On April 3, 2020, the Canada Border Services Agency published Customs Notice 20-14 "Implementation of the Canada-United States-Mexico Agreement (CUSMA)" in which the CBSA discusses the new Certification of Origin requirements under CUSMA and the new tariff codes. When CUSMA enters into effect (the implementation date is scheduled for July 1, 2020), some of the rules for Canadian importers who import originating goods will change from the rules that must be followed under NAFTA. All goods that meet the rules of origin in CUSMA will be customs duty-free (with the exception of certain agricultural goods).
Tariff codes changes
After implementation of CUSMA, tariff code NAFTA Mexico-United States Tariff (MUST) will no longer be used. CUSMA's preferential tariff treatments are: the United States Tariff (UST – tariff treatment code 10) and the Mexico Tariff (MXT – tariff treatment code 11). The MUST tariff code will remain in place in the interim, for adjustments pertaining to importations that occurred while NAFTA was in effect.
Certification of origin changes
The NAFTA Certificate of Origin will no longer be used when CUSMA enters into force. However, the requirement that a certification of origin be provided prior to the importation remains.
Importers must make sure that CUSMA exporters follow the new certification of origin requirements. A certification of origin shall include the following minimum data elements:
1. Importer, Exporter, or Producer – Certification of Origin
Indicate whether the certifier is the exporter, producer or importer in accordance with Article 5.2 of Chapter 5 of the CUSMA.
2. Certifier
Provide the certifier's name, title, address (including country), telephone number and e-mail address.
3. Exporter
Provide the exporter's name, address (including country), e-mail address, and telephone number if different from the certifier. This information is not required if the producer is completing the certification of origin and does not know the identity of the exporter. The address of the exporter shall be the place of export of the good in a party's territory.
4. Producer
Provide the producer's name, address (including country), e-mail address, and telephone number, if different from the certifier or exporter or, if there are multiple producers, state "Various" or provide a list of producers. A person that wishes for this information to remain confidential may state "Available upon request by the importing authorities". The address of the producer shall be the place of production of the good of the party's territory.
5. Importer
Provide, if known, the importer's name, address, e-mail address, and telephone number. The address of the importer shall be in the party's territory.
6. Description and Harmonized System (HS) Tariff Classification of the Good
- Provide a description of the good and the HS tariff classification of the good to the 6-digit level located in the Customs Tariff. The description should be sufficient to relate it to the good covered by the certification;
- If the certification of origin covers a single shipment of a good, indicate, if known, the invoice number related to the exportation.
7. Origin Criteria
Specify the origin criterion under which the good qualifies, as set out in Article 4.2 (Originating Goods) of Chapter 4 of the CUSMA.
8. Blanket Period
Include the period if the certification covers multiple shipments of identical goods for a specified period of up to 12 months as set out in Article 5.2 (Claims for Preferential Tariff Treatment) of Chapter 5 of the CUSMA.
9. Authorized Signature and Date
The certification must be signed and dated by the certifier and accompanied by the following statement:
"I certify that the goods described in this document qualify as originating and the information contained in this document is true and accurate. I assume responsibility for proving such representations and agree to maintain and present upon request or to make available during a verification visit, documentation necessary to support this certification."
Importers should prepare themselves for the new Certification of Origin requirements and take the necessary steps to update their systems to obtain the new Certifications of Origin. Exporters must also update their systems to be able to provide the new Canadian Certification of Origin. Exporters who ship large volumes of originating goods to Canada (e.g., via electronic commerce platforms) may have to update their computer programs to be able to issue the Certifications with the invoice number included on the Certification of Origin.
Advance rulings need to be updated
Importers who have an advance ruling might not be able to rely on the advance ruling after the implementation of CUSMA.
On April 3, 2020, the Canada Border Services Agency published Customs Notice 20-14 "Implementation of the Canada-United States-Mexico Agreement (CUSMA)" in which the CBSA makes it clear that NAFTA origin advance rulings will no longer be valid when CUSMA enters into effect. As a result, importers should take steps to obtain updated CUSMA origin advance rulings sooner rather than later.
Importers who have an existing NAFTA advance ruling might not be able to rely on the NAFTA advance ruling after the implementation of CUSMA. The CBSA is requiring NAFTA advance rulings to be updated. The CBSA wants to review the facts in the context of CUSMA and issue replacement CUSMA advance rulings. In Customs Notice 20-14, the CBSA writes:
"Advance rulings for origin issued under NAFTA, will only remain valid for goods imported under NAFTA's preferential tariff treatment. Therefore, an applicant wishing to have an advance ruling for origin under CUSMA, will need to submit a new application to the Canada Border Services Agency. For more information, please consult Memorandum D11-4-16, Advance Rulings for Origin under Free Trade Agreements."
What this means is that if the CBSA disagrees with a past NAFTA advance ruling during a CUSMA origin verification, the CBSA may issue a retroactive assessment and take the position that the NAFTA advance ruling is no longer valid. This could be very costly to an importer. The CBSA might refer to Customs Notice 20-14 and take the position that Canadian importers were notified that they should have applied for a new CUSMA advance ruling.
Cyndee Todgham Cherniak is a lawyer and founder of LexSage.