Updated February 2026 | Country of origin verification
A US importer was sourcing consumer goods from a supplier who claimed:
"We manufacture in Vietnam. COO is Vietnam."
The pricing was good.
The lead time was fast.
The paperwork looked normal.
And the client's goal was simple:
Avoid China tariffs + avoid Section 301 exposure.
We did a standard origin verification step (part of our CBP audit readiness workflow).
We asked for the proof that actually matters:
And the supplier's answers were… soft.
They kept giving marketing answers like:
"Don't worry, we are Vietnam."
They could not provide:
Vietnamese raw material purchase invoices.
They provided a few invoices, but:
So we pushed one level deeper:
"Show us the inbound customs records into Vietnam."
They couldn't.
That's when we knew the truth was nearby.
They were using a Vietnam facility — but it wasn't real manufacturing.
It was:
Final assembly + packing in Vietnam
while most components were produced in China.
In other words:
This is the exact pattern CBP has been hammering.
If CBP determines origin is actually China, the importer is exposed to:
Even if the shipment cleared.
Because CBP can come back later.
This is the part most importers don't understand:
Even if the duty difference is "not huge," false COO is treated as a serious violation.
CBP can hit:
This is the nuclear scenario.
If the product is in an AD/CVD scope category, Vietnam transshipment becomes:
"Circumvention."
And then the importer is facing:
Two things broke it.
1) The factory could not prove substantial transformation
Their Vietnam activity was basically:
No real manufacturing.
No meaningful transformation.
2) Their documentation didn't match capacity
Their "Vietnam factory" had:
It was a finishing point, not a factory.
We did it in a way that would hold up in an audit.
We physically visited.
We checked:
We demanded:
The key components traced back to China.
This is underrated but deadly accurate.
If they claim 10,000 units/month, but they have:
Then the claim collapses.
This was the part that made the client go cold.
They were preparing a shipment valued around $180K–$250K.
If CBP reclassified origin as China, the exposure was roughly:
25%–45% landed cost increase (depending on HTS and tariff stacking)
So you're talking about:
$45K–$110K in additional duties/tariffs
on one shipment.
And that's just the tariff side.
If CBP treated it as a false COO violation, the cost could go much higher because:
This is how one shipment becomes a 6-month problem.
We didn't "argue."
We forced a decision.
Option A — Make it real Vietnam
If they want Vietnam origin, then:
Option B — Declare China
If it's China, declare China.
Stop playing games.
Option C — Change suppliers
If they refuse transparency, we walk.
The client did not ship under false Vietnam origin.
They changed the structure.
They either:
But the key point is:
We prevented them from walking into a CBP trap.
CBP knows this playbook.
They're specifically targeting:
Vietnam "manufacturers" who:
India "manufacturers" who:
Indonesia manufacturers who:
If your supplier fits this profile, you're already on CBP's radar.
When they audit country of origin, they verify:
1) Substantial transformation occurred
Not just "final assembly." Real manufacturing that changes the essential character of the product.
2) Documentation matches capacity
If you claim 50,000 units/month, they check: Do you have the machines, materials, workers, and space to actually do that?
3) Material sourcing is traceable
Where did the inputs come from? Can you prove it with invoices, customs records, and payment trails?
4) The factory is real
Not a warehouse with a packing line. An actual production facility with equipment, workforce, and activity that matches your order volume.
5) Your reasonable care is documented
Did you verify origin before claiming it? Or did you just trust what the supplier wrote on the invoice?
Because it's profitable.
If a Vietnam factory can:
Everyone wins. Until CBP audits you.
Then:
Before you claim Vietnam/India/Indonesia origin:
On-site verification
Walk the factory. Count machines. Check material stock. Verify workforce size.
Material traceability
Demand invoices, customs records, and payment proof for key inputs.
Capacity analysis
Does their equipment and labor actually support the output they claim?
Substantial transformation test
Is real manufacturing happening, or just assembly/packing?
Documentation package
Production records, BOM breakdown, supplier contracts, inspection reports.
In your supplier contracts:
Origin warranty clause
"Supplier warrants that goods meet substantial transformation requirements for claimed country of origin and will provide documentation upon request."
Audit rights
"Buyer retains right to verify production process, material sourcing, and capacity to support origin claims."
Penalty for false origin
"Supplier is liable for all duties, penalties, and legal costs resulting from incorrect origin claims."
One shipment:
$45K–$110K in tariffs and penalties
Multiple shipments:
6-figure exposure + forced disclosures + retroactive duties
AD/CVD circumvention finding:
Cash deposits on all future shipments + supplier blacklisting + years of legal costs
Worst case:
Criminal referral for intentional misclassification
Origin fraud is not a "technicality."
CBP treats it as serious compliance failure.
Q: How does CBP determine country of origin?
CBP uses "substantial transformation" test: where did the product gain its essential character? Simple assembly, packing, or labeling doesn't count. Real manufacturing with significant value-add and process change does.
Q: Can my supplier just give me a Certificate of Origin?
Certificates of Origin are not proof. They're just paperwork. CBP wants production records, material invoices, capacity documentation, and traceability. A CO from a chamber of commerce means nothing if the factory can't back it up.
Q: What if my Vietnam factory uses some Chinese components?
Using Chinese inputs isn't automatically illegal. The question is: does the Vietnam processing constitute substantial transformation? If yes, and you can document it, Vietnam origin is legitimate. If it's just assembly, it's still China origin.
Q: How do I know if my factory can actually prove origin?
Ask for the documentation CBP will ask for: production flow, material invoices, inbound customs records, capacity proof, workforce records. If they can't provide it in 24-48 hours, they can't prove origin.