CBP Issues Instructions on Filing Claims Under the Peru TPA

The Peru TPA was implemented by Presidential Proclamation 8341, and is effective for goods entered or withdrawn from warehouse for consumption on or after February 1, 2009. (See ITT's Online Archives or 02/02/09 news, 09020210, for BP summary.)

The following are highlights of CBP's instructions:

19 CFR to be Amended to Implement the Peru TPA

According to CBP, 19 CFR will be amended to implement the Peru TPA and the Peru TPA Implementation Act. Accordingly, these instructions are subject to change once the regulations are issued.

Retention of ATPA/ATPDEA Benefits, Loss of GSP Benefits

Goods of Peru are no longer eligible to receive benefits under the Generalized System of Preferences (GSP) program. However, Peru retains its benefits under the Andean Trade Preference Act (ATPA) and the Andean Trade Promotion Drug Eradication Act (ATPDEA)¹.

SPI of "PE", ABI Not Yet Programmed for Peru TPA

A claim for preferential tariff treatment may be filed on originating goods at the time of entry summary by placing the Special Program Indicator (SPI) "PE" as a prefix to the HTS subheading for each good or line item for which treatment is being claimed.

Note that the programming updates to the Automated Commercial System (ACS) allowing for automated processing have not yet been completed and until further notice, importers claiming preference under the Peru TPA must file non-ABI (manual) entry summaries. Importers will have the option to file ABI entries at release (rather than manual) and follow through with manual entry summaries. This option is allowed only for Peru TPA claims and will terminate once ACS programming to allow electronic entry summary filing is complete.

(See ITT's Online Archives or 02/12/09 news, 09021220, for BP summary of CBP's ABI system requirements for the Peru TPA.)

Certification Requirements

The importer may make a claim for preferential tariff treatment based on a written or electronic certification issued by the importer, exporter or producer, or based on the importer's knowledge to include reasonable reliance on information in the importer's possession that the good qualifies as an originating good according to the rules of origin.

The importer must be prepared to submit upon CBP's request the certification or other information setting forth the reasons that the good qualifies as originating. The certification or other information is not required to be filed with CBP at the time the claim is made. However, the importer is responsible for retaining supporting documentation, which may be requested by CBP, as to the good's eligibility for preferential treatment at the time the claim was made.

If the certification serves as the basis for the claim, it does not need to be in a prescribed format, may be submitted electronically, and may cover a single shipment or multiple shipments of identical goods not to exceed the time period of 12 months. The certification must not only include the reason the good qualifies as originating, but must contain the required data elements pertaining to the importation of the good, as outlined in an attachment to CBP's memo. The certification may be submitted in English or Spanish. If submitted in Spanish, CBP may request an English translation.

An importer may submit a certification completed or generated by an exporter or producer or may issue the certification based on information submitted by the exporter or producer that the good qualifies as originating; however, the importer must exercise reasonable care when certifying to the accuracy and truthfulness of the information submitted to CBP. The fact that the importer has issued a certification based on information provided by the exporter or producer or submits a certification executed by the exporter or producer does not relieve the importer of the responsibility to exercise reasonable care.

If the basis for the claim is not a certification but rather is supported by other information, that information must also include the required data elements outlined in the attachment, but does not need to include the certifying statement or the blanket period. However, the information must sufficiently support the claim for preference.

(See CBP's memo for details on the requirement of a certification or other information for an importation of goods with an FOB value of $2,500 or less, etc.)

CBP Verification

The Peru TPA places the burden of substantiating the validity of a claim for preferential tariff treatment on the importer. An importer may make a claim for preferential tariff treatment based on knowledge or information in their possession that the good is originating. When verifying the validity of a claim, CBP will direct inquiries to the importer via a CBP Form 28, Request for Information.

Upon request by CBP, the importer is required provide additional documentation above and beyond the certification such as additional cost and manufacturing information. In addition, the importer may provide relevant information from the exporter or producer of the good. In many instances, the exporter may be unwilling to provide cost and/or sourcing information to the importer. CBP will still work through the importer. The importer is expected to arrange for the foreign supplier to provide information directly to CBP.

The Peru TPA provides flexibility by not mandating that the certification or other information be in a prescribed format (such as the NAFTA Certificate of Origin) and by permitting the certification to be submitted to CBP electronically where feasible.

Positive and Negative Determinations for a Claim

If the importer forwards the certification and all other records or documentation demonstrating that the goods qualify for preferential tariff treatment, CBP will notify the importer of the positive determination via a CBP Form 29, Notice of Action, stating that based on the information submitted the goods qualify as originating.

