(Lexology – Arent Fox LLP)
Canada and Mexico are still account for a huge amount of imports ? over 25% of all imports entering the United States last year. And of course a large proportion of those imports are processed with claims that the product is eligible for NAFTA duty preference (zero or reduced duty rates and no mpf fees). Based on activity levels over the past year, it appears that Customs and Border Protection (CBP) is now more aggressively probing to see if those NAFTA claims are valid. For U.S. importers, this can mean some level of disruption to gather and present paperwork acceptable to CBP for past entries, as well as the potential for loss of NAFTA benefits (higher duty rates and mpf), enforcement actions, and penalties if NAFTA claims turn out to be incorrect or cannot be supported with sufficient backup to satisfy CBP.
Over the past few years, we have heard several pronouncements from CBP (as well as the Canadian and Mexican customs authorities) that more attention would be paid to verifying NAFTA origin claims. Anecdotal evidence indicates this has indeed occurred, with increased emphasis on validating NAFTA origin claims in a variety of ways. Read more here.
