Introduction to NAFTA - .Should you be filling out a NAFTA certificate? 2. ... • NAFTA Interactive

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  • 5/6/2013

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    Copyright 2012 Mike Allocca. All

    rights reserved.

    Introduction to NAFTA (overview of 3 new FTAs)

    NASBITE International Conference

    Albuquerque, NM April 11, 2013

    11:15 a.m. - 12:30 p.m.

    Copyright 2012 Mike Allocca. All

    rights reserved.

    Importer/Exporter Responsibilities

    It is the importer/exporters responsibility to be aware of and comply to, all existing and future regulations of any and all U.S./Canadian/Mexican government agencies controlling NAFTA imports/exports within the NAFTA territories. Every effort is made to ensure that the information presented is current and accurate. I assume no liability or responsibility for the application of the information presented, or any changes, updates, additions or corrections that may exist at the time of presentation. This training is not intended as legal advice or legal guidance. You should consult with an attorney to obtain legal advice.

    No portion of this material maybe copied or distributed without the express written permission from Mike Allocca.

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    Copyright 2012 Mike Allocca. All

    rights reserved.

    Table of Contents What is NAFTA

    Overview of the 3 new FTAs

    Steps to determine if your products qualify

    Originating material

    Rules of Origin /Annex 401

    Preference criteria

    Examples/NAFTA Resources

    Summary

    Copyright 2012 Mike Allocca. All

    rights reserved.

    What is NAFTA

    Free trade agreement with CA,MX,US

    Effective Jan 1, 1994

    15 year phase in period (free trade on all

    eligible goods by end of 2008)

    1st agreement that allows other governments

    customs officials to come into USA

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    S. Korea - US FTA

    Copyright 2013 Mike Allocca. All

    rights reserved.

    Oct 21, 2011 President signed legislation

    approving agreement. March 15th,2012 went

    into effect.

    95% of US exports of eligible

    consumer/industrial products to S. Korea

    will become duty free within 5 years; if

    products meet rule of origin

    Remaining tariffs phased out over 10 years

    Colombia - US FTA

    Copyright 2013 Mike Allocca. All

    rights reserved.

    Oct 21, 2011 President signed legislation

    approving agreement. May 15th, 2012 went

    into effect.

    80% of US exports of eligible

    consumer/industrial products to Colombia

    will become duty free immediately; if

    products meet rule of origin

    Remaining tariffs phased out over 10 years

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    Panama - US FTA

    Oct 21, 2011 President signed legislation

    approving agreement. Oct 31st, 2012 went

    into effect.

    87% of US exports of eligible

    consumer/industrial products to Panama

    will become duty free immediately; if

    products meet rule of origin

    Remaining tariffs phased out over 10 years Copyright 2013 Mike Allocca. All

    rights reserved.

    Copyright 2013 Mike Allocca. All

    rights reserved.

    What is NAFTA

    Free trade agreement with CA,MX,US

    Effective Jan 1, 1994

    15 year phase in period (free trade on all

    eligible goods by end of 2008)

    1st agreement that allows other governments

    customs officials to come into USA

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    Copyright 2013 Mike Allocca. All

    rights reserved.

    NAFTA Benefits

    Benefits the importer,

    reduced or duty free

    goods.

    No MPF from Canada

    for NAFTA goods

    Can make the exporter

    more competitive then

    other non-participating

    countries

    345% increase in trade

    among the 3 countries.

    Increase market access

    within each country.

    Saves your client a

    step if it is an

    intermediate product

    www.export.gov/fta

    Copyright 2008 Mike Allocca. All

    rights reserved.

    http://www.export.gov/fta

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    Copyright 2013 Mike Allocca. All

    rights reserved.

    Determining if your products

    qualify Step 1

    1. Should you be filling out a NAFTA certificate?

    2. Determine your proper HTS classification for

    each item.

