The CHFTA Verification of Origin Regulations (SOR/2023-153) provide guidelines for verifying the origin of goods under the Canada-Honduras Free Trade Agreement (CHFTA). Registered on June 23, 2023, these regulations intend to ensure that goods eligible for preferential tariff treatment are produced in compliance with CHFTA requirements. Their primary aim is to streamline the verification process, preventing trade fraud and ensuring adherence to customs laws.

Key definitions in the regulations include “goods,” referring to items eligible for preferential tariff treatment under the CHFTA, and “material,” which denotes components used in the production of goods. The terms “verification letter” and “verification questionnaire” are tools for requesting information about a good’s origin, while a “verification visit” refers to an inspection conducted to confirm this origin.

Verification can occur through various methods. Customs officers may conduct verification visits to the premises of exporters, producers, or suppliers in Honduras, requiring at least five business days’ notice and written consent from the visited entity. Additionally, the customs administration can request information through questionnaires or letters, which must identify the customs officer and describe the goods in question. Recipients of verification letters or questionnaires are granted at least 30 days to respond, with an option for a 30-day extension under certain circumstances, such as natural disasters that hinder record-keeping.

Specific conditions govern verification visits, including sending a notice of intent to the relevant parties and the competent authority in Honduras. The customs officer must obtain written consent from the entity being visited, and observers may accompany the officer, although their role is limited to observation.

Exporters and producers are required to maintain records in Honduras for five years after signing a Certificate of Origin and must grant customs officers access to these records during the verification process. They are also obligated to respond to verification requests within the specified timeframes.

If a verification process indicates that goods do not qualify for preferential tariff treatment, the customs officer must issue a written notice explaining this determination. The notice will specify when the preferential treatment may be denied, allowing exporters or producers the opportunity to provide additional information.

All verification communications, including letters and notices, must be sent in a manner that confirms receipt, ensuring transparency and accountability throughout the verification process.

Canada (2023-153) July 5, 2023