CBP Issues Implementation Instructions on Filing & Acceptance of Claims Under DR-CAFTA (Part IV - Final)

To date, the President has declared that the DR-CAFTA will be in effect and implemented for El Salvador only. Therefore, for purposes of these instructions, CBP states that reference to a DR-CAFTA country is the U.S. and El Salvador. The DR-CAFTA took effect for El Salvador on March 1, 2006.

This is Part IV the final part of a multi-part series of summaries of this memorandum, and highlights the process that CBP uses to verify a CAFTA-DR claim. See ITT's Online Archives or 03/08/06, 03/09/06, and 03/10/06 news, 06030805, 06030920, and 06031010 for Parts I-III.)

Verification by CBP

According to CBP, the CAFTA-DR places the burden of substantiating the validity of the claim for preferential tariff treatment on the importer. An importer may make a claim based on a certification or knowledge or information in his/her possession that the good qualifies as an originating good. CBP may verify the validity of the claim and will direct inquiries for verification via a CBP Form 28, Request for Information, to the importer.

Furhermore, when requested by CBP, the importer shall provide additional documentation above and beyond the certification such as additional cost and manufacturing information. Such information may include records concerning the RVC calculation used in the claim for preference such as the build up or build down methods as outlined in GN 29 of the HTS. This includes, but is not limited to, records concerning the purchase of, cost of, value of, and payment for the good and the purchase of, cost of, value of and payment for all materials used in the production of the good, and the production of the good in its exported form.

In addition, the importer may provide relevant information from the exporter or producer of the good. In many instances, the exporter may be unwilling to provide cost and/or sourcing information to the importer. CBP will still work through the importer. The importer is expected to arrange for the foreign supplier to provide information directly to CBP.

The CAFTA-DR provides flexibility by not mandating the certification or other information be in a prescribed format (such as the NAFTA Certificate of Origin) and by permitting the certification to be submitted to CBP electronically where feasible. (See memorandum for examples of actions that CBP may take when verifying a claim.)

Determination of a Verification

If the importer forwards the certification and/or any other records or documentation demonstrating that the goods qualify for preferential tariff treatment, CBP will notify the importer of the positive determination via a CBP Form 29, Notice of Action, stating that based on the information submitted the goods qualify as originating. The CBP Form 29 will include the HTS number, description of the good, and the relevant rule of origin applied to the good.

If the importer fails to submit a certification or any relevant information, CBP will issue a negative determination via a "Proposed" CBP Form 29. The notice shall specify why the goods do not qualify for preferential tariff treatment and notify the importer that they have 20 days from the date of the notice to provide the certification and/or any related documentation to CBP. The proposed CBP Form 29 will cite the appropriate legal authority and/or regulations and detail the rate and/or value advance where appropriate.

If the importer fails to comply with the proposed CBP Form 29 within 20 days of the date of the notice, or provides a certification and/or any other documentation, and CBP determines, based on the information submitted, that the goods do not qualify for preferential tariff treatment, a negative determination will be issued to the importer via the form of a CBP Form 29 "Action Taken". The notice will specify why the goods do not originate pursuant to the CAFTA-DR rules of origin, cite the appropriate legal authority and/or regulations and detail the rate and/or value advance where appropriate.

If claims were made for preferential tariff treatment based on a blanket certification against which a negative determination was established, CBP shall deny preferential tariff treatment to all importations of identical merchandise covered by that blanket certification for all entries that have not reached final liquidation.

Where CBP determines through verification that an importer has certified more than once, falsely or without substantiation, that a good qualifies as originating, CBP may suspend preferential tariff treatment to identical goods imported by such person until that person proves to CBP's satisfaction that the goods comply with the applicable rules and regulations and qualify for preferential treatment under the Agreement.

If CBP determines that a certification or other information containing the data elements is illegible, defective or has not been completed in accordance with the requirements, the importer shall be granted no less than five working days to submit a corrected certification. Failure to provide a corrected certification shall result in denial of the claim.

(CBP adds that 19 CFR will be amended to implement the DR-CAFTA and the DR-CAFTA Implementation Act. As such, the instructions contained in this memorandum are subject to change once the regulations are issued.)

(See ITT's Online Archives or 03/03/06 news, 06030305, for BP summary of a CBP notice announcing the temporary non-ABI requirement (see Part I of this series of summaries for additional discussion), and removal of El Salvador's GSP, CBTPA, and CBERA benefits due to implementation of the DR-CAFTA for that country. See ITT's Online Archives or 03/02/06 news, 06030200, for Part I of a multi-part series of BP summaries on Proclamation 7987 implementing the DR-CAFTA.)

CBP Memorandum, including Attachment A (dated 03/03/06) available at http://www.cbp.gov/linkhandler/cgov/import/international_agreements/free_trade/dominican_republic/us_dominican.ctt/us_dominican.doc

BP Note

The DR-CAFTA is also referred to as "CAFTA-DR"