producers." The USMCA is designed to modernize food and agriculture trade, advance rules of origin for automobiles and trucks, and enhance intellectual property protections, among other matters, according to the Office of the U.S. Trade Representative. Explore the USMCA's impact on the automotive sector. The deadline has now passed and all USMCA Parties must agree on accepting plan modifications. of origin include the rules for the application of the preferential tariff rates under Economic Partnership Agreements (EPA) and the rules for the application of the preferential tariff rates under the Generalized System of Preferences (GSP). The rules are aimed at ensuring originating goods are those that were produced in the United States, Mexico, or Canada and have a production process that generated a sufficient amount of investment in any-or-all of the three member countries (e.g. Customs Tariff - Historical (2010-2022) Customs Tariff - Historical (2003-2009) A comprehensive description of USMCA criteria and other compliance guidance for claiming USMCA preferential treatment for goods being entered into the United States can be found in U.S. Customs and Border Protections USMCA Implementing Instructions (CBP Publication No. hbbd``b`$ "^ TbyX D@>&F=m @ Under USMCA, unless the importer is operating under an approved alternative staging regime, the RVC requirement for passenger vehicles and light trucks is: (a) 66% under the net cost method from July 1, 2020 to June 30, 2021; (b) 69% under the net cost method from July 1, 2021 to June 30, 2022; In 2019, Mexico ranked as the sixth largest light vehicle producer with 3.8 million units. More information can be obtained through the Automotive Parts Remanufacturers Association website. Description. North American steel and aluminum procurement requirement, Applies only to passenger motor vehicles and light and heavy trucks, New North American steel and aluminum procurement requirements, 66 percent RVC using the net cost method beginning July 1, 2020, 69 percent RVC using the net cost method beginning July 1, 2021, 72 percent using the net cost method beginning July 1, 2022, 75 percent using the net cost method beginning July 1, 2023, 60 percent RVC using the net cost method beginning July 1, 2020, 64 percent RVC using the net cost method beginning July 1, 2024, or 4 years after the entry into force, 70 percent using the net cost method beginning July 1, 2027 or 7 years after entry into force. Additional rules are described in Annex 703.2 (certain agricultural goods), Annex 300-B, Appendix 6A (certain textile goods) and Annex 308.1 (certain automatic data processing goods and their . NOTE: The purchase of a good in the territory does not . In the case of an exporter who is not the producer of the good, reasonable reliance on the producers written representation, such as in a certification of origin, that the good is originating. Official websites use .gov 1358-0121) (available in English, Spanish, and French). It is generally reserved for basic products such as those harvested, mined, or fished in the NAFTA territory, although it would include a manufactured good with no non-NAFTA inputs. This will dictate the Rule of Origin to analyze and determine eligibility. Any importer who claims preferential tariff treatment under USMCA for a good imported into the United States from a USMCA country must keep the following documentation for a period of no less than five years from the date of entry: The importer must render these records for examination and inspection upon request per 19 U.S. Code 1508-1510 and 19 CFR Part 163.6. Production undertaken on a non-originating material in one or more of the Parties contributes to the originating status of the good, regardless of whether that production was sufficient to confer originating status to the material itself. If you prefer to watch a video, you can find the visual guide here. Reactions within the US business community, however, have been mixed. While we strive for accuracy in all our communications, as the Importer of Record it is incumbent upon your company to ensure that you are aware of the requirements under the new regulations so that you maintain compliance as always. Legislation. Overview%20of%20Chapter%204%20%28Rules%20of%20Origin%29%20of%20the%20US-Mexico-Canada%20Trade%20Agreement, mailto:?subject=Overview%20of%20Chapter%204%20%28Rules%20of%20Origin%29%20of%20the%20US-Mexico-Canada%20Trade%20Agreement&body=https://www.whitecase.com/insight-alert/overview-chapter-4-rules-origin-us-mexico-canada-trade-agreement, https://www.linkedin.com/shareArticle?mini=true&url=https://www.whitecase.com/insight-alert/overview-chapter-4-rules-origin-us-mexico-canada-trade-agreement&title=Overview%20of%20Chapter%204%20%28Rules%20of%20Origin%29%20of%20the%20US-Mexico-Canada%20Trade%20Agreement&source=www.whitecase.com, https://twitter.com/intent/tweet?text=Overview%20of%20Chapter%204%20%28Rules%20of%20Origin%29%20of%20the%20US-Mexico-Canada%20Trade%20Agreement&url=https://www.whitecase.com/insight-alert/overview-chapter-4-rules-origin-us-mexico-canada-trade-agreement&via=WhiteCase, https://www.facebook.com/share.php?u=https://www.whitecase.com/insight-alert/overview-chapter-4-rules-origin-us-mexico-canada-trade-agreement&t=Overview%20of%20Chapter%204%20%28Rules%20of%20Origin%29%20of%20the%20US-Mexico-Canada%20Trade%20Agreement, https://www.whitecase.com/sites/default/files/2019-08/overview-of-chapter-4-rules-of-origin-of-the-us-mexico-canda-trade-agreement.pdf, http://news.whitecase.com/5/38/forms/subscribe.asp, Overview of Chapter 4 (Rules of Origin) of the US-Mexico-Canada Trade Agreement, One or more of the non-originating materials used to produce the good cannot satisfy the applicable product-specific rules of origin because both the good and its materials are classified in the same tariff heading (thus precluding a tariff shift); or, The good was imported into the territory of a Party in unassembled or disassembled form but was classified as an assembled good pursuant to General Rule of Interpretation 2(a) of the Harmonized System; and. 2023 FOCUS Business Solutions, Inc. All Rights Reserved. (Reference: Article 401(d)). USA.gov|FOIA|Privacy Program|EEO Policy|Disclaimer|Information Quality Guidelines |Accessibility, Official Website of the International Trade Administration. Origin procedures provide for the course of action to be followed when applying the preferential Customs Duty rates. Marketing Coordinator & Asst. However, as described previously, CBP permitted automotive producers, exporters, and importers to obtain and submit the necessary certifications and documentation, including any documentation necessary to establish compliance with the RVC requirement, by December 31, 2020, for claims of preferential tariff treatment of qualifying passenger vehicles, light trucks, or heavy trucks entered for consumption or withdrawn from warehouse for consumption, on or after July 1, 2020, and through the end of calendar year 2020. Foreign Safeguard Activity Involving U.S. Exports. The size of Mexicos passenger vehicle market and its shared border with the U.S. provide a robust market for Original Equipment Manufacturers (OEMs) and aftermarket auto parts. A .gov website belongs to an official government organization in the United States. The Annex 401 Rules of Origin are based on a change in tariff classification, a regional value-content requirement, or both. 17 The new rules applicable to certain parts of railway or tramway locomotives or rolling stock will be phased in, taking effect three years after the USMCAs entry into force. CBPs USMCA Center will review the revised certification for omissions and errors within 30 days. Mexico is the sixth largest passenger vehicle manufacturer in the world, producing 3.7 million passenger vehicles annually. We provide below an illustrative list of sectors and products that are subject to revised product-specific rules of origin under the USMCA. If you need help determining this 6-digit code, please contact us. If you are the Producer of some, but not all parts, you may select Exporter. Last but not least is your autograph. CBPs USMCA Center will coordinate a review with DOL. Please do not mix Steel, Aluminum, and LVC in one file. The requirements of the NAFTA Rules of Origin differ from good to good. U.S. International Trade Commission 500 E Street, SW Washington, D.C., 20436 202.205.2000 TDD 202.205.1810 Contact Us; Hours & Directions; If CBP determines that the producers certifications are not properly filed, the producer must resubmit a new package for review via the USMCA Center Portal using the initial how-to file process. Vehicle sales decreased by seven percent, with 1.3 million units sold in 2019 compared to 1.4 million units in 2018. LVC, Steel, and Aluminum certification can be filed through the USMCA Centers portal at CBPs website. Not to be confused with January 1st to January 1st of the next year as this would signify a year plus one day. For example, the private sector Advisory Committee for Trade Policy Negotiations (ACTPN) noted in its assessment of the Agreement that "[s]ome members of the ACTPN appreciate that the agreement strengthens the rules of origin, notably for steel-intensive goods, to ensure greater North American content. Importer/exporter or producer certification of origin (indicate which is certifier), Description and HTS classification of the good, Blanket period (how long the certification is valid up to 12 months). U.S. Department of Commerce Please note each individual submission will receive an individual tracking number. For example: hb```6 y,BH( ebAA zAAAFA Preference Criterion B is used when the good being certified is produced using materials that the producer/exporter is unable to . B) Produced entirely in the territory of one or more of the Parties using non-originating materials provided the good satisfies all applicable requirements of Annex 4-B (Product-Specific Rules of Origin). Form 10-K (annual report [section 13 and 15(d), not s-k item 405]) filed with the SEC The fact that the US-Mexico-Canada Agreement ("USMCA"), which replaced NAFTA on July 1, does not require any particular form Certificate of Origin ("COO") has left many importers and . If the good is an agricultural good, see also criterion F and Annex 703.2. Mexico is also a member of the Pacific Alliance, a trade bloc formed in 2011 by Mexico, Chile, Colombia, and Peru. If the good was qualified via a tariff shift, indicate TS. If Origin Criterion A or C, you may enter NO., Identify the country of origin of the good using the ISO Country Code (e.g. The new de minimis rules are as follows: Like the NAFTA, the USMCA contains a list of products that are ineligible for these de minimis exemptions (including many food and agricultural products). Filed through the automotive Parts Remanufacturers Association website the USMCA Centers portal at cbps website on a in. 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