textile and apparel preference rules l.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Textile and Apparel Preference Rules PowerPoint Presentation
Download Presentation
Textile and Apparel Preference Rules

Loading in 2 Seconds...

play fullscreen
1 / 113

Textile and Apparel Preference Rules - PowerPoint PPT Presentation


  • 459 Views
  • Uploaded on

Textile and Apparel Preference Rules. U.S. Customs & Border Protection. U.S.-Morocco FTA Technical Seminar: Textile & Apparel Rules . 14-18 March 2005 Casablanca, Morocco. Overview. U.S. Customs & Border Protection U.S. Duty Rates & the FTA Brief Textile Lesson Fiber, Yarn & Fabric

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Textile and Apparel Preference Rules' - salena


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
textile and apparel preference rules

Textile and Apparel Preference Rules

U.S. Customs & Border Protection

slide3

Overview

  • U.S. Customs & Border Protection
  • U.S. Duty Rates & the FTA
  • Brief Textile Lesson
    • Fiber, Yarn & Fabric
  • Concepts Defined
  • FTA Preference Rules
    • Tariff Shift Rule
  • Compliance & Enforcement
  • Resources
slide4

U.S. Customs & Border Protection (CBP)

  • On March 1, 2003, the U.S. Customs Service became part of the Bureau of Customs and Border Protection (CBP) within the Department of Homeland Security.
  • CBP has many roles, the priority mission is to protect our borders.
      • Regulating & Facilitating International Trade
      • Collecting Import Duties
      • Enforcing U.S. Trade Laws
      • The U.S. has over 300 Ports of Entry
slide5

Imports After Quota Expire

  • Effective for exports on/after 1 January 2005, all textiles and wearing apparel from World Trade Organization (WTO) members are no longer subject to quota.
    • Possible Chinese Safeguards
slide6

Imports WITHOUT Quotas

Without quotas, competition will be fierce and the social/political aspect is something to watch!

  • “More than 80% of our export earnings are coming from this [apparel and textile] sector.” - Farkul Ahsan, Bangladesh Embassy official.
  • Where Free Trade Hurts: The end of textile quotas makes economic sense, but the social disruption will be huge.(Business Week, Dec. 15, 2003)
  • Countdown to 2005: Developing Nations Fear Millions of Job Losses(WWD, Feb. 3, 2004)
slide7

Competition

  • Without quotas, textile and apparel manufacturers will be searching for a Competitive Advantage.
  • Without quotas, price will play a major factor in determining who has a Competitive Advantage.
slide8

Purpose of an FTA?

  • What is the Purpose of an FTA? Remember this is a Free Trade AGREEMENT.
  • In all agreements there are negotiations - and all parties make concessions.
  • The intent of an FTA is that both parties benefit from that agreement.
slide9

Three Possible Duty Rates

  • Products of Morocco can be eligible for three different duty rates depending on the inputs (raw materials) and production.
    • (1) Non-FTA products are subject to Regular Duties
    • FTA products are (2) Duty Free or (3) Reduced Duties

www.ustr.gov

slide10

FTA Duty Reductions

  • For the majority of qualifying textile products, tariffs will be eliminated over six (6) years. (see Annex IV – Tariff Elimination)
  • However, immediate, duty-free treatment will be provided to selected items – up to designated quantities.
    • Annex 4-B: Tariff Rate Quotas for originating goods. Quantities above the levels in Annex 4-B will immediately be eligible for the reduced rates listed in Annex IV – Tariff Elimination.
slide11

FTA Duty Reductions

  • Upon full implementation of the U.S.-Morocco Free Trade Agreement, ALL originating textiles and wearing apparel will be duty free.
slide13

Average U.S. Duty Rates

  • Although the average trade-weighted duty rate for all U.S. imports is less than 2%, U.S. duty rates on textiles and apparel remain high.

