What is NAFTA?
The North American Free Trade Agreement (NAFTA) is a
comprehensive trade agreement between Canada, the United
States and Mexico. It provides importers with the opportunity
to substantially reduce or eliminate duties ... if their
products can be proven to meet very specific NAFTA eligibility
requirements.
What
you should know about NAFTA...
-
Products exported from a NAFTA-member country may
be eligible for preferential tariff treatment if the
goods can be proven to originate in a member country
(based on the rules of origin in the agreement). Products
made from materials that do not originate in a NAFTA-member
country may also be eligible for preferential tariff
treatment if sufficient North American processing
can be established.
- To
determine which rule of origin applies to a particular
product, the product is analyzed in depth - often
a very complex undertaking. A meticulous audit trail
is necessary to ensure that your product qualifies
under NAFTA, without risking serious penalties for
inadequate proof of origin.
- If
goods are eligible for preferential tariff, a Certificate
of Origin - declaring the goods meet the NAFTA eligibility
requirements - must be provided by the exporter or
producer of the goods. This certificate must be in
the importer’s possession, and available to
Customs, at the time of entry. If Customs finds a
Certificate of Origin to be invalid, duties can be
reassessed retroactively with interest.
- Customs
administrations are stepping up regulatory audits
of companies claiming NAFTA preferential treatment.
It is critically important that importers, exporters,
and producers maintain proper files and retain all
origin-related records. Those who do not comply face
substantial retroactive duties and serious penalties.
How
can Livingston help?
- Livingston
offers Insight Docs Canada and Insight Docs USA, two
software solutions that assist Canadian and American
companies to prepare NAFTA Certificates of Origin,
along with other customs-related documents.
- Livingston
provides educational workshops on topics such as NAFTA,
customs compliance, and other trade-related issues.
Our NAFTA seminars provide clients with information
on the Agreement, how to use it to your advantage,
and how to manage NAFTA compliance issues.
- The
Livingston International Consulting Group can ensure
you take full advantage of the benefits provided by
NAFTA without doing more than necessary to fully meet
the requirements. They can help determine the eligibility
of your products for free-trade status, develop the
necessary audit trail, make recommendations on internal
procedures and systems to maintain your proof of origin
on an ongoing basis, recommend changes to procurement
and production processes to enable you to benefit
from a reduced rate of duty, and act on your behalf
when Customs comes calling.
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