NAFTA Rules of Origin
NAFTA rules of origin determine whether an exported product receives preferential tariff treatment when moving between the three countries.
These rules are based on the Harmonized System of tariff classification.
Your goods qualify for NAFTA originating status if they are wholly produced in one or more of the NAFTA countries, made up of components and materials that originate in one or more NAFTA countries, meet the requirements laid out for that specific type of product or the good is automatic data processing equipment.
You will need to fill out a Certificate of Origin form for applicable goods.
The United States applies both federal and state taxes to business. U.S. tax law is complex at the federal level, but particularly intricate at the state level—as all 50 states have their own unique tax code.
Canada and the U.S. have a treaty to avoid double taxation, but this doesn’t apply to the state level.
If you are exporting goods into the U.S. that originate from a third country, ensure that the country in question is not affected by U.S. sanctions.
A practical example is Cuba, which many Canadian companies have business ties too. However, attempting to export Cuban-made goods into the U.S. can land you in trouble. Even if you are not directly exporting Cuban goods into the U.S., if you have any business ties to Cuba, you should investigate the scope of the Helms-Burton Act, which governs the prohibition on America’s trade with Cuba.
Business litigation is common in the U.S., so ensure that your contracts are clear and specific to avoid disputes.
Common causes for litigation include late payments, breach of contract, disputes with an intermediary and IP issues.
As with every country, attempting to resolve a dispute through litigation in the U.S. is very expensive, and arbitration or alternative dispute resolution is often the better path.
The American Arbitration Association can connect you with mediation services.
Product liability lawsuits are also common in the U.S.
This means product liability insurance (PLI) is more expensive if you’re operating in the U.S.
PLI is not mandatory in the U.S., but some buyers may refuse to purchase your products unless you have coverage.
Insurance Canada can provide you with more information on PLI.