35422 Federal Register / Vol. 86, No. 126 / Tuesday, July 6, 2021 / Proposed Rules 

1The term ‘‘non-preferential purposes’’ generally 

refers to purposes set forth in laws, regulations, and 

administrative determinations of general 

application applied to determine the country of 

origin of goods not related to the granting of tariff 

preferences pursuant to a trade agreement or a trade 

preference program such as the Generalized System 

of Preferences. Non-preferential purposes include 

antidumping and countervailing duties; safeguard 

measures; origin marking requirements; and any 

discriminatory quantitative restrictions or tariff 

quotas. They also include rules of origin used for 

trade statistics and for determining eligibility for 

government procurement. See, e.g., Art. I, Uruguay 

Round Agreement on Rules of Origin. They do not 

include the rules of origin used to determine 

eligibility for preferential tariff treatment under 

trade agreements unless otherwise explicitly 

specified in those agreements. Notwithstanding the 

above, under Title VII of the Tariff Act of 1930, as 

amended, merchandise within the scope of the 

Department of Commerce’s antidumping and/or 

countervailing duty proceedings may be associated 

with a country of origin (for purposes of the scope 

of antidumping/countervailing duties) that is 

different from the country of origin determined by 

CBP for other purposes. 

DEPARTMENT OF HOMELAND 

SECURITY 

U.S. Customs and Border Protection 

DEPARTMENT OF THE TREASURY 

19 CFR Parts 102 and 177 

[USCBP–2021–0025] 

RIN 1515–AE63 

Non-Preferential Origin Determinations 

for Merchandise Imported From 

Canada or Mexico for Implementation 

of the Agreement Between the United 

States of America, the United Mexican 

States, and Canada (USMCA) 

AGENCY: U.S. Customs and Border 

Protection, Department of Homeland 

Security; Department of the Treasury. 

ACTION: Notice of proposed rulemaking; 

request for comments. 

SUMMARY: This document proposes to 

amend the U.S. Customs and Border 

Protection (CBP) regulations regarding 

non-preferential origin determinations 

for merchandise imported from Canada 

or Mexico. Specifically, this document 

proposes that CBP will apply certain 

tariff-based rules of origin in the CBP 

regulations for all non-preferential 

determinations made by CBP, 

specifically, to determine when a good 

imported from Canada or Mexico has 

been substantially transformed resulting 

in an article with a new name, 

character, or use. For consistency, this 

document also proposes to modify the 

CBP regulations for certain country of 

origin determinations for government 

procurement. Collectively, the proposed 

amendments in this notice of proposed 

rulemaking (NPRM) are intended to 

reduce administrative burdens and 

inconsistency for non-preferential origin 

determinations for merchandise 

imported from Canada or Mexico for 

purposes of the implementation of the 

Agreement Between the United States of 

America, the United Mexican States, 

and Canada (USMCA). Elsewhere in this 

issue of the Federal Register, CBP is 

publishing an interim final rule to 

amend various regulations to implement 

the USMCA for preferential tariff 

treatment claims. The interim final rule 

amends the CBP regulations, inter alia, 

to apply certain tariff-based rules of 

origin for determining the country of 

origin for the marking of goods imported 

from Canada or Mexico. 

DATES: Comments must be received by 

August 5, 2021. 

ADDRESSES: You may submit comments, 

identified by docket number USCBP– 

2021–00X25 by one of the following 

methods: 

• Federal eRulemaking Portal at 

http://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Due to COVID–19-related 

restrictions, CBP has temporarily 

suspended its ability to receive public 

comments by mail. 

Instructions: All submissions received 

must include the agency name and 

docket number for this rulemaking. All 

comments received will be posted 

without change to http://

www.regulations.gov, including any 

personal information provided. For 

detailed instructions on submitting 

comments and additional information 

on the rulemaking process, see the 

‘‘Public Participation’’ heading of the 

SUPPLEMENTARY INFORMATION section of 

this document. 

Docket: For access to the docket to 

read background documents or 

comments received, go to http://

www.regulations.gov. Due to the 

relevant COVID–19-related restrictions, 

CBP has temporarily suspended on-site 

public inspection of the public 

comments. 

FOR FURTHER INFORMATION CONTACT: 

Operational Aspects: Queena Fan, 

Director, USMCA Center, Office of 

Trade, U.S. Customs and Border 

Protection, (202) 738–8946 or usmca@

cbp.dhs.gov. 

Legal Aspects: Craig T. Clark, 

Director, Commercial and Trade 

Facilitation Division, Regulations and 

Rulings, Office of Trade, U.S. Customs 

and Border Protection, (202) 325–0276 

or craig.t.clark@cbp.dhs.gov. 

SUPPLEMENTARY INFORMATION: 

I. Public Participation 

Interested persons are invited to 

participate in this rulemaking by 

submitting written data, views, or 

arguments on all aspects of this notice 

of proposed rulemaking (NPRM). U.S. 

Customs and Border Protection (CBP) 

also invites comments that relate to the 

economic, environmental, or federalism 

effects that might result from this 

proposed rule. Comments that will 

provide the most assistance to CBP will 

reference a specific portion of the 

NPRM, explain the reason for any 

recommended change, and include data, 

information or authority that support 

such recommended change. 

II. Background 

The country of origin of merchandise 

imported into the customs territory of 

the United States (the fifty states, the 

District of Columbia, and Puerto Rico) is 

important for several reasons. The 

country of origin of merchandise 

determines the rate of duty, 

admissibility, quota, eligibility for 

procurement by government agencies, 

and marking requirements. There are 

various rules of origin for goods 

imported into the customs territory of 

the United States, generally referred to 

as ‘‘preferential’’ and ‘‘non-preferential’’ 

rules of origin. ‘‘Preferential’’ rules are 

those that apply to merchandise to 

determine eligibility for special 

treatment, including reduced or zero 

tariff rates, under various trade 

agreements or duty preference 

legislation, e.g., Generalized System of 

Preferences. ‘‘Non-preferential’’ rules 

are those that generally apply for all 

other purposes.1 CBP uses the 

substantial transformation standard to 

determine the country of origin of goods 

for non-preferential purposes. For a 

substantial transformation to occur, ‘‘a 

new and different article must emerge, 

‘having a distinctive name, character or 

use.’’’ Anheuser-Busch Brewing Ass’n v. 

United States, 207 U.S. 556, 562 (1908) 

(quoting Hartranft v. Wiegmann, 121 

U.S. 609, 615 (1887)). 

