25. The U.S.-Chile Free Trade Agreement (US-CFTA)

 

25. The U.S.-Chile Free Trade Agreement (US-CFTA) 

The U.S.-Chile Free Trade Agreement (US-CFTA) took effect January 1, 2004, with the  enactment of the US-CFTA Implementation Act (P. L.108-77; 117 Stat. 909). (Presidential  Proclamation 7746, the official announcement of US-CFTA, incorporates by reference  Publication 3652 of the U.S. International Trade Commission. Publication 3652 amends the  Harmonized Tariff Schedule by adding General Note 26, which implements the duty provisions  of the US-CFTA. Title 19, Code of Federal Regulations is being amended to implement the US CFTA.) 

The US-CFTA eliminates duties on goods originating in Chile and the United States over  a maximum transition period of 12 years. Under the schedule to eliminate duties, 85 percent of  Chilean goods received immediate duty-free status. Duties on the remaining goods will phase out  in four-, eight-, 10- and 12-year stages, although Chile and the United States may later choose to  accelerate these phase-outs. 

Eligible Items 

According to the rules set forth in the Agreement and incorporated into our domestic  legislation as General Note 26 of the Harmonized Tariff Schedule, merchandise that originates in  Chile or the United States will receive a reduced or free rate of duty. Goods that originate  elsewhere and are merely transshipped through Chile will not be entitled to these benefits. 

Originating is a term used to describe goods that meet the requirements of Article 4.1 of  the Agreement. Article 4.1 defines originating as goods that meet one of the following  conditions: 

• The good is wholly obtained or produced entirely in the territory of Chile or the  United States, 

• The good is produced in the territory of Chile or the United States and meets the  rule specified in Annex 4.1, through either a tariff shift or tariff-shift-plus regional-value content rules, or 

• The good is produced entirely in the Chile or the United States exclusively from  originating materials. 

Originating goods that subsequently undergo any operation outside of the territories of  Chile or the United States other than unloading, reloading, or other processes necessary to  preserve the condition of the good, will lose their originating status. Goods that have undergone  simple combining or packaging operations or mere dilution with water or other substances will  not be considered originating. 

Entry Procedures 

Importers may claim preferential duty treatment for commercial shipments requiring a  formal entry by prefixing “CL” to the tariff classification number on the CF 7501 (Entry  Summary). 

Pursuant to Article 4.13(7) of the Agreement, the United States does not require a  certificate of origin when the value of the originating goods is US $2,500 or less. 

Certification Of Origin 

The US-CFTA requires the importer to substantiate the validity of a claim for preferential  treatment. At CBP’s request, an importer must submit a certification of origin or other  supporting documentation to demonstrate that the imported goods “originate,” as defined by the  Act.  

A US-CFTA certification of origin is not an official form, as it is in other trade  agreements, and does not need to be in a prescribed format. The certification of origin may take  many forms, such as a statement on company letterhead, a statement on a commercial invoice or  supporting documentation. Whatever form or format is used, however, must contain the  following data elements to demonstrate that the goods are US-CFTA originating goods: 

• Name and address of the importer, 

• Name and address of the exporter, 

• Name and address of the producer, 

• Description of good, 

• Harmonized tariff classification number, 

• Preference criterion, 

• Commercial invoice number on single shipments, 

• Identify the blanket period in “mm/dd/yyyy to mm/dd/yyyy” format (12-month  maximum) for multiple shipments of identical goods, 

• Authorized signature, company, title, telephone, fax, e-mail and certification date,  • Certification that the information is correct. 

The certification of origin may cover a single entry or multiple entries in a period not to  exceed 12 months. The importer must retain the certificate of origin and supporting  documentation in the United States and must provide it to CBP upon request. 

