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CUSMA Rules of Origin Regulations (SOR/2020-155)

Regulations are current to 2022-09-11 and last amended on 2020-07-01. Previous Versions

PART 5General Provisions (continued)

Marginal note:Transport requirements — retention of originating status

  •  (1) If an originating good is transported outside the territories of the CUSMA countries, the good retains its originating status if

    • (a) the good remains under customs control outside the territories of the CUSMA countries; and

    • (b) the good does not undergo further production or any other operation outside the territories of the CUSMA countries, other than unloading, reloading, separation from a bulk shipment, storing, labelling or other marking required by the importing CUSMA country or any other operation necessary to transport the good to the territory of the importing CUSMA country or to preserve the good in good condition, including

      • (i) inspection,

      • (ii) removal of dust that accumulates during shipment,

      • (iii) ventilation,

      • (iv) spreading out or drying,

      • (v) chilling,

      • (vi) replacing salt, sulphur dioxide or other aqueous solutions, or

      • (vii) replacing damaged packing materials and containers and removing units of the good that are spoiled or damaged and present a danger to the remaining units of the good.

  • Marginal note:Good entirely non-originating

    (2) A good that is a non-originating good by application of subsection (1) is considered to be entirely non-originating for the purposes of these Regulations.

  • Marginal note:Exceptions for certain goods

    (3) Subsection (1) does not apply with respect to

    • (a) a “smart card” of subheading 8523.52 containing a single integrated circuit, if any further production or other operation that that good undergoes outside the territories of the CUSMA countries does not result in a change in the tariff classification of the good to any other subheading;

    • (b) a good of any of subheadings 8541.10 through 8541.60 or 8542.31 through 8542.39, if any further production or other operation that that good undergoes outside the territories of the CUSMA countries does not result in a change in the tariff classification of the good to a subheading outside of that group;

    • (c) an electronic microassembly of subheading 8543.90, if any further production or other operation that that good undergoes outside the territories of the CUSMA countries does not result in a change in the tariff classification of the good to any other subheading; or

    • (d) an electronic microassembly of subheading 8548.90, if any further production or other operation that that good undergoes outside the territories of the CUSMA countries does not result in a change in the tariff classification of the good to any other subheading.

Marginal note:Exceptions

 A good is not an originating good merely by reason of

  • (a) mere dilution with water or another substance that does not materially alter the characteristics of the good; or

  • (b) any production or pricing practice with respect to which it may be demonstrated, on the basis of a preponderance of evidence, that the object was to circumvent these Regulations.

PART 6Automotive Goods

Definitions

Marginal note:Definitions

 The following definitions apply in this Part.

aftermarket part

aftermarket part means a good that is not for use as original equipment in the production of passenger vehicles, light trucks or heavy trucks. (pièce destinée au marché du service après-vente)

all-terrain vehicle

all-terrain vehicle means a vehicle that does not meet United States federal safety and emissions standards permitting unrestricted on-road use or the equivalent Mexican or Canadian on-road standards. (véhicule tout-terrain)

annual purchase value

annual purchase value or APV means the sum of the values of high-wage materials purchased annually by a producer for use in the production of passenger vehicles, light trucks or heavy trucks in a plant located in the territory of a CUSMA country. (valeur annuelle des achats)

average base hourly wage rate

average base hourly wage rate means the average hourly rate of pay based on all the hours performed on direct production work at a plant or facility, even if the workers performing that work are paid on a salary, piece-rate, or day-rate basis. It includes all hours performed by full-time, part time, temporary and seasonal workers. The rate of pay does not include benefits, bonuses, shift-premiums or premium pay for overtime, holidays or weekends. If a worker is paid by a third party, such as a temporary employment agency, only the wages received by the worker are included in the average hourly base wage rate calculation.

For direct production workers, the average base hourly wage rate of pay is calculated based on all of their working hours. For other workers performing direct production work, the average base hourly rate is calculated based on the number of hours performing direct production work. The rate also does not include any hours worked by interns, trainees, students or any other worker who does not have an express or implied compensation agreement with the employer.

