JBF Bahrain W.L.L. v. United States

Slip Op. 26-99
UNITED STATES
COURT OF INTERNATIONAL TRADE
Court No. 23-00067
JBF BAHRAIN W.L.L., as successor-in-interest to
JBF Bahrain S.P.C.,
Plaintiff,
v.
UNITED STATES,
Defendant.
Before: M. Miller Baker, Judge
OPINION
[Denying Plaintiff’s motion for partial summary judg-
ment and granting Defendant’s cross-motion for par-
tial summary judgment.]
Dated: August 19, 2026
Lawrence M. Friedman and Pietro N. Bianchi, Barnes,
Richardson & Colburn LLP, Chicago, IL, on the briefs
for Plaintiff.
Justin R. Miller, Attorney-in-Charge, International
Trade Field Office, and Marcella Powell, Senior Trial
Counsel, Commercial Litigation Branch, Civil Divi-
sion, U.S. Department of Justice, New York, NY, on
the briefs for Defendant. Of counsel for Defendant was
Taylor R. Bates, Office of the Assistant Chief Counsel,
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Ct. No. 23-00067 	Page 2
International Trade Litigation, U.S. Customs and Bor-
der Protection, New York, NY.
Baker, Judge: The United States and Bahrain have
a free-trade agreement. To receive its benefit, at least
35 percent of an import’s value must derive from those
nations’ materials and processing. Here, the litigants
disagree over the applicable test for determining when
the cost of a third-country input counts toward that
requirement.
The government argues that under the Harmo-
nized Tariff Schedule of the United States (HTSUS)
provision codifying the agreement, a third-country in-
put must twice undergo a “substantial transforma-
tion.” This is a long-standing term of art that looks to
various factors on a case-by-case basis.
On the other hand, the two nations agreed in a side
letter to use a different standard, the tariff-shift test,
which 	an 	agency 	regulation 	incorporates. 	The 	im-
porter argues that this metric governs and that under
it, the cost of a third-country input counts toward the
35-percent requirement so long as its processing re-
sults in a single HTSUS classification change.
The 	court 	agrees 	with 	the 	government. 	The
HTSUS—a statute—is clear. Unless the importer can
show that a third-country input underwent a double
substantial transformation, its cost doesn’t count to-
ward the 35-percent requirement. The agency regula-
tion 	adopting 	the 	tariff-shift 	test—even 	though 	it
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Ct. No. 23-00067 	Page 3
reflects the side letter agreed to by the United States
and Bahrain—is ultra vires and therefore invalid.
But even if the tariff-shift provisions could apply
here, the importer misreads them. They mimic the
statute’s substantial-transformation framework by re-
quiring that the tariff shift occur twice. First, the pro-
cessing of a third-country input into an intermediate
good must result in a classification change. In turn,
the conversion of that article into a final product must
yield a second such change.
In short, the importer’s legal theory here is doubly
wrong. The court therefore grants partial summary
judgment for the government.
I
In September 2004, the two countries signed the
United States–Bahrain Free Trade Agreement. See
H.R. Doc. 109–71, 109th Cong., 1st Sess., at 5–209
(2005) (text of the Agreement). As relevant here, it pro-
vides for preferential tariff treatment for certain goods
produced in one of the signatories and exported to the
other.
Chapter Four’s “Rules of Origin” govern whether a
product exported from either nation is an “originating
good” and thereby eligible for the preference. Art. 4.1,
id. 	at 69. As relevant here, merchandise qualifies
when it satisfies two requirements.
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Ct. No. 23-00067 	Page 4
First, it must be “a new or different article of com-
merce that has been grown, produced, or manufac-
tured” in either country. Art. 4.1(b), id. at 69. Second,
the sum of the value of inputs made and processing
performed in one or both signatory nations must be
“not less than 35 percent of the appraised value of the
good” at the time of importation. Id.
