Details on Presidential Proclamation Implementing DR-CAFTA for Costa Rica Effective January 1st

According to the proclamation, the DR-CAFTA for Costa Rica is generally in effect for goods entered or withdrawn from warehouse for consumption on or after January 1, 2009.

Annexes Containing HTS Modifications for Costa Rica Posted to ITC Web Site

The proclamation states that the HTS modifications necessary to implement DR-CAFTA for Costa Rica are not in the proclamation but are instead listed in Annexes I and II of ITC publication 4038, which is incorporated by reference into Proclamation 8331.

(Note Proclamation 8331 (in Annex III) also makes technical rectifications to the HTS Pharmaceutical Appendix. See future issue of ITT for details.)

Manual Entry Summaries to be Required Until ACS Updated

According to a recent U.S. Customs and Border Protection (CBP) memo, the programming updates to the Automated Commercial System (ACS) allowing for automated processing have not yet been completed. Therefore, until further notice, importers claiming Costa Rica preference under the CAFTA-DR should file manual entries or file ABI entries at release with manual entry summaries.

January 1st Changes for Costa Rica

Annexes I and II state that effective with respect to goods entered or withdrawn from warehouse for consumption on or after January 1, 2009 (partial list):

Costa Rica Added to List of DR-CAFTA Countries; Removed from CBTPA, CBERA, GSP

HTS General Note 29 is amended to add the Dominican Republic to the list of DR-CAFTA countries.

HTS General Notes 4, 7, and 17; HTS Chapter 98, Subchapter XX, U.S. Note 1 and U.S. Note 5(e); and HTS Chapter 98, Subchapter II, U.S. Note 7(b) are amended to: delete Costa Rica from the list of designated Caribbean Basin Economic Recovery Act (CBERA) and Caribbean Basin Trade Partnership Act (CBTPA) beneficiary countries; reflect the exclusion of Costa Rica from the Generalized System of Preferences (GSP); and to add Costa Rica to the list of former CBERA and CBTPA beneficiary countries.

Three New Apparel TPLs Created for Costa Rica

HTS Chapter 99, Subchapter XV, U.S. Notes 16 and 17 are added and create the following new apparel tariff preference levels (TPLs) for Costa Rica:

1) Certain wool woven apparel goods -- a new duty-free TPL is created for certain non-originating wool apparel goods, not knitted or crocheted, containing 36% or more by weight of wool or subject to wool restraints, that are cut and sewn or otherwise assembled in Costa Rica, including men's and boys' suits; suit-type jackets and blazers; trousers, breeches, and shorts; and women's and girls' suits; suit-type jackets and blazers; skirts; and trousers, breeches, and shorts.

This TPL has an annual aggregate limit of 500,000 SME in calendar years 2009 through 2018 (to be entered under new HTS subheading 9915.62.05).

2) Certain wool woven apparel goods -- a new duty-free TPL is created for certain non-originating apparel goods made from fabric of wool (except fabric of carded wool, or made from wool yarn having an average fiber diameter of less than or equal to 18.5 microns), that are both cut and sewn or otherwise assembled in Costa Rica, including men's and boys' suits; suit-type jackets and blazers; waistcoats (vests); trousers and breeches; and women's and girls' suits; suit-type jackets and blazers; waistcoats (vests); skirts; and trousers, and breeches.

This TPL has an annual aggregate limit of 500,000 SME in calendar years 2009 through 2018 (to be entered under new HTS subheading 9915.62.15).

Goods that could qualify for preferential treatment under both of these TPLs must be imported under and counted first toward the 9915.62.15 TPL limit, until such limit is reached, and then can be imported under and counted toward the limit established in the 9915.62.05 TPL.

3) Mastectomy swimsuits -- a new duty-free TPL is created for certain non-originating women's post-mastectomy knitted or crocheted swimwear that are both cut or knit to shape and sewn or otherwise assembled in Costa Rica (see new Note 17 for full description). The TPL limit grows annually from 2009 through 2014 (from 100,000 SME to 133,823 SME) and then remains at 133,823 SME for calendar years 2015 -- 2018.

Although the HTS states that these swimsuits should be entered using HTS subheading 9915.61.01 or new 9915.61.02. HTS 9915.61.01 is used for the Nicaraguan apparel TPL. ITC and CBP sources state that they are aware of the error and expect to issue another new HTS number.

DR-CAFTA Sugar TRQs² for Costa Rica

HTS Chapter 98, Subchapter XXII, U.S. Note 25(a) is amended to add new paragraph (v) to subdivision (a), which states that Costa Rica's calendar year 2009 duty-free quantity for the "trade surplus" sugar, syrup goods, and sugar-containing products tariff rate quota (TRQ) is 11,660 metric tons (to be entered under HTS subheading 9822.05.20).

