News & Insights

Friday, August 28, 2020

Customs Announces Additional 45-day Transition Period For Compliance With New Country Of Origin Marking Requirements For Imported Goods Produced In Hong Kong

Customs and Border Protection (CBP) issued a CSMS Message on August 21st (CSMS #43729326) announcing a new 45-day transition period for compliance with the new country of origin marking requirements for imported goods that are products of Hong Kong.  CBP has decided to give importers more time to comply with the new requirements and is extending the transition period through November 9, 2020.

By way of background, this past May, the Department of State certified to Congress that Hong Kong is no longer sufficiently autonomous from the People’s Republic of China (PRC) by virtue of, among other things, the PRC’s recent imposition of national security legislation that violated not only Hong Kong’s autonomy but also the Sino-British Joint Declaration, which is a UN-filed international treaty. As a result, Executive Order 13936, which was issued on July 14, 2020, formally suspended the United States’ special treatment for Hong Kong with respect to U.S. immigration laws and regulations, the Arms Export Control Act, the Defense Production Act, the Export Control Reform Act, as well as the Customs laws and regulations as they pertain to the country of origin marking rules.

Executive Order 13936 specified that the suspension of special treatment for Hong Kong would apply to 19 U.S.C. Section 1304 of the Tariff Act of 1930, in addition to the statutes referenced above. Section 1304 covers the country of origin marking requirements that apply to goods that are imported into the United States. Section 1304 requires that all articles of foreign origin be marked so as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. The intent of Section 1304 is to allow consumers in the United States to make informed purchasing decisions based on the products’ countries of origin. Executive Order 13936 requires that products of Hong Kong that are imported into the United States should be marked “Made in China.”

CBP previously issued a General Notice on August 11
th notifying the public that the new country of origin marking requirement would take effect after September 25, 2020.  See 85 Federal Register 48551 (August 11, 2020). However, CBP has decided to give U.S. importers more time to adapt and comply with the new requirement, and has extended the transition period “through” November 9, 2020.  During the interim, CBP personnel at the ports and at the Centers of Excellence and Expertise will not take any enforcement actions, such as the issuance of marking notices and marking penalties, for goods that continue to be marked as products of Hong Kong. However, it is recommended that U.S. importers should ensure that they are in full compliance with the new requirements by November 9, 2020.

CBP also stated in CSMS #43729326 that the new marking requirement has no bearing on the origin that must be declared to CBP on import documentation. Rather, goods that are products of Hong Kong under the U.S. rules of origin should continue to be declared as such to CBP at the time of entry. The only customs statute referenced in the Executive Order is Section 1304 which applies exclusively to the country of origin 
marking of goods. Therefore, the change in policy mandated by the Executive Order impacts only the marking of imported merchandise into the United States and nothing else.

In addition, as we have previously reported in this blog, the Executive Order did not extend the Section 301 tariffs assessed on certain Chinese-origin goods to products of Hong Kong. If the Section 301 tariffs were intended to apply to certain goods imported from Hong Kong, the Executive Order would have identified Section 301 of the Trade Act of 1974 in the list of affected statutes.

Companies importing merchandise produced in Hong Kong should take steps during this transition period to ensure that their goods will be marked to indicate China (and not Hong Kong) as the proper country of origin when entered into the United States as of November 9, 2020. If you have any questions relating to CBP’s General Notice,  Executive Order 13936, or other international trade-related issues, please contact us.