Guidelines regarding implementation of Section 28DA of the Customs Act, 1962 and CAROTAR, 2020 in respect of Rules of Origin under Trade Agreements (FTA/PTA/CECA/CEPA) and verification of Certificates of Origin - Customs - PUBLIC NOTICE NO. 125 /2020

( ) , , ( ), - F. No. S/3-MISC-PRO-05/2020-21/ACC (I) Date: 14.09.2020 PUBLIC NOTICE NO. 125 /2020 Subject: Guidelines regarding implementation of Section 28DA of the Customs Act, 1962 and CAROTAR, 2020 in respect of Rules of Origin under Trade Agreements (FTA/PTA/CECA/CEPA) and verification of Certificates of Origin- reg. Attention of all importers, exporters, Customs Brokers and all other stakeholders is invited to Chapter VAA and Section 28DA of the Customs Act, 1962, which has been inserted vide Clause 110 of Finance Act, 2020, and to Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (hereafter referred to as the CAROTAR, 2020) issued vide Notification No. 81/2020-Customs (N.T.) dated 21st August, 2020, on the above mentioned subject.In this regard CBIC Circular No. 38/2020-Customs dated 21.08.2020 issued vide F.No.15021/18/2020 (ICD) , and earlier P.N.No.116/2020 dated 03.09.2020 issued by this office may be seen . 2). The aforementioned Section and Rules aim to supplement the operational certification procedures related to implementation of the Rules of Origin, as prescribed under the respective trade agreements (FTA/PTA/CECA/CEPA) and notified under the Customs Notifications issued in terms of Section 5 of the Customs Tariff Act, 1975 for each agreement. The CAROTAR, 2020 shall come into force on 21st September, 2020, to provide sufficient time for transition and to ensure that the prescribed conditions in terms of Rule 4 are compiled with. Necessary modifications in Bill of entry format are being made to allow declaration in terms of Rule 3(a) and 3(d) of CAROTAR, 2020. 3) As per provisions of Rule.3, to claim preferential rate of duty under a trade agreement, the importer or his agent shall, at the time of filing Bill of entry,- (a) make a declaration in the bill of entry that the goods qualify as originating goods for preferential rate of duty under that agreement; (b) indicate in the bill of entry the respective tariff notification against each item on which preferential rate of duty is claimed; (c) produce certificate of origin covering each item on which preferential rate of duty is claimed; and (d) enter details of certificate of origin in the bill of entry, namely: (i) certificate of origin reference number; (ii) date of issuance of certificate of origin; (iii) originating criteria; (iv) indicate if accumulation/cumulation is applied; (v) indicate if the certificate of origin is issued by a third country (back-to-back); and (vi) indicate if goods have been transported directly from country of origin. 3.1). Notwithstanding anything contained in the Rules, the claim of preferential rate of duty may be denied by the proper officer without verification if the certificate of origin- (a) is incomplete and not in accordance with the format as prescribed by the Rules of Origin; (b) has any alteration not authenticated by the Issuing Authority; (c) is produced after its validity period has expired; (d) is issued for an item which is not eligible for preferential tariff treatment under the trade agreement; and in all such cases, the certificate shall be marked as INAPPLICABLE . 4). As per provisions of Rule 4, the importer claiming preferential rate of duty shall- (a) possess information, as indicated in Form -I ( Refer Notfn No. 81/2020-Customs (N.T.) dated 21.08.2020), to demonstrate the manner in which country of origin criteria, including the regional value content and product specific criteria, specified in the Rules of Origin, are satisfied, and submit the same to the proper officer on request. (b) keep all supporting documents related to Form -I for at least five years from date of filing of bill of entry and submit the same to the proper officer on request. (c) exercise reasonable care to ensure the accuracy and truthfulness of the aforesaid information and documents. 5). As per provisions of Rule 5, information may be requisitioned from the importer. (1) Where, during the course of customs clearance or thereafter, the proper officer has reason to believe that origin criteria prescribed in the respective Rules of Origin have not been met, he may seek information and supporting documents, as may be deemed necessary, from the importer in terms of Rule 4 to ascertain correctness of the claim. (2) Where the importer is asked to furnish information or documents, he shall provide the same to the proper officer within ten working days from the date of such information or documents being sought. (3) Where, on the basis of information and documents received, the proper officer is satisfied that the origin criteria prescribed in the respective Rules of Origin have been met, he shall accept the claim and inform the importer in writing within fifteen working days from the date of receipt of said information and documents. (4) Where the importer fails to provide requisite information and documents by the prescribed due date or where the information and documents received from the importer are found to be insufficient to conclude that the origin criteria prescribed in the respective Rules of Origin have been met, the proper officer shall forward a verification proposal in terms of Rule 6 to the nodal officer nominated for this purpose. (5) Notwithstanding anything contained in this rule, the Principal Commissioner of Customs or the Commissioner of Customs may, for the reasons to be recorded in writing, disallow the claim of preferential rate of duty without further verification, where: (a) the importer relinquishes the claim; or (b) the information and documents furnished by the importer and available on record provide sufficient evidence to prove that goods do not meet the origin criteria prescribed in the respective Rules of Origin . 