Textile and Apparel Preference Rules

1
Textile and Apparel Preference Rules

• U.S. Customs Border Protection

2
U.S.-Morocco FTA Technical Seminar Textile
Apparel Rules
14-18 March 2005 Casablanca, Morocco
3
Overview

• U.S. Customs Border Protection
• U.S. Duty Rates the FTA
• Brief Textile Lesson
• Fiber, Yarn Fabric
• Concepts Defined
• FTA Preference Rules
• Tariff Shift Rule
• Compliance Enforcement
• Resources

4
U.S. Customs Border Protection (CBP)

• On March 1, 2003, the U.S. Customs Service became
  part of the Bureau of Customs and Border
  Protection (CBP) within the Department of
  Homeland Security.
• CBP has many roles, the priority mission is to
  protect our borders.
• Regulating Facilitating International Trade
• Collecting Import Duties
• Enforcing U.S. Trade Laws
• The U.S. has over 300 Ports of Entry

5
Imports After Quota Expire

• Effective for exports on/after 1 January 2005,
  all textiles and wearing apparel from World Trade
  Organization (WTO) members are no longer subject
  to quota.
• Possible Chinese Safeguards

6
Imports WITHOUT Quotas

• Without quotas, competition will be fierce and
  the social/political aspect is something to
  watch!
• More than 80 of our export earnings are coming
  from this apparel and textile sector. - Farkul
  Ahsan, Bangladesh Embassy official.
• Where Free Trade Hurts The end of textile quotas
  makes economic sense, but the social disruption
  will be huge. (Business Week, Dec. 15, 2003)
• Countdown to 2005 Developing Nations Fear
  Millions of Job Losses (WWD, Feb. 3, 2004)

7
Competition

• Without quotas, textile and apparel manufacturers
  will be searching for a Competitive Advantage.
• Without quotas, price will play a major factor in
  determining who has a Competitive Advantage.

8
Purpose of an FTA?

• What is the Purpose of an FTA? Remember this is
  a Free Trade AGREEMENT.
• In all agreements there are negotiations - and
  all parties make concessions.
• The intent of an FTA is that both parties benefit
  from that agreement.

9
Three Possible Duty Rates

• Products of Morocco can be eligible for three
  different duty rates depending on the inputs (raw
  materials) and production.
• (1) Non-FTA products are subject to Regular
  Duties
• FTA products are (2) Duty Free or (3) Reduced
  Duties

www.ustr.gov
10
FTA Duty Reductions

• For the majority of qualifying textile products,
  tariffs will be eliminated over six (6) years.
  (see Annex IV Tariff Elimination)
• However, immediate, duty-free treatment will be
  provided to selected items up to designated
  quantities.
• Annex 4-B Tariff Rate Quotas for originating
  goods. Quantities above the levels in Annex 4-B
  will immediately be eligible for the reduced
  rates listed in Annex IV Tariff Elimination.

11
FTA Duty Reductions

• Upon full implementation of the U.S.-Morocco Free
  Trade Agreement, ALL originating textiles and
  wearing apparel will be duty free.

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(No Transcript)
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Average U.S. Duty Rates

• Although the average trade-weighted duty rate for
  all U.S. imports is less than 2, U.S. duty rates
  on textiles and apparel remain high.
• Product Average Duty FTA Rate
• Yarn 8 0
• Fabric 10 0
• Made-Up Articles 10 0
• Apparel 16 0
• When fully implemented

14
Originating Goods

• An Originating good meets the applicable FTA
  preference rule of origin.
• A Non-Originating good does NOT meet the
  applicable preference rule of origin.

