CBP Issues Instructions on Filing & Substantiating Claims under the U.S.-Australia FTA

CBP notes that 19 CFR is being amended to implement the UAFTA and the UAFTA Implementation Act. Accordingly, these instructions are subject to change once the regulations are issued.

(The memorandum also gives an overview of the UAFTA, covering: (i) its general rules for originating textiles and apparel and originating non-textile articles along with their de minimis provisions and exceptions, (ii) regional value content (RVC) calculation methods, (iii) treatment of sets, (iv) tariff-rate quotas (TRQs) for certain agricultural products, (v) immediate and staged duty reductions/duty-free treatment, (vi) etc.

In addition, in its memorandum, CBP states that there have been no tariff preference levels (TPLs) established for Australia. All claims for preferential treatment will have to meet the tariff shift rules as described in the UAFTA's Annexes.)

UAFTA Claims Must Continue to Be Filed Non-ABI Until Further Notice

CBP continues to state that until further notice, importers claiming preference under the UAFTA must file their entries manually (non-ABI). Importers will have the option to file ABI entries at release and follow through with manual (non-ABI) entry summaries. This option is allowed only for UAFTA claims and will terminate once ACS programming is complete.

Use of SPI "AU" to Make a UAFTA "Originating Goods" Claim

CBP states that a claim for preferential tariff treatment on qualifying goods that originate in Australia may be filed at the time of entry summary by placing the Special Program Indicator (SPI) "AU" as a prefix to the HTS subheading for each good or line item for which treatment is being claimed.

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

Upon CBP's request, the importer must be prepared to submit a statement setting forth the reasons that the good qualifies as originating.

The statement need not be in a prescribed format, may be submitted electronically, and may cover a single shipment or multiple shipments of identical goods not to exceed the time period of 12 months.

The statement must include the reason the good qualifies as originating, and the importer must also be prepared to submit specific information or data elements pertaining to the importation of the good.

(See Attachment A to CBP's memorandum for these data elements, including the certification that should be signed and dated with the applicable date or blanket period.)

Importers must maintain records for 5 years. CBP states that importers are required to maintain for five years after the date of importation, all records relating to the importation of the good. In addition, an importer may be required to submit upon CBP's request records which are necessary to demonstrate that the good qualifies as originating.

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

Importer has burden of substantiating validity of UAFTA claim. According to CBP, the UAFTA places the burden of substantiating the validity of a claim for preferential tariff treatment on the importer. An importer may make a claim based on knowledge or information in his/her possession that the good qualifies as an originating good.

CBP may verify validity of UAFTA claim via CBP Form 28. CBP may verify the validity of a claim and will direct inquiries for verification via a CBP Form 28 (Request for Information) to the importer.

The importer will substantiate a claim by submitting a statement or supporting documentation containing the required data elements of Attachment A (see above) specifying how the good qualifies as an originating good and shall include additional requested documentation beyond the statement.

In addition, the importer shall provide relevant information from the exporter or producer of the good. In many instances, 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. The importer is expected to arrange for their foreign supplier to provide information directly to CBP.

The UAFTA provides flexibility by not mandating the statement to be in a prescribed format; however, it must contain the data elements and certification as outlined in Attachment A to CBP's memorandum (see above). Upon CBP's issuance of the CBP Form 28, the importer shall provide the statement and any requested documentation to CBP no later than 30 days from the date of the request. The statement can be submitted to CBP electronically.

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

Determination on whether the goods qualify as originating via CBP Form 29, etc. CBP states that if the importer forwards a statement and any records and information necessary to demonstrate that the goods imported qualify for preferential tariff treatment, CBP will notify the importer of a positive determination via a CBP Form 29 (Notice of Action) stating that the goods qualify as originating.

If the importer fails to submit a statement or any relevant information, CBP will issue a negative determination via a proposed CBP Form 29 (Notice of Action). If the importer fails to comply with the proposed CBP Form 29 within 20 days of the date of the notice, a negative determination will be sent to the importer in the form of a CBP Form 29 (Notice of Action Taken).

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

In most cases, CBP will issue a copy of the CBP Form 29 (Notice of Action) only to the importer. In those cases, where there has been correspondence between CBP and the exporter or producer, a copy of the CBP Form 29 will be issued to the exporter/producer as well as the importer.

Claims for preferential tariff treatment may be based on a statement that pertains to a single shipment or a blanket statement covering shipments of identical goods for a period of up to 12 months. Where a negative determination is made with respect to a blanket statement, 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.

Correction of Invalid UAFTA Claims

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 merchandise processing fee (MPF) owed.

CBP states that pursuant to Article 5.13.4(b) of the UAFTA, the importer will not be subject to any penalty if the claim is promptly corrected and any duty and MPF owed is paid at least one year from submission of the invalid claim.

Petition and Protest Rights

According to CBP, importers or other interested parties may avail themselves of post entry administrative and judicial procedures, such as 19 USC 1514 or the use of Supplemental Information Letters/Post Entry Adjustments to receive a refund of duties and/or MPFs for eligible goods entered, or withdrawn from warehouse, for consumption, on or after the effective date of the UAFTA.

Petitions. CBP states that the Miscellaneous Trade and Technical Corrections Act of 2004, enacted on December 3, 2004, repealed 19 USC 1520(c) which provides for the reliquidation of an entry or reconciliation on the basis of a clerical error, mistake of fact or other inadvertence. Post entry petitions that would have been submitted under this provision requesting refunds on originating goods entered, or withdrawn from warehouse, for consumption on or after January 1, 2005 can be filed under 19 USC 1514 within 180 days after liquidation.

Protests. Importers or other interested parties may file a protest to contest a negative origin determination pursuant to 19 USC 1514 within 180 days of the date of liquidation or denial. The protest may enable the importer to receive a refund of duties and/or merchandise processing fees for eligible goods entered, or withdrawn from warehouse for consumption.

Merchandise Processing Fees and Harbor Maintenance Fee

In addition to the reduced and free rates of duty afforded by the UAFTA, goods that qualify for preferential tariff treatment are not subject to MPFs. However, merchandise is not exempt from the harbor maintenance fee (HMF).

(See ITT's Online Archives or 01/03/05 news, 05010315, for BP summary on Presidential Proclamation 7857 which implemented the UAFTA.)

CBP memorandum (dated 12/30/04) available at http://www.cbp.gov/linkhandler/cgov/import/international_agreements/autrade.ctt/autrade.doc