NAFTA Appeal Procedures in the United States

Generally

The NAFTA grants various parties the right to appeal origin determinations, country of origin marking determinations and advance rulings made by any NAFTA country. Each country must provide at least one level of administrative review independent of the official or office responsible for the determination that has been appealed. In addition, each country must ensure that judicial or quasi-judicial review is provided in accordance with its domestic law for persons whose appeals are denied at the administrative level.

Origin determinations may be appealed by the person who completed and signed the Certificate of Origin or by the importer claiming preferential NAFTA treatment. The person who signed the Certificate of Origin may appeal, whether or not an identical appeal on the origin of goods has been filed by the importer. Persons whose goods have been the subject of a country of origin marking determination or who have received an advance ruling may also appeal unfavorable decisions.

Dispute Settlement Under the NAFTA

The vast majority of trade in North America now takes place in accordance with the clear and well-established rules of the NAFTA and the World Trade Organization (WTO). Nonetheless, in such a large trading area, disputes are bound to emerge. In such cases, the NAFTA directs the governments concerned to seek to resolve their differences amicably through the NAFTA’s Committees and Working Groups or other consultations. If no mutually acceptable solution is found, the NAFTA provides for expeditious and effective panel procedures.

One of the principal elements of the NAFTA is the establishment of a clear set of rules for dealing with the settlement of disputes. Dispute settlement provisions for countervailing duty and anti-dumping matters are covered under Chapter Nineteen. Chapter Twenty of the NAFTA includes provisions relating to the avoidance or settlement of all disputes regarding the interpretation or application of the NAFTA. There are also special rules for disputes under Chapter Eleven (Investment) and Chapter Fourteen (Financial Services). Administrative support to Chapter Nineteen and Chapter Twenty panels is provided by the Canadian, U.S. and Mexican National Sections of the NAFTA Secretariat.

Chapter Nineteen of the NAFTA

This Chapter provides an option of binational panel review in place of domestic judicial review for domestic decisions regarding anti-dumping and countervailing duty matters. Prior to the entry into force of the Canada-U.S. FTA and then NAFTA, anti-dumping, countervailing duty, and injury final determinations of a government could only be appealed To certain domestic courts or administrative tribunals of the NAFTA Parties.

Chapter Twenty of the NAFTA

Canada regards this Chapter as invaluable in ensuring that the trade relations among the 3 countries are based on an established set of rules as opposed to economic or political power. As such, the objectives of the Chapter Twenty provisions are similar to those of the dispute settlement provisions of the WTO.

Chapter Eleven of the NAFTA

For investment disputes relating to obligations of NAFTA parties under Chapter Eleven, the NAFTA sets out dispute resolution procedures to resolve complaints between NAFTA investors and the host State. Complaints that are subject to NAFTA Chapter Eleven are resolved by arbitration, based on the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL) and the International Centre for the Settlement of Investment Disputes (ICSID).

Chapter Fourteen of the NAFTA

This Chapter contains a provision for the resolution of conflicts in the area of financial services. In this case, the resolution of disputes follows the procedures set out in Chapter Twenty of the Agreement, with the caveat that panelists are to be chosen from a special roster of experts in the field of financial services. Chapter Fourteen has not been invoked to date by the NAFTA members.

Procedures in Canada

In Canada, an appeal of an origin determination is known as a request for the redetermination of the origin of the goods, and can be requested by the person who completed and signed the Certificate of Origin or by the importer. A request by the person who completed and signed the Certificate of Origin should be made in writing to the customs region in which most of the importations occurred. The application may contain multiple requests for goods imported under different transactions and line numbers, if all the requests involve the origin of a single product. The transaction and line number of the importation or importations in question must be submitted with the request.

The person who completed and signed the Certificate of Origin will be informed by letter of the outcome of the request for the redetermination of the goods. The decision made pursuant to a request for redetermination of the origin of goods can be further appealed by the person who requested the redetermination through the provisions set out in the Customs Act.

An appeal of an advance ruling or a marking determination may be requested in writing from the office that issued the ruling or made the marking determination.

Annex 401 Appeals

Annex 401 of the NAFTA provides the specific rule of origin that is applied to determine whether a good qualifies as an originating good under the terms of the NAFTA.

In relation to appeals, these procedures are used by importers, exporters or producers of goods to request a second review of NAFTA decisions given by the customs administrations:

Article 510 of the NAFTA
Chapter 12 – Appeal Procedures
19 CFR 181.111-.116 – Review and Appeal of Adverse Marking Decisions can be found in sections 181.111 – 181.116
19 CFR 181.75 – Origin Determination Appeals

Procedures in Mexico

Differences with final determinations issued by the customs authorities shall proceed according to the recourses established in the Federal Fiscal Code, except that appeals shall be made by the interested party before filing suit in the Federal Fiscal Court.

When an appeal is filed against determinations made in terms of Article 31 of the Customs Act, the customs authority may reinstate the administrative procedure, as appropriate, before issuing the resolution that will conclude the appeal, as well as resolving the appeal and issuing a new determination to replace the contested one.

The appeal shall be filed with the authority that issued or executed the contested determination, within 45 days following the effective date of the notification.

