About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (June 15, 2020)

handle is hein.crs/govdbyz0001 and id is 1 raw text is: xa S 1,k Rules of Origin Eackg r nd What are Rules of Origin? Rules of origin (ROG) are laws, regulations, and procedures used for ascertaining the nationality o fimportedproducts. ROG are important for many reasons, including determining the admis sibility of imported goods, as sessing dutyrates, country oforigin marking, applying tariff quotas, enforcing U.S trade laws, establishing eligibility for preferentialprograms and free- trade agreements (FTAs), and collecting trade statistics. Determining origin is relatively straightforward if all of a product's rawmaterials and parts are manufactured and assembledin one country. However, in today's global economy, parts ofmanufactured goods to be assembled into products such as automobiles, computers, or clothing, often come from many countries. This can make determining origin a complexprocess. Non-preferential ROO apply to imports fromall countries with which the importing country has normal trade relations (NTR), and are consistent with World Trade Organization (WTO) obligations. For the United States, NTR applies to all WTO members, except those thathave an FTA with the United States or receive another kind of U.S. preferential trade treatment. Non-preferential ROO are used to assess tariffs, enforce trade laws (e.g., antidumping and countervailing duties), collect statistics, and for other purposes. For non-preferential ROO, there is no specific U.S. law or legislative methodology that specifically defines the term country oforigin. Instead, U.S. Customs and Border Protection (CBP) administers non-preferential rules based on abody of CBP regulations, prior agency interpretations, and court decisions. When the countryoforigin is in doubt, an importer may apply to CBP for an advance customs ruling. Preferential ROO applyto FTAs such as the United States -Mexico -Canada Agreement (USMCA) and certain non-reciprocal trade preferences, like the African Growth and Opportunity Act (ACQA) and the Generalized System of Preferences (GSP). Preferential ROO are important because they ensure only eligible trading partners receive the tariff benefits of the specialprogramor EFA. Some preferential ROO may also be crafted to limit the impact of these programs on import-sensitive industries. They are unique to each specialtrade programor FA. Preferential ROO in FTAs are negotiated by the parties to the agreement and approved by Congress as part of the EFA implementing legislation. For specialU.S. trade programs like AGOA and GSP, they are drafted and approved by Congress. Enforcement. CBP interprets, administers, and enforces rules of origin, as well as country of origin labeling, tariff classification, customs valuation, and many other laws relating to U.S. imports. International Commitments. The 1994 WTO Agreement on Rules of Origin requires WTO members not to use ROO to disrupt trade, to apply ROO in a consistent, transparent, non-discriminatory, andreasonable manner, and to notify other members about any rule changes. TheWTO agreement also setup an ongoing programto harmonize non-preferential rules, with negotiations conductedby a WTO Rules of Origin committee and a technical committee under the World Customs Organization (WCO). The WCO also facilitates trade by providing as sistance to customs administrations worldwide on interpreting ROO and other technical is sues. Figure I. Rules of Origin Uses Source: World Customs Organization. Graphic by CRS. ROO in FTAs generally stipulate how anch manufacturing rru s t come from within the FA region in order to receive trade benefits (e.g., duty-free treatrent). Although FAs are individually negotiated, there are many common elements across agreements. Originating Goods. In order to receive the benefits of an FTA, imported products must originate in one of the partner countries by satisfying one of three conditions. They mst be: (1) grown,harvested, orished in the FA region; (2)produced in the FA region u sing only materials made in the FA region; or (3) produced in the FtA region with non-FTA country coiponents while meeting addition aproduct-specific ROOrequirements. Specific Rules of Origin. Each U.S. FA has a chapter containing general ROO provisions, cobined with an annexthat lists ROO for individual products. These product-specific ROO generally take one of threeformis (see Figure 2). Change of Tariff Classification ortariff-shift rules require that aproductbe substantially transformed as illustrated by a change in its Harmonized Tariff Schedule A A '2 Updated June 15,2020

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Already a HeinOnline Subscriber?

Log In

profiles profiles most