U.S. exporters whose products qualify under the new U.S.-Chile Free Trade Agreement (FTA) Rules of Origin may provide their Chilean customers considerable savings. This article addresses the written declaration necessary for the Chilean buyer to claim free or reduced rates of duty.
Certificate of Origin
A written declaration of origin can take many forms including a statement on company letterhead, a statement on a commercial invoice, or a formal certificate of origin. While no official form is required in order to declare origin under the U.S.-Chile FTA, the National Customs Service of Chile has issued a list of required data elements.
These data elements can be found at the U.S. Trade Information Center website. You'll find a free PDF version of a U.S.-Chile Certificate of Origin form at the Shipping Solutions website.
Shipments under $2,500 in value do not require a written declaration of U.S. or Chilean origin.
Declaring Goods as Originating
The Chilean importer is responsible for claiming preferential treatment for a given shipment at the time the goods are cleared through Customs. (Under the U.S.-Chile FTA, the ultimate responsibility for the validity of the claim lies with the importer, not the exporter, as it is under NAFTA.) In order to claim the preferential duty rate, the importer must provide to Chilean Customs a written declaration, which may or may not be in the form of a certificate of origin.
Despite the fact that the ultimate responsibility for making the declaration lies with the importer, the information needed to support the declaration will have to be provided by the producer. The written declaration that the goods are originating may be produced by the exporter, importer or producer of the goods.
If someone other than the producer (i.e., the exporter or importer) issues the declaration, it must be based upon either:
- A written declaration of origin issued by the producer, or
- The issuer's intimate knowledge of the product, its manufacture, and its components.
The importer is heavily dependent upon the assistance and cooperation of its U.S. suppliers in producing accurate and well-documented declarations of origin.
In some cases, a considerable amount of research into the inputs in the production of the goods is required in order to determine origin. Many exporters and importers believe that the only time that the declaration of origin can be provided is at the time the shipment clears customs, creating a sense of urgency in determining the origin of the goods.
To obtain the reduced duty rate immediately, this is true. The importer, however, has another option. The importer may pay the non-preferential duties at the time the goods clear Customs and then has up to a year from the import date to apply for a refund of excess duties. This may happen in cases where the information required to determine that the goods are originating is not available at the time of shipment.
When the importer applies for a refund of the excess duties, they are required to supply a written declaration of the goods’ originating status.
In some situations, an exporter may find that multiple shipments of identical goods are being sent to the same Chilean importer. In these cases, the exporter doesn’t need to create new written declarations of origin for each individual shipment. Instead, the importer may maintain a blanket declaration or certificate of origin to be presented to Customs at the acceptance of each shipment. Chilean Customs suggests that the blanket period not exceed one year.
The company that issues the written declaration of origin is required to maintain a copy of the declaration for five years from the date of importation of the goods. In addition, that company must also save a copy of all the supporting documentation used to demonstrate that the goods qualify as originating under the U.S.-Chile FTA rules of origin.
Filing a Correction
If, after a declaration of origin has been filed with Chilean Customs, one of the parties to the transaction realizes that the declaration or certificate was prepared based on incorrect information or it contains some type of error, the issuer of the declaration of origin must immediately notify, in writing, every person to whom it was originally issued.
While the importer will have to pay the Customs authority unpaid duties, Chilean Customs may not impose penalties on the issuer of the certificate of origin if notification of such an error was provided in a timely fashion, as defined by the U.S.-Chile FTA.
This article, which was first published in May 2004, has been updated to include current information and web links.