Product Average Duty FTA Rate*

  • Yarn 8% 0%
  • Fabric 10% 0%
  • Made-Up Articles 10% 0%
  • Apparel 16% 0%

*When fully implemented

slide14

“Originating” Goods

  • An “Originating” good meets the applicable FTA preference rule of origin.
  • A “Non-Originating” good does NOT meet the applicable preference rule of origin.
slide16

Example of High U.S. Duty

  • Nylon/Spandex Knit Top HTS 6109.90.10
  • Non-FTA Rate = 32%
  • FTA Duty Rate = 0% (free)
slide17

Example of High U.S. Duty

  • Cotton Knit Shirt HTS 6105.10.00
  • Non-FTA Rate = 19.7%
  • FTA Duty Rate = 0% (free)
slide18

Example of High U.S. Duty

  • Cotton Trousers = 16.6%
    • Men’s 6203.42.4015
    • Women's 6204.62.4020
  • MMF Trousers = 27.9%
    • Men’s 6203.43.4010
    • Women’s 6204.63.3510
  • FTA Duty Rate = 0% (free)
slide19

U.S.- Morocco FTA

Chapter 4 - Textiles and Apparel

Articles:

4.1 - Tariff Elimination

4.3 - Rules of Origin and Related Matters

4.4 - Customs and Administrative Cooperation

Annex 4-A - Preferential Rules of Origin (a.k.a. Tariff Shift Rules)

Annex 4-B - Tariff Rate Quotas on Apparel Goods

slide20

FTA Preference Rules

  • In most cases, a good must be “more than” a product of Morocco, it must also meet the FTA preference rule of origin.
slide21

Preferential Rule of Origin

  • Is this “Originating” fabric?
slide22

FTA Originating Product

Annex 4-A(1)(i):

“each of the non-originating materials used in the production of the good undergoes an applicable change in tariff classification specified in this Annex as a result of production occurring entirely in the territory of one or both of the Parties…”

slide23

Harmonized Tariff Schedule

Know the

HTS Number!

U.S. Harmonized Tariff Schedule: www.usitc.gov

slide24

Harmonized Tariff Schedule

  • The Harmonized Tariff Schedule (HTS) shows the applicable duty rate.
  • It also shows if the item qualifies for various trade preference programs
  • Just like classification, always look at the rule for the finished product.

www.usitc.gov

slide25

Market Analysis

  • Harmonized Tariff Schedule
    • U.S. Duty Rates
    • Other Preference Programs
  • Quotas
    • Non-WTO Members
    • Chinese Safeguards
  • U.S. Import Data
    • U.S. Demand for Imported Products
slide26

Brief Textile Lesson

  • What is a textile product?
slide27

Textile Manufacturing

  • Fiber…..Yarn…..Fabric…..
slide28

Fiber

  • Fiber
    • staple fibers
    • filament fibers
slide29

Yarn

  • Yarn
    • single
    • plied
slide30

Fabric

  • Fabric
    • woven
    • knit
    • non-woven
slide31

Concepts Defined

  • Fiber Forward
  • Yarn Forward
  • Fabric Forward

The textile and apparel preference rules are very similar for U.S. Free Trade Agreements with Morocco, Bahrain, the NAFTA, Singapore, Chile, and Australia.

slide32

Fiber Forward

  • Fiber Forward requires U.S. and/or Morocco origin fiber, and all operations forward.

Forward

Fiber

slide33

Yarn Forward

  • Yarn Forward requires U.S. and/or Morocco origin yarn, and all operations forward, but the fiber may originate outside the U.S. and Morocco.

Forward

Yarn

slide34

Fabric Forward

  • Fabric Forward requires U.S. and/or Morocco origin fabric, and all operations forward, but the fibers and yarns may originate outside the U.S. and Morocco.

Forward

Fabric

slide35

FTA Preference Rules

U.S.-Morocco FTA Preference Rules

  • Yarn
  • Fabric
  • Made-up Articles
  • Apparel

The “General” Rule

slide36

FTA Rules

  • Reminder: Always look up the Harmonized Tariff Schedule (HTS) number for the finished product that will be exported to the United States.
  • It is important to know the HTS number for the products you produce!
slide37

FTA Rule for Yarn

  • The preference rule for yarn is fiber forward, except:
    • spun yarns of silk, wool, and vegetable fibers (other than cotton) may be spun with fibers originating outside US/Morocco.
    • filament yarns must be formed (extruded) in Morocco or the United States.
slide38

