Country of Origin and Originating Goods

US importers are required to report certain information on commercial documents for all US Customs entries as required per 19 CFR 141.86. These fields will be utilized to compliantly file a Customs entry with US Customs and Border Protection. Most commonly these fields are value, classification, weight, buyer, seller, and country of origin. The importer is required to properly identify and declare the country of origin of all goods at the time of entry on the Customs entry 7501. The country of origin is identified as where a product is manufactured, produced, processed, or grown. Importers frequently mistake country of origin as the country from where the goods were shipped or the country where simply assembly of goods took place. Simply assembly such as packing, painting, or washing of parts does not determine the country of origin as the good has to meet substantial transformation to be considered the country of origin. Improperly declaring or identifying the country of origin can result in fines and penalties. The importance of the country of origin as they often can determine if quotas, ADD/CVD, and potential Free Trade Agreements as originating goods.

On the other hand, the hidden risks of an FTA’s country of origin is not the same as originating goods or non-preferential and preferential origin in regards to Free Trade Agreements. Originating goods meet specific rules of origin that may qualify for preferential duty exemption from Free Trade Agreements. Identifying if the goods originate can provide substantial savings on dutiable goods. The country of origin often identifies opportunities to explore if a good qualifies for a Free Trade Agreement by meeting the Rules of Origin listed in the agreement. However, not all goods that have an origin of a Free Trade Agreement can be considered as originating by the terms of the agreement. Unlike that of the country origin, the Free Trade Certificate is not required to make a customs entry.

Importers are required to use reasonable care and establish processes when declaring goods as originating or qualifying for benefits of a Free Trade Agreement. Completely analyzing your product lines and how goods are sourced or manufactured in certain regions can open your business to opportunities and savings. To review your products, assist with country of origin determination, FTA qualification, or more information on how Allyn International can assist with your Trade Compliance program, contact sales@allynintl.com for more information.