The End of CBP's Restrained Enforcement for USMCA

On July 1, 2020, the Agreement between the United States of America, the United Mexican States, and Canada (USMCA) became effective, paving the way for the immediate or staged elimination of duties and barriers to trilateral trade in goods originating in the United States, Mexico, and Canada. However, despite the effective date of the agreement, businesses required additional time to adjust policies and procedures for compliance under USMCA, particularly as it relates to the preferential tariff treatment of goods. In response to this, CBP announced that during Phase 1 of Implementation (July 1, 2020- December 31, 2020) the agency would show restraint in enforcement and instead focus on supporting the trade’s USMCA compliance efforts through webinars and other educational outreach efforts. For autos, Customs will extend the period of enforcement restraint to July 1, 2021.

With the end of this restrained enforcement period on the horizon, Queena Fan, director of the CBP USMCA Center, confirmed there are no plans to limit enforcement after January 1, 2021. During her presentation in early November to the National Association for Foreign-Trade Zones, Ms. Fan acknowledged this could change if there were new issues or industry concerns brough to CBP’s attention.

Importers must exercise reasonable care when making a claim under USMCA, including ensuring that they have a complete and valid certification of origin at the time the claims is made and meeting all recordkeeping obligations. To this end, some important changes in the USMCA from NAFTA in terms of country-of-origin certificates importers should be ready to implement are as follows:

• USMCA permits a claim for preferential treatment to be based on a certificate of origin completed by the exporter, producer, or the importer.
• There is no specific form for country-of-origin certificate and the CF 434 is obsolete.
• The country-of-origin certificate must be separate from the invoice and from other commercial documentation issued by a non-Party.
• Electronic certificates of origin with electronic or digital signatures are allowed.
• Country-of-origin certificates will not be required for importations of originating goods the value of which does not exceed US $2500 (or its equivalent), provided the importation is not part of a series of importations undertaken to evade the requirements to pay duty or otherwise comply with the law.

With the end of CBP’s restrained enforcement period, it is important to ensure your USMCA compliance is up to date. Barnes, Richardson & Colburn, LLP attorneys have extensive knowledge of the USMCA and managing the transition from NAFTA compliance to USMCA compliance. Do not hesitate to contact any of our professionals to discuss these important updates.