How to complete a
NAFTA Certificate
Can your product qualify for NAFTA?
START- Use this to help you
determine if your products can
qualify for NAFTA
Is your product
manufactured in
Mexico, Canada or
US?
No
Please provide the non preferential
certificate of origin. See page 12 for
an example
Yes
yes
Make
Does your product contain at
least one component from
countries other than MX, CA or
US
Do you make or
purchase these
products?
No, all the
components are
made in US, MX or
CA
Purchased
Your products can
qualify for NAFTA
Please follow
instructions on page 2
to complete NAFTA
Please provide
NAFTA
Do you have NAFTA
from your supplier?
No
Please provide the non preferential
certificate of origin. See page 12 for
an example
Yes
Your products can
qualify for NAFTA
Please follow
instructions on page 2
to complete NAFTA
1
NAFTA Certificate
This is an example of a NAFTA certificate. Please enter all highlighted fields and follow instructions
for fields 6-10.
DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
OMB No. 1651-0098
Exp. 08-31-2014
NORTH AMERICAN FREE TRADE AGREEMENT
CERTIFICATE OF ORIGIN
19 CFR 181.11, 181.22
1. EXPORTER NAME AND ADDRESS
2. BLANKET PERIOD
Your company name and address
FROM
01/01/2017
TO
TAX IDENTIFICATION NUMBER:
Your company Tax ID
12/31/2017
3. PRODUCER NAME AND ADDRESS
4. IMPORTER NAME AND ADDRESS
Available to CBP upon request
Various
6.
HS TARIFF
CLASSIFICATION
NUMBER
5.
DESCRIPTION OF GOOD(S)
Enter Donaldson part number and
description
See page 3
for info
7.
8.
PREFERENCE
PRODUCER
CRITERION
See page
6 for
info
See
page
10 for
info
9.
NET COST
10.
COUNTRY
OF ORIGIN
Enter
COO of
part
(MX, CA
or US)
See
page 11
I CERTIFY THAT:
• THE INFORMATION ON THIS DOCUMENT IS TRUE AND ACCURATE AND I ASSUME THE RESPONSIBILITY FOR PROVING SUCH
REPRESENTATIONS. I UNDERSTAND THAT I AM LIABLE FOR ANY FALSE STATEMENTS OR MATERIAL OMISSIONS MADE ON OR IN
CONNECTION WITH THIS DOCUMENT;
• I AGREE TO MAINTAIN AND PRESENT UPON REQUEST, DOCUMENTATION NECESSARY TO SUPPORT THIS CERTIFICATE, AND TO INFORM, IN
WRITING, ALL PERSONS TO WHOM THE CERTIFICATE WAS GIVEN OF ANY CHANGES THAT COULD AFFECT THE ACCURACY OR VALIDITY OF
THIS CERTIFICATE;
• THE GOODS ORIGINATED IN THE TERRITORY OF ONE OR MORE OF THE PARTIES, AND COMPLY WITH THE ORIGIN REQUIREMENTS
SPECIFIED FOR THOSE GOODS IN THE NORTH AMERICAN FREE TRADE AGREEMENT AND UNLESS SPECIFICALLY EXEMPTED IN ARTICLE
411 OR ANNEX 401, THERE HAS BEEN NO FURTHER PRODUCTION OR ANY OTHER OPERATION OUTSIDE THE TERRITORIES OF THE
PARTIES; AND
• THIS CERTIFICATE CONSISTS OF
11.
PAGES, INCLUDING ALL ATTACHMENTS.
11a. AUTHORIZED SIGNATURE
Please signed before submitting NAFTA
11b. COMPANY
11c. NAME
11d. TITLE
Your company name
Your name
11e. DATE
MM/DD/YYY
Your Title
11f.
TELEPHONE
NUMBERS
(Voice)
phone number
xxx-xxx-xxxx
(Facsimile)
Fax Number
xxx-xxx-xxxx
CBP Form 434 (04/11)
2
HTS
HTS stands for Harmonized Tariff Schedule. It was developed by the World Customs
Organization (WCO), these codes are used to classify and define internationally traded goods. In most
cases, in order to import or export a product internationally, the traded good must be assigned an HTS
code that corresponds with the Harmonized Tariff Schedule.
These codes go from 2-digit chapters and narrow down to a specific 10-digit code. Each section
of the 10-digit HTS code represents a predefined nomenclature. Within each Chapter, goods are listed
according to a hierarchical classification system, broken down into finer and finer categories. The HTS
code becomes more defined and segmented as the number of digits increase.
Section and Chapter titles describe broad categories of goods, while headings and subheadings
describe products in more detail. Generally, HTS sections and chapters are arranged in order of a
product’s degree of manufacture or in terms of its technological complexity.
