Canada–Costa Rica Free Trade Agreement (CCRFTA): Costa Rica Free Zone Regime
Memorandum D11-4-27

Ottawa, July 8, 2014

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In Brief

  1. Appendix B has been updated to reflect changes made to the List of goods for which the Costa Rica Tariff may be claimed.
  2. The editing revisions made in this memorandum do not affect or change any of the existing policies or procedures.

This memorandum contains the regulations and information for determining whether CCRFTA originating goods imported from Costa Rica have received the benefits of the Costa Rica Free Zone Regime, and whether such goods are entitled to the Costa Rica preferential tariff treatment.

Legislation

CCRFTA Non-entitlement to Preference Regulations

Guidelines and General Information

Definitions

1. In this memorandum, any reference that is made to:

"Costa Rica Free Zone regime"
is a system that has the effect of subsidizing companies on the condition of export of their goods.
"geographic area"
means any area within Costa Rica where companies are provided with the benefits of the Costa Rica Free Zone regime including income tax exemptions and subsidies.

General

2. The CCRFTA Non-entitlement to Preference Regulations establishes that listed goods, which although originating in accordance with the CCRFTA Rules of Origin Regulations, are deemed not to originate and are, therefore, not entitled to the Costa Rica Tariff (CRT) rate of customs duty if they have undergone operations in a specified Costa Rica Free Zone.

3. Appendix A sets out the geographic areas, i.e., a list of companies that receive the benefits of the Costa Rica Free Zone regime and, thus, are not entitled to the CRT. Companies listed in Appendix A will remain listed until such time as they no longer receive the benefits of the Costa Rica Free Zone regime. Appendix A will be revised and modified, as required, as a result of ongoing consultations with Foreign Affairs, Trade and Development Canada and Costa Rica. 

4. Where CCRFTA originating goods are classified under any of the tariff item numbers set out in Appendix B, and the goods have undergone operations in a geographic area as listed in Appendix A, such goods are not entitled to the CRT. In these instances, the Most-Favoured Nation (MFN) rate or, if applicable, the General Preferential Tariff (GPT) is applied.

5. Where originating goods cited in Appendix B have not undergone operations in a geographic area listed in Appendix A, such goods may be entitled to the CRT only if the goods originate in accordance with the CCRFTA Rules of Origin Regulations. Further information concerning the rules of origin can be found in Memorandum D11-5-3, Canada–Costa Rica Free Trade Agreement (CCRFTA) – Rules of Origin. Importers must be in possession of a valid CCRFTA Certificate of Origin (form B246) when claiming the CRT.

6. Importers who possess a Certificate of Origin must ensure that the goods they have imported have not undergone operations in a geographic area listed in Appendix A. The Certificate of Origin contains fields where exporters and/or producers in Costa Rica must indicate whether they have benefited from the Costa Rica Free Zone regime. Further information concerning the Certificate of Origin can be found in Memorandum D11-4-2, Proof of Origin, and Memorandum D11-4-14, Certification of Origin.

7. Importers are encouraged to regularly consult Appendix A and Appendix B in conjunction with the Certificate of Origin to ensure that their imported goods continue to meet the CCRFTA Rules of Origin Regulations and remain entitled to the CRT. Conversely, previously non-qualifying goods could become qualifying if a company previously listed in Appendix A ceases to receive the benefits of the Costa Rica Free Zone regime.

8. The date of accounting of the goods on Form B3-3, Canada Customs Coding Form, will be the date considered when determining the entitlement of the CRT for companies cited in Appendix A and the goods listed in Appendix B.

9. All goods imported from Costa Rica are still entitled to the GPT rate of duty only if the goods meet the rules set out in Memorandum D11-4-4, Rules of Origin Respecting the General Preferential Tariff and Least Developed Country Tariff. The geographic area restrictions do not apply to the GPT.

10. This memorandum will be continually updated to accurately reflect any changes to geographic areas and tariff item numbers in Appendix A and Appendix B.

Additional Information

11. For more information, within Canada call the Border Information Service at 1-800-461-9999. From outside Canada call 204-983-3500 or 506-636-5064. Long distance charges will apply. Agents are available Monday to Friday (08:00 – 16:00 local time/except holidays). TTY is also available within Canada: 1-866-335-3237.

Appendix A - List of geographic areas – Companies

Having consulted with the Minister for International Trade, the Minister of Public Safety and Emergency Preparedness specifies the following as geographic areas for purposes of subsections 16(2)(a)(ii) and 49.1(4) of the Customs Tariff.

Note: This list will be modified or revised, as required, as a result of ongoing consultations with the Foreign Affairs, Trade and Development Canada.

Appendix B - List of goods for which the Costa Rica Tariff may be claimed

The benefits of the Costa Rica Tariff may be claimed for goods classified under the following tariff item numbers only if the goods are considered originating as per the CCRFTA Rules of Origin Regulations,and such goods are not produced wholly or partially within a geographic area specified in accordance with subsection 16(2.1) of the Customs Tariff and Appendix A.

Note: This list has been compiled from Schedules 2 and 3 of Bill C-32, Canada-Costa Rica Free Trade Agreement Implementation Act, an Act to implement the Free Trade Agreement between the Government of Canada and the Government of the Republic of Costa Rica (the Act). If there are any discrepancies between this list and those set out in the Act, the Act takes precedence.

References

Issuing office:
Trade and Anti-dumping Programs Directorate
Headquarters file:
 n/a
Legislative references:
Customs Tariff
Canada-Costa Rica Free Trade Agreement Implementation Act
CCRFTA Non-entitlement to Preference Regulations
CCRFTA Rules of Origin Regulations
Other references:
D11-4-2, D11-4-4, D11-4-14, D11-5-3
Superseded memorandum D:
D11-4-27 dated June 17, 2009
Date modified: