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CBP Issues GSP Refund Guidance

On Friday, April 20, 2018, U.S. Customs and Border Protection (CBP) published a notice in the Federal Register providing instructions to importers regarding how to receive refunds for duty preference claims made under the Generalized System of Preferences (GSP) following its expiration on December 31, 2017. Although the GSP expired last December, it was renewed as part of the Consolidated Appropriations Act in March. However, from January 1, 2018, through April 21, 2018, importers were unable to receive duty-free treatment for GSP claims at the time of entry.

Pursuant to Friday’s Federal Register notice, as well as guidance posted on CBP’s website, importers who claimed GSP through the Automated Broker Interface (ABI) from January 1, 2018, through April 21, 2018, by utilizing Special Preference Indicator (SPI) “A” on their entries will receive refunds automatically. For importers who did not file electronically or did not utilize the “A” SPI, post-summary corrections seeking refunds must be submitted to CBP no later than September 18, 2018. However, if an entry has liquidated, protests may also be submitted to CBP requesting the refund.

Importantly, CBP’s guidance on its website clarifies that the agency will not be issuing refunds for GSP claims made on the same entry line as an aluminum or steel product subject to Section 232 duties. Additionally, going forward, CBP advised importers not to claim GSP on products that are subject to Section 232 duties, because preferential duty treatment will not be given to those entry lines under the GSP. There is statutory authority for this prohibition, namely 19 U.S.C. § 2463, which states that specific articles may not be designated as GSP-eligible, among these being articles subject to Section 232 duties (19 U.S.C. § 1862). The only exceptions are for imports of aluminum or steel products from Brazil and Argentina, which have been exempted from the Section 232 duties.

We note that the prohibition on claiming duty preference programs for products subject to Section 232 duties may not be limited to the GSP. For example, Note 16(a) to Subchapter III of Chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS) states that “no special rates of duty” will be accorded to goods covered by heading 9903.80.01 (the subheading under which products subject to Section 232 goods must be entered). Importantly, this restrictive language was not included in the Presidential Proclamation implementing the Section 232 duties. Additionally, unlike GSP, there is no statutory authority for such a blanket prohibition. Through informal communications with CBP’s Base Metals Center for Excellence and Expertise, we understand that CBP is still developing its strategy with regard to the duty preference restrictions under the new Subchapter Note, and, for now, other duty preference claims are being accepted for products subject to Section 232 additional duties. Importers are advised, however, that CBP may reverse course on this position at any time.

© 2020 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.


About this Author

Mollie Sitkowski, Drinker Biddle Law Firm, Chicago, Trade Law Attorney

Mollie D. Sitkowski assists clients in ensuring their internal processes meet Customs' "reasonable care" standard. She assists clients with various aspects of trade law, including valuation, classification, free trade agreements, country of origin determinations, and auditing their import documentation to identify potential issues and risk areas. Mollie also supports clients with export compliance, including advising on export screening and classification, and filing license classification requests and voluntary disclosures with the Bureau of Industry...