6).The said Circular aims to provide procedure for sending verification request to the Verification Authorities in exporting countries in terms of trade agreements, Section 28DA and CAROTAR, 2020, and further guidelines for implementation of aforementioned Section and Rules. 7). The CAROTAR, 2020 and Rules of Origin notified for a trade agreement in terms of sub-section (1) of section 5 of the Customs Tariff Act, 1975, broadly provide the following grounds for verification: a) In case of a doubt regarding the genuineness of the Certificate of Origin (CoO) such as any deficiency in the format of the certificate or mismatch of signatures or seal when compared with specimens on record. b) In case of a doubt on the accuracy of information regarding origin, i.e. where a doubt arises on whether the product qualifies as an originating good under the relevant Rules of Origin. In other words, these are cases where there is a reasonable belief that a product is not grown or not produced/manufactured in a particular country or required value addition/change in CTH/PSR etc., as the case may be, has not been achieved for the goods to qualify as originating. c) Verification could also be undertaken on random basis as a measure of due diligence. For this purpose, factors such as the quantum of duty being foregone, the nature of goods vis- -vis the country of origin, commodities that are prone to mis- declaration of country of origin, compliance record of the importer etc., may be given regard while selecting Certificates of Origin for random verification. 8). The Rules of Origin, by virtue of which goods attain origin of a country, have evolved with subsequent reviews of trade agreements. Most trade agreements have moved from single general rule to specific rule for most of the Tariff lines, with inclusion of vast array of processes which can confer origin. Section 28DA makes it incumbent upon an importer to possess sufficient information as regards the manner in which country of origin criteria, including the regional value content and product specific criteria, specified in the Rules of Origin in the trade agreement, are satisfied. For this purpose, CAROTAR, 2020 has provided a Form-I, containing list of basic minimum information which an importer is required to obtain while importing goods under claim of preferential rate of duty. Therefore, in case there is a doubt with regard to origin of goods, information would be first called upon from the importer of the goods, in terms of Rule 5 read with Rule 4 of CAROTAR, 2020, before initiating verification with the partner country in terms of Rule 6. 8.1) Section 28DA of the Act further provides that mere submission of a certificate of origin shall not absolve the importer of the responsibility to exercise reasonable care to the accuracy and truthfulness of the information supplied. Hence, the importer is required to provide information in terms of Section 28DA(1) (iii) of the Act and as prescribed under CAROTAR, 2020, and has to take reasonable care to ensure the accuracy and truthfulness of the information furnished. 9). The Rules of Origin under various trade agreements lay down the format of the certificate of origin, the period of validity, manner of obtaining the certificate etc. One of the usual conditions for accepting the certificate is that it should be signed by the authorized signatories whose name, signature and seal have been communicated by the partner country through agreed channels. At present, the signatures and seals are received by the Board, either directly from the Government of the partner country or through the Department of Commerce. 9.1) The Directorate General of Systems, CBIC has built an online repository on ICES for storing the signatures/seals to facilitate comparison by the assessing officers. DRI has been tasked with uploading the data in the database. 9.2) For the benefit of non-EDI customs locations, copies of specimen signatures and seals will be circulated by DRI. For other locations, the ICES online repository may be utilized. 9.3) In case the specimen seal/signature is not available in the ICES online repository, the issue may be referred to the Board for verification. 10).This Public Notice should be considered as Standing Order for the purpose of officers and staff of department. 11). Difficulties, if any, may be brought to the notice of Additional Commissioner of Customs, (Import), ACC, Mumbai (E-mail id: [email protected]). Sd/- (Vijay Singh Chauhan) Commissioner of Customs, Import (ACC)