Common use of Regional Value Content Clause in Contracts

Regional Value Content. 1. Except as provided in paragraph 6, each Party shall provide that the regional value content of a good shall be calculated, at the choice of the importer, exporter, or producer of the good, on the basis of either the transaction value method set out in paragraph 2 or the net cost method set out in paragraph 3. 2. Each Party shall provide that an importer, exporter, or producer may calculate the regional value content of a good on the basis of the following transaction value method: RVC = (TV-VNM)/TV x 100 where RVC is the regional value content, expressed as a percentage; TV is the transaction value of the good, adjusted to exclude any costs incurred in the international shipment of the good; and VNM is the value of non-originating materials including materials of undetermined origin used by the producer in the production of the good. 3. Each Party shall provide that an importer, exporter, or producer may calculate the regional value content of a good on the basis of the following net cost method: 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 including materials of undetermined origin used by the producer in the production of the good. 4. Each Party shall provide that the value of non-originating materials used by the producer in the production of a good shall not, for the purposes of calculating the regional value content of the good under paragraph 2 or 3, include the value of non- originating materials used to produce originating materials that are subsequently used in the production of the good. 5. Each Party shall provide that if a non-originating material is used in the production of a good, the following may be counted as originating content for the purpose of determining whether the good meets a regional value content requirement: (a) the value of processing of the non-originating materials undertaken in the territory of one or more of the Parties; and (b) the value of any originating material used in the production of the non-originating material undertaken in the territory of one or more of the Parties. 6. Each Party shall provide that an importer, exporter, or producer shall calculate the regional value content of a good solely on the basis of the net cost method set out in paragraph 3 if the rule under the Annex 4-B (Product-Specific Rules of Origin) does not provide a rule based on the transaction value method. 7. If an importer, exporter, or producer of a good calculates the regional value content of the good on the basis of the transaction value method set out in paragraph 2 and a Party subsequently notifies the importer, exporter, or producer, during the course of a verification pursuant to Chapter 5 (Origin Procedures) that the transaction value of the good, or the value of material used in the production of the good, is required to be adjusted or is unacceptable under Article | of the Customs Valuation Agreement, the exporter, producer, or importer may then also calculate the regional value content of the good on the basis of the net cost method set out in paragraph 3. 8. For the purposes of calculating the net cost of a good under paragraph 3, the producer of the good may: (a) calculate the total cost incurred with respect to all goods produced by that producer, subtract 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 those goods, and then reasonably allocate the resulting net cost of those goods to the good; (b) calculate the total cost incurred with respect to all goods produced by that producer, reasonably allocate the total cost to the good, and then subtract 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 good; or (c) reasonably allocate each cost that forms part of the total cost incurred with respect to the 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, and non-allowable interest costs, provided that the allocation of all those costs is consistent with the provisions regarding the reasonable allocation of costs set out in the Uniform Regulations.

