[Federal Register Volume 66, Number 191 (Tuesday, October 2, 2001)]
[Notices]
[Pages 50248-50249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-24533]


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DEPARTMENT OF THE TREASURY

Customs Service


Procedyres 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 renewable 
preferential trade program that allows the eligible products of 
designated developing countries to directly enter the United States 
free of duty. Except for beneficiary countries designated under the 
African Growth and Opportunity Act, the GSP will expire at midnight on 
September 30, 2001, unless its provisions are extended by Congress. 
This document provides notice to importers that claims for duty-free 
treatment under the GSP will not be processed by Customs for 
merchandise entered or withdrawn from a warehouse for consumption on or 
after October 1, 2001, if the program is not extended before that date. 
This document also sets forth the mechanisms that will facilitate 
refunds, should the GSP be renewed with retroactive effect.

DATES: The plan set forth in this document will become effective as of 
October 1, 2001, if Congress does not extend the GSP program before 
that date.

FOR FURTHER INFORMATION CONTACT: For specific questions relating to the 
Automated Commercial System:
    James MacDonald, Office of Information and Technology, 703-921-
1027.
    For general operational questions:
    Formal entries  Arlene Lugo, 202-927-4183;
    Informal entries  Dan Norman, 202-927-0542;
    Mail entries  Robert Woods, 202-927-1236;
    Passenger claims  Wes Windle, 202-927-0167.

SUPPLEMENTARY INFORMATION:

Background

    Section 501 of the Trade Act of 1974, 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 directly 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 Trade 
Act of 1974, as amended (19 U.S.C. 2462(a) and 2463(a)). Pursuant to 
section 505 of the Trade Act of 1974, as amended (19 U.S.C. 2465), 
duty-free treatment under the GSP is scheduled to expire on September 
30, 2001. However, this expiration date does not apply to African 
Growth and Opportunity Act (AGOA) beneficiary countries, for whom GSP 
duty-free treatment will remain in effect through September 30, 2008, 
pursuant to section 506B of the Trade Act of 1974, as amended (19 
U.S.C. 2466b).
    Congress is currently considering whether to extend the section 505 
GSP expiration date. If Congress does not pass legislation extending 
that date before midnight, September 30, 2001, no claims for duty-free 
treatment under the program for non-AGOA beneficiary country exports 
will be processed by Customs on entries made after that time. If 
legislation extending that GSP expiration date is enacted after the GSP 
expires under section 505, language may be included that would make the 
GSP effective back to that expiration date.
    Recognizing the effect that renewing GSP duty treatment with 
retroactive effect has on both importers, who must request refunds of 
duties deposited, and Customs, which must liquidate or reliquidate 
eligible entries, Customs developed a mechanism to facilitate certain 
refunds. Set forth below is Customs plan that will be implemented on 
October 1, 2001, in the case of all GSP beneficiary countries other 
than AGOA beneficiary countries, if the section 505 expiration date has 
not been extended by September 30, 2001.

Formal Entries

Claims--Duties Must Be Deposited

    Although Customs will accept claims for GSP duty-free treatment, as 
specified below, Customs will not process the claim as duty free under 
the GSP for merchandise entered, or withdrawn from warehouse for 
consumption on or after October 1, 2001. Further, duties at the normal-
trade-relations rate must be deposited, unless an alternate claim is 
made under another preferential program for which the merchandise 
qualifies (for example, the Andean Trade Preference Act or the 
Caribbean Basin Economic Recovery Act).
    On or after October 1, 2001, for all merchandise that would qualify 
for the GSP were the GSP still in effect, Automated Broker Interface 
(ABI) filers must deposit duties at the normal-trade-relations rate 
with their entry summaries, but may continue to claim GSP duty-free 
treatment by using the Special Program Indicator (SPI) ``A'' as a 
prefix to the tariff number. Customs Automated Commercial System (ACS) 
will accept the SPI ``A'' transmission with the payment of duty. If the 
GSP is renewed with retroactive effect, the duties deposited will be 
refunded by Customs without further action by the ABI filer. In effect, 
use of the SPI ``A'' will constitute an ABI filer's request for a 
refund of duties paid for GSP line items if GSP is renewed with 
retroactive effect. It is noted that for ABI filers to take advantage 
of this system for receiving an automatic refund if GSP is renewed 
retroactively, the filers will have to reprogram their software to 
allow for the submission of estimated duties with the SPI ``A'' 
designation on entries. ABI filers who do not wish to reprogram their 
software will be required to request refunds in writing to the 
appropriate port director identifying

[[Page 50249]]

the affected entry numbers if the GSP is renewed with retroactive 
effect.
    While reprogramming is strictly voluntary, continued use of the SPI 
``A'' has some benefits: one already mentioned is that the filer will 
not have to request a refund of deposited duties in writing should the 
GSP be renewed with retroactive effect; another is 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 statistical corrections.
    Importers may not use the SPI ``A'' if they intend to later claim 
drawback, because claiming both the refund of duties deposited 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 
with retroactive effect, and the importer has not claimed drawback or 
enabled another person to claim drawback, then the importer may request 
a refund of duties deposited by writing to the port director at the 
port of entry. Also, importers may not use the SPI ``A'' if they have 
made an alternative duty-free treatment claim to GSP (for example, the 
Andean Trade Preference Act or the Caribbean Basin Economic Recovery 
Act).

Refunds

1. Automatic
    If an ABI entry summary was filed with the SPI ``A'', should the 
GSP be renewed with retroactive effect, then Customs will liquidate or 
reliquidate all affected ABI entry summaries with a refund for the GSP 
line items with no further action needed to be taken by the filer to 
request a refund.
2. Need for written request
    If an ABI entry summary was filed without the SPI ``A'', then the 
request for a refund must be in writing. Further, all non-ABI filers 
must request refunds 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 through the ABI with the SPI 
``A'' designation will be processed in accordance with the automatic 
refund procedure outlined above.

Baggage declarations and non-ABI informals

    When merchandise is presented for clearance, travelers and 
importers will be advised verbally that they may be eligible for a 
refund of GSP duties. Travelers/importers desiring such refund should 
request the Customs Officer to annotate the receipt of payment to 
indicate that the merchandise would be eligible for GSP duty-free 
treatment. Then, should the GSP be renewed with retroactive effect, the 
traveler/importer must request the GSP duty refund in a letter that 
includes the copy of the receipt of payment and submit the request to 
the appropriate Customs port of entry.

Mail entries

    Should the GSP be renewed with retroactive effect, those addressees 
who received GSP eligible merchandise (identified on the CF 3419A, 
(Mail Entry)) may be eligible for a refund of GSP duties and should 
submit a separate written claim for a refund. The request for the 
refund and a copy of the CF 3419A should be submitted to the 
appropriate International Mail Branch identified at the bottom right-
hand corner of the CF 3419A. (The copy of the CF 3419A must be included 
with the request, as the information contained on the form will be the 
only record of the GSP merchandise entered and whether the duties and 
fees were paid).

    Dated: September 26, 2001.
John H. Heinrich,
Acting Assistant Commissioner, Field Operations.
[FR Doc. 01-24533 Filed 10-1-01; 8:45 am]
BILLING CODE 4820-02-P