CBP notes that if the importer fails to submit a certification or any relevant information, CBP will issue a negative determination via a "proposed" CBP Form 29. The notice will specify why the goods do not qualify for preferential tariff treatment and notify the importer that they have 20 days from the date of the notice to provide the certification and all related documentation to CBP. The proposed CBP Form 29 will cite the appropriate legal authority and/or regulations and detail the rate and/or value advance where appropriate.

If the importer fails to submit the information requested in the proposed CBP Form 29 within 20 days of the date of the notice, or provides a certification and/or supporting documentation, and CBP determines, based on the information submitted, that the good does not qualify for preferential tariff treatment, a negative determination will be sent to the importer via the form of a CBP Form 29. The notice will specify why the good does not originate pursuant to the Peru TPA rules of origin, cite the appropriate legal authority and/or regulations and detail the rate and/or value advance, as appropriate.

If claims were made for preferential tariff treatment based on a blanket certification against which a negative determination was established, CBP will deny preferential tariff treatment to all importations of identical merchandise covered by that blanket certification for all entries that have not reached final liquidation.

(See memo for details on false certifications, illegible certifications, etc.)

Correction of Peru TPA Claims

An importer is required to promptly make a corrected declaration if the importer has reason to believe the declaration was based on incorrect information. The importer is required to submit corrections and pay any additional duties and merchandise processing fees (MPF) within 30 days from the date the error was discovered.

Penalties will not be assessed for promptly and voluntarily declaring that imported goods were not originating according to the rules of origin, provided the importer complies with the requirements set forth in 19 CFR 162.74 and did not engage in negligence, gross negligence, or fraud.

Post Importation Claims

If a claim for preference was not made at the time of importation and the goods were originating, the Peru TPA permits importers to make post-importation claims for preferential tariff treatment and request a refund of excess duties and/or MPF. The importer may make a post-importation claim no later than one year after the date of importation and must comply with the requirements of 19 USC 1520(d). (See memo for claim requirements.)

Originating Goods Exempt from MPF, All Goods Subject to HMF

In addition to the reduced and free rates of duty afforded by the Peru TPA, originating goods that qualify for preferential tariff treatment are not subject to MPF. However, no merchandise is exempt from the harbor maintenance fee (HMF).

Originating Textiles and Apparel

Textiles and apparel products may qualify as originating under Peru TPA if they meet the requirements specified in the agreement. The duty rate for these goods will be identified in the HTS "special" column.

Below is a summary of the types of processes required for some of the more basic products to be considered eligible for the Peru TPA. Depending on the type of product, it may be exempt from these requirements. (For more specific information and specific tariff shift rules for the article being imported, refer to HTS General Note 32.)

Yarn - generally, fiber must originate in Peru or the U.S. in order to qualify for preferential tariff treatment.

Fabric - generally, yarn must originate in Peru or the U.S. to qualify for preferential tariff treatment. Cotton and man-made knit fabric are under fiber forward rules.

Apparel - generally, yarn must originate in Peru or the U.S. in order to qualify for preferential tariff treatment.

Short Supply

Fibers, yarns or fabrics not available in commercial quantities in a timely manner among the Parties are listed in HTS Chapter 98, Subchapter XXII, U.S. Note 29. Importers making a short supply claim must use HTS number 9822.06.20 for textile and apparel goods in Chapters 50-63 and subheading 9404.90.

Handloomed, Handmade and Folklore Goods

A folklore agreement must be negotiated between the two parties before goods may be eligible for this provision. Once a country has negotiated a folklore agreement, goods can be entered under HTS 9822.06.25 in addition to their HTS Chapter 1-97 numbers. To date, there has been no mutual agreement; a Textile Book Transmittal (TBT) will be issued if an agreement is reached.

¹The Proclamationwhich amended the HTS to implement the Peru TPA inadvertently removed Peru from the list of countries eligible to receive ATPA/ATPDEA benefits. However, the U.S. Trade Representative issued a correction reinstating Peru's benefits. CBP notes that goods of Peru that were entered or withdrawn from warehouse for consumption between February 1 and February 8, 2009 that wish to make a retroactive ATPA/ATPDEA claim may do so using a post-entry amendment. (See ITT's Online Archives or 02/18/09 news, 09021899, 2 for most recent BP summary.)

(See CBP's memo for details, additional topics (such as rules of origin, Peru TPA agricultural TRQs, the textile de minimis rules, the treatment of sets (textiles), etc.))

Memo (dated 02/10/09) available at http://www.cbp.gov/linkhandler/cgov/trade/trade_programs/international_agreements/free_trade/peru/peru_tpa.ctt/peru_tpa.pdf

Attachment containing certification data elements (posted 02/10/09) available at http://www.cbp.gov/linkhandler/cgov/trade/trade_programs/international_agreements/free_trade/peru/a.ctt/a.pdf