On June 29, 2015, President Obama signed into law the Trade Preferences Extension Act of 2015 (HR 1295). Among other actions, the law revives the Generalized System of Preferences (GSP) program, a trade preferences program originally signed into law in 1974 that, in 2012, saved American businesses $749 million in tariffs, but which was allowed by Congress to lapse as of July 31, 2013.

This reauthorization extends GSP duty-free preferences to eligible products imported into the United States between July 29, 2015, the effective date of the reauthorization legislation, and December 31, 2017, and also makes the GSP program retroactive to its expiration. Put differently, importers of otherwise GSP-eligible merchandise entered on or after August 1, 2013, but prior to July 29, 2015, are entitled to a refund of the duties paid from U.S. Customs and Border Protection (CBP); but only if a request for such a refund is appropriately filed within 180 days of the enactment of HR 1295, or by December 26, 2015.

Some important notes on the GSP program and its reauthorization:

• There are currently 122 countries designated as “Beneficiary Developing Countries” (BDCs) for which duty-free imports are authorized on over 5,000 types of products.
• Under terms of the original act, eligible articles from BDCs enter duty-free, provided that 35 percent of the value of the article originates from one of the BDCs.
• The newly passed legislation (HR 1295) requires CBP to refund overpaid duties within 90 days from the date of the liquidation or reliquidation (CBP’s action on request), not from the importer’s date of request.
• No interest will be paid on tariffs refunded.

Any refund request submitted to CBP must contain sufficient information to enable CBP to: (i) locate the entry; or (ii) reconstruct the entry if it cannot be located. CBP previously advised importers of otherwise GSP-eligible merchandise to “flag” entries during the period the GSP program was lapsed to better enable the identification of affected entries in the event of retroactive reauthorization. The legislation permits CBP to reliquidate even finally liquidated entries, but we anticipate that CBP will issue additional guidance regarding the treatment of unliquidated entries or entries that have been liquidated, but which are eligible to be protested.