CBP applies two different methods for 

determining if merchandise has been 

substantially transformed. One method 

involves case-by-case adjudication, 

relying primarily on tests articulated in 

judicial precedent and past 

administrative rulings. The other 

method consists of codified rules in part 

102 of title 19 of the Code of Federal 

Regulations (19 CFR part 102) (referred 

to as the part 102 rules), which are 

primarily expressed through specified 

differences in the Harmonized Tariff 

Schedule of the United States (HTSUS) 

classification of the good and its 

materials. This method is often referred 

to as the ‘‘change in tariff classification’’ 


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2See ‘‘Rules for Determining the Country of 

Origin of a Good for Purposes of Annex 311 of the 

North American Free Trade Agreement; Rules of 

Origin Applicable to Imported Merchandise,’’ 60 FR 

22312, 22314 (May 5, 1995), citing, in part, ‘‘Rules 

of Origin Applicable to Imported Merchandise,’’ 59 

FR 141 (Jan. 3, 1994). 

3The Agreement Between the United States of 

America, the United Mexican States, and Canada is 

the official name of the USMCA treaty. Please be 

aware that, in other contexts, the same document 

is also referred to as the United States-MexicoCanada Agreement. 

4This rule does not apply for purposes of 

determining whether merchandise is subject to the 

scope of antidumping and countervailing duty 

proceedings under Title VII of the Tariff Act of 

1930, as amended, as such determinations fall 

under the authority of the Department of 

Commerce. Specifically, notwithstanding a CBP 

country of origin determination, that merchandise 

may be subject to the scope of antidumping and/ 

or countervailing duty proceedings associated with 

a different country. 

or ‘‘tariff shift’’ method. Both the caseby-case and tariff shift methods are 

intended to produce the same 

determinations as to origin because both 

apply the same substantial 

transformation standard. 

CBP first promulgated the part 102 

rules in 1994 to fulfill the commitment 

of the United States under Annex 311 of 

the North American Free Trade 

Agreement (NAFTA), which required 

the parties to establish rules for 

determining whether a good is a good of 

a NAFTA party (i.e., the United States, 

Mexico, or Canada). In contrast to the 

case-by-case method, the part 102 rules 

were intended to provide for more 

certainty, transparency, and consistency 

in application of origin decisions. They 

codify, rather than constitute an 

alternative to, the substantial 

transformation standard and are 

intended to implement the standard 

consistently.2

Country of Origin Marking 

Requirements for Imported Merchandise 

From Canada or Mexico Pursuant to the 

Agreement Between the United States of 

America, the United Mexican States, 

and Canada (USMCA) 3

On November 30, 2018, the ‘‘Protocol 

Replacing the North American Free 

Trade Agreement with the Agreement 

Between the United States of America, 

the United Mexican States, and Canada’’ 

(the Protocol) was signed to replace the 

NAFTA. Section 601 of the United 

States-Mexico-Canada Agreement 

Implementation Act (USMCA Act), 

Public Law 116–113, 134 Stat. 11 (19 

U.S.C. Chapter 29), repealed the North 

American Free Trade Agreement 

Implementation Act (NAFTA 

Implementation Act), Public Law 103– 

182, 107 Stat. 2057 (19 U.S.C. 3301 et 

seq.), as of the date that the USMCA 

entered into force, July 1, 2020. The 

NAFTA provisions set forth in part 181 

of title 19 of the CFR (19 CFR part 181) 

and in General Note 12, Harmonized 

Tariff Schedule of the United States 

(HTSUS), continue to apply to goods 

entered for consumption, or withdrawn 

from warehouse for consumption, prior 

to July 1, 2020. On July 1, 2020, CBP 

published an interim final rule (IFR) in 

the Federal Register (CBP Dec. 20–11) 

amending 19 CFR part 181 and adding 

a new part 182 of title 19 of the CFR (19 

CFR part 182) containing several 

USMCA provisions, including the 

Uniform Regulations regarding rules of 

origin (appendix A to part 182). See 85 

FR 39690 (July 1, 2020). 

In another IFR published elsewhere in 

this issue of the Federal Register 

(‘‘Agreement Between the United States 

of America, the United Mexican States, 

and Canada (USMCA) Implementing 

Regulations Related to the Marking 

Rules, Tariff-rate Quotas, and Other 

USMCA Provisions’’ (RIN 1515–AE56)), 

CBP is amending the CBP regulations to 

include additional USMCA 

implementing regulations in 19 CFR 

part 182 and to amend other portions of 

title 19 of the CFR. The IFR includes 

amendments to parts 102 and 134 of 

title 19 of the CFR (19 CFR parts 102 

and 134) to apply the rules of origin set 

forth in 19 CFR part 102 for determining 

the country of origin for the marking of 

goods imported from Canada or Mexico. 

Those amendments facilitate the 

transition from the NAFTA to the 

USMCA by maintaining the status quo 

for country of origin for marking 

determinations. 

Non-Preferential Origin Determinations 

for Merchandise Imported From Canada 

or Mexico 

Although the NAFTA Implementation 

Act was repealed by the USMCA Act as 

of July 1, 2020, the part 102 rules 

remain in 19 CFR part 102 and are 

applicable for country of origin marking 

determinations for goods imported from 

Canada or Mexico under the USMCA 

(pursuant to the IFR, being concurrently 

published, as explained above). The part 

102 rules, specifically §§ 102.21 through 

102.25, are also to be used by CBP to 

determine the country of origin of 

textile and apparel products (imported 

from all countries except from Israel 

(see 19 CFR 102.22)), including the 

administration of quantitative 

restrictions, if applicable. 

After the part 102 rules were 

promulgated in 1994, the rules were 

subsequently amended to also include 

references to specific U.S. trade 

agreements that incorporated those rules 

as part of the determination for trade 

preference eligibility, i.e., for preference 

purposes. For example, as indicated in 

the scope provision for part 102, the 

rules set forth in §§ 102.1 through 

102.21 also apply for purposes of 

determining whether an imported good 

is a new or different article of commerce 

under § 10.769 of the United StatesMorocco Free Trade Agreement 

regulations and § 10.809 of the United 

States-Bahrain Free Trade Agreement 

regulations. 

Unlike the NAFTA, the USMCA does 

not refer to a marking requirement, 

except with regard to certain 

agricultural goods. For certain 

agricultural goods, the USMCA does 

contain a requirement that a good must 

first qualify to be marked as a good of 

Canada or Mexico in order to receive 

preferential tariff treatment under the 

USMCA. For most goods, only the 

general Uniform Regulations regarding 

rules of origin set forth in Appendix A 

of part 182 of title 19 (19 CFR part 182) 

and the product-specific rules of origin 

contained in General Note 11, HTSUS, 

are needed to determine whether a good 

is an originating good under the 

USMCA and therefore is eligible to 

receive preferential tariff treatment. 

