TRALAC - Trade Law Centre

AGOA FAQ

This section contains a number of Frequently Asked Questions pertaining to AGOA. Additional FAQs will continue to be added to this list.  

 

iconfaq | What is AGOA?

iconfaq How did AGOA come about?

iconfaq Where do I find the text of the AGOA legislation?

iconfaq Which countries does AGOA apply to?

iconfaq How does a country qualify to become an AGOA beneficiary country?

iconfaq Does an exporter need to "register under AGOA"?

iconfaq Are AGOA benefits permanent?

iconfaq What trade benefits does AGOA provide?

iconfaq | What is the AGOA Forum?

iconfaq | Where can I obtain technical assistance relating to AGOA?

iconfaq | The AGOA legislation encourages countries to devise an 'AGOA Utilization Strategy'. What do these look like?

iconfaq What products are covered by AGOA?

iconfaq How does an exported product qualify for AGOA duty-free treatment?  

iconfaq If a product does not qualify for AGOA benefits, does that mean that import duties must be paid when such goods are shipped to the USA?

iconfaq How does a product benefit from AGOA benefits if it is listed as a qualifying product?

iconfaq What are Rules of Origin and how do they apply under AGOA?

iconfaq What are some of the specifics of the Rules of Origin under AGOA?

iconfaq Are there different rules, obligations and benefits for exporters of textiles and clothing using AGOA?

iconfaq What is a certificate of origin?

iconfaq Where do I find AGOA resources including training videos?

iconfaq Where do I find the contact details of the responsible authorities dealing with licensing, agricultural inspections and so forth?

 


What is AGOA?

AGOA is the acronym that stands for “African Growth and Opportunity Act”. As the name suggests, AGOA is a piece of legislation that was enacted by the United States in the year 2000 under then-President Bill Clinton. The key feature of this legislation is that it abolished (for imports into the US) the import duties on thousands of products, where these are manufactured in any Sub-Saharan African country that has qualified as a beneficiary of AGOA preferences. A short history on AGOA can be read here

The AGOA legislation is unilateral and non-reciprocal. This simply means that it forms part of US national legislation, and its trade preferences relate only to the opening of its own market to the qualifying exports from African countries.

Prior to AGOA, countries classified as developing or least-developed were able to export goods to the US under preferential (mostly duty-free) conditions under the country’s Generalised System of Preferences (GSP) scheme, which is similar to the GSP that many industrialized countries offer developing countries. However, the GSP legislation is subject to periodic renewal and from time to time expires, creating uncertainty for importers and exporters. The AGOA legislation meanwhile incorporated all products classified as GSP (approximately 4,500), meaning that African countries qualifying for AGOA preferences were not subject to the periodic expiry (or renewal) of the GSP legislation. In addition, the AGOA legislation classified more than 1,500 additional products as AGOA eligible, meaning that between 6,000 – 7,000 products are free of import duty into the US when produced in a qualifying AGOA beneficiary.

The AGOA legislation was initially enacted to cover the period 2000 – 2008, but has been extended a number of times since then, most recently in 2015 through an Act of Congress (and following a lengthy hearings process).  It now expires in 2025.

Below: US President Obama signing the AGOA Trade Preferences Extension Act of 2015 into law. 

obama signature agoa extension2015

 

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How did AGOA come about?

During the 1990s, the United States realized that it offered very few tangible trade benefits to exporters from African countries. In addition, the US wanted to create a more meaningful partnership with African countries based on shared economic growth and trade, by offering non-reciprocal trade and economic benefits to qualifying Sub-Saharan African countries.

The AGOA legislation originated in the US Congress. It was widely supported by Democrats and Republicans in a strong showing of bipartisanship, and passed both houses of Congress (the House of Representatives and the Senate) prior to being signed into law by President Bill Clinton. At the time, the legislation covered the years 2000 – 2008 but has subsequently been updated and extended on a number of occasions, most recently to 2025.

 

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Where do I find the text of the AGOA legislation?