FTA Rule for Fabric

  • The preference rule for fabric is yarn forward, except:
    • fiber forward:
      • cotton & man-made fiber knit fabric
      • man-made fiber non-woven fabric
      • certain specialty fabrics
    • fabric forward:
      • silk & linen fabrics
      • coated fabrics, but with exceptions
slide39

Rule for Made-Up Articles

  • The preference rule for made-up articles is yarn forward, except:
    • fabric forward:
      • silk & linen articles
      • man-made fiber luggage
      • certain other products

Examples of Made-Up Articles: Towels, Bedding, Carpets, Luggage, etc.

slide40

FTA Rule for Apparel

  • The preference rule for apparel is yarn forward, exceptions include:
    • cut & sew rule for:
      • Certain apparel made from specific fabrics
      • Apparel made of silk fabric
      • Apparel made of linen fabric
      • Apparel made of fabrics in “short supply”
slide41

Tariff Shift Rule

Tariff Shift Rule

  • International Nomenclature (HTS)
  • WTO Consistent
  • Transparent
  • Not Subjective (“Substantial Transformation”)
  • Unlike “Value Added” Rules
slide42
50 - Silk

51 - Wool

52 - Cotton

53 - Other Vegetable

54 - Man-Made Filaments

55 - Man-Made Staple

56 - Wadding, etc

57 - Carpets, etc

58 - Special Fabrics

59 - Coated Fabrics

60 - Knit Fabrics

61 - Knit Apparel

62 - Woven Apparel

63 - Made-Up Articles

Harmonized Tariff Schedule

Section XI - Textile and Textile Articles

U.S. Harmonized Tariff Schedule: www.usitc.gov

slide43

Tariff Shift Rule

A change to heading ####, from any other heading, except ####, #### through ####, and ####.

Example for Cotton Yarn (Heading 5205): A change to headings 5201 through 5207 from any other chapter, except from headings 5401 through 5405, or 5501 through 5507.

slide44

Preference Rule for Yarn

Remember that the preference rule for yarn is “Fiber Forward”

Therefore the fibers must originate in a preference country.

slide45

Example: Cotton Yarn (5205)

A change to headings 5201 through 5207 [cotton yarn] from any other chapter*, except from headings 5401 through 5405 [man-made filament fibers], or 5501 through 5507 [man-made staple fibers].

* since cotton fibers are classified in chapter 52,foreign fibers may not be used.

slide46

Example: Cotton Yarn (5205)

Rule as written...

A change to headings 5201 through 5207 from any other chapter, except from headings 5401 through 5405, or 5501 through 5507.

Or, you can say...

A change to cotton yarn from any other chapter, except from man-made fibers.

slide47

Example: Cotton Yarn (5205)

  • You must use Morocco and/or U.S. Cotton and Man-Made Fibers.
  • However, all other fibers may be foreign…
slide48

Blended Fibers

  • There are always exceptions….
  • For example, if you have a blended fiber yarn, 65% Cotton and 35% Wool, the wool fibers do NOT have to be a product of Morocco or the United States.
slide49

Preference Rule Summary

Textile Product “General” Rule

Yarn Fiber Forward

Fabric Yarn Forward

Made-up Articles Yarn Forward

Apparel Yarn Forward

There are exceptions to every rule!

slide50

U.S. - Morocco FTA

  • Preferential treatment for certain textiles and apparel

Advanced Lesson

u s morocco fta
U.S. - Morocco FTA
  • Preferential Rules of Origin
    • Annex 4-A of the FTA (Textiles & Apparel)
    • Annex 4-B: Tariff Rate Quotas
  • Keep in mind that most textile and apparel products must be “more than” a product of Morocco to qualify for the FTA preferential treatment.
slide52

General Rule for Yarn

  • “Fiber Forward”
    • Fibers must originate in one or both of the Parties
    • Yarn must be formed in a Party
slide53

Example 1 - Cotton Yarn

  • Raw Cotton (5201) is grown in Egypt and exported to Morocco
  • Formed into Cotton Yarn (5205) in Morocco
  • Cotton Yarn (5205) exported to U.S.
  • Origin? Eligible for FTA Preference?
slide54

Example 1 - Cotton Yarn

Fiber Yarn Fabric Cut & Sew

Egypt Morocco

Fiber Forward Rule

slide55

Example 1 - Cotton Yarn

A change to headings 5201 through 5207 [cotton yarn] from any other chapter*, except from headings 5401 through 5405 [man-made filament fibers], or 5501 through 5507 [man-made staple fibers].

