Proposed regulations on non-preferential origin determinations, imports from Canada or Mexico; OIRA review completed

Proposed regulations can now be expected to be released for publication in the Federal Register.

Proposed regulations can now be expected to be released for publication

OMB’s Office of Information and Regulatory Affairs (OIRA) reported it has completed its review of proposed regulations concerning non-preferential origin determinations for merchandise imported from Canada or Mexico for implementation of the United States-Mexico-Canada Agreement (USMCA). 

Certain regulations are subject to review by OMB’s OIRA before being issued. According to OIRA, its review of the proposed regulations was completed on June 25, 2021. OIRA identifies the regulations as follows:

  • RIN: 1515-AE63Non-preferential origin determinations for merchandise imported from Canada or Mexico for implementation of the agreement between the United States of America, the United Mexican States, and Canada 

On the OIRA website, the proposed regulations are further described as follows: 

This document proposes to amend the U.S. Customs and Border Protection (CBP) regulations regarding non-preferential origin determinations for merchandise imported from Canada or Mexico.  Specifically, this document proposes that CBP will apply the part 102 rules of origin of title 19 of the Code of Federal Regulations (CFR) for all non-preferential purposes of the customs laws, to determine when a good imported from Canada or Mexico has been substantially transformed resulting in an article with a new name, character, or use.  For consistency, this document also proposes to modify the regulations in part 177 of title 19 of the CFR for country of origin determinations for government procurement.  Collectively, the proposed amendments in this notice of proposed rulemaking (NPRM) will reduce administrative burdens and inconsistency for non-preferential origin determinations for merchandise imported from Canada or Mexico for purposes of the implementation of the Agreement Between the United States of America, the United Mexican States, and Canada (USMCA).  Concurrently with this proposed rule, CBP is publishing an interim final rule to amend various regulations to implement the USMCA for preferential tariff treatment claims.  See Agreement Between the United States of America, the United Mexican States, and Canada (USMCA) Implementing Regulations Related to the Marking Rules, Tariff-rate Quotas, and Other USMCA Provisions (RIN 1515-AE56). That rule will amend, inter alia, parts 102 and 134 of title 19 of the CFR to apply the rules set forth in the part 102 rules of origin for determining the country of origin for marking of goods imported from Canada or Mexico.  It will not, however, mandate application of part 102 for any other non-preferential purposes (as proposed here).

Now that OIRA review has been completed, the proposed regulations can be expected to be released for publication in the Federal Register—the exact date of publication not being known. 
 

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Steve Brotherton
Principal and Global Export and Sanctions Leader
T: 415-963-7861
E: sbrotherton@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094
E: labad@kpmg.com

Irina Vaysfeld
Principal
T: 212-872-2973
E: ivaysfeld@kpmg.com

Amie Ahanchian
Principal
T: 202-533-3247
E: aahanchian@kpmg.com

Christopher Young
Principal
T: 312-665-3229
E: christopheryoung@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

George Zaharatos
Principal
T: 404-222-3292
E: gzaharatos@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

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