NAFTZ Lays Out Concerns About CBP Treatment of Section 301 Goods From FTZs

CBP's treatment of goods from foreign-trade zones that are subject to the recently decreased Section 301 tariffs should go through a notice a comment process because it amounts to a change in policy, the National Association of Foreign-Trade Zones said in a Feb. 18 letter to the agency. “The 'level playing field' (i.e., providing U.S. FTZs and bonded warehouses equal Customs duty treatment), is a fundamental [principle] of U.S. law governing FTZs, has always been protected in the current Trade Remedy environment,” it said. A lawyer for the NAFTZ recently explained the arguments and said the letter was coming (see 2002120011).

CBP's tariff treatment of the goods based upon when FTZ privileged foreign status was applied for and not on the tariff rate upon withdrawal deserves reconsideration, the NAFTZ said. “Looking specifically at the China Section 301 actions, USTR has chosen to be silent on technical aspects of FTZ activity,” the association said. “Silence does not mean the USTR is acting contrary to or ignoring the President’s policy with respect to imposition and management of the Sec. 301 duties.” There should be different treatment based on whether PF status is mandated, as was the case with the Section 301 tariffs, it said.

Due to the inconsistency of the CBP policy on “previously afforded 'mandated' privileged foreign merchandise at zone withdrawal,” CBP should “provide notice and an opportunity for public comment in the Customs Bulletin,” the NAFTZ said. “The fact that no such notice or comment opportunity was provided is one more basis for reconsidering the referenced CSMS message.”

Email ITTNews@warren-news.com for a copy of the letter.