Notice to Exporters

Administration of the North American Free Trade Agreement Provisions Relating to Transhipment

Serial No: 91
Date: Date: April 12, 1996


1. This Notice to Exporters provides an explanation of the provisions in the NAFTA related to the detection and prevention of illegal transhipment of textiles and apparel and outlines the steps that may be taken by a NAFTA country to verify the origin of certain textile and apparel goods.

NAFTA Provisions

2. Article 512(2)(b) of the NAFTA, provides for cooperation NAFTA countries in their efforts to detect and prevent unlawful transhipment of textile and apparel goods from a non-NAFTA country. Such detection shall aid in the enforcement of prohibitions and/or quantitative restrictions established in a NAFTA country. This will be accomplished through verification of an exporter/producers "capacity of production" of these goods, and on the condition that the Customs administration proposing to conduct a verification visit in another NAFTA country

(i)obtains the consent of the NAFTA country in whose territory the verification is to occur, and
(ii)provides notification to the exporter or producer whose premises are to be visited.

3. The NAFTA country making the request to conduct a verification visit, is required to provide the exporter or producer (whose goods are the subject of the verification) of the date of the proposed visit, giving no less than 48 hours notice prior to that date. The notification will provide certain information including identification of the basis for the visit, the name and titles of the visiting official(s), the proposed date(s) of the visit, the legal authority for the visit, the object and scope of the visit, the specific good(s), the production period, and identification of the consequences should the exporter/producer decide not to consent to the verification visit.

4. The NAFTA country conducting the verification visit must also notify and obtain the consent of the Canadian government. The Canadian government may choose to have observers presentduring the visit. If such is the case, the exporter/producer will be contacted within the 48 hour period prior to the proposed visit, in order to identify the Canadian government official(s) who will also be present. Canadian exporters or producers who receive a request by a NAFTA country to verify "production capacity" of their facilities may contact Mr. Bill Claypole, Director, Origin Determination Directorate, Revenue Canada at (613) 954-6980 to request the presence of a Canadian observer if a Canadian official has not already been identified.

5. Origin verification procedures for Canadian exports of goods claimed as NAFTA originating, supported by Certificates of Origin, have been established under NAFTA Article 506. Accordingly, the verification of production under Article 512(2)(b) of the NAFTA does not include NAFTA origin verification but relates solely to the export of non-originating goods.

Marilyn Friesen
Deputy Director
Textiles and Clothing
Special Trade Policy Division
Export and Import Controls Bureau
Department of Foreign Affairs and International Trade
P.O. Box 481, Station "A"
Ottawa, Ontario
K1N 9K6

Telephone: 613-996-3711
Facsimile: 613-995-5137