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1 Preamble Recognizing the unique difficulties faced by the machine tool i-ndustry in the territory represented by AIT; Recognizing the efforts of AIT to revitalize the machine tool i-ndustry in the territory represented by AIT; Recognizing that CCNAA, upon request by AIT, has responded in g-ood faith to cooperate with AIT in this regard; And noting the decisions on machine tools of the President of t-he territory represented by AIT dated May 20,1986, and December27, 1991, which affirmed the importance which AIT places upon t-he machine tool industry in the territory represented by AIT; C-CNAA and AIT have reached the following Understanding: 1.SELF-MONITORING MEASURES The authorities represented by CCNAA will implement self-moni-toring measures for the specific purpose of creating a periodof continued stability of trade in certain categories of mach-ine tools between CCNAA and AIT. To this effect, CCNAA will m-onitor the total number of certain machine tools, defined her-eafter, exported to and destined for consumption in the terri-tory represented by AIT for the period of January 1, 1992, th-rough December 31, 1993. 2.DEFINITIONS The following definitions apply to this Understanding: A."Monitored Product" means the products (assembled or unasse-mbled) listed in Appendix A to this Understanding, includi-ng substantially complete machine tools and parts thereof,as defined in Annex A. Appendix A contains a description ofeach product as well as the current tariff classification number of each product in the territory represented by AITunder the "Harmonized Tariff Schedules of the United State-s" ("HTSUSA") and in the territory represented by CCNAA un-der the "Classification of Import and Export Commodities" used in that territory (CCC Code). If any change in these classification numbers occurs during the period that this Understanding is in effect, Appendix A shall be modified toreflect such change. The HTSUSA classification number cont-rols the definition of each Monitored product. Each of theAppendices and Annex A to this Understanding constitutes anintegral part of this Understanding. B. "Destined for consumption in the territory represented byAIT" means exported directly to the territory represented by AIT, or indirectly through one or more territories otherthan a territory represented by a party to this Understand-ing . C. "Territory represented by AIT" means the customs territoryof the United States of America and foreign trade zones lo-cated in the territory of the United States of America. D. "Monitored Period" means each of the 6-moth periods descri-bed in Article 3 hereof. The "First Monitored Period" runsfrom January 1, 1992 through June 30, 1992. The "Second Mo-nitored Period" runs from July 1, 1992 through December 31,1992. The "Third Monitored Period" runs from January 1, 1993 through June 30, 1993. The "Fourth Monitored Period" runsfrom July 1,1993 through December 31,1993. E. "Term" means the term of this Understanding, i.e., the per-iod commencing January 1,1992 through December 31, 1993. 3.EXPORT LIMITS A. Between January 1, 1992 and December 31, 1993, CCNAA shallensure that in each of the Periods specified below, exportpermits shall be issued to exporters in the territory repr-esented by CCNAA for each of the following categories and sub-ca-tegories of Monitored products destined for consump-tion in the territory represented by AIT in quantities thatshall not exceed in the aggregate the following number of units. ────────────────────────────── JAN-JULY-JAN- JULY- JUNEDECJUNE DEC 1992 199219931993 CATEGORY ────────────────────────────── NC Lathes72100 119 144────────────────────────────── NC Milling Machines181181 181 181-with controls 23 232323attached ────────────────────────────── Machining Centers 112140 186 227────────────────────────────── B. Except as provided in paragraph 3.D., commencing January 1,1992, until the expiry or termination of this Understanding, CCNAA shall ensure, during the Term, that in each periodeach Monitored Product destined for consumption in the ter-ritory represented by AIT shall be exported from the terri-tory represented by CCNAA under an export permit in the fo-rm shown in Appendix C to this Understanding issued by thecompetent authorities in the territory represented by CCNAA. C. Except as provided in paragraph 3.D., during the Term refe-rred to in paragraph 3.B., CCNAA shall ensure that the com-petent authorities in the territory that it represents sha-ll issue export permits containing the represents shall is-sue export permits containing the information prescribed inAppendix C to this Understanding. Except as provided in pa-ragraph 3.D., AIT shall ensure that the authorities in theterritory it represents shall require presentation of an