118 STAT. 1110 PUBLIC LAW 108–302—AUG. 17, 2004 (II)(aa) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in such Annex as a result of production occurring entirely in the territory of Morocco or the United States, or both; or (bb) the good otherwise satisfies the requirements specified in such Annex; and (III) the good satisfies all other applicable requirements of this section. (2) REQUIREMENTS.—A good described in paragraph (1)(B)(ii) is an originating good only if the sum of— (A) the value of each material produced in the territory of Morocco or the United States, or both, and (B) the direct costs of processing operations performed in the territory of Morocco or the United States, or both, is not less than 35 percent of the appraised value of the good at the time the good is entered into the territory of the United States. (c) CUMULATION.— (1) ORIGINATING GOOD OR MATERIAL INCORPORATED INTO GOODS OF OTHER COUNTRY.—An originating good or a material produced in the territory of Morocco or the United States, or both, that is incorporated into a good in the territory of the other country shall be considered to originate in the terri tory of the other country. (2) MULTIPLE PROCEDURES.—A good that is grown, pro duced, or manufactured in the territory of Morocco or the United States, or both, by 1 or more producers, is an originating good if the good satisfies the requirements of subsection (b) and all other applicable requirements of this section. (d) VALUE OF MATERIALS.— (1) IN GENERAL.—Except as provided in paragraph (2), the value of a material produced in the territory of Morocco or the United States, or both, includes the following: (A) The price actually paid or payable for the material by the producer of such good. (B) The freight, insurance, packing, and all other costs incurred in transporting the material to the producer’s plant, if such costs are not included in the price referred to in subparagraph (A). (C) The cost of waste or spoilage resulting from the use of the material in the growth, production, or manufac ture of the good, less the value of recoverable scrap. (D) Taxes or customs duties imposed on the material by Morocco, the United States, or both, if the taxes or customs duties are not remitted upon exportation from the territory of Morocco or the United States, as the case may be. (2) EXCEPTION.—If the relationship between the producer of a good and the seller of a material influenced the price actually paid or payable for the material, or if there is no price actually paid or payable by the producer for the material, the value of the material produced in the territory of Morocco or the United States, or both, includes the following: (A) All expenses incurred in the growth, production, or manufacture of the material, including general expenses. (B) A reasonable amount for profit.
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