Archive for the ‘Forms’ Category


 

NAFTA Certificate of Origin: Top 5 Mistakes and How to Avoid Them

NAFTA Certificate of OriginPacking slips, commercial invoices and customs invoices are all documents that can be easily completed. What I mean is that you are simply taking shipping or invoicing data – shipper, consignee, carrier name, description of goods, etc. – and plugging it into the respective area on one of these documents.

But how about the North American Free Trade Agreement (NAFTA) Certificate of Origin? Can you use the same document completion philosophy?

In a quick glance at a NAFTA Certificate of Origin, one might assume that the answer is yes. Exporter — yes. Producer — yes. Importer, description of goods, blanket period — yes, yes, yes. Sounds like we’re on a roll! We read the NAFTA Certificate of Origin completion instructions, understand what information is required and we finish this form off to satisfy the foreign purchaser’s request. Right?

Wrong!

The main difference between an NAFTA Certificate of Origin and the aforementioned documents is that all the products you list on this document must qualify under the North America Free Trade Agreement. That’s right – do not simply complete the document. There are rules that must be observed.

As we already noted, some fields on the NAFTA Certificate of Origin are fairly basic and you can easily fill them in. The focus of this article is to provide clarification on the less understood areas to raise awareness of their complexity.

Five Common Errors on a NAFTA Certificate of Origin:

#1. Field 6 — Harmonized System (H.S.) Tariff Classification Number

As emphasized in a previous article, it is very important that the H.S. tariff classification is correctly assigned to each product, as the first six digits will determine which of the NAFTA “Specific Rules of Origin” will apply (Go to page 141  to see the list).  If you are unsure regarding the tariff classification a customs broker can help.

#2. Field 7 — Preference Criterion

The completion of this field is going to depend on where a product was sourced or manufactured, the extent of the manufacturing and transformation process, and/or the source and place of manufacturing for any raw materials. Note that the preference criterion chosen for one product might not be the same as for another, and each situation will need to be evaluated on its own merit.

#3. Field 8 — Producer

Hey, you get a lucky break! This is one of the easier ones. YES, NO(1), NO(2), and NO(3) are your options. The ‘NO’ options of (1), (2), and (3) refer to what you are basing your NAFTA claim on — whether you ‘just know it is NAFTA eligible’ (1), or you have documentation from the producer that it is NAFTA eligible (other than an NAFTA Certificate of Origin ) (2), or you have a voluntarily provided and accurately completed NAFTA Certificate of Origin from the manufacturer (3). We respectfully advise that you go for (3), as this assures that the actual producer has done his due diligence in confirming NAFTA eligibility of the product he is providing to you.

#4. Field 9 — Net Cost

In order to properly complete this field, you will need to understand the NAFTA “Specific Rules of Origin” applying to a product to determine if Regional Value Content is a factor and whether the Net Cost method will be used. In this field, you will either show ‘NC’ if the Net Cost method was used, or ‘NO’ (all other situations). By the way — do not place a dollar amount in this field, as this merely indicates to a customs agency that you did not read the instructions!

#5. Field 10 — Country of Origin

This one sounds simple, doesn’t it? You would be amazed, however, at the number of NAFTA Certificate of Origins  we receive that indicate countries other than the U.S., Canada or Mexico (remember, it’s the North American Free Trade Agreement). Another common mistake is for someone to automatically assume that just because certain products are made in Canada, the U.S., or Mexico they qualify for NAFTA. In fact, if they do not qualify, they must not be listed on this document.

Sound complicated? In some cases, it is straight forward, but in so many others (for example, products with many foreign components), NAFTA qualification can be an onerous task. The point we are making is for companies and individuals to realize that much care needs to be exercised (before signing, please read the disclaimer at the bottom of the form so you understand your responsibilities).

Repercussions of incorrectly filled out NAFTA Certificate of Origins:

Your worst nightmare would be a situation where a company has been importing a product for many years assuming that it qualifies under NAFTA (i.e. duty free), then discovering through a customs audit that the goods do not qualify. Regular Canadian or U.S. duty rates range from duty free to over 200%; fines and penalties could also be assessed. Need we say more?

It should be noted that similar rules apply for any Certificate of Origin relating to a free trade agreement. For instance, if you grab a copy of a Canada-Chile FTA Certificate of Origin, you will notice many similarities.

Still baffled over the completion of this document, or whether or not your goods qualify under NAFTA? If you require advice or have questions related to NAFTA,  please contact one of our Trade Compliance Specialists. They will help you take full advantage of the benefits provided by NAFTA.

Additionally, take an in depth tour of NAFTA, by attending an upcoming NAFTA Workshop wherein you will gain a better understanding of NAFTA, learn how to manage NAFTA compliance and utilize this free trade agreement to your benefit.