Article 4.2 defines “new or different article of com-
merce” as “a good that has been substantially trans-
formed from a good or material that is not wholly the
growth, product, or manufacture of one [or][1] both of
the Parties and that has a new name, character, or use
distinct from the good or material from which it was
transformed.” Id. at 69 (emphasis added). 2
That 	“good 	or 	material 	that 	is 	not 	wholly 	the
growth, product, or manufacture of one [or] both of the
Parties” in turn must itself be “a new or different arti-
cle of commerce that has been grown, produced, or
manufactured” in one of the signatory nations. Art.
4.14, id. at 74. And so it too must derive from a “good
or material that is not wholly the growth, product, or
manufacture of one [or] both of the Parties.” Art. 4.2,
id. at 69.
1 The original text uses “of,” an obvious typo.
2 Article 4.14 in turn provides a detailed definition of “sub-
stantially transformed.” See id. at 75.
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The upshot is that for the cost of a third-country in-
put to count toward the 35-percent requirement, it
must 	undergo 	double 	substantial 	transformation—
first into an intermediate good, and then once again
into a final product.
On the same day they signed the Agreement, the
two countries exchanged correspondence (the Side Let-
ter). It provides that to determine “whether a good is a
‘new or different article of commerce that has been
grown, produced, or manufactured’ for purposes of [Ar-
ticle] 4.1(b) of the Agreement, each Party should be
guided by the specific rules in tariff classification set
forth in section 102.20 of the United States Customs
Regulations . . . .” ECF 51-4, at 2–3.
The Customs regulation referenced in the Side Let-
ter in turn applies a tariff-shift test to determine the
country of origin of a final product that incorporates a
foreign input. See 19 C.F.R. § 102.20. 3
In November 2005, the President submitted the
Agreement and voluminous supporting papers to Con-
gress for approval as required by 19 U.S.C. § 3805,
which governs the effectuation of trade agreements.
3 Under the tariff-shift method, an imported “good, or [im-
ported] component of a good, is considered of United States
origin if the subsequent manufacturing processes in the
United States are sufficient to change that good or compo-
nent’s tariff classification.” Bestfoods v. United States, 260
F.3d 1320, 1322 (Fed. Cir. 2001) (citing 19 C.F.R. § 102.11).
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Ct. No. 23-00067 	Page 6
See H.R. Doc. 109–71, 109th Cong., 1st Sess. 4 Accord-
ing to the government, the Side Letter was not among
those documents. See ECF 72, at 5. 5
In early 2006, Congress passed the United States–
Bahrain Free Trade Agreement Implementation Act.
See Pub. L. 106–169, 119 Stat. 3581, 19 U.S.C. § 3805
note. This law adopts the Agreement’s rules of origin
in all material respects. See Pub. L. 106–169, § 202,
119 Stat. at 3585–91. It never mentions the Side Let-
ter and does not incorporate its terms.
The Implementation Act also allows the President
to “proclaim such actions” as necessary to “appropri-
ately” carry out its provisions. Id. § 103(a)(1), 119 Stat.
4 While Congress has allowed the President to negotiate
trade agreements with foreign countries in certain circum-
stances, see, e.g., 19 U.S.C. § 3803, such agreements are not
self-executing and “shall enter into force with respect to the
United States if (and only if)” the President satisfies vari-
ous procedural requirements. As relevant here, the statute
required the President to notify Congress, timely submit a
description of changes to existing law that would be needed
“to bring the United States into compliance with the agree-
ment,” and then submit a full copy of the text of the agree-
ment and a specific universe of supporting documents.
19 U.S.C. § 3805(a)(1), (2). Even if such procedural prereq-
uisites are satisfied, as they were here, an agreement does
not take effect unless an implementing act becomes law.
Id. § 3805(a)(1)(D).
5 But oddly, the Side Letter is included in the “final text” of
Article IV of the Agreement found on the website of the
United States Trade Representative. See ECF 51-5.
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Ct. No. 23-00067 	Page 7
at 3583. Exercising that authority, in July 2006 the
President issued Proclamation 8039, “To Implement
the United States–Bahrain Free Trade Agreement,
and for Other Purposes.” 71 Fed. Reg. 43,635.
Among other things, the President found it neces-
sary 	to 	include 	the 	Implementation 	Act’s 	rules 	of
origin in the HTSUS. 6 See 71 Fed. Reg. 43,635, ¶ 5. In
doing so, he did not mention, much less incorporate,
the Side Letter.