In addition, a HTS Chapter 98, Subchapter XXII, U.S. Note 24 is added to provide an additional duty-free TRQ for certain Costa Rica sugar, syrup goods, and sugar-containing products, which shall not exceed 2,000 metric tons for calendar year 2009 (to be entered under new HTS subheading 9822.05.15).

Ethyl Alcohol TRQ Allocation for Costa Rica

HTS Chapter 99, Subchapter I, U.S. Note 3 is amended to include an allocation of the ethyl alcohol or a mixture thereof duty-free TRQ for Costa Rica, which cannot exceed the metric equivalent of 31,000,000 gallons in any calendar year.

DR-CAFTA Agricultural/Food TRQs² for Costa Rica

HTS Chapter 99, Subchapter XV, U.S. Notes 4, 5, 6, 8, 10, and 14 are amended to add agricultural TRQs for Costa Rica and list their annual limits for calendar years 2009 through 2024 (e.g., meats, dairy products, food and infant preparations, confectionary, mixes and dough, etc.).

A new U.S. Note 7(a) is added to HTS Chapter 99, Subchapter XV which creates a duty-free in-quota TRQ for certain dried milk products and animal feeds containing milk or milk derivatives (to be entered under new HTS subheading new 9915.04.20).The proclamation lists the in-quota quantities and duty rates for this TRQ for the years 2009 through 2024.

In addition, a new U.S. Note 7(b) is added to provide over-quota (high-duty) rates for the products of the above new milk/animal feed TRQ (to be entered under new HTS subheadings 9915.04.21 through 9915.04.24). The proclamation lists the over-quota quantities and duty rates for this TRQ for the years 2009 through 2024.

(Note that new HTS 9915.04.25 through 9915.04.28 has the same duty rates as 9915.04.21 through 9915.04.24, respectively, but with no TRQ levels.)

Costa Rica Added to List of Countries Not Subject to Additional Agricultural Safeguard Duties

HTS Chapter 99, Subchapter IV, U.S. Note 1 is amended to add Costa Rica to the list of countries that are not subject to certain additional agricultural safeguard duties.

Costa Rica Added to List of Countries Eligible for Duty-Free Entry for Certain Containers

HTS Chapter 9, Additional U.S. Note 4 is amended to add Costa Rica to the list of countries eligible for duty-free entry for certain empty immediate containers and wrappings and intermediate containers of tea (heading 0902).

¹The DR-CAFTA is also abbreviated as "CAFTA-DR"

²Such goods must qualify as originating goods under the DR-CAFTA except that any operations performed in, or any material obtained from, the U.S. be considered as if the operations were performed in, and the material was obtained from, a country that is not a party to the DR-CAFTA. (As a result, the SPI of P+ must be used).

(See ITT's Online Archives or 12/24/08 news, 08122405, for previous BP summary announcing the proclamation implementing the DR-CAFTA for Costa Rica.

See ITT's Online Archives or 01/06/09 news, 09010605, for BP summary announcing that all requests for retroactive DR-CAFTA textile duty benefits/interest are due approximately April 1, 2009; CBP cannot yet process Costa Rica requests.

See ITT's Online Archives or 12/10/08 news, 08121035, for BP summary of the USTR determining that 4 DR-CAFTA countries are eligible for 2009 sugar/products "trade surplus" TRQs.

See ITT's Online Archives or 08/19/08 news, 08081915, for Part II of BP's summary of CBP issuing an interim rule amending 19 CFR for the preferential tariff treatment and other customs-related provisions of the DR-CAFTA, with a link to Part I.

See ITT's Online Archives or 08/13/08 news, 08081310, for BP summary of a CBP memo on new DR-CAFTA pocket bag, single transformation, small duty reduction provisions, etc.)

Proclamation 8331 (FR Pub 12/30/08) available at http://edocket.access.gpo.gov/2008/pdf/E8-31137.pdf

ITC Publication 4038 "Modifications to the Harmonized Tariff Schedule of the United States to Implement the Dominican Republic-Central America-United States Free Trade Agreement with Respect to Costa Rica" (containing Annexes I - III of the proclamation) available at http://hotdocs.usitc.gov/docs/tata/hts/pub4038.pdf

CBP Memo (dated 01/07/09) available at http://www.cbp.gov/linkhandler/cgov/trade/trade_programs/international_agreements/free_trade/dominican_republic/cafta_costa_rica.ctt/cafta_costa_rica.doc