The Generalized System of Preferences (GSP), a unilateral U.S. preferential trade program recently renewed by Congress, offers substantial duty savings for U.S. importers of qualifying merchandise. The GSP is intended to aid developing countries in the growth of their economies by providing them with duty-free access to the U.S. market for certain products. It is a renewable program, which means that it periodically expires and must be reenacted by Congress—typically with retroactive effect. During the periods of time in which the GSP has expired, GSP claims are not accepted or processed by U.S. Customs Border Protection (CBP). However, once the program is renewed by Congress, CBP will begin to accept new claims as well as retroactively process claims covering entries made during the lapsed period.

Before making claims under the GSP or any other U.S. special trade program or Free Trade Agreement (e.g., North American Free Trade Agreement, etc.), U.S. companies are strongly advised to verify that the imported goods actually qualify under the rules set forth under the program, and maintain documentation that supports their claims and substantiates product eligibility should CBP question or test the veracity of their claims in the future.

The GSP last expired on July 13, 2013, and was only recently renewed by Congress as part of the Trade Preferences Extension Act of 2015, which was signed into law on June 29, 2015. Duty-free treatment of GSP-eligible imports effectively resumes on July 29, 2015 and extends until December 31, 2017. CBP will process GSP claims for entries of qualifying merchandise made on or after July 29th, as well as issue duty refunds for entries that were made during the lapsed period (i.e., going back to July 31, 2013).

Retroactive GSP benefits only apply to eligible goods from countries designated as GSP beneficiary countries as of July 29, 2015. Claims will not be accepted for goods from any country (such as Bangladesh or Russia) that lost their GSP eligibility status during the period time in which the GSP was in lapse. The list of designated GSP beneficiary countries can be found in General Note 4(a) of the Harmonized Tariff Schedule of the United States (HTSUS). However, the list of beneficiary countries and qualifying products change from time to time, and companies are strongly advised to ensure that they are relying on the most recent edition of the HTSUS when making claims.

CBP recently issued instructions to the trade community relating to the mechanics of making GSP claims. For example:

• U.S. importers can begin entering eligible goods without the payment of duty under GSP by using the Special Program Indicator (SPI) "A," "A+," or "A*," for shipments entered or withdrawn from warehouse for consumption on or after July 29, 2015.
• With respect to making retroactive claims, many U.S. importers flagged the SPI on entries made during the time in which GSP had expired. Thus, CBP will automatically reliquidate those entries and issue duty refunds without any further action by the importers.
• Even if a company failed to use the SPI on past entries made while GSP was in lapse, refunds of duties paid can still be obtained from CBP. Those importers must submit a formal written request to the Port Director at the port of entry where the goods were entered into the United States on or before December 29, 2015. The written request for a refund can cover either a single entry or all entry summaries filed by an individual filer at a single port. The following information should be included in the written request to expedite processing of the duty refund: (1) a statement specifically requesting a refund from CBP; (2) identification of the specific entry numbers and line items for which GSP refunds are requested; (3) the specific refund amount for each line item; and (4) the total refund amount owed (not including interest) for all affected entry summaries.
• CBP also issued instructions for obtaining GSP refunds for eligible goods entered by mail, baggage or via informal entry.

Duty refunds should be issued by CBP no later than ninety (90) days after liquidation or re-liquidation of the entries in question.

Before making claims under the GSP or any other U.S. special trade program or Free Trade Agreement (e.g., North American Free Trade Agreement, etc.), U.S. companies are strongly advised to verify that the imported goods actually qualify under the rules set forth under the program, and maintain documentation that supports their claims and substantiates product eligibility should CBP question or test the veracity of their claims in the future.