Customs Regulations in North America Key Terms

Learn key terms for customs regulations in North America

Understanding the customs regulations that surround trade across the US/Canada or US/Mexico border is essential. Customs regulations within North America are unique due to the North American Free Trade Agreement (NAFTA), created in 1994. This agreement provides guidance regarding the restrictions and limitations to trade across the borders of the North American countries. It is important to know some key terms about customs regulations in North America to meet standards for doing business within these countries.

Import duty, tariff

Import duty is the tax placed on imported goods, paid by the person importing the goods. It is usually based on the value of the product being imported and is also referred to as a tariff. While many goods can be traded between countries in North America duty-free, a country can deny NAFTA benefits if regulations aren't followed.

Import requirements

Products entering the United States from other countries need to be declared and classified so that the appropriate duty is applied to them. Import requirements refer to the proper safety and markings of products entering the United States and the need for declaring the value of such items for the purpose of paying duties.

Export compliance

In order to export goods to other countries within North America, there are many steps and controls required. Export compliance refers to the adherence of screenings, classifications and controls needed to export your goods.

North America Free Trade Agreement (NAFTA)

This agreement is specific to the countries within North America: Canada, Mexico and the United States. It fosters trade between the countries, primarily through the elimination of tariffs. When dealing with customs regulations for importing and exporting goods, NAFTA defines how goods are to be handled between these countries.
U.S. Customs and Border Protection.

Rule of origin

In order for a product to qualify for duty-free status under NAFTA, a rule of origin requirement must be met. This takes into account where the product is manufactured or grown. If your product is wholly produced, including its parts, in North America, it will meet the rule of origin and you will need a certificate of origin to export.

Harmonized Tariff Schedule

The Harmonized Tariff Schedule is the list of tariffs on various products. It employs a standardized classification system that is used worldwide. When importing goods, the Harmonized Tariff Schedule is referred to for determining tariffs.
United States International Trade Commission provides a detailed description of the Harmonized Tariff Schedule.