of an origin verification under Sec.  10.616 of this 
subpart, the port director determines either that the imported good did 
not qualify as an originating good at the time of importation or that a 
basis exists upon which preferential tariff treatment may be denied 
under Sec.  10.616 of this subpart.
    (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.  10.593  Definitions.

    For purposes of Sec. Sec.  10.593 through 10.605:
    (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 (m) 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 provided for in subheading 8701.20, 8704.10, 
8704.22, 8704.23, 8704.32, or 8704.90, or heading 8705 or 8706, HTSUS, 
or motor vehicles for the transport of 16 or more persons provided for 
in subheading 8702.10 or 8702.90, HTSUS;
    (2) Motor vehicles provided for in subheading 8701.10 or any of 
subheadings 8701.30 through 8701.90, HTSUS;
    (3) Motor vehicles provided for the transport of 15 or fewer 
persons provided for in subheading 8702.10 or 8702.90, HTSUS, or motor 
vehicles provided for in subheading 8704.21 or 8704.31, HTSUS; or
    (4) Motor vehicles provided for in subheadings 8703.21 through 
8703.90, HTSUS;
    (c) Exporter. ``Exporter'' means a person who exports goods from 
the territory of a Party;
    (d) 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;
    (e) 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;
    (f) Good. ``Good'' means any merchandise, product, article, or 
material;
    (g) Goods wholly obtained or produced entirely in the territory of 
one or more of the Parties. ``Goods wholly obtained or produced 
entirely in the territory of one or more of the Parties'' means:
    (1) Plants and plant products harvested or gathered in the 
territory of one or more of the Parties;
    (2) Live animals born and raised in the territory of one or more of 
the Parties;
    (3) Goods obtained in the territory of one or more of the Parties 
from live animals;
    (4) Goods obtained from hunting, trapping, fishing, or aquaculture 
conducted in the territory of one or more of the Parties;
    (5) Minerals and other natural resources not included in paragraphs 
(g)(1) through (g)(4) of this section that are extracted or taken in 
the territory of one or more of the Parties;
    (6) Fish, shellfish, and other marine life taken from the sea, 
seabed, or subsoil outside the territory of one or more of the Parties 
by vessels registered or recorded with a Party and flying its flag;
    (7) Goods produced on board factory ships from the goods referred 
to in paragraph (g)(6) of this section, if such factory ships are 
registered or recorded with a Party and flying its flag;

[[Page 33683]]

    (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 more of the Parties; or
    (ii) Used goods collected in the territory of one or more 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 more of the 
Parties from used goods, and used in the territory of a Party in the 
production of remanufactured goods; and
    (12) Goods produced in the territory of one or more of the Parties 
exclusively from goods referred to in any of paragraphs (g)(1) through 
(g)(10) of this section, or from the derivatives of such goods, at any 
stage of production;
    (h) Material. ``Material'' means a good that is used in the 
production of another good, including a part or an ingredient;
    (i) Model line. ``Model line'' means a group of motor vehicles 
having the same platform or model name;
    (j) 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;
    (k) 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 rates for comparable 
maturities of the Party in which the producer is located;
    (l) 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 29, HTSUS, or this subpart;
    (m) 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;
    (n) Producer. ``Producer'' means a person who engages in the 
production of a good in the territory of a Party;
    (o) Production. ``Production'' means growing, mining, harvesting, 
fishing, raising, trapping, hunting, manufacturing, processing, 
assembling, or disassembling a good;
    (p) Reasonably allocate. ``Reasonably allocate'' means to apportion 
in a manner that would be appropriate under generally accepted 
accounting principles;
    (q) 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;
    (r) Remanufactured good. ``Remanufactured good'' means a good that 
is classified in Chapter 84, 85, or 87, or heading 9026, 9031, or 9032, 
HTSUS, other than a good classified in heading 8418 or 8516, HTSUS, and 
that:
    (1) Is entirely or partially comprised of recovered goods; and
    (2) Has a similar life expectancy and enjoys a factory warranty 
similar to a new good that is classified in one of the enumerated HTSUS 
chapters or headings;
    (s) 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 more of the Parties, 
engineering, tooling, die-setting, software design and similar computer 
services;
    (t) 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;
    (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;
    (u) 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;
    (v) 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;
    (w) Total cost. ``Total cost'' means all product costs, period 
costs, and other costs for a good incurred in the territory of one or 
more 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

[[Page 33684]]

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;
    (x) Used. ``Used'' means used or consumed in the production of 
goods; and
    (y) Value. ``Value'' means the value of a good or material for 
purposes of calculating customs duties or for purposes of applying this 
subpart.