If the party’s domicile is outside the town in which the customs authority that issued or executed the contested determination is located, the appeal may be filed in the nearest tax office or sent by certified mail with return receipt, as long as the mailing is made from the place where the appellant lives. The date of filing shall be the date on which the appeal is submitted or mailed, as the case may be.

If the decision of the fiscal authority is adverse, the party may appeal the decision to the Federal Fiscal Court, a quasi-judicial body. The decision of the Federal Fiscal Court may be appealed by either party to the Judicial Court. Decisions of this court may be appealed to the Supreme Court.

Procedures in the United States

Appeals of Advance Rulings

Persons who request an advance ruling may obtain administrative review of that ruling in accordance with Title 19, Code of Federal Regulations, @ 181.102. Appeals must be filed within 30 calendar days after issuance of the ruling and shall contain:

the name and address of the person seeking review (or of his or her agent);
the Customs identification number or employer identification number in the case of a U.S. importer, the employer number or importer/exporter number assigned by Revenue Canada in the case of a Canada exporter or producer, and the federal taxpayer registry number (RFC) in the case of a Mexican exporter or producer;
the number and date of the advance ruling;
the numbers and dates of any involved entries;
the nature of, and justification for, the objection.

Protests of Origin Determinations

Exporters and producers in Canada and Mexico who completed a Certificate of Origin may obtain administrative review of an origin determination by filing a protest in accordance with Title 19, Code of Federal Regulations,@ 174.12, within 90 calendar days after the date of liquidation of the entry. Protests shall be filed on Customs Form 19 or a letter of the same size clearly labeled “Protest” and setting forth the same content as the Form 19. Protests shall be filed with the port director of the port of entry. Protests shall contain the same information as noted above for advance rulings, as well as the date of liquidation of the entry for the goods which is the subject of the protest. A protesting party may file one protest for multiple entries filed in the same port if all the entries involve the same merchandise and the protest involves a decision common to all the entries.

If requested by all interested parties (e.g., the exporter, producer and/or importer), Customs will consolidate multiple protests of a single determination of origin and one notice of its decision will be issued to all parties without regard to whether the notice reflects confidential business information. Where all interested parties do not request consolidation, the U.S. Customs Service may consolidate the protests for internal processing but will issue separate, confidential notices to each Protestant.

If the U.S. Customs and Border Protection decides to allow the protest of a producer or exporter, either in whole or in part, any monies owed by the Government will be refunded to the party that paid those duties (generally the importer) even if that party never filed a protest.

Protests and Petitions for Reconsideration of Marking Decisions.

U.S. importers may protest adverse marking decisions in accordance with Title 19, Code of Federal Regulations, @ 174.12. Protests must be made within 90 calendar days after the date of the issuance of Customs Form 4647 (Notice to Mark and/or Notice to Redeliver) or within 90 calendar days of the date of liquidation in the case of the assessment of marking duties. Exporters and producers in Canada and Mexico do not have an independent right to protest adverse marking decisions. However, they may intervene in any protest filed by the importer by following the procedures described in Title 19, Code of Federal Regulations, @ 181.115. To assist the exporter/producer to adequately prepare an intervention protest, U.S. Customs and Border Protection will issue a statement within 30 days concerning the basis for the marking decision if requested by the exporter/producer in accordance with Title 19, Code of Federal Regulations, @ 181.113.

To intervene in an importer’s protest, the exporter or producer must file a type-written statement of intervention, in English, with the or port director with whom the importer’s protest was filed. This statement shall be in the form of a letter, signed by the exporter or producer, and shall contain:

the name and address of the exporter or producer (or authorized agent);
the employer number assigned by Revenue Canada for Canadian exporters or producers, and the federal taxpayer registry number (RFC) for Mexican exporters or producers;
the number and date of each entry involved in the adverse marking decision;
a specific description of the merchandise;
a complete statement of all relevant facts relating to the adverse marking decision and the transaction to which it relates, including the date of the decision;
a detailed statement of position regarding why the exporter/producer believes the marking decision is contrary to Annex 311 of the NAFTA;
a statement as to whether the exporter/producer requested the basis of Customs’ decision in accordance with Title 19, Code of Federal Regulations, @ 181.113, and a copy of the response (if available);
the number assigned to the importer’s protest;
a statement that the intervenor is the exporter or producer of the merchandise and, if the intervenor is the exporter, a statement that it maintains sufficient records to enable Customs to evaluate the merits of its claim regarding the adverse marking decision;
a statement regarding whether the intervenor desires confidentiality in accordance with Title 19, Code of Federal Regulations @ 181.121. Absent this statement, Customs will issue a consolidated response to all interested parties without regard to confidentiality.

If the importer does not protest a marking decision within 90 days, the exporter/producer may petition Customs for reconsideration of the adverse marking decision. The petition for reconsideration shall contain the same information as an intervention protest and shall be filed in the same manner.

Judicial Review.

Any party whose appeal, protest or petition for reconsideration has been denied, in whole or in part, may contest that denial by filing a civil action in the United States Court of International Trade within 30 days after the date of the mailing of the notice of denial.

Customs Procedures

Customs Procedures includes various subjects such as Certificate of Origin, Advance Rulings, NAFTA Claims, Verifications, Determinations, and Appeals to name a few. Determinations are issued by the customs administrations as a result of a NAFTA verification. Determinations are binding on the exporter and/or producer and may be appealed.

NAFTA Appeal Procedures