Page:United States Statutes at Large Volume 102 Part 2.djvu/855

 PUBLIC LAW 100-449—SEPT. 28, 1988

102 STAT. 1859

(2) The term "Annex rules" means the rules proclaimed under subsection (d). (3) The term "direct cost of processing or direct cost of assembling" means the costs directly incurred in, or that can reasonably be allocated to, the production of goods, including— (A) the cost of all labor, including benefits and on-the-job training, labor provided in connection with supervision, quality control, shipping, receiving, storage, packaging, management at the location of the process or assembly, and other like labor, whether provided by employees or independent contractors; (B) the cost of inspecting and testing the goods; (C) the cost of energy, fuel, dies, molds, tooling, and the depreciation and maintenance of machinery and equipment, without regard to whether they originate within the territory of a Party; (D) development, design, and engineering costs; (E) rent, mortgage interest, depreciation on buildings, property insurance premiums, maintenance, taxes and the cost of utilities for real property used in the production of goods; and (F) royalty, licensing, or other like payments for the right to the goods; but not including— (i) costs relating to the general expense of doing business, such as the cost of providing executive, financial, sales, advertising, marketing, accounting and legal services, and insurance; (ii) brokerage charges relating to the importation and exportation of goods; (iii) the costs for telephone, mail, and other means of communication; (iv) packing costs for exporting the goods; (v) royalty payments related to a licensing agreement to distribute or sell the goods; (vi) rent, mortgage interest, depreciation on buildings, property insurance premiums, maintenance, taxes, and the cost of utilities for real property used by personnel charged with administrative functions; or (vii) profit on the goods. (4) The term "goods wholly obtained or produced in the territory of either Party or both Parties" means— (A) mineral goods extracted in the territory of either Party or both Parties; (B) goods harvested in the territory of either Party or both Parties; (C) live animals born and raised in the territory of either Party or both Parties; (D) goods (fish, shellfish, and other marine life taken from the sea by vessels registered or recorded with a Party and flying its flag; (E) goods produced on board factory ships from the goods referred to in subparagraph (D) provided such factory ships are registered or recorded with that Party and fly its flag; (F) goods taken by a Party or a person of a Party from the seabed or beneath the seabed outside territorial waters, provided that Party has rights to exploit such seabed;

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