Parker Supplier Certification for Trade Compliance FAQ

 

As the global leader in Motion & Control Technologies, Parker Hannifin Corporation sells and distributes products in nearly every international market. It becomes necessary for Parker to obtain certain facts about the purchased items from our suppliers. This information is further used by Parker to provide product information to our global customers.

 

What is Harmonized Tariff Schedule Classification?

The Harmonized Tariff Schedule description and coding system was designed to meet an internationally uniform basis for the collection of trade statistics (first 6 digits). Tariff classification enables governments to identify goods imported into the country for purposes of duty and tax collection, as well as gathering statistical information for economic planning, trade negotiation, and the enforcement of national and international laws and preferential trade programs such as the North American Free Trade Agreement (NAFTA).

All goods must be properly classified using the Harmonized Tariff Schedule (HTS) Classification aka: TARIC (European Union), or Schedule B (US).

HTS Links:

·         US International Trade Commission (USITC) HTS

https://hts.usitc.gov/current/

·         US Commerce Department / Census Bureau Schedule B

http://www.census.gov/foreign-trade/schedules/b/index.html

 

After consulting the Search Engine, you can obtain further assistance on Schedule B numbers from a commodity specialist at the U.S. Census Bureau Foreign Trade Division:

o    Durable goods (metals, machinery, computer, electronic and other miscellaneous goods) call: 301-763-3259

o    Non-durable goods (food, animal, wood, paper, mineral, chemical and textile goods) call: 301-763-3484

· For assistance identifying your appropriate HS number you may also contact your local Export Assistance Center or call the Trade Information Center at 1-800-USATRAD(E).

· European Union Taric:

http://ec.europa.eu/taxation_customs/dds2/taric/taric_consultation.jsp?Lang=en&Expand=true&SimDate=20150623 then click [Browse]

· European Common Customs Nomenclature of the Harmonized Tariff Schedule:

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2014:312:FULL&from=EN

 

What is Country of Manufacture?

 

Country of Manufacture is the country in which am item is harvested, produced, manufactured or assembled. An item can only have a single country of origin.

The country of manufacture of an item that is produced in more than one country will normally be the country in which the last significant transformation occurs.

Some items supplied to Parker could be manufactured in more than one country.

For example: If an item that is purchased by Parker is produced in Korea and in Brazil, and both origins are supplied to Parker, the correct selection under country of manufacture will be MULTIPLE ORIGINS.

If the country of Manufacture is Canada, Mexico, or the United States, you will be prompted next to provide NAFTA information for the item in question.

If the country of Manufacture is an EU Member State, you will be prompted next to provide EU Preference information for the item in question.

 

USMCA Eligible

 

This cell will contain a checkbox that the user would manually select like the current NAFTA solicitation.

 

When selected, the user is confirming the part qualification under the agreement for the current calendar year.

 

That action will open access to complete the remaining USMCA fields.

 

If the user does not indicate the part is eligible, the remaining USMCA fields should not be available for them to complete.

 

 

Origin Criteria

 

EXPLANATION OF ORIGIN CRITERION CODES

A - Wholly obtained or produced entirely in the territory of one or more of the Parties, as defined in Article 4.3 (Wholly Obtained or Produced Goods)

 

B - Produced entirely in the territory of one or more of the Parties using non-originating materials provided the good satisfies all applicable requirements of Annex 4-B (Product-Specific Rules of Origin)

 

C - Produced entirely in the territory of one or more of the Parties exclusively from originating materials

 

D - Except for a good provided for in Chapter 61 to 63 of the Harmonized System, good is produced entirely in the territory of one or more of the Parties;

 

i) one or more of the non-originating materials provided for as parts under the Harmonized System used in the production of the good cannot satisfy the requirements set out in Annex 4-B (Product-Specific Rules of Origin) because both the good and its materials are classified in the same subheading or same heading that is not further subdivided into subheadings or;

 

ii) the good was imported into the territory of a Party in an unassembled or a disassembled form but was classified as an assembled good pursuant to rule 2(a) of the General Rules of Interpretation of the Harmonized System;

 

and the regional value content of the good, determined in accordance with Article 4.5 (Regional Value Content), is not less than 60 percent if the transaction value method is used, or not less than 50 percent if the net cost method is used”.

