Customs authorities across the region are ramping up enforcement efforts in line with global trends, placing increased scrutiny on origin certifications under various Free Trade Agreements (FTAs). Businesses claiming preferential tariff treatment must now be more vigilant than ever—non-compliance can result in retroactive duties, penalties, and even the loss of trade benefits.

What’s Happening?

Origin verification is the process customs authorities use to confirm that goods benefiting from preferential tariffs under FTAs—such as CAFTA-DR, the Panama–Central America FTA, or the EU–Central America Association Agreement—truly qualify as originating.

Verification is increasingly being carried out through desk audits, with authorities focusing on:

• Incomplete or incorrect origin declarations
• Lack of supporting documentation for materials and production processes
• Discrepancies between declared origin and supplier invoices

Key Rules to Remember

• Keep Detailed Records: Exporters must retain origin documentation (e.g., cost breakdowns, production records) for at least five years.
• Substantial Transformation is Essential: Simple assembly or repackaging does not confer origin status.
• Supplier Declarations Matter: Input materials must be supported by origin-compliant supplier certifications.

Common Pitfalls We’re Seeing

• Generic or “off-the-shelf” certificates without supporting evidence
• Misapplication of tariff shift or regional value content rules
• Missed verification requests due to weak internal communication

How to Get Ready

• Review your origin determination procedures
• Provide FTA-specific training to your trade compliance team
• Conduct a proactive internal audit before customs comes knocking

Need Help?

We support companies across Central America with:

• Origin analysis tailored to specific FTAs
• Assistance in responding to customs verification requests
• Design and implementation of internal controls to ensure origin compliance

If your business relies on tariff preferences to stay competitive, now is the time to ensure your documentation is bulletproof.

At Dentons, we deliver tailored legal and business solutions that keep you compliant—and ahead of the curve. Contact us today to protect your trade benefits and strengthen your origin compliance strategy.