CSMS Message: 01-000085

TO: ALL ABI BROKERS.

FROM: ARLENE LUGO

SUBJECT: AGOA NON TEXTILE IMPLEMENTATION

DATE: 01/12/2001

JANUARY 12, 2000

ENT-14:FO:TP:IA:TA

TO: DIRECTORS, FIELD OPERATIONS
PORT DIRECTORS
ASSISTANT PORT DIRECTORS, TRADE

FROM: EXECUTIVE DIRECTOR, TRADE PROGRAMS

PASS TO: IMPORT AND ENTRY SPECIALISTS, INSPECTORS, BROKERS, IMPOR
AND OTHER INTERESTED PARTIES

SUBJECT: IMPLEMENTATION INFORMATION ON THE NON-TEXTILE "ENHANCED"
PROVISIONS OF THE AFRICAN GROWTH AND OPPORTUNITY ACT

BACKGROUND:

THE TRADE AND DEVELOPMENT ACT OF 2000 ("THE ACT"), WAS SIGNED INTO
ON MAY 18, 2000. TITLE I OF THE ACT AUTHORIZES A NEW TRADE AND
INVESTMENT POLICY FOR DESIGNATED COUNTRIES OF SUB-SAHARAN AFRICA (SSA)
AND IS REFERRED TO IN THE ACT AS THE "AFRICAN GROWTH AND OPPORTUNITY
ACT" (AGOA). THE AGOA WAS SCHEDULED FOR IMPLEMENTATION ON OCTOBER 1,
2000. PRESIDENTIAL PROCLAMATION 7350, WHICH IMPLEMENTED THE AGOA AND
DESIGNATED ELIGIBLE COUNTRIES, WAS PUBLISHED IN THE FEDERAL REGISTER
ON OCTOBER 4, 2000 (65 FR 59321).

PRESIDENTIAL PROCLAMATION 7388, DATED DECEMBER 18, 2000, DESIGNATED
THE HARMONIZED TARIFF SCHEDULE (HTS) ITEM NUMBERS THAT ARE ELIGIBLE
FOR DUTY-FREE TREATMENT UNDER THE PROVISIONS OF THE AGOA.
PROCLAMATION 7388 WAS PUBLISHED IN THE FEDERAL REGISTER ON DECEMBER
21, 2000 (65 FR 80723).

INTERIM CUSTOMS REGULATIONS IMPLEMENTING THE TRADE PROVISIONS OF THE
AGOA WERE PUBLISHED IN THE FEDERAL REGISTER ON OCTOBER 5, 2000 (65 FR
59668). A NEW SECTION OF THE REGULATIONS, 19 CFR 10.178A, COVERS THE
ENHANCED GSP PREFERENTIAL TARIFF TREATMENT PROVISIONS FOR NON-TEXTILE
ARTICLES ORIGINATING IN SUB-SAHARAN AFRICAN COUNTRIES.

TITLE I OF THE AGOA PROVIDES FOR PREFERENTIAL TARIFF TREATMENT FOR
TEXTILE AND APPAREL ARTICLES AS WELL AS ENHANCED GENERALIZED SYSTEM OF
PREFERENCES (GSP) BENEFITS FOR CERTAIN GOODS CURRENTLY EXCLUDED FROM
GSP ELIGIBILITY.

THIS MEMORANDUM CONCERNS ONLY THE ENHANCED GSP PROVISIONS FOUND IN
SECTION 111 OF THE AGOA.

ELIGIBLE ARTICLES:

SECTION 111 AMENDS THE TRADE ACT OF 1974 BY ADDING A NEW SECTION,
SECTION 506A(B)(1) (19 USC 2466A(B)(1)). THIS NEW SECTION AUTHORI
THE PRESIDENT TO PROVIDE DUTY-FREE TREATMENT FOR CERTAIN ARTICLE THAT
ARE OTHERWISE EXCLUDED FROM GSP ELIGIBILITY IF THOSE ARTICLES
ORIGINATE IN DESIGNATED SSA COUNTRIES. THE DUTY-FREE TREATMENT WILL
APPLY TO THE FOLLOWING ARTICLES, PROVIDED THAT THE PRESIDENT
DESIGNATES THE ARTICLE AS ELIGIBLE; THE ARTICLE IS THE GROWTH, PRODUCT
OR MANUFACTURE OF AN ELIGIBLE BENEFICIARY SSA COUNTRY; AND THE ARTICLE
MEETS THE ORIGIN AND RELATED RULES DESCRIBED LATER IN THIS MEMORANDUM:

