What is the NAFTA Certificate of Origin?
The NAFTA Certificate of Origin is used by the United States, Canada, and Mexico to determine if imported goods are eligible to receive reduced or eliminated duty as specified by the NAFTA. For purposes of obtaining preferential tariff treatment, this document must be completed legibly and in full by the exporter and be in the possession of the importer at the time the declaration is made. This document may also be completed voluntarily by the producer for use by the exporter.
Do I need to complete the NAFTA Certificate of Origin in order to export my product to one of the other NAFTA countries?
The NAFTA Certificate of Origin is not required for shipments to another NAFTA country unless the product qualifies for preferential tariff treatment under the NAFTA rules of origin. A certificate is not needed if the shipment does not qualify for preferential tariff treatment.
How do I determine where my good is classified?
Products are classified using national tariff schedules of the country into which they are imported. All NAFTA countries are members of the World Customs Organization (WCO) and utilize the Harmonized Commodity Description and Coding System. The system is used by more than 200 countries and economies as a basis for their Customs tariffs and for the collection of international trade statistics.
The Harmonized System comprises about 5,000 commodity groups. Goods are classified under a six digit code, arranged in a legal and logical structure and is supported by well-defined rules to achieve uniform classification.
The first two digits are the chapter, the first four comprise the heading, and the first six digits comprise the subheading. For example, a grand piano is classified in subheading 9201.20 of the Harmonized System. Chapter 92 is used for Musical Instruments; heading 92.01 for pianos, and subheading 9201.20 is for grand pianos. Individual countries may establish additional classifications beyond the six-digit level. At the eight-digit level these are called tariff items.
How can I tell if my product qualifies for duty free treatment?
Once the appropriate classification has been determined, the tariff schedules maintained by each of the NAFTA countries will indicate the related rates of duty.
The U.S. tariff schedules has columns labeled “General” and “Special”, in the Canadian Tariff the equivalent columns are entitled “MFN Tariff” and “Applicable Preferential Tariffs”. If the rate listed in the “General/MFN” column is “free,” the duty rate is zero. The Mexican tariff information website has a section labeled “Tariff applied to rest of the world countries.” If the rate listed here is “Ex”, the duty rate is zero. All products classified under these subheadings or tariff numbers are eligible for duty-free treatment, and the NAFTA Certificate of origin is not required.
If the rate in the “general” column is not zero, the exporter should next check the rate in the “Special/Preferential” column. The U.S. tariff schedule uses the codes “CA” and “MX” for Canada and Mexico, respectively. The Canadian tariff schedule uses the codes “US” and “MX” for the United States and Mexico, respectively. In the case of Mexico, there is a section labeled “Tariff applied to trade partners” that uses the codes “EE.UU.” and “Canada” for the preferential rate applicable to these countries. For most products, the rate applied to goods that qualify for NAFTA preferences is zero.
I can see that my product is subject to a tariff in another NAFTA country, but is eligible for duty-free treatment under the NAFTA. How do I claim the duty-free treatment?
In order to receive the preferential rate established in the NAFTA, the product must meet the applicable rule of origin. These rules, which are established in Chapter Four of the NAFTA, specify the production that must occur in order for a product to be eligible for NAFTA treatment. For example, a product imported into one NAFTA country from outside North America, then shipped onward to another NAFTA country may not qualify for duty-free treatment.
The NAFTA rules of origin have been modified several times since the agreement entered into force. For the most up-to-date information on tariffs and rules of origin, please see the links provided at the end of this document.
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.
How do I complete the Certificate 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.
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. Where the exporter is not the producer, the exporter may complete the Certificate on the basis of: knowledge that the good originates; reasonable reliance on the producer’s written representation that the good originates; or, a completed and signed Certificate of Origin for the good 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 and other obligations 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.
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. Adequate records relating to the goods, and their materials and production must support the facts asserted in the Certificate. 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.