October 2023 — Question 57
Can the importer claim duty free treatment under the United States-Korea Free Trade Agreement (UKFTA) in the following scenario? Empty plastic water bottles are exported from the U.S. to South Korea. In South Korea, the water bottles are recycled and turned into raw materials (RPET) then reprocessed into a foam from which yoga mats are manufactured. The importer files entry under 9506.91.0030 for the yoga mats which are shipped directly from South Korea. NOTE: if any portion of an answer is false, the entire answer is false.
- ANo, because UKFTA requires that merchandise be wholly obtained or produced entirely in the territory of Korea to be eligible for duty free treatment.
- BNo, because the UKFTA applies to North Korea and not South Korea.
- CNo, because goods classified under 9506.91.0030, HTSUS, are not eligible for duty-free treatment under UKFTA.
- DYes, because UKFTA permits duty free claims for goods wholly obtained or produced entirely in the territory of Korea or of the United States or both and 9506.91.0030 lists the special program indicator of "KR."✓ CBP's answer
Why this answer
The cited general note sets the UKFTA origin rules: a good qualifies as originating if, among other paths, it is wholly obtained or produced entirely in the territory of Korea or of the United States, or both, and the KR indicator opposite a subheading shows the good is eligible for the preferential rate. The yoga mats were manufactured in South Korea from materials recovered there out of U.S.-origin bottles, so the wholly-obtained-or-produced test spanning both territories is satisfied and the claim under subheading 9506.91.0030 is proper. Option A fails because it truncates the rule to Korea alone, omitting the note's express inclusion of United States and combined-territory production. Watch for: Truncating the rule to Korea alone, forgetting it also covers U.S. or combined-territory production.
Original CBLE Simulator explanation — the question and key above are CBP's; this analysis is ours. Verify against the current edition before relying on it in practice.
CBP's cited authority
Answer and citations as published in CBP's official answer key for the October 2023 examination.
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