Key Supplier Responsibilities - Magna



TABLE OF CONTENTS

Page

Supply Chain Management Expectations 2

Documentation 2

Document Completion Instructions

a. U.S. Manufacturer’s Affidavit 5

b. Country of Origin Affidavit 7

c. NAFTA Certificate of Origin 9

SUPPLY CHAIN MANAGEMENT EXPECTATIONS

1. NAFTA and COUNTRY OF ORIGIN

• All documentation provided to Magna Mirrors or to it’s agent must be in English

• All documents required by Magna Mirrors for customs clearance must be provided to it’s Customs Broker prior to the shipment’s arrival into the U.S.

• Certificates and country of origin statements must be provided annually as requested

• Magna Mirrors requires that all responses be given in the time frame specified so that we may in turn meet our customer expectations and minimize our import costs. Suppliers that fail to meet Magna Mirrors requirements will be debited $150.00 to cover administrative fees. Responses must be complete and accurate including Magna Mirrors part number. Suppliers that fail to comply will be at risk to quote on new business

It is the responsibility of suppliers to provide information for each part that is supplied to Magna Mirrors Industries.

|Suppliers outside of North America are responsible for submitting the Country of Origin Statement included in this package. A |

|customs / commercial invoice is required for all shipments imported into the U.S. regardless of value. |

|North American Suppliers are responsible for submitting a NAFTA Certificate of Origin, Trace Value Information, Country of Origin |

|Affidavit if goods do not qualify as a NAFTA good and/or a U.S. Manufacturer’s Affidavit if the good is of U.S. origin |

A. DOCUMENTATION

1. Country of Origin Affidavit OR Manufacturer’s Affidavit

a. A Country of Origin Statement must be completed and signed if a NAFTA Certificate of Origin cannot be completed. NAFTA Certificates of Origin cannot be completed if:

i. The supplier or manufacturer is outside of North America

ii. The supplier or manufacturer cannot qualify and certify the good as a NAFTA eligible good

iii. The good is not shipped direct from a NAFTA eligible country to Canada

b. A U.S. Manufacturer’s Affidavit is required ONLY if as the supplier, you are the manufacturer of the item supplied to Magna Mirrors and the item is of U.S. origin. A NAFTA Certificate of Origin will still be required.

2. NAFTA Certificate of Origin (Refer to Completion Instructions)

a. This document is required for all parts, components and assemblies supplied to Magna Mirrors

i. To qualify a product under the North American Free Trade Agreement (NAFTA), you must be aware of the materials that went into the end product. If you are not the manufacturer or producer of the product, you should obtain a letter of origin or producers NAFTA Certificate of Origin from your supplier. Once the product has been qualified, complete all fields and sign the document for return to Magna Mirrors

ii. If the product does not qualify as a NAFTA good, please state “ineligible” on the certificate and provide the country of origin of the product supplied to Magna Mirrors. Sign the document and return to Magna Mirrors. A “Statement of Origin” will also be required.

iii. If you are uncertain of the origin of the product supplied to Magna Mirrors, please contact your customs broker for assistance in completing the NAFTA Certificate of Origin and/or Statement of Origin

A NAFTA Certificate of Origin must be provided for all parts, components and assemblies provided to Magna Mirrors.

Only one NAFTA Certificate covering all part numbers is required per calendar year. A Certificate is valid for up to 365 days.

It is your legal obligation, as the exporter, to notify Magna Mirrors, if the NAFTA Certificate is no longer valid due to sourcing or cost changes to your process.

You are required to notify Magna Mirrors within 30 days of knowing the NAFTA Certificate of Origin is no longer valid.

3. Pro forma Customs Invoice or Commercial Invoice

a. All commercial invoices or pro forma customs invoice must contain the following information:

i. Country of origin of each item shipped

ii. Harmonized tariff (classification) number of each item to the 6th digit level

iii. Additional charges that are included in the price, such as duty, brokerage, assists, royalties, commissions and domestic freight must be identified and itemized

iv. Terms of sale used (example CIF INCOTERM2010 or 2011)

v. Reason for transaction (sale, repair & return, prototype, sample, consignment or warranty repair)

vi. If goods are returning after having been further processed, state type of processing, cost of processing AND cost of the goods that were processed

vii. Purchase Order number. If a sample or prototype, indicate “sample” or “prototype” on the on the paperwork

viii. An accurate description complete with a Magna Mirrors part number of each item shipped

ix. If a motor, the document must indicate the following: 1) AC or DC 2) type of motor (gear, electric, hydraulic etc) 3) whether or not brushless 4) the watts or horsepower of the motor and, 5) number of phases

b. If No Charge Shipment

Customs requires a value even if there is no purchase or selling price. Specific procedures must be followed for all shipments of goods provided to (name of company) free of charge. Samples may be shipped at no charge, but the following language must be included on the customs or commercial invoice:

“Samples, No Commercial Value, not for resale.

