With the end of the year quickly approaching, now is the time for importers and exporters to review, update and renew their blanket North American Free Trade Agreement (NAFTA) Certificates of Origin and/or other Free Trade Agreement Certificates of Origin on file with Pacific Customs Brokers.
Importer Responsibilities Under NAFTA:
As with other preferential trade programs, the importer bears responsibility to claim the benefits. A claim for preferential NAFTA treatment is done when the Certificate of Origin is supplied with the Customs documents at the time the goods enter Canada, Mexico or the United States.
NAFTA creates a free trade area, not a common market. Customs administrations will still exist and goods entering Canada, Mexico or the United States must still comply with each country?s laws and regulations. Importers need to be aware the agreement does not allow for the unchecked movement of goods among Canada, Mexico and the United States.
Exporter Responsibilities Under NAFTA:
The exporter is responsible for fully completing the Certificate of Origin, also referred to as the NAFTA Certificate. If you are exporting or importing eligible goods and you are not the producer or the manufacturer these are your three options:
- Complete your own certificate of origin based on the information from your producer's or manufacturer's NAFTA.
- Complete your own certificate of origin based on a letter from the producer or manufacturer explaining why the goods would be eligible for NAFTA.
- Complete your own certificate of origin based on your own knowledge of the product.
Correctly Completed Certificates:
For companies reviewing NAFTA Certificates of Origin (NCO) from their North American vendors, the first step is to ensure that at face value, the certificate has proper coding and is fully completed. While this might sound like common sense you would be surprised how many certificates are missing information or contain unacceptable data (for instance, indicating a dollar value in the net cost column). In order to assure accuracy of the data, you need to have sufficient knowledge regarding the completion of the document, the basics of which are usually found on the second page of the Certificate of Origin. If not completed accurately, you are at risk for Administrative Monetary Penalties System (AMPS) and potential duties issued by Canada Border Services Agency.
An Opportunity to Increase Your Awareness:
If you are unsure about your knowledge and ability to perform this step, Pacific Customs Brokers offers a variety of services to cover verification, collection, review and maintenance of Certificates of Origin, as well as a NAFTA Workshop. Register for our next NAFTA Workshop on November 21, 9:00 am to 2:00 pm today!
Should you have questions regarding your free trade agreement renewals, please do not hesitate to contact our Compliance Department by telephone or email [email protected] with any questions you may have.
You may also post your thoughts or questions in our comments section below or email us at Ask Your Broker.