19 CFR § 10.196 - Cost or value of materials produced in a beneficiary country or countries.

---
identifier: "/us/cfr/t19/s10.196"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "19 CFR § 10.196 - Cost or value of materials produced in a beneficiary country or countries."
title_number: 19
title_name: "Customs Duties"
section_number: "10.196"
section_name: "Cost or value of materials produced in a beneficiary country or countries."
chapter_name: "U.S. CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF HOMELAND SECURITY; DEPARTMENT OF THE TREASURY"
part_number: "10"
part_name: "ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE, ETC."
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "19 U.S.C. 66, 1202 (General Note 3(i), Harmonized Tariff Schedule of the United States (HTSUS)), 1321, 1481, 1484, 1498, 1508, 1623, 1624, 4513."
regulatory_source: "28 FR 14663, Dec. 31, 1963, unless otherwise noted."
cfr_part: "10"
---


# 10.196 Cost or value of materials produced in a beneficiary country or countries.

(a) *“Materials produced in a beneficiary country or countries” defined.* For purposes of § 10.195, the words “materials produced in a beneficiary country or countries” refer to those materials incorporated in an article which are either:

(1) Wholly the growth, product, or manufacture of a beneficiary country or two or more beneficiary countries; or

(2) Subject to the limitations set forth in § 10.195(a), substantially transformed in any beneficiary country or two or more beneficiary countries into a new or different article of commerce which is then used in any beneficiary country in the production or manufacture of a new or different article which is imported directly into the U.S.

(b) *Questionable origin.* When the origin of a material either is not ascertainable or is not satisfactorily demonstrated to the Center director, the material shall not be considered to have been grown, produced, or manufactured in a beneficiary country.

(c) *Determination of cost or value of materials produced in a beneficiary country.* (1) The cost or value of materials produced in a beneficiary country or countries includes:

(i) The manufacturer's actual cost for the materials;

(ii) When not included in the manufacturer's actual cost for the materials, the freight, insurance, packing, and all other costs incurred in transporting the materials to the manufacturer's plant;

(iii) The actual cost of waste or spoilage (material list), less the value of recoverable scrap; and

(iv) Taxes and/or duties imposed on the materials by any beneficiary country, provided they are not remitted upon exportation.

(2) Where a material is provided to the manufacturer without charge, or at less than fair market value, its cost or value shall be determined by computing the sum of:

(i) All expenses incurred in the growth, production, or manufacture of the material, including general expenses;

(ii) An amount for profit; and

(iii) Freight, insurance, packing, and all other costs incurred in transporting the material to the manufacturer's plant.

If the pertinent information needed to compute the cost or value of a material is not available, the appraising officer may ascertain or estimate the value thereof using all reasonable ways and means at his disposal.