* Since cotton fibers are classified in chapter 52,foreign fibers may not be used.

slide56

General Rule for Woven Fabric

  • “Yarn Forward”
    • Yarn and Fabric formation must occur in one or both of the Parties
slide57

Example 2 - Woven MMF Fabric

  • Raw Cotton (5201) produced in China and exported to Morocco
  • Polyester Staple Fiber (5503) produced in Japan and exported to Morocco
  • Cotton and Polyester further processed, then blended and spun into a 70% Polyester/30% Cotton Yarn (5509) in Morocco.
  • Polyester/Cotton Yarn woven into Oxford Cloth fabric (5512) in Morocco
  • The Oxford Cloth (5512) is exported to the U.S.
  • Origin? Eligible for FTA Preference?
slide58

Example 2 -Woven MMF Fabric

Fiber Yarn Fabric Cut & Sew

China Morocco Morocco

Japan

Yarn Forward Rule

slide59

Example 2 -Woven MMF Fabric

  • A change to heading 5512 through 5516 from any heading outside that group, except from heading 5106 through 5110, 5205 through 5206, 5401 through 5404 or 5505 through 5510.
    • (remember, the general preference rule for fabric is “Yarn Forward”)
slide60

Example 2 -Woven MMF Fabric

  • A change to heading 5512 through 5516 from any heading outside that group, except from heading 5106 through 5110 [wool yarn], 5205 through 5206 [cotton yarn], 5401 through 5404 [man-made filament yarn] or 5505 through 5510 [man-made staple yarn].
  • Therefore all wool, cotton and man-made fiber yarns must be formed in Morocco and/or the U.S., but fibers may come from anyplace.
slide61

General Rule for Knit Fabric

  • “Fiber Forward”
    • Fiber, Yarn and Fabric formation must occur in one or both of the Parties
slide62

General Rule for Apparel

Made in Morocco

  • “Yarn Forward”
    • Yarn, Fabric, and Apparel formation must occur in one or both of the Parties
slide63

Exceptions to the Rule...

  • Not all items follow the yarn-forward rule.
  • Some apparel rules have an easier “cut-and-sew” rule, including:
    • 6108.21 Certain Cotton Underwear
    • 6108.31 Certain Cotton Pajamas
    • Woven apparel made of “short supply” yarns and/or fabrics (Chapter 62 Rule 2)
  • Built into the Tariff Shift Rules (Annex 4-A)
slide64

Tariff Rate Quotas

Annex 4-B: Tariff Rate Quotas

  • Although duty rates will be eliminated within 5 years of the implementation, for certain originating goods listed in Annex 4-B, the duty rate will be zero (0%) for a specified quantity of goods.
  • Excess quantities are eligible for reduced duties (Article 4.1.7)
  • Beginning in year six (6), all goods described in Annex 4-B will be duty-free.
slide65

Component that Determines the Tariff Classification

  • For purposes of determining the origin of a good of Chapters 61 - 63, the rule applicable to that good shall only apply to the component that determines the tariff classification of the good and such component must satisfy the tariff change requirements….
    • Chapter 61, Chapter Rule 2
    • Chapter 62, Chapter Rule 3
    • Chapter 63, Chapter Rule 1
slide66

General Rule for Apparel

  • The tariff shift rule only applies to the component that determines the tariff classification
  • There are a few exceptions, but in most cases, you are not concerned about the origin of all other fabrics.
slide67

General Rule for Apparel

  • What is the component that determines the tariff classification?
slide68

General Rule for Apparel

  • What is the component that determines the tariff classification?
slide69

General Rule for Apparel

  • What is the component that determines the tariff classification?
slide70

Example 3 - Pants (Trousers)

