In very rare cases, a product that has not undergone the required tariff conversion may still be eligible for PREFERENTIAL treatment under NAFTA if a regional value content requirement is met. Below is a link to the portable document format (PDF) of this form. The content of the form is duplicated in HTML after the PDF link. Finally, see the NAFTA information available on the International Trade Training (IBT) website: The formula for calculating regional value using the transaction value method is as follows: Section 415 of NAFTA defines fungible goods as goods that are interchangeable for commercial purposes and have substantially identical characteristics. Where a manufacturer mixes credible goods with originating status and non-originating goods in such a way that physical identification of the originating products is impossible, he may determine the origin of those goods on the basis of one of the standard methods for accounting for materials laid down in the uniform rules (e.B. FIFO, LIFO). These provisions also apply to fungible materials used in the manufacture of a product. This article was merged from a series of six articles first published in 2002-2003. It has been updated to include information, links, and updated formatting. General Note 12 The origin criterion for HTS 9401.69 reads as follows: A manufactured product would be difficult to qualify under preference criterion A. All parts and raw materials used to manufacture the product should be extracted or manufactured entirely in one of the territories. The NAFTA preference criteria, marked with the letters “A” to “F”, indicate how your product qualifies for a NAFTA tariff rate.
A preference criterion is required in box 7 of the certificate of origin for each export product. The NAFTA preference criteria are as follows: In the above situations, no tariff changes are possible due to the classification of the goods. In this situation, goods may qualify for a NAFTA tariff preference if they meet the regional value content requirement of 60% of the transaction value or 50% of the net cost method. Preference criterion F applies to certain agricultural products exported from the United States to Mexico. For more information, you may contact the Bilateral and Enforcement Division of the Foreign Agricultural Service of the U.S. Department of Agriculture at 202-720-3798. Some specific rules of origin require a product to have a regional minimum value, which means that a certain percentage of the value of the goods must come from North America. There are two formulas for calculating the regional value content. The exporter or producer can choose between these two formulas: the transaction value method or the net cost method. In addition, I have written a number of articles dealing with the correct way to complete the NAFTA Certificate of Origin. And you can download a free NAFTA Certificate of Origin in PDF format from the Shipping Solutions website. Preference criteria, producer and net cost are entered on the EZ-Start product detail screen in a section entitled NAFTA/Other Free Trade Agreements.
You can also save this information for each of your products in the Products form of the Databases tab. Box 3: Indicate the full legal name and address of the manufacturer. If the certificate contains more than the goods of a manufacturer, attach a list of additional manufacturers, including the legal name and address, associated with the goods described in box 5. If you want this information to be confidential, it is acceptable to include the note “Available to Customs upon Request”. If the manufacturer and exporter are identical, fill in the field with “Equal”. If the producer is unknown, it is acceptable to specify “Unknown”. In this section, you will learn how to determine if your products qualify for the NAFTA preference if you sell them with accessories, spare parts or tools. I will also explain the differences between packaging and shipping materials and how they affect the determination of NAFTA. This criterion applies to certain automatic data processing goods and their parts specified in Annex 308.1. Field 7: For each good described in box 5, specify which criterion (A to E) is applicable. The rules of origin shall be laid down in the rules adopted and published by the Contracting Parties.
The finished leather comes from Mexico, as it meets the general criterion Note 12. Assuming that spectacled suitcases do not contain non-originating materials, they are derived from the fact that they are made entirely from an originating material (because it meets the criterion of General Note 12). Goods wholly mined or manufactured in Canada, Mexico or the United States and that do not contain foreign materials or parts originating outside the NAFTA territory are considered preference criterion A under NAFTA. Here are some examples: The NAFTA rules of origin contain the steps necessary to determine whether your goods qualify for the NAFTA preference. Since there is no way to remember all the terms of the agreement, you need to know how to apply the rules to determine if your goods are considered originating and set up a system to verify your company`s products. Although these costs are excluded from the calculation of the net cost, they are part of the total cost of the material. Therefore, costs such as royalties are excluded in the calculation of net costs in order to determine whether the material meets a regional value content requirement (and can therefore be classified as an intermediate material), but are included in the total value of the material once its origin has been determined. The total value of an intermediate material can be counted as the initial cost. Well, that`s the trap, isn`t it? The rest of the shape is simple, but the flesh of it is in these three columns. These columns determine whether your goods deserve preferential tariff treatment under the North American Free Trade Agreement between the United States, Canada and Mexico. Where a rule of origin is based on a change in tariff classification, each of the non-originating materials used in the manufacture of the goods must undergo the applicable modification, since production takes place entirely within the territory of NAFTA.
This means that non-originating materials must be classified under one customs provision before processing and another after the end of processing. The specific rule of origin precisely defines the change in tariff classification that must occur for the goods to be considered originating. The six preferential criteria A to F provide customs authorities and the importer with information on how the goods qualify for preferential treatment under NAFTA. For a good to fall under this criterion, it must not contain non-North American parts or materials located anywhere in the production process. It is usually reserved for commodities, such as. B those harvested, extracted or fished in the NAFTA region, although it includes a manufactured product without non-NAFTA inputs. The rules of origin set out in Chapter 4 of NAFTA are used to determine whether the goods originate in a NAFTA area (United States, Canada or Mexico). NAFTA rules of origin take into account where goods are manufactured and the materials from which they are made.
Only originating products within the meaning of NAFTA are entitled to duty-free or reduced customs treatment. (These rules should not be confused with the country of origin used for labelling, quota, anti-dumping or countervailing cases.) So if you`re exporting soybeans that you grew in a Nebraska field, you put an A in column 7. Obviously, other elements are more complicated and it can be difficult to determine which preference criteria are correct. A good is considered to be originating if the good consists entirely of components and materials which, in themselves, are considered to be products originating in a NAFTA country […].