 

Certifier Type

 

EXPLANATION OF CERTIFIER INDICATOR CODES

A – Certifier is not the Producer, but has a FTA certification from the Producer of the good

B – Certifier is the Importer

C – Certifier is the Exporter

D – Certifier is the Producer (Manufacturer)

 

Note: Any good for which you are the producer, always select “D”. Suppliers are usually going to be either A, C or D.

 

NAFTA – Why does Parker Need to Know?

 

Parker uses supplier items to manufacture our products. Parker customers require us to certify the items we sell that are NAFTA eligible. Parker cannot make NAFTA eligibility determinations without having certain facts about the items we purchase from suppliers. Parker will collect this information from our suppliers on an annual basis.

 

NAFTA Eligible- What Does This Mean?

 

By checking this box, you are indicating to Parker that the item in question is considered an Originating Good under the NAFTA Agreement. .

 

Preference Criteria – 4 Ways Goods Qualify for NAFTA

 

The NAFTA sets out four "Preference Criterion," meaning that there are four ways in which goods qualify for NAFTA:

Preference Criteria A - Goods "wholly produced or obtained" in the NAFTA region, i.e., they contain no non-NAFTA material. Goods that are "wholly obtained or produced" entirely in one or more NAFTA countries are Preference Criteria A. For a good to qualify under this criterion, all parts and materials must be produced in the NAFTA Territory. (Manufactured goods qualify in this category only in very limited circumstances.)

Preference Criteria B - Goods contain Non-NAFTA materials, but do meet the Annex 401 origin rules. The rules can be found at https://hts.usitc.gov/current/

Go to HTS (By Chapter)

Go to General Note 12 - North American Free Trade Agreement

Locate HTS Classification Number to find the specific rule

Goods made from non-originating materials can qualify for NAFTA treatment as long as each non-NAFTA material undergoes a tariff shift and, or meets a regional value requirement as specified in NAFTA Article 401 (aka HTS General Note 12).

 

 

Preference Criterion C

 

This criterion corresponds to goods produced entirely in Canada, Mexico, and/or the United States exclusively from NAFTA materials.

Preference Criterion C is used when the producer/exporter is able to document that the finished good is produced entirely in the NAFTA territory using only materials that would qualify in their own right. The producer/exporter should have documented proof that every raw material and component is a NAFTA good.

Preference Criteria D - Unassembled goods and goods classified in same (HS) Harmonized System category as their parts (D1.) or; do not meet the Annex 401 rule of origin, but contain sufficient North American regional value content (D2.) Goods qualify under Criterion D only in very limited circumstances

 

Producer – Did Your Firm Produce the Good?

Yes – My firm did produce the good

No (1) – My firm did not produce the good, but I have direct knowledge that the good originates

No (2) – My firm did not produce the good, but I have a producer’s statement indicating the good originates

No( 3) – My firm did not produce the good, but I have a NAFTA Certificate of Origin for the good from the producer or an exporter or the good.

If you are not the producer/manufacturer of the product, we request that you obtain the information from the producer/manufacturer.

 

Net Cost – Is NAFTA Qualification Based on Regional Value?

 

The answer will be N/C, for Net Cost or production cost if:

1) The good’s Preference Criteria is B; and

2) The NAFTA qualification requires a regional value content percentage under Net Cost.

In all other cases, the answer will be NO.

 

EU Preferential Origin

Parker uses supplier purchased raw materials and components in the manufacture of our products. Parker’s customers require us to certify the items we sell that are eligible for EU Preferential Origin and the duty relief which results. Parker cannot make EU Preferential Origin eligibility determinations with having certain facts about the items we purchase from our suppliers. Parker will collect this information from our suppliers on an annual basis.

