Tuesday, May 18, 2010

Free Trade Tuesday - ATPA

Welcome to Free Trade Tuesday! This week we are discussing the Andean Trade Preferences Act.

The original enactment of the ATPA provided free or reduced rates of duty for merchandise imported into the United States from Bolivia, Columbia, Peru and Ecuador. In 2002, the Andean Trade Promotion and Drug Eradication Act (ATPDEA) renewed and amended the ATPA to provide duty-free treatment for certain products previously excluded under the ATPA. Benefits for Bolivia were suspended effective December 15, 2008. The ATPA was intended to stimulate trade between the United States and the designated countries. Origin criteria is determined similar to the rules found in the GSP. The ATPA was originally scheduled for expiration in 2006; however, the current expiration is set for December 31, 2010.

Products that are the growth, product or manufacture of Colombia, Ecuador or Peru are eligible for duty-free treatment if the articles meet the specified eligibility requirements. Eligible articles will be designated by a "J" in the "Special" sub column.

To be eligible, articles must be imported directly from a beneficiary country, and the sum of the cost or value of the material produced in a beneficiary country, or two or more beneficiary countries under the ATPA or CBERA, plus the direct costs of processing operations performed in a beneficiary country or countries, is not less than 35% of the appraised value at the time it is entered. Substantial transformation can confer eligibility for ATPA.

Similar to GSP, there are some articles for which General Note 11 will not be applicable, found in GN 11(d).

ATPA - Key Facts
Expiration: 12/31/2010
HTS General Note: GN 11
Imported Directly: Yes
De Minimis: None
Origin Criteria: 35%, with 15% U.S. Origin Content Allowable
MPF: No exemption
Regulations: 19 CFR 10.201

Join us again next Tuesday when we discuss the North American Free Trade Agreement.

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