| Title: | NAFTA-FACT SHEET 17 |
|---|---|
| Date: | 1994-01-06 |
| To: | abi |
| Links: | previous, next |
TO : ALL ABI BROKERS.
FROM : ROBYN DAY
SUBJECT : NAFTA-FACT SHEET 17
DATE : 01/05/94
4001071
JANUARY 1, 1994
SPE-CO:TO:T:T RA
CATEGORY: NAF
TO: ALL ASSISTANT REGIONAL COMMISSIONERS (OPERATIONS),
DISTRICT, AREA AND PORT DIRECTORS OF CUSTOMS
FROM: ACTING DIRECTOR, OFFICE OF TRADE OPERATIONS
PASS TO ALL REGIONAL PROGRAM MANAGERS, NATIONAL IMPORT
SPECIALISTS, IMPORT SPECIALISTS, ENTRY OFFICERS,
INSPECTORS, BROKERS AND OTHER INTERESTED PARTIES
SUBJECT: NAFTA FACT SHEET # 17 (VBT-94-01)--INSTRUCTIONS FOR
IMPLEMENTING NAFTA FOR TEXTILES
ACTION: THE FOLLOWING ARE GUIDELINES THAT CAN BE USED TO ASSIST
THE FIELD AND THE IMPORTING COMMUNITY IN ADMINISTERING
THE NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA). IT
SHOULD BE STRESSED THAT THESE ARE GUIDELINES ONLY AND
ANY QUESTIONS OR CONCERNS ABOUT THE INTERPRETATIVE
NATURE OF THE AGREEMENT SHOULD BE REFERRED TO THE
TEXTILE PRODUCTS BRANCH OR THE OFFICE OF REGULATIONS
AND RULINGS.
19 CFR 12.132 (CODE OF FEDERAL REGULATIONS) WILL
REQUIRE THE COUNTRY OF ORIGIN DECLARATION TO BE SIGNED
BY THE MANUFACTURER OR PROCESSOR FOR ALL TEXTILE
PRODUCTS (AS DEFINED BY APPENDIX 1.1 OF THE NAFTA
AGREEMENT) CLAIMING NAFTA QUALIFYING. THIS DECLARATION
MUST CONTAIN INFORMATION ON THE COMPLETE MANUFACTURING
PROCESS AND ALL MATERIALS INVOLVED, I.E. YARN, FABRIC,
ETC.
BASICALLY, NAFTA CAN BE BROKEN DOWN INTO THREE PARTS.
THEY ARE:
1) NAFTA QUALIFYING BECAUSE THE PRODUCT MEETS THE
REQUIREMENTS AS SPECIFIED IN THE AGREEMENT.
2) DOES NOT QUALIFY FOR NAFTA BECAUSE THE PRODUCT
DOES NOT FULLY MEET THE REQUIREMENTS AS SPECIFIED
IN THE AGREEMENT. TARIFF RATE QUOTAS (CALLED
TARIFF PREFERENCE LEVELS, OR TPLS) HAVE BEEN
ESTABLISHED FOR THAT PRODUCT UNDER ANNEX 300-B,
APPENDIX 6, OF NAFTA TO ALLOW ENTRY UNDER THE
PREFERENTIAL DUTY TREATMENT UP TO A SPECIFIC
QUANTITY. ONCE THAT QUANTITY IS REACHED THE
PRODUCT IS DUTIABLE AT THE COLUMN 1 RATE.
3) DOES NOT FULLY QUALIFY FOR NAFTA AND NO TPLS
HAVE BEEN ESTABLISHED FOR THIS COMMODITY, OR THE
IMPORTER DOES NOT MEET THE REQUIREMENTS TO ENTER
MERCHANDISE UNDER THE TPL. THE PRODUCT IS
DUTIABLE AT THE COLUMN 1 RATE.
A. NAFTA QUALIFYING.
1) PRODUCTS THAT MEET THE SPECIFIC RULES AS SET
OUT IN ANNEX 401 OF THE AGREEMENT.
