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Federal Register / Vol. 86, No. 126 / Tuesday, July 6, 2021 / Proposed Rules
country of origin marking and all other non-preferential country of origin determinations made by CBP for goods imported from Canada or Mexico would be based on substantial transformations occurring with tariff shifts as defined under part 102. 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.
In FY 2019, 38,832 importers 15 made 2.6 million non-NAFTA-preference entries of goods from Canada and Mexico, valued at $155 billion.16 All of these entries were subject to nonpreferential country of origin marking requirements, while some were also subject to other non-preferential country of origin determinations, like trade remedies, that involve case-by-case adjudication. CBP does not have precise data on the number of importers who entered goods from Canada and Mexico that were subject to country of origin requirements for marking and another non-preferential purpose that would be affected by this rulemaking. Based on available FY 2019 data on goods from Canada and Mexico subject to part 102
rules for marking and that involve caseby-case adjudication for the nonpreferential purposes of Section 201 and Section 232 duties and quotas, as well as the 38,832 importers who entered non-NAFTA preference goods from Canada and Mexico in FY 2019, CBP
estimates that this rulemaking could affect between approximately 10,000
and 38,832 unique importers entering goods from the USMCA countries of Canada and Mexico each year. These importers would range from individual buyers households or businesses to large businesses across many different industries. Some industries and businesses may be more affected than others, depending on the ultimate country of origin determination and the classification of the merchandise being imported. The exact number of small importers affected by this rulemaking is unknown. However, according to a separate CBP analysis, the vast majority of importers are classified as small businesses. Because this rulemaking would directly affect importers and the vast majority of importers are small businesses, the rule could affect a substantial number of small entities.
15 Based on unique importer of record numbers of importers who entered goods in FY 2019. In some cases, multiple IOR numbers correspond to the same entity.
16 These goods were not eligible for the Generalized System of Preferences.

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The Regulatory Flexibility Act does not specify thresholds for economic significance but instead gives agencies flexibility to determine the appropriate threshold for a particular rule. Changing from case-by-case adjudications for other non-preferential origin purposes to part 102s tariff shift rules may impose some costs on importers with goods from Canada and Mexico.
Importers who switch from using these two determination methods for nonpreferential origin purposes to just the part 102 rules with this rulemaking may incur some one-time, minor costs to adjust their inventory tracking systems and Automated Commercial Environment entries to reflect the part 102-based non-marking-related, nonpreferential country of origin for their goods. As an example, if an importer has an inventory tracking system that identifies the non-marking, nonpreferential country of origin for its goods from Canada and Mexico based on existing case-by-case adjudication rules, with this rulemaking, that importer may need to revise the system to ensure that it identifies the goods based on the part 102 rules if the importer is importing goods subject to inconsistent origin determinations under the current practice. These determinations should match the country of origin determinations that importers must already make for nonpreferential marking purposes.
According to representatives of the Commercial Operations Advisory Committee, these costs will be approximately $2,000-$3,000 per company.
Some importers who source the same goods from Canada or Mexico and another country may also need to adjust their business practices to ensure that they properly use the part 102 rules for customs non-preferential country of origin purposes when the good is sourced from Canada or Mexico once this rulemaking is in effect and use caseby-case adjudications for any goods sourced outside of Canada or Mexico that are subject to non-preferential treatment. According to representatives of the Commercial Operations Advisory Committee, these costs are minimal. For mid to large companies, these costs would total at most $2,000 to $3,000
note that this is in addition to a similar estimate above. Smaller companies would have smaller costs.
CBP does not believe that these costs, a maximum of $4,000$6,000, would have a significant economic impact on importers, including those considered small under the RFA. The annual value of importations average $4 million per importer, so these one-time costs make
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up less than one percent of the value of their importations. In addition, trade members have expressed that the nonmonetized benefits of operating under a single set of rules well outweigh the minimal costs to comply with this rulemaking. Therefore, CBP certifies that this rulemaking, if finalized, will not have a significant economic impact on a substantial number of small entities. CBP welcomes comments on this conclusion.
C. Paperwork Reduction Act The Paperwork Reduction Act of 1995
44 U.S.C. 3507d requires that CBP
consider the impact of paperwork and other information collection burdens imposed on the public. CBP has determined that there is no collection of information that requires a control number assigned by the Office of Management and Budget.
Signing Authority This rulemaking is being issued in accordance with 19 CFR 0.1a1, pertaining to the authority of the Secretary of the Treasury or that of his or her delegate to approve regulations related to certain customs revenue functions.
List of Subjects 19 CFR Part 102
Canada, Customs duties and inspections, Imports, Mexico, Reporting and recordkeeping requirements, Trade agreements.
19 CFR Part 177
Administrative practice and procedure, Customs duties and inspection, Government procurement, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations For the reasons given above, it is proposed to amend parts 102 and 177 as set forth below:
PART 102RULES OF ORIGIN
1. The general authority citation for part 102 is revised to read as follows:

Authority: 19 U.S.C. 66, 1202 General Note 3i, Harmonized Tariff Schedule of the United States, 1624, 3592, 4513.

2. Amend 102.0 by revising the second sentence and adding four sentences after the second sentence to read as follows:

102.0

Scope.

For goods imported into the United States from Canada or Mexico and entered for consumption, or
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