o-riginal export permit as a condition of entry into the ter-ritory represented by AIT of Monitored Products. To the ex-tent provided under the laws applicable in the territory r-epresented by AIT, noting in particular the necessary exis-ting enforcement authority prescribed in C to this providedunder section 1501(c) of the Omnibus Trade and Competitive-ness Act of 1988, AIT shall ensure that the authorities inthe territory it represents prohibit entry to such productsnot accompanied by such an export permit. D.Except as provided in paragraph 3.F., during the First Moni-tored Period, Monitored Products may be exported from the t-erritory represented by CCNAA destined for consumption in t-he territory represented by AIT without an export permit, p-rovided that the total number of units of each category andsub-category of Monitored Products so exported during thisperiod shall count against the export ceilings provided inparagraph 3.A. for the Fist Monitored Period. E.CCNAA shall provide AIT by July 31, 1992 with a report rega-rding the number of units of Monitored Products exported tothe territory represented by AIT during the First Monit oredPeriod. This report shall indicate, for each individual exp-ort under each category and subcategory of Monitored Product,the name of the manufacturer, the number of units exported,the model and serial number of each unit, and the date of e-xport to the territory represented by AIT. AIT shall determ-ine, based on its records of the number of units imported i-nto the territory represented by AIT and all records and anyother information supplied by CCNAA as provided in this par-agraph, the number of units of Monitored Products exportedfrom the territory represented by CCNAA during the First Mo-nitored Period, and shall provide its determination to CCNAAby September 30, 1992. In case of a significant discrepancybetween the statistics of the respective territories regard-ing thenumber of units of Monitored Products imported intothe territory represented by AIT, CCNAA may request AIT toprovide, and upon such request AIT shall provide, nonconfid-ential information to document the number of units importedinto the territory represented by AIT. F.If the number of units of any category or sub-category of M-onitored Products which AIT thus determines have been expor-ted during the First Monitored Period exceeds the levels setout for this period, the category and sub-category levels p-rovided in paragraph 3.A. for the Second and Third MonitoredPeriods shall be equally reduced by such corresponding exce-ss or excesses. G.AIT shall ensure that the Customs Service of the territoryrepresented by AIT determines the date of export, based onthe date of the relevant bill of lading for each MonitoredProduct exported from the territory represented by CCNAA wi-thout an export permit, provided, however, that the exportdate for each withdrawal of a Monitored Product without exp-ort permit from a bonded warehouse shall be the date such w-ithdrawal took place and the product was entered for consum-ption in the territory represented by AIT. CCNAA shall dete-rmine the date of export, based on the date of export stamp-ed by the customs authorities in the territory representedby CCNAA on the relevant export permit issued by the compet-ent authorities represented by CCNAA, of each Monitored Pro-duct exported from the territory represented by CCNAA desti-ned for consumption in the territory represented by AIT und-er valid export permit issued by the competent authoritiesrepresented by CCNAA. H.Commencing January 1, 1992,AIT shall promptly report to CCN-AA any importation into the territory represented by AIT ofa Monitored Product without export permit, based on the dateof the relevant bill of lading, including the date of exportof that product from the territory represented by CCNAA. Thequantity so reported shall be counted toward the export lim-it for that Monitored Product for the period in which the p-roduct was exported from the territory represented by CCNAA.AIT shall effect redelivery, to the maximum extent possible,of any Monitored Product not bearing a valid export permit.If redelivery does not occur, AIT and CCNAA shall promptlyconsult to discuss alternative measures and the chargeabili-ty of such unpermitted Monitored Product to the applicableexport limit. If consultations do not result in a satisfact-ory solution and both sides agree that continued applicationof this paragraph undermines the objectives of this Underst-anding and causes serious difficulties in the restraint ofexports by the authorities in the territory represented byCCNAA envisioned in this Understanding, the Monitored Produ-ct without export permit reported by AIT shall no longer becounted toward the export limit for the relevant MonitoredPeriod. Nothing in this