The NAFTA Certificate of Origin
Exports to and from NAFTA countries are eligible for duty- and tariff- free treatment, if all inputs used in their manufacture are imported from NAFTA countries. These products, assuming they fully comply with NAFTA’s Rules of Origin – and therefore are said to “originate” – must have a completed a NAFTA Certificate of Origin in order to take advantage of this privilege. This document must be completed by the exporter and be in the possession of the importer at the time the declaration is made. If, for some reason, the exporter is not the producer, the non-exporting producer may voluntarily complete the certificate for use by the exporter, though it is not a requirement. An exporter need not complete this document if the exported goods do not qualify as originating.
Exports within the NAFTA region are classified using the applicable tariff schedules of the country into which they are imported. NAFTA countries operate under the Harmonized Commodity Description and Coding System as members of the WTO. Under this system, goods are classified under a six-digit code, supported by well-defined rules to achieve uniform classification. The first two digits refer to the chapter, the first four comprise the heading, and the subheading consists of the first six. However, some rules of origin operate at the eight-digit level. If applicable, the eight-digit code must be appropriate for the country of importation.
All NAFTA countries use a uniform NAFTA Certificate of Origin printed in English, French, or Spanish. The exporter may choose to complete the form in the language of the country of export, or of the importing country. In addition to completing this form in the appropriate language, the invoice accompanying the commercial importation must include a statement, handwritten, typed, or stamped on or attached to the commercial invoice, certifying that these goods qualify as originating.
The US requires the exporter and importer to both keep the NAFTA Certificate of Origin, or a copy for five years from the date of signature. The facts outlined in the Certificate must be supported by adequate records concerning the production of the products as well as their materials. Mexico requires exporters must maintain a copy for 10 years. For Canada, it’s six years – from the time of the transaction for the importer and from the date of signing for the exporter. Careful consideration for properly filling out this document may save an exporter on duties and tariffs – but it can also be quite costly if information is not properly supplied. Exporters must take care to adequately understand this form before using it.
The Servicio de Administración Tributaria (SAT) has racheted up international trade inspections in Mexico