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TPD > FTAA > Canada Proposals 2000 > Positions
 
 


Canada's Proposals for the FTAA Agreement 
FTAA Negotiating Groups - Canadian Written Submissions 

 

June 2000

PROPOSAL FOR THE FTAA CHAPTER ON CUSTOMS PROCEDURES
  1. GENERAL PRINCIPLES AND OBLIGATIONS
     
    1. Transparency and Dissemination

      Customs administrations shall establish specific procedures and mechanisms to:
      1. ensure clarity and predictability of national requirements and procedures that affect international business operations and the timely clearance of goods, and 

      2. ensure the availability of current and relevant information to the trading community on customs procedures and requirements in a prompt and easily accessible manner. 

      The customs administrations shall also provide adequate and fair appeal procedures for redress of customs decisions.

    2. Facilitation and Simplification of Customs Procedures

      Customs administrations shall establish simplified customs procedures associated with the timely and efficient movement and clearance of goods and services to reduce the administration and cost burdens placed on the international trading community while maintaining appropriate enforcement capabilities.

    3. Effectiveness and Efficiency

      Customs administrations shall implement mechanisms aimed at continuously modernizing customs procedures to improve their effectiveness and efficiency, and develop methodologies (benchmarks) for periodically measuring and evaluating progress to fulfil these objectives.

    4. Automation

      Customs administrations shall develop modern automated systems for clearance procedures, that are compatible throughout the Americas, to facilitate information exchange between administrations and the trading community. These automated customs systems may also be used for enforcement activities such as contraband detection and to improve risk management techniques. 

    5. Cooperation

      Customs administrations shall foster greater cooperation among the member administrations on issues relating to information exchange and data improvement. They shall also coordinate clearance procedures among non-customs border authorities and provide a foundation for technical assistance and exchanges of best practices.

    6. Integrity

      Customs administrations shall implement established procedures for the recruitment, management and training of personnel to ensure a high standard of service to the international trading community and establish a system of internal staff controls, including a regime of sanctions against employees proven to have compromised integrity standards.

    7. Combating fraud and other customs-related illicit activities

      Customs administrations shall adopt mechanisms to detect and combat fraud and other customs-related illicit activities and also provide enforcement arrangements and penalty regimes for non-compliance which are expeditious and effective. 

  2. OTHER CUSTOMS PROCEDURES RELATED TO THE ENTRY OF GOODS

    Advance Rulings

    1. Each Party shall, through its customs administration, provide for the issuance of written advance rulings, prior to the importation of a good into its territory, to an importer in its territory or an exporter or producer in the territory of any other Party, on the basis of the facts and circumstances presented by such importer, exporter or producer of the good, concerning the application of its Customs laws to an import transaction, including classification, valuation, country of origin, or eligibility for preferential treatment under this Agreement.

    2. Each Party shall provide for the issuance of advance rulings, including a detailed description of the information reasonably required to process an application for a ruling.

    3. Each Party shall provide that its customs administration:

      1. may, at any time during the course of an evaluation of an application for an advance ruling, request supplemental information from the person requesting the ruling; and 

      2. shall, after it has obtained all necessary information from the person requesting an advance ruling, issue the ruling within 120 days. 

    4. Subject to paragraph 5, each Party shall apply an advance ruling to importations into its territory of the good for which the ruling was requested, beginning on the date of its issuance or such later date as may be specified in the ruling.

    5. The Party issuing an advance ruling may modify or revoke the ruling:

      1. if the ruling is based on an error

        1. of fact, or 

        2. in the tariff classification or value of a good or a material that is the subject of the ruling; 

      2. if there is a change in the material facts or circumstances on which the ruling is based;

      3. to conform with a modification of Chapter xx Rules of Origin; or

      4. to conform with a judicial decision or a change in its domestic law.

    6. Each Party shall provide that where it issues an advance ruling to a person that has misrepresented or omitted material facts or circumstances on which the ruling is based or has failed to act in accordance with the terms and conditions of the ruling, the Party may apply such measures as the circumstances may warrant.

