Image credits: Kelsey Knight
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News Article

USMCA Benefits on Verification of Origin.

By Sofía Hanna | Mon, 11/30/2020 - 14:21

USMCA’s last revised version from Dec. 10, 2019 has been drafted and checked by the three nations to bring certainty and benefits to each member country. Within this new agreement, Mexico will also be able to verify components’ origins, unlike NAFTA that only gave this mandate to the US and Canada.

"For a product to receive preferential tariff treatment according to UMSCA, it has to comply with a minimum of productive processes, manufacturing operations or the contribution of added value made in the countries that make up the treaty," states the official USMCA report. 

According to ANTAD, Mexican authorities can now do a verification of origin for products that are being imported from companies located within the territory. The country that does the verification will have 120 days after receiving all the information to deliver a verdict and send it in writing. Each country has a group responsible for this verification. In Mexico's case, SAT will be the one that makes the questionnaire to the exporter. After collecting all the information, this body will communicate if rules were followed. NAFTA did not establish the need for specific bodies to carry out this function nor did it set any deadlines for the process to be finalized, which delayed queries and made tariffs higher, as mentioned in an article from Reforma. 

Once a product is certified as regional, the validity of the designation will be of four years, according to AmCham. The information needed in these verifications will be: 

  • The certifier’s identification
  • Exporter data 
  • Certifier details
  • Manufacturer data
  • Importer data
  • Description and tariff classification
  • Origin criterion
  • Overall period

The Mexican automotive industry, in particular, will be greatly benefited by this, beyond its preferential access to the US market. Furthermore, with nearshoring creating more opportunities for the Mexican industry, as stated in a previous MBN article, a protocol that regulates regionality could further enhance the country’s advantages.

According to the USMCA report, regionality revisions will provide greater clarity in terms of implementation, improved performance and reduced operating costs by removing the verification format and through the expedition of certifications, instead. 

The data used in this article was sourced from:  
AmCham, GobMex, MBN, ANTAD, Reforma
Photo by:   Kelsey Knight, Unsplash
Sofía Hanna Sofía Hanna Junior Journalist and Industry Analyst