 

You may also leave your comments or questions on completing a NAFTA Certificate of Origin in the comments section below.

Related Blog Articles:

Related Customs Forms:

 Related Video:

Video: What is the North American Free Trade Agreement?

The North American Free Trade Agreement (NAFTA), is a multilateral free trade agreement between the United States, Canada and Mexico.

In this video we’ll discuss:

  • A brief overview of NAFTA
  • Learn how to determine if your goods are NAFTA eligible
  • Benefits of NAFTA on trade
  • Importer and exporter responsibilities under NAFTA

 

 

If you need assistance in determining if your goods qualify, or if you have questions on how to fill out the NAFTA Certificate of Origin, please contact one of our Trade Compliance Specialists. They will help you take full advantage of the benefits provided by NAFTA.

Additionally, take an in depth tour of NAFTA, by attending an upcoming NAFTA Workshop wherein you will gain a better understanding of NAFTA, learn how  to manage NAFTA compliance and utilize this free trade agreement to your benefit.

 

Has your business benefited from NAFTA? Do  you have questions about NAFTA? We welcome your comments below or email  Ask Your Broker.

 

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ACI eManifest: Know the Difference Between Proof of Report and Proof of Release

StampThe Canada Border Services Agency (CBSA) has recently published a document with respect to a highway carrier’s responsibility to provide proof of report and proof of release as it relates to the ACI eManifest program.

For many years, truckers have been conditioned to make sure that there is a CBSA stamp on their Pre-Arrival Review System (PARS) paperwork as this constituted proof that the shipment had been released. Under ACI eManifest, highway carriers are now submitting a conveyance report (ACI lead sheet) to CBSA when they arrive at the border. This conveyance report has a unique number referred to as the Conveyance Reference Number. Upon submission of the ACI emanifest lead sheet, CBSA wands or enters the Conveyance Reference Number (CRN) and if everything is in order with the eManifest, it will be stamped and the carrier will be “authorized to move”.  A stamp on the ACI emanifest lead sheet represents proof of report, but, and this is a really big but, it does not represent proof of release.

We have recently encountered a number of situations where highway carriers have had a stamp on their ACI eManifest lead sheet but one or more of the shipments associated with that lead sheet have not been released. CBSA has no real explanation as to how this can occur and it is more than likely a case of human error or a system glitch. That said, if you go merrily down the road with only a stamp on your lead sheet and nothing else as proof of release you are flirting with disaster.

As outlined in this CBSA document, the only acceptable ways to provide proof of report and release are as follows:

Proof of Report

  • Stamped ACI Lead sheet; OR
  • Section 12(1) report from Portal (Available once CBSA acknowledges arrival of the conveyance and until archived by the CBSA system,  approximately 90 days.)

Proof of Release

  • CBSA stamp on each individual cargo control document; OR
  • RNS messaging through a 3rd party Service Provider or EDI

CBSA has stated very emphatically that they will continue to stamp individual PARS upon the request of the carrier until the ACI eManifest program is in its fully electronic end state. If your driver has five or more PARS on his truck, he may be sent in to the Long Room to get these documents stamped but that is a small price to pay for the security of having that proof in the event of a customs audit.

We strongly encourage highway carriers that are not participants in the Release Notification System (RNS) to advise their drivers to insist on having each and every PARS stamped at the Canadian border.

If you have any questions about ACI eManifest, or any other cross-border transportation matter, please don’t hesitate to contact our Carrier Liaison at 855.542.6644  or via email at carrierhelpdesk@pcb.ca.

 

Additional Resource:

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9 Steps to Importing a Vehicle into Canada from the U.S.

Importing a Vehicle into CanadaRegulated by several different government agencies, importing a vehicle tends to be a multistage process. Transport Canada defines a “vehicle” as any means of transport that is capable of being driven or drawn on roads, by any means other than muscular power exclusively, but that does not run exclusively on rails. This includes not only motor vehicles, but also recreational, camping, boat, horse and stock trailers, as well as wood chippers, generators or any other equipment mounted on rims and tires.

Whether you are importing a commercial and recreational vehicle from the United States into Canada, the steps below will help you avoid having the vehicle refused entry, delays at the border, and possible penalties with Canada Border Services Agency. We have broken the complex process of importing a vehicle into Canada into eight major steps:

1. Ensure vehicle admissibility into Canada

Your vehicle must meet the requirements of the Canada Border Services Agency, Transport Canada and the Canadian Food Inspection Agency before it can be imported. If your vehicle is not admissible, importing the vehicle into Canada could be a costly disappointment.

For example:

  • Will the vehicle be admissible under Transport Canada or the Registrar of Imported Vehicles?

