CBP Issues Instructions on Filing & Acceptance of Claims under the DR-CAFTA (Part I)

To date, the President has declared that the DR-CAFTA will be in effect and implemented for El Salvador only. Therefore, for purposes of these instructions, CBP states that reference to a CAFTA-DR country is the U.S. and El Salvador. The DR-CAFTA took effect for El Salvador on March 1, 2006.

(CBP adds that 19 CFR will be amended to implement the DR-CAFTA and the DR-CAFTA Implementation Act. As such, the instructions contained in this memorandum are subject to change once the regulations are issued.)

(See ITT's Online Archives or 03/03/06 news, 06030305, for BP summary of a CBP notice announcing the temporary non-ABI requirement (see below), and removal of El Salvador's GSP, CBTPA, and CBERA benefits due to implementation of the DR-CAFTA for that country. See ITT's Online Archives or 03/02/06 news, 06030200, for Part I of a multi-part series of BP summaries on Proclamation 7987 implementing the DR-CAFTA.)

This is Part I of a multi-part series of summaries of this memorandum, and highlights the required Special Program Indicators (SPIs) P and P, the temporary requirement for non-ABI entry summaries, the certification or information supporting DR-CAFTA claims, record maintenance, and the applicability of the HMF/MPF. See future issues of ITT for additional summaries.

Claims are Filed with SPI P for Originating Goods, SPI P for Qualifying Goods

CBP states that preferential tariff treatment may be received for imported goods of a CAFTA-DR country that are eligible as an "originating" good or a "qualifying" good (see definition below). Although the same rules found in General Note (GN) 29(n) apply to determine whether a good is originating or qualifying, there is a distinction between those eligible goods and the indicator for making a claim.

A claim for preferential tariff treatment may be filed at the time of entry summary by placing the Special Program Indicator (SPI) "P" or "P" as a prefix to the HTS subheading for each good or line item for which treatment is being claimed. A good that is originating by meeting the rule of origin set forth in HTS GN 29 may receive preferential duty treatment by using the SPI "P". A good that is qualifying may receive a preferential rate of duty by using the SPI "P" along with the appropriate chapter 98 or 99 HTS number.

An "originating" good is one that meets the general and/or product specific rules of origin set forth in GN 29(b) or (n). An originating good must be more than a product of a country. It must meet the rules of origin of the DR-CAFTA in order to receive benefits.

"Qualifying" goods are certain agricultural goods, such as beef, dairy products and sugar that are subject to quantitative restrictions as found in chapter 98 or 99 of the HTS. A "qualifying" good is one that meets the product specific rule of origin found in GN 29(n), however U.S. materials or inputs are considered to be of a non-Party. Therefore, in determining whether a good meets a specific rule of origin, U.S. materials are considered non-originating.

Temporary Non-ABI Entry Summary Requirement

CBP explains that program updates to the Automated Commercial System (ACS), which allow for automated processing have not been completed. Therefore, until further notice from CBP, importers claiming preference under the DR-CAFTA for El Salvador must file non-Automated Broker Interface (ABI) entries. CBP notes that importers will have the option to file ABI entries at release and follow through with manual entry summaries. This option is allowed only for DR-CAFTA claims and will terminate once ACS programming to allow electronic filing is complete.

Claims Must be Based on "Certification" or "Other Information"

Written/electronic certification, or importer's knowledge (reasonable reliance). CBP states that the importer may make a claim for preferential tariff treatment based on i) a written or electronic certification issued by the importer, exporter or producer, or ii) importer's knowledge to include reasonable reliance on information in the importer's possession that the good qualifies as an originating good according to the rules of origin. The importer must be prepared to submit upon CBP's request the certification or other information setting forth the reasons that the good qualifies as originating. The certification or other information is not required to be on file at the time the claim is made. However, the importer is responsible for retaining supporting documentation, which may be requested by CBP, as to the good's eligibility for preferential treatment at the time the claim was made.

Claims based on single/multiple certification must contain certain information. If the certification serves as the basis for the claim, it does not need to 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 certification must not only include the reason the good qualifies as originating, but must contain the required data elements pertaining to the importation of the good, as outlined in Attachment A of CBP's Memorandum. The certification may be submitted in English or Spanish. If submitted in Spanish, CBP may request an English translation.

Importer must exercise reasonable care no matter who generates certification. An importer may submit a certification completed or generated by an exporter or producer or may issue the certification based on information submitted by the exporter or producer that the good qualifies as originating; however, the importer must exercise reasonable care when certifying to the accuracy and truthfulness of the information submitted to CBP. The fact that the importer has issued a certification based on information provided by the exporter or producer or submits a certification executed by the exporter or producer does not relieve the importer of the responsibility to exercise reasonable care.

Claims based on "other information" must include certain information. According to CBP, if the basis for the claim is not a certification but rather is supported by other information, that information must also include the required data elements outlined in Attachment A of CBP's Memorandum, but does not need to include the certifying statement or the blanket period. However, the information must sufficiently support the claim for preference.

Low value shipments. CBP adds that a certification or other information shall not be required for an importation of goods with an F.O.B. value of $2,500 or less unless CBP considers the importation to be carried out or planned for the purposes of evading U.S. laws and regulations. Moreover, if CBP conducts a verification to determine if the goods are in compliance with other U.S. laws and/or regulations, CBP may require the importer to furnish a valid certification regardless of the monetary value of the good.

Record Maintenance

According to CBP, importers are required to maintain records for five years after the date of importation, including certification, if completed, and all records relating to the importation of the good.

Applicability of MPF and HMF

In addition to the reduced and free rates of duty afforded by the DR-CAFTA, CBP notes that goods that qualify for preferential treatment are not subject to the Merchandise Processing Fee (MPF). Merchandise that qualifies for preferential treatment under a Trade Preference Level (TPL) will not be exempt from MPF. In addition, CBP states that no merchandise is exempt from the harbor maintenance fee (HMF).

CBP Memorandum, including Attachment A (dated 03/03/06) available at http://www.cbp.gov/linkhandler/cgov/import/international_agreements/free_trade/dominican_republic/us_dominican.ctt/us_dominican.doc