CBP Issues Reminders on GN 15 Exemptions and Over-Quota Safeguards for TRQ Agricultural Products
As a result of recent reviews, U.S. Customs and Border Protection has issued two reminders on tariff rate quota agricultural products for (1) exemptions under Harmonized Tariff Schedule (HTS) General Note (GN) 15 and (2) over-quota safeguards under HTS heading 9904.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
GN 15 TRQ Exemptions for Agricultural Products
CBP states that it has become aware of what appears to be the misclassification of commercial shipments of agricultural products entered pursuant to HTS GN 15. (GN 15 refers to products that are subject to a TRQ but are exemptfrom being counted against the in-quota quantity of that product.)
Products exempt from TRQ only under certain circumstances. CBP states that products are exempt from a TRQ under GN 15 only under certain circumstances which include the following:
products imported by or for the account of any agency of the U.S. government;
products imported for the personal use of the importer, provided that the net quantity of such product in any one shipment does not exceed 5 kilograms;
products which will not enter the commerce of the U.S. (e.g., imported as samples for taking orders, for exhibition, display or sampling at a trade fair, for research, etc.) provided that written approval from the Secretary of Agriculture or designated representative at the U.S. Department of Agriculture (USDA) is presented at the time of entry;
certain blended syrups; or
certain cotton.
CBP reminds CBP field offices and the importing community that misuse of these provisions impacts the proper administration of TRQs and revenue collection and that intentional circumvention of quotas is subject to enforcement action as appropriate.
Agricultural Safeguards Under HTS 9904
CBP states that it has become aware of several issues related to the agricultural safeguards under HTS heading 9904 (which include certain beef, dairy products, peanuts and peanut products, sugars, chocolate, cotton, etc. that are subject to safeguard measures which allow the imposition of additional duties based upon either the value or the quantity of goods imported into the U.S. (i.e., "over quota safeguards").) CBP is therefore reminding the importing community and field personnel of the following basic concepts to be kept in mind when classifying agricultural merchandise subject to an over-quota TRQ duty rate:
Over-quota provisions are considered part of a TRQ for administration purposes, and improper HTS combinations (valid HTS heading 9904 and underlying HTS Chapter 1-97 numbers that are mismatched) result in merchandise not being properly charged to the quota. Proper combinations of HTS heading 9904 and underlying HTS Chapter 1-97 provisions are specified in the HTS and the instructions for TRQ openings issued by HQ Quota. CBP notes that such instructions (QBTs) are available at: http://www.cbp.gov/xp/cgov/import/textiles_and_quotas/qbts/
The value-based and quantity-based agricultural safeguards are mutually exclusive. CBP states that it must be directed by the Secretary of Agriculture to change from the value-based to the quantity-based safeguards (see HTS Chapter 99, Section IV, U.S. Note 2). If the Secretary of Agriculture implements quantity-based safeguards (via a Federal Register notice), HQ Quota will issue a notice to the field and trade (at the link above).
If the merchandise originates from a country with which the U.S. has a free trade agreement that exempts the goods from agricultural safeguard duties, a HTS heading 9904 provision is not required. Depending on the HTS heading 9904 provision used, filers may be paying additional duty unnecessarily. (Refer to HTS Chapter 99, Section IV, U.S. Note 1 for a list of exempt countries.) CBP notes that specifics regarding particular trade agreements are available at: http://www.cbp.gov/xp/cgov/import/international_agreements/free_trade/ and
http://www.ustr.gov/Trade_Agreements/Section_Index.html.
(See ITT's Online Archives or 09/06/07 news, 07090640 2 and 3, for earlier BP summaries on CBP's release of these reminders.)
QBT-07-539, dated 08/22/07, available at http://www.cbp.gov/linkhandler/cgov/import/textiles_and_quotas/qbts/qbt2007/07_539.ctt/07_539.doc
QBT-07-540, dated 08/24/07, available at http://www.cbp.gov/linkhandler/cgov/import/textiles_and_quotas/qbts/qbt2007/07_540.ctt/07_540.doc