Regional Value Content. 1. For the purposes of this Article: 2. Except as provided in paragraph 6paragraphs 3 and 4, each Party shall provide that an exporter or a producer calculates the regional value content of a good shall be calculated, at on the choice basis of the importerfollowing transaction value method: RVC = TV – VNM x 100 TV 3. Each Party shall provide that an exporter or a producer of an automotive good of heading 87.01, exportersubheading 8703.21 through 8703.90, or heading 87.04 through 87.08 may calculate the regional value content on the basis of the following net cost method: RVC = NC - VNM x 100 NC 4. Each Party shall provide that an exporter or a producer of an automotive good of subheading 8407.31 through 8407.34, heading 87.02, or subheading 8703.10 may calculate the good, regional value content of the good on the basis of either the transaction value method set out in paragraph 2 or the net cost method set out in paragraph 3. 25. Each Party shall provide that an importer, exporter, or producer may calculate For the purposes of calculating the regional value content of a good on the basis of the following transaction value method: RVC = (TV-VNM)/TV x 100 where RVC is the regional value contentunder paragraph 2 or 3, expressed as a percentage; TV is the transaction value of the good, adjusted to exclude any costs incurred in the international shipment of the good; and VNM is the value of non-originating materials including materials of undetermined origin used by the producer in the production of the good. 3. Each Party shall provide that an importer, exporter, or producer may calculate the regional value content of a good on the basis of the following net cost method: 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 including materials of undetermined origin used by the producer in the production of the good. 4. Each Party shall provide that the value of non-originating materials used by the producer in the production of a good shall not, for the purposes of calculating the regional value content of the good under paragraph 2 or 3, does not include the value of non- of: (a) Non-originating materials material or non-originating intermediate material used to produce originating materials material that are is subsequently used in the production of the good. 5. Each Party shall provide that if a non-originating material is used in the production of a good, the following may be counted as originating content for the purpose of determining whether the good meets a regional value content requirement: (a) the value of processing of the non-originating materials undertaken in the territory of one or more of the Parties; andor (b) the value of any Non-originating material used by another producer to produce an originating material that is subsequently acquired and used in the production of the non-originating material undertaken in the territory of one or more of the Partiesa good. 6. Each Party shall provide that an importer, exporter, or producer shall calculate the regional value content of a good solely on the basis of the net cost method set out in paragraph 3 if the rule under the Annex 4-B (Product-Specific Rules of Origin) does not provide a rule based on the transaction value method. 7. If an importer, exporter, or producer of a good calculates the regional value content of the good on the basis of the transaction value method set out in paragraph 2 and a Party subsequently notifies the importer, exporter, or producer, during the course of a verification pursuant to Chapter 5 (Origin Procedures) that the transaction value of the good, or the value of material used in the production of the good, is required to be adjusted or is unacceptable under Article | of the Customs Valuation Agreement, the exporter, producer, or importer may then also calculate the regional value content of the good on the basis of the net cost method set out in paragraph 3. 8. For the purposes of calculating the net cost of a good under paragraph 3, the producer of the good may: (a) calculate the total cost incurred with respect to all goods produced by that producer, subtract any sales promotion, marketing, marketing and after-sales service costscost, royaltiesroyalty, shipping and packing costscost, and nonandnon-allowable interest costs cost that are is included in the total cost of all those goods, and then reasonably allocate the resulting net cost of those goods to the good; (b) calculate the total cost incurred with respect to all goods produced by that producer, reasonably allocate the total cost to the good, and then subtract any sales promotion, marketing, and ,or after-sales service costscost, royaltiesroyalty, shipping and packing costscost, and non-allowable interest costs cost that are is included in the portion of the total cost allocated to the good; or (c) reasonably allocate each cost that forms part of the total cost incurred with respect to the good so that the aggregate of these costs does not include any sales promotion, marketing, marketing and after-sales service costscost, royaltiesroyalty, shipping and packing costscost, or non-allowable interest cost. 7. If a producer calculates the net cost in accordance with paragraph 6, any sales promotion, marketingand after-sales service cost, royalty, shipping and packing cost, and non-allowable interest costscost that are included in the value of a material used in the production of the good are not subtracted from the net cost in the calculation under paragraph 3. 8. Except as provided in paragraph 9, provided the value of a material used in the production of a good: (a) isthe transaction value of the material determined in accordance with Article 1 of the Customs Valuation Agreement; (b) if there is no transaction value or the transaction value of the material is unacceptable under Article 1 of the Customs Valuation Agreement,is determined in accordance with Articles 2 through 7 of the Customs Valuation Agreement; (c) if not covered under subparagraph (a) or (b), includes freight, insurance, packing and all other costs incurred in transporting the material to the place of importation; or (d) in the case of a domestic transaction, is determined in accordance with the principles of the Customs Valuation Agreement in the same manner as an international transaction, with any modificationsrequired by the circumstances. 9. The value of an intermediate material is: (a) the total cost incurred with respect to all goods produced by the producer of the good that can be reasonably allocated to that intermediate material; or (b) the allocation sum of all those costs that comprise the total cost incurred with respect to that intermediate material that can be reasonably allocated to that intermediate material. 10. The value of an indirect material is consistent based on the Generally Accepted Accounting Principles applicable in the territory of the Party in which the indirect material is used in the production, testing, or inspection of a good, or in the maintenance of buildings or the operation of equipment associated with the provisions regarding the reasonable allocation production of costs set out in the Uniform Regulationsa good.

