What is TAA Compliance?

Map of TAA Compliant Countries(Updated: May 29, 2018 )

How do you know if you are TAA Compliant? TAA refers to the Trade Agreement Act. Under 19 USC 2501 Trade Agreements Act government agencies may only purchase US-made or designated country end products or US or designated country services.

Are Your Products on GSA Schedule TAA Compliant?

Because the estimated value of a GSA schedule exceeds $191,000, all GSA product sales must be Trade Agreement Act (TAA) compliant, as per FAR 25.4. In order to be TAA compliant, Customs and Border Protection (CBP) considers either that 50 percent of the cost of manufacture or location where product is “substantially transformed” is from/within a TAA Designated Country.

If you offer services through your GSA Schedule, the TAA may also apply to you; but that is not always the case. The issue of how the TAA applies to services is a complex one.

How to Determine if products were “Substantially Transformed?”

If a product is completely manufactured in the United States or in a TAA designated country, you are TAA compliant. Software country of origin is determined in the country where the software was compiled.

Sometimes a product requires assembly in several countries or has components from various countries; the TAA compliance becomes murkier and a determination of where the product is substantially transformed is required. If a product is manufactured in various countries, the final product must be “substantially transformed” in a designated country. Substantial transformation would be transforming an article into a new and different article of commerce, with a name, character, or use distinct from the original article. (refer to FAR 25.001(c))

Responsibility falls wholly on the government contractor, to determine if a product has been substantially transformed. More information on International Trade: Rules of Origin available here: http://www.fas.org/sgp/crs/row/RL34524.pdf.

Who Makes the Determination of TAA Compliance?

The U.S. Customs and Border Protection states that “the responsibility for making a determination of substantial transformation rests solely with the contractor. The contractor can go to The Office of Regulations and Rulings within U.S. Customs and Border Protection, which is the Federal agency responsible for making substantial transformation determinations or giving their opinions.”

How to Keep Your GSA Schedule TAA Compliant?

First you must have a system in place that periodically verifies that the products being offered under your GSA schedule are TAA compliant. Furthermore, if you are not a manufacturer, we recommend that you verify countries of origin quarterly or, at minimum, with catalog updates from your suppliers to verify that products are still being manufactured or “substantially transformed” in a TAA designated country.

If your manufacturing source changes during the term of your contract and items are now manufactured in a non-designated country, your products will consequently be out of compliance. You must immediately take action to remove the non-TAA compliant items from your GSA Schedule. A GSA consultant from the Coley team can assist with getting this processed.

TAA Designated Countries are regularly updated and can be accessed from here:  FAR-Clause-52_225-5. Also, as noted on our table below, if a product is manufactured in China, Indonesia, Malaysia, or Sri Lanka, you may be permitted to sell them, but only to the VA with a required waiver. Territories belonging to the United States, are TAA compliant therefore, American Samoa, Northern Mariana Islands, Puerto Rico, and the United States Virgin Islands are compliant countries.

Current List of TAA Compliant Countries Include:

 

Edit
AfghanistanDenmarkLatviaSao Tome and Principe
AngolaDjiboutiLesothoSenegal
Antigua and BarbudaDominicaLiberiaSierra Leone
ArmeniaDominican RepublicLiechtensteinSingapore
ArubaEl SalvadorLithuaniaSint Eustatius
AustraliaEquatorial GuineaLuxembourgSint Maarten
AustriaEritreaMadagascarSlovak Republic
BahamasEstoniaMalawiSlovenia
BahrainEthiopiaMaliSoloman Islands
BangladeshFinlandMaltaSomalia
BarbadosFranceMauritaniaSouth Sudan
BelgiumGambiaMexicoSpain
BelizeGermanyMoldova*Saint Kitts and Nevis
BeninGreeceMontenegroSaint Lucia
BhutanGrenadaMontserratSaint Vincent and the Grenadines
BonaireGrenadinesMoroccoSweden
British Virgin IslandsGuatemalaMozambiqueSwitzerland
BulgariaGuineaNepalTaiwan
Burkina FasoGuinea BissauNetherlandsTanzania U.R.
BurundiGuyanaNew ZealandTimor- Leste (East Timor)
CambodiaHaitiNicaraguaTogo
CanadaHondurasNigerTrinidad & Tobago
Central African RepublicHong KongNorwayTuvalu
ChadHungaryOmanUganda
ChileIcelandPanamaUkraine*
ColombiaIrelandPeruUnited Kingdom
ComorosIsraelPuerto Rico**United States of America
Democratic Republic of the CongoItalyPolandVanuatu
Costa RicaJamaicaPortugalWestern Samoa
CroatiaJapanRomaniaYemen
CuracaoKiribatiRwandaZambia
CyprusKorea, Republic of (South)Samoa
Czech RepublicLaos