paragraph or paragraph 3.I. shall a-ffect the rights and obligations under the Customs laws app-licable in the territory represented by AIT. I.During the period covered by this Understanding, if any Mon-itored Product that has been imported into the territory re-presented by AIT with a valid, original export permit, or o-therwise counted against the export limits, is subsequentlyreexported without having been used for its intended purpos-e, orredelivered, or agreed no longer to be counted under P-aragraph 3.H., the relevant export limit for the period inwhich reexport or redelivery occurs, or the decision not tocount under Paragraph 3.H. is made, shall be increased by t-he corresponding number of units. J.CCNAA shall provide that the export of Monitored Products w-ill be spaced as evenly as practicable on a quarterly basisthroughout each Monitored Period. 4. carry-over and advance use of export permits A. CCNAA may adjust the export limits provided in paragraph 3 f-or any period by an amount not to exceed five percent thereof(the "adjustable portion"), and may permit any part or all ofthe adjustable portion to be carried over for use in the nextMonitored Period or to be subject to advance use in the curr-ent Monitored Period. AIT shall be notified of such advanceuse or carry-over and all notifications of use shall be rece-ived no later that two (2) months before the end of the Moni-tored Period in which any such use is intended. The adjustab-le portion may by increased beyond such five percent upon AIT's prior agreement. With regard to carry-over, CCNAA may req-uest an adjustment of an additional five percent, to which A-IT shall agree in the absence of evidence that such addition-al carry-over would adversely affect the machine tool marketin the territory represented by AIT. B. All export permits issued by the competent authorities repre-sented by CCNAA in reliance upon any such use of the adjusta-ble portion or any part thereof shall be so marked. Advanceuse of any adjustable portion or any part thereof of the exp-ort limit for any Monitored Period shall be made not earlierthan one month before the end of the current Monitored Periodand carry-over of the adjustable portion or any part thereofthe export limit for any Monitored Period shall be made notlater than the first month of the following Monitored Period.5. IMPLEMENTATION OF THIS UNDERSTANDING A. The provisions of this Understanding shall be implemented byAIT and CCNAA in accordance with the laws and regulations inforce in the territories that represent. B. CCNAA shall provide AIT with a letter setting forth the sel-fmonitoring measures and the statutory and/or regulatory pro-visions that the competent authorities in the territory CCNAArepresents shall use to implement and enforce this Understan-ding. Upon receipt of such letter, AIT shall provide CCNAA w-ith the views of the competent authorities in the territoryrepresented by AIT regarding the applicability of antitrustlaws to actions taken pursuant to this Understanding. C. AIT and CCNAA shall monitor trade in subassemblies between t-he respective territories to ensure that the Criteria for Su-bstantially Complete Machine tools, as provided in Annex A,are fully and effectively implemented. 6. MONITORING A. AIT and CCNAA shall exchange non-proprietary information nec-essary for the implementation and enforcement of this Unders-tanding. Each party to this Understanding shall report to theother party any action it takes to implement or enforce thisUnderstanding . B. CCNAA shall provide AIT with a report in English containing,at a minimum, the following non-proprietary information; eachpermit number, quantity, date of export or expected date ofexport, and which Monitored product is covered by each exportpermit, not later than 30 days after the end of each quarterand after the end of each month requested by AIT. C. AIT shall furnish to CCNAA all non-proprietary information a-nd data relating to administration of paragraph 3 of this Un-derstanding. 7. CONSULTATIONS Representatives of CCNAA and AIT shall consult annually, and atany other time at the request of either party, regarding any ma-tter concerning this Under-standing or its implementation, oper-ation, enforcement, or circumvention, including but not limitedto retrofitting and/or up-grading. 