Rule2021-14264
Agreement Between the United States of America, the United Mexican States, and Canada (USMCA) Implementing Regulations Related to the Marking Rules, Tariff-Rate Quotas, and Other USMCA Provisions
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 6, 2021
Effective
July 1, 2021
Issuing agencies
Homeland Security DepartmentU.S. Customs and Border ProtectionTreasury Department
Abstract
This interim final rule amends the U.S. Customs and Border Protection (CBP) regulations to include implementing regulations for the preferential tariff treatment and related customs provisions of the Agreement Between the United States of America, the United Mexican States, and Canada (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 The USMCA applies to goods from Canada and Mexico entered for consumption, or withdrawn from warehouse for consumption, on or after July 1, 2020. This document 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. This document makes amendments to apply the marking rules in determining the country of origin for marking purposes for goods imported from Canada or Mexico and for other purposes specified by the USMCA. This document also 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, and 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. Concurrently with this interim final rule, CBP is publishing a notice of proposed rulemaking that proposes to apply the rules for all non- preferential origin determinations made by CBP for goods imported from Canada or Mexico. CBP will also issue additional USMCA implementing regulations in an interim final rule to be published in the Federal Register at a later date.
Full Text
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<title>Federal Register, Volume 86 Issue 126 (Tuesday, July 6, 2021)</title>
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[Federal Register Volume 86, Number 126 (Tuesday, July 6, 2021)]
[Rules and Regulations]
[Pages 35566-35594]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-14264]
[[Page 35565]]
Vol. 86
Tuesday,
No. 126
July 6, 2021
Part II
Department of Homeland Security
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U.S. Customs and Border Protection
Department of the Treasury
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19 CFR Parts 10, 102, 132, et al.
Agreement Between the United States of America, the United Mexican
States, and Canada (USMCA) Implementing Regulations Related to the
Marking Rules, Tariff-Rate Quotas, and Other USMCA Provisions; Interim
Final Rule
Federal Register / Vol. 86 , No. 126 / Tuesday, July 6, 2021 / Rules
and Regulations
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
DEPARTMENT OF THE TREASURY
19 CFR Parts 10, 102, 132, 134, 163, 182 and 190
[USCBP-2021-0026]
[CBP Dec. 21-10]
RIN 1515-AE56
Agreement Between the United States of America, the United
Mexican States, and Canada (USMCA) Implementing Regulations Related to
the Marking Rules, Tariff-Rate Quotas, and Other USMCA Provisions
AGENCY: U.S. Customs and Border Protection, Department of Homeland
Security; Department of the Treasury.
ACTION: Interim final rule; request for comments.
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SUMMARY: This interim final rule amends the U.S. Customs and Border
Protection (CBP) regulations to include implementing regulations for
the preferential tariff treatment and related customs provisions of the
Agreement Between the United States of America, the United Mexican
States, and Canada (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. This document 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. This document
makes amendments to apply the marking rules in determining the country
of origin for marking purposes for goods imported from Canada or Mexico
and for other purposes specified by the USMCA. This document also
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, and 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.
Concurrently with this interim final rule, CBP is publishing a notice
of proposed rulemaking that proposes to apply the rules for all non-
preferential origin determinations made by CBP for goods imported from
Canada or Mexico. CBP will also issue additional USMCA implementing
regulations in an interim final rule to be published in the Federal
Register at a later date.
DATES: Effective date: This interim final rule is effective on July 1,
2021.
Comments due date: Comments must be received by September 7, 2021.
ADDRESSES: You may submit comments, identified by docket number USCBP-
2021-0026, by one of the following methods:
<bullet> Federal eRulemaking Portal at <a href="http://www.regulations.gov">http://www.regulations.gov</a>.
Follow the instructions for submitting comments.
<bullet> Mail: Due to COVID-19-related restrictions, CBP has
temporarily suspended its ability to receive public comments by mail.
Instructions: All submissions received must include the agency name
and docket number for this rulemaking. All comments received will be
posted without change to <a href="http://www.regulations.gov">http://www.regulations.gov</a>, including any
personal information provided. For detailed instructions on submitting
comments and additional information on the rulemaking process, see the
``Public Participation'' heading of the SUPPLEMENTARY INFORMATION
section of this document.
Docket: For access to the docket to read background documents or
comments received, go to <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Due to the
relevant COVID-19-related restrictions, CBP has temporarily suspended
on-site public inspection of the public comments.
FOR FURTHER INFORMATION CONTACT:
Operational Aspects and Audit Aspects: Queena Fan, Director, USMCA
Center, Office of Trade, U.S. Customs and Border Protection, (202) 738-
8946 or <a href="/cdn-cgi/l/email-protection#8cf9ffe1efedccefeefca2e8e4ffa2ebe3fa"><span class="__cf_email__" data-cfemail="2257514f4143624140520c464a510c454d54">[email protected]</span></a>.
Legal Aspects: Craig T. Clark, Director, Commercial and Trade
Facilitation Division, Regulations and Rulings, Office of Trade, U.S.
Customs and Border Protection, (202) 325-0276 or
<a href="/cdn-cgi/l/email-protection#c8abbaa9a1afe6bce6aba4a9baa388abaab8e6aca0bbe6afa7be"><span class="__cf_email__" data-cfemail="127160737b753c663c717e736079527170623c767a613c757d64">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Public Participation
Interested persons are invited to participate in this rulemaking by
submitting written data, views, or arguments on all aspects of this
interim final rule. U.S. Customs and Border Protection (CBP) also
invites comments that relate to the economic, environmental, or
federalism effects that might result from this interim final rule.
Comments that will provide the most assistance to CBP will reference a
specific portion of the interim final rule, explain the reason for any
recommended change, and include data, information or authority that
support such recommended change.
II. Background
On November 30, 2018, the ``Protocol Replacing the North American
Free Trade Agreement with the Agreement Between the United States of
America, the United Mexican States, and Canada'' (the Protocol) was
signed to replace the North American Free Trade Agreement (NAFTA). The
Agreement Between the United States of America, the United Mexican
States (Mexico), and Canada (the USMCA) \1\ is attached as an annex to
the Protocol and was subsequently amended to reflect certain
modifications and technical corrections in the ``Protocol of Amendment
to the Agreement Between the United States of America, the United
Mexican States, and Canada'' (the Amended Protocol), which the Office
of the United States Trade Representative (USTR) signed on December 10,
2019.
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\1\ The Agreement Between the United States of America, the
United Mexican States, and Canada is the official name of the USMCA
treaty. Please be aware that, in other contexts, the same document
is also referred to as the United States-Mexico-Canada Agreement.
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Pursuant to section 106 of the Bipartisan Congressional Trade
Priorities and Accountability Act of 2015 (19 U.S.C. 4205) and section
151 of the Trade Act of 1974 (19 U.S.C. 2191), the United States
adopted the USMCA through the enactment of the United States-Mexico-
Canada Agreement Implementation Act (USMCA Act), Public Law 116-113,
134 Stat. 11 (19 U.S.C. Chapter 29), on January 29, 2020. Section
103(a)(1)(B) of the USMCA Act (19 U.S.C. 4513(b)(1)) provides the
authority for new or amended regulations to be issued to implement the
USMCA, as of the date of its entry into force.
Mexico, Canada, and the United States certified their preparedness
to implement the USMCA on December 12, 2019, March 13, 2020, and April
24, 2020, respectively. As a result, pursuant to paragraph 2 of the
Protocol, which provides that the USMCA will take effect on the first
day of the third month after the last signatory party provides written
notification of the completion of the domestic implementation of the
USMCA through the enactment of
[[Page 35567]]
implementing legislation, the USMCA entered into force on July 1, 2020.
Subsequent to the USMCA's entry into force date, on December 27,
2020, the Consolidated Appropriations Act, 2021 (Appropriations Act),
Public Law 116-260, was enacted with Title VI of the Act containing
technical corrections to the USMCA Act. All of the changes contained
within Title VI of the Appropriations Act are retroactively effective
on July 1, 2020, which is the entry into force date of the USMCA. These
changes include amending section 202 of the USMCA Act (19 U.S.C. 4531)
to prohibit non-originating goods used in production processes within
foreign trade zones (FTZs) from qualifying as originating goods under
the USMCA. See section 601(b) of Title VI of the Appropriations Act.
Additionally, section 601(e) of Title VI of the Appropriations Act
amended 19 U.S.C. 1520(d) to allow the refund of merchandise processing
fees for USMCA post-importation claims.
Pursuant to Article 5.16 of the USMCA, the United States, Mexico,
and Canada trilaterally negotiated and agreed to Uniform Regulations.
The USMCA Free Trade Commission adopted the Uniform Regulations in its
Decision No.1, effective as of the date of entry into force of the
USMCA. Annex I to that decision includes: \2\
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\2\ Available at: <a href="https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/free-trade-commission-decisions/usmca-free-trade-commission-decision-no-1">https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/free-trade-commission-decisions/usmca-free-trade-commission-decision-no-1</a>.
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<bullet> The Uniform Regulations Regarding the Interpretation,
Application, and Administration of Chapter 4 (Rules of Origin) and
Related Provisions in Chapter 6 (Textile and Apparel Goods) (Uniform
Regulations regarding rules of origin), and
<bullet> The Uniform Regulations Regarding the Interpretation,
Application, and Administration of Chapters 5 (Origin Procedures), 6
(Textile and Apparel Goods), and 7 (Customs Administration and Trade
Facilitation) of the Agreement Between the United States of America,
the United Mexican States, and Canada (Uniform Regulations regarding
origin procedures).
In accordance with USMCA Article 5.16, modifications or additions
to the Uniform Regulations shall be considered regularly to reduce
their complexity and to ensure better compliance. To this end, further
iterations of the Uniform Regulations may be negotiated. Part 182 of
title 19 of the Code of Federal Regulations (CFR)(19 CFR part 182) will
be amended through rulemaking to reflect future changes to the Uniform
Regulations, as needed.
The USMCA superseded NAFTA and its related provisions on the
USMCA's entry into force date. See Protocol, paragraph 1. Section 601
of the USMCA Act repealed the North American Free Trade Agreement
Implementation Act (NAFTA Implementation Act), Public Law 103-182, 107
Stat. 2057 (19 U.S.C. 3301), as of the date that the USMCA entered into
force. The NAFTA provisions set forth in part 181 of title 19 of the
CFR (19 CFR part 181) and in General Note 12, Harmonized Tariff
Schedule of the United States (HTSUS), continue to apply to goods
entered for consumption, or withdrawn from warehouse for consumption,
prior to July 1, 2020.
Claims for preferential tariff treatment under the USMCA may be
made as of July 1, 2020. On July 1, 2020, CBP published an interim
final rule (IFR), entitled ``Implementation of the Agreement Between
the United States of America, the United Mexican States, and Canada
(USMCA) Uniform Regulations Regarding Rules of Origin,'' in the Federal
Register (85 FR 39690), amending part 181 and adding a new part 182
containing several USMCA provisions, including the Uniform Regulations
regarding rules of origin (Appendix A to part 182). In addition to
those regulations and the regulations set forth in this document,
persons intending to make USMCA preference claims may refer to the CBP
website at <a href="https://www.cbp.gov/trade/priority-issues/trade-agreements/free-trade-agreements/USMCA">https://www.cbp.gov/trade/priority-issues/trade-agreements/free-trade-agreements/USMCA</a> for further guidance, including the U.S.
USMCA Implementing Instructions. The United States International Trade
Commission has modified the HTSUS to include the addition of a new
General Note 11, incorporating the USMCA rules of origin for preference
purposes, and the insertion of the special program indicator ``S'' or
``S+'' for the USMCA in the HTSUS ``special'' rate of duty
subcolumn.\3\
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\3\ The S+ indicator is used for certain agricultural goods and
textile tariff preference levels (TPLs).
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A. The Customs Related USMCA Provisions
The USMCA is composed of 34 chapters along with additional side
letters. CBP is responsible for administering the customs related
provisions contained within Chapters 1 (Initial Provisions and General
Definitions), 2 (National Treatment and Market Access for Goods), 4
(Rules of Origin), 5 (Origin Procedures), 6 (Textile and Apparel Goods)
and 7 (Customs Administration and Trade Facilitation) of the USMCA and
the Uniform Regulations regarding rules of origin as well as the
Uniform Regulations regarding origin procedures, pursuant to Article
5.16 of the USMCA.
This IFR amends the CBP regulations to implement significant
portions of the USMCA, but does not contain all relevant subparts. CBP
will promulgate the remaining USMCA implementing regulations and
solicit public comments at a later date. Additionally, future
trilateral negotiations on the Uniform Regulations may result in
additional provisions that must be included in the rulemaking process
at a later date. CBP will address any comments received in a final rule
published in the Federal Register.
1. Customs Related USMCA Provisions Addressed in This IFR
Chapter 1 of the USMCA contains the general definitions and
country-specific definitions applicable to the USMCA, unless otherwise
provided.
Chapter 2 of the USMCA sets forth the national treatment and market
access provisions. Unless otherwise provided, each USMCA country shall
apply a customs duty on an originating good in accordance with its
Schedule to Annex 2-B (Tariff Commitments) of Chapter 2 of the USMCA.
See Article 2.4 of the USMCA. Appendix 2 to Annex 2-B of Chapter 2 of
the USMCA contains the Tariff Schedule of the United States reflecting
the tariff-rate quotas that the United States will apply to certain
originating goods from Canada under the USMCA. Specifically, paragraph
15 of Appendix 2 to Annex 2-B contains the tariff-rate quota for sugar-
containing products of Canada that necessitates an amendment to the CBP
regulations. Chapter 2 of the USMCA also sets forth the definition of
``commercial samples of negligible value'' (Article 2.1); the duty-free
treatment of those commercial samples of negligible value, subject to
certain conditions (Article 2.9); the duty-free treatment of goods re-
entered after being temporarily exported to another USMCA country for
repair or alteration, subject to certain exceptions and conditions
(Article 2.8); and the drawback and duty-deferral program provisions
(Article 2.5).
Chapter 5 of the USMCA sets forth the origin procedures.
Specifically, Chapter 5 of the USMCA contains the rules for making a
claim for preferential tariff treatment (Article 5.2); the requirements
for a certification of origin (Article 5.2); the set of minimum data
elements required for a certification of origin (Annex 5-A); the basis
of the certification of origin (Article 5.3); the
[[Page 35568]]
importer's obligations regarding importations when claiming
preferential tariff treatment (Article 5.4); the exporter's and
producer's obligations (Article 5.6); the recordkeeping requirements
for importers, exporters, and producers (Article 5.8); the general
origin verification requirements and procedures (Article 5.9); the
determination of origin provisions (Article 5.10); the right to file
for refunds and claims for preferential tariff treatment after
importation (Article 5.11); and the confidentiality provisions related
to the exchange of information between USMCA countries (Article 5.12).
Additionally, Article 5.5 of the USMCA sets forth the exceptions to the
certification of origin requirement. Pursuant to Article 5.5, 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 $1,000 U.S. dollars or any
higher amount as the importing USMCA country may establish, or it is an
importation of a good for which the USMCA country into whose territory
the good was imported has waived the requirement for a certification of
origin. Consistent with this article, the United States has
established, with the same exceptions related to evading compliance, a
higher importation value amount of $2,500 U.S. dollars for commercial
importations and has waived the certification of origin requirement for
the entire category of non-commercial importations.
The penalties provisions for the USMCA are described in Chapters 5
and 7. Article 5.13 provides that each USMCA country shall maintain
criminal, civil, or administrative penalties for violations of its laws
and regulations related to Chapter 5 (see also Articles 5.4.2 and
5.6.3). Chapter 7 of the USMCA generally sets forth provisions related
to customs administration and trade facilitation. Specifically, Article
7.18 states that each USMCA country shall adopt or maintain measures
that allow for the imposition of a penalty by a USMCA country's customs
administration for breach of its customs laws, regulations, or
procedural requirements, including those governing tariff
classification, customs valuation, transit procedures, country of
origin, or claims for preferential tariff treatment. Chapter 7 of the
USMCA also contains the confidentiality provisions related to the
protection of information collected from traders. The confidentiality
provisions in Article 7.22, in combination with the confidentiality
provisions in Article 5.12, ensure the protection of confidential
information provided to a USMCA country's customs administration and
prevent the unauthorized disclosure of this information to third
parties and to other USMCA countries.
The Chapters 1, 2, 5, and 7 provisions discussed above are
reflected in this IFR.
2. Customs Related Provisions Addressed in Previously Published IFR
Chapter 4 of the USMCA contains the general rules of origin for
preferential tariff treatment provisions, and Chapter 6 includes the
rules of origin specific to textiles and apparel goods. CBP has already
incorporated these rules of origin into the CBP regulations. On July 1,
2020, CBP published an IFR in the Federal Register (85 FR 39690) to, in
part, add the Uniform Regulations regarding rules of origin
trilaterally agreed upon by the United States, Mexico, and Canada as
Appendix A of new part 182 to title 19 of the CFR (19 CFR part 182).
3. Customs Related Provisions To Be Addressed in Subsequent Rulemaking
Any additional CBP regulations needed to implement USMCA provisions
will be included in a subsequent rulemaking to be published in the
Federal Register at a later date.
B. Verifications and Determinations of Origin
Chapter 5 of the USMCA and the Uniform Regulations regarding origin
procedures govern the verification and determination of origin
requirements and procedures. Pursuant to Article 5.9.1 of Chapter 5 of
the USMCA, a USMCA country, through its customs administration, may
conduct a verification to determine whether a good qualifies for USMCA
preferential tariff treatment by one or more of the following means: A
written request or questionnaire seeking information, including
documents, from the importer, exporter, or producer; a verification
visit to the premises of the exporter or producer in order to request
information, including documents, and to observe the production process
and the related facilities; for a textile or apparel good, the
procedures set out in USMCA Article 6.6; or any other procedure as may
be decided by the USMCA countries. For textile or apparel goods, the
verification procedures set out in USMCA Article 6.6 provide an
alternative verification means that a USMCA country has the discretion
to utilize only when conducting a textile or apparel goods
verification. The USMCA Article 6.6 site visit verification
requirements and procedures will be addressed in a subsequent
rulemaking to be published in the Federal Register at a later date.
A USMCA country may choose to initiate a verification, using any of
these verification means, with the importer or with the person who
completed the certification of origin. See USMCA Article 5.9.2. If the
USMCA country initiates a verification other than with the importer, it
must inform the importer, only for the purpose of the importer's
knowledge, of the initiation of the verification. See USMCA Article
5.9.6 and the Uniform Regulations regarding origin procedures.
USMCA Article 5.9 and the Uniform Regulations regarding origin
procedures set forth the information that must be contained in a
written request for information, questionnaire, or request for a
verification visit (see USMCA Article 5.9.5), the requirements that a
USMCA country must follow during a verification (see USMCA Article
5.9.7(a) and (b)), the time that the importer, exporter, or producer
has to respond to a request for information or questionnaire (see USMCA
Article 5.9.7(c)), and the time that the exporter or producer has to
consent to or refuse a verification visit request (see USMCA Article
5.9.7(d)).
Pursuant to USMCA Article 5.9.9, when a USMCA country initiates a
verification through a verification visit request, the USMCA country is
required to provide a copy of the verification visit request to the
customs administration of the USMCA country in whose territory the
visit is to occur, and, if requested by the USMCA country in whose
territory the visit is to occur, the embassy of that USMCA country in
the territory of the USMCA country proposing to conduct the visit.
USMCA Article 5.9 contains additional provisions governing verification
visit procedures, including providing the circumstances under which the
exporter or producer whose premises are to be visited during the
verification visit, or the customs administration of the USMCA country
in whose territory the verification visit is to occur, may postpone the
verification visit. See USMCA Article 5.9.10 and 5.9.11.
During a verification, there are also requirements that records be
made available for inspection. USMCA Article 5.8 requires that
importers, exporters, and producers maintain certain documentation and
records. Pursuant to the Uniform Regulations regarding origin
procedures, these records must be maintained in such a manner as to
enable an officer of the USMCA
[[Page 35569]]
country's customs administration, when conducting a verification under
USMCA Article 5.9, to perform detailed verifications of the
documentation and records to verify the information on the basis of
which the certification of origin was completed and the claim for
preferential tariff treatment was made. Importers, exporters, and
producers that are required to maintain records pursuant to USMCA
Article 5.8.1 and 5.8.2 must make those records available for
inspection by an officer of the USMCA country's customs administration
conducting a verification, and in the case of a verification visit,
provide facilities for that inspection.
