[Federal Register Volume 62, Number 107 (Wednesday, June 4, 1997)]
[Notices]
[Pages 30672-30673]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14539]


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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 eligible products of many developing 
countries to enter the United States duty-free. The GSP is currently 
scheduled to expire at midnight on May 31, 1997, 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merchandise entered or withdrawn from a warehouse on or after June 1, 
1997, 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 
June 1, 1997, if Congress does not extend the GSP program before that 
date.

FOR FURTHER INFORMATION CONTACT: For specific questions relating to the 
Automated Commercial System:

Arthur Versich, Office of Automated Commercial System, 202-927-1042.

    For general operational questions:

Formal entries
    John Pierce, 202-927-1249
Informal entries
    Thomas Wygant, 202-927-1167
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 the GSP Renewal Act of 1996 (the Act, Pub.L. 104-188, 110 
Stat. 1775, at Stat. 1917), duty-free treatment under the GSP is 
presently scheduled to expire on May 31, 1997.
    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, May 31, 1997, 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 June 1, 1997, 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 June 1, 1997. Duties at the most-favored-nation rate must be 
deposited, or a claim may be made under another

[[Page 30673]]

preferential program for which the merchandise may qualify (for 
example, the Andean Trade Preference Act or the Caribbean Basin 
Economic Recovery Act).
    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 merchandise 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 May 31, 1997, 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 and again when the GSP 
expired on July 31, 1995, and was later renewed with retroactive 
effect.
    If the GSP expires, the Customs Headquarters-developed computer 
program will refund all duties deposited for imports that otherwise 
would have been eligible for GSP duty-free treatment if the GSP is 
later renewed with retroactive effect. The computer program will 
identify those entries filed through the Automated Broker Interface 
(ABI) using the SPI ``A'' and will be able to process most refunds 
without requiring further action by ABI filers.
    Filers who do not wish to reprogram will be required to request 
refunds identifying the affected entry numbers in writing if the GSP is 
renewed retroactively.
    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 port 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 SPI ``A'' 
transmitted via ABI after May 31, 1997, into a SPI ``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 would have to 
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, travelers and 
importers will be advised verbally or by a written notice that they may 
be eligible for a refund of GSP duties.
    Travelers/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 written 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: May 30, 1997.
A.W. Tennant,
Field Operations Acting Assistant Commissioner.
[FR Doc. 97-14539 Filed 6-3-97; 8:45 am]
BILLING CODE 4820-02-P