C.4-Chile Q&AChile Q&A
What is the U.S.-Chile Free Trade Agreement?
The U.S.-Chile Free Trade Agreement (FTA) is an agreement between the United States and Chile that allows both nations to strengthen and develop economic relations and to establish free trade between the two nations through the reduction and elimination of barriers to trade in goods and to investment; and to lay the foundation for further cooperation to expand and enhance the benefits of such Agreement.
Will this require additional paperwork for all of my shipments to Chile?
No. The U.S.-Chile FTA only applies to goods that are deemed to be originating and claim eligibility for lower preferential rates of duty.
Can I use a NAFTA certificate of origin to declare that my products qualify for preferential duty treatment under the U.S.-Chile FTA?
No. An example of a format that is acceptable to use for origin declarations under the U.S.-Chile FTA can be found in the "Declaring Origin" section of this website. Chilean Customs will NOT recognize origin claims for preferential duty made on a NAFTA or other certificate of origin that references any agreement other than the U.S.-Chile Free Trade Agreement.
Who benefits from the lower duty rates negotiated under this agreement?
In general, it is the importer that pays for the duties as a matter of clearing the goods through customs, and the importer that will benefit if the good being exported to Chile qualifies as originating. However, in situations where the duty payable on a shipment is considered significant, it may affect the competitiveness of the U.S. supplier as the importer decides what to buy and from whom to buy it. An exporter that is able to prove that their goods are originating may afford their buyer considerable savings, in essence discounting their product at no cost to themselves.
How can my product qualify to take advantage of the U.S.- Chile Free Trade Agreement?
The product must qualify as an originating good.
In order to be eligible for preferential duty rates, is it necessary to fill out a certificate of origin?
The U.S.-Chile FTA requires that the importer make a written declaration in the importation document that the good qualifies as originating. Information demonstrating that a good qualifies as originating, such as a certificate of origin, is not required at the time of importation. However, the Importer must be prepared to submit information demonstrating that the good qualifies as originating if requested by the customs authority. The Agreement does not require this information to be provided in a specific format.
Why do I need to go through the process of qualifying my good if I don't even need a certificate of origin?
The statement of eligibility for preferential duty rates is a declaration whose truthfulness may be verified by Chilean customs as they deem it necessary under the provisions of the U.S.-Chile FTA. Declarations that are found after the fact to deliberately make false statements may result in significant penalties.
I have heard that packaging materials and containers are not taken into consideration when qualifying a good under the Chile FTA. Is this true?
When the packing materials and containers are being used for shipping purposes, the materials and containers are disregarded in determining the origin of the good being shipped.
The packaging material or container in which a good is packaged for retail sale will be disregarded in determining whether all non-originating materials used in the production of the good undergo an applicable change in tariff classification using the tariff shift method. If such a good is subject to the regional value content method, the packaging material or container will be taken into account as originating or non-originating in determining the regional value content of the good.
I often send accessories for my product separately from the product. Will these qualify automatically if the main product qualifies?
When accessories, spare parts, or tools that form part of the good's standard accessories, spare parts, or tools, are delivered with a good, they are regarded as a material used in the production of the good as long as they 1) are classified with and not invoiced separately from the good 2) the quantities are not considered to be unusual. However, when these ancillary items are sent separately from the original good, they become "the good" and must qualify as such.
What if my good is produced in the United States, but is transshipped through a third country on its way to Chile? Can it still qualify for preferential treatment?
According to Article 4.11 of the U.S.-Chile FTA, a good that undergoes "subsequent production or any other operation outside the territories of the Parties, other than unloading, reloading, or any other process necessary to preserve the good in good condition or to transport the good to the territory of a Party" can no longer qualify for preferential treatment.
Does this agreement affect the treatment of used goods entering Chile from the United States?
Used goods from the U.S. that are originating will no longer be subject to a 50% surcharge upon entering Chile.
If I believe after thoroughly reviewing my product, its inputs, and the applicable rule of origin, that there remains ambiguity as to the "originating" status of the product under the U.S.-Chile FTA, is there a way that I can find out the position of Chilean customs prior to the arrival of my goods in Chile?
The customs authority of Chile will issue "advance rulings" at the written request of the importer, exporter, or producer on questions of tariff classification, customs valuation questions, duty drawback, origin, and treatment of goods entering temporarily for repair or alteration. Extensive information regarding the facts and circumstances of the inquiry will be required by the Customs authority prior to issuing such a ruling. In general, advance rulings will remain in effect for at least three years from the date of their issuance and will be made publicly available, subject to confidentiality requirements in domestic Chilean law. Chilean customs has up to 150 days to issue an advance ruling from the date of the request provided the requester submitted all necessary information. Prepared by the International Trade Administration. With its network of 108 offices across the United States and in more than 75 countries, the International Trade Administration of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
The U.S.-Chile Free Trade Agreement (FTA) is an agreement between the United States and Chile that allows both nations to strengthen and develop economic relations and to establish free trade between the two nations through the reduction and elimination of barriers to trade in goods and to investment; and to lay the foundation for further cooperation to expand and enhance the benefits of such Agreement.
