Much has been written about qualifying goods under the North American Free Trade Agreement (NAFTA) rules of origin. Because manufacturers are sourcing materials and components from around the world, it is often confusing to determine eligibility for NAFTA qualification.
In order to better understand qualification for a NAFTA Certificate of Origin (NAFTA COO), we sat down with the NAFTA team at Star USA, who creates thousands of NAFTAs each year, and asked them to provide additional insight into NAFTA COOs.
Q. What exactly is a NAFTA COO?
Basically, it is a trilaterally agreed upon form used by Canada, Mexico, and the United States to certify that goods qualify for the preferential tariff treatment accorded by NAFTA (North American Free Trade Agreement)
Q. Is a NAFTA COO required for shipments to Canada and Mexico?
It is never REQUIRED for shipments or crossing the border. Sometimes an importer or customer may request it, and if a claim is made for preferential treatment, there must be a valid certificate to back up the claim.
Q. What are the benefits of a NAFTA COO?
The certificate of origin helps qualify an item for duty free status under NAFTA.
Q. Who is responsible for completing the Certificate of Origin?
The exporter. Suppliers for goods to be exported may provide a supplier’s declaration, but the official NAFTA certificate is to be completed by the ultimate exporter of the goods.
Q. What is the shipper / exporter certifying by completing a NAFTA COO?
That the covered goods meet the rules of origin, and therefore, qualify for preferential rates.
Q. What is so difficult about NAFTA rules of origin?
For starters, every classification has its own rules. Incorrect information on a NAFTA regarding classification or otherwise can result in penalties from U.S. Customs and Border Protection. The section of the NAFTA in the HTSUS (General Note 12) is over 150 pages of specific rules.
Q. What is the main cause of penalties in a NAFTA document?
When the classification, qualification, or country of origin of a good was improperly determined.
Q. Who can sign the NAFTA COO?
Customs will question certification by any title they think may not have the authority or knowledge to represent the exporter. Anyone that knows the requirements, and that they are met, can sign the document; however there is great personal liability in signing a NAFTA, therefore, the person signing the NAFTA should be carefully selected.
Q. For how long should copies of the Certificate of Origin be retained?
For the US, the exporter is required to retain the original or a copy for five years from the date it is made. The importer is required to keep the certificate for five years after importation. These time frames differ for Mexico and Canada.
Exporters are being faced with a mountain of challenges in order to comply with NAFTA requirements and may require additional resources or knowledge. For further questions on NAFTA or anything else related to International Trade, our NAFTA Team can be reached by calling (800) 230-5554.