Regulatory Standards for Implementation of the North American Free Trade Agreement

SUMMARY: This document publishes for the information of the general

public the text of a document setting forth uniform regulatory

standards adopted by the United States, Canada and Mexico for purposes

of implementing the preferential tariff treatment and other Customs-

related provisions of the North American Free Trade Agreement (NAFTA).

The final Customs Regulations implementing the NAFTA, which are based

in part on the standards set forth herein, also appear in this issue of

the Federal Register.

FOR FURTHER INFORMATION CONTACT:

Myles Harmon, Office of Regulations and Rulings (202-482-7000).

SUPPLEMENTARY INFORMATION:

Background

On December 17, 1992, the United States, Canada and Mexico (the

``Parties'') entered into an agreement, the North American Free Trade

Agreement (NAFTA). The stated objectives of the NAFTA included

elimination of barriers to trade in, and facilitation of the cross-

border movement of, goods and services between the territories of the

Parties. The provisions of the NAFTA were adopted by the United States

with the enactment of the North American Free Trade Agreement

Implementation Act, Pub. L. 103-182, 107 Stat. 2057.

Prior to the entry into force of the NAFTA on January 1, 1994,

representatives of the Parties engaged in a series of trilateral

discussions pursuant to Article 511 of the NAFTA for the purpose of

formulating uniform regulatory texts or principles in respect of

Chapters Four and Five of the NAFTA and in respect of certain

provisions within Chapter Three of the NAFTA. As concerns Chapter Four

which sets forth the rules of origin and related provisions for

purposes of preferential duty treatment under the NAFTA, the Parties

agreed, by an exchange of letters dated December 30, 1993, to implement

substantively verbatim texts covering all of the provisions of that

Chapter. However, in recognition of the different existing customs

legal and procedural requirements in the three countries, in the case

of Chapter Five and some provisions of Chapter Three the Parties

agreed, by an exchange of letters dated December 30, 1993, to use a

standards approach whereby agreement was reached on certain minimum

principles to be reflected in each Party's regulations, with each Party

being left free to implement those principles, and any other

requirements not inconsistent therewith, in accordance with the needs

of the Party's particular statutory and regulatory framework.

On December 30, 1993, Customs published T.D. 94-1 in the Federal

Register (58 FR 69460) setting forth interim amendments to the Customs

Regulations to implement the preferential tariff treatment and other

Customs-related provisions of the NAFTA in accordance with the

implementation principles agreed to by the Parties as discussed above.

Subsequent to the publication of T.D. 94-1, the Parties engaged in

additional trilateral discussions with a view to modifying the Chapter

Four substantively verbatim texts and the standards adopted for

purposes of Chapters Three and Five, and those modifications were

formally agreed to by the Parties through an exchange of letters in

June 1995. The substantively verbatim texts relating to Chapter Four

and the standards adopted for purposes of Chapters Three and Five, as

so modified, have been incorporated in the provisions of the Customs

Regulations implementing the NAFTA that are published as a final rule

also in this issue of the Federal Register.

The purpose of this document is to set forth for the information of

the general public the current text of the NAFTA Chapter Three and

Chapter Five regulatory standards document as agreed to by the Parties.

Dated: August 24, 1995.

Stuart P. Seidel,

Assistant Commissioner, Office of Regulations and Rulings.

Accordingly, the document containing the regulatory standards

relating to Chapters Three and Five of the NAFTA, as discussed above,

is reproduced below:

Uniform Regulations for the Interpretation, Application, and

Administration of Chapters Three (National Treatment and Market Access

for Goods) and Five (Customs Procedures) of the North American Free

Trade Agreement

The Government of Canada, the Government of the United Mexican

States and the Government of the United States of America, pursuant to

Article 511(1) of the North American Free Trade Agreement, adopt the

following Uniform Regulations regarding the interpretation, application

and administration of Chapters Three and Five of the North American

Free Trade Agreement:

Section A--Certification of Origin

1. The Certificate of Origin referred to in Article 501(1) of the

North American Free Trade Agreement (hereinafter ``the Agreement'')

shall be:

(a) equivalent in substance to the Certificate of Origin set out in

Annex I.1a;

(b) in a printed format or in such other medium or format as may be

approved by the customs administration of the Party into whose

territory the good is imported;

(c) completed by the exporter in accordance with these Uniform

Regulations, including any instructions contained in the Certificate of

Origin set out in Annex I.1a; and

(d) at the option of the exporter, completed in either the language

of the Party into whose territory the good is imported or the language

of the Party from whose territory the good is exported in accordance

with Annex I.1d.

2. For purposes of Article 501(5)(a) of the Agreement, a single

Certificate of Origin may be used for:

(a) a single shipment of goods that results in the filing of one or

more entries on the importation of the goods into the territory of a

Party; or

(b) more than one shipment of goods that result in the filing of

one entry on the importation of the goods into the territory of a

Party.

Article II: Obligations Regarding Importations

1. For purposes of Article 502(1)(a) of the Agreement, ``valid

Certificate of Origin'' means a Certificate of Origin that the exporter

of the good in a territory of a Party completes in accordance with the

requirements set out in Article I of these Uniform Regulations.

2. For purposes of Article 502(1)(c) of the Agreement:

(a) the importer shall, upon the request of the customs

administration of the Party into whose territory the good is imported,

provide a written translation of the Certificate of Origin in the

language of that Party; and

(b) where the customs administration of the Party into whose

territory the good is imported determines that a Certificate of Origin

is illegible, defective on its face or has not been completed in

accordance with Article I

[[Page 46465]]

of these Uniform Regulations, the importer shall be granted a period of

not less than five working days to provide the customs administration

with a copy of the corrected Certificate.

3. An importer that makes a corrected declaration of origin

pursuant to Article 502(1)(d) and (2)(b) of the Agreement and pays any

duties owing shall not, in accordance with Article 502(2)(b), be

subject to penalties, as set out in Annex II.3.