  • Raw Cotton (5201) and Polyester filament fibers (5503) are produced in the U.S.
  • Cotton and Polyester fibers are combined and spun into a 80% Cotton/20% Polyester yarn (5206) in the U.S.
  • Cotton/Polyester Yarn is woven into Twill Fabric (5210) in the U.S. and exported to Morocco
  • Twill Fabric cut and sewn into women’s cotton pants (6204.62) in Morocco and exported to the U.S.
  • Origin? Eligible for FTA Preference?
slide71

Example 3 - Pants(Trousers)

Fiber Yarn Fabric Cut & Sew

U.S. U.S. U.S. Morocco

Yarn Forward Rule

slide72

Example 3 - Pants(Trousers)

  • A change to subheadings 6204.61 through 6204.69 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, Chapter 54, or headings 5508 through 5516, 5801 through 5802 or 6001 through 6006, provided that the good is both cut and sewn or otherwise assembled in the territory of on or both of the Parties.
slide73

Example 3 - Pants(Trousers)

  • A change to subheadings 6204.61 through 6204.69 from any other chapter, except from headings 5106 through 5113[wool yarn/fabric], 5204 through 5212 [cotton yarn/fabric], 5307 through 5308 or 5310 through 5311 [certain yarns/fabrics (jute)], Chapter 54 [man-made fiber filament yarn/fabric], or headings 5508 through 5516 [man-made fiber staple yarn/fabric], 5801 through 5802 [certain specialty fabrics] or 6001 through 6006 [knit fabric], provided ....
slide74

Example 3 - Pants(Trousers)

  • Therefore, all wool, cotton and man-made fiber yarns and fabric must be produced in the U.S. and/or Morocco.
  • However, this means the trousers could be produced with foreign Silk fabric (5007), or from Linen (5309), and the garment will still receive FTA treatment.
slide75

Special Rules: Visible Lining

  • Exception to the Rule: For certain apparel, certain visible lining fabrics must be formed from yarn and finished in the territory of a Party.
    • Men’s and women’s suits & suit-type jackets, skirts, overcoats, anoraks, windbreakers, & similar articles
slide76

Example 4 - Visible Lining

  • 100% Cashmere Yarn (5109) formed in the U.S. and exported to Morocco
  • Cashmere Yarn woven into fabric (5112) in Morocco
  • 100% Rayon Fabric (5408.22.90) woven in Morocco of filament yarn produced in Taiwan
  • All fabric cut and sewn in Morocco, made into a Men’s Cashmere Overcoat with Rayon Lining (6201.11) and exported to the U.S.
  • Origin? Eligible for FTA Preference?
slide77

Example 4 - Visible Lining

Fiber Yarn Fabric Cut & Sew

? U.S. Morocco Morocco

Taiwan Morocco Morocco

Yarn Forward Rule

Fabric Forward Rule

Visible Lining Fabric

slide78

Example 4 - Visible Lining

  • 6201.11: This is the same “yarn forward” rule as used in example 3, but it also states….
  • …. Provided that any visible lining material contained in the apparel article satisfies the requirements of Chapter Rule 1 for Chapter 62.
  • …visible lining material in certain men’s and women’s garments must be formed from yarn and finished in the territory of a Party.
slide79

Special Rules: De Minimis

  • Article 4.3.7 of the Agreement
    • Rule allows for the use of non-originating Fibers and Yarns in the component that determines the tariff classification, up to 7% by weight of the total weight of the component.
      • Exception for Elastomeric Yarns

Fiber

Yarn

slide80

De Minimis

  • If the stripes on this shirt are composed of foreign yarns, the shirt would still qualify as an originating good, as long as the yarns weigh not more than 7%.
slide81

Example 5 - De Minimis

  • Raw Canadian Wool (5101) formed into Wool Yarn (5107) in the U.S. and exported to Morocco
  • U.S. Wool Yarn woven into Fabric (5112) in Morocco
  • Fabric incorporates as a Pin-Stripe a Rayon Filament Yarn formed in Malaysia (Comprises 5% of the fabric by weight)
  • Fabric cut and sewn in Morocco into Men’s Suit Coats (6203.31)
  • Suit Coats exported to the U.S.
  • Origin? Eligible for FTA Preference?
  • What if Jacket had a Visible Lining?
slide82

Example 5 - De Minimis

Fiber Yarn Fabric Cut & Sew

Canada U.S. Morocco Morocco

Malaysia Morocco Morocco

Yarn Forward Rule

Yarn Not More than 7%

slide83

Treatment of Sets

  • Article 4.3.8: Textile or Apparel goods cannot be an originating set* unless:
    • each good in the set is originating, or
    • the non-originating goods in the set do not exceed 10% of the value of the set.
  • There are not many textile or apparel sets.