**Includes all US Territories

 

Non-TAA Compliant Countries List Below:

*FAR 52.225-5 (Reviewed: May 2018); Federal Acquisition Regulation , Trade Agreements.

 

Edit
AlbaniaGeorgiaMarshall IslandsSeychelles
AlgeriaGhanaMauritiusSri Lanka
ArgentinaIndiaMicronesiaSudan
AzerbaijanIndonesiaMonacoSouth Africa
BelarusIranMongoliaSuriname
BoliviaIraqMyanmarSwaziland
Bosnia and HerzegovinaJordanNamibiaSyria
BotswanaKazakhstanNauruTajikistan
BrazilKenyaNigeriaThailand
Brunei DarussalamKorea, NorthPakistanTonga
CameroonKosovoPalauTunisia
Cape VerdeKuwaitPapua New GuineaTurkey
ChinaKyrgyzstanParaguayTurkmenistan
Cote d’IvoireLebanonPhilippinesUnited Arab Emirates
CubaLibyaQatarUruguay
EcuadorMacaoRepublic of CongoUzbekistan
EgyptMacedoniaRussiaVenezuela
FijiMalaysiaSaudi ArabiaVietnam
GabonMaldivesSerbiaZimbabwe

 
 

VA only – Waiver Required

The VA is in charge of the healthcare related Federal Supply Schedules (FSS.)There may be some instances where certain healthcare related products needed to save lives are only manufactured in non-TAA compliance countries including China. You must obtain a TAA Waiver from a Contracting Officer before you can add any non-TAA compliant products to your Schedule. The letter must state that the product is necessary and that they are providing a waiver of the TAA for a particular contract or task order.

The VA is currently processing Non-Availability Waiver Determinations under the VA’s 65 I B Pharmaceutical and Drugs Schedule program.  Furthermore, these waiver requests can only be processed for products falling under the scope of Special Item Number 42-2A Single source drug, innovator multiple source drug, and any biological product identified under Section 600.3 of Title 21, CFR.

 

Edit
ChinaIndonesiaMalaysia
Sri LankaThailand

Sources:
World Trade Organization
GSA Vendor Support
VA – Office of Acquisition and Logistics  
FAR 25. 4 Acquisition.gov  
FAR 25.225-5 Acquisition.gov
Harmonized Tariff Schedule of the United States

 

*FAR Case 2016-009; New Designated Countries Effective as of October 31, 2016 for Moldova and Ukraine

24 Comments

  1. Is Puerto considered USA? Is it TAA compliant? I don’t see it listed as a TAA complaint Country.

    Thanks

    Reply
    • Hello Ann, Puerto Rico will not be in this listing because it is a territory belonging to the United States, therefore making these items TAA compliant. Other U.S. districts and territories and that are also considered TAA compliant are: District of Columbia, American Samoa, Northern Mariana Islands, the aforementioned Puerto Rico, and the United States Virgin Islands. Thanks for your question, I have updated our blog to explain how the TAA applies to US territories.

    • Is there a waiver for scooters & power chairs
      Manufactured in China
      To sell to the VA?
      National Contracts just awarded to two companies that have products manufactured in Main land China!!