4. Where as a result of an origin verification conducted under

Article 506 of the Agreement, the customs administration of a Party

determines that a good that is covered by a Certificate of Origin that

is applicable to multiple importations of identical goods in accordance

with Article 501(5)(b) does not qualify as an originating good, such

Certificate may not be used to claim preferential tariff treatment for

those identical goods after the date that the written determination is

provided under Article 506(9).

Article III: Exceptions

1. The statement referred to in Article 503(a) of the Agreement

shall, where required by the customs administration of the Party into

whose territory the good is imported, be attached to, or handwritten,

stamped or typed on, the commercial invoice covering the good.

2. For purposes of Article 503 of the Agreement, ``series of

importations'' is defined in Annex III.2.

Article IV: Obligations Regarding Exportations

1. For purposes of Article 504(1)(b) of the Agreement, ``promptly''

is defined in Annex IV.1.

2. For purposes of Article 504(3) of the Agreement, no Party may

impose civil or administrative penalties on an exporter or producer of

a good in its territory where the exporter or producer, prior to the

commencement of an investigation by officials of that Party with

authority to conduct a criminal investigation regarding the Certificate

of Origin, provides the written notification referred to in Article

504(1)(b).

3. For purposes of Article 504(1)(b) of the Agreement, where the

customs administration of a Party provides an exporter or producer of a

good with a determination under Article 506(9) that the good is a non-

originating good, the exporter or producer shall notify all persons to

whom it gave a Certificate of Origin in respect of that good of the

determination.

Section B--Administration and Enforcement

Article V: Records

1. The documentation and records required to be maintained under

Article 505 of the Agreement shall be kept in such a manner as to

enable an officer of the customs administration of a Party, in

conducting a verification of origin under Article 506, to perform

detailed verifications of the documentation and records to verify the

information on the basis of which:

(a) in the case of an importer, a claim for preferential tariff

treatment was made with respect to a good imported into its territory;

and

(b) in the case of an exporter or producer, a Certificate of Origin

was completed with respect to a good exported to the territory of

another Party.

2. Importers, exporters and producers in the territory of a Party

that are required to maintain documentation or records under Article

505 of the Agreement shall be permitted, in accordance with that

Party's law, to maintain such documentation and records in machine-

readable form, provided that the documentation or records can be

retrieved and printed.

3. Exporters and producers that are required to maintain records

pursuant to Article 505(a) of the Agreement shall, subject to the

notification and consent requirements provided for in Article 506(2),

make those records available for inspection by an officer of the

customs administration of a Party conducting a verification visit and

provide facilities for inspection thereof.

4. A Party may deny preferential tariff treatment to a good that is

the subject of an origin verification where the exporter, producer or

importer of the good that is required to maintain records or

documentation under Article 505 of the Agreement:

(a) subject to paragraph 5, fails to maintain records or

documentation relevant to determine the origin of the good in

accordance with the requirements of the Agreement, these Uniform

Regulations or the Uniform Regulations under Chapter Four of the

Agreement; or

(b) denies access to the records or documentation.

5. Where the customs administration of a Party finds during the

course of an origin verification that a producer of a good in the

territory of another Party has failed to maintain its records in

accordance with the Generally Accepted Accounting Principles applied in

the territory of the Party in which the good is produced as required by

Article 413(e) of the Agreement, the producer shall be given an

opportunity to record its costs in accordance with those Generally

Accepted Accounting Principles within 60 days of being informed in

writing by the customs administration that the records have not been

maintained in accordance with those Generally Accepted Accounting

Principles.

6. For purposes of Article 505 of the Agreement and these Uniform

Regulations, ``records'' include books as referenced in the Uniform

Regulations under Chapter Four.

Article VI: Origin Verifications

1. For purposes of Article 506(1)(c) of the Agreement, the customs

administration of a Party may conduct a verification of origin with

respect to a good that is imported into its territory by means of:

(a) A verification letter that requests information from the

exporter or producer of the good in the territory of another Party,

provided that it contains specific reference to the good that is the

subject of the verification; or

(b) any other method of communication customarily used by the

customs administration of the Party in conducting a verification.

2. Subject to paragraph 3, where the customs administration of a

Party conducts a verification under paragraph 1(b), it may, on the

basis of a response of an exporter or producer to a communication

referred to in paragraph 1(b), issue a determination under Article

506(9) of the Agreement:

(a) that the good does not qualify as an originating good, provided

that the response is in writing and is signed by that exporter or

producer; or

(b) that the good qualifies as an originating good.

3. Where the producer of a good chooses to calculate the regional

value content of a good under that net cost method as set out in the

Uniform Regulations under Chapter Four of the Agreement, the customs

administration of the Party into whose territory the good was imported

may not, during the time period over which the net cost has been

calculated, verify the regional value content in respect of that good.

4. The customs administration of a Party, in conducting a

verification visit under Article 506(1)(b) of the Agreement, shall send

the notice referred to in Article 506(2)(a) by certified or registered

mail, or any other method that produces a confirmation of receipt by

the exporter or producer whose premises are to be visited.

5. When the exporter or producer of a good that is the subject of a

proposed

[[Page 46466]]

verification visit by the customs administration of a Party has not

given its written consent to a visit under Article 506(4) of the

Agreement, the customs administration may determine that the good does

not qualify as an originating good and may deny preferential tariff

treatment to that good.

6. For purposes of Article 506(7) of the Agreement, an exporter or

producer of a good shall identify to the customs administration

conducting a verification visit any observers designated to be present

during such visit.

7. Each Party shall identify to the other Parties, by January 1,

1994, the office to which notice shall be sent under Article

506(2)(a)(ii) of the Agreement.

8. For purposes of Article 506(5) of the Agreement, a notice of

postponement of a verification visit shall be made in writing and shall

be sent to the address of the customs office that sent the notice of

intention to conduct a verification visit.

9. The common standards for the written questionnaires referred to

in Article 506(1)(a) of the Agreement are set out in Annex VI.9.

