Background

U.S. Customs and Border Protection has issued an interim final rule amending its regulations to implement “significant portions” of the U.S.-Mexico-Canada Agreement that replaced NAFTA. This rule took effect July 1 and comments on it are due no later than Sept. 7.

Highlights of the provisions in this rule include the following.

- continues application of the current part 102 tariff shift rules to determine the country of origin for marking purposes of goods imported from Canada or Mexico under the USMCA, regardless of whether preferential tariff treatment is claimed

- states that a certification of origin is not required, with some exceptions related to evading compliance, for a claim of preferential tariff treatment if the value of the importation does not exceed $2,500 or for any non-commercial importations

- sets forth the method used for calculating the value of goods or materials for purposes of determining whether foreign material is considered de minimis

- limits the NAFTA preference override to goods entered or withdrawn from warehouse for consumption prior to July 1, 2020

- continues the NAFTA exceptions to marking requirements

- describes the means CBP may use to conduct verifications of claims for preferential tariff treatment and states that CBP will accept information directly from the importer, exporter, or producer during a verification

- provides that CBP will issue determinations of origin, or notices of intent to deny preferential tariff treatment, to the importer and to the exporter or producer that is subject to the verification and either completed the certification of origin or provided information directly to CBP during the verification

- requires importers to maintain the certification of origin and all records and documents they have demonstrating that a good qualifies for preferential tariff treatment under the USMCA, including those related to transit and transshipment, for a minimum of five years from the date of importation

- requires importers, or exporters or producers acting as the importer of record, wishing to request review and/or appeal of CBP marking determinations to follow the general protest procedures in 19 CFR 174

- requires drawback claims to be filed within five years after the date of importation and to be transmitted electronically in the Automated Commercial Environment

- clarifies that goods re-entered after repair or alteration are eligible for duty-free treatment even if subject to NAFTA or USMCA drawback

- adds 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

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