TCO: Contract Manufacturers and Country of Origin

Question: My company is a contract manufacturer. We receive goods from another country, apply a coating to them, then ship them back to the original country. Do we have to provide country-of-origin certification saying the goods originated from our country for their return?

Answer: The rules around certifying origin depend on the legal requirements of the country where the importer of record is located, as well as any requirements in applicable Free Trade Agreements that company may be a signatory of. In many cases, the deciding factor is whether or not "substantial transformation" has occurred in a given country. This determination may involve multiple different considerations. Generally speaking, though, it's unlikely that applying a coating would be considered substantial transformation.

An overview and several examples of what does and does not constitute substantial transformation are available from the U.S. International Trade Administration.

This article is current as of 2020-07-08.

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