Will this require additional paperwork for all of my shipments to Chile?
No. The U.S.-Chile FTA only applies to goods that are deemed to be originating and claim eligibility for lower preferential rates of duty.
Can I use a NAFTA certificate of origin to declare that my products qualify for preferential duty treatment under the U.S.-Chile FTA?
No. An example of a format that is acceptable to use for origin declarations under the U.S.-Chile FTA can be found in the "Declaring Origin" section of this website. Chilean Customs will NOT recognize origin claims for preferential duty made on a NAFTA or other certificate of origin that references any agreement other than the U.S.-Chile Free Trade Agreement.
Who benefits from the lower duty rates negotiated under this agreement?
In general, it is the importer that pays for the duties as a matter of clearing the goods through customs, and the importer that will benefit if the good being exported to Chile qualifies as originating. However, in situations where the duty payable on a shipment is considered significant, it may affect the competitiveness of the U.S. supplier as the importer decides what to buy and from whom to buy it. An exporter that is able to prove that their goods are originating may afford their buyer considerable savings, in essence discounting their product at no cost to themselves.
How can my product qualify to take advantage of the U.S.- Chile Free Trade Agreement?
The product must qualify as an originating good.
In order to be eligible for preferential duty rates, is it necessary to fill out a certificate of origin?
The U.S.-Chile FTA requires that the importer make a written declaration in the importation document that the good qualifies as originating. Information demonstrating that a good qualifies as originating, such as a certificate of origin, is not required at the time of importation. However, the Importer must be prepared to submit information demonstrating that the good qualifies as originating if requested by the customs authority. The Agreement does not require this information to be provided in a specific format.
Why do I need to go through the process of qualifying my good if I don't even need a certificate of origin?
The statement of eligibility for preferential duty rates is a declaration whose truthfulness may be verified by Chilean customs as they deem it necessary under the provisions of the U.S.-Chile FTA. Declarations that are found after the fact to deliberately make false statements may result in significant penalties.
I have heard that packaging materials and containers are not taken into consideration when qualifying a good under the Chile FTA. Is this true?
When the packing materials and containers are being used for shipping purposes, the materials and containers are disregarded in determining the origin of the good being shipped.
The packaging material or container in which a good is packaged for retail sale will be disregarded in determining whether all non-originating materials used in the production of the good undergo an applicable change in tariff classification using the tariff shift method. If such a good is subject to the regional value content method, the packaging material or container will be taken into account as originating or non-originating in determining the regional value content of the good.
I often send accessories for my product separately from the product. Will these qualify automatically if the main product qualifies?
When accessories, spare parts, or tools that form part of the good's standard accessories, spare parts, or tools, are delivered with a good, they are regarded as a material used in the production of the good as long as they 1) are classified with and not invoiced separately from the good 2) the quantities are not considered to be unusual. However, when these ancillary items are sent separately from the original good, they become "the good" and must qualify as such.
What if my good is produced in the United States, but is transshipped through a third country on its way to Chile? Can it still qualify for preferential treatment?
According to Article 4.11 of the U.S.-Chile FTA, a good that undergoes "subsequent production or any other operation outside the territories of the Parties, other than unloading, reloading, or any other process necessary to preserve the good in good condition or to transport the good to the territory of a Party" can no longer qualify for preferential treatment.
Does this agreement affect the treatment of used goods entering Chile from the United States?
Used goods from the U.S. that are originating will no longer be subject to a 50% surcharge upon entering Chile.
If I believe after thoroughly reviewing my product, its inputs, and the applicable rule of origin, that there remains ambiguity as to the "originating" status of the product under the U.S.-Chile FTA, is there a way that I can find out the position of Chilean customs prior to the arrival of my goods in Chile?
The customs authority of Chile will issue "advance rulings" at the written request of the importer, exporter, or producer on questions of tariff classification, customs valuation questions, duty drawback, origin, and treatment of goods entering temporarily for repair or alteration. Extensive information regarding the facts and circumstances of the inquiry will be required by the Customs authority prior to issuing such a ruling. In general, advance rulings will remain in effect for at least three years from the date of their issuance and will be made publicly available, subject to confidentiality requirements in domestic Chilean law. Chilean customs has up to 150 days to issue an advance ruling from the date of the request provided the requester submitted all necessary information. Prepared by the International Trade Administration. With its network of 108 offices across the United States and in more than 75 countries, the International Trade Administration of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.