* WATCHES, EXCEPT THOSE WATCHES ENTERED AFTER JUNE 30, 1989, THAT
PRESIDENT SPECIFICALLY DETERMINES, AFTER PUBLIC NOTICE AND COMMENT,
WILL NOT CAUSE MATERIAL INJURY TO WATCH OR WATCH BAND, STRAP, OR
BRACELET MANUFACTURING AND ASSEMBLY OPERATIONS IN THE UNITED STATES
OR THE U.S. INSULAR POSSESSIONS (THE EXCEPTED WATCHES ALREADY
QUALIFY FOR GSP TREATMENT);

* CERTAIN ELECTRONIC ARTICLES;

* CERTAIN STEEL ARTICLES;

* FOOTWEAR, HANDBAGS, LUGGAGE, FLAT GOODS, WORK GLOVES, AND LEATHER
WEARING APPAREL WHICH WERE NOT ELIGIBLE ARTICLES FOR PURPOSES OF THE
GSP ON JANUARY 1, 1995, AS THE GSP WAS IN EFFECT ON THAT DATE;

* CERTAIN SEMI-MANUFACTURED AND MANUFACTURED GLASS PRODUCTS; AND

* ANY OTHER ARTICLES WHICH THE PRESIDENT DETERMINES TO BE
IMPORT-SENSITIVE IN THE CONTEXT OF THE GSP.

ATTACHMENT (1) LISTS THE HTS ITEM NUMBERS THAT WERE DESIGNATED IN
PRESIDENTIAL PROCLAMATION 7388 AS ELIGIBLE FOR DUTY-FREE TREATMENT
UNDER THE ENHANCED GSP PROVISIONS OF THE AGOA.

RULES OF ORIGIN:

19 CFR 10.171 THROUGH 10.178 LIST THE ORIGIN AND RELATED RULES FOR
GSP ARTICLES. THE PROVISIONS OF 19 CFR 10.171, 10.173 AND 10.175
THROUGH 10.178 WILL APPLY TO ARTICLES OF SSA COUNTRIES THAT ARE
ELIGIBLE FOR THE ENHANCED GSP BENEFITS, WITH THE FOLLOWING AMENDMENTS,
PROVIDED FOR IN 19 CFR 10.178A(D):

* THE TERM "BENEFICIARY DEVELOPING COUNTRY" MEANS "BENEFICIARY
SUB-SAHARAN AFRICAN COUNTRY;"

* IN THE GSP DECLARATION SET FORTH IN 19 CFR 10.173(A)(1)(I), THE
COLUMN HEADING "MATERIALS PRODUCED IN A BENEFICIARY DEVELOPING
COUNTRY OR MEMBERS OF THE SAME ASSOCIATION" SHOULD READ "MATERIAL
PRODUCED IN A BENEFICIARY SUB-SAHARAN AFRICAN COUNTRY OR IN THE
UNITED STATES:

* THE PROVISIONS OF 19 CFR 10.175(C) WILL NOT APPLY; AND

* FOR PURPOSES OF DETERMINING COMPLIANCE WITH THE 35% VALUE CONTENT
REQUIREMENT SET FORTH IN 19 CFR 10.176(A):

* AN AMOUNT NOT TO EXCEED 15% OF THE APPRAISED VALUE AT TIME
ENTRY MAY BE ATTRIBUTED TO THE COST OR VALUE OF MATERIALS
PRODUCED IN THE CUSTOMS TERRITORY OF THE UNITED STATES (THE
PROVISIONS OF 19 CFR 10.177 WILL APPLY FOR PURPOSES OF
IDENTIFYING MATERIALS PRODUCED IN THE CUSTOMS TERRITORY OF THE
UNITED STATES AND THE COST OF VALUE OF THOSE MATERIALS), AND

* THE COST OR VALUE OF MATERIALS INCLUDED IN THE ARTICLE THAT ARE
PRODUCED IN ONE OR MORE BENEFICIARY SSA COUNTRY MAY BE APPLIED
WITHOUT REGARD TO MEMBERSHIP IN AN ASSOCIATION OF COUNTRIES.