The Uniform Regulations regarding origin procedures also clarify
that, where a USMCA country's customs administration is conducting a
verification of a good under USMCA Article 5.9, the customs
administration may conduct an origin verification of a material that is
used in the production of that good. The verification of that material
is expected to be conducted in accordance with certain USMCA
procedures. The Uniform Regulations regarding origin procedures
enumerate the specific USMCA articles and Uniform Regulations regarding
origin procedures paragraphs that apply to the verification of
materials.\4\ The USMCA country's customs administration may, during a
verification of a material that is used in the production of a good,
consider the material to be non-originating in determining whether the
good is an originating good, if the producer or supplier of that
material does not allow the customs administration access to
information required to make a determination of whether the material is
originating by denying access to its records; failing to respond to a
verification questionnaire or letter; or refusing to consent to a
verification visit within the required time.
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\4\ See Uniform Regulations regarding origin procedures, Origin
Verifications Section, paragraph 10, which states that where the
customs administration of a USMCA country, in conducting an origin
verification of a good imported into its territory under USMCA
Article 5.9, conducts an origin verification of a material that is
used in the production of the good, the origin verification of that
material is expected to be conducted in accordance with the
procedures set out in: USMCA Article 5.9(1), (5), (7 through 11),
(13), and (18); and paragraphs 3, 6, 13, 14, and 15 of the Origin
Verifications Section of the Uniform Regulations regarding origin
procedures.
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After the verification is conducted, the USMCA country must provide
the importer, and the exporter or producer that completed the
certification of origin and is the subject of the verification, with a
written determination of origin that includes the findings of facts and
the legal basis for the determination. See USMCA Article 5.9.14. Prior
to issuing this determination of origin, if the USMCA country intends
to deny USMCA preferential tariff treatment, the USMCA country must
inform the importer, and any exporter or producer who is the subject of
the verification and provided information during the verification, of
the preliminary results of the verification and a notice of intent to
deny that includes when the denial would be effective and a period of
at least 30 days for the submission of additional information,
including documents, related to the originating status of the good. See
USMCA Article 5.9.16. The reasons that a USMCA country may deny USMCA
preferential tariff treatment are set forth in USMCA Article 5.10.2.
Additionally, in accordance with USMCA Article 5.9.17, if a
verification indicates a pattern of conduct by an importer, exporter,
or producer of false or unsupported representations that a good
imported into the country's territory qualifies as an originating good,
the USMCA country may withhold preferential tariff treatment to
identical goods imported, exported, or produced by such person until
that person establishes compliance with USMCA Chapters 4, 5, and 6.
Section 207(a)(1)(A) of the USMCA Act (19 U.S.C. 4533(a)(1)(A))
provides the Secretary of the Treasury with the authority to conduct a
verification, pursuant to USMCA Article 5.9, of whether a good is an
originating good under section 202 of the USMCA Act (19 U.S.C. 4531) or
section 202A of the USMCA Act (19 U.S.C. 4532). Section 207(b) of the
USMCA Act (19 U.S.C. 4533(b)(1)) sets forth the basis for a negative
determination of origin that applies to verifications conducted under
USMCA Chapter 5. Specifically, section 207(b) of the USMCA Act provides
that a negative determination is a determination by the Secretary that
a claim by the importer, exporter, or producer that the good qualifies
as an originating good under 19 U.S.C. 4531 is inaccurate; that the
good does not qualify for preferential tariff treatment under the USMCA
because the importer, exporter, or producer failed to respond to a
request for information or failed to provide sufficient information to
determine that the good qualifies as an originating good; after receipt
of a notification of a verification visit, the exporter or producer did
not provide written consent for the visit; the importer, exporter, or
producer does not maintain, or denies access to, records or
documentation required under section 508(1) of the Tariff Act of 1930,
as amended (19 U.S.C. 1508(1)); or the importer, exporter, or producer
otherwise fails to comply with the requirements of section 207 of the
USMCA Act or, based on the preponderance of the evidence, circumvents
the requirements of section 207 of the USMCA Act. Section 207(c)(1) of
the USMCA Act (19 U.S.C. 4533(c)(1)) provides that, upon making a
negative determination, the Secretary may deny preferential tariff
treatment under the USMCA with respect to the good while section
207(c)(2) of the USMCA Act (19 U.S.C. 4533(c)(2)) allows the Secretary
to withhold preferential tariff treatment for identical goods based on
a pattern of conduct.
To address these general USMCA verification and determination of
origin requirements and procedures, CBP has included subpart G, Origin
Verifications and Determinations, in part 182 of title 19 of the CFR.
C. Marking Rules
Section 304(a) of the Tariff Act of 1930, as amended (19 U.S.C.
1304), provides that, unless excepted, every article of foreign origin
imported into the United States shall be marked in a conspicuous place
as legibly, indelibly, and permanently as the nature of the article (or
container) will permit in such manner as to indicate to an ultimate
purchaser in the United States the English name of the country of
origin of the article. The regulations issued under the authority of
section 304 to implement the country of origin marking requirements are
set forth in 19 CFR part 134. Part 134 identifies the articles subject
to marking, the methods and manner of marking that should be used, the
exceptions to the marking requirements, the marking requirements for
containers or holders, and the procedures for articles found not
legally marked.
CBP employs two primary methods for determining the country of
origin for marking purposes when imported goods are processed in, or
contain materials from, more than one country. One method uses case-by-
case adjudication to determine whether the goods have been
substantially transformed in a particular country. The other method
consists of codified rules, also used to determine whether the goods
have been substantially transformed, primarily expressed through a
change in the HTSUS classification, often referred to as a ``tariff
shift.''
Part 134 sets forth the country of origin marking requirements and
exceptions. Section 134.1(b) defines
[[Page 35570]]
``country of origin'' as the country of manufacture, production, or
growth of any article of foreign origin entering the United States.
Further work or material added to an article in another country must
effect a substantial transformation in order to render such other
country the ``country of origin'' within the meaning of part 134;
however, for a good of a NAFTA country, the marking rules set forth in
part 102 of title 19 of the CFR (19 CFR part 102) apply (although these
rules have commonly been referred to as the NAFTA Marking Rules, they
apply in other contexts as well and are thus referred to herein as the
``part 102 rules'').''). The part 102 rules are codified rules that
determine the country of origin for marking purposes using primarily
the ``tariff shift'' method. CBP first promulgated these codified part
102 rules to fulfill the United States' commitment under Annex 311 of
NAFTA, which required the parties to establish rules for determining
whether a good is a good of a NAFTA country. Although the NAFTA
Implementation Act was repealed by the USMCA Act as of July 1, 2020,
the part 102 rules remain in effect. The part 102 rules are also used
for several other trade agreements. For instance, as indicated in the
scope provision for part 102 (Sec. 102.0), the rules set forth in
Sec. Sec. 102.1 through 102.21 also apply for purposes of determining
whether an imported good is a new or different article of commerce
under Sec. 10.769 of the United States-Morocco Free Trade Agreement
regulations and Sec. 10.809 of the United States-Bahrain Free Trade
Agreement regulations.
The USMCA does not contain a general marking requirement. Except
for certain agricultural goods, a good does not need to first qualify
to be marked as a good of Mexico or Canada in order to receive
preferential tariff treatment under the USMCA. For most goods, only the
general Uniform Regulations regarding rules of origin set forth in
Appendix A of part 182 of title 19 of the CFR and the product-specific
rules of origin contained in General Note 11, HTSUS, are needed to
determine whether a good is an originating good under the USMCA to
receive preferential tariff treatment. Therefore, in line with the
present scope of the part 102 rules, the part 102 rules will continue
to be applicable to determine country of origin for marking purposes
for goods imported from Canada or Mexico under the USMCA (regardless of
whether preferential tariff treatment is claimed).
The Secretary of the Treasury has general rulemaking authority,
pursuant to 19 U.S.C. 1304 and 1624, to make such regulations as may be
necessary to carry out the provisions of section 304(a) of the Tariff
Act of 1930, as amended, related to the country of origin marking
requirements for imported articles of foreign origin. CBP believes that
extending application of the well-established part 102 rules to USMCA
goods will provide continuity for the Canadian and Mexican importing
community because those rules have been applied to all imports from
Canada and Mexico since 1994. As a result of this longevity, the
importing community has made extensive efforts to comply with the part
102 rules and CBP has significant experience in applying those rules to
goods from Canada and Mexico. These factors provide predictability and
consistency in the application of the marking rules and in CBP's
administration of the rules. The codified part 102 rules are a
simplified and standardized approach for determining the country of
origin for marking purposes (regardless of whether preferential tariff
treatment is claimed).
The importing communities from Canada and Mexico are used to
applying the part 102 rules as opposed to the case-by-case method.
Accordingly, to make the transition from NAFTA to the USMCA as least
disruptive to the importing community as possible, CBP has decided to
continue application of the current part 102 rules to determine the
country of origin for marking purposes of a good imported from Canada
or Mexico to articles imported pursuant to the USMCA. However, the
other marking requirements in 19 CFR part 134, such as the rules for
marking containers, the exceptions applicable to the marking
requirements, and the methods of marking, also previously applied to
goods from Canada and Mexico, and continue to apply to these goods.
Thus, CBP is amending parts 102 and 134 of title 19 of the CFR to
continue the application of the part 102 rules for determining origin
for marking purposes for Mexico and Canada, and also to reflect the
continued applicability of the other marking requirements and the
relevant exceptions.
Origin determinations are also required in other instances, such as
in the administration of quantitative restrictions. Concurrently with
this IFR, CBP is publishing a notice of proposed rulemaking (NPRM) that
proposes to apply the part 102 rules for non-preferential origin
determinations made by CBP for goods imported from Canada or Mexico,
including government procurement determinations.\5\ In addition to
promoting uniformity and transparency, the NPRM will implement USMCA
Article 13.4.5, which provides as follows: ``For the purposes of
covered procurement, a Party shall not apply rules of origin to goods
or services imported from or supplied from the other Party that are
different from the rules of origin the Party applies at the same time
in the normal course of trade to imports or supplies of the same goods
or services from the same Party.'' \6\
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\5\ That proposed rule does not apply for purposes of
determining whether merchandise is subject to the scope of
antidumping and countervailing duty proceedings under Title VII of
the Tariff Act of 1930, as amended, as such determinations fall
under the authority of the Department of Commerce. Specifically,
notwithstanding a CBP country of origin determination, that
merchandise may be subject to the scope of antidumping and/or
countervailing duty proceedings associated with a different country.
\6\ Although Canada is not a party to Chapter 13 of the USMCA,
the United States has a similar commitment to Canada through Article
IV-5 of the World Trade Organization (WTO) Revised Agreement on
Government Trade, as amended on Mar. 30, 2012, Marrakesh Agreement
Establishing the World Trade Organization, Annex 4(b), 1915 U.N.T.S.
103.
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Adverse Marking Decisions
Under NAFTA, an adverse marking decision is a decision by CBP which
an exporter or producer of merchandise believes to be contrary to the
provisions of Annex 311 of NAFTA. While Article 510 of NAFTA provides
specific rights of review and appeal for marking determinations, the
USMCA does not provide any such rights. Additionally, section 209 of
the USMCA Act struck the language from subsection (k) of section 304 of
the Tariff Act of 1930, as amended (19 U.S.C. 1304(k)), that provided
these specific petition rights, such as with respect to adverse marking
decisions, for NAFTA exporters and producers. Thus, these specific
rights and procedures are not provided for under the USMCA or the USMCA
Act. Accordingly, an importer, or an exporter or producer (only when
acting as the importer of record (IOR)) wishing to request review and/
or appeal of CBP marking determinations must follow the procedures set
forth in part 174 of the CFR.
Part 174 sets forth the general protest procedures pursuant to 19
U.S.C. 1514, which allows for the administrative review of challenges
to CBP determinations, including marking and other origin decisions. As
the general statutory and regulatory authority for protests in 19
U.S.C. 1514 and 19 CFR part 174 and the specific USMCA authority under
the USMCA and the USMCA Act do not provide exporters or
[[Page 35571]]
producers the right to request administrative review and appeal of
marking decisions, USMCA exporters and producers may not file a protest
of a marking determination under the USMCA, unless the exporter or
producer is acting as the IOR.
D. Tariff-Rate Quota for Sugar-Containing Products Originating in
Canada
Tariff-rate quotas permit a specified quantity (``in-quota
quantity'') of merchandise to be entered or withdrawn for consumption
at a reduced duty rate (``in-quota tariff rate of duty'') during a
specified period. See 19 CFR 132.1(b). Appendix 2 to Annex 2-B of
Chapter 2 of the USMCA, entitled Tariff Schedule of the United States--
(Tariff Rate Quotas), reflects the tariff-rate quotas that the United
States will apply to certain originating goods from Canada under the
USMCA. These originating goods from Canada are permitted entry into the
territory of the United States, at the in-quota quantity, subject to
the reduced quota rates instead of the rates of duty specified in
Chapter 1 through Chapter 97 of the HTSUS.
Paragraph 15 of Appendix 2 to Annex 2-B of the USMCA sets out the
tariff-rate quota for sugar-containing products of Canada, including
the aggregate quantity of originating goods of Canada permitted to
enter free of duty in each calendar year and the article description of
the qualifying originating goods. Pursuant to section 103(c)(4) of the
USMCA Act, which authorizes the President to take necessary actions to
implement the tariff-rate quotas in the Schedule of the United States
to Annex 2-B of the USMCA, the special classification provisions in
Chapter 98 of the HTSUS have been modified to include the sugar-
containing products subject to this tariff-rate quota.
The tariff-rate quota for sugar-containing products of Canada under
the USMCA will be administered using export certificates. When Canada
provides the United States with the written notification of its intent
to require export certificates for sugar-containing products in
accordance with paragraph 15(d) of Appendix 2 of Annex 2-B of the
USMCA, the USTR will publish a notice in the Federal Register
announcing this determination. In any year for which the USTR has
published such a determination in the Federal Register, imports of the
sugar-containing products of Canada, at the in-quota quantity, will
only be eligible for the in-quota tariff rate of duty if the U.S.
importer makes a declaration to CBP, in the form and manner determined
by CBP, that a valid export certificate issued by the Government of
Canada is in effect for the goods.
Section 132.17 of title 19 of the CFR (19 CFR 132.17) sets forth
the form and manner determined by CBP to constitute a required
declaration that a valid export certificate is in effect for the goods.
Specifically, Sec. 132.17 governs the requirement for an export
certificate for sugar-containing products to qualify for the tariff-
rate quota and provides a description of the sugar-containing products
subject to these requirements, when the export certificate is valid,
and the recordkeeping retention and production requirements. For the
sugar-containing products described in Sec. 132.17(a), the importer
must possess a valid export certificate in order to claim the in-quota
tariff rate of duty on the products at the time they are entered or
withdrawn from warehouse for consumption. The importer must record the
unique identifier of the export certificate for these products on the
entry summary or warehouse withdrawal for consumption (Customs Form
7501, column 34), or its electronic equivalent. The Government of
Canada will issue the export certificates. A certificate is valid if it
meets the requirements of 15 CFR 2015.3(b). If the export certificate
is valid, it will authorize entry into the United States at the in-
quota tariff rate of duty established under the USMCA.
III. Amendments to the Regulations
Pursuant to 19 U.S.C. 4535(a), the Secretary of the Treasury has
the authority to prescribe such regulations as may be necessary to
implement the USMCA. Section 103(b)(1) of the USMCA Act (19 U.S.C.
4513(b)(1)) requires that initial regulations necessary or appropriate
to carry out the actions required by or authorized under the USMCA Act
or proposed in the Statement of Administrative Action approved under 19
U.S.C. 4511(a)(2) to implement the USMCA shall, to the maximum extent
feasible, be prescribed within one year after the date on which the
USMCA enters into force. This IFR amends the CBP regulations to
implement significant portions of the USMCA. CBP will promulgate the
remaining USMCA implementing regulations.
In order to provide transparency and facilitate their use, the
majority of the USMCA implementing regulations are set forth in part
182 of title 19 of the CFR, entitled the United States-Mexico-Canada
Agreement. Part 182 sets forth the USMCA preferential tariff treatment
and other customs related provisions. This IFR amends part 182 to add
regulations implementing significant portions of USMCA Chapters 1, 2,
5, and 7, as discussed above, in the existing part 182 regulatory
framework. Additionally, this document makes necessary amendments to
other parts of title 19 of the CFR to implement relevant USMCA
provisions and to apply the part 102 rules when determining the country
of origin for marking purposes for goods imported from USMCA countries.
All of the regulatory amendments made in this document are
consistent with the provisions of the USMCA, the Uniform Regulations
regarding origin procedures, and the USMCA Act (19 U.S.C. Chapter 29).
A. Part 10
Section 10.8 sets forth the documentation requirements for articles
exported for repairs or alterations. As explained further in Section
III.F., Subpart J--Commercial Samples and Goods Returned after Repair
or Alteration below, CBP is applying the documentation provisions of
Sec. 10.8(a), (b), and (c) to the entry of goods which are returned
from Canada or Mexico after having been exported for repairs or
alterations and which are claimed to be duty-free. Section 10.8(a)(2)
provides that a declaration must be completed by the owner, importer,
consignee, or agent having knowledge of the pertinent facts and filed
during entry of the articles that are returned after having been
exported for repairs or alterations. Currently, this declaration
requires the individual completing it to state that such articles were
exported from the United States for repairs or alterations and without
benefit of drawback. This portion of the declaration is necessary
because ordinarily these re-entered goods do not qualify for a reduced
duty rate with the benefit of drawback. However, there is an exception
provided in U.S. Note 1 of Subchapter II, Chapter 98, HTSUS, for NAFTA
and USMCA drawback. Goods re-entered after repair or alteration are
eligible for duty-free treatment even if subject to NAFTA or USMCA
drawback. Accordingly, CBP is amending the declaration in Sec.
10.8(a)(2) to clarify this distinction by adding ``(unless subject to
USMCA drawback)'' after ``without the benefit of drawback.''
B. Part 102
Part 102, Rules of Origin, sets forth rules for determining the
country of origin of certain imported goods. CBP is amending part 102
of title 19 of the CFR (19 CFR part 102) to apply its rules of origin
to determine the country of origin for marking purposes of goods
imported from Canada or Mexico under the
[[Page 35572]]
USMCA (regardless of whether preferential tariff treatment is claimed).
1. Scope
This document amends Sec. 102.0 to extend the scope of part 102 to
include the USMCA. Section 102.0 is revised to state that the rules set
forth in Sec. Sec. 102.1 through 102.18 and 102.20 also determine the
country of origin for marking purposes for goods imported from a USMCA
country. Under the USMCA, the Uniform Regulations regarding rules of
origin set forth in Appendix A to part 182 and the product-specific
rules of origin contained in General Note 11, HTSUS, are needed to
determine whether a good originates under the USMCA to receive
preferential tariff treatment. The USMCA includes, inter alia,
provisions that rely on whether goods qualify to be marked as goods of
Canada, Mexico, or, under General Note 11, HTSUS, the United States, to
determine the appropriate tariff benefit, thus also requiring the part
102 rules. See USMCA Chapter 2, Annex 2-B, Tariff Schedule of the
United States, General Notes.
2. Definitions
Section 102.1 sets forth the general definitions applicable to this
part. CBP is adding a new definition for ``inventory management
method'' to provide clarity to the public. Currently, part 102 refers
to the inventory management method merely with cross-references to part
181 without defining the term or providing a specific citation for
where the method is described. As the term ``inventory management
method'' is used for purposes of NAFTA and the USMCA, CBP believes that
adding the definition in Sec. 102.1 is necessary. Thus, the term
``inventory management method'' is added as paragraph (l) and is
defined as ``(1) averaging; (2) ``last-in, first-out;'' (3) ``first-in,
first-out;'' or (4) any other method that is recognized in the
Generally Accepted Accounting Principles (GAAP) of the country in which
the production is performed or otherwise accepted by that country.'' In
order to add the term in alphabetical order, CBP is redesignating
paragraphs (l) through (p) as paragraphs (m) through (q).
