Details of the Presidential Proclamation Implementing the U.S.-Oman FTA

OFTA Claims May be Made, Manual Summaries Required Until ACS Updated

According to a recent U.S. Customs and Border Protection CSMS message, importers and brokers may now file OFTA claims; however, the programming updates to the Automated Commercial System (ACS) allowing for automated processing have not yet been completed. Therefore, until further notice, importers claiming OFTA benefits should file manual entries or file ABI entries at release with manual entry summaries.

Annexes Containing HTS Modifications for OFTA Posted to ITC Web Site

The proclamation states that the HTS modifications necessary to implement the OFTA are not in the proclamation but are instead listed in Annexes I and II of ITC publication 4050, which is incorporated by reference into Proclamation 8332.

January 1, 2009 Changes Made by Annex I

According to the Proclamation, the following changes are made to the HTS to implement the OFTA:

'OM' indicator. HTSGeneral Note 3 is amended to add "OM" as the Special Tariff Treatment indicator (aka the SPI) for the OFTA.

Oman No Longer a GSP Country. HTS General Note 4 and the corresponding HTS Chapter 1-97 numbers are amended to reflect Oman's exclusion from the Generalized System of Preferences (GSP) program.

New HTS General Note 31. The HTS is modified to include a new General Note 31 for the OFTA. This note describes the requirements for goods to be considered originating under the OFTA, provides definitions of terms, information on valuation, special textile and apparel rules, the tariff shift rules of origin, etc.

Originating goods. In general, an originating good must be imported directly from Oman and must meet one of the following three rules: (1) wholly the growth, product, or manufacture of Oman or the U.S. (or both); (2) the good satisfies the applicable OFTA change in tariff classification (shift) rules, or (3) the good is a new or different article of commerce that has been grown, produced, or manufactured in Oman or the U.S. (or both), where its value and the direct costs of processing in Oman and/or the U.S. are 35% or more of the appraised value.

Valuation of materials. Included are explanations of the following terms for purposes of the valuation of materials (partial list):

Indirect materials. Indirect materials (goods used but not physically incorporated) shall be disregarded in determining whether a good qualifies as originating, except that the cost of such indirect materials may be included in meeting the 35% value content requirement where applicable.

Textile and apparel articles. General Note 31 also contains special rules for textile and apparel articles (the 7% weight rule for goods that would otherwise be considered non-originating, and the 10% value rule for retail sets that would otherwise be considered non-originating).

Product specific rules of origin (including tariff shift rules). General Note 31 includes the OFTA product specific rules of origin (used, and sometimes subject to other rules, to determine whether a good is considered originating for purposes of receiving OFTA preferential treatment).

New HTS Chapter 99, Subchapter XVI. A new Subchapter XVI, with 13 U.S. Notes, is added to Chapter 99, which among other things, establishes a tariff preference level (TPL) and tariff rate quotas (TRQs) for certain OFTA originating goods in HTS 9916, as follows:

"Third country" TPL for Chapter 61 and 62 cotton/MMF apparel. HTS 9916.90.20 provides a duty-free annual TPL of 50 million square meters equivalent (SME) annually for cotton or manmade fiber apparel goods of Chapter 61 (knit) and Chapter 62 (woven) that are cut or knit to shape, or both, and sewn or otherwise assembled in Oman from fabric or yarn produced or obtained outside of Oman or the U.S. This annual TPL is in place for the period of 2009 through 2018.

(Such apparel must meet the conditions of General Note 31, other than the condition that they be originating.)

TRQs. Certain duty-free "in-quota" annual TRQ quantities are in place for the period of 2009 through 2018, as specified in U.S. Note 3 through 12 to Subchapter XVI. These provisions, and their corresponding Chapter 2 - 52 HTS provisions, are as follows:

Once an "in-quota" TRQ fills for the year, the good is subject to an "over-quota" duty rate. These over-quota duty rates are listed in Appendix II, and become duty-free, in a staged manner, on January 1, 2018.

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

Temporary duty-free admission for a national's goods and vessel repairs. HTS Chapter 98, Subchapter XXII, U.S. Note 1(b) and (c) (HTS 9822.01.05 and 9822.01.10) for the duty-free admission for goods of certain nationals, etc. and for vessel repair) are amended by listing the OFTA.

January 1, 2009 and Other Changes Made by Annex II

According to Annex II, the following changes are effective with respect to qualifying goods entered, or withdrawn from warehouse, for consumption on or after January 1, 2009, or other dates (partial list):

Immediate OFTA Duty-Free Treatment. Annex II lists the HTS Chapter 1-98 tariff numbers that are duty-free immediately if they qualify under the terms of the OFTA. For these tariff numbers, the column 1 rate of duty "Special" subcolumn will have the symbol "OM" along with the duty rate of "Free".

Staged OFTA Duty Reductions. The OFTA staged duty reductions (to zero) are listed for each affected HTS Chapter 1-99 eight-digit tariff number. The staged duty reductions take effect annually beginning January 1, 2009 and January 1 of subsequent years variously (until 2018 at the latest), depending on the tariff number's phase-out schedule. By December 31, 2018, all of these tariff numbers should be free of duty under the OFTA.

(The OFTA is also abbreviated as the UOFTA.)

Presidential Proclamation 8332, FR Pub 12/31/08, available at http://edocket.access.gpo.gov/2008/pdf/E8-31234.pdf

Proclamation 8332's Annexes (ITC publication 4050, dated December 2008) available at http://hotdocs.usitc.gov/docs/tata/hts/pub4050.pdf

CSMS message 09-00021 (dated 01/13/09) available at http://apps.cbp.gov/csms/viewmssg.asp?Recid=17407&page=&srch_argv=09-000021&srchtype=all&btype=&sortby=&sby