U.S. regulations implementing provisions of the USMCA

Preferential tariff treatment and non-preferential origin determinations

Preferential tariff treatment and non-preferential origin determinations

U.S. Customs and Border Protection (CBP) and the U.S. Treasury Department today jointly released for publication in the Federal Register an interim final rule and notice of proposed rulemaking related to the agreement between the United States, Mexico, and Canada (USMCA).

Interim final rule

The interim final rule [PDF 354 KB (102 pages) amends the CBP regulations to include implementing regulations for the preferential tariff treatment and related customs provisions of the USMCA. The USMCA applies to goods from Canada and Mexico entered for consumption, or withdrawn from warehouse for consumption, on or after July 1, 2020.

The interim final rule:

  • Implements provisions of the USMCA related to general definitions, confidentiality, import requirements, export requirements, post-importation duty refund claims, drawback and duty deferral programs, general verifications and determinations of origin, commercial samples, goods re-entered after repair or alteration in Canada or Mexico, and penalties
  • Makes amendments to apply the marking rules in determining the country of origin for marking purposes for goods imported from Canada or Mexico and for other purposes specified by the USMCA
  • Includes amendments to add the sugar-containing products subject to a tariff-rate quota to the CBP regulations governing the requirement for an export certificate
  • Includes conforming amendments for the declaration required for goods re-entered after repair or alteration in Canada or Mexico, recordkeeping provisions, and the modernized drawback provisions 

Notice of proposed rulemaking

Released concurrently with the interim final rule, a notice of proposed rulemaking [PDF 188 KB] (25 pages) proposes to amend the CBP regulations regarding non-preferential origin determinations for merchandise imported from Canada or Mexico.

Specifically, the proposed rulemaking notice proposes:

  • That CBP will apply certain tariff-based rules of origin in the CBP regulations for all non-preferential determinations made by CBP, specifically, to determine when goods imported from Canada or Mexico have been substantially transformed, thereby resulting in an article with a new name, character or use
  • To modify the CBP regulations for certain country of origin determinations for government procurement

Collectively, the proposed amendments are intended to reduce administrative burdens and inconsistency for non-preferential origin determinations for merchandise imported from Canada or Mexico for purposes of the implementation of the USMCA.

CBP on August 4, 2021, released for publication in the Federal Register an extension of the comment period [PDF 256 KB] to September 7, 2021.

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

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

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

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

George Zaharatos
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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