We have all seen the “Made in USA” stamp or label affixed to goods purchased around the world. Although the label is intended to be used to identify goods as meeting the Rule of Origin, it has also morphed into a mark of quality goods resulting in its use for sales purposes. We feel good about purchasing these goods because they are helping our economy and employing our residents. However, in recent months the Federal Trade Commission has ascertained that there is “rampant fraud” in the use of these labels and state that “violators essentially faced no consequences.” This has sparked impending rules on such claims with steep penalties for those who use them fraudulently.
What Does This Mean For You?
If you are importing US goods into the United States you want to take a look at your documents as well as review the product origins to ensure accurate “Made in USA” claims. With the increased focus on thwarting fraudulent use, importers are likely going to experience increased enforcement. As the US, Canada, and Mexico have one of the closest trading relationships in the world, US goods frequently ship back and forth between our borders. If you are making a US Goods Returning (USGR) for duty-free treatment you want to make sure that you not only have the required documentation at the time of entry to be eligible to make the claim but also the documented proof to back it up. The documents required are as follows:
- A Manufacturer's Affidavit confirming the goods were made in the US
- A Declaration by the Foreign Shipper, attesting that the goods were not improved in condition or repaired abroad
- A Declaration by Owner, Importer, Consignee, or Agent
Pro tip: Just because the goods that are returning were originally procured in the US does not mean that the country of origin is the US. Without all of the required documents and supporting evidence, the goods may be subject to duty, taxes, and fees.
What To Expect From Enforcement
- An increase in inspections
- An increase in Requests for Information, referred to as a CF28, post clearance in which the importer will have to provide documented proof that the goods were manufactured, produced, or grown in the US. If adequate proof is not supplied CBP will assess duties plus interest.
- In the case of products that are manufactured with US components, an increase in Requests for Information is referred to as a CF28. If adequate proof is not supplied CBP will assess duties plus interest.
Are There Restrictions On Claiming USGR?
As always, whenever you are making a claim for preferential duty treatment, you want to make sure that you have all of your regulatory bases covered. The following are certain instances where even if the origin is confirmed to be US, a USGR claim may be prohibited:
- Was drawback claimed when the goods were originally exported?
- Was the good manufactured in a Foreign Trade Zone? Even if that zone is located in the US, that does not automatically determine the origin is US.
- Are there other tax considerations outside of standard duty, taxes, and fees?
- Were the goods cleared under a Temporary Import Bond (TIB) and already benefited from reduced or eliminated duty?
- Other considerations that may prohibit the eligibility of the goods from using the 9801 USGR treatment.
Anytime you are importing into the US, you want to ensure that you are certain of the facts that you are declaring, as well as the details of the programs you are utilizing. Business changes, supplier changes, and requirements are frequently updated, so keeping yourself, your business, and documents up-to-date is the best investment you can make in your cross-border business.