10. Where, pursuant to Article 403(3) of the Agreement, a producer

of a motor vehicle identified in Article 403 (1) or (2) elects to

average its regional value-content calculation over its fiscal year,

the customs administration of the Party into whose territory the motor

vehicle was imported may request, in writing, that the producer submit

a cost submission reflecting the actual costs incurred in the

production of the category of motor vehicles for which the election was

made.

11. Where the customs administration of a Party requests that a

cost submission be submitted by the producer of a motor vehicle under

paragraph 10, such cost submission shall be submitted within 180 days

after the close of that producer's fiscal year or within 60 days from

the date on which the request was made, whichever is later.

12. Where the customs administration of a Party sends a written

request under paragraph 10, such request shall constitute a

verification letter under paragraph 1(a).

13. The customs administration of a Party may, for purposes of

verifying the origin of a good, request that the importer of the good

voluntarily obtain and supply written information voluntarily provided

by the exporter or producer of the good in the territory of another

Party, provided that the failure or refusal of the importer to obtain

and supply such information shall not be considered as a failure of the

exporter or producer to supply the information or as a ground for

denying preferential tariff treatment.

14. Nothing in this Article shall limit any right accorded under

Chapter Five of the Agreement to the exporter or producer of a good in

the territory of a Party by virtue of the fact that such exporter or

producer is also the importer of the good in the territory of the Party

in which preferential tariff treatment is claimed.

15. Where a customs administration conducts a verification of

origin of a good under Article 506(1)(a) of the Agreement or paragraph

1(a), it may send the verification letter or questionnaire by:

(a) certified or registered mail, or any other method that produces

confirmation of receipt by the exporter or producer; or

(b) any other method, regardless of whether it produces proof of

receipt from the exporter or producer of the good.

16. Where the customs administration of a Party has sent a

verification letter or questionnaire to an exporter or producer of a

good in the territory of another Party and such exporter or producer

fails to respond within the period specified therein, which shall be no

less than 30 days from the date on which the verification letter or

questionnaire was sent, the customs administration:

(a) shall send a subsequent verification letter or questionnaire:

(i) if requested by the Party from whose territory the good was

exported, by the method set out in paragraph 15(a), or

(ii) if not requested by the Party from whose territory the good

was exported, by the method set out in paragraph 15 (a) or (b); and

(b) may send, with that subsequent verification letter or

questionnaire, the written determination referred to in Article 506(9)

of the Agreement, including a notice of intent to deny preferential

tariff treatment referred to in paragraph 19.

17. Where the customs administration of a Party sends a written

determination under paragraph 16(b) and the exporter or producer fails

to respond to the subsequent verification letter or questionnaire

within 30 days:

(a) from the date of its receipt by the exporter or producer, where

it was sent in accordance with paragraph 16(a)(i); or

(b) from the date of its receipt by the exporter or producer or

from the date it was sent by the customs administration, as the case

may be, in accordance with paragraph 16(a)(ii),

the customs administration may deny preferential tariff treatment to

the good.

18. Where the customs administration of a Party does not send a

written determination under paragraph 16(b) and the exporter or

producer fails to respond to the subsequent verification letter or

questionnaire within 30 days:

(a) from the date of its receipt by the exporter or producer, where

it was sent in accordance with paragraph 16(a)(i), or

(b) from the date of its receipt by the exporter or producer or

from the date it was sent by the customs administration, as the case

may be, in accordance with paragraph 16(a)(ii),

the customs administration may deny preferential tariff treatment to

the good in accordance with paragraph 19.

19. Where the customs administration of a Party determines, as a

result of an origin verification, that a good that is the subject of

the verification does not qualify as an originating good, the written

determination provided for under Article 506(9) of the Agreement shall:

(a) include a notice of intent to deny preferential tariff

treatment with respect to that good that specifies the date after which

preferential tariff treatment will be denied and the period during

which the exporter or producer of the good may provide written comments

or additional information regarding the determination; and

(b) if requested by the Party from whose territory the good is

exported, be sent by certified or registered mail or by any other

method that produces confirmation of receipt by the exporter or

producer of the good.

20. Where the customs administration of a Party determines on the

basis of information obtained during a verification that a good does

not qualify as an originating good:

(a) the date on which preferential tariff treatment may be denied

pursuant to the notice referred to in paragraph 19, shall be no earlier

than 30 days from the date on which

(i) receipt of the written determination is confirmed by the

exporter or producer, if a request has been made under subparagraph

19(b), and

(ii) the customs administration sends the written determination, if

no such request has been made; and

(b) before denying preferential tariff treatment, the customs

administration shall take into account any comments or additional

information provided by the exporter or producer during the period

referred to in subparagraph (a).

21. For purposes of Article 506(10) of the Agreement, ``pattern of

conduct''

[[Page 46467]]

means repeated instances of false or unsupported representations by an

exporter or producer of a good in the territory of a Party that are

established by the customs administration of another Party on the basis

of not fewer than two origin verifications of two or more importations

of the goods that result in not fewer than two written determinations

being sent to that exporter or producer pursuant to Article 506(9) that

conclude, as a finding of fact, that Certificates of Origin completed

by that exporter or producer with respect to identical goods contain

false or unsupported representations.

22. For purposes of Article 506(12) of the Agreement, ``consistent

treatment'' means the established application by the customs

administration of a Party that can be substantiated by the continued

acceptance by that customs administration of the tariff classification

or value of identical materials on importations of the materials into

its territory by the same importer over a period of not less than two

years immediately prior to the date that the Certificate of Origin for

the good that is the subject of the determination under Article 506(11)

was completed, provided that with respect to those importations:

(a) such materials had not been accorded a different tariff

classification or value by one or more district, regional or local

offices of that customs administration on the date of such

determination; and

(b) the tariff classification or value of such materials is not the

subject of a verification, review or appeal by that customs

administration on the date of such determination.

23. For purposes of Article 506(12) of the Agreement, a person

shall be entitled to rely on a ruling or advance ruling in accordance

with Annex VI.23.