BELOW IS A SIMPLISTIC SUMMARY OF THE TYPE OF
PROCESSES REQUIRED FOR SOME OF THE MORE BASIC
PRODUCTS IN ORDER FOR THEM TO BE CONSIDERED NAFTA
QUALIFYING. THERE ARE EXCEPTIONS EVEN TO THESE
REQUIREMENTS, DEPENDING ON THE SPECIFIC TYPE OF
PRODUCT IT IS. FOR MORE SPECIFIC INFORMATION
REFER TO ANNEX 401 AND 300-B OF THE AGREEMENT, OR
REQUEST A WRITTEN RULING FROM THE OFFICE OF
REGULATIONS AND RULINGS.
A) YARN - GENERALLY, FIBER MUST ORIGINATE IN
A NAFTA COUNTRY IN ORDER TO QUALIFY FOR NAFTA
TREATMENT.
B) FABRIC - GENERALLY, YARN MUST ORIGINATE IN
A NAFTA COUNTRY IN ORDER TO QUALIFY FOR NAFTA
TREATMENT.
C) APPAREL - GENERALLY, YARN MUST ORIGINATE
IN A NAFTA COUNTRY IN ORDER TO QUALIFY FOR
NAFTA TREATMENT.
2) IN ORDER TO QUALIFY FOR NAFTA THE FILER MUST
DECLARE IT. THIS IS DONE BY PLACING THE PREFIX
"MX" IN FRONT OF THE HARMONIZED TARIFF SCHEDULE
(HTS) NUMBER 1-97 FOR GOODS OF MEXICAN ORIGIN AND
"CA" FOR GOODS OF CANADIAN ORIGIN WHEN THE
ENTRY\ENTRY SUMMARY IS FILED.
3) MEXICAN PRODUCTS ELIGIBLE FOR CLASSIFICATION
UNDER HTS NUMBER 9802.00.9000. THIS IS
MERCHANDISE THAT WOULD HAVE QUALIFIED FOR ENTRY
UNDER THE OLD "SPECIAL REGIME" (9802.00.8010),
EXCEPT IT IS NOT LIMITED TO SPECIFIC CATEGORIES,
BUT IS OPEN TO ALL TEXTILE PRODUCTS, AS LONG AS
U.S. FORMED FABRIC IS USED AND THIS FABRIC IS CUT
IN THE UNITED STATES. FOREIGN GREIGE FABRIC THAT
IS PRINTED AND DYED, THEN CUT IN THE UNITED STATES
DOES NOT, REPEAT, NOT QUALIFY FOR ENTRY UNDER THIS
HTS NUMBER. IMPORTERS WILL BE OBLIGATED TO KEEP
ON FILE PROOF THAT FABRIC IS U.S. FORMED (YARN
INTO FABRIC).
PRODUCTS CLASSIFIED UNDER 9802.00.9000 ARE FREE OF
DUTY, EVEN UPON THE VALUE ADDED IN MEXICO. THE
ITA-370P FORMS WILL NOT BE REQUIRED FOR
MERCHANDISE CLASSIFIED UNDER HTS NUMBER
9802.00.9000; HOWEVER ACCURATE RECORDS MUST BE
MAINTAINED TO SHOW THE AMOUNT OF CUT COMPONENTS
EXPORTED, AND THE FINISHED GARMENTS IMPORTED. IN
ADDITION, ALL THE OTHER REQUIREMENTS OF THE FORMER
SPECIAL REGIME REMAIN UNCHANGED, I.E., FINDINGS
AND TRIMMINGS OF FOREIGN ORIGIN DO NOT EXCEED 25
PERCENT OF THE COST OF THE COMPONENT OF THE
ASSEMBLED PRODUCT.
4) FOR IMPORTS OF CARPETING FROM MEXICO, AN
EXCEPTION EXISTS TO THE ELIGIBILITY REQUIREMENTS.
