A certificate is not needed if the shipment does not qualify for preferential tariff treatment. Products are classified using national tariff schedules of the country into which they are imported.
The system is used by more than countries and economies as a basis for their Customs tariffs and for the collection of international trade statistics. The Harmonized System comprises about 5, 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 Chapter 92 is used for Musical Instruments; heading Individual countries may establish additional classifications beyond the six-digit level.
At the eight-digit level these are called tariff items. 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. All products classified under these subheadings or tariff numbers are eligible for duty-free treatment, and the NAFTA Certificate of origin is not required.
Therefore, they are affected daily by what they pay for the products and how safe they are. Trade is considered "free" or "open" when goods and services can move into markets without restrictions, and prices are determined by supply and demand. Nations sometimes erect barriers to this free movement of goods and services, such as quotas limiting the quantity of products imported, or non-tariff barriers, such as registration or labeling requirements, that create obstacles to selling foreign goods.
These barriers can significantly increase the cost of the product. In , jobs supported by the export of U. This criterion is limited to the following two circumstances:. D-1 the good was imported into the territory of a NAFTA country in an unassembled or disassembled form but was classified as an assembled good, pursuant to HS General Rule of Interpretation 2 a ; or. D-2 the good incorporated one or more non-originating materials, provided for as parts under the HS, which could not undergo a change in tariff classification because the heading provided for both the good and its parts, and was not further subdivided into subheadings, or the subheading provided for both the good and its parts and was not further subdivided.
E Certain automatic data processing goods and their parts, specified in Annex Reference: Annex F The good is an originating agricultural good under preference criterion A, B or C above and is not subject to a quantitative restriction in the importing NAFTA country because it is a "qualifying good" as defined in Annex A good listed in Appendix For each good described in field 5, state "YES" if you are the producer of the good. If you are not the producer of the good, state "NO" followed by 1 , 2 , or 3 , depending on whether this certificate was based upon:.
For each good described in Field 5, where the good is subject to a regional value content RVC requirement, indicate "NC" if the RVC is calculated according to the net cost method; otherwise, indicate "NO".
Reference: Articles Common Error: Many NAFTA certificates are found to be invalid due to the exporter stating the actual cost of the commodities in this field. As stated above, the net cost field is not asking for actual cost of the good but which method is being used to ascertain that the commodities being imported meet the NAFTA Rules of Origin.
Common Error: The NAFTA certificate is invalid and ineffective if the commodities listed are not produced in a participating country in the agreement. Many people do this so that whoever is clearing the goods knows where the items are made.
This field must be completed, signed and dated by the exporter. When the Certificate is completed by the producer for use by the exporter, it must be completed, signed and dated by the producer.
The date must be the date the Certificate was completed and signed. In many cases, the number of pages is left blank or it is signed by a person in an administrative position. The Canada Border Services Agency CBSA has been known to question the validity of the certificate when signed by someone with questionable knowledge of the information.
Valid NAFTA certificates used for the relief of customs duties must be kept as part of the importer's records that are required to be kept for seven 7 years following the customs clearance. Gloria Terhaar has over 17 years of Canadian customs brokerage experience. Gloria has extensive experience in all aspects of documentation and regulatory requirements as they relate to importing products into Canada.
In , Gloria also participated in the Canadian Produce Marketing Association and the Canadian Horticultural Council advocacy event "Fall Harvest" in Ottawa where she participated in advocacy efforts for the Canadian produce industry. How can we help you? Tell us how we can help.
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Dos And Don'ts Of Section Understanding Trade Deficits and Surpluses. Instructions On Filling Out The Certificate Of Origin Below are the instructions outlining how to correctly complete each field of a NAFTA certificate, as well as some of the most common errors customs brokers identify when validating certificates.
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