NAFTA and CCFTA Verification of Origin Regulations (SOR/97-333)

Interpretation

1 The definitions in this section apply in these Regulations.

Act

Act means the Customs Act. (Loi)

customs administration

customs administration means the competent authority that is responsible under the law of a NAFTA country or of Chile, as the case may be, for the administration of customs laws and regulations. (administration douanière)

Generally Accepted Accounting Principles

Generally Accepted Accounting Principles has the meaning assigned to that expression by Schedule XII of the NAFTA Rules of Origin Regulations or by Schedule XI of the CCFTA Rules of Origin Regulations, as the case may be. (principes comptables généralement reconnus)

goods

goods means goods for which preferential tariff treatment under NAFTA or preferential tariff treatment under CCFTA is claimed. (marchandises)

material

material means a good that is used in the production of another good, and includes a part or ingredient. (matière)

verification letter

verification letter means a letter that requests information with respect to the origin of goods that are the subject of a verification of origin. (lettre de vérification)

verification questionnaire

verification questionnaire means a questionnaire that requests information with respect to the origin of goods that are the subject of a verification of origin. (questionnaire de vérification)

verification visit

verification visit means the entry into a place or premises for the purposes of conducting a verification of origin of goods under paragraph 42.1(1)(a) of the Act. (visite de vérification)

Manner of Conducting a Verification of Origin

2 In addition to a verification visit, an officer may conduct a verification of origin of goods in any of the following manners:

• (a) by reviewing a verification questionnaire completed by

  • (i) the exporter or producer of the goods, or

  • (ii) a producer or supplier of a material that is used in the production of the goods;

• (b) by reviewing a written response received from a person referred to in paragraph (a) to a verification letter; or

• (c) by reviewing any other information received from a person referred to in paragraph (a).

Prescribed Premises

3 The following premises of persons in a NAFTA country other than Canada or in Chile are prescribed premises for the purposes of a verification visit:

• (a) the premises of an exporter or a producer of goods; and

• (b) the premises of a producer or a supplier of a material that is used in the production of goods.

Conditions for Conducting a Verification Visit

• 4 (1) An officer may conduct a verification visit on the condition that

  • (a) the officer sends a written notice of the intention to conduct the verification visit to

    • (i) the person whose premises are the subject of the verification visit,

    • (ii) the customs administration of Chile or of the NAFTA country in the territory of which the verification visit is to occur, and

    • (iii) if requested by the customs administration of Chile or of the NAFTA country in the territory of which the verification visit is to occur, the embassy in Canada of Chile or of that NAFTA country, as the case may be; and

  • (b) the person whose premises are the subject of the verification visit consents to the verification visit.

• (2) A notice referred to in paragraph (1)(a) shall specify

  • (a) the identity of the customs administration of the officer sending the notice;

  • (b) the name of the person whose premises are the subject of the verification visit;

  • (c) the date and place of the verification visit;

  • (d) the object and scope of the verification visit, including specific reference to the goods that are the subject of the verification of origin or to the materials that are used in the production of those goods;

  • (e) the name and title of the officer; and

  • (f) the legal authority for the verification visit.

Postponement of a Verification Visit

• 5 (1) Any customs administration that receives a notice under subparagraph 4(1)(a)(ii) may postpone the verification visit by sending a written request to the officer who sent the notice, within 15 days after receiving the notice.

• (2) A postponement of a verification visit under subsection (1) shall be for a period not exceeding 60 days beginning on the date of receipt of the notice, or for a longer period, where the longer period is agreed to by the customs administration of Canada and the customs administration of Chile or the NAFTA country in the territory of which the verification visit is to take place, as the case may be.

Observers

6 Any person who receives a notice under subparagraph 4(1)(a)(i) may designate two observers to be present during the verification visit.

7 An observer designated under section 6 may not participate in the verification visit in a manner other than as an observer.

8 A person who designates an observer under section 6 shall identify that observer to the officer conducting the verification visit.

Generally Accepted Accounting Principles

9 Where an officer determines, during the course of a verification of origin, that a producer of goods has failed to record costs in accordance with Generally Accepted Accounting Principles applied in the territory of the NAFTA country or Chile in which the goods that are the subject of the verification of origin are produced, the officer shall send a written notice to the producer stating that the producer has not recorded its costs in accordance with Generally Accepted Accounting Principles and that the producer must record those costs in accordance with those principles within 60 days after receiving that written notice.

