64 frequently asked questions about the USMCA: from 7 to 9

The Ministry of Economy published a list of 64 frequently asked questions about the Treaty between Mexico, the United States and Canada (USMCA).

The USMCA establishes that each Party shall provide that a recovered material obtained in the territory of one or more of the Parties be treated as originating when used in the production of, and incorporated in, a remanufactured good.

For greater certainty: a remanufactured good is originating only if it meets the applicable requirements of Article 4.2 (Original Merchandise); and a recovered material that is not used or incorporated in the production of a remanufactured good is originating only if it complies with the applicable requirements of Article 4.2 (Original Goods).

These are questions seven through nine about the USMCA:

7. What are the main provisions of Chapter 4 on Rules of Origin of the USMCA?

• De Minimis. Taking into account that global value chains have become an essential feature of our productive reality, in order to provide the necessary balance that companies require to access a global supply of inputs, and at the same time, promote the use of components of the region, the De Minimis provision was updated in order to increase the current percentage but not exceed 10%, which corresponds to that established with the rest of our business partners.
• Aquaculture. The article on fully obtained goods was updated in order to expressly and clearly recognize that fish obtained from aquaculture in the region are considered originating. According to the FAO, aquaculture is probably the fastest growing food production sector and represents a significant percentage, almost 50%, of the world’s food fisheries.
• Games or Assortments. Considering that there is a tendency to present merchandise at stake or assortment, which has become an increasingly widespread marketing strategy, new provisions related to games and assortments were incorporated in order to ensure compliance with origin.
• Remanufactured Goods. Recognizing new business models based on recycling, in order to facilitate business opportunities in an environmentally friendly industry, a provision is specifically incorporated on remanufactured goods, in the sense of recognizing the originating nature of the materials, parts or components that were recovered and subjected to disassembly for subsequent remanufacturing. Remanufacturing is an important and growing sector in the United States, as well as being the largest consumer of this type of product.
• Principle or Clause on “Accumulation”, which allows to recognize as originating both the materials of the signatory countries and the processes carried out in any of their territories. With this, regional value chains are strengthened.

8. What is the objective of Chapter 5 of the USMCA Origin Procedures?

• The Chapter establishes the provisions related to the issuance of the proofs or certification of origin, the actions to verify the origin of the goods, as well as the penalties for irregularities in the matter of rules of origin.
• The USMCA:

1) Modernize the certification scheme and verification procedure to simplify and expedite the verifications.

2) It eliminates the format of the certificate of origin and certification on invoice or any other commercial document is allowed, provided that minimum information data is declared.

3) Introduces certification by the producer and importer, the latter subject to a transition period for its implementation.

• Origin verifications will be carried out by the customs authority of the importing country, through requests for information or visits to the plants, where it is allowed to observe the entire production process and related facilities. In the event that importers fail to comply with the provisions of this Chapter in relation to the origin of the goods, each country will determine whether to apply a civil, criminal or administrative sanction.

9. What is the objective of Chapter 6 of Textile and Clothing Goods of the USMCA?

The objective of this Chapter is to establish specific disciplines related to certain provisions regarding rules of origin, customs cooperation and procedures to verify the origin of textiles and clothing.