Instructions for Form 443: NAFTA Certificate of Origin

Source: Trade Information Center, U.S. Department of Commerce

THE CERTIFICATE OF ORIGIN AND HOW TO QUALIFY PRODUCTS FOR TARIFF PREFERENCE

This document is meant to be a guide on the Rules of Origin provisions of the North American Free Trade Agreement. Exporters should keep in mind that only the NAFTA text itself and the customs regulations of each country that may be issued to implement NAFTA are definitive. For complex issues or where interpretation is required, exporters should seek legal assistance or an advanced ruling from the Customs Administration in the country to which they are exporting.

Overview

Under the North American Free Trade Agreement, (NAFTA), U.S., Mexican and Canadian tariffs are phased out on "originating" goods. (Originating goods are those that meet the appropriate NAFTA rule-of-origin, meaning that they have sufficient North American content to qualify for NAFTA tariff preference.) The exporter is responsible for determining whether his/her products qualify, but must provide a NAFTA Certificate of Origin to the importer so that the importer can claim NAFTA tariff preference.

Making the Origin Determination

If the importer wants to claim the NAFTA preferential tariff rate, the exporter must determine whether or not the product meets the NAFTA rule of origin. How to Make the Rule of Origin Determination contains information that will help the exporter make this determination.

Qualifying Products for Tariff Preference

Once an exporter determines that the exported good will meet the NAFTA rules of origin, he/she must fill out a Certificate of Origin. The exporter must then send the certificate to the importer. While the Certificate does not have to accompany the shipment, the importer must have a copy of the Certificate in hand before claiming the NAFTA tariff preference.

If the Certificate is not available, the higher most-favored-nation (MFN) tariff will be applied. The Certificate must be completed accurately and legibly.

If the product does not qualify for NAFTA tariff preference, the Certificate must not be completed, because the product is subject to the MFN tariff rate. (The completed NAFTA certificate of origin certifies that the product meets the NAFTA rules of origin.)

Filling Out the Certificate of Origin

Can I Use the U.S.-Canada Free Trade Agreement (CFTA) Exporter's Certificate of Origin Form for shipments to Canada?

As of January 1, 1994, the NAFTA Certificate of Origin should be used for exports to Canada. However, Canada Customs will accept the old CFTA certificate for shipments entering Canada before May 2, 1994. Blanket certificates are good until May 1, 1994. Exporters, however, must certify that the products qualify for tariff preference under the NAFTA rules of origin, rather than the CFTA rules of origin.

Who Should Use the Form?

All exporters to Mexico and Canada of goods for which the importers will claim tariff preference should use the certificate of origin form. Importers can not claim NAFTA tariff preference until they are in possession of a NAFTA Certificate of Origin from the exporter. Importers can only claim NAFTA tariff preference if the imported good meets the NAFTA rules of origin.

What Language Must the Form Be In?

The Certificate shall be completed in the language of the country of export or the language of the importing country, at the exporter's discretion. Importers shall submit a translation of the Certificate to their own customs administration when requested.

What Does the Form Cover?

A Certificate of Origin may cover a single importation of goods or multiple importations of identical goods. Certificates that cover multiple shipments are called blanket certificates. Blanket Certificates normally may apply to goods imported within any twelve-month period.

The NAFTA defines identical goods as "goods that are the same in all respects, including physical characteristics, quality and reputation, irrespective of minor differences in appearance that are nor relevant to a determination of origin of those goods under the NAFTA rules of origin."

Who Must Complete the Certificate?

The Certificate of Origin must be completed and signed by the exporter of the goods. Where the exporter is not the producer, the exporter may complete the Certificate on the basis of: knowledge of where the good originates; reasonable reliance on the producer's written representation that the good originates; or a completed and signed Certificate of Origin for the good voluntarily provided to the exporter by the producer.

Are there Circumstances in which the NAFTA Certificate of Origin is not Required?

A NAFTA Certificate of Origin is not required for a commercial importation of a good whose value does not exceed US$1000 or its equivalent amount in Mexico's or Canada's currency. However, the invoice accompanying the commercial importation must include a statement certifying that the good qualifies as an originating good. The statement should be attached to, or handwritten, stamped or typed on the commercial invoice.

A NAFTA Certificate of Origin shall not be required for non-commercial importation of a good whose value does not exceed US$1000 or its equivalent amount in Mexico's or Canada's currency.

These above two exceptions are valid as long as the importation does not form part of a series of importations that may be reasonably considered to have been undertaken or arranged for the purpose of avoiding the certification requirement.

In addition, the exporter should not provide a NAFTA Certificate of Origin if the importer is not eligible to claim NAFTA tariff preference.

What Should an Exporter do if his/her Certificate of Origin Form is not ready at the Time of Export?

Importers can make the claim for NAFTA tariff preference up to one year after the importation of a good, and apply for a refund of customs duties paid as a result of the good not being accorded preferential tariff treatment.

How Long is the Certificate Valid?