The President directed that the HTSUS be modified
by incorporating the changes recommended in Annex
I to the International Trade Commission’s Publication
3830, Modifications to the Harmonized Tariff Schedule
of the United States to Implement the United States–
Bahrain Free Trade Agreement. Id. at 43,636, ¶ (1).
Like Proclamation 8039, the Commission’s recommen-
6 This body of ordinances is treated as “statutory provisions
of law for all purposes.” 19 U.S.C. § 3004(c)(1); see also
V.O.S. Selections, Inc. v. Trump, 149 F.4th 1312, 1324 (Fed.
Cir. 2025) (en banc) (“The HTSUS itself is indeed a statute
but is not published physically in the United States code.”)
(cleaned up), aff’d, 607 U.S. 229 (2026). Another law de-
fines this collection as consisting of General Notes, General
Rules of Interpretation, Additional U.S. Rules of Interpre-
tation, sections I to XXII of the schedule, and the Chemical
Appendix. See Omnibus Trade and Competitiveness Act of
1988, Pub. L. 100–418, title I, § 1204(a), 102 Stat. 1107,
1148.
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Ct. No. 23-00067 	Page 8
ded changes to the HTSUS did not mention or incorpo-
rate the Side Letter.
One of those changes was the addition of a new
General Note 30 to the HTSUS in July 2006. 7 It mate-
rially tracks the rules of origin found in the Agreement
and carried over into Section 202 of the Implementa-
tion Act. Thus, as relevant here, a third-country input
must undergo double substantial transformation to
count toward the 35-percent origination requirement.
See General Note 30(b)(ii); id. 30(d)(iv)(C), (D).
In addition to authorizing the President to promul-
gate HTSUS changes such as General Note 30, the Im-
plementation Act also empowers Customs to enact reg-
ulations to “appropriately” carry out the law’s provi-
sions. § 103(a)(1), 119 Stat. at 3583. The agency exer-
cised this authority in 2007 and 2008. See 72 Fed. Reg.
58,511 (interim rule); 73 Fed. Reg. 42,679 (final rule).
The regulations adopt the rules of origin in the
Agreement, 	the 	Implementation 	Act, 	and 	General
Note 30, see 19 C.F.R. § 10.810, except in one critical
respect—the definition of “new or different article of
commerce.” See id. § 10.809(i). Under the new mean-
ing, such an article “exists when the country of origin
of a good which is produced in a Party from foreign
7 General Note 30 and the regulations discussed below are
excerpted in the Addendum to this opinion.
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Ct. No. 23-00067 	Page 9
materials is determined to be that country” under 19
C.F.R. “§§ 102.1 through 102.21.” Id. 8
As relevant here, the Part 102 regulations provide
that “the country of origin of [an] imported good[ ]” is
“the country in which . . . [e]ach foreign material incor-
porated in that good undergoes an applicable change
in tariff classification set out in § 102.20.” See 19
C.F.R. § 102.11(a)(3). In other words, the country of
origin of a product made with a foreign input is deter-
mined by a tariff-shift test.
II
According to its statement of undisputed facts, JBF
Bahrain, the plaintiff here, imported film 9 from Bah-
rain in 2015. ECF 74, ¶ 1. Customs found the product
ineligible for duty-free treatment under the Agree-
ment because the third-country inputs “did not un-
dergo double substantial transformation” and thus
could not count toward the 35-percent requirement.
8 Customs explained that it based this redefinition on the
Side Letter. See 72 Fed. Reg. at 58,513.
9 The technical name is “biaxially oriented polyethylene
terephthalate film.” According to the importer, this product
is used for packaging and coverings. ECF 51, at 3.
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Ct. No. 23-00067 	Page 10
U.S. 	Customs 	and 	Border 	Protection 	Ruling 	HQ
H290625 (June 7, 2022) (Customs Ruling) at 4. 10
The importer duly filed a protest, which was de-
nied. 11 Customs Ruling at 23. The agency explained
that the film’s third-country inputs were “not substan-
tially transformed when processed” into an intermedi-
ate product. Id. at 12.
