1. How to Be TAA Compliant
2. What Does Compliance Mean?

To be TAA compliant means following the requirements of the Trade Agreement Act (TAA).

How to Be TAA Compliant

The Trade Agreement Act is a law that was passed for the purpose of making international trade more open and fair. One of the main requirements of the TAA is products purchased by the United States government can only be made in the U.S. or by a designated country.

To comply with this act, contracts must make sure that end products meet a variety of requirements and must provide certification as such. Materials, supplies, and articles that are obtained specifically for use by the public are included.  One of the requirements of the TAA is that products need either to be manufactured or substantially transformed in a designated country or in the U.S.

Some designated countries covered by the TAA include:

  • Countries such as Canada and Mexico that have agreed to reciprocal trade with the U.S.
  • Countries that have entered the Government Procurement Agreement of the WTO.
  • Countries such as Haiti that are located in the Caribbean Basin.
  • Least developed countries, including Laos and Ethiopia.

Some countries have been excluded from the designated countries list. This includes China, which is one of the largest manufacturers of electronics in the world. This can make it difficult for the government to acquire IT equipment that is also TAA compliant.

What Does Compliance Mean?

Holding a GSA MAS contract requires TAA compliance. Before one of these contracts has been granted, you must certify that the product you are providing has been significantly altered or produced in the United States or a designated country. You must also agree that every product you provide during the length of your contract will meet these requirements.

If you're not familiar with the TAA, these rules for compliance may seem very complicated. Fortunately, this isn't the case. All it really means is that you cannot sell the government a product that has been manufactured in a country not covered by the TAA. Prohibited countries include:

  • China
  • Russia
  • India

Being TAA compliant can be very beneficial, as it can give you access to lucrative government contracts.  If you want to be sure that you are complying with the TAA so that you can hold MAS contracts, there are a few simple strategies you can employ.

First and foremost, you need to be careful about who you choose to manufacture your products. Never pick a country that isn't a TAA designated country, as this could cause you to lose your contract. Second, it's always good to keep the lines of communication open within your company. Frequently talk with your partners so that you can all be sure the company is maintaining TAA compliance.

The third strategy for complying with the TAA is to make sure you are thoroughly documenting your operations. Make sure that you have a letter of supply agreement, so you have proof of where your products originated. You will also need to be certain that your products include documentation related to their origin country. Every product should have a correct country of origin code and origin markings.

As with any type of business, you need full details related to your inventory. This can include sample products. Being proactive about your contract is also a good idea. Regularly receiving compliance training can make sure you're following all requirements necessary for holding your contract.

Because the TAA involves international trade, you need to familiarize yourself with information related to border and customs protections.  If you notice a potential problem with compliance, you should research the issue with the TAA immediately so that you can take actions to fix the problem and avoid the loss of your contract. Companies that do frequent transactions with countries that do not comply with the TAA should seek assistance from a professional before applying for an MAS contract.

Similarly, if you already hold an MAS contract, and you aren't quite sure if you are correctly complying with the TAA, you need professional advice. Working with a professional who is familiar with the requirements of the TAA will make it much easier to get your company in compliance, so your contract will be preserved.

If you need help becoming TAA compliant, you can post your legal needs on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.