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Federal Register / Vol. 86, No. 126 / Tuesday, July 6, 2021 / Proposed Rules
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of goods from Canada and Mexico.9 All of these entries were subject to nonpreferential country of origin marking requirements, while some of these goods were also subject to other nonpreferential country of origin determinations, like trade remedies, that involve case-by-case adjudication.
Around the same time, in FY 2020 and the start of FY 2021, CBP issued 52
rulings determining the origin of goods imported from Canada and Mexico for non-preferential purposes.10 These rulings, except for those involving the importation of certain textile and apparel products, employed case-bycase adjudication to determine whether such goods were substantially transformed in Canada or Mexico or other countries.
In the future, CBP projects that around 38,832 importers would continue to make around 2.6 million entries of goods from Canada and Mexico that are subject to nonpreferential trade treatment, with or without this rule, each year. An unknown share of these importers would enter goods subject to nonmarking-related non-preferential treatment. CBP also projects that about 52 case-by-case non-preferential country of origin determinations would be requested and issued each year in the absence of this rulemaking based on the historical number of case-by-case adjudications. This rulemaking would eliminate such case-by-case determination requests and the issuance of such rulings.
Costs and Revenue Impacts of Rule This rulemaking may introduce changes in non-preferential payments from importers to the U.S. Government.
In addition, there may be minimal costs for some importers, as discussed in this section. 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 non-preferential origin purposes to just the part 102 rules with this rulemaking may, for example, incur some one-time, minor costs to adjust their inventory tracking systems and Automated Commercial Environment ACE entries to reflect the part 102based non-marking, non-preferential country of origin for their goods in those cases where origin determinations 9 These goods were not eligible for the generalized system of preferences.
10 Based on data from October 1, 2019, to December 16, 2020.

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under the current practice have been inconsistent.11 In such instances, importers may also need to adjust their business practices to ensure that they properly use the part 102 rules for all non-preferential country of origin purposes when the goods are sourced from Canada or Mexico under this proposed rule. These same importers must also ensure that they use case-bycase adjudications for any goods sourced outside of Canada or Mexico that are subject to non-preferential treatment. The extent of these costs on importers is unknown, but likely to be minimal. CBP requests public comments on these costs and any other costs of this rule to importers. This rule would not introduce costs to CBP.
In addition to costs, applying the part 102 tariff shift rules of origin rather than case-by-case adjudications to determine the origin for other nonpreferential purposes could lead to trade policy outcomes different from historical and current practice. If an importers goods are subject to inconsistent origin determinations under the current practice, this proposed rule may lead to a change in non-preferential payments from importers to the U.S. Government, which would result in an equal change in U.S. Government revenue. The number of instances where an importer would receive a different nonpreferential country of origin determination under this rulemaking compared to current practice would likely be low, especially considering both methods apply the same substantial transformation standard and are intended to reach the same results.
The specific effects of these different determinations on revenue are unknown. Any change in payments from importers to the U.S. Government as a result of this rulemaking are considered transfers rather than costs or benefits as they are moving money from one part of society to another.12 CBP
requests public comments on the potential number of instances where a good would be treated differently under trade remedy laws and relief under the 11 As an example, if an importer has an inventory tracking system that identifies the non-marking, non-preferential country of origin for its goods from Canada and Mexico based on existing case-by-case adjudication rules, with this rule, 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.
12 As described in OMB Circular A4, transfer payments occur when . . . monetary payments from one group are made to another group that do not affect total resources available to society.
Examples of transfer payments include payments for insurance and fees paid to a government agency for services that an agency already provides.

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new rule compared to historical and current practice and any related effects on revenue.
Benefits of Rule Besides costs and revenue impacts, this rulemaking would introduce benefits to importers and the U.S.
Government. Importers must exercise reasonable care when determining the country of origin for their goods, which can include researching previous caseby-case adjudications on substantial transformation. This rulemaking would enhance the consistency of country of origin marking and non-preferential country of origin determinations for goods imported from Canada and Mexico. All determinations made by CBP would be based on substantial transformation through application of the part 102 rules. This change would allow importers of goods from Canada and Mexico to comply with just one non-preferential country of origin determination made by CBP for their goods rather than two.
The overall benefit to importers of complying with just one country of origin determination method from CBP
for their goods from Canada and Mexico is unknown. Some importers who require CBP ruling requests to determine the country of origin for nonpreferential purposes would enjoy greater benefits from the transition to just one non-preferential determination method. As previously described, importers of goods from Canada and Mexico must currently request two country of origin rulings from CBP if they cannot determine the country of origin for non-preferential purposes one for country of origin marking and one for case-by-case adjudication for other non-preferential purposes. CBP
estimates that a case-by-case determination request takes an importer at least 8 hours on average to request, at a time cost of $250.96 per request according to an importers average hourly time value of $31.37.13 Based on 13 CBP bases this $31.37 loaded wage rate on the Bureau of Labor Statistics BLS 2020 median hourly wage rate for Cargo and Freight Agents $21.04, which CBP assumes best represents the wage for importers, multiplied by the ratio of BLS
average 2020 total compensation to wages and salaries for Office and Administrative Support occupations 1.4912, the assumed occupational group for importers, to account for non-salary employee benefits. Source of median wage rate:
U.S. Bureau of Labor Statistics. Occupational Employment Statistics, May 2020 National Occupational Employment and Wage Estimates United StatesMedian Hourly Wage by Occupation CodeOccupation Code 435011. Updated March 31, 2020. Available at https www.bls.gov/oes/
2020/may/oes_nat.htm. Accessed June 1, 2021. The total compensation to wages and salaries ratio is equal to the calculated average of the 2020 quarterly
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