CBP Notice on Certain HTS Chapter 99 "Additional Duty" Provisions Based on the Agricultural Product's Price
U.S. Customs and Border Protection (CBP) has issued a notice on the Uruguay Round price-based "additional duty" (safeguard) provisions of HTS Chapter 99, Subchapter IV for certain agricultural products imported into the U.S. from all countries except Canada, Mexico, Jordan, Singapore, or Chile.
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The agricultural products covered by the price-based special safeguard provisions of HTS Chapter 99, Subchapter IV include certain (partial list): beef; milk and cream; butter; dairy products; butter substitutes; cheese; peanuts; sugars, syrups, and molasses; sugar-containing articles; chocolate; infant formula; mixes and doughs, peanut butter and paste; mixed condiments and mixed seasonings; ice cream; animal feed; and cotton.
Classification Should be Based on the CIF "Unit Price"
The notice and CBP sources state that according to the Uruguay Round, the CIF (cost, insurance, and freight) "unit price" is to be used when classifying subject agricultural products under the price (value) based provisions of HTS Chapter 99, Subchapter IV.
However, the Automated Commercial System (ACS) calculates the FOB (free on board) "unit price" for subject HTS Chapter 99 Subchapter IV agricultural products (based on the FOB invoice price and the number of units) and is not programmed to calculate CIF unit prices for this purpose.
CBP states that ACS' use of FOB to determine the HTS number and duty rate may result in the incorrect HTS number and a higher duty rate (as the price-based additional duty rate for a subject agricultural product increases as the "unit price" of that product drops).
Filers Who Want to Use CIF Price May File Non-ABI Entries
CBP's message and sources state that if ACS will compute a different HTS and higher duty rate (using FOB "unit price") than the filer did (using CIF "unit price"), the entry may be filed non-ABI at the correct HTS and lower duty rate (using CIF "unit price").
(The U.S. imposes additional duties on certain agricultural goods pursuant to the special safeguard provisions in Article 5 of the Uruguay Round Agreement on Agriculture. These additional duties are imposed if the unit price at which a given product enters falls below a specified unit price (price-based safeguards), or if the volume of such imports exceeds a specified level (quantity-based safeguards). Both price-based and quantity-based safeguards are provided for in HTS Chapter 99, Subchapter IV.
Only one type of safeguard (either price-based or quantity-based) may be applied at any given time to the same article.)
CBP message (Adm: 04-0061, dated 01/13/04) availablefromBP via email or fax by emailing staff@brokerpower.com.