[Federal Register Volume 60, Number 172 (Wednesday, September 6, 1995)]
[Notices]
[Pages 46464-46482]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-21717]




  Federal Register / Vol. 60, No. 172 / Wednesday, September 6, 1995 / 
Notices  

[[Page 46464]]


DEPARTMENT OF THE TREASURY

Customs Service


Regulatory Standards for Implementation of the North American 
Free Trade Agreement

AGENCY: U.S. Customs Service, Department of the Treasury.

ACTION: General notice.

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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