CBP Issues Instructions on Filing & Substantiating Claims under the US-Singapore FTA

(The memorandum also gives an overview of the SFTA, covering i) its general rules for originating textile and originating non-textile articles along with their de minimis provisions and exceptions, ii) its Tariff Preference Levels (TPLs) for certain non-originating apparel and the original Certificate of Origin/Eligibility document that is required from the importer at time of entry when making such a SFTA TPL claim, iii) SFTA Tariff Rate Quotas (TRQs) for certain agricultural goods, iv) the Integrated Sourcing Initiative (ISI) for information technology and medical products (see BP Note), v) etc.

CBP continues to state that until further notice, SFTA claims must be filed non-ABI. (CBP notes that importers will have the option to file ABI entries at release and follow thorough with manual (non-ABI) entry summaries which make the SFTA claim, adding that this option will cease once ACS programming is modified for the SFTA.)

In addition, CBP states these instructions are subject to change once its SFTA regulations are issued.

Use of SPI "SG" to Make a Claim for SFTA "Originating Goods" or TPL Goods

According to the memorandum and CBP sources, a claim for SFTA preferential treatment for originating goods or TPL goods may be filed at the time of entry summary by placing the Special Program Indicator (SPI) "SG" as a prefix to the HTS tariff number for each good or line item for which treatment is being claimed.

Statement for "Originating Goods" to be Submitted to CBP Upon Request

At the request of CBP, the importer shall submit a statement or supporting documents (statement) to demonstrate that the imported goods are originating and qualify for SFTA preferential tariff treatment.

CBP states the statement need not be in a prescribed format; however, it must contain certain data elements, including certain language, as follows:

Legal name, address, telephone and e-mail of the importer of record, exporter of the good (if different from the producer), and producer of the good (if known);

Sufficiently detailed description of the good;

HS tariff classification number to six-digits or more;

Applicable SFTA preference criterion;

Commercial invoice number for a single shipment;

Blanket period for multiple shipments of identical goods (12-month maximum);

Authorized signature, company, title, telephone, fax, e-mail, and statement date; and

Certification language. This language, among other things, states that the information is true and accurate, that the goods comply with the origin requirements of the SFTA, and that the importer assumes liability for any false statements or material omissions and responsibility for proving the representations therein. (See memorandum for text.)

CBP's Verification of a SFTA "Originating Goods" Claim

Importer has burden of substantiating validity of SFTA claim if requested by CBP. According to CBP, the SFTA places the burden of substantiating the validity of a SFTA claim for preferential treatment on the importer. The importer's claim may be based on knowledge or information in his/her possession that the good qualifies as an originating good.

Inquiries regarding verification via a CBP Form 28. CBP states that it may verify the validity of the SFTA claim for preferential treatment and that such inquiries will be sent to the importer via a CBP Form 28 (Request for Information), which must be answered no later than 30 days from the date of the request.

An importer will substantiate a claim by submitting a statement containing the required data elements (see above), as well as any additional requested documentation above and beyond the statement, such as information concerning the RVC calculation.

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The importer may also provide relevant information from the exporter or producer of the good. In many instances, CBP states that the exporter may be unwilling to provide cost and/or sourcing information to the importer. CBP states that it will still work through the importer, and that the importer is expected to arrange for their foreign supplier to provide information directly to CBP.

CBP's Determination of a SFTA "Originating Goods" Claim

Positive/negative determination on whether the goods qualify as originating via CBP Form 29. CBP states that if the importer forwards, upon CBP's request, the statement and any other records and information demonstrating that the goods qualify for SFTA preferential tariff treatment, CBP will notify the importer of the positive determination via a CBP Form 29 (Notice of Action) stating that the goods qualify as SFTA originating, and will include the HTS number, description of the good and the relevant rule of origin applied to the good.

A negative determination regarding a statement, issued via a "Proposed" CBP Form 29, may be issued due to a failure to submit the statement or any relevant information. If the importer fails to comply with the "Proposed" CBP Form 29, within 20 days of the date of the notice, a CBP Form 29 (Notice of Action Taken) negative determination will be issued to the importer.