Sec.  10.594  Originating goods.

    Except as otherwise provided in this subpart and General Note 
29(m), HTSUS, a good imported into the customs territory of the United 
States will be considered an originating good under the CAFTA-DR only 
if:
    (a) The good is wholly obtained or produced entirely in the 
territory of one or more of the Parties;
    (b) The good is produced entirely in the territory of one or more 
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 29(n), HTSUS, and the good satisfies all other 
applicable requirements of General Note 29, HTSUS; or
    (2) The good otherwise satisfies any applicable regional value 
content or other requirements specified in General Note 29(n), HTSUS, 
and satisfies all other applicable requirements of General Note 29, 
HTSUS; or
    (c) The good is produced entirely in the territory of one or more 
of the Parties exclusively from originating materials.


Sec.  10.595  Regional value content.

    (a) General. Except for goods to which paragraph (d) of this 
section applies, where General Note 29(n), 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 29(n), 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, subheading 
8408.20, heading 8409, or headings 8701 through 8708, 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 paragraph (d)(2) 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 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 more 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;

[[Page 33685]]

    (B) Determine the average referred to in paragraph (d)(4)(i) 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) or 
(d)(4)(ii) for automotive goods that are exported to the territory of 
one or more Parties.
    (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.  10.596  Value of materials.

    (a) Calculating the value of materials. Except as provided in Sec.  
10.603, for purposes of calculating the regional value content of a 
good under General Note 29(n), HTSUS, and for purposes of applying the 
de minimis (see Sec.  10.598 of this subpart) provisions of General 
Note 29(n), 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, of the 
material 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 El Salvador purchases material x from 
an unrelated seller in El Salvador 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 El Salvador ($100), adjusted in 
accordance with the provisions of Article 8. In this example, it is 
irrelevant whether material x was initially imported into El 
Salvador by the seller (or by anyone else). So long as the producer 
acquired material x in El Salvador, 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 El Salvador at or about the same time the goods were sold to 
the producer in El Salvador. Thus, if the seller of material x also 
sold an identical material to another buyer in El Salvador 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 more 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 more 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:
    (i) The costs of freight, insurance, packing, and all other costs 
incurred in transporting the material within or between the territory 
of one or more 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 more 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 more of the 
Parties.
    (d) Accounting method. Any cost or value referenced in General Note 
29, 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.  10.597  Accumulation.

    (a) Originating materials from the territory of one or more of the 
Parties 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 more of the 
Parties by one or more producers is an originating good if the good 
satisfies the requirements of Sec.  10.594 of this subpart and all 
other applicable requirements of General Note 29, HTSUS.


Sec.  10.598  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 29(n), 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 29(n), HTSUS; and
    (3) The good meets all other applicable requirements of General 
Note 29, HTSUS.
    (b) Exceptions. Paragraph (a) 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

[[Page 33686]]

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, that 
is used in the production of the following goods:
    (i) Infant preparations containing over 10 percent by weight of 
milk solids provided for in subheading 1901.10, 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; and
    (vi) Animal feeds containing over 10 percent by weight of milk 
solids provided for in subheading 2309.90, HTSUS; and
    (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, HTSUS, 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; and
    (9) Except as provided in paragraphs (b)(1) through (b)(8) of this 
section and General Note 29(n), 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 29(n), 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 5402.10.30, 5402.10.60, 
5402.31.30, 5402.31.60, 5402.32.30, 5402.32.60, 5402.41.10, 5402.41.90, 
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 in the territory of a Party. For purposes of this 
paragraph, ``wholly formed'' means that all the production processes 
and finishing operations, starting with the extrusion of filaments, 
strips, film, or sheet, and including 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, took place in the territory of a 
Party.
    (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 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.


