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31 CFR § 560.420 - Reexportation by non-U.S. persons of certain foreign-made products containing U.S.-origin goods or technology.

Date issued: Oct. 22 2012

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§560.420 Reexportation by non-U.S. persons of certain foreign-made products containing U.S.-origin goods or technology.
For purposes of satisfying the de minimis content rule in §560.205(b)(2):
(a) U.S.-origin goods (excluding software) falling within the definition in §560.205 must comprise less than 10 percent of the total value of the foreign-made good (excluding software);
(b) U.S.-origin software falling within the definition in §560.205 must comprise less than 10 percent of the total value of the foreign-made software;
(c) U.S.-origin technology falling within the definition in §560.205 must comprise less than 10 percent of the total value of the foreign-made technology; and,
(d) In cases involving a complex product made of a combination of U.S.-origin goods (including software) and technology falling within the definition in §560.205, the aggregate value of all such U.S.-origin goods (including software) and such technology contained in the foreign-made product must be less than 10 percent of...

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TURBOFAC Commentary (351 words)

Notes:

1) 560.420 is integral to the interpretation of the basic re-exportation prohibition of 560.205. Read in conjunction with 560.205, and comments thereto.

This interpretive provision at least appears to set up a de minimis calculation mirroring the one found in the EAR, which has its own 10% de minimis rule with respect to re-exports of U.S.-origin goods to Iran. See BIS De minimis Rules and Guidelines - § 734.4 and Supplement No. 2 to part 734 of the EAR (as modified on 11 April 2018).

OFAC has not provided guidance conclusively stating that the calculation methodologies for the purposes of its de minimis rule are identical to the BIS analogue. In general, it should be expected that calculations passing muster...