Responding to FTA Verification Requests: The Customs Broker's Perspective

Transcription

1 Responding to FTA Verification Requests: The Customs Broker's Perspective

2 Agenda: Introduction Overview Understanding your FTA and Trade Promotion Rules of Origin and Exceptions Origin vs Originating Situation review Why wait for a 28? Check list Responding to Customs

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4 Decision to source from an FTA country Applying the appropriate FTA Finding a Manufacturer Making your Customs Entry Making the goods Transporting 4

5 Understanding your FTA: What rules of origin apply to your product? I.e. yarn forward What exceptions, to the rule of origin, may apply to your product? I.e. short supply What other requirements must be met in order for your goods to qualify under the FTA? I.e. de minimis; direct shipment; sewing thread 5

6 Same goes for your Trade Preference Programs.. What rules under the program apply to your good in order for it to qualify? Don t forget Haiti and HOPE, Hope II and HELPenacted in 2006 Are there any additional requirements? 6

7 Fiber Forward Fibers must be formed in the countries party to the trade agreements Yarn Forward Fiber can originate from anywhere but yarn must be formed in the countries party to the trade agreement. In general this is the standard rule of origin across FTAs. Fabric Forward Yarn can originate from anywhere but the fabric, knit or woven, must be formed in the countries that are party to the agreement. 7

8 Cut and Sew Garments must be cut and sewn (assembled) in the countries which are party to the agreement & Regional Value Content Inputs, and assembling processes of at least a certain percentage of the total value must take place in the countries which are a party to the agreement. 8

9 TPLs (Tariff Preference Levels) Value-Added Rules Cumulation Short supply Earned import allowances Direct shipment De minimis Sewing thread Narrow elastics Visible lining fabric Pocketing bag fabric Nylon filament yarns 9

10 Origin vs Originating Although your good s Country of Origin may be an FTA Country, this does not mean that it meets the requirements under the FTA program to be considered a qualifying good. There are specific Rules of origin put in place under each FTA that must be met for your good to qualify. These rules are different from how we determine the Country of Origin. 10

11 SAMPLE SCENARIO 11

12 We have a 100% Cotton Garment Pre-determined that this garment will follow the following rule of origin in order to qualify under the agreement: Yarn Forward Pre-determined that the following rules will also apply in order for the garment to qualify under the agreement: Direct Shipment Narrow Elastic Fabric Sewing Thread Pocket Bags Visible Lining 12

13 Documents Commercial Invoice finished goods Proof of Payment Certificate *If required Photo of Garment *If sample not requested Yarn Affidavit Fabric Affidavit Sewing Thread Affidavit Narrow Elastic Affidavit Pocket Bag Affidavit Visible Lining Production Records of relevant raw materials Purchase orders Invoices / Proof of Payment Payments Transportation and export documentation Entry Documentation into finishing country Bill of Materials / Cut Yield Report Fabric inventory logs Cutting tickets of finished good Production reports (sewing / finishing operations) Time Cards Final inspection reports Export documentation 13

14 Why wait for a 28? Be Proactive rather than Reactive Understand the FTA or Trade Preference Program and how it applies to your specific product. Be sure of product s eligibility prior to making the claim. Have processes and procedures in place to ensure the required information is readily available and easy to access. Make sure your Custom s Broker is aware that your product qualifies for preferential treatment. 14

15 Check yourself before you wreck yourself. Have a self audit process in place with your vendors. Set up a response timeline for both you and your vendors. i.e. Your vendor will have 7 days to provide you the requested and necessary information. You will then have 7 days to review and ensure all information is provided and correct. Depending on the volume of goods you import, this should be done at least once a year, if not more, to ensure that your vendors are prepared, and even more importantly compliant. State your expectations of your vendors, make them known. Set up factory visits. Know your factories that you are doing business with. 15

16 Make a list and check it twice. Once you have determined what rules and requirements apply to your good, create a checklist of the documents that will be needed for both you and if need be, Customs, to substantiate that the goods qualify for preferential treatment under an FTA. The checklists could be an extremely helpful tool to also provide to, and organize your vendors. 16

17 When you present your documents to Customs, think of it as telling your garments production story from start to finish. Neatly organize and group your documents. Quality of information over the quantity. Only supply Customs with what they truly need to substantiate the claim. Highlight key pieces of information to make it easy for Customs to review. You don t want to leave Customs questioning anything.. 17

18 Details Matter Thank you 18