8. CREATION OF SUB-CATEGORIES OF MONITORED PRODUCTS A. CCNAA shall ensure, through export permits issued by the app-ropriate authorities in the territory it represents, that thenumber of units of various types and sizes of machines withineach Monitored Product category reflects a representative pr-oduct mix of units in that Monitored Product category export-ed from the territory represented by CCNAA destined for cons-umption in the territory represented by AIT. IfAIT considersthat exports from the territory represented by CCNAA destinedfor consumption in the territory represented by AIT of a par-ticular type of Monitored Product increases significantly re-lative to the representative product mix (from time to timedefined after taking into account market conditions in the t-erritory represented by AIT), and that material distortionsof trade within a Monitored Product category are sufficientto substantially impair or threaten to impair the attainmentof the objectives of this Understanding, AIT may request con-sultations with CCNAA. B. The consultations so requested shall be completed no later t-han 90 days after the date of the request for consultations.No later than 30 days after the conclusion of consultation,CCNAA shall ensure that the competent authorities in the ter-ritory it represents take such mutually agreed upon measuresas are necessary and appropriate to eliminate such materialdistortion as provided under the laws and regulations of theterritory represented by CCNAA. Such measures shall in c- lude the establishment of appropriate sub-categories of Moni-tored Products as set forth in appendix D. If agreement is n-ot reached in 90 days, either party may take such measures asit determines are necessary to attain the objectives of thisUnderstanding. For the purposes of paragraph 8.A., the allow-able quantity of each separate sub-category shall be calcula-ted on the basis of the representative product mix set forthbelow: Machining centers: At least thirty to fifty percent of expor-ts from the territory represented by CCNAA to the territoryrepresented by AIT must remain in the "small vertical" sub-c-ategory; the remainder shall be distributed among the othersub-c8tegories specified in Appendix D to the Understanding (i.e., they shall not be concentrated in any single sub-categ-ory). Numerically Controlled (NC) Lathes: The territory representedby CCNAA shall maintain at least eighty percent of its NC la-the exports to the territory represented by AIT in the "smallhorizontal" sub-category. Either side may request consultations to discuss mutually agree-able modifications to this guidance to take account of major ch-anges in market conditions. 9. SPECIAL ISSUE PERMITS A. Whenever the authorities of the territory represented by AITdetermine that the attainment of the objectives of this Unde-rstanding requires the importation into the territory repres-ented by AIT of any Monitored Product in excess of its appli-cable export limit for any period of this Understanding, AITshall ask CCNAA to request that the competent authorities inthe territory it represents issue special export permits forthat Monitored Period and for that Monitored Product in suchquantity as AIT deems appropriate, in excess of the applicab-le export limit. B. In cases where a machine tool user in the territory represen-ted by AIT asserts that no comparable tool can be obtained f-rom domestic suppliers, AIT shall ensure that the authoritiesin the territory represented by AIT shall immediately beginan investigation upon receipt of a properly completed specialissue permit application. If AIT does not identify a domesticsource of comparable machine tools within thirty(30) days, A-IT shall automatically request that CCNAA issue the requestedpermits. C. AIT shall ensure that the authorities in the territory repre-sented by AIT shall give special consideration to requests f-rom CCNAA or individual companies for special issue permitsassociated with direct investment in the territory represent-ed by AIT consistent with the December 27, 1991 decision ofthe authorities in the territory represented by AIT. D. Each special permit issued under the preceding paragraph 9,shall be marked "special" and shall be used within 90 days f-rom the date of issuance, unless AIT agrees to an extensionof such 90-day period . E. No Monitored Product exported to the territory represented byAIT under special permit shall be counted for the purposes ofdetermining the export limit; or representative product mixunder this Understanding. 10. ADDITIONAL MONITORING AIT shall ensure that the competent authorities in the territoryrepresented by AIT shall take appropriate measures to ensure th-at imports of Monitored Products from other territories dot notimpair the attainment of the attainment of the objectives of th-is Understanding. 