Regional Value Content. o 1. Except as provided in for paragraph 6, each Party shall provide that the regional content value content of a good shall be calculated, at the choice option of the importer, exporter, exporter or producer of the good, on the basis of either under the transaction value method set out in paragraph 2 or the net cost method set out in paragraph 3. o 2. Each Party shall provide that an importer, exporter, exporter or producer may calculate the regional content value content of a good on the basis of the following good under the transaction value method: RVC = (TV▪ RVC=(TV-VNM)/TV x 100 where o where: ▪ RVC is the regional value content, expressed as a percentage; ▪ TV is the transaction value of the goodGood, adjusted to exclude any costs incurred in the international shipment of the goodGood; and ▪ VNM is the value of non-originating materials including materials of undetermined origin used by the producer in the production of the good. o 3. Each Party shall provide that have an importer, exporter, exporter or producer that may calculate the regional value content of a good Good on the basis of the following net cost method: RVC = (NC▪ RVC=(NC-VNM)/NC x 100 • where ▪ RVC is the regional value content, expressed as a percentage; ▪ NC is the net cost of the goodgoods; and ▪ VNM is the value of non-originating materials including materials of undetermined origin used by the producer in the production of the good. o 4. Each Party shall provide Except as provided in Article 10.3 of Appendix 1 to Annex 4-B, for a motor vehicle identified in Article 10.4.2(a) of that Appendix, or a component identified in Table G of that Appendix, the value of non-originating materials used by the producer in the production of a good shall notnot include, for the purposes of calculating the value of regional value content of the good under paragraph 2 or 3, include the value of non- non-originating materials used to produce originating materials that are to be subsequently used in the production of the good. o 5. Each Party shall provide that that, if a non-originating material is used in the production of a the good, the following may be counted as originating content for the purpose purposes of determining whether the good meets a the value of regional value content requirement: (a) the value of the processing of the non-originating materials undertaken carried out in the territory of one or more of the Parties; and (b) the value of any originating material used in the production of the non-non- originating material undertaken carried out in the territory of one or more of the Parties. o 6. Each Party shall provide that an importer, exporter, exporter or producer shall calculate the regional content value content of a good solely on the basis of only under the net cost method set out in paragraph 3 if the rule under the REO Annex 4-B (Product-Specific Rules of Origin) does not provide for a rule based on the transaction value method. o 7. If an importer, exporter, or producer of a good calculates the regional content value content of the good on the basis of under the transaction value method set out in paragraph 2 and a Party subsequently notifies the importer, exporter, exporter or producer, during the course of a verification pursuant to under Chapter 5 (Origin Procedures) ), that the transaction value of the good, good or the value of the material used in the production of the good, is required to be adjusted or is unacceptable under Article | 1 of the Customs Valuation Agreement, the exporter, producer, producer or importer may then also calculate the regional content value content of the good on the basis of in accordance with the net cost method set out in paragraph 3. 8. o For the purposes of calculating the net cost calculation of a the good under set out in paragraph 3, the producer of the good may: : ▪ ((a) calculate the total cost incurred with in respect to of all goods produced by that producer, subtract less any costs of sales promotion, marketing, and after-sales service costsservices, royalties, shipping and packing costspackaging, and non-allowable interest as well as any ineligible financing costs that are included in the total cost of all those such goods, and then reasonably allocate the resulting net cost of those goods to the good; goods, ▪ (b) calculate the total cost incurred with in respect to of all goods produced by that producer, producer by reasonably allocate allocating the total cost to the good, goods and then subtract any discounting the costs of sales promotion, marketing, and after-sales service costsservices, royalties, shipping and packing packaging, and ineligible financing costs, and non-allowable interest costs that are included in the portion of the total cost allocated to the goodgoods; or (c) reasonably allocate each cost that forms part of the total cost incurred with respect to the 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, and non-allowable interest costs, provided that the allocation of all those costs is consistent with the provisions regarding the reasonable allocation of costs set out in the Uniform Regulations.