The Secretary of the Treasury has 

general rulemaking authority, pursuant 

to 19 U.S.C. 1304 and 1624, to make 

such regulations as may be necessary to 

carry out the provisions of section 

304(a) of the Tariff Act of 1930, as 

amended, related to the country of 

origin requirements for imported 

articles of foreign origin. The 

Department of the Treasury and CBP 

have concluded that extending 

application of the well-established part 

102 rules to goods imported from the 

USMCA countries of Canada and 

Mexico will provide continuity for the 

importing community because those 

rules have been applied to all imports 

from these countries since 1994.4 The 

importing community has made 

extensive efforts to comply with the part 

102 rules and CBP has significant 

experience in applying those rules to 

imported merchandise from Canada and 

Mexico. The part 102 rules, as codified, 

are a reliable, simplified, and 

standardized method for CBP when 

determining the country of origin for 

customs purposes. 

When promulgating the part 102 rules 

in 1994, the U.S. Customs Service (now 

CBP) explained: 

. . . the long history of the substantial 

transformation rule, [and] its administration 

has not been without problems. These 

problems devolve from the fact that 

application of the substantial transformation 

rule is on a case-by-case basis and often 

involves subjective judgments as to what 


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35424 Federal Register / Vol. 86, No. 126 / Tuesday, July 6, 2021 / Proposed Rules 

constitutes a new and different article or as 

to whether processing has resulted in a new 

name, character, and use. As a result, 

application of the substantial transformation 

rule has remained essentially non-systematic 

in that a judicial or administrative 

determination in one case more often than 

not has little or no bearing on another case 

involving a different factual pattern. Thus, 

while judicial and administrative decisions 

involving the substantial transformation rule 

may have some value as restatements or 

refinements of the basic rule, they are often 

of little assistance in resolving individual 

cases involving the myriad of issues or tests 

that have arisen, such as the distinction 

between producer’s goods and consumer’s 

goods, the significance of further 

manufacturing or finishing operations, and 

the issue of dedication to use. The very fact 

that the substantial transformation rule has 

been the subject of a large number of judicial 

and administrative determinations is 

testament to the basic problem: The case-bycase approach, involving application of the 

rule based on specific sets of facts, has led 

to varied case-specific interpretations of the 

basic rule, resulting in a lack of predictability 

which in turn has engendered a significant 

degree of uncertainty both within Customs 

and in the trade community as regards the 

effect that a particular type of processing 

should have on an origin determination. 

‘‘Rules for Determining the Country of 

Origin of a Good for Purposes of Annex 

311 of the North American Free Trade 

Agreement,’’ 59 FR 110, 141 (January 3, 

1994). 

Importers of goods from Canada and 

Mexico are well-versed in the part 102 

rules, and the greater specificity and 

transparency those rules provide will 

facilitate the determination of eligibility 

for USMCA tariff preferences for certain 

agricultural goods, as noted above. 

Accordingly, to make the transition 

from the NAFTA to the USMCA as 

smooth as possible for the importing 

community, CBP is amending 19 CFR 

parts 102 and 134, in the IFR 

concurrently published today, to 

continue application of the part 102 

rules to determine the country of origin 

for marking purposes of a good 

imported from Canada or Mexico. 

CBP has not previously applied the 

part 102 rules for non-preferential origin 

determinations involving goods 

imported from Canada and Mexico other 

than for textile products and for 

purposes of determining country of 

origin marking. CBP has, instead, used 

case-by-case adjudication for other nonpreferential origin determinations. CBP 

makes such non-preferential origin 

determinations for purposes such as 

admissibility, quota, procurement by 

government agencies, and application of 

duties imposed under sections 301 to 

307 of the Trade Act of 1974, as 

amended (19 U.S.C. 2411–2417, 

commonly referred to as ‘‘Section 301’’). 

This means that importers of goods from 

Canada and Mexico are subject to two 

different non-preferential origin 

determinations for imported 

merchandise: One for marking; and, 

another for determining origin for other 

purposes. Consequently, these importers 

must also potentially comply with 

requirements to declare two different 

countries of origin for the same 

imported good (e.g., Canada and China). 

This burdens importers with 

unnecessary additional requirements, 

creates inconsistency, and reduces 

transparency. 

To address these burdens, CBP is 

proposing to amend the scope section of 

part 102 of title 19 of the CFR so that 

the substantial transformation standard 

will be applied consistently across all 

non-preferential origin determinations 

that CBP makes for merchandise 

imported from Canada and Mexico. This 

purpose is accomplished by adding new 

language to the scope provision of the 

part 102 rules. The proposed regulatory 

change will obviate the need for 

importers of merchandise from Canada 

and Mexico wishing to comply with the 

various laws that require CBP origin 

determinations from having to request 

multiple non-preferential country of 

origin determinations from CBP for a 

particular good. The proposed 

regulatory change also means that CBP 

will no longer need to issue rulings with 

multiple non-preferential origin 

determinations goods imported from 

Canada or Mexico, and there will no 

longer be rulings that conclude that a 

good imported from Canada or Mexico 

has two different origins under the 

USMCA (i.e., one for marking and one 

for other, customs non-preferential 

purposes). CBP’s application of the part 

102 rules would not, however, affect 

similar determinations made by other 

agencies, such as the Department of 

Commerce’s scope determinations in 

antidumping or countervailing duty 

proceedings (see 19 CFR 351.225), 

determinations by the Agricultural 

Marketing Service under the Country of 

Origin Labeling (‘‘COOL’’) law (see 7 

CFR part 65), or origin determinations 

made by other agencies for purposes of 

government procurement under the 

Federal Acquisition Regulation (see 48 

CFR chapter 1). 

CBP is also proposing to make 

corresponding edits to part 177 of title 

19 of the CFR, which sets forth the 

requirements for various types of 

administrative rulings. Specifically, 

subpart B of part 177 applies to the 

issuance of country of origin advisory 

rulings and final determinations relating 

to government procurement for 

purposes of granting waivers of certain 

‘‘Buy American’’ restrictions in U.S. law 

and practice for products from eligible 

countries. As noted in 19 CFR 177.21, 

the subpart is intended to be applied 

consistent with the Federal Acquisition 

Regulation (48 CFR chapter 1) and the 

Defense Acquisition Regulations System 

(48 CFR chapter 2). It is also noted that 

Chapter 13 of the USMCA provides that 

the United States will apply the same 

rules of origin to Mexican imports for 

government procurement as it does for 

other trade. The United States has the 

same obligation to Canada under Article 

IV:5 of the WTO Agreement on 

Government Procurement. While the 

substantial transformation standard 

already applies by statute (19 U.S.C. 

2518(4)(B)), CBP’s proposed application 

of the part 102 rules to make these 

substantial transformation 

determinations would ensure the 

consistency of CBP determinations for 

goods imported from Mexico and 

Canada. The proposed regulatory 

change will specifically provide that, 

when making country of origin 

determinations for purposes of subpart 

B of part 177, the part 102 rules will be 

applied by CBP to determine whether 

goods imported into the United States 

from Canada or Mexico previously 

underwent a substantial transformation 

in Canada or Mexico. The proposed 

regulatory change would not affect the 

origin determinations other agencies 

make related to procurement. 