15
Example of High U.S. Duty
Non-FTA vs. FTA
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Example of High U.S. Duty

• Nylon/Spandex Knit Top HTS 6109.90.10
• Non-FTA Rate 32
• FTA Duty Rate 0 (free)

17
Example of High U.S. Duty

• Cotton Knit Shirt HTS 6105.10.00
• Non-FTA Rate 19.7
• FTA Duty Rate 0 (free)

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Example of High U.S. Duty

• Cotton Trousers 16.6
• Mens 6203.42.4015
• Women's 6204.62.4020
• MMF Trousers 27.9
• Mens 6203.43.4010
• Womens 6204.63.3510
• FTA Duty Rate 0 (free)

19
U.S.- Morocco FTA

• Chapter 4 - Textiles and Apparel
• Articles
• 4.1 - Tariff Elimination
• 4.3 - Rules of Origin and Related Matters
• 4.4 - Customs and Administrative Cooperation
• Annex 4-A - Preferential Rules of Origin (a.k.a.
  Tariff Shift Rules)
• Annex 4-B - Tariff Rate Quotas on Apparel Goods

20
FTA Preference Rules

• In most cases, a good must be more than a
  product of Morocco, it must also meet the FTA
  preference rule of origin.

21
Preferential Rule of Origin

• Is this Originating fabric?

22
FTA Originating Product

• Annex 4-A(1)(i)
• each of the non-originating materials used in
  the production of the good undergoes an
  applicable change in tariff classification
  specified in this Annex as a result of production
  occurring entirely in the territory of one or
  both of the Parties

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Harmonized Tariff Schedule
Know the HTS Number!
U.S. Harmonized Tariff Schedule www.usitc.gov
24
Harmonized Tariff Schedule

• The Harmonized Tariff Schedule (HTS) shows the
  applicable duty rate.
• It also shows if the item qualifies for various
  trade preference programs
• Just like classification, always look at the rule
  for the finished product.

www.usitc.gov
25
Market Analysis

• Harmonized Tariff Schedule
• U.S. Duty Rates
• Other Preference Programs
• Quotas
• Non-WTO Members
• Chinese Safeguards
• U.S. Import Data
• U.S. Demand for Imported Products

26
Brief Textile Lesson

• What is a textile product?

27
Textile Manufacturing

• Fiber..Yarn..Fabric..

28
Fiber

• Fiber
• staple fibers
• filament fibers

29
Yarn

• Yarn
• single
• plied

30
Fabric

• Fabric
• woven
• knit
• non-woven

31
Concepts Defined

• Fiber Forward
• Yarn Forward
• Fabric Forward

The textile and apparel preference rules are very
similar for U.S. Free Trade Agreements with
Morocco, Bahrain, the NAFTA, Singapore, Chile,
and Australia.
32
Fiber Forward

• Fiber Forward requires U.S. and/or Morocco origin
  fiber, and all operations forward.

Forward
Fiber
33
Yarn Forward

• Yarn Forward requires U.S. and/or Morocco origin
  yarn, and all operations forward, but the fiber
  may originate outside the U.S. and Morocco.

Forward
Yarn
34
Fabric Forward

• Fabric Forward requires U.S. and/or Morocco
  origin fabric, and all operations forward, but
  the fibers and yarns may originate outside the
  U.S. and Morocco.

Forward
Fabric
35
FTA Preference Rules

• U.S.-Morocco FTA Preference Rules
• Yarn
• Fabric
• Made-up Articles
• Apparel

The General Rule
36
FTA Rules

• Reminder Always look up the Harmonized Tariff
  Schedule (HTS) number for the finished product
  that will be exported to the United States.
• It is important to know the HTS number for the
  products you produce!

37
FTA Rule for Yarn

• The preference rule for yarn is fiber forward,
  except
• spun yarns of silk, wool, and vegetable fibers
  (other than cotton) may be spun with fibers
  originating outside US/Morocco.
• filament yarns must be formed (extruded) in
  Morocco or the United States.