The original AGOA legislation was signed into law as Public Law 106-200 during May 2000.

Find it at this link

Subsequently, a number of updates to this legislation were passed by the US Congress – some of these were technical amendments (for example: Miscellaneous Trade and Technical Corrections Act of 2004) while others extended the legislation beyond its original 8-year term (for example: the AGOA Acceleration Act of 2004  ).

Other amendments addressed aspects of the AGOA legislation that were set for earlier expiry, for example the special wearing apparel provisions that granted beneficiary countries favourable rules of origin pertaining to exports of clothing under AGOA. The most recent extension of AGOA, covering the period 2015 – 2015, is known as the AGOA Enhancement Act of 2015 and can be found at this link)

All AGOA and related legislation can be downloaded from this site’s Legal Documents archive.

 

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Which countries does AGOA apply to?

The AGOA legislation makes provision only for countries of Sub-Saharan Africa to be eligible as AGOA beneficiaries. Qualification is not automatic and countries are required to meet a number of conditions on an ongoing basis. When a country of Sub-Saharan Africa does not meet (or no longer meets) the AGOA eligibility requirements, its preferential market access to the US market under AGOA can be suspended. Some former AGOA beneficiaries have over the years lost their AGOA eligibility status.

list beneficiaries

A list of countries that are currently eligible as an AGOA beneficiary can be viewed in the table at the following link.

The map below provides a snapshot of AGOA eligibility in 2016. 

 

agoa charts beneficiaries web 2016

 

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How does a country qualify to become an AGOA beneficiary country?

The US President may designate a country as a beneficiary Sub-Saharan African country eligible for AGOA preferences if he determines that the country meets the eligibility criteria set forth in: (1) Section 104 of AGOA (see 19 U.S.C. 3703); and (2) section 502 of the 1974 US Trade Act (see 19 U.S.C. 2462).

Only countries in Sub-Saharan Africa can be AGOA beneficiaries, since the legislation specifically seeks to enhance the trade, investment and political relationship between the US and Sub-Saharan Africa. In order for a country to qualify as an AGOA beneficiary, and to maintain its beneficiary status, it must meet a number of criteria set out for this purposes by the AGOA legislation as well as by the US Trade Act of 1974 (see links above). A country must also be eligible for the US Generalized System of Preferences (GSP), whose eligibility requirements and those of AGOA essentially overlap. 

While GSP eligibility does not imply AGOA eligibility, 47 of the 48 Sub-Saharan African countries are currently GSP eligible.

Among the required criteria, a country must have established, or make continual progress towards establishing, a market based economy, political pluralism, respect private property rights, incorporate an open rules-based trading system, eliminate barriers to US trade and investment, respect internationally recognized human rights, protect worker rights and so forth.

In addition, the country may not engage in activities that undermine US national security or foreign policy interests.

A more complete list can be found at this link

Countries that do not meet these criteria will lose their AGOA beneficiary status. The US routinely assesses ongoing compliance with these criteria and in the event of a country no longer meeting the criteria will place that country on notice pending suspension from receiving AGOA preferences. Under the most recent AGOA legislation (2015), a variety of stakeholders including private organizations and entities have the right to apply for an AGOA beneficiary’s status under the AGOA legislation to be reviewed, should there be evidence of a country not or no longer meeting the AGOA eligibility requirements (See details of the petition process at this link).

Primary drivers for such an eligibility review may be, for example, when barriers that unfairly target US exports are maintained or put in place.

During 2015, South Africa was subject to an extensive AGOA Eligibility Review, owing to concerns by the US about South Africa's treatment of certain imports of chicken, beef and pork. Documents from this review can be viewed here

During 2016, 38 countries were designated as AGOA beneficiaries. 

 

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Does an exporter need to "register under AGOA"?

No, an exporter is not required to "register" under the AGOA legislation in order to take advantage of its benefits when exporting goods to the US. However, each country has different rules and regulations and many countries require that an exporter be registered for export purposes (this is unrelated to AGOA per se) with local customs or revenue authorities. Often this also involves receiving a unique exporter authorization number. These are national measures and different from country to country: it is advisable to contact the customs or revenue authorities in the home country to see what registration measures and related formalities may be required.   

