U.S. Customs and Border Protection (CBP) established a United States, Mexico, Canada Free Trade Agreement (USMCA) Center to act as a one-stop shop for assisting the trade community with the implementation of the new agreement which enters into force on July 1. To this end, CBP will be hosting a series of webinars and videos about key implementation topics to include entry procedures, rules of origin, textiles, autos and auto parts, certification, enforcement, and available resources. On June 11, CBP hosted a two-hour webinar giving an in-depth look at the USMCA center and outlining certain key elements of the agreement. Unlike NAFTA, the USMCA has a 16 year sunset provision with a built in six-year review requirement. The Acting Director of the center emphasized the shift in compliance responsibilities to the importer. The Regional Value Content (RVC) increases to 75%. More information regarding the application of the Labor Value Content will be provided shortly. Despite the publication of uniform regulations by the three countries there are domestic regulations that CBP is preparing. These and General Headnote 11 are pending. The Acting Director of the USMCA Center informed us that the agency is establishing a frequently asked questions forum, links to resources from other government agencies and those created by the agency as implementation roles out. The agency continues to work on the use of the S and S+ SPI. The S+ will most likely be reserved for certain agricultural products. Using this SPI will indicate that the product meets the requirements for USMCA preference and that the claimant has the documents to support the claim. The agency notified the trade that the merchandise processing fee will not be refunded on post importation claims. A legislative fix is necessary to change this. Reconciliation will continue to use the 09 entry type, but separating NAFTA reconciliation from USMCA reconciliation is necessary. The USMCA is silent on marking requirements so the current marking rules apply to products claiming preference under the agreement. Unlike NAFTA, a good does not need to qualify to be marked as a good of CA or MX in order to receive preferential tariff treatment under USMCA. The exception involves certain agricultural goods. In addition, a good with a non-foreign origin (i.e. a U.S. good) is also eligible for preferential tariff treatment and U.S. will also be accepted as a country of origin on a USMCA claim. Post importation claims cannot use the post summary correction (PSC). The procedures under 19USC1520(d) must be used. A post-importation claim, submitted individually or through the ACE Reconciliation Prototype, must include the following information: Declaration that Good Qualifies; Certification of Origin (with required data elements); Statement on Whether Doc. Provided to Any Other Persons; and Statement on Whether Protest or Petition Filed. A summary of drawback standards of NAFTA-to-USMCA are as follows: Substitution Standards USMCA adopts TFTEA substitution standards when drawback is permitted (i.e., substitution under the same 8-digit HTSUS subheading rather than “same kind and quality” substitution”) Sugar Exception USMCA expands scope of sugar exception, which retains substantial transformation substitution standards (i.e., pre-TFTEA substitution standards) of “same-kind-and-quality” for specific sugar products, to benefit the trade Conditions of Export USMCA removed a NAFTA provision that applied a fee pursuant to Section 22 of the U.S. Agricultural Adjustment Act, subject to Chapter Seven (Agriculture and Sanitary and Phytosanitary Measures) NAFTA drawbacks claims can continue to be filed until 2025.
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