On August 11, 2020, Customs and Border Protection (CBP) posted a Federal Register General Notice about a change in the country of origin for goods that are produced in Hong Kong. The announcement states that beginning on September 25, 2020 all goods produced in Hong Kong will need to be marked as a product of China, unless your goods in question are excepted from markings.
These marking changes are the result of the July 14 President’s Executive Order that ended Hong Kong's special trade status.
So what does this mean for shippers? In general, the clock is now ticking to inform your supplier(s) of this important change with their product markings as well as to make any updates to all systems and order processing systems. There is no question that time is of the essence.
So, let’s ask ourselves a few questions about this change:
Does this mean that products that were produced in Hong Kong and now marked as from China, also be subjected to the section 301 tariffs? No, this rule only applies to marking requirements under 19 U.S.C. 1304. Entry summary procedures have not changed. Entry summaries and duty payments should continue to be filed according to current regulation and policy, products of Hong Kong should continue to report International Organization for Standardization (ISO) country code 'HK' as the country of origin when required.”
What will happen if goods produced from Hong Kong and marked as such after September 25, 2020? Expect those goods to be held for inspection in order for a “remarking” to take place as well as possible penalties.
What will happen if goods were produced prior to this notice with Hong Kong markings with documentation to prove the manufacturing date? Expect the same response as stated above, expect the goods to be held and remarked according to 19 U.S.C. 1304.
At the end of our business day this change between Hong Kong, China and United States is a much bigger issue than marking as we can see this change will impact many other parts of the business world.
Other countries (such as the EU) have taken a similar stand on products originating from HK so this marking issue may expand as a requirement for other countries, so we need to keep a vigilant watch for their messaging.
If you have additional questions and or any concerns please feel free to contact me.