On August 11, 2014 U.S. Customs and Border Protection (CBP) issued a memorandum providing new guidance regarding acceptable mechanisms for submission of post-importation preference claims. CBP advises it has eliminated the use of protests as a mechanism to file post-entry claims for free trade agreement and preferential tariff program benefits to align its policy with a 2012 ruling.
For free trade agreements and preferential tariff programs (FTAs) not governed by 19 U.S.C. 1520(d), importers have long utilized other mechanisms to file claims for duty refunds when the trade agreement benefits were not filed at the time of filing the entry summary. At times, the evidence of eligibility is not available at the time of entry. Exercising reasonable care, the importer does not claim benefits at that time, and may elect to file a claim on a post-summary basis. 19 U.S.C. 1520(d) provides the ability to file such claims with specific requirements for certain FTAs. Under the statutory provision, importers may file a 1520(d) claim within one year from the date of importation.
With no such statutory provision addressing post-entry claims for other FTAs, CBP previously took the position that importers could file post-entry claims by means of post-entry amendment (PEA) for ACS entry summaries, post-summary correction (PSC) for ACE entry summaries, or a protest under the provisions of 19 U.S.C. 1514.
CBP is now turning to its Headquarters ruling H193959, issued on July 30, 2012 as the reason for amending its policy. In that ruling, CBP interprets that the trade agreement with Singapore requires the claim for preferential tariff treatment be made at the time of filing the entry summary, and that importers are barred from making a claim when they fail to do so. It cites several Court of International Trade cases in support of its interpretation.
CBP’s new guidance states that importers cannot use a protest to submit initial claims for preference benefits. It will however, continue to permit the filing of PEAs and PSCs to claim benefits of programs that are not subject to the 1520(d) requirements.
CBP will be updating its various publications to reflect this change in policy, including the side-by-side comparison chart of various trade programs published on its website. For quick reference to the impact of this policy change, below is a table of preference programs and the method by which CBP will permit a post-importation claim to benefits.
|19 USC 1520(d)||PEA or PSC|
|CAFTA-DR NAFTAChile FTA Oman FTAColombia TPA Panama TPA
Korea FTA Peru TPA
|AGOA Civil Aircraft Agreement Jordan FTAAustralia FTA GSP Morocco FTABahrain FTA Insular Possessions Pharmaceutical
CBERA Israel FTA Products
CBTPA Intermediate Chemicals for Dyes Singapore FTA
For any questions regarding this CBP guidance, please contact your local DB Schenker brokerage office.