AGOA Product Eligibility
AGOA product eligibility implies that a product, when produced in an AGOA beneficiary country, may enter the United States free of import duty. Products must comply with the relevant local processing (Rules of Origin) as well as customs requirements.
AGOA preferences currently apply to approximately 6,500 tariff lines (at the HS8-digit level). This includes the approximately 5,000 tariff lines currently covered by the United States Generalised System of Preferences (GSP), plus tariff lines added by the AGOA legislation.
In addition, apparel sector tariff lines also qualify where countries have met the AGOA “apparel visa” requirements.
Newly-added AGOA products comprise inter alia previously excluded items such as footwear, luggage, handbags, watches, certain automotive components etc.
Although the largest portion of AGOA-eligible items comprises goods that previously qualified under the GSP, the AGOA legislation adds a number of benefits, not least by removing the need for periodic GSP renewal (the products therefore qualify irrespective of GSP renewal - an issue that came to the fore in 2012 when the GSP was allowed to lapse for a few months), but also removes certain quantitative safeguards which place limits on the quantity or value of any one product imported under the GSP program. These are therefore a waiver from the GSP’s ‘Competitive Need Limitations’. The current GSP programme is authorised through July 31, 2013.
How does an exported product qualify for AGOA duty-free treatment?
1. It must be included in the list of GSP-eligible articles (without exclusions), or included in the list of new AGOA products, or be a qualifying apparel or textile item;
2. 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;
3. 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 (see next points)
4. 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;
5. In the case of clothing/apparel, the 35% rule does not apply directly, instead, the goods need to comply with the respective Rules of Origin requirements;
6. 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.