CBP Issues Colombia FTA Implementation Instructions

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May 16, 2012

On May 16, 2012, U.S. Customs and Border Protection (CBP) issued implementation instructions providing guidance with respect to preferential tariff claims under the U.S.-Colombia Trade Promotion Agreement (Colombia FTA).  The Colombia FTA provides for the immediate or staged elimination of duties and barriers to bilateral trade in goods and services originating in the United States and/or Colombia. The implementation instructions address issues such as origination, rules of origin, de minimis provisions, quotas, preference claims and post-importation claims.

The instructions follow two days after the President issued a Proclamation implementing the Colombia FTA for goods entered, or withdrawn from warehouse for consumption, on or after May 15, 2012. The Proclamation incorporated, by reference, U.S. International Trade Commission Publication 4320. Annex I of Publication 4320 amends the United States Harmonized Tariff Schedule (HTSUS) by adding a new General Note 34 containing specific information regarding the Colombia FTA and a new Subchapter XXI to Chapter 99 to provide for temporary tariff rate quotas implemented by the Colombia FTA. New provisions were also added to Subchapter XXII to Chapter 98. Additionally, Annex II of Publication 4320 amends the HTSUS to provide for immediate and staged tariff reductions.  

CBP’s Implementation Instructions include the following topics:

Origination, Transit, and Transshipment
An originating good is one that meets the general and/or product specific rules of origin set forth in General Note 34 and all other requirements of the agreement. Goods that undergo further production outside the territory of the United States or Colombia, other than unloading, reloading or other processing to preserve the condition of the good or to transport the good to the territory of the United States or Colombia, or goods that do not stay under customs control in the territory of a non-Party, will not be considered originating.

Rules of Origin
Under the Colombia FTA, a good is considered originating when the good is wholly obtained or produced entirely in the territory of the United States and/or Colombia; the good is produced entirely in the territory of the United States and/or Colombia and either each of the non-originating materials used in the production of the good undergoes an applicable change in tariff classification specified in General Note 34 (o) or the good otherwise satisfies any applicable regional value content requirements specified in General Note 34(b); and
the good satisfies all other applicable requirements. The good is also considered originating when it is produced entirely in the territory of the United States and/or Colombia exclusively from originating material.

Eligibility for Textiles and Apparel
Textiles and apparel products may qualify as originating if they meet the requirements as specified in the Colombia FTA. The duty rates for these goods will be identified in a “special” column.

De Minimis
The Colombia FTA has a 10 percent de minimis provision for most goods, with exceptions for certain textiles.

Quota
For agricultural products subject to quota under the Colombia FTA, the required 98 or 99 HTS number and the appropriate 1-97 HTS number must be identified on the CBP form 7501.

Claiming Preference
A claim for preferential tariff treatment may be made at the time of entry summary by prefacing the HTSUS number of the applicable good on CBP Form 7501 with the Special Program Indicator “CO”.  Subsequent to the completion of programming, importers may make a preference claim at entry summary through the Automated Commercial System or Automated Commercial Environment, or may make a post-importation claim within one year of importation.

For further information, please contact a Barnes/Richardson attorney.