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2.1 Quotas and Import Licensing

An import quota is a quantity control on imported merchandise for a certain period of time. Quotas are established by legislation, by directives and by proclamations issued under the authority contained in specific legislation. CBP controls the importation of quota merchandise but has no authority to change or modify any quota.

US import quotas may be divided into two types: absolute and tariff rate. Tariff‑rate quotas (TRQs) provide for the entry of a specified quantity of the product at a reduced rate of duty during a given period. There is no limitation on the amount of the product that may be entered during the quota period, but quantities entered in excess of the quota for that period are subject to higher duty rates.

The quota status of a commodity subject to a TRQ cannot be determined in advance of its entry. The in-quota (low) rates of duty are ordinarily assessed on such commodities entered from the beginning of the quota period until such time as it is determined that imports are nearing the quota level. CBP port directors are then instructed to require the deposit of estimated duties at the over‑quota (high) duty rate and to report the time of official presentation of each entry. A final determination is then made of the date and time when a quota is filled, and all port directors are advised accordingly.

Absolute quotas are quantitative, that is, no more than the amount specified is permitted entry during the quota period. Some absolute quotas are global, while others are allocated to specified countries. Imports in excess of a specified quota may be held until the opening of the next quota period by placing them in a foreign trade zone (FTZ) or entering them into a warehouse, or they may be exported or destroyed under CBP supervision.

Some absolute quotas are invariably filled at or shortly after the opening of the quota period. Each of these quotas is therefore officially opened at noon Eastern Standard Time (EST), or the equivalent in other time zones, on the designated effective date. When the total quantity of the entries filed at the opening of the quota period exceeds the quota, the merchandise is released on a pro rata basis, the pro rata being the ratio between the quota quantity and the total quantity offered for entry. This assures an equitable distribution of the quota.

Merchandise is not regarded as presented for purposes of determining quota priority until an entry summary or withdrawal from warehouse for consumption has been submitted in proper form and the merchandise is located within the port limits.

The CBP entry procedures generally applicable to other imports apply to commodities subject to quota limitations as well.

A. Absolute Quotas and Associated Licensing Requirements

The US did not have in place any absolute import quotas or associated visa or licensing requirements as of 1 February 2011. The quotas that were previously in place on certain mainland Chinese apparel expired on 1 January 2009.

B. TRQs and Licensing Requirements

a) TRQs Administered by CBP

As provided in the HTSUS, the commodities shown in the table below are subject to TRQ limitations in effect as of the date of publication of this guide. Additionally, CBP administers a considerable number of TRQs that have been included in US trade preference programmes such as AGOA, ATPDEA, CBTPA and HOPE as well as in FTAs negotiated by the US.

Animal feed

Cotton fibres

Milk, cream, and whey (dried)

Beef

Chocolate

Mixed condiments and seasonings

Blended syrups

Chocolate and low-fat chocolate crumb

Mixes and dough

Brooms (whiskbrooms)

Dairy products

Olives

Brooms (other)

Ethyl alcohol

Peanuts

Canadian cheddar cheese

Ice cream

Peanut butter and paste

Certain sugar-containing articles

Infant formula

Sugar, including sugar cane

Cocoa powder

Mandarin oranges

Tobacco

Cotton

Milk and cream

Tuna

Cotton card strips

Milk and cream (condensed or evaporated)

Wool fabrics (worsted)

b) Agricultural Quotas Administered by the USDA

Certain dairy products (shown in the table below) are subject to annual TRQs administered by the USDA and may be imported at the in‑quota rate only under import licences issued by that department. These products may be imported at the over‑quota rate without an import licence.

American‑type cheese

Cheeses and substitutes for cheese

Milk, cream, and whey (dried)

Blue mould cheese

Cheddar cheese except Canadian cheddar

Swiss or Emmentaler cheese

Butter and fresh/sour cream

Edam and Gouda cheese

 

Butter substitutes

Italian‑type cheese

 

c) Licensing Requirements on Watches and Watch Movements Produced in US Insular Possessions

There are no licensing requirements or quotas on watches and watch movements entering the US unless they are produced in the insular possessions (US Virgin Islands, American Samoa, Guam and the Commonwealth of the Northern Mariana Islands). The DOC and the Department of Interior administer a programme that establishes an annual allocation for watches and watch movements assembled in the insular possessions to enter the US free of duty under statistical note 5 to HTSUS Chapter 91. Licences are issued only to established insular producers.

C. Import Restrictions and Prohibitions

The importation of certain classes of merchandise may be prohibited or restricted to protect the economy and security of the US, to safeguard consumer health and well‑being, or to preserve domestic plant and animal life. Some commodities are also subject to an import quota or a restraint under bi-lateral trade agreements and arrangements.

Many of these prohibitions and restrictions are prescribed by the laws and regulations administered by CBP or by other US government agencies with which CBP co-operates in enforcement. These laws and regulations may, for example, prohibit entry; limit entry to certain ports; restrict routing, storage or use; or require treatment, labelling or processing as a condition of release. CBP clearance is given only if these additional requirements are met. This applies to all types of importations, including those made by mail and those placed in FTZs.

Foreign exporters should make certain that (1) the US importer has provided proper information to permit the submission of necessary information concerning packing, labelling, etc., and (2) the necessary arrangements have been made by the importer for entry of the merchandise into the US.

 

Content provided by Hong Kong Trade Development Council
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