Verification of Rules of Origin Explained

The North American Free Trade Agreement (“NAFTA”) is a free-trade agreement between Mexico, the United States, and Canada, well known by most customs broker companies. NAFTA was implemented in 1994 and has been in effect since then. As you may have read, NAFTA is currently being renegotiated therefore the rules for import/export could change. However, one that is unlikely to change much are the rules of origin.

Free trade treaties work because it encourages goods to be made within each specific country in the free-trade area. Free trade works because it encourages economic development in the area, therefore, goods from outside the area are still subject to customs.

To prevent this abuse, countries use “rules of origin” which determine whether goods originate under the free trade area and thus are entitled to preferential tariff treatment. The verification process is different for each country, but the rules were developed as part of the treaty. The Canada Border Services Agency (“CBSA”) implements the verification rules and enforces them.

The CBSA issues guidelines for verification:

  1. D11-4-4: shows the general rules of origin; such as how to identify which country your goods originate from and how they are treated by Canadian law;
  2. D11-5-2: shows the specific rules applied to NAFTA.
  3. D11-4-20: illustrates the procedures to verify rules of origin under any free-trade agreement.

You can find more detailed information in Memorandum D11-4-20 in Appendix A which outlines the procedures for NAFTA and Chile-Canada agreement (CCFTA); Appendix B which outlines the Canada-Israel agreement (“CIFTA”); Appendix D explains procedures for Canada-Peru agreement (“CPFTA”), the Canada-Costa Rica agreement (“CCOFTA”), the Canada-Jordan agreement (CJFTA), and the Canada-Panama agreement (“CPAFTA”); and Appendix E covers the procedures for the Canada-European free trade are agreement which includes Norway, Liechtenstein, Iceland, and Switzerland (“CEFTA”).

Finally, these guidelines also provide an overview of the procedures that will take place should your goods have to go through verification procedures by customs officials in Mexico, Israel, Peru, the United States, Jordan, Costa Rica, or Panama. However, in the case of the CEFTA, the CBSA conducts the verification.

ARGO Customs

If you are trying to import into Canada and need assistance, ARGO Customs Brokers are here to help. ARGO Customs provides import/export assistance at all major points of entry into and out of Canada. If you have a question about verification of origin, we can help.