103 STAT. 2676 PROCLAMATION 5923—DEC. 14, 1988 (B) For the pmposes of subdivision (c)(vii) of this note, goods imported into the customs territory of die United States are eligible for treatment as "goods originating in the territory of Canada" only if— (1) they are goods wholly obtained or produced in the territory of Canada and/or the United States, or (2) they have been transformed in the territory of Canada and/or the United States, so as to be subject— (I) to a change in tariff classification in Canada as described in the rules of subdivision (c)(vii)(R) of ^s note, or (n) to such other requirements subdivision (c)(vii)(R) of this note may provide when no change in tariff classification occurs, and they meet the other conditions set out in subdivi- sions (c)(vii)(F), (G), (H), (I), (J) and (R) of this note. (C) Goods shall not be considered to originate in the territory of Canada pursuant to subdi- vision (c)(vii)(B)(2) merely by virtue of having undergone— (1) simple packaging or, except as expressly provided by the rules of subdivision (c)(vii](R) of this note, combining operations, (2) mere dlution with water or another substance that does not materially alter the charac- teristics of the goods, or (3) any process or work in respect of which it is established, or in respect of which the facts as ascertained clearly justify the presumption, that the sole object was to circumvent the provisions of subdivision (c)(vii) of this note. (D) Accessories, spare parts, or tools delivered with any piece of equipment, machinery, ap- paratus, or vehicle that form part of its standard equipment shall be treated as having the same origin as that equipment, machinery, apparatus, or vehicle if the quantities and values of such accessories, spare parts, or tools are customary for the equipment, machinery, appa- ratus, or vehicle. (E) Goods exported from the territory of Canada originate in the territory of Canada only if the goods meet the applicable requirements of subdivisions (c}(vii)(B), (C) and (D) of this note and are shipped to the territory of the United States without having entered die com- merce of any third country and the goods, if shipped through the territory of a third country, do not undergo any operations other than unloading, reloading, or any operation necessary to transport them to the territory of the United States or to preserve them in good condition, and the documents related to the exportation and shipment of the goods from the territory of Canada show the territory of the United States as their final destination. (F) Whenever the processing or assembly of goods in the territory of Canada and/or the United States results in one of the changes in tariff classification in Canada described by the rules set forth in subdivision (c)(vii)(R] of this note, such goods shall be considered to have been transformed in the territory of Canada and shall be treated as goods originating in the territory of Canada, provided that such processing or assembly occurs entirely within the territory of Canada and/or the United States and that such goods have not subsequent- ly undergone any processing or assembly outside of Canada or the United States that im- proves the goods in condition or advances them in value. (G) Whenever the assembly of goods in the territory of Canada fails to result in a change of tariff classification because— (1) the goods were imported into the territory of Canada in an unassembled or a disassem- bled form and were classified as unassembled or disassembled goods pursuant to General Rule of Interpretation 2(a), or (2] the tariff subheading for the goods provides for both the goods themselves and their parts, such goods shall not be treated as goods originating in the territory of Canada. (H) Notwithstanding subdivision (c)(vii)(G], goods described in that paragraph shall be con- sidered to have been transformed in the territory of Canada and be treated as goods origi- nating in the territory of Canada if— (1) the value of materials originating in the territory of Canada and/or the United States that are used or consumed in the production of the goods plus the direct cost of assembling the goods in the territory of Canada and/or the United States constitute not less than 50 percent of the value of the goods when exported to the territory of the United States, and (2) the goods have not subsequent to assembly undergone processing or further assembly in a third country and they meet the requirements of subdivision (c)(vii](E) of this note. (I) The provisions of subdivision (c)(vii)(H] of this note shall not apply to goods of chapters 61 through 63.
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