Transcript Presentation title slide - 42 pt Times New Roman, White

Free Trade Agreements and Special
Trade Programs
Rick O’Connell
Assistant Area Director, Trade
JFK International Airport
Thursday, November 13, 2008
Reference Material - Websites
 www.ustr.gov – U.S. Trade Representative
 www.usitc.gov – International Trade Commission
 www.cbp.gov – U.S. Customs and Border Protection (click
“Trade”, “Trade Programs”, then “International Agreements”
 www.tradeagreements.gov – U.S. Government (Departments
of Agriculture, Commerce, State, Treasury and the Office of
the United States Trade Representative) interagency effort
 www.otexa.itc.doc.gov – Office of Textiles and Apparel
Trade Agreement vs. Trade Program
Free Trade Agreement
 A reciprocal agreement between two or more parties
 Broader provisions beyond Customs issues
 Israel, Jordan, NAFTA, Chile, Singapore, Australia,
Morocco, CAFTA-DR, Bahrain
Special Trade Program
 A unilateral action on the part of the United States
 US exporters do not receive benefits
 GSP, ATPA/ATPDEA, CBERA/CBI, CBPTA, AGOA
FREE TRADE AGREEMENTS / SPECIAL TRADE PROGRAMS
GENERAL NOTE
SPI
GN 16
D
GN 11
J, J*, J+
GN 28
AU
GN 30
BH
Caribbean Basin Economic Recovery Act (CBERA) and
Caribbean Basin Trade Partnership Act (CBTPA)
GN 7/ GN 17
E, E* & R
Central America – Dominican Republic Free Trade Agreement
(CAFTA-DR)
GN 29
P, P+
GN 26
CL
GN 4
A, A+, A*
GN 8
IL, N (QIZ)
GN 18
JO
GN 27
MA
GN 12
CA, MX
None yet
None yet
GN 25
SG, 9999.00.84
(ISI provision)
African Growth and Opportunity Act (AGOA)
Andean Trade Preferences Act (ATPA) & Andean Trade
Promotion and Drug Eradication Act (ATPDEA)
Australia Free Trade Agreement (AFTA)
Bahrain Free Trade Agreement (BFTA)
Chile Free Trade Agreement (CFTA)
Generalized System of Preferences (GSP)
Israel Free Trade Area, West Bank, Gaza Strip, Qualified
Industrial Zones (ILFTA)
Jordan Free Trade Area (JFTA)
Morocco Free Trade Agreement (MFTA)
North American Free Trade Agreement (NAFTA)
Oman Free Trade Agreement
Singapore Free Trade Agreement (SFTA)
Current Free Trade Agreements (FTAs)
1.
Israel 9/1/85
The United States–Israel Free Trade Area Agreement (US-ILFTA) also affords
preferential tariff treatment to goods manufactured by eligible companies in the
Egyptian Qualifying Industrial Zones (QIZs) and the Jordanian QIZs.
a) Jordan QIZ 11/21/96
b) Egypt QIZ 12/29/04
2.
NAFTA 1/1/94
3.
Jordan 12/17/01
4.
Chile 1/1/04
5.
Singapore 1/1/04
6.
Australia 1/1/05
7.
Morocco 1/1/06
8.
CAFTA-DR 3/1/06 El Salvador; 4/1/06 Honduras, Nicaragua; 7/1/06
Guatemala; 3/1/07 Dominican Republic
9.
Bahrain 8/1/06
Potential &/or Future FTAs
CAFTA-DR (Costa Rica)
Peru
Oman
Colombia
Panama
South Korea
Ecuador
Malaysia
Thailand
United Arab Emirates
Free Trade Area of the Americas (FTAA) - Efforts to integrate the Western
Hemisphere into a free trade area of the region’s 34 democracies
Southern African Customs Union (SACU) – Botswana, Lesotho, Namibia,
South Africa and Swaziland
Egypt
Vietnam
Free Trade Agreement Overview
 New FTAs based on NAFTA
and GSP – each has a
dedicated note in the HTS
 FTAs not “free” but preferential
 Concrete obligations for the
importer regarding customs
procedures
 Commitment to publish laws
and regulations on the Internet
 The rules are not identical and
can only be applied to the
respective agreements.
