Out with the old NAFTA, in with the new USMCA

The USMCA will be effective on July 1st and CBP has finally issued instructions for implementation to help guide importers on the updated rules. USCBP will also be offering a help center to offer guidance, clarification, and documentation for those in need to facilitate the smooth implementation of the treaty, which we outlined last month in our blog. Below, you can find the updates that will most likely impact our clients, but it’s by no means comprehensive.

Businesses may be impacted by the changes and will need to review company policies, standard operating procedures, documentation, and make corrections and updates as applicable to become current with the new USMCA requirements.  Keep in mind that updates to the documentation requirements and the rules of origin changes, there may be company policies and procedures that need to be brought current to encapsulate the new rules on required documentation that must be available for reporting.  Considering the importance of these changes and updates, we heartily recommend thorough training for staff and management.

Updated de minimis thresholds:

  • USA – $800 USD
  • Canada – $150 CAD for customs and $40 CAD for taxes
  • Mexico – $117 USD for customs and $50 USD for taxes

Sunset Clause

  • The full term on the USMCA will be 16 years.
  • After 6 years USMCA can be renegotiated, canceled or readopted

Automobiles

Enhanced Regional Value Content for

Total car – 75%

  • Core parts – 75%
  • Principal parts – 70%
  • Complementary parts – 65%

Labor requiring $16 per hour average pay

  • Automobiles – 40%
  • Light Trucks – 45%

Certificate of origin rules

  • formal certification document  isn’t required to come from Importers
  • Commercial invoices are valid documentation of the certificate of origin
  • Documentation can be created by either importers, exporters, or producers of the

Finally, importers should closely monitor for new guidance from your friends at Edward J. Zarach & Associates.  The process of passing and implementing USMCA has proved to be ever-changing, and further updates and clarification are likely to be necessary so you should reach out to us with your questions and concerns.