CSMS Message: 02-001501

TO: DIRECTORS, FIELD OPERATIONS

FROM: EXECUTIVE DIRECTOR, TRADE COMPLIANCE AND FACILITATION
OFFICE OF FIELD OPERATIONS

SUBJECT: ANDEAN TRADE PROMOTION AND DRUG ERADICATION ACT
IMPLEMENTATION INSTRUCTIONS FOR NON-TEXTILE PRODUCTS

BACKGROUND:

THE TRADE AND DEVELOPMENT ACT OF 2002 ("THE ACT"), WAS SIGNED INTO LAW
ON AUGUST 6, 2002. TITLE XXXI OF THE ACT CONCERNS THE RENEWAL AND
EXPANSION OF THE ANDEAN TRADE PREFERENCE ACT (ATPA) AND IS ENTITLED THE
"ANDEAN TRADE PROMOTION AND DRUG ERADICATION ACT" (THE ATPDEA). THE
THE ATPDEA IMMEDIATELY RESTORED DUTY FREE TREATMENT TO ARTICLES THAT
HAD BEEN ELIGIBLE FOR ATPA BENEFITS PRIOR TO THE PROGRAM'S EXPIRATION
ON DECEMBER 4, 2001. THE EXPANDED BENEFITS REQUIRE A PRESIDENTIAL
DETERMINATION CONCERNING THE ELIGIBILITY OF PRODUCTS AND COUNTRIES.

PRESIDENTIAL PROCLAMATION 7616 DETERMINED THAT BOLIVIA, COLOMBIA,
ECUADOR, AND PERU ARE ELIGIBLE COUNTRIES FOR THE PURPOSES OF RECEIVING
ATPDEA BENEFITS. IN ADDITION, THE PROCLAMATION DETERMINED THAT PRODUCTS
FROM THOSE COUNTRIES THAT ARE PROPERLY CLASSIFIED UNDER THE ATTACHED
HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTS) ITEM NUMBERS ARE
ELIGIBLE FOR DUTY-FREE TREATMENT. THE PROCLAMATION WAS SIGNED ON
OCTOBER 31, 2002, AND WAS PUBLISHED IN THE FEDERAL REGISTER ON NOVEMBER
5, 2002 (67 FR 67283). THE PROCLAMATION TOOK EFFECT UPON SIGNATURE.

INTERIM REGULATIONS WILL BE PUBLISHED BY CUSTOMS IN THE NEAR FUTURE.
HOWEVER, WE WILL ACCEPT CLAIMS FOR PREFERENTIAL TARIFF TREATMENT FOR
ATPDEA ELIGIBLE GOODS IMMEDIATELY.

THE ATPDEA AMENDS THE ATPA, WHICH IS CODIFIED AT 19 USC 3201 THROUGH
3206, TO PROVIDE ADDITIONAL TRADE BENEFITS TO DESIGNATED BENEFICIARY
COUNTRIES. THE AMENDMENT PROVIDES PREFERENTIAL TARIFF TREATMENT FOR
TEXTILE AND APPAREL ARTICLES, AS WELL AS FOR NON-TEXTILE GOODS
PREVIOUSLY EXCLUDED FROM ATPA ELIGIBILITY.

THIS MEMORANDUM CONCERNS ONLY THE NON-TEXTILE PROVISIONS OF ATPDEA.
NON-TEXTILE ARTICLES ELIGIBLE FOR PREFERENTIAL TARIFF TREATMENT:

IN REGARD TO NON-TEXTILE GOODS, SECTION 3103 AMENDS 19 USC 3203 BY
PROVIDING PREFERENTIAL TARIFF TREATMENT FOR THE FOLLOWING GOODS IF
THEY QUALIFY AS ATPDEA ORIGINATING GOODS AND ARE IMPORTED DIRECTLY
INTO THE UNITED STATES FROM AN ATPDEA BENEFICIARY COUNTRY:

* TUNA, PREPARED OR PRESERVED IN ANY MANNER, IN FLEXIBLE AIRTIGHT
CONTAINERS. THE FOLLOWING SECONDARY HTS ITEM NUMBERS CAN BE USED
IN CONJUNCTION WITH THE PRIMARY ATPDEA 9821.01.01 TUNA PROVISION:
1604.14.3091. BY MAKING A CLAIM FOR ATPDEA BENEFITS, THE IMPORTER
IS ACKNOWLEDGING THAT ALL REQUIREMENTS OF SECTION E OF THE ANNEX
HAVE BEEN MET (NEW U.S. NOTE 2 FOR SUBCHAPTER XXI, HTS).
* PETROLEUM, OR ANY PRODUCT DERIVED THEREFROM, PROVIDED FOR IN
HEADINGS 2709 AND 2710 OF THE HTS.

* FOOTWEAR NOT DESIGNATED AT THE TIME OF THE EFFECTIVE DATE OF THIS
TITLE AS ELIGIBLE FOR PURPOSES OF THE GENERALIZED SYSTEM OF
PREFERENCES UNDER TITLE V OF THE TRADE ACT OF 1974.

