I am reading a lot lately about Country of Origin and themany way businesses are attempting to manipulate this given the significantlyincreased US Tariffs.

So what exactly are we talking about, the granular detailsas they say.  It is one of the mostfundamental concepts that you need to understand as an Importer of Record (IOR).  They are the rules in relation toestablishing country of origin.  So whatdo we mean by Country Of Origin?

This isn’t the country that your product has shippedfrom.  Rather, this is the country thatthe product was manufactured in or went through a transformation otherwise knownas place of last significant alteration.

So why is this significant? Well, their importance is derived from the fact that duties andrestrictions in several cases rely upon the source of the import.  Rules of origin are used:

·       To implement measures and instruments ofcommercial policy such as anti-dumping duties and safeguard measures

·       To determine whether imported products shallreceive most-favoured-nation (MFN) treatment or preferential treatment

·       For the purposes of trade statistics

·       For the application of labelling and markingrequirements

·       For government procurement

It is accepted by all countries that harmonization of rulesof origin, ie the definition of rules or origin that will be applied by allcountries and that will be the same whatever the purpose for which they areapplied.

I am seeing a lot of people asking is it legal for goods tobe transhipped from say, China, to Vietnam and then claim that they are ofVietnamese origin?  Simple answer, NO!

Please please please do not attempt to fall for thesecircumventions as they will eventually come back to bite your rear end.  You may be lucky enough to get it through ata reduced rate initially but you will literally be sweating over the nextnumber of years for when its your turn for a customs audit and its discovered.

And what happens then? Well, you’ll certainly have to pay the duty difference.  You’ll have to pay a fine.  And you could actually end up in prison!  Yes, it is this serious.

Just remember, it’s the IOR who is legally responsible forall of the paperwork and payments.  Don’tget sucked in to this practice, you will not win.

And for those unscrupulous brokers out there who are a partyto this.  Shame on you!  Maybe that’s why approximately 15% of brokerlicenses in the US are either suspended or under scrutiny.  Well, that’s certainly a topic for anotherblog post!

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