Canada Border Services Agency (CBSA) has issued a response regarding CETA originating goods that are entered into an FTZ in the U.S. before exported to Canada.
Following is CBSA’s response.
In response to your question about goods in an FTZ located in the US, please keep in mind the two requirements that must be met:
- the goods remained under customs control while outside the territory of the Parties, and
- after goods leave the CETA territory, no further production or other operations have been undertaken other than unloading, reloading or any other operation to preserve the goods in good condition or to transport the goods to the territory of one of the Parties.
Your follow-up question asks whether a notarized document would suffice to meet the second objective. We am working on the assumption that the first objective is met. Without knowing what it would say or who would provide this document we cannot answer. We did consult with the CBSA auditors in TAPD to find out what would be expected should a verification take place.
When CBSA performs a verification to examine whether goods did not undergo any prohibited production or operation, we would expect to obtain the following:
- Customs control documents (Entry and exit of the FTZ).
- Document that shows that no further operations were undertaken other than unloading, reloading, or preserving the condition of the good once the goods left the country with which Canada has a free trade agreement (CBP Form).
Based on former verifications, we have been advised by the CBSA auditors that for the latter document, at the time of entry when the CBP Form 214, “Application for Foreign-Trade Zone Admission and/or Status Designation†is completed, the status Zone Restricted (Field 23) should be marked, since the Zone Restricted Status is for:
“merchandise taken into a zone for the sole purpose of storage, exportation, destruction, merchandise in zone restricted status may not be manufactured or processed in the zone. Merchandise may not be manipulated except to the extent necessary for its exportation, destruction, or storage, i.e. except for packing, unpacking, repacking, testing or similar operation incidental to exportation or destruction†(Foreign-Trade Zones Manual, p.59)
Also, the auditors advise that an analysis of the inventory in the FTZ may be necessary for the period under verification.
If you want to learn more about how the FTZ and bounded warehouse works in the U.S., here are the links to: