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Why is COO important?
COO can impact the rate of duty, admissibility, quota, and marking requirements, and can effect procurement by government agencies
What are the two different types of treatment associated with COO?
Non-preferential and preferential treatment
What is non-preferential treatment?
Applies to products imported from countries without bilateral of multilateral trade agreements.
Used to determine normal trade relations treatment (MFN), marking requirements, and government procurement.
Countries with non-preferential treatment are usually found under Column 1-General and Column 2.
Used to determine normal trade relations treatment (MFN), marking requirements, and government procurement.
Countries with non-preferential treatment are usually found under Column 1-General and Column 2.
What are the rules used to determine whether or not a product comes from a non-preferential country?
"Wholly obtained" criterion for goods that are wholly the growth, product, or manufacture of the country.
For goods that contain materials from more than one country, the "substantial transformation" criterion is applied.
For goods that contain materials from more than one country, the "substantial transformation" criterion is applied.
What is preferential treatment?
Apply where there is a bilateral or multilateral trade agreement between countries (NAFTA, US-Chile FTA)
What are the rules used to determine whether or not a product comes from a preferential country?
"Wholly obtained" criterion for goods that are wholly of growth, product, or manufacture of a particular country.
For goods that consist of materials from more than one country are based on "substantial transformation" rules and must meet the minimum local value content depending on which country the FTA is with.
For goods that consist of materials from more than one country are based on "substantial transformation" rules and must meet the minimum local value content depending on which country the FTA is with.
Under what circumstances does merchandise qualify for NAFTA rules of origin?
1. Goods that are wholly produced in Canada, Mexico, and/or the US exclusively from NAFTA materials.
2. Have been transformed in Canada, Mexico, or the US and any non-NAFTA components have undergone a change in tariff classification.
3. Goods produced with components that do not undergo a change in tariff classification have a regional value of 60% when transaction value is used or 50% when net cost value is used to determine duty rate.
2. Have been transformed in Canada, Mexico, or the US and any non-NAFTA components have undergone a change in tariff classification.
3. Goods produced with components that do not undergo a change in tariff classification have a regional value of 60% when transaction value is used or 50% when net cost value is used to determine duty rate.
What qualifies as a change in tariff classification?
Example: Thread from a non-NAFTA country is used to make a piece of clothing which is produced in a NAFTA county
What are the COO rules for textiles and apparel?
TEXTILES AND APPAREL:
FABRIC: COO is the country in which the fabric is woven, knitted, felted, or created
YARN: COO is the country in which the staple fibers are spun
OTHER: COO is country in which the components of the product are assembled EXCEPT FOR MINOR ATTACHMENTS
FABRIC: COO is the country in which the fabric is woven, knitted, felted, or created
YARN: COO is the country in which the staple fibers are spun
OTHER: COO is country in which the components of the product are assembled EXCEPT FOR MINOR ATTACHMENTS
What are minor attachments?
buttons, thread, embroidery, pockets, cuffs...
What happens when the COO cannot be determined by the basic COO rules for textiles and apparel?
1. If the product went through processing in two or more countries, COO is the country in which the MOST IMPORTANT assembly took place (substantial transformation)
2. If (1) cannot be determined, COO is the LAST country in which manufacturing took place
2. If (1) cannot be determined, COO is the LAST country in which manufacturing took place