Country of Origin & Verification
Country of origin is one of the most fundamental — and frequently misunderstood — concepts in customs law. It determines which duty rates apply to your goods, whether your products qualify for preferential treatment under a free trade agreement, and what marking requirements must be met before merchandise clears CBP. Getting it wrong can result in denied entry, additional duties, penalties, and costly delays.
Great Lakes Customs Law helps importers navigate complex origin determinations, defend against origin verification inquiries from CBP, and ensure compliance with marking requirements. Whether you’re dealing with a multi-country supply chain, an FTA qualification question, or a CBP Form 28 request for information, we have the experience to guide you through it.
What Is Country of Origin?
For customs purposes, the country of origin is the country where an article was manufactured, produced, or grown. When only one country is involved in making a product, the determination is straightforward — that country is the origin.
But modern global supply chains rarely involve just one country. Raw materials may come from one nation, components may be manufactured in another, and final assembly may occur in a third. When multiple countries contribute to the production of an article, the origin determination becomes significantly more complex — and the stakes for getting it right become much higher.
Determines Tariffs
Origin dictates which duty rates apply — including Section 301 tariffs on Chinese goods, Section 232 duties, and MFN rates.
Unlocks Preferential Rates
Origin determines whether products qualify for preferential (reduced or zero) duty rates under a Free Trade Agreement like USMCA.
Triggers Labeling Rules
Origin governs the marking requirements under 19 USC 1304 — what must be shown on the article, how, and where.
What Is Substantial Transformation?
When goods are manufactured or produced using materials from more than one country, or when they undergo further processing in multiple countries, the country of origin is determined by identifying where the article last underwent a “substantial transformation.” This is a legal standard, not a simple checklist.
Substantial transformation occurs when an article is converted into a new and different article of commerce — one with a distinct name, character, and use from what it was before the transformation. For example, if raw steel from one country is shipped to another country and manufactured into automotive parts, the country where the steel was transformed into finished parts is typically the country of origin.
Not every processing operation qualifies. Minor processing, simple assembly, repackaging, labeling, and testing generally do not change the country of origin. The distinction between what constitutes a substantial transformation and what does not is one of the most litigated and fact-specific questions in customs law. CBP and the courts evaluate each case individually, looking at the totality of the manufacturing process and the degree of change the article undergoes.
Country of Origin Marking Requirements
Under 19 USC 1304, every article of foreign origin imported into the United States must be marked with the English name of its country of origin. The marking must satisfy three requirements:
Conspicuously Located
Placed where an ultimate purchaser would reasonably see it.
Legible
Clearly readable without difficulty.
Indelible & Permanent
Able to remain on the article through normal handling and use, unless the article falls within a narrow set of exceptions.
The marking requirement applies to the article itself, not just the packaging. While there are some exceptions — certain bulk commodities, articles incapable of being marked, and goods that would be substantially damaged by marking, among others — the general rule is strict, and CBP enforces it aggressively.
What Happens Without Proper Marking?
The consequences of failing to properly mark imported goods with their country of origin can be significant and disruptive to your business. These consequences can compound quickly — an importer who receives a redelivery demand and cannot locate or return the goods may face both liquidated damages and penalties, turning a marking deficiency into a much larger problem.
- Denied entry. CBP can refuse to release merchandise that is not properly marked, holding it at the port until the issue is resolved.
- Redelivery demands. If improperly marked goods have already been released into commerce, CBP can demand that the importer redeliver them to customs custody for marking. Failure to comply with a redelivery demand can trigger liquidated damages against the customs bond.
- Additional duty of 10%. CBP can impose a 10% ad valorem duty on top of the normal duties owed before allowing release of unmarked or improperly marked articles.
- Penalties. In cases involving intentional mismarking or repeated violations, CBP may assess penalties under 19 USC 1592 for fraud, gross negligence, or negligence.
Free Trade Agreement Origin Rules
The substantial transformation standard described above is the default rule for determining country of origin. However, when goods are imported under a Free Trade Agreement (FTA), different and often more specific origin rules apply. These FTA-specific rules can significantly affect whether your goods qualify for preferential duty rates.
The United States currently has trade agreements with numerous partners:
FTA origin rules typically use a combination of tariff shift rules, regional value content requirements, and specific processing requirements to determine whether a product qualifies as “originating” under the agreement. These rules vary by product and by agreement, and they can be highly technical. An article that qualifies under one FTA may not qualify under another, even if the manufacturing process is identical. Substantial transformation may still be part of the analysis, but it is applied differently within the FTA framework.
Origin Verifications by CBP
An origin verification is a formal process through which CBP investigates whether imported goods genuinely qualify as “originating” under a Free Trade Agreement. These verifications have become increasingly common as CBP scrutinizes FTA claims more closely, particularly in sectors where preferential duty rates create a significant financial incentive to claim origin.
- The importer’s declaration of origin and any certificates of origin
- Identity and contact information of the exporter and producer
- Detailed description of all operations involved in the growth, production, or manufacture of the goods
- Material values and costs, including bills of materials
- Description and value of all materials used in production
- Direct and indirect costs of processing operations
- Supporting documents such as invoices, contracts, and production records
CBP initiates origin verifications through one of two forms. A Form 28 is typically the first step — CBP asks questions and requests documentation. If the responses are insufficient, or if CBP determines the goods do not qualify, a Form 29 follows, proposing to deny the FTA claim and assess additional duties.
CBP Form 28 — Request for Information
An information request asking the importer to provide documentation supporting the origin claim. Responses must be thorough, consistent, and directly responsive to the specific questions asked.
CBP Form 29 — Notice of Proposed Action
Issued if Form 28 responses are insufficient or if CBP concludes the goods do not qualify. Proposes to deny the FTA claim and assess additional duties — often retroactively on prior entries.
Responding to an origin verification requires careful coordination between the importer, the foreign producer, and legal counsel. The documentation must be thorough, consistent, and responsive to CBP’s specific questions. Incomplete or contradictory responses can result in denial of the FTA claim, retroactive duty assessments on prior entries, and potential penalties.
Why Origin Matters More Than Ever
With increased tariffs on goods from China and other countries, shifting trade policies, and heightened CBP enforcement, country of origin has become one of the most consequential determinations in international trade.
Importers who restructure their supply chains to avoid tariffs — by routing production through third countries, for example — face intense scrutiny from CBP, which actively investigates transshipment and evasion schemes. CBP and the Department of Commerce have significantly expanded enforcement resources against suspected origin fraud, particularly involving Section 301 and antidumping/countervailing duties.
At the same time, importers who qualify for FTA benefits but fail to maintain adequate documentation risk losing those benefits retroactively. The cost of getting origin wrong — whether through lost preferential treatment, additional duties, or penalties — can be substantial. Proactive compliance and experienced legal guidance are the best protection.
Questions About Country of Origin or a CBP Verification?
Whether you are planning a supply chain restructure, preparing an FTA certification, responding to a Form 28 or Form 29, or facing a redelivery demand, Great Lakes Customs Law has the experience to guide you through. Attorney Jason Wapiennik has handled hundreds of origin and marking matters for importers nationwide.