Customs Declaration - Legal Regulation incorrect

I believe there is an issue with how the legal regulation determined during creation of an export customs declaration. My first thought, and from what I have read, the customs declaration legal regulation is determined based of the country where the goods are physically shipped. However, in our situation it appears the determination happens based on the country of the foreign trade organization. Can anyone else confirm this is the case? I have been searching the OSS site for some documentation but apparently have been unable to find the right combination of search keys.

Our situation is this, we have a drop ship sales order where:

Sales Org in ECC: Netherlands

Supplying Plant: United States

Receiving Customer: Serbia

We expected that the customs declaration would have determined an US legal regulation (thus determining US HTS numbers) however, instead, the document determined an EU legal regulation and therefore EU HTS codes. The Geography tab clearly shows the country of departure as US. Does this seem wrong to anyone else? Am I just not understanding the proper determination method for customs declarations?

I did debug and trace to ensure we are not overwriting this information anywhere during the transfer from ECC --> GTS, so I have ruled out code customization as an issue. Any thoughts, comments would be appreciated.

Thanks,

Rachael