III. Discussion of Proposed 

Amendments 

Pursuant to 19 U.S.C. 4535(a), the 

Secretary of the Treasury has the 

authority to prescribe such regulations 

as may be necessary to implement the 

USMCA. Section 103(b)(1) of the 

USMCA Act (19 U.S.C. 4513(b)(1)) 

requires that initial regulations 

necessary or appropriate to carry out the 

actions required by or authorized under 

the USMCA Act or proposed in the 

Statement of Administrative Action 

approved under 19 U.S.C. 4511(a)(2) to 

implement the USMCA shall, to the 

maximum extent feasible, be prescribed 

within one year after the date on which 

the USMCA enters into force. The 

Secretary also has general rulemaking 

authority, pursuant to 19 U.S.C. 1304 

and 1624, to make such regulations as 

may be necessary to carry out the 

provisions of the Tariff Act of 1930, as 

amended, related to the country of 

origin requirements for imported 

articles of foreign origin. The Secretary 

also has authority under 19 U.S.C. 1502 

to regulate the procedures for issuing 

binding rulings, and 19 U.S.C. 

2515(b)(1) requires the Secretary to 

make rulings and determinations as to 


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5See supra footnote 4. 

6See 19 U.S.C. 1304 and 19 CFR part 134. 7See supra footnote 4. 

8Based on unique importer of record (IOR) 

numbers of importers who entered goods in FY 

2019. In some cases, multiple IOR numbers 

correspond to the same entity. 

substantial transformation under 19 

U.S.C. 2518(4)(B). 

CBP is proposing to amend the scope 

provision in 19 CFR part 102 to apply 

the substantial transformation standard 

consistently across country of origin 

determinations CBP makes for imported 

goods from the USMCA countries of 

Canada and Mexico for non-preferential 

purposes.5 Specifically, CBP proposes to 

amend section 102.0 to extend the scope 

of part 102 to state that the rules set 

forth in §§ 102.1 through 102.18 and 

102.20 are intended to apply to CBP’s 

country of origin determinations for 

non-preferential purposes for goods 

imported from Canada and Mexico. 

CBP is also proposing to amend 

subpart B of 19 CFR part 177 to add a 

cross-reference to clarify that, for 

‘‘country of origin’’ in § 177.22(a), the 

determination pursuant to 19 U.S.C. 

2515(b)(1) as to whether an article has 

been substantially transformed into a 

new and different article of commerce 

with a name, character, or use distinct 

from that of the article or articles from 

which it was so transformed, for 

purposes of granting waivers of certain 

‘‘Buy American’’ restrictions, must be 

made using the rules set forth in 

§§ 102.1 through 102.18 and 102.20 of 

title 19 of the CFR for goods from 

Canada and Mexico. 

IV. Statutory and Regulatory Authority 

A. Executive Orders 13563 and 12866 

Executive Orders 13563 and 12866 

direct agencies to assess the costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. This 

rulemaking is a ‘‘significant regulatory 

action,’’ although not an economically 

significant regulatory action, under 

section 3(f) of Executive Order 12866. 

Accordingly, the Office of Management 

and Budget (OMB) has reviewed this 

regulation. 

Background and Purpose of Rule 

All merchandise of foreign origin 

imported into the United States must 

generally be marked with its country of 

origin, and it is subject to a country of 

origin determination by CBP.6 The 

country of origin of imported goods may 

be used as a factor to determine 

preferential trade treatment, such as 

eligibility under various trade 

agreements and special duty preference 

legislation, like the Generalized System 

of Preferences. The country of origin of 

imported goods is also used to 

determine non-preferential trade 

treatment, such as admissibility, 

marking, and trade relief.7 Importers 

must exercise reasonable care in 

determining the country of origin of 

their goods and often make this 

determination on their own. However, 

some importers may seek advice from 

CBP to determine the country of origin 

for their goods for preferential and/or 

non-preferential purposes. 

CBP applies two methods for 

determining the country of origin of 

imports for non-preferential purposes, 

as stated above. One method involves 

case-by-case adjudication to determine 

whether the goods have been 

substantially transformed in a particular 

country, relying primarily on judicial 

precedent and past administrative 

rulings. The other method consists of 

codified rules in part 102 of title 19 of 

the Code of Federal Regulations (19 CFR 

part 102) (referred to as the part 102 

rules), which are also used to determine 

whether the goods have been 

substantially transformed, but are 

primarily expressed through specific 

changes in the Harmonized Tariff 

Schedule of the United States (HTSUS) 

classification, often referred to as a 

‘‘tariff shift.’’ Both the case-by-case and 

tariff shift methods implement the 

substantial transformation standard and 

are intended to lead to the same result. 

Prior to the USMCA, under the 

NAFTA, country of origin marking 

determinations were made using the 

NAFTA marking rules codified in 19 

CFR part 102 that specify whether a 

good imported from Canada or Mexico 

that is not entirely of Canadian or 

Mexican origin has been substantially 

transformed through processes that 

resulted in changes in the tariff 

classification (i.e., tariff shifts) in 

Canada or Mexico. To determine the 

country of origin of goods imported 

from Canada or Mexico for other nonpreferential purposes (i.e., purposes 

other than marking), CBP employed 

case-by-case adjudication to determine 

whether such goods were substantially 

transformed in those NAFTA countries. 

These different non-preferential country 

of origin-determination methods 

required some importers to determine 

and declare two different countries of 

origin for the same imported good (e.g., 

Canada and China). 

The USMCA, which recently 

superseded the NAFTA, was generally 

silent as to how the country of origin 

should be determined for goods 

imported from Canada and Mexico for 

marking and other non-preferential 

purposes. However, CBP is concurrently 

publishing an IFR in this issue of the 

Federal Register that, among other 

things, continues to apply the existing 

part 102 rules for determining the 

country of origin for marking of goods 

imported from Canada or Mexico. In 

this proposed rule, CBP proposes to 

expand the scope of the part 102 rules 

to provide that those rules are also to be 

generally applicable for all other (i.e., 

other than marking) non-preferential 

origin determinations made by CBP for 

goods imported from the USMCA 

countries of Canada and Mexico. CBP’s 

application of the part 102 rules would 

not, however, affect similar 

determinations made by other agencies, 

such as the Department of Commerce’s 

scope determinations in antidumping or 

countervailing duty proceedings (see 19 

CFR 351.225). 