Sec.  10.599  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.  10.600  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 29(n), HTSUS, provided that:
    (1) The accessories, spare parts, or tools are classified with, and 
not invoiced separately from, the good, regardless of whether they 
appear 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.
    (a) 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.  10.595 of this subpart.


Sec.  10.601  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 CAFTA-DR 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 29(n), 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.


[[Page 33687]]


    Example 1. Guatemalan Producer A of good C imports 100 non-
originating blister packages to be used as retail packaging for good 
C. As provided in Sec.  10.596(a)(1) of this subpart, 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.  10.595(b) of this subpart), 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) x100 (see 
Sec.  10.595(c) of this subpart), the adjusted value of the blister 
packaging would be included as part of the VOM, value of originating 
material.


Sec.  10.602  Packing materials and containers for shipment.

    (a) Effect on tariff shift rule. Packing materials and containers 
for shipment, as defined in Sec.  10.593(m) of this subpart, 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 29(n), 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.  10.593(m) of this 
subpart, 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. Producer A of the Dominican Republic produces good C. 
Producer A ships good C to the United States in a shipping container 
that it purchased from Company B in the Dominican Republic. The 
shipping container is originating. The value of the shipping 
container determined under section Sec.  10.596(a)(2) of this 
subpart 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 United States importer decides to use 
the build-up method, RVC = (VOM/AV) x 100 (see Sec.  10.595(c) of 
this subpart), 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.  10.603  Indirect materials.

    An indirect material, as defined in Sec.  10.582(m) of this 
subpart, will be considered to be an originating material without 
regard to where it is produced.

    Example. Honduran Producer C produces good C using non-
originating material A. Producer C 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.  
10.594(b)(1) of this subpart and General Note 29(n), each of the 
non-originating materials in good C must undergo the specified 
change in tariff classification in order for good C to be considered 
originating. Although non-originating material A 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.  10.604  Transit and transshipment.

    (a) General. A good that has undergone production necessary to 
qualify as an originating good under Sec.  10.594 of this subpart 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.


Sec.  10.605  Goods classifiable as goods put up in sets.

    Notwithstanding the specific rules set forth in General Note 29(n), 
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.

Tariff Preference Level


Sec.  10.606  Filing of claim for tariff preference level.

    A cotton or man-made fiber apparel good of Nicaragua described in 
Sec.  10.607 of this subpart that does not qualify as an originating 
good under Sec.  10.594 of this subpart may nevertheless be entitled to 
preferential tariff treatment under the CAFTA-DR under an applicable 
tariff preference level (TPL). To make a TPL claim, the importer must 
include on the entry summary, or equivalent documentation, the 
applicable subheading in Chapter 99 of the HTSUS (9915.61.01) 
immediately above the applicable subheading in Chapter 61 or 62 of the 
HTSUS under which each non-originating cotton or man-made fiber apparel 
good is classified.


Sec.  10.607  Goods eligible for tariff preference level claims.

    Goods eligible for a TPL claim consist of cotton or man-made fiber 
apparel goods provided for in U.S. Note 15(b), Subchapter XV, Chapter 
99, HTSUS, that are both cut (or knit-to-shape) and sewn or otherwise 
assembled in the territory of Nicaragua, and that meet the applicable 
conditions for preferential tariff treatment under the CAFTA-DR, other 
than the condition that they are originating goods. The preferential 
tariff treatment is limited to the quantities specified in U.S. Note 
15(c), Subchapter XV, Chapter 99, HTSUS.


Sec.  10.608  Submission of certificate of eligibility.

    An importer who claims preferential tariff treatment on a non-
originating cotton or man-made fiber apparel good must submit a 
certificate of eligibility issued by an authorized official of the 
Government of Nicaragua, demonstrating that the good is eligible

[[Page 33688]]

for entry under the applicable TPL, as set forth in Sec.  10.607 of 
this subpart. The certificate of eligibility must be in writing or must 
be transmitted electronically pursuant to any electronic means 
authorized by CBP for that purpose.