Verification Letters and Verification Questionnaires

10 A verification letter or verification questionnaire shall specify

• (a) the identity of the customs administration of the officer sending the verification letter or verification questionnaire;

• (b) a description of the goods that are the subject of the verification of origin or of the materials that are used in the production of those goods; and

• (c) the period within which the verification letter must be answered or the verification questionnaire must be completed and returned, which period, except in the case of a verification letter under section 11, shall be not less than 30 days after the date on which the verification letter or the verification questionnaire was sent.

11 Where, pursuant to section 11 of the NAFTA Rules of Origin Regulations or pursuant to section 10 of the CCFTA Rules of Origin Regulations, a producer of a motor vehicle elects to average its regional value content calculation over the producer’s fiscal year, an officer may, in a verification letter, request that a cost submission reflecting the actual costs incurred in the production of the category of motor vehicles for which the election was made be submitted to the officer by the producer not later than the later of

• (a) 180 days after the end of the producer’s fiscal year, and

• (b) 60 days after the date on which the verification letter was sent.

Subsequent Verification Letters and Verification Questionnaires

12 Where a verification letter or verification questionnaire has been sent to a person and that person does not respond to the verification letter, or complete and return the verification questionnaire, within the period specified therein, an officer shall send a subsequent verification letter or subsequent verification questionnaire to that person.

Denial or Withdrawal of Preferential Tariff Treatment Under NAFTA or of Preferential Tariff Treatment Under Ccfta

13 For the purposes of subsection 42.1(2) of the Act, preferential tariff treatment under NAFTA or preferential tariff treatment under CCFTA may be denied or withdrawn from the goods that are the subject of a verification of origin where the exporter or producer of the goods

• (a) does not consent to a verification visit within 30 days after receiving a notice referred to in paragraph 4(1)(a);

• (b) who is required to maintain records of goods in accordance with the applicable laws of the country in which the verification of origin is conducted

  • (i) fails to maintain those records in accordance with those laws, or

  • (ii) denies the officer conducting the verification of origin access to those records; or

• (c) to whom a subsequent verification letter or subsequent verification questionnaire is sent under section 12 does not respond to the subsequent verification letter or complete the subsequent verification questionnaire and return it to an officer within 30 days after the date on which the subsequent verification letter or subsequent verification questionnaire is

  • (i) received, where the subsequent verification letter or subsequent verification questionnaire is sent in accordance with paragraph 18(a), or

  • (ii) sent, where the subsequent verification letter or subsequent verification questionnaire is sent in accordance with paragraph 18(b).

• 14 (1) An officer shall send a written notice of the intent to re-determine the origin of goods under subsection 59(1) of the Act with any statement that is provided to an exporter or producer of goods pursuant to subsection 42.2(1) of the Act and that states that the goods that are the subject of a verification of origin are not eligible for preferential tariff treatment under NAFTA or preferential tariff treatment under CCFTA, as the case may be.

• (2) A notice referred to in subsection (1) shall include the date after which preferential tariff treatment under NAFTA or preferential tariff treatment under CCFTA, as the case may be, may be denied or withdrawn in respect of the goods that are the subject of the verification of origin and the period during which the exporter or producer of the goods may provide written comments or additional information regarding the origin of those goods.

15 A re-determination of the origin of goods shall not be made earlier than 30 days after the date on which the notice referred to in subsection 14(1) is

• (a) received, where the notice is sent in accordance with paragraph 18(a); or

• (b) sent, where the notice is sent in accordance with paragraph 18(b).

Methods of Sending Documents

16 A verification letter or verification questionnaire may be sent by any method.

17 A notice referred to in subparagraph 4(1)(a)(i) shall be sent by any method that produces a confirmation of receipt.

18 A subsequent verification letter, subsequent verification questionnaire or a notice referred to in section 14 shall be sent

• (a) if requested by the customs administration of Chile or of a NAFTA country from whose territory the goods were exported as the case may be, by any method that produces a confirmation of receipt; or

• (b) in any other case, by any method.

Repeal

19 [Repeal]

Coming into Force

Footnote ^*20 These Regulations come into force on the day on which section 38 of the Canada-Chile Free Trade Agreement Implementation Act, chapter 14 of the Statutes of Canada, 1997, comes into force.

• Return to footnote ^*[Note: Regulations in force July 5, 1997, see SI/97-86.]