ORIGIN ASSESSMENT

Under the North American Free Trade Agreement, preferential tariff treatment may be given to imported goods that are considered originating from the US, Canada, or Mexico. However, assessing origin under NAFTA is a time consuming and complicated process, and must be supported with proper documentation. Failure to retain records for an adequate period, or making false declarations of origin, even if unintentional, can lead to severe civil or even criminal penalties.

CERTIFICATE OF ORIGIN

The NAFTA signatory countries have established a uniform Certificate of Origin (COO) used to identify goods entering their territories that are entitled to preferential tariff treatment.

For importers, a valid COO must be obtained within one year from the time of importation in order to claim preferential tariff treatment.

Exporters or producers preparing COO must be able to provide a copy to customs officials upon request – up to five years (or more) after a good has been exported.

COST-BENEFITS

The generation of proper COO using NAFTA Rules of Origin (ROO), although intended to distinguish between NAFTA originating goods and non-originating goods, can result in significant unexpected costs that alter the expected net benefits from NAFTA. It is therefore critical that the process be automated so that the cost savings can be realized or passed on to customers.