The Generalized System of Preferences (GSP) provides duty-free treatment to goods of designated beneficiary countries. The program was authorized by the Trade Act of 1974 to promote economic growth in the developing countries and was implemented on January 1, 1976.
The GSP periodically expires and must be renewed by Congress to remain in effect. All previous GSP renewals that have taken effect after a lapse have included a retroactive clause providing refunds to importers of eligible goods imported during the lapse period.
The 2015 GSP reauthorization (H.R. 1295) will expire on
December 31, 2017.
Barring Congressional action, the Generalized System of Preferences (GSP) will expire for goods entered or withdrawn from warehouse after midnight, December 31, 2017.
Special Procedures for GSP-Eligible Goods
In the event of a lapse and until further notice, importers are strongly encouraged to continue to flag GSP-eligible importations with the SPI “A,” even as they pay normal trade relations (column 1) duty rates on otherwise GSP-eligible importations. Importers may not file SPI “A” without duties.
- CBP is working to have programming in place that, in the event that GSP is renewed with a retroactive refund clause, will allow CBP to automate the duty refund process.
- CBP will continue to allow post-importation GSP claims made via post summary correction (PSC) and protest (19 USC 1514, 19 CFR 174) subsequent to the expiration of GSP, for importations made while GSP was still in effect. CBP will not allow post-importation GSP claims made via PSC or protest subsequent to the expiration of GSP, for importations made subsequent to expiration.
- The pending expiration of GSP has no effect on goods entered with African Growth and Opportunity Act (AGOA) preference.
- Since the GSP does not provide an MPF exemption, its expiration has no impact on the collection of the MPF.
- Goods of least-developed beneficiary developing countries (LDBDCs) listed in HTSUS General Note 4(b)(i) maintain their MPF exemption per 19 CFR 24.23(c)(1)(iv).
- Per 19 CFR 141.68(a)(2) & (3), the time of entry can be as early as the time that the entry documents are filed, provided that the merchandise is within the port limits and such has been requested.
Extension of Liquidation
Requests for the suspension of liquidation under 19 CFR 159.12 pending the reinstatement of GSP will be denied. Questions should be directed to the Trade Agreements Branch at FTA@dhs.gov.
Almost 5,000 tariff items are eligible for GSP benefits:
- 3,500 of which are available to all GSP countries
- 1,500 of which are available solely to Least Developed Beneficiary Developing Countries (LDBDCs)
In order to benefit from GSP, a good must be either wholly obtained or sufficiently manufactured in a GSP country. Sufficiently manufactured means that all 3rd-country materials have undergone a substantial transformation plus at least 35% of the good’s value has been added in the beneficiary country. Additionally, the good must be “imported directly”.
Eligible tariff items are identified by the symbols “A”, “A*” or “A+” in the “Special” sub-column of the HTSUS.
- The symbol “A” indicates that all GSP countries are eligible (HTSUS General Note 4(a))
- The symbol “A*” indicates that certain GSP countries are ineligible (HTSUS General Note 4(d))
- The symbol “A+” indicates approximately 1,500 additional tariff items for which only the LDBDCs are eligible (HTSUS General Note 4(b))
For more information, visit the USTR-US Generalized System of Preferences Guidebook.
An American forwarding company recently settled civil penalty charges with the Bureau of Industry and Security (BIS) after the attempted distribution of unlicensed export goods subject to Export Administration Regulation controls. The shipment was to be received by a company in Pakistan registered on the Entity List. The items for export included an ultrasonic mill cutting machine controlled for anti-terrorism reasons.
Bureau of Industry and Security stated that the company:
- Failed to flag the transaction of issue
- Name and address information of listed entity and importer closely matched
- Had not screened the entity:
- Against any other government issued prohibited party lists
- Several of the company’s internal filing programs flagged the entry
The settlement requires the American company to:
- pay a $175,000 penalty
- receive two external export control compliance audits
If BIS were to identify any violation of Export Administration Regulations, the company will have to provide waybills and other export control documentation. If the company complies with the requirements of the agreement and commits no additional export violations, the BIS will suspend and waive $75,000 of the penalty through March 2020.
For more information, contact Rex Sherman, Vice President, LAX Branch Manager, CHB, at firstname.lastname@example.org.
In August of this year, the United States passed the Countering America’s Adversaries through Sanctions Act (COAC). The legislation contains clauses that affects the entry of merchandise with links to individuals who have been forced into labor. The United States Customs and Border Patrol (CBP) is committed to educating shippers of the consequences and risks associated with forced labor as well as their responsibility of compliance under reasonable care.