CBP is also revising the definition of ``value.'' The definition of
``value'' provides different methods for calculating the value of goods
or materials for purposes of determining whether foreign material that
does not undergo the applicable change in tariff classification (set
out in Sec. 102.20) or satisfies the other applicable requirements of
that section is considered de minimis (set out in Sec. 102.13). CBP is
adding the clarifier ``under NAFTA'' to paragraphs (1) and (2) to make
clear that the methods set forth in these paragraphs only apply to
NAFTA. CBP is adding a new paragraph (3) to set forth the method used
for calculating the value of goods or materials under the USMCA for
purposes of determining whether foreign material is considered de
minimis. Under the USMCA, the value of a good or material is its
customs value or transaction value within the meaning of the Uniform
Regulations regarding rules of origin set forth in Appendix A to part
182.
3. Inapplicability of NAFTA Preference Override to USMCA Claims
CBP is amending Sec. 102.19 to limit the NAFTA preference override
to apply to NAFTA only. Under NAFTA, to receive preferential tariff
treatment, a good must be ``originating'' under General Note 12, HTSUS,
and the good must qualify to be marked as a good of a NAFTA country
under the part 102 rules in Sec. 102.20. Under the USMCA, unlike
NAFTA, a good does not need to qualify to be marked as a good of Canada
or Mexico in order to receive preferential tariff treatment.
Accordingly, the NAFTA preference override provisions are no longer
necessary under the USMCA. Thus, CBP is adding a new paragraph (c) to
Sec. 102.19 to state that the NAFTA preference override in paragraphs
(a) and (b) applies only to goods entered for consumption, or withdrawn
from warehouse for consumption, prior to July 1, 2020, which is the
date that the USMCA entered into force.
4. Conforming Amendments
As a result of adding the definition of ``inventory management
method'' to Sec. 102.1, CBP needs to make several conforming
amendments to other sections of part 102. Accordingly, CBP is removing
the phrase ``provided under the appendix to part 181 of this chapter''
from Sec. 102.11(b)(2) and ``provided under the appendix to part 181
of the Customs Regulations'' from Sec. 102.12(b). These cross-
references to the inventory management methods in the appendix to part
181 are no longer needed because the definition of ``inventory
management method'' is now contained in the general definitions of part
102.
C. Part 132
Part 132, Quotas, sets forth the rules and procedures applicable to
quotas administered by CBP. CBP is amending Sec. 132.17(a) to reflect
the tariff-rate quota for sugar-containing products of Canada
established in paragraph 15 of Appendix 2 to Annex 2-B of Chapter 2 of
the USMCA. CBP has decided to adopt a similar approach for describing
the sugar-containing products as used in the preceding section of this
part when describing the beef products subject to an export certificate
requirement. This simpler approach removes the specific HTSUS
subheading classifications and, alternatively, cross-references to the
USTR definition of sugar-containing products and the description of the
products in paragraph 15 of Appendix 2 to Annex 2-B of Chapter 2 of the
USMCA. As CBP is not the party responsible for determining the sugar-
containing products that qualify for the tariff-rate quota, this
approach ensures that the CBP regulations contain an accurate
description of the products in the event of a change in the HTSUS
subheadings or a change in the USTR definition.
D. Part 134
Part 134, Country of Origin Marking, sets forth the regulations
implementing the country of origin marking requirements and exceptions
of section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304).
For purposes of the USMCA, the part 102 rules will be applied to
determine the country of origin for marking purposes of a good imported
from Canada or Mexico (regardless of whether preferential tariff
treatment is claimed). Thus, CBP is making the necessary amendments to
part 134. Part 134 identifies the articles subject to marking, the
methods and manner of marking that should be used, the exceptions to
the marking requirements, the marking requirements for containers or
holders, and the procedures for articles found not legally marked.
1. Definitions
Section 134.1 contains the definitions for part 134. CBP is adding
the USMCA to several definitions to clarify that, for those purposes, a
good may be from either a NAFTA or USMCA country. In the ``country of
origin'' definition in Sec. 134.1(b), CBP is adding language to
clarify that for a good of a NAFTA or USMCA country, the rules set
forth in part 102 determine the country of origin for marking purposes.
The definition of the ``NAFTA Marking Rules'' in paragraph (j) has been
replaced with a new definition for the ``Part 102 Rules,'' which are
rules promulgated for purposes of determining whether a good is a good
of a NAFTA country and to determine the country of origin for
[[Page 35573]]
marking purposes for goods imported from USMCA countries.
For the definition of ``ultimate purchaser'' in Sec. 134.1(d), CBP
is adding ``or USMCA'' to note that, instead of the general definition
of ``ultimate purchaser,'' the USMCA will use the same definition of
``ultimate purchaser'' as applied to a good of a NAFTA country. For a
good of a NAFTA or USMCA country, the ``ultimate purchaser'' is the
last person in the United States who purchases the good in the form in
which it was imported. The words ``or USMCA'' have also been added to
the examples and the term ``part 102 Rules'' has replaced the term
``NAFTA Marking Rules,'' in the examples of an ``ultimate purchaser,''
as appropriate.
CBP is further amending Sec. 134.1(g) to add the USMCA to the
definition of a ``good of a NAFTA country'' and to replace references
to the ``NAFTA Marking Rules'' with ``part 102 Rules.'' The paragraph
heading of paragraph (g) has been revised to read ``good of a NAFTA or
USMCA country'' and ``or USMCA'' has been added to the definition to
define a ``good of a NAFTA or USMCA country'' for marking purposes, as
an article for which the country of origin is Canada, Mexico, or the
United States as determined under the part 102 Rules. Paragraph (i)
defining a ``NAFTA country'' has similarly been revised. The paragraph
heading of paragraph (i) has been revised to read ``NAFTA or USMCA
country'' and the appropriate cross-reference to the definition of
``territory'' in the USMCA has been added. Accordingly, a ``NAFTA or
USMCA country'' is defined as the territory of the United States,
Canada, or Mexico, as defined in Annex 201.1 of the NAFTA and Chapter
1, Section C of the USMCA.
Finally, Sec. 134.1 has added a new paragraph (l) to include a
definition of ``USMCA'' and has revised the definition of ``NAFTA'' in
paragraph (h). The new paragraph (l) defines ``USMCA'' as the Agreement
between the United States of America, the United Mexican States, and
Canada (USMCA), entered into force by the United States, Canada and
Mexico on July 1, 2020. CBP has also added a second sentence to the
definition of ``NAFTA'' stating that NAFTA is not applicable to goods
entered for consumption, or withdrawn from warehouse for consumption,
on or after July 1, 2020 to clarify in part 134 that the USMCA
superseded NAFTA when it entered into force.
2. Marking of Containers
Subpart C of part 134 addresses the marking requirements and
exceptions under 19 U.S.C. 1304(b) for containers and holders. CBP is
amending Sec. Sec. 134.22, 134.23 and 134.24, which provide the
general rules for marking of containers or holders, the rules for
containers or holders designed for or capable of reuse, and the rules
for containers or holders not designed for or capable of reuse, to add
the necessary USMCA references. Specifically, CBP is adding ``or
USMCA'' to Sec. Sec. 134.22(b), (d)(2), and (e)(1) to indicate that a
good of a USMCA country which is a usual container is treated the same
as a good of a NAFTA country. No marking is required for any good of a
NAFTA or USMCA country that is a usual container.
CBP is amending Sec. 134.23(a) to note that the exception for
goods of a NAFTA country which are usual containers also applies to the
USMCA with the addition of the words ``or USMCA.'' CBP is also revising
Sec. Sec. 134.24(c)(1), (c)(2), and (d)(1) by adding ``or USMCA'' to
clarify that disposable containers or holders are treated the same
under the USMCA as under NAFTA.
3. Exceptions to the Marking Requirements
In section 209 of the USMCA Act, Congress amended section 304(k) of
the Tariff Act of 1930, as amended (19 U.S.C 1304(k)), to create the
same exceptions to the marking requirements for the goods of a USMCA
country as under NAFTA. Section 134.32 contains the general exceptions
to the marking requirements. CBP is adding ``or USMCA'' to paragraphs
(h), (p) and (q) of Sec. 134.32 to indicate that the exceptions to the
marking requirements apply to NAFTA and the USMCA. These general
exceptions to the marking requirements are: to articles of a USMCA
country for which the ultimate purchaser must reasonably know the
country of origin by reason of the circumstances of their importation
or by reason of the character of the articles even though they are not
marked to indicate their origin; to goods of a USMCA country which are
original works of art; and to goods of a USMCA country which are
provided for in subheading 6904.10 or heading 8541 or 8542 of the
HTSUS.
4. Other Marking Provisions
CBP is also adding ``or USMCA'' to multiple other provisions in
part 134 to indicate that goods of a USMCA country are subject to the
same treatment and marking requirements as goods of a NAFTA country.
Specifically, CBP is revising Sec. Sec. 134.35(a) and (b), 134.43(a),
(c)(3), (d)(3), and 134.45(a)(2) to include the USMCA. These sections
address articles substantially changed by manufacture, methods of
marking specific articles, and approved markings of country name,
respectively. Additionally, CBP is revising Sec. 134.35(b) to replace
a reference to the ``NAFTA Marking Rules'' with ``part 102 Rules.''
E. Part 163
Part 163, Recordkeeping, sets forth the recordkeeping requirements
and procedures governing the maintenance, production, inspection, and
examination of records. As discussed in more detail in Section III.F.,
Subpart C--Export Requirements below, 19 CFR 182.21(c) requires an
exporter or producer who completes a certification of origin or a
producer who provides a written representation for a good exported from
the United States to Canada or Mexico to maintain all records and
supporting documents relating to the origin of a good for which the
certification of origin was completed. The records must be maintained
as provided for in Sec. 163.5. Because Sec. 163.5(a) qualifies that
the requirement to maintain records for the required retention periods
and in the prescribed format only pertains to persons listed in Sec.
163.2, CBP is amending Sec. 163.2 to add USMCA exporters and
producers.
CBP is amending the scope provision in Sec. 163.0, redesignating
Sec. 163.2(c)(2) to (c)(3), and adding a new Sec. 163.2(c)(2) to
include the USMCA exporters or producers. It is not necessary to amend
Sec. 163.2 to include the USMCA importers because Sec. 163.2 includes
all importers without qualification. CBP will make any additional
amendments to part 163 necessary to implement the USMCA and to
incorporate modifications to the Uniform Regulations in a subsequent
rulemaking to be published in the Federal Register at a later date.
F. Part 182
Part 182, United States-Mexico-Canada Agreement, implements the
duty preference and related customs provisions applicable to imported
goods under the USMCA. CBP is amending part 182 of title 19 of the CFR
(19 CFR part 182) to promulgate additional USMCA implementing
regulations related to Chapters 1, 2, 5, and 7 of the USMCA. Currently,
part 182 contains a framework with its various subparts outlined. The
existing part 182 substantive provisions include the scope, a rules of
origin subpart (Subpart F), and Appendix A that sets forth the Uniform
Regulations regarding rules of origin trilaterally agreed upon by the
United States, Mexico, and Canada.
[[Page 35574]]
This document amends part 182 to add the general definitions and
confidentiality provisions to Subpart A (General Provisions), and to
add the implementing regulations for Subparts B (Import Requirements),
C (Export Requirements), D (Post-Importation Duty Refund Claims), E
(Restrictions on Drawback and Duty-Deferral Programs), G (Origin
Verifications and Determinations), J (Commercial Samples and Goods
Returned after Repair or Alteration), and K (Penalties). The
implementing regulations for the remaining part 182 subparts will be
included in a subsequent rulemaking to be published in the Federal
Register at a later date.
Subpart A--General Provisions
Definitions
Section 182.1 sets forth the general definitions applicable to this
part. Chapter 1 of the USMCA sets forth the general and country-
specific definitions to be applied throughout the USMCA, unless
otherwise noted. Since Sec. 182.1 contains the definitions of the
common terms that are used in multiple places in part 182, it includes
definitions from 19 U.S.C. 4502, several Chapters of the USMCA, and the
Uniform Regulations regarding rules of origin set forth in Appendix A
to part 182. Additional definitions that are not common terms
throughout part 182 and are applicable on a more limited basis are set
forth elsewhere with the substantive provisions to which they relate.
For instance, Appendix A to part 182 contains many definitions that are
applicable only to the Uniform Regulations regarding rules of origin.
Confidentiality
To ensure protection of confidential information provided to a
USMCA country's customs administration and to prevent the unauthorized
disclosure of this information to third parties and to other USMCA
countries, the USMCA contains confidentiality protections. These
confidentiality provisions are set forth in USMCA Articles 5.12, 7.22,
7.26, and 7.28. The USMCA also extends the confidentiality provisions
in Articles 5.12 and 7.22 to textile and apparel goods under USMCA
Chapter 6. See USMCA Article 6.9.
Article 5.12 generally governs the treatment of confidential
information exchanged by USMCA countries. A USMCA country that receives
information designated as confidential from another USMCA country or
that is deemed confidential under the receiving USMCA country's laws is
required to maintain the confidentiality of this information pursuant
to its respective laws. The receiving USMCA country may use or disclose
the confidential information, however, for purposes of administration
or enforcement of its customs laws or as otherwise provided for under
its law, including in an administrative, quasi-judicial, or judicial
proceeding. See USMCA Article 5.12.1 and 5.12.3. A USMCA country may
decline to provide information requested by another USMCA country if it
has failed to act to keep information confidential in accordance with
its law. See USMCA Article 5.12.2. USMCA Article 7.28 extends these
confidentiality protections to Section B in USMCA Chapter 7 on
cooperation and enforcement. USMCA Article 7.26 governs the exchange of
specific confidential information between USMCA countries and sets
forth the procedures for USMCA countries to request and provide
information that is normally collected in connection with the
importation, exportation, or transit of a good for purposes of
enforcing or assisting in the enforcement of measures concerning
customs offenses.
USMCA Article 7.22 governs the protection of information, related
to members of the trade community (traders), received by the USMCA
country's customs administration. It requires that each USMCA country's
customs administration apply measures governing the collection,
protection, use, disclosure, retention, correction, and disposal of
information that it collects from traders. See USMCA Article 7.22.1.
Each USMCA country's customs administration must protect confidential
information from use or disclosure, in accordance with its laws, that
could prejudice the competitive position of the trader to whom the
confidential information relates. See USMCA Article 7.22.2. The customs
administration may use or disclose confidential information, however,
for the purposes of administration or enforcement of its customs laws
or as otherwise provided under its law, including in an administrative,
quasi-judicial, or judicial proceeding. See USMCA Article 7.22.3. The
confidentiality provisions as set forth in USMCA Articles 5.12, 7.22,
7.26, and 7.28 apply to all applicable exchanges of confidential
information between the USMCA countries, including a USMCA Article 7.27
verification report containing information obtained during a
verification, such as data and documents, that is provided when a USMCA
country requests another USMCA country conduct a verification in its
territory. Additionally, to further safeguard confidential information,
the USMCA allows the importer, exporter, or producer to send
information directly to the USMCA country conducting a verification,
including documents, to allow the party to protect its proprietary
information. See USMCA Article 5.9.3.
Several U.S. statutes and regulations govern CBP's treatment and
disclosure of confidential information. The exchange of information
between USMCA countries is governed by 19 U.S.C. 1628. Section 209(c)
of the USMCA Act amended section 628 of the Tariff Act of 1930 (19
U.S.C. 1628) by striking subsection (c) and inserting language
applicable to the USMCA in accordance with USMCA Articles 5.12, 7.26,
and 7.28. Pursuant to 19 U.S.C. 1628(c), the Secretary may authorize
CBP to exchange information with any government agency of a USMCA
country if the Secretary reasonably believes the exchange of
information is necessary to implement USMCA chapters 2, 4, 5, 6, or 7,
and obtains assurances from such agency that the information will be
held in confidence and used only for governmental purposes.
The Privacy Act (5 U.S.C. 552a) governs the collection,
maintenance, use, and dissemination of personally identifiable
information (PII) in systems of records maintained by Federal agencies.
PII is defined as information that permits the identity of an
individual to be directly or indirectly inferred, including any other
information that is linked or linkable to that individual, regardless
of whether the individual is a U.S. citizen, lawful permanent resident,
visitor to the United States, or employee or contractor of the
Department of Homeland Security.
The Freedom of Information Act (FOIA) (5 U.S.C. 552) provides that
any person has the right to request access to records from any federal
agency. Under FOIA's terms, federal agencies must disclose records upon
receiving a written request for them, except for those records or
portions of records protected from disclosure by any of the nine
exemptions or three exclusions found in the statute.
Part 5 of title 6 of the CFR (6 CFR part 5) governs the disclosure
of information created or maintained by CBP and requested pursuant to
the FOIA and Privacy Act. Part 103 of title 19 of the CFR (19 CFR part
103) governs the production and disclosure of CBP-maintained
information under other statutory or regulatory provisions and/or as
requested through administrative and/or legal processes. Accordingly,
part 5 of title 6 and part 103 of title 19
[[Page 35575]]
apply where the impetus for the release of information to a member of
the public by CBP stems from a request from a member of the public,
while USMCA-related disclosures involve CBP proactively releasing
information to third parties, for example, the importer, exporter,
producer, or other USMCA country, to fulfill the United States'
commitments under the USMCA. Nonetheless, CBP will maintain the
confidentiality and disclosure protections in part 103 for USMCA-
related information disclosures, including Sec. 103.23(b) detailing
the circumstances where disclosures will not be made and Sec. 103.33
addressing the release of information to foreign agencies.
The Trade Secrets Act (18 U.S.C. 1905) bars the unauthorized
disclosure by government officials of any information received in the
course of their employment or official duties when such information
``concerns or relates to the trade secrets, processes, operations,
style of work, or apparatus, or to the identity, confidential
statistical data, amount or source of any income, profits, losses, or
expenditures of any person, firm, partnership, corporation, or
association.'' See 18 U.S.C. 1905. Specifically, the Trade Secrets Act
protects those required to furnish commercial or financial information
to the government by shielding them from the competitive disadvantage
that could result from disclosure of that information by the
government. The courts have interpreted the Trade Secrets Act as
covering the same type of information that falls under Exemption 4 of
the FOIA. See, e.g., CNA Fin. Corp. v. Donovan, 830 F.2d 1132, 1140
(D.C. Cir. 1987). Exemption 4 of the FOIA protects ``trade secrets and
commercial or financial information obtained from a person [that is]
privileged or confidential.'' See 5 U.S.C. 552(b)(4).
The Trade Secrets Act permits those covered by the Act to disclose
protected information when the disclosure is otherwise ``authorized by
law,'' which includes both statutes expressly authorizing disclosure
and properly promulgated substantive agency regulations authorizing
disclosure based on a valid statutory interpretation. See Chrysler v.
Brown, 441 U.S. 281, 294-316 (1979). For example, 19 U.S.C. 1514(e)
grants the Secretary of the Treasury authority to provide, in the case
of a negative USMCA determination, the entry number and any other entry
information considered necessary to allow the exporter or producer, who
is the subject of the determination and completed the certification of
origin, to exercise its protest rights pursuant to 19 CFR part 174,
except when there is a pattern of conduct of false or unsupported
representations pursuant to 19 U.S.C. 1514(f).
Thus, CBP is adding a new Sec. 182.2 to address CBP's
responsibility to maintain the confidentiality of the USMCA-related
information it receives from the public in accordance with existing
statutory and regulatory requirements, including 19 CFR part 103, 6 CFR
part 5, and all other applicable statutes and regulations, the legally
permitted disclosures of this information that CBP is authorized to
make to third parties and other USMCA countries, and the information
sharing that is permissible with U.S. government authorities, including
the Department of Labor with respect to the USMCA's labor value content
requirements.
Section 182.2 fulfills CBP's commitment under USMCA Article 7.22 to
apply measures governing the protection, use, and disclosure of
information collected from traders. Section 182.2 is focused on USMCA-
related disclosures of information collected from members of the trade
community (traders). As discussed in more detail in Section III.F.,
Subpart G--Origin Verifications and Determinations below, the USMCA
requires several notifications, unique to the USMCA, that permit
authorized disclosures to importers, exporters, or producers of
information collected from traders. Under the USMCA and the Uniform
Regulations regarding origin procedures, the confidentiality
requirements apply when CBP provides a determination of origin,
originally issued to the exporter or producer, to the importer in
accordance with USMCA Article 5.9.14 and the Uniform Regulations
regarding origin procedures.
