[Code of Federal Regulations]
[Title 19, Volume 2]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 19CFR181.72]

[Page 377-379]
 
                        TITLE 19--CUSTOMS DUTIES
 
  CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY
 
PART 181--NORTH AMERICAN FREE TRADE AGREEMENT--Table of Contents
 
           Subpart G--Origin Verifications and Determinations
 
Sec. 181.72  Verification scope and method.

    (a) General. Subject to paragraph (e) of this section, Customs may 
initiate a verification in order to determine whether a good imported 
into the United States qualifies as an originating good for purposes of 
preferential tariff treatment under the NAFTA as stated on the 
Certificate of Origin pertaining to the good. Such a verification:
    (1) May also involve a verification of the origin of a material that 
is used in the production of a good that is the subject of a 
verification under this section;
    (2) May include verification of the applicable rate of duty applied 
to an originating good in accordance with Annex 302.2 of the NAFTA and 
may include a determination of whether a good is a qualifying good for 
purposes of Annex 703.2 of the NAFTA; and
    (3) Shall be conducted only by means of one or more of the 
following:
    (i) A verification letter which requests information from a Canadian 
or Mexican exporter or producer, including a Canadian or Mexican 
producer of a material, and which identifies the good or material that 
is the subject of the verification. The verification letter may be on 
Customs Form 28 or other appropriate format and may be sent:
    (A) By certified or registered mail, or by any other method that 
produces a confirmation of receipt by the exporter or producer; or
    (B) By any other method, regardless of whether it produces proof of 
receipt by the exporter or producer;
    (ii) A written questionnaire sent to an exporter or a producer, 
including a producer of a material, in Canada or Mexico. The 
questionnaire:
    (A) May be sent by certified or registered mail, or by any other 
method that produces a confirmation of receipt by the exporter or 
producer; or
    (B) May be sent by any other method, regardless of whether it 
produces proof of receipt by the exporter or producer; and
    (C) May be completed by the Canadian or Mexican exporter or producer 
either in the English language or in the language of the country in 
which that exporter or producer is located;
    (iii) Visits to the premises of an exporter or a producer, including 
a producer of a material, in Canada or Mexico to review the types of 
records referred to in Sec. 181.12 of this part and observe the 
facilities used in the production of the good or material; and
    (iv) Any other method which results in information from a Canadian 
or Mexican exporter or producer, including a Canadian or Mexican 
producer of a material, that is relevant to the origin determination. 
The information so obtained may form a basis for a negative 
determination regarding a good (see Sec. 181.75(b) of this part) only if 
the information is in writing and is signed by the exporter or producer.
    (b) Applicable accounting principles. When conducting a verification 
of origin to which Generally Accepted Accounting Principles may be 
relevant, Customs will apply and accept the Generally Accepted 
Accounting Principles applicable in the country in which the good is 
produced or in which the exporter is located.
    (c) Inquiries to importer not precluded. Nothing in paragraph (a) of 
this section shall preclude Customs from directing inquiries or requests 
to a U.S. importer for documents or other information regarding the 
imported good. If such an inquiry or request involves requesting the 
importer to obtain and provide written information from the exporter or 
producer of the good or from the producer of a material that is used in 
the production of the good, such information shall be requested by the 
importer and provided to the importer by the exporter or producer only 
on a voluntary basis, and a failure or refusal on the part of the 
importer to obtain and provide such information shall not be considered 
a failure of the exporter or producer to provide the information and 
shall not constitute a ground for denying preferential tariff treatment 
on the good.

