The specific NAFTA Certificate of Origin form that had been created by the customs authorities in the United States, Mexico and Canada can no longer be used for tariff preference claims. 

The United States-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement (NAFTA) on July 1, 2020, updates and modifies certain tariff preference claim procedures. In general terms, these updated procedures are set forth under Chapter 5 of the USMCA. 

Below is a general summary of some of the most relevant provisions of the USMCA’s key tariff preference claim procedures.

Tariff Preference Claims and Certification Requirements Under the USMCA

Pursuant to Chapter 5 of the USMCA, an importer may make a claim for preferential tariff treatment based on a certification of origin provided by the exporter, producer or importer of the good for which the preference claim is being made. Significantly, though, the specific NAFTA Certificate of Origin form that had been created by the customs authorities in the United States, Mexico and Canada can no longer be used for tariff preference claims. Instead, the USMCA provides more flexibility relating to the preparation and format for origin certifications.

Under the USMCA, origin certifications can be completed and submitted electronically with an electronic or digital signature and may cover a single importation or multiple importations of identical goods within a maximum 12-month period. All origin certifications must contain the following statement:

I certify that the goods described in this document qualify as originating and the information contained in this document is true and accurate. I assume responsibility for proving such representations and agree to maintain and present upon request or to make available during a verification visit, documentation necessary to support this certification.  

In addition, all origin certifications must contain the following nine data elements:

• Whether the certification is prepared by the importer, exporter or producer  
• Certifier identity (name, title, address, telephone number and email address of certifier)
• Exporter identity (name, title, address, telephone number and email address of exporter)
• Producter identity (name, title, address, telephone number and email address of producer)
• Importer identity (name, title, address, telephone number and email address of importer)
• Description and Harmonized System tariff classification of the goods to the six-digit level
• Specific criteria under which the goods meet USMCA origin requirements (A, B, C or D)
• Blanket period (certification is valid up to 12 months in the case of multiple shipments of identical goods) 
• Authorized signature and date

Origin certifications generally may be provided on an invoice or any other document. Importantly, the customs authorities in the United States, Mexico and Canada may not reject a claim for preferential tariff treatment based solely on the reason that the invoice was issued in a country that is not a party to the USMCA. However, an origin certification may not be provided on an invoice or any other commercial document that is issued in a country that is outside of North America. 

When an importer makes a tariff preference claim by submitting an origin certification, the customs authority in that country may require that the importer provide documents or other information to support the certification. Furthermore, if a claim for preferential tariff treatment is based on a certification of origin completed by an importer, the customs authority in that country parties may prohibit the importer from: (1) issuing a certification based on a certification of origin or written representation completed by the exporter or producer; and (2) making a subsequent claim for preferential tariff treatment for the same importation based on a certification of origin completed by the exporter or producer.

Basis For a Certification Origin

Pursuant to Chapter 5, an importer may complete a certification of origin on the basis of the importer having information, including documents, that demonstrates that the good is originating. Similarly, a producer may provide a certification of origin on the basis of the producer having information that evidences that the good is originating.    

Exporters also may provide certifications of origin. In instances where the exporter is not the producer of the good, the certification may be completed by the exporter on the basis of (1) having information, including documents, that demonstrates that the good is originating; or (2) reasonable reliance on the producer’s written representation that the good is originating.

Importantly, the customs authorities in the USMCA countries may not require an exporter or producer to complete or provide a certification of origin or a written representation to another person.

Exceptions to Certification of Origin

Under Chapter 5, certifications of origin are not required if the value of the importation does not exceed US $1,000 or the equivalent in Mexican or Canadian currency or any higher amount that the governments in the United States, Mexico or Canada may deem appropriate. In such cases, a party may require a written representation certifying that the good qualifies as an originating good.

Additionally, certifications of origin may not be required if it is an importation of a good for which the USMCA country has waived the requirement for a certification of origin.

Significantly, these two exceptions may only be utilized if the importation does not form part of a series of importations that may be considered to have been undertaken or arranged for the purpose of evading compliance with the importing party’s laws.  

Importer Obligations

As discussed above, when making a tariff preference claims, an importer must satisfy certain requirements. To begin with, the importer must make a statement forming part of the import documentation based on a valid certification of origin that the good qualifies as an originating good. The importer also must have a valid certification of origin in its possession at the time this statement is made. In addition, an importer is required to provide a copy of the certification of origin upon the request of the customs authority in the USMCA country of importation.

Moreover, as discussed above, if the importer bases the tariff preference claim on a certification of origin that the importer prepared, the importer must provide evidence that the good is originating upon the request of the customs authority in the USMCA country of importation. Such evidence can be based on the importer having information, including documents, that demonstrates that the good is originating.

If the claim for preferential tariff treatment is based on a certification of origin completed by a producer that is not the exporter of the good, the importer must show that the originating good did not undergo additional production or any other operation other than those necessary to preserve it in good condition or to transport it into the USMCA country where the good is imported.

Importantly, if an importer has reason to believe that the certification of origin is based on incorrect information that could affect the accuracy or validity of such certification, the importer must promptly correct the importation document and pay any duties owed. If the importer promptly takes such action, it will not be subject to penalties for making the incorrect statement that formed part of the import documentation.

