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Entry into force of sewing thread, narrow elastic and pocket fabric requirement for apparel goods

This notice is to inform Tariff Preference Level (TPL) clients of changes which entered into force effective January 1, 2022. This notice follows a notice sent on June 30, 2021 regarding entry into force of sewing thread requirements for apparel goods effective July 1, 2021.

The Canada-United States-Mexico Agreement (CUSMA) provides that, in order to qualify as originating, apparel must, in addition to other requirements, be produced using originating sewing thread, narrow elastics and pocket lining. 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 1, 2021, and the narrow elastics and pocket lining rules on January 1, 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.

How to apply for a permit:

In order to process applications for import permits and export certificates of eligibility in the New Export Import Controls System under these new rules, 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”.