24. A ruling or advance ruling referred to in paragraph 23 that is

issued by the customs administration of a Party shall remain in force

until modified or revoked.

25. No modification or revocation of a ruling referred to in

paragraph 23, other than an advance ruling, may be applied to a good

that was the subject of the ruling and that was imported prior to the

date of such modification or revocation unless:

(a) the person to whom the ruling was issued has not acted in

accordance with its terms and conditions; or

(b) there has been a change in the material facts or circumstances

on which the ruling was based.

26. For purposes of Article 506(11) of the Agreement, reference to

the phrase, ``one or more materials used in the production of the

good'' means materials that are used in the production of the good or

that are used in the production of a material that is used in the

production of the good.

27. Article 506(12)(a) of the Agreement in relation to Article

506(11) includes:

(a) a ruling or advance ruling that is issued with respect to a

material that is used in the production of the good or that is used in

the production of a material that is used in the production of the

good; or

(b) the consistent treatment given on the entry of a material that

is used in the production of the good or that is used in the production

of a material used in the production of the good.

28. Where the customs administration of a Party, in conducting a

verification of origin of a good imported into its territory under

Article 506 of the Agreement, conducts a verification of the origin of

a material that is used in the production of the good, the verification

of the material shall be conducted in accordance with the procedures

set out in:

(a) Article 506 (1), (2), (3), (5), (7) and (8); and

(b) paragraphs 1, 2, 3, 4, 6, 8, 13, 14, 15 and 16(a).

29. The customs administration of a Party, in conducting a

verification of a material that is used in the production of a good

pursuant to paragraph 28, may consider the material to be non-

originating in determining whether the good is an originating good

where the producer or supplier of that material does not allow the

customs administration access to information required to make a

determination of whether the material is an originating material by the

following or other means:

(a) denial of access to its records;

(b) failure to respond to a verification questionnaire or letter;

or

(c) refusal to consent to a verification visit within 30 days of

receipt of notification under Article 506(2) of the Agreement, as made

applicable by paragraph 28.

30. A Party shall not consider a material that is used in the

production of a good to be a non-originating material solely on the

basis of a postponement of a verification visit under Article 506(5) of

the Agreement as made applicable by paragraph 28(a).

31. Where the customs administration of a Party conducts a

verification under Article 506 of the Agreement, it may also verify:

(a) the applicable rate of customs duty applied to an originating

good in accordance with the rules set out in Annex 302.2 of the

Agreement; and

(b) whether a good is a qualifying good for the purposes of Annex

703.2 of the Agreement.

Section C--Advance Rulings

Article VII: Advance Rulings

1. For purposes of Article 509 of the Agreement, the customs

administration of a Party shall issue an advance ruling to a producer

in the territory of another Party of a material that is used in the

production of a good in the territory of another Party, provided that

the good is to be subsequently imported into the territory of the Party

issuing the ruling, concerning any matter covered by Article 509(1) (a)

through (e) and (g) with respect to that material.

2. The common standards regarding the information to be submitted

in an application for an advance ruling are set out in Annex VII.2.

3. For purposes of Article 509 of the Agreement, an application to

the customs administration of a Party for an advance ruling shall be

completed in the language of that Party as set out in Annex I.1d.

4. Subject to paragraph 5 and 6, the customs administration to

which the application is made shall issue an advance ruling within 120

days of its receipt of all information reasonably required to process

the application, including any supplemental information that may be

requested.

5. Each Party may provide that where an application for an advance

ruling is made to its customs administration that involves an issue

that is the subject of:

(a) a verification of origin,

(b) a review by or appeal to the customs administration, or

(c) judicial or quasi-judicial review in its territory,

the customs administration may decline to issue the ruling.

6. For purposes of Article 509(3) of the Agreement, where the

customs administration of a Party determines that an application for an

advance ruling is incomplete, it may decline to further process the

application provided that:

(a) it has notified the applicant of any supplemental information

required and of the period, which shall not be less than 30 days,

within which the applicant must provide the information; and

(b) the applicant has failed to provide the information within the

period specified.

7. Nothing in paragraph 5 or 6 shall be construed so as to prevent

a person from re-applying for an advance ruling.

[[Page 46468]]

8. For purposes of Article 509(7) of the Agreement, ``importations

of a good'' is defined in Annex VII.8.

Section D--Review and Appeal

Article VIII: Review and Appeal

1. A denial of preferential tariff treatment to a good by the

customs administration of a Party under these Uniform Regulations may

be appealed under Article 510 of the Agreement by the exporter or

producer of the good who completed the Certificate of Origin for the

good in respect of which a claim for preferential tariff treatment was

denied, including a denial of preferential tariff treatment under

Article 506(4).

2. Where an advance ruling is issued under Article 509 of the

Agreement or paragraph 1 of Article VII of these Uniform Regulations, a

modification or revocation of the advance ruling shall be subject to

review and appeal under Article 510.

3. Where a Party denies preferential tariff treatment to a good on

the basis:

(a) that a corrected Certificate of Origin has not been provided

within that period set out in Article II(2)(b) of these Uniform

Regulations, or

(b) of a failure to comply with a time limit under these Uniform

Regulations or under the Agreement, except for the time limit under

Article 502(3) of the Agreement, with respect to the furnishing of

records or other information to the customs administration of that

Party,

the decision rendered on review and appeal under Article 510(2)(a) of

that determination shall be on the merits of whether the good qualifies

as an originating good, provided that in the case of subparagraph (a)

above, a corrected Certificate of Origin is provided to the customs

administration of the Party.

Section E--Tariff Elimination

Article IX: Tariff Elimination

1. For purposes of Annex 302.2 and Annex 300-B of the Agreement,

Annex 302.2 (4), (5), (6), (8), (10), (11), (12) and (13) and Annex

300-B, Section 2, paragraph 2(b) do not apply where a Party gives duty

free treatment to all other Parties in respect of an originating good

imported into its territory.

