This fictitious US manufacturer, Let's Pretend Business, expanded their business. To do so, they began to import new goods into the United States.
- HTS Classification
- Negotiated appropriate Incoterms
- Selected a carrier
- Selected a broker
- Determined the type of shipping (ocean vs. air)
- Shipping less than container load (LCL) or full container load (FCL)
- Completed necessary prior arrival and Customs paperwork
- Country of Origin Marking
What to do when the proper country of origin is identified
- CBP discovers the error and conducts an investigation
- Submit a Prior Disclosure because you have not received notification of CBP making a discovery
- Keep doing business as usual and risk fines and penalties
Proper marking and labeling of an item is product dependent
Let's get back to marking products with the appropriate country of origin and understanding why it is essential.
According to CBP, "every article of foreign origin entering the United States must be legibly marked with the English name of the country of origin unless an exception from marking is provided for in the law."
In Let's Pretend's journey, had they ensured appropriate labeling and taken steps to secure reasonable care, they may not have ended up in this predicament.
Take note, check with your Customs broker to ensure you are taking all necessary steps to achieve reasonable care.
Here we go down the rabbit hole! Achieve reasonable care with country of origin.
The consumer cares about country of origin too
While globalization continues, consumers become more educated about the country of origin where their purchases are sourced and manufactured.
According to a 2015 survey by YouGov and GT Nexus indicates that 52% of consumers surveyed about food and beverage products are willing to pay more knowing their goods were ethically and sustainably sourced.
Additionally, a Morgan Stanley survey in 2016 asked consumers how much they care about ethical retailing. Findings conclude that 51% of respondents indicated that ethical credentials are somewhat to very important.
Finally, a 2015 Nielsen global study, resulted in 75% saying a brand's country of origin is more important than several other factors.
Why do consumers care about country of origin?
They want to know the country of origin for a few reasons:
- Ethical and sustainable sourcing
- Workers rights and safety
- Workers health and safety
- Environmental impact
- Social and geopolitical impact
- Commitment to products made in an individual's home country, i.e. "Made in the USA"
Proper identification of the country of origin helps Customs:
- Apply appropriate duties
- Confiscate/seize goods from prohibited countries and/or items
- Step toward achieving reasonable care
- Provide information to the end-user
Lastly, if you mislabel, there are corrective actions you can take.