If any direct production worker or worker performing direct production work is compensated by a method other than hourly, such as a salary, piece-rate or day-rate basis, the worker’s hourly base wage rate is calculated by converting the salary, piece-rate or day-rate to an hourly equivalent. This hourly equivalent is then multiplied by the number of hours worked in direct production for purposes of calculating the average base hourly wage rate. (taux horaire moyen de la rémunération de base)

class of motor vehicles

class of motor vehicles means one of the following classes of motor vehicles:

  • (a) road tractors for semi-trailers of subheading 8701.20, vehicles for the transport of 16 or more persons of subheading 8702.10 or 8702.90, motor vehicles for the transport of goods of subheading 8704.10, 8704.22, 8704.23, 8704.32 or 8704.90, special purpose motor vehicles of heading 87.05 or chassis fitted with engines of heading 87.06;

  • (b) tractors of any of subheadings 8701.10 or 8701.30 through 8701.90;

  • (c) vehicles for the transport of 15 or fewer persons of subheading 8702.10 or 8702.90 or light trucks of subheading 8704.21 or 8704.31; or

  • (d) passenger vehicles of subheadings 8703.21 through 8703.90. (catégorie de véhicules automobiles)

complete motor vehicle assembly process

complete motor vehicle assembly process means the production of a motor vehicle from separate constituent parts, including

  • (a) a structural frame or unibody;

  • (b) body panels;

  • (c) an engine, a transmission and a drive train;

  • (d) brake components;

  • (e) steering and suspension components;

  • (f) seating and internal trim;

  • (g) bumpers and external trim;

  • (h) wheels; and

  • (i) electrical and lighting components. (chaîne de montage complète de véhicules automobiles)

direct production work

direct production work means work by any employee directly involved in the production of passenger vehicles, light trucks, heavy trucks, or parts used in the production of these vehicles in the territory of a CUSMA country. It includes work by an employee directly involved in the set-up, operation or maintenance of tools or equipment used in the production of those vehicles or parts. Direct production work may take place on a production line, at a workstation, on the shop floor or in another production area.

Direct production work also includes

  • (a) material handling of vehicles or parts;

  • (b) inspection of vehicles or parts, including inspections that are normally categorized as quality control and, for heavy trucks, pre-sale inspections carried out at the place where the vehicle is produced;

  • (c) work performed by skilled tradespeople, such as process or production engineers, mechanics, technicians and other employees responsible for maintaining and ensuring the operation of the production line or tools and equipment used in the production of vehicles or parts; and

  • (d) on-the-job training regarding the execution of a specific production task.

Direct production work does not include any work by executive or management staff that have the authority to make final decisions to hire, fire, promote, transfer and discipline employees or any workers engaged in research and development, or work by engineering or other personnel that are not responsible for maintaining and ensuring the operation of the production line or tools and equipment used in the production of vehicles or parts. It also does not include any work by interns, trainees, students, or any other worker that does not have an express or implied compensation agreement with the employer. (travailleur qui participe directement à la production)

direct production worker

direct production worker means any worker whose primary responsibilities are direct production work, meaning at least 85% of the worker’s time is spent performing direct production work. (travailleur affecté à la production directe)

first motor vehicle prototype

first motor vehicle prototype means the first motor vehicle that

  • (a) is produced using tooling and processes intended for the production of motor vehicles to be offered for sale; and

  • (b) follows the complete motor vehicle assembly process in a manner not specifically designed for testing purposes. (premier prototype de véhicule automobile)

heavy truck

heavy truck means a vehicle, other than a vehicle that is solely or principally for off-road use, of subheading 8701.20, 8704.22, 8704.23, 8704.32 or 8704.90, or a chassis fitted with an engine of heading 87.06 that is for use in such a vehicle. (camion lourd)

high-wage assembly plant for passenger vehicle or light truck parts

high-wage assembly plant for passenger vehicle or light truck parts means a qualifying wage rate production plant that is operated by a producer or by a supplier with whom the producer has a contract of at least three years for the materials listed in paragraphs (a) to (c), provided that the plant is located in the territory of a CUSMA country and that it has production capacity of

  • (a) 100,000 or more engines of heading 84.07 or 84.08;

  • (b) 100,000 or more transmissions of subheading 8708.40; or

  • (c) 25,000 or more advanced battery packs.