    • ColeyGSA

      The VA TAA waivers usually apply to pharmaceutical contracts. Here is a link to their site with a little more information: TAA — Non-Availability Determinations under 65 I B

      If you have additional questions regarding a specific contract, you may reach out the Contracting Officer for more guidance.

  2. Would territories of Australia be considered TAA compliant?

    Reply
  3. ColeyGSA

    Australia including states and territories are included in TAA – Australian Capital Territory, New South Wales, Northern Territory, Queensland, South Australia, Tasmania, Victoria, and Western Australia.

    Reply
  4. As a manufacturing company, if you assembly a unit in the U.S. and use only one small fraction for the product that is from a TAA non-compliant country (a locking mechanism)and the rest of the product material is from TAA compliant countries would the overall finished product still qualify as TAA compliant?

    Reply
    • Julio Cardenas

      **Updated**
      As long as 50 percent of the cost of manufacture occurs in a TAA designated country, it should be considered TAA Compliant.

    • Does this include if your point of origin is say China but you can prove you assemble in the US and occur that 51% cost ? What if it is an OEM product ?

    • ColeyGSA

      Components manufactured elsewhere that are a part of the total solution, no matter if it’s an OEM, may still be within the parameters of substantial transformation. It does sound like most of your components are made in China. What these components are and the purpose they serve may also affect the outcome of this test. Reach out to Coley if you need TAA help. We can provide an assessment of your specific situation for an hourly rate.

  5. Nearly all disposable coveralls are manufactured in China. I see several companies on GSA selling coveralls that they claim are manufactured by a company who is a distributor only. The coveralls they distribute are from China. How are these companies able to sell Chinese coveralls on GSA?

    Reply
  6. Hi! Great website and very informative. I am wondering about little Macedonia and when it might become a TAA designated county. Obviously it’s disputes with Greece and its internal fragility remain an issue, but I was wondering if there is movement with its application to join NATO, the EU, etc? We sell a product partially produced there and we are prevented from selling certain items due to this situation.

    Reply
    • Patrick, I am glad you like our site! TAA countries are those who have Trade Agreements with the US. Joint NATO is not a trade agreement that could provide TAA Designated Country status. However, the EU currently has trade agreements with the United States and therefore all the members are TAA compliant countries. We will continue to check the various sources listed at the end of this blog to keep our list of TAA Designated Countries up to date. Another thing to keep in mind is: substantial transformation. Verify if your product is “partially produced” in one country, and substantially transformed in a TAA designated country, it could still qualify as TAA compliant. Best of Luck!

  7. I did not see the authority for the UAE to be considered as a designated country under the TAA. Is the UAE / Dubai in fact a designated country under the TAA? If so, what do they fall under? I know UAE is a member of the WTO, but they are not included as a member or observer to the GPA, correct? Any light you can share on UAE’s status as a (non) designated country would be appreciated.

    Reply
    • ColeyGSA

      Thanks for reaching out regarding United Arab Emirates. Currently, the General Service Administration includes the UAE on their Designated Countries List. Per your request we did further research and could not verify the source for GSA doing so. The UAE is not included in the definitive list to be found in the Federal Acquisition Regulation (FAR) Subpart 25.4 You are correct in that the UAE is a WTO signatory, just not on an agreement that is incorporated in the elements required by the FAR. Based on our research UAE is non-TAA compliant country per the FAR definition.

  8. Dear Sir/Madam
    What is the situation for Turkey and Turkey Products
    We produce fish oil + omega supplements products

    Can the sales channel want to this request from us
    current we have register to the FDA for our all products

    Regards,

    Reply
    • ColeyGSA

      Turkey is currently not on the list of Trade Agreements Act (TAA) approved countries. Although it is a member of North Atlantic Treaty Organization (NATO), it is currently not part of the World Trade Organization (WTO) agreement. There are a few countries that the Department of Veteran Affairs (VA) will provide wavers for pharmaceutical purposes, however, Turkey is not one of those listed.

