CBP's Interim Rule Amends 19 CFR for the U.S. - Bahrain FTA (Part IV - Final - Verification, Penalties, Returns)

Comments must be received by December 17, 2007.

This is Part IV, the final part of a multi-part series of summaries on CBP's interim rule for the BFTA, and highlights the provisions on origin verifications and determinations, negative origin determinations, BFTA violations, and returns after repair or alteration, in new Subpart N.

Origin Verifications and Determinations

Under 19 CFR 10.824, a claim for BFTA preferential treatment made under 19 CFR 10.803, including any declaration or other information submitted to CBP in support of the claim, will be subject to such verification as the port director deems necessary. In the event that the port director is provided with insufficient information to verify or substantiate the claim, the port director may deny the claim for preferential treatment.

(When conducting a verification of origin to which Generally Accepted Accounting Principles may be relevant, CBP will apply and accept the GAAP applicable in the country of production.)

Issuance of Negative Origin Determinations

According to 19 CFR 10.825, if as a result of an origin verification initiated under this subpart, CBP determines that a claim for preferential tariff treatment made under 19 CFR 10.803 should be denied, it will issue a determination in writing or via an authorized electronic data interchange system to the importer that describes the goods, its findings of fact, and the legal basis for the determination.

BFTA Penalties

1. CFR 10.826 states that all criminal, civil, or administrative penalties which may be

imposed on U.S. importers for violations of the customs and related laws and regulations will also apply to U.S. importers for violations of the laws and regulations relating to the BFTA.

Goods Re-Entered After Repair or Alteration in Bahrain

According to 19 CFR 10.827, goods returned after having been repaired or altered in Bahrain, whether or not pursuant to a warranty, are eligible for duty-free treatment under HTS 9802.00.40 and 9802.00.50.

The provisions of paragraphs 19 CFR 10.8(a)-(c) relating to the documentary requirements for goods entered under HTS 9802.00.40 or 9802.00.50 will apply in connection with the entry of goods which are returned from Bahrain after having been exported for repairs or alterations and which are claimed to be duty free.

This duty-free treatment will not apply to goods which, in their condition as exported from the U.S. to Bahrain, are incomplete for their intended use and for which the processing operation performed in Bahrain constitutes an operation that is performed as a matter of course in the preparation or manufacture of finished goods.

(For purposes of this section, "repairs or alterations" means restoration, addition, renovation, re-dyeing, cleaning, re-sterilizing, or other treatment which does not destroy the essential characteristics of, or create a new or commercially different good from, the good exported from the U.S.)

(See ITT's Online Archives or 10/17/07, 10/18/07 and 10/22/07 news, 07101715, 07101833, and 07102223, for Parts I - III.

See ITT's Online Archives or 08/10/06 news, 06081025, for the final part of BP summary on CBP's original instructions on filing and acceptance of claims under the BFTA, with links to the previous parts.

See ITT's Online Archives or 09/17/04 news, 04091705, for BP summary announcing that the U.S. and Bahrain signed a FTA. See ITT's Online Archives or 07/31/06 and 11/27/06 news, 06073105 and 06112710, for Parts I and II of BP summaries of the President's issuance of the proclamation to implement the BFTA, including highlights of the agreement and its annexes, respectively.)

- comments must be received by December 17, 2007

CBP interim rule (D/N USCBP-2007-0063; CBP Dec. 07-81, FR Pub 10/16/07) available at http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/07-5062.pdf