In order to ensure compliance with the applicable U.S. statutory
and regulatory provisions, CBP is also extending the confidentiality
regulations in Sec. 182.2 to any of the notifications made during a
verification that potentially involve information disclosures to third
parties. These include CBP's notification of the initiation of a
verification to the importer (Sec. 182.73(c)), sending a request for
information to the exporter or producer prior to issuing a negative
determination (Sec. 182.75(c)(1)), the issuance of a positive or
negative determination of origin (Sec. 182.75), and the issuance of
the intent to deny (Sec. 182.75(c)(3)). Section 182.2(b) also
authorizes CBP to disclose confidential information collected from
traders to U.S. government authorities responsible for the
administration and enforcement of USMCA requirements, such as the
information in the labor value content vehicle certifications to the
Department of Labor. The provision that allows the importer, exporter,
or producer to send information directly to CBP to protect its
proprietary information is set forth in Sec. 182.72(c). See subpart G
of part 182.
While Sec. 182.2 is intended to address only USMCA-specific
information collections and disclosures, CBP will continue to treat all
confidential information received from the public, such as routine
entry information, in accordance with existing statutory and regulatory
requirements, including the routine uses of the systems of record
notices (SORNs) for the trade systems maintained by CBP. As discussed
above, the exchange of information between USMCA countries is governed
by statutory authority (19 U.S.C. 1628).
Subpart B--Import Requirements
Subpart B of part 182 (19 CFR 182.11-182.16) contains the USMCA
import requirement provisions, as provided for in Chapter 5 of the
USMCA, including the filing of a claim for preferential tariff
treatment upon importation (Sec. 182.11), certification of origin
requirements (Sec. 182.12), importer obligations (Sec. 182.13),
certification of origin not required (Sec. 182.14), maintenance of
records (Sec. 182.15), effect of noncompliance, and failure to provide
documentation regarding transshipment (Sec. 182.16).
Section 182.11, Filing of claim for preferential tariff treatment
upon importation, sets forth the procedure for making a claim for
preferential tariff treatment upon importation, the basis for making a
claim, and the requirement that the importer correct a claim if it has
reason to believe that the claim is based on inaccurate information or
is otherwise invalid. In accordance with Article 5.2.1 of the USMCA, an
importer may make a claim for USMCA preferential tariff treatment based
on a certification of origin completed by the importer, exporter, or
producer for the purpose of certifying that a good being exported from
the territory of a USMCA country into the territory of another USMCA
country qualifies as an originating good. An importer who makes a claim
for preferential tariff treatment upon importation, pursuant to Sec.
182.11(b), also qualifies for an exemption from the merchandise
processing fee.
Section 182.12, Certification of Origin, indicates the requirements
for the certification of origin, consistent with Articles 5.2 and 5.3
of the USMCA, including the specifics on what the certification of
origin must contain, its
[[Page 35576]]
form, its basis, its applicability, and its validity.
Section 182.14, Certification of origin not required, sets forth
the types of importations, consistent with Article 5.5 of the USMCA,
where an importer will not be required to submit a copy of a
certification of origin. Unless Sec. 182.14(b) applies, an importer
will not be required to submit a copy of a certification of origin for
a non-commercial importation of a good; or a commercial importation for
which the value of the originating goods does not exceed $2,500 in U.S.
dollars.
Section 182.15, Maintenance of records, contains the recordkeeping
requirements, in accordance with Article 5.8.1 of the USMCA, that apply
to an importer claiming USMCA preferential tariff treatment for a good
imported into the United States. The importer must maintain the
certification of origin and all records and documents that the importer
has demonstrating that the 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
of the good. These records are in addition to any other records that
the importer is required to prepare, maintain, or make available to CBP
under part 163.
Pursuant to Sec. 182.16(a), if the importer fails to comply with
applicable requirements under this subpart, including submission of a
complete certification of origin prepared in accordance with Sec. Sec.
182.12 and 182.14, when requested, CBP may deny preferential tariff
treatment to imported goods. In addition, pursuant to Sec. 182.16(b),
CBP may deny preferential tariff treatment to an originating good if
the good is transported outside the territories of the USMCA countries,
and at the request of CBP, the importer of the good does not provide
evidence demonstrating to the satisfaction of CBP that the transit and
transshipment conditions of the USMCA were met.
Subpart C--Export Requirements
Subpart C of part 182 (19 CFR 182.21) sets forth the obligations of
an exporter or producer who completes a certification of origin for a
good exported from the United States to Canada or Mexico. These export
requirements are in accordance with Article 5.6 of the USMCA. These
requirements include the submission of the certification of origin to
CBP upon request, and a requirement to provide prompt notification of
errors in the certification of origin that could affect its accuracy or
validity to every person to whom the certification was provided,
including CBP.
Paragraph (c) of Sec. 182.21 sets forth the recordkeeping
requirements, in accordance with Article 5.8.2 of the USMCA, that apply
to an exporter or producer who completes a certification of origin or a
producer who provides a written representation for a good exported from
the United States to Canada or Mexico. These records must be maintained
as provided for in 19 CFR 163.5 and must be stored and made available
for examination and inspection by the appropriate CBP official in the
same manner as provided in part 163. As discussed in Section III.E.
Part 163 above, to impose these recordkeeping requirements on the USMCA
exporters and producers, CBP had to make conforming amendments to 19
CFR 163.2(c).
Subpart D--Post-Importation Duty Refund Claims
Subpart D of part 182 (19 CFR 182.31-182.33) sets forth the
provisions related to post-importation claims for preferential tariff
treatment. Under 19 U.S.C. 1520(d), CBP may reliquidate an entry to
refund any excess duties paid at importation on a good qualifying for
preferential tariff treatment under the rules of origin for certain
enumerated trade agreements for which a claim for preferential tariff
treatment was not filed at importation (1520(d) claims).
Notwithstanding the fact that a valid protest was not filed, and
provided a claimant files the required documents as described in 19 CFR
182.32(b), this provision allows the claimant to receive refunds for
any excess duties. See 19 U.S.C. 1520(d).
Section 182.31 sets forth the right to make this post-importation
claim for preferential tariff treatment. Specifically, where a good
would have qualified as an originating good when it was imported into
the United States but no claim for preferential tariff treatment was
made, the importer of that good may file a claim for a refund of any
excess duties at any time within one year after the date of importation
of the good in accordance with the procedures set forth in Sec.
182.32. CBP may refund any excess duties by liquidation or
reliquidation of the entry covering the good in accordance with Sec.
182.33 of this subpart.
As described above, on December 27, 2020, the Appropriations Act
was enacted with Title VI of the Act setting forth technical
corrections to the USMCA Act. Prior to the enactment of the
Appropriations Act and the technical corrections, section 205(a)(1)(C)
of the USMCA Act only permitted an importer who made a claim for USMCA
preferential tariff treatment upon importation pursuant to Sec.
182.11(b) to qualify for an exemption from the merchandise processing
fee while importers who filed a USMCA post-importation claim under 19
U.S.C. 1520(d) (1520(d) claim) were limited to the refund of any excess
duties paid at importation and were specifically excluded from
receiving the refund of any merchandise processing fees paid at
importation. Section 601(e) of Title VI of the Appropriations Act
amended 19 U.S.C. 1520(d) to allow the refund of merchandise processing
fees for USMCA post-importation claims. This change is retroactively
effective as of July 1, 2020, USMCA's entry into force date, and
authorizes CBP to issue refunds of the merchandise processing fees for
USMCA post-importation claims.
Subpart E--Restrictions on Drawback and Duty-Deferral Programs
Subpart E of part 182 (19 CFR 182.41-182.54) sets forth the
provisions regarding drawback claims and duty-deferral programs, as
provided for under Article 2.5 of the USMCA, and applies to any good
that is a ``good subject to USMCA drawback'' within the meaning of 19
U.S.C. 4534. Drawback, as generally provided for in section 313 of the
Tariff Act of 1930, as amended (19 U.S.C. 1313), is the refund or
remission, in whole or in part, of duties, taxes, and fees imposed and
paid under Federal law upon entry or importation.
The requirements and procedures set forth in subpart E for USMCA
drawback are in addition to the general definitions, requirements, and
procedures for drawback claims set forth in part 190 of title 19 of the
CFR, unless otherwise specified. Further, the requirements and
procedures of subpart E are also in addition to those for manipulation,
manufacturing, and smelting and refining warehouses contained in parts
19 and 144, for foreign trade zones under part 146, and for temporary
importations under bond in part 10.
Subpart E contains sections on applicability (Sec. 182.41), duties
and fees not subject to drawback (Sec. 182.42), eligible goods subject
to USMCA drawback (Sec. 182.43), calculation of drawback (Sec.
182.44)--which includes the lesser of duty rule for USMCA drawback at
Sec. 182.44(a), goods eligible for full drawback (Sec. 182.45),
filing of drawback claim (Sec. 182.46), completion of claim for
drawback (Sec. 182.47), retention of records (Sec. 182.49),
liquidation and payment of drawback claims (Sec. 182.50), prevention
of
[[Page 35577]]
improper payment of claims (Sec. 182.51), subsequent claims for
preferential tariff treatment (Sec. 182.52), verification of claim for
drawback, and waiver or reduction of duties (Sec. 182.54). Certain
sections and paragraphs in subpart E of part 182 remain reserved. CBP
is reviewing these reserved sections and paragraphs because of
outstanding policy considerations and they will be addressed in a
subsequent rulemaking. With the exception of the specific sections
discussed below, the USMCA drawback provisions contained in subpart E
are substantially similar to the NAFTA drawback provisions contained in
part 181.
In Sec. 182.44(d), Substitution manufacturing drawback under 19
U.S.C. 1313(b), CBP is allowing substitution using the 8-digit HTSUS
subheading number standard for the USMCA. See 19 U.S.C. 4534(b). This
8-digit HTSUS subheading number standard is the standard previously
provided for in section 906, Drawback and Refunds, of the Trade
Facilitation and Trade Enforcement Act of 2015 (TFTEA) (Pub. L. 114-
125, 130 Stat. 122, February 24, 2016). CBP is adding a paragraph
(d)(2), Special rule for sought chemical elements, in Sec. 182.44,
that was not part of NAFTA drawback. This paragraph (d)(2) is intended
to clarify the term ``same kind and quality'' as it applies to sought
chemical elements.
The USMCA drawback provisions in Sec. 182.45 include a few
differences from NAFTA drawback. In Sec. 182.45, CBP has made changes
to paragraph (d), Certain goods exported to Canada or Mexico,
regarding, inter alia, certain sugar tariffs that are excluded from the
lesser of duty rule as provided for in 19 U.S.C. 4534(a)(6). In Sec.
182.45, CBP also has added new paragraph (e), Certain goods exported to
Canada, as provided for in 19 U.S.C. 4534(a)(7) and (a)(8), and a new
paragraph (f), Certain goods that are exported or deemed exported, as
provided for in 19 U.S.C. 4534(a)(3).
The USMCA did not provide for the time or method of filing a USMCA
drawback claim. Accordingly, CBP has made conforming changes to the
procedures in Sec. 182.46, Filing of drawback claim, to better align
with the general requirements of part 190, Modernized Drawback, as
provided for in 19 U.S.C. 1313, as amended. These conforming changes
will ensure a more uniform approach to the filing and processing of all
drawback claims by requiring claims to be filed within 5 years after
the date of importation and to be transmitted electronically in the
Automated Commercial Environment (ACE).
Subpart G--Origin Verifications and Determinations
Subpart G of part 182 (19 CFR 182.71-182.76) contains the general
USMCA verification and determination of origin provisions, including
the applicability of these provisions (Sec. 182.71), verification of
claim for preferential tariff treatment (Sec. 182.72), notification
and response procedures (Sec. 182.73), verification visit procedures
(Sec. 182.74), determinations of origin (Sec. 182.75), and repeated
false or unsupported preference claims (Sec. 182.76).
Section 182.71, Applicability, states that subpart G contains the
general origin verification and determination provisions applicable to
goods claiming USMCA preferential tariff treatment. USMCA Articles 5.9
and 5.10 and the Uniform Regulations regarding origin procedures
address general verification and determinations of origin.
Additional verification procedures that apply to textile and
apparel goods and automotive goods will be set forth in Subpart H,
Textile and Apparel Goods, and Subpart I, Automotive Goods, in part
182. These subparts will be included in a subsequent rulemaking to be
published in the Federal Register at a later date. Please refer to the
CBP website at <a href="https://www.cbp.gov/trade/priority-issues/trade-agreements/free-trade-agreements/USMCA">https://www.cbp.gov/trade/priority-issues/trade-agreements/free-trade-agreements/USMCA</a> for more information, including
the U.S. USMCA Implementing Instructions, regarding verifications of
textile and apparel goods and automotive goods.
Section 182.72, Verification of claim for preferential tariff
treatment, describes the means that CBP may use to conduct a
verification, contains the provisions related to verifications of a
material, states that CBP will accept information directly from the
importer, exporter, or producer during a verification, and contains the
accounting principles that apply to a verification. A claim for USMCA
preferential tariff treatment will be subject to such verification as
CBP deems necessary. A verification described in subpart G of part 182
may be conducted by a Center of Excellence and Expertise (Center) or by
Regulatory Audit and Agency Advisory Services. In accordance with USMCA
Article 5.9.2, CBP may initiate the verification of goods imported into
the United States under the USMCA with the importer, or with the
exporter or producer who completed the certification of origin.
A verification of a claim for USMCA preferential tariff treatment
may be conducted by means of one or more of the following: Requests for
information, including documents, from the importer, exporter, or
producer; questionnaires seeking information, including documents, from
the importer, exporter, or producer; verification visits to the
premises of the exporter or producer in Mexico or Canada in order to
request information, including documents, and to observe production
processes and facilities; and any other procedure to which the USMCA
countries may agree.
As described in Sec. 182.72(b), when conducting a verification of
a good imported into the United States, CBP may conduct a verification
of the material that is used in the production of that good. A
verification of a material producer may be conducted pursuant to any of
the verification means set forth in Sec. 182.72(a). Please note that
CBP believes that the term ``material producer'' and our application of
the verification of materials in part 182 to be sufficiently broad to
encompass a verification of either a material producer or a material
supplier. CBP encourages public comment on this issue, including
whether a material supplier should be separately accounted for in the
regulations. In accordance with the Uniform Regulations regarding
origin procedures,\7\ with the exception of the notification to the
importer of the initiation of a verification (Sec. 182.73(c)) and the
determination of origin provisions (Sec. 182.75), subpart G applies
when CBP is conducting a verification of a material.
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\7\ See Uniform Regulations regarding origin procedures, Origin
Verifications Section, paragraph 10, which states that where the
customs administration of a USMCA country, in conducting an origin
verification of a good imported into its territory under USMCA
Article 5.9, conducts an origin verification of a material that is
used in the production of the good, the origin verification of that
material is expected to be conducted in accordance with the
procedures set out in: USMCA Article 5.9(1), (5), (7 through 11),
(13), and (18); and paragraphs 3, 6, 13, 14, and 15 of the Origin
Verifications Section of the Uniform Regulations regarding origin
procedures.
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Section 182.73, Notification and response procedures, contains the
notification and response procedures for requests for information,
questionnaires, and verification visits. Paragraph (a) specifies the
contents of a request for information and a questionnaire, in
accordance with USMCA Article 5.9.5, and that the importer, exporter,
or producer must make records available for inspection by a CBP
official during a verification. Paragraph (b) states that, prior to
conducting a verification visit in Canada or Mexico, CBP will provide
the exporter or producer with a notification stating the intent to
conduct a verification visit, and provides the contents of that
notification in
[[Page 35578]]
accordance with USMCA Article 5.9.5. Paragraph (c) sets forth the
importer notification that is required, pursuant to USMCA Article 5.9.6
and the Uniform Regulations regarding origin procedures, when CBP
initiates a verification with the exporter or producer. Paragraph (d)
provides the means of communication that CBP may use to contact the
exporter or producer. In accordance with USMCA Article 5.9.18, all
communication to the exporter or producer will be sent by any means
that can produce a confirmation of receipt, with the Uniform
Regulations regarding origin procedures specifying the specific means.
Paragraph (e) contains information regarding when the time periods in
subpart G begin, and paragraph (f) sets forth the amount of time that
the importer, exporter, or producer has to respond to a request for
information and a questionnaire, and that an exporter or producer has
to consent to or deny the verification visit.
Section 182.74, Verification visit procedures, sets forth the
verification visit procedures applicable to CBP when it is conducting a
verification visit of an exporter or producer in Canada or Mexico. CBP
may conduct a verification visit of the exporter or producer's premises
in-person or remotely. The same verification visit procedures apply to
both in-person and remote verification visits, including the
notification of a verification visit to the exporter or producer whose
premises are to be visited (Sec. 182.73(b)), the response time for
responding to a notification of a verification visit (Sec.
182.73(f)(2)), the written consent required prior to the verification
visit (Sec. 182.74(a)), the option to request a postponement of the
visit (Sec. 182.74(b)), the records that must be made available for
inspection by a CBP official conducting the verification, the
facilities provided for that inspection (Sec. 182.74(c)), and the
right to have observers (Sec. 182.74(d)).
Section 182.75, Determinations of origin, sets forth the contents
of a determination of origin and the parties that will receive the
determination of origin. While USMCA Article 5.9.14 only requires that
a USMCA country provide a written determination of origin to the
importer, and the exporter or producer that completed the certification
of origin and is the subject of a verification, CBP has decided to
extend the parties to whom it will issue a determination of origin. As
stated in Sec. 182.75(b), CBP will issue the determination of origin
to the importer, and to the exporter or producer who is subject to the
verification and either completed the certification of origin or
provided information directly to CBP during the verification to ensure
that the same parties receive both the intent to deny and the
determination of origin. This determination of origin will be issued to
these parties within 120 days or, in exceptional cases and upon
notification to the appropriate parties, within 210 days, after CBP has
determined that it has received all the information necessary to issue
a determination in accordance with USMCA Article 5.9.15.
USMCA Article 5.9.15 requires the USMCA country conducting the
verification to, as expeditiously as possible and within 120 days after
it has received all the information necessary (including any
information collected pursuant to a verification request to an exporter
or producer) to make the determination and provide the written
determination to the appropriate parties. The Uniform Regulations
regarding origin procedures further clarify that ``all the information
necessary'' includes information that may be required regarding the
materials used in the production of a good or any assistance requested
under USMCA Article 5.9.8 during a verification from another USMCA
country. Pursuant to USMCA Article 5.9.15, the USMCA country may extend
this 120-day period, in exceptional cases, for up to 90 days after
notifying the importer, and any exporter or producer who is subject the
verification or provided information during the verification. CBP has
decided to provide this notification of the extension to all parties to
whom it will issue a determination of origin pursuant to 19 CFR
182.75(b), including to the exporter or producer who is subject to the
verification and either completed the certification of origin or
provided information directly to CBP during the verification.
Paragraph (c) of Sec. 182.75 contains the provisions that apply to
negative determinations of origin when CBP intends to deny USMCA
preferential tariff treatment. This paragraph sets forth the
circumstances under which CBP must send a request for information to
the exporter or producer prior to issuing a negative determination in
accordance with USMCA Article 5.9.4, the reasons that CBP may deny
preferential tariff treatment, the intent to deny provision, and the
additional requirements that apply when CBP issues a negative
determination. Paragraph (c)(2) contains the reasons that CBP may deny
USMCA preferential tariff treatment as set forth in USMCA Article
5.10.2. CBP will amend paragraph (c)(2) in a subsequent rulemaking to
be published in the Federal Register at a later date to reflect the
application of the USMCA Article 5.10.2 reasons for denial to textile
and apparel goods and automotive goods and to ensure that paragraph
(c)(2) contains a comprehensive list of the reasons for denial with the
appropriate cross-references.
As described above, pursuant to USMCA Article 5.9.16, prior to
issuing a written determination of origin, if the USMCA country intends
to deny USMCA preferential tariff treatment, the USMCA country must
inform the importer, and any exporter or producer who is subject to the
verification and provided information during the verification, of the
preliminary results of the verification and provide those persons with
a notice of intent to deny. Paragraph (c)(3) of Sec. 182.75 contains
the intent to deny provision, including that CBP will inform the
importer, and the exporter or producer who is subject to the
verification and either completed the certification of origin or
provided information directly to CBP during the verification, of CBP's
intent to deny preferential tariff treatment. As discussed above, CBP
has decided to extend the parties who receive an intent to deny, beyond
the requirements in USMCA Article 5.9.16, to ensure that the same
parties receive the intent to deny and the determination of origin. The
intent to deny will contain the preliminary results of the
verification, the effective date of the denial of preferential tariff
treatment, and a notice to the importer, exporter, or producer that CBP
will provide 30 days to submit additional information, including
documents, related to the preferential tariff treatment of the good.
