[Federal Register Volume 59, Number 184 (Friday, September 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23657]


[[Page Unknown]]

[Federal Register: September 23, 1994]


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DEPARTMENT OF THE TREASURY
Customs Service

 

Procedures if the Generalized System of Preferences Program 
Expires

AGENCY: U.S. Customs Service, Department of the Treasury.

ACTION: General notice.

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SUMMARY: The Generalized System of Preferences (GSP) is a preferential 
trade program that allows the products of many developing countries to 
enter the United States duty free. The GSP is currently scheduled to 
expire at midnight on September 30, 1994, unless its provisions are 
extended by Congress. This document provides notice to importers that 
claims for duty-free treatment under the GSP may not be made for 
merchandise entered or withdrawn from a warehouse on or after October 
1, 1994, if the program is not extended before that date. The document 
also sets forth a Customs mechanism to facilitate refunds, if the GSP 
is renewed retroactively.

DATE: The plan set forth in this document will become effective as of 
October 1, 1994, if Congress does not extend the GSP program before 
that date.

FOR FURTHER INFORMATION CONTACT: For general operational aspects: Lisa 
Crosby, Office of Trade Operations, 202-927-0163. For specific 
questions relating to the Automated Commercial Systems: Irv Fisher, 
Office of Automated Commercial System, 202-927-1220.

SUPPLEMENTARY INFORMATION:

Background

    Section 501 of the Trade Act of 1974 (the Act), as amended (19 
U.S.C. 2461) authorizes the President to establish a Generalized System 
of Preferences (GSP) to provide duty-free treatment for eligible 
articles imported from designated beneficiary countries. Beneficiary 
developing countries and articles eligible for duty-free treatment 
under the GSP are designated by the President by Presidential 
Proclamation in accordance with sections 502(a) and 503(a) of the Act 
(19 U.S.C. 2462(a) and 2463(a)). Pursuant to 19 U.S.C. 2465(a), as 
amended by section 13802 of Public Law 103-66, 107 Stat. 312, 667-668, 
duty-free treatment under the GSP is presently scheduled to expire on 
September 30, 1994. Thus, duties at the most-favored-nation rate must 
be deposited, or a claim may be made under another preferential program 
for which the merchandise qualifies.
    Congress is currently considering whether to extend the GSP program 
in the context of legislation to implement the Uruguay Round of trade 
negotiations under the General Agreement on Tariffs and Trade. If this 
legislation is not enacted prior to September 30, 1994, language may be 
included that would renew the GSP retroactively, requiring 
reliquidation of numerous entries to refund duties collected.
    Recognizing the impact that retroactive renewal and consequent 
numerous reliquidations would have on both importers and Customs, 
Customs has developed a mechanism to facilitate refunds, should GSP be 
renewed retroactively. Set forth below is Customs plan that will be 
implemented on October 1, 1994, if the GSP has not been extended by 
that date.

