Free Trade Agreement Series: Part 1- Exporter Requirements Under NAFTA
When you are preparing to export goods to Mexico or Canada (“NAFTA Countries”), you are likely going to seek preferential treatment of your goods under NAFTA. However, before you ship the goods to your buyer, make sure you are familiar with the regulations governing duty free treatment. Otherwise, you may end up paying duty when you least expect it. Carefully following NAFTA regulations and ensuring the goods you are exporting “originate” in the U.S., Canada, or Mexico will keep you from paying unexpectedly.
In the U.S., the rules governing NAFTA are set forth in 19 C.F.R. 181* and 19 U.S.C. Chapter 21.**
Export Requirements
- Certificate of Origin = As a U.S. exporter, it is your responsibility to prepare the Certificate of Origin (“Certificate”) for your product (the same is true for foreign exporters to the U.S.).
- The Certificate may be completed on CBP Form 434 or a document approved by any of the NAFTA countries. http://forms.cbp.gov/pdf/CBP_Form_434.pdf
- As an exporter, you need not be the actual producer of the goods, but if you aren’t, make sure you know whether the goods qualify as originating from a NAFTA country. You can ascertain this information directly from the producer, and your reasonable reliance on the word or signed Certificate of Origin from the producer may form your legal basis for completing CBP Form 434.
- Exporters need not submit the form to CBP upon shipping the goods because the form will be used by the Importer in the country of destination to prove the goods qualify for NAFTA duty free treatment. However, if CBP requests a copy of the Certificate, the exporter (or his producer) must provide it.
- If the exporter (or producer) finds an error in the Certificate, he must be sure to remedy the mistake within 30 days of discovering the error by written notification to all parties sent a copy of the Certificate if the change affects its accuracy or validity.
- Additionally, exporters (or producers who complete a Certificate) are required to maintain a copy of the Certificate for five years after the date it is signed as well as any documentation associated with the goods covered under the Certificate.
- Should the exporter fail to follow these guidelines, CBP may impose penalties pursuant to 19 U.S.C. 1508(e) or other “such measures as the circumstances may warrant.” 19 C.F.R. §181.13
**http://www.law.cornell.edu/uscode/text/19/chapter-21
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