JBF then filed suit in this court under 19 U.S.C.
§§ 1514(a) and 1515(c) to contest the denial. See gen-
erally ECF 26 (amended complaint). The court has
subject-matter jurisdiction under 28 U.S.C. § 1581(a).
Both parties move for partial summary judgment.
Such relief is available “if the movant shows that there
is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
10 The court takes judicial notice of this document that can
be 	accurately 	and 	readily 	obtained 	from 	the 	agency’s
website, see https://rulings.cbp.gov/search?term=HQ%20H290625&
collection=ALL&commodityGrouping=ALL&sortBy=DATE_DESC&
pageSize=100&page=1, 	a 	source 	whose 	accuracy 	cannot
reasonably be questioned. Fed. R. Evid. 201(b)(2); see also
id. 201(c)(1) (allowing the court to take judicial notice sua
sponte).
11 For background on the classification of entries and the
protest process, see ARP Materials, Inc. v. United States,
520 F. Supp. 3d 1341, 1346–47 (CIT 2021), aff’d, 47 F.4th
1370 (Fed. Cir. 2022).
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Ct. No. 23-00067 	Page 11
USCIT R. 56(a). The litigants agree that their respec-
tive motions only raise a question of law.
III
JBF and the government submitted dueling state-
ments of undisputed material facts and responses. See
USCIT R. 56.3(a), (b); ECF 51-1 (JBF’s statement);
ECF 67-2 (government’s response); ECF 67-3 (govern-
ment’s statement); ECF 74 (JBF’s response). Based on
those filings, the court finds the following facts to be
material and undisputed:
1. In 2015, JBF imported the film in a single entry.
ECF 67-2, ¶ 1.
2. Customs denied that entry duty-free treatment
under the Agreement. Id. ¶ 5.
3. The agency then liquidated the entry. Id. ¶ 6.
4. At liquidation, Customs classified the film under
subheading 3920.62.0090. Id. ¶ 9.
5. JBF protested the liquidation, asserting that the
film qualified for duty-free entry under the Agree-
ment. Id. ¶ 7.
6. The agency denied the protest. Id. ¶ 12.
7. The film was manufactured in Bahrain with
third-country inputs before its importation into the
United States. ECF 74, ¶ 1.
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Ct. No. 23-00067 	Page 12
IV
A
Pared to the bone, the question in this case is
whether 	General 	Note 	30(d)(iv)(D) 	or 	19 	C.F.R.
§ 10.809(i) governs the definition of “new or different
article of commerce.” The former uses the substantial-
transformation test found in the Agreement and the
Implementation Act; the latter uses the tariff-shift
standard of 19 C.F.R. § 102.20 referenced in the Side
Letter.
JBF invokes the familiar principle that “an agency
is bound by its own regulations.” Wagner v. United
States, 365 F.3d 1358, 1361 (Fed. Cir. 2004) (citing
Service 	v. 	Dulles, 	354 	U.S. 	363, 	388 	(1957)); 	see
ECF 51, at 17. It contends that because the Implemen-
tation 	Act 	authorized 	Customs 	to 	issue 	19 	C.F.R.
§ 10.809(i), the latter provision is “controlling author-
ity that clarif[ies] the meaning of [General Note] 30.”
ECF 73, at 6. 12 This regulation, the importer observes
12 JBF also asserts that the two countries signed the Side
Letter because they “were not satisfied that the substantial
transformation requirement in [General Note] 30(d)(iv)(D)
was sufficiently free of ambiguity and subjectivity.” Id. at
9. The President, however, promulgated General Note 30
some two years after Bahrain and the U.S. signed the
Agreement. (Doc Brown, call your office.) But recasting the
importer’s argument in more plausible terms, it certainly
appears that both nations meant for the Side Letter to
(footnote continues on next page)
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Ct. No. 23-00067 	Page 13
(see id. at 12), is consistent with both the Side Letter
and Customs’s stated intention in 2008 “to apply the
Part 102 [tariff-shift] rules to any [free-trade agree-
ment] negotiated in the future using the substantial-
transformation 	standard.” 	73 	Fed. 	Reg. 	43,385,
43,386–87.