Such engines, transmissions or advanced battery packs are not required to qualify as originating. (usine de montage à rémunération élevée pour les pièces de véhicules de promenades ou de véhicules utilitaires légers)

high-wage assembly plant for heavy truck parts

high-wage assembly plant for heavy truck parts means a qualifying wage rate production plant that is operated by a corporate producer or by a supplier with whom the corporate producer has a contract of at least three years for the materials listed in paragraphs (a) to (c), provided that the plant is located in the territory of a CUSMA country and that it has a production capacity of

  • (a) 20,000 or more engines of heading 84.07 or 84.08;

  • (b) 20,000 or more transmissions of subheading 8708.40; or

  • (c) 20,000 or more advanced battery packs.

Such engines, transmissions or advanced battery packs are not required to qualify as originating. (usine de montage pour les pièces de camions lourds)

high-wage labour costs

high-wage labour costs means the sum of wage expenditures, not including benefits, for workers who perform direct production work at a qualifying wage-rate vehicle assembly plant. (coûts de main-d’oeuvre à rémunération élevée)

high-wage material

high-wage material means a material that is produced in a qualifying wage-rate production plant. (matières à rémunération élevée)

high-wage technology expenditures

high-wage technology expenditures means wage expenditures – expressed as a percentage of a passenger vehicle, light truck or heavy truck producer’s total production wage expenditures – at a corporate level in the territory of one or more of the CUSMA countries on

  • (a) research and development including prototype development, design, engineering, or testing operations and any work undertaken by a producer for the purpose of creating new, or improving existing, materials, parts, vehicles or processes, including incremental improvements thereto; and

  • (b) information technology, including software development, technology integration, vehicle communications or information technology support operations.

Expenditures on capital or other non-wage costs for research and development or information technology are not included. For greater certainty, there is no minimum wage rate associated with high-wage technology expenditures. (dépenses liées à la technologie à rémunération élevée)

high-wage transportation or related costs for shipping

high-wage transportation or related costs for shipping means costs incurred by a producer for transportation, logistics or material handling associated with the movement of high-wage parts or materials within the territories of the CUSMA countries, provided that the transportation, logistics or material handling provider pays an average base hourly wage rate to direct production employees performing these services of at least

  • (a) US$16 in the United States;

  • (b) CA$20.88 in Canada; and

  • (c) MXN$294.22 in Mexico.

High-wage transportation or related costs for shipping may be included in high wage material and manufacturing expenses if those costs are not otherwise included. (frais de transport ou connexes d’expédition à rémunération élevée)

LVC

LVC means labour value content. (TVT)

light truck

light truck means a vehicle of subheading 8704.21 or 8704.31, except for a vehicle that is solely or principally for off-road use. (véhicule utilitaire léger)

marque

marque means the trade name used by a separate marketing division of a motor vehicle assembler. (marque)

model line

model line means a group of motor vehicles having the same platform or model name. (modèle)

model name

model name means the word, group of words, letter, number or similar designation assigned to a motor vehicle by a marketing division of a motor vehicle assembler to

  • (a) differentiate the motor vehicle from other motor vehicles that use the same platform design;

  • (b) associate the motor vehicle with other motor vehicles that use different platform designs; or

  • (c) denote a platform design. (nom de modèle)

motorhome or entertainer coach

motorhome or entertainer coach means a vehicle of heading 87.02 or 87.03 built on a self-propelled motor vehicle chassis that is solely or principally designed as temporary living quarters for recreational, camping, entertainment, corporate or seasonal use. (caravane motorisée ou véhicule récréatif)

motor vehicle assembler

motor vehicle assembler means a producer of motor vehicles and any related persons or joint ventures in which the producer participates. (monteur de véhicules automobiles)

new building

new building means a new construction, including at least the pouring or construction of a new foundation and floor, the erection of a new structure and roof and installation of new plumbing, electrical and other utilities to house a complete vehicle assembly process. (nouvel édifice)

passenger vehicle

passenger vehicle means a vehicle of subheadings 8703.21 through 8703.90, except for

