(1) For subsection 153ZNE(2) of the Act, each non-originating material used in the production of goods mentioned in an item in the table in Part 2 of Schedule 1 must satisfy the change in tariff classification (if any) mentioned in the item.
(2) For subsection 153ZNE(3) of the Act, a non-originating material used in the production of goods mentioned in an item in the table in Part 2 of Schedule 1 that does not satisfy the change in tariff classification (if any) mentioned in the item is taken to satisfy the change in tariff classification if:
(a) it was produced entirely in Japan, or entirely in Japan and Australia, from other non-originating materials; and
(b) each of those materials satisfies the change in tariff classification, including by one or more applications of this subsection.