38
FTA Rule for Fabric

• The preference rule for fabric is yarn forward,
  except
• fiber forward
• cotton man-made fiber knit fabric
• man-made fiber non-woven fabric
• certain specialty fabrics
• fabric forward
• silk linen fabrics
• coated fabrics, but with exceptions

39
Rule for Made-Up Articles

• The preference rule for made-up articles is yarn
  forward, except
• fabric forward
• silk linen articles
• man-made fiber luggage
• certain other products

Examples of Made-Up Articles Towels, Bedding,
Carpets, Luggage, etc.
40
FTA Rule for Apparel

• The preference rule for apparel is yarn forward,
  exceptions include
• cut sew rule for
• Certain apparel made from specific fabrics
• Apparel made of silk fabric
• Apparel made of linen fabric
• Apparel made of fabrics in short supply

41
Tariff Shift Rule

• Tariff Shift Rule
• International Nomenclature (HTS)
• WTO Consistent
• Transparent
• Not Subjective (Substantial Transformation)
• Unlike Value Added Rules

42
Harmonized Tariff Schedule
Section XI - Textile and Textile Articles

• 50 - Silk
• 51 - Wool
• 52 - Cotton
• 53 - Other Vegetable
• 54 - Man-Made Filaments
• 55 - Man-Made Staple
• 56 - Wadding, etc

• 57 - Carpets, etc
• 58 - Special Fabrics
• 59 - Coated Fabrics
• 60 - Knit Fabrics
• 61 - Knit Apparel
• 62 - Woven Apparel
• 63 - Made-Up Articles

U.S. Harmonized Tariff Schedule www.usitc.gov
43
Tariff Shift Rule

• A change to heading , from any other heading,
  except , through , and .
• Example for Cotton Yarn (Heading 5205) A
  change to headings 5201 through 5207 from any
  other chapter, except from headings 5401 through
  5405, or 5501 through 5507.

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Preference Rule for Yarn

• Remember that the preference rule for yarn is
  Fiber Forward
• Therefore the fibers must originate in a
  preference country.

45
Example Cotton Yarn (5205)

• A change to headings 5201 through 5207 cotton
  yarn from any other chapter, except from
  headings 5401 through 5405 man-made filament
  fibers, or 5501 through 5507 man-made staple
  fibers.
• since cotton fibers are classified in chapter
  52, foreign fibers may not be used.

46
Example Cotton Yarn (5205)

• Rule as written...
• A change to headings 5201 through 5207 from any
  other chapter, except from headings 5401 through
  5405, or 5501 through 5507.
• Or, you can say...
• A change to cotton yarn from any other chapter,
  except from man-made fibers.

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Example Cotton Yarn (5205)

• You must use Morocco and/or U.S. Cotton and
  Man-Made Fibers.
• However, all other fibers may be foreign

48
Blended Fibers

• There are always exceptions.
• For example, if you have a blended fiber yarn,
  65 Cotton and 35 Wool, the wool fibers do NOT
  have to be a product of Morocco or the United
  States.

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Preference Rule Summary

• Textile Product General Rule
• Yarn Fiber Forward
• Fabric Yarn Forward
• Made-up Articles Yarn Forward
• Apparel Yarn Forward

There are exceptions to every rule!
50
U.S. - Morocco FTA

• Preferential treatment for certain textiles and
  apparel

Advanced Lesson
51
U.S. - Morocco FTA

• Preferential Rules of Origin
• Annex 4-A of the FTA (Textiles Apparel)
• Annex 4-B Tariff Rate Quotas
• Keep in mind that most textile and apparel
  products must be more than a product of Morocco
  to qualify for the FTA preferential treatment.

52
General Rule for Yarn

• Fiber Forward
• Fibers must originate in one or both of the
  Parties
• Yarn must be formed in a Party

53
Example 1 - Cotton Yarn

• Raw Cotton (5201) is grown in Egypt and exported
  to Morocco
• Formed into Cotton Yarn (5205) in Morocco
• Cotton Yarn (5205) exported to U.S.
• Origin? Eligible for FTA Preference?

54
Example 1 - Cotton Yarn

• Fiber Yarn Fabric Cut Sew
• Egypt Morocco

Fiber Forward Rule
55
Example 1 - Cotton Yarn

• A change to headings 5201 through 5207 cotton
  yarn from any other chapter, except from
  headings 5401 through 5405 man-made filament
  fibers, or 5501 through 5507 man-made staple
  fibers.
• Since cotton fibers are classified in chapter
  52, foreign fibers may not be used.