An importer also may be required to demonstrate that a good was shipped in accordance with the requirements set out under the USMCA by providing additional documents, including among others, transportation documents and storage documents.

Exporter Obligations

As provided under Chapter 5, an exporter or producer that completes a certification of origin may be required to provide a copy of such certification to the customs authority in its country upon request. Importantly, if an exporter or producer has reason to believe that its certification of origin contains or is based on incorrect information, it must notify every person and every party to whom it provided the certification of any change that could affect its accuracy or validity. If such action is promptly taken, penalties may not be imposed on the exporter or producer providing the correction notification.

Errors and Discrepancies

Chapter 5 provides that the customs authorities in the USMCA countries may not reject certifications of origin due to minor errors or discrepancies as long as they do not create doubts concerning the correctness of the import documentation. Furthermore, if a customs authority determines that a certification of origin is illegible, defective or has not been completed pursuant to the requirements stated under Chapter 5, importers may be granted a period of at least five business days to provide the customs authority with a corrected certification of origin.

Record-Keeping Requirements

Pursuant to Chapter 5, an importer claiming preferential tariff treatment must maintain certain documentation relating to the claim, including, among others: (1) the documentation related to the importation (including the certification of origin that served as the basis for the claim; (2) all records necessary to demonstrate that the good is originating; and (3) information necessary to prove compliance with the provisions on importations set forth in Chapter 5, if applicable. Such materials must be maintained for a period of no less than five years from the date of importation of the good.

Similarly, Chapter 5 provides that an exporter or producer that completes a certification of origin, or a producer that provides written representation in a party’s territory, may be required to maintain all records necessary to demonstrate a good’s origin, including those associated with, among others: (1) the purchase, value, cost, shipping and payment for the good or material; (2) the purchase, cost, value, shipping and payment for all materials, including indirect materials, used in the production of the good or material; and (3) the production of the good in the form in which it is exported or the production of the material in the form in which it was sold, respectively.

Importantly, the record-keeping requirements set out under Chapter 5 for importers, exporters and producers apply even if the customs authority does not require a certification of origin or if a requirement for a certification of origin has been waived.

Origin Verification

Pursuant to Chapter 5, the customs authorities in the USMCA countries may conduct verification of claims for preferential tariff treatment for purposes of determining whether a good imported to their respective territories is an originating good.

Such origin verifications may be conducted through several procedures, which include, among others: (1) a written request seeking information from the importer, exporter or producer of the good; or (2) a verification visit to the premises of the exporter or producer in order to request information and observe the production process and related facilities.

A customs authority may choose to initiate a verification of the importer or the person who completed the certification of origin. When conducting a verification, the customs authority may accept information directly from the importer, exporter or producer. If an importer does not provide sufficient information to demonstrate that a good is originating, the customs authority may request information from the exporter or producer before it denies the claim for preferential tariff treatment.

A customs authority may deny a claim for preferential tariff treatment under certain scenarios. Some of these scenarios include, among others: (1) the customs authority determining that a good does not qualify for preferential treatment; or (2) the customs authority not receiving sufficient information to determine that the good qualifies as originating from a member territory. Additionally, if an exporter, producer or importer fails to maintain required records relating to a good or denies access to them, a customs authority may deny a claim for preferential tariff treatment.

Importantly, if verifications made by a customs authority indicate a pattern of conduct by an importer, exporter or a producer of false representations that a good imported into its territory qualifies as an originating good, that customs authority may withhold preferential tariff treatment with respect to identical goods imported, exported or produced by such person until that person complies with the USMCA’s requirements.

Determinations of Origin

Chapter 5 provides that an importing party may deny a claim for preferential tariff treatment under certain scenarios. In general terms, if an importer, exporter or producer fails to comply with the requirements of Chapter 5, an importing party may deny a claim for preferential tariff treatment.

Some of these scenarios include, among others: (1) the importing party determining that a good does not qualify for preferential treatment; or (2) the importing party not receiving sufficient information to determine that the good qualifies as originating from a member territory.

Additionally, if an exporter, producer, or importer fails to maintain required records or documentation of a good or denies access to them, an importing party may deny a claim for preferential tariff treatment.

Refunds and Claims for Preferential Tariff Treatment After Importation

Pursuant to Chapter 5, an importer may apply for preferential tariff treatment and a refund of any excess duties paid for a good if it did not make a claim for preferential treatment at the time of importation, provided that the good would have qualified for preferential tariff treatment when it was imported.

For these purposes, the customs authority may require the importer to: (1) make a claim for preferential tariff treatment; (2) provide a statement that the good was originating at the time of importation; (3) provide a copy of the certification of origin; (4) provide any other documentation in relation to the importation of the good that may be required by the customs authority.

The customs authority may require that the actions described above be taken no later than one year after the date of importation, or a longer period if specified in the applicable country’s laws.

For More Information

If you would like further information about this Alert or other matters pertaining to the USMCA, please contact Eduardo Ramos-Gómez, Rosa M. Ertze, Geoffrey M. Goodale, Brian S. Goldstein, Miguel de Leon Perez, any of the attorneys in our International Group or the attorney in the firm with whom you are in regular contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.