2. For purposes of Annex 302.2 and Annex 300-B of the Agreement,

the customs administration of the Party into whose territory an

originating good is imported shall determine the applicable

preferential tariff rate of duty under Annex 302.2 (8), (10), (11),

(12) and (13) and Annex 300-B, Section 2, paragraph 2(b) on the basis

of the Marking Rules established under Annex 311 only where:

(a) materials used in the production of the good are obtained from,

or

(b) processing of the good occurs in,

the territory of a Party other than the Party from whose territory the

good is exported or the Party into whose territory the good is

imported, provided that the good has been improved in condition or

advanced in value in the territory of the Party from which it is

exported. Otherwise, the customs administration shall apply the

preferential tariff rate of duty that is applicable to the Party from

whose territory the good is exported, provided that the good has been

improved in condition or advanced in value in that territory.

3. For purposes of Annex 302.2 of the Agreement, each Party may,

notwithstanding that the requirements of Article 502 and any other

legal requirements imposed under its law have been satisfied, deny the

applicable preferential tariff rate of duty set out in that Annex to an

originating good imported into its territory:

(a) if, where contrary to the laws of that Party, the claim for

preferential tariff treatment for the good is not supported by

documentary evidence such as invoices, bills of lading or waybills that

indicate the shipping route and all points of shipment and

transshipment prior to the importation of the good into its territory,

and

(b) if, where the good is shipped through or transshipped in the

territory of a country that is not a Party under the NAFTA, the

importer of the good does not provide, on the request of that Party's

customs administration, a copy of the customs control documents that

indicate, to the satisfaction of the customs administration, that the

good remained under customs control while in the territory of such

country,

Section F--Drawback and Duty Deferral Programs

Article X: Drawback and Duty Deferral Programs

1. For purposes of Article 303 of the Agreement, ``identical or

similar'' means ``identical'' and ``similar'' as defined in Article 15,

subsections 2 (a) and (b) of the Customs Valuation Code, and as further

defined in Annex IX.1.

2. For purposes of Article 303(1) of the Agreement, ``the total

amount of customs duties paid to another Party on the good that has

been subsequently exported to the territory of that other Party'' means

the customs duties that are paid in respect of the entry for

consumption of the good in the customs territory of a Party, including

any change referred to under paragraph 7(b).

3. For purposes of Article 303(1) of the Agreement, where a good is

exported from the territory of a Party to the territory of another

Party and entered into a duty deferral program in that other Party:

(a) the good shall not be considered to have been exported to the

territory of that other Party unless and until such time as the good is

withdrawn from the duty deferral program for consumption in the customs

territory of that other Party, and

(b) where the good or another good incorporating that good is

subsequently exported directly from the duty deferral program to a non-

NAFTA country, Article 303 shall not apply to the good, and a refund,

waiver or reduction of duties may be granted upon presentation of

satisfactory evidence of the exportation of the good or that other good

to the non-NAFTA country.

4. In accordance with paragraph (d) of the definition of

``satisfactory evidence'' under Article 318, ``satisfactory evidence''

includes an affidavit from the person claiming, subject to Article 303

of the Agreement, a refund, waiver or reduction of customs duties,

where such affidavit is based on information received from the importer

of the good in the territory of the Party into which the good was

subsequently exported.

5. Satisfactory evidence, in the form of one or more of the

documents referred to in the definition in Article 318 of the Agreement

and paragraph 4, shall contain:

(a) the import entry number,

(b) the date of importation,

(c) the tariff classification number,

(d) the rate of duty, and

(e) the amount of duties paid,

in respect of the importation of the good into the territory of the

Party to which the good was subsequently exported.

6. The Party to whom a claim for refund of the amount of customs

duties paid, or a waiver or reduction of the amount of customs duties

owed, is made may request that the Party to whose territory the good

was subsequently exported examine the information referred to under

paragraph 5 (a) through (e) that was provided in connection with that

claim.

7. The Party to whom a request was made under paragraph 6 shall:

(a) where it determines that the information referred to under

paragraph 5 is not correct at the time of the request, provide the

requesting Party with the corrected information, and

(b) monitor the importations in respect of the goods that were the

[[Page 46469]]

subject of a request and notify the requesting Party of any change in

respect of the duties paid in connection therewith.

8. For purposes of Article 303.6(b) of the Agreement, the

circumstances under which a good shall be considered to be in same

condition include the following:

(a) mere dilution with water or another substance;

(b) cleaning, including removal of rust, grease, paint or other

coatings;

(c) application of preservative, including lubricants, protective

encapsulation, or preservation paint;

(d) trimming, filing, slitting or cutting;

(e) putting up in measured doses, or packing, repacking, packaging

; repackaging; or

(f) testing, marking, labelling, sorting, or grading,

provided that such operations do not materially alter the

characteristics of the good.

Section G--Final Provisions

Article XI: Final Provisions

1. For purposes of Chapter Five of the Agreement and these Uniform

Regulations, ``completed'' means completed, signed and dated.

2. Each Party shall ensure that its customs procedures governed by

the Agreement are in accordance with Chapter Five of the Agreement and

these Uniform Regulations.

3. These Uniform Regulations shall enter into force on the date of

the entry into force of the Agreement.

4. For purposes of Chapter Five of the Agreement and these Uniform

Regulations, any reference to ``materials that are used in the

production of the good'' or ``that are used in the production of a

material that is used in the production of the good'' shall include

materials that are incorporated into a good or material as defined in

the Uniform Regulations for Chapter Four.

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[[Page 46470]]

[GRAPHIC][TIFF OMITTED]TN06SE95.013

BILLING CODE 4820-02-C

[[Page 46471]]

NORTH AMERICAN FREE TRADE AGREEMENT

CERTIFICATE OF ORIGIN INSTRUCTIONS

For purposes of obtaining preferential tariff treatment, this

document must be completed legibly and in full by the exporter and be

in the possession of the importer at the time the declaration is made.