With this regulatory change, all nonpreferential country of origin 

determinations by CBP for goods 

imported from Canada or Mexico would 

be based on substantial transformation 

pursuant to the tariff shift rules required 

by 19 CFR part 102. This would 

eliminate the need for some importers of 

products from Canada or Mexico to 

request two different non-preferential 

determinations—one for country of 

origin marking and one for case-by-case 

adjudication for other non-preferential 

purposes—to confirm CBP’s treatment 

of their imports and avoid potentially 

different determinations. The 

rulemaking would also eliminate the 

need for some importers to comply with 

requirements to declare two different 

countries of origin for the same 

imported good (e.g., Canada and China). 

CBP is proposing these changes to 

simplify and standardize country of 

origin determinations by CBP for all 

non-preferential purposes for goods 

imported from Canada or Mexico. 

Population Affected by Rule 

This rulemaking would directly affect 

certain importers of goods from Canada 

and Mexico and the U.S. Government 

(particularly CBP). In fiscal year (FY) 

2019, 38,832 importers 8 made 2.6 

million non-NAFTA-preference entries 


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9These goods were not eligible for the 

generalized system of preferences. 

10Based on data from October 1, 2019, to 

December 16, 2020. 

11As an example, if an importer has an inventory 

tracking system that identifies the non-marking, 

non-preferential country of origin for its goods from 

Canada and Mexico based on existing case-by-case 

adjudication rules, with this rule, that importer may 

need to revise the system to ensure that it identifies 

the goods based on the part 102 rules if the importer 

is importing goods subject to inconsistent origin 

determinations under the current practice. 

12As described in OMB Circular A–4, transfer 

payments occur when ‘‘. . . monetary payments 

from one group [are made] to another [group] that 

do not affect total resources available to society.’’ 

Examples of transfer payments include payments 

for insurance and fees paid to a government agency 

for services that an agency already provides. 

13CBP bases this $31.37 loaded wage rate on the 

Bureau of Labor Statistics’ (BLS) 2020 median 

hourly wage rate for Cargo and Freight Agents 

($21.04), which CBP assumes best represents the 

wage for importers, multiplied by the ratio of BLS’ 

average 2020 total compensation to wages and 

salaries for Office and Administrative Support 

occupations (1.4912), the assumed occupational 

group for importers, to account for non-salary 

employee benefits. Source of median wage rate: 

U.S. Bureau of Labor Statistics. Occupational 

Employment Statistics, ‘‘May 2020 National 

Occupational Employment and Wage Estimates 

United States- Median Hourly Wage by Occupation 

Code- Occupation Code 43–5011.’’ Updated March 

31, 2020. Available at https://www.bls.gov/oes/ 

2020/may/oes_nat.htm. Accessed June 1, 2021. The 

total compensation to wages and salaries ratio is 

equal to the calculated average of the 2020 quarterly 

of goods from Canada and Mexico.9 All 

of these entries were subject to nonpreferential country of origin marking 

requirements, while some of these goods 

were also subject to other nonpreferential country of origin 

determinations, like trade remedies, that 

involve case-by-case adjudication. 

Around the same time, in FY 2020 and 

the start of FY 2021, CBP issued 52 

rulings determining the origin of goods 

imported from Canada and Mexico for 

non-preferential purposes.10 These 

rulings, except for those involving the 

importation of certain textile and 

apparel products, employed case-bycase adjudication to determine whether 

such goods were substantially 

transformed in Canada or Mexico or 

other countries. 

In the future, CBP projects that 

around 38,832 importers would 

continue to make around 2.6 million 

entries of goods from Canada and 

Mexico that are subject to nonpreferential trade treatment, with or 

without this rule, each year. An 

unknown share of these importers 

would enter goods subject to nonmarking-related non-preferential 

treatment. CBP also projects that about 

52 case-by-case non-preferential country 

of origin determinations would be 

requested and issued each year in the 

absence of this rulemaking based on the 

historical number of case-by-case 

adjudications. This rulemaking would 

eliminate such case-by-case 

determination requests and the issuance 

of such rulings. 

Costs and Revenue Impacts of Rule 

This rulemaking may introduce 

changes in non-preferential payments 

from importers to the U.S. Government. 

In addition, there may be minimal costs 

for some importers, as discussed in this 

section. Changing from case-by-case 

adjudications for other non-preferential 

origin purposes to part 102’s tariff shift 

rules may impose some costs on 

importers with goods from Canada and 

Mexico. Importers who switch from 

using these two determination methods 

for non-preferential origin purposes to 

just the part 102 rules with this 

rulemaking may, for example, incur 

some one-time, minor costs to adjust 

their inventory tracking systems and 

Automated Commercial Environment 

(ACE) entries to reflect the part 102- 

based non-marking, non-preferential 

country of origin for their goods in those 

cases where origin determinations 

under the current practice have been 

inconsistent.11 In such instances, 

importers may also need to adjust their 

business practices to ensure that they 

properly use the part 102 rules for all 

non-preferential country of origin 

purposes when the goods are sourced 

from Canada or Mexico under this 

proposed rule. These same importers 

must also ensure that they use case-bycase adjudications for any goods 

sourced outside of Canada or Mexico 

that are subject to non-preferential 

treatment. The extent of these costs on 

importers is unknown, but likely to be 

minimal. CBP requests public comments 

on these costs and any other costs of 

this rule to importers. This rule would 

not introduce costs to CBP. 

In addition to costs, applying the part 

102 (tariff shift) rules of origin rather 

than case-by-case adjudications to 

determine the origin for other nonpreferential purposes could lead to trade 

policy outcomes different from 

historical and current practice. If an 

importer’s goods are subject to 

inconsistent origin determinations 

under the current practice, this 

proposed rule may lead to a change in 

non-preferential payments from 

importers to the U.S. Government, 

which would result in an equal change 

in U.S. Government revenue. The 

number of instances where an importer 

would receive a different nonpreferential country of origin 

determination under this rulemaking 

compared to current practice would 

likely be low, especially considering 

both methods apply the same 

substantial transformation standard and 

are intended to reach the same results. 

The specific effects of these different 

determinations on revenue are 

unknown. Any change in payments 

from importers to the U.S. Government 

as a result of this rulemaking are 

considered transfers rather than costs or 

benefits as they are moving money from 

one part of society to another.12 CBP 

requests public comments on the 

potential number of instances where a 

good would be treated differently under 

trade remedy laws and relief under the 

new rule compared to historical and 

current practice and any related effects 

on revenue. 

Benefits of Rule 

Besides costs and revenue impacts, 

this rulemaking would introduce 

benefits to importers and the U.S. 

Government. Importers must exercise 

reasonable care when determining the 

country of origin for their goods, which 

can include researching previous caseby-case adjudications on substantial 

transformation. This rulemaking would 

enhance the consistency of country of 

origin marking and non-preferential 

country of origin determinations for 

goods imported from Canada and 

Mexico. All determinations made by 

CBP would be based on substantial 

transformation through application of 

the part 102 rules. This change would 

allow importers of goods from Canada 

and Mexico to comply with just one 

non-preferential country of origin 

determination made by CBP for their 

goods rather than two. 

