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Imports from U.S. Insular Possessions Eased Under CBP Final Rule

Wednesday, February 11, 2015
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has issued a final rule intended to streamline the certification process and modernize the entry process for shipments from U.S. insular possessions.

Goods imported into the U.S. customs territory from an insular possession may be eligible for duty-free treatment under the provisions of General Note 3(a)(iv) of the Harmonized Tariff Schedule of the United States. Insular possessions include the U.S. Virgin Islands, Guam, American Samoa, Wake Island, Midway Islands and Johnston Atoll. In addition, goods imported from the Commonwealth of the Northern Mariana Islands are entitled to the same tariff treatment as imports from Guam. Puerto Rico is not an insular possession because it is part of the U.S. customs territory.

To receive duty-free treatment on imports from U.S. insular possessions, importers must currently file with each entry a CBP Form 3229, Certificate of Origin for U.S. Insular Possessions, that is signed by the chief or assistant chief customs officer or other official responsible for customs administration at the port of shipment. CBP has noted that no other certificate of origin requires verification and signature by a local customs officer at the port of export, which in practice requires the shipper to deliver the form to the customs officer and either wait for a signature or leave the form to be signed and retrieved at a later time.

To align this certification process with the post-importation verification process used for other certificates of origin required under free trade agreements and trade preference programs, and to ease the administrative burden on shippers as well as importers seeking duty-free treatment of goods from U.S. insular possessions, CBP is eliminating the requirement that a customs official at the port of export verify and sign CBP Form 3229. In addition, this rule requires only that the importer present this form upon CBP’s request, rather than with each entry. However, the importer will have to maintain the form in its possession and may be subject to the assessment of a recordkeeping penalty if it cannot be produced.

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