Pursuant to paragraph (c)(4), if, 30 days after the importer receives
the intent to deny, CBP determines that one or more of the reasons for
the denial of preferential tariff treatment continues to apply, CBP
will issue a negative determination of origin. In addition to the
contents of the determination set forth in Sec. 182.75(a), a negative
determination of origin will provide the exporter or producer with the
information necessary to file a protest as provided for in 19 U.S.C.
1514(e) and part 174, unless CBP determines that there is a pattern of
conduct of false or unsupported representations pursuant to Sec.
182.76. Pursuant to 19 U.S.C. 1514(e), CBP is authorized to provide
exporters or producers who receive a negative determination of origin
with the entry number and any other entry information considered
necessary to allow the exporter or producer to exercise its protest
rights under 19 U.S.C. 1514 and
[[Page 35579]]
part 174, unless CBP determines that there is a pattern of conduct of
false or unsupported representations pursuant to 19 U.S.C. 1514(f). CBP
will be amending part 174 to allow exporters and producers to exercise
their protest rights in a subsequent rulemaking to be published in the
Federal Register at a later date.
Section 182.76, Repeated false or unsupported preference claims,
states that, in accordance with USMCA Article 5.9.17, if a verification
reveals a pattern of conduct by the importer, exporter, or producer of
false or unsupported representations that a good imported into the
United States qualifies for USMCA preferential tariff treatment, CBP
may withhold preferential tariff treatment for entries of identical
goods until CBP determines that representations of that person are in
conformity with part 182 and with General Note 11, HTSUS.
As explained in more detail above in Section III.F., Subpart A--
General Provisions, CBP has a duty to ensure the protection of
confidential business information. In order to ensure compliance with
the applicable U.S. statutory and regulatory provisions, CBP has
decided to apply the confidentiality regulations in Sec. 182.2 to any
of the notifications made during a verification that potentially
involve information disclosures to third parties. These include CBP's
notification of the initiation of a verification to the importer (Sec.
182.73(c)), sending a request for information to the exporter or
producer prior to issuing a negative determination (Sec.
182.75(c)(1)), the issuance of a positive or negative determination of
origin (Sec. 182.75), and the issuance of the intent to deny (Sec.
182.75(c)(3)). The provision that allows the importer, exporter, or
producer to send information directly to CBP to protect its proprietary
information is set forth in Sec. 182.72(c).
Subpart I--Automotive Goods
Subpart I of part 182 pertains to automotive goods. The regulations
in subpart I, which are currently reserved as Sec. Sec. 182.91-182.93,
may be more expansive than previously anticipated. To allow for this
possibility, the numbering structure of the regulations in subpart J
has been modified, as explained below. The actual text of the subpart I
regulations will be included in a subsequent rulemaking to be published
in the Federal Register at a later date.
Subpart J--Commercial Samples and Goods Returned After Repair or
Alteration
Subpart J (19 CFR 182.111-182.112) provides for the duty-free
treatment of commercial samples of negligible value and goods re-
entered after repair or alteration in Canada or Mexico. The regulations
in subpart J, which were previously reserved as Sec. 182.101 and Sec.
182.102, are redesignated as Sec. 182.111 and Sec. 182.112 due to
changes in the numbering structure of subpart I of part 182, discussed
above.
Commercial Samples
Section 182.111 defines commercial samples of negligible value,
based on Article 2.1 of the USMCA, as commercial samples which have a
value, individually or in the aggregate as shipped, of not more than
one U.S. dollar, or the equivalent amount in the currency of Canada or
Mexico; or which are so marked, torn, perforated, or otherwise treated
that they are unsuitable for sale or for use except as commercial
samples. These commercial samples of negligible value qualify for duty-
free entry from Canada or Mexico, in accordance with Article 2.9 of the
USMCA, only if the samples are imported solely for the purpose of
soliciting orders for foreign goods or services.
Goods Re-Entered After Repair or Alteration in Canada or Mexico
Section 182.112 sets forth the rules that apply for purposes of
obtaining duty-free treatment on goods returned after repair or
alteration in Canada or Mexico. This section also contains the
conditions under which these goods are not eligible for duty-free
treatment and provides the documentation requirements. The documentary
requirements set forth in Sec. 10.8(a), (b), and (c) apply to goods
claiming duty-free treatment under Sec. 182.112. While CBP is aware
that under ordinary circumstances Sec. 10.8 applies to articles
claimed to be subject to duty on the value of the repairs or
alterations performed abroad, for purposes of the USMCA, the same
documentation requirements in Sec. 10.8(a), (b), and (c) apply in
connection with the entry of goods returned after repairs or
alterations from Canada or Mexico which are claimed to be duty-free
under the USMCA.
Subpart K--Penalties
Subpart K of part 182 (19 CFR 182.121-182.124) sets forth penalties
provisions, including those related to general penalties under the
USMCA (Sec. 182.121), corrected claim or certification of origin by
importers (Sec. 182.122), corrected certification of origin by U.S.
exporters or producers (Sec. 182.123), and the framework for
correcting claims or certifications of origin (Sec. 182.124). The
regulations in subpart K, which were previously reserved as Sec. Sec.
182.111-182.114, are redesignated as Sec. Sec. 182.121-182.124 due to
changes in the numbering structure of subparts I and J of part 182, as
discussed above. These provisions are in accordance with Articles 5.13,
5.4.2, 5.6.3, and 7.18 of the USMCA.
As stated in Sec. 182.121, except as otherwise provided in subpart
K, all criminal, civil, or administrative penalties which may be
imposed on U.S. importers, exporters, and producers for violations of
the customs and related U.S. laws and regulations will also apply to
U.S. importers, exporters, and producers for violations of the U.S.
laws and regulations relating to the USMCA. An importer who makes a
corrected claim or certification of origin, and an exporter or producer
who provides written notification of an incorrect certification of
origin will not be subject to civil or administrative penalties under
19 U.S.C. 1592 if the corrected claim, certification of origin, or
written notification is made promptly and voluntarily. Section 182.124,
Framework for correcting claims or certifications of origin, defines
``promptly and voluntarily'' for these purposes, provides that in cases
involving fraud or subsequent incorrect claims a person may not
voluntarily correct a claim or certification of origin, sets forth the
requirements for the statement that must accompany each corrected claim
or certification of origin, and requires that a U.S. importer who makes
a corrected claim must tender any actual loss of duties and merchandise
processing fees, if applicable.
G. Part 190
Part 190, Modernized Drawback, sets forth the general provisions
applicable to all drawback claims and specialized provisions applicable
to specific types of drawback claims filed under 19 U.S.C. 1313, as
amended. CBP is amending part 190 to make conforming edits to include
USMCA drawback claims. The scope provision in Sec. 190.0 is amended to
clarify that additional drawback provisions relating to the USMCA are
contained in subpart E of part 182. Section 190.0a addresses claims
filed under NAFTA and CBP is amending the paragraph heading of Sec.
190.0a to reflect that this section is applicable to claims filed under
both NAFTA and the USMCA. Section 190.0a
[[Page 35580]]
is also amended to clarify that USMCA drawback claims filed under the
provisions of part 182 must be filed separately from claims filed under
the provisions of part 190 (currently it only lists NAFTA drawback
claims filed under part 181). And lastly, Sec. 190.51 provides the
process for completion of drawback claims and CBP is making conforming
changes such as referencing the USMCA and part 182 to indicate that the
same process is used for both NAFTA drawback and USMCA drawback claims.
IV. Statutory and Regulatory Requirements
A. Administrative Procedure Act
Under section 553 of the Administrative Procedure Act (APA) (5
U.S.C. 553), agencies generally are required to publish a notice of
proposed rulemaking in the Federal Register that solicits public
comment on the proposed regulatory amendments, consider public comments
in deciding on the content of the final amendments, and publish the
final amendments at least 30 days prior to their effective date. This
rule is exempt from APA rulemaking requirements pursuant to 5 U.S.C.
553(a)(1) as a foreign affairs function of the United States because it
is promulgating several of the U.S. domestic regulations necessary to
implement the preferential tariff treatment and customs related
provisions of the USMCA, which is a trilateral agreement negotiated
between the United States, Mexico, and Canada. However, CBP is
soliciting comments on this IFR and will consider all comments received
before issuing a final rule.
For the same reasons, a delayed effective date is not required
under 5 U.S.C. 553(d)(3). The USMCA entered into force on July 1, 2020.
CBP provided guidance to the public on how to comply with the
requirements of the USMCA by posting on the CBP website, available at
<a href="https://www.cbp.gov/trade/priority-issues/trade-agreements/free-trade-agreements/USMCA">https://www.cbp.gov/trade/priority-issues/trade-agreements/free-trade-agreements/USMCA</a>, the U.S. USMCA Implementing Instructions, which were
issued on March 25, 2020 and updated on June 30, 2020. The provisions
of this IFR codify several of these Implementing Instructions. A
delayed effective date would cause additional confusion and would be
impractical, unnecessary, and contrary to public interest.
B. Executive Orders 13563 and 12866
Executive Orders 13563 and 12866 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility.
Rules involving the foreign affairs function of the United States
are exempt from the requirements of Executive Orders 13563 and 12866.
Because this rule involves a foreign affairs function of the United
States by implementing a trilaterally negotiated agreement between the
United States, Mexico, and Canada, this rule is not subject to the
provisions of Executive Orders 13563 and 12866.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended
by the Small Business Regulatory Enforcement and Fairness Act of 1996,
requires an agency to prepare and make available to the public a
regulatory flexibility analysis that describes the effect of a proposed
rule on small entities (i.e., small businesses, small organizations,
and small governmental jurisdictions) when the agency is required to
publish a general notice of proposed rulemaking for a rule. Since a
notice of proposed rulemaking is not necessary for this rule, CBP is
not required to prepare a regulatory flexibility analysis for this
rule.
D. Paperwork Reduction Act
The collection of information in this document has been approved by
OMB in accordance with the Paperwork Reduction Act (44 U.S.C. 3507)
under OMB control numbers 1651-0117, 1651-0098, and 1651-0023. An
agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a valid
control number assigned by OMB. The collections of information and
recordkeeping requirements related to this rule have been approved by
OMB under an emergency revision and extension of collection number
1651-0117 (Free Trade Agreements), an emergency revision of collection
number 1651-0098 (NAFTA Regulations and Certificate of Origin), and an
emergency revision and extension of collection number 1651-0023 (CBP
Form 28 Request For Information). The revision of collection number
1651-0117 is necessary for CBP to collect the information needed to
implement the USMCA. The revision of collection number 1651-0023 is
necessary to reflect an increase in burden hours due to the use of CBP
Form 28 for an additional purpose: Requesting additional information
needed for enforcing the USMCA. The revision of collection number 1651-
0098 is necessary to reflect the reduction in burden hours that results
from the USMCA superseding NAFTA and the repeal of the NAFTA
Implementation Act, as of the USMCA's entry into force date of July 1,
2020. Importers, who did not claim preferential tariff treatment at the
time of importation, have one year from the date of importation of the
originating goods to file post-importation claims. These importers may
need to use the NAFTA Certificate of Origin to file a post-importation
claim for goods from Canada and Mexico entered for consumption, or
withdrawn from warehouse for consumption, prior to July 1, 2020 during
that one-year time period. Once one year has elapsed, CBP will
discontinue this information collection. The likely respondents for
these information collections are importers, exporters, producers, and
customs brokers.
The information collection requirements will result in the
following estimated burden hours:
Free Trade Agreements
Estimated Number of Annual Respondents: 4,699,460.
Estimated Number of Annual Responses per Respondent: 1.00034.
Estimated Total Annual Responses: 4,701,060.
Estimated Time per Response: 2 hours.
Estimated Total Annual Burden Hours: 9,402,120.
NAFTA Certificate of Origin
Estimated Number of Annual Respondents: 13,000.
Estimated Number of Annual Responses per Respondent: 1.
Estimated Total Annual Responses: 13,000.
Estimated Time per Response: 2 hours.
Estimated Total Annual Burden Hours: 26,000.
NAFTA Questionnaire
Estimated Number of Annual Respondents: 400.
Estimated Number of Annual Responses per Respondent: 1.
Estimated Total Annual Responses: 400.
Estimated Time per Response: 2 hours.
Estimated Total Annual Burden Hours: 800.
[[Page 35581]]
NAFTA Motor Vehicle Averaging Election
Estimated Number of Annual Respondents: 11.
Estimated Number of Annual Responses per Respondent: 1.28.
Estimated Total Annual Responses: 14.
Estimated Time per Response: 1 hour.
Estimated Total Annual Burden Hours: 14.
CBP Form 28 Request for Information
Estimated Number of Annual Respondents: 62,000.
Estimated Number of Annual Responses per Respondent: 1.
Estimated Total Annual Responses: 62,000.
Estimated Time per Response: 2 hours.
Estimated Total Annual Burden Hours: 124,000.
Comments concerning the collection of information and the accuracy
of the estimated annual burden, and suggestions for reducing that
burden, should be directed to the Office of Management and Budget,
Attention: Desk Officer for Customs and Border Protection, Department
of Homeland Security, Office of Information and Regulatory Affairs,
Washington, DC 20503. A copy should also be sent to the Trade and
Commercial Regulations Branch, Regulations and Rulings, U.S. Customs
and Border Protection, 90 K Street NE, 10th Floor, Washington, DC
20229-1177. Comments are specifically welcome on (a) whether the
proposed collection of information is necessary for the proper
performance of the mission of the agencies, and whether the information
will have practical utility; (b) the accuracy of the estimate of the
burden of the collections of information; (c) ways to enhance the
quality, utility, and clarity of the information collection; (d) ways
to minimize the burden of the information collection, including through
the use of automated collection techniques or other forms of
information technology; and (e) estimates of capital or start-up costs
and costs of operation, maintenance, and purchase of services to
maintain the information. Comments should be received on or before
September 7, 2021.
V. Signing Authority
This rulemaking is being issued in accordance with 19 CFR
0.1(a)(1), pertaining to the authority of the Secretary of the Treasury
(or that of his or her delegate) to approve regulations related to
certain customs revenue functions.
List of Subjects
19 CFR Part 10
Bonds, Exports, Imports, Reporting and recordkeeping requirements,
Trade agreements.
19 CFR Part 102
Canada, Mexico, Reporting and recordkeeping requirements, Trade
agreements.
19 CFR Part 132
Imports.
19 CFR Part 134
Labeling, Packaging and containers.
19 CFR Part 163
Administrative practice and procedure, Exports, Imports, Penalties,
Reporting and recordkeeping requirements.
19 CFR Part 182
Administrative practice and procedure, Canada, Exports, Mexico,
Reporting and recordkeeping requirements, Trade agreements.
19 CFR Part 190
Alcohol and alcoholic beverages, Claims, Exports, Foreign trade
zones, Guantanamo Bay Naval Station, Cuba, Packaging and containers,
Reporting and recordkeeping requirements, Trade agreements.
For the reasons stated above, amend parts 10, 102, 132, 134, 163,
182, and 190 of title 19 of the Code of Federal Regulations as set
forth below.
PART 10--ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE,
ETC.
0
1. The general authority citation for part 10 is revised to read as
follows:
Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized
Tariff Schedule of the United States (HTSUS)), 1321, 1481, 1484,
1498, 1508, 1623, 1624, 4513.
Sec. 10.8 [Amended]
0
2. In Sec. 10.8(a)(2) amend the declaration by adding the words
``(unless subject to USMCA drawback)'' after the words ``without the
benefit of drawback.''
PART 102--RULES OF ORIGIN
0
3. The general authority citation for part 102 is revised to read as
follows:
Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized
Tariff Schedule of the United States), 1624, 3592, 4513.
Sec. 102.0 [Amended]
0
4. Amend Sec. 102.0 as follows:
0
a. In the beginning of the second sentence, remove the word ``These''
and add in its place the words ``Under NAFTA, these''; and
0
b. Add a new third sentence.
The addition reads as follows:
Sec. 102.0 Scope. * * * The rules set forth in Sec. Sec. 102.1
through 102.18 and 102.20 also determine the country of origin for
marking purposes of imported goods under the Agreement Between the
United States of America, the United Mexican States, and Canada
(USMCA). * * *
* * * * *
0
5. In Sec. 102.1:
0
a. Paragraph (a) is amended by removing the reference to ``(m)(5),
(m)(6), and (m)(7)'' and adding in its place the reference to ``(n)(5),
(n)(6), and (n)(7)'';
0
b. Paragraph (i) is amended by removing the reference to ``(m)(5),
(m)(6), and (m)(7)'' and adding in its place the reference to ``(n)(5),
(n)(6), and (n)(7)'';
0
c. Paragraphs (l) through (p) are redesignated as paragraphs (m)
through (q);
0
d. A new paragraph (l) is added;
0
e. In redesignated paragraph (q)(1), add the words ``under NAFTA''
after the word ``good'';
0
f. In redesignated paragraph (q)(2), add the words ``under NAFTA''
after the word ``material''; and
0
g. Add paragraph (q)(3).
The additions read as follows:
Sec. 102.1 Definitions.
* * * * *
(l) Inventory management method. ``Inventory management method''
means:
(1) Averaging;
(2) ``Last-in, first-out;''
(3) ``First-in, first-out;'' or
(4) Any other method that is recognized in the Generally Accepted
Accounting Principles (GAAP) of the country in which the production is
performed or is otherwise accepted by that country.
* * * * *
(q) * * *
(3) In the case of a good or material under the USMCA, its customs
value or transaction value within the meaning of Appendix A to part 182
of this chapter.
Sec. 102.11 [Amended]
0
6. Amend Sec. 102.11(b)(2) by removing the phrase ``provided under the
appendix to part 181 of this chapter''.
Sec. 102.12 [Amended]
0
7. Amend Sec. 102.12(b) by removing the phrase ``provided under the
appendix to part 181 of the Customs Regulations''.
[[Page 35582]]
Sec. 102.19 [Amended]
0
8. In Sec. 102.19, add paragraph (c) to read as follows:
Sec. 102.19 NAFTA preference override.
* * * * *
(c) Paragraphs (a) and (b) of this section apply only to goods
entered for consumption, or withdrawn from warehouse for consumption,
prior to July 1, 2020.
PART 132--QUOTAS
0
9. The general and specific authority citations for part 132 continue
to read as follows:
Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized
Tariff Schedule of the United States (HTSUS)), 1623, 1624.
Sections 132.15, 132.17, and 132.18 also issued under 19 U.S.C.
1202 (additional U.S. Note 3 to Chapter 2, HTSUS; additional U.S.
Note 8 to Chapter 17, HTSUS; and subchapter II of Chapter 99, HTSUS,
respectively), 1484, 1508.
Sec. 132.17 [Amended]
0
10. Amend Sec. 132.17 by revising the first sentence of paragraph (a)
to read as follows:
(a) * * * For sugar-containing products defined in 15 CFR
2015.2(a), and as described in paragraph 15 of Appendix 2, Tariff
Schedule of the United States--(Tariff Rate Quotas), to Annex 2-B of
Chapter 2 of the Agreement Between the United States of America, the
United Mexican States, and Canada (USMCA), for which preferential
tariff treatment is claimed under the USMCA, and that are products of a
participating country, as defined in 15 CFR 2015.2(e), the importer
must possess a valid export certificate in order to claim the in-quota
tariff rate of duty on the products at the time they are entered or
withdrawn from warehouse for consumption. * * *
* * * * *
PART 134--COUNTRY OF ORIGIN MARKING
0
11. The general authority citation for part 134 continues to read as
follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 3(i),
Harmonized Tariff Schedule of the United States), 1304, 1624.
