What is the process for determining if a product qualifies for the NAFTA preferential tariff and for completing the Certificate?

Completion of a NAFTA Certificate is the declaration that the party signing the document has researched the NAFTA agreement terms and has determined that the subject goods are "originating goods" as defined in the agreement. The preparation of the NAFTA Certificate imposes obligations and liabilities on the party signing the certificate. Signing authorities should be aware of the terms of the NAFTA agreement. Just because the product was manufactured in a NAFTA country (U.S., Mexico, or Canada) does not automatically qualify it for NAFTA preferential duty rate. The product must meet the specific NAFTA rule of origin and the Exporter must complete the NAFTA Certificate of Origin before the importer can claim the NAFTA tariff rate. PBB's Trade & Regulatory Services can assist you in this process.

Why do I have to "mark" my goods, i.e., made in USA or Canada, when they are already labeled?

Under CBSA (Canada Border Services Agency) regulations, certain goods entering Canada from other countries (NAFTA and non NAFTA) must clearly indicate the country in which the good/product was made. These marking requirements are not to be confused with the labeling requirements administered by Industry Canada or Agri-Food. There are technical rules that are applied systematically to determine the country in which the good was substantially transformed. PBB's Trade & Regulatory Services can assist you in proper marking of your goods.

If we are importing 100 of the same items, e.g., "sisal mats," must each mat have a label for the country of origin, or can we just mark the outside of the box?

Each mat must have a country of origin label affixed to it.

Isn't my product NAFTA eligible as it has over 50% Canadian, Mexican, or American content?

Not necessarily. NAFTA eligibility is determined according to the NAFTA Rules of Origin that are based on the tariff number of the finished product as imported into the United States. The Rules are very specific, usually requiring a tariff shift of the non-originating materials and/or regional value content. U.S. Customs has been verifying many NAFTA claims assessing monetary penalties for false NAFTA claims. PBB's Trade & Regulatory Services can assist you in determining NAFTA eligibility of your merchandise.

What are the benefits of obtaining an Advance Customs Ruling for tariff classification?

By obtaining an Advance Customs Ruling for tariff classification you are demonstrating reasonable care in classifying your products for importation into Canada.  This will eliminate any risk associated with a penalty for incorrect classification and will provide you with an accurate duty rate for costing your products. CBSA will also issue rulings for valuation and NAFTA eligibility.

What is the Canadian Automated Export Program (CAED)?

The Canadian Automated Export Program is an electronic software program initiated by CBSA and Statistics Canada allowing registered exporters and agents the ability to transmit electronically completed Export Declaration forms to CBSA instead of via the paper based reporting method.

As an importer, am I obligated to amend an error on a Customs accounting document? Is there a certain dollar cut-off figure?

Under Section 32.2 of the Customs Act, importers are required to make self-adjustments or corrections to accounting documents when they have reason to believe that information on the
accounting document relating to tariff classification, origin, or value for duty is in error, regardless of the amount underpaid. Further corrections should be submitted even if the change is revenue neutral.

What is CSA?

The acronym CSA stands for "Customs Self Assessment".

How long should copies of NAFTA Certificates of Origin be retained?

The importer is required to retain the Certificate and all other relevant documentation for 6 years from the time of transaction for the importer and 6 years from the date of signing for the Canadian exporter. In the USA, the retaining time is five years and in Mexico, 10 years.

What is AMPS?

The acronym AMPS stands for "Administrative Monetary Penalties System".

What does PVA mean?

The acronym PVA stands for periodic verification audit. This is an audit system in place with the Canada Border Services Agency.

What is C-TPAT?

Customs-Trade Partnership Against Terrorism is a joint U.S. government-business initiative to build cooperative relationships that strengthen overall supply chain and border security. C-TPAT recognizes that Customs can provide the highest level of security only through close cooperation with the ultimate owners of the supply chain, importers, carriers, brokers, warehouse operators and manufacturers. Through this initiative, Customs is asking businesses to ensure the integrity of their security practices and communicate their security guidelines to their business partners within the supply chain. This program is similar to the Partners in Protection program that Canada Customs and Revenue Agency has implemented.


What is FAST?

Free and Secure Trade is a joint Canada-U.S. initiative involving the Canada Customs and Revenue Agency, Citizenship and Immigration Canada , the United States Customs Service, and the United States Immigration and Naturalization Service. FAST supports moving pre-approved eligible goods across the border quickly and verifying trade compliance away from the border. The benefits of FAST include:
· Greater speed and certainty in the clearance of transborder shipments
· Reduced costs of compliance with customs requirements
· A strong and ongoing partnership with the Canadian and U.S. Customs Administrations


What is PIP?

Partners in Protection is a program that is designed to enlist the co-operation of private industry in efforts to enhance border security, combat organized crime and terrorism, increase awareness of customs compliance issues, and help detect and prevent contraband smuggling. This is accomplished through an agreement called a Memorandum of Understanding (MOU).

This program will benefit your company by:
· Shipments and travelers will be processed more quickly
· Improved security levels
· Your staff will become more familiar with customs requirements
· Customs will review your security procedures and suggest improvements, if necessary, to help in reducing the possibility of your company being used unknowingly for contraband smuggling purposes
· Enhanced reputation for your company by demonstrating a willingness to work with Customs in the fight against drugs and other contraband in Canada


Do we require a signed and sealed Form A certificate of origin and a through bill of lading in order to claim General Preferential Tariff Treatment?

