Je veux savoir à propos de…

Federal Register / Vol. 86, No. 126 / Tuesday, July 6, 2021 / Proposed Rules substantial transformation under 19
U.S.C. 25184B.
CBP is proposing to amend the scope provision in 19 CFR part 102 to apply the substantial transformation standard consistently across country of origin determinations CBP makes for imported goods from the USMCA countries of Canada and Mexico for non-preferential purposes.5 Specifically, CBP proposes to amend section 102.0 to extend the scope of part 102 to state that the rules set forth in 102.1 through 102.18 and 102.20 are intended to apply to CBPs country of origin determinations for non-preferential purposes for goods imported from Canada and Mexico.
CBP is also proposing to amend subpart B of 19 CFR part 177 to add a cross-reference to clarify that, for country of origin in 177.22a, the determination pursuant to 19 U.S.C.
2515b1 as to whether an article has been substantially transformed into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed, for purposes of granting waivers of certain Buy American restrictions, must be made using the rules set forth in 102.1 through 102.18 and 102.20 of title 19 of the CFR for goods from Canada and Mexico.
IV. Statutory and Regulatory Authority
jbell on DSKJLSW7X2PROD with PROPOSALS

A. Executive Orders 13563 and 12866
Executive Orders 13563 and 12866
direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits including potential economic, environmental, public health and safety effects, distributive impacts, and equity. Executive Order 13563
emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rulemaking is a significant regulatory action, although not an economically significant regulatory action, under section 3f of Executive Order 12866.
Accordingly, the Office of Management and Budget OMB has reviewed this regulation.
Background and Purpose of Rule All merchandise of foreign origin imported into the United States must generally be marked with its country of origin, and it is subject to a country of origin determination by CBP.6 The country of origin of imported goods may 5 See 6 See
be used as a factor to determine preferential trade treatment, such as eligibility under various trade agreements and special duty preference legislation, like the Generalized System of Preferences. The country of origin of imported goods is also used to determine non-preferential trade treatment, such as admissibility, marking, and trade relief.7 Importers must exercise reasonable care in determining the country of origin of their goods and often make this determination on their own. However, some importers may seek advice from CBP to determine the country of origin for their goods for preferential and/or non-preferential purposes.
CBP applies two methods for determining the country of origin of imports for non-preferential purposes, as stated above. One method involves case-by-case adjudication to determine whether the goods have been substantially transformed in a particular country, relying primarily on judicial precedent and past administrative rulings. The other method consists of codified rules in part 102 of title 19 of the Code of Federal Regulations 19 CFR
part 102 referred to as the part 102
rules, which are also used to determine whether the goods have been substantially transformed, but are primarily expressed through specific changes in the Harmonized Tariff Schedule of the United States HTSUS
classification, often referred to as a tariff shift. Both the case-by-case and tariff shift methods implement the substantial transformation standard and are intended to lead to the same result.
Prior to the USMCA, under the NAFTA, country of origin marking determinations were made using the NAFTA marking rules codified in 19
CFR part 102 that specify whether a good imported from Canada or Mexico that is not entirely of Canadian or Mexican origin has been substantially transformed through processes that resulted in changes in the tariff classification i.e., tariff shifts in Canada or Mexico. To determine the country of origin of goods imported from Canada or Mexico for other nonpreferential purposes i.e., purposes other than marking, CBP employed case-by-case adjudication to determine whether such goods were substantially transformed in those NAFTA countries.
These different non-preferential country of origin-determination methods required some importers to determine and declare two different countries of origin for the same imported good e.g., Canada and China.

supra footnote 4.
19 U.S.C. 1304 and 19 CFR part 134.

VerDate Sep<11>2014

16:39 Jul 02, 2021

Jkt 253001

7 See
PO 00000

supra footnote 4.

Frm 00017

Fmt 4702

Sfmt 4702

35425

The USMCA, which recently superseded the NAFTA, was generally silent as to how the country of origin should be determined for goods imported from Canada and Mexico for marking and other non-preferential purposes. However, CBP is concurrently publishing an IFR in this issue of the Federal Register that, among other things, continues to apply the existing part 102 rules for determining the country of origin for marking of goods imported from Canada or Mexico. In this proposed rule, CBP proposes to expand the scope of the part 102 rules to provide that those rules are also to be generally applicable for all other i.e., other than marking non-preferential origin determinations made by CBP for goods imported from the USMCA
countries of Canada and Mexico. CBPs application of the part 102 rules would not, however, affect similar determinations made by other agencies, such as the Department of Commerces scope determinations in antidumping or countervailing duty proceedings see 19
CFR 351.225.
With this regulatory change, all nonpreferential country of origin determinations by CBP for goods imported from Canada or Mexico would be based on substantial transformation pursuant to the tariff shift rules required by 19 CFR part 102. This would eliminate the need for some importers of products from Canada or Mexico to request two different non-preferential determinationsone for country of origin marking and one for case-by-case adjudication for other non-preferential purposesto confirm CBPs treatment of their imports and avoid potentially different determinations. The rulemaking would also eliminate the need for some importers to comply with requirements to declare two different countries of origin for the same imported good e.g., Canada and China.
CBP is proposing these changes to simplify and standardize country of origin determinations by CBP for all non-preferential purposes for goods imported from Canada or Mexico.
Population Affected by Rule This rulemaking would directly affect certain importers of goods from Canada and Mexico and the U.S. Government particularly CBP. In fiscal year FY
2019, 38,832 importers 8 made 2.6
million non-NAFTA-preference entries 8 Based on unique importer of record IOR
numbers of importers who entered goods in FY
2019. In some cases, multiple IOR numbers correspond to the same entity.

E:FRFM06JYP1.SGM

06JYP1