FOR MAN-MADE FIBER FELTED AND TUFTED CARPETS
(5703.20, 5703.30 OR 5704) FIBER MUST ORIGINATE IN
A NAFTA COUNTRY TO RECEIVE NAFTA TREATMENT.
5) FOR IMPORTS OF MAN-MADE FIBER SWEATERS FROM
MEXICO, AN EXCEPTION EXISTS TO THE ELIGIBILITY
REQUIREMENTS. IN MOST CASES, YARN MUST ORIGINATE
IN A NAFTA COUNTRY FOR APPAREL TO QUALIFY FOR
NAFTA TREATMENT. FOR MAN-MADE FIBER SWEATERS
(6110.30), THE FIBERS MUST ORIGINATE IN A NAFTA
COUNTRY TO RECEIVE NAFTA TREATMENT.
B. NAFTA QUALIFYING BASED ON A TARIFF PREFERENCE LEVEL
(TPL)
1) BOTH MEXICO AND CANADA WILL ISSUE A CERTIFICATE
OF ELIGIBILITY FOR TEXTILE ARTICLES TO BE ELIGIBLE
FOR TPLS. WITHOUT THIS CERTIFICATE OF ELIGIBILITY
NON-NAFTA QUALIFYING TEXTILE MERCHANDISE WILL BE
DUTIABLE AT THE COLUMN 1 RATE.
WHEN A CERTIFICATE OF ELIGIBILITY IS SUBMITTED
WITH THE ENTRY\ENTRY SUMMARY THE APPROPRIATE
CHAPTER 99 NUMBER OR 9802.00.8055, AS WELL AS THE
CERTIFICATE OF ELIGIBILITY NUMBER MUST APPEAR ON
THE CF 7501 IN COLUMN 34.
REFER TO QBT-93-121 FOR TEXTILE MERCHANDISE
SUBJECT TO ABSOLUTE QUOTA RESTRAINT LEVELS. VISAS
MAY BE REQUIRED FOR SOME NONQUALIFYING TEXTILE
CATEGORIES (SEE D) AND MUST BE SHOWN IN COLUMN 34
OF THE CF7501.
IN THOSE CASES WHERE BOTH AN ABSOLUTE QUOTA AND
TPL EXIST FOR MEXICO, THE CERTIFICATE OF
ELIGIBILITY MUST BE PRESENTED WITH THE ENTRY\ENTRY
SUMMARY, AS WELL AS THE VISAED COMMERCIAL INVOICE.
IN COLUMN 34, ONLY THE VISA NUMBER SHOULD APPEAR.
2) TPLS HAVE BEEN ESTABLISHED FOR APPAREL GOODS
CLASSIFIED IN CHAPTERS 61 AND 62 THAT ARE BOTH CUT
(OR KNIT TO SHAPE) AND SEWN OR OTHERWISE ASSEMBLED
IN MEXICO OR CANADA FROM FOREIGN FABRIC OR YARN.
3) TPLS HAVE BEEN ESTABLISHED FOR TEXTILE AND
APPAREL GOODS IN CHAPTERS 61, 62 AND 63 THAT ARE
SEWN OR OTHERWISE ASSEMBLED IN MEXICO UNDER HTS
NUMBER 9802.00.8055 (USED TO BE 9802.00.8060).
THIS IS FOR FOREIGN FABRIC CUT IN THE UNITED
STATES AND EXPORTED TO MEXICO FOR ASSEMBLY. IF A
TPL FILLS FOR THIS HTS NUMBER MERCHANDISE MUST
THEN BE ENTERED UNDER HTS 9802.00.8065.
TPLS CANNOT BE USED FOR THE FOLLOWING:
A) APPAREL GOODS IN CHAPTERS 61 AND 62 MADE
FROM BLUE DENIM FABRIC OF 200 GRAMS OR MORE
(5209.42, 5211.42, 5212.24.6020 AND
5514.32.0010). THESE PRODUCTS ARE NOT
ELIGIBLE FOR TARIFF PREFERENCE LEVELS AND
MUST BE ENTERED UNDER THE COLUMN 1 DUTY RATE.
