NAFTA Origin Verification Audit

The U.S. Customs Service man initiate a verification in order to determine whether or not a good imported into the United States qualifies as an originating good for purposes of preferential treatment under the NAFTA as stated on the Certificate of Origin.

A NAFTA verification audit is simply the method used by all three Customs services in the NAFTA territory to determine whether or not a product that has been claimed as NAFTA eligible IS in fact NAFTA eligible.

The US Customs Service may initiate a verification audit with an importer to determine whether or not a good imported into the US qualifies as originating for the purposes of preferential tariff treatment under the NAFTA.

All three Customs Services cooperate with NAFTA verification requests.

As a producer or exporter, you can be subject to audit verification from all three countries.

Origin verifications are:

• The act of verifying the exporter’s claim that the imported good is an “originating” good under NAFTA

Origin verifications are NOT:

• Asking the importer of record routine questions about the imported goods
• Asking the importer of record questions about the NAFTA claim

How are NAFTA Verification Audits initiated?

• CO requested from the importer of record
• Informal inquiries directed to the exporter of producer:
  • conferences with the exporter in the US
  • correspondence
  • telephone calls
• Formal inquiries directed to the exporter of producer:
  • written questionnaire
  • visit to the exporter’s premises

Verification Visit Procedures

• Written Notification to:
  • the exporter or producer to be visited
  • the Customs Administrator in either Canada, Mexico, or the USA
  • the embassy of Canada, Mexico, or the USA if requested
• Written Consent from the exporter

An Origin Determination Is:

• a written statement as to whether or not the imported merchandise qualifies as an “originating” good entitled to preferential duty treatment under the NAFTA
  
• issued AFTER an origin verification (within 60 days of receipt of all information)
  
• which is not binding upon the Customs service

Under the NAFTA, this right is also extended to the Customs services in Canada and Mexico.

As a US Exporter or Producer, if the Customs service in Canada or Mexico requests information about the product that you are certifying, failure to provide the information in a timely manner will result in your product being considered non-originating, and the NAFTA claim being denied. This will require your customer pay Customs duties and fees, which might make your product non-competitive.

More information is contained in 19 C.F.R. 181.72 to 181.76.