19. Andean Trade Preference Act (ATPA)/

 

19. Andean Trade Preference Act (ATPA)/ 

Andean Trade Promotion and Drug Eradication Act (ATPDEA) 

The Andean Trade Preference Act (ATPA) provides for the duty-free entry of certain  merchandise from designated beneficiary countries. The United States enacted ATPA into  law on December 4, 1991, and it expired on December 4, 2001. When the Trade Act of 2002  became law on December 4, 2001, it renewed ATPA through December 31, 2006, and  introduced the new Andean Trade Promotion and Drug Eradication Act (ATPDEA)  provision. ATPDEA expanded some trade benefits for textiles from ATPA beneficiary  countries. 

Beneficiary Countries 

The following countries have been designated as ATPA/ATPDEA beneficiary countries:   Bolivia Colombia Ecuador Peru 

Eligible Items 

When ATPA was renewed, portions of the Act were expanded into ATPDEA, which  extends preferential treatment for merchandise previously excluded by ATPA. These include  certain leather materials, watches and watch parts, petroleum and petroleum derivatives, tuna  packaged in foil or other flexible packages, some footwear, and certain textile and apparel  articles. 

However, many products remain excluded from receiving preferential treatment,  including certain textile and apparel items; rum and tafia; and above-quota imports of certain  agricultural products like tuna in cans, syrups, sugars, and sugar products, which are subject to  tariff-rate quotas. 

Non-textile goods for which all ATPA countries are eligible for preferential treatment are  identified by a “J” in the “Special” subcolumn under Column 1 of the Harmonized Tariff  Schedule. Goods for which only some ATPA countries qualify for preferential treatment are  identified by a “J*.” Goods that qualify for preferential treatment in the expanded ATPDEA  provision are identified by “J+.” 

Certain textile and apparel goods may enter the United States free of duty or restrictions on  quantity if they meet certain requirements. The textile and apparel goods eligible for preferential  treatment are listed in Chapter 98, subchapter XXI of the Harmonized Tariff Schedule. 

Rules Of Origin 

Commercial shipments from designated beneficiary countries that require formal entry  may make a claim for preferential tariff treatment under ATPA/ATPDEA by entering the letter  “J” on CBP Form 7501 (the entry summary) as a prefix to the appropriate tariff schedule  number. 

Non-textile merchandise will be eligible for ATPA/ATPDEA duty-free treatment only if  the following conditions are met: 

• The merchandise must have been produced in a beneficiary country. This  requirement is satisfied when: 

(1) The goods are wholly the growth, product, or manufacture of a beneficiary  country, or  

(2) The goods have been substantially transformed into a new or different article  of commerce in a beneficiary country. 

• The merchandise must be imported directly from any beneficiary country into the  customs territory of the United States. 

• At least 35 percent of the article’s appraised value must consist of the cost or  value of materials produced in one or more ATPA or CBI beneficiary countries  and/or the direct costs of processing operations performed in one or more ATPA  or CBI beneficiary countries. The Commonwealth of Puerto Rico and the U.S.  Virgin Islands are defined as beneficiary countries for purposes of this 

requirement. In addition, the cost or value of materials produced in the customs  territory of the United States (other than Puerto Rico) may be counted toward the  35 percent value-added requirement, but only to a maximum of 15 percent of the  appraised value of the imported article. 

Certain textile and apparel goods may enter the United States free of duty or restrictions  on quantity if they meet certain requirements. The textile and apparel goods eligible for  preferential treatment are listed in Chapter 98, subchapter XXI of the Harmonized Tariff  Schedule. 

The cost or value of materials imported into ATPA or CBI beneficiary countries from  non-beneficiary countries may be included when calculating the 35 percent value-added  requirement for an eligible article if the materials are first substantially transformed into new or  different articles of commerce and are then used as constituent materials in producing the  eligible article. The phrase “direct costs of processing operations” means costs directly incurred  or reasonably allocated to producing the article, including the cost of actual labor, dies, molds,  tooling, depreciation of machinery, research and development, inspection, and testing. Business overhead, administrative expenses and profit, and other general business expenses like  casualty and liability insurance, advertising, and salespeople’s salaries, are not considered direct  costs of processing operations. 

 Further information can be found at:  cbp.gov/xp/cgov/import/international_agreements/atpa/