NCBFAA Offers Support for Proposed Use of Part 102 Rules for Origin Under USMCA

The National Customs Brokers & Forwarders Association of America is backing CBP's proposed use of Part 102 marking rules to determine the country of origin for non-preferential claims under USMCA (see 2107010045), the trade group said in a July 27 email. CBP proposes to use NAFTA's Part 102 tariff shift marking rules for determining country of origin for non-preferential USMCA claims and government procurement. Some have wondered whether the proposal will prove to be controversial (see 2107070011 and 2107080040).

NCBFAA President Jan Fields said in the comments that "these rules are a proven, precise, and predictable way to determine non-preferential qualification and will enhance uniform decision-making for other non-preferential origin determinations such as Section 301 tariffs that have posed much confusion," the trade group said. "The alternative case-by-case adjudication process method that CBP uses at this time relies primarily on subjective tests articulated in often obscure judicial precedent and past administrative rulings."

The NCBFAA "understands that in most cases the Part 102 rules result in a more flexible substantial transformation than the case-by-case approach," it said. "However, Fields suggested that in those less-common cases we would expect CBP to amend the Part 102 tariff shift rule in accordance with that ruling or decision and at least honor that precedent until modified or revoked through an appropriate notice and comment process." Comments are due Aug. 5.

The NCBFAA said it filed supportive comments in the agency's docket and urged its membership to file similar comments with help from an NCBFAA template. "We note that the part 102 rules already control the determination of the country of origin of imported textile and apparel products for purposes of the customs laws and the administration of quantitative restrictions as well as to determine whether an imported good is a new and different article of commerce under the U.S. Morocco and Bahrain Free Trade Agreements," the template says. "This rulemaking, if adopted, could serve as a springboard to apply the part 102 rules for exports from any country to the U.S. for any commodity, not just textiles and apparel."