November 7, 2002

ENT-14:FO:TCF:SE:TA RW

TO : Directors, Field Operations

FROM : Executive Director, Trade Compliance and Facilitation
Office of Field Operations

SUBJECT : Andean Trade Promotion and Drug Eradication Act
Implementation Instructions for Non-Textile Products

BACKGROUND:

The Trade and Development Act of 2002 ("the Act"), was signed into law on August 6, 2002. Title XXXI of the Act concerns the renewal and expansion of the Andean Trade Preference Act (ATPA) and is entitled the "Andean Trade Promotion and Drug Eradication Act" (the ATPDEA). The ATPDEA immediately restored duty free treatment to articles that had been eligible for ATPA benefits prior to the program's expiration on December 4, 2001. The expanded benefits require a Presidential determination concerning the eligibility of products and countries.

Presidential Proclamation 7616 determined that Bolivia, Colombia, Ecuador, and Peru are eligible countries for the purposes of receiving ATPDEA benefits. In addition, the proclamation determined that products from those countries that are properly classified under the attached Harmonized Tariff Schedule of the United States (HTS) item numbers are eligible for duty-free treatment. The Proclamation was signed on October 31, 2002, and was published in the Federal Register on November 5, 2002 (67 FR 67283). The Proclamation took effect upon signature.

Interim regulations will be published by Customs in the near future. However, we will accept claims for preferential tariff treatment for ATPDEA eligible goods immediately.

The ATPDEA amends the ATPA, which is codified at 19 USC 3201 through 3206, to provide additional trade benefits to designated beneficiary countries. The amendment provides preferential tariff treatment for textile and apparel articles, as well as for non-textile goods previously excluded from ATPA eligibility. This memorandum concerns only the non-textile provisions of the ATPDEA.

NON-TEXTILE ARTICLES ELIGIBLE FOR PREFERENTIAL TARIFF TREATMENT:

In regard to non-textile goods, section 3103 amends 19 USC 3203 by providing preferential tariff treatment for the following goods if they qualify as an ATPDEA originating goods and are imported directly into the United States from an ATPDEA beneficiary country:

• " Tuna, prepared or preserved in any manner, in flexible airtight containers. The following secondary HTS item numbers can be used in conjunction with the primary ATPDEA 9821.01.01 tuna provision: 1604.14.1010, 1604.14.3051, or 1604.14.3091. By making a claim for ATPDEA benefits, the importer is acknowledging that all requirements of section E of the Annex have been met (new U.S. Note 2 for Subchapter XXI, HTS).
  
  
• " Petroleum, or any product derived therefrom, provided for in headings 2709 and 2710 of the HTS.
  
  
• " Footwear not designated at the time of the effective date of this title as eligible for purposes of the Generalized System of Preferences under Title V of the Trade Act of 1974.
  
  
• " Certain handbags, luggage, flat goods, work gloves and leather wearing apparel.
  
  
• " Watches and watch parts (including cases, bracelets and straps), of whatever type including, but not limited to, mechanical, quartz digital or quartz analog, if those watches or watch parts contain any material which is the product of any country with respect to which HTS column 2 rates of duty apply.

The annex to Presidential Proclamation 7616 identifies those HTS item numbers that are eligible for ATPDEA preferential tariff treatment identified above. The annex is included as Attachment A.

ATPDEA ORIGIN RULES:

The Act defines an "ATPDEA originating good" as one that meets the rules of origin for a good set forth in 19 USC 3203. An article may be eligible for preferential treatment if the article is either:

(i) Wholly the growth, product, or manufacture of an ATPDEA beneficiary country; or

(ii) A new or different article of commerce, which has been grown, produced, or manufactured in an ATPDEA beneficiary country.
No article will be eligible for preferential treatment by virtue of having merely undergone simple (as opposed to complex or meaningful) combining or packaging operations, or mere dilution with water or mere dilution with another substance that does not materially alter the characteristics of the article.

Value content requirement - General. An article may be eligible for preferential treatment only if the sum of the cost or value of the materials produced in an ATPDEA beneficiary country or countries, plus the direct costs of processing operations performed in an ATPDEA beneficiary country or countries, is not less than 35 percent of the appraised value of the article at the time it is entered.

Commonwealth of Puerto Rico, U.S. Virgin Islands and Caribbean Basin Initiative (CBI) beneficiary countries. For the specific purpose of meeting the 35% rule, the term "ATPDEA beneficiary country" includes the Commonwealth of Puerto Rico, the U.S. Virgin Islands, and any CBI beneficiary country as defined in 19 CFR 10.191(b)(1). Any cost or value of materials or direct costs of processing operations attributable to the Virgin Islands or any CBI beneficiary country must be included in the article prior to its final exportation to the United States from an ATPDEA beneficiary country.

Materials produced in the United States. For purposes of meeting the 35% rule, an amount not to exceed 15 percent of the appraised value of the article at the time it is entered may be attributed to the cost or value of materials produced in the customs territory of the United States (other than the Commonwealth of Puerto Rico).

CERTIFICATE OF ORIGIN:

The ATPDEA Certificate of Origin must be used to certify that an article qualifies for ATPDEA preferential tariff treatment. The exporter in the ATPDEA beneficiary country must prepare the ATPDEA Certificate of Origin. If the exporter is not the producer of the article, the exporter may complete an ATPDEA Certificate of Origin on the basis of

(a) its reasonable reliance on the producer's written representation that the article qualifies for preferential tariff treatment or (b) a completed and signed ATPDEA Certificate of Origin for the article voluntarily provided to the exporter by the producer.

Attachment B is a copy of the ATPDEA Non-Textile Certificate of Origin for use until the form is available on the Internet. Customs may request copies of the Certificate of Origin when verifying a claim for preferential treatment.

IMPORTER REQUIREMENTS:

The importer must make a written declaration that the article qualifies for ATPDEA preferential tariff treatment. This declaration shall be made at the time of filing the entry summary by placing on the CF - 7501 the Special Program Indicator (SPI) "J+" as a prefix to the HTS subheading item number for each article for which such treatment is claimed.

Importers or their agents may file entries for merchandise eligible for the expanded ATPDEA benefits via ABI. To do so, the SPI indicator "J" should precede the applicable HTS item number.

Each importer claiming ATPDEA preferential tariff treatment must maintain, in the United States, all records relating to the importation of the article. Those records must include any relevant documents or records as specified in 19 CFR 163.1(a).

VERIFICATIONS OF CLAIMS:

A claim for ATPDEA non-textile preferential tariff treatment will be subject to whatever verification the Port Director deems necessary. Any such verification will be conducted against the importer. If, for any reason, the Port Director is prevented from verifying the claim, he/she may deny the claim for preferential tariff treatment.

ACTION:

Effective immediately, importers may file claims for preferential tariff treatment of ATPDEA originating non-textile goods from Bolivia, Colombia, Ecuador, and Peru. In addition, importers or their agents may avail themselves of all available post-entry procedures, with the exception of NAFTA 520(d) claims, to receive a refund of duties for eligible ATPDEA non-textile articles entered, or withdrawn from warehouse for consumption on or after October 31, 2002.

The Automated Commercial System (ACS) has been updated to allow for automated processing of these entries. Importers claiming preferential tariff treatment under the ATPDEA may file entries electronically.

Importer questions regarding the non-textile provisions of the ATPDEA should be directed to the ports. Questions from the ports should be directed to Mr. Richard Wallio, Trade Agreements Branch, at (202) 927-9704.

Michael D'Ambrosio for

Elizabeth G. Durant
Attachments

www.cbp.gov/xp/cgov/import/international_agreements/atpa/non_textile.xml