CBP Issues Instructions on Filing Claims Under the Oman FTA (Part II - Details)

The OFTA was implemented by Presidential Proclamation 8332, and is effective for goods entered or withdrawn from warehouse for consumption on or after January 1, 2009. (See ITT's Online Archives or 01/15/09 news, 09011520 for BP summary of Proclamation 8332.)

This is Part II, the final part, of BP's two-part series of summaries on CBP's memo, and provides highlights of the instructions for the filing and acceptance of claims for preferential treatment of goods under the OFTA:

19 CFR to be Amended to Implement the OFTA

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

Claims at Entry Summary Must Include SPI "OM"

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) "OM" 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 OFTA should file manual entries or file ABI entries at release with manual entry summaries.

Declaration Requirements

The importer may make a claim for preferential tariff treatment based on the importer's knowledge or 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 a signed declaration with the data elements outlined in an attachment to CBP's memo as well as manufacturing, cost and other data necessary to substantiate compliance with the OFTA. The declaration need not be in a prescribed format, may be submitted electronically, and may cover a single shipment or multiple shipments of identical goods, not to exceed a 12-month time period.

CBP Verification

The OFTA places the responsibility 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 the declaration and substantiating documentation to establish the validity of the claim. The declaration need not be in a prescribed format; however, it must contain the data elements in the attachment. The importer must provide the declaration and all other supporting documentation to CBP within 30 days of a request.

Determination of a Claim

If CBP determines that the good qualifies for preferential tariff treatment, CBP will notify the importer of the positive determination via a CBP Form 29, Notice of Action. The CBP Form 29 will state that the good qualifies as originating, and will include the HTS number, description of the good and the relevant rule of origin applied to the good.

CBP notes that if the importer fails to submit the requested information, CBP will issue a negative determination via a "Proposed" CBP Form 29. The notice will specify why the good does not qualify for preferential tariff treatment and allow the importer an additional 20 days to provide the requested information. The proposed CBP Form 29 will cite the applicable statutes and/or regulations and detail the rate and/or value advance, as 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 declaration 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 in the form of a CBP Form 29. The notice will specify why the good does not originate pursuant to the OFTA rules of origin, cite the applicable statutes and/or regulations and detail the rate and/or value advance, as appropriate.

Claims for preferential tariff treatment must be supported by a declaration that pertains to a single shipment or a blanket declaration covering shipments for a period of up to 12 months. When a negative determination is made with respect to a blanket declaration, CBP will deny preferential tariff treatment on all importations of identical goods covered by that blanket declaration for all entries that have not reached final liquidation.

If CBP finds that subsequent to a negative determination, an importer submits an additional preference claim on identical goods that is found by means of another verification to be unsubstantiated or false, CBP may suspend preferential tariff treatment on identical goods imported by that party until the importer has shown to CBP's satisfaction that the goods originate.

Post-Importation Claims

If a claim for preference was not made at the time of entry summary, the OFTA permits the importer to make a post-importation claim for preferential tariff treatment and request a refund of excess duties and/or merchandise processing fee (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.)

Protest Rights

An importer or other interested party may file a protest to contest a negative origin determination pursuant to 19 USC 1514 within 180 days of the date of liquidation. The protest may enable the importer to receive a refund of duties and/or MPFs for eligible goods entered, or withdrawn from warehouse, for consumption.

Originating Goods Exempt from MPF, All Goods Subject to HMF

Originating goods under the OFTA, in addition to being subject to reduced or free rates of duty, are exempt from MPF. Goods eligible for preferential treatment under a TPL are non-originating and thus ineligible for the MPF exemption. Note that goods are not exempt from the Harbor Maintenance Fee (HMF) regardless of their originating status.

Cumulation

The OFTA contains a "cumulation" provision, which provides that the value of materials produced in the U.S. or Oman and the direct cost of processing performed in the U.S. or Oman may be counted without limitation toward satisfying the 35% direct cost of processing requirement.

OriginatingTextiles and Apparel

Textiles and apparel products may qualify as originating under OFTA if they meet the requirements specified in the Agreement. The duty rate for these goods will be "free" as identified in the "Special" column.

Below is a summary of the processes required for some of the more basic products to be considered eligible for the OFTA. 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 31(h).)

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

Fabric - generally, yarn must originate in Oman or 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 Oman or U.S. in order to qualify for preferential tariff treatment.

TPL Established for Certain Non-Originating Cotton/MMF Apparel

A tariff preference level has been established for qualifying cotton and man-made fiber (MMF) apparel, fabric and made-up goods. The TPL covers cotton and MMF apparel goods provided for in Chapters 61 and 62 of the HTS. The apparel goods must be cut or knit to shape, or both, and sewn or otherwise assembled in Oman, regardless of the origin of the fabric or yarn used to produce the goods.

This TPL is provided for in Chapter 99, Subchapter XVI, Note 13 and is covered by HTS number 9916.99.20.

To date, there is no requirement that a certificate of eligibility issued by the government of Oman be submitted to make entry under the TPL.

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

(See ITT's Online Archives or 01/15/09 news, 09011525, for Part I of BP's summary on these instructions.)

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

Attachment containing declaration data elements (posted 01/07/09) available at http://www.cbp.gov/linkhandler/cgov/trade/trade_programs/international_agreements/free_trade/oman/adata.ctt/adata.doc