Value for Customs purposes only $ ____________.”

c. U.S. Goods Returned

All returned goods must be made in accordance with the procedures below. Returned U.S. Goods are exempted from duty and taxes provided the invoice is properly completed at the time of entry. Goods can not have been advanced in value or improved in condition. They must be returned in same condition as received. Invoice should state:

“U.S. goods returned without having been advanced in value or improved in condition. Reason for return is (state reason – example repair, sale, inspection etc.)”

• When returning to the U.S., and the goods were sold, the value declared on the Customs or Commercial invoice must be the selling price to Magna Mirrors

• If the goods are U.S. origin and being returned for reasons other than a sale, the value should be that of the item when originally sold or transferred. If processed or repair, the cost of processing and repair must also be included. There may be some exceptions.

• The value of machinery or other capital goods may be depreciated based on acceptable accounting methods

• Examples of returned goods that would qualify for special duty treatment are as follows:

o Articles found to be damaged and returned for repair, replacement or credit

o Items returned in their original condition when unused for any reason

o Items returned for disposal

o Items that do not meet specifications

MANUFACTURER’S AFFIDAVIT INSTRUCTIONS TO COMPLETE

(Only complete if the good supplied to Magna Mirrors is of U.S. origin and you are the U.S. manufacturer of the good)

AFFIDAVIT OF MANUFACTURE FOR Magna Mirrors

I, (state your name) declare that the following merchandise

(state Magna Mirrors part number and complete description of part manufactured)

was manufactured by us at the following location:

(state address goods were manufactured at)

I further declare that U.S. Manufacturer’s drawback:

( ) was claimed Amount: Port: Date:

( ) was not claimed

in connection with the export of this material.

Signed: ____________________________________

(Signature and Title of Signature)

____________________________________

(Company Name)

____________________________________

(Place and Date of Signing

NOTE: This affidavit must be filled out completely and signed!!

AFFIDAVIT OF MANUFACTURE FOR Magna Mirrors

I, _________________________ declare that the following merchandise

___________________________________________________________

___________________________________________________________

___________________________________________________________

was manufactured by us at the following location:

___________________________________________________________

___________________________________________________________

I further declare that U.S. Manufacturer’s drawback:

( ) was claimed Amount: Port: Date:

( ) was not claimed

iIn connection with the export of this material.

Signed: ____________________________________

(Signature and Title of Signature)

____________________________________

(Company Name)

____________________________________

(Place and Date of Signing

COUNTRY OF ORIGIN STATEMENT FOR PARTS SUPPLIED TO

Magna Mirrors

INSTRUCTIONS

I, __________________Enter name of person signing_____, as authorized representative of the company identified below, a manufacturer or supplier of parts as indicated below declare that the information provided herein is, to the best of my knowledge and belief, accurate and complete.

|Part Number |Description of Part |Country of Origin |

| | | |

|Enter Magna Mirrors part number |Brief description of part |Enter Country of Origin of part supplied to|

| | |Magna Mirrors |

| | | |

| | | |

| | | |

Signed:

________enter company name______________________________________________

Corporation or Firm

________enter complete address____________________________________________

Street Address

______________________________________________________________________

City and State or Province

________enter name and title of person signing document_________________________

Name and Title

________please sign document______________________________________________

Signature

________enter date of signature_____________________________________________

Date:

_________________________________________________________

Email

_________________________________________________________

Telephone Number

Note: If additional space is required please attach a continuation page

COUNTRY OF ORIGIN AFFIDAVIT FOR PARTS SUPPLIED TO

Magna Mirrors

I, _________________________________, as authorized representative of the company identified below, a manufacturer or supplier of parts as indicated below declare that the information provided herein is, to the best of my knowledge and belief, accurate and complete.

|Part Number |Description of Part |Country of Origin |

| | | |

| | | |

| | | |

| | | |

| | | |

Signed:

_________________________________________________________

Corporation or Firm

_________________________________________________________

Street Address

_________________________________________________________

City and State or Province

_________________________________________________________

Name and Title

_________________________________________________________

Signature

_________________________________________________________

Date:

