NAFTA Upside Down

It is good that Customs and Border Protection publishes information to help the public engage in informed compliance. Really, that is a good thing. The trade and those who serve the trade appreciate it.

But, sometimes they use publications to promote a specific legal agenda. Usually, that is made clear in the documents. Other times, CBP does things that just look sneaky.

CBP just put out this handy document and an attachment to help people decide when it is appropriate to claim NAFTA preferential treatment. To me, this looks sneaky.

The problem is that it completely muddles the question of who is responsible for the accuracy of NAFTA claims. Is it the importer or the producer/exporter? Admittedly, the importer must use reasonable care in making the claim. So, an importer should reject a facially false certificate. If the importer has reason to suspect the certificate of origin is incorrect for some reason, it should take reasonable steps to verify it. But, the producer/exporter who certified the goods agreed, according to the terms of the Certificate of Origin, to prove the claim and be liable for false certifications. Under the NAFTA scheme of things, the producer/exporter is the party who has to do the heavy lifting on NAFTA qualification issues. The importer should be able to rely on a facially valid and complete Certificate of Origin.

In its notice, CBP refers to a court decision, Golden Ship Trading Company, in which an importer got in trouble for making GSP claims it could not support. Apparently, Customs wants importers to have the same responsibilities under NAFTA as under GSP. This is essentially the gist of what it is trying to prove in the Ford case.

The problem is that NAFTA just doesn't work like that. The Agreement requires that Customs presume a NAFTA claim is valid unless CBP conducts a verification and finds the claim to be invalid. Verifications require action by the certifier, not the importer. Customs is apparently unhappy with this part of the agreement and has latched on to reasonable care and Golden Ship as a way to put this responsibility on the importer.

Customs seems to have learned its lesson. Importer focused verifications are written into the newer free trade agreements. If Customs wants to change the NAFTA rules, it should be up front about it. Rather than try and create legal obligations through public notices and litigation, Customs should either (1) work to get the Agreement changed or (2) live up to its obligations and conduct verifications of the certifiers.

Comments

Anonymous said…
Yes and yes. If CBP is going to try and create a new burden for importers, they should at least go through the proper legal channels (lobbying to get legislation changed) instead of unilaterally and somewhat arbitrarily deciding that importers suddenly have a new set of legal obligations they must fulfill.
Mar 26, 2007, 4:30:00 PM
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