0
12. Amend Sec. 134.1 as follows:
0
a. Revise the second sentence of paragraph (b);
0
b. In paragraph (d), add the words ``or USMCA'' after the words ``good
of a NAFTA'' each place it appears and remove the words ``NAFTA Marking
Rules'' each place they appear and add in their place the words ``part
102 Rules'';
0
c. In paragraph (g):
0
i. Add the words ``or USMCA'' after the term ``NAFTA'' in the paragraph
heading;
0
ii. Add the words ``or USMCA'' after the words ``good of a NAFTA''; and
0
iii. Remove the words ``NAFTA Marking Rules'' and add in their place
the words ``part 102 Rules'';
0
e. Add a second sentence to paragraph (h);
0
f. Revise paragraph (i);
0
g. Revise paragraph (j); and
0
h. Add paragraph (l).
The revisions and additions read as follows:
Sec. 134.1 Definitions.
* * * * *
(b) * * * Further work or material added to an article in another
country must effect a substantial transformation in order to render
such other country the ``country of origin'' within the meaning of this
part; however, for a good of a NAFTA or USMCA country, the marking
rules set forth in part 102 of this chapter (hereinafter referred to as
the part 102 Rules) will determine the country of origin.
* * * * *
(h) * * * NAFTA is not applicable to goods entered for consumption,
or withdrawn from warehouse for consumption, on or after July 1, 2020.
(i) NAFTA or USMCA country. ``NAFTA or USMCA country'' means the
territory of the United States, Canada or Mexico, as defined in Annex
201.1 of NAFTA and Chapter 1, Section C of the USMCA.
(j) Part 102 Rules. ``Part 102 Rules'' are the rules promulgated
for purposes of determining whether a good is a good of a NAFTA
country, as set forth in part 102 of this chapter. The rules also apply
to determine the country of origin for marking purposes for goods
imported under the USMCA.
* * * * *
(l) USMCA. ``USMCA'' means the Agreement Between the United States
of America, the United Mexican States, and Canada (USMCA), entered into
force by the United States, Canada and Mexico on July 1, 2020.
Sec. 134.22 [Amended]
0
13. Amend Sec. 134.22 as follows:
0
a. In paragraph (b), add the words ``or USMCA'' after the term
``NAFTA'';
0
b. In paragraph (d)(2):
0
i. Add the words ``or USMCA'' after the term ``NAFTA'' in the paragraph
heading; and
0
ii. Add the words ``or USMCA'' after the term ``NAFTA'' in the first
sentence; and
0
c. In paragraph (e)(1), add the words ``or USMCA'' after the term
``NAFTA''.
Sec. 134.23 [Amended]
0
14. Amend Sec. 134.23(a) by adding the words ``or USMCA'' after the
term ``NAFTA'' in the first sentence.
Sec. 134.24 [Amended]
0
15. Amend Sec. 134.24 by adding the words ``or USMCA'' after the term
``NAFTA'' each place it appears.
Sec. 134.32 [Amended]
0
16. Amend Sec. 134.32 as follows:
0
a. In paragraph (h), add the words ``or USMCA'' after the term
``NAFTA'';
0
b. In paragraph (p), add the words ``or USMCA'' after the term
``NAFTA''; and
0
c. In paragraph (q), add the words ``or USMCA'' after the term
``NAFTA''.
Sec. 134.35 [Amended]
0
17. Amend Sec. 134.35 as follows:
0
a. In paragraph (a), add the words ``or USMCA'' after the term
``NAFTA'' in the paragraph heading;
0
b. In paragraph (b):
0
i. Add the words ``or USMCA'' after the term ``NAFTA'' in the paragraph
heading;
0
ii. Add the words ``or USMCA'' after the words ``goods of a NAFTA'' in
the first sentence; and
0
iii. Remove the words ``NAFTA Marking Rules'' and add in their place
the words ``part 102 Rules''.
Sec. 134.43 [Amended]
0
18. Amend Sec. 134.43 by adding the words ``or USMCA'' after the term
``NAFTA'' in each place it appears.
Sec. 134.45 [Amended]
0
19. Amend Sec. 134.45(a)(2) by adding the words ``or USMCA'' after the
term ``NAFTA''.
PART 163--RECORDKEEPING
0
20. The general and specific authority citations for part 163 continue
to read as follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1484, 1508, 1509, 1510,
1624.
Section 163.2 also issued under 19 U.S.C. 3904, 3907.
Sec. 163.0 [Amended]
0
21. Amend Sec. 163.0 as follows:
0
a. Add the words ``and the Agreement Between the United States of
America, the United Mexican States, and Canada (USMCA)'' after the
words ``North American Free Trade Agreement'';
0
b. Add the words ``and 182'' after the number ``181''.
0
22. Amend Sec. 163.2(c) by:
[[Page 35583]]
0
a. Adding the words ``and producers'' after the word ``exporters'' in
the paragraph heading;
0
b. Redesignating paragraph (c)(2) as paragraph (c)(3);
0
c. Adding a new paragraph (c)(2).
The addition reads as follows:
Sec. 163.2 Persons required to maintain records.
* * * * *
(c) * * *
(2) USMCA. Any exporter or producer who completes a certification
of origin or a producer who provides a written representation for a
good exported from the United States to Canada or Mexico pursuant to
the Agreement Between the United States of America, the United Mexican
States, and Canada (USMCA) must maintain records in accordance with
part 182 of this chapter.
* * * * *
PART 182--UNITED STATES-MEXICO-CANADA AGREEMENT
0
23. The general and specific authority citations for part 182 are
revised to read as follows:
Authority: 19 U.S.C. 66, 1202 (General Note 3(i) and General
Note 11, Harmonized Tariff Schedule of the United States (HTSUS)),
1624, 4513, 4535;
Section 182.1 also issued under 19 U.S.C. 4502;
Subpart D also issued under 19 U.S.C. 1520(d);
Subpart E also issued under 19 U.S.C. 4534;
Subpart 182.61 also issued under 19 U.S.C. 4531, 4532;
Subpart G also issued under 19 U.S.C. 4533.
Subpart A--General Provisions
0
24. Add Sec. 182.1 to read as follows:
Sec. 182.1 General definitions.
The definitions applicable to rules of origin are contained in
Appendix A. This section sets forth the general definitions used
throughout this part. As used in this part, the following terms will
have the meanings indicated unless either the context in which they are
used requires a different meaning or a different definition is
prescribed for a particular section of this part:
Canada, when used in a geographical rather than governmental
context, means the ``Territory'' of Canada as defined in Appendix A to
this part;
Claim for preferential tariff treatment means a claim that a good
is entitled to the customs duty rate applicable under the USMCA to an
originating good and to an exemption from the merchandise processing
fee;
Commercial importation means the importation of a good into the
United States, Canada, or Mexico for the purpose of sale, or any
commercial, industrial, or other like use.
Customs duty includes a duty or charge of any kind imposed on or in
connection with the importation of a good, and any surtax or surcharge
imposed in connection with such importation, but does not include any:
(1) Charge equivalent to an internal tax imposed consistently with
Article III:2 of the GATT 1994;
(2) Fee or other charge in connection with the importation
commensurate with the cost of services rendered;
(3) Antidumping or countervailing duty; and
(4) Premium offered or collected on an imported good arising out of
any tendering system in respect of the administration of quantitative
import restrictions, tariff-rate quotas, or tariff preference levels;
Customs Valuation Agreement means the Agreement on Implementation
of Article VII of the General Agreement on Tariffs and Trade 1994, set
out in Annex 1A to the WTO Agreement;
Days means calendar days, and includes Saturdays, Sundays and
holidays;
Enterprise means an entity constituted or organized under
applicable law, whether or not for profit, and whether privately-owned
or governmentally-owned or controlled, including a corporation, trust,
partnership, sole proprietorship, joint venture, association or similar
organization;
Exporter means an exporter located in the territory of a USMCA
country and an exporter required under this part to maintain records
regarding exportations of a good;
GATT 1994 means the General Agreement on Tariffs and Trade 1994,
set out in Annex 1A to the WTO Agreement;
Goods means merchandise, product, article, or material;
Goods of a USMCA country means domestic products as these are
understood in the GATT 1994 or such goods as the USMCA country may
agree, and includes originating goods of a USMCA country;
HTSUS means the Harmonized Tariff Schedule of the United States as
promulgated by the U.S. International Trade Commission;
Identical goods means goods that are the same in all respects,
including physical characteristics, quality, and reputation,
irrespective of minor differences in appearance that are not relevant
to a determination of origin of those goods;
Importer means an importer located in the territory of a USMCA
country and an importer required under this part to maintain records
regarding importations of a good;
Indirect material means a material used or consumed in the
production, testing, or inspection of a good but not physically
incorporated into the good, or a material used or consumed in the
maintenance of buildings or the operation of equipment associated with
the production of a good, including:
(1) Fuel and energy,
(2) Tools, dies, and molds,
(3) Spare parts and materials used or consumed in the maintenance
of equipment or buildings,
(4) Lubricants, greases, compounding materials and other materials
used or consumed in production or used to operate equipment or
buildings,
(5) Gloves, glasses, footwear, clothing, safety equipment, and
supplies,
(6) Equipment, devices and supplies used or consumed for testing or
inspecting the goods,
(7) Catalysts and solvents, and
(8) Any other material that is not incorporated into the good but
if the use in the production of the good can reasonably be demonstrated
to be a part of that production;
Material means a good that is used in the production of another
good, and includes a part or ingredient;
Mexico, when used in a geographical rather than governmental
context, means the ``Territory'' of Mexico as defined in Appendix A to
this part;
Originating, when used with regard to a good or material, means a
good or material qualifying as originating under the rules of origin
set forth in General Note 11, HTSUS, and in Appendix A to this part;
Person means a natural person or an enterprise;
Post-importation duty refund claim means a claim filed by the
importer of a good for a refund of any excess customs duties at any
time within one year after the date of importation of the good where
the good would have qualified as an originating good when it was
imported into the United States but no claim for preferential tariff
treatment was made.
Preferential tariff treatment means the customs duty rate
applicable under the USMCA to an originating good;
Producer means a person who engages in the production of a good;
Series of importations means two or more customs entries covering a
good arriving the same day from the same exporter and consigned to the
same person;
[[Page 35584]]
United States, when used in a geographical rather than governmental
context, means the territory of the United States as defined in
Appendix A to this part;
Used means used or consumed in the production of a good;
USMCA means the Agreement between the United States of America, the
United Mexican States, and Canada, entered into force by the United
States, Canada and Mexico on July 1, 2020.
USMCA country means a Party to the USMCA;
Value means the value of a good or material for the purpose of
calculating customs duties or for the purpose of applying this part;
WTO means the World Trade Organization; and
WTO Agreement means the Marrakesh Agreement Establishing the World
Trade Organization done at Marrakesh on April 15, 1994.
0
25. Add Sec. 182.2 to subpart A to read as follows:
Sec. 182.2 Confidentiality.
(a) Maintaining confidentiality. Subject to paragraph (b) of this
section, CBP must maintain the confidentiality of the information that
it receives from the public when the information is considered trade
secrets under the Trade Secrets Act (18 U.S.C. 1905), personally
identifiable information under the Privacy Act (5 U.S.C. 552a), or
privileged or confidential commercial or financial information. This
information must be maintained as confidential in accordance with part
103 of this chapter, 6 CFR part 5, and all other applicable statutes
and regulations.
(b) Authorized disclosures. CBP may only disclose the confidential
information in paragraph (a) of this section to third parties and to
other USMCA countries for purposes of administration or enforcement of
the customs laws or if otherwise authorized by law, and pursuant to the
routine uses of the systems of record notices (SORNs) for the trade
systems maintained by CBP. This does not preclude the disclosure of
confidential information to U.S. government authorities responsible for
the administration and enforcement of USMCA requirements, such as the
Department of Labor, and of customs and revenue matters.
Subpart B--Import Requirements
0
26. Add Sec. 182.11 to read as follows:
Sec. 182.11 Filing of claim for preferential tariff treatment upon
importation.
(a) Basis of claim. An importer may make a claim for USMCA
preferential tariff treatment, including an exemption from the
merchandise processing fee, based on a written or electronic
certification of origin, as specified in Sec. 182.12, completed by the
importer, exporter, or producer for the purpose of certifying that a
good qualifies as an originating good.
(b) Making a claim. The claim is made by including on the entry
summary, or equivalent documentation, or by the method specified for
equivalent reporting via a CBP-authorized electronic data interchange
system, the letters ``S'' or ``S+'' as a prefix to the subheading of
the HTSUS under which each originating good is classified.
(c) Corrected claim. If, after making the claim specified in
paragraph (b) of this section, the importer has reason to believe that
the certification of origin is based on inaccurate information or is
otherwise invalid, the importer must promptly and voluntarily correct
the claim or certification of origin, pay any duties that may be due,
and submit a statement either in writing to the CBP office where the
original claim was filed or via a CBP-authorized electronic data
interchange system in accordance with Sec. 182.124 of this part (see
Sec. Sec. 182.122 and 182.124 of this part).
0
27. Add Sec. 182.12 to read as follows:
Sec. 182.12 Certification of origin.
(a) General. An importer who makes a claim, pursuant to Sec.
182.11(b), based on a certification of origin completed by the
importer, exporter, or producer that the good is originating must
submit, at the request of CBP, a copy of the certification of origin.
The certification of origin:
(1) Need not be in a prescribed format but must be in writing or
must be transmitted electronically pursuant to any electronic means
authorized by CBP for that purpose;
(2) May be provided on an invoice or any other document, except an
invoice or commercial document issued in the territory of a non-USMCA
country;
(3) Must be in the possession of the importer at the time the claim
for preferential tariff treatment is made;
(4) Must include the following information to be valid:
(i) Whether the certifier is the importer, exporter, or producer in
accordance with this subpart;
(ii) The certifier's name, title, address (including country),
telephone number, and email address;
(iii) The exporter's name, address (including country), email
address, and telephone number if different from the certifier, unless
the producer is completing the certification of origin and does not
know the identity of the exporter;
(iv) The producer's name, address (including country), email
address, and telephone number, if different from the certifier or
exporter; or if there are multiple producers, ``Various'' or a list of
producers (see also paragraph (c) of this section);
(v) If known, the importer's name, address, email address, and
telephone number; or if there are multiple importers, ``Various'' or a
list of importers;
(vi) The legal name, address (including country), telephone number,
and email address (if any) of the responsible official or authorized
agent of the importer, exporter, or producer signing the certification;
(vii) A description of the good for which preferential tariff
treatment is claimed, which must be sufficiently detailed to relate it
to the invoice and the Harmonized System (HS) nomenclature;
(viii) The HTSUS tariff classification, to six or more digits, as
necessary for the specific change in tariff classification rule for the
good set forth in General Note 11, HTSUS;
(ix) The applicable rule of origin set forth in General Note 11,
HTSUS, under which the good qualifies as an originating good;
(x) In the case of a good listed in Schedule II of Appendix A of
this part, the following statement must be included: ``Schedule II of
the USMCA Rules of Origin Uniform Regulations'';
(xi) If the certification of origin covers a single shipment of a
good, the invoice number related to the exportation, if known;
(xii) In case of a blanket certification issued with respect to
multiple shipments of identical goods within any period specified in
the certification of origin, not exceeding 12 months from the date of
certification, the period that the certification covers; and
(5) Must include the following statement: ``I certify that the
goods described in this document qualify as originating and the
information contained in this document is true and accurate. I assume
responsibility for proving such representations and agree to maintain
and present upon request or to make available during a verification
visit, documentation necessary to support this certification.''
(b) Address. For the purposes of the certification of origin
provided for in paragraph (a) of this section:
(1) The address of the exporter provided under paragraph
(a)(4)(iii) is the place of export of the good in a USMCA country's
territory;
[[Page 35585]]
(2) The address of a producer provided under paragraph (a)(4)(iv)
is the place of production of the good in a USMCA country's territory;
and
(3) The address of the importer provided under paragraph (a)(4)(v)
must be in a USMCA country's territory.
(c) Confidentiality of producer information. For the purposes of
the information provided under paragraph (a)(4)(iv) of this section, a
person that wishes for this information to remain confidential may
state ``Available upon request by the importing authorities.''
(d) Responsible official or agent. The certification of origin
provided for in paragraph (a) of this section must be signed and dated
by a responsible official of the importer, exporter, or producer, or by
the importer's, exporter's, or producer's authorized agent having
knowledge of the relevant facts.
(e) Language. The certification provided for in paragraph (a) of
this section must be completed in English, French, or Spanish. If the
certification of origin is not in English, CBP may require the importer
to submit an English translation of the certification.
(f) Basis of a certification of origin. (1) A certification of
origin may be completed by the importer, exporter, or producer of the
good on the basis of:
(i) The certifier of the certification of origin of the good having
information, including documents, that demonstrate that the good is
originating; or
(ii) In the case of an exporter who is not the producer of the
good, reasonable reliance on the producer's written representation,
such as in a certification of origin, that the good is originating.
(2) CBP may not require that an exporter or producer complete a
certification of origin, or provide a certification of origin or
written representation to another person.
(g) Applicability of certification of origin. The certification of
origin provided for in paragraph (a) of this section may be applicable
to:
(1) A shipment of goods into the United States, which may consist
of:
(i) A single shipment of goods that results in the filing of one or
more entries; or
(ii) More than one shipment of goods that results in the filing of
one entry.
(2) Multiple shipments of identical goods into the United States
that occur within a specified blanket period, not exceeding 12 months,
set out in the certification.
(h) Validity of certification of origin. A certification of origin
that is properly completed, signed, and dated in accordance with the
requirements of this section will be accepted as valid for four years
following the date on which it was completed.
0
28. Add Sec. 182.13 to read as follows:
Sec. 182.13 Importer obligations.
(a) General. An importer who makes a claim for USMCA preferential
tariff treatment:
(1) Will be deemed to have made a statement based on a valid
certification of origin that the good qualifies as an originating good;
(2) Is responsible for the truthfulness of the claim and of all the
information and data contained in the certification of origin provided
for in Sec. 182.12; and
(3) Is responsible for submitting supporting documents requested by
CBP, and for the truthfulness of the information contained in those
documents. When a certification of origin prepared by an exporter or
producer forms the basis of a claim for preferential tariff treatment
and CBP requests the submission of supporting documents, the importer
will provide to CBP, or arrange for the direct submission by the
exporter or producer of, information relied on by the exporter or
producer in preparing the certification.
(b) Exemption from penalties. An importer will not be subject to
civil or administrative penalties under 19 U.S.C. 1592 for making an
incorrect claim for preferential tariff treatment or submitting an
incorrect certification of origin, provided that the importer promptly
and voluntarily corrects the claim or certification of origin, pays any
duties and merchandise processing fees, if applicable, that may be due,
and submits a statement either in writing or via a CBP-authorized
electronic data interchange system to the CBP office where the original
claim was filed in accordance with Sec. 182.124 (see Sec. Sec.
182.122 and 182.124).
0
29. Add Sec. 182.14 to read as follows:
Sec. 182.14 Certification of origin not required.
(a) General. Except as otherwise provided in paragraph (b) of this
section, an importer will not be required to submit a copy of a
certification of origin under Sec. 182.12 for:
(1) A non-commercial importation of a good; or
(2) A commercial importation for which the value of the originating
goods does not exceed $2,500 in U.S. dollars.
(b) Exception. If CBP determines that an importation described in
paragraph (a) of this section is part of a series of importations
carried out or planned for the purpose of evading compliance with the
certification requirements of Sec. 182.12, CBP will notify the
importer that for that importation the importer must submit to CBP a
copy of the certification of origin. The importer must submit such a
copy within 30 days from the date of the notice. Failure to timely
submit a copy of the certification of origin will result in denial of
the claim for preferential tariff treatment.
0
30. Add Sec. 182.15 to read as follows:
Sec. 182.15 Maintenance of records.
(a) General. An importer claiming USMCA preferential tariff
treatment for a good must maintain for a minimum of five years from the
date of importation of the good, all records and documents that the
importer has demonstrating that the good qualifies for preferential
tariff treatment under the USMCA, including the certification of origin
and records related to transit and transshipment. These records are in
addition to any other records that the importer is required to prepare,
maintain, or make available to CBP under part 163 of this chapter.
(b) Method of maintenance. The records and documents referred to in
paragraph (a) of this section must be maintained by importers as
provided in Sec. 163.5 of this chapter.
0
31. Add Sec. 182.16 to read as follows:
Sec. 182.16 Effect of noncompliance; failure to provide documentation
regarding transshipment.
(a) General. If the importer fails to comply with applicable
requirements under this subpart, including submission of a complete
certification of origin prepared in accordance with Sec. Sec. 182.12
and 182.14, when requested, CBP may deny preferential tariff treatment
to the imported good.