This document may also be completed voluntarily by the producer for use

by the exporter. Please print or type:

Field 1: State the full legal name, address (including country) and

legal tax identification number of the exporter. Legal tax

identification number is: in Canada, employer number or importer/

exporter number assigned by Revenue Canada; in Mexico, federal

taxpayer's registry number (RFC); and in the United States, employer's

identification number or Social Security number.

Field 2: Complete field if the Certificate covers multiple

shipments of identical goods as described in Field #5 that are imported

into a NAFTA country for a specified period of up to one year (blanket

period). ``FROM'' is the date upon which the Certificate becomes

applicable to the good covered by the blanket Certificate (it may be

prior to the date of signing this Certificate). ``TO'' is the date upon

which the blanket period expires. The importation of a good for which

preferential tariff treatment is claimed based on this Certificate must

occur between these dates.

Field 3: State and full legal name, address (including country) and

legal tax identification number, as defined in field #1, of the

producer. If more than one producer's good is included on the

Certificate, attach a list of the additional producers, including the

legal name, address (including country) and legal tax identification

number, cross referenced to the good described in field #5. If you wish

this information to be confidential, it is acceptable to state

``Available to Customs upon request''. If the producer and the exporter

are the same, complete field with ``SAME''. If the producer is unknown,

it is acceptable to state ``UNKNOWN''.

Field 4: State the full legal name, address (including country) and

legal tax identification number, as defined in field #1, of the

importer. If the importer is not known, state ``UNKNOWN''; if multiple

importers, state ``VARIOUS''.

Field 5: Provide a full description of each good. The description

should be sufficient to relate it to the invoice description and to the

Harmonized System (H.S.) description of the good. If the Certificate

covers a single shipment of a good, include the invoice number as shown

on the commercial invoice. If not known, indicate another unique

reference number, such as the shipping order number.

Field 6: For each good described in field #5, identify the H.S.

tariff classification to six digits. If the good is subject to a

specific rule of origin in Annex 401 that requires eight digits,

identify to eight digits, using the H.S. tariff classification of the

country into whose territory the good is imported.

Field 7: For each good described in field #5, state which criterion

(A through F) is applicable. The rules of origin are contained in

Chapter Four and Annex 401. Additional rules are described in Annex

703.2 (certain agricultural goods), Annex 300-B, Appendix 6A (certain

textile goods) and Annex 308.1 (certain automatic data processing goods

and their parts). NOTE: In order to be entitled to preferential tariff

treatment, each good must meet at least one of the criteria below.

Preference Criteria

A--The good is ``wholly obtained or produced entirely'' in the

territory of one or more of the NAFTA countries, as referred to in

Article 415. NOTE: The purchase of a good in the territory does not

necessarily render it ``wholly obtained or produced''. If the good is

an agricultural good, see also criterion F and Annex 703.2. (Reference:

Article 401(a) and 415)

B--The good is produced entirely in the territory of one or more of

the NAFTA countries and satisfies the specific rule of origin, set out

in Annex 401, that applies to its tariff classification. The rule may

include a tariff classification change, regional value-content

requirement or a combination thereof. The good must also satisfy all

other applicable requirements of Chapter Four. If the good is an

agricultural good, see also criterion F and Annex 703.2 (Reference:

Article 401(b))

C--The good is produced entirely in the territory of one or more of

the NAFTA countries exclusively from originating materials. Under this

criterion, one or more of the materials may not fall within the

definition of ``wholly produced or obtained'', as set out in Article

415. All materials used in the production of the good must qualify as

``originating'' by meeting the rules of Article 401(a) through (d). If

the good is an agricultural good, see also criterion F and Annex 703.2

(Reference: Article 401(c))

D--Goods are produced in the territory of one or more of the NAFTA

countries but do not meet the applicable rule of origin, set out in

Annex 401, because certain non-originating materials do not undergo the

required change in tariff classification. The goods do nonetheless meet

the regional value-content requirement specified in Article 401(d).

This criterion is limited to the following two circumstances:

1. The good was imported into the territory of a NAFTA country in

an unassembled or disassembled form but was classified as an assembled

good, pursuant to H.S. General Rule of Interpretation 2(a); or

2. The good incorporated one or more non-originating materials,

provided for as parts under the H.S., which could not undergo a change

in tariff classification because the heading provided for both the good

and its parts and was not further subdivided into subheadings, or the

subheading provided for both the good and its parts and was not further

subdivided. NOTE: This criterion does not apply to Chapters 61 through

63 of the H.S. (Reference: Article 401(d))

E--Certain automatic data processing goods and their parts,

specified in Annex 308.1 that do not originate in the territory are

considered originating upon importation into the territory of a NAFTA

country from the territory of another NAFTA country when the most-

favoured-nation tariff rate of the good conforms to the rate

established in Annex 308.1 and is common to all NAFTA countries

(Reference: Annex 308.1)

F--The good is an originating agricultural good under preference

criterion A, B, or C above and is not subject to a quantitative

restriction in the importing NAFTA country because it is a ``qualifying

good'' as defined in Annex 703.2, Section A or B (please specify). A

good listed in Appendix 703.2.B.7 is also exempt from quantitative

restrictions

[[Page 46472]]

and is eligible for NAFTA preferential tariff treatment if it meets the

definition of ``qualifying good'' in Section A of Annex 703.2. NOTE 1:

This criterion does not apply to goods that wholly originate in Canada

or the United States and are imported into either country. NOTE 2: A

tariff rate quota is not a quantitative restriction.

Field 8: For each good described in field #5, state ``YES'' if you

are the producer of the good. If you are not the producer of the good,

state ``NO'' followed by (1), (2) or (3), depending on whether this

certificate was based upon: (1) your knowledge of whether the good

qualifies as an originating good; (2) your reliance on the producer's

written representation (other than a Certificate of Origin) that the

good qualifies as an originating good; or (3) a completed and signed

Certificate for the good, voluntarily provided to the exporter by the

producer.

