107 STAT. 2080
PUBLIC LAW 103-182—DEC. 8, 1993
satisfies the requirements of subsection (a) if, subsequent to that
production, the good undergoes further production or any other
operation outside the territories of the NAFTA countries, other
than unloading, reloading, or any other operation necessary to
preserve it in g^ood condition ortotransport the good to the territory
of a NAFTA country.
(1) NONQUALIFYING OPERATIONS. —A good shall not be consid-
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eredtobe an originating good merely by reason of—
(1) mere dilution with water or another substance that
does not materially alter the characteristics of the good; or
(2) any production or pricing practice with respect to which
it may be demonstrated, by a preponderance of evidence, that
the object wastocircumvent this section.
(m) INTERPRETATION AND APPLICATION,—For piirposes of this
section:
(1) The basis for anyterififclassification is the HTS.
(2) Except as otherwise expressly provided, whenever in
this section there is a reference to a heading or subheading
such reference shall be a reference to a heading or subheading
of the HTS.
(3) In applying subsection (a)(4), the determination of
whether a heading or subheading under the HTS provides
for and specifically describes both a good and ite parts shall
be made on the basis of the nomenclature of the heading
or subheading, the rules of interpretetion, or notes of the HTS.
(4) In applying the Customs Valuation Code—
(A) the principles of the Customs Valuation Code shall
apply to domestic transactions, with such modifications
as may be required by the circimistances, as would apply
to international transactions;
(B) the provisions of this section shall take precedence
over the Customs Valuation Code to the extent of any
difierence; and
(C) the definitions in subsection (o) shall take precedence over the definitions in the Customs Valuation Code
to the extent of any difference.
(5) All coste referred to in this section shall be recorded
and mainteined in accordance with the Generally Accepted
Accounting Principles applicable in theterritoryof the NAFTA
country in which the good is produced.
(n) ORIGIN OP AUTOMATIC DATA PROCESSING GOODS. — Notwithstanding any other provision of this section, when the NAFTA
countries apply the most-favored-nation rate of duty described in
paragraph 1 of section A of Annex 308.1 of the Agreement to
a good provided for under the tariff provisions set out in Table
308.1.1 of such Annex, the good shall, upon importation from a
NAFTA country, be deemed to originate in theterritoryof a NAFTA
country for purposes of this section.
(o) SPECIAL RULE FOR CERTAIN AGRICULTURAL PRODUCTS.—
Notwithstanding any other provision of this section, for purposes
of applying a rate of dutytoa good provided for in—
(1) heading 1202 that is exported from the territoiy of
Mexico, if the good is not wholly obteined in the territory
of Mexico,
(2) subheading 2008.11 that is exported from the territory
of Mexico, if any material provided for in heading 1202 USC d
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