On June 29, President Obama signed into law the Trade Preferences Extension Act of 2015 (“the Act”). This legislation extends certain U.S. trade preference programs through which the United States grants duty-free treatment to certain products from the developing world. As King & Spalding reported on June 26, key programs extended under the Act include the Generalized System of Preferences (“GSP”), the African Growth and Opportunity Act (“AGOA”), and preferential tariff treatment for Haitian-made apparel.
Companies that import goods from developing countries may find it useful to determine whether any inputs in their supply chains could be eligible for duty-free treatment under any of the programs. Likewise, companies that imported GSP-eligible products during the time period when the program was suspended may obtain retroactive preferential duty benefits that will be made available in the coming months, as discussed below. For example, President Obama terminated the designation of Russia as a beneficiary developing country under the GSP program, effective October 3, 2014. Following that action, Customs instructed importers that goods of Russian origin entered or withdrawn from warehouse on or after October 3, 2014, should not be entered with the benefit of GSP. This example underscores why importers who may be eligible to recover retroactive GSP benefits should closely coordinate efforts with their import and compliance functions.
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