Tuesday, May 11, 2010

Free Trade Tuesday - IFTA

Welcome to Free Trade Tuesday! This week we are discussing the Israel Free Trade Area Implementation Act

Implemented in 1985, IFTA provides free or reduced rates of duty for merchandise imported into the United States from Israel. The IFTA is intended to stimulate trade between the United States and Israel. Origin criteria is determined similar to the rules found in the GSP. IFTA has no termination date and duties for eligible products were completely phased out in 1995.

If a tariff number is eligible for IFTA, the symbol "IL" appears in the "Special" sub-column.

In order to qualify for special treatment under ITFA, the merchandise must be imported directly from Israel. Imported directly means that the goods were shipped from Israel to the U.S. without passing through the territory of any other country. However, goods may transit through another country without losing eligibility so long as nothing is done to the merchandise other than loading and unloading and the goods do not enter the commerce of the other country.

The sum of the cost of the material produced in Israel plus direct costs of the processing operations performed in the Israel must not be less than 35% of the appraised value of the imported article in order to qualify for benefits. In calculating the 35%, up to 15% of the 35% can be contributed from the United States.

If the article is not wholly from Israel, it may still be eligible if the article is substantially transformed into a different article of commerce.

IFTA - Key Facts
Expiration: None
HTS General Note: GN 8
Imported Directly: Yes
De Minimis: No
Origin Criteria: 35%, with 15% U.S. Origin Content Allowable, Substantial Transformation
MPF: Exempt for all goods, whether or not originating
Regulations: N/A

In addition to special treatment for duties, the act also includes provisions for intellectual property, agriculture and more. Click
HERE for more details on the IFTA and other trade agreements.

Join us again next Tuesday when we discuss the Andean Trade Preferences Act (ATPA).

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