In recent months, Canada Border Services Agency auditors have determined that certain textile apparel produced in the United States does not qualify for duty-free entry under NAFTA.

Duty-free tariff treatment applies to NAFTA, LDC and other qualifying goods purchased under free trade agreements. However, assessments due to lack of origin verification information are payable by the importer, and often result in unnecessary costs.

There are several issues related to beneficial tariff treatments (e.g. non-qualifying operations, non-originating materials), and auditors are actively pursuing origin verifications in order to ensure only those goods that qualify will benefit from duty-free tariff treatment. Issues discovered in previous audits that still exist today will be dealt with more harshly than in the first audit.

Direct knowledge of how goods qualify for duty-free entry should be obtained when purchasing eligible goods. To reduce the expense and duration of audits, and to avoid costly ‘surprise’ assessments at the end of audits due to incorrect or incomplete responses from the supplier / manufacturer, importers should ensure their suppliers are aware of the rules of origin. In the case of non-originating materials, goods may still qualify for duty-free entry if proper documentation is on file.

The Omnitrans Technical Consulting Team provides practical solutions to assist importers protect themselves from unnecessary assessments and fines.

Now is the time to contact our consultants for advice and assistance in structuring their purchases and verifying the origin of goods eligible for duty-free entry to Canada.