[Code of Federal Regulations]

[Title 19, Volume 1]

[Revised as of April 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 19CFR10.197]



[Page 166]

 

                        TITLE 19--CUSTOMS DUTIES

 

   CHAPTER I--BUREAU OF CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF 

              HOMELAND SECURITY; DEPARTMENT OF THE TREASURY

 

PART 10_ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE, ETC.

--Table of Contents

 

                  Subpart B_Caribbean Basin Initiative

 

Sec.  10.197  Direct costs of processing operations performed in a 

beneficiary country or countries.



    (a) Items included in the direct costs of processing operations. As 

used in Sec.  10.195 and Sec.  10.198, the words ``direct costs of 

processing operations'' mean those costs either directly incurred in, or 

which can be reasonably allocated to, the growth, production, 

manufacture, or assembly of the specific merchandise under 

consideration. Such costs include, but are not limited to the following, 

to the extent that they are includable in the appraised value of the 

imported merchandise:

    (1) All actual labor costs involved in the growth, production, 

manufacture or assembly of the specific merchandise, including fringe 

benefits, on-the-job training, and the cost of engineering, supervisory, 

quality control, and similar personnel;

    (2) Dies, molds, tooling, and depreciation on machinery and 

equipment which are allocable to the specific merchandise;

    (3) Research, development, design, engineering, and blueprint costs 

insofar as they are allocable to the specific merchandise and;

    (4) Costs of inspecting and testing the specific merchandise.

    (b) Items not included in the direct costs of processing operations. 

Those items which are not included within the meaning of the words 

``direct costs of processing operations'' are those which are not 

directly attributable to the merchandise under consideration or are not 

``costs'' of manufacturing the product. These include, but are not 

limited to:

    (1) Profit; and

    (2) General expenses of doing business which are either not 

allocable to the specific merchandise or are not related to the growth, 

production, manufacture, or assembly of the merchandise, such as 

administrative salaries, casualty and liability insurance, advertising, 

and salesmen's salaries, commissions, or expenses.



[T.D. 84-237, 49 FR 47993, Dec. 7, 1984; 49 FR 49575, Dec. 20, 1984]



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