[Federal Register Volume 63, Number 115 (Tuesday, June 16, 1998)]
[Notices]
[Pages 32911-32912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-15883]


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DEPARTMENT OF THE TREASURY

Customs Service


Procedures if the Generalized System of Preferences Program 
Expires

AGENCY: Customs Service, Treasury.

ACTION: General notice.

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SUMMARY: The Generalized System of Preferences (GSP) is a renewable 
preferential trade program that allows the eligible products of 
designated developing countries to directly enter the United States 
free of duty. The GSP is currently scheduled to expire at midnight on 
June 30, 1998, unless its provisions are extended by Congress. This 
document provides notice to importers that claims for duty-free 
treatment under the GSP may not be made for merchandise entered or 
withdrawn from a warehouse on or after July 1, 1998, if the program is 
not extended before that date. This document also sets forth mechanisms 
to facilitate refunds, should the GSP be renewed with retroactive 
effect.

DATES: The plan set forth in this document will become effective as of 
July 1, 1998, if Congress does not extend the GSP program before that 
date.

FOR FURTHER INFORMATION CONTACT: For specific questions relating to the 
Automated Commercial System: Arthur Versich, Office of Automated 
Commercial System, 703-921-7117.
    For general operational questions:

Formal entries--John Pierce, 202-927-1249;
Informal entries--Thomas Wygant, 202-927-1167;
Mail entries--Robert Woods, 202-927-1236;
Passenger claims--Michael Perron, 202-927-1325.

SUPPLEMENTARY INFORMATION:

Background

    Section 501 of the Trade Act of 1974 (the Act), as amended (19 
U.S.C. 2461), authorizes the President to establish a Generalized 
System of Preferences (GSP) to provide duty-free treatment for eligible 
articles imported directly from designated beneficiary countries. 
Beneficiary developing countries and articles eligible for duty-free 
treatment under the GSP are designated by the President by Presidential 
Proclamation in accordance with sections 502(a) and 503(a) of the Act 
(19 U.S.C. 2462(a) and 2463(a)). Pursuant to 19 U.S.C. 2465(a), as 
amended by section 981 of Public Law 105-34, 111 Stat. 902, duty-free 
treatment under the GSP is presently scheduled to expire on June 30, 
1998.
    Congress is currently considering whether to extend the GSP 
program. If Congress does not pass legislation renewing the GSP before 
midnight, June 30, 1998, no claims for duty-free treatment under the 
program will be allowed on entries made after that time. If legislation 
is enacted but does not become effective before the GSP expires, 
language may beincluded that could renew the GSP with retroactive 
effect back to the date of its present expiration.
    Recognizing the effect that renewing GSP duty treatment with 
retroactive effect has on both importers, who must request refunds of 
duties deposited, and Customs, which must liquidate or reliquidate 
eligible entries, Customs developed a mechanism to facilitate certain 
refunds. Set forth below is Customs plan that will be implemented on 
July 1, 1998, if the GSP has not been extended by that date.

Formal Entries

Claims--Duties must be deposited

    No claims for duty-free treatment under the GSP may be made for 
merchandise entered, or withdrawn from warehouse for consumption on or 
after July 1, 1998. Duties at the most-favored-nation rate must be 
deposited, or a claim may be made under another preferential program 
for which the merchandise may qualify (for example, the Andean Trade 
Preference Act or the Caribbean Basin Economic Recovery Act).
    When the GSP expires, Customs will employ an electronic mechanism 
that will allow the timely processing of refunds of duties deposited on 
eligible entries without requiring further action by the electronic 
filer. Entry summaries filed after June 30, 1998, with the Special 
Program Indicator (SPI) for the GSP (the letter ``A'') used as a prefix 
to the tariff number for all merchandise that would qualify for the GSP 
were the GSP still in effect will be accepted with deposited duties, 
and should the GSP be renewed with retroactive effect, the duties 
deposited with these entries will be refunded without further action by 
the filer. In effect, use of the SPI ``A'' will constitute an 
importer's request for a refund of duties paid for GSP line items 
should the GSP be renewed with retroactive effect.
    Although the Customs Automated Commercial System (ACS) will be 
reprogrammed to accept the use of the SPI ``A'' with the payment of 
duty, the Automated Broker Interface (ABI) with the ACS will not be so 
reprogrammed. Accordingly, those filers that utilize the ABI who wish 
to continue utilizing the

[[Page 32912]]

SPI ``A'' for purposes of receiving an automatic GSP refund should the 
GSP be renewed with retroactive effect will have to reprogram their 
software to accept the submission of estimated duties with the SPI 
``A'' designation on entries. (ABI filers who do not wish to reprogram 
their software will be required to request refunds in writing to the 
appropriate port director identifying the affected entry numbers if the 
GSP is renewed with retroactive effect). While reprogramming is 
strictly voluntary, continued use of the SPI ``A'' has some benefits: 
one already mentioned is that the filer will not have to request a 
refund of deposited duties in writing should the GSP be renewed with 
retroactive effect; another is that ACS will perform its usual edits on 
the information transmitted by the filer, thereby ensuring that GSP 
claims are for acceptable country/tariff combinations and eliminating 
the need for numerous statistical corrections.
    Importers may not use the SPI ``A'' if they intend to later claim 
drawback. To claim both this refund and drawback would be to request a 
refund in excess of duties actually deposited. Importers who are unsure 
as to whether they will claim drawback are advised not to use the SPI 
``A''. If the GSP is renewed with retroactive effect, and they have not 
yet claimed drawback, they may request a refund by writing to the port 
director at the port of entry. If the GSP is not renewed with 
retroactive effect, they will still have the option of filing a 
drawback entry.

Refunds

1. Automatic
    Should the GSP be renewed with retroactive effect, then Customs 
will liquidate or reliquidate all affected ABI entry summaries with a 
refund for the GSP line items. If an ABI entry summary was filed with 
the SPI ``A'', then no further action need be taken by the filer to 
request a refund.
2. Need for written request
    If an ABI entry summary was filed without the SPI ``A'', then the 
request for a refund must be in writing. Further, all non-ABI filers 
must request refunds in writing. Instructions on how to request a 
refund in writing will be issued if the GSP is renewed with retroactive 
effect.

Informal Entries

    Refunds on informal entries filed through the ABI with the SPI 
``A'' designation will be processed in accordance with the automatic 
refund procedure outlined above.

Baggage declarations and non-ABI informals

    When merchandise is presented for clearance, travelers and 
importers will be advised verbally or by a written notice that they may 
be eligible for a refund of GSP duties. Travelers/importers may write a 
statement directly on their Customs declarations (CF 6059B) or informal 
entries (CF 363) indicating their desire for a refund. Then should the 
GSP be renewed with retroactive effect, no further action need be taken 
by the importer to request a refund. Failure to request a refund at 
this time and in this manner does not operate to bar a written request 
in the future.

Mail entries

    Should the GSP be renewed with retroactive effect, those addressees 
who received GSP eligible merchandise (identified on the CF 3419A, 
(Mail Entry)) may be eligible for a refund of GSP duties and should 
submit a separate written claim for a refund. The request for the 
refund and a copy of the CF 3419A should be submitted to the 
appropriate International Mail Branch identified at the bottom right-
hand corner of the CF 3419A. (The copy of the CF 3419A must be included 
with the request, as the information contained on the form will be the 
only record of the GSP merchandise entered and whether the duties and 
fees were paid).

    Dated: June 10, 1998.
Louis E. Samenfink,
Acting Assistant Commissioner, Field Operations.
[FR Doc. 98-15883 Filed 6-15-98; 8:45 am]
BILLING CODE 4820-02-P