Importers need to be very aware of the rules when planning a supply chain strategy to reduce the burden of tariffs. Even prior to the sanctions, this has been an important subject with which to understand and comply. The below illustrates several of the illegal practices. What the video does not properly illustrate is the impact of being found non-compliant even after a period of not getting caught. Customs and Border Protection (CBP) can review years of importing history if an illegal act may have occurred.
It is right and proper to use substantial transformation or even moving your source of supply to a country where duty is less burdensome. But this stewardship of company resources must be legally handled.
Detailed information about substantial transformation mentioned in the video can be found in Customs and Border Protection’s Rules of Origin Informed Compliance Publication:CBP Informed Compliance - US RULES OF ORIGIN