CBP Clarifies Rules for NAFTA MPF Exemption and Certificate of Origin Requirements

U.S. Customs and Border Protection (CBP, Customs) issued a Federal Register notice on Monday, September 17, 2007 amending title 19 of the Code of Federal Regulations (19 CFR), to clarify declaration requirements for claiming Merchandise Processing Fee (MPF) exemptions for goods subject to the North American Free Trade Agreement (NAFTA). The notice also clarifies certain Certificate of Origin requirements for NAFTA goods.

Regarding MPF exemptions, the notice addresses “situations in which an importer of an originating good does not have a duty preference incentive to make the required NAFTA declaration upon entry because the Normal Trade Relations rate of duty on the good is free (i.e., the good is unconditionally duty free).”

According to 19 CFR 24.23(b)(1)(i)(B), all merchandise formally entered or released by Customs is subject to a minimum MPF of $25 unless otherwise exempted. Some NAFTA goods may qualify for exemptions identified in 19 CFR 24.23(c), and as stated in the register notice, “in order to claim the MPF exemption for unconditionally free goods from a NAFTA country, an importer of an originating good must place the appropriate special program indicator opposite the good on the entry form even if the importer is not actually claiming NAFTA preference for duty purposes.”

The Federal Register notice also explains that importers may be required to provide a Certificate of Origin for NAFTA-originating goods, unless the value of the shipment is $2,500 or less. It goes on to clarify that “the $2,500 value refers to the total value of a shipment and not the value of the individual goods in a shipment.” The full text of the Federal Register notice can be found here.