The government responds that the regulation, and
perforce the Side Letter—which is at best legislative
history once removed, as Congress presumably never
saw it—cannot oust General Note 30’s plain language,
which is the governing statutory authority. ECF 72, at
27–28. 	And 	that 	language 	unambiguously 	defines
“new or different article of commerce” using the sub-
stantial-transformation 	test, 	General 	Note
30(d)(iv)(D), which in turn is expressly defined in the
statute, see id. 30(d)(iv)(H).
The court agrees with the government.
For reasons that are not apparent, the President
evidently did not transmit the Side Letter to Congress.
The latter—presumably because its members were un-
aware of it—in turn did not enact the Side Letter into
law.
Instead, 	in 	the 	Implementation 	Act 	Congress
adopted the Agreement’s rules of origin, which define
“new 	or 	different 	article 	of 	commerce” 	using 	the
supersede the Agreement’s adoption of the substantial-
transformation test.
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Ct. No. 23-00067 	Page 14
substantial-transformation test. See § 202, 119 Stat.
at 3585–91. And as described above, the President, ex-
ercising power conferred by the Act, promulgated Gen-
eral Note 30—a statute—which carries forward the
same test.
Congress also authorized Customs to publish regu-
lations to ensure the statute’s provisions were “appro-
priately implemented.” § 103(a)(1), 119 Stat. at 3583
(emphasis added). In issuing 19 C.F.R. § 10.809(i), the
agency exceeded its remit, as that provision purports
to substantively redefine a term—“new or different ar-
ticle of commerce”—already delineated in the Imple-
mentation Act and General Note 30. An “appropriate”
regulation can only be one that is consistent with the
statute.
When “a court . . . conclude[s] the regulation is in-
consistent with the statutory language . . . , the regu-
lation will not control.” United States v. Haggar Ap-
parel Co., 526 U.S. 380, 392 (1999); see also Util. Air
Regul. Grp. v. EPA, 573 U.S. 302, 328 (2014) (“[A]n
agency may not rewrite clear statutory terms to suit
its own sense of how the statute should operate.”);
GHS Health Maint. Org., Inc. v. United States, 536
F.3d 1293, 1297 (Fed. Cir. 2008) (“When a regulation
directly contradicts a statute, the regulation must
yield.”).
Finally, JBF’s invocation of the Federal Circuit’s
decision in an earlier iteration of Bestfoods v. United
States is unavailing. See ECF 51, at 16. There, an
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Ct. No. 23-00067 	Page 15
importer challenged Treasury regulations imposing a
tariff-shift test to determine the country of origin of
North American Free Trade Agreement goods. It ar-
gued the regulations violated the federal marking stat-
ute, 19 U.S.C. § 304, which had been judicially con-
strued to require that imported articles undergo a
“substantial transformation” 13 to avoid being denomi-
nated as of foreign origin.
The Federal Circuit upheld the tariff-shift regula-
tions. It reasoned that they did “not conflict with the
marking statute,” which “does not specify what meth-
odology must be used to determined what is an ‘article
of foreign origin.’୻” 165 F.3d 1371, 1375 (Fed. Cir.
1999). “When the NAFTA marking rules displaced the
Gibson-Thomsen 	approach 	for 	purposes 	of 	NAFTA
goods, it was not necessary to amend the marking stat-
ute in order to effect that change, because nothing in
the statute required adherence to the [substantial-
transformation] approach.” Id. at 1375–76.
Here, by contrast, the relevant statute demands ad-
herence to the substantial-transformation test. See
General Note 30(d)(iv)(D). Not only that, it prescribes
how that standard is to be applied. See id. 30(d)(iv)(H).
The court therefore holds that the definition of “new or
different 	article 	of 	commerce” 	found 	in 	19 	C.F.R.
13 See United States v. Gibson-Thomsen Co., 27 C.C.P.A.
267, 273 (1940).
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Ct. No. 23-00067 	Page 16
§ 10.809(i) does not apply. Instead, the one found in
General Note 30(d)(iv)(D) governs.