 

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Are AGOA benefits permanent, or how long do they last?

AGOA forms part of US legislation and as such may be amended, extended or repealed for example through an Act of Congress.

Consequently, the status as an AGOA beneficiary is not permanent but rather based on the ongoing compliance with the AGOA eligibility requirements. A country that no longer fulfills these criteria may lose its AGOA status following a notice period; in such cases that country would revert to that of any other country without AGOA status (which may entail lesser GSP preferences, or even no preferential market access at all). When a country that is not AGOA eligible - or which has lost its AGOA status - meets the AGOA eligibility criteria, the President of the US may consider reinstating that country's AGOA beneficiary status. See for example the official proclamation regarding the status of Lomé

Under the most recent extension of AGOA, its preferences and privileges were extended by an additional 10 years from 2015 to 2025. This extension included the special preferences for wearing apparel, which allows beneficiaries subject to conditions to utilize imported fabric in their manufacturer of AGOA-compliant garments (previously, the special preferences for apparel exporters were more limited in duration).

 

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What trade benefits does AGOA provide?

AGOA’s benefits go beyond mere market access, and include closer collaboration between the US and African countries in other areas, technical and economic assistance, aid, investment funding, political and strategic collaboration in certain fields, and so on. One of the key benefits however remains preferential market access to the US market for over 6,000 products when these are produced and (also) originate (*** see Note) in Africa.

By removing US import duties on products covered by the AGOA legislation, producers and exporters in AGOA beneficiary countries receive a competitive advantage over exporters in other countries who may need to pay standard US import duties, which for certain textile articles might be more than 30% on the value of the product. This is a win-win scenario both for African producers and exporters as well as for US importers and consumers, the latter who may benefit from more competitive sourcing of products, compared to sourcing from elsewhere. Products that are AGOA eligible may thus claim duty-free status when imported into the US. AGOA products use the code ‘D’ in the US Harmonized Tariff Schedule to reflect their AGOA status when the relevant paperwork is filed on importation into the US. Apparel products are classified separately in the tariff database.

‘D’ – AGOA duty-free treatment

‘A’ – Generalized System of Preferences

etc.

While even a small duty rate can translate into a significant competitive advantage for a producers exporting to the US from Africa, there is a correlation between the size of the standard US import duty and the relative benefit that a US importer sourcing products from Africa can claim: the higher the duty saving, the greater the relative advantage of using AGOA when clearing goods for import into the US. In highly competitive sectors where even a small percentage saving can translate into a valuable advantage, AGOA preferences can play an important role in helping to facilitate trade between Africa and the US.

 

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What is the AGOA Forum?

The AGOA legislation (Public Law 106-200) makes provision for the establishment of a United States-Sub-Saharan Africa Trade and Economic Cooperation Forum (“AGOA Forum”).

Hosting of this significant annual event alternates between Washington D.C. in the US, and an African country. The last few AGOA Forums were held in Washington (2014), Libreville Gabon (2015), Washington (2016) and Lomé Togo (2017) respectively. 

In Sec. 103, containing the legislation’s policy statements, reference is made to the US Congress’ support for an AGOA Forum.

Sec. 105 deals with the AGOA Forum in particular, and instructs the President of the United States to convene “annual high-level meetings between appropriate officials of the United States Government and officials of the governments of sub- Saharan African countries in order to foster close economic ties between the United States and sub-Saharan Africa”.  

>> For additional details on the past few annual AGOA Forums, including copies of the agenda as well as related documents, visit the AGOA Forum section. 

 

The venue for the 2017 Forum is Lomé, Togo.

AGOA forum2017 togo banner

 

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Where can I obtain technical assistance relating to AGOA?

