Highlights of the DR-CAFTA Implementation Bill (Part VI)

A Presidential Proclamation must still be issued to amend the tariff schedule for DR-CAFTA, etc. (USTR sources have previously stated that the DR-CAFTA can enter into force for the U.S. and one or more subject countries that have approved it; the U.S. does not have to wait for all subject countries to approve the agreement. In addition, press sources have indicated that the DR-CAFTA has been approved by Guatemala, El Salvador and Honduras, but has not been approved by Costa Rica, Dominican Republic and Nicaragua, and that Nicaragua and the Dominican Republic are expected to approve the agreement within 60 days, but Costa Rica might take 1 - 2 years to approve it.)

This is Part VI of a multi-part series of summaries of the Act that will highlight the provisions of the bill, beginning to end. Part VI covers the inapplicability of customs user fees; providing DR-CAFTA duty benefits for textiles and apparel retroactive to January 1, 2004; and adding certain DR-CAFTA provisions to 19 USC 1592 and 19 USC 1514.

(See ITT's Online Archives or 08/04/05, 08/10/05, 08/18/05, 08/24/05 and 08/26/05 news, 05080405, 05081015, 05081810, 05082410, and 05082615 for Parts I-V respectively.)

Customs user fees. The Act adds a new paragraph to 19 USC 58c(b) to indicate that no Merchandise Processing Fee (MPF) may be charged with respect to goods that qualify as DR-CAFTA originating goods under the Act. In addition, any service for which an exemption from such fee is provided by reason of this paragraph may not be funded with money contained in the Customs User Fee Account. (Paragraphs regarding the inapplicability of the MPF already exist for NAFTA, Israel, U.S.-Chile Free Trade Agreement (FTA), U.S. Singapore FTA, and U.S.-Australia FTA.)

Retroactive liquidations/reliquidations of entries of textile or apparel goods made on or after January 1, 2004. An entry (including a withdrawal from warehouse for consumption) of a textile or apparel good:

• of a CAFTA-DR country that the U.S. Trade Representative (USTR) has designated as an eligible country for purposes of this section,
• that would have qualified as originating if the good had been entered after the date of entry into force of the Agreement for that country,
• that was made on or after January 1, 2004, and before the date of the entry into force of the Agreement with respect to that country, and
• for which customs duties in excess of the applicable rate of duty for that good set out in the Schedule of the United States to Annex 3.3 of the Agreement (Annex 3.3) were paid,

shall be liquidated or reliquidated at the applicable Annex 3.3 rate of duty for that good, and the Secretary of the Treasury shall refund any excess customs duties paid with respect to such entry.

Accordance to the Act, liquidation or reliquidation may be made with respect to an entry of a textile or apparel good only if a request is filed with U.S. Customs and Border Protection (CBP), within the time period CBP establishes by regulation in consultation with the Secretary of Treasury, that contains sufficient information to enable CBP to locate the entry; or to reconstruct the entry if it cannot be located; and for CBP to determine that the good satisfies the requirements listed above.

Prior disclosure of incorrect information. The Act amends 19 USC 1592 to add a new paragraph on prior disclosure regarding claims under the DR-CAFTA FTA. Paragraphs on prior disclosure of incorrect information already exist for NAFTA, the U.S.- Chile FTA, the U.S.- Singapore FTA; and the U.S.-Australia FTA.

False certifications of origin. In addition, the Act creates a new subsection in 19 USC 1592 on false certifications of origin under the DR-CAFTA. Subsections on false certifications of origin already exist for NAFTA and the U.S.-Chile FTA.

Denial of preferential treatment. The Act also creates a new subsection in 19 USC 1514 on denial of preferential tariff treatment under the DR-CAFTA. Subsections on denial of preferential treatment already exist for NAFTA and the U.S.-Chile FTA.

1520(d) claims. The Act amends 19 USC 1520(d) (which allows claims filed within one year to reliquidate with a refund, when no claims was made at time of importation) to include the DR-CAFTA. This subsection currently provides for such claims for NAFTA and the U.S.-Chile FTA.

DR-CAFTA is also referred to as CAFTA-DR or CAFTA. It is also referred to in this summary as the Agreement.

H.R. 3045 available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_bills&docid=f:h3045enr.txt.pdf.

Statement of Administrative Action available at http://www.ustr.gov/assets/Trade_Agreements/Bilateral/CAFTA/Transmittal/asset_upload_file816_7815.pdf.

Copy of final text of DR-CAFTA, as posted to USTR website, at http://www.ustr.gov/Trade_Agreements/Bilateral/CAFTA/CAFTA-DR_Final_Texts/Section_Index.html