Importers Have Until September 25 to Comply with New Marking Requirements for Goods From Hong Kong

As reported previously and as a result of the growing tensions between US and China, President Trump issued an Executive Order on July 14, 2020, concerning certain import and export trade requirements between the two countries. Among these changes, it was mandated that goods produced in Hong Kong now be required to be marked with China as their country of origin in accordance with the requirements of 19 U.S.C.A. § 1304 and 19 C.F.R. Part 134. US Customs and Border Protection (CBP) has now prepared a Federal Register Notice for publication on August 11, 2020, providing an effective date for such marking and noting the repercussions if goods from Hong Kong are not so marked.

Requirement Details

Currently, goods produced in Hong Kong are marked as “Made in Hong Kong.”  According to the notice from CBP, goods produced in Hong Kong, which are entered or withdrawn from warehouse for consumption into the United States will have to be marked country of origin “China” starting 45 days after the notice is published in the Federal Register. The Notice is currently scheduled to be published on August 11, 2020. This means that, unless otherwise excepted from marking, goods produced in Hong Kong which enter US customs territory on or after September 25, 2020, will be subject to the new marking requirement.

Marking is governed by Section 304 of the Tariff Act of 1930, as amended (19 U.S.C.A. § 1304), and 19 C.F.R. Part 134. The statute provides that unless excepted, every article of foreign origin (or its container) imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a many as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. Further, a 10% ad valorem duty will be applied to articles that are not properly marked in accordance with the requirements of 19 U.S.C.A. § 1304 and 19 C.F.R. Part 134.

• At this time it is not clear whether, or when, goods produced in Hong Kong would also become subject to tariffs that otherwise apply to Chinese-origin products.

Why Is This Happening Now?

On July 14, 2020, the President issued Executive Order 13936 on Hong Kong Normalization. Among other things, this Order stated that because Hong Kong was determined to no longer be sufficiently autonomous from China to justify differential treatment in relation to China, the President was suspending application of section 201(a) of the United States-Hong Kong Policy Act of 1992, as amended (22 U.S.C. 5721(a)), to certain statutes, including 19 U.S.C. 1304.

The Order also provided that within 15 days appropriate actions must be commenced by relevant agencies.

Next Steps

Effective on September 25, 2020, every Article of Hong Kong origin imported into the US will be subject to the same marking requirements as goods produced in China. Absent any further notice or guidance from CBP, it is expected that CBP will begin enforcement of the requirements at or about that time. Shipments from Hong Kong are easily identified and thus could become an easy target for verification of compliance with the new marking rule.

• Because of the time needed to mark, pack, and ship goods from Hong Kong to the US, it is imperative that importers act quickly to ensure compliance with this new requirement.