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Trade and Industry Department The Government of the Hong Kong Special Administrative Region
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Certificate of Origin Circulars

24-hour hotline : 23 922 922

e-mail address : enquiry@tid.gov.hk

Ref : EIC 111/2/11

5 August 2008

Dear Sirs,

Commercial Information Circular No. 403/2008

Certificate of Origin Circular No. 9/2008

US : Uniform Rules of Origin for Imported Merchandise

The US Customs and Border Protection (CBP) published in the Federal Register (FR) notice of 25 July 2008 a proposal to establish uniform rules governing CBP determinations of the country of origin of imported merchandise. Under the proposal, application of the country of origin rules codified in Title 19, Code of Federal Regulations, Part 102 will be extended to all imported merchandise. Interested parties may submit their comments to CBP by 23 September 2008. A copy (pdf format) of the FR notice is appended to this circular for reference.

DETAILS

  1. All merchandise imported into the United States is subject to a country of origin determination. Under current regulations, there are two primary methods that CBP uses to determine the country of origin of imported goods that are processed in, or contain material from, more than one country. To determine whether goods have been "substantially transformed" in a particular country, one method employs case-by-case adjudication while the other uses codified rules which are primarily expressed through changes in tariff classification (the Part 102 rules). 
     
  2. According to the notice, the substantial transformation standard has developed over many years through numerous US court decisions and CBP administrative rulings. Because the rule has been applied on a case-by-case basis to a wide range of scenarios and has frequently involved consideration of multiple criteria, the substantial transformation standard has been difficult for the US courts and CBP to apply consistently and has often resulted in a lack of predictability and certainty for the trade community. Hence, CBP is proposing to extend application of the Part 102 rules to all country of origin determination made under the US customs and related laws and navigation laws, unless otherwise specified. CBP believes that the proposed uniform rules for all trade will result in origin determinations that are more objective, transparent, and predictable.
     
  3. In addition, CBP states that after over 10 years of concurrently administering the Part 102 rules and the case-by-case methods for determining origin, it has identified five specific product areas in which the outcomes of the two systems have been inconsistent and for which the codified rules in Part 102 should be altered. Details of the proposed changes are as follows:
  1. Pipe Fittings and Flanges - to reflect the current industry practices and general principles enunciated by the US courts, CBP proposes to amend the Part 102 rule for goods classified in Harmonized Tariff Schedule of the United States (HTSUS) heading 7301 through 7307 to provide for a change within heading 7307 from fitting forgings or flange forgings to fittings or flanges made ready for commercial use by certain processing, including bevelling, bore threading, center or step boring, face machining, heat treating, recoining or resizing, taper boring, machining ends or surfaces other than a gasket face, drilling bolt holes, and burring or shot blasting. 
     
  2. Greeting Cards - CBP proposes to amend the Part 102 rule for HTSUS headings 4901 through 4911 by creating a specific rule for heading 4909, providing for a change to that heading from any other heading except from heading 4911 when the change is a result of adding text. The effect of this amendment is to enable the country of origin of all printed greeting cards to be determined according to the country of initial printing of literary text, photographs, graphic designs, or illustrations.
     
  3. Glass Optical Fiber - to eliminate the inconsistent origin results under the case-by-case method and Part 102 rule when imported glass preforms are drawn to create optical fiber, CBP proposes to amend the Part 102 rules by providing for a change to HTSUS subheading 9001.10 from any other subheading, except from subheading 8544.70 or glass preforms of heading 7002.
     
  4. Rice Preparations - to eliminate the inconsistent origin results under the case-by-case method and Part 102 rule when the rice is made into a rice preparation, CBP proposes to amend the Part 102 rules by providing for a change to HTSUS subheading 1904.90 from any other heading, except from heading 1006 or wild rice of subheading 1008.90.
  1. CBP is also proposing certain corrections to the rules of origin for two textile and apparel products. Please refer to our Commercial Information Circular No. 404/2008, Certificate of Origin Circular No. 10/2008 cum Notice to Exporters Series 1 (USA) No. 7/2008 for details.

ENQUIRIES

  1. For enquiries concerning the content of this circular, please contact the undersigned at 2398 5682.

Yours faithfully,




(Miss Bonny CHAO)

for Director-General of Trade and Industry



Note: While every effort is made to ensure the accuracy of the above information, the Department cannot guarantee this to be so and will not be held liable for any reliance placed on the same.