Where Your Products Are Really Made: The Trade Agreements Act and Country-of-Origin Fraud

Published 2026 | TIKC NewsWire

If you sell products to the government, one of your quietest but sharpest risks is a single question: where was this actually made? Two overlapping rules, the Buy American Act and the Trade Agreements Act (TAA), control the country of origin of what the government buys. A wrong or careless country-of-origin certification is a growing source of False Claims Act cases, and product resellers are squarely in the line of fire.

Buy American vs. the Trade Agreements Act

These two are often confused. The Buy American Act is a preference: it favors domestic end products through price evaluation adjustments, but it does not flatly ban foreign goods. The Trade Agreements Act is a prohibition: on covered acquisitions above a dollar threshold, the government may generally buy only U.S.-made or designated-country end products. Designated countries include U.S. free trade agreement partners and certain others, but notably not countries like China. So a product substantially transformed in a non-designated country can be flatly ineligible on a TAA-covered buy, no matter how good the price.

The concept that trips people up: substantial transformation

Country of origin under the TAA turns on where the product was substantially transformed into a new and different article of commerce, not simply where it was assembled or shipped from, and not where the company is headquartered. Components can come from many places, but the analysis asks where the last substantial transformation happened. Get this wrong, or rely on a supplier’s say-so without checking, and your certification can be false even if you never intended to deceive.

Why it is a real enforcement risk

When you offer a product on a TAA-covered contract, you are certifying its compliance. If you sell a non-compliant product (for example, one substantially transformed in a non-designated country) and certify otherwise, DOJ can pursue it under the False Claims Act, especially where you knew or recklessly disregarded the true origin. Resellers are exposed because they often rely on manufacturers and distributors for origin information, then certify to the government without independent verification. Whistleblowers, frequently competitors or insiders, know exactly where to look.

What to do now

• Know when the TAA applies. It attaches to covered acquisitions above the threshold. Confirm whether your contract is TAA-covered before you offer a product.
• Verify origin, do not assume it. Get country-of-origin documentation from your suppliers, and understand the substantial-transformation analysis rather than trusting a label or a headquarters location.
• Watch your supply chain for changes. A manufacturer that shifts production to a non-designated country can turn a compliant product non-compliant overnight.
• Document your diligence. Keep the evidence behind each certification so you can show good faith.
• Flow the requirement down to distributors and suppliers, and get them to stand behind their origin claims.

Country of origin is not a shipping detail. It is a certification the government can and does enforce. Verify before you certify. Brick by brick.

FAQ

What is the difference between Buy American and the Trade Agreements Act?

Buy American is a price preference for domestic products. The Trade Agreements Act is a prohibition that, on covered buys above a threshold, generally limits the government to U.S.-made or designated-country end products.

Is a product from China TAA-compliant?

Generally no. China is not a designated country, so a product substantially transformed in China is typically not TAA-compliant on a covered acquisition, regardless of price.

What is substantial transformation?

The point where a product is transformed into a new and different article of commerce with a new name, character, or use. Country of origin follows the last substantial transformation, not mere assembly or shipping point.

Can a reseller be liable for a false origin claim?

Yes. If you certify TAA compliance and the product is non-compliant, you can face False Claims Act exposure, particularly if you knew or recklessly disregarded the true origin. Verify with your suppliers and keep records.

Sources

Federal Acquisition Regulation. (2026). Part 25, Foreign acquisition; Subpart 25.4, Trade agreements.

U.S. Code. (2026). Trade Agreements Act of 1979, 19 U.S.C. 2501 et seq.

This article is general information, not legal advice.