Agathon Associates can help you determine whether you can save money using free trade agreement procedures.
Here's a quick overview of FTA qualification from U.S. Customs
1. Is your good dutiable upon importation into the United States? (http://2016.export.gov/FTA/ftatarifftool/TariffSearch.aspx)
If not, it may not be worthwhile for you to perform a free trade agreement (FTA) origination analysis and comply with the recordkeeping requirements necessary to make a FTA claim.[1]
2. Do you know your good’s background, where it was grown, mined or manufactured? Do you know where the components or ingredients were produced?
If the answer is "no," do not claim preference!
3. Was your good produced in a FTA partner country or was it produced elsewhere and simply shipped through or subject to minor processing in the FTA partner?
If the good was not SUBSTANTIALLY manufactured in an FTA country, do not claim FTA preference!
4. If your good was produced in an FTA-partner country, do you have a certificate of origin or affidavit from the EXPORTER or MANUFACTURER attesting that it “ORIGINATES” under the terms of the FTA?
If not, don’t claim FTA preference.
5. If you have an affidavit or certification of origin from the exporter or producer in the FTA-partner country, is the Harmonized Tariff Schedule (HTS) number correct? Is the signatory someone in the company with knowledge of how the good was produced and access to substantiating records? Is this type of product typically produced in this country?
If the answer to all three questions is not “yes,” do not claim FTA preference.
6. Subsequent to the good’s production, did it enter into the commerce of another country?
If the answer is “yes,” do not claim FTA preference.
(Disregard this question with respect to goods of Australia, Bahrain, Chile, Morocco, Oman or Singapore.)
7. Subsequent to the good’s manufacture, did it undergo operations outside of a FTA partner country other than to load, unload or preserve it in good condition?
If the answer is “yes,” do not claim FTA preference.
8. Do you have any reason to suspect the veracity of the documents provided to you?
If “yes” and you proceed to make a FTA claim, you would not be exercising your reasonable care responsibilities.
9. Is EVERY molecule of your good (from resource extraction through the ENTIRE chain of production) the product or growth of the U.S. or a FTA partner country and have you records to that effect?
If “yes,” your good is “wholly obtained” and preference can be claimed.
10. Is your good produced EXCLUSIVELY from materials produced in the U.S. or a FTA partner country, and for which you have a certificate of origin or manufacturer’s affidavit on file?
If “yes," your good is “exclusively of originating materials” and preference can be claimed.
(Note: This criterion is usually seen only in the simplest of manufactured goods.)
11. The following questions do not apply to goods of Jordan or Israel, and only to certain goods of Bahrain, Morocco or Oman.
A) Does the importer, exporter or producer know the correct HTS classification number of the good and ALL of the materials used to produce it?
B) Has he looked up the tariff-shift rule in the General Note of the U.S. HTS or underlying FTA and ensured that ALL non-originating materials (those not backed by a certificate of origin or affidavit) meet this rule?
C) If the tariff-shift rule requires a regional value content, are the manufacturing costs incurred in the FTA party sufficient to meet the threshold?
If the answer to any of these questions is “no,” do not fill out a certificate of origin or affidavit, or make a FTA preference claim.
12. For additional information, refer to the CBP website or contact a licensed Customs Broker or other trade professional.
[1] Even if your good is unconditionally free, you may want to make a FTA claim to obtain the merchandise processing fee (MPF) exemption (0.003464 x the value of the good, min. $25, max. $485). The following FTAs provide the MPF exemption: Australia, Bahrain, CAFTA-DR, Chile, Colombia, Korea, NAFTA, Oman, Panama, Peru and Singapore.
You may also want to perform the FTA analysis because your customer has requested that you provide a FTA certificate of origin.
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