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USMCA Provisions May Reduce Need for 9801 Claims on US Origin Goods

Some new provisions within the USMCA seem to make claims of U.S. goods returned under Harmonized Tariff Schedule heading 9801 for U.S. origin goods much less important than was the case under NAFTA. Kevin Riddell, director-trade and regulatory compliance at Tremco Group in Canada, highlighted the changes, which allow for USMCA claims on U.S. origin goods, in a recent LinkedIn post. While Riddell said he hadn't tried to enter U.S. goods under the new USMCA provisions, a CBP spokesperson confirmed that “a USMCA claim may be made on goods of U.S. origin, provided it satisfies its applicable rule of origin and all other requirements of the Agreement have been met.”

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Previously, importers of U.S. goods frequently used the 9801 classification rather than claim NAFTA because “only goods of Canadian or Mexican origin could claim NAFTA benefits upon entry,” Riddell said. This meant that companies would either have to pay the duties on U.S. origin goods or claim 9801. That seems to have changed, based on the July 1 HTS updates that coincided with USMCA taking effect, he said. The newly created General Note 11 for USMCA uses the SPI S or S+ “regardless of country of origin, and it specifically allows for 'Goods that originate in the territory of Mexico, Canada or the United States,'” Riddell said.

The change “will greatly ease our documentation burdens, and allow for a single system to manage preferential origin,” Riddell said. The previous approach caused a number of problems in the process, he said. “Most integrated supply chains in North America move goods across borders multiple times at some point and end up having to declare US goods for a US import,” Riddell said. “The difference in the processes for NAFTA and 9801 forces these companies to maintain 2 documentation processes.” Also, manufacturers frequently questioned the need for additional information when a NAFTA certificate was already provided, he said. “This would all have been much easier if we could have just claimed NAFTA on US origin goods.”