NAFTA Preference Criteria
A) The good is "wholly obtained or produced entirely" in the territory of one or more of the NAFTA countries as referenced in Article 415. Note: The purchase of a good in the territory does not necessarily render it "wholly obtained or produced." If the good is an agricultural good, see also criterion F and Annex 703.2
NB: If a product has any non-originating materials, it does not qualify under "A." For example: a refrigerator which has a compressor containing one washer that was country of origin Malaysia does not qualify under "A." Similarly, if the refrigerator is made in the U.S.A. exclusively from originating materials except for one washer from a U.S. manufacturer who will not issue a NAFTA Certificate of Origin to the refrigerator maker, it does not qualify under "A."
In either of these situations, the refrigerator may easily qualify as a NAFTA product under one of the other criterion.
B) The good is produced entirely in the territory of one or more of the NAFTA countries and satisfies the specific rule of origin, set out in Annex 401, that applies to its tariff classification. The rule may include a tariff classification change, regional value-content requirement, or a combination thereof. The good must also satisfy all other applicable requirements of Chapter Four. If the good is an agricultural good, see also criterion F and Annex 703.2
C) The good is produced entirely in the territory of one or more of the NAFTA countries exclusively from originating materials. Under this criterion, one of more of the materials may not fall within the definition of "wholly produced or obtained" as set out in Article 415. All materials used in the production of the good must qualify as "originating" by meeting the rules of Article 401(a) through (d). If the good is an agricultural good, see also criterion F and Annex 703.2
D) Goods are produced in the territory of one of more of the NAFTA countries but do not meet the applicable rule of origin, set out in Annex 401, because certain non-originating materials do not undergo the required change in tariff classification. The goods do nonetheless meet the regional value content requirement specified in Article 401(d). This criterion is limited to the following two circumstances:
1. The good was imported into the territory of a NAFTA country in an unassembled or disassembled form but was classified as an assembled good, pursuant to Harmonized Tariff Schedule (HTS) General Rule of Interpretation 2(a), or
2. The good incorporated one or more non-originating materials, provided for as parts under the HTS., which could not undergo a change in tariff classification because the heading provided for both the good and its parts and was not further sub-divided into subheadings, or the subheading provided for both the good and its parts and was not further subdivided.
E) Certain automatic data processing goods and their parts, specified in Annex 308.1, that do not originate in the territory, are considered originating upon importation into the territory of a NAFTA country from the territory of another NAFTA country when the most-favored-nation tariff rate of the good conforms to the rate established in Annex 308.1 and is common to all NAFTA countries.
F) The good is an originating agricultural good under preference criterion A, B, or C above and is not subject to a quantitative restriction in the importing NAFTA country because it is a "qualifying good" as defined in Annex 703.2 Section A or B. A good listed in Appendix 703.2B.7 is also exempt from quantitative restrictions and is eligible for NAFTA preferential tariff treatment if it meets the definition of "qualifying good" in Section A of Annex 703.2.
NOTE 1: This criterion does not apply to goods that wholly originate in Canada or the United States and are imported into either country.
NOTE 2: A tariff rate quota is not a quantitative restriction.
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