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

This is Part III of a multi-part series of summaries of the HTS changes made by the proclamation. (See ITT's Online Archives or 09/10/04 and 09/15/04 news, 04091005 and 04091510, for Parts I and II.)

The following AGOA III changes to the HTS are effective for articles entered, or withdrawn from warehouse, for consumption on or after July 13, 2004:

De minimis weight threshold increased. HTS Chapter 98, Subchapter XIX, U.S. Note 3(a)(iii) is amended to increase the weight threshold for the de minimis rule to 10% (from 7%). The amended language below is between the < >:

An article otherwise eligible for AGOA preferential treatment under any provision of this subchapter shall not be ineligible for such treatment because it contains fibers or yarns not wholly formed in the U.S. or in one or more designated AGOA beneficiary countries¹ , provided that the total weight of all such fibers and yarns is not more than <10%> of the total weight of the article.

Ineligible collars, cuffs, attached belts, etc., allowed. A new subdivision (iv) is added to HTS Chapter 98, Subchapter XIX, U.S. Note 3(a) to allow articles to receive AGOA preferential treatment, even if they contain certain otherwise ineligible components (e.g. collars, attached belts, etc.), as follows:

An article otherwise eligible for AGOA preferential treatment shall not be ineligible for such treatment because it contains any of the following components that do not meet the requirements set forth in the provisions of this subchapter: any collars or cuffs (the foregoing cut or knit-to-shape), drawstrings, shoulder pads or other padding, waistbands, belt attached to the article, straps containing elastic, or elbow patches.

Former beneficiary AGOA countries that enter into FTA with U.S. A new subdivision (d) is added to HTS Chapter 98, Subchapter XIX, U.S. Note 3 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.

Definition of ethnic printed fabrics added. HTS Chapter 98, Subchapter XIX, U.S. Note 4 is amended by redesignating current U.S. Note 4 as U.S. Note 4(a) and adding a new U.S. Note 4(b) which defines "ethnic printed fabrics" for purposes of 9819.11.27 as follows:

• containing a selvedge on both edges, having a width of less than 50 inches, classifiable under 5208.52.30 or 5208.52.40;
• of the type that contains designs, symbols and other characteristics of African prints (a) normally produced for and sold on the indigenous African market, and (b) normally sold in Africa by the piece as opposed to being tailored into garments before being sold in indigenous African markets;
• printed, including waxed, in one or more eligible beneficiary AGOA countries¹; and
• formed in the U.S., from yarns formed in the U.S., or from fabric formed in one or more beneficiary AGOA countries¹ from yarn originating either in the U.S. or one or more beneficiary AGOA countries¹.

Hybrid fabric and knit-to-shape allowed for HTS 9819.11.03. 9819.11.03 is amended to read as follows (added language between < >):

Apparel articles of HTS Chapter 61 or 62 sewn or otherwise assembled in one or more such 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>, the foregoing which (1) are embroidered or were subject to stone-washing, enzyme washing, acid washing, permapressing, oven-baking, bleaching, garment-dyeing, screen printing or other similar processes, and (2) but for such embroidery or processing are of a type otherwise described in 9802.00.80

9819.11.09 AGOA apparel cap amended for "former beneficiary AGOA countries¹" and new U.S. note 2(e). 9819.11.09, the tariff number for the AGOA cap, is amended i) to add language allowing for former beneficiary AGOA countries or both^1,2 and ii) for new U.S. note 2(e), which allows 9819.11.09 apparel to contain 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.

9819.11.12 AGOA "third country" sublimit amended for date extension. 9819.11.12, the tariff number for the AGOA "third country" sublimit, is amended to reflect the extension of this sublimit through September 30, 2007.

HTS 9819.11.21. HTS 9819.11.21 is amended as follows (replacement language between < >):

Apparel articles both cut (or knit-to-shape) and sewn or otherwise assembled in one or more such countries <, to the extent that apparel articles of such fabrics or yarns would be eligible for the tariff treatment provided in general note 12 to the tariff schedule, without regard to the source of the fabrics or yarns>.

Duty-free treatment for ethnic printed fabrics under HTS 9819.11.27. HTS 9819.11.27 is amended to add AGOA duty-free treatment for ethnic printed fabrics (in addition to continuing to provide AGOA duty-free treatment to handloomed, handmade, and folklore articles).

9819.11.30 amended for "former AGOA beneficiary countries¹." 9819.11.30 is amended to add language allowing for former beneficiary AGOA countries.^1,2

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

²the proclamation may modify the description of this tariff number in only one place or in three places, depending on how the International Trade Commission (ITC) interprets the proclamation's instructions (due to slight differences between three similar phrases in the tariff number).

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 Note

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.