We recently issued CSMS #14-000003, dated January 3, 2014, to notify the trade community that
General Statistical Note 3(c) had been updated in the 2014 Harmonized Tariff Schedule of the U.S. (HTSUS). One update indicates that goods of a country with which the U.S. has a free trade agreement (FTA) that provides an exemption from the merchandise processing fee (MPF) can be imported free of MPF by using each agreement’s special program indicator (SPI).
Additionally, GSN 3(c) was updated to indicate that goods imported under the Civil Aircraft Agreement, Pharmaceutical Agreement or Intermediate Chemicals for Dyes Agreement (SPIs “C,” “K,” or “L,” respectively) that are marked or eligible to be marked the “product of” a country with which the U.S. has an FTA that provides the MPF exemption, can be imported free of MPF by adding the “#” symbol after the respective SPI in the entry documentation.
With this notice we seek to clarify that, with respect to a preference program that provides the MPF exemption to “originating” goods, in order to claim such exemption in addition to the Civil Aircraft Agreement, Pharmaceutical Agreement or Intermediate Chemicals for Dyes Agreement (SPIs “C#,” “K#,” or “L#,” respectively), a good must meet the preference program’s “origination” requirements, including any “imported directly” requirement. With respect to a preference program that provides the MPF exemption to goods that meet the lesser “product of” standard, as defined in each agreement, the same “product of” standard and “imported directly” requirements apply when using SPI “C#,” “K#,” and “L#” to obtain the MPF exemption.
Furthermore, we note that the update to GSN 3(c) unintentionally omitted other special trade regimes which provide for MPF exemption, such as for products of U.S. insular possessions; beneficiary countries under the Caribbean Basin Economic Recovery Act; and least developed beneficiary countries under the Generalized System of Preferences. Please refer to 19 CFR 24.23 (c) for a complete list of MPF exemptions.
CBP will work together with the International Trade Commission to ensure these clarifications are incorporated into the HTSUS as soon as practicable.
For the reasons stated above, CSMS #14-000003, dated January 3, 2014, is modified by this notice to the extent it is inconsistent with the guidance provided here. Any questions concerning this notice may be directed to the Trade Agreements Branch at email@example.com.