CBP Proposes to Uniformly Apply 19 CFR Part 102 Rules to All Country of Origin Determinations, Etc.

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 amend the Part 102 rules for pipe fittings and flanges, printed greeting cards, glass optical fiber, and rice preparations. In addition, this proposed rule would make certain corrections to 19 CFR 102.21 for certain textile and apparel products.

Written comments are due by September 23, 2008.

(All merchandise imported into the U.S. is subject to a country of origin determination. The origin of imported goods is determined for various purposes, including admissibility into the U.S., eligibility for preferential trade programs, country of origin marking requirements, and administration of the U.S. textile import program.)

The following is an overview of CBP's proposed rule:

Would Apply to All CBP Country of Origin Determinations, Unless Excepted

Since 1996, the country of origin rules (tariff shift and other) in 19 CFR 102 have applied to all imports from Canada and Mexico, and nearly all imports of textile products, accounting for approximately 40% of total U.S. imports.

CBP is now proposing to extend the application of these Part 102 country of origin rules to all "product of" or "country of origin" determinations made under the customs and related laws and the navigation laws of the U.S., unless otherwise specified or provided by statute.

Would Apply to FTAs That Use 'Substantial Transformation' Standard

These Part 102 rules 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, 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.

Would Not Apply to Certain Products if FTA Specifies Other Origin Tests/Methods

CBP is also proposing that the Part 102 rules not be used where preferential trade agreements specify another origin test for agreement purposes. For example, application of tariff benefits under the North American Free Trade Agreement (NAFTA) are determined by the origin rules set out in Chapter Four of NAFTA.

Moreover, the Part 102 rules would not be used to make preference determinations for goods other than textile and apparel goods under the U.S.-Israel and U.S.-Jordan FTAs, as it has been the understanding of U.S. negotiators and trade officials of those governments that the case-by-case method would be used for making origin determinations for preference purposes under those agreements. However, CBP would use the appropriate sections of 19 CFR Part 102 to make all other origin determinations (non-preference or preference) regarding goods from Israel and Jordan.

Would Not Apply to AD/CV Scope Determinations, Etc.

Origin-related determinations are also made in the context of trade remedy laws, which may differ from CBP's origin determination. For example, for antidumping and countervailing duty scope issues, origin-related scope decisions are made by the International Trade Administration, and not CBP, and are dispositive for purposes of administering the AD/CV trade remedy laws.

As these ITA origin-related scope determinations are for trade remedy purposes only, they do not alter CBP's origin determination for customs purposes unrelated to trade remedies.

Pipe Fittings, Greeting Cards, Etc. Rules Would be Modified

CBP proposes to change the specific tariff shift and other rules set forth in 19 CFR 102.20 that apply to printed greeting cards classified in Harmonized Tariff Schedule (HTS) heading 4909, fittings and flanges classified in HTS heading 7307, glass optical fiber classified in HTS subheading 9001.10, and rice preparations classified in HTS subheading 1904.90.

Textile and Apparel Rules Would be Corrected

CBP also proposes to correct two aspects of the rules of origin for textile and apparel products in 19 CFR 102.21: (1) for fabrics of HTS Chapter 59 and (2) brassieres and similar articles and parts.

CBP Believes Proposed Rule Would Facilitate the Exercise of Reasonable Care

CBP states that it believes that its 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.

CBP proposed rule (D/N USCBP-2007-0100, FR Pub 07/25/08) available at http://edocket.access.gpo.gov/2008/pdf/E8-17025.pdf