(b) Failure to provide documentation regarding transshipment. Where
the requirements for preferential tariff treatment set forth elsewhere
in this subpart are met, CBP nevertheless may deny preferential tariff
treatment to an originating good if the good is transported outside the
territories of the USMCA countries, and at the request of CBP, the
importer of the good does not provide evidence demonstrating to the
satisfaction of CBP that the transit and transshipment conditions set
forth in Appendix A of this part were met.
Subpart C--Export Requirements
0
32. Add Sec. 182.21 to read as follows:
Sec. 182.21 Certification of origin for goods exported to Canada or
Mexico.
(a) Submission of certification of origin to CBP. An exporter or
producer who completes a certification of origin for a good exported
from the United States to Canada or Mexico must
[[Page 35586]]
provide a copy of the certification of origin (written or electronic)
to CBP upon request.
(b) Notification of errors in certification of origin. An exporter
or producer who completes a certification of origin for a good exported
from the United States to Canada or Mexico and who has reason to
believe that the certification contains or is based on incorrect
information must promptly and voluntarily notify every person, in
writing, to whom the certification was provided of any change that
could affect the accuracy or validity of the certification.
Notification of an incorrect certification must also be given either in
writing or via a CBP-authorized electronic data interchange system to
CBP specifying the correction in accordance with Sec. 182.124 (see
Sec. Sec. 182.123 and 182.124).
(c) Maintenance of records--(1) General. An exporter or producer
who completes a certification of origin or a producer who provides a
written representation for a good exported from the United States to
Canada or Mexico must maintain, for a period of at least five years
after the date the certification was completed, all records and
supporting documents relating to the origin of a good for which the
certification of origin was completed, including the certification or
copies thereof and records and documents associated with:
(i) The purchase, cost, value, and shipping of, and payment for,
the good or material;
(ii) The purchase, cost, value, and shipping of, and payment for,
all materials, including indirect materials, used in the production of
the good or material; and
(iii) The production of the good in the form in which the good is
exported or the production of the material in the form in which it was
sold.
(2) Method of maintenance. The records referred to in paragraph (c)
of this section must be maintained as provided in Sec. 163.5 of this
chapter.
(3) Availability of records. For purposes of determining compliance
with the provisions of this part, the records required to be maintained
under this section must be stored and made available for examination
and inspection by a CBP official in the same manner as provided in part
163 of this chapter.
Subpart D--Post-Importation Duty Refund Claims
0
33. Add Sec. 182.31 to read as follows:
Sec. 182.31 Right to make post-importation claim for preferential
tariff treatment and refund duties.
Notwithstanding any other available remedy, where a good would have
qualified as an originating good when it was imported into the United
States but no claim for preferential tariff treatment was made, the
importer of that good may file a claim for a refund of any excess
customs duties at any time within one year after the date of
importation of the good in accordance with 19 U.S.C. 1520(d) and the
procedures set forth in Sec. 182.32. Unless the importer fails to
comply with the applicable requirements in this part, CBP may refund
any excess customs duties by liquidation or reliquidation of the entry
covering the good in accordance with Sec. 182.33.
0
34. Add Sec. 182.32 to read as follows:
Sec. 182.32 Filing procedures.
(a) Place of filing. A post-importation claim for a refund must be
filed with CBP, either at the port of entry or electronically.
(b) Contents of claim. A post-importation claim for a refund must
be filed by presentation of the following:
(1) A written or electronic declaration or statement stating that
the good was an originating good at the time of importation and setting
forth the number and date of the entry or entries covering the good;
(2) A copy of a written or electronic certification of origin
prepared in accordance with Sec. 182.12 demonstrating that the good
qualifies for preferential tariff treatment;
(3) A written statement indicating whether the importer of the good
provided a copy of the entry summary or equivalent documentation to any
other person. If such documentation was so provided, the statement must
identify each recipient by name, CBP identification number, and address
and must specify the date on which the documentation was provided; and
(4) A written statement indicating whether or not any person has
filed a protest, petition, or request for reliquidation; and if any
such protest, petition, or request for reliquidation has been filed,
the statement must identify the filing by number and date.
0
35. Add Sec. 182.33 to read as follows:
Sec. 182.33 CBP processing procedures.
(a) Status determination. After receipt of a post-importation claim
made pursuant to Sec. 182.32, CBP will determine whether the entry
covering the good has been liquidated and, if liquidation has taken
place, whether the liquidation has become final.
(b) Pending protest, petition, or request for reliquidation or
judicial review. If CBP determines that any protest, petition, or
request for reliquidation relating to the good has not been finally
decided, CBP will suspend action on the claim filed under Sec. 182.32
until the decision on the protest, petition, or request for
reliquidation becomes final. If a summons involving the tariff
classification or dutiability of the good is filed in the Court of
International Trade, CBP will suspend action on the claim filed under
Sec. 182.32 until judicial review has been completed.
(c) Allowance of claim--(1) Unliquidated entry. If CBP determines
that a claim for a refund filed under Sec. 182.32 should be allowed
and the entry covering the good has not been liquidated, CBP will take
into account the claim for refund in connection with the liquidation of
the entry.
(2) Liquidated entry. If CBP determines that a claim for a refund
filed under Sec. 182.32 should be allowed and the entry covering the
good has been liquidated, whether or not the liquidation has become
final, the entry must be reliquidated in order to effect a refund of
customs duties under this section. If the entry is otherwise to be
reliquidated based on administrative review of a protest or as a result
of judicial review, CBP will reliquidate the entry taking into account
the claim for refund under Sec. 182.32.
(d) Denial of claim--(1) General. CBP may deny a claim for a refund
filed under Sec. 182.32 if the claim was not filed timely, if the
importer has not complied with the requirements of Sec. 182.32 or the
other applicable requirements in this part, or if, following an origin
verification, CBP determines either that the imported good was not an
originating good at the time of importation or that a basis exists upon
which preferential tariff treatment may be denied.
(2) Unliquidated entry. If CBP determines that a claim for a refund
filed under Sec. 182.32 should be denied and the entry covering the
good has not been liquidated, CBP will deny the claim in connection
with the liquidation of the entry, and notice of the denial and the
reason for the denial will be provided to the importer in writing or
via a CBP-authorized electronic data interchange system.
(3) Liquidated entry. If CBP determines that a claim for a refund
filed under Sec. 182.32 should be denied and the entry covering the
good has been liquidated, whether or not the liquidation has become
final, the claim may be denied without reliquidation of
[[Page 35587]]
the entry. If the entry is otherwise to be reliquidated based on
administrative review of a protest, petition, or request for
reliquidation or as a result of judicial review, such reliquidation may
include denial of the claim filed under this subpart. In either case,
CBP will provide notice of the denial and the reason for the denial to
the importer in writing or via a CBP-authorized electronic data
interchange system.
Subpart E--Restrictions on Drawback and Duty-Deferral Programs
0
36. Add Sec. 182.41 to read as follows:
Sec. 182.41 Applicability.
This subpart sets forth the provisions regarding drawback claims
and duty-deferral programs under Article 2.5 of the USMCA and applies
to any good that is a ``good subject to USMCA drawback'' within the
meaning of 19 U.S.C. 4534. The provisions of this subpart apply to
goods which are entered for consumption, or withdrawn from warehouse
for consumption, into the United States on or after July 1, 2020. The
requirements and procedures set forth in this subpart for USMCA
drawback are in addition to the general definitions, requirements, and
procedures for all drawback claims set forth in part 190 of this
chapter, unless otherwise specifically provided in this subpart. Also,
the requirements and procedures set forth in this subpart for USMCA
duty-deferral programs are in addition to the requirements and
procedures for manipulation, manufacturing, and smelting and refining
warehouses contained in part 19 and part 144 of this chapter, for
foreign trade zones under part 146 of this chapter, and for temporary
importations under bond contained in part 10 of this chapter.
0
37. Add Sec. 182.42 to read as follows:
Sec. 182.42 Duties and fees not subject to drawback.
The following duties or fees which may be applicable to a good
entered for consumption or withdrawn from warehouse for consumption in
the Customs territory of the United States are not subject to drawback
under this subpart:
(a) Antidumping and countervailing duties;
(b) A premium offered or collected on a good with respect to
quantitative import restrictions, tariff-rate quotas or tariff
preference levels; and
(c) Customs duties paid or owed under unused merchandise
substitution drawback. There will be no payment of such drawback under
19 U.S.C. 1313(j)(2) on goods exported to Canada or Mexico.
0
38. Add Sec. 182.43 to read as follows:
Sec. 182.43 Eligible goods subject to USMCA drawback.
Except as otherwise provided in this subpart, drawback is
authorized for an imported good that is entered for consumption and is:
(a) Subsequently exported to Canada or Mexico (see 19 U.S.C.
1313(j)(1));
(b) Used as a material in the production of another good that is
subsequently exported to Canada or Mexico (see 19 U.S.C. 1313(a)); or
(c) Substituted by a good of the same kind and quality as defined
in Sec. 182.44(d) and used as a material in the production of another
good that is subsequently exported to Canada or Mexico (see 19 U.S.C.
1313(b)).
0
39. Add Sec. 182.44 to read as follows:
Sec. 182.44 Calculation of drawback.
(a) General. Except in the case of goods specified in Sec. 182.45,
drawback of the duties previously paid upon importation of a good into
the United States may be granted by the United States, upon
presentation of a USMCA drawback claim under this subpart, on the lower
amount of:
(1) The total duties paid or owed on the good in the United States;
or
(2) The total amount of duties paid on the exported good upon
subsequent importation into Canada or Mexico.
(b) Individual relative value and duty comparison principle. For
purposes of this section, relative value will be determined, and the
comparison between the duties referred to in paragraph (a)(1) of this
section and the duties referred to in paragraph (a)(2) of this section
will be made, separately with reference to each individual exported
good, including where two components or materials are used to produce
one exported good or one component or material is divided among
multiple exported goods.
(c) Direct identification manufacturing drawback under 19 U.S.C.
1313(a). Upon presentation of the USMCA drawback claim under 19 U.S.C.
1313(a), in which the amount of drawback payable is based on the lesser
amount of the customs duties paid on the good either to the United
States or to Canada or Mexico, the amount of drawback refunded may not
exceed 99 percent of the duty paid on such imported merchandise into
the United States.
(d) Substitution manufacturing drawback under 19 U.S.C. 1313(b).
Upon presentation of a USMCA drawback claim under 19 U.S.C. 1313(b), on
which the amount of drawback payable is based on the lesser amount of
the customs duties paid on the good either to the United States or to
Canada or Mexico, the amount of drawback is the same as that which
would have been allowed had the substituted merchandise used in
manufacture been itself imported.
(1) General. For purposes of drawback under this subpart, the term
``same kind and quality'' has the same meaning as the 8-digit HTSUS
substitution standard established in 19 U.S.C. 1313(b)(1) (see
Sec. Sec. 190.2 and 190.22(a)(1)(i) of this chapter).
(2) Special rule for sought chemical elements. For purposes of
drawback under this subpart, for sought chemical elements, the term
``same kind and quality'' has the same meaning as the 8-digit HTSUS
substitution standard established in 19 U.S.C. 1313(b)(4) (see Sec.
190.22(a)(2) of this chapter).
(e) Meats cured with imported salt. Meats, whether packed or
smoked, which have been cured with imported salt may be eligible for
drawback in aggregate amounts of not less than $100 in duties paid on
the imported salt upon exportation of the meats to Canada or Mexico
(see 19 U.S.C. 1313(f)).
(f) Jet aircraft engines. A foreign-built jet aircraft engine that
has been overhauled, repaired, rebuilt, or reconditioned in the United
States with the use of imported merchandise, including parts, may be
eligible for drawback of duties paid on the imported merchandise in
aggregate amounts of not less than $100 upon exportation of the engine
to Canada or Mexico (19 U.S.C. 1313(h)).
(g) Unused goods under 19 U.S.C. 1313(j)(1) that have changed in
condition. An imported good that is unused in the United States under
19 U.S.C. 1313(j)(1) and that is shipped to Canada or Mexico not in the
same condition within the meaning of Sec. 182.45(b)(1) may be eligible
for drawback under this section except when the shipment to Canada or
Mexico does not constitute an exportation under 19 U.S.C. 1313(j)(4).
0
40. Add Sec. 182.45 to read as follows:
Sec. 182.45 Goods eligible for full drawback.
(a) Goods originating in Canada or Mexico. A Canadian or Mexican
originating good that is dutiable and is imported into the United
States is eligible for drawback without regard to the limitation on
drawback set forth in Sec. 182.44 if that good is originating under
the rules of origin set out in General Note 11, HTSUS, and Appendix A
of this part, and is:
[[Page 35588]]
(1) Subsequently exported to Canada or Mexico;
(2) Used as a material in the production of another good that is
subsequently exported to Canada or Mexico; or
(3) Substituted by a good of the same 8-digit HTSUS subheading
number and used as a material in the production of another good that is
subsequently exported to Canada or Mexico.
(b) Claims under 19 U.S.C 1313(j)(1) for goods in same condition. A
good imported into the United States and subsequently exported to
Canada or Mexico in the same condition is eligible for drawback under
19 U.S.C. 1313(j)(1) without regard to the limitation on drawback set
forth in Sec. 182.44 .
(1) Same condition defined. For purposes of this subpart, a
reference to a good in
the ``same condition'' includes a good that has been subjected to
any of the following operations provided that no such operation
materially alters the characteristics of the good:
(i) Mere dilution with water or another substance;
(ii) Cleaning, including removal of rust, grease, paint or other
coatings;
(iii) Application of preservative, including lubricants, protective
encapsulation, or preservation paint;
(iv) Trimming, filing, slitting or cutting;
(v) Putting up in measured doses, or packing, repacking, packaging
or repackaging; or
(vi) Testing, marking, labelling, sorting, grading, or inspecting a
good.
(2) Commingling of fungible goods--(i) General--(A) Inventory of
other than all non-originating goods. Commingling of fungible
originating and non-originating goods in inventory is permissible
provided that the origin of the goods and the identification of entries
for designation for same condition drawback are on the basis of an
approved inventory management method set forth in the Appendix A to
this part (see 19 CFR 102.1).
(B) Inventory of the non-originating goods. If all goods in a
particular inventory are non-originating goods, identification of
entries for designation for same condition drawback must be on the
basis of one of the accounting methods in Sec. 190.14 of this chapter,
as appropriate.
(ii) Exception. Agricultural goods imported from Mexico may not be
commingled with fungible agricultural goods in the United States for
purposes of same condition drawback under this subpart.
(c) Goods not conforming to sample or specifications or shipped
without consent of consignee under 19 U.S.C. 1313(c). An imported good
exported to Canada or Mexico by reason of failure of the good to
conform to sample or specification or by reason of shipment of the good
without the consent of the consignee is eligible for drawback under 19
U.S.C. 1313(c) without regard to the limitation on drawback set forth
in Sec. 182.44. Such a good must be exported or destroyed within the
statutory 5-year time period and in compliance with the requirements
set forth in subpart D of part 190 of this chapter, as applicable.
(d) Certain goods exported to Canada or Mexico. A good provided for
in U.S. tariff items 1701.13.20 or 1701.14.20 that is imported into the
Customs territory of the United States under any re-export or like
program that is used as a material, or substituted for by a good of the
same kind and quality that is used as a material, in the production of
a good provided for in Canadian tariff item 1701.99.00 or Mexican
tariff items 1701.99.01, 1701.99.02, and 1701.99.99 (relating to
refined sugar), is eligible for drawback without regard to the
limitation on drawback set forth in Sec. 182.44. Same kind and quality
for purposes of this subsection means that the imported good and the
substituted good must be capable of being used interchangeably in the
manufacture or production of the exported or destroyed articles with no
substantial change in the manufacturing or production process.
(e) Certain goods exported to Canada. Goods identified in Article
2.5.6(g) of the USMCA and in 19 U.S.C. 4534(a)(7) and (8), if exported
to Canada, are eligible for drawback without regard to the limitations
on drawback set forth in Sec. 182.44.
(f) Certain goods that are exported or deemed exported. Goods that
are delivered:
(1) To a duty-free shop,
(2) For ship's stores or supplies for ships or aircrafts, or
(3) For the use in a project undertaken jointly by the United
States and a USMCA country, and destined to become the property of the
United States, are eligible upon exportation for drawback without
regard to the limitations on drawback set forth in Sec. 182.44.
0
41. Add Sec. 182.46 to read as follows:
Sec. 182.46 Filing of drawback claim.
(a) Time of filing. A drawback claim under this subpart must be
filed within 5 years after the date of importation of the goods on
which drawback is claimed. No extension will be granted unless it is
established that a CBP official was responsible for the untimely
filing. Drawback will be allowed only if the completed good is exported
within 5 years after importation of the merchandise identified or
designated to support the claim.
(b) Method of filing. A drawback claim must be filed electronically
through a CBP-authorized electronic system (see Sec. 190.51 of this
chapter).
0
42. Add Sec. 182.47 to read as follows:
Sec. 182.47 Completion of claim for drawback.
(a) General. A claim for drawback will be granted, upon the
submission of appropriate documentation to substantiate compliance with
the drawback laws and regulations of the United States, evidence of
exportation to Canada or Mexico, and satisfactory evidence of the
payment of duties to Canada or Mexico. Unless otherwise provided in
this subpart, the documentation, filing procedures, time and place
requirements and other applicable procedures required to determine
whether a good qualifies for drawback must be in accordance with the
provisions of part 190 of this chapter, as appropriate; however, a
drawback claim subject to the provisions of this subpart must be filed
separately from any part 190 drawback claim (that is, a claim that
involves goods exported to countries other than Canada or Mexico).
Claims inappropriately filed or otherwise not completed within the
periods specified in Sec. 182.46 will be considered abandoned.
(b) Complete drawback claim--(1) General. A complete drawback claim
under this subpart must consist of the filing of the appropriate
completed drawback entry, evidence of exportation (a copy of the
Canadian or Mexican customs entry showing the amount of duty paid to
Canada or Mexico) and its supporting documents, and a certification
from the Canadian or Mexican importer as to the amount of duties paid.
Each drawback entry filed under this subpart must be filed using the
indicator ``USMCA Drawback''.
(2) Specific claims. The following documentation, for the drawback
claims specified below, must be submitted to CBP in order for a
drawback claim to be processed under this subpart. Missing
documentation or incorrect or incomplete information on required
customs forms or supporting documentation will result in an incomplete
drawback claim.
(i) Manufacturing drawback claim. The following must be submitted
in connection with a claim for direct identification manufacturing
drawback
[[Page 35589]]
or substitution manufacturing drawback:
(A) A completed CBP Form 331, or its electronic equivalent, to
establish the manufacture of goods made with imported merchandise and,
if applicable, the identity of substituted domestic, duty-paid or duty-
free merchandise, and including the tariff classification number of the
imported merchandise;
(B) CBP Form 7501, or its electronic equivalent, or the import
entry number;
(C) [Reserved]
(D) Evidence of exportation and satisfactory evidence of the
payment of duties in Canada or Mexico, as provided in paragraph (c) of
this section;
(E) Waiver of right to drawback. If the person exporting to Canada
or Mexico was not the importer or the manufacturer, written waivers
executed by the importer or manufacturer and by any intervening person
to whom the good was transferred must be submitted in order for the
claim to be considered complete; and
(F) An affidavit of the party claiming drawback stating that no
other drawback claim has been made on the designated goods, that such
party has not provided an exporter's certification of origin pertaining
to the exported goods to another party except as stated on the drawback
claim, and that the party agrees to notify CBP if the party
subsequently provides such an exporter's certification of origin to any
person.