Field 9: For each good described in field #5, where the good is

subject to a regional value content (RVC) requirement, indicate ``NC''

if the RVC is calculated according to the net cost method; otherwise,

indicate ``NO''. If the RVC is calculated according to the net cost

method over a period of time, further identify the beginning and ending

date (DD/MM/YR) of that period. (Reference: Articles 402.1, and 402.5)

Field 10: Identify the name of the country (``MX'' or ``US'' for

agricultural and textile goods exported to Canada; ``US'' or ``CA'' for

all goods exported to Mexico; or ``CA'' or ``MX'' for all goods

exported to the United States) to which the preferential rate of

customs duty applies, as set our in Annex 302.2, in accordance with the

Marketing Rules or in each Party's schedule of tariff elimination.

For all other originating goods exported to Canada, indicate

appropriately ``MX'' or ``US'' if the goods originate in that NAFTA

country, within the meaning of the NAFTA Rules of Origin Regulations,,

and any subsequent processing in the other NAFTA country does not

increase the transaction value of the goods by more than seven percent;

otherwise indicate ``JNT'' for joint production. (Reference: Annex

302.2).

Field 11: This field must be completed, signed and dated by the

exporter. When the Certificate is completed by the producer for use by

the exporter, it must be completed, signed and dated by the producer.

The date must be the date the Certificate was completed and signed.

[[Page 46473]]

Annex I.1d

Language of a Party

For purposes of these Uniform Regulations the language of a Party

shall be, in the case of:

(a) Canada, English or French;

(b) Mexico, Spanish; and

(c) the United States, English.

[[Page 46474]]

Annex II.3

Corrected Declaration of Origin

An importer shall not be subject to penalties if, in the case of:

(a) Canada, the importer makes the corrected declaration within

ninety days from the date on which the importer has reason to believe

that the declaration is incorrect;

(b) Mexico, the importer makes the corrected declaration before the

customs administration begins an investigation regarding an incorrect

declaration or initiates the exercise of its auditing powers on the

accuracy of a declaration or an inspection pursuant to the application

of the random selection procedures; and

(c) United States, the importer makes the corrected declaration

within thirty days from the date on which the importer has reason to

believe that the declaration is incorrect and such corrected

declaration is make before the commencement of a formal investigation

of the incorrect declaration.

[[Page 46475]]

Annex III.2

Country-Specific Definitions of ``Series of Importations''

For purposes of Article 503 of the Agreement, ``series of

importations'' means, in the case of:

(a) Canada, two or more importations of a good accounted for

separately but covered by one commercial invoice issued by the seller

of the good to the purchaser of the good;

(b) Mexico, two or more customs entries covering a good arriving

the same day or released the same day, and consigned to, or imported by

any person, but covered by one commercial invoice; and

(c) the United States, two or more customs entries covering a good

arriving the same day from the same exporter and consigned to the same

person.

[[Page 46476]]

Annex IV.1

Country-Specific Definitions of ``Promptly''

For purposes of Article 504(1)(b) of the Agreement, ``promptly''

means, in the case of:

(a) Canada, immediately;

(b) Mexico, prior to the commencement of an investigation by

officials with authority to conduct criminal investigations regarding

the Certificate of Origin; and

(c) the United States, within 30 days.

[[Page 46477]]

Annex VI.9

Common Standards for Written Questionnaires

1. For purposes of Article VI.9 of these Uniform Regulations, the

Parties will seek to agree on uniform questions to be included in a

general questionnaire.

2. Subject to paragraph 3, where the customs administration of a

Party conducts a verification under Article 506(1)(a) of the Agreement,

it shall send the general questionnaire referred to in paragraph 1 of

this Annex.

3. For purposes of Article 506(1)(a) of the Agreement, where the

customs administration of a Party requires specific information not

reflected in the general questionnaire, it may send a more specific

questionnaire, according to the information required to determine

whether the good that is the subject of the verification is an

originating good.

4. For purposes of Article VI of these Uniform Regulations, the

verification questionnaires may, at the option of the exporter or

producer, be completed in either the language of the Party into whose

territory the good is imported, or the language of the Party in the

territory in which the exporter or producer is located.

5. Nothing in this Annex shall be interpreted to constrain the

customs administration of a Party from requesting additional

information in accordance with Article 506(1)(a) of the Agreement and

these Uniform Regulations.

[[Page 46478]]

Annex VI.23

Rulings and Advance Rulings

A person shall be entitled to rely on a ruling or advance ruling

that is issued, in the case of:

(a) Canada, in accordance with Departmental Memorandum 11-11-1

(National Customs Rulings) or pursuant to section 43.1(1) of the

Customs Act (Advance Rulings);

(b) Mexico, pursuant to Article 34 of the Codigo Fiscal de la

Federacion and to Article 30 of the Ley Aduanera or the applicable

provision of Mexican law related to advance rulings under Article 509

of the Agreement; and

(c) the United States, pursuant to 5 U.S.C. 301, 19 U.S.C. 66, or

19 U.S.C. 1624.

[[Page 46479]]

Annex VII.2

Common Standards for Information Required in the Application for an

Advance Ruling

1. For purposes of Article 509(2) of the Agreement, each Party

shall provide that a request for an advance ruling shall contain:

(a) the name and address of the exporter, producer or importer of

the good requesting the issuance of the ruling, as the case may be,

hereinafter referred to as the applicant,

(b) where the applicant is

(i) the exporter of the good, the name and address of the producer

and importer of the good, if known,

(ii) the producer of the good, the name and address of the exporter

and importer of the good, if known, or

(iii) the importer of the good, the name and address of the

exporter and, if known, the producer of the good.

(c) where the request is made on behalf of an applicant, the name

and address of the person requesting the issuance of the advance ruling

and either

(i) a written statement from the person requesting the issuance of

the advance ruling, or

(ii) upon the request of the customs administration of that Party,

such person provide, in accordance with its laws, evidence from the

applicant on whose behalf the ruling is being requested,

that indicates that the person is duly authorized to transact business

as the agent of the applicant.

