Common use of Value of Materials Clause in Contracts

Value of Materials. 1. Subject to paragraphs 2 and 3, the value of a material referred to in Article 3.3 shall be: (a) for a material imported directly by the producer of a good, the CIF value at the time of importation of the material; (b) for 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, i.e., in the same manner as for imported goods, with such reasonable modifications as may be required due to the absence of an importation by the producer; or (c) for a material that is self-produced, the sum of all costs incurred in the production of the material, including general expenses, and an amount for profit equivalent to the profit added in the normal course of trade. 2. For purposes of paragraph 1, the following, where included under paragraph 1, may be deducted from the value of the non-originating materials: (a) the costs of freight 3 , insurance, packing, and all other costs incurred in transporting the material within a Party's territory or between the territories of the Parties to the location of the producer; (b) duties, taxes, and customs brokerage fees on the material paid in the territory of one or both 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; (c) 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-product; and (d) the cost of processing incurred in the territory of one or both of the Parties in the production of the non- originating material. 3 For greater certainty and for purposes of Articles 3.4.2(a) and 3.4.3(a), "costs of freight" includes the costs of all types of freight, including in-land freight, incurred within a Party's territory, regardless of the mode of transportation. 3. For purposes of paragraph 1, the following, where not included under paragraph 1, may be added to the value of the originating materials: (a) the costs of freight, insurance, packing, and all other costs incurred in transporting the material within a Party's territory or between the territories of the Parties to the location of the producer; (b) duties, taxes, and customs brokerage fees on the material paid in the territory of one or both 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 (c) 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-product.