B) APPAREL GOODS IN CHAPTERS 61 AND 62 MADE
FROM WOVEN OXFORD FABRIC OF AN AVERAGE YARN
NUMBER LESS THAN 135 METRIC NUMBER (5208.19,
5208.39, 5208.49, 5208.59, 5210.19, 5210.29,
5210.39, 5210.49, 5210.59, 5512.11, 5512.19,
5513.13, 5513.23, 5513.33 AND 5513.43).
THESE PRODUCTS ARE NOT ELIGIBLE FOR TARIFF
PREFERENCE LEVELS AND MUST BE ENTERED UNDER
THE COLUMN 1 DUTY RATE.
C) COTTON AND MAN-MADE FIBER UNDERWEAR
(6107.11, 6107.12, 6108.21, 6108.22) AND T-
SHIRTS, TANK TOPS AND SIMILAR APPAREL
COMPOSED CHIEFLY OF CIRCULAR KNIT FABRICS OF
A YARN NUMBER EQUAL TO OR LESS THAN 100
METRIC NUMBER (6109.10 AND 6109.90). THESE
PRODUCTS ARE NOT ELIGIBLE FOR TPLS AND MUST
BE ENTERED UNDER THE COLUMN 1 DUTY RATE.
D) MAN-MADE FIBER SWEATERS (6110.30) ARE NOT
ELIGIBLE FOR TPLS AND MUST BE ENTERED UNDER
THE COLUMN 1 DUTY RATE.
4) TPLS HAVE BEEN ESTABLISHED FOR COTTON OR MAN-
MADE FIBER FABRIC AND COTTON OR MAN-MADE FIBER
MADE-UP TEXTILE ARTICLES CLASSIFIED IN CHAPTERS
52-55, 58, 60 AND 63 THAT ARE WOVEN OR KNIT IN
MEXICO OR CANADA FROM FOREIGN SPUN YARN.
TPLS HAVE ALSO BEEN ESTABLISHED FOR TEXTILE
ARTICLES CLASSIFIED IN HTS NUMBER 9404.90 THAT ARE
FINISHED AND CUT AND SEWN OR OTHERWISE ASSEMBLED
FROM FOREIGN FABRICS (5208.11 - 5208.29, 5209.11 -
5209.29, 5210.11 - 5210.29, 5211.11 - 5211.29,
5212.11, 5212.12, 5212.21, 5212.22, 5407.41,
5407.51, 5407.71, 5407.81, 5407.91, 5408.21,
5408.31, 5512.11, 5512.21, 5512.91, 5513.11 -
5513.19, 5514.11 - 5514.19, 5516.11, 5516.21,
5516.31, 5516.41, 5516.91).
CANADA HAS BEEN GIVEN A SPECIAL PROVISION FOR
REPORTING TPLS THAT APPLY FOR FABRIC AND MADE-UP
TEXTILES.
A) FOR TEXTILE ARTICLES THAT ARE NOT
QUALIFYING BECAUSE CERTAIN NON-ORIGINATING
TEXTILE MATERIALS DO NOT UNDERGO THE
APPLICABLE CHANGE IN TARIFF CLASSIFICATION AS
SET OUT IN THE AGREEMENT, BUT WHERE SUCH
MATERIALS ARE 50 PERCENT OR LESS BY WEIGHT OF
THE MATERIALS OF THAT TEXTILE ARTICLE, ONLY
50 PERCENT OF THE SQUARE METER EQUIVALENT
(SME) IS TO BE CHARGED TO THE TPL. IF OVER
50 PERCENT, THEN 100 PERCENT OF THE SME WILL
BE CHARGED.
QUOTA WILL BE PROGRAMMED TO REPORT ONLY 50
PERCENT OF AN AMOUNT WHEN AN APPROPRIATE
CHAPTER 99 NUMBER IS SHOWN. THE FIELD
OFFICES AND THE IMPORTING COMMUNITY WILL
CONTINUE TO REPORT THE FULL QUANTITY ON THE
CF 7501.
