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GLOSSARY

Rules of Origin

The laws, regulations, and administrative rulings that determine the origin of goods. These rules can affect the amount of duty or whether the goods are permitted to enter the country.
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What is Rules of Origin?

Rules of Origin are the requirements used to determine the country of origin of a product. 

Some examples of Rules of Origin:

Wholly produced or manufactured: A product is wholly produced or manufactured in a country if it’s entirely procured in that country.

Considerable transformation: A product has had a considerable transformation if it has undergone changes that go past just assembly or processing. 

Costs of materials rule: Rules of Origin apply here if the cost of the materials in a country is at least 50% of the value of the product. 

Since country of origin may impact eligibility for preferential duty rates, it’s crucial this information is confirmed well in advance of the goods arriving and passing through Customs.  

This can be especially tricky with products such as textiles or clothing, which can be made with materials sourced from multiple places.

Related articles: 

The Complete Guide to Importing Textiles to the U.S.

NAFTA vs.USMCA: A Complete Comparison 

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