C43u—USMCA Basics for Importers

Subscriber price: $125.00, Non-subscriber price: $200.00
Estimated total study time: 7 hours 57 minutes

This course will provide an overview of the United States-Mexico-Canada Free Trade Agreement (USMCA), which entered into force on July 1, 2020. The USMCA replaced the North American Free Trade Agreement (NAFTA), which was in effect since 1994. The USMCA is a comprehensive and modern trade agreement that covers a wide range of topics, such as trade in goods and services, digital trade, intellectual property, labor, environment, customs, rules of origin, and dispute settlement.

The USMCA aims to strengthen the three countries' economic integration and competitiveness, while promoting fair trade practices and enhancing cooperation on various issues of mutual interest. The USMCA also reflects the changes and challenges of the 21st-century economy, such as the growth of e-commerce, the protection of data privacy, the enforcement of labor rights, and the preservation of the environment.

This course is for anyone responsible for preparing USMCA documentation or that is involved with international imports to the U.S. from Canada or Mexico. This course covers the main features and benefits of the USMCA, as well as the requirements and procedures for exporting and importing goods and services under the USMCA. We provide useful information and resources to help navigate the USMCA and take advantage of the opportunities it offers.

USMCA: Introduction

In this lesson we explore the history and purpose of the USMCA, its structure and regulations, the countries involved and the benefits and challenges of participation. We also delve into some of the key differences between the USMCA and its predecessor, NAFTA.

(Estimated study time: 46 minutes)

Introduction
Introduction to USMCA
- History and Purpose of USMCA
- The Structure of the Agreement and Regulations
- The USMCA Region
- Benefits and Challenges of USMCA Participation
- Key Differences Between NAFTA and USMCA
  - Agricultural Provisions
  - Dispute Settlement Provisions
  - Rules of Origin for Automobiles
  - Intellectual Property Protection
  - Sunset Provision for Review
  - In Conclusion Regarding Differences Between the Agreements

USMCA: Tariff Preferences and Rulings

This lesson will equip you with the knowledge and skills to navigate the complexities of tariff preferences and rulings for the USMCA.

(Estimated study time: 47 minutes)

Introduction
USMCA Tariff Preferences and How They Work
HTSUS Duty Columns
Finding the USMCA Tariff Rates and Quotas for Specific Products and Countries
Shipments that Disqualify Products from USMCA
USMCA Advance Ruling Procedures

USMCA: General and Product Specific Rules of Origin

This module provides a comprehensive exploration of the pivotal role that the Rules of Origin and Regional Value Content (RVC) play in international trade, particularly within the context of Free Trade Agreements (FTAs).

The first part of the module focuses on the Rules of Origin, explaining their importance in preventing ‘trade deflection’ and ensuring that FTA benefits are extended only to goods or services with substantial economic ties to the FTA partner countries. It delves into the intricacies of these rules, their implications under the United States-Mexico-Canada Agreement (USMCA), and the different criteria used to determine the origin of a product. The module also highlights the importance of these rules in various sectors, including the automatic data processing goods and parts sector.

The second part of the module introduces the concept of RVC, a method used to determine the value of a product that originates from a particular region. It explains how the RVC calculation is a key factor in determining whether a product qualifies for preferential tariff treatment under FTAs, especially if a tariff shift does not occur. The module presents an in-depth exploration of the two primary methods for calculating the RVC: the Transaction Value Method and the Net Cost Method, explaining their differences and applications.

Throughout the module, learners will gain a solid understanding of why both the Rules of Origin and RVC calculation methods are cornerstones of FTAs. They will also learn how to navigate the complexities of RVC calculations and ensure compliance with FTAs. By the end of this module, learners should be able to understand and apply the rules of origin in their trade practices, making them better equipped to navigate the world of international trade.

(Estimated study time: 1 hour 19 minutes)

Introduction
Why the Rules of Origin are Important
Non-Originating vs. Originating Material
General Note 9, 11 and 12—U.S. Free Trade Agreements with Canada and Mexico
Rules of Origin Under the USMCA
- The General Rules of Origin
- Special Rules of Origin
- Preference Criterion the General Rules of Origin
  - Criterion A: Wholly Obtained or Produced
  - Criterion B: Tariff Shifts and RVCs
  - Criterion C: Made From Originating Materials
  - Criterion D: Unassembled/Disassembled Goods
  - Criterion E: Certain Computer Goods and Parts
Regional Value Content (RVC) Calculation Methods
- Determining Eligibility Using Regional Value Content
- Transaction Value Method
- Net Cost Method
- Averaging of Costs for Regional Value Content

USMCA: Special Rules of Origin and Operations that do not Qualify

This module provides a deep dive into the intricate aspects of the Rules of Origin in international trade, specifically under the United States-Mexico-Canada Agreement (USMCA). Here’s a breakdown of the module:

Intermediate Materials: The module starts by explaining how self-produced materials that meet the rules of origin and are used in the final good can be designated by the producer for calculating the Regional Value Content (RVC) of final goods.