The process of assigning HTS codes is known as "HTS Classification” In order to classify your product
you need to ask the following questions:
•
•
•
•
•
What is the product? (name/synonyms)
What does it do?
How does it work?
How is it used?
In what industry is it used? (Commercial, Industrial, Home)
3
The first step is to assign the Chapter in which your products might fall.
Make sure to read the Chapter notes for exclusions. You product might fall under a different Chapter.
Example:
Example:
A flashlight falls into Chapter 85
After assigning the Chapter, you need to find the heading (4-digit) within Chapter 85, creating a more
specific description of the type of electrical machinery. You have to go down each heading until you find
the heading that best describes your product
8501 - Electric Motors and Generators
8502- Electric generating sets and rotary converters
8503- Parts suitable for use solely on principally with machines of headings 8501 or 802
8504- Electrical transformers, static converters (for example rectifiers) and inductors; parts thereof:
4
The flashlight falls into heading 8513
After finding the heading, the subheading (6-digits) must be assigned. The flashlight falls into
subheading 8513.10 which is the subheading for lamps
Flashlights are classified under HTS 8513.10.2000
Chapter
85
Electrical machinery and equipment and parts thereof…
Heading
Subheading
Rate Subheading
8513
8513.10
8513.10.20
Portable electric lamps designed to function by their own source of energy….
Lamps
Flashlights
For NAFTA purposes you only need to assign the first 6-digits. Enter the 6-digits in field 6 of
NAFTA Certificate
If you need support you can visit the following websites:
• Harminized Tariff Schedule – In this website you can find the complete 2015 HTSA
https://www.usitc.gov/tata/hts/bychapter/index.htm
• Ruling Module/CROSS – in this website you can find customs ruling for specific products
http://rulings.cbp.gov/index.asp
• HTS Search – https://hts.usitc.gov/
• Schedule B Search Engine - https://uscensus.prod.3ceonline.com/
5
Preference Criterion
START- Use this to help you
determine the Preference
Criterion
Are the goods a natural
resource grown, harvested or
mined in the NAFTA countries?
Enter Preference Criterion A in
field 7 of the NAFTA Certificte
Yes
*If you believe that Preference Code A
applies to your parts, contact
[email protected]
NO
No
Are all of the components
manufactured in US, Canada
or Mexico?
Is at least one component of
your product imported from
countries other than MX, CA or
US
YES
Do you have
certificates of origin
for all purchased
components?
NO
No
Enter Preferential code B if your
product qualifies for NAFTA. See
page 6 for qualification details
YES
YES
Enter Preference Code C in
field 7 of the NAFTA
*Note: The term NAFTA countries refers to the
three countries in the NAFTA zone. Canada,
Mexico and United States.
Contact
[email protected]
for more assistance
Other Preference Codes: If you think your parts fall into these below, contact [email protected] for more assistance
· CODE D – refers to rare cases where a good and its parts have the same classification number and they could not undergo the
required tariff change
· CODE E – refers to goods that are specific Automated Data Processing Machines and their parts (Annex 308.1)
· CODE F – refers to agricultural goods imported into Mexico only special part of the Bilateral Negotiation
6
Preference Criterion B
Preference criterion B applies to goods that undergo a tariff change. Change in tariff
classification is referred as tariff shift. This term describes the phenomenon that, after manufacturing,
components lose their classification under their tariff and result in new classification as a finished good.
Originating material means a good that is produced in NAFTA territories (US, MX and CA) and meets the
specific rules and therefore qualifies for the duty exemption benefit.
Non-originating material means a good that was produced outside of the NAFTA territories
Goods might qualify for NAFTA even if they contain materials form other countries outside of NAFTA as
long as these materials satisfy the rules of origin specified in Annex 401
https://www.cbp.gov/trade/nafta/annex-401
For up to date Annex 401 information, refer to the specific Rules of Origin in General Note 12 of the
Harmonized Tariff Schedule of the United States. Go to
https://www.usitc.gov/tata/hts/bychapter/index.htm and select General Notes, here you will see the
rules of origin for your HTS.