_________________________________________________________

Email

_________________________________________________________

Telephone Number

| | | |

| | |NAFTA CERTIFICATE OF ORIGIN INSTRUCTIONS |

| | | |

|FIELD | |EXPLANATION / REQUIREMENTS |

| | |Provide your full legal name, address and tax ID number. |

|1 |Exporter Name and Address |If you are not the exporter, please complete and indicate in the body of the NAFTA Certificate |

| | |““Producer Certificate of Origin” |

| | | |

|2 |Blanket Period |Provide blanket certification on a calendar year basis - not to exceed 365 days |

| | | |

|3 |Producer Name and Address |Complete only if the producer of the goods supplied to Magna Mirrors. This field can be completed|

| | |as follows: 1) provide full legal name, address and tax ID number of producer 2) indicate “Same |

| | |as above” or 3) Available upon request. |

| | | |

| | |Certificates that state “unknown” will be returned for correction |

| | | |

|4 |Importer Name and Address |Do not list Magna Mirrors Industries as the importer – state “various” |

| | | |

|5 |Description of Goods |The goods being certified must be described using both a noun description and the Magna Mirrors |

| | |part number. If you require more than one page, please use an attachment. |

| | | |

| | |Example: Shaft, steel Part 12345E |

| | | |

| | |If the item is obsolete, cannot be found or not currently produced, write obsolete, do not |

| | |recognize or not available yet in field 7 of the Certificate |

| | | |

|6 |HTS Tariff Classification |The tariff classification number of each product is to be identified to the six digit level. |

| |Number |Example: 8708.29 |

| | | |

| | |If a classification number has been pre-filled and provided by Magna Mirrors and you disagree with|

| | |the tariff classification number please stroke out and provide the classification number you have |

| | |determined the product to be. Please provide rationale for the classification number change. |

| | | |

|7 |NAFTA Preference Criterion|Enter A, B, C, or D in this field. Any criteria other than B or C will be questioned by Magna |

| | |Mirrors. |

| | | |

| | |If you are a supplier shipping parts to Magna Mirrors from outside of North America (Canada, |

| | |Mexico or U.S.), then your product will not qualify under the NAFTA rules. Please indicate “not |

| | |eligible” in this box and provide the country of origin in field 10. |

| | | |

| | |If the part is not eligible write “Not Eligible” in Box 7 of the Certificate. The traced value |

| | |field must still be completed. |

| | | |

| | |DO NOT assume that your good qualifies just because of a “value added” process. |

| | | |

| | |The rules of origin are contained in Chapter 4 and Annex 401. To qualify goods must meet one of |

| | |the criteria as outlined below: |

| | | |

| | |PREFERENCE CRITERIA |

| | | |

| | |A - The good is "wholly obtained or produced entirely" in the territory of one or more of the |

| | |NAFTA countries, as referred to in Article 415. NOTE: The purchase of a good in the territory |

| | |does not necessarily mean it was "wholly obtained or produced". To use this criteria there can be|

| | |no non-originating material used in the production of the finished good supplied to Magna Mirrors |

| | | |

| | |B - The good is produced entirely in the territory of one or more of the NAFTA countries and |

| | |satisfies the specific rule of origin, set out in Annex 401 that applies to its tariff |

| | |classification. The rule may include a tariff classification change, regional value contact |

| | |requirement or a combination thereof. To use this criteria you must know the classification |

| | |number of the finished good supplied to Magna Mirrors prior to identifying the applicable NAFTA |

| | |Rule . |

| | | |

| | |C - The good is produced entirely in the territory of one or more of the NAFTA countries |

| | |exclusively from originating materials. Under this criterion, one or more of the materials may |

| | |not fall within the definition of "wholly produced or obtained", as set out in Article 415. All |

| | |materials used in the production of the good must qualify as "originating" by meeting the rules of|

| | |Article 401. A Certificate of Origin from your supplier for each component used in the finished |

| | |good supplied to Magna Mirrors is necessary when using this criteria. |

| | | |

| | |Please contact your customs broker or consultant if assistance is required to correctly determine |

| | |the criteria. |

| | | |

|8 |Producer |Indicate YES or NO(1) or NO(2) or NO(3) in this field |

| | | |

| | |If you are the producer of the good supplied to Magna Mirrors, state "YES" |

| | | |

| | |If you are not the producer of the good, state "NO" followed by (1), (2), or (3), depending on |

| | |whether this certificate was based upon: |

| | |(1) your knowledge of whether the good qualifies as an originating good (i.e. meets NAFTA |

| | |eligibility requirements); |

| | |(2) your reliance on the producer's written representation (other than a Certificate of Origin) |

| | |that the good qualifies as an originating good; or |

| | |(3) a completed and signed Certificate for the good, voluntarily provided to the exporter by the |

| | |producer. |

| | |Indicate either “NO” or “NC” in this field. Do not enter a dollar value in this column or Magna |

|9 |Net Cost |Mirrors will reject the Certificate |

| | | |

| | |Where the rule of origin under Preference Criteria B, requires that a net cost calculation be made|

| | |to prove origin, "NC" is to be indicated in the "Net Cost" column. In all other cases, indicate |

| | |“NO” |

| | | |

| | |The Certificate will be rejected if: |

| | |If preference Criterion A or C is indicated in Field 7 (NC cannot be used), and/or |