No. An Exporter's Statement of Origin is acceptable. A fully completed, signed exporter’s statement may be accepted together with the through bill of lading.

Our company is ISO certified. Why should I engage the services of PBB Global Logistics to conduct a Customs Compliance Audit?

ISO Certification indicates that a company has procedures in place for auditing quality. A Customs Compliance Audit is much more comprehensive and examines issues such as systems linkage, valuation, H.S. Classification, plus much more. PBB Global Logistics team of auditors can ensure that your company has the procedures in place to ensure optimal regulatory compliance

If I sell goods that are on the export control list, am I responsible for export permits?

The responsibility for ensuring compliance with the export regulations would be determined by the Incoterm. This defines at which point your company, the seller, relinquishes title to the goods. If title is passed to the buyer within Canada (i.e., Incoterm XW ex-works), then the buyer is the exporter of record and responsible for obtaining the required export permits. However, there is an exception: if the buyer/exporter does not have an official presence in Canada, such as a foreign purchasing agent, then the Canadian seller can be held liable for any export regulation infractions. PBB's Trade & Regulatory Services can assist you in determining your export obligations.

Will imported steel sheet products be assessed antidumping duties under SIMA?

The Special Import Measures Act (SIMA) is an act that is separate from the Customs Act and the Customs Tariff Act. In order to monitor the dumping of imported goods, CCRA will review all subject commodities and assess antidumping duty where applicable. Importers should contact their suppliers to determine whether specific normal values or the advance over export prices will be applied to importations. Importers are reminded that it is their responsibility to calculate and declare their antidumping duty liability.


Do products imported from a parent/sister company have any affect on the valuation of the goods?

It may, should the relationship for any reason cause the goods to be valued lower than they would be sold to an unrelated company. Should this occur measures would have to be taken to determine the value of the goods in accordance to the Customs Act.


If product is imported from a vendor that provided a NAFTA certificate, and it is later discovered that the goods do not qualify, is a correction required?

Yes, an amendment to the customs entry should be filed, however you must obtain a letter from the supplier that describes their incorrect use of NAFTA. You will also have to pay the correct rate of duty on the imported product. From date of discovery you should file amending entry within 90 days to avoid any AMPS penalties.


Isn't it my broker's responsibility to assign the correct tariff classification and retrieve NAFTA Certificates?

No. Although a broker can be commissioned to retrieve and verify the validity of NAFTA certificates, the responsibility ultimately lies with the importer. The importer must ensure that that the certificates are correct and must also keep a copy of their certificates on file.


We mistakenly sent a shipment to a U.S. customer that did not match their order. Will we be forced to pay duty and GST when the customer returns the shipment to us?

No. As long as the goods are in the same condition as when they were exported, they can be imported back into Canada as "Canadian Goods Returned". In order for this to happen, the shipper must indicate on the paperwork that the goods are being returned because they were sent in error. This claim must be supported with copies of the original export documents (from Canada to the USA) so as to show "proof of export".


What happens if I claim NAFTA duty rates without a certificate on file?

If the CCRA were to ask for the NAFTA or performed an audit and the certificate was unavailable, an AMPS penalty could apply.

What is the concept of "reason to believe" and how is it related to Compliance?

The interpretation of "reason to believe" occurs when an importer has specific information regarding the origin, tariff classification, value for duty, or diversion from a declared end use, of the imported goods, that gives them "reason to believe" that a declaration is incorrect. In terms of compliance, an importer would be deemed non-compliant if they were provided with "reason to believe" that a declaration was incorrect and did not rectify the error.

Pursuant to section 32.2 of the Customs Act, it is required that the importer, within ninety days of reason to believe that the declaration of Origin and/or Value for Duty and/or Tariff Classification made under the Customs Act for any imported is incorrect, shall make a correction to the declaration and pay any duties and interest that may become owing as a result of the correction to the declaration.


What is transfer pricing and whom does it affect?

Transfer pricing refers to the prices at which services, tangible property, and intangible property are traded across international borders between related parties.


Who is responsible for keeping the NAFTA Certificate on file?

The CCRA recommends that the Mexican or U.S. exporter maintain the original Certificate of Origin and send copies to each Canadian importer who will claim preferential tariff treatment. The exporter must maintain a record of which Canadian importers have received a Certificate so that the importers can be notified of any changes to that Certificate.

It is a requirement of the Customs Act for the Importer of Record to keep NAFTA Certificates of Origin on file for 5 years plus the current year.


Who is responsible for preparing the paperwork for an order placed with a U.S. vendor?

It is the shipper's (i.e. your supplier) responsibility to prepare the customs paperwork. However, it should be noted that you could also complete a Canada Customs invoice using the information from the supplier's commercial invoice.


Who should be completing and signing my NAFTA Certificate?

Exporters and Producers are the only groups that should complete and sign NAFTA certificates of origin, as they are the most knowledgeable about what component(s) comprise the good(s). Certificates must be based on a certificate of origin or other written representation filled out by that producer. Importers cannot claim benefit of NAFTA until they are in possession of a valid NAFTA Certificate of Origin.


Why do I have to list all my part #'s on a NAFTA?

The CCRA requires each individual item, usually by product line to be verified for NAFTA Certification. This means that each product line would be looked at on an individual basis to see if it qualifies for NAFTA. Putting the part #'s on the NAFTA certificate tells Customs that each item has been looked at and qualified for NAFTA.