The Canadian International Trade Tribunal (“CITT”) recently released a decision in MRP Retail Inc. v. President of the CBSA (Appeal No. AP-2006-005). The issue in this appeal was whether imported T-shirts were entitled to preferential tariff treatment (at the Mexico Tariff rate).

The T-shirts were produced in Mexico by Alimex Fashion SA de CV (“Alimex”) for California Sunshine. California Sunshine made a number of shipments to MRP between April 10 and July 24, 2001. In each case, it provided a certificate of origin in which, purporting to be the producer of the goods, it certified that they were of Mexican origin. Following an audit, CBSA denied the preferential tariff treatment citing lack of proof of origin.

The CITT stated that the law applicable to this situation was:

The regulations require a “...[c]ertificate of [o]rigin for the goods...,” [1] although no form for a certificate of origin is prescribed.

Thus, if the cotton knit T-shirts and tank tops were cut (or knit to shape) and sewn or otherwise assembled in the United States or Mexico from cotton that was grown in the United States or Mexico, they would be originating goods. The CITT emphasized that nowhere do the regulations prescribe the form of certificate itself or indicate that it must be provided by a “producer.” In any event, the CITT view was that California Sunshine could be considered the producer of the goods. The CITT concluded that the certificates of origin tendered in this case met the low threshold imposed by section 24 of the Customs Tariff Act; the real issue in the appeal was whether or not MRP has proven that the goods in issue met the prescribed rules of origin.

The CITT also stated that there is no legal requirement stipulating that specific dates or periods must be indicated on a certificate of origin. Given the blanket wording of some of the certificates, it was reasonable to interpret those certificates as covering all relevant shipments that occurred on or before the dates of the certificates. There was no evidence on the record to contradict this interpretation.

The Tribunal found that it could not accept the CBSA’s argument that audit-type, detailed, supporting business information was required to prove origin as this would be tantamount to imposing the comprehensiveness and exacting certainty sought in an audit of the origin of goods as the standard of proof for an appeal under section 67 of the Act. The Tribunal was of the view that it should be possible for an importer to adduce evidence on appeal that would satisfy the Tribunal of the origin of the goods without necessarily meeting the CBSA’s auditing standards. MRP proved by a preponderance of evidence, but was not required to do so beyond all possible doubt (as the CBSA suggested), that the goods in issue were originating goods.

The Tribunal was satisfied that the goods in issue were made in Mexico from originating materials. This was a marked departure from the views of the CBSA regarding the strictness of the Certificate of Origin process and has clarified the standards on exporters and importers regarding this procedure.