    Review and Appeal

    Each Party shall grant the same rights to review and appeal on any determination or advance ruling given to its importers, exporters and manufacturers.

    Each Party shall provide that importers in its territory have access to:

    1. at least one level of administrative review independent of the official or office responsible for the decision under review, and

    2. judicial review before a Court or Tribunal of the decision taken at the final level of administrative review. 

    Penalties (Sanctions)

    Each Party shall establish or maintain criminal, civil or administrative penalties for violations of its laws and regulations governing its customs procedures.

    Cooperation

    The Parties shall cooperate:
     

    1. to the extent possible, and in order to facilitate trade between their territories, on customs issues such as those related to the compiling and exchange of statistics on the importation and exportation of goods, the harmonizing of documentation used in trade, the standardizing of data elements, the acceptance of an international data syntax, and the exchange of information; and

    2. to the extent possible, in the dissemination of customs regulations and information through the use of the electronic means or to establish contact points to address inquiries.

    Harmonization of data requirements

    The Customs Administrations of the Parties shall, in order to maximize the benefits to be derived from their co-operative efforts, endeavor to harmonize their data requirements.

  3. CUSTOMS PROCEDURES RELATED TO THE ADMINISTRATION OF THE ORIGIN REGIME

    1. DECLARATION AND CERTIFICATION

      Article x1: Declaration and Certification

      1. The Parties shall establish, prior to the implementation of this Agreement, an origin declaration for the purpose of an exporter certifying that a good being exported from the territory of a Party into the territory of another Party qualifies as an originating good, and may thereafter revise the declaration by agreement of the Parties.

      2. Each Party shall:
        1. require that, for an origin declaration to be considered valid by the Party into whose territory a good is imported with respect to which a claim for preferential tariff treatment is made, the origin declaration be completed and signed by the exporter of that good in the territory of the Party from which the good is exported; and

        2. provide that, where an exporter in its territory is not the producer of the good, the exporter may complete and sign an origin declaration on the basis of

          1. its knowledge of whether the good qualifies as an originating good, or

          2. its reasonable reliance on the producer's written representation that the good qualifies as an originating good.


      3. Each Party shall provide for, at the election of an exporter, a blanket origin declaration by that exporter for multiple shipments that shall
        1. be applicable to multiple importations of identical originating goods, that occur within a period specified by the exporter, not to exceed one year; and 

        2. be in the form of a letter by a responsible officer of the exporter, specifying 

          1. the goods to which the declaration applies, 

          2. the time period covered by the declaration, and 

          3. the wording of the origin declaration to be established by the Parties pursuant to paragraph 1.

      4. Each Party may require that an origin declaration for a good imported into its territory be completed by the exporter in an official language of any of the Parties.

      5. A Party may, in accordance with its domestic legislation, grant preferential tariff treatment to low value shipments of originating products from another Party and to originating products forming part of the personal luggage of a traveller coming from another Party by waiving the requirements to present an origin declaration as referred to in paragraph ___. 

      6. A Party may exclude any importation from the provisions of paragraph 1 when the importation is part of a series of importations that may reasonably be considered to have been undertaken or arranged for the purpose of avoiding the origin declaration requirements of this Annex.
      7. The Parties will exchange information regarding the value limits applied by each Party for products referred to in paragraph 5.

      Article x2: Obligations relating to importations

      1. Except as otherwise provided in this Chapter, each Party shall require an importer in its territory that claims preferential tariff treatment for a good imported into its territory from the territory of another Party to:
        1. make an origin declaration, that the good qualifies as an originating good;

        2. have the origin declaration in its possession at the time the declaration is made;

        3. provide, on the request of the customs administration of the Party into which the good is imported,
          1. a copy of the origin declaration,

          2. documentary evidence such as the description of the good and bills of lading or waybills that indicate the shipping route and all points of shipment and transhipment prior to the importation of the good into its territory, and

          3. where the good is shipped through or transshipped in the territory of a non-Party, a copy of the customs control documents and any other acceptable or comparable documents that indicate, to the satisfaction of the customs administration, that the good remained under customs control while in the territory of such non-Party; and

        4. promptly make a corrected declaration and pay any duties owing where the importer has reason to believe that an origin declaration contains information that is not correct. The importer shall not be subject to penalties for the making of an incorrect declaration, if it voluntarily makes a corrected declaration pursuant to this paragraph.