Rules of Origin
The NAFTA Model
Preference Criterion
 What is a Rule of Origin?
 Wholly Obtained
 Product Specific Rules of Origin
 Tariff Shift (based on international nomenclature,
transparent and not subjective)
 Regional Value Content (RVC)
 Exclusively from Originating Materials
 De Minimis
 Current Agreements based on the NAFTA model: Singapore,
Chile, Australia and CAFTA-DR
General Rules of Origin
 A good must be “more than” a product of a Party country,
it must meet a preference rule of origin
 The general rules incorporate different methods for
determining origin
 An imported good must be “originating” per the general
rules of the agreement in order to receive preferential
treatment
Rules of Origin
The GSP Model
Objectives
 A good must be “more than” a product of a Party country,
it must meet the rules of origin
 Wholly Obtained (same principle as found in NAFTA model)
 Substantial Transformation + 35% Value Added
 Tariff Shift (same principle as found in NAFTA model)
 Present only in new trade agreements
 Imported Directly
 Deemed Certification and Declaration
 Current Agreements based on the GSP model: Israel FTA, Egypt QIZ,
Jordan QIZ, Jordan FTA, Morocco FTA, Bahrain FTA
Deemed Certification &
Declaration
 An importer making a claim for preference is deemed to
have certified that the goods qualify
 Importer must be prepared to submit a signed declaration
 Description of the good, invoice numbers, quantity
 Description of operations performed identifying direct cost
of processing
 Description of materials and value
 Description of any applicable change in tariff classification
* The concept is not found in NAFTA
Making an FTA Claim
Basis for a Claim
 A claim is essentially an assertion by the importer that
the good is originating according to the rules of the
agreement, based on:
 Certification, Supporting Statement or Declaration in the
importer’s possession; or
 Importer Knowledge
 Claim is made by placing the Special Program Indicator
field “SPI” on the entry summary
Importer Focus
Correspondence is with the importer
Importer should coordinate with the exporter/producer
for submission of business confidential information
directly to CBP
*NAFTA is an exporter focused agreement
Requesting Information
What will CBP ask for?
 Certification, Supporting Statement or Declaration
 Documents supporting production process, cost data,
materials used in production
 Information concerning the growth, production or manufacture
Affect of a Claim Based on Importer Knowledge
 CBP retains authority through the agreement to request
the necessary information to conduct a verification and
make a determination
 CBP may be required to ask specific detailed questions
 What preference criteria was used to qualify the good as
originating?
Certification/Statement/Declaration
Importer Requirement
Can be in any format
CBP requires certain data elements
Must be submitted upon request
May be submitted electronically
Data Elements
Data Elements
Importer
Exporter
Producer
Description of
Good
Classification
Preference Criteria or Rule of
Origin
Single Shipment
Multiple Shipment
Authorized Signature
Certification
Supporting Documentation Needed:
For Wholly Obtained
 Evidence of origin of good and/or all materials used in production.