Regional Value Content. 1. Except as provided in paragraph 6, each Party shall provide that the The regional value content of a good goods shall be calculated, at the choice of the importer, exporter, or producer of the good, on the basis of either the transaction value method set out in paragraph 2 or the net cost method set out in paragraph 3. 2. Each Party shall provide that an importer, exporter, or producer may calculate the regional value content of a good calculated on the basis of the following transaction value methodformula: RVC = [(TV - VNM) / TV-VNM)/TV x ] * 100 where where: RVC is the regional value content, expressed as a percentage; TV is the transaction value of the good, good adjusted to exclude any costs incurred a F.O.B. basis, except as provided in paragraph 2. In the international shipment event there is no transaction value or one cannot be determined under Article 1 of the goodCustoms Valuation Agreement, the value shall be determined in accordance with Articles 2 through 7 of that Agreement; and VNM is the transaction value of non-originating materials including materials adjusted to a CIF basis, except as provided in paragraph 5. In the event there is no transaction value or one cannot be determined under Article 1 of undetermined origin used by the Customs Valuation Agreement, the value shall be determined in accordance with Articles 2 through 7 of that Agreement. 2. Where the producer in the production of the goodgood does not export it directly, the transaction value shall be adjusted to the point at which the purchaser receives the good within the territory where the producer is located. 3. Each Party shall provide that an importer, exporter, or producer may calculate the regional value content of a good Where origin is determined on the basis of the following net regional value content method, the required percentage shall be specified in Annex 4.03. 4. All the costs considered in calculating the regional value content shall 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. 5. Where the producer of a good buys a non-originating material in the territory of the Party where the producer is located, the value of the non-originating material shall not include freight, insurance, packing or any other cost method: RVC = (NC-VNM)/NC x 100 where RVC is incurred in transporting the material from the warehouse of the supplier to the location of the producer. 6. To calculate 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 including materials of undetermined origin used by the producer in the production of the good. 4. Each Party shall provide that the value of non-originating materials used by the producer in the production of a good shall not, for the purposes of calculating the regional value content of the good under paragraph 2 or 3, not include the value of non- originating materials used to produce originating materials that are subsequently used in the production of the good. 5. Each Party shall provide that if a non-originating material is used in the production of a good, the following may be counted as originating content for the purpose of determining whether the good meets a regional value content requirement: (a) the value of processing of the non-originating materials undertaken in the territory of one or more of the Parties; and (b) the value of any originating material used in the production of the non-an originating material undertaken in the territory of one or more of the Parties. 6. Each Party shall provide that an importer, exporter, or producer shall calculate the regional value content of a good solely on the basis of the net cost method set out in paragraph 3 if the rule under the Annex 4-B (Product-Specific Rules of Origin) does not provide a rule based on the transaction value method. 7. If an importer, exporter, or producer of a good calculates the regional value content of the good on the basis of the transaction value method set out in paragraph 2 bought and a Party subsequently notifies the importer, exporter, or producer, during the course of a verification pursuant to Chapter 5 (Origin Procedures) that the transaction value of the good, or the value of material used in the production of the that good, is required to be adjusted or is unacceptable under Article | of the Customs Valuation Agreement, the exporter, producer, or importer may then also calculate the regional value content of the good on the basis of the net cost method set out in paragraph 3. 8. For the purposes of calculating the net cost of a good under paragraph 3, the producer of the good may: (a) calculate the total cost incurred with respect to all goods produced by that producer, subtract 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 those goods, and then reasonably allocate the resulting net cost of those goods to the good; (b) calculate the total cost incurred with respect to all goods produced by that producer, reasonably allocate the total cost to the good, and then subtract 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 good; or (c) reasonably allocate each cost that forms part of the total cost incurred with respect to the 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, and non-allowable interest costs, provided that the allocation of all those costs is consistent with the provisions regarding the reasonable allocation of costs set out in the Uniform Regulations.