The overall benefit to importers of 

complying with just one country of 

origin determination method from CBP 

for their goods from Canada and Mexico 

is unknown. Some importers who 

require CBP ruling requests to 

determine the country of origin for nonpreferential purposes would enjoy 

greater benefits from the transition to 

just one non-preferential determination 

method. As previously described, 

importers of goods from Canada and 

Mexico must currently request two 

country of origin rulings from CBP if 

they cannot determine the country of 

origin for non-preferential purposes— 

one for country of origin marking and 

one for case-by-case adjudication for 

other non-preferential purposes. CBP 

estimates that a case-by-case 

determination request takes an importer 

at least 8 hours on average to request, 

at a time cost of $250.96 per request 

according to an importer’s average 

hourly time value of $31.37.13 Based on 


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estimates (shown under Mar., June, Sep., Dec.) of 

the total compensation cost per hour worked for 

Office and Administrative Support occupations 

($28.8875) divided by the calculated average of the 

2020 quarterly estimates (shown under Mar., June, 

Sep., Dec.) of wages and salaries cost per hour 

worked for the same occupation category 

($19.3725). Source of total compensation to wages 

and salaries ratio data: U.S. Bureau of Labor 

Statistics. Employer Costs for Employee 

Compensation. Employer Costs for Employee 

Compensation Historical Listing March 2004– 

December 2020, ‘‘Table 3. Civilian workers, by 

occupational group: employer costs per hours 

worked for employee compensation and costs as a 

percentage of total compensation, 2004–2020.’’ 

March 2021. Available at https://www.bls.gov/web/ 

ecec/ececqrtn.pdf. Accessed June 1, 2021. 

14CBP bases this wage on the FY 2019 salary, 

benefits, and non-salary costs (i.e., fully loaded 

wage) of the national average of CBP attorney 

positions. 

this time cost and the historical average 

of about 52 case-by-case adjudication 

requests for non-preferential country of 

origin determinations for goods 

imported from Canada and Mexico, CBP 

estimates that importers would save at 

least $13,050 in research time costs each 

year from no longer submitting case-bycase adjudication requests to CBP for 

their non-preferential country of origin 

requests for goods from Canada and 

Mexico. These requests may impose an 

unknown amount of additional time and 

resource costs on importers from an 

importer’s gathering of information for 

the process and drafting the request, 

which could be avoided with this 

rulemaking. 

Furthermore, CBP’s country of origin 

determinations sometimes result in an 

imported good being determined to be a 

product of Canada or Mexico for some 

customs purposes and a good of a third 

country for other purposes. This 

rulemaking would eliminate these 

different determinations, which would 

standardize country of origin 

determinations for non-preferential 

purposes for goods imported from the 

USMCA countries of Canada and 

Mexico. CBP’s application of the part 

102 rules would not, however, affect 

similar determinations made by other 

agencies, such as the Department of 

Commerce’s scope determinations in 

antidumping or countervailing duty 

proceedings (see 19 CFR 351.225). This 

standardized approach would provide 

additional benefits to importers, but the 

extent of these benefits is unknown. 

CBP requests public comments on the 

benefits of this change to importers. 

Although this rulemaking would 

eliminate the need for some importers to 

request case-by-case country of origin 

determinations for non-preferential 

purposes, it may require such importers 

to now request classification 

determinations for their goods imported 

from Canada and Mexico. The extent of 

these new classification requests is 

unknown. To the extent that importers 

would need to request additional 

classification determinations in place of 

case-by-case adjudications, the benefits 

of this rulemaking to importers would 

be lower. CBP requests public 

comments on any other benefits of this 

rulemaking to importers. 

As previously stated, CBP issued 52 

non-preferential determinations 

adjudicated on a case-by-case basis for 

goods imported from Canada and 

Mexico from October 2019 to December 

2020. This rulemaking would eliminate 

the need for CBP to make such case-bycase determinations for similar goods 

imported from Canada and Mexico in 

the future. The current method for CBP 

to determine country of origin on a caseby-case basis for non-preferential 

purposes is generally more time and 

resource-intensive than the tariff-shift 

method. For CBP, country of origin 

determinations for non-preferential 

purposes based on case-by-case 

adjudications are highly individual, 

fact-intensive exercises. This 

rulemaking would largely make it easier 

for CBP to administer rules of origin for 

non-preferential country of origin 

determinations for goods imported from 

Canada and Mexico by employing the 

codified part 102 rules for both country 

of origin marking and other nonpreferential purposes. By eliminating 

the need for importers to request nonpreferential case-by-case determinations 

of their goods from Canada and Mexico, 

CBP would save an average of 5 hours 

to 40 hours currently dedicated to each 

case-by-case adjudication. This would 

translate to a time cost saving of 

between $494.90 and $3,959.20 based 

on a CBP attorney’s average hourly time 

value of $98.98.14 CBP estimates that 

with this proposed rule, CBP would no 

longer have to make 52 case-by-case 

rulings determining the origin of goods 

imported from Canada or Mexico for 

non-preferential purposes according to 

historical data. Considering these 

forgone determinations and the average 

time cost per determination, CBP would 

save approximately $25,735 to $205,878 

per year from this rulemaking. These 

benefits would represent time cost 

savings to CBP rather than budgetary 

savings, meaning that CBP could use the 

savings to perform other agency 

missions, such as facilitating trade. As 

previously stated, this rulemaking may 

increase requests for classifications of 

goods imported from Canada and 

Mexico, though the extent of these 

requests is unknown. To the extent that 

CBP would need to conduct additional 

classifications in place of case-by-case 

adjudications, the benefits of this 

rulemaking to CBP would be lower. 

Net Impact of Rule 

In summary, this rulemaking would 

introduce costs, revenue changes, and 

benefits to importers and the U.S. 

Government. Some importers, for 

example, whose goods are subject to 

inconsistent origin determinations 

under the current practice, may incur 

minor costs to adjust their inventory 

tracking systems, ACE entries, and 

business practices to reflect the new 

country of origin determination for 

other non-preferential purposes, as 

described above. Transitioning to the 

proposed tariff shift system could also 

lead to an increase or decrease in nonpreferential payments from importers, 

which would lead to an equal increase 

or decrease in revenue to the U.S. 

