NC is the net cost of the good; and
VNM is the value of non-originating materials used by the producer in the production of the good.
4. For purposes of paragraphs 2 and 3, and except as provided in Articles 403(1) and 403(2)(a)(i), the value of non-originating materials used by the producer in the production of the good shall not include the value of non-originating materials used to produce originating materials that are subsequently used in the production of the good.
5. The regional value content of a good shall be calculated solely on the basis of the net cost method described in paragraph 3, where:
(a) there is no transaction value for the good;
(b) the transaction value of the good is unacceptable under Article 1 of the Customs Valuation Code;
(c) the good is sold by the producer to a related person and the volume, by units of quantity, of sales of identical or similar goods to related persons, during the six-month period immediately preceding the month in which the good is sold, exceeds 85 percent of the producer's total sales with respect to such goods;
(d) the good is
(i) identified in Article 403(1) or 403(2),
(ii) provided for in headings 64.01 through 64.05, or