Goods of Crimea are of Ukrainian Origin US Customs Reminds Us

The U.S. position on Crimea is clear and this sentiment was echoed throughout the customs community in a country of origin marking message it published on April 23rd that stated that goods originating in Crimea are products of the Ukraine.

This means that for country of origin labeling on any product, including that which is on clothing labels, if it is made in Crimea it is of Ukrainian origin - ONLY.

After reminding us of the law requiring that the English name of the country of origin must be marked, U.S. Customs specifically stated that the:

“Growth, production, or manufacture of a good in Crimea is growth, production, or manufacture of a good in Ukraine.  Goods which are the growth, product, or manufacture of Crimea and other areas of Ukraine should be marked as ‘Product of Ukraine’ or ‘Made in Ukraine’.  If the container of the imported good is marked, it may be marked, ‘Contents made in Ukraine’ or words similar in meaning.”

“So what happens if it’s accidentally marked as “Russia” or some other country?” you may be asking yourself?  Pain (in the wallet).  Or at least, a headache for the importer, as goods not correctly marked will also be subject to additional duties of 10% of the final appraised value unless exported or destroyed under Customs supervision prior to liquidation.

So, referendum of not.  Goods of Crimea are of Ukrainian origin.  Period.

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Importing Products That You Want to Sell to the US Government? Is That Even Possible?

Sure you want to be a vendor of the U.S. Government, but in order to sell to government agencies, you must have a product that is a
 “U.S. –Made End Product.”

 

As defined in the Federal Procurement Regulations, a U.S. – Made End Product is

"An article that is mined, produced, or manufactured in the United States or that is substantially transformed in the United States into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed.”

Given the breadth of international trade, it is not uncommon to find that a product sold to the US government is not actually 100% of U.S. origin, but rather has some foreign components that were substantially transformed - as the above definition references - here in the U.S.

As a result of this international trade reality, a waiver may be granted on certain “Buy American” restrictions for purposes of selling to the U.S. government.  U.S. Customs offers advisory rulings and final country of origin determinations as to whether an article is or would be a product of a designated country or instrumentality for the purpose of granting such a waiver.

The rule of origin set forth in the U.S. Customs law at 19 USC §2518(4)(B) (see also 19 CFR §177.22) provides that:

An article is a product of a country or instrumentality only if

     i) it is wholly the growth, product, or manufacture of that country or instrumentality, or

     ii) in the case of an article which consists in whole or in part of materials from another country or instrumentality, it has been substantially transformed into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed.

In determining whether a substantial transformation occurred, US Customs considers the totality of the circumstances in its analysis of the assembly of components of various origins into completed products.  It further does so on a case-by-case basis.

Such analyzed factors include the origin of the components themselves, resources expended on product design and development, the extent of the processing that occurs within a country, and whether such processing rendered a product with a new name, character and use.

Other considerations include the nature and extent of post-assembly inspection and testing procedures, and the worker skill required during the actual manufacturing process.

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Country of Origin UK - What Next? Residency in Spain?

Today I wrote some letters on stationary that my mother bought in Italy in 2000.  On the package, was the following sticker indicating that its country of origin was the UK.

I had been studying at the Mediterranean Academy of Diplomatic Studies in Malta in the late 1990s and recalled that back then the European Union (EU) was still adding countries through their many “enlargements” in order to bring in other countries to participate in a unified political system.

The 6 founding members of the European Community were Belgium, France, Germany, Italy, Luxembourg and the Netherlands.  In 1993 however, came the creation of the EU which included these countries and also the UK, Greece, Denmark, Spain, Portugal and Ireland.

A unified customs system had begun years earlier however, with the European Economic Community.  

Nonetheless, given all of the developments since then it struck me as odd to see a product sold in Italy nonetheless marked with its country of origin as being the UK.

And speaking of developments, just earlier this month the US and European Union had a discussion on the possibility of joint trade relations.  For me this was quite unimaginable, because with the European model, the first step of having open trade borders led to integration on a much higher level, namely that someone from Bulgaria or Romania (joined EU in 2007) for example, can go and live in France or Spain and lawfully work there, and in fact, many have gone there.

Would opening up our trade borders ultimately open the door for me (or you) to live along the Mediterranean Sea in Cataluyna?  Wouldn’t that be nice to live in Barcelona???

And who would come and live here with us?  Makes you wonder…

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Labeling Products as Being Made or Assembled in the USA

Both the Federal Trade Commission (FTC) and US Customs have distinct rules governing country of origin marking and qualifying claims of US origin.

The FTC’s focus is with regards to the labeling and advertising of products making claims of US origin.  This is because the FTC is charged with preventing deception and unfairness in the marketplace.  It therefore has the power to bring law enforcement actions against false or misleading claims that a product is of U.S. origin.  Naturally, where a product is being imported and it’s labeled “Made in USA,” it is likely going to raise some eyebrows without further explanation.

Traditionally, the FTC has required that a product labeled or advertised as Made in USA be "all or virtually all" made in the U.S.  While this is not clearly defined, the thrust of this rule is that the product itself is comprised of components that are of US origin, or virtually all of US origin.

US Customs interest in marking however, has to do with consumer preferences.  According to the case, United States v. Friedlaender & Co., 27 C.C.P.A. 297 at 302 (1940), the intention behind the marking law (19 U.S.C. 1304) was "that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product.  The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will."

US Customs, on the other hand, does not require any marking of Made in the USA when a product is of US origin.  Where this issue typically arises however, is in the case of an article whose components are of US origin but for which the final product is “assembled” in another country.

Customs has held that where the word “assembled” is used in conjunction with the origin statement to supply additional information, it has been found acceptable provided the additional information about where the watch was assembled was (1) not false or misleading, (2) appeared in close proximity to, and (3) was in a comparable font size to, the country of origin marking.

One point to note is that the FTCs rules tend to be more prohibitive than that of US Customs, so when in doubt, consult with the agency itself, such as at the FTC webpage entitled “Complying With the Made in USA Standard” http://business.ftc.gov/documents/bus03-complying-made-usa-standard or your attorney.

Questions/comments?  Post below or email me at clark.deanna@gmail.com