For Tariff Shift Qualifications
 Bill of Materials
 Affidavits of origin for originating materials
 Production records of finished goods
 Classification of all non-originating materials
 Demonstration of tariff shift
For RVC Requirements:
 Bill of Materials
 Invoices for all materials
 Affidavits of origin for originating materials
 Production records of finished goods
 Cost breakdown of all expenses related to the production of the good
 RVC calculation
Post-Entry Procedures
Post Entry
 Supplemental Information Letters/Post Entry
Amendments
 19 USC 1514 for liquidated entries in which the entry
date of the merchandise is after Dec. 18, 2004
Post Importation
 19 USC 1520 (d) post-importation
 Only method available if provision is present in the
agreement
 NAFTA, Chile, CAFTA-DR
Comparison Chart Available on CBP.gov
Preferential Trade Agreements & Trade
Programs Synopsis
(Non-Textile)
Trade Agreements Branch
Special Enforcement Division
Commercial Targeting and Enforcement
May 2007
General Notes Reference
African Growth and Opportunity Act
GN 16
Andean Trade Preferences Act & Andean Trade Promotion and Drug
Eradication Act (ATPA/ATPDEA)
Australia Free Trade Agreement (AFTA)
GN 11
Bahrain Free Trade Agreement (BFTA)
GN 30
Caribbean Basin Economic Recovery Act (CBERA)
GN 7
Caribbean Basin Trade Partnership Act (CBTPA)
GN 17
Central America-Dominican Republic Free Trade Agreement (CAFTA-DR)
GN 29
Chile Free Trade Agreement (CFTA)
GN 26
Generalized System of Preferences (GSP)
GN 4
Israel Free Trade Agreement (IFTA)
GN 8
Jordan Free Trade Agreement (JFTA)
GN 18
Morocco Free Trade Agreement (MFTA)
GN 27
North American Free Trade Agreement (NAFTA)
GN 12
Singapore Free Trade Agreement (SFTA)
GN 25
GN 28
AGOA References
Effective Date: 10/2/00
Expiration Date: 9/30/15
General Note in HTS: GN 16
Special Indicator in HTS: D
Regulation Cite: 19 CFR 10.178a
US Code: 19 USC 3706
Public Law: 106-200
AGOA Summary
Reference
General Note 16
SPI
D
General Rules of Origin
Wholly Obtained, 35% Value Added + Substantial
Transformation
Value Content
15% of US cost & value may count towards 35%
Level of Documentation at
Importation
Knowledge
Verification Notification
Importer
Determination Notification
Importer, Exporter if provided documentation to CBP
Transit/Transshipment
Imported Directly
Post-Importations
SIL/PEA, 19 USC 1514
MPF
No exemption (but products of least-developed beneficiary developing countries General
Note 4 (b)(i) are exempt )
ATPA/ATPDEA References
Expiration Date: 06/30/07
General Note in HTS: GN 11
Special Indicator in HTS: J, J*, J+
Regulation Cite: 19 CFR 10.201 – 207 & 10.241 - 248
US Code: 19 USC 3201 - 3206
Public Law: 102-182
ATPA/ATPDEA Summary
Reference
General Note 11
SPI
J, J*, J+
General Rules of Origin
(Preference Criteria)
Wholly Growth, 35% Value Added + Substantial
Transformation
Regional Value Content
15% of US cost or value can be counted towards 35%
Level of Documentation at
Importation
Knowledge (ATPA); CPB Form 449, Signed by the exporter
(ATPDEA)
Verification Notification
Importer
Determination Notification
Importer, Exporter if provided documentation to CBP
Transit/Transshipment
Imported Directly
Post-Importations
SIL/PEA, 19 USC 1514
MPF
No exemption
Australia Free Trade Agreement
Effective Date: 1/1/05
Expiration Date: None
General Note in HTS: GN 28
Special Indicator in HTS: AU
US Code: 19 USC 3805
Public Law: 108-286
Australia FTA Summary
Reference
General Note 28
SPI
AU
General Rules of Origin
(Preference Criteria)
Wholly Obtained, Tariff Shift &/or RVC, Exclusively from
Originating Materials, Other Qualifying Method
Regional Value Content
Build-up, Build-down, Net Cost
Level of Documentation at
Importation
Freeform Statement (10 data elements); Importer Knowledge
Verification Notification
Importer, At discretion may contact exporter
Determination Notification
Importer, Exporter if provided documentation to CBP
Transit/Transshipment
Must support no further production occurred in a 3rd country
Post-Importations
SIL/PEA or 19 USC 1514
MPF
Exempt for Originating Goods
Bahrain Free Trade Agreement