B
Even if 19 C.F.R. § 10.809(i)’s definition of “new or
different article of commerce” were enforceable, JBF
misreads how Part 102’s rules of origin work in tan-
dem with Customs’s regulations in Part 10 implement-
ing the Agreement.
Save for that definition, the implementing regula-
tions mirror the rules of origin found in Article 4.1(b)
of the Agreement, Section 202 of the Implementation
Act, 	and 	General 	Note 	30(b)(ii). 	See 	19 	C.F.R.
§§ 10.809(c), (g), (h); 10.810(a)(2), (b). JBF does not dis-
pute that under these provisions, the processing of a
third-country input must twice result in a “new or dif-
ferent article of commerce.”
Section 10.809(i) defines that term by looking to 19
C.F.R. “§§ 102.1 through 102.21.” Id. § 10.809(i). The
gatekeeper provision in that range is § 102.11, which
as relevant here sets out general rules to “determin[e]
the country of origin of imported goods.” Id. § 102.11.
JBF 	contends, 	and 	the 	court 	agrees, 14 	that
§ 102.11(a)(3) governs when an intermediate 	good
14 Assuming, as the importer argues, that § 10.809(i)’s def-
inition of “new or different article of commerce” replaces
General Note 30’s.
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Ct. No. 23-00067 	Page 17
made with a third-country input becomes a “new or
different article of commerce” for § 10.809(i) purposes.
The former regulation provides that the country of
origin is where “[e]ach foreign material incorporated
in that good undergoes” a tariff shift under “102.20.”
Id. § 102.11(a)(3).
Under § 10.810(a)(2), the “new or different” inter-
mediate good made from a third-country input in turn
must be processed into another “new or different” final
product. 	But 	instead 	of 	once 	again 	relying 	on
§ 102.11(a)(3), which points to § 102.20’s tariff-shift
provisions to make that determination, JBF changes
its tune and claims that 19 C.F.R. § 102.11(a)(2) gov-
erns. See ECF 51, at 22.
This provision states that the processing country is
the country of origin when a good made there “is pro-
duced exclusively from domestic materials.” 19 C.F.R.
§ 102.11(a)(2) (emphasis added). According to the im-
porter, when a foreign input undergoes a tariff shift
and is deemed to originate from the processing coun-
try, the new or different intermediate good is a “do-
mestic material.” See ECF 51, at 21. So voilà, JBF con-
tends, a final product created solely from that inter-
mediate good is a second “new or different article of
commerce.” See id. at 22.
But § 102.11(a)(2) cannot apply for § 10.809(i) pur-
poses, because a “new or different article of commerce”
is one “which is produced in a Party from foreign ma-
terials.” 19 C.F.R. § 10.809(i) (emphasis added). The
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Ct. No. 23-00067 	Page 18
former, though, only encompasses merchandise “pro-
duced 	exclusively 	from 	domestic 	materials.” 	Id.
§ 102.11(a)(2) (emphasis added).
Thus, § 102.11(a)(3) must apply to the final product
made from an intermediate good that incorporates for-
eign materials. As discussed above, that provision re-
quires that “[e]ach foreign material incorporated in
that good” undergo “an applicable change in tariff clas-
sification set out in § 102.20.” Id. § 102.11(a)(3) (em-
phasis added). That means the processing of the inter-
mediate good into a final product must also result in a
tariff shift for the latter to be a “new or different article
of commerce” for § 10.809(i) purposes.
Ironically, the Side Letter confirms this reading of
the regulations. Recall that it states that “whether a
good is a ‘new or different article of commerce’୻” should
be governed by “the specific rules in tariff classifica-
tion set forth in section 102.20 of the United States
Customs Regulations . . . .” ECF 51-4, at 2–3 (emphasis
added). JBF’s theory of the case thus lives by the Side
Letter and dies by the Side Letter. If that document’s
tariff-shift test governs here, it applies to both the in-
termediate good and the final product, not just the for-
mer as the importer contends. 15
15 If a de novo trial on the merits were to yield the same
factual findings made by Customs, it would show that the
(footnote continues on next page)
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Ct. No. 23-00067 	Page 19
* 	* 	*
For an import from Bahrain made with third-coun-
try inputs to qualify for preferential treatment under
the Agreement, at least 35 percent of its value must
derive from processing in, and materials made in, one
or both signatory nations. For the cost of a third-coun-
try input to count toward that number, it must un-
dergo double substantial transformation as prescribed
by General Note 30. But even if the regulation’s defi-
nition of “new or different article of commerce” sup-
planted the statute’s as JBF contends, the importer
would have to show that the inputs underwent a dou-
ble tariff shift.
