United States-Mexico-Canada Agreement Rules of Origin and Origin Procedures Now Available

On June 3, 2020, the United States-Mexico-Canada Agreement (the “USMCA”) Uniform Regulations for Rules of Origin and Certificates of Origin Procedures were issued. The USMCA and these Regulations will be in force as of July 1, 2020. The North American Free Trade Agreement (“NAFTA”) Rules of Origin and Certificate of Origin requirements remain in force for goods put into commerce through June 30, 2020.

• Rules of Origin: The Rules of Origin are designed to increase purchases among North American suppliers by increasing the regional value content requirements for many tariff product categories, but also increase the de minimis standard allowances for the value of non-originating materials used in the production of non-originating goods.
• Certificates of Origin: The USMCA shifts the Certificate of Origin burden from exporters to importers. Certificates of Origin may be processed and signed electronically without the need for duplicate paper records, so long as certain minimum data elements are present, and a broader range of documents may be used to verify the status of materials as originating goods.  Importers have a twelve-month reconciliation period in which duties can be reassessed if a Certificate of Origin is not yet available. Importers will need to maintain Certificate of Origin documentation for five years from the receipt of goods.

Automotive manufacturers and suppliers face many changes under the USCMA. Under these Rules of Origin procedures: 

• Each major vehicle class and each principal part has specific rules of origin requirements. Each principal part must meet specific regional value content requirements to qualify as an originating good.  These requirements will be gradually increased over the next several years of the agreement.
• Automotive manufacturers may choose to average regional value content calculation by vehicle class, model line or production facility. This choice may allow averaging over an extended initial period.
• Automotive manufacturers must provide notice to the applicable customs agency of the intent to average regional value content. This election must be made no later than July 31, 2020.
• Automotive manufacturers and suppliers will be provided additional time to respond to customs inquiries for originating documentation to support a Certificate of Origin through December 31, 2020.

For more information regarding these changes, contact your Honigman relationship attorney.