Regional Value Content. 1. Except as provided in paragraph 6, each Party shall provide that the regional value content of a good shall be calculated, at the choice of the importer, exporter, or producer of the good, on the basis of either the transaction value method set out in paragraph 2 or the net cost method set out in paragraph 3. 2. Each Party shall provide that an importer, exporter, or producer may calculate the regional value content of a good on the basis of the following transaction value method: RVC = (TV-VNM)/TV x 100 where RVC is the regional value content, expressed as a percentage; TV is the transaction value of the good, adjusted to exclude any costs incurred in the international shipment of the good; and VNM is the value of non-originating materials including materials of undetermined origin used by the producer in the production of the good. 3. Each Party shall provide that an importer, exporter, or producer may calculate the regional value content of a good on the basis of the following net cost method: 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 including materials of undetermined origin used by the producer in the production of the good. 4. Each Party shall provide that the value of non-originating materials used by the producer in the production of a good shall not, for the purposes of calculating the regional value content of the good under paragraph 2 or 3, include the value of non- non-originating materials used to produce originating materials that are subsequently used in the production of the good. 5. Each Party shall provide that if a non-originating material is used in the production of a good, the following may be counted as originating content for the purpose of determining whether the good meets a regional value content requirement: (a) the value of processing of the non-originating materials undertaken in the territory of one or more of the Parties; and (b) the value of any originating material used in the production of the non-originating material undertaken in the territory of one or more of the Parties. 6. Each Party shall provide that an importer, exporter, or producer shall calculate the regional value content of a good solely on the basis of the net cost method set out in paragraph 3 if the rule under the Annex 4-B 2 (Product-Specific Rules of Origin) does not provide a rule based on the transaction value method. 7. If an importer, exporter, or producer of a good calculates the regional value content of the good on the basis of the transaction value method set out in paragraph 2 and a Party subsequently notifies the importer, exporter, or producer, during the course of a verification pursuant to Chapter 5 (Origin Procedures) that the transaction value of the good, or the value of material used in the production of the good, is required to be adjusted or is unacceptable under Article | of the Customs Valuation Agreement, the exporter, producer, or importer may then also calculate the regional value content of the good on the basis of the net cost method set out in paragraph 3. 8. For the purposes of calculating the net cost of a good under paragraph 3, the producer of the good may: (a) calculate the total cost incurred with respect to all goods produced by that producer, subtract any sales promotion, marketing, and after-sales service costs, royaltiesroyalties paid to non-affiliated parties, shipping and packing costs, and non-non- allowable interest costs that are included in the total cost of all those goods, and then reasonably allocate the resulting net cost of those goods to the good; (b) calculate the total cost incurred with respect to all goods produced by that producer, reasonably allocate the total cost to the good, and then subtract any sales promotion, marketing, and after-sales service costs, royaltiesroyalties paid to non- affiliated parties, shipping and packing costs, and non-allowable interest costs that are included in the portion of the total cost allocated to the good; or (c) reasonably allocate each cost that forms part of the total cost incurred with respect to the good so that the aggregate of these costs does not include any sales promotion, marketing, and after-sales service costs, royaltiesroyalties paid to non-affiliated parties, shipping and packing costs, and non-allowable interest costs, provided that the allocation of all those costs is consistent with the provisions regarding the reasonable allocation of costs set out in the Uniform Regulations.