[[Page 378]]

    (d) Failure to respond to letter or questionnaire--(1) Nonresponse 
to initial letter or questionnaire. If the exporter or producer, 
including a producer of a material, fails to respond to a verification 
letter or questionnaire sent under paragraph (a)(2)(i) or (a)(2)(ii) of 
this section within 30 calendar days from the date on which the letter 
or questionnaire was sent, or such longer period as may be specified in 
the letter or questionnaire, Customs shall send a follow-up verification 
letter or questionnaire to that exporter or producer. The follow-up 
letter or questionnaire:
    (i) Except where the verification letter or questionnaire only 
involved the origin of a material used in the production of a good and 
was sent to the producer of the material, may include the written 
determination referred to in Sec. 181.75 of this part, provided that the 
information specified in paragraph (b) of that section is also included; 
and
    (ii) Shall be sent:
    (A) By certified or registered mail, or by any other method that 
produces a confirmation of receipt by the exporter or producer, if so 
requested by the customs administration of Canada or Mexico from which 
the good was exported; or
    (B) By any method, if no request under paragraph (d)(1)(ii)(A) of 
this section has been made by the Canadian or Mexican customs 
administration.
    (2) Nonresponse to follow-up letter or questionnaire--(i) Producer 
of a material. If a producer of a material fails to respond to a follow-
up verification letter or questionnaire sent under paragraph (d)(1) of 
this section, Customs may consider the material to be non-originating 
for purposes of determining whether the good to which that material 
relates is an originating good.
    (ii) Exporter or producer of a good. If the exporter or producer of 
a good fails to respond to a follow-up verification letter or 
questionnaire sent under paragraph (d)(1) of this section, Customs may 
consider the good to be non-originating and consequently may deny 
preferential tariff treatment on the good as follows:
    (A) If the follow-up letter or questionnaire included a written 
determination as provided for in paragraph (d)(1)(i) of this section and 
the exporter or producer fails to respond to the follow-up letter or 
questionnaire within 30 calendar days or such longer period as specified 
therein:
    (1) From the date on which the follow-up letter or questionnaire and 
written determination were received by the exporter or producer, if sent 
pursuant to paragraph (d)(1)(ii)(A) of this section; or
    (2) From the date on which the follow-up letter or questionnaire and 
written determination were either received by the exporter or producer 
or sent by Customs, if sent in accordance with paragraph (d)(1)(ii)(B) 
of this section; or
    (B) Provided that the procedures set forth in Secs. 181.75 and 
181.76 of this part are followed, if the follow-up letter or 
questionnaire does not include a written determination as provided for 
in paragraph (d)(1)(i) of this section and the exporter or producer 
fails to respond to the follow-up letter or questionnaire within 30 
calendar days or such longer period as specified in the letter or 
questionnaire:
    (1) From the date on which the follow-up letter or questionnaire was 
received by the exporter or producer, if sent pursuant to paragraph 
(d)(1)(ii)(A) of this section; or
    (2) From the date on which the follow-up letter or questionnaire was 
either received by the exporter or producer or sent by Customs, if sent 
in accordance with paragraph (d)(1)(ii)(B) of this section.
    (e) Calculation of regional value content under net cost method--(1) 
General. Where a Canadian or Mexican producer of a good elects to 
calculate the regional value content of a good under the net cost method 
as set forth in General Note 12, HTSUS, and in the appendix to this 
part, Customs may not, during the time period over which that net cost 
is calculated, conduct a verification under Sec. 181.72(a) of this part 
with respect to the regional value content of that good.
    (2) Cost submission for motor vehicles. Where, pursuant to General 
Note 12, HTSUS, and the appendix to this part, a Canadian or Mexican 
producer of a light duty vehicle or heavy duty vehicle, as defined in 
the appendix to this part, elects to average its regional

[[Page 379]]

value content calculation over its fiscal year, Customs may request, in 
writing, that the producer provide a cost submission reflecting the 
actual costs incurred in the production of the category of motor 
vehicles for which the election was made. Such a written request shall 
constitute a verification letter under paragraph (a)(2)(i) of this 
section, and the requested cost submission shall be submitted to Customs 
within 180 calendar days after the close of the producer's fiscal year 
or within 60 days from the date on which the request was made, whichever 
is later.

[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as amended by T.D. 02-15, 67 FR 
15482, Apr. 2, 2002]