IN BRIEF, ANY ARTICLE DESCRIBED ABOVE THAT IS WHOLLY THE GROWTH,
PRODUCT OR MANUFACTURE OF, OR IS A NEW OR DIFFERENT ARTICLE OF
COMMERCE THAT HAS BEEN GROWN, PRODUCED OR MANUFACTURED IN A
BENEFICIARY SSA COUNTRY, MEETING THE 35% VALUE-CONTENT REQUIREMENT,
MAY QUALIFY FOR DUTY-FREE TREATMENT UNDER THE ENHANCED GSP PROVISIONS
OF THE AGOA. SIMPLE PACKAGING OR COMBINING OPERATIONS, OR MERE
DILUTION WITH WATER OR ANOTHER SUBSTANCE, ARE NOT SUFFICIENT TO CO
ORIGIN FOR PURPOSES OF THE AGOA.

BENEFICIARY COUNTRIES:

SECTION 107 OF THE AGOA DEFINED SUB-SAHARAN AFRICA AS 48 SPECIFIC
COUNTRIES OR THEIR SUCCESSOR POLITICAL ENTITIES. THE PRESIDENT IS
AUTHORIZED TO DESIGNATE ANY OF THOSE 48 COUNTRIES AS A "BENEFICIARY
SUB-SAHARAN AFRICAN COUNTRY." PRESIDENTIAL PROCLAMATION 7350
DESIGNATED THE FOLLOWING 35 SSA COUNTRIES AS BENEFICIARY SSA COUNTRIES
FOR PURPOSES OF THE AGOA:

REPUBLIC OF BENIN GABONESE REPUBLIC
REPUBLIC OF BOTSWANA REPUBLIC OF GHANA
REPUBLIC OF CAPE VERDE REPUBLIC OF GUINEA
REPUBLIC OF CAMEROON REPUBLIC OF GUINEA-BISSAU
CENTRAL AFRICAN REPUBLIC REPUBLIC OF KENYA
REPUBLIC OF CHAD KINGDOM OF LESOTHO
REPUBLIC OF CONGO REPUBLIC OF MADAGASCAR
REPUBLIC OF DJIBOUTI REPUBLIC OF MALAWI
STATE OF ERITREA REPUBLIC OF MALI
ETHIOPIA ISLAMIC REPUBLIC OF MAURITANIA
REPUBLIC OF MAURITIUS REPUBLIC OF SENEGAL
REPUBLIC OF MOZAMBIQUE REPUBLIC OF SEYCHELLES
REPUBLIC OF NAMIBIA REPUBLIC OF SIERRA LEONE
REPUBLIC OF NIGER REPUBLIC OF SOUTH AFRICA
FEDERAL REPUBLIC OF NIGERIA UNITED REPUBLIC OF TANZANIA
REPUBLIC OF RWANDA REPUBLIC OF UGANDA
DEMOCRATIC REPUBLIC OF SAO REPUBLIC OF ZAMBIA
TOME AND PRINCIPE

IN ADDITION, THE FOLLOWING COUNTRIES HAVE BEEN DESIGNATED AS "LESS
DEVELOPED BENEFICIARY SSA COUNTRIES."

REPUBLIC OF BENIN REPUBLIC OF MALAWI
REPUBLIC OF CAPE VERDE REPUBLIC OF MALI
REPUBLIC OF CAMEROON ISLAMIC REPUBLIC OF MAURITANIA
CENTRAL AFRICAN REPUBLIC REPUBLIC OF MOZAMBIQUE
REPUBLIC OF CHAD REPUBLIC OF NIGER
REPUBLIC OF CONGO FEDERAL REPUBLIC OF NIGERIA
REPUBLIC OF DJIBOUTI REPUBLIC OF RWANDA
STATE OF ERITREA DEMOCRATIC REPUBLIC OF SAO
ETHIOPIA TOME AND PRINCIPE
REPUBLIC OF GHANA REPUBLIC OF SENEGAL
REPUBLIC OF GUINEA REPUBLIC OF SIERRA LEONE
REPUBLIC OF GUINEA-BISSAU UNITED REPUBLIC OF TANZANIA
REPUBLIC OF KENYA REPUBLIC OF UGANDA
KINGDOM OF LESOTHO REPUBLIC OF ZAMBIA
REPUBLIC OF MADAGASCAR

