International Trade Today is a Warren News publication.

CBP Clarifies Update to HTS Statistical Note

CBP clarified a recent Harmonized Tariff Schedule update to explain that several origination requirements must still be met for a good to be eligible for Merchandise Processing Fee (MPF) exemptions for originating goods within a preference program. The clarification follows a Jan. 3 CSMS message highlighting a change to General Statistical (GSN) Note 3(c) within the 2014 HTS (see 14010624). The agency also said some preference programs that include MPF exemptions were mistakenly not named in the update.

Sign up for a free preview to unlock the rest of this article

If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.

GSN 3(c) was updated to say under the Civil Aircraft Agreement, Pharmaceutical Agreement or Intermediate Chemicals for Dyes Agreement that goods 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 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," said CBP. "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."

The HTS update also "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." CBP will work with the International Trade Commission to make sure the clarifications are incorporated into the HTS, it said.