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Updated: Memorandum D11-4-3: Rules of Origin Respecting the Most-Favoured-Nation Tariff

https://www.cbsa-asfc.gc.ca/publications/dm-md/d11/d11-4-3-eng.html

Ottawa, May 29, 2026

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Plain language summary

Target audience: Importers of commercial goods.

Key content: Provides information about the administration of the rules of origin and shipping requirements respecting the Most-Favoured-Nation tariff treatment.

Keywords: Legislation, regulations, rules of origin, Most-Favoured-Nation (MFN) tariff treatment, proof of origin, shipping requirements.

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Updates to this D-memo

This memorandum has been revised to reflect changes to the shipping requirements for Most-Favoured-Nation (MFN) tariff treatment purposes.

Guidelines and General Information

General

1. MFN beneficiary countries can be found in the List of Countries and Applicable Tariff Treatments set out in the schedule of the Customs Tariff.

2. Goods that originate in countries not set out in the List of Countries of the Customs Tariff and goods that do not satisfy the MFN rules of origin, are subject to the General Tariff rate of customs duty. Goods originating in North Korea, Russia and Belarus are not entitled to the MFN tariff rates.

Rules of Origin

3. To qualify for the MFN tariff treatment, at least 50% of the cost of production of the goods must be incurred in one or more MFN beneficiary countries or Canada. Canadian content may be included as MFN originating in the calculation of the 50% requirement.

4. Cost of production includes:

  1. materials (exclusive of duties and taxes);
  2. labour; and
  3. factory overhead.

5. Cost of production excludes:

  1. the cost of outside packing and expenses related to outside packing, required for the transportation of the goods, not including packing in which the goods are ordinarily sold for consumption;
  2. gross profit of the manufacturer or exporter and the profit or remuneration of any trader, broker or other person dealing in the goods in their finished manufactured condition;
  3. royalties;
  4. customs or excise duty or tax paid or payable on imported materials;
  5. carriage, insurance and other charges from the place of production or manufacture in the country of origin to the port of shipment; and
  6. any other costs or charges incurred or to be incurred subsequent to the completion of the manufacture of the goods.

6. The goods must be finished in a MFN beneficiary country in the form in which they are imported into Canada.

Proof of Origin

7. Proof of origin for MFN tariff treatment must be presented to the Canada Border Services Agency (CBSA) in the form of:

  1. a commercial invoice or Form CI1 Canada Customs Invoice indicating the country of origin of the goods, or
  2. any other documentation indicating the country of origin of the goods.

8. Proof of origin must be presented at the times set out in section 13 of the Proof of Origin of Imported Goods Regulations.

Shipping Requirements

9. Goods are entitled to MFN tariff treatment only if they are shipped directly to Canada from a country that is an MFN beneficiary, which may include transhipment through intermediate, non-beneficiary countries.

10. In accordance with the Direct Shipment (Most-Favoured-Nation Tariff, General Preferential Tariff, General Preferential Tariff Plus, Least Developed Country Tariff, Commonwealth Caribbean Countries Tariff, Australia Tariff and New Zealand Tariff) Regulations, the goods may be shipped directly to Canada from an MFN beneficiary country on a through bill of lading (TBL) or other documentation indicating the shipping route and all points of shipment and transhipment prior to the importation of the goods.

11. According to the above regulations and for the purposes of subsection 17(1) of the Customs Tariff, transhipment through an intermediate country is permitted provided:

  1. customs control documents establishing that the goods remained under customs control in the intermediate country; and
  2. documentary evidence indicating the shipping route and all points of shipment and transhipment prior to the importation of the goods.

12. In line with Canada's standard transhipment requirements, the CBSA administers MFN originating goods as retaining their originating status when transported outside a beneficiary country if they do not undergo any further production or other operation outside the beneficiary country, other than unloading, reloading, separation from a bulk shipment, storing or any other operation necessary to transport the goods to Canada or to preserve them in good condition.

13. Upon request of an officer, importers shall provide a copy of the documents that establish that the goods remained under customs control and did not undergo any further production or other operations while in a non-beneficiary country.

References

Consult these resources for further information.

Applicable legislation

Superseded memoranda D

D11-4-3 dated April 4, 2013

Issuing Office

Tariff Classification, Origin and Valuation Division
Trade Programs Directorate
Commercial and Trade Branch

Contact us

Contact border information services

Related links

Page details

Date modified:

2026-05-29

Topic(s)

Trade Agreements
International Trade and Border Management
CBSA Other

Information source

Canada Border Services Agency (CBSA)
Disclaimer

The foregoing information is provided for informational purposes only and is not intended as, nor should it be considered, professional advice or a substitute for conducting your own thorough research and review. Before making any decisions or taking any action based on the information provided, you should conduct your own independent investigation and/or seek professional advice from a qualified expert in the relevant field. The CSCB disclaims all liability for actions taken or not taken based on the information provided.