Government. The exact amounts of 

these costs and revenue changes are 

unknown, but they should be small 

considering the tariff shift methodology 

implements the same substantial 

transformation standard as the existing 

case-by-case method. Additionally, the 

rule would implement a simpler, 

standardized administration system for 

country of origin determinations made 

by CBP for all non-preferential purposes 

for goods imported from Canada and 

Mexico that would save importers and 

the U.S. Government time and 

resources. Importers could save at least 

an estimated $13,050 in time costs 

annually from this rulemaking, while 

the U.S. Government could save 

between $25,735 and $205,878 in time 

costs each year. Overall, CBP believes 

this rulemaking’s benefits would 

outweigh the costs. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA; 

5 U.S.C. 601 et. seq.), as amended by the 

Small Business Regulatory Enforcement 

and Fairness Act of 1996, requires 

agencies to assess the impact of 

regulations on small entities. A small 

entity may be a small business (defined 

as any independently owned and 

operated business not dominant in its 

field that qualifies as a small business 

per the Small Business Act); a small notfor-profit organization; or a small 

governmental jurisdiction (locality with 

fewer than 50,000 people). 

This rulemaking proposes to expand 

the scope of the 19 CFR part 102 rules 

to provide that those rules are to be 

generally applicable to all nonpreferential country of origin 

determinations made by CBP for goods 

imported from the USMCA countries of 

Canada and Mexico. With this change, 


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15Based on unique importer of record numbers of 

importers who entered goods in FY 2019. In some 

cases, multiple IOR numbers correspond to the 

same entity. 

16These goods were not eligible for the 

Generalized System of Preferences. 

country of origin marking and all other 

non-preferential country of origin 

determinations made by CBP for goods 

imported from Canada or Mexico would 

be based on substantial transformations 

occurring with tariff shifts as defined 

under part 102. CBP’s application of the 

part 102 rules would not, however, 

affect similar determinations made by 

other agencies, such as the Department 

of Commerce’s scope determinations in 

antidumping or countervailing duty 

proceedings (see 19 CFR 351.225). 

In FY 2019, 38,832 importers 15 made 

2.6 million non-NAFTA-preference 

entries of goods from Canada and 

Mexico, valued at $155 billion.16 All of 

these entries were subject to nonpreferential country of origin marking 

requirements, while some were also 

subject to other non-preferential country 

of origin determinations, like trade 

remedies, that involve case-by-case 

adjudication. CBP does not have precise 

data on the number of importers who 

entered goods from Canada and Mexico 

that were subject to country of origin 

requirements for marking and another 

non-preferential purpose that would be 

affected by this rulemaking. Based on 

available FY 2019 data on goods from 

Canada and Mexico subject to part 102 

rules for marking and that involve caseby-case adjudication for the nonpreferential purposes of Section 201 and 

Section 232 duties and quotas, as well 

as the 38,832 importers who entered 

non-NAFTA preference goods from 

Canada and Mexico in FY 2019, CBP 

estimates that this rulemaking could 

affect between approximately 10,000 

and 38,832 unique importers entering 

goods from the USMCA countries of 

Canada and Mexico each year. These 

importers would range from individual 

buyers (households or businesses) to 

large businesses across many different 

industries. Some industries and 

businesses may be more affected than 

others, depending on the ultimate 

country of origin determination and the 

classification of the merchandise being 

imported. The exact number of small 

importers affected by this rulemaking is 

unknown. However, according to a 

separate CBP analysis, the vast majority 

of importers are classified as small 

businesses. Because this rulemaking 

would directly affect importers and the 

vast majority of importers are small 

businesses, the rule could affect a 

substantial number of small entities. 

The Regulatory Flexibility Act does 

not specify thresholds for economic 

significance but instead gives agencies 

flexibility to determine the appropriate 

threshold for a particular rule. Changing 

from case-by-case adjudications for 

other non-preferential origin purposes 

to part 102’s tariff shift rules may 

impose some costs on importers with 

goods from Canada and Mexico. 

Importers who switch from using these 

two determination methods for nonpreferential origin purposes to just the 

part 102 rules with this rulemaking may 

incur some one-time, minor costs to 

adjust their inventory tracking systems 

and Automated Commercial 

Environment entries to reflect the part 

102-based non-marking-related, nonpreferential country of origin for their 

goods. As an example, if an importer 

has an inventory tracking system that 

identifies the non-marking, nonpreferential country of origin for its 

goods from Canada and Mexico based 

on existing case-by-case adjudication 

rules, with this rulemaking, that 

importer may need to revise the system 

to ensure that it identifies the goods 

based on the part 102 rules if the 

importer is importing goods subject to 

inconsistent origin determinations 

under the current practice. These 

determinations should match the 

country of origin determinations that 

importers must already make for nonpreferential marking purposes. 

According to representatives of the 

Commercial Operations Advisory 

Committee, these costs will be 

approximately $2,000-$3,000 per 

company. 

Some importers who source the same 

goods from Canada or Mexico and 

another country may also need to adjust 

their business practices to ensure that 

they properly use the part 102 rules for 

customs non-preferential country of 

origin purposes when the good is 

sourced from Canada or Mexico once 

this rulemaking is in effect and use caseby-case adjudications for any goods 

sourced outside of Canada or Mexico 

that are subject to non-preferential 

treatment. According to representatives 

of the Commercial Operations Advisory 

Committee, these costs are minimal. For 

mid to large companies, these costs 

would total at most $2,000 to $3,000 

(note that this is in addition to a similar 

estimate above). Smaller companies 

would have smaller costs. 

CBP does not believe that these costs, 

a maximum of $4,000–$6,000, would 

have a significant economic impact on 

importers, including those considered 

small under the RFA. The annual value 

of importations average $4 million per 

importer, so these one-time costs make 

up less than one percent of the value of 

their importations. In addition, trade 

members have expressed that the nonmonetized benefits of operating under a 

single set of rules well outweigh the 

minimal costs to comply with this 

rulemaking. Therefore, CBP certifies 

that this rulemaking, if finalized, will 

not have a significant economic impact 

on a substantial number of small 

entities. CBP welcomes comments on 

this conclusion. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(44 U.S.C. 3507(d)) requires that CBP 

consider the impact of paperwork and 

other information collection burdens 

imposed on the public. CBP has 

determined that there is no collection of 

information that requires a control 

number assigned by the Office of 

Management and Budget. 

Signing Authority 

This rulemaking is being issued in 

accordance with 19 CFR 0.1(a)(1), 

pertaining to the authority of the 

Secretary of the Treasury (or that of his 

or her delegate) to approve regulations 

related to certain customs revenue 

functions. 

List of Subjects 

19 CFR Part 102 

Canada, Customs duties and 

inspections, Imports, Mexico, Reporting 

and recordkeeping requirements, Trade 

agreements. 

19 CFR Part 177 

Administrative practice and 

procedure, Customs duties and 

inspection, Government procurement, 

Reporting and recordkeeping 

requirements. 

Proposed Amendments to the 

Regulations 

For the reasons given above, it is 

proposed to amend parts 102 and 177 as 

set forth below: 

PART 102—RULES OF ORIGIN 

■ 1. The general authority citation for 

part 102 is revised to read as follows: 

Authority: 19 U.S.C. 66, 1202 (General 

Note 3(i), Harmonized Tariff Schedule of the 

United States), 1624, 3592, 4513. 