Regional Value Content. o 1. Except as provided in paragraph 6, each Party shall provide that the regional value content of a good shall be calculated, at the choice of the importer, exporter, exporter or producer of the good, on the basis of either the transaction value method set out in paragraph 2 or the net cost method set out in paragraph 3. o 2. Each Party shall provide that an importer, exporter, or producer may calculate the regional value content of a good on the basis of the following transaction value method: RVC = (TV▪ RVC=(TV-VNM)/TV x 100 o where ▪ RVC is the is the regional value content, expressed as a percentage; ▪ TV is the transaction value of the good, adjusted to exclude any costs incurred in the international shipment of the good; and ▪ VNM is the value of non-originating materials including materials of undetermined origin used by the producer in the production of the good. o 3. Each Party shall provide that an importer, exporter, exporter or producer may calculate the regional value content of a good on the basis of the following net cost method: RVC = (NC▪ RVC=(NC-VNM)/NC x 100 o where ▪ RVC is the 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 including materials of undetermined origin used by the producer in the production of the good. o 4. Each Party shall provide Except as provided in Article 10.3 of Appendix 1 to Annex 4-B, for a motor vehicle identified in Article 10.4.2(a) of that Appendix, or a component identified in Table G of that Appendix, the value of non-originating materials used by the producer in the production of a good shall not, for the purposes of calculating the regional value content of the good under paragraph 2 or 3, include the value of non- non-originating materials used to produce originating materials that are subsequently used in the production of the good. o 5. Each Party shall provide that if a non-originating material is used in the production of a good, the following may be counted as originating content for the purpose of determining whether the good meets a regional value content requirement: (a) the value of processing of the non-originating materials undertaken in the territory of one or more of the Parties; and (b) the value of any originating material used in the production of the non-non- originating material undertaken in the territory of one or more of the Parties. o 6. Each Party shall provide that an importer, exporter, exporter or producer shall calculate the regional value content of a good solely on the basis of the net cost method set out in paragraph 3 if the rule under the PSR Annex 4-B (Product-Specific Rules of Origin) does not provide a rule based on the transaction value method. o 7. If an importer, exporter, exporter or producer of a good calculates the regional value content of the good on the basis of the transaction value method set out in paragraph 2 and a Party subsequently notifies the importer, exporter, exporter or producer, during the course of a verification pursuant to Chapter 5 (Origin Procedures) that the transaction value of the good, or the value of material used in the production of the good, is required to be adjusted or is unacceptable under Article | 1 of the Customs Valuation Agreement, the exporter, producer, or importer may then also calculate the regional value content of the good on the basis of the net cost method set out in paragraph 3. o 8. For the purposes of calculating the net cost of a good under paragraph 3, the producer of the good may: : ▪ (a) calculate the total cost incurred with respect to all goods produced by that producer, subtract 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 those goods, and then reasonably allocate the resulting net cost of those goods to the good; , ▪ (b) calculate the total cost incurred with respect to all goods produced by that producer, reasonably allocate the total cost to the good, and then subtract any sales promotion, marketing, and after-sales service costs, royalties, shipping and packing costs, costs and non-allowable interest costs that are included in the portion of the total cost allocated to the good; or , or ▪ (c) reasonably allocate each cost that forms part of the total cost incurred with respect to the 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, and non-allowable interest costs, provided that the allocation of all those costs is consistent with the provisions regarding the reasonable allocation of costs set out in the Uniform Regulations.

