Dear Valued Customer,
We reported in our August 10th newsletter that Presidential Executive Order 13936 dealing with Hong Kong Normalization would require imported goods produced in Hong Kong to no longer be marked to indicate “Hong Kong” as their origin, but must be marked to indicate “China” within 45 days of the date the order was published in the Federal Register on August 11, which would have fallen on September 25, 2020.
However, on Friday, August 21, Customs and Border Protection issued CSMS #43729326 – GUIDANCE: Additional 45-day Compliance Period for Hong Kong Normalization, wherein they announced, “In an effort to allow importers ample time to comply with EO (executive order) requirements for goods produced in Hong Kong to be appropriately marked with the origin of “China”, CBP is extending the transition period for an additional 45 days, through November 9, 2020. During this period, CBP personnel from the Ports of Entry and Centers of Excellence and Expertise (Centers) should not take any enforcement actions (i.e., marking notices, marking penalties, etc.) on goods produced in Hong Kong for purposes of 19 U.S.C. 1304. Centers and Ports of Entry should take measures to inform accounts and importers of these new marking rules for Hong Kong set forth in the EO.”
CBP’s message went on to state, “This change in marking requirements does not affect country of origin determinations for purposes of assessing ordinary duties under Chapters 1-97 of the HTSUS or temporary or additional duties under Chapter 99 of the HTSUS. Entry summary procedures also have not changed. Given that this new rule only applies to marking requirements under 19 U.S.C. 1304, filers should continue to file their entry summaries and submit payments for applicable duties, taxes and fees in accordance with current regulations and policies.”
CBP has previously advised that the change in marking requirements for products from Hong Kong doesn’t subject the goods to tariffs meant for goods from China. CBP confirmed in list of frequently asked questions posted to the agency’s website Aug. 12, stating, “Therefore, goods that are products of Hong Kong should continue to report International Organization for Standardization (ISO) country code ‘HK’ as the country of origin when required.”
There have been questions from importers regarding the timing of enforcement of the country of origin marking of “China” on/after November 9. To be clear, the executive order is technically already in effect and Hong Kong suppliers must ensure that, regardless of the date of production of the product, all goods should be remarked with the country of origin as “China” BEFORE the goods are exported to the USA to avoid clearance delays and additional costs for marking violations after November 9. Even if the goods were exported well in advance of November 9 without being marked as “China”, if clearance of the goods is delayed beyond November 9, the goods will be subject to the marking requirements as of the date of entry. If the goods are not properly marked to comply with the EO as of November 9, the goods may be subject to a “marking penalty” of 10% and may need to be re-marked in a bonded facility or elsewhere under Customs supervision based on 19 USC 1304 (i).
Thank you very much for your attention. If you have any questions, please contact your nearest JJB representative.
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