The USMCA permits CBP to verify whether a good entered with a claim for preferential tariff treatment qualifies as originating by: (1) Written request or questionnaire to the importer, exporter, or producer of the good seeking information or documents, such as via CBP Form 28; (2) Visit to the premises of the exporter or producer of the good in order to request information or documents and to observe the production process and the related facilities; and (3) Any other procedure that may be decided by the Parties.
Separate optional verification procedures for textile or apparel goods are set out in Article 6.6 of the USMCA, as explained below.
CBP will accept information, including documents, directly from the exporter, producer, or importer. Information that may be helpful during a verification includes but is not limited to the following:
- Flow-charts, technical specifications, and other documents explaining the manufacturing process;
- An explanation of how the good meets the specific rule of origin;
- A bill of materials showing the classification number, origin, and cost of each material;
- Certifications or affidavits from the producer of each originating material attesting to the country of manufacture and its originating status;
- Purchase orders and proof of payment to substantiate values;
- Documentation pertaining to assists, inventory management methods, and indirect materials;
- Raw materials invoices;
- Production records; and
- Export documents.
If an importer provides insufficient information, CBP must request information from the exporter or producer before it may deny the claim for preferential treatment. If CBP intends to deny preferential tariff treatment based on information submitted during the verification, CBP will inform the importer, and any subject of the verification that provided information. CBP will allow additional information to be submitted 30 days after CBP has informed the parties of its intent to deny the claim.
If the importer provides CBP with sufficient information to demonstrate the goods origin, CBP will notify the importer and any exporter or producer that completed the certification of origin of a positive determination via CBP Form 29, which will include the HTSUS number, description of the good, and the applicable rule of origin.
Negative Determination and Protest Rights
If the importer does not adequately substantiate the claim, CBP will notify the importer and any exporter or producer who is subject to the verification, of proposed action via CBP Form 29. The importer and any other party receiving the notice will have 30 days to submit additional information. If CBP does not receive additional information supporting the claim for preferential treatment, CBP will issue a negative determination to the importer as well as the exporter or producer, as appropriate, via CBP Form 29. CBP will deny the preference claim and liquidate the entries with the applicable duties, taxes, and fees.
If a preference claim is made on a good covered by a blanket certification, and a negative determination is issued, CBP will deny preference to all importations of identical goods covered by that blanket certification and liquidate the entries with the applicable duties, taxes, and fees.
As for any eligible CBP decision, importers or other authorized parties may file a protest to contest a denial of preferential tariff treatment of a claim made at entry pursuant to 19 U.S.C. 1514 within 180 days of liquidation.
Bottom Line: Along with the complexities and associated costs introduced by the USMCA, importers must exercise reasonable care with regard to their USMCA transactions to reduce risk of penalties.