Reminder on U.S.-Australia Free Trade Agreement

Issue 5, January 9, 2009

While the U.S.-Australia Free Trade Agreement (US-AFTA) has been in effect for several years, it has been deemed warranted to re-communicate the below general information on this agreement-

The US-AFTA took effect for goods entered on or after January 1, 2005. The final text of the Agreement and its rules of origin can be found on-line at the U.S. Trade Representative (USTR) website at http://www.ustr.gov/.

This trade agreement provides for the immediate or staged elimination of duties for bilateral trade in goods originating in the United States and/or Australia. Generally, under the US-AFTA, a good is “originating” where:

1. The good is wholly obtained or produced entirely in the territory of one or both of the Parties (Australia, the U.S. or both);
2. The good is produced entirely in the territory of one or both of the Parties and
   1. Each of the non-originating materials used in the production of the good undergoes an applicable change in tariff classification specified in General Note 28(n); or
   2. The good otherwise satisfies any applicable regional value content; orThe good meets any other requirements specified in General Note 28(n), and all other applicable requirements are met; or
3. The good is produced entirely in the territory of one or both of the Parties exclusively from originating materials; or
4. The good otherwise qualifies as an originating good pursuant to the Agreement.

Certain specific products (such as agricultural items) have specific rules & requirements tied to the agreement and the rules should be reviewed when making determination of “originating” status.

Importers may file claims for preferential tariff treatment on qualifying goods that originate in Australia. These claims are made at the time the entry summary is filed by placing the SPI “AU” as a prefix to the HTS item number for each line on which preferential tariff treatment is claimed.

The US-AFTA states that the importer may make a claim for preferential tariff treatment based on the importer’s knowledge, or information in the importer’s possession, that the good qualifies as an “originating” good according to the US-AFTA rules of origin. A certificate of origin is not required to support the claim for a preferential rate of duty; however, a good should be entered as such only if the importer possesses information, or has the knowledge, that the good qualifies as being eligible for the FTA benefit. To have confidence in claiming this duty preference, the Importer will need the support of the foreign manufacturer/supplier that documentation is available to support the FTA claim. Initially this support is usually in the form of a statement or letter attesting that an assessment by the manufacturer or supplier confirms the product may be accepted as “originating” under the agreement. As requested by U.S. Customs, additional supporting documentation may be required to be supplied to confirm this assessment.

As a matter of broker compliance, DHL Global Forwarding requires a written declaration from the importer in order to make free trade claims on their behalf. This validates the importer made instruction to the broker to make the claim on their behalf.

In addition to the reduced rates of duty afforded by the US-AFTA, goods that qualify for such preferential tariff treatment are not subject to Customs’ Merchandise Processing Fees (MPF). However, the US-AFTA does not exempt from the assessment of Harbor Maintenance Fee (HMF).

Additional information on the US-AFTA is available on the U.S. Customs (CBP) website at- http://www.cbp.gov/xp/cgov/trade/trade_programs/international_agreements/free_trade/australia/