Dear friends and customers,
As we have informed previously, USMCA will be implemented on July 1st 2020. We will be happy to assist you during this transition process.
We encourage your compliance teams to review the new rules of origin to determine if you continue to qualify under the new USMCA. The latest USMCA Rules of Origin (specific by product) can be found on Chapter 4, Annex 5-B, at: https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/Text/US_Tariff_Schedule.pdf or as an attachment to this email.
Many of the new USMCA rules of origin remain unchanged or are most favorable than under NAFTA; however, it is important for you to review these rules and confirm if your products qualify under the new USMCA.
Below are important steps to consider during this transition:
- Review the Bill of Materials for each finished good you wish to qualify for USMCA. Make sure to include full description of the finished product with 10 digit HTS, full description for each component and its 10-digit HTS, Country of origin, value for each component, any packaging, and value added(labor). Review the process made in Mexico to help determine the extent of the transformation in Mexico. If picture can be included in your Costed Bill of Material, you may add it.
- Request the new USMCA Certifications from your suppliers to make sure that originating components used in your production still qualify under the new USMCA.
- For products that did not qualify for NAFTA under De Minimis for a small margin in value, we encourage you to do a USMCA study since new USMCA increases the foreign component allowance from 7% to 10% and you might now qualify under USMCA.
- Confirm if your system/database/Anexo 24 will be ready by July 1st 2020 to report the new USMCA claim in your EDI invoices. Please note Special Program Indicator (SPI) was previously MX to indicate your product qualified under NAFTA and will now require an “S” to claim USMCA. We will still need you to declare country of origin MX in addition to your Special program Indicator (SPI).
- If you currently submit non-edi invoices or do not have the capability to report the new “S” to indicate when you claim USMCA, please be sure to let us know. You may add as a comment “USMCA” or “Qualifies for USMCA” on commercial invoice to indicate the part numbers you intend to claim. We cannot assume all part numbers or products on your invoice qualify for USMCA; therefore, we recommend you report a claim individually, either a comment or for example: MX/S 0703.10.4000
As an importer, you will be required to have an origin certification at the time a USMCA claim is made. Please make sure you coordinate with exporter and producer to decide who will prepare and submit the origin certification and make sure we receive it prior to day of importation.
USMCA will no longer require CBP Form 434 NAFTA, instead you may use any free form that meets the 9 minimum requirements (Chapter 5 Origin Procedures, Article 5.2 and Annex 5-A)
- Importer, exporter or producer Certification
- Exporter Name
- Producer Name
- Importer name
- Description and HS Code
- Origin Criteria
- Blanket Period
- Authorized Signature and Date
- Certification Statement
For your convenience we have prepared the attached certification of origin format.
Feel free to contact us if you have any questions or comments.