One of the E-1 visa requirements is that the trade is international – the trade is between the U.S. and a treaty country. This means that the items of trade (for example clothes) or services have to be exchanged for consideration between the U.S. and a treaty country.
Our clients sometimes ask us the following questions: If I am an Australian national, do the goods (e.g. clothes) have to be manufactured Australia? Can the goods be manufactured in a third country? Does it make any difference if goods are manufactured in a third country that is a treaty country (e.g. Germany) or non-treaty country (e.g. China)? Can I purchase the goods from a third country and once I hold the title to the goods, can I sell them to my U.S. customers? Does this qualify as trade?
There are 2 approaches:
- Origin of the goods controls: this means, that the trade would be considered international trade only if the goods are manufactured in your treaty country. The goods could not be manufactured in any other country (treaty or non-treaty) as the origin of the goods controls. For example, if you are an Australian national, the goods (e.g. clothes) would have to be manufactured in Australia. Once you sell the clothes to your U.S. customers (and assuming you meet the other E-1 requirements), you could qualify for E-1 visa.
- Title of the goods controls: this means that the trade would be considered international even if the goods were manufactured in a third country (either treaty or non-treaty). Under this approach, once you purchase the goods from a third country, you hold the title to the goods. Once you sell the goods to your U.S. customers, the trade is considered to be international. For example, if you are an Australian national, you could purchase the goods (g. clothes) that are manufactured in a third country (e.g. China) and then sell the products to the U.S. customers. Please note that under this approach, it does not matter if the third country is an E-1 treaty country or not. Please see the list of E-1 treaty countries when you click here.
Please note that there is no formal guidance as to whether the origin of the goods (the country where the goods were manufactured), or the title of the goods controls. In 2000, a Department of State representative indicated that title of the goods would control when considering if the trade is international. However, this has not been published in any official regulation and in case you want to argue the title of the goods approach, you should contact an immigration attorney to help you with the case strategy. A prudent approach would be to position the case in a manner that meets the requirements and given the lack of clarity in this area, both approaches could work.
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