(ii) Same condition drawback claim under 19 U.S.C. 1313(j)(1). The
following must be submitted in connection with a drawback claim
covering a good in the same condition:
(A) The foreign entry number and date of entry, the HTSUS
classification for the foreign entry, the amount of duties paid for the
foreign entry and the applicable exchange rate, and, if applicable, a
certification from the claimant that provides as follows: ``Same
condition--The undersigned certifies that the merchandise herein
described is in the same condition as when it was imported under the
above import entry(s) and further certifies that this merchandise was
not subjected to any process of manufacture or other operation except
the allowable operations as provided for by regulation.'';
(B) Information sufficient to trace the movement of the imported
goods after importation;
(C) In-bond application submitted pursuant to part 18 of this
chapter, if applicable. This is required for merchandise which is
examined at one port but exported through border points outside of that
port. Such goods must travel in bond from the location where they were
examined to the point of the border crossing (exportation). If
examination is waived, in-bond transportation is not required;
(D) Notification of intent to export or waiver of prior notice. CBP
must be notified at least 5 business days in advance of the intended
date of exportation in order to have the opportunity to examine the
goods (see Sec. 190.35 of this chapter);
(E) Evidence of exportation. Acceptable documentary evidence of
exportation to Canada or Mexico may include originals or copies of any
of the following documents that are issued by the exporting carrier:
bill of lading, air waybill, freight waybill, export ocean bill of
lading, Canadian customs manifest, and cargo manifest. Supporting
documentary evidence must establish fully the time and fact of
exportation, the identity of the exporter, and the identity and
location of the ultimate consignee of the exported goods;
(F) Waiver of right to drawback. If the party exporting to Canada
or Mexico was not the importer, a written waiver from the importer and
from each intermediate person to whom the goods were transferred is
required in order for the claim to be considered complete; and
(G) An affidavit of the party claiming drawback stating that no
other drawback claim has been made on the designated goods.
(iii) Nonconforming or improperly shipped goods drawback claim. The
following must be submitted in the case of goods not conforming to
sample or specifications, or shipped without the consent of the
consignee and subject to a drawback claim under 19 U.S.C. 1313(c):
(A) Customs Form 7501, or its electronic equivalent, to establish
the fact of importation, the receipt of the imported goods, and the
identity of the party to whom drawback is payable (see Sec.
182.48(b));
(B) [Reserved]
(C) CBP Form 7512, or its electronic equivalent, if applicable;
(D) Notification of intent to export or waiver of prior notice. CBP
must be notified at least 5 business days in advance of the intended
date of exportation in order to have the opportunity to examine the
goods (see Sec. 190.42 of this chapter); and
(E) Evidence of exportation, as provided in paragraph (b)(2)(ii)(E)
of this section.
(iv) Meats cured with imported salt. The provisions of paragraph
(b)(2)(i) of this section relating to direct identification
manufacturing drawback will apply to claims for drawback on meats cured
with imported salt filed under this subpart insofar as applicable to
and not inconsistent with the provisions of this subpart, and the forms
referred to in that paragraph must be modified to show that the claim
is being made for refund of duties paid on salt used in curing meats.
(v) Jet aircraft engines. The provisions of paragraph (b)(2)(i) of
this section relating to direct identification manufacturing drawback
will apply to claims for drawback on foreign-built jet aircraft engines
repaired or reconditioned in the United States filed under this subpart
insofar as applicable to and not inconsistent with the provisions of
this subpart and the provisions of subpart N of part 190 of this
chapter.
(c) [Reserved]
0
43. Add Sec. 182.49 to read as follows:
Sec. 182.49 Retention of records.
All records required to be kept by the exporter, importer,
manufacturer or producer under this subpart with respect to
manufacturing drawback claims, and all records kept by others which
complement the records of the importer, exporter, manufacturer or
producer, including any person who transfers or enables another person
to make or perfect a drawback claim, must be retained for at least
three years from the date of liquidation of such claims or longer
period if required by law (see Sec. Sec. 190.10, 190.15, 190.38, and
190.175(c) of this chapter).
0
44. Add Sec. 182.50 to read as follows:
Sec. 182.50 Liquidation and payment of drawback claims.
(a) General. When the drawback claim has been fully completed by
the filing of all required documents, and exportation of the articles
has been established and the amount of duties paid to Canada or Mexico
has been established, the entry will be liquidated to determine the
proper amount of drawback due either in accordance with the limitation
on drawback set forth in Sec. 182.44 of this subpart or in accordance
with the regular drawback calculation. The liquidation procedures of
subpart H of part 190 of this chapter, as appropriate, will control for
purposes of this subpart.
(b) [Reserved]
(c) Accelerated payment. Accelerated drawback payment procedures
will apply as set forth in Sec. 190.92 of this chapter, as
appropriate. However, a person who receives drawback of duties under
this procedure must repay the
[[Page 35590]]
duties paid if a USMCA drawback claim is adversely affected thereafter
by administrative or court action.
0
45. Add Sec. 182.51 to read as follows:
Sec. 182.51 Prevention of improper payment of claims.
(a) Double payment of claim. The drawback claimant must certify to
CBP that the claimant has not earlier received payment on the same
import entry for the same designation of goods. If, notwithstanding
such a certification, such an earlier payment was in fact made to the
claimant, the claimant must repay any amount paid on the second claim.
(b) Preparation of Certification of Origin. The drawback claimant
must, within 30 calendar days after the filing of the drawback claim
under this subpart, submit to CBP a written statement as to whether the
claimant has prepared, or has knowledge that another person has
prepared, a certification of origin provided for under Sec. 182.12 and
pertaining to the goods which are covered by the claim. If, following
such 30-day period, the claimant prepares, or otherwise learns of the
existence of, any such certification of origin, the claimant must,
within 30 calendar days thereafter, disclose that fact to CBP.
0
46. Add Sec. 182.52 to read as follows:
Sec. 182.52 Subsequent claims for preferential tariff treatment.
If a claim for a refund of duties is allowed by the Canadian or
Mexican customs administration under Article 5.11 of the USMCA (post-
importation claim) or under any other circumstance after drawback has
been granted under this subpart, the appropriate CBP official must
reliquidate the drawback claim and obtain a refund of the amount paid
in drawback in excess of the amount permitted to be paid under Sec.
182.44.
0
47. Add Sec. 182.54 to read as follows:
Sec. 182.54 Verification of claim for drawback, waiver or reduction
of duties.
The allowance of a claim for drawback, waiver or reduction of
duties submitted under this subpart is subject to such verification,
including verification with the Canadian or Mexican customs
administration, of any documentation obtained in Canada or Mexico and
submitted in connection with the claim, as CBP may deem necessary.
Subpart G--Origin Verifications and Determinations
0
48. Add Sec. 182.71 to read as follows:
Sec. 182.71 Applicability.
This subpart contains the general origin verification and
determination provisions applicable to goods claiming preferential
tariff treatment under Sec. 182.11(b) or Sec. 182.32.
0
49. Add Sec. 182.72 to read as follows:
Sec. 182.72 Verification of claim for preferential tariff treatment.
(a) Verification. A claim for preferential tariff treatment made
under Sec. 182.11(b) or 182.32, including any statements or other
information submitted to CBP in support of the claim, will be subject
to such verification as CBP deems necessary. CBP may initiate the
verification of goods imported into the United States under the USMCA
with the importer, or with the exporter or producer who completed the
certification of origin. A verification of a claim for preferential
tariff treatment under the USMCA may be conducted by means of one or
more of the following:
(1) Requests for information or questionnaires, including a request
for documents, to the importer, exporter, or producer;
(2) Verification visits to the premises of the exporter or producer
in Mexico or Canada in order to request information, including
documents, and to observe production processes and facilities; and
(3) Any other procedure to which the USMCA countries may agree.
(b) Verification of a material. When conducting a verification of a
good imported into the United States, CBP may conduct a verification of
the material that is used in the production of that good. A
verification of a material producer may be conducted pursuant to any of
the verification means set forth in paragraph (a) of this section. With
the exception of Sec. Sec. 182.73(c) and 182.75, the provisions in
this subpart also apply to the verification of a material and
references to the term ``producer'' apply to a producer of a good or to
a material producer.
(c) Sending information directly to CBP. During a verification, CBP
will accept information, including documents, directly from an
importer, exporter, or producer.
(d) Applicable accounting principles. When conducting a
verification to which Generally Accepted Accounting Principles or an
otherwise accepted inventory method may be relevant, CBP will apply and
accept the Generally Accepted Accounting Principles applicable in the
USMCA country in which the production is performed or from which the
good is exported, as appropriate, or an otherwise accepted inventory
management method as provided for in Appendix A of this part. If
information, including documents, books and records, were not
maintained accordingly, CBP will provide the importer, exporter or
producer 30 days to record costs in accordance with Appendix A of this
part.
0
50. Add Sec. 182.73 to read as follows:
Sec. 182.73 Notification and response procedures.
(a) Requests for information and questionnaires. When conducting a
verification through a request for information or a questionnaire as
provided for in Sec. 182.72(a)(1), CBP will send the importer,
exporter or producer a written request for information, a written
questionnaire, or its electronic equivalent, including a request for
specific documentation to support the claim for preferential tariff
treatment.
(1) Contents. The written request for information, written
questionnaire, or its electronic equivalent will contain the following:
(i) The objective and scope of the verification, including the
specific issue that the verification is seeking to resolve; and
(ii) Sufficient information to identify the good or material that
is the subject of the verification.
(2) Availability of records--(i) Verification of a good. The
importer, exporter, or producer must make the records, which are
required to be maintained to demonstrate that the good qualifies for
preferential tariff treatment under the USMCA, available for inspection
by a CBP official conducting a verification. CBP may deny the claim for
preferential tariff treatment of the good for failure to maintain the
required records or if a CBP official is denied access to the records.
(ii) Verification of a material. During the verification of a
material, any records in the material producer's possession
demonstrating that the material qualifies as originating must be made
available for inspection by a CBP official conducting a verification.
CBP may consider the material that is used in the production of the
good and is the subject of the verification to be non-originating
material if a CBP official is denied access to these records.
(b) Notification of a verification visit. Prior to conducting a
verification visit in Canada or Mexico, CBP will provide the exporter
or producer, using one of the communication means specified in
paragraph (d)(2) of this section, with a notification stating the
intent to conduct a verification visit and containing the following:
(1) The objective and scope of the verification, including the
specific issue
[[Page 35591]]
that the verification is seeking to resolve;
(2) Sufficient information to identify the good or material that is
the subject of the verification;
(3) A request for the written consent of the exporter or producer
whose premises are going to be visited;
(4) The legal authority for the visit;
(5) The proposed date and location of the visit;
(6) The specific purpose of the visit; and
(7) The names and titles of the U.S. officials conducting the
visit.
(c) Importer notification. When CBP initiates a verification by
sending a request for information or questionnaire under paragraph (a)
of this section to an exporter or producer or by sending a notification
of a verification visit under paragraph (b) of this section, CBP will
notify the importer claiming preferential tariff treatment of the good
that CBP has initiated a verification of that good, subject to the
confidentiality provisions in Sec. 182.2.
(d) Means of communications. (1) For purposes of a verification, it
is sufficient for CBP to use the contact information provided in the
certification of origin for any communication sent to the importer,
exporter, or producer.
(2) For purposes of a verification, CBP will send all communication
to the exporter or producer by any means that can produce a
confirmation of receipt including:
(i) Electronic mail;
(ii) International courier services;
(iii) Certified or registered mail services; or
(iv) A CBP-authorized electronic data interchange system.
(e) Time periods. Any time periods specified in this subpart begin
from the date of confirmation of receipt, provided for in paragraph
(d)(2) of this section, when sending communication to the exporter or
producer, and begin from the date the communication is sent when
sending communication to the importer.
(f) Response time for a request for information, a questionnaire,
and a notification of a verification visit--(1) Request for information
and questionnaire. When CBP sends a request for information or a
questionnaire, the importer, exporter, or producer will have 30 days
from the date specified in paragraph (e) of this section to respond and
provide the requested documentation. CBP may deny the claim for
preferential tariff treatment of the good, or consider the material
that is used in the production of the good to be non-originating
material, for failure to respond to the request for information subject
to the conditions in Sec. 182.75(c)(1), or for failure to respond to
the questionnaire.
(2) Notification of a verification visit. When CBP sends a
notification of a verification visit, the exporter or producer will
have 30 days from the date specified in paragraph (e) of this section
to consent to or deny the verification visit. CBP may deny the claim
for preferential tariff treatment of the good, or consider the material
that is used in the production of the good to be non-originating
material, for failure to provide consent for a verification visit
within the 30-day response period, unless a postponement is requested
in accordance with Sec. 182.74(b).
0
51. Add Sec. 182.74 to read as follows:
Sec. 182.74 Verification visit procedures.
(a) Written consent required. Prior to conducting a verification
visit in Canada or Mexico, CBP must obtain the written consent of the
exporter or producer whose premises are to be visited. The exporter or
producer must submit this written consent, requested in the
notification of a verification visit under Sec. 182.73(b)(3), to CBP
through one of the communication means specified in Sec. 182.73(d)(2),
within the time period provided in Sec. 182.73(f)(2), unless a
postponement is requested in accordance with paragraph (b) of this
section.
(b) Postponement of a verification visit--(1) Request for
postponement by an exporter or producer. Within 15 days of confirmed
receipt of the notification of a verification visit, the exporter or
producer may, on a single occasion, using one of the communication
means specified in Sec. 182.73(d)(2), request the postponement of the
verification visit for a period not to exceed 30 days from the proposed
date of the visit.
(2) Notification of a postponement. CBP will notify the exporter or
producer when a postponement request under paragraph (b)(1) of this
section is received and will provide the new date of the verification
visit. The Mexican or Canadian customs administration where the
verification visit will occur may also, within 15 days of confirmed
receipt of the notification of a verification visit, postpone the
verification visit for a period not to exceed 60 days from the proposed
date of the visit or for a longer period as CBP and the Mexican or
Canadian customs administration may decide. CBP will notify the
exporter or producer if the verification visit is postponed at the
request of the Mexican or Canadian customs administration.
(c) Availability of records--(1) Verification of a good. The
exporter or producer must make the records, which are required to be
maintained to demonstrate that the good qualifies for preferential
tariff treatment under the USMCA, available for inspection by a CBP
official conducting a verification and provide facilities for that
inspection during the verification visit. CBP may deny the claim for
preferential tariff treatment of the good for failure to maintain these
records or if a CBP official is denied access to these records.
(2) Verification of a material. During the verification of a
material, any records in the material producer's possession
demonstrating that the material qualifies as originating must be made
available for inspection by a CBP official conducting a verification.
CBP may consider the material that is the used in the production of the
good and is the subject of the verification visit to be non-originating
material if a CBP official is denied access to these records.
(d) Observers. The exporter or producer may designate up to two
observers to be present during the verification visit, if the exporter
or producer chooses, provided that:
(1) The observers do not participate in a manner other than as
observers;
(2) The failure of the exporter or producer to designate observers
does not result in the postponement of the visit; and
(3) The exporter or producer identifies to CBP any observers
designated to be present during the visit.
0
52. Add Sec. 182.75 to subpart G to read as follows:
Sec. 182.75 Determinations of origin.
(a) Contents. For verifications initiated under this part, CBP will
issue a determination of origin that sets forth:
(1) A description of the good that was the subject of the
verification;
(2) A statement setting forth the findings of facts made in
connection with the verification and upon which the determination is
based; and
(3) The legal basis for the determination.
(b) Parties who will receive a determination of origin. CBP will
issue the determination of origin to the importer, and to the exporter
or producer who is subject to the verification and either completed the
certification of origin or provided information directly to CBP during
the verification, subject to the confidentiality provisions in Sec.
182.2, within 120 days (or in exceptional cases and upon notification
to the parties, within 210 days) after CBP has determined that it has
received all the information necessary to issue a determination of
origin, including any
[[Page 35592]]
information necessary from the exporter or producer.
(c) Negative determinations--(1) When a request for information
must be sent to the exporter or producer prior to issuing a negative
determination. If a claim for preferential tariff treatment is based on
a certification of origin completed by the exporter or producer, and,
in response to a request for information, the importer does not provide
CBP with sufficient information to verify or substantiate the claim,
CBP will send a written request for information or its electronic
equivalent to the exporter or producer that completed the certification
of origin, subject to the confidentiality provisions in Sec. 182.2,
prior to issuing a negative determination.
(2) Denial of preferential tariff treatment. CBP may deny the claim
for preferential tariff treatment if:
(i) The certification of origin is not submitted to CBP upon
request as required pursuant to Sec. 182.12(a);
(ii) The claim or certification of origin is invalid or based on
inaccurate information and is not corrected within the required time
period pursuant to Sec. 182.11(c);
(iii) CBP determines that the importer, exporter, or producer
failed to provide sufficient information to substantiate the claim;
(iv) CBP determines that the good does not qualify for preferential
tariff treatment, including failing to meet the rules of origin
requirements in General Note 11, HTSUS, and Appendix A to this part;
(v) The importer, exporter, or producer fails to respond to the
request for information pursuant to Sec. 182.73(f)(1) subject to the
conditions in Sec. 182.75(c)(1);
(vi) The importer, exporter, or producer fails to respond to the
questionnaire pursuant to Sec. 182.73(f)(1);
(vii) The exporter or producer fails to consent to a verification
visit pursuant to Sec. 182.74;
(viii) The importer, exporter, or producer fails to maintain
records demonstrating that the good qualifies for preferential tariff
treatment as required pursuant to this part;
(ix) The importer, exporter, or producer denies access, as
requested by CBP, to records or documentation that are in its
possession or required to be maintained pursuant to this part;
(x) The exporter or producer denies access to records or
documentation that are in its possession or required to be maintained,
or to facilities during a verification visit as required pursuant to
this part;
(xi) CBP finds a pattern of conduct pursuant to Sec. 182.76; or
(xii) CBP determines that any other reason to deny a claim for
preferential tariff treatment as set forth in this part applies
(3) Intent to deny. Prior to issuing a negative determination, CBP
will inform the importer, and the exporter or producer who is subject
to the verification and either completed the certification of origin or
provided information directly to CBP during the verification, of CBP's
intent to deny preferential tariff treatment, subject to the
confidentiality provisions in Sec. 182.2. This intent to deny will
contain the preliminary results of the verification, the effective date
of the denial of preferential tariff treatment, and a notice to the
importer, exporter, or producer that CBP will provide 30 days to submit
additional information, including documents, related to the
preferential tariff treatment of the good.
(4) Issuance of a negative determination of origin. CBP will issue
a negative determination of origin to the parties specified in
paragraph (b) of this section if CBP determines, at least 30 days after
receipt by the importer, exporter, or producer of the intent to deny
issued pursuant to paragraph (c)(3) of this section, that one or more
of the reasons for denial of preferential tariff treatment under
paragraph (c)(2) of this section continues to apply. In addition to the
contents of the determination set forth in paragraph (a) of this
section, unless CBP determines that there is a pattern of conduct of
false or unsupported representations pursuant to Sec. 182.76, a
negative determination of origin will provide the exporter or producer
with the information necessary to file a protest as provided for in 19
U.S.C. 1514(e) and part 174 of this chapter.
0
53. Add Sec. 182.76 to subpart G to read as follows:
Sec. 182.76 Repeated false or unsupported preference claims.
Where the verification reveals a pattern of conduct by the
importer, exporter, or producer of false or unsupported representations
relevant to a claim that a good imported into the United States
qualifies for preferential tariff treatment under the USMCA, CBP may
withhold preferential tariff treatment under the USMCA for entries of
identical goods covered by subsequent statements, declarations, or
certifications by that importer, exporter, or producer until CBP
determines that representations of that person are in conformity with
this part and with General Note 11, HTSUS.
0
54. Revise subpart J consisting of Sec. Sec. 182.111 through 182.112
to read as follows:
Subpart J--Commercial Samples and Goods Returned after Repair or
Alteration
Sec.
182.111 Commercial samples of negligible value.
182.112 Goods re-entered after repair or alteration in Canada or
Mexico.
Sec. 182.111 Commercial samples of negligible value.
(a) General. Commercial samples of negligible value imported from
Canada or Mexico may qualify for duty-free entry under subheading
9811.00.60, HTSUS. For purposes of this section, ``commercial samples
of negligible value'' means commercial samples which have a value,
individually or in the aggregate as shipped, of not more than one U.S.
dollar, or the equivalent amount in the currency of Canada or Mexico,
or which are so marked, torn, perforated, or otherwise treated that
they are unsuitable for sale or for use except as commercial samples.
(b) Qualification for duty-free entry. Commercial samples of
negligible value imported from Canada or Mexico will qualify for duty-
free entry under subheading 9811.00.60, HTSUS, only if:
(1) The samples are imported solely for the purpose of soliciting
orders for foreign goods or services; and
(2) If valued over one U.S. dollar, the samples are properly
marked, torn, perforated or otherwise treated prior to arrival in the
Unit
[…truncated; see source link]Indexed from Federal Register on July 6, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.