Supporting Law/Reg

United States Customs Service, Treasury
of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2703 (c)(2), (e)(1),
or (f)(3)).
(3) Wholly the growth, product, or manufacture of a beneficiary country. For
purposes of § 10.191 through § 10.199, the
expression ‘‘wholly the growth, product, or manufacture of a beneficiary
country’’ refers both to any article
which has been entirely grown, produced, or manufactured in a beneficiary country or two or more beneficiary countries and to all materials
incorporated in an article which have
been entirely grown, produced, or manufactured in any beneficiary country or
two or more beneficary countries, as
distinguished from articles or materials imported into a beneficiary country from a non-beneficiary country
whether or not such articles or materials were substantially transformed
into new or different articles of commerce after their importation into the
beneficiary country.
(4) Entered. For purposes of § 10.191
through § 10.199, the term ‘‘entered’’
means entered, or withdrawn from
warehouse for consumption, in the customs territory of the U.S.
[T.D. 84–237, 49 FR 47993, Dec. 7, 1984, as
amended by T.D. 89–1, 53 FR 51252, Dec. 21,
1988; T.D. 00–68, 65 FR 59657, Oct. 5, 2000; T.D.
01–17, 66 FR 9645, Feb. 9, 2001]

§ 10.192 Claim for exemption from
duty under the CBI.
A claim for an exemption from duty
on the ground that the CBI applies
shall be allowed by the port director
only if he is satisfied that the requirements set forth in this section and
§ 10.193 through § 10.198b have been met.
Duty-free treatment may be claimed at
the time of filing the entry summary
by placing the symbol ‘‘E’’ as a prefix
to the HTSUS subheading number for
each article for which such treatment
is claimed on that document.
[T.D. 84–237, 49 FR 47993, Dec. 7, 1984, as
amended by T.D. 89–1, 53 FR 51252, Dec. 21,
1988; T.D. 94–47, 59 FR 25570, May 17, 1994;
T.D. 00–68, 65 FR 59658, Oct. 5, 2000]

§ 10.193 Imported directly.
To qualify for treatment under the
CBI, an article shall be imported directly from a beneficiary country into
the customs territory of the U.S. For

§ 10.194
purposes of § 10.191 through § 10.198b the
words ‘‘imported directly’’ mean:
(a) Direct shipment from any beneficiary country to the U.S. without
passing through the territory of any
non-beneficiary country; or
(b) If the shipment is from any beneficiary country to the U.S. through the
territory of any non-beneficiary country, the articles in the shipment do not
enter into the commerce of any nonbeneficiary country while en route to
the U.S. and the invoices, bills of lading, and other shipping documents
show the U.S. as the final destination;
or
(c) If the shipment is from any beneficiary country to the U.S. through the
territory of any non-beneficiary country, and the invoices and other documents do not show the U.S. as the final
destination, the articles in the shipment upon arrival in the U.S. are imported directly only if they:
(1) Remained under the control of the
customs authority of the intermediate
country;
(2) Did not enter into the commerce
of the intermediate country except for
the purpose of sale other than at retail,
and the port director is satisfied that
the importation results from the original commericial transaction between
the importer and the producer or the
latter’s sales agent; and
(3) Were not subjected to operations
other than loading and unloading, and
other activities necessary to preserve
the articles in good condition.
[T.D. 84–237, 49 FR 47993, Dec. 7, 1984, as
amended by T.D. 00–68, 65 FR 59658, Oct. 5,
2000]

§ 10.194 Evidence of direct shipment.
(a) Documents constituting evidence of
direct shipment. The port director may
require that appropriate shipping papers, invoices, or other documents be
submitted within 60 days of the date of
entry as evidence that the articles
were ‘‘imported directly’’, as that term
is defined in § 10.193. Any evidence of direct shipment required shall be subject
to such verification as deemed necessary by the port director.
(b) Waiver of evidence of direct shipment. The port director may waive the
submission of evidence of direct shipment when otherwise satisfied, taking

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§ 10.195

19 CFR Ch. I (4–1–02 Edition)

into consideration the kind and value
of the merchandise, that the merchandise was, in fact, imported directly and
that it otherwise clearly qualifies for
treatment under the CBI.
§ 10.195

Country of origin criteria.

(a) Articles produced in a beneficiary
country—(1) General. Except as provided herein, any article which is either wholly the growth, product, or
manufacture of a beneficiary country
or a new or different article of commerce which has been grown, produced,
or manufactured in a beneficiary country, may qualify for duty-free entry
under the CBI. No article or material
shall be considered to have been grown,
produced, or manufactured in a beneficiary country by virtue of having
merely undergone simple (as opposed
to complex or meaningful) combining
or packaging operations, or mere dilution with water or mere dilution with
another substance that does not materially alter the characteristics of the
article. Duty-free entry under the CBI
may be accorded to an article only if
the sum of the cost or value of the material produced in a beneficiary country or countries, plus the direct costs
of processing operations performed in a
beneficiary country or countries, is not
less than 35 percent of the appraised
value of the article at the time it is entered.
(2) Combining, packaging, and diluting
operations. No article which has undergone only a simple combining or packaging operation or a mere dilution in a
beneficiary country within the meaning of paragraph (a)(1) of this section
shall be entitled to duty-free treatment
even though the processing operation
causes the article to meet the value requirement set forth in that paragraph.
(i) For purposes of this section, simple combining or packaging operations
and mere dilution include, but are not
limited to, the following processes:
(A) The addition of batteries to devices;
(B) Fitting together a small number
of components by bolting, glueing, soldering etc.;
(C) Blending foreign and beneficiary
country tobacco;

(D) The addition of substances such
as anticaking agents, preservatives,
wetting agents, etc.;
(E) Repacking or packaging components together;
(F) Reconstituting orange juice by
adding water to orange juice concentrate; and
(G) Diluting chemicals with inert ingredients to bring them to standard degrees of strength.
(ii) For purposes of this section, simple combining or packaging operations
and mere dilution shall not be taken to
include processes such as the following:
(A) The assembly of a large number
of discrete components onto a printed
circuit board;
(B) The mixing together of two bulk
medicinal substances followed by the
packaging of the mixed product into
individual doses for retail sale;
(C) The addition of water or another
substance to a chemical compound
under pressure which results in a reaction creating a new chemical compound; and
(D) A simple combining or packaging
operation or mere dilution coupled
with any other type of processing such
as testing or fabrication (e.g., a simple
assembly of a small number of components, one of which was fabricated in
the beneficiary country where the assembly took place).
The fact that an article or material has
undergone more than a simple combining or packaging operation or mere
dilution is not necessarily dispositive
of the question of whether that processing constitutes a substantial transformation for purposes of determining
the country of origin of the article or
material.
(b) Commonwealth of Puerto Rico and
U.S. Virgin Islands—(1) General. For purposes of determining the percentage referred to in paragraph (a) of this section, the term ‘‘beneficiary country’’
includes the Commonwealth of Puerto
Rico and the U.S. Virgin Islands. Any
cost or value of materials or direct
costs of processing operations attributable to the U.S. Virgin Islands must
be included in the article prior to its
final exportation from a beneficiary
country to the United States.
(2) Manufacture in the Commonwealth
of Puerto Rico after final exportation.

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