19 CFR §10.196

1. (a)“Materials produced in a beneficiary country or countries” defined. For purposes of § 10.195, the words “materials produced in a beneficiary country or countries” refer to those materials incorporated in an article which are either:
   1. (1)Wholly the growth, product, or manufacture of a beneficiary country or two or more beneficiary countries; or
   2. (2)Subject to the limitations set forth in § 10.195(a), substantially transformed in any beneficiary country or two or more beneficiary countries into a new or different article of commerce which is then used in any beneficiary country in the production or manufacture of a new or different article which is imported directly into the U.S.
2. (b)Questionable origin. When the origin of a material either is not ascertainable or is not satisfactorily demonstrated to the Center director, the material shall not be considered to have been grown, produced, or manufactured in a beneficiary country.
3. (c)Determination of cost or value of materials produced in a beneficiary country.
   1. (1)The cost or value of materials produced in a beneficiary country or countries includes:
      1. (i)The manufacturer's actual cost for the materials;
      2. (ii)When not included in the manufacturer's actual cost for the materials, the freight, insurance, packing, and all other costs incurred in transporting the materials to the manufacturer's plant;
      3. (iii)The actual cost of waste or spoilage (material list), less the value of recoverable scrap; and
      4. (iv)Taxes and/or duties imposed on the materials by any beneficiary country, provided they are not remitted upon exportation.
   2. (2)Where a material is provided to the manufacturer without charge, or at less than fair market value, its cost or value shall be determined by computing the sum of:
      1. (i)All expenses incurred in the growth, production, or manufacture of the material, including general expenses;
      2. (ii)An amount for profit; and
      3. (iii)Freight, insurance, packing, and all other costs incurred in transporting the material to the manufacturer's plant.