(d) a statement, on the basis of the applicant's knowledge, as to

whether the issue that is the subject of the request for an advance

ruling is, or has been, the subject of

(i) a verification of origin

(ii) an administrative review or appeal

(iii) a judicial or quasi-judicial review, or

(iv) a request for an advance ruling

in the territory of any Party, and if so, a brief statement setting

forth the status or disposition of the matter.

(e) a statement, on the basis of the applicant's knowledge, as to

whether the good that is the subject of the request for an advance

ruling has previously been imported into the territory of the Party to

whom the request for the advance ruling has been made.

(f) a statement that the information presented is accurate and

complete, and

(g) a complete description of all relevant facts and circumstances

relating to the issue that is the subject of the request for the

advance ruling, including,

(i) a concise statement, within the scope of Article 509(1) of the

Agreement, setting forth the issue on which the advance ruling is

sought, and

(ii) a general description of the good.

2. Where relevant to the issue that is the subject of the request

for an advance ruling, the request shall include, in addition to the

information referred to in paragraph 1,

(a) a copy of any advance ruling or other ruling with respect to

the tariff classification of the good that has been issued to the

applicant by the Party to whom the request for an advance ruling is

made, and

(b) if no previous advance ruling or other ruling with respect to

the tariff classification of the good has been issued by the Party to

whom the request for the advance ruling is made, sufficient information

to enable the customs administration of that Party to classify the

good, including,

(i) a full description of the good, including, where relevant, the

composition of the good, a description of the process by which the good

is manufactured, a description of the packaging in which the good is

contained, the anticipated use of the good and its commercial, common

or technical designation, product literature, drawings, photographs, or

schematics, and

(ii) where practical and useful, a sample of the good.

3. Where the request for the advance ruling involves the

application of a rule of origin that requires an assessment of whether

materials used in the production of the good undergo an applicable

change in tariff classification, the request shall include:

(a) a listing of each material that is used in the production of

the good,

(b) with respect to each material referred to in paragraph (a) that

is claimed to be an originating material, a complete description of the

material, including the basis on which it is considered that the

material originates,

(c) with respect to each material referred to in paragraph (a) that

is a non-originating material or the origin of which is unknown, a

complete description of the material, including its tariff

classification, if known, and

(d) a description of all processing operations employed in the

production of the good, the location of each operation and the sequence

in which the operations occur.

4. Where the request for an advance ruling involves the application

of a regional value-content requirement, the applicant shall indicate

whether the request is based on the use of the transaction value or the

net cost method, or both.

5. Where the request for an advance ruling involves the use of the

transaction value method, the request shall include:

(a) information sufficient to calculate the transaction value of

the good in accordance with Schedule II of the NAFTA Rules of Origin

Regulations with respect to the transaction of the producer of the

good, adjusted to a F.O.B. basis,

(b) information sufficient to calculate the value of each material

that is a non-originating material or the origin of which is unknown

that is used in the production of the good in accordance with Section

7, and, where applicable, section 6(10) of the NAFTA Rules of Origin

Regulations, and

(c) with respect to each material that is claimed to be an

originating material that is used in the production of the good, a

complete description of the material including the basis on which it is

considered that the material originates.

[[Page 46480]]

6. Where the request for an advance ruling involves the use of the

net cost method, the request shall include:

(a) a listing of all product, period and other costs relevant to

determining the total cost of the good referred to under the NAFTA

Rules of Origin Regulations,

(b) a listing of all excluded costs to be subtracted from the total

cost referred to under the NAFTA Rules of Origin Regulations,

(c) information sufficient to calculate the value of each material

that is a non-originating material or the origin of which is unknown

that is used in the production of the good in accordance with section 7

of the NAFTA Rules of Origin Regulation,

(d) the basis for any allocation of costs in accordance with

Schedule VII of the NAFTA Rules of Origin Regulations, and

(e) the period over which the net cost calculation is to be made.

7. Where the request for an advance ruling involves an issue of

whether, with respect to a good or a material that is used in the

production of a good, the transaction value of the good or the material

is acceptable, the request shall include information sufficient to

permit an examination of the factors enumerated in Schedules III or

VIII of the NAFTA Rules of Origin Regulations, as applicable.

8. Where the request for an advance ruling involves an issue with

respect to an intermediate material under Article 402(10) of the

Agreement, the request shall contain sufficient information to

determine the origin and value of the material in accordance with

Article 402(11).

9. Where the request for an advance ruling is limited to the

calculation of an element of a regional value content formula, in

addition to the information required under paragraph 1, only that

information set out under paragraph 4, 5 and 6 which is relevant to the

issue that is the subject of the request for an advance ruling need be

contained in the request.

10. Where the request for an advance ruling is limited to the

origin of a material that is used in the production of a good in

accordance with Article VII.1 of these Uniform Regulations, in addition

to the information required under paragraph 1, only that information

set out under paragraph 2 and 3 which is relevant to the issue that is

the subject of the advance ruling need be contained in the request.

[[Page 46481]]

Annex VII.8

Country-Specific Definitions of ``importations of a good''

For purposes of Article 509(7) of the Agreement, ``importations of

a good'' means importations of a good:

(a) which, in the case of Canada, has been released pursuant to

section 31 of the Customs Act;

(b) for which, in the case of Mexico, an entry document has been

presented pursuant to Article 25 of the Ley Aduanera (Customs Act); and

(c) which, in the case of the United States, has been entered

pursuant to section 1484 of title 19, United States Code.

[[Page 46482]]

Annex IX.1

United States Definition of ``identical or similar''

For purposes of Article 303 of the Agreement, in the case of the

United States ``identical or similar'' shall have the same meaning as

``same kind and quality'' as set forth in 19 U.S.C. Sec. 1313(b).

[FR Doc. 95-21717 Filed 9-5-95; 8:45 am]

BILLING CODE 4820-02-M