By James Sawyer and Beata Spuhler

Further to our July 18, 2014, client alert, United States Customs and Border Protection’s (CBP) Office of International Trade has now formally published a guidance document limiting post-importation claims for certain preferential trade programs to a Post Entry Amendment (PEA) or Post Summary Correction (PSC).

Notwithstanding the agency’s longstanding prior practice and past administrative and legal precedent, according to CBP’s revised position importers can no longer claim duty preferences via the Protest mechanism under 19 U.S.C. § 1514 for any of the following preferential trade programs or Free Trade Agreements (FTA):

  • US-Australia FTA
  • US-Bahrain FTA
  • US-Israel FTA
  • US-Jordan FTA
  • US-Morocco FTA
  • US-Singapore FTA
  • AGOA
  • Civil Aircraft Agreement
  • Generalized System of Preferences
  • Insular Possessions
  • Uruguay Round Concessions on Intermediate Dyes and Chemicals
  • Pharmaceutical Appendix

While CBP’s change in practice remains questionable, importers should understand the new policy change and take steps to accelerate the qualification and claim for duty preferences under any of the above programs at the time of entry or prior to liquidation. In other words, under the new policy, the only way importers can benefit from duty preference claims for the above-referenced programs will be to make such claims either (1) at the time of entry or (2) by filing a PEA/PSC prior to liquidation. CBP has specified that protests filed to make the initial post-importation claims for these duty preference programs will be denied by CBP with a notation “rejected as non-protestable,” based upon the agency’s interpretation of recent Court of International Trade decisions.

Those remaining FTAs that include a specific mechanism for making post-importation claims pursuant to 19 U.S.C. § 1520(d) will continue to be processed by making the post-entry duty preference claim within one year of the entry date. These FTAs include NAFTA, US-Chile FTA, CAFTA-DR, US-Peru FTA, US-Korea FTA, US-Colombia FTA, US-Panama FTA and US-Oman FTA.

If you have any questions regarding CBP’s new policy, or have significant volume of liquidated entries (not more than 180 days old) that you have subsequently determined are eligible for any of the above FTAs or duty preference programs, please contact one of the authors listed above or any other member of Drinker Biddle’s Customs and International Trade Team.

Source: Client Alert