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/