G/RO/LDC/N/USA/1  
 
11 July 2017  
(17-3715) Page: 1/5 
Committee on Rules of Origin  Original: English  
 
 
NOTIFICATION OF PREF ERENTIAL RULES OF OR IGIN FOR  
LEAST DEVELOPED COUN TRIES  
UNITED STATES 
The following communication, dated 30 June 2017, is being circulated at the request of the 
delegation of United States . 
 
_______________  
 
 
Paragraph 4.3 of the 2015 Ministerial Decision on preferential rules of origin for least developed 
countries (WT/L/917/Add.1) requires preference -granting Members  to notify preferential rules o f 
origin as per the established procedures1. In addition, as mandated by the Ministerial Decision, the 
Committee on Rules of Origin agreed, at its meeting of 2 March 2017, to a template  for such 
notifications (G/RO/84 ). 
 
Following such requirements, the following notification has been received from: United States . 
 
A. BASIC INFORMATION  
 
1)  Notif ying member  United States  
2)  Date of entering into force of Rules 
of origin and any substantive  
modification thereof  1 January 1976  
https://www.gpo.gov/fdsys/pkg/STATUTE -88/pdf/STATUTE -
88-Pg1978 -2.pdf  
3)  Date of expiration of Rules of origin 
if applicable  31 December 2017, see Section 201 of the Trade Preferences 
Extension Act of 2015, available at:  
https://www.congress.gov/114/plaws/publ27/PLAW -
114publ27.pdf  
4)  Title of the preferential scheme for 
which legislation on Rules of origin 
is applicable  Generalized System of Preferences  
5)  Authority(ies) granting the 
preferential treatment  President of the  United States ( www.whitehouse.gov ) 
6)  National authorities in charge of 
Rules of origin administration  Office of the U.S. Trade Representative ( www.ustr.gov ) 
GSP Program Office  
1-202-395-6971 
gsp@ustr.eop.gov  
 
                                                
1 The relevant notification requirements are contained in Paragraph 2(d) of Annex 1 of the Transparency 
Mechanism for  Preferential Trade Arrangements (WT/L/806) and in Paragraph 4 of Annex II of the Agreement 
on Rules of Origin.  G/RO/LDC/N/USA/1  
 
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  B. INFORMATION ON RULES OF ORIGIN  
I.  BENEFICIARIES  
1)  List of Beneficiaries  Presently, 120 countries beneficiaries under the U.S. GSP 
program.  A full list of beneficiaries can be  found in General 
Note 4 of the HTSUS.  Please see: 
https://hts.usitc.gov/current  
Click on "General Notes, General Rules of Interpretation; 
General Statistical Notes" and then scroll down to General 
Note 4.  
2)  Eligibility  Beneficiary developing countries and articles eligible for 
duty-free treatment are designated by the President by 
Executive order in accordance with sections 502(a)(1) and 
503(a) of the Trade Act of 1974 as amended (19 U.S.C. 
2462(a)(1), 2463 (a)). 
http://uscode.house.gov/browse/prelim@title19/chapter12&ed
ition=prelim  
Click on "Subchapter V – Generalized System of Preferences".  
 
II.  CRITERIA FOR DETERMINING  SUBSTANTIAL TRANSFORMATION  
1)   General criteria, if applicable for all 
products  The general rule of origin can be found in 19 USC 2463(a)(2).  
"§2463. Designation of eligible articles  
(a) Eligible articles  
(2)  Rule of origin  
 (A) General rule  
 The duty -free treatment provided under this subchapter 
shall apply to any eligible article which is the growth, 
product, or manufacture of a beneficiary developing 
country if - 
 (i) that article is imported directly from a beneficiary 
developing country into the customs territory of 
the United States; and  
 (ii) the sum of - 
(I) the cost or value of the materials 
produced in the beneficiary developing 
country or any two or more such 
countries that are members of the same 
association of countries and are treated 
as one count ry under section  2467(2) of 
this title, plus  
(II) the direct costs of processing operations 
performed in such beneficiary developing 
country or such member countries, is not 
less than 35% of the appraised value of 
such article at the time it is entered."  
 (a) Definition of wholly obtained 
products  The definition for wholly obtained products can be found in 19 
Code of Federal Regulations (CFR) 10.176.  
https://www.ecfr.gov/cgi -bin/text -
idx?SID=f2b2023c0935e6cc23392ff36646ef13&mc=true&node
=pt19.1.10&rgn=div5  
"(a)  Merchandise produced in a beneficiary developing 
country or any two or more countries which are 
members of the same association  of countries —(1) 
General.  Except as otherwise provided in this section, 
any article which either is wholly the growth, product, 
or manufacture of, or is a new or different article of 
commerce that has been grown, produced, or 
manufactured in, a beneficia ry developing country may 
qualify for duty -free entry under the Generalized 
System of Preferences (GSP).  No article will be 
considered to have been grown, produced, or G/RO/LDC/N/USA/1  
 
