Federal Register - July 6, 2021
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Source: Federal Register
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Federal Register / Vol. 86, No. 126 / Tuesday, July 6, 2021 / Rules and Regulations
country of origin as the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the country of origin within the meaning of part 134; however, for a good of a NAFTA country, the marking rules set forth in part 102 of title 19 of the CFR 19 CFR part 102 apply although these rules have commonly been referred to as the NAFTA Marking Rules, they apply in other contexts as well and are thus referred to herein as the part 102 rules.. The part 102
rules are codified rules that determine the country of origin for marking purposes using primarily the tariff shift method. CBP first promulgated these codified part 102 rules to fulfill the United States commitment under Annex 311 of NAFTA, which required the parties to establish rules for determining whether a good is a good of a NAFTA country. Although the NAFTA Implementation Act was repealed by the USMCA Act as of July 1, 2020, the part 102 rules remain in effect. The part 102 rules are also used for several other trade agreements. For instance, as indicated in the scope provision for part 102 102.0, 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 States-Bahrain Free Trade Agreement regulations.
The USMCA does not contain a general marking requirement. Except for certain agricultural goods, a good does not need to first qualify to be marked as a good of Mexico or Canada 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 of the CFR 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 to receive preferential tariff treatment. Therefore, in line with the present scope of the part 102 rules, the part 102 rules will continue to be applicable to determine country of origin for marking purposes for goods imported from Canada or Mexico under the USMCA regardless of whether preferential tariff treatment is claimed.
The Secretary of the Treasury has general rulemaking authority, pursuant
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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 marking requirements for imported articles of foreign origin. CBP
believes that extending application of the well-established part 102 rules to USMCA goods will provide continuity for the Canadian and Mexican importing community because those rules have been applied to all imports from Canada and Mexico since 1994. As a result of this longevity, the importing community has made extensive efforts to comply with the part 102 rules and CBP has significant experience in applying those rules to goods from Canada and Mexico.
These factors provide predictability and consistency in the application of the marking rules and in CBPs administration of the rules. The codified part 102 rules are a simplified and standardized approach for determining the country of origin for marking purposes regardless of whether preferential tariff treatment is claimed.
The importing communities from Canada and Mexico are used to applying the part 102 rules as opposed to the case-by-case method. Accordingly, to make the transition from NAFTA to the USMCA as least disruptive to the importing community as possible, CBP
has decided to continue application of the current part 102 rules to determine the country of origin for marking purposes of a good imported from Canada or Mexico to articles imported pursuant to the USMCA. However, the other marking requirements in 19 CFR
part 134, such as the rules for marking containers, the exceptions applicable to the marking requirements, and the methods of marking, also previously applied to goods from Canada and Mexico, and continue to apply to these goods. Thus, CBP is amending parts 102
and 134 of title 19 of the CFR to continue the application of the part 102
rules for determining origin for marking purposes for Mexico and Canada, and also to reflect the continued applicability of the other marking requirements and the relevant exceptions.
Origin determinations are also required in other instances, such as in the administration of quantitative restrictions. Concurrently with this IFR, CBP is publishing a notice of proposed rulemaking NPRM that proposes to apply the part 102 rules for nonpreferential origin determinations made by CBP for goods imported from Canada or Mexico, including government
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procurement determinations.5 In addition to promoting uniformity and transparency, the NPRM will implement USMCA Article 13.4.5, which provides as follows: For the purposes of covered procurement, a Party shall not apply rules of origin to goods or services imported from or supplied from the other Party that are different from the rules of origin the Party applies at the same time in the normal course of trade to imports or supplies of the same goods or services from the same Party. 6
Adverse Marking Decisions Under NAFTA, an adverse marking decision is a decision by CBP which an exporter or producer of merchandise believes to be contrary to the provisions of Annex 311 of NAFTA. While Article 510 of NAFTA provides specific rights of review and appeal for marking determinations, the USMCA does not provide any such rights. Additionally, section 209 of the USMCA Act struck the language from subsection k of section 304 of the Tariff Act of 1930, as amended 19 U.S.C. 1304k, that provided these specific petition rights, such as with respect to adverse marking decisions, for NAFTA exporters and producers. Thus, these specific rights and procedures are not provided for under the USMCA or the USMCA Act.
Accordingly, an importer, or an exporter or producer only when acting as the importer of record IOR wishing to request review and/or appeal of CBP
marking determinations must follow the procedures set forth in part 174 of the CFR.
Part 174 sets forth the general protest procedures pursuant to 19 U.S.C. 1514, which allows for the administrative review of challenges to CBP
determinations, including marking and other origin decisions. As the general statutory and regulatory authority for protests in 19 U.S.C. 1514 and 19 CFR
part 174 and the specific USMCA
authority under the USMCA and the USMCA Act do not provide exporters or 5 That proposed 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.
6 Although Canada is not a party to Chapter 13
of the USMCA, the United States has a similar commitment to Canada through Article IV5 of the World Trade Organization WTO Revised Agreement on Government Trade, as amended on Mar. 30, 2012, Marrakesh Agreement Establishing the World Trade Organization, Annex 4b, 1915
U.N.T.S. 103.
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