56
General Rule for Woven Fabric

• Yarn Forward
• Yarn and Fabric formation must occur in one or
  both of the Parties

57
Example 2 - Woven MMF Fabric

• Raw Cotton (5201) produced in China and exported
  to Morocco
• Polyester Staple Fiber (5503) produced in Japan
  and exported to Morocco
• Cotton and Polyester further processed, then
  blended and spun into a 70 Polyester/30 Cotton
  Yarn (5509) in Morocco.
• Polyester/Cotton Yarn woven into Oxford Cloth
  fabric (5512) in Morocco
• The Oxford Cloth (5512) is exported to the U.S.
• Origin? Eligible for FTA Preference?

58
Example 2 -Woven MMF Fabric

• Fiber Yarn Fabric Cut Sew
• China Morocco Morocco
• Japan

Yarn Forward Rule
59
Example 2 -Woven MMF Fabric

• A change to heading 5512 through 5516 from any
  heading outside that group, except from heading
  5106 through 5110, 5205 through 5206, 5401
  through 5404 or 5505 through 5510.
• (remember, the general preference rule for fabric
  is Yarn Forward)

60
Example 2 -Woven MMF Fabric

• A change to heading 5512 through 5516 from any
  heading outside that group, except from heading
  5106 through 5110 wool yarn, 5205 through 5206
  cotton yarn, 5401 through 5404 man-made
  filament yarn or 5505 through 5510 man-made
  staple yarn.
• Therefore all wool, cotton and man-made fiber
  yarns must be formed in Morocco and/or the U.S.,
  but fibers may come from anyplace.

61
General Rule for Knit Fabric

• Fiber Forward
• Fiber, Yarn and Fabric formation must occur in
  one or both of the Parties

62
General Rule for Apparel
Made in Morocco

• Yarn Forward
• Yarn, Fabric, and Apparel formation must occur in
  one or both of the Parties

63
Exceptions to the Rule...

• Not all items follow the yarn-forward rule.
• Some apparel rules have an easier cut-and-sew
  rule, including
• 6108.21 Certain Cotton Underwear
• 6108.31 Certain Cotton Pajamas
• Woven apparel made of short supply yarns and/or
  fabrics (Chapter 62 Rule 2)
• Built into the Tariff Shift Rules (Annex 4-A)

64
Tariff Rate Quotas

• Annex 4-B Tariff Rate Quotas
• Although duty rates will be eliminated within 5
  years of the implementation, for certain
  originating goods listed in Annex 4-B, the duty
  rate will be zero (0) for a specified quantity
  of goods.
• Excess quantities are eligible for reduced duties
  (Article 4.1.7)
• Beginning in year six (6), all goods described in
  Annex 4-B will be duty-free.

65
Component that Determines the Tariff
Classification

• For purposes of determining the origin of a good
  of Chapters 61 - 63, the rule applicable to that
  good shall only apply to the component that
  determines the tariff classification of the good
  and such component must satisfy the tariff change
  requirements.
• Chapter 61, Chapter Rule 2
• Chapter 62, Chapter Rule 3
• Chapter 63, Chapter Rule 1

66
General Rule for Apparel

• The tariff shift rule only applies to the
  component that determines the tariff
  classification
• There are a few exceptions, but in most cases,
  you are not concerned about the origin of all
  other fabrics.

67
General Rule for Apparel

• What is the component that determines the tariff
  classification?

68
General Rule for Apparel

• What is the component that determines the tariff
  classification?

69
General Rule for Apparel

• What is the component that determines the tariff
  classification?

70
Example 3 - Pants (Trousers)

• Raw Cotton (5201) and Polyester filament fibers
  (5503) are produced in the U.S.
• Cotton and Polyester fibers are combined and spun
  into a 80 Cotton/20 Polyester yarn (5206) in
  the U.S.
• Cotton/Polyester Yarn is woven into Twill Fabric
  (5210) in the U.S. and exported to Morocco
• Twill Fabric cut and sewn into womens cotton
  pants (6204.62) in Morocco and exported to the
  U.S.
• Origin? Eligible for FTA Preference?

