CBP Issues Instructions on Filing & Acceptance of Claims under the U.S.-Morocco FTA

1. CFR must still be amended for the MFTA; therefore, CBP states that these instructions are subject to change pending the release of the amended regulations. (See ITT's Online Archives or 12/27/05 news, 05122705, for part I of a multi-part series of BP summaries on Presidential Proclamation 7971 implementing the MFTA.)

MFTA Claims May Be Filed Effective January 1, 2006

According to CBP, effective January 1, 2006, importers and brokers may file claims for preferential tariff treatment on qualifying goods that originate in Morocco. These claims shall be made at the time the entry summary is filed by placing on the CBP Form 7501 SPI "MA" as a prefix to the HTS item number for each line on which preferential tariff treatment is claimed.

MFTA Claims Can Be Filed on ABI

According to CBP, the Automated Commercial System (ACS) has been programmed to accept MFTA claims through the ACS system. (See ITT's Online Archives or 05/25/05 news, 05052510, for BP summary of ABI system requirements for filing MFTA claims.)

(CBP adds that program updates related to quota processing are complete. Therefore, CBP field personnel must process these entries through the ACS quota module.)

Morocco No Longer GSP-Eligible

Because Morocco is no longer eligible for Generalized System of Preferences (GSP) benefits upon implementationof MFTA, CBP states that HTS General Note 4(a) is modified by deleting "Morocco" from the enumeration of independent beneficiary developing countries.

Overview of MFTA Rules of Origin

Generally, under the MFTA, CBP states that a good shall qualify for preferential tariff treatment as a "product of Morocco" if:

(a) The good is wholly obtained or produced entirely in Morocco, the U.S. or both;

(b) For goods other than those covered by Annex 4-A (textiles and apparel) and Annex 5-A (certain plant and vegetable products, foods and beverages, plastics, metals, ignition wiring sets, and motor vehicle parts), the good is a new or different article of commerce that has been grown, produced, or manufactured in the territory of one or both of the Parties, and the sum of (i) the value of materials produced in the territory of one or both of the Parties, plus (ii) the direct costs of processing operations performed in the territory of one or both of the Parties is not less than 35 percent of the appraised value of the good at the time it is imported into the territory of a Party; or

(c) For goods covered by the rules in Annex 4-A or Annex 5-A, the good has satisfied the required tariff shift specified in the Annex (product-specific tariff shifts).

Textiles and Apparel

CBP states that textiles and apparel products may qualify as originating under the MFTA if they meet the requirements as specified in the MFTA. The duty rate for these goods will be identified in the "special" column. Although there are differences, these requirements are similar to those in the North American Free Trade Agreement (NAFTA).

Below is a summary of the type of processes required for some of the more basic products in order for them to be considered eligible for the MFTA. There are exceptions even to these requirements, depending on the specific type of product. For more specific information refer to General Note 27(h) and Annex I of the modification to the HTS to implement MFTA, USITC Publication 3721.

(a) Yarn: generally, fiber must originate in Morocco or U.S. to qualify for preferential tariff treatment.

(b) Fabric: generally, yarn must originate in Morocco or U.S. to qualify for preferential tariff treatment. Cotton and man-made knit fabric are under fiber forward rules.

(c) Apparel: generally, yarn must originate in Morocco or U.S. to qualify for preferential tariff treatment.

Agricultural Tariff Rate Quotas (TRQ)

According to CBP, MFTA provides 15 quantitative restraints associated with a reduced duty rate for agricultural products such as cheese, butter, dairy products, beef, cotton, and tobacco provided for in HTS Chapter 99, Subchapter XII, U.S. Notes 3 through 16. The agricultural quotas are covered by HTS numbers 9912.02.05 through 9912.52.40.

47 Tariff Preference Levels (TPL)

TPLs have been established for textiles and textile apparel under the MFTA. Each of the TPLs is unique and goods must meet certain criteria in order to be eligible. (See ITT's Online Archives or 01/03/06 news, 06010315, for BP summary of CBP notices on 2006 TPLs for MFTA textile and apparel products.)

Record Maintenance

Importers are required to maintain for five years after the date of importation, all records relating to the importation of the good, including, but not limited to the purchase of, cost of, value of and payment for the good and the materials used in the production of the good.

MPF and HMF Continue to Apply

Goods eligible for preferential tariff treatment under the MFTA are not exempt from the merchandise processing fee (MPF) or the harbor maintenance fee (HMF).

Additional CBP Implementation Information

CBP's memorandum also gives an overview of various issues related to the filing and acceptance of claims under MFTA, among other issues, such as (partial list):

CBP U.S.-MFTA Implementation Information (dated 12/29/05) available at http://www.cbp.gov/linkhandler/cgov/import/international_agreements/free_trade/morocco/morocco_fta_implement.ctt/morocco_fta_implement.doc .

CBP Admin 06-0002 on ACS programming (dated 01/03/06) available at http://www.brokerpower.com/cgi-bin/adminsearch/admmsg.view.pl?article=2006/2006-0002.ADM