5) TPLS HAVE BEEN ESTABLISHED FOR COTTON AND MAN-
MADE FIBER YARNS (5205 - 5207, 5509 - 5511) THAT
ARE SPUN IN CANADA OR MEXICO FROM FOREIGN FIBER
(5201 - 5203, 5501 - 5507).
C) NON-NAFTA QUALIFYING BECAUSE THE PRODUCTS DO NOT
MEET THE REQUIREMENTS AS SPECIFIED IN THE AGREEMENT AND
NO TPLS HAVE BEEN ESTABLISHED, OR THE IMPORTER DOES NOT
MEET THE REQUIREMENTS TO ENTER UNDER A TPL.
1) PRODUCTS THAT DO NOT QUALIFY FOR NAFTA
TREATMENT OR A TPL AND ARE PRODUCTS OF CANADA OR
MEXICO ARE DUTIABLE AT THE COLUMN 1 RATE.
2) PRODUCTS THAT MAY BE ELIGIBLE FOR A TPL, BUT A
CERTIFICATE OF ELIGIBILITY IS NOT PRESENTED WITH
THE ENTRY\ENTRY SUMMARY ARE DUTIABLE AT THE COLUMN
1 RATE.
D) QUOTA\VISA REQUIREMENTS
1) QUOTA\VISA REQUIREMENTS HAVE BEEN ESTABLISHED
FOR 21 DIFFERENT CATEGORY NUMBERS, COVERING 14
RESTRAINT LEVELS. THESE QUOTA\VISA REQUIREMENTS
ARE REQUIRED ONLY FOR GOODS THAT DO NOT QUALIFY
FOR NAFTA TREATMENT BECAUSE THEY DO NOT MEET THE
RULES OF ORIGIN AS SPECIFIED IN THE AGREEMENT.
MERCHANDISE THAT QUALIFIES FOR NAFTA TREATMENT
BECAUSE THEY QUALIFY FOR A TPL, AND MERCHANDISE
THAT DOESN'T QUALIFY FOR NAFTA TREATMENT ARE
SUBJECT TO QUOTA\VISA REQUIREMENTS, IF THEY FALL
WITHIN ONE OF THE CATEGORIES LISTED BELOW.
219 347\348\647\648
313 410
314 433
315 443
317 611
338\339\638\639 633
340\640 643
AN ELECTRONIC MESSAGE WILL BE POSTED ON THE
BULLETIN BOARD PROVIDING DETAILS FOR THIS NEW VISA
REQUIREMENT.
2) MERCHANDISE SUBJECT TO BOTH ABSOLUTE QUOTAS AND
TPLS FOR THE SAME LINE ITEM.
CURRENTLY, THE QUOTA SECTION IS UNABLE TO REPORT
TWO QUOTAS TO THE SAME HTS NUMBER (I.E., TPL AND
ABSOLUTE QUOTA TO THE SAME CHAPTER 1-97 HTS
NUMBER). UNTIL PROGRAMMING CAN BE COMPLETED TO
ALLOW FOR THIS, ABSOLUTE QUOTAS WILL BE REPORTED
AS NORMAL. COPIES OF THE CF7501 MARKED "TPL COPY"
WILL BE MAINTAINED BY THE TEAMS UNTIL THE PROGRAM
WILL PERMIT THIS ADDITIONAL CHARGE TO THE TPL.
THIS SHOULD ONLY BE DONE FOR THOSE HTS NUMBERS IN
WHICH BOTH A TPL AND ABSOLUTE QUOTA NEED TO BE
REPORTED(PLEASE REVIEW QBT-93-123 FOR FURTHER
INSTRUCTIONS ON REPORTING OF TPL). WHEN
PROGRAMMING IS COMPLETED (ESTIMATED TO BE AROUND
FEBRUARY) THE TPLS WILL BE REPORTED AT THAT TIME.
E) RESPONSES TO MOST FREQUENTLY ASKED QUESTIONS.