There's a wealth of information and advice relating to AGOA right here on the AGOA.info website. However, for more technical and practical assistance relating to exporting under AGOA, and depending on which country you are based in and what economic activity you are involved in, you should consider contacting the US embassy located in your country.

A detailed list of US embassies in Africa along with their contact details and website address can be found in the AGOA Web Resources section on this site, and specifically the section on US embassies.  

The US, through the USAID, also funds various Trade and Investment Hubs in Africa. These are located in Accra, Ghana (West Africa Trade and Investment Hub), in Nairobi Kenya (East Africa Trade and Investment Hub) and in Gaborone Botswana (Southern African Trade and Investment Hub). If you are based in the southern, east or west African region, please make contact with the respective trade and investment hub closest to you.

Highly qualified and experienced staff and advisors are able to assist with your AGOA-related technical questions and support needs. 

It is also advisable to contact your local chamber of commerce or manufacturers' association as many of these have a specialized trade desk that may be of assistance with specific trade-related queries. Find links to chambers at the following link

Other relevant resources available on this site: 

arrow right  Chambers of Commerce (Africa)

arrow right  Sector Associations and Export Promotion (Africa)

arrow right  Development and Finance organizations (United States)

arrow right  Government departments (United States)

arrow right  Regulatory authorities (United States) (relevant to licensing and authorizations, esp. relating to agricultural products)

 

Websites of the USAID Trade and Investment Hubs

WA hubSA hubEA hub

US embassies in Africa

embassies

 

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The AGOA legislation encourages countries to develop an 'AGOA Utilization Strategy'. What do these look like?

A number of countries have developed an AGOA Utilization Strategy, helping to focus them on better utilizing the benefits provided by AGOA. A dozen such strategies can be downloaded from this site at the following link. Guidelines on developing an AGOA strategy are available in the following document.  

burundistrategyagoa  madagascarstrategyagoa  rwandastrategy  zambiastrategy

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What products are covered by AGOA

AGOA covers more than 6,000 products using the HTS-8 tariff classification. This includes approximately 5,000 products (tariff lines) that fall under the GSP as well as more than 1,000 tariff lines that are duty-free only for exports to the US from AGOA beneficiaries. A searchable list of products eligible for duty-free export to the US is available at this link (status: 2017).

What is the HTS-8 product classification?

The HTS refers to the US Harmonised Tariff System nomenclature, and is largely based on the internationally standardized Harmonized Commodity Description and Coding System managed by the World Customs Organisation. It classifies all traded products into sections, chapters, headings, sub-headings and so on.

 

Let’s take, for example, "pineapples in packages":

  • Section II represents vegetable products
  • Chapter 08 covers edible fruit and nuts, peel of citrus/melons
  • Heading 0804 covers dates, figs, pineapples, avocadoes etc.
  • Sub-Heading 0804.30 covers pineapples
  • The 8-digit sub-division 0804.30.40 covers ‘pineapples in crates or other packages’

 

Using the above example:

Tariff line 0804.30.40 has a standard US import duty of 2.11c / kg (as of 2017)

It also has the AGOA ‘D’ code in the US tariff book, meaning that when imported into the US from an AGOA beneficiary, this import duty is not applicable.

 

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How does an exported product qualify for AGOA duty-free treatment?  

In order for a product to qualify for AGOA preferences, a number of factors are considered (AGOA coverage falls within the area of responsibility of the US International Trade Commission, the US Congress and others).

These include the following:

(1) the product must be included in the list of GSP-eligible articles (without exclusions), or

(2) included in the list of new AGOA products (denoted 'D'), or be a qualifying apparel or textile item;

(3) It must be imported into the United States directly from the AGOA beneficiary country or pass through another country in a sealed container and addressed to a location in the United States;

(4) The article must be the growth, product, or manufacture of the AGOA beneficiary country by fulfilling the relevant Rules of Origin requirements for general or apparel items respectively

(5) If foreign materials are imported into the AGOA country first, to be used in the production of an AGOA-eligible product, the sum of the cost of the materials produced in the AGOA beneficiary country, plus the costs of processing, must equal at least 35 percent of the product’s value when the product is sold for export into the United States (see section on Rules of Origin);

(6) In the case of clothing/apparel, the 35% rule does not apply directly, instead, the goods need to comply with the respective textile and apparel Rules of Origin requirements;

(7) The US importer must request duty-free treatment under AGOA on the relevant customs entry form (Form 7501) by placing an “D” in column 27 in front of the US tariff number that identifies the imported article.