71
Example 3 - Pants(Trousers)

• Fiber Yarn Fabric Cut Sew
• U.S. U.S. U.S. Morocco

Yarn Forward Rule
72
Example 3 - Pants(Trousers)

• A change to subheadings 6204.61 through 6204.69
  from any other chapter, except from headings 5106
  through 5113, 5204 through 5212, 5307 through
  5308 or 5310 through 5311, Chapter 54, or
  headings 5508 through 5516, 5801 through 5802 or
  6001 through 6006, provided that the good is both
  cut and sewn or otherwise assembled in the
  territory of on or both of the Parties.

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Example 3 - Pants(Trousers)

• A change to subheadings 6204.61 through 6204.69
  from any other chapter, except from headings 5106
  through 5113wool yarn/fabric, 5204 through 5212
  cotton yarn/fabric, 5307 through 5308 or 5310
  through 5311 certain yarns/fabrics (jute),
  Chapter 54 man-made fiber filament yarn/fabric,
  or headings 5508 through 5516 man-made fiber
  staple yarn/fabric, 5801 through 5802 certain
  specialty fabrics or 6001 through 6006 knit
  fabric, provided ....

74
Example 3 - Pants(Trousers)

• Therefore, all wool, cotton and man-made fiber
  yarns and fabric must be produced in the U.S.
  and/or Morocco.
• However, this means the trousers could be
  produced with foreign Silk fabric (5007), or from
  Linen (5309), and the garment will still receive
  FTA treatment.

75
Special Rules Visible Lining

• Exception to the Rule For certain apparel,
  certain visible lining fabrics must be formed
  from yarn and finished in the territory of a
  Party.
• Mens and womens suits suit-type jackets,
  skirts, overcoats, anoraks, windbreakers,
  similar articles

76
Example 4 - Visible Lining

• 100 Cashmere Yarn (5109) formed in the U.S. and
  exported to Morocco
• Cashmere Yarn woven into fabric (5112) in Morocco
• 100 Rayon Fabric (5408.22.90) woven in Morocco
  of filament yarn produced in Taiwan
• All fabric cut and sewn in Morocco, made into a
  Mens Cashmere Overcoat with Rayon Lining
  (6201.11) and exported to the U.S.
• Origin? Eligible for FTA Preference?

77
Example 4 - Visible Lining

• Fiber Yarn Fabric Cut Sew
• ? U.S. Morocco Morocco
• Taiwan Morocco Morocco

Yarn Forward Rule
Fabric Forward Rule
Visible Lining Fabric
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Example 4 - Visible Lining

• 6201.11 This is the same yarn forward rule
  as used in example 3, but it also states.
• . Provided that any visible lining material
  contained in the apparel article satisfies the
  requirements of Chapter Rule 1 for Chapter 62.
• visible lining material in certain mens and
  womens garments must be formed from yarn and
  finished in the territory of a Party.

79
Special Rules De Minimis

• Article 4.3.7 of the Agreement
• Rule allows for the use of non-originating Fibers
  and Yarns in the component that determines the
  tariff classification, up to 7 by weight of the
  total weight of the component.
• Exception for Elastomeric Yarns

Fiber
Yarn
80
De Minimis

• If the stripes on this shirt are composed of
  foreign yarns, the shirt would still qualify as
  an originating good, as long as the yarns weigh
  not more than 7.

81
Example 5 - De Minimis

• Raw Canadian Wool (5101) formed into Wool Yarn
  (5107) in the U.S. and exported to Morocco
• U.S. Wool Yarn woven into Fabric (5112) in
  Morocco
• Fabric incorporates as a Pin-Stripe a Rayon
  Filament Yarn formed in Malaysia (Comprises 5 of
  the fabric by weight)
• Fabric cut and sewn in Morocco into Mens Suit
  Coats (6203.31)
• Suit Coats exported to the U.S.
• Origin? Eligible for FTA Preference?
• What if Jacket had a Visible Lining?