    • Thank you for interest.
      Is TAA compliance request for nutritional supplementation?
      for example; sale of the market and pharmacy sales
      So what should we do
      do we have a chance to get a TAA compliance certificate for the company

      Regards,

    • ColeyGSA

      Check your contracts for FAR Clause 52.223-1. If found, Trade Agreements will apply and the product must comply with these approved countries of origin.

      For example. Nutritional and Dietary Supplements are within the scope of the VA’s 65 I B Pharmaceutical and Drug Federal Supply Schedule contract program. Trade Agreements is currently in full-effect and this product must originate from an approved TAA country.

  9. I do not see Mauritius on the list of TAA compliant country. Would the AGOA membership for Mauritius allow Mauritius to become a TAA compliant country?

    Reply
    • ColeyGSA

      Unfortunately FAR 52.225-5 does not list Mauritius as a non-TAA compliant region. Further, the African Growth and Opportunity Act does not appear to be listed as an agreement that will bring Mauritius into TAA-compliance. The Trade Agreement Act changes periodically. Please frequent our site as we attempt to keep this page fresh with TAA-compliant countries.

  10. Some of the new pharmaceutical ingredients (API) made in India ( Non TAA compliant country) by multinational companies and drug formulation is done in TAA compliant country. I it possible to get wavier in this case

    Reply
    • ColeyGSA

      Yes, it is possible to obtain a waiver (TAA – Non-availability Determination) from your Contracting Officer and only applies to the VA Federal Supply Schedule. Specific requirements from the VA FSS as follows:

      TAA — Non-Availability Determination
      Special Item Number (SIN) 42-2A product items that are not U.S.-made or designated country end products must be offered for sale to the Government under an FSS 65 I B contract and must be listed as other end products, as required by Federal Acquisition Regulation (FAR) 52.212-3(g)(5)(ii). In accordance with FAR 25.403(c) & 25.103(b)(2), the decision has been made that the Contracting Officer may make an individual non-availability determination pursuant to 1) information provided by the offeror that neither the offered 42-2A product items nor similar or like items are mined, produced, or manufactured in the United States or a designated country in sufficient quantity to fulfill the requirements, and 2) in light of the requirement set forth in 38 U.S.C. Section 8126(a)(1) that manufacturers shall make available for procurement on the Federal Supply Schedule of the General Services Administration each covered drug of the manufacturer. Below outlines the process for offering these items to the Government under an FSS 65 I B contract via modification or via an Interim Agreement (IA), as applicable.

      Source: https://www.va.gov/opal/nac/fss/taa.asp#65ib

    • Thank you so much for clarification

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52.225-5 Trade Agreements.

As prescribed in 25.1101(c)(1), insert the following clause:

Trade Agreements (Feb 2016)

(a) Definitions. As used in this clause—

“Caribbean Basin country end product”—

(1) Means an article that—

(i)    (A) Is wholly the growth, product, or manufacture of a Caribbean Basin country; or

(B) In the case of an article that consists in whole or in part of materials from another country, has been substantially transformed in a Caribbean Basin country into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed; and

(ii) Is not excluded from duty-free treatment for Caribbean countries under 19 U.S.C. 2703(b).

(A) For this reason, the following articles are not Caribbean Basin country end products:

(1) Tuna, prepared or preserved in any manner in airtight containers;

(2) Petroleum, or any product derived from petroleum;

(3) Watches and watch parts (including cases, bracelets, and straps) of whatever type including, but not limited to, mechanical, quartz digital, or quartz analog, if such watches or watch parts contain any material that is the product of any country to which the Harmonized Tariff Schedule of the United States (HTSUS) column 2 rates of duty apply (i.e., Afghanistan, Cuba, Laos, North Korea, and Vietnam); and

(4) Certain of the following: textiles and apparel articles; footwear, handbags, luggage, flat goods, work gloves, and leather wearing apparel; or handloomed, handmade, and folklore articles;

(B) Access to the HTSUS to determine duty-free status of articles of these types is available at http://www.usitc.gov/tata/hts/. In particular, see the following:

(1) General Note 3(c), Products Eligible for Special Tariff treatment.

