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Federal Register / Vol. 86, No. 126 / Tuesday, July 6, 2021 / Proposed Rules or tariff shift method. Both the caseby-case and tariff shift methods are intended to produce the same determinations as to origin because both apply the same substantial transformation standard.
CBP first promulgated the part 102
rules in 1994 to fulfill the commitment of the United States under Annex 311 of the North American Free Trade Agreement NAFTA, which required the parties to establish rules for determining whether a good is a good of a NAFTA party i.e., the United States, Mexico, or Canada. In contrast to the case-by-case method, the part 102 rules were intended to provide for more certainty, transparency, and consistency in application of origin decisions. They codify, rather than constitute an alternative to, the substantial transformation standard and are intended to implement the standard consistently.2

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Country of Origin Marking Requirements for Imported Merchandise From Canada or Mexico Pursuant to the Agreement Between the United States of America, the United Mexican States, and Canada USMCA 3
On November 30, 2018, the Protocol Replacing the North American Free Trade Agreement with the Agreement Between the United States of America, the United Mexican States, and Canada the Protocol was signed to replace the NAFTA. Section 601 of the United States-Mexico-Canada Agreement Implementation Act USMCA Act, Public Law 116113, 134 Stat. 11 19
U.S.C. Chapter 29, repealed the North American Free Trade Agreement Implementation Act NAFTA
Implementation Act, Public Law 103
182, 107 Stat. 2057 19 U.S.C. 3301 et seq., as of the date that the USMCA
entered into force, July 1, 2020. The NAFTA provisions set forth in part 181
of title 19 of the CFR 19 CFR part 181
and in General Note 12, Harmonized Tariff Schedule of the United States HTSUS, continue to apply to goods entered for consumption, or withdrawn from warehouse for consumption, prior to July 1, 2020. On July 1, 2020, CBP
published an interim final rule IFR in 2 See Rules for Determining the Country of Origin of a Good for Purposes of Annex 311 of the North American Free Trade Agreement; Rules of Origin Applicable to Imported Merchandise, 60 FR
22312, 22314 May 5, 1995, citing, in part, Rules of Origin Applicable to Imported Merchandise, 59
FR 141 Jan. 3, 1994.
3 The Agreement Between the United States of America, the United Mexican States, and Canada is the official name of the USMCA treaty. Please be aware that, in other contexts, the same document is also referred to as the United States-MexicoCanada Agreement.

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the Federal Register CBP Dec. 2011
amending 19 CFR part 181 and adding a new part 182 of title 19 of the CFR 19
CFR part 182 containing several USMCA provisions, including the Uniform Regulations regarding rules of origin appendix A to part 182. See 85
FR 39690 July 1, 2020.
In another IFR published elsewhere in this issue of the Federal Register Agreement Between the United States of America, the United Mexican States, and Canada USMCA Implementing Regulations Related to the Marking Rules, Tariff-rate Quotas, and Other USMCA Provisions RIN 1515AE56, CBP is amending the CBP regulations to include additional USMCA
implementing regulations in 19 CFR
part 182 and to amend other portions of title 19 of the CFR. The IFR includes amendments to parts 102 and 134 of title 19 of the CFR 19 CFR parts 102
and 134 to apply the rules of origin set forth in 19 CFR part 102 for determining the country of origin for the marking of goods imported from Canada or Mexico.
Those amendments facilitate the transition from the NAFTA to the USMCA by maintaining the status quo for country of origin for marking determinations.
Non-Preferential Origin Determinations for Merchandise Imported From Canada or Mexico Although the NAFTA Implementation Act was repealed by the USMCA Act as of July 1, 2020, the part 102 rules remain in 19 CFR part 102 and are applicable for country of origin marking determinations for goods imported from Canada or Mexico under the USMCA
pursuant to the IFR, being concurrently published, as explained above. The part 102 rules, specifically 102.21 through 102.25, are also to be used by CBP to determine the country of origin of textile and apparel products imported from all countries except from Israel see 19 CFR 102.22, including the administration of quantitative restrictions, if applicable.
After the part 102 rules were promulgated in 1994, the rules were subsequently amended to also include references to specific U.S. trade agreements that incorporated those rules as part of the determination for trade preference eligibility, i.e., for preference purposes. For example, as indicated in the scope provision for part 102, the rules set forth in 102.1 through 102.21 also apply for purposes of determining whether an imported good is a new or different article of commerce under 10.769 of the United StatesMorocco Free Trade Agreement regulations and 10.809 of the United
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States-Bahrain Free Trade Agreement regulations.
Unlike the NAFTA, the USMCA does not refer to a marking requirement, except with regard to certain agricultural goods. For certain agricultural goods, the USMCA does contain a requirement that a good must first qualify to be marked as a good of Canada or Mexico in order to receive preferential tariff treatment under the USMCA. For most goods, only the general Uniform Regulations regarding rules of origin set forth in Appendix A
of part 182 of title 19 19 CFR part 182
and the product-specific rules of origin contained in General Note 11, HTSUS, are needed to determine whether a good is an originating good under the USMCA and therefore is eligible to receive preferential tariff treatment.
The Secretary of the Treasury has general rulemaking authority, pursuant to 19 U.S.C. 1304 and 1624, to make such regulations as may be necessary to carry out the provisions of section 304a of the Tariff Act of 1930, as amended, related to the country of origin requirements for imported articles of foreign origin. The Department of the Treasury and CBP
have concluded that extending application of the well-established part 102 rules to goods imported from the USMCA countries of Canada and Mexico will provide continuity for the importing community because those rules have been applied to all imports from these countries since 1994.4 The importing community has made extensive efforts to comply with the part 102 rules and CBP has significant experience in applying those rules to imported merchandise from Canada and Mexico. The part 102 rules, as codified, are a reliable, simplified, and standardized method for CBP when determining the country of origin for customs purposes.
When promulgating the part 102 rules in 1994, the U.S. Customs Service now CBP explained:
. . . the long history of the substantial transformation rule, and its administration has not been without problems. These problems devolve from the fact that application of the substantial transformation rule is on a case-by-case basis and often involves subjective judgments as to what 4 This rule does not apply for purposes of determining whether merchandise is subject to the scope of antidumping and countervailing duty proceedings under Title VII of the Tariff Act of 1930, as amended, as such determinations fall under the authority of the Department of Commerce. Specifically, notwithstanding a CBP
country of origin determination, that merchandise may be subject to the scope of antidumping and/
or countervailing duty proceedings associated with a different country.

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