[Federal Register Volume 60, Number 128 (Wednesday, July 5, 1995)]
[Notices]
[Pages 35103-35104]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16331]



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DEPARTMENT OF THE TREASURY

Customs Service


Procedures if the Generalized System of Preferences Program 
Expires

AGENCY: Customs Service, 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 July 31, 1995, 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entered or withdrawn from a warehouse on or after August 1, 1995, if 
the program is not extended before that date. The document also sets 
forth mechanisms to facilitate refunds, if the GSP is renewed 
retroactively.

DATES: The plan set forth in this document will become effective as of 
August 1, 1995, if Congress does not extend the GSP program before that 
date.

FOR FURTHER INFORMATION CONTACT: For specific questions relating to the 
Automated Commercial Systems: Irv Fisher, Office of Automated 
Commercial System, 202-927-1220. For general operations questions:

Formal entries
Lisa Crosby, 202-927-0163
Informal entries
Debi Rutter, 202-927-1847
Mail entries
Dan Norman, 202-927-0542
Passenger claims
Robert Jacksta, 202-927-1311

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 601 of the Uruguay Round Agreements Act, 19 U.S.C. 
2465 note, Pub.L. 103-465, 108 Stat. 4990 (1994), duty-free treatment 
under the GSP is presently scheduled to expire on July 31, 1995.
    Congress is currently considering whether to extend the GSP 
program. If legislation is enacted but does not become law before the 
GSP expires, language may be included that would renew the GSP 
retroactively to the date of its presently scheduled expiration and 
Customs will need to reliquidate numerous entries to make refunds of 
duties collected. However, if Congress does not pass legislation 
renewing the GSP before midnight, July 31, 1995, no claims for duty-
free treatment under the program may be allowed on entries made after 
that time.
    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 August 1, 1995, if the GSP has not been extended by that 
date.

Formal Entries

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 August 1, 1995. 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. 

[[Page 35104]]

    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 July 31, 1995, 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.
    This plan was used when the GSP expired on September 30, 1994, and 
was later renewed with retroactive effect by section 601 of the Uruguay 
Round Agreements Act, Pub.L. 103-465, 108 Stat. 4990 (1994). Customs 
Headquarters developed a computer program that identified entries made 
using the SPI ``A'' while the program was lapsed and was able to 
process most refunds without requiring further action by the importer. 
Refunds were delayed somewhat while the program was being written and 
de-bugged. Customs intends to use the same program this year if the GSP 
is renewed with retroactive effect and believes it is the most 
efficient way to process large numbers of refunds quickly.
    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).
    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 July 31, 1995 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.

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. Field locations shall not issue GSP refunds except as 
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.

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.

Baggage Declarations and Non-ABI Informals

    When merchandise is presented for clearance, travellers and 
importers will be advised verbally or with a written notice that they 
may be eligible for a refund of GSP duties.
    Travellers/importers may write a statement directly on their 
Customs declarations (CF 6059B) or informal entries (CF 363 or CF 7501) 
indicating their desire for a refund. If GSP duty-free status is 
reenacted with a retroactive provision, no further action to obtain a 
refund will be required on the part of the importer who has written 
such a statement. Failure to request a refund in this manner does not 
preclude them from making a timely request in the future.

Mail Entries

    A written notice will be sent to the addressees with the CF 3419A 
(Mail Entry) informing them that they may be eligible for a refund of 
GSP duties.
    The addressees may submit a claim requesting a refund of GSP duties 
and return it, along with a copy of the CF 3419A to the appropriate 
International Mail Branch (address listed on bottom right hand corner 
of CF 3419A). It is essential that a copy of the CF 3419A be included 
as this will be the only method of identifying GSP products and 
ensuring that duties and fees have been paid.

    Dated: June 28, 1995.
Philip Metzger,
Acting Assistant Commissioner, Field Operations.
[FR Doc. 95-16331 Filed 7-3-95; 8:45 am]
BILLING CODE 4820-02-P