Regional Value Content. 1. For the purposes of this Article: 2. Except as provided in paragraph 6paragraphs 3 and 4, each Party shall provide that an exporter or a producer calculates the regional value content of a good shall be calculated, at on the choice basis of the importerfollowing transaction value method: RVC = TV – VNMx 100 TV 3. Each Party shall provide that an exporter or a producer of an automotive good of heading 87.01, exportersubheading 8703.21 through 8703.90, or heading 87.04 through 87.08 may calculate the regional value content on the basis of the following net cost method: RVC = NC - VNMx 100 NC 4. Each Party shall provide that an exporter or a producer of an automotive good of subheading 8407.31 through 8407.34, heading 87.02, or subheading 8703.10 may calculate the good, regional value content of the good on the basis of either the transaction value method set out in paragraph 2 or the net cost method set out in paragraph 3. 25. Each Party shall provide that an importer, exporter, or producer may calculate For the purposes of calculating the regional value content of a good on the basis of the following transaction value method: RVC = (TV-VNM)/TV x 100 where RVC is the regional value contentunder paragraph 2 or 3, expressed as a percentage; TV is the transaction value of the good, adjusted to exclude any costs incurred in the international shipment of the good; and VNM is the value of non-originating materials including materials of undetermined origin used by the producer in the production of the good. 3. Each Party shall provide that an importer, exporter, or producer may calculate the regional value content of a good on the basis of the following net cost method: 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 including materials of undetermined origin used by the producer in the production of the good. 4. Each Party shall provide that the value of non-originating materials used by the producer in the production of a good shall not, for the purposes of calculating the regional value content of the good under paragraph 2 or 3, does not include the value of non- of: (a) Non-originating materials material or non-originating intermediate material used to produce originating materials material that are is subsequently used in the production of the good. 5. Each Party shall provide that if a non-originating material is used in the production of a good, the following may be counted as originating content for the purpose of determining whether the good meets a regional value content requirement: (a) the value of processing of the non-originating materials undertaken in the territory of one or more of the Parties; andor (b) the value of any Non-originating material used by another producer to produce an originating material that is subsequently acquired and used in the production of the non-originating material undertaken in the territory of one or more of the Partiesa good. 6. Each Party shall provide that an importer, exporter, or producer shall calculate the regional value content of a good solely on the basis of the net cost method set out in paragraph 3 if the rule under the Annex 4-B (Product-Specific Rules of Origin) does not provide a rule based on the transaction value method. 7. If an importer, exporter, or producer of a good calculates the regional value content of the good on the basis of the transaction value method set out in paragraph 2 and a Party subsequently notifies the importer, exporter, or producer, during the course of a verification pursuant to Chapter 5 (Origin Procedures) that the transaction value of the good, or the value of material used in the production of the good, is required to be adjusted or is unacceptable under Article | of the Customs Valuation Agreement, the exporter, producer, or importer may then also calculate the regional value content of the good on the basis of the net cost method set out in paragraph 3. 8. For the purposes of calculating the net cost of a good under paragraph 3, the producer of the good may: (a) calculate the total cost incurred with respect to all goods produced by that producer, subtract any sales promotion, marketing, marketing and after-sales service costscost, royaltiesroyalty, shipping and packing costscost, and non-allowable interest costs cost that are is included in the total cost of all those goods, and then reasonably allocate the resulting net cost of those goods to the good; (b) calculate the total cost incurred with respect to all goods produced by that producer, reasonably allocate the total cost to the good, and then subtract any sales promotion, marketing, and or after-sales service costscost, royaltiesroyalty, shipping and packing costscost, and non-non- allowable interest costs cost that are is included in the portion of the total cost allocated to the good; or (c) reasonably allocate each cost that forms part of the total cost incurred with respect to the good so that the aggregate of these costs does not include any sales promotion, marketing, marketing and after-sales service costscost, royaltiesroyalty, shipping and packing costscost, or non- allowable interest cost. 7. If a producer calculates the net cost in accordance with paragraph 6, any sales promotion, marketing and after-sales service cost, royalty, shipping and packing cost, and non-allowable interest costscost that are included in the value of a material used in the production of the good are not subtracted from the net cost in the calculation under paragraph 3. 8. Except as provided in paragraph 9, provided the value of a material used in the production of a good: (a) is the transaction value of the material determined in accordance with Article 1 of the Customs Valuation Agreement; (b) if there is no transaction value or the transaction value of the material is unacceptable under Article 1 of the Customs Valuation Agreement, is determined in accordance with Articles 2 through 7 of the Customs Valuation Agreement; (c) if not covered under subparagraph (a) or (b), includes freight, insurance, packing and all other costs incurred in transporting the material to the place of importation; or (d) in the case of a domestic transaction, is determined in accordance with the principles of the Customs Valuation Agreement in the same manner as an international transaction, with any modifications required by the circumstances. 9. The value of an intermediate material is: (a) the total cost incurred with respect to all goods produced by the producer of the good that can be reasonably allocated to that intermediate material; or (b) the allocation sum of all those costs that comprise the total cost incurred with respect to that intermediate material that can be reasonably allocated to that intermediate material. 10. The value of an indirect material is consistent based on the Generally Accepted Accounting Principles applicable in the territory of the Party in which the indirect material is used in the production, testing, or inspection of a good, or in the maintenance of buildings or the operation of equipment associated with the provisions regarding the reasonable allocation production of costs set out in the Uniform Regulationsa good.

