Nafta Certificate of Origin

1. NAFTA
Certificate of Origin and Supporting Records

2. NAFTA Benefits
What are the rules and how can I benefit?
Certificate of Origin
Harmonized Tariff # (HS)
Preference Criteria
Rules of Origin
Penalties
3. Certificate of Origin
A Customs Form 434, completed by the exporter or producer to certify that a good being exported from the United States into Canada or Mexico, or from Canada or Mexico into the United States, qualifies as an originating good for purposes of preferential treatment under the NAFTA
4. Purpose of Certificate of Origin
Trilateral form used to claim NAFTA preference
Certifies that a good exported qualifies as an originating good under NAFTA
5. When C/Os Not Required - U.S.
Waiver obtained from Port Director
Non-commercial importation of the good
Commercial importation less than $2,500
http://forms.cbp.gov/pdf/CBP_Form_434.pdf
6. Certificate of Origin Instructions
Fields 1,3, 4:Name and address of the exporter, producer,and importer
Field 2is used for blanket periods
Multiple shipments
Identical goods
One year period
Field 5:Description of the good sufficient to relate it to an invoice and to the HTSUS
Field 6:HTSUS classification 6 to 8 digits
Field 7:Preference Criterion (A, B, C, D, E, and F)
Field 8:Producer statement:
Yes =Producer
No (1,2, or 3) =Not Producer;
1 - first knowledge,
2 written statement from producer,
3 signed Certificate from producer
Yes
or
No(#)
Field 9:
If good identified in Field 5 is subject to RVC requirement the field would contain:
NC =net cost method
No=not net cost method
If RVC calculated over a period of time, the field would show beginning and ending dates
NC
or
No
Field 10:Identifies the country to which the preferential rate of Customs duty applies, for goods exported into the United States:
MX = Mexico
CA = Canada
These same codes are used as a prefix to the HTSUS recorded on the Customs entry to identify it as a NAFTA claim
Field 11:Signature of preparer and date:
The exporter, or the producer
US
or
MX
CA
13. Exporters Obligations
Exporters who sign a C/O must:
Provide a copy of the C/O and all related documentation to customs upon request
Correct a C/O once there is reason to believe that it contains erroneous information and notify, in writing, all parties who the C/O was given
Maintain the C/O and all related documentation for at least 5 years after the date C/O signed
NAFTA Articles 504 and 505
14. NAFTA Required Records
Importer - C/O and related import documents
Exporter/Producer- Recordsrelating to the purchase, cost, value, and payment for:
the good that is exported to the U.S.
all material and indirect materials used in production of the good
production of the good in the form in which the good is exported
181.21 and NAFTA Article 505
15. Online Resources
Harmonized Tariff #Search http://www.census.gov/foreign-trade/schedules/b/index.html
2.Entire HTS usitc.gov/tata/hts/bychapter/index.htm
3. http://rulings.customs.gov/
4. General notes 12 (t) replaced Annex 401
http://www.usitc.gov/publications/docs/tata/hts/bychapter/0910gn.pdf Rules of Origin
16. 17. 18. 19. 20. 21. 22. Preferential Treatment
A - wholly obtained or produced
CUT FLOWERS Wholly grown in Mexico
B - non-originating materials undergo tariff shift
C - produced entirely in the territory from originating materials
23. Preferential Treatment
D - produced entirely in the territory but one or more of the non-originating materials provided for as parts does not undergo a change in tariff classification - good was imported in an unassembled or a disassembled form - heading for the good provides for the good and its parts and is not further subdivided, provided a certain RVC is met.
24. Preferential Treatment
E - applies to certain automatic data processing goods and their parts. Ref: Annex 308.1 of NAFTA
Digital Processing Units
8471.913.9%
F - applies to agricultural goods
25. Criteria B
non-originating materials undergo tariff shift
B - SIMPLE TARIFF SHIFT Silk Fabric 5007 Made from imported silk yarn (5006)