* CERTAIN HANDBAGS, LUGGAGE, FLAT GOODS, WORK GLOVES AND LEATHER
WEARING APPAREL.

* WATCHES AND WATCH PARTS (INCLUDING CASES, BRACELETS AND STRAPS),
OF WHATEVER TYPE INCLUDING, BUT NOT LIMITED TO, MECHANICAL, QUARTZ
DIGITAL OR QUARTZ ANALOG, IF THOSE WATCHES OR WATCH PARTS CONTAIN
ANY MATERIAL WHICH IS THE PRODUCT OF ANY COUNTRY WITH RESPECT TO
WHICH HTS COLUMN 2 RATES OF DUTY APPLY.

THE ANNEX TO PRESIDENTIAL PROCLAMATION 7616 IDENTIFIES THOSE HTS
ITEM NUMBERS THAT ARE ELIGIBLE FOR ATPDEA PREFERENTIAL TARIFF
TREATMENT IDENTIFIED ABOVE. THE ANNEX IS INCLUDED IN ATTACHMENT
A.

ATPDEA ORIGIN RULES:

THE ACT DEFINES AN "ATPDEA ORIGINATING GOOD" AS ONE THAT MEETS THE
RULES OF ORIGIN FOR A GOOD SET FORTH IN 19 USC 3203.

AN ARTICLE MAY BE ELIGIBLE FOR PREFERENTIAL TARIFF TREATMLENT IF THE
ARTICLE IS EITHER:

(I) WHOLLY THE GROWTH, PRODUCT, OR MANUFACTURE OF AN ATPDEA BENEFICIARY
COUNTRY. NO ARTICLE WILL BE ELIGIBLE FOR PREFERENTIAL TREATMENT BY
VIRTURE OF HAVING MERELY UNDERGONE SIMPLE (AS OPPOSED TO COMPLEX OR
MEANINGFUL) COMBINING OR PACKAGING OPERATIONS, OR MERE DILUTION WITH
WATER OR MERE DILUTION WITH ANOTHER SUBSTANCE THAT DOES NOT MATERIALLY
ALTER THE CHARACTERISTICS OF THE ARTICLE.

VALUE CONTENT REQUIREMENT - GENERAL. AN ARTICLE MAY BE ELIGIBLE FOR
PREFERENTIAL TREATMENT ONLY IF THE SUM OF THE COST OR VALUE OF THE
MATERIALS PRODUCED IN AN ATPDEA BENEFICIARY COUNTRY OR COUNTRIES, PLUS
THE DIRECT COSTS OF PROCESSING OPERATIONS PERFORMED IN AN ATPDEA
BENEFICIARY COUNTRY OR COUNTRIES, IS NOT LESS THAN 35 PERCENT OF THE
APPRAISED VALUE OF THE ARTICLE AT THE TIME IT IS ENTERED.

COMMONWEALTH OF PUERTO RICO, U.S. VIRGIN ISLANDS AND CARIBBEAN BASIN
INITIATIVE (CBI) BENEFICIARY COUNTRIES. FOR THE SPECIFIC PURPOSE OF
MEETING THE 35% RULE, THE TERM "ATPDEA BENEFICIARY COUNTRY" INCLUDES
THE COMMONWEALTH OF PUERTO RICO, THE U.S. VIRGIN ISLANDS, AND ANY CBI
BENEFICIARY COUNTRY AS DEFINED IN 19 CFR 10.191(B)(L). ANY COST OR
VALUE OF MATERIALS OR DIRECT COSTS OF PROCESSING OPERATIONS
ATTRIBUTABLE TO THE VIRGIN ISLANDS OR ANY CBI BENEFICIARY COUNTRY
MUST BE INCLUDED IN THE ARTICLE PRIOR TO ITS FINAL EXPORTATION TO
THE UNITED STATES FROM AN ATPDEA BENEFICIARY COUNTRY.
MATERIALS PRODUCED IN THE UNITED STATES. FOR PURPOSES OF MEETING
THE 35% RULE, AN AMOUNT NOT TO EXCEED 15 PERCENT OF THE APPRAISED
VALUE OF THE ARTICLE AT THE TIME IT IS ENTERED MAY BE ATTRIBUTED
TO THE COST OR VALUE OF MATERIALS PRODUCED IN THE CUSTOMS
TERRITORY OF THE UNITED STATES (OTHER THAN THE COMMONWEALTH OF
PUERTO RICO).

