GSP Refunds: Duty Savings Opportunities for Importers

This alert covers (i) recommended actions for importers to take; (ii) special rules for goods covered by antidumping and countervailing duties; (iii) goods subject to the recent steel and aluminum and China tariffs; (iv) the GSP refund process; and (v) GSP enforcement issues.

Background

The GSP program promotes economic growth in developing countries by providing duty free treatment of certain products imported from designated beneficiary countries. The effective dates of the GSP program are specified through congressional legislation and requires periodic reauthorization.

As part of the Consolidated Appropriations Act, 2018 (H.R. 1625), signed into law on March 23, 2018, the GSP program was reauthorized through December 31, 2020. The law, which went into effect April 22, 2018, also provided for the retroactive refund of all duties to the importer of record (IOR) on GSP-eligible goods entered during the January 1, 2018 through April 21, 2018 lapse period.

Actions for Importers to Take

• Identify and track GSP refunds for entries that contain a GSP claim and required duty payments during the January 1 through April 21, 2018 retroactive period, in order to verify that all eligible duty refunds have been issued by CBP.
• Review country of origin and classification of goods with GSP claims to determine if the claims were valid.
• Identify GSP duty savings opportunities for entries from designated beneficiary countries for post-importation claims for the retroactive period.
• Obtain documentary evidence that substantiates GSP claims.
• File post-importation claims on or before September 19, 2018 (see GSP Refund Process below).
• Follow-up with CBP on any refunds that are not received.

Special Rule for Goods Subject to AD/CVD

GSP refunds on goods that are subject to Anti-dumping and/or Countervailing duties (AD/CVD) will be issued when the AD/CVD liquidation instructions are issued. Post-importation GSP claims on goods subject to AD/CVD are made per the process outlined above.

Goods Subject to Section 232 Tariffs or Section 201 Tariffs Not Eligible for GSP

Per 19 USC 2463(b)(2), GSP preferential duty treatment may not be received on goods subject to Section 232 tariffs on steel and aluminum or goods subject to Section 201 duties or quotas. Currently, the only goods subject to the provisions of Section 201 are solar panels and cells, and washing machines and washing machine parts. Accordingly, no refunds will be issued for GSP claims on any goods subject to either Section 232 or Section 201 duties for duties deposited on or after the effective date of the Section 232 or Section 201 duties.

To the extent that a country has been exempted from the Section 232 duties, and such country is a GSP designated beneficiary country, then the limitation on claiming GSP will not apply. Currently, two GSP designated beneficiary countries are exempt from Section 232 duties, Brazil and Argentina; accordingly, at present, GSP claims may be made and refunded on steel and aluminum products from these two countries.

With regards to the Section 201 duties, CBP noted in a recent message that imports of certain solar cells and panels from Philippines and certain solar cells, solar panels, washing machines, and washing machine parts from Thailand are the only GSP eligible goods that are subject to Section 201 measures. See CSMS #18-000307.

GSP Refunds Process

Entries filed electronically which included the Special Program Indicator (“SPI”) “A”:

• A refund will be issued automatically, unless the GSP goods are subject to AD/CVD, Section 232 tariffs on steel and aluminum, or Section 201 tariffs on large residential washers and solar cells and modules (see below for more information). 
• The Importer of Record will receive a refund check via mail, unless they are part of the ACH refund program in which case the refund will be received electronically.
• All such refunds should be received by mid-July 2018.

Entries filed electronically which did NOT include the SPI “A”:

• Importers have until September 19, 2018 to submit post-importation GSP claims for goods imported during the GSP lapse on which the SPI “A” was not transmitted at entry summary.
• GSP refund requests on unliquidated entries are submitted as Post Summary Corrections (“PSC”s).
• GSP refund requests on liquidated entries are submitted as protests.
• Failure to submit a post-importation GSP claim for entries made during the lapse period on or before September 19, 2018 will not be remediable via protest. Late submissions will be denied
• Post-importation GSP claims will be processed after refunds of claims made at time of entry are completed.

Paper entries:

• Addressees must request a refund of GSP duties in writing, along with a copy of the CBP Form 3419A, to the appropriate International Mail Branch (address listed on bottom right hand corner of CBP Form 3419A).
• It is essential that a copy of the CBP Form 3419A be included, as this is the only means of identifying whether GSP goods have been entered and the estimated duties and fees paid.
• Importers have until September 19, 2018 to request refunds on paper entries.

Important Notes:

• Refunds will be issued to the Importer of Record for the import transaction as indicated on CBP Form 7501. Entities that are not the Importer of Record, but paid duties on the GSP goods must recover the refunded duties from the Importer of Record.
• There have been cases of CBP erroneously failing to refund or refunding the incorrect amount of GSP duties. It is important to track refunds expected and received, and follow-up with CBP regarding any missing amounts.
• For additional information, see CSMS# 18-000296.

GSP Enforcement

Though documentary evidence of GSP-eligibility of goods is not required at time of entry, CBP may request such evidence at a later date (for instance, via a CBP Form 28 Request for Information). At such time, the importer may be required to provide certificates of origin, manufacturers’ affidavits, bills of material, technical drawings or other information that substantiates the country of origin and classification of goods with GSP claims.