  • (a) a vehicle with a compression-ignition engine of subheadings 8703.31 through 8703.33 or a vehicle of subheading 8703.90 with both a compression-ignition engine and an electric motor for propulsion;

  • (b) a three- or four-wheeled motorcycle;

  • (c) an all-terrain vehicle;

  • (d) a motorhome or entertainer coach; and

  • (e) an ambulance, hearse or prison van. (véhicule de promenade)

plant

plant means a building, or buildings in close proximity but not necessarily contiguous, machinery, apparatus and fixtures or movables incorporated with an immovable or permanently attached or joined to an immovable, that are under the control of a producer and that are used in the production of

  • (a) passenger vehicles, light trucks or heavy trucks; or

  • (b) a good listed in any of Tables A.1 to G. (usine)

platform

platform means the primary load-bearing structural assembly of a motor vehicle that determines the basic size of the motor vehicle and is the structural base that supports the driveline and links the suspension components of the motor vehicle for various types of frames, such as the body-on-frame, space-frame and monocoques. (plate-forme)

qualifying wage-rate production plant

qualifying wage-rate production plant means a plant that produces materials for passenger vehicles, light trucks or heavy trucks located in the territory of a CUSMA country at which the average base hourly wage rate for direct production workers is at least

  • (a) US$16 in the United States;

  • (b) CA$20.88 in Canada; and

  • (c) MXN$294.22 in Mexico. (usine de production à taux de rémunération admissible)

qualifying wage-rate vehicle assembly plant

qualifying wage-rate vehicle assembly plant means a passenger vehicle, light truck or heavy truck assembly plant located in the territory of a CUSMA country at which the average base hourly wage rate is at least

  • (a) US$16 in the United States;

  • (b) CA$20.88 in Canada; and

  • (c) MXN$294.22 in Mexico. (usine de montage de véhicules à taux de rémunération admissible)

RVC

RVC means regional value content. (TVR)

refit

refit means a plant closure, for purposes of plant conversion or retooling, for at least three months. (réaménagement)

size category

size category, with respect to a light-duty vehicle, means that the total of the interior volume for passengers and the interior volume for luggage is

  • (a) 2.38 m3 (85 ft3) or less;

  • (b) more than 2.38 m3 (85 ft3) but less than 2.80 m3 (100 ft3);

  • (c) 2.80 m3 (100 ft3) or more but not more than 3.08 m3 (110 ft3);

  • (d) more than 3.08 m3 (110 ft3 but less than 3.36 m3 (120 ft3); or

  • (e) 3.36 m3 (120 ft3) or more. (catégorie de taille)

super-core

super-core means the parts listed in column 1 of Table A.2, which are considered as a single part for the purposes of performing an RVC calculation in accordance with subsections 14(10), (11) and (13) and 16(10). (ensemble de pièces essentielles)

total vehicle plant assembly annual purchase value

total vehicle plant assembly annual purchase value means the sum of the values of all parts or materials purchased, on an annual basis, for use in the production of passenger vehicles, light trucks or heavy trucks in a plant located in the territory of a CUSMA country. (valeur totale annuelle des achats d’usine de montage de véhicules)

underbody

underbody means a component, comprising a single part or two or more parts joined together, with or without additional stiffening members, that forms the base of a motor vehicle, beginning at the fire-wall or bulkhead of the motor vehicle and ending

  • (a) if there is a luggage floor panel in the motor vehicle, at the place where that luggage floor panel begins; or

  • (b) if there is no luggage floor panel in the motor vehicle, at the place where the passenger compartment of the motor vehicle ends. (soubassement)

VNM

VNM means the value of non-originating materials. (Version anglaise seulement)

vehicle that is solely or principally for off-road use

vehicle that is solely or principally for off-road use means a vehicle that does not meet U.S. federal safety and emissions standards permitting unrestricted on-road use or the equivalent Mexican or Canadian on-road standards. (véhicule uniquement ou principalement utilisé hors route)

 
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