Principle of Accumulation: It then discusses how producers or exporters can include any regional value added by suppliers of non-originating materials in the final goods. This principle can help reduce the value of non-originating materials used in production.

Fungible Goods and Materials: The module explores how goods that are interchangeable for commercial purposes and have essentially identical properties are treated in the context of the Rules of Origin.

Non-Originating Materials that can be Disregarded: It covers various materials that can be disregarded before applying the tariff shift rule. These include de minimis quantities; accessories, spare parts and tools; packaging materials and containers for retail sale; packing materials and containers for shipment, and indirect material.

Nonqualifying Operations That Do Not Confer Origin: Lastly, the module highlights certain operations that do not confer origin even if they cause a change in tariff classification, allowing the good to meet the tariff shift rule.

(Estimated study time: 1 hour 12 minutes)

Introduction
Special Rules to Confer Origin
- Intermediate Materials
- Accumulation
- Fungible Goods and Materials
Non-Originating Materials that can be Disregarded
- Materials Disregarded Before Application of the Tariff Shift
- The De Minimis Rule
- Accessories, Spare Parts and Tools
- Indirect Materials
- Packaging for Retail Sale
- Packing for Shipment
Non-qualifying Operations That Do Not Confer Origin
Product Materials Worksheet
Example of Classification and Certification Under a Tariff Shift

USMCA: Special Provisions for Certain Sectors

The rules of origin vary depending on the product and the sector, and some of them have specific provisions and requirements that exporters and importers need to be aware of. In this section, we will explain the rules of origin that pertain to special provisions for important sectors and products under the USMCA, such as automotive products, chemical reactions, treatment of sets, textiles and apparel, and others. We will also provide examples and references to help determine how to apply these special rules and requirements to specific goods.

(Estimated study time: 35 minutes)

Introduction
Automotive Goods
- Definition of an Automotive Good or Product
- Regional Value Content (RVC) for Automotive Goods
- Labor Value Content (LVC)
- USMCA Allows Averaging for Similar Goods
- Steel and Aluminum Purchase Requirement
- Transitions and Alternative Staging Regimens
Rules for the Chemical or Allied Industries
Treatment of Sets
Textiles and Apparel
- Definitions of Textiles and Apparel
- Commercial Availability/Short Supply
- Tariff Preference Level
- De Minimis (Textiles)

USMCA: Documentation Requirements

One of the key aspects of the USMCA is the Origin Certification, a document that verifies the origin of goods being traded. This certification can be complex, involving various steps and considerations, from determining which goods qualify for USMCA to documenting how and why they qualify. It also requires careful monitoring of parts, components, materials, and costs, as even slight changes can affect a product’s eligibility. This module provides a comprehensive overview of the USMCA Origin Certification process, including its scope, completion, and the obligations of importers and exporters. It also highlights the changes from the previous North American Free Trade Agreement (NAFTA) and provides practical tips to avoid common errors.

The automotive industry is a key sector in the trade relations between the United States, Mexico, and Canada. As part of the United States-Mexico-Canada Agreement (USMCA), specific certification requirements have been established for passenger vehicles, light trucks, and heavy trucks. These requirements, which include Labor Value Content (LVC), Steel, and Aluminum certifications, are crucial for these vehicles to be eligible for preferential tariff treatment under the USMCA. This lesson provides a comprehensive overview of the pre-entry automotive certification requirements, detailing the steps producers need to take to submit their certifications through the USMCA Center’s portal at the U.S. Customs and Border Protection (CBP) website. It also outlines the information that needs to be included in the certification, the obligations of the producers, and the review process conducted by the CBP and the U.S. Department of Labor. Whether you’re a producer, importer, or exporter, this guide will help navigate the certification process and ensure compliance with the USMCA.

(Estimated study time: 1 hour 6 minutes)

Introduction
Documentation Requirements for USMCA
- Determining USMCA Eligibility
- USMCA Origin Certification
  - Language
  - Scope
  - Completion of Origin Certification
  - When a Certification of Origin is Not Required
  - Importers' Obligations
- Vendors' Certificates/Documentary Evidence to Support Claim
- Common Errors that Require Correction of the USMCA Origin Certification
Other Certifications that may be required
- Pre-Entry Automotive Certification Requirements for Passenger Vehicles, Light and Heavy Trucks
  - Labor Value Content Certification
    - Labor Content Rule
    - Information to Submit for LVC Certification
    - Labor Value Content for Passenger Vehicles
    - Labor Value Content for Light Trucks and Heavy Trucks
  - Steel and Aluminum Certification
    - Steel or Aluminum Certification
- Certificate of Eligibility

