Starting February 2025, new CBP shipping regulations will introduce an important change: all shipments crossing the U.S./Canada border must now include the Country of Origin (COO) for each product. This requirement applies to all shipments destined for the U.S. and other international locations. 


What is a Country of Origin (COO)?

The Country of Origin refers to where a product was manufactured or produced. This designation is essential for determining whether duties or taxes apply when the item is imported, as well as the applicable rate. Different countries have varying duty rates—some may be higher, while others may not have any.


Determining your Country of Origin is extremely important as incorrectly declaring can lead to fines of up to $50,000 USD and potential bans from shipping across the U.S. border. We recommend reviewing your product details and ensure the Country of Origin is correctly declared on all shipments.


How to Determine the Country of Origin for Your Product

Determining the Country of Origin (COO) for your products can depend on several factors. Here are the key ways to identify it:


1. "Made in X" Labeling

Many products have a "Made in X" label on the packaging or directly on the product itself. This is often the most straightforward way to determine the COO.

Note: For books, the Country of Origin (COO) is determined by the 'printed in' label, as the publisher and printing location may differ. For instance, a book could be published in Canada but printed in the U.S. In this case, the COO would be the U.S., as it is the location where the printing process occurred. 


2. Substantial Transformation

If a product undergoes a major transformation in a second country—changing so significantly that it becomes a new item with a different name, character, or use—then the COO may shift to that country.


3. Significant Increase in Value

A substantial increase in a product’s value may also impact its COO. If the retail value of the finished product is significantly higher than its original value due to manufacturing, processing, or assembly, this could indicate a change in COO. However, the exact percentage required for this determination varies.

We strongly recommend consulting CBP regulations, trade agreements, and tariff shift rules. When in doubt, contacting CBP directly will help clarify the appropriate COO designation for your shipments.


Understanding How Country of Origin is Determined

When identifying the Country of Origin (COO) for your products, it’s important to consider how much the product changes during production and the value added to a product during manufacturing or assembly. Here’s a closer look at how these apply to different scenarios:


Handmade Products

If you create handmade goods using raw materials, the COO depends on whether the raw materials undergo a substantial transformation in the manufacturing process.

Examples:

  • If you import aluminum sheets from China and use them to craft custom metal charms in Canada, the COO would be Canada. The raw material has been significantly altered, resulting in a new product with a different purpose and character.

  • However, if you import metal jewelry from China and simply attach a string to turn it into a bracelet, the COO would remain China since the transformation is minimal and does not change the essential nature of the product.

On the other hand, the value added to a product during manufacturing or assembly can change the COO.

For example, if you’re assembling wooden picture frames in Canada for export to the U.S.,  and you import pre-cut wooden panels from China but you simply apply a finish and assemble the frames in Canada. The COO would depend on the following factors:

  • If the finish and assembling process significantly increases the value of the final product, the COO would be Canada.

  • If the wood from China remains the dominant pricing factor in the product’s overall value, the COO would be China.

  • If the work done in Canada (labour) increases the retail value, the COO would be Canada. If the labor does not significantly impact the final value, the COO would remain China.

Clothing

For most clothing items, the Country of Origin (COO) is typically listed on the tag. However, if you are handmaking clothing with raw material or the process adds the minimum percentage value, the COO is determined by where the transformation of the material happens.

Examples:

  • If you import fine fabric from Italy but design and sew a dress in Canada, the COO would be Canada because the fabric has undergone a major transformation into a completely new product.

  • If you import plain T-shirts from Bangladesh and simply add a printed design or logo in Canada, the COO would remain Bangladesh since the modification is minor and does not change the fundamental nature of the product.

    • However, if you take those same T-shirts and significantly alter them, such as cutting, resewing, and transforming them into a completely new style, the COO could be considered Canada, as the original product has undergone a substantial transformation and this has added substantial value to the product.

Sets and Kits

If you sell sets or kits that contain components from different countries, the COO depends on the value added and whether the final product is considered substantially different from its individual parts.

Example:

  • Imagine you create customized stationery sets in Canada and ship them to the U.S.

  • The notebooks and pens are sourced from Japan, but you package them in a wooden box made in Canada, complete with custom engraving, branding, and additional design elements.

    • If the Canadian packaging and customization significantly increase the overall value, the COO would be Canada.

    • However, if the notebooks and pens remain the dominant components in determining the product’s value, the COO would still be Japan.

The extent of transformation and added value are key in determining the final Country of Origin for sets and kits.

How do I provide proof of Country of Origin?

If requested, Chit Chats or CBP may ask for proof of the Country of Origin (COO) for your products. It’s highly recommended that you include a commercial invoice or relevant manufacturer documentation with your shipments that clearly states the COO. In addition, you can also provide any information (website, product listing, etc.) that would support the claim of the COO that you have declared. If you create handmade products and would like to add proof of country of origin (COO), you can use the following document template to self-certify the origin of your goods.


For sellers of collectibles or other unique products, it is your responsibility to determine the COO and ensure the necessary supporting documentation is available. In the case of collectibles, we advise contacting the manufacturer directly, as many items may not have the COO listed on their packaging. Taking these steps will help ensure compliance and smooth processing of your shipments.


If you need additional resources:

If you have any additional questions regarding COOs, please contact the CBP directly.