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  manufactured in a beneficiary developing country by 
virtue of having merely undergone s imple (as opposed 
to complex or meaningful) combining or packaging 
operations or mere dilution with water or mere dilution 
with another substance that does not materially alter 
the characteristics of the article. Duty -free entry under 
the GSP may be accord ed to an article only if the sum 
of the cost or value of the materials produced in the 
beneficiary developing country or any two or more 
countries that are members of the same association of 
countries and are treated as one country under section 
507(2) of the Trade Act of 1974, as amended (19 
U.S.C. 2467(2)), plus the direct costs of processing 
operations performed in the beneficiary developing 
country or member countries, is not less than 35% of 
the appraised value of the article at the time it is 
entered. " 
 (b)  Describe the criteria for not -
wholly produced products  No article which has undergone only a simple combining or 
packaging operation or a mere dilution in a beneficiary 
developing country will be entitled to duty -free treatment.  19 
CFR 10.176(a)( 2) (above) provides a non -exhaustive list of 
operations that are insufficient to confer origin.  
 (c)  Insert the formula for 
calculating ad valorem  
percentage  The formula for calculating the regional value content of the 
article can be found in 19 CFR 10 .176(a)(1).  Under the 
formula, the sum of the cost or value of the materials 
produced in the beneficiary developing country or any two or 
more countries that are members of the same association of 
countries, plus the direct costs of processing operations 
performed in the beneficiary developing country or member 
countries, must not be less than 35% of the appraised value 
of the article at the time it is entered.  
2)  Product specific rules of origin, where applicable  
 (a)  Insert  the link where the 
complet e list of product 
specific rules of origin can be 
found.  N/A. 
 (b)  Insert the formula for 
calculating ad valorem  
percentage, when applied for 
product specific rule  N/A. 
3) Definition of non -originating 
material and originating material, if 
any N/A. 
4) List of insufficient working process, 
if any  N/A. 
5) Rules for application of cumulation 
and related procedures if any  Eligible articles produced in two or more beneficiary countries 
are eligible for duty -free treatment if the countries collectively 
meet the rules of origin.  In addition, an article produced in a 
least-developed beneficiary developing country (LDBDC) may 
count inputs from LDBDCs and beneficiary developing country 
(BDC) in its regional association towards the 35% domestic 
content requiremen t for satisfying the rules of origin for 
qualifying articles.  General Note 4 of the HTSUS has the most 
recent list of GSP eligible countries, territories, and 
associations.  There are currently 6 associations whose GSP 
eligible beneficiary members can ben efit from this provision:  
the South Asian Association for Regional Cooperation 
(SAARC); the Andean Group (or Cartagena Agreement); the 
Association of Southeast Asian Nations (ASEAN); the 
Caribbean Common Market (CARICOM); the Southern African 
Development Community (SADC); and the West African 
Economic and Monetary Union (WAEMU).  
6) Any other information that member 
deems necessary  The Office of the U.S. Trade Representative publishes a GSP 
Guidebook.  The most recent edition is available here:  
https://ustr.gov/sites/default/files/gsp/GSP%20Guidebook%2
0March%202017.pdf  G/RO/LDC/N/USA/1  
 