82
Example 5 - De Minimis

• Fiber Yarn Fabric Cut Sew
• Canada U.S. Morocco Morocco
• Malaysia Morocco Morocco

Yarn Forward Rule
Yarn Not More than 7
83
Treatment of Sets

• Article 4.3.8 Textile or Apparel goods cannot be
  an originating set unless
• each good in the set is originating, or
• the non-originating goods in the set do not
  exceed 10 of the value of the set.
• There are not many textile or apparel sets.
• Setis defined in General Rule of
  Interpretation (GRI) 3 of the Harmonized System

84
Tariff Preference Levels

• Tariff Preference Levels (TPL) are a major
  exception to the Tariff Shift Rules.
• TPLs allow for the use of non-originating
  materials, and although the finished product is
  not an originating product under the FTA, it is
  eligible for preferential treatment as if it were
  an originating product!
• This provision is limited.

85
Tariff Preference Levels (TPL)

• Article 4.3.9-14 TPLs for Non-Originating
• Fabric of Chapters 51, 52, 54, 55, 58 and 60.
• Apparel of Chapters 61 and 62.

86
Tariff Preference Levels

• Non-originating Fabric and Apparel goods entered
  under the TPL are eligible for duty-free access
  up to a limited amount.
• The TPL is only applicable for the first 10 years
  of the free trade agreement.
• In year 11 of the agreement, the TPL is
  eliminated, and non-originating goods are subject
  to duty. (Exception is eliminated.)

87
Tariff Preference Levels

• Quantity in Square Meter Equivalents
• Years 1-4 30,000,000
• Year 5 25,714,000
• Year 6 21,428,000
• Year 7 17,142,000
• Year 8 12,856,000
• Year 9 8,571,000
• Year 10 4,285,000
• Year 11 -0-

88
Tariff Preference Levels

• The fabric and apparel goods shall receive
  preferential tariff treatment, regardless of the
  origin of the fiber, yarn or fabric used to
  produce the goods.
• Must meet other FTA rules such as, for garments,
  the fabric must be cut and sewn in an FTA party.

89
Example 6 - Tariff Preference Levels

• Knit Cotton Fabric (6005) is produced in Sri
  Lanka and exported to Morocco
• Fabric cut and sewn into Womens knit tops
  (6110.20) in Morocco
• Exported to the U.S.
• Origin? Eligible for FTA Preference?

90
Example 6 - TPL for Apparel

• Fiber Yarn Fabric Cut Sew
• ? ? Sri Lanka Morocco

Yarn Forward Rule
TPL Rule
But...
91
TPL - WARNING!

• from fabric or yarn produced or obtained from
  outside the territory of a Party, regardless of
  the origin
• Knit-to-Shape components are not considered
  fabric and therefore garments containing them
  do NOT qualify for the TPL!

92
Sub-Saharan African Cotton

• Article 4.3.15
• TPL for Yarn and Knit Fabric containing Cotton
  Fibers from designated least-developed
  sub-Saharan African countries.
• Only Yarn and Knit Fabric have a fiber forward
  preference rule of origin.
• Non-Originating Yarn and Knit Fabric containing
  Cotton Fibers from certain sub-Saharan African
  countries, are eligible for duty free treatment.

93
Sub-Saharan African Cotton

• Bulletin Officiel, No. 4861 6 chaoual 1421
  (1.1.2001), Exoneration du droit dimportation en
  faveur des produits originaires et en provenance
  de certains pays dAfrique.
• Limited to 1,067,257 kilograms annually.
• This provision does not expire.

94
Keys to Exercises

• Example 1 Origin is Morocco Not eligible for
  preference because the Egyptian cotton does not
  satisfy tariff shift rule for 5205.
• Example 2 Origin is Morocco Eligible for
  preference. It meets the tariff shift rule for
  5512.
• Example 3 Origin is Morocco Eligible for
  preference. Only has to meet the yarn forward
  rule to satisfy tariff shift rule for 6204.62.
  (fibers could be foreign)
• Example 4 Origin is Morocco Eligible for
  preference. Both the tariff shift rule and the
  visible lining rule for 6201.11 is satisfied.

