# Presentation: 132533

## 
Making                           
CAFTA-DR Work For You
  Compliance Training by the U.S. Department of Commerce 
Trade Promotion Programs
Trade Information Center

- Making
- CAFTA-DR Work For You
-   *Compliance Training by the U.S. Department of Commerce** *
*Trade Promotion Programs*
*Trade Information Center*

## OVERVIEW

- Free Trade  ~ (*if you qualify!)
- Understanding CAFTA-DR
- How to use CAFTA-DR
- HS number / Good classification
- Originating goods (ROO)
- Certifying as Originating Good

## What is the CAFTA-DR?

## CAFTA-DR Basics

- CAFTA-DR is a preferential trade agreement.
- Strictly voluntary.
- Goods must be made in the USA (or a signatory country); AND
- Must meet origin requirements (i.e., rules of origin).

## What steps should be taken to qualify products in order to benefit from CAFTA-DR? 

## Four Steps to Qualifying

- Determine the harmonized (HS) tariff code
- Determine benefit (MFN vs. FTA rate)
- Review rule of origin (Agreem’t specific)
- Determine whether good qualifies

## Step 1: Determine HS Number

- What is the HS Number?
- It classifies products for customs purposes
- 6-10 digits long (e.g., 1234.56.0000)
- First 6 digits are "harmonized;” _i.e._, identical
- Used to determine import duty rate

## Step 2: Benefits

- Review CAFTA-DR  tariff elimination schedule
- Separate tariff elimination schedules by country (Annex 3.3)
- Determine whether there is a lower tariff rate for your product under the FTA

## Step 2A:FTA Tariff Schedules

- Duties eliminated by “_staging categories_”
- Categories are labeled A  through Y
- Each letter corresponds to a time frame for calculated duty reductions
-  Letters appear in column next to tariff rate

## Step 2A:FTA Tariff Schedules

| HS # | Description | Base | Category |
| --- | --- | --- | --- |
| 8705 | Special purpose motor vehicles |  |  |
| 870510 | Crane lorries | 8 | B |
| 870520 | Mobile drilling derricks | 8 | A |
| 870530 | Fire Fighting Vehicles | 8 | A |
| 870540 | Concrete Mixers | 8 | B |

**Dominican Republic**

## Step 3: Rules of Origin

- _When & how origin is determined?:_
- When: *If beneficial* (e.g., FTA rate is lower than MFN rate) determine Rule of Origin
- How: Use Chapter 4 and Annex 4.1 of the CAFTA-DR  to determine the specific ROO and origin procedures

## Step 3: Rules of Origin

- _Who determines origin?:_
- The *producer/exporter* is responsible for determining origin

## Step 3: Rules Of Origin

- _What is an originating good?:_
- Wholly obtained or Produced Entirely in the territory
- Tariff Classification Change (i.e., tariff shift)
- Regional Value Content (RVC)
- Or both (tariff shift and RVC)

## Step 4: QualifyingTariff Shift

- Product specific rule based on tariff classification (i.e., 6 digit HS #)
- _Definition_: foreign inputs undergo operations that shift their tariff classification, and this shift meets the origin rule for the new tariff classification
- See Annex 4.1

## Step 4: QualifyingRVC

- _Regional Value Content_
- Requires the product to contain specific amount (percentage) of originating content
- Applicable ONLY IF Rule of Origin specifies the option OR requires it

## Will additional paperwork be required for all my shipments to Central America and the Dominican Republic? 

## No.  
Same paperwork requirements as before.

Unless, claiming preferential treatment under CAFTA-DR.
Certify goods as originating.

- Same paperwork requirements as before.
- Unless, claiming preferential treatment under CAFTA-DR.
- Certify goods as originating.

- Documentation

## Documentation

*The IMPORTER* claims the preferential treatment (unlike NAFTA)
- Be prepared to submit certifying documentation to assist the importer
- Statement/Certificate of Origin:  No prescribed format

## Web Resources

- Websites:
- _export.gov/cafta_ or _export.gov/fta_
- _buyusa.gov/centralamerica/en_