Find additional details at this link on AGOA's product eligibility principles.  

 

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If a product does not qualify for AGOA benefits, does that mean that import duties must be paid when such goods are shipped to the USA?

When a product is not covered by AGOA, standard import terms and conditions apply when imported into the US. If a tariff line is subject to an import tariff and not subject to AGOA preferences, no preferences are available to exporters using AGOA. The product may however be duty-free when a US importer sources it from another country, under a different preference program.

Even if a product is not covered by AGOA this does not necessarily mean that an import duty is applicable. Many products no longer are subject to an import duty and it is important that importers familiarize themselves with the applicable duty (or zero-duty) for their respective shipment.

There is also a general distinction between US imports of products from other WTO member countries, and from non-member countries (the latter are subject to the US “Column II” tariff). The majority of Sub-Saharan African countries are full members of the WTO. When a product is not covered by AGOA and the standard tariff treatment is applicable, this might involve a certain rate applicable to imports from WTO members and a different (higher) tariff for imports from non-WTO member countries.  

 

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How does a product benefit from AGOA benefits if it is listed as a qualifying product?

If it has been established that a product is covered by the AGOA preference scheme, it will only benefit from such AGOA preferences provided that such product is the

  • growth or manufacture’ of an AGOA beneficiary country, and
  • is shipped directly from the AGOA beneficiary to the US (while transits through other countries are acceptable, such products may not enter the commerce of any third country).

Being the growth or manufacture of a beneficiary country simply means that the product must have been produced in the AGOA beneficiary; this is to avoid situations whereby goods are sourced by an AGOA beneficiary from other, third countries, and then transshipped to the US through its own territory (claiming to be a locally-made product) in order to claim preferential import status.

The criteria that specify the conditions under which a product can be considered to be a locally-made product are known as the rules of origin (RoO). Under AGOA, the RoO distinguish between wearing apparel and other goods. These criteria are discussed in the next FAQ section.

 

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What are Rules of Origin and how do they apply under AGOA?

Rules of Origin (RoO) are the criteria that define the origin of a product, and more specifically, describe the processing that must be undertaken on imported (non-originating materials) in order to confer local origin status. RoO form an integral part to any preferential trade arrangement in that they help ensure that the benefits accruing under such an agreement are for goods that originate in the beneficiary country, rather than goods that are produced elsewhere.

RoO distinguish between two different types of goods: (a) those that are wholly produced by the exporting country, and (b) those that are further processed there using a combination of local and imported materials. In the former, the origin status of a product tends to be undisputed and can easily be attributed to the country where such a product is grown or manufactured (examples would include minerals extracted from the soil, wheat grown there, cattle or beef born, raised and processed there etc.).

RoO become particularly important in cases where products are made up using both local and foreign inputs; here the RoO specify what minimum amount of processing and value-adding activity must take place locally before a product can be deemed to be of local origin. RoO are intended to ensure that only goods that have attained the economic origin of the beneficiary country will benefit from trade preferences, thus ensuring local value-adding activities and preventing transshipment of goods from other countries.

All goods exported to the US and claiming AGOA preferences must meet or exceed the RoO as set out by the AGOA legislation. See the next section for further details.

 

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What are some of the specifics of the Rules of Origin under AGOA?

AGOA essentially has two types of origin rule categories: those applicable to wearing apparel (and certain textiles), and those applying to all other products.

Products that are grown, harvested, extracted and mined inside an AGOA beneficiary country obtain the economic origin of that country and may potentially qualify for AGOA preferences if included on the list of eligible products.

