News & Insights

Tuesday, August 11, 2020

Customs Announces New Country of Origin Marking Requirements for Imported Goods Produced in Hong Kong

Customs and Border Protection (CBP) issued a General Notice on August 11th notifying the public that imported goods produced in Hong Kong must be marked to indicate China as their country of origin. , The new requirements stem from the President’s recent Executive Order 13936 which formally suspended Hong Kong’s special trade status with the United States. CBP is granting importers a transition period to implement the new marking requirement. Accordingly, such goods must be marked to indicate China as the country of origin when entered or withdrawn from warehouse for consumption into the United States after September 25, 2020.  See 85 Federal Register 48551 (August 11, 2020) for further details.

By way of background, the Department of State certified to Congress this past May 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 violates not only Hong Kong’s autonomy but the Sino-British Joint Declaration which is a UN-filed international treaty, as well. As a result, the President issued Executive Order 13936 on July 14, 2020 stating that the U.S. would suspend its special treatment for Hong Kong with respect to 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.

The United States has been providing special treatment to Hong Kong under the US-Hong Kong Policy Act of 1992, and treating Hong Kong as if it were its own country—separate and independent from the PRC. Under the Act, the Secretary of State is required to submit an annual report to Congress as to whether Hong Kong continues to remain sufficiently autonomous from the PRC, and to certify whether Hong Kong continues to merit special treatment.

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 statute 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. Under the special treatment afforded to Hong Kong, CBP allowed goods that originated in Hong Kong to be marked “Made in Hong Kong,” rather than “Made in China.” Accordingly, Executive Order 13936 indicates that such goods must now be marked “Made in China.”

One question that arose is whether the Executive Order requires U.S. importers to declare the PRC as the country of origin in the entry documentation filed for entries of merchandise from Hong Kong.  However, the only customs statute referenced in the Executive Order is Section 1304 which applies to the country of origin
 marking of goods that are imported into the United States. Therefore, the change in policy mandated by the Executive Order impacts only the marking of imported merchandise into the United States.

Another question that has arisen is whether the Section 301 tariffs assessed on certain Chinese-origin goods now also apply to products imported from Hong Kong. As noted in our previous blog article, senior officials from CBP have publicly stated that the Executive Order does not authorize the application of the Section 301 tariffs on goods of Hong Kong origin. 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 after September 25, 2020. If you have any questions relating to CBP’s General Notice,  Executive Order 13936, or other international trade-related issues, please contact us. 

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Melissa M. Proctor
President and CEO
Peggy Chaplin Louie
Senior Attorney
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