Sec.  10.609  Transshipment of non-originating cotton or man-made fiber 
apparel goods.

    (a) General. A good will not be considered eligible for 
preferential tariff treatment under an applicable TPL by reason of 
having undergone production that would enable the good to qualify for 
preferential tariff treatment if subsequent to that production the 
good:
    (1) Undergoes 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 for 
preferential tariff treatment under an applicable TPL may be required 
to demonstrate, to CBP's satisfaction, that the requirements set forth 
in paragraph (a) of this section were met. An importer may demonstrate 
compliance with these requirements 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.


Sec.  10.610  Effect of noncompliance; failure to provide documentation 
regarding transshipment of non-originating cotton or man-made fiber 
apparel goods.

    (a) Effect of noncompliance. If an importer of a good for which a 
TPL claim is made fails to comply with any applicable requirement under 
this subpart, 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 a good for which a TPL claim is made 
if the good is shipped through or transshipped in a country other than 
a Party, 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 requirements set forth in Sec.  10.609(a) of 
this subpart were met.

Origin Verifications and Determinations


Sec.  10.616  Verification and justification of claim for preferential 
tariff treatment.

    (a) Verification. A claim for preferential tariff treatment made 
under Sec.  10.583(b) of this subpart, 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 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 CAFTA-DR 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 the Party in which the good is produced, to review the 
records of the type referred to in Sec.  10.589(c)(1) of this subpart 
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.  10.617  Special rule for verifications in a Party 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 a Party 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 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 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 U.S. (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 a Party 
conduct a verification.
    (2) Actions during a verification. While a verification under this 
paragraph is being conducted, CBP 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;

[[Page 33689]]

    (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 this paragraph, CBP 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 
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 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) Denial of permission to conduct a verification. If an 
enterprise does not consent to a verification under this section, CBP 
may deny preferential tariff treatment to the type of goods of the 
enterprise that would have been the subject of the verification.
    (d) Assistance 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 a Party, along 
with the competent authorities of the Party, to the premises of an 
exporter, producer or any other enterprise involved in the movement of 
textile or apparel goods from a Party to the United States.
    (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.  10.618  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 
made under Sec.  10.583(b) of 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 29, HTSUS, and in Sec. Sec.  10.593 
through 10.605 of this subpart, the legal basis for the determination.


Sec.  10.619  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 CAFTA-DR rules of origin 
set forth in General Note 29, HTSUS, CBP may suspend preferential 
tariff treatment under the CAFTA-DR 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 29, HTSUS.

Penalties


Sec.  10.620  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 
CAFTA-DR.


Sec.  10.621  Corrected claim or certification by importers.

    An importer who makes a corrected claim under Sec.  10.583(c) of 
this subpart 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.  10.622  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.  10.589(b) with respect to the making of an incorrect 
certification.


Sec.  10.623  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

[[Page 33690]]

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 are 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 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.  10.624  Goods re-entered after repair or alteration in a Party.

    (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 a Party as provided for in subheadings 
9802.00.40 and 9802.00.50, HTSUS. Goods returned after having been 
repaired or altered in a Party, whether or not pursuant to a warranty, 
are eligible for duty-free treatment, provided that the requirements of 
this section are met. For purposes of this section, ``repairs or 
alterations'' 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.
    (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 a Party, are incomplete for their 
intended use and for which the processing operation performed in the 
Party 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 of this part, 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 a Party after having been exported for repairs or alterations and 
which are claimed to be duty free.

Retroactive Preferential Tariff Treatment for Textile and Apparel Goods


Sec.  10.625  Refunds of excess customs duties.