The Certificate of Origin will be accepted by Customs Administration for a period of four years after the date on which the certificate was signed by the exporter.

What are the Exporter's Obligations in Regard to the Certificate?

Exporters or producers that prepare Certificates of Origin shall provide copies to their own customs administration upon request.

Exporters or producers that provide a Certificate of Origin must maintain records pertaining to the exportation for five years or such longer periods as may be specified by their country. The United States require that records be kept for five years.

Exporters or producers that complete a Certificate of Origin shall notify all parties to whom the Certificate was given of any change that could affect its accuracy or validity.

Does a Producer who is not an Exporter have an Obligation to Fill out a Certificate of Origin?

The NAFTA does not obligate a producer who is not an exporter to provide the ultimate exporter of a product with a NAFTA certificate of origin. Many exporters, however, may request such documentation from their producers as documentation that a good they sell to Mexico or Canada meet the rule of origin, or that a input used in a good produced by the exporter meets a NAFTA rule of origin. If the non-exporting producer does complete the NAFTA certificate of origin, that producer is subject to the same obligations regarding record keeping, etc., as the exporter.

Instructions for Completing the Exporter's Certificate of Origin

Exporters should review the certificate of origin instructions issued with the Certificate of Origin. The following further explains some of the instructions on the NAFTA Certificate of Origin form:

Field 3

This field requires information regarding the producer of the goods. It allows exporters to state "Available to Customs Upon Request," if they do not want to disclose the producer's name to the importer, for example. It also allows exporters to state "Unknown." It is important to note that although the producer may be unknown, the exporter must still be able to document the North American origin of the good. An exporter, for example, may have goods from a number of producers in inventory. If, once those goods are mixed in inventory, the products become indistinguishable from one another, the exporter will not know who the producer is for the particular good being exported, and thus would state "unknown" on the certificate of origin. The exporter, however, must still be able to demonstrate that the exported good originate.

(NAFTA article 406 covers the treatment of fungible materials, i.e., goods that are interchangeable for commercial purposes and whose properties are essentially identical. If an exporter has fungible materials that are originating and non-originating, or has manufactured a product containing originating and non-originating fungible products, the exporter should refer to NAFTA Treatment of Fungible Goods and Materials (Article 407), Spare Parts and Tools (Article 407), and Indirect Materials (Article 408).)

Field 7

Preference Criteria A-F are the ways in which goods may qualify for NAFTA tariff preference. These criteria are explained in detail on the following document How to Make the Rule of Origin Determination.

NOTE: Exporters should review the NAFTA definition of an "agricultural" good, to determine if they need to use criteria "F." Processed foods, often not considered an agricultural product, fall within the NAFTA definition of agriculture, as does raw natural fibers (silk, cotton, etc.) and furskins. The NAFTA definition of agriculture can be found in the document above, "How to Make the Rule of Origin Determination".

Field 9

This field can not be filled out until the producer or exporter has determined the "preference criteria" for their products as required in field 7.

If the producer or exporter has met the requirements of one of the "preference criteria" in field seven and has not had to calculate "regional value content" in order to do so, then they would indicate "NO" in field 9.

If the producer or exporter has used the "net cost" methodology of calculating regional value content to determine that their good qualified for NAFTA preference under one of the preference criteria in field 7, then they would indicate "NC" in this field. If the exporter or producer has calculated regional value content over a period of time, using either the net cost or transaction value method, they must indicate the beginning and end dates of that period.

Field 10

If an exporter or supplier has qualified his/her products for NAFTA tariff preference based on production in just one of the three NAFTA countries (the U.S., Mexico and Canada), then the country of origin in field 10 would be the country in which the production has taken place.

However, if production has taken place in one or more NAFTA party, (for example, a good is assembled in United States, with inputs from both the United States and Canada), then exporter/suppliers will need to refer to the "marking rules" to determine country of origin.

The "marking rules" should not be confused with the NAFTA rules of origin. NAFTA rules of origin are used to determine whether or not a product has sufficient North American content to qualify for NAFTA tariff preference. A second set of rules, the "marking rules," also known as the "non-preferential" rules of origin, are used to determine country of origin. Marking rules are based entirely on tariff-shifts -- there are no value content requirements.

For U.S. goods being exported to Mexico, the country of origin will determine if Mexico will apply the preferential tariff rate for goods from the U.S. or goods from Canada. In some, but not all cases, the tariff NAFTA tariff phaseouts differ depending on whether a product is from the United States or Canada. For U.S. exports to Mexico, a U.S. producer can state "US" if the good qualifies for NAFTA tariff preference with no Canadian or Mexican parts, and no production carried out in Mexico or Canada. However, if there are Mexican and/or Canadian parts, or part of the production process was carried out in Mexico and/or Canada, exporters must use the "marking rules" to determine country of origin.

(1) The MFN rate applies to goods produced in most countries, such as Japan or France. The MFN rate applies to goods which do not qualify for the NAFTA preferential rate.

Information Source: Trade Information Center