Launched in July 2020, the USMCA is now beyond its first transition year. Now, the era of USMCA enforcement has begun.

What does this means for your company, your suppliers or your customers in the United States, Canada or Mexico? Are you taking advantage of new tariff savings rules? Are your USMCA certifications in order and required records in compliance? Are your company’s production strategies linked to USMCA rules of origin?

These are just a few of the myriad questions business executives are now asking. For this reason, our team has designed a USMCA Diagnostic tailored to address the most pressing concerns and shape ongoing compliance objectives for the years ahead.

Our USMCA Diagnostic™

  1. Build and manage a targeted and unique USMCA strategy project for your company.
    • Each company and each product is different. The same holds true for suppliers and customers. A strategic approach to USMCA risks and benefits begins with a thoughtful understanding of how the USMCA rules apply to an individual company’s product lines and the company’s key objectives for the US marketplace.
  2. Conduct a comparison of the USMCA origin rules to the legacy NAFTA origin rules on your priority products.
    • Analyze how these products have qualified under NAFTA and how they are now treated under the new USMCA rules. For instance, some key NAFTA automotive origin rules, such as “deemed originating” no longer apply under the USMCA.
    • Critical review of the USMCA certifications issued and the USMCA tariff preference claims made by your company.
    • US Customs and Border Protection (CBP) can be expected to issue requests for data and other origin information (CF-28s). The transition period, now expired, was not a “safe harbor” period to issue USMCA certificates without consequence, but simply more time to gather needed data.
  3. Shape an “enterprise risk” or “whole of company” approach to the USMCA.
    • Identify a team from key corporate divisions within the company – from the sales department to logistics personnel to the finance group – to provide important considerations when issuing USMCA certifications and making USMCA claims.
  4. Advise on communications from CBP the company receives so that it is properly considered by senior managers for response.
    • CBP will be expecting companies to demonstrate “reasonable care” and “due diligence” when issuing USMCA certifications and making USMCA claims.
  5. Guide company policies governing the issuance of USMCA certifications, particularly if you are issuing a USMCA certification as an importer.
    • Under the USMCA, an importer may issue its own certifications that can be relied on when making USMCA preference claims. We understand the legal risks this choice presents and can provide advice on how best to mitigate them.
  6. Gauge your company’s suppliers in regard to their USMCA understanding and needs.
    • This is especially important if you are a Tier 1 automotive supplier and your Tier 2 suppliers previously provided you only “traced value” for your NAFTA qualification analysis.
  7. Help your company personnel understand how the Labor Value Content (LVC) requirements of the USMCA apply if your company is in the automotive sector.
    • The LVC certification requirements apply only to vehicle manufacturers, but vehicle parts suppliers will need to know how these provisions also impact them and their OEM customer.
  8. Suggest best practices on how  to track and retain records of entries filed without a USMCA preference claim (due to lack of available data at the time of entry).
    • The USMCA exempts the general duty rate and the Merchandise Processing Fee (MPF) when USMCA claims are made at entry, or when post-entry USMCA claims are made, the duty and MPF paid at entry are refunded retroactively.
    • While NAFTA certifications and claims are no longer valid, the NAFTA has not entirely disappeared. US CBP retains the authority to conduct NAFTA verifications (audits) retroactively going back to 2015.
  9. Bottom line? We offer our best advice.
    • The best and most effective approach in the long term is getting it right from the beginning. Use this advice to “connect the dots” for your company’s exposure to non-USMCA risks, such as continuing 232 and 301 tariff exposure. Use it to understand the competitive field.

Key Contacts