Common use of Fungible Goods or Materials Clause in Contracts

Fungible Goods or Materials. 1. For the purposes of determining whether a good qualifies as an originating good of a Party, where fungible originating materials of the Party and fungible non- originating materials that are commingled in an inventory are used in the production of the good, the origin of the materials may be determined pursuant to an inventory management method under the Generally Accepted Accounting Principles in the Party. 2. Where fungible originating goods of a Party and fungible non-originating goods are commingled in an inventory and, prior to exportation do not undergo any production process or any operation in the Party where they were commingled other than unloading, reloading and any other operation to preserve them in good condition, the origin of the good may be determined pursuant to an inventory management method under the Generally Accepted Accounting Principles in the Party. 3. Once an inventory management method set out in paragraphs 1 and 2 has been chosen, it shall be used throughout the fiscal year or fiscal period of the person that selected the inventory management method.