11. FAIR AND EQUITABLE TREATMENT A. The authorities of the territory represented by AIT shall pr-ovide treatment which is fair and equitable, and generallyno less favorable in effect, for the territory represented byCCNAA vis-a-vis any other country which is a party to a comp-arable Understanding on machine tools with AIT. B. If the authorities of the territory represented by CCNAA con-sider that, as a result of the application of this Understan-ding, CCNAA is placed in a position materially unfair and in-equitable, or generally less favorable in effect, vis-a-visany other country which is a party to a comparable Understan-ding on machine tools with AIT, the authorities of the terri-tory represented by CCNAA may request consultations with theauthorities of the territory represented by AIT. Such consul-tations will be held and concluded promptly with a view to d-etermining appropriate remedial action, and AIT will take su-ch appropriate remedial measures as may be mutually agreed toby the two authorities in such consultation . 12. SPECIAL PROVISION A. If in the last quarter of 1992, (1) the aggregate market share accounted for by imports of allUnderstanding products into the territory represented by AIT from countries and territories other than Japan and t-he territory represented by CCNAA for the most recent twe-lve-month period increases by more than ten percent from the previous twelve-month period aggregate market share, and (2) aggregate forecasted 1993 apparent consumption in the ter-ritory represented by AIT for all Monitored Products incr-eases by more than fifteen percent from their 1991 level, the authorities of the territory represented by CCNAA may consult with the authorities of the territory represented by AIT. B. If it is confirmed that both of the above conditions are met,then CCNAA may choose to limit its machine tool exports as f-rom January 1, 1993 during the two periods January 1, 1993 t-hrough June 30, 1993, and July 1, 1993 through December 31,1993, to either the number of units specified in paragraph 3.A. for all Monitored Products or a market share level for al-l Monitored Products, as indicated below: ────────────────────────────── Jan-June 1993July-Dec 1993 ────────────────────────────── GATE GORYUnitsMarketUnitsMarket Shareshare ────────────────────────────── NC LATHES 119 4.46 144 6.29 ────────────────────────────── NC MILLING18125.21 18125.21 MACHINES --with controls23 3.0023 3.00 attached ────────────────────────────── MACHINING 186 5.82 227 8.94 CENTERS ────────────────────────────── C. If CCNAA chooses these market share levels for calendar year1993, these levels would amend the levels specified in parag-raph 3.A., and the number of units which the territory repre-sented by CCNAA may export to the territory represented by A-IT in each of these two periods shall be calculated by multi-plying the above percentages time one-half the Data Resources, Incorporated forecast of annual 1993 apparent consumptionof each category and sub-category of Monitored Product in theterritory represented by AIT. The first projection of annual1993 apparent consumption shall be prepared in November 1992,and it shall be revised in May 1993 and September 1993. 13. DURATION In the event that the duration of any comparable arrangement onmachine tools is shorter than the duration of this Under-standi-ng, the Term shall be reduced to have the same duration as thatof such arrangement. 14. GATT ACCESSION The authorities represented by AIT understand that the authorit-ies represented by CCNAA are presently seeking CCNAA accession,and hereby state that nothing provided in this Understanding isintended to contravene the GATT or is intended to operate to pr-ejudice CCNAA's application for GATT accession. Should, however,such a situation arise, AIT and CCNAA will hold emergency consu-ltations with the objective of remedying this situation. 15. ENTRY INTO FORCE This Understanding shall enter into force upon the date of sign-ature. 16. TERMINATION This Understanding will terminate on December 31, 1993, and willnot be extended. Thereafter, trade in machine tools between theterritory represented by CCNAA and the territory represented byAIT shall be governed by the rules and provisions of the GeneralAgreement on Tariffs and Trade (GATT). Consistent with the GATT,the territory represented by CCNAA shall receive treatment thatis fair, equitable, and generally not less favorable in effectthan that accorded to any other country or territory exportingmachine tools covered by this Understanding to the territory re-presented by AIT. 17. DETERMINATION REPORT TO THE COMPETENT AUTHORITIES IN THE TE-RRITORY REPRESENTED BY AIT Provided that it is determined that CCNAA is effectively implem-enting this Understanding and continues to effectively implementand enforce this Understanding during the period of this Unders-tanding, the competent authorities in the territory representedby AIT shall take no action under section 232 of the Trade Expa-nsion Act of 1962 to adjust imports of Monitored Products fromthe territory represented by CCNAA. 