By checking the PREFERENTIAL ORIGIN box, you are electronically declaring that the item in question originate in European Community / European Union (CE/EU) and satisfy the rules of origin governing preferential trade with

Egypt (EG), Albania (AL), Algeria (DZ), Bosnia and Herzegovina (BA), CARIFORUM-States, Ceuta and Melilla (XC,XL), Chile (CL), ESA-States, Faroe Islands (FO), Georgia (GE), Iceland (IS), Israel (IL), Jordan (JO), Colombia (CO), Lebanon (LB), Liechtenstein (LI), Morocco (MA), Macedonia (MK), Mexico (MX), Montenegro (ME), Norway (NO), Peru (PE), Switzerland (CH), Serbia (XS), South Africa (ZA), Tunisia (TN), Republic of Korea (KR), Republic of Moldova (MD), Palestinian Territory (West Bank and Gaza Strip) (PS), West-Pacific-States (WPS), Central America (CAM).

The list of the countries is updated on a regular basis.

 

Generally this means that goods must either:

(1) be manufactured from raw materials or components which have been grown or produced in the beneficiary country or, should that not be the case,

(2) at least undergo a certain amount of working or processing in the beneficiary country. Such goods are considered to be "originating".

 

No Cumulation

 

Cumulation is the term used to describe a system that allows originating products of country A to be further processed or added to products originating in country B, just as if they had originated in country B. The resulting product would have the origin of country B. It can only be applied between countries operating with identical origin rules.

By checking the NO CUMULATION box, you are declaring EU Preferential Origin has been obtained without the application of cumulation with materials originating in one or more of the partner countries.

 

Where do I find the EU Preferential Rules of Origin?

 

http://ec.europa.eu/taxation_customs/customs/customs_duties/rules_origin/preferential/article_779_en.htm

 

UK Preferential Origin

Parker uses supplier purchased raw materials and components in the manufacture of our products. Parker’s customers require us to certify the items we sell that are eligible for EU Preferential Origin and the duty relief which results. Parker cannot make EU Preferential Origin eligibility determinations with having certain facts about the items we purchase from our suppliers. Parker will collect this information from our suppliers on an annual basis.

By checking the PREFERENTIAL ORIGIN box, you are electronically declaring that the item in question originate in European Community / European Union (CE/EU) and satisfy the rules of origin governing preferential trade with

Egypt (EG), Albania (AL), Algeria (DZ), Bosnia and Herzegovina (BA), CARIFORUM-States, Ceuta and Melilla (XC,XL), Chile (CL), ESA-States, Faroe Islands (FO), Georgia (GE), Iceland (IS), Israel (IL), Jordan (JO), Colombia (CO), Lebanon (LB), Liechtenstein (LI), Morocco (MA), Macedonia (MK), Mexico (MX), Montenegro (ME), Norway (NO), Peru (PE), Switzerland (CH), Serbia (XS), South Africa (ZA), Tunisia (TN), Republic of Korea (KR), Republic of Moldova (MD), Palestinian Territory (West Bank and Gaza Strip) (PS), West-Pacific-States (WPS), Central America (CAM).

The list of the countries is updated on a regular basis.

 

Generally this means that goods must either:

(1) be manufactured from raw materials or components which have been grown or produced in the beneficiary country or, should that not be the case,

(2) at least undergo a certain amount of working or processing in the beneficiary country. Such goods are considered to be "originating".

 

No Cumulation

 

Cumulation is the term used to describe a system that allows originating products of country A to be further processed or added to products originating in country B, just as if they had originated in country B. The resulting product would have the origin of country B. It can only be applied between countries operating with identical origin rules.

By checking the NO CUMULATION box, you are declaring UK Preferential Origin has been obtained without the application of cumulation with materials originating in one or more of the partner countries.

 

Certify – Declaring the Accuracy of the Information Provided

 

By checking this box you are attesting to the accuracy of the part information as supplied to Parker Hannifin Corporation and its foreign subsidiaries.

You have agreed to provide this information to Parker and you will support regulatory and legal requirements associated with making your declarations in writing or electronically. You undertake to inform Parker immediately if this information, also partly, is no longer valid. You undertake to make available to the customs authority any further supporting documents they require.

It is imperative that all information be completed in a timely and accurate manner. Suppliers who fail to comply may not be able to sell their products through our system resulting in significant loss of business for both Parker and the supplier.