      2. Each Party shall provide that, where an importer in its territory claims preferential tariff treatment for a good imported into its territory from the territory of another Party, the Party may deny preferential tariff treatment to the good if the importer fails to comply with any requirement under this Chapter.

      3. Each Party shall provide that, where a good would have qualified as an originating good when it was imported into the territory of that Party but no claim for preferential tariff treatment was made at that time, the importer of the good may, within a period of not less than one year after the date on which the good was imported, apply for a refund of any excess duties paid as the result of the good not having been accorded preferential tariff treatment, on presentation of:

        1. a written declaration that the good qualified as an originating good at the time of importation;

        2. a copy of the origin declaration; and

        3. such other documentation relating to the importation of the good that the customs administration of a Party may require.

      Article x3: Obligations relating to exportations

      1. Each Party shall provide that:

        1. an exporter in its territory shall provide a copy of the origin declaration to its customs administration on request; and

        2. an exporter in its territory that has completed and signed an origin declaration, and that has reason to believe that the declaration contains information that is not correct, shall promptly notify in writing all persons to whom the declaration was given by the exporter of any change that could affect the accuracy or validity of the declaration.

      2. Each Party:

        1. shall provide that a false certification, by an exporter in its territory, that a good to be exported to the territory of another Party qualifies as an originating good shall have the same legal consequences, with appropriate modifications, as would apply to an importer in its territory for a contravention of its customs laws and regulations regarding the making of a false statement or representation concerning imported goods; and

        2. may apply such measures as the circumstances may warrant where an exporter in its territory fails to comply with any requirement of this Chapter.

      Article x4: Record and document keeping requirements

      Each Party shall provide that:

      1. an exporter in its territory that completes and signs an origin declaration shall maintain in its territory, for (__) years after the date on which the declaration was signed, or for such longer period as the Party may specify, all records relating to the origin of a good for which preferential tariff treatment was claimed in the territory of another Party, including records associated with:

        1. the purchase of, cost of, value of, and payment for the good that is exported from its territory,

        2. the sourcing of, purchase of, cost of, value of, and payment for, all materials, including indirect materials, used in the production of the good that is exported from its territory, and

        3. the production of the good in the form in which the good is exported from its territory; and

      2. an importer claiming preferential tariff treatment for a good imported into the Party's territory shall maintain in that territory, for (__) years after the date of importation of the good or for such longer period as the Party may specify, such documentation, including a copy of the origin declaration, as the Party may require relating to the importation of the good.

    2. THE ADMINISTRATION OF RULES OF ORIGIN

      Article x5: Advance Rulings

      1. Each Party shall, through its customs administration, provide for the issuance of written advance rulings, prior to the importation of a good into its territory, to an importer in its territory or an exporter or producer in the territory of any other Party, on the basis of the facts and circumstances presented by such importer, exporter or producer of the good, concerning whether the good qualifies as an originating good under the requirements of Chapter xx Rules of Origin.

      2. Each Party shall adopt or maintain procedures for the issuance of advance rulings, including a detailed description of the information reasonably required to process an application for a ruling.

      3. Each Party shall provide that its customs administration:

        1. may, at any time during the course of an evaluation of an application for an advance ruling, request supplemental information from the person requesting the ruling; and

        2. shall, after it has obtained all necessary information from the person requesting an advance ruling, issue the ruling within 120 days.

      4. Subject to paragraph 5, each Party shall apply an advance ruling to importations into its territory of the good for which the ruling was requested, beginning on the date of its issuance or such later date as may be specified in the ruling.

      5. The Party issuing an advance ruling may modify or revoke the ruling:

        1. if the ruling is based on an error

          1. of fact, or

          2. in the tariff classification or value of a good or a material that is the subject of the ruling;

        2. if there is a change in the material facts or circumstances on which the ruling is based;

        3. to conform with a modification of Chapter xx Rules of Origin; or

        4. to conform with a judicial decision or a change in its domestic law.