(2) General Note 17, Products of Countries Designated as Beneficiary Countries under the United States-Caribbean Basin Trade Partnership Act of 2000.

(3) Section XXII, Chapter 98, Subchapter II, Articles Exported and Returned, Advanced or Improved Abroad, U.S. Note 7(b).

(4) Section XXII, Chapter 98, Subchapter XX, Goods Eligible for Special Tariff Benefits under the United States-Caribbean Basin Trade Partnership Act; and

(2) Refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the acquisition, includes services (except transportation services) incidental to the article, provided that the value of those incidental services does not exceed that of the article itself.

“Designated country” means any of the following countries:

(1) A World Trade Organization Government Procurement Agreement (WTO GPA) country (Armenia, Aruba, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea (Republic of), Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Montenegro, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Taiwan (known in the World Trade Organization as “the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei)”), or United Kingdom);

(2) A Free Trade Agreement (FTA) country (Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Korea (Republic of), Mexico, Morocco, Nicaragua, Oman, Panama, Peru, or Singapore);

(3) A least developed country (Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cambodia, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, Laos, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Nepal, Niger, Rwanda, Samoa, Sao Tome and Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, South Sudan, Tanzania, Timor-Leste, Togo, Tuvalu, Uganda, Vanuatu, Yemen, or Zambia); or

(4) A Caribbean Basin country (Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Bonaire, British Virgin Islands, Curacao, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saba, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Sint Eustatius, Sint Maarten, or Trinidad and Tobago).

“Designated country end product” means a WTO GPA country end product, an FTA country end product, a least developed country end product, or a Caribbean Basin country end product.

“End product” means those articles, materials, and supplies to be acquired under the contract for public use.

“Free Trade Agreement country end product” means an article that—

(1) Is wholly the growth, product, or manufacture of a Free Trade Agreement (FTA) country; or

(2) In the case of an article that consists in whole or in part of materials from another country, has been substantially transformed in an FTA country into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed. The term refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product includes services (except transportation services) incidental to the article, provided that the value of those incidental services does not exceed that of the article itself.

“Least developed country end product” means an article that—

(1) Is wholly the growth, product, or manufacture of a least developed country; or

(2) In the case of an article that consists in whole or in part of materials from another country, has been substantially transformed in a least developed country into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed. The term refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product, includes services (except transportation services) incidental to the article, provided that the value of those incidental services does not exceed that of the article itself.“United States” means the 50 States, the District of Columbia, and outlying areas.

“U.S.-made end product” means an article that is mined, produced, or manufactured in the United States or that is substantially transformed in the United States into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed.

“WTO GPA country end product” means an article that—

(1) Is wholly the growth, product, or manufacture of a WTO GPA country; or

(2) In the case of an article that consists in whole or in part of materials from another country, has been substantially transformed in a WTO GPA country into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed. The term refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product includes services, (except transportation services) incidental to the article, provided that the value of those incidental services does not exceed that of the article itself.

(b) Delivery of end products. The Contracting Officer has determined that the WTO GPA and FTAs apply to this acquisition. Unless otherwise specified, these trade agreements apply to all items in the Schedule. The Contractor shall deliver under this contract only U.S.-made or designated country end products except to the extent that, in its offer, it specified delivery of other end products in the provision entitled “Trade Agreements Certificate.”

(End of clause)

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Julio Cardenas

Julio Cardenas

Senior Consultant
Julio has years of experience helping companies maximize the benefits of GSA Schedule ownership. His expertise spans a broad range of services, including helping companies acquire their GSA Schedule, remaining compliant with the myriad terms and conditions.
Julio Cardenas

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