Country of Origin Automation Offers Benefits for Firms, Say Industry Officials
The automation of country of origin determination processes stands to benefit U.S. importers and exporters by eliminating human error and allowing for filing comparisons, said Ginger Catizone, global trade content director at Integration Point during a May 13 webinar. Automation allows companies to analyze single or multiple filings against multiple country of origin rules with potentially different requirements, said Catizone. “At the same time you’re building up a repository of origin determinations for reference to be used in the future while simultaneously demonstrating a consistent, repeatable and auditable process for a customs agency,” said Catizone. Despite automation, U.S. firms still need to grapple with the traditional complexities of determining country of origin, said Catizone and Audrey Garrett, import compliance manager for the Americas with Flowserve Corporation.
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The option to enter goods as wholly obtained from a specific origin is increasingly limited considering the growth of component sourcing globally, said Garrett. Global companies are, therefore, largely deciding origin using substantial transformation analysis when their goods don't have preferential status. “You can have a new name. You can have a new character or you can have a new use. But the substantial transformation test is very complex,” said Garrett. “Customs does not have a one formula fits all. It can be very difficult to see how they are going to decide on something without looking at the entire process of a particular product.” Companies, however, can make decisions based on past rulings, said Garrett. The automated country of origin processing and the development of a ruling repository is therefore invaluable, according to Catizone. But companies also have to distinguish between different customs regulations under preferential country of origin requirements in trade agreements. “You have to look to rules of origin for whatever particular trade agreement you’re working with,” said Garrett.