Attention U.S. importers: is your supplier providing you with inaccurate NAFTA certificates? Would you be able to tell if they were? Not being careful when it comes to double-checking your certificates of origin can potentially force you to dish out money for penalties. By understanding NAFTA’s requirements and asking your supplier the right questions, you can prevent unnecessary spending.
One common error for NAFTA certificates of origin is wrong preference criterion (field #7). NAFTA has six different preference criteria, identified by the letters A-F, which define how goods qualify for preferential tariff treatment. For example, preference criterion B is only applicable when goods have been made entirely in a NAFTA country and the rules of origin have been satisfied.
Asking how your supplier qualified the goods for NAFTA is an imperative, precautionary step. You need to make sure your supplier has the necessary backup documentation to support the qualification. What counts as backup documentation?
- supplier’s NAFTA certificate for purchased parts that go into the product listed on the importer’s NAFTA certificate
- a costed bill of materials from when NAFTA was declared
- written documentation of the supplier’s method for determining how the goods qualified for NAFTA
You should not be relying on the supplier’s certificate as the sole proof that your product qualifies. When reviewing certificates of origin, these cautious steps are ones that can save you from repaying back duties, interest, and fines in the event of a Customs audit.
By Lauren Felasco