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U.S. TARIFF EXEMPTIONS |
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TARIFF TREATMENT OF IMPORTS FROM THE
FREELY ASSOCIATED |
The Compact of Free Association originally applied Headnote 3(a), now General Note 3(a) (iv)of the Harmonized Tariff Schedule, to the freely associated states, but Public Law 99-239,section 401(a), substituted a liberalized version of the generalized system of preferences (GSP).The changes were based on concessions given to the Caribbean countries under the Caribbean Basin Initiative (CBI). Section 401(a) of PL. 99-239 rewrites section 242 of the Compact and specifies the conditions under which articles from the Federated States of Micronesia and the Marshall Islands can enter the United States exempt from duty. Similar treatment is provided to Palau under its Compact. The cost of materials produced in the beneficiary country plus direct costs of processing in the beneficiary country must be at least 35 percent of the appraised value of the eligible article. U.S. produced materials up to 15 percent of the value of the article may bes ubstituted for the local value added requirement. The Compact law provides that all articles are deemed eligible except the following: watches and clocks, acrylic buttons, textiles and apparel subject to textile agreements, and footwear and other leather goods excluded by law from GSP eligibility. Canned tuna in water, which is excluded from the CBI, is duty-free under the Compact, but only up to 10 percent of annual U.S. consumption.
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TARIFF TREATMENT of
IMPORTS - U.S. INSULAR AREAS |
1. General Note 3(a)(iv) of the Harmonized Tariff Schedule extends duty-free treatment to the products of U.S. insular areas ("insular possessions"). 2. Eligible U.S. insular areas are the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. 3. Virtually all products are eligible for entry under General Note 3(a)(iv). (Watches are provided duty-free treatment under Schedule 7, Support E, Headnote 6 of the Tariff Schedules.) 4. Eligible products must satisfy certain foreign content criteria in order to qualify for duty-free treatment. 5. All products must satisfy certain rules of origin in order to qualify for duty-free treatment. 6. U.S. insular areas are not subject to the U.S. textile quota program. |