18. NOTICES For all purposes hereunder AIT and CCNAA shall be represented byand all communications and notices shall be addressed and deliv-ered to: Done, in duplicate, at Washington, D.C. on this 30 th day ofJune, 1992. For AIT (Signed) Chairman of the Board and Managing Director American Institute in Taiwan For CCNAA (Signed) Representative Coordination Council for North American Affairs APPENDIX A (CONCORDANCE) CATEGORY CCC CODE HTSUSA* NC LATHES8458.11.00.00.88458,11.0010 8458.91.00.00.18458.11.0030 8458.11.0050 8458.11.0090 8458.91.1060 8458.91.1080 8458.91.5050 8458.91.5070 8466.93.00.00.98468.93.1060 8466.93.7080 MACHINING CENTERS8457.10.00.00.08457.10.0005 8457.30.00.00.08457.10.0015 8457.10.0025 8457.10.0035 8457.10.0045 8466.93.00.00.98466.93.1060 8466.93.7080 NC MILLING MACHINES 8459.51.000.88459.51.0080 8459.61.000.68459.61.0080 8466.93.00.00.98466.93.1060 8466.93.7080 -- NC MILLING MACHINES 8459.51.0008459.51.0080 WITH CONTROLS8459.61.0008459.61.0080 ATTACHED 8466.93.00.00.98466.93.1060 8466.93.7080 *NOTE: Consistent with U.S. Customs Service practice, if the nu-merical control unit is not imported with the machine to- ol, the latter is nevertheless classified as a numerical- ly controlled machine tool, provided it has the specific characteristics of this type of machine, including facin- gs for a numerical control and a system for measuring di- splacements or the position of the moving elements. 1 Covered if part of a substantially complete machine tool, asdefined by Annex A, but not covered if spare parts or replace-ment components, for machine tools or substantially completemachine tools already in the territory represented by AIT.2 Included in sub-category if numerical control is attached.ANNEX A The following principles should be used to determine when expor-ts of components of any Monitored Product constitute unassembledmachine tools (hereinafter referred to as "substantially comple-te machine tools") for purposes of paragraph 2.A of the Underst-nding, and thus should be consequently counted in the export l-imits provided for in the Understanding. These principles applyto Numerically Controlled Lathes, Machining Centers, and NC Mil-ling Machines. 1. Points are allocated for components not exported from the te-rritory represented by CCNAA. Exports will be considered tobe substantially completed machine tools if components not e-xported from the territory represented by CCNAA account forless than 12 points. 2. In order for exports not to be counted in the export limits,components not exported from the territory represented by CC-NAA must account for 12 or more points. There must be a mini-mum of six points in critical elements, of which at least twopoints must be in the castings/machining/ fabrications sub-g-roup. 3. These principles will be applied to all machine tool compone-nts of all ;Monitored Products exported directly or indirect-ly to the territory represented by AIT through one or more t-hird countries. 4. These principles will be applied to each model and type of M-onitored Product. 5. In the event that components for one Monitored Product are e-xported from the territory represented by CCNAA in more thanone shipment, they will be treated as components being expor-ted in one shipment. 6. CCNAA and AIT will cooperate in the implementation of theseprinciples and should problems arise, CCNAA and AIT will seeksolutions through mutual consultation. CRITERIA FOR SUBSTANTIALLY COMPLETE NC LATHES AIT and CCNAA will determine on the basis of the criteria outli-ned below when imports of components of a Monitored Product con-stitute a substantially complete machine tool for purposes of p-aragraph 2.A. of this Understanding. This determination will bemade by machine tool model and irrespective of the number of se-parate shipments in which the components destined for a particu-lar consignee enter the territory represented by AIT. Imports will be considered substantially complete machine toolsand be counted against the applicable Export Limit based on thelisted components that are imported from Japan or the territoryrepresented by CCNAA, directly or indirectly through third part-ies. Points are scored for components that are not imported fromJapan or the territory represented by CCNAA. Critical Elements (must have a minimum of 6 points, of which aminimum of 2 points must be in the castings/fabrications/machin-ing subgroup) software: source code -- 1 servo drives (amplifiers) -- 1 servo motors -- 1 NC control -- up to 3* major castings/fabrications -- up to 2** machining of major fabrications/ castings -- up to 2** spindle assembly (including speed change mechanism) -- 1 ballscrews -- 1 automatic tool changer and tool magazine (if applicable) --1 Other Elements spindle motor -- 1 electrical system -- 1 coolant system -- 1 hydraulic system -- 1 lubrication system -- 1 pneumatic system (if applicable) -- 1 sheet metal fabrications -- 1 chip removal system (if applicable) -- 1 need 12 points to pass *for numerical control: printed circuit