The attorneys at the Dilendorf Law Firm recognize the complexities that exist for importers when complying with U.S. Customs and Border Protection (CBP) in determining the country of origin (COO) and markings required for goods coming into the U.S. Our clients rely on us to carefully review their COO and markings to be sure they are in full compliance with all governing agencies.
In today’s global manufacturing environment, a country of origin determination can be a complex and sometimes subjective process, particularly when a finished product’s component parts may originate in multiple countries. Products are often subject to rules that vary based on origin, and even between agencies. It is also critical for importers to be diligent about following the rules and regulations impacting the marking and labeling of their products.
A product’s country of origin can impact its duty rate and eligibility for duty preference programs, as well as whether it is subject to trade sanctions, AD/CV duties, and other import restrictions. Failure to properly determine the country of origin and appropriately mark or label these goods could result in loss of duty preferences, harsh penalties, detentions, and seizures.
The Dilendorf Law Firm regularly advises clients on how to properly identify and label the correct country of origin in compliance with both U. S. Customs Marking Rules. Our attorneys’ expertise helps clients better understand how their products are affected by global sourcing patterns, and not only facilitate compliance but also uncover potential cost savings.
Preferential vs. Non-preferential Rules
Country-of-origin markings are governed in two ways: preferential and non-preferential. The preferential rules of origin pertain to goods that are covered by a free or preferential trade agreement, in which a product can benefit from reduced tariffs. For example, the North American Free Trade Agreement (NAFTA) can allow for tariff concessions when goods originate in a NAFTA area.
When imported goods do not qualify for a preferential duty program, non-preferential rules are used to determine the country of origin. In this case, goods that are grown, produced or manufactured in a single country, or “wholly obtained” in that country, the determination is simple, but goods that are not “wholly obtained” in a single country make this decision more challenging.
The U.S. non-preferential standard for ascertaining country of origin here would be based on the last place where the good was substantially transformed into a “new and distinct” article. While there is no single statute that provides a definitive standard on non-preferential rules of origin, CBP relies on a body of court decisions, agency interpretations and CBP regulations to determine the country of origin.
Upon request, CBP will issue legally binding advance rulings regarding country-of-origin determinations, as well as other issues related to merchandise being imported into the U.S. A database of published rulings is available on the CBP’s website using the Customs Rulings Online Search System (CROSS).
The Customs and International Trade practice at the Dilendorf Law Firm offers expert guidance to clients in the determination of country of origin and all CBP compliance issues related to the import of goods into the United States.
- Country of Origin – U.S. Customs and Border Protection
- U.S. Rules of Origin – U.S. Customs and Border Protection
- Rules of Origin: Substantial Transformation – International Trade Administration
- International Trade: Rules of Origin – Congress.gov
- FTA Certificates of Origin – International Trade Administration
- Antidumping and Countervailing Duties FAQ – U.S. Customs and Border Protection
- Code of Federal Regulation: Country of Origin Marking – Govinfo.gov
- About the Customs Rulings Online Search System – U.S. Customs and Border Protection