Global Affairs Canada issued a notice to industry to inform Tariff Preference Level (TPL) clients of changes which entered into force effective January 1st, 2022 for sewing thread, narrow elastic and pocket fabric requirements for apparel goods under the Canada-United States-Mexico Agreement (CUSMA). For importers and exporters, this news is crucial as it affects their regulatory compliance.
This notice follows a notice sent on June 30th, 2021 regarding entry into force of sewing thread requirements for apparel goods effective July 1, 2021.
Under CUSMA, apparel must be produced using originating sewing thread, narrow elastics, and pocket lining to qualify as originating. These requirements are provided for in chapter notes 2, 3, or 4 of Chapter 61 and chapter notes 3, 4, or 5, of Chapter 62 of Annex 4-B (Product-Specific Rules of Origin). The originating sewing thread rule became effective on July 1st, 2021, and the narrow elastics and pocket lining rules on January 1st, 2022.
The recent Free Trade Commission decision published on the Government of Canada website clarifies that goods of Chapter 61 and 62 that are produced in a CUSMA party using non-originating sewing thread, pocket lining or narrow elastic may nonetheless be eligible for duty-free treatment when imported into Canada, the United States or Mexico under the applicable CUSMA TPL, regardless of the origin of the yarn or fabric used.
When applying for a permit to process applications for import permits and export certificates of eligibility in the New Export Import Controls System under these new rules, importers/customs brokers are to indicate that:
- The yarn is non-originating (e.g., Yarn = 3C for third country) under Country of Origin – Raw Material (box 19 on the application form), when the sewing thread, narrow elastic or pocket lining is non-originating and the goods are TPL-eligible under the chapter notes indicated above. In addition, brokers are requested to indicate in the comment box the following: “Goods not originating under Chapter Notes”.
For more information regarding these rules contact:
EICS Administration Permit Operations, Client Services and Reporting (TIA)
Trade and Export Controls
Global Affairs Canada
Government of Canada
EICS Help Desk:
1-613-944-1265 | 1-877-808-8838