Effective Date: August 1, 2006
Expiration Date: None
General Note in HTS: GN 30
Special Indicator in HTS: BH
US Code: 19 USC 3805 note
Public Law: 109-169
Bahrain FTA Summary
Reference
General Note 30
SPI
BH
General Rules of Origin
(Preference Criteria)
Wholly Growth, 35% Value Added + Substantial
Transformation; Tariff Shift for specific goods
Value Content
Unlimited US content towards meeting 35%
Level of Documentation at
Importation
Supporting Declaration; Importer Knowledge
Verification Notification
Importer
Determination Notification
Importer, Exporter if provided documentation to CBP
Transit/Transshipment
Imported Directly
Post-Importations
SIL/PEA, 19 USC 1514
MPF
Exempt for originating goods
Caribbean Basin Economic Recovery Act
Effective Date: 10/2/00
Expiration Date: N/A
General Note in HTS: GN 7
Special Indicator in HTS: E, E*
Regulation Cite: 19 CFR 10.191 - 199
US Code: 19 USC 2701 - 2706
Public Law: 98-67
CBERA Summary
Reference
General Note 7
SPI
E, E*
General Rules of Origin
(Preference Criteria)
Wholly Growth, 35% Value Added + Substantial
Transformation
Value Content
15% of US cost or value can be counted towards 35%
Level of Documentation at
Importation
Knowledge
Verification Notification
Importer
Determination Notification
Importer, Exporter if provided documentation to CBP
Transit/Transshipment
Imported Directly
Post-Importations
SIL/PEA, 19 USC 1514
MPF
Exempt for all goods, whether or not they are originating
Caribbean Basin Trade Preferences Act
Expiration Date: 9/30/08
General Note in HTS: GN 17
Special Indicator in HTS: R
Regulation Cite: 19 CFR 10.231 - 237
US Code: 19 USC 2701 - 2707
Public Law: 106-200
CBTPA Summary
Reference
General Note 17
SPI
R
General Rules of Origin
(Preference Criteria)
Wholly Obtained, Good originates according to the NAFTA
rules of origin
Regional Value Content
If applicable per GN 12
Level of Documentation at
Importation
CPB Form 450, Signed by the exporter
Verification Notification
Importer
Determination Notification
Importer, Exporter if provided documentation to CBP
Transit/Transshipment
Imported Directly
Post-Importations
SIL/PEA, 19 USC 1514
MPF
Exempt for all goods, whether or not they are originating
Central America-Dominican
Republic Free Trade Agreement
 Effective Dates:
 3/1/06 (El Salvador)
 4/1/06 (Nicaragua & Honduras)
 7/1/06 (Guatemala)
 Expiration Date: None
 General Note in HTS: GN 29
 Special Indicator in HTS: P, P+
 US Code: 19 USC 4001 note
 Public Law: 109-53
CBI/CBERA/CBTPA/CAFTA-DR
Comparison
Caribbean
Basin Initiative
(CBI)
Caribbean
Basin Economic
Recovery Act
(CBERA)
Caribbean Basin
Trade Partnership
Act (CBTPA)
Central AmericaDom. Rep. Free
Trade Agreement
(CAFTA-DR)*
Program
providing duty
free treatment of
certain goods
Act that
implemented CBI
Expands CBERA
benefits to previously
excluded articles
applying NAFTA rules
of origin & tariffs
Reciprocal trade
agreement between
the US and Central
American countries
Countries listed
in GN 7(a)
Countries listed in GN
17(a)
Costa Rica,
Guatemala, Honduras,
El Salvador,
Nicaragua, Dominican
Republic
SPI “E” or “E*”
SPI “R”
SPI “P” or “P+”
* CAFTA amends certain provisions of CBERA/CBTPA
CAFTA-DR Summary
Reference
General Note 29
SPI
P, P+
General Rules of Origin
(Preference Criteria)
Wholly Obtained, Tariff Shift &/or RVC, Exclusively from
Originating Materials; [Qualifying Goods]
Regional Value Content
Build-up, Build-down, Net Cost
Level of Documentation at
Importation
Freeform Certification (10 data elements); Importer
Knowledge
Verification Notification
Importer, At discretion may contact exporter
Determination Notification
Importer, Exporter if provided documentation to CBP
Transit/Transshipment
No further production; must stay under Customs control
Post-Importations
19 USC 1520(d)
MPF
Exempt for Originating Goods & Qualifying Goods
* Imports from CAFTA countries will lose GSP, CBERA & CBTPA eligibility upon implementation of FTA
Chile Free Trade Agreement
Effective Date: 1/1/04
Expiration Date: None
General Note in HTS: GN 26
Special Indicator in HTS: CL
Regulation Cite: 19 CFR 10.400 et. seq.