      6. The Party issuing an advance ruling may review an advance ruling to establish its continued validity.


      7. Each Party shall provide that where it issues an advance ruling to a person that has misrepresented or omitted material facts or circumstances on which the ruling is based or has failed to act in accordance with the terms and conditions of the ruling, the Party may apply such measures as the circumstances may warrant.

    Article x6: Review and Appeal

    1. Each Party shall grant substantially the same rights of review and appeal of determinations of origin and advance rulings by its customs administration as it provides to importers in its territory to any person:

      1. who completes and signs an origin declaration for a good that has been the subject of a determination of origin; or

      2. who has received an advance ruling pursuant to Article x5.

    2. Each Party shall provide that the rights of review and appeal referred to in paragraph 1 shall include access to:

      1. at least one level of administrative review independent of the official or office responsible for the determination under review; and

      2. in accordance with its domestic law, judicial or quasi-judicial review of the determination or decision taken at the final level of administrative review.

    3. VERIFICATION AND CONTROL OF ORIGIN

      Article x7: Procedures for verifying origin

      1. For purposes of determining whether a good imported into its territory from the territory of another Party qualifies as an originating good, a Party may, through its customs administration, conduct a verification by means of:

        1. written questionnaires to an exporter or a producer in the territory of that other Party for purposes of obtaining the information on the basis of which an origin declaration referred to in Article x1 was completed and signed;

        2. visits to the premises of an exporter or a producer in the territory of that other Party to review the records referred to in Article x4 and to observe the facilities used in the production of the good; or

        3. such other procedures as the Parties may agree.

      2. Prior to conducting a verification visit pursuant to paragraph (2)(b), the customs administration of the Party shall :
        1. deliver a written notification of its intention to conduct the visit at least 30 days in advance of the proposed visit to 

          1. the exporter or producer whose premises are to be visited,

          2. the customs administration of the Party in whose territory the visit is to occur, and

          3. if requested by the Party in whose territory the visit is to occur, the embassy of that Party in the territory of the Party proposing to conduct the visit; and

        2. obtain the written consent of the exporter or producer whose premises are to be visited.

      3. The notification referred to in paragraph 3 shall include:

        1. the identity of the customs administration issuing the notification;

        2. the name of the exporter or producer whose premises are to be visited;

        3. the date and place of the proposed verification visit;

        4. the object and scope of the proposed verification visit, including specific reference to the good that is the subject of the verification;

        5. the names and titles of the officials performing the verification visit; and

        6. the legal authority for the verification visit.

      4. Where an exporter or a producer does not respond to a written questionnaire, has not given its written consent to a proposed verification visit within 30 days of delivery of notification pursuant to paragraph 3, fails to give sufficient information on a questionnaire or denies access to records during a visit, the notifying Party may deny preferential tariff treatment to the good that would have been the subject of the origin verification.

      5. Each Party shall provide that, where its customs administration receives notification pursuant to paragraph 3, its customs administration may, within 15 days of receipt of the notification, postpone the proposed verification visit for a period not exceeding 60 days from the date of such receipt, or for such longer period as the Parties may agree.

      6. A Party shall not deny preferential tariff treatment to a good based solely on the postponement of a verification visit pursuant to paragraph 6.

      7. Each Party shall permit an exporter or a producer whose good is the subject of a verification visit by another Party to designate two observers to be present during the visit, provided that:

        1. the observers do not participate in a manner other than as observers; and

        2. the failure of the exporter or producer to designate observers shall not result in the postponement of the visit.

      8. Each Party shall, through its customs administration, when conducting a verification of origin to which Generally Accepted Accounting Principles or Generally Accepted Auditing Standards may be relevant, accept and make use of such principles as are applicable in the territory of the Party of the exporter or the producer, as the case may be.

      9. The Party conducting a verification shall provide the exporter or producer whose good is the subject of the verification with a written determination of whether the good qualifies as an originating good, including findings of fact and the legal basis for the determination.

