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CBP Issues Directive on GSP Refund Procedures

On June 29, 2015, President Obama signed the Trade Preferences Extension Act of 2015 (H.R. 1295), which renewed the Generalized System of Preferences program (GSP), effective July 29, 2015 and retroactively to July 31, 2013. CBP has posted a directive on its website outlining how it intends to process duty refunds for GSP eligible merchandise which was entered between July 31, 2013, and July 29, 2015.

CBP states that it will process refunds for entries filed via the Automated Broker Interface (ABI) with the Special Program Indicator (SPI) “A,” “A+,” or “A*” for duties deposited on GSP-eligible goods during the lapse period from August 1, 2013 through July 28, 2015. CBP advises no action is required for such entries filed with SPIs “A,” “A+,”, or “A*” during the lapse period (July 31, 2013, and July 29, 2015). CBP has indicated that it will start issuing GSP refunds shortly after the effective date (i.e., July 29, 2015).

For entries that were made during the lapse period without using the SPI indicator, importers must affirmatively request refunds. The written request must contain sufficient information to enable Customs to identify the entry. For ACE summary entries where no SPI was transmitted, refund claims must be made via Post Summary Correction (PSC) unless the entry is outside the PSC 270 days filing period. For all other entries, importers will need to submit a written refund request to CBP.

Any refund requests must be received by CBP no later than December 28, 2015, and any refunds issued will be paid without interest. Customs is going to continue to collect duty on GSP eligible entries until July 29, 2015.

Notwithstanding the language in the GSP Directive regarding the submission of claims for refunds, section 201 of H.R. 1295 provides that “A liquidation or reliquidation may be made under subparagraph (A) with respect to an entry only if a request therefore is filed with U.S. Customs and Border Protection not later than 180 days after the date of the enactment of this Act that contains sufficient information to enable U.S. Customs and Border Protection to locate the entry . . .” (Emphasis added.)

While it is clearly CBP’s stated intention to refund duties on GSP eligible transactions, importers and brokers should carefully consider the risk of relying upon CBP to identify those transactions and issue refunds without filing a formal notice of claim before December 28, 2015. In this regard, importers should confirm that their entries were filed with the appropriate GSP SPI and brokers should consider contacting their importer clients to identify those situations where the importer is content to rely upon CBP to take affirmative action on their potential GSP transactions without the submission of formal requests for refunds, regardless of how the entry was filed.

For further information regarding the GSP refund process, please feel free to contact Alan Klestadt (Aklestadt@gdlsk.com or 212-973-7722) or any member of Grunfeld, Desiderio, Lebowitz, Silverman, & Klestadt.

Compliments of Grunfeld, Desiderio, Lebowitz, Silverman, & Klestadt – a member of the EACC