US Code: 19 USC 3805 Note
Public Law: 108-77
Chile FTA Summary
Reference
General Note 26
SPI
CL
General Rules of Origin
(Preference Criteria)
Wholly Obtained, Tariff Shift &/or RVC, Exclusively of
Originating Materials
Regional Value Content
Build-up, Build-down
Level of Documentation at
Importation
Freeform Certification (10 data elements); Sufficient
Knowledge
Verification Notification
Importer
Determination Notification
Importer, Exporter if provided documentation to CBP
Transit/Transshipment
Must support no further production occurred in a 3rd country
Post-Importations
19 USC 1520(d)
MPF
Exempt for Originating Goods
* Imports from Chile lost GSP eligibility upon implementation of FTA (Jan 1, 2004)
Generalized System of Preferences
Effective Date: 1/1/76
Expiration Date: 12/31/08
General Note in HTS: GN 4
Special Indicator in HTS: A, A+, A*
Regulation Cite: 19 CFR 10.171 – 178a
US Code: 19 USC 2461 - 2467
GSP Summary
Reference
General Note 4
SPI
A, A+, A*
General Rules of Origin
(Preference Criteria)
Wholly Obtained, 35% Value Added + Substantial
Transformation
Value Content
US cost and value may NOT count towards 35%
Level of Documentation at
Importation
Knowledge (Form A no longer required)
Verification Notification
Importer
Determination Notification
Importer, Exporter if provided documentation to CBP
Transit/Transshipment
Imported Directly
Post-Importations
SIL/PEA, 19 USC 1514
MPF
Exempt for products of least-developed beneficiary developing
countries regardless of whether a claim is made
Israel Free Trade Agreement
Effective Date: 9/1/85
Expiration Date: None
General Note in HTS: GN 8
Special Indicator in HTS: IL
US Code: 19 USC 2112
Public Law: 99-47
Israel FTA Summary
Reference
General Note 8
SPI
IL
General Rules of Origin
(Preference Criteria)
Wholly Growth, 35% Value Added + Substantial
Transformation
Value Content
15% of US cost or value can be counted towards 35%
Level of Documentation at
Importation
Knowledge, Form A (optional)
Verification Notification
Importer
Determination Notification
Importer, Exporter if provided documentation to CBP
Transit/Transshipment
Imported Directly
Post-Importations
SIL/PEA, 19 USC 1514
MPF
Exempt for all products, whether or not originating
Qualified Industrial Zone
(QIZ)
QIZ General Information
Extension of ILFTA benefits to goods produced in
designated regions outside of Israel
Company must be approved by Joint Committees
Separate requirements for inputs regulated by Joint
Committees
Imported goods must meet the 35% value added +
substantial transformation and imported directly
requirement to receive benefits
Jordan Qualified Industrial
Zone (QIZ)
Effective Date: 11/21/96
Expiration Date: None
General Note in HTS: GN 3(a)(v) & GSN 3(d)
Special Indicator in HTS: IL in HTS, N on 7501
Jordan QIZ Summary
Reference
General Note 8 and 3(a)(v), General Statistical Note 3(d)
SPI
IL in HTS, but N on 7501
General Rules of Origin
(Preference Criteria)
Wholly Growth, 35% Value Added + Substantial
Transformation
Value Content
15% of US cost or value can be counted towards 35%
Level of Documentation at
Importation
Knowledge
Verification Notification
Importer
Determination Notification
Importer, Exporter if provided documentation to CBP
Transit/Transshipment
Direct Shipment
Post-Importations
SIL/PEA, 19 USC 1514
MPF
No exemption
Egypt Qualified Industrial
Zone (QIZ)
 Effective Date: 12/29/04
 Expiration Date: None
 General Note in HTS: GN 3(a)(v) & GN 3(d)
 Special Indicator in HTS: IL in HTS, N on 7501
 US-Israel Free Trade Area Implementation Act: 69 FR
78094
 Eligible company list at: Egypt Ministry of Foreign Trade