Regional Value Content. 1. Except as provided in paragraph 6, each Party shall provide that the regional value content of a good shall be calculated, at the choice of the importer, exporter, or producer of the good, on the basis of either the transaction value method set out in paragraph 2 or the net cost method set out in paragraph 3. 2. Each Party shall provide that an importer, exporter, or producer may calculate the regional value content of a good on the basis of the following transaction value method: RVC = (TV-VNM)/TV x 100 where RVC is the regional value content, expressed as a percentage; TV is the transaction value of the good, adjusted to exclude any costs incurred in the international shipment of the good; and VNM is the value of non-originating materials including materials of undetermined origin used by the producer in the production of the good. 3. Each Party shall provide that an importer, exporter, or producer may calculate the regional value content of a good on the basis of the following net cost method: 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 including materials of undetermined origin used by the producer in the production of the good. 4. Each Party shall provide that the value of non-originating materials used by the producer in the production of a good shall not, for the purposes of calculating the regional value content of the good under paragraph 2 or 3, include the value of non- non-originating materials used to produce originating materials that are subsequently used in the production of the good. 5. Each Party shall provide that if a non-originating material is used in the production of a good, the following may be counted as originating content for the purpose of determining whether the good meets a regional value content requirement: (a) the value of processing of the non-originating materials undertaken in the territory of one or more of the Parties; and (b) the value of any originating material used in the production of the non-originating material undertaken in the territory of one or more of the Parties. 6. Each Party shall provide that an importer, exporter, or producer shall calculate the regional value content of a good solely on the basis of the net cost method set out in paragraph 3 if the rule under the Annex 4-B (Product-Specific Rules of Origin) does not provide a rule based on the transaction value method. 7. If an importer, exporter, or producer of a good calculates the regional value content of the good on the basis of the transaction value method set out in paragraph 2 and a Party subsequently notifies the importer, exporter, or producer, during the course of a verification pursuant to Chapter 5 (Origin Procedures) that the transaction value of the good, or the value of material used in the production of the good, is required to be adjusted or is unacceptable under Article | 1 of the Customs Valuation Agreement, the exporter, producer, or importer may then also calculate the regional value content of the good on the basis of the net cost method set out in paragraph 3. 8. For the purposes of calculating the net cost of a good under paragraph 3, the producer of the good may: (a) calculate the total cost incurred with respect to all goods produced by that producer, subtract 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 those goods, and then reasonably allocate the resulting net cost of those goods to the good; (b) calculate the total cost incurred with respect to all goods produced by that producer, reasonably allocate the total cost to the good, and then subtract 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 good; or (c) reasonably allocate each cost that forms part of the total cost incurred with respect to the 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, and non-allowable interest costs, provided that the allocation of all those costs is consistent with the provisions regarding the reasonable allocation of costs set out in the Uniform Regulations.