It seems like a simple question, "what is the country of origin for your imported products?" Well you buy them from a company in Germany and that company ships the products to you in the U.S. so you may think the answer is "Germany," but you may be totally incorrect and liable for significant penalties for assuming you know the products' origin.
U.S. Customs & Border Protection (CBP) enforces trade laws, rules and regulations and one area of particular concern for CBP is that they know the correct country of origin for an imported product. Even though the products may have been shipped from Germany (in our example) what if they were actually manufactured in China or another country other than Germany? Is the correct country of origin being declared by the U.S. importer when the goods arrive in the U.S. for Customs' clearance?
Reporting the correct country of origin for all imported products is critical for many reasons, including:
- Some products may be eligible for reduced duty or duty free entry based on their country of origin.
- Some products may be banned entry in the U.S. based on their country of origin.
- Additional duties (anti-dumping duties and countervailing duties) may apply to some products from certain countries.
- Some countries may have a higher incidence of counterfeiting goods.
- Special restrictions or rules may apply to certain products from certain countries.
The U.S. importer is the party legally liable for reporting the correct country of origin for every product they import. Errors in reporting the country of origin can lead to significant additional costs due to Customs exams and Customs penalties. It is critical that every importer know the products that they import and that they report complete and accurate data to U.S. Customs. It would be wise to conduct a "self-audit" of your imports or to obtain the services of an experienced consultant who can assist with this process. Our sister company TradeLogic International is ready and able to assist you or answer any questions you may have. Their website is www.tradelogicintl.com or email them at email@example.com.