The Canada B0rder Services Agency has clarified what is required when originating goods are sent from the EU to the U.S. for delivery to Canada or to another EU country in order to prove they have remained under customs control while in the U.S.; including requirements for goods that enter an FTZ in the U.S.
As contained in the Protocols on Rules of Origin and Origin Procedures for CETA (the Protocols), Article 22 – Proof related to transport through a third country reads that when goods are shipped through or transshipped outside the territory of the Parties, a copy of the customs control documents indicating that the product remained under customs control while outside the territories of the Parties must be provided.
Whether the transshipped goods enter a bonded warehouse or an FTZ, documentation needs to be provided to the importing country’s Customs administration to demonstrate that the goods remained under Customs supervision while in the intermediate country and were not further processed in accordance with Article 14 – Transport through a third country of the Protocols.
With respect to operations that are allowed, as per Article 14 of the Protocols, for a good to retain its originating status, the good must not undergo further production or any operation other than unloading, reloading, or any other operation necessary to preserve the good in good condition.
For goods that enter into an FTZ in the U.S., although FTZs are under U.S. Customs and Border Protection (CBP) supervision, it is our understanding that unlike CBP bonded warehouses, they are not considered under CBP jurisdiction; assembly, processing and manufacturing are allowed in the FTZ; and there are no customs entries issued unless the good enters into the U.S. for consumption. Considering this, it is important to note that it may be difficult to produce documentation to demonstrate that the goods remained under customs supervision or that they did not undergo further production, as stipulated in Article 14 of the Protocols.
Considering this, prior to determining whether to use an FTZ in the U.S. it is important to ensure that as per Article 22 of the Protocols, that customs control documents will be available, should the importer be requested by the CBSA to demonstrate that the goods remained under customs control in the FTZ.