| | |If preference Criterion B is used and rule requires a tariff shift only ( NC cannot be used) |

| | | |

|10 |Country of Origin |Indicate the country of origin of the part supplied to Magna Mirrors |

| | | |

| | |Magna Mirrors will reject Certificates that do not contain a country of origin |

| | | |

|10a |Trace Value |For each product, identify if the item shipped to Magna Mirrors is a traced item. |

| | | |

| | |The traced value of all items on the NAFTA passenger car and light duty truck tracing list is |

| | |required as well as the traced value of all items on the tracing list that have been incorporated |

| | |into the product shipped to Magna Mirrors |

| | | |

| | |If the good that you supply to Magna Mirrors does not have a “traced” item incorporated into the |

| | |product shipped to Magna Mirrors, state “$0.00”. |

| | | |

| | |If you do have a “traced” item that was incorporated into the product shipped to Magna Mirrors on |

| | |the traced list that is shipped to Magna Mirrors, state “$$$$ (indicate amount for that item - ie:|

| | |$0.03 USD) See below for the cost that must be reported as a trace value. |

| | | |

| | |The traced value is the sum of the customs value of the traced material when it cleared customs, |

| | |duties, customs brokerage fees, freight and insurance. Where title passes before or at the time |

| | |the traced material first enters a NAFTA country, freight and insurance are included up to the |

| | |point of entry and stop at that point. If title passes after the traced material has entered a |

| | |NAFTA country from a non-NAFTA country, freight and insurance are included up to the point that |

| | |title passes and stop at that point |

| | | |

| | |Where your supplier (or that supplier's supplier) imported the traced material, the traced value |

| | |remains the same value as identified above and needs to be reported to you by your supplier. |

| | | |

| | |The "Tracing" requirements of NAFTA specify that the value(s) of imported parts identified on the |

| | |tracing list be traced back to the transaction in which they were imported. Even where these |

| | |traced materials are incorporated into components or assemblies in North America, the value of |

| | |these materials must be traced back to their import value. Remember: Traced Value does not lose |

| | |its origin. |

| | | |

| | |Where the import value of these materials cannot be traced, the entire value of the component or |

| | |assembly incorporating one or more of these materials must be considered to be "non-originating" |

| | |for purposes of regional value content calculation. Accordingly, it will be more difficult to |

| | |meet the regional value content requirement of NAFTA. |

| | | |

|10b |Currency of Trace Value |For each product, identify the currency of the traced value (USD, MXP or CAD). The currency used |

| | |must be the currency of the NAFTA country in which you are located. |

| | | |

|11 |Certification |Complete ALL information elements, including number of pages (include certificate page in the |

| | |count). Ensure your completed document is signed by a person who has authority to sign. |

| | | |

| | |Certificates without a signature will be rejected for correction |

Additional Notes:

1) A NAFTA Country is defined as follows:

a. Canada: Provinces, territories, areas beyond the territorial seas of Canada within which Canada may exercise rights with respect to the seabed, subsoil and their natural resources

b. Mexico: States of the Federation and the Federal District, the islands, including the reefs and keys in adjacent seas, islands of Guadalupe and Revillagigedo situated in the Pacific Ocean and the continental shelf and the submarine shelf of such islands, keys and reefs

c. United States: 50 States, District of Columbia, Puerto Rico, foreign trade zones located in the U.S. and Puerto Rico and areas beyond the territorial seas of the U.S. within which the U.S. may exercise rights with respect to the seabed, subsoil and their natural resources

2) Do not complete the NAFTA Certificate unless you know and can prove that your good originates. If not, do not complete a NAFTA Certificate of Origin.

a. Do you know the background of your product?

b. Who produced it?

c. Where the components or ingredients were manufactured?

3) Merely purchasing a good in a NAFTA country does NOT automatically make it NAFTA eligible

4) Value added processing over 50% does NOT automatically make your good eligible for NAFTA

5) If your good qualified for NAFTA and was then sent overseas temporarily for further work and returned to a NAFTA country – do not complete a NAFTA Certificate

6) Repack or pass through goods from a non-NAFTA country are not NAFTA eligible

7) Goods can be marked “Made in Canada”, “Made in US” or “Made in Mexico” yet not be eligible for NAFTA and qualify for NAFTA duty rates (Country of origin is determined by a different set of rules – “NAFTA Marking Rules of Origin”)

8) If the NAFTA Certificate of origin is not ready at time of export, you have one year from the date of import to claim a refund

9) The NAFTA Certificate, with supporting documentation, should be prepared PRIOR to preparing a Certificate and must be readily available upon request by Customs

10) If you are not familiar with or are uncertain, ASK for help from your customs broker or consultant

A GOOD CERTIFICATE IS COMPLETE, CORRECT AND CLEAR!

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