EXPIRATION DATE:

THE EXPIRATION DATE FOR THIS ENHANCED GSP PROGRAM IS SEPTEMBER 30,
2008. DESIGNATED ARTICLES WILL REMAIN ELIGIBLE FOR DUTY-FREE
TREATMENT UNDER THE ENHANCED GSP PROVISIONS UNTIL THAT DATE. ARTICLES
DESIGNATED UNDER THE STANDARD GSP PROGRAM WILL REMAIN SUBJECT TO
OCCASIONAL EXPIRATIONS AND RENEWALS. STANDARD GSP IS NEXT SCHEDULED
TO EXPIRE ON SEPTEMBER 30, 2001.

IMPORTER REQUIREMENTS:

IN ORDER TO MAKE A CLAIM FOR DUTY-FREE TREATMENT UNDER THE ENHANCED
GSP PROVISIONS OF THE AGOA, THE IMPORTER MUST MEET THE FOLLOWING
REQUIREMENTS:

* MUST HAVE RECORDS THAT EXPLAIN HOW THE IMPORTER CAME TO THE
CONCLUSION THAT THE ARTICLE QUALIFIES FOR DUTY-FREE TREATMENT;

* MUST HAVE RECORDS THAT DEMONSTRATE THAT THE IMPORTER IS CLAIMING
THAT THE ARTICLE QUALIFIES FOR DUTY-FREE TREATMENT BECAUSE IT IS
THE GROWTH, OR THE PRODUCT, OR THE MANUFACTURE OF A BENEFICIARY
SSA COUNTRY.

* FOR ARTICLES GROWN IN A BENEFICIARY SSA COUNTRY, THE IMPORTER
MUST HAVE RECORDS THAT THE PRODUCT WAS GROWN IN THAT COUNTRY,
SUCH AS A RECORD OF RECEIPT FROM A FARMER WHOSE CROPS ARE GROWN
IN THAT COUNTRY;

* FOR ARTICLES PRODUCED OR MANUFACTURED IN A BENEFICIARY SSA
COUNTRY, THE IMPORTER MUST HAVE RECORDS THAT INDICATE THAT THE
MANUFACTURING OR PROCESSING OPERATIONS REFLECTED IN OR APPLIED
THE ARTICLE MEET THE COUNTRY OF ORIGIN RULES SET FORTH IN 19 CFR
10.176(A) AND 10.178A(D);

* MUST ESTABLISH AND IMPLEMENT INTERNAL CONTROLS THAT PROVIDE FOR THE
PERIODIC REVIEW OF THE ACCURACY OF THE DECLARATIONS OR OTHER RECORDS
REFERRED TO IN 19 CFR 10.178A(E)(2);

* MUST HAVE SHIPPING PAPERS THAT SHOW HOW THE ARTICLE MOVED FROM THE
BENEFICIARY SSA COUNTRY TO THE UNITED STATES. IF THE IMPORTED
ARTICLE WAS SHIPPED THROUGH A COUNTRY OTHER THAN A BENEFICIARY SSA
COUNTRY AND THE INVOICES AND OTHER DOCUMENTS FROM THE BENEFICIARY
SSA COUNTRY DO NOT SHOW THE UNITED STATES AS THE FINAL DESTINATION,
THE IMPORTER MUST ALSO HAVE DOCUMENTATION THAT DEMONSTRATES THAT
THE CONDITIONS OF 10 CFR 10.175(D)(1) WERE MET;

* MUST HAVE RECORDS THAT DEMONSTRATE THE COST OR VALUE OF THE
MATERIALS PRODUCED IN THE U.S. OR A BENEFICIARY COUNTRY OR COUNTRIES
AND THE DIRECT COSTS OF PROCESSING OPERATIONS INCURRED IN THE
BENEFICIARY SSA COUNTRY THAT WERE RELIED UPON BY THE IMPORTER TO
DETERMINE THAT THE 35% VALUE CONTENT REQUIREMENT WERE MET; AND

* MUST BE PREPARED TO PRODUCE THE RECORDS DESCRIBED ABOVE WITHIN 30
DAYS OF A REQUEST FROM CUSTOMS AND MUST BE PREPARED TO EXPLAIN HOW
THOSE RECORDS AND THE INTERNAL CONTROLS DESCRIBED ABOVE JUSTIFY THE
IMPORTER'S CLAIM FOR DUTY-FREE TREATMENT.