* “Set”is defined in General Rule of Interpretation (GRI) 3 of the Harmonized System

slide84

Tariff Preference Levels

  • Tariff Preference Levels (TPL) are a major exception to the Tariff Shift Rules.
  • TPLs allow for the use of non-originating materials, and although the finished product is not an “originating” product under the FTA, it is eligible for preferential treatment as if it were an originating product!
  • This provision is limited.
slide85

Tariff Preference Levels (TPL)

Article 4.3.9-14: TPLs for Non-Originating:

  • Fabric of Chapters 51, 52, 54, 55, 58 and 60.
  • Apparel of Chapters 61 and 62.
slide86

Tariff Preference Levels

  • Non-originating Fabric and Apparel goods entered under the TPL are eligible for duty-free access up to a limited amount.
  • The TPL is only applicable for the first 10 years of the free trade agreement.
  • In year 11 of the agreement, the TPL is eliminated, and non-originating goods are subject to duty. (Exception is eliminated.)
slide87

Tariff Preference Levels

Quantity in Square Meter Equivalents

Years 1-4: 30,000,000

Year 5: 25,714,000

Year 6: 21,428,000

Year 7: 17,142,000

Year 8: 12,856,000

Year 9: 8,571,000

Year 10: 4,285,000

Year 11: -0-

slide88

Tariff Preference Levels

  • The fabric and apparel goods shall receive preferential tariff treatment, regardless of the origin of the fiber, yarn or fabric used to produce the goods.
  • Must meet other FTA rules such as, for garments, the fabric must be cut and sewn in an FTA party.
slide89

Example 6 - Tariff Preference Levels

  • Knit Cotton Fabric (6005) is produced in Sri Lanka and exported to Morocco
  • Fabric cut and sewn into Women’s knit tops (6110.20) in Morocco
  • Exported to the U.S.
  • Origin? Eligible for FTA Preference?
slide90

Example 6 - TPL for Apparel

Fiber Yarn Fabric Cut & Sew

? ? Sri Lanka Morocco

Yarn Forward Rule

TPL Rule

But...

slide91

TPL - WARNING!

  • “… from fabric or yarn produced or obtained from outside the territory of a Party, regardless of the origin…”
  • Knit-to-Shape components are not considered “fabric” and therefore garments containing them do NOT qualify for the TPL!
slide92

Sub-Saharan African Cotton

Article 4.3.15:

  • TPL for Yarn and Knit Fabric containing Cotton Fibers from designated least-developed sub-Saharan African countries.
  • Only Yarn and Knit Fabric have a “fiber forward” preference rule of origin.
  • Non-Originating Yarn and Knit Fabric containing Cotton Fibers from certain sub-Saharan African countries, are eligible for duty free treatment.
slide93

Sub-Saharan African Cotton

  • Bulletin Officiel, No. 4861 – 6 chaoual 1421 (1.1.2001), Exoneration du droit d’importation en faveur des produits originaires et en provenance de certains pays d’Afrique.
  • Limited to 1,067,257 kilograms annually.
  • This provision does not expire.
slide94

Keys to Exercises

  • Example 1: Origin is Morocco; Not eligible for preference because the Egyptian cotton does not satisfy tariff shift rule for 5205.
  • Example 2: Origin is Morocco; Eligible for preference. It meets the tariff shift rule for 5512.
  • Example 3: Origin is Morocco; Eligible for preference. Only has to meet the yarn forward rule to satisfy tariff shift rule for 6204.62. (fibers could be foreign)
  • Example 4: Origin is Morocco; Eligible for preference. Both the tariff shift rule and the visible lining rule for 6201.11 is satisfied.
slide95

Keys to Exercises

  • Example 5: Origin is Morocco; Eligible for preference as the tariff shift rule for 6203.31 is satisfied. Rayon yarn meets de minimis levels. If it had a lining, it would have to meet the visible lining rule.
  • Example 6: Origin is Morocco; Eligible for preference under TPL.