1) WILL THERE STILL BE QUOTAS ON ORIGINATING
TEXTILE AND APPAREL ARTICLES UNDER NAFTA?
NO.
2) WILL VISAS STILL BE REQUIRED FOR ORIGINATING
GOODS? NON-ORIGINATING GOODS?
VISAS WILL NOT BE REQUIRED FOR ORIGINATING GOODS.
VISAS WILL BE REQUIRED FOR NONORIGINATING GOODS
FOR THE FOLLOWING CATEGORIES.
219 347\348\647\648
313 410
314 433
315 443
317 611
338\339\638\639 633
340\640 643
3) HOW WILL SPECIAL REGIME GOODS WHICH HAVE BEEN
ACIDWASHED, PERMAPRESSED GOODS, ETC. BE TREATED
UNDER NAFTA?
THEY WILL BE CONSIDERED ORIGINATING AND BE FREE OF
DUTY, PROVIDED THEY MEET ALL THE REQUIREMENTS FOR
CLASSIFICATION UNDER HTS NUMBER 9802.00.9000.
4) WHAT DOCUMENTATION WILL BE REQUIRED FOR THESE
GOODS?
THE ITA 370-P FORM WILL NO LONGER BE REQUIRED,
HOWEVER IMPORTERS ARE ADVISED THAT THEY ARE
OBLIGATED TO KEEP RECORDS SHOWING THE USE OF
FABRIC FORMED IN THE U.S., I.E., INVOICE FROM A
MILL AND AFFIDAVIT STATING FABRIC IS FORMED IN THE
U.S. COMPLIANCE REVIEWS WILL STILL BE DONE TO
VERIFY COMPLIANCE.
5) WHAT CATEGORIES OF TEXTILE AND APPAREL ARTICLES
WILL BE SUBJECT TO TPLS AND WHAT ARE THE AMOUNTS
OF THOSE TPLS? WHAT DOCUMENTATION IS REQUIRED TO
GET A REDUCED RATE OF DUTY FOR TEXTILES UNDER A
TPL?
ALMOST ALL TYPES OF TEXTILE AND APPAREL ARTICLES
WILL BE ELIGIBLE FOR TPLS, WITH A FEW EXCEPTIONS.
A CERTIFICATE OF ELIGIBILITY ISSUED BY EITHER
CANADA OR MEXICO WILL BE REQUIRED UPON ENTRY
BEFORE THE PREFERRED DUTY RATE CAN BE CLAIMED.
THE AMOUNTS OF TPLS CAN BE FOUND IN THE AGREEMENT
UNDER SCHEDULE 6.B.1, 6.B.2 AND 6.B.3.
6) IF ORIGINATING GOODS ARE NO LONGER SUBJECT TO
QUOTAS, CAN IMPORTERS NOW FILE REGULAR ENTRIES FOR
MERCHANDISE THAT WAS FORMERLY SUBJECT TO
ENTRY\ENTRY SUMMARY (LIVE ENTRY) PROCEDURES?
THE DECISION ON WHETHER A LIVE ENTRY IS REQUIRED
NEEDS TO BE MADE BY THE LOCAL DISTRICT, BUT IF
MERCHANDISE IS NOT SUBJECT TO QUOTA\VISA
REQUIREMENTS OR TPLS, AN 01 TYPE ENTRY CODE IS
PERMITTED.
7) WHAT HAPPENS TO THE COTTON FEE UNDER NAFTA?
THE COTTON FEE STILL APPLIES.
8) WILL THE TEXTILE COUNTRY OF ORIGIN DECLARATION
STILL BE REQUIRED UNDER NAFTA?
YES. HOWEVER, FOR MERCHANDISE THAT IS CLAIMED AS
NAFTA QUALIFYING, THE TEXTILE DECLARATION MUST BE
SIGNED BY THE EXPORTER OR PRODUCER.
INFO: QUESTIONS REGARDING THIS TELEX MAY BE REFERRED TO THE
TEXTILE PRODUCTS BRANCH AT 202-927-0001 OR 202-927-
0705.
JANET L. LABUDA