CBP Clarification on NAFTA Certificates of Eligibility and the Quota Period to Which they Correspond
U.S. Customs and Border Protection (CBP) has posted a notice to its Web site which it states clarifies the acceptance of North American Free Trade Agreement (NAFTA) Certificates of Eligibility for certain textile and apparel products from Canada or Mexico subject to tariff preference levels (TPLs) and the quota period to which they correspond.
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Canada and Mexico Certificate Numbers Must "Match" Different Dates
Canada certificate numbers must match entry summary year. CBP states that Certificates of Eligibility issued by the Government of Canada must reflect a certificate number with a prefix that corresponds with the year of presentation of the entry summary (e.g. 5CA121212 for entry summaries presented in 2005).
Mexico certificate numbers must match export year. CBP further states that Certificates of Eligibility issued by the Government of Mexico must reflect a certificate number with a prefix that corresponds to the year the merchandise was exported from Mexico (e.g. 5MX121212 for entry summaries with a 2005 export date from Mexico).
Three Ways to Make TPL Claims
The following are highlights from CBP's notice on the three ways in which a Canada or Mexico TPL NAFTA claim can be made:
Release under entry/ID followed by entry summary with NAFTA certificate of eligibility. CBP states that the importer is not required to present an entry/entry summary (live entry) in order to obtain release of the shipment. The importer can obtain release of the merchandise using entry or I.D. procedures, which requires the presentation of the summary within 10 working days after release is authorized or before the quota period ends, whichever occurs first (19 CFR 142.23).
If a shipment is released on or after December 16, 2005, the summary must be presented by December 31, 2005 with a 2005 Certificate of Eligibility. If the summary is presented after December 31, 2005 with a 2005 Certificate of Eligibility and 2005 quota is available, quota will be charged however liquidated damages will be assessed for late file. If the summary is presented after December 31, 2005 with a 2006 Certificate of Eligibility, the summary will be rejected.
In addition, when using entry/ID procedures followed by entry summary with the NAFTA certificate of eligibility, CBP states that:
the shipment must be charged to the quota period in which it is released1
quota priority and quota status are not granted until the entry summary ispresented in proper form. If the quota fills prior to the presentation of the summary, the importer is responsible for paying the column one rate of duty.
Release of merchandise under entry/entry summary with a NAFTA certificate of eligibility. CBP states that quota priority and quota status are granted when the entry/entry summary is presented in proper form. Under this option the merchandise should not be released until quota is processed. If the quota is filled, CBP states that the importer has the option to warehouse the goods until the next opening, export/destroy the goods, or pay the Normal Trade Relations (NTR) rate of duty.
Post entry claims for NAFTA TPL. CBP states that if an importer does not claim TPL upon the initial filing of the entry summary, a post-entry claim for TPL treatment may be filed using post-entry procedures for unliquidated entries. In order to be a valid post-entry claim, the Certificate of Eligibility must accompany the claim.
The date a post-entry claim is received establishes the date/time of presentation for quota processing. If quota is available at time of receipt, the importer is entitled to the in-quota rate (low duty).
(CBP notes that NAFTA allows for the import of specified textile and apparel goods imported into the U.S. from Canada or Mexico, which are not "originating" goods but may be granted preferential tariff treatment like originating goods up to specific annual quantitative TPL. CBP further states that a valid preferential Certificate of Eligibility is required when making a TPL claim. Shipments of textile and apparel that are otherwise eligible for a TPL but without a Certificate of Eligibility will be subject to the Normal Trade Relations (NTR) rate.
In addition, CBP states that this notice supersedes TBT-97-012 (01/21/97) and TBT-97-004 (01/07/97), and detailed information on NAFTA Certificates of Eligibility can be found in Customs Directive 3550-085 (12/21/03) See today's ITT, 06010420, for BP summary of CBP notices announcing details of the 2006 TPLs for Canada and Mexico.)
1 CBP notes that this ensures that importers may not gain release of merchandise subject to a tariff-rate quota at the end of a quota period and file entry summary after the close of that period in order to circumvent the tariff rate quota in effect at the time of release.
CBP contact - Christine Kegley (202) 344-2319
CBP notice (QBT-05-075/TBT-05-032, dated 12/30/05) available at http://www.cbp.gov/linkhandler/cgov/import/textiles_and_quotas/qbts/qbt2005/05_075.ctt/05_075.doc.