95
Keys to Exercises

• Example 5 Origin is Morocco Eligible for
  preference as the tariff shift rule for 6203.31
  is satisfied. Rayon yarn meets de minimis
  levels. If it had a lining, it would have to
  meet the visible lining rule.
• Example 6 Origin is Morocco Eligible for
  preference under TPL.

A
96
A Future Customs Official?
97
Compliance and Enforcement

• Under the U.S.-Morocco FTA, certain textiles and
  apparel qualify for duty-free entry.
• Both Governments want this agreement to benefit
  those that comply with terms of the agreement.

98
Customs Cooperation

• Article 4.4 of the U.S.-Morocco FTA has strong
  Customs Cooperation provisions.
• Allows for the joint (Morocco/U.S.) verification
  of FTA preference claims.

99
Customs Cooperation

• Article 4.4.2 If requested by the United
  States, Morocco shall verify a claim of origin.
  If requested by Morocco, the United States shall
  verify a claim of origin.

100
Customs Cooperation

• Article 4.4.4 Each party shall permit the other
  to assist in a verification, after notifying the
  other party.
• Article 4.4.5 Each party shall provide the other
  information or documents.

101
Customs Cooperation

• Article 4.4.6 Each party may take appropriate
  action, including suspending preferential tariff
  treatment to ANY textile or apparel good exported
  or produced by a company if there is reasonable
  suspicion.

102
Customs Cooperation

• Article 4.4.7 The party conducting the
  verification shall provide a written report.
• Article 4.4.10 The parties shall consult to
  resolve any technical or interpretive
  difficulties or to discuss ways to improve
  cooperation.

103
Compliance

• In order for the U.S. importer to receive
  preferential duty, they must make a declaration
  to U.S. Customs and Border Protection (CBP).
• CBP uses the principles of Informed Compliance.
  

104
Notices to the Public www.cbp.gov

• CBP publishes on the Internet, guidance to the
  importing community, including implementation
  information on Free Trade Agreements.

105
Binding Rulings from CBP

• Interested Parties may request a (FREE) Binding
  Ruling from CBP!
• Classification under the HTS
• FTA Eligibility

106
Binding Rulings from CBP

• Please send letter, sample and/or detailed
  description to
• Office of International Trade
• Regulations and Rulings
• U.S. Customs and Border Protection
• 1300 Pennsylvania Ave, NW
• Washington, DC 20229 USA

107
Introducing eRulings

• Ruling requests may now be submitted over the
  Internet via eRuling.
• Details on www.cbp.gov
• Then link to
• import
• rulings

108
Binding Rulings - CROSS

• Rulings issued to all parties are located on the
  Customs Ruling Online Search System, or CROSS.
• www.cbp.gov
• Then link to
• import
• rulings
• CROSS

109
CBP Publication

• Customs Border Protection publication
• Importing into the United States
• Designed for the Novice Importer
• Classification and Valuation
• Invoice Requirements
• Marking Requirements
• Customs Brokers

www.cbp.gov/xp/cgov/toolbox/publications
110
CBP Publications

• What Every Member of the Trade Community Should
  Know About
• Apparel Terminology
• Fiber Trade Names Generic Terms
• Fibers Yarns Construction Class.
• NAFTA for Textile Articles
• Ribbons Trimmings
• Textile Apparel Rules of Origin

www.cbp.gov/xp/cgov/toolbox/publications
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Internet Resources

• U.S. Government Internet Resources
• Rules of Origin Rulings www.cbp.gov
• Textile Trade Data otexa.ita.doc.gov
• Trade Agreements www.ustr.gov
• Duty Rates www.usitc.gov
• Labeling www.ftc.gov

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Disclaimer

• This presentation is simply a brief overview of
  the preference rules for textiles and apparel.
  The presentation attempts to show the general
  rule for major products, but it does not include
  most exceptions to the rule. Interested parties
  may consider requesting a binding ruling from
  U.S. Customs Border Protection prior to
  exporting to the United States.

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Conclusion

• It may sound difficult at first, but once you
  understand the concepts, the rules for most
  products are easy to understand.
• The benefits are worth the trouble of compliance.