processing of the intermediate good into the final product
did not result in a tariff shift. JBF’s brief observes that the
agency classified the intermediate product it made in Bah-
rain from third-country inputs “in [HTSUS subheading]
3920.62.0090.” ECF 51, at 20. And it also acknowledges in
its statement of uncontested facts that the agency correctly
classified 	the 	final 	product 	“in 	[HTSUS 	subheading]
3920.62.0090.” ECF 51-4, ¶ 9. At least based on the facts
that Customs found, creation of the final merchandise did
not result in the required change in the applicable sub-
heading (3920.62.0090). See 19 C.F.R. § 102.20.
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Ct. No. 23-00067 	Page 20
The court therefore denies JBF’s motion for partial
summary judgment (ECF 51) and grants the govern-
ment’s cross-motion (ECF 72). The parties shall file a
joint status report within 30 days. See ECF 53.
Dated: August 19, 2026 	/s/ M. Miller Baker
New York, NY 	Judge
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ADDENDUM
Contents:
General Note 30 excerpts .................................................. 1a
Subdivision (b).............................................................. 1a
Subdivision (d) ............................................................. 2a
Customs Part 10 regulation excerpts ............................... 4a
19 C.F.R. § 10.809, “Definitions” ................................. 4a
19 C.F.R. § 10.810, “Originating goods” ...................... 5a
Customs Part 102 regulation excerpts ............................. 6a
19 C.F.R. § 102.1(d), “Definitions”............................... 6a
19 C.F.R. § 102.11, “General Rules” ............................ 7a
19 C.F.R. § 102.20, “Specific rules by tariff classifica-
tion” .............................................................................. 8a
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Ct. No. 23-00067 Addendum 	Page 1a
General Note 30 excerpts1
Subdivision (b)
For the purposes of this note, subject to the provisions of
subdivisions (c), (d), (e), (g) and (h) thereof, a good imported
into the United States is eligible for treatment as an origi-
nating good . . . under the terms of this note only if—
* * *
(ii) . . . the good is a new or different article of commerce
that has been grown, produced or manufactured in the
territory of Bahrain or of the United States, or both, and
the sum of—
(A) the value of each material produced in the terri-
tory of Bahrain or of the United States, or both, and
(B) the direct costs of processing operations per-
formed in the territory of Bahrain or of 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; . . .
* * *
1 All underlined terms appear that way in the original text of
General Note 30.
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Ct. No. 23-00067 Addendum 	Page 2a
and is imported directly into the territory of the United
States from the territory of Bahrain and meets all other
applicable requirements of this note. For purposes of this
note, the term “good” means any merchandise, product, ar-
ticle or material.
* * *
Subdivision (d)
* * *
(iv) Definitions. For the purposes of this note:
* * *
(B) The term “material” means a good, including a
part or ingredient, that is used in the growth, pro-
duction or manufacture of another good that is a new
or different article of commerce that has been grown,
produced, or manufactured in Bahrain or of[2] the
United States, or both.
(C) The term “material produced in the territory of
Bahrain or of the United States, or both” means a
good that is . . . a new or different article of commerce
that has been grown, produced or manufactured in
the territory of Bahrain or of the United States, or
both.
2 So in original. An obvious error.
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Ct. No. 23-00067 Addendum 	Page 3a
(D) The term “new or different article of commerce”
means, except as provided in this subdivision, a good
that—
(1) has been substantially transformed from a
good or material that is not wholly the growth,
product or manufacture of Bahrain or of the
United States, or both; and
(2) has a new name, character or use distinct
from the good or material from which it was
transformed,
but a good shall not be considered a new or different
article of commerce by virtue of having undergone
simple combining or packaging operations, or mere
dilution with water or another substance that does
not materially alter the characteristics of the good.
