U.S. Customs and Border Protection (CBP) has published a proposed rule which would amend its regulations in order to use uniform tariff shift and other rules for CBP determinations of the country of origin of imported merchandise.

Under the current regulations, CBP uses two primary methods to determine the country of origin of imported goods that are processed in, or contain materials from, more than one country. One method employs case-by-case review to determine whether a good has been ‘‘substantially transformed’’ in a particular country. The other method employs codified rules to determine whether a good has been ‘‘substantially transformed’’ through changes in tariff classification.

CBP believes that the proposed extension of the 19 CFR Part 102 country of origin (tariff shift and other) rules will result in determinations that are more objective, transparent, and predictable and will therefore facilitate the exercise of reasonable care by importers with respect to their obligations regarding the identification of the proper country of origin of imported merchandise.

The uniform tariff shift and other rules, codified in 19 CFR Part 102, would replace CBP’s system of case-by-case adjudicated origin determinations, unless otherwise specified.

CBP’s proposed rule would also make specific amendments or corrections to the rules within 19 CFR Part 102 for the following products:

• pipe fittings and flanges
• rice preparations
• printed greeting cards
• textiles and apparel (102.21)
• glass optical fiber

Details of the proposed changes associated with these products can be found within the proposed rule as posted on the U.S. Govt. Printing Office (GPO) website.

Under the proposed rule, the rules under 19CFR Part 102 would also apply to free trade agreements that use the substantial transformation standard as part of the test to determine whether products qualify for reduced tariffs, where the trade negotiators had reached an understanding that the codified rules under 19 CFR Part 102 should guide those determinations. To date, this includes the U.S.-Bahrain and U.S.-Morocco FTAs. CBP adds that it intends to apply the Part 102 rules to any FTA negotiated in the future using the substantial transformation standard, unless otherwise specified.

In addition, CBP’s proposed rule would amend the country of origin marking regulations in 19 CFR Part 134 and the government procurement country of origin determination regulations in 19 CFR Part 177 for the uniform application of the Part 102 rules.

A copy of the actual CBP proposed rule is available at the GPO website at- http://edocket.access.gpo.gov/2008/pdf/E8-17025.pdf

Interested parties may submit written comment to CBP regarding the proposed rule. Written comments on this proposed rule are due by September 23, 2008, and may be submitted by mail or via the Federal eRulemaking Portal at- http://www.regulations.gov.

Sincerely,

Paul E. Vroman
Manager,Regulatory & Compliance Consulting and Projects
Licensed Customs Broker
NCBFAA Certified Customs Specialist