and Industry Website (www.qizegypt.gov.eg)
Egypt QIZ Summary
Reference
General Note 8 and 3(a)(v), General Statistical Note 3(d)
SPI
IL in HTS, but N on 7501
General Rules of Origin
(Preference Criteria)
Wholly Growth, 35% Value Added + Substantial
Transformation
Value Content
15% of US cost or value can be counted towards 35%
Level of Documentation at
Importation
Knowledge
Verification Notification
Importer
Determination Notification
Importer, Exporter if provided documentation to CBP
Transit/Transshipment
Direct Shipment
Post-Importations
SIL/PEA, 19 USC 1514
MPF
No exemption
Jordan Free Trade Agreement
Effective Date: 12/17/01
Expiration Date: None
General Note in HTS: GN 18
Special Indicator in HTS: JO
US Code: 19 USC 2112
Public Law: 107-43
Jordan FTA Summary
Reference
General Note 18
SPI
JO
General Rules of Origin
(Preference Criteria)
Wholly Growth, 35% Value Added + Substantial
Transformation
Value Content
15% of US cost or value can be counted towards 35%
Level of Documentation at
Importation
Knowledge
Verification Notification
Importer
Determination Notification
Importer, Exporter if provided documentation to CBP
Transit/Transshipment
Imported Directly
Post-Importations
SIL/PEA, 19 USC 1514
MPF
No exemption
Morocco Free Trade Agreement
Effective Date: 1/1/06
Expiration Date: None
General Note in HTS: GN 27
Special Indicator in HTS: MA
US Code: 19 USC 3805 note
Public Law: 108-302
Morocco FTA Summary
Reference
General Note 27
SPI
MA
General Rules of Origin
(Preference Criteria)
Wholly Obtained, Substantial Transformation + 35% Valued
Added, Tariff Shift
Value Content
Unlimited US content towards meeting 35%
Level of Documentation at
Importation
Freeform Declaration (10 data elements); Deemed
Certification
Verification Notification
Importer
Determination Notification
Importer, Exporter if provided documentation to CBP
Transit/Transshipment
Imported Directly
Post-Importations
SIL/PEA or 19 USC 1514
MPF
No Exemption
* Imports from Morocco lost GSP eligibility upon implementation of FTA
North American Free Trade Agreement
Effective Date: 1/1/94
Expiration Date: None
General Note in HTS: GN 12
Special Indicator in HTS: CA / MX
Regulation Cite: 19 CFR 181
US Code: 19 USC 3301 - 3473
Public Law: 103-182
NAFTA Summary
Reference
General Note 12
SPI
MX, CA
General Rules of Origin
(Preference Criteria)
Wholly Obtained, Tariff Shift &/or RVC, Wholly of
Originating Materials, Exception to Tariff Shift, IT goods
Regional Value Content
Transaction Value, Net Cost
Level of Documentation at
Importation
Certificate of Origin, CBP Form 434; Alternate CBP
Form 434; Computer Generated CBP Form 434
Verification Notification
Determination Notification
Exporter (Importer must provide C/O prior to
verification)
Exporter, Negative Determination issued to Importer
Post-Importations
19 USC 1520(d)
MPF
Exempt for Originating Goods
Singapore Free Trade Agreement
Effective Date: 1/1/04
Expiration Date: None
General Note in HTS: GN 25
Special Indicator in HTS: SG
US Code: 19 USC 3805 Note
Public Law: 108-78
Singapore FTA Summary
Reference
General Note 25
SPI
SG
General Rules of Origin
Wholly Obtained, Tariff Shift &/or RVC, Integrated Sourcing
Initiative
Regional Value Content
Build-up, Build-down
Level of Documentation at
Importation
Freeform Statement (10 data elements); Importer Knowledge
Verification Notification
Importer, At discretion may contact exporter
Determination Notification
Importer, Exporter if provided documentation to CBP
Transit/Transshipment
Must support no further production occurred in a 3rd country
Post-Importations
SIL/PEA or 19 USC 1514
MPF
Exempt for Originating Goods and ISI Goods