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NAFTA
Certificate of Origin
- by Reginald Biddle
- Trade Information Center, Trade Development
- US Department of Commerce
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- With additional WWW link information supplied by:
- Paul E. Litton
- Ypsilanti U. S. Export Assistance Center
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WHEN SHOULD A NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) BE COMPLETED?
A NAFTA Certificate of Origin should only be completed for products exported
to Canada or Mexico that meet the NAFTA rules of origin of production in the
NAFTA countries. Inclusion of products that do not qualify is illegal and
subject to fines and penalties.
Elimination of Canadian and Mexican duties assessed on U.S. products is one
of the major ways that NAFTA assists U.S. companies. To ensure that the benefits
of tariff removal accrue to NAFTA products, and not to Non-NAFTA products, NAFTA
includes tough rules of origin. Only products that meet the NAFTA rules of
origin are eligible for the preferential duty rates.
Under NAFTA, products that qualify under the rules of origin will have zero
duties when traded between the U.S. and Canada, and will have low or zero
tariffs when traded between the U.S. and Mexico. An importer must submit to
customs a NAFTA Certificate of Origin completed by the exporter in order to be
eligible for preferential tariff rates.
By filling out a NAFTA Certificate of Origin, a shipper is certifying that
the covered goods meet the rules of origin, and therefore, qualify for
preferential rates. If the product does not qualify for NAFTA tariff
preferences, the Certificate must not be completed, as the product is then
usually subject to the Most Favored Nation (MFN) tariff rate, rather than the
NAFTA rate.
IS A NAFTA CERTIFICATE OF ORIGIN REQUIRED FOR SHIPMENTS TO CANADA AND MEXICO?
A NAFTA Certificate of Origin is not required for shipments to Mexico or
Canada. The exporter should only prepare a NAFTA Certificate if the product
qualifies for preferential tariff treatment under the NAFTA rules of origin.
A NAFTA Certificate of Origin is not required for the commercial importation
of a good valued at less than US$1,000. However, for goods to qualify for NAFTA
preferential duties, the invoice accompanying the commercial importation must
include a statement certifying that they qualify as originating goods under the
NAFTA rules of origin. The statement should be handwritten, stamped, typed on or
attached to the commercial invoice. This exception is valid as long as the
shipment does not form part of a series of importations that appear to have been
made for the purpose of avoiding the Certification requirement.
WHEN AND HOW DO I SUBMIT A NAFTA CERTIFICATE OF ORIGIN?
Once an exporter determines that the exported good will meet the NAFTA rules
of origin, a NAFTA Certificate of Origin must be completed accurately and
legibly. The exporter must then send the Certificate to the importer. While the
Certificate does not have to accompany the shipment, the importer must have a
copy of the Certificate in hand before claiming the NAFTA tariff preference at
customs. Certificates of Origin may, at the discretion of the exporter, cover a
single importation of goods or multiple importations of identical goods.
In some cases, an exporter may not have the NAFTA Certificate of Origin ready
at the time of export. However, the importer still has up to one year after the
goods go through customs to make a claim for the NAFTA tariff preference and to
apply for a refund of duties paid at the time of entry.
WHO IS RESPONSIBLE FOR DETERMINING IF THE PRODUCT QUALIFIES UNDER NAFTA AND
FOR COMPLETING THE CERTIFICATE?
The Certificate of Origin must be completed and signed by the exporter of the
goods. When the exporter is not the producer, the exporter may complete the
Certificate in the following circumstances:
- On the basis of knowledge that the good originates
- Reasonable reliance on the producer's written representation that the good
originates
- When a completed and signed Certificate of Origin for the good is
voluntarily provided to the exporter by the producer.
Exporters who are not producers often request that their producers or
distributors provide them with a NAFTA Certificate of Origin as proof that the
final good, or an input used in the manufacture of the final good, sold to
Mexico or Canada meets the rules of origin. NAFTA does not obligate a producer
who is not an exporter to provide the ultimate exporter with a NAFTA Certificate
of Origin. However, if the non-exporting producer does complete the NAFTA
Certificate of Origin, they are subject to the same obligations regarding record
keeping, etc., as is the exporter. Even so, it is the exporter's Certificate,
and not the non-exporting producer's Certificate, that must be provided to the
importer. The producer's statement should be kept in the files of the exporter
as backup for their own Certificate.
A distributor does not complete a Certificate of Origin for qualifying goods
unless the distributor is the exporter.
WHAT IS THE PROCESS FOR DETERMINING IF A PRODUCT QUALIFIES FOR THE NAFTA
PREFERENTIAL TARIFF AND FOR COMPLETING THE CERTIFICATE?
Completion of a NAFTA Certificate of Origin is an affirmation that the party
signing the document has researched the terms of the NAFTA Agreement and has
determined that the goods covered by the Certificate of Origin are
"originating goods" as defined by the Agreement. Preparation of a
NAFTA Certificate of Origin imposes certain legal rights, obligations and
liabilities on the party signing the document and should be based on a careful
inquiry into the terms of the text of the NAFTA Agreement and other relevant
United States regulations.
