Country of Origin

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Category: Supply Chain, Customs, Import, Customs Broker

Country of Origin

October 10, 2019 Posted by Tanya Krieger

Country of Origin Customs & Border Protection (CBP) regulations require that every party importing goods into the US declare the Country of Origin of the merchandise. Inaccurate statements may lead to detention of goods and even penalties. Patterns of mis-declaration typically result in a significant increase in physical examinations which raise costs and delay shipments. They can also result in CBP audits of importer files. Intentional violations are subject to criminal penalties. With the implementation of additional tariffs, CBP scrutiny of Country of Origin has increased. However, CBP may not immediately examine, detain, or identify a Country of Origin discrepancy. CBP may return later, weeks or months after a shipment is release, to investigate and enforce the law. Such enforcement may also include the redelivery of the goods to CBP custody. Release of a shipment is not acceptance or approval. If Customs subsequently learns that the Country of Origin was mis-declared, there is no statute of limitations for Customs to penalize the importer. It is our opinion that the importer would be subject to civil and potential criminal charges if the wrong Country of Origin was declared. Buying DDP under these circumstances would not absolve a company from being held liable. There are certain legal ways to change the Country of Origin. Please refer to our website or contact us for more information. To avoid the difficulties associated with improper Country of Origin declarations it is recommended that importers review the US Country of Origin rules with respect to each of their products to ensure that their declarations to CBP at time of import are correct. Country of Origin rules are not internationally harmonized. While the Country of Origin claims made by a foreign supplier may be correct according to the rules of their country, they may be incorrect under US rules. Foreign rules do not apply to US imports, US rules do. So seeking guidance from a supplier is risky. The US has more than one method for determining Country or Origin. For Section 301 duties there are two main tests to determine the Country of Origin: (1) substantial transformation or (2) the special origin rules found under 10 CFR Part 102. Some of the US Country of Origin rules are complex as they may also be modified by treaties. If you have questions concerning Country of Origin or need assistance with this complex subject, please don’t hesitate to contact your KRIEGER worldwide representative.


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