A+

slide97

Compliance and Enforcement

  • Under the U.S.-Morocco FTA, certain textiles and apparel qualify for duty-free entry.
  • Both Governments want this agreement to benefit those that comply with terms of the agreement.
slide98

Customs Cooperation

  • Article 4.4 of the U.S.-Morocco FTA has strong Customs Cooperation provisions.
  • Allows for the joint (Morocco/U.S.) verification of FTA preference claims.
slide99

Customs Cooperation

  • Article 4.4.2: If requested by the United States, Morocco shall verify a claim of origin. If requested by Morocco, the United States shall verify a claim of origin.
slide100

Customs Cooperation

  • Article 4.4.4: Each party shall permit the other to assist in a verification, after notifying the other party.
  • Article 4.4.5: Each party shall provide the other information or documents.
slide101

Customs Cooperation

  • Article 4.4.6: Each party may take appropriate action, including suspending preferential tariff treatment to ANY textile or apparel good exported or produced by a company if there is reasonable suspicion.
slide102

Customs Cooperation

  • Article 4.4.7: The party conducting the verification shall provide a written report.
  • Article 4.4.10: The parties shall consult to resolve any technical or interpretive difficulties or to discuss ways to improve cooperation.
slide103

Compliance

  • In order for the U.S. importer to receive preferential duty, they must make a declaration to U.S. Customs and Border Protection (CBP).
  • CBP uses the principles of “Informed Compliance.”
slide104

Notices to the Public

www.cbp.gov

  • CBP publishes on the Internet, guidance to the importing community, including implementation information on Free Trade Agreements.
slide105

Binding Rulings from CBP

Interested Parties may request a (FREE) Binding Ruling from CBP!

  • Classification under the HTS
  • FTA Eligibility
slide106

Binding Rulings from CBP

Please send letter, sample and/or detailed description to:

Office of International Trade

Regulations and Rulings

U.S. Customs and Border Protection

1300 Pennsylvania Ave, NW

Washington, DC 20229 USA

slide107

Introducing “eRulings”

  • Ruling requests may now be submitted over the Internet via “eRuling”.
  • Details on www.cbp.gov

Then link to:

          • import
          • rulings
slide108

Binding Rulings - CROSS

  • Rulings issued to all parties are located on the Customs Ruling Online Search System, or “CROSS”.

www.cbp.gov

Then link to:

          • import
          • rulings
          • CROSS
slide109

CBP Publication

Customs & Border Protection publication:

  • Importing into the United States
    • Designed for the Novice Importer
    • Classification and Valuation
    • Invoice Requirements
    • Marking Requirements
    • Customs Brokers
  • www.cbp.gov/xp/cgov/toolbox/publications
slide110

CBP Publications

  • What Every Member of the Trade Community Should Know About:
    • Apparel Terminology
    • Fiber Trade Names & Generic Terms
    • Fibers & Yarns: Construction & Class.
    • NAFTA for Textile Articles
    • Ribbons & Trimmings
    • Textile & Apparel Rules of Origin
  • www.cbp.gov/xp/cgov/toolbox/publications
slide111

Internet Resources

U.S. Government Internet Resources:

  • Rules of Origin & Rulings www.cbp.gov
  • Textile Trade Data otexa.ita.doc.gov
  • Trade Agreements www.ustr.gov
  • Duty Rates www.usitc.gov
  • Labeling www.ftc.gov
slide112

Disclaimer

  • This presentation is simply a brief overview of the preference rules for textiles and apparel. The presentation attempts to show the “general rule” for major products, but it does not include most exceptions to the rule. Interested parties may consider requesting a binding ruling from U.S. Customs & Border Protection prior to exporting to the United States.
slide113

Conclusion

  • It may sound difficult at first, but once you understand the concepts, the rules for most products are easy to understand.
  • The benefits are worth the trouble of compliance.