  • For all non-apparel products, the general requirement is that at least 35% of the appraised value (at the US port of entry) of a product must consist of materials and processing of the AGOA beneficiary country (see additional details here)
  • For textiles and wearing apparel, a number of different rules categories apply, with no direct regard being had for the share of appraised value that is from local sources. The most noteworthy of these origin rules applies to wearing apparel manufactured in an AGOA country with LDC (lesser developed country) status: apparel made locally from third country fabric qualifies for AGOA preferences. The RoO for wearing apparel are spelt out in greater detail in the following section.

>>> Two additional rules relate to the RoO: (a) in calculating the 35% local content threshold under the general rule, up to 15% (of the 35%) may be input materials originating in the United States and (b) AGOA beneficiary countries may ‘cumulate’ production in meeting the RoO, meaning the criteria may be fulfilled jointly in two or more countries in arriving at the 35% local content threshold.

 

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Are there different rules and benefits for exporters of textiles and clothing using AGOA?

Yes, as outlined above, the general 35% rule does not apply to textiles and apparel, for which a number of separate and different rule categories apply.

AGOA beneficiary countries that wish to export apparel to the US under AGOA must first implement a so-called apparel visa system (see a related announcement relating to Madagascar), which pertains to the tracking of inputs such as fabric used in the production of apparel, as well as maintain all records pertaining to the use of imported fabric. As of 2017, approximately 25 of the 38 AGOA beneficiaries had implemented the requisite apparel visa system, enabling them to produce qualifying apparel under AGOA.

The textile and apparel RoO (additional details about these provisions are available here) are set out in more than a dozen separate categories, for which the US tariff database uses a special tariff book chapter and associated headings, subheadings and 8-digit sub-divisions (chapter HTS 98 / heading HTS 9819 / sub-heading HTS 9819.11 / division HTS 9819.11.03 onwards).

The three most prominent RoO categories (and HTS code) for textiles and apparel relating to AGOA exports are as follows:

 

Textiles:

>> HTS 9819.11.33

Textiles classified under chapters 50 through 60, as well as chapter 63, and which are produced in a LDC AGOA beneficiary and which are made from fibers, yarns, fabrics, fabric components or components knit-to-shape in one or more such AGOA beneficiaries.

Apparel:

>> HTS 9819.11.12

Apparel articles assembled or knit-to-shape in a LDC AGOA beneficiary, regardless of the country of origin of the fabric or the yarn used to make such articles. This provision applies to almost all AGOA beneficiaries as most have LDC status. In addition, a technical amendment to the AGOA legislation also extended this criteria to Botswana, Namibia and Mauritius.

>> HTS 9819.11.09

Apparel articles assembled in an AGOA beneficiary country from fabric wholly formed in one or more such AGOA beneficiaries from yarn originating in the US or in an AGOA beneficiary (or former beneficiary) country. This provision applies for example to South African producers, as South Africa is not classified as an LDC country.

Follow this link to the AGOA textile data section. 

 

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What is a certificate of origin?

A certificate of origin is a document that accompanies shipments from the exporter to the US, certifying the contents of the shipment and the origin thereof – in other words, a declaration by the exporter that the products in the shipment meet the relevant rules of origin. It is important to note that these certificates have to be provided by the exporter and not the importer - please contact your local customs office or chamber of commerce for assistance with the relevant local rules for obtaining and completing a certificate of origin. Download a sample certificate here

agoa certificate of origin textiles

 

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Where do I find AGOA resources including training videos?

 Please have a look at the Web Resources section on this site - it contains web links to a number of useful resources relating to AGOA, including training videos. Other web resource sections include chambers of commerce, development and finance organisations, US government departments, regulatory authorities, African sector associations, think-tanks and general trade resources

web resources

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Where do I find the contact details of the responsible authorities dealing with licensing, agricultural inspections and so forth?

The contact details for various regulatory authorities in the US dealing with relevant aspects of importing goods - especially agricultural products - into the US can be found in the relevant web resources section on this site. 

 

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