CBP Issues Final Rule on the U.S.-Chile FTA

According to CBP sources, this final rule updates the interim regulations on the US-CFTA to reflect current practice and make clarifications and corrections. (See ITT's Online Archives or 03/15/05 news, 05031530, for the final part of BP's summary of the interim rule, with links to the earlier parts.)

Final Rule Adopts Interim Rule with Certain Changes

The interim rule amending 19 CFR Parts 10, 24, 162, 163, 178 and 191 is adopted as a final rule with certain changes to Parts 10 and 191, as highlighted below (partial list):

19 CFR 191.0, drawback. The last sentence in 19 CFR 191.0 has been removed. Although CBP originally intended to include regulations which address the subject of drawback in new Subpart H of Part 10, CBP subsequently determined that no such regulations were necessary as the drawback provisions in Part 191 were sufficient for purposes of the US-CFTA.

19 CFR 10.401, scope of Subpart H. The words "entered into" in the first sentence have been replaced by the word "signed" to avoid any potential confusion between the date that the US-CFTA was signed (June 6, 2003) and the date that it entered into force (January 1, 2004).

The reference to Part 191 in the third sentence has been removed consistent with the removal of the cross-reference to Subpart H, Part 10 in 19 CFR 191.0.

The definition of "claim for preferential tariff treatment" in paragraph (c) has been revised to add the words "and to an exemption from the merchandise processing fee" at the end of the definition to clarify that the term encompasses a claim that a good is entitled to an exemption from the merchandise processing fee.

The definition of "national" (formerly paragraph (o)) has been removed as that term is not used in Subpart H of Part 10.

A definition of "identical goods" has been added as new paragraph (n). This definition was set forth in19 CFR 10.411(d)(2) and 10.422(d)(2) of the interim regulatory text but has been removed from those provisions and inserted into the general definitions section for the reason that the term also appears in 19 CFR 10.474. In addition, the definition has been modified slightly by replacing the word "production" with the words "particular rule of origin," which CBP believes more accurately describe the means by which a good is determined to qualify as originating.

19 CFR 10.410, filing of a claim for preferential tariff treatment. Paragraph (a) has been revised to add the words "including an exemption from the merchandise processing fee," immediately following the words "under the US-CFTA,'" in the first sentence to clarify that a claim for preferential tariff treatment for an originating good under the US-CFTA includes a claim that the good is entitled to an exemption from the merchandise processing fee.

19 CFR 10.411, certification of origin. Paragraph (c), which concerns who may sign the certification, has been revised to require that the certification of origin include the legal name and address of the responsible official or authorized agent signing the certification, and also to ask for the telephone and e-mail address when available. CBP states that this information is necessary in the event that the person signing the certification is not identified pursuant to 19 CFR 10.411(a)(2)(i) - (a)(2)(iii).

19 CFR 10.412, importer obligations. CBP is adding a sentence at the end of paragraph (a) stating that CBP will allow for the direct submission by the exporter or producer of business confidential or other sensitive information, including cost and sourcing information. CBP states that it recognizes that, under certain circumstances, Chilean producers may be reluctant to provide production information and costs to U.S. importers due to business confidentiality concerns.

Paragraph (d), which stated that "importers are expected to establish and implement internal controls which provide for the periodic review of the accuracy of the certifications or other records referred to in paragraph (b)(1) of this section," has been removed as there is no basis of authority for this provision in the US-CFTA or the US-CFTA Implementation Act.

19 CFR 10.415, maintenance of records. Paragraph (a) has been revised to remove the words "in the United States" to conform to the corresponding provision in the US-CFTA, which includes no restriction on where the records referenced in that provision must be maintained.

19 CFR 10.441 and 10.442, procedures for the filing/processing of post-importation duty-refund claims. CBP states that the references to "petition or request for reliquidation" in 19 CFR 10.441(b)(4) and 10.442(b), (c)(2), and (d)(3) are no longer necessary, and have been removed by this final rule.

19 CFR 10.422, TPL certificate of eligibility. Paragraph (a)(2), which sets forth the information to be included on the certificate of eligibility, has been modified to require that the certificate include the legal name and address of the responsible official or authorized agent of the importer signing the certificate (if different from the importer of record), and also to ask for the telephone and e-mail address when available.

19 CFR 10.455, value of materials. Paragraphs (b)(1)(i) and (b)(2)(i) have been revised to delete the words "within or between the territory of Chile, the United States, or both" to conform these paragraphs to the wording in the corresponding statutory provisions.

19 CFR 10.470, verification of claims for preferential tariff treatment. The second sentence of the paragraph (a) introductory text has been revised to replace the words "for any reason is prevented from verifying" with the words "is provided with insufficient information to verify or substantiate." CBP states that this new wording more accurately reflects the circumstances under which a verification may result in the denial of a claim for reasons beyond the control of the parties to an import transaction.

19 CFR 10.474, repeated false or unsupported preference claims. The words "CBP finds" have been replaced with the words "verification or other information reveals" to more accurately reflect the wording in Sec. 205(g) of the US-CFTA Implementation Act.

(See final rule for a complete list of changes.)

BP has previously referred to the US-CFTA as the UCFTA or CFTA.

(See ITT's Online Archives or 02/09/04 news, 04020910, for BP summary of CBP's instructions on filing and substantiating claims under the US-CFTA.)

CBP final rule (CBP Dec. 06-39, FR Pub 12/20/06) available at http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/06-9780.pdf