Rule States: A change to heading 5007
from any other heading
26. RULES OF ORIGIN
Determine whether a good originates in the territory of a party
Determine whether the good is entitled to preferential treatment
27. Criteria B
TARIFF SHIFT Travel kit under HTS 9605.00 consisting of :
Plastic case 3923.10ChinaSewing thread5204.20 Italy
Needles 7319.90 IndonesiaToothpaste 3306.10France
Toothbrush 9603.21Taiwan
Rule States: Change to heading 9601 through 9605 from any other chapter.
28. Criteria B
HTS#9605000000Travel sets for personal toilet, sewing or shoe or clothes cleaning (other than manicure and pedicure sets of heading 8214). . . . .
http://www.census.gov/foreign-trade/schedules/b/2004/sb96.html
29. Criteria B
TARIFF SHIFT AND REGIONAL VALUE CONTENT (RVC) Plastic Boxes under HTS 3923.10Resins3901.20 Rule states: A change to subheadings 3923.10 through 3923.21 from any other heading, provided there is an RVC of not less than(A) 60% under TV or (B) 50% under net cost
30. Regional Value Content - RVC
Two MethodsTransaction Value Method 60%Net Cost Method 50%
31. RVC - Transaction Value Method
Transaction Value MethodRVC = TV - VNMx 100TV
TVtransaction value of the good adjusted to an F.O.B. basis
VNMvalue of non-originating materials used by producer
32. RVC Net Cost Method
Net Cost MethodRVC = NC - VNMx 100NC
NCnet cost of the goodVNMvalue of non-originating materials used by producer
33. Criteria C
The good is produced entirely in the NAFTA territory of one or more of the Parties exclusively from originating materials
Materials from Rule B
34. Criteria C
Wooden Desks under HTS 9403.30
Wood4407.10Grown in USMetal Legs9403.90Made in US from KR steel (7212.50) Metal Hardware 9403.90Made in US from KR steel (7212.50)9403.90 rule states: A change to subheading 9403.90 from any other heading
35. Criteria C
Silk Fabric
Silk Tie
36. Criteria D
The good is produced entirely in the territory of one or more of the Parties but one or more of the non-originating materials does not undergo a change in tariff classification.The good does nonetheless meet the regional value content requirement specified in Article 401(d).
37. Criteria D
Importedin an unassembled or disassembled form but was classified as an assembled good (kit, exclusive parts, etc..)
HTS classification describes both the good itself and its parts (not further subdivided)
38. Criteria D
Tricycle Kit (unassembled tricycle packaged in MX) under HTS 9501.0020All parts 9501.0040CN, MX, US
HTS 9501.0020 reads: Wheeled toys designed to be ridden by children;parts and accessories thereof.Rule states: A change to heading 9501 from any other chapter.
39. Criteria D
Tricycle KitHTS 9501.0020 (1) parts and good in same subheadingHTS 9501.00 (2) Does Not satisfy tariff shift BUT may fall under this provision if enough RVC
40. Any Penalties?
41. Penalty Amounts
Willful - $100,000 or 75% of the appraised value, whichever is less, for each release of merchandise
Negligent - $10,000 or 40% of the appraised value, whichever is less, for each release of merchandise.
http://www.cbp.gov/nafta/hwm000a.htm
42. Penalty Amounts
Willful Knowing, false statement, i.e. voluntary and intentional, failure to maintain, store or retrieve a demanded record
Negligent Failure to exercise reasonable care and competence in maintaining a storing, or retrieving a demanded record.
43. Exceptions to Penalties
A U.S. Importer who makes a corrected declaration:
Will not be subject to civil or criminal penalties, provided it was voluntarily made
It is voluntarily ifaccomplished:
Within 30 days following discovery that the NAFTA declaration was incorrect
Before start of criminal investigation
44. Exporter/Producer to Report Errors in C/O to Avoid Penalty
Exporter/Producer
U.S.-within 30 days after discovery, notify all persons whom the C/O was given.
Canada -immediately
Mexico- prior to commencement of a criminal investigation
Reference:Annex IV.1, Regulatory Standards for Implementation of NAFTA, 8/24/95
45. The End

Documents

Nafta Certificate of Origin