      10. Where verifications by a Party indicate a pattern of conduct by an exporter or a producer of false or unsupported representations that a good imported into its territory qualifies as an originating good, the Party may withhold preferential tariff treatment to identical goods exported or produced by such person until that person establishes compliance with the rules of origin.

      11. Each Party shall provide that where it determines that a certain good imported into its territory does not qualify as an originating good based on a tariff classification or a value applied by the Party to one or more materials used in the production of the good, which differs from the tariff classification or value applied to the materials by the Party from whose territory the good was exported, the Party's determination shall not become effective until it notifies in writing both the importer of the good and the person that completed the origin declaration of the determination.

      12. A Party shall not apply a determination made under paragraph 12 to an importation made before the effective date of the determination where:
        1. the customs administration of the Party from whose territory the good was exported has issued an advance ruling under Article x5 or any other ruling on the tariff classification or on the value of materials, or has given consistent treatment to the entry of the materials under the tariff classification or value at issue, on which a person is entitled to rely; and

        2. the advance ruling or consistent treatment was given prior to initiation of the determination.

      13. If a Party denies preferential tariff treatment to a good pursuant to a determination made under paragraph 12, it shall postpone the effective date of the denial for a period not exceeding 90 days where the importer of the good, or the person who completed and signed the origin declaration for the good, demonstrates that it has relied in good faith to its detriment on the tariff classification or value applied to such materials by the customs administration of the Party from whose territory the good was exported.

      14. Additional approaches to verification under consideration

      Article x8: Confidentiality

      1. Each Party shall maintain, in accordance with its law, the confidentiality of confidential business information collected pursuant to this Chapter and shall protect that information from disclosure that could prejudice the competitive position of the persons providing the information.


      2. The confidential business information collected pursuant to this Chapter may only be disclosed to those authorities responsible for the administration and enforcement of determinations of origin and of customs and revenue matters. 

      Article x9: Cooperation

      1. In furtherance of their mutual interest in ensuring the effective and uniform administration of Articles x1, x2 and x3, the Parties shall cooperate fully in the verification of origin declarations and in the enforcement of their respective laws in accordance with this Agreement.

      2. Pursuant to paragraph 1, the Parties shall:

        1. cooperate in developing verification standards and a framework to ensure that the Parties act consistently in determining that goods imported into their respective territories meet the rules of origin set out in Chapter xx; and

        2. exchange information to assist each other in the tariff classification, valuation and determination of origin of imported and exported goods.

      3. In furtherance of their mutual interest in the prevention, investigation and repression of unlawful acts, the Parties shall cooperate fully in the enforcement of their respective customs laws in accordance with this Agreement and with other treaties, agreements and memoranda of understanding between them.

      4. Each Party shall, to the extent allowed by its law with respect to the confidentiality of information, notify another Party of any determination, measure or ruling, including, to the greatest extent practicable, any that is prospective in application, that:

        1. establishes an administrative policy or principle that is likely to influence future determinations of origin; or

        2. changes the scope of an existing administrative policy, principle, precedential decision, regulation or rule of general application regarding determinations of origin.

Article x10: Institutional arrangements


The Parties will establish an appropriate institutional mechanism to ensure the effective administration of the customs-related provisions of this Agreement.


  SANCTIONS

Each Party shall maintain measures imposing criminal, civil or administrative penalties for violations of its laws and regulations relating to this Chapter.
 

  • TECHNICAL COOPERATION


    The Parties will establish a Customs Procedures Group, comprising representatives of each Party, to ensure:

    1. a mechanism to establish common understanding and approach for customs procedures, requirements and regulations and their continuous improvement,


    2. the interpretation of customs related articles in the Agreement,


    3. review of issues referred from the trading community with respect to classification, administration of origin, value, customs procedures, or other matters relating to the customs process, 


    4. the management of ongoing issues and concerns that arise from the application of the Agreement in technical customs areas, and


    5. the provision of training and technical assistance.
       

  • Source: Canadian Department of Foreign Affairs and International Trade