Sources Of Additional Information 

CBP has drafted regulations that implement the provisions of the US-CFTA. These may  be found in sections 10.401 through 10.490, CBP regulations. Also, information has been posted  on the CBP Website at: www.cbp.gov/xp/cgov/import/international_agreements/

 

26. The U.S. – Singapore Free Trade Agreement (US-SFTA) 

The provisions of the U.S.-Singapore Free Trade Agreement Implementation Act (Public  Law 108-78; 117 Stat. 948; 19 USC 3805 note) took effect on January 1, 2004. Upon  implementation, the Harmonized Tariff Schedule was amended to include General Note 25,  which contains specific information regarding the U.S.-Singapore Free Trade Agreement. The  agreement provides for the immediate or staged elimination of duties and barriers to bilateral  trade in goods and services originating in the United States and Singapore over a period of ten  years. Customs regulations are being updated to implement the provisions of this agreement. 

According to Section 202 of the US-SFTA Implementation Act, in general, non-textile  goods shall qualify for preferential tariff treatment as a “product of Singapore” if: 

• The good is wholly obtained or produced entirely in Singapore, the U.S. or both;  • Each non-originating material used in the production of the good imported from  Singapore either: 

1. Undergoes an applicable change in tariff classification (tariff shift) 

specified in General Note 25(o) of the Harmonized Tariff Schedule as a 

result of production occurring entirely in Singapore, the United States or  both or 

2. The good otherwise satisfies the applicable regional value content or other  requirements specified in General Note 25(o). 

• The good, as imported, is enumerated in General Note 25(m) as imported from  Singapore, a provision known as the Integrated Sourcing Initiative. 

 A textile or apparel good must meet the terms of General Note 25 in order to receive the  preferential tariff treatment under the US-SFTA. 

Integrated Sourcing Initiative (ISI)  

 Per Article 3.2(1) of the US-SFTA, certain information technology and medical  products listed in General Note 25(m) may be considered originating goods for purposes of the  Agreement when shipped between the United States and Singapore, regardless of whether they  satisfy the applicable rule of origin. Singapore must be the country of export in order for ISI eligible goods to receive benefits under the US-SFTA; however, the country of origin of the  good may be any country. An ISI product does not qualify as “originating” simply by being  imported into Singapore or the United States—shipment from one US-SFTA country to another  is required to obtain originating status. 

 The ISI provision eliminates the requirement that these products must meet specific rules  of origin under “tariff shift” or “regional value content” requirements. The only way an ISI  material, component, or product would affect a regional-value-content calculation is if an ISI  product is shipped from a non-FTA party (Malaysia, for example) to Singapore and then to the  United States (and is held there without undergoing any processing) and then shipped back to  Singapore where the ISI product is used as input for the manufacture of a non-ISI good. 

 Upon request, documents must be provided to CBP verifying that goods claiming  preferential treatment under this ISI provision were exported directly from the country of  Singapore. For purposes of ISI, the territory of Singapore is defined as its land territory, internal  waters and territorial sea plus certain maritime zones. The goods must still be marked with the  true country of origin—despite receiving originating status under US-SFTA. 

Entry Procedures

For commercial shipments requiring a formal entry, a claim for preferential tariff  treatment may be filed at the time of entry summary by placing the symbol “SG” as a prefix to  the Harmonized Tariff Schedule subheading for each good or line item for which treatment is  being claimed. For non-originating apparel goods eligible for preferential treatment under a  tariff-preference level (TPL), please refer to General Note 25 and Subchapter X of Chapter 99 of  the Harmonized Tariff Schedule. 

Customs Verification 

If CBP requests, the importer must submit a statement or supporting documentation  containing informational data elements to demonstrate that the imported goods qualify for  preferential tariff treatment. There is no official CBP form or required format for certification,  and the statement may be submitted electronically. 

 Importers are required to maintain all records relating to the importation of US-SFTA  goods for five years after the date of importation. These include, but are not limited to, records  concerning the purchase of, cost of, value of and payment for the good, the purchase of, cost of,  value of and payment for all materials used in the production of the good, and the production of  the good in its exported form. 

Further information on the U.S.-Singapore Free Trade Agreement is available at:  cbp.gov/xp/cgov/import/international_agreements/