Details of Presidential Proclamation on AGOA III, GSP for Iraq, Etc

This is Part II of a multi-part series of summaries of the HTS changes made by the proclamation. (See ITT's Online Archives or 09/10/04 news, 04091005 for Part I which covered Iraq's designation as a GSP beneficiary country, etc. See future issues of ITT for additional summaries.)

The following GSP modification to the HTS is effective for articles entered, or withdrawn from warehouse, for consumption on or after the sixtieth day after September 7, 2004:

Certain titanium and articles thereof from Russia no longer GSP-eligible. General note 4(d) is modified to indicate that HTS 8108.90.60 from Russia will no longer be GSP eligible. HTS 8108.90.60 is a basket provision for titanium and articles thereof and has statistical breakouts for bars, rod, profiles, and wire; plates, sheets, strips and foil; tubes and pipes; and 'other.'

The following AGOA III and CBTPA changes to the HTS are effective for articles entered, or withdrawn from warehouse, for consumption on or after July 13, 2004 (partial list):

Former beneficiary AGOA countries that enter into FTA with U.S. A new subdivision b(iii) is added to General note 16 in order to define "former beneficiary AGOA country"¹ as a country that, after being designated as a beneficiary AGOA country¹, ceased to be designated as such a country by reason of its entering into a free trade agreement (FTA) with the U.S.

Furthermore, General note 16(b)(ii)(A) is amended to allow the cost or value of materials produced in "former beneficiary AGOA countries"¹ to be counted toward the 35% appraised value threshold for AGOA-GSP products.

AGOA-GSP benefits extended through 2015. General note 16(c) is amended to extend AGOA-GSP duty-free treatment through the close of September 30, 2015 (from September 30, 2008).

(AGOA III also extended the standard GSP program (i.e. A, A* or A) for AGOA beneficiary countries by amending the date in 19 USC 2466b to September 30, 2015.)

Hybrid 9802.00.80 AGOA apparel assembled from both fabric and knit-to-shape. HTS Chapter 98, Subchapter II, U.S. Note 7(a) is amended to read in part (added language is between < >):

the duty-free treatment indicated for such heading [HTS 9802.00.80] shall apply only to apparel articles sewn or otherwise assembled in one or more such beneficiary countries from fabrics wholly formed and cut, or from components knit-to-shape, in the U.S., from yarns wholly formed in the U.S. <or both> (including fabrics not formed from yarns), etc.

Hybrid 9802.00.80 CBTPA apparel assembled from both fabric and knit-to-shape. HTS Chapter 98, Subchapter II, U.S. Note 7(b)(i) is amended to read in part that for purposes of HTS 9802.00.80 (added language is between <>):

apparel articles sewn or otherwise assembled in one or more such beneficiary countries from fabrics wholly formed and cut, or from components knit-to-shape, in the U.S., from yarns wholly formed in the U.S. <or both> (including fabrics not formed from yarns), etc.

9819.11.09 AGOA apparel cap² extended, adjusted. HTS Chapter 98, Subchapter XIX, U.S. Note 2(a) and (b) are modified to reflect the extension of the AGOA cap (HTS 9819.11.09) through September 30, 2015 for apparel assembled from AGOA fabric or AGOA knit-to-shape components, or apparel formed on seamless knitting machines in an AGOA country, all made from AGOA³ yarns or U.S. yarns, or etc. Subject apparel may also contain (but not be exclusively made from) fabrics, fabric components formed, or knit-to-shape components described in 9819.11.03 or 9819.11.06.

In addition, the applicable fiscal year percentage for the cap is slightly decreased each year from its previous percentage; however, it still reaches 7.0% on October 1, 2007. The applicable annual percentage then stays at 7.0% annually through the fiscal year ending September 30, 2015.

9819.11.12 AGOA "third country" sublimit extended, adjusted. HTS Chapter 98, Subchapter XIX, U.S. Note 2 (b) is modified to reflect the extension through September 30, 2007 of the AGOA cap sublimit (HTS 9819.11.12) for apparel assembled or knit-to-shape and assembled, or both, in lesser developed AGOA country(ies), regardless of the country of origin of the fabric or yarn.

The applicable fiscal year percentage for the sublimit is increased so that it rises each year until it reaches 2.9285% on October 1, 2005. The applicable percentage then drops to 1.6071% for the last year of October 1, 2006 - September 30, 2007.

New subdivision to U.S. Note 2 (regarding 9819.11.09). A new subdivision (e) is added to HTS Chapter 98, Subchapter XIX, U.S. Note 2 to state that for purposes of 9819.11.09, an apparel article imported thereunder may contain fabrics, fabric components formed, or components knit-to-shape that are specified as being of a type required in the apparel articles of 9819.11.03 or 9819.11.06.

¹ actually termed "former beneficiary sub-Saharan African country(ies)" or "beneficiary sub-Saharan African country(ies)", as applicable

² also termed 'aggregate cap' in certain BP summaries.

³ also may be made from or contain yarn originating in a "former AGOA beneficiary country" as defined above.

Proclamation 7808 (FR Pub 09/09/04) available at http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-20551.pdf

BP Notes

1. It is not yet known when the International Trade Commission's (ITC's) online 2004 HTS (Supplement 1) will be amended to reflect the changes contained in Proclamation 7808.
2. The link to the proclamation contained in Part I of this series of BP summaries (See ITT's Online Archives or 09/10/04 news, 04091005) has been corrected in the Online Archives.