VERIFICATION BY CUSTOMS:

THE VERIFICATION PROCEDURES PROVIDED FOR UNDER 19 CFR 10.173 WILL
APPLY TO CLAIMS MADE UNDER THE ENHANCED GSP PORTIONS OF THE AGOA.

FAILURE TO PROVIDE SUFFICIENT DOCUMENTATION TO SUPPORT THE CLAIM TO
CUSTOMS UPON REQUEST WILL RESULT IN THE CLAIM'S DENIAL.

ACTION:

SECTION 111 OF THE AFRICAN GROWTH AND OPPORTUNITY ACT EXTENDS ENHANCED
GSP TREATMENT TO CERTAIN NON-IMPORT-SENSITIVE, NON-TEXTILE PRODUCTS
THAT ORIGINATE IN DESIGNATED SSA COUNTRIES. EFFECTIVE FOR GOODS
ENTERED, OR WITHDRAWN FROM WAREHOUSE FOR CONSUMPTION, ON OR AFTER
DECEMBER 21, 2000, IMPORTERS MAY FILE CLAIMS FOR PREFERENTIAL TARIFF
TREATMENT UNDER THIS PROGRAM OF DESIGNATED ARTICLES THAT ORIGINATE IN
BENEFICIARY SSA COUNTRIES.

IMPORTERS OR THEIR AGENTS MAY ALSO AVAIL THEMSELVES OF ALL AVAILABLE
POST-ENTRY PROCEDURES, WITH THE EXCEPTION OF NAFTA 520(D) CLAIMS, TO
RECEIVE A REFUND OF DUTIES FOR ELIGIBLE AGOA NON-TEXTILE ARTICLES
ENTERED, OR WITHDRAWN FROM WAREHOUSE FOR CONSUMPTION, ON OR AFTER
DECEMBER 21, 2000, THE EFFECTIVE DATE OF PRESIDENTIAL PROCLAMATION
7388.

TO CLAIM AGOA PREFERENTIAL TARIFF TREATMENT, THE IMPORTER MUST MAKE
WRITTEN DECLARATION THAT THE ARTICLE QUALIFIES FOR AGOA PREFERENTIAL
TREATMENT. SUCH CLAIM SHALL BE MADE AT THE TIME OF FILING THE ENTRY
SUMMARY BY PLACING ON THE DOCUMENT THE SPECIAL PROGRAM INDICATOR
(SPI) "D" AS A PREFIX TO THE HTS ITEM NUMBER FOR EACH ARTICLE FOR
WHICH TREATMENT IS CLAIMED.

AS OF THE WRITING OF THESE INSTRUCTIONS, THE AUTOMATED COMMERCIAL
SYSTEM (ACS) HAS NOT BEEN UPDATED TO ALLOW FOR AUTOMATED PROCESSING
THESE ENTRIES. UNTIL FURTHER NOTICE FROM THE OFFICE OF TRADE PROGRAMS
AT CUSTOMS HEADQUARTERS, IMPORTERS CLAIMING PREFERENCE UNDER THE
ENHANCED GSP PROVISIONS OF THE AGOA MUST FILE THEIR ENTRIES MANUALLY.
IMPORTERS MAY CONTINUE TO FILE CLAIMS THROUGH THE AUTOMATED BROKER
INTERFACE (ABI) FOR THOSE ARTICLES ELIGIBLE FOR STANDARD GSP
TREATMENT.

QUESTIONS REGARDING THE NON-TEXTILE PROVISIONS OF THE AGOA SHOULD BE
DIRECTED TO ARLENE LUGO, TRADE AGREEMENTS BRANCH, AT 202-927-4183.

/S/
PAUL K. SCHWARTZ, FOR
ELIZABETH G. DURANT

CC: EXECUTIVE DIRECTOR, FIELD OPERATIONS