Before you import a vehicle, you should also contact the Registrar of Imported Vehicles (RIV). The RIV is an agency contracted by Transport Canada to administer a national program to ensure that imported vehicles are brought into compliance with Canada’s safety standards. We recommend you verify with the RIV whether the vehicle is admissible into Canada. Inquire about the RIV program, vehicle admissibility, RIV exemptions, recall clearance information, vehicle modification requirements and vehicle branding history.

Tips on Admissibility:

  • U.S. titled vehicles are permitted provided they are titled in the USA or; if new a Manufacturer’s Statement of Origin or Certificate of Origin. (U.S. export worksheet required)
  • Offshore vehicles are not permitted unless they are more than 15 years of age from the date of manufacture. (No U.S. export worksheet required)

 

2. Meet clearance documentation requirements

Ensure you have the required documents for both U.S. Customs and Border Protection and Canada Border Services Agency. The following documents must accompany the vehicle and be presented to U.S. Customs at the time of export:

  • Original Title, Manufacturer’s Statement of Origin or Certificate of Origin (front and back). Should your vehicle not be required to have one of the these documents, then you must provide a Certificate of No Title
  • Bill of Sale
  • Recall clearance letter (U.S. only)
  • NAFTA, if applicable (commercial U.S. imports only)
  • Copies of the Export Certificate and Invoices (in English or French), if export location is other than the U.S.

 

3. File AES before giving 72 hour export notice

New! Effective October 2, 2014, the US Census Bureau has added an export filing requirement on the U.S. Customs and Border Protection Automated Export System (AES). The AES must be filed prior to the 72-hour notice. An EIN or IRS or Duns Number from the seller will be required along with the worksheet attached to file the AES. AES filing for self-propelled equipment is mandatory.
AES filing must be handled by a U.S domiciled company. A customs broker, freight forwarder or United States Principal Party in Interest (USPPI) can file the AES declaration.  Once the AES is accepted, an Internal Transaction Number (ITN) number will be issued. The ITN number must accompany the request to start the 72-hour export notice with U.S. Customs and Border Protection.

4. Submit required documents to CBP 72 hours prior to export

For vehicles being imported into Canada from the U.S., the required documentation must be submitted to U.S. Customs and Border Protection (CBP)  at least 72 hours prior to export.

Tip: Confirm the U.S. port being used, and ensure that the desired port allows for vehicle export processing.

You will need to provide:

  • U.S. Customs vehicle export worksheet
  • Copy of Bill of Sale
  • Copy of Vehicle Title (front and back), Manufacturer’s Statement of Origin (MSO) or certified copy of the same from the Department of Motor Vehicles (DMV). If you are bringing in a salvage vehicle, you must supply a copy of the Salvage Title. If the Title is not in your name, then the seller must sign as the seller and the buyer must appear as the buyer on the Title. Partial submissions are not allowed.
  • Vehicles not requiring a Title – If you are exporting equipment that does not require a Title, you must complete the “No Title Required” Addendum.

Assuming your documentation above is accurate and complete, a U.S. Customs and Border Protection official will begin the export checks which are completed within 72 hours of receipt (usually Monday to Friday, excluding holidays. However, please contact the customs office where you plan to cross, directly, to verify their hours of operation).

Note: At the time of exit from the U.S, the owner/agent of the vehicle must supply the vehicle and original documents to U.S. Customs at the port of export in person.

 

5. Meet Canadian Food Inspection Agency (CFIA) Requirements

The following are subject to import requirements, and inspection procedures and fees in order to prevent the entry and establishment of injurious plant pests in Canada:

  • used agricultural vehicles, equipment, implements, containers, and carriers;
  • used earth moving vehicles, equipment,implements, tools, carriers and containers;
  • used passenger and recreational vehicles; and
  • used military equipment.

Regardless of its origin, imported used vehicles, farm equipment and related earth moving vehicles and equipment must be free from soil, sand, earth, plant residue, manure and related debris. Many exotic plant pest organisms capable of causing economic loss to Canadian agricultural production can be transported in soil and related matter.

 

6. Submit required documents to Canada Border Services Agency at the first point of entry into Canada

The Canada Border Services Agency (CBSA) office at the point of entry will process the import of your vehicle into Canada.

  • The Importer can declare the goods in person at the first point of entry upon arrival or;
  • The Importer can arrange for an agent to act on their behalf

The required documentation includes:

  • Bill of Sale
  • Title
  • Transport Canada Vehicle Import Form 1
  • Form B3 (for commercial) or Form B15 (for personal) – to account for any applicable duties or tax such as a possible 6.1% duty if the car is manufactured outside the USA, GST payable at the time of import,  HST or PST portion payable at time of registration, Excise Tax on air conditioning of $100.00 CAD, and the possible green levy anywhere between $1,000.00 to $4,000.00 CAD depending on the vehicle.

