Expiration of the Generalized System of Preferences ("GSP")

The Generalized System of Preference ("GSP") is scheduled to expire on December 31, 2006 and it is uncertain if Congress will renew it before its expiration.  Once the expiration occurs, articles that were eligible for duty free treatment under the GSP will then be required to deposit U.S. Customs duties at the Normal-Trade-Relations ("NTR") rate, unless the articles qualifies under another preferential trade program (e.g.: NAFTA, Israel, Singapore, the Andean Trade Preference Act, the Caribbean Basin Economic Recovery Act).

For more information on other trade programs and duty rates, please visit the USITC’s website at:

Preferential Trade Programs: http://hotdocs.usitc.gov/docs/tata/hts/bychapter/0612_tocgn.htm
Tariff Schedule (duty rates): http://www.usitc.gov/tata/hts/bychapter/index.htm

Although it will be required to deposit duties at the Normal-Trade- Relations ("NTR") rate after its expiration, U.S. Customs will continue to accept entry summaries with the Special Program Indicator (SPI) "A" as a prefix to the tariff number.  A benefit of continuing to utilize the SPI "A" is that importers or brokers will not have to request in writing to Customs for a refund of the duties should it be renewed with retroactive benefits from the date of expiration. 

The GSP program currently provides for duty free treatment for only certain eligible articles imported directly from designated beneficiary developing countries.  These articles must also be the sum of (1) the cost or value of the materials produced in the beneficiary developing country or any two or more countries which are members of the same association of countries which is treated as one country, plus (2) the direct costs of processing operations performed in such beneficiary developing country or such member countries is not less than 35 percent of the appraised value of such article at the time of its entry.

 The following countries are designated beneficiary developing countries under the GSP:

 Important Note: Please note that any county indicated above may be excluded from the GSP program if it is determined that the country has become sufficiently developed or competitive, either as a whole or with respect to one or more of its products.  For more information on country eligibility and Competitive Need Limits (“CNL”), please visit the USTR’s website at: http://www.ustr.gov/Trade_Development/Preference_Programs/GSP/Section_Index.html.

 For GSP eligible articles imported this month, the time of entry is critical in determining if your shipment will be affected.  The time of entry will normally be:

 (1) The time the appropriate Customs officer authorizes the release of the merchandise or any part of the merchandise covered by the entry documentation, or

(2) The time the entry documentation is filed, if requested by the importer on the entry documentation at the time of filing, and the merchandise already has arrived within the port limits; or

(3) The time the merchandise arrives within the port limits, if the entry documentation is submitted before arrival, and if requested by the importer on the entry documentation at the time of submission.

Note: The effective time of entry for merchandise which is not subject to a quantitative or tariff-rate quota and which is covered by an entry for immediate transportation ("I.T.") made at the port of original importation, if entered for consumption at the port designated by the consignee or his agent in such transportation entry without having been taken into custody by the port director for general order, shall be subject to the rates in effect when the I.T. entry was accepted at the port of original importation.

At this time, for any shipments that may be affected by this change, we would like to request that documentation is presented to us as earliest as possible in order to avoid the payment of duties at the Normal-Trade-Relations ("NTR) rate.

Once we receive updated information on the renewal status of this program, another notification will be sent out.  

For further details concerning the above referenced information, please consult with your local James J. Boyle & Co. office listed below.

Sincerely,
James J. Boyle & Co.
Monterey Park Office
Greg Kodama
President

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