board circuit board assembly circuit testing, cycling and burn-in, functional systems testing cabinet (including card racks) microprocessors wire harnesses and electric cables operator's panel CRT power supply unit 1 point for 3 of above 2 points for 5 of above 3 points for 7+ of above (must either get credit for printed circuit boards or microprocessors to qualify for any points) **major castings/fabrications include: bed headstock carriage cross-slide and turret(s) tailstock (if applicable) 1 point for 2 castings/fabrications 2 points for 3+ castings/fabrications 1 point for machining 2 castings/fabrications 2 points for machining 3+ castings/fabrications CRITERIA FOR SUBSTANTIALLY COMPLETE MACHINING CENTERS AND NC MI-LLING MACHINES AIT and CCNAA will determine on the basis of the criteria outli-ned below when imports of components of a Monitored Product con-stitute a substantially complete machine tool for purposes of p-aragraph 2.A. of this Understanding. This determination will bemade by machine tool model and irrespective of the number of se-parate shipments in which the components destined for a particu-lar consignee enter the territory represented by AIT. Imports will be considered substantially complete machine toolsand be counted against the applicable Export Limit based on thelisted components that are imported from Japan or the territoryrepresented by CCNAA, directly or indirectly through third part-ies. Points are scored for components that are not imported fromJapan or the territory represented by CCNAA. Critical Elements (must have a minimum of 6 points, of which aminimum of 2 points must be in the castings/fabrications/machin-ing subgroup) software: source code -- 1 servo drives (amplifiers) -- 1 servo motors -- 1 NC control -- up to 3* major castings/fabrications -- up to 2** machining of major fabrications/ castings -- up to 2** spindle assembly (including speed change mechanism) -- 1 ballscrews -- 1 automatic tool changer and tool magazine (if applicable) --1 Other Elements spindle motor -- 1 electrical system -- 1 coolant system -- 1 hydraulic system -- 1 lubrication system -- 1 pneumatic system (if applicable) -- 1 sheet metal fabrications -- 1 chip removal system (if applicable) -- 1 need 12 points to pass *for numerical control: printed circuit board circuit board assembly circuit testing, cycling and burn-in, functional systems testing cabinet (including card racks) microprocessors wire harnesses and electric cables operator's panel CRT power supply unit if 3 of above get 1 point if 5 of above get 2 points if 7+ of above get 3 points (must either get credit for printed circuit boards or microprocessors to qualify for any points) **major castings/fabrications include: bed/base saddle (if applicable) column table/pallet head/ram 1 point for 2 castings/fabrications 2 points for 3 + castings/fabrications 1 point for machining 2 castings/fabrications 2 points for machining 3* castings/fabrications APPENDIX B CONCORDANCE OF U.S. SHIPMENTS, IMPORTS, AND EXPORTS PRODUCT SHIPMENTSEXPORTSIMPORTS (SIG NOS.)* (SCHEDULE B)*(HTSUSA)* NC LATHES 35415 15 8458.11.0010 8458.11.001035415 16 8458.11.0030 8458.11.0030 35415 17 8458.11.0050 8458.11.0050 35415 18 8458.11.0090 8458.11.0090 35415 21 8458.91.1060 8458.91.1060 35415 31 8458.91.1080 8458.91.1080 35415 33 8458.91.5050 8458.91.5050 8458.91.5070 8458.91.5070 NC MILLING MACHINES 35416XX**8459.51.0080 8459.51.00808459.61.0080 8459.61.0080 MACHINING3541A 01 8457.10.0005 8457.10.0005CENTERS3541A 03 8457.10.0015 8457.10.00153541A 05 8457.10.0025 8457.10.0025 3541A 07 8457.10.0035 8457.10.0035 3541A 09 8457.10.0045 8457.10.0045 3541A 11 3541A 13 3541A 15 3541A 17 3541A 19 * These numbers are subject to revision when the authorities re-presented by AIT adopt modifications to the applicable SIG, i-mport or export nomenclatures. Technical adjustments will bemade as necessary. **There is no SIC Code for numerically controlled milling machi-nes. Milling machines are reported under SIC Code 35416. NOTE: Consistent with Customs Service practice in the territoryrepresented by AIT, if the control unit is not imported w-ith the machine tool, the latter is nevertheless to be co-nsidered as a numerically controlled machine tool, provid-ed it has the specific characteristics of this type of ma-chine, including a system for measuring displacements or the position of the moving elements. APPENDIX C (copy of CCNAA export permit) APPENDIX D SUBCATEGORIES OF MONITORED PRODUCTS MACHINING CENTERSHTSUSA Used or Rebuilt 8457.10.0005 Small, Vertical 8457.10.0015 Large, Vertical 8457.10.0025 Horizontal8457.10.0035 Other 8457.10.0045 NC LATHES Small, Horizontal 8458. 11.0010 8458. 11.0030 Medium, Horizontal8458. 11.0050 Large, Horizontal 8458. 11.0090 Vertical8458. 91.1060 8458. 91.1080 8458. 91.5050 8458. 91.5070