    (a) Applicability. Section 205 of the Dominican Republic--Central 
America--United States Free Trade Agreement Implementation Act, as 
amended by section 1634(d) of the Pension Protection Act of 2006, 
provides for the retroactive application of the Agreement and payment 
of refunds for any excess duties paid with respect to entries of 
textile and apparel goods of eligible CAFTA-DR countries that meet 
certain conditions and requirements. Those conditions and requirements 
are set forth in paragraphs (b) and (c) of this section.
    (b) General. Notwithstanding 19 U.S.C. 1514 or any other provision 
of law, and subject to paragraph (c) of this section, a textile or 
apparel good of an eligible CAFTA-DR country that was entered or 
withdrawn from warehouse for consumption on or after January 1, 2004, 
and before the date of the entry into force of the Agreement with 
respect to the last CAFTA-DR country will be liquidated or reliquidated 
at the applicable rate of duty for that good set out in the Schedule of 
the United States to Annex 3.3 of the Agreement, and CBP will refund 
any excess customs duties paid with respect to such entry, with 
interest accrued from the date of entry, provided:
    (1) The good would have qualified as an originating good under 
section 203 of the Act if the good had been entered after the date of 
entry into force of the Agreement for that country; and
    (2) Customs duties in excess of the applicable rate of duty for 
that good set out in the Schedule of the United States to Annex 3.3 of 
the Agreement were paid.
    (c) Request for liquidation or reliquidation. Liquidation or 
reliquidation may be made under paragraph (b) of this section with 
respect to an entry of a textile or apparel good of an eligible CAFTA-
DR country only if a request for liquidation or reliquidation is filed 
with the CBP port where the entry was originally filed within 90 days 
after the date of the entry into force of the Agreement for the last 
CAFTA-DR country, and the request contains sufficient information to 
enable CBP:
    (1) To locate the entry or to reconstruct the entry if it cannot be 
located; and
    (2) To determine that the good satisfies the conditions set forth 
in paragraph (b) of this section.
    (d) Definitions. For purposes of this section:
    (1) ``Eligible CAFTA-DR country'' means a country that the United 
States Trade Representative has determined, by notice published in the 
Federal Register, to be an eligible country for purposes of section 205 
of the Act;
    (2) ``Last CAFTA-DR country'' means, of Costa Rica, the Dominican 
Republic, El Salvador, Guatemala, Honduras, and Nicaragua, the last 
country for which the Agreement enters into force; and
    (3) ``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)), other than 
a good listed in Annex 3.29 of the Agreement.

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; Public Law 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 a new paragraph (c)(9) to read as 
follows:


Sec.  24.23  Fees for processing merchandise.

* * * * *
    (c) * * *
    (9) 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 Dominican 
Republic-Central America-United States Free Trade

[[Page 33691]]

Agreement Implementation Act (see also General Note 29, HTSUS) that are 
entered, or withdrawn from warehouse for consumption, on or after 
January 1, 2005.

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, and the U.S.-Morocco Free Trade Agreement are contained in 
Part 10, Subparts H, I, J, and M 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(a)(2) is amended by redesignating paragraphs (a)(2)(x) 
and (a)(2)(xi) as paragraphs (a)(2)(xi) and (a)(2)(xii), and adding a 
new paragraph (a)(2)(x) to read as follows:


Sec.  163.1  Definitions.

* * * * *
    (a) * * *
    (2) * * *
    (x) The maintenance of any documentation that the importer may have 
in support of a claim for preferential tariff treatment under the 
Dominican Republic-Central America-United States Free Trade Agreement 
(CAFTA-DR), including an CAFTA-DR 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.  10.585  CAFTA-DR records that the importer may have in support of 
a CAFTA-DR 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.  
10.583 and 10.584'' to the table in numerical order to read as follows:


Sec.  178.2  Listing of OMB control numbers.

------------------------------------------------------------------------
        19 CFR Section               Description        OMB control No.
------------------------------------------------------------------------
 
                              * * * * * * *
Sec.  Sec.   10.583 and         Claim for                      1651-0125
 10.584..                        preferential tariff
                                 treatment under the
                                 Dominican Republic-
                                 Central America-US
                                 Free Trade
                                 Agreement..
 
                              * * * * * * *
------------------------------------------------------------------------

* * * * *

W. Ralph Basham,
Commissioner, U.S. Customs and Border Protection.
    Approved: June 9, 2008.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. E8-13252 Filed 6-12-08; 8:45 am]
BILLING CODE 9111-14-P