7. Pay RIV registration fee

Once your vehicle has been imported into Canada, contact the RIV and pay a registration fee of $195 + tax.

Current fees for registering a U.S. imported vehicle in the RIV program

Vehicles entering the RIV program with a Vehicle Import Form – Form 1:

  • $195.00 + GST and QST for vehicles entering through a border crossing in Quebec
  • $195.00 + GST/HST for vehicles entering through a border crossing in any other province

Tip: Do not forget to include a copy of the recall letter if required

RIV exemptions:

Vehicles are exempt from the Registrar of Imported Vehicles (RIV) registration if they are imported under one of the following conditions:

  • Commercial Importation – Importer is listed on the list of recognized vehicle importers with Transport Canada
  • Non-Commercial Importation – New Canadian vehicle bearing a valid Canadian compliance label. The manufacturer of the vehicle must be listed with Transport Canada
  • Canadian certified vehicle being returned to Canada by original owner
  • Vehicles older than 15 years
  • Vehicle entered for exhibition, demonstration, testing, evaluation, or special purposes (Sch VII required)
  • Visitor, tourist, or a person holding a valid work permit or student visa
  • Work vehicle (A work vehicle is defined as one used primarily for civil engineering construction and maintenance, that is not built on a truck or truck-type chassis. This does not include a tractor or any vehicle designed to be drawn behind another vehicle).

Transport Canada will issue the Importer a Form 2 after all the fees have been paid.

 

8. Pass Inspection and Registration

The original Form 1 and Form 2, along with the vehicle, must now be taken to an approved inspection facility within 45 days of import. Once inspected, your Form 2 will be stamped and the vehicle will be ready for registration.

Take your stamped Form 2, original Bills of Sale, original Title, and B3 or B15 from Canada Customs to your local licensing/registration office, pay your HST/PST, and drive away!

 

9. Keep Records on File

Last but not the least, do not forget to keep a record on file. All records of importation must be kept on file with the importer for six years.

 

As you can see, importing a vehicle is a complex process. This article contains general guidelines and information pertaining to the CBSA administration of the Transport Canada import requirements. If you were ever to consider the services of a customs broker, we recommend doing so when importing a vehicle. A customs broker can help ensure that your vehicle meets the import requirements, avoid any costly delays and penalties at the border and assist with the transportation of your vehicle.

For more information or should you require assistance in importing a vehicle, contact Pacific Customs Brokers. Our import specialists can make this process simple and handle your next vehicle import for you. Additionally, enquire about the vehicle shipping services we offer.

Do you have questions on importing a vehicle into Canada? Leave them for us in the comments section below.

 

Webinars: Learn from the Comfort of Your Desk

Computer-WorldMap-600As the laws governing trade continue to evolve and become more complex, continual improvement in voluntary compliance is required through awareness and education. At Pacific Customs Brokers, we firmly believe that it is in the best interest of an importer to understand the entire supply chain process and be aware of their responsibilities in order to remain well within regulatory compliance. For the past 5 years, Pacific Customs Brokers has offered a variety of Trade Compliance Seminars related to importing and exporting into Canada and the United States.

In keeping with the current business climate and the fact that we all have different learning styles and constraints on time and travel, we are excited to move into the next phase of our education program with the introduction of Trade Compliance Webinars. Our live and on-demand webinars are designed to be a convenient way for trade professionals to stay ahead of new regulations with international trade and gain additional knowledge in key areas. The webinars will focus on practical tools that trade professionals find themselves using every day and provide you with substantial knowledge necessary to complete accurate documentation, understand logistics, get a feel for how transactions move through the regulatory process, valuation considerations and other topics of interest. Each of our live webinars will be followed by a Q & A session.

September Webinars:

Join us for the unveiling of:

 More webinars coming soon

 

We recognize that each of us gathers and processes information in different ways. In addition to educating the trade community through our seminars and webinars, we offer the following online resources:

  • Weekly Trade eNewsletter – updates on international trade, cross-border issues, Customs regulations, seminars, webinars and more
  • You Broker Knows Blog – informative trade blog articles written by our team of professionals 
  • International Trade News – current and archived trade news from Customs and other government resources
  • Your Broker Knows Videos – informational videos on a wide range of trade and shipping topics
  • Live Chat – instant messaging service where each ‘chat’ is one-on-one with a client services team member

We hope you’ll join us and encourage you to share this with colleagues and business partners who might find it useful.

Do you have questions about our trade compliance webinars? Use the comments section below to leave us your thoughts or email Ask Your Broker.