* * *
(H) The term “substantially transformed” means,
with respect to a good or a material, changed as the
result of a manufacturing or processing operation so
that—
(1) (aa) the good or material is converted from a
good that has multiple uses into a good or ma-
terial that has limited uses;
(bb) the physical properties of the good or ma-
terial are changed to a significant extent; or
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Ct. No. 23-00067 Addendum 	Page 4a
(cc) the operation undergone by the good or
material is complex by reason of the number
of processes and materials involved and the
time and level of skill required to perform
those processes; and
(2) the good or material loses its separate iden-
tity in the manufacturing or processing opera-
tion.
* * *
Customs Part 10 regulation excerpts
19 C.F.R. § 10.809, “Definitions”
For purposes of §§ 10.809 through 10.817:
* * *
(c) Good. “Good” means any merchandise, product, ar-
ticle, or material;
* * *
(g) Material. “Material” means a good, including a part
or ingredient, that is used in the growth, production, or
manufacture of another good that is a new or different
article of commerce that has been grown, produced, or
manufactured in one or both of the Parties;
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Ct. No. 23-00067 Addendum 	Page 5a
(h) Material produced in the territory of one or
both of the Parties. “Material produced in the terri-
tory of one or both of the Parties” means a good that is
. . . a new or different article of commerce that has been
grown, produced, or manufactured in the territory of
one or both of the Parties;
(i) New or different article of commerce. A “new or
different article of commerce” exists when the country
of origin of a good which is produced in a Party from
foreign materials is determined to be that country un-
der the provisions of §§ 102.1 through 102.21 of this
chapter[.]
* * *
19 C.F.R. § 10.810, “Originating goods”
(a) General. A good will be considered an originating
good under the BFTA when imported directly from the
territory of a Party into the territory of the other Party
only if:
* * *
(2) The good is a new or different article of com-
merce, as defined in § 10.809(i) of this subpart, that
has been grown, produced, or manufactured in the
territory of one or both of the Parties, . . . , and meets
the value-content requirement specified in para-
graph (b) of this section; . . .
* * *
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Ct. No. 23-00067 Addendum 	Page 6a
(b) Value-content requirement. A good described in
paragraph (a)(2) of this section will be considered an
originating good under the BFTA only if the sum of the
value of materials produced in one or both of the Par-
ties, plus the direct costs of processing operations per-
formed in one or both of the Parties, 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.
* * *
Customs Part 102 regulation excerpts
19 C.F.R. § 102.1, “Definitions”
* * *
(d) Domestic material. “Domestic material” means a ma-
terial whose country of origin as determined under these
rules is the same country as the country in which the good
is produced.
(e) Foreign material. “Foreign material” means a mate-
rial whose country of origin as determined under these
rules is not the same country as the country in which the
good is produced.
* * *
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Ct. No. 23-00067 Addendum 	Page 7a
19 C.F.R. § 102.11, “General Rules” (within Subpart
B, “Rules of Origin”)
The following rules shall apply for purposes of determining
the country of origin of imported goods other than textile
and apparel products covered by § 102.21.
(a) The country of origin of a good is the country in
which:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic
materials; or
(3) Each foreign material incorporated in that good
undergoes an applicable change in tariff classifica-
tion set out in § 102.20 and satisfies any other appli-
cable requirements of that section, and all other ap-
plicable requirements of these rules are satisfied.
* * *
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Ct. No. 23-00067 Addendum 	Page 8a
19 C.F.R. § 102.20, “Specific rules by tariff classifica-
tion”
The following rules are the rules specified in § 102.11(a)(3)
and other sections of this part. Where a rule under this sec-
tion permits a change to a subheading from another sub-
heading of the same heading, the rule will be satisfied only
if the change is from a subheading of the same level speci-
fied in the rule.
HTSUS 	Tariff 	shift 	and/or 	other 	require-
ments
* * * 	* * *
(G) 	Section VII: Chapters 39 through 40
* * * 	* * *
3920.10–
3921.90
* * *
A change to any other good of subhead-
ing 3920.10 through 3921.90 from any
other 	subheading, 	including 	another
subheading within that group.
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