Claims--Duties Must Be Deposited

    No claims for duty-free treatment under the GSP may be made for 
merchandise entered, or withdrawn from warehouse for consumption on or 
after October 1, 1994. Duties at the most-favored-nation rate must be 
deposited, or a claim may be made under another preferential program 
for which the merchandise qualifies (for example, the Andean Trade 
Preference Act, the Caribbean Basin Initiative, or the U.S.-Israel Free 
Trade Area Agreement).
    While estimated duties must be deposited, all filers who file entry 
summaries through the Automated Broker Interface (ABI) may continue to 
file using the Special Program Indicator (SPI) for the GSP (the letter 
``A'') as a prefix to the tariff number for all entries that would have 
qualified for the GSP if the GSP were still in effect. Customs 
Automated Commercial System (ACS) will be reprogrammed to accept the 
SPI ``A'' with the payment of duty.
    Filers using the ABI may reprogram their software so that the SPI 
``A'' can still be used as a prefix to the tariff number, but with the 
payment of duty. While reprogramming is strictly voluntary, continued 
use of the SPI ``A'' has some benefits. One benefit of continued use of 
the SPI ``A'' is that the filer will not have to write a letter to 
Customs requesting a refund if the GSP is renewed with retroactive 
effect. Use of the SPI ``A'' will enable Customs to identify affected 
line items and refund duties without a written request from the 
importer. In other words, after September 30, 1994, the SPI ``A'' will 
constitute an importer's request for a refund of duties paid for GSP 
line items, should GSP renewal be retroactive. Other benefits are that 
ACS will perform its usual edits on the information transmitted by the 
filer, thereby ensuring that GSP claims are for acceptable country/
tariff combinations and eliminating the need for numerous statistical 
corrections.
    Details on the programming changes required have been issued as an 
administrative message to all ABI filers.
    Filers who do not wish to reprogram will be required to request 
refunds in writing if the GSP is renewed retroactively, identifying the 
affected entry numbers.
    ABI filers continuing to use the SPI ``A'' may use it as they do 
now (for example, for warehouse entries and for formal consumption 
entries).
    A claim for a preferential rate under another trade program, 
however, will preclude use of the SPI ``A'' to request a refund. Thus, 
for example, an importer entering merchandise using a reduced rate 
under the U.S.-Israel Free Trade Area Agreement will be precluded from 
using the ``A'' to request that the U.S.-Israel FTA claim be converted 
to a GSP claim, should the GSP be renewed retroactively. Importers, 
however, may make such a request in writing if the GSP is renewed 
retroactively.
    Similarly, importers may not use the SPI ``A'' if they intend to 
later claim drawback. Use of the SPI ``A'' is the importer's indication 
that he wishes to receive a refund if the GSP is renewed retroactively. 
To claim both this refund and drawback would be to request a refund in 
excess of duties actually deposited. Importers who are unsure as to 
whether they will claim drawback are advised not to use the SPI ``A''. 
If the GSP is renewed retroactively, and they have not yet claimed 
drawback, they may request a refund by writing to the district director 
at the port of entry. If the GSP is not renewed retroactively, they 
will still have the option of filing a drawback entry.
    Continued use of the SPI ``A'' is not available to non-ABI filers.

Statistics

    For statistical purposes, ACS will internally convert any ``A'' 
transmitted via ABI after September 30, 1994 into a ``Q''. If the GSP 
is renewed retroactively to that date, Census will convert all ``Q'' 
statistics into ``A'' statistics, thereby ensuring that next year's 
competitive need limitations under the GSP are accurate. This will also 
vastly reduce the number of statistical corrections that must be done 
by import specialists.

Informal Entries

    Refunds on informal entries filed via ABI on a Customs Form 7501 
with the SPI ``A'' will be processed in accordance with the procedures 
outlined above. Procedures for other kinds of informal entries will be 
issued at a later date if necessary.

Refunds

    If the GSP is renewed with retroactive effect, Customs will 
reliquidate all affected ABI entry summaries with a refund for the GSP 
line items or will provide administrative refunds for entry summaries 
that cannot be liquidated. Field locations shall not issue GSP refunds 
until instructed to do so by Customs Headquarters.
    If a filer files an ABI entry summary with the SPI ``A'', no 
further action will need to be taken by the filer to request a refund; 
filing with the SPI ``A'' constitutes a valid claim for a refund. 
Refunds for summaries filed without the SPI ``A'' must be requested in 
writing. Instructions on how to request a refund in writing will be 
issued if the GSP is renewed with retroactive effect.
    Customs cannot overemphasize that any refund for duty-free claims 
under the GSP for merchandise entered or withdrawn from warehouse on or 
after September 30, 1994, will only be issued provided that the GSP is 
renewed retroactively by Congress in the same manner that tariff 
preference programs have been renewed in the past.

    Dated: September 20, 1994.
Samuel H. Banks,
Assistant Commissioner, Commercial Operations.
[FR Doc. 94-23657 Filed 9-20-94; 3:43 pm]
BILLING CODE 4820-02-P