Made in Vietnam or Made in China?

To get around the punitive tariff treatment, Vietnamese officials say China is intentionally mislabeling its products as "made in Vietnam".

"Dozens" of products have been identified, Hoang Thi Thuy, a Vietnamese Customs Department official, stated in Media, and goods like textiles, fishery products, agricultural products, steel, aluminum, and processed wooden products were most vulnerable to the fraud. "It will sabotage Vietnamese brands and products and it will also affect consumers. We could even get tariff retribution from other countries, and if that happens, it will hurt our economy," Foreign Minister Pham Binh Minh told the Vietnamese National Assembly last week.

Marking of the country of origin is super important in the importing It could be easy but it could be very complicated sometimes. For instance, phones and other electronics are tricky to have an origin country. You have a South Korean camera and RAM, a Japanese screen, a Taiwanese SOC, using Chinese PCB and miscellaneous electrical components (resistors, capacitors LED's, diodes, etc). All the components put together in Vietnam with American software on top. What is the country of origin? The thumbs of rule for determining the country of origin in 19 CFR Part 134.1

"If the article in question is not wholly manufactured, produced, or grown within a single country, then we must consider the source or origin of any component or material that is used in the manufacture, production, or assembly of the good, and whether the further work or material added to an article in a subsequent country effected a “substantial transformation” on that part, component or material, so as to render such other country the “country of origin” of the end product. "

***substantial transformation is a processing of foreign input result in an article with a new name, charter or use ***

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Keep your financial transaction record and Country of Origin certificate

My current company has a coffee trading company importer client who sources coffee beans worldwide, particularly in GSP or Tariff preferred countries. Even importation document fully complained, the U.S custom still selects some shipment to the exam. One time they bring in coffee beans from Nicaragua in Central American and claim Dominican -Republic-Central America ( CAFTA-DR). The U.S custom sends a notice of action to request more information for this entry even it was admitted to the US 3 months ago. To properly trace back the growth in Nicaragua, the U.S Custom looks for affidavits from the growers of the product, as well as any affidavits from any middle-men (if a cartage company was used, etc.). In this case, a proof of payment transaction, such as check copy or wire transfer copy to manufacture, can be sufficient documentation to prove the product origin. Good that the importers keep the financial transaction record well. So the payment proof together with the country of origin certificate, they are well accepted by U.S custom.

The consequence of failure to mark COO

• CBP Officials may demand re-delivery and remarking to CBP custody at importer's cost even the shipment is released and admit to USA.
• Articals not properly marked will be subject to additional 10% of duties of final apprised value.
• CBP will issue liquidated damages to importers if the products cannot be redelivered
• Up to $5000 or 1 year imprisonment for any intentional removal, defacement, destruction or alteration of a marking of the country of origin.
• Increase the chance to exam importer;s subsequent shipment.

Country of origin marking is always one of the top focus in CBP checking list, particularly if the entry is related to Antidumping/Countervailing, quota/ Visa restriction, NAFTA, GSP, tariff preferential agreement, government procurement, etc. If any of these is being claimed, please make sure you have the certified country of origin ( the exporter can apply it from Chamber of Commerce), a properly formatted invoice with the country of origin word stuffing and consolidation parties that make sense to U.S Custom. The more completed information you can pass to your broker, the better chance you will have shipment clear in a timely manner.

Have questions? Let us chat!

By: Coco Yang / Licensed Customs Broker; ALTJFK Offices