CERTIFICATE OF ORIGIN:

THE ATPDEA CERTIFICATE OR ORIGIN MUST BE USED TO CERTIFY THAT AN
ARTICLE QUALIFIES FOR ATPDEA PREFERENTIAL TARIFF TREATMENT. THE
EXPORTER IN THE ATPDEA BENEFICIARY COUNRY MUST PREPRAE THE ATPDEA
CERTIFICATE OF ORIGIN. IF THE EXPORTER IS NOT THE PRODUCER OF THE
ARTICLE, THE EXPORTER MAY COMPLETE AN ATPDEA CERTIFICATE OF ORIGIN
ON THE BASIS OF
(A) ITS REASONABLE RELIANCE ON THE PRODUCER'S WRITTEN REPRESENTATION
THAT THE ARTICLE QUALIFIES FOR PREFERENTIAL TARIFF TREATMENT OR (B)
A COMPLETED AND SIGNED ATPDEA CERTIFICATE OF ORIGIN FOR THE ARTICLE
VOLUNTARILY PROVIDED TO THE EXPORTER BY THE PRODUCER.

ATTACHMENT B IS A COPY OF THE ATPDEA NON-TEXTILE CERTIFICATE OF ORIGIN
FOR USE UNTIL THE FORM IS AVAILABLE ON THE INTERNET. CUSTOMS MAY
REQUEST COPIES OF THE CERTIFICATE OF ORIGIN WHEN VERIFYING A CLAIM FOR
PREFERENTIAL TREATMENT.

IMPORTER REQUIREMENTS:
THE IMPORTER MUST MAKE A WRITTEN DECLARATION THAT THE ARTICLE
QUALIFIES FOR ATPDEA PREFERENTIAL TARIFF TREATMENT. THIS DECLARATION
SHALL BE MDE AT THE TIME OF FILING THE ENTRY SUMMARY BY PLACING ON THE
CF-7501 THE SPECIAL PROGRAM INDICATOR (SPI) "J+" AS A PREFIX TO THE
HTS SUBHEADING ITEM NUMBER FOR EACH ARTICLE FOR WHICH SUCH TREATMENT
IS CLAIMED.

IMPORTERS OF THEIR AGENTS MAY FILE ENTRIES FOR MERCHANDISE ELIGIBLE FOR
THE EXPANDED ATPDEA BENEFITS VIA ABI. TO DO SO, THE SPI INDICATOR "J"
SHOULD PRECEDE THE APPLICABLE HTS ITEM NUMBER.

EACH IMPORTER CLAIMING ATPDEA PREFERENTIAL TARIFF TREATMENT MUST
MAINTAIN, IN THE UNITED STATES, ALL RECORDS RELATING TO THE
IMPORTATION OF THE ARTICLE. THOSE RECORDS MUST INCLUDE ANY RELEVANT
DOCUMENTS OR RECORDS AS SPECIFIED IN 19 CFR 163.1(A).

VERIFICATION OF CLAIMS:

A CLAIM FOR ATPDEA NON-TEXTILE PREFERENTIAL TARIFF TREATMENT WILL BE
SUBJECT TO WHATEVER VERIFICATION THE PORT DIRECTOR DEEMS NECESSARY.
ANY SUCH VERIFICATION WILL BE CONDUCTED AGAINST THE IMPORTER. IF,
FOR ANY REASON, THE PORT DIRECTOR IS PREVENTED FROM VERIFYING THE
CLAIM, HE/SHE MAY DENY THE CLAIM FOR PREFERENTIAL TARIFF TREATMENT.

ACTION:

EFFECTIVE IMMEDIATELY, IMPORTERS MAY FILE CLAIMS FOR PREFERENTIAL
TARIFF TREATMENT OF ATPDEA ORIGINATING NON-TEXTILE GOODS FROM
BOLIVIA, COLOMBIA, ECUADOR, AND PERU. IN ADDITION, IMPORTERS OR
THEIR AGENTS MAY AVAIL THEMSELVES OF ALL AVAILABLE POST-ENTRY
PROCEDURES, WITH THE EXCEPTION OF NAFTA 520(D) CLAIMS, TO
RECEIVE A REFUND OF DUTIES FOR ELIGIBLE ATPDEA NON-TEXTILE ARTICLES
ENTERED, OR WITHDRAWN FROM WAREHOUSE FOR CONSUMPTION, ON OR AFTER
OCTOBER 31, 2002.

THE AUTOMATED COMMERCIAL SYSTEM (ACS) HAS BEEN UPDATED TO ALLOW FOR
AUTOMATED PROCESSING OF THESE ENTRIES. IMPORTERS CLAIMING
PREFERENTIAL TARIFF TREATMENT UNDER THE ATPDEA MAY FILE ENTRIES
ELECTRONICALLY.

IMPORTER QUESTIONS REGARDING THE NON-TEXTILE PROVISIONS OF THE
ATPDEA SHOULD BE DIRECTED TO THE PORTS. QUESTIONS FROM THE PORTS
SHOULD BE DIRECTED TO MR. RICHARD WALLIO, TRADE AGREEMENTS BRANCH,
AT (202) 927-9704.

/S/

MICHAEL D'AMBROSIO FOR

ELIZABETH G. DURANT

ATTACHMENTS AVAILABLE ON WWW. CUSTOMS.GOV