USMCA: Entry, Refund Processing, and Recordkeeping

This lesson provides a comprehensive overview of the United States-Mexico-Canada Agreement (USMCA) Entry and Refund Processing. It details the process of claiming USMCA preferential treatment, which allows importers to benefit from lower tariff rates and quotas. The text outlines the conditions and exceptions that must be met to claim this treatment, including the necessary documentation and the origin of the product. It also explains the importance of maintaining accurate records and the potential penalties for non-compliance. Additionally, the procedures for making USMCA claims after importation and the requirements for obtaining refunds of any excess duties paid is covered. It emphasizes the importance of maintaining accurate records, the penalties for non-compliance, and the need for these records to be readily available upon request. This information is crucial for any importer seeking to navigate the complexities of USMCA regulations and benefit from preferential tariff treatment.

(Estimated study time: 38 minutes)

Introduction
USMCA Entry and Refund Processing
- Claiming USMCA preferential treatment
- USMCA Claims After Importation
USMCA Recordkeeping Requirements
- General Recordkeeping Requirements
- Importer's Recordkeeping
- Exporter or Producer Recordkeeping
- Vehicle Producer Recordkeeping

USMCA: Effects on other Programs

This lesson provides an overview of the impact of the United States-Mexico-Canada Agreement (USMCA) on some other trade programs, with a focus on the regulations and conditions for commercial samples, printed advertising materials, and the drawback program. It outlines the specific articles and sections of the USMCA and the Code of Federal Regulations (CFR) that govern these areas, the requirements for duty-free entry, the definition of "negligible value," and the changes between NAFTA and the USMCA. Additionally, it discusses the conditions for exporting goods, the concept of "the lesser of the two" in duty assessment, and the eligibility criteria for full drawback. We also touch upon duty deferral programs, the role of Foreign Trade Zones (FTZs), and the provisions for temporary importations under bond (TIBs) within the USMCA framework.

(Estimated study time: 1 hour 3 minutes)

Introduction
Effect of the USMCA On:
- Commercial Samples and Printed Advertising Materials
- USMCA Drawback Programs
  - Drawback Under USMCA
  - Goods Not Subject to Drawback Under USMCA
  - Goods under Manufacturing Drawback and The Lesser of the Two Designation
  - Goods Eligible for Full Drawback of 19 CFR 182.45
    - Goods Originating in Canada or Mexico
    - Goods in the Same Condition
    - Goods not conforming to sample or specifications or shipped without consent of consignee
    - Certain goods exported to Canada or Mexico.
    - Certain goods exported to Canada
    - Certain Goods that are Exported or Deemed Exported.
- USMCA Duty Deferral Programs
  - Duty Deferral in General
  - Foreign Trade Zones and USMCA
  - USMCA and Bonded Warehouses
  - Temporary Importations Under Bond and USMCA
  - Maquiladoras and Inward Processing Programs
- USMCA's Effect on HTSUS Chapter 98
  - United States Goods Returned (HTSUS 9801)
  - Repairs and Alterations (HTSUS 9802.00.40 and 50)
- USMCA's Effect on Tariff Preference Level (9823)
- User Fees
U.S.-Mexico-Canada Agreement (USMCA) Tariff Preference Level (TPL) and Tariff Rate Quota (TRQ)

USMCA: Country of Origin Marking; Verifications and Audit

This lesson provides a detailed overview of the country of origin Marking rules as they apply under the United States-Mexico-Canada Agreement (USMCA). It outlines the regulations that determine how goods are marked to indicate their country of origin, which is crucial for consumers and businesses involved in North American trade. The lesson explains the general rules for determining the country of origin for various products, including exceptions and special provisions. It also highlights the marking methods and exceptions specific to USMCA goods, as well as the de minimis provisions that allow certain foreign materials to be disregarded when determining the origin for marking the product, which may differ from the origin determined for duty.

This lesson also provides a comprehensive overview of the origin verification process conducted by the Customs and Border Protection (CBP) under the USMCA. It details the methods used for verification, the role of the importer, exporter, and producer in the process, and the types of information that may be requested. The text also outlines the potential penalties and liabilities for non-compliance, as well as the provisions for review and appeal.

(Estimated study time: 32 minutes)

Introduction
Country of Origin Marking
- Origin for Marking Purposes
- General Rules for Determining the Country of Origin Other than Textile and Apparel Products
- USMCA Marking Method
- USMCA Container Marking
- General Exceptions to Marking Apply to USMCA Goods
- Goods Not Marked at Time of Importation
- De Minimis Provisions for Marking
USMCA Origin Verification and Compliance
- Origin Verification by CBP
- Penalties and Liabilities for Non-Compliance
  - Penalties
  - Denial of Benefits
Review and Appeal