A product does not automatically qualify for NAFTA tariff treatment just
because the product was manufactured in the United States or purchased from a
U.S. company. The product must meet the specific NAFTA rule of origin and the
exporter must complete the NAFTA Certificate of Origin before the importer can
claim the NAFTA tariff rate.
Follow these steps to determine if a product qualifies:
Step 1. Determine the Harmonized System Number for the product being
exported.
The NAFTA rules of origin are organized under the Harmonized System (HS). HS
numbers are standardized classification numbers assigned to identify a specific
type of product in international trade. Customs authorities use HS numbers to
apply duties and taxes. These numbers are typically six to ten digits long. The
first six digits are standardized worldwide, while some governments, to further
distinguish products in a certain category, use additional numbers. In the
United States, HS numbers are also called Schedule B numbers. To obtain tariff
information, the HS number up to the 6-digit level is required.
Step 2. Determine the Canadian/Mexican MFN tariff for the product. If the MFN
rate is zero, no NAFTA Certificate is needed.
Step 3. If the MFN rate is not zero, use the HS number to find the applicable
rule of origin in the NAFTA Agreement and then to determine if the product
qualifies for a NAFTA tariff rate.
When products meet the rules of origin, and therefore, qualify for NAFTA
tariff benefits, they are said to "originate". Article 401 of the
NAFTA Agreement determines which goods originate and precludes goods from other
countries from obtaining those benefits by merely passing through Canada, Mexico
or the United States.
Chapter 4 of the NAFTA Agreement sets out most of the principles governing
origin determination. The NAFTA Rules of Origin (Annex 401) are located in the
text of the NAFTA Agreement on the website of the Organization of American
States (http://www.sice.oas.org/trade/nafta/Anx401a1.asp).
Exporters must carefully research the terms of the Agreement to determine
whether their goods are entitled to NAFTA benefits. They should not assume that
the goods are entitled to NAFTA benefits merely because they were made in a
NAFTA country.
Step 4. If the product meets the NAFTA rule of origin, complete the NAFTA
Certificate of Origin. If the product does not meet the rule of origin, do not
complete the Certificate.
HOW LONG SHOULD COPIES OF THE CERTIFICATE OF ORIGIN BE RETAINED?
In the United States, the exporter is required to retain either the original
or a copy of the Certificate for five years from the date of signature. The
importer is required to retain the Certificate and all other relevant
documentation for five years after the importation of the goods. The facts
asserted in the Certificate must be supported by adequate records relating to
the goods, and their materials and production. Mexican exporters must maintain a
copy of the Certificate for 10 years. Canadian importers and exporters are
required to keep the Certificate for six years from the time of the transaction
for the importer and six years from the date of signing for the Canadian
exporter.
WHAT LANGUAGE SHOULD BE USED TO COMPLETE THE NAFTA CERTIFICATE OF ORIGIN?
A uniform Certificate of Origin is used in all three countries and is printed
in English, French or Spanish. The Certificate shall be completed in the
language of the country of export or the language of the importing country, at
the exporter's discretion. Importers must submit a translation of the
Certificate to their own customs administration when requested.
WHERE CAN I GET FORMS?
The following information is from the Canadian Customs website for their B232
North American Free Trade Agreement - Certificate of Origin.
You can view this document in the following format(s):
PDF fillable form available courtesy of Near North Customs Brokers: http://www.nearnorthcustoms.com/forms/b232epNAFTA.pdf
self-extracting file (b232ep.exe) is found at http://www.cbsa-asfc.gc.ca/E/pbg/cf/b232/README.html.
It contains the following individual file(s) in PostScript format::
- PostScript 3.0 - a430e2.ps
- PostScript 3.0 - a430g1.ps
For other forms, please visit: http://www.ccra-adrc.gc.ca/menu/EmenuFIL.html.
Forms and instructions are also available at the US Customs Website of http://www.customs.ustreas.gov/travel/forms.htm.
The forms are also available from a variety of commercial stationary stores
and commercial printers.
Additional information concerning the NAFTA Certificate of Origin as well as
a variety of NAFTA related topics are available at the NAFTA Flash Fax line.
Please call 1-800-USA-TRADE (800/872-8723) for a current menu of documents to be
sent toll free to your fax machine.
For additional information and assistance in completion of the NAFTA
Certificate of Origin, please contact the nearest office of the US Commercial Service which can be found at
http://www.export.gov/comm_svc/eac.html.
Where Can I Get Help?
The TIC has created a tool to assist companies to fill out the NAFTA
certificate of Origin. Please visit: http://web.ita.doc.gov/ticwebsite/ticit.nsf/.
Date
Updated: March 27, 2007
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