In addition, if the importer provides the statement and/or supporting documents, and CBP determines, based on the information submitted, that the goods do not qualify for preferential treatment as SFTA originating goods, a negative determination will be sent to the importer in the form of a CBP Form 29 (Notice of Action Taken).

CBP states that if claims were made for preferential tariff treatment based on a blanket statement against which a negative determination was established, CBP shall deny preferential tariff treatment to all importations of identical merchandise covered by that blanket statement for all entries that have not reached final liquidation.

Importers must maintain records for 5 years. CBP notes that importers are required to maintain records relating to the importation of the good for five years after the date of importation, including (partial list) , records concerning the purchase of the good, the purchase of all materials used in the production of the good, and the production of the good in its exported form.

Correction of statement. CBP states that an importer is required to promptly make a corrected declaration if the importer is aware that the claim is not valid. Penalties will not be assessed if the importer voluntarily declares that imported goods were not originating according to the rules of origin, corrects the claim and pays any duty and MPF owed within a certain timeframe.

(Although the SFTA states that the importer will not be subject to any penalty if the claim is corrected and any duty and MPF owed is paid at least one year from submission of the invalid claim, CBP sources state that this language is confusing and is being examined.)

Merchandise Processing Fee

According to CBP, originating goods that qualify for SFTA preferential treatment are not subject to the Merchandise Processing Fee (MPF). TPL textile merchandise is still subject to the MPF.

Petition and Protest Rights

CBP states that importer or other interested parties may avail themselves of post entry administrative and judicial procedures, such as 19 USC 1520(a) or (c) to receive a refund of duties and/or MPF for eligible goods entered, or withdrawn from warehouse, for consumption on or after the effective date of the SFTA.

In addition, importers or other interested parties may file a protest under 19 USC 1514 to contest a negative origin determination within 90 days of the date of liquidation or denial. The protest may enable the importer to receive a refund of duties and/or MPF for eligible goods entered, or withdrawn from warehouse, for consumption.

CBP Memorandum (dated 01/23/04), including attached USTR Trade Facts sheet on the SFTA Integrated Sourcing Initiative (dated 07/21/03) available at http://www.cbp.gov/ImageCache/cgov/content/import/international_5fagreements/singapore_5ffta_5finstruct_2edoc/v1/singapore_5ffta_5finstruct.doc

BP Notes

The SFTA Integrated Sourcing Initiative (ISI).In its memorandum, CBP states that the SFTA provides that certain listed information technology products and medical products may be considered SFTA originating goods when shipped between the U.S. and Singapore, regardless of whether they satisfy the applicable rule of origin.

CBP states that in order for ISI eligible information technology products and medical products to receive preferential treatment under the SFTA, the good must be shipped from a non-FTA country (a country other than Singapore or the U.S.) to the territory of Singapore, then shipped directly to the U.S. for importation, with Singapore as the country of export and any country as the country of origin (and origin-marked accordingly).

(CBP notes that a product on the ISI list that is shipped from a non-FTA country and used as input for the manufacture of a non-ISI final product (such as a machine tool) in Singapore does not count as an originating material for purposes of a regional value content (RVC) calculation. See memorandum for CBP's explanation of "the only way" an ISIS product would affect an RVC calculation.)

CBP states that its field offices will receive further instruction on the applicability of the ISI procedures for ABI entries once programming is completed.

CBP's SFTA Memorandum is similar to its UCFTA Memorandum. According to CBP sources, many of the provisions of the SFTA discussed in this CBP memorandum are similar to certain U.S.-Chile FTA (UCFTA) provisions, which are discussed in CBP's U.S-Chile FTA (UCFTA) memorandum. However, different CBP authors wrote the two memorandums, resulting in certain similar provisions being presented differently. (See ITT's 02/09/04 news, 04020910 for BP summary of CBP's memorandum on the filing and substantiation of claims under the UCFTA.)