Questions & Answers to the Memorandum of Understanding between CCRA and CBP on the exchange of NAFTA related information

May 1, 2003

Question 1
Why have we entered into this type of arrangement?

Answer:
The Canada Customs and Revenue Agency (CCRA) and Bureau of Customs and Border Protection (CBP) are committed under Article 512 of the NAFTA to cooperate in the enforcement of their respective customs-related laws or regulations implementing the NAFTA. In order to fulfill that commitment, the parties have agreed to bilaterally exchange the following NAFTA-related information: specific data elements from determinations of origin, the full text of re-determinations, further re-determinations, audit reports, and advance rulings and the annual audit plan.

Question 2
What is the purpose of exchanging NAFTA-related information with the CBP?

Answer:
We believe that this exchange of information will ensure and enhance consistency in the application of the NAFTA rules of origin. It will also help to ensure that only originating goods receive the preferential tariff treatment provided for in the NAFTA. The CCRA and the CBP also foresee the MOU as a common tool to facilitate the sound administration of the NAFTA and to provide assistance to exporters in an effort to increase informed compliance across our border.

Question 3
What information are we going to share?

Answer:
We will be sharing our annual audit plans, the audit reports provided to US exporters, origin determinations resulting from verifications, origin re-determinations, further re-determinations as a result of appeals, and advance rulings provided pursuant to Article 509 of the NAFTA.

The annual audit plan will be exchanged at the beginning of our respective fiscal years. The audit plans cover only audits to be performed by CCRA origin auditors at HQ and CBP auditors.

The information exchanged relating to origin determinations, as a result of an origin verification, will consist of: country of export, method of verification, the name and address of the exporter and the producer, HS number, applicable preference criterion, result of the determination, and date on which the determination was issued.

In the case of the audit reports, origin re-determinations, further re-determinations and advance rulings, we will exchange the full text of the decision that was provided to the exporter, producer or importer as the case may be.

Question 4
What is the implementation date?

Answer:
The MOU is to be signed and implemented on April 23, 2003.

Question 5
What about verifications and/or audits commenced prior to that date?

Answer:
The information to be exchanged will be for verifications and audits commenced after April 23, 2003 and appeals and advance rulings requested after April 23, 2003. Advance rulings and appeals
requested and, verifications or audits commenced prior to April 23, 2003, will not be shared.

Question 6
How will the importers, the exporters or producers, be advised that the information they submit to the CCRA will be exchanged with the CBP?

Answer:
The origin verification letter requesting the exporter to provide CCRA with information supporting the origin of the good, as well as the letters acknowledging the receipt of the appeal or advance ruling request will include a new paragraph explaining the exchange of information. We will also advise
our trading community via a customs notice, etc.

Question 7
Since this exchange of information is performed under the NAFTA, are we exchanging Mexican information as well?

Answer:
At the present time, this MOU is bilateral: only Canadian and American information will be exchanged.

Question 8
Even though we are sharing information, will it remain confidential?

Answer:
This MOU is based upon the principles of reciprocity and confidentiality. The information exchanged will be treated as confidential and will be granted the protection from disclosure provided under the law of the participant receiving such information.

Question 9
Can we share the CBP information within the CCRA?

Answer:
Since the purpose of this MOU is to ensure and enhance compliance with the NAFTA rules of origin, the information obtained under this MOU can be shared for that purpose. If the CCRA wanted to disclose this information to any other authorities for any other purpose, the CCRA would have to contact the CBP and request their written consent prior to any disclosure within the CCRA or other government departments (and vice-versa).

Question 10
Do we know, prior to the implementation, if the work performed by the CBP is similar to ours?

Answer:
An information-gathering meeting took place in Washington, DC in January 2002. During that meeting, the participants explained their legislative requirements and administrative practices. Americans and Canadians perform their Customs activities in a similar fashion.

Question 11
Will this exchange of information also include tariff treatment appeals filed as a result of a re-determination based upon the lack of a certificate of origin on the part of the importer?

Answer:
We will only be exchanging decisions related to exporter origin audits/verifications where a questionnaire was sent.