[Code of Federal Regulations]

[Title 19, Volume 2]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 19CFR181.72]



[Page 377-379]

 

                        TITLE 19--CUSTOMS DUTIES

 

   CHAPTER I--BUREAU OF CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF 

        HOMELAND SECURITY; DEPARTMENT OF THE TREASURY (CONTINUED)

 

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;



[[Page 378]]



    (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.

    (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



[[Page 379]]



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 Sec. Sec.  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 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]