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  III.   DOCUMENTARY REQUIREMENTS  
1)  Certificate of origin and other proofs of origin  
 (a)  Requir ement for certificate of 
origin and/or any other proof 
of origin, if any  A certificate of origin is not required, but when the article is 
not wholly the growth, product, or manufacture of a single 
beneficiary country, the exporter of the merchandise or oth er 
appropriate party having knowledge of the relevant facts shall 
be prepared to submit a declaration setting forth all pertinent 
detailed information concerning the production or manufacture 
of the merchandise.  See 19 CFR 10.173:  
https://www.ecfr.gov/cgi -bin/text -
idx?SID=61efe140c8a30e01ae54661a8c33c917&mc=true&no
de=se19.1.10_1173&rgn=div8  
 (b)  Authority to be designated for 
issuance of certificate of origin  See subsection (a) above.  
 (c)  Prescribed form of Certificate 
of origin and/or any other 
proof of origin  See subsection (a) above.  
 (d)  Any other procedures applied 
for certificate of origin and/or 
any other proof of ori gin, if 
any N/A. 
2)  Direct shipment  
 (a)  Rules applicable for direct 
shipment, if any  In order to qualify for preferential treatment, the eligible 
article must be imported directly from a beneficiary country to 
the United States.  The term "imported di rectly" is defined at 
19 CFR 10.175.  
 (b)  Documentary requirement for 
proof of direct shipment 
including when the transport 
of consignment involves 
transit through one or more 
intermediate countries, if any  The documentary requirements can be found at 19  CFR 
10.175.  In general, if the shipment from a beneficiary country 
to the United States passes through the territory of any other 
country, the merchandise in the shipment cannot enter into 
the commerce of any other country while en route to the 
United St ates, and the invoice, bills of lading, and other 
shipping documents must show the U.S. as the final 
destination; or if the goods are shipped from the beneficiary 
developing country to the United States through a free trade 
zone in a beneficiary developing  country, the merchandise 
cannot enter into the commerce of the country maintaining 
the free trade zone.  
 
IV.  VERIFICATION AND PENALTIES  
1)  Procedure for verification of proofs 
of origin  The regulations related to examination, sampling, and testing 
of merchandise can be found at 19 CFR 151.1 through 151.16.   
https://www.ecfr.gov/cgi -bin/text -
idx?SID=6a6d50ad25a755802a02b7b576771fdc& mc=true&no
de=pt19.2.151&rgn=div5  
2)  Penalties for fraud and false 
declarations  In general, if a claim for preference under GSP is incorrect, 
the importer’s claim of preference will be denied, and the 
importer must pay the applicable duty.  If a Customs and 
Border Protection Officer finds any package that contains an 
article not specified on the invoice, and there is reason to 
believe the article was omitted from the invoice by fraud, 
gross negligence, negligence on the part of the seller, shipper, 
owner,  or agent, a monetary penalty may be imposed, or in 
some cases, the merchandise may be seized or forfeited. 
(See e.g., 19 U.S.C. 1592, 19 CFR 162.)  
http://uscode.house.gov/view.xhtml?path=/prelim@title19/ch
apter4/subtitle3/part5&edition=prelim  
https://www.ecfr.gov/cgi -bin/text -
idx?SID=6a6d50ad25a755802a02b7b576771fdc&mc=true&no
de=pt19.2.162&rgn=div5  G/RO/LDC/N/USA/1  
 
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  3)  Authorities and procedures for 
appeal in the case of dispute on 
verification  An importer may disagree with the dutiable status after the 
entry has been liquidated. A decision at this stage of the entry 
transaction is requested by filing a protest and application for 
further review on CBP Form 19:  
https://www.cbp.gov/sites/default/files/documents/CB P_Form
_19.pdf  
4) Requirement for preserving the 
documents related to issuance of 
certificate of origin  The exporter of the merchandise or other appropriate party 
having knowledge of the relevant facts who makes a claim of 
preference under GSP are require d to maintain records to 
support that claim for a period of five years from the date of 
entry.  
5) Any other relevant information  N/A. 
 
V.  REFERENCE TEXTS  
(a) The legislative texts in one of the 
official WTO languages containing 
the preferential rules of  origin 
applicable under a PTA granted 
under the Decision on Measures in 
Favour of Least -Developed 
Countries (Annex F of the Hong 
Kong Ministerial Declaration)  See Subsection II.1 above.  
(b) The full text of the administrative 
regulations concerning modal ities 
for issuance, acceptance, 
retrospective issuance and 
replacement of certificates of 
origin or any equivalent 
declarations to be made, including 
any requirements  related to 
stamps to be used along with 
notification of stamps  See Subsection III.1 abov e. 
(c) The full text and related 
administrative regulations of the 
modalities for the proof of 
movement of the consignment of 
the goods from the beneficiary 
countries to preference -giving 
countries including transit through 
third countries  See Subsection III.2 above.  
(d) The full texts of the modalities of 
the verification procedures and 
related penalties  See Section IV above.  
__________