USMCA Implementing Regulations
On July 6, 2021, US Customs and Border Protection (CBP) and the US Department of the Treasury (Treasury) published in the Federal Register the notice for the USMCA Implementing Regulations Related to the Marking Rules, Tariff-rate Quotas, and Other USMCA Provisions interim final rule. The interim rule is effective July 1, 2021.
The rule amends CBP regulations to include implementing regulations for the preferential tariff treatment and related customs provisions of the United States-Mexico-Canada Agreement (USMCA). The USMCA applies to goods from Canada and Mexico entered for consumption, or withdrawn from warehouse for consumption, on or after July 1, 2020. The interim rule:
- amends the Code of Federal Regulations (CFR) to implement the provisions in Chapters 1, 2, 5, and 7 of the USMCA related to general definitions, confidentiality, import requirements, export requirements, post-importation duty refund claims, drawback and duty-deferral programs, general verifications and determinations of origin, commercial samples, goods re-entered after repair or alteration in Canada or Mexico, and penalties.
- makes amendments to apply the marking rules in determining the country of origin for purposes for goods imported from Canada or Mexico and for other purposes specified by the USMCA.
- includes amendments to add the sugar-containing products subject to a tariff-rate quota under Appendix 2 to Annex 2-B of Chapter 2 of the USMCA to the CBP regulations governing the requirement for an export certificate.
- makes conforming amendments for the declaration required for goods re-entered after repair or alteration in Canada or Mexico, recordkeeping provisions, and the modernized drawback provisions.
Comments are due on September 7, 2021, and may be filed in Docket number USCBP-2021-0026 at http://www.regulations.gov.
Additional USMCA implementing regulations are forthcoming in an interim final rule to be published in the Federal Register.
NPRM – non-preferential rules of origin
Also on July 6, 2021, CBP and Treasury published in the Federal Register a notice of proposed rulemaking and request for comments on Non-Preferential Origin Determinations for Merchandise Imported from Canada or Mexico for Implementation of the USMCA (NPRM).
The NPRM is a proposed amendment to the CBP regulations regarding non-preferential origin determinations for goods imported from Canada or Mexico under the USMCA. The amendment proposes that CBP will extend certain tariff-based rules of origin for preferential determinations found at 19 CFR part 102 (“part 102 rules” (formerly the “NAFTA marking rules”) to all non-preferential determinations for goods imported from Canada or Mexico. The NPRM also proposes to modify for consistency the CBP regulations for certain country of origin determinations for government procurement.
Since 1994 when first introduced, the part 102 rules have provided a standardized method for determining the country of origin for customs purposes of goods imported from Canada or Mexico and CBP has concluded that extending the application of these rules would provide continuity for importers. CBP is proposing to amend the scope of these rules to reduce the burden on importers to declare two different countries of origin for the same imported good and so that the substantial transformation standard will be applied consistently to all goods imported from Canada or Mexico under the USMCA.
Advantages to streamlining the use of these rules for both preferential and non-preferential origin claims include eliminating the need for importers to request multiple non-preferential country of origin determinations from CBP for the same good and for CBP to issue rulings with multiple non-preferential origin determinations on goods imported from Canada or Mexico. If this proposal is adopted, there will no longer be rulings that conclude that a good imported from Canada or Mexico has two different origins under the USMCA depending on whether for country of origin marking or for other customs purposes.
In the interim final rule published concurrently with the NPRM, CBP amended the CBP regulations to include additional USMCA implementing regulations including amendments to the part 102 rules. Those amendments facilitate the transition from the NAFTA to the USMCA by maintaining the status quo for country of origin for marking determinations. Comments are due on August 5, 2021,and may be filed in Docket number USCBP-2021-00X25 at http://www.regulations.gov.