COAC defines the scope as any merchandise, regardless of the degree or method by which it is collected or created, made in part or wholly by persons forced into labor, is prohibited from entry into the United States unless CBP finds clear and convincing evidence that said merchandise was not produced with forced labor.
In the case of a violation, CBP will:
- deny entry and may seize products;
- refer the issue to Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) with request to initiate a criminal investigation for violation of U.S. law;
- issue a summons or Request for Information.
The Associated Press recently reported on the instances of forced labor trafficking of North Korean citizens and nationals. While foreign factory jobs are coveted by North Korean citizens, they are far from freedom, often imposing the same strict policies as in their home country.
The report documented seafood produced by forced North Korean labor ended up in supermarkets across the U.S., Canada, and Europe. Which, according to the sanctions, is a federal crime.
CBP states that it is the obligation of importer to exercise reasonable care and due diligence to ensure that their products comply to all the laws and regulations including those related to human trafficking and forced labor.
Customs welcomes allegations on forced labor at its eAllegation portal. Parties who provide original information that leads to the recovery of penalties or fines are eligible to seek compensation.
Maintaining vigilance is the best way to remain socially compliant in an industry where forced labor exists.
Concerned with compliance? Contact Green Worldwide Shipping today!
The in-bond process allows imported merchandise to be entered at one U.S. port of entry without appraisement or payment of duties and transported by a bonded carrier to another U.S. port of entry, or other authorized destination, provided all statutory and regulatory conditions are met.
DATES: This rule is effective on November 27, 2017. A flexible enforcement period will be granted for 90 days after the effective date of this rule.
3 TYPES OF IN-BOND ENTRIES
- Immediate Transportation (IT)
- allows merchandise upon its arrival at a U.S. port to be transported to another U.S. port, where a subsequent entry must be filed
- Transportation and Exportation (T&E)
- allows merchandise to be entered at a U.S. port for transit through the United States to another U.S. port, where the merchandise is exported without the payment of duties.
- Immediate Exportation (IE)
- allows cargo that has arrived at a U.S. port to be immediately exported from that same port without the payment of duties.
5 MAJOR CHANGES TO THE IN-BOND PROCESS:
- Except for merchandise transported by pipeline and truck shipments transiting the U.S. from Canada, elimination of the paper in-bond application (CBP Form 7512) – require carriers and agents to electronically file the in-bond application;
- Requirement of additional information on the in-bond application including the six-digit U.S. Harmonized Tariff Schedule number, if available;
- Establishment of a 30-day maximum transit time to transport in-bond merchandise between U.S. ports, for all modes of transportation except pipeline and barge (60 days);
- Requirement for carriers to electronically request and receive permission from CBP before diverting in-bond merchandise from its intended destination port to another port; and
- allows for the transportation of in-bond merchandise with non-bonded merchandise in a container or compartment that is not sealed, if the in-bond merchandise is corded and sealed, or labeled as in-bond merchandise.
- Requirement for carriers to report the arrival and location of the in-bond merchandise within two business days of arrival at the port of destination or port of exportation.
Changes to this rule, including the automation of the in-bond process, will enhance CBP’s ability to regulate and track in-bond merchandise and ensure that in-bond merchandise is properly entered or exported.
For more information, visit the CBP’s Federal Register Notice.
On November 13th, the United States Department of Commerce (DOC) announced final determinations of the anti-dumping and countervailing investigations of hardwood plywood imports from the People’s Republic of China.
Merchandise subject to investigations included:
- Hardwood and decorative plywood;
- Certain veneered panels:
- Defined as flat, multi-layered plywood consisting of 2 or more layers or piles of wood veneers and a core.
The DOC found dumping had occurred at a margin of 183.36 percent.
Summary of final determinations:
- Mandatory respondents of this case have received a dumping rate of 36 percent;
- As did eligible non-selected respondents
- All other producers in China have received the same rate as part of the China-wide entity
- Mandatory respondents of this case have received a final subsidy rate of 98 and 194.9 percent;
- 61 companies failed to respond to a quantity and value questionnaire;
- resulting in a subsidy rate of 9 percent
- All other producers in China received subsidies of 98 percent.
Commerce will instruct U.S. Customs and Border Patrol to collect cash deposits to equal the final weighted average dumping rates. If the U.S. International Trade Commission (ITC) determines that the domestic hardwood plywood industry is injured, Commerce will instruct Customs to continue the collection of cash deposits until equal to the applied rates. If the ITC makes negative determinations of injury to domestic industry, investigations will be terminated.
Commerce currently maintains 412 AD and CVD orders which provide relief to American companies and industries impacted by unfair trade.
For more information on this case, contact Rex Sherman, Vice President, LAX Branch Manager, CHB, at email@example.com.