Trade, Export Controls & Sanctions
Active FTAs globally with distinct rules of origin
Typical record retention period for origin verification
Potential duty exposure on incorrectly claimed preferences
Regulation Overview
https://ustr.gov/trade-agreements/free-trade-agreements
Free Trade Agreements are legally binding treaties between countries that reduce or eliminate tariffs on qualifying goods. For supply chain and compliance teams, the core obligation is proving that products meet each agreement's rules of origin—the criteria determining whether a product qualifies for preferential tariff treatment.
Rules of origin vary by agreement and by product. USMCA requires 75% Regional Value Content for automotive products. CPTPP uses 45-55% RVC thresholds depending on calculation method. The EU-UK TCA requires tariff shift plus processing rules. Each agreement has its own product-specific rules, certification formats, and verification procedures.
FTA compliance requires BOM-level origin data—HS classifications, supplier origin declarations, cost breakdowns, and manufacturing process documentation—from every supplier. When tariff schedules change, supply chains shift, or new FTAs take effect, your entire origin qualification portfolio requires reassessment.
Key Components / Sub-Frameworks
Exporters and producers certifying product origin under any FTA
Importers claiming preferential tariff treatment at customs entry
Manufacturers sourcing components from multiple countries
Non-FTA-country companies routing production through FTA member states
Distributors and trading companies managing multi-origin product lines
Customs brokers and trade compliance teams managing FTA portfolios
Key Thresholds
Your company exports the same product to the US, UK, Japan, and Australia. USMCA requires a net cost RVC calculation. The EU-UK TCA requires a tariff shift plus processing rule. CPTPP has its own product-specific rules. Each agreement uses different origin criteria, different certification formats, and different cumulation provisions. Your team maintains parallel qualification analyses for every product-market combination.
CBP issues a Request for Information on shipments you imported 3 years ago under USMCA preference. You need BOMs, cost breakdowns, supplier origin certificates, and HS classification records for hundreds of line items. The documentation is scattered across purchasing, engineering, and logistics. Thirty days to respond. Back duties at 25% if you cannot defend the claim.
Your origin determination depends on your Tier 1 supplier's origin declaration. But that supplier sources from Tier 2 suppliers across three countries. Without BOM-level origin evidence from the supplier—not just a signed declaration—you cannot calculate actual Regional Value Content or verify tariff shift. One supplier's unsupported claim invalidates your entire certification.
RVC calculations require accurate cost data—material costs, labour, overhead, profit—broken down by originating and non-originating inputs. When component costs change quarterly, exchange rates fluctuate, and suppliers update pricing, your RVC calculations drift. Annual requalification across thousands of SKUs using spreadsheets is unsustainable.
Certivo In Action
Certivo in Action — FTA Workflow
From Spreadsheet Qualification to Automated Origin Management
CORA collects supplier origin data, calculates RVC, validates tariff shift, and generates certifications automatically. Your team focuses on exception management and strategic origin planning—not manual cost data reconciliation.
Verification Defense Acceleration
Generate complete, audit-ready verification response packages in hours—not the weeks of manual compilation across purchasing, engineering, and logistics.
Proactive FTA Compliance Assurance
When supplier costs change, BOMs shift, or exchange rates move, Certivo requalifies affected products automatically. Know which SKUs are at risk of losing preference before your next shipment.
Key Statistics
Frequently Asked Questions
Which companies need FTA compliance programs?
Any company claiming preferential tariff treatment under a free trade agreement—whether as exporter, producer, or importer—must demonstrate that products meet the agreement's rules of origin. This applies to manufacturers sourcing components from multiple countries, importers claiming reduced duties, and exporters certifying origin for customers. Certivo maps your product portfolio against applicable FTAs and identifies which SKUs qualify for preferential treatment.
What happens if an FTA origin claim is denied during a customs audit?
If customs authorities determine a product does not meet rules of origin requirements, the importer must pay the difference between the preferential tariff rate and the standard MFN rate—plus interest. In cases of gross negligence or systematic misrepresentation, authorities can impose additional penalties, deny future FTA participation, and refer cases for criminal investigation. Certivo maintains complete audit-ready evidence from the moment of qualification, reducing verification risk.
How does Certivo handle rules of origin across different FTAs?
CORA collects one set of supplier origin evidence—BOM details, cost data, HS classifications, and origin declarations—and qualifies products against USMCA, CPTPP, RCEP, EU-UK TCA, and other FTAs simultaneously. Each agreement's product-specific rules are mapped in the platform, ensuring accurate tariff shift analysis and RVC calculations per agreement. One supplier submission supports multiple FTA certifications.
Does Certivo support Regional Value Content calculations?
Yes. Certivo calculates RVC using transaction value, net cost, and build-up methods as required by each agreement. CORA extracts cost data from supplier documents, applies the correct calculation methodology per FTA and product category, and flags products approaching or falling below RVC thresholds. When input costs change, Certivo recalculates automatically and alerts your team.
How does FTA compliance relate to other trade regulations like tariffs and BABA?
FTA origin determinations interact directly with Section 301/232 tariff exposure, BABA domestic content requirements, and AEO/C-TPAT trusted trader programs. A product that qualifies under USMCA is exempt from the 25% tariff on Mexican goods—making origin accuracy a direct duty cost decision. Certivo validates supplier evidence against FTA origin rules, tariff classifications, and domestic content requirements from a single data set.