FAQs
If not, it may not be worthwhile for you to perform a free trade agreement (FTA) origination analysis and adhere to the sourcing and recordkeeping requirements necessary to make a FTA claim.[1] [2]
Global Tariffs by Customs Info
[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. $25.67, max. $497.99). The following FTAs provide the MPF exemption: Australia, Bahrain, CAFTA-DR, Chile, Colombia, Korea, NAFTA, Oman, Panama, Peru and Singapore.
[2] You may also want to perform the FTA analysis because your customer has requested that you provide a FTA certificate of origin.
If the answer is "no," do not claim preference.
If the good was not SUBSTANTIALLY manufactured in a FTA country, do not claim FTA preference!
If the answer to all three questions is not “yes,” do not claim FTA preference.
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.)
If the answer is “yes,” do not claim FTA preference.
If the answer is “yes,” do not claim FTA preference.
If “yes” and you proceed to make a FTA claim, you would not be exercising your reasonable care responsibilities.
If “yes,” your good is “wholly obtained” and preference can be claimed.
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.)
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.
For additional information, refer to the CBP website at https://www.cbp.gov/trade/priority-issues/trade-agreements/free-trade-agreements or contact a licensed Customs Broker or other trade professional.