Generally
For goods made in one country with no foreign inputs, determination of the country of origin is easy--it is the country of production. Increasingly, however, goods are processed in multiple countries using both domestic and foreign materials, thereby complicating the determination of the country of origin. The NAFTA provides that Canada, Mexico and the United States write specific rules defining "country of origin". In the United States, the marking statute, Section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304) requires that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked with its country of origin. Paragraph 1 of Annex 311 of the NAFTA provides that the NAFTA parties shall establish "Marking Rules" to determine when a good is a good of a NAFTA country. The Marking Rules established by the United States are set forth in 19 CFR Part 102 which are used to determine the country of origin. The Marking Rules are distinct from the rules of origin that are used to determine whether a good is originating under Article 401 of the Agreement. The Marking Rules are all based on a tariff change and are largely the same in all three countries.
Originating goods and goods which undergo the specific tariff classification changes prescribed by the Marking Rules are considered goods of Canada, Mexico or the United States (as appropriate) and are subject to the Agreement's provisions on marking. Goods may be marked with the country of origin in English, Spanish or French, except that Canada, Mexico and the United States may, as part of their general consumer information measures, require that an imported good be marked with its country of origin in the same manner as prescribed for domestic goods. Unless specifically exempted, Canada, Mexico and the United States may require that goods imported from another NAFTA country be marked in a conspicuous place legibly, indelibly, and sufficiently permanently to indicate to the ultimate purchaser the country of origin of the article. Such marking requirements must comply with the NAFTA's general provisions on methods of marking, exemptions, etc.
Method
Generally, goods of Canada, Mexico and the United States may be marked using any reasonable method, including stickers, labels, tags, or paint. The marking must be conspicuous, legible and sufficiently permanent to survive normal distribution and store handling.
Containers
A usual container imported empty, whether or not disposable, need not be marked with its country of origin. (A usual container is one in which the good will ordinarily reach its ultimate purchaser.) However, the master container in which the usual containers are imported may be required to be marked with the country of origin of its contents.
A usual container imported filled, whether or not disposable is not required to be marked with its own country of origin. A NAFTA country may, however, require that the container be marked with the country of origin of its contents, unless the contents are marked with their country of origin and the container can be readily opened for inspection of the contents, or the marking of the contents is clearly visible through the container.
Exemptions
Canada, Mexico and the United States shall exempt from country of origin marking requirements a good of another NAFTA country that:
- is a crude substance;
- is imported for use by the importer and is not intended for sale in the form in which it was imported;
- is to undergo production in the territory of the importing country by the importer, or on its behalf, in a manner that would result in the good becoming a good of the importing country under the marking rules;
- by reason of its character, or the circ*mstances of its importation, the ultimate purchaser would reasonably know its country of origin even though it is not marked;
- was produced more than 20 years prior to its importation;
- for purposes of temporary duty-free admission, is in transit or in bond or otherwise under customs administration control;
- is an original work of art; or
- is provided for in subheading 6904.10 [ceramic building bricks, blocks and tiles], or heading 8541 [diodes, transistor and similar semiconductor devices] or 8542 [electronic integrated circuits and microassemblies].
Additional products are exempt from country of origin marking requirements, but Canada, Mexico and the United States may require that their outermost usual containers be marked to indicate the country of origin of the goods they contain. These include a Canadian, Mexican or U.S. good that:
- is incapable of being marked;
- cannot be marked prior to exportation to the territory of another NAFTA country without causing injury to the goods;
- cannot be marked except at a cost that is substantial in relation to its customs value so as to discourage its exportation;
- cannot be marked without materially impairing its function or substantially detracting from its appearance.
- is in a container that is marked in a manner that will reasonably indicate the good's origin to the ultimate purchaser.
- was imported without the required marking and cannot be marked after its importation except at a cost that would be substantial in relation to its customs value, provided that the failure to mark the good before importation was not for the purpose of avoiding compliance with the requirement.
Goods Not Marked at Time of Importation
Importers are allowed, where administratively practicable, to mark goods that are not marked at the time of importation, prior to their release from customs control or custody. This rule applies unless an importer has repeatedly violated the country of origin marking requirements after receiving written notification that the goods are required to be marked prior to importation.
Canada, Mexico and the United States may impose special marking duties or penalties for repeated violations of country of origin marking requirements after written notification, as well as for removal of the goods from customs custody or control before the goods have been marked. Additional duties or penalties may also be imposed for deceptive marking.
For further information regarding the country of origin marking requirements and exceptions in the United States, see 19 CFR Part 134.
