Alerts and Updates
Uniform Rules on Country of Origin for Imported Goods Proposed by the U.S. Customs and Border Protection
July 30, 2008
Friday, July 25, 2008 - Federal Register (Volume 73, Number 144, pp. 43385 - 43394)
Notice of Proposed Rulemaking
U.S. Customs and Border Protection (CBP) published its intent to adopt "uniform rules" governing CBP's determinations of country of origin for imported merchandise. The proposal would extend the application of the country of origin rules codified in 19 CFR Part 102.
The Part 102 rules currently apply to textiles (with certain exceptions) and to products of a NAFTA signatory country (United States, Canada and Mexico). Essentially CBP intends to eliminate the long-standing application of the "substantial transformation" test that has evolved from judicial opinions and the current rules of origin that are found in Part 134 of the CBP regulations.
CBP announced that unless otherwise prohibited by statute, Free Trade Agreement (FTA), or otherwise, it intends to apply the 19 CFR Part 102 rules to any FTA negotiated in the future using the substantial transformation standard of Part 102 (tariff shift or tariff shift and value) as set forth in that Part.
In a rather contradictory manner, CBP proposes to amend Part 102 in certain instances where that Part is inconsistent with certain rulings issued by CBP. Products specifically singled out by CBP include pipe fittings and flanges, greeting cards, glass optical fiber, and rice preparations. Certain changes are also proposed to Part 102 that relate to certain textile products. As a result of the proposed amendments, Part 102 rules would be used to determine whether a good meets the "product of" criterion for receiving duty preference under a broad group of programs covering insular possessions, West Bank, Gaza Strip or qualifying industrial zones, Generalized System of Preferences (GSP), Caribbean Basin Economic Recovery Act (CBERA), Freely Associated States, Andean Trade Preference Act (ATPA), African Growth and Opportunity Act (AGOA), U.S.-Morocco Free Trade Agreement, U.S.-Bahrain Free Trade Agreement. The value requirements under any of these rules would still apply.
CBP is accepting public and agency comments, and all comments must be received by CBP on or before September 23, 2008.
To learn more about this notification or about submitting comments, please click on the following link: http://edocket.access.gpo.gov/2008/E8-17025.htm.
For Further Information
If you have any questions about this Alert or would like more information, please contact Brian S. Goldstein, any other member of the Corporate Practice Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.