KPMG Warns of Risk for Importers to Certify Origin Under USMCA
While the U.S.-Mexico-Canada Agreement allows importers to certify goods as deserving tariff benefits -- not just producers or exporters -- KPMG warned webcast listeners that if the importer and producer aren't related parties, it could be a mistake. Andrew Doornaert told listeners on May 11, “It would be a risk if you’re just relying on the exporter’s old NAFTA certificate.”
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He said that an importer that certifies goods qualify would have to retain supporting documents arguing for the good's origin; the purchase, cost, value and shipping cost of the good; the purchase, cost, value and shipping of materials used in the production of the good; documents explaining the manufacturing process; certifications from material suppliers on the country of manufacture for those materials; and documentation on indirect materials. “If you’re unrelated, there’s no guarantee that that exporter/producer may be willing to give you that information about value,” Doornaert said.
If CBP decides that an import did not qualify for USMCA, CBP will “deny privilege to all goods covered by that blanket certificate.” he said. “That could be an entire year’s worth of parts.” If CBP finds a pattern of conduct, it may deny preferences until compliance is established. He said that's similar to how CBP treats NAFTA violations today, but it's formalized in USMCA.