Qualify for NAFTA using the Rules of Origin Annex 401
There are two ways to qualify products that contain non-originating materials; by tariff shift and by
Regional Value Content
7
Tariff Shift
In order to determine if the rule of origin has been met, you must know the HTS number of the good as
well as the HTS number of all of the non-NAFTA materials used to produce the good (you will only need
the first six digits for NAFTA purposes)
Example: A cookie is baked in the US and some of its ingredients are obtained outside the NAFTA
territory. See Table Below
Cookie HTS 1905.31
Material
Origin
Wheat Flour
Butter
Eggs
Argentina
New Zealand
US
Originating (from
NAFTA countries)
No
No
Yes
Sugar
Mexico
Yes
Chocolate Chips
Netherlands
No
HS or portion thereof
1101
0405
No need since it’s form
NAFTA country
No need since it’s form
NAFTA country
1806.90
Since Cookies are classified under 1905.31 they fall in the following Rule of Orign
4. A Change to heading 1902 through 1905 from any other chapter
Since the rule of origin states that a change from any other chapter and all the non-originating
components are classified outside chapter 19*, they meet the required tariff change (Wheat Flour
chapter 11, Butter chapter 04 and Chocolate Chips chapter 18.) We do not consider whether the sugar
or eggs meet the tariff change because they’re originating (from NAFTA territory)
* The first two digits (19) of this classification are a reference to the appropriate chapter. The first four digits combined (1905)
comprise the article’s heading within that chapter, while the last six digits (1905.31) break that heading down into subheadings.
Regional Value Content
Some Annex 401 specific rules require that a minimum regional value content, meaning that a certain
percentage of the value of the good must be from NAFTA countries.
We usually use the Net Cost method which calculates the regional value content as a percentage of the
net cost to produce the good.
The formula to calculate RVC using net cost is:
RVC = NC – VNM x 100
NC
RVC – Regional Value Content
NC – Net Cost
VNM – Value non-Originating Material (Non NAFTA)
8
Example: A battery operated flashlight is made in Mexico from Japanese flashlight parts. The total cost
to produce the flashlight is $3.65 and the value of the non-originating material is $1.80
Flashlight HTS 8513.10
Material
Origin
Flashlight Parts
Japan
Originating (from
NAFTA countries)
No
HS
Value
8513.90
$1.80
Annex 401 for 8513.10 states:
The first of these two rules (A) is not met since there is no heading change (same 4 first digits), therefore
the second rule must be verified (B)
The second rule (B) the required subheading change is met (last two digits are different) and the
regional value content must be met:
RVC = NC – VNM x 100
NC
RVC = ( 3.65 - 1.80) x 100
3.65
RVC = 50.7
The flashlight is considered eligible for NAFTA, since the required regional value content exceeds 50%
where net cost method is used as required by (B)(2)
9
Producer Code
START- Use this to help you
determine the Producer Code
Do you manufacture
the product?
Enter YES in field 8,
producer code on
NAFTA Certificate
Yes
No
Do you have a
signed NAFTA from
the supplier of your
products?
No
Do you have a
country of origin or
Manufacturer’s
affidavit from your
supplier?
Yes
No
Enter NO(3) in field
8 of NAFTA
certificate
Please contact Trade
Compliance for
assitance
Yes
Please enter
NO(2) in field 8
10
Net Cost
For this part you will need to know the preference criterion, field 7 of NAFTA Certificate
START- Use this to help you
determine Net Cost
Was C your choice
for Preference
Code?
Was B your choice
for Preference
Criterion?
Yes
Did you calculate
RVC using the Net
Cost method?
No, Tariff Shift
was used
Yes
Enter NC in field
9 NET Cost
No
Enter NO in field 9
Net Cost
Yes
Enter NO in field 9
Net Cost
11
Non Preferential Certificate of Origin Example
CERTIFICATE OF ORIGIN
1. SELLER NAME AND ADDRESS
2. BLANKET PERIOD (MM/DD/YYYY)
------------------------------------------------------------------------
Enter your Company name and address
FROM 01/01/2017
-----------------------------------------------------------------------TO
12/31/2017
TAX IDENTIFICATION NUMBER:
3. PRODUCER NAME AND ADDRESS
4. BUYER NAME AND ADDRESS
Available to CBP Upon Request
Donaldson Company Inc
1400 W 94th St
Bloomington, MN 55431
USA
TAX IDENTIFICATION NUMBER:
TAX IDENTIFICATION NUMBER: 41-0222640
5. PART NUMBER
DESCRIPTION OF GOOD(S)
6.
COUNTRY OF
ORIGIN
X002275-016-170 - RESTRICTION GAUGE
7. NOTES
CN
THIS CERTIFICATE CONSITES OF _____ PAGES INCLUDING ALL ATTACHMENTS
9.
9a. AUTHORIZED SIGNATURE
9b. COMPANY
9c. NAME (Print or Type)
9d. TITLE
9e. DATE
(MM/DD/YYYY)
10/4/2016
9f.TELEPHONE
(Voice)
XXX-XXX-XXXX
(Facsimile)
XXX-XXX-XXXX
12