■ 2. Amend § 102.0 by revising the 

second sentence and adding four 

sentences after the second sentence to 

read as follows: 

§ 102.0 Scope. 

* * * For goods imported into the 

United States from Canada or Mexico 

and entered for consumption, or 


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withdrawn from warehouse for 

consumption, before [EFFECTIVE DATE 

OF FINAL RULE], these specific 

purposes are: country of origin marking; 

determining the rate of duty and staging 

category applicable to originating textile 

and apparel products as set out in 

Section 2 (Tariff Elimination) of Annex 

300–B (Textile and Apparel Goods) 

under NAFTA; and determining the rate 

of duty and staging category applicable 

to an originating good as set out in 

Annex 302.2 (Tariff Elimination) under 

NAFTA. CBP will determine the 

country of origin for all non-preferential 

purposes for goods imported into the 

United States from Canada or Mexico 

and entered for consumption, or 

withdrawn from warehouse for 

consumption, on or after [EFFECTIVE 

DATE OF FINAL RULE], using the rules 

set forth in §§ 102.1 through 102.18 and 

102.20. The rules in this part regarding 

goods wholly obtained or produced in a 

country are intended to apply 

consistently for all such purposes. The 

rules in this part which determine when 

a good becomes a new and different 

article or a new or different article of 

commerce as a result of manufacturing 

processes in a given country are also 

intended to apply consistently for all 

purposes where this requirement exists 

for ‘‘country of origin’’ or ‘‘product of’’ 

determinations made by CBP for goods 

imported from Canada or Mexico. The 

rules in this part do not affect similar 

determinations made by other agencies, 

such as the Department of Commerce’s 

scope determinations in antidumping or 

countervailing duty proceedings (see 19 

CFR 351.225). * * * 

PART 177—ADMINISTRATIVE 

RULINGS 

■ 3. The general authority citation for 

part 177 is revised to read as follows: 

Authority: 5 U.S.C. 301; 19 U.S.C. 66, 

1202 (General Note 3(i), Harmonized Tariff 

Schedule of the United States), 1502, 1624, 

1625, 2515. 

■ 4. Amend § 177.22 by adding a 

sentence to the end of paragraph (a) to 

read as follows: 

§ 177.22 Definitions. 

(a) * * * (For goods imported into the 

United States after processing in Canada 

or Mexico and entered for consumption, 

or withdrawn from warehouse for 

consumption, on or after [EFFECTIVE 

DATE OF FINAL RULE], substantial 

transformation will be determined using 

the rules set forth in §§ 102.1 through 

102.18 and 102.20.) 

* * * * * 

Troy A. Miller, the Senior Official 

Performing the Duties of the 

Commissioner, having reviewed and 

approved this document, is delegating 

the authority to electronically sign this 

document to Robert F. Altneu, who is 

the Director of the Regulations and 

Disclosure Law Division for CBP, for 

purposes of publication in the Federal 

Register. 

Robert F. Altneu, 

Director, Regulations & Disclosure Law 

Division, Regulations & Rulings, Office of 

Trade, U.S. Customs and Border Protection. 

Approved: 

Timothy E. Skud, 

Deputy Assistant Secretary of the Treasury. 

[FR Doc. 2021–14265 Filed 7–1–21; 11:15 am] 

BILLING CODE 9111–14–P 

DEPARTMENT OF COMMERCE 

Patent and Trademark Office 

37 CFR Part 1 

[Docket No. PTO–P–2021–0006] 

RIN 0651–AD53 

Standard for Presentation of 

Nucleotide and Amino Acid Sequence 

Listings Using XML (eXtensible 

Markup Language) in Patent 

Applications To Implement WIPO 

Standard ST.26; Incorporation by 

Reference 

AGENCY: United States Patent and 

Trademark Office, Department of 

Commerce. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The United States Patent and 

Trademark Office (USPTO or Office) is 

proposing to revise the rules of practice 

for submitting biological sequence data 

associated with disclosures of 

nucleotide and amino acid sequences in 

patent applications by incorporating by 

reference the provisions of Standard 

ST.26 into the USPTO rules. Other 

conforming changes to accommodate for 

proposed new rules of practice based on 

the new standard are also included. 

These proposed amendments would 

apply to international and national 

applications filed on or after January 1, 

2022. In addition to simplifying the 

process for applicants filing in multiple 

countries, a requirement to submit a 

single sequence listing in eXtensible 

Mark-up Language (XML) format will 

result in better preservation, 

accessibility, and sorting of the 

submitted sequence data for the public. 

DATES: Comments must be received by 

September 7, 2021 to ensure 

consideration. 

ADDRESSES: For reasons of Government 

efficiency, comments must be submitted 

through the Federal eRulemaking Portal 

at www.regulations.gov. To submit 

comments via www.regulations.gov, 

enter docket number PTO–P–2021–0006 

on the homepage and click ‘‘Search.’’ 

The site will provide a search results 

page listing all documents associated 

with this docket. Find a reference to this 

notice and click on the ‘‘Comment 

Now!’’ icon, complete the required 

fields, and enter or attach your 

comments. Attachments to electronic 

comments will be accepted in ADOBE®

portable document format or 

MICROSOFT WORD® format. Because 

comments will be made available for 

public inspection, information that the 

submitter does not desire to make 

public, such as an address or phone 

number, should not be included in the 

comments. 

Visit the Federal eRulemaking Portal 

website (www.regulations.gov) for 

additional instructions on providing 

comments via the portal. If electronic 

submission of comments is not feasible 

due to lack of access to a computer and/ 

or the internet, please contact the 

USPTO using the contact information 

below for special instructions. 

FOR FURTHER INFORMATION CONTACT: 

Mary C. Till, Senior Legal Advisor, 

Office of Patent Legal Administration, 

Office of the Deputy Commissioner for 

Patents, by email at Mary.Till@

uspto.gov; or Ali Salimi, Senior Legal 

Advisor, Office of Patent Legal 

Administration, Office of the Deputy 

Commissioner for Patents, by email at 

Ali.Salimi@uspto.gov. Contact via 

telephone at 571–272–7704 for special 

instructions on submission of 

comments. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

a. Summary of Changes 

b. Introduction 

c. Standard ST.26 

d. Benefits 

e. WIPO Authoring and Validation Tool 

(WIPO Sequence) 

f. Applicability 

II. Discussion of Specific Rules 

III. Rulemaking Considerations 

I. Background 

a. Summary of Changes 

Standard ST.26 is the new 

international standard developed by the 

World Intellectual Property 

Organization (WIPO) and member states 

and adopted by the same. Under 

Standard ST.26, patent applications that 

contain disclosures of nucleotides and/ 

or amino acid sequence(s) must present 


jbell on DSKJLSW7X2PROD with PROPOSALS