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Preparing for USMCA…What do you need to know?

Home News Preparing for USMCA…What do you need to know?

The countdown is on and July 1, 2020 is fast approaching; are you prepared for the new Agreement?  Farrow will require your certifications prior to July 1 in order to ensure your database is updated.

NAFTA will cease to remain in effect upon the implementation of the New Agreement. The Certificate of Origin currently used to prove NAFTA eligibility is no longer valid as of July 1, 2020 for your future imports.  All imports as of July 1, 2020 that do not have a valid USMCA certification will have the Chapter 1-97 ad valorem duty rate applied.  Please note there is not a required document format under the new Agreement, but there are several required data elements.  We have provided a template for your use.

The following are steps which should be undertaken as soon as possible:

1. Contact your manufacturers from Mexico and Canada and make sure that they understand the new rules of origin and have verified that their goods actually qualify.
2. Contact your exporters from Mexico and Canada and ensure that they send their certifications either as Blanket certificates or update their invoices to contain the appropriate Certification of Origin (remember the blanket NAFTA Certificates of Origin cannot be used after June 30).
3. Review your current Rulings and if you have any Advance Rulings related to Origin, the NAFTA ruling will no longer be valid.  You must apply for a new ruling under USMCA.
4. If you are the exporter, importer, or Manufacturer, and you intend to certify qualification, review the rules of origin (some rules are very complex) to determine whether goods qualify and under what rule.
5. Ensure you start with the correct tariff classification for the good.
6. Review the rule of origin for that good to determine if the rule has a tariff shift rule or a regional value content rule or another rule.
7. Review your Bill of Materials and update the Bill of Materials if the components or ingredients have changed;
8. Ensure that you list the origin of each item in the Bill of Materials.
9. List the tariff classification number for each item that was not manufactured in Canada;
10. If you must apply a tariff shift rule of origin, ensure that the tariff shift has occurred for each item in the Bill of Materials; and if you must apply a regional value content rule, perform the calculations to determine if the rule of origin is satisfied.
11. Send Farrow your certifications under the new agreement to naftaus@farrow.com.  You may also reach out for assistance via e-mail.

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