Lag in customs system keeps U.S. tariffs intact

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Lag in customs system keeps U.S. tariffs intact

The United States has not updated its electronic customs system, meaning tariff cuts agreed upon in the Korus FTA have not taken effect across the Pacific, the Ministry of Foreign Affairs and Trade said yesterday.

“We asked the U.S. to speed up updating the Automated Broker Interface (ABI) system,” the ministry said. “The U.S. government expressed regret about confusion in the customs process due to delays in updating the system.”

According to a report by the JoongAng Ilbo Los Angeles on Saturday, importers in the United States are not seeing any tariff cuts on products that entered after the March 15 implementation date.

“The U.S. trade authority has not prepared enough to start the Korus FTA, even though it took over six years to implement the bill,” an importer in Los Angeles said.

He said if the new rate on his products is not applied as planned, he would still have to pay $30,000 to $40,000 in tariffs.

Seoul had been asking Washington to complete all preparation work, including updating the ABI system before implementing the trade pact.

The U.S. Customs and Border Protection (CBP) agency posted a notice on its Web site on Thursday stating the FTA tariff cuts will be applied to its ABI system from March 21. Korea began its implementation on March 15.

This is not the first time the United States has belatedly updated tariff rates within its ABI system. In its FTA with Peru, the United States updated the ABI system two months after the deal took effect, causing inconveniences for U.S. importers, according to an official at the ministry.

Exporters in Korea were not aware of the delay in the U.S. customs system. A small auto parts company was notified on Friday that tariffs on its products shipped to the United States on Thursday were not lifted or reduced at all.

The ministry said there will be no problems moving forward, even though the CBP will not implement tariff cuts until Wednesday.

Importers in the U.S. are required to first submit customs declarations for items that enter the country and submit summary documents within 10 working days before paying tariffs.

For items that arrived in the U.S. before Wednesday, importers don’t have to hand in entry summaries until the ABI system is revised.

According to a Korean customs official living in the U.S., there were more than 20 importers that requested a delay in customs declarations until the Korus FTA takes effect.

By Song Su-hyun, Kim Moon-ho []

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