    3. Look up the duty rate , if any, in country of

    destination. http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2012/01-99/tblmod-

    eng.html

    Steps to Classify your products

    with the correct HTS code 1) You must use the GRI- General Rules of interpretation

    mandatory by law

    2) You must read the chapter/section notes mandatory by

    law

    3) Strongly recommend you use the CROSS- not mandatory

    but should be

    4) Strongly recommend you consider purchasing the (EN)

    Explanatory Notes to the WCO not mandatory but should

    be

    http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2012/01-99/tblmod-eng.htmlhttp://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2012/01-99/tblmod-eng.htmlhttp://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2012/01-99/tblmod-eng.htmlhttp://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2012/01-99/tblmod-eng.htmlhttp://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2012/01-99/tblmod-eng.htmlhttp://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2012/01-99/tblmod-eng.htmlhttp://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2012/01-99/tblmod-eng.htmlhttp://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2012/01-99/tblmod-eng.htmlhttp://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2012/01-99/tblmod-eng.htmlhttp://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2012/01-99/tblmod-eng.htmlhttp://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2012/01-99/tblmod-eng.html

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    Copyright 2008 Mike Allocca. All

    rights reserved.

    Sample Canadian Import Database

    Looking up Duty rates http://export.customsinfo.com/Default.aspx

    http://export.customsinfo.com/Default.aspx

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    http://export.gov/FTA/ftatarifftool/index.asp

    Copyright 2012 Mike Allocca. All

    rights reserved.

    Determining if your products

    qualify Step 2 4. Look up definitions of originating/ non-

    originating material.

    5/6. Determine if you are or are not the mfg and

    have supporting documentation.

    7. Look up the specific rule of origin for each of

    your products. (annex 401) http://www.nafta-sec-alena.org/en/view.aspx?x=343&mtpiID=158#SectionB

    http://www.nafta-sec-alena.org/en/view.aspx?x=343&mtpiID=158http://www.nafta-sec-alena.org/en/view.aspx?x=343&mtpiID=158http://www.nafta-sec-alena.org/en/view.aspx?x=343&mtpiID=158http://www.nafta-sec-alena.org/en/view.aspx?x=343&mtpiID=158http://www.nafta-sec-alena.org/en/view.aspx?x=343&mtpiID=158

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    Rules of Origin Websites

    Panama- Rules of origin http://www.ustr.gov/sites/default/files/uploads/agreements/fta/panama/asset_upl

    oad_file527_10897.pdf

    Colombia Rules of origin http://www.ustr.gov/sites/default/files/uploads/agreements/fta/colombia/asset_u

    pload_file13_10153.pdf

    S. Korea Rules of origin http://www.ustr.gov/sites/default/files/uploads/agreements/fta/korus/asset_uploa

    d_file680_12704.pdf

    Copyright 2013 Mike Allocca. All

    rights reserved.

    Copyright 2013 Mike Allocca. All

    rights reserved.

    Examples

    Electric train set - Tariff shift

    Wooden Furniture Tariff shift & RVC

    Formulas for RVC Transaction Value/

    Net Cost for NAFTA only

    http://www.ustr.gov/sites/default/files/uploads/agreements/fta/panama/asset_upload_file527_10897.pdfhttp://www.ustr.gov/sites/default/files/uploads/agreements/fta/panama/asset_upload_file527_10897.pdfhttp://www.ustr.gov/sites/default/files/uploads/agreements/fta/colombia/asset_upload_file13_10153.pdfhttp://www.ustr.gov/sites/default/files/uploads/agreements/fta/colombia/asset_upload_file13_10153.pdfhttp://www.ustr.gov/sites/default/files/uploads/agreements/fta/korus/asset_upload_file680_12704.pdfhttp://www.ustr.gov/sites/default/files/uploads/agreements/fta/korus/asset_upload_file680_12704.pdf

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    Determining if your products

    qualify Step 3 If you meet each of the rules of origin for

    Colombia, Panama and Korea FTAs notify your

    customer in writing that your product is eligible

    (there are NO official FTA forms or certificates

    for these (3) three FTAs. However an unofficial

    form does exist.)

    Record keeping requirements. (5 years)

    Copyright 2013 Mike Allocca. All

    rights reserved.

    Copyright 2010 Mike Allocca. All

    rights reserved.

    Determining if your products

    qualify Step 4 If you meet each of the rules of origin,

    begin to fill out a NAFTA certificate.

    Determine what is your correct preference

    criteria.

    Be aware of blanket NAFTAs, DeMinimis

    Rule/Fungible goods rule.

    Record keeping requirements.

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    Common Errors to avoid when

    declaring eligibility Use 1st (6) six digits of HTS code only

    There is no official certificate- do not use an old

    NAFTA form for the (3) three new FTAs

    There are NO preference criterion (letters A-E) like

    under NAFTA

    There is NO Net cost or transaction value like under

    NAFTA. They are called the build up and build down

    method.

    Country of origin (2) two choices per certificate

    Copyright 2013 M