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. Quotas and Licensing Requirements on Textile Products

a) Quotas

CBP administers import controls on certain cotton, wool, man-made fibre, silk blend and other vegetable fibre articles manufactured or produced in designated countries. As of 1 January 2006, CBP implemented absolute quotas on certain textile and apparel imports from Belarus, China, Russia, Ukraine and Vietnam, as well as TRQs for certain textiles and apparel under AGOA, ATPDEA, CBTPA, NAFTA and the FTAs with Chile and Singapore. Quotas on Chinese merchandise are set to expire on 1 January 2009, and quotas on merchandise from Belarus, Russia, Ukraine and Vietnam will be terminated once these countries accede to the World Trade Organisation (WTO).

b) Visa and Licensing Requirements

A textile visa is an endorsement in the form of a stamp on an invoice or export control licence that is executed by a foreign government. It is used to control the exportation of textiles and textile products to the US and to prohibit the unauthorised entry of such merchandise into this country. A visa may cover either quota or non-quota merchandise. Conversely, quota merchandise may or may not require a visa depending upon the country of origin. A visa does not guarantee entry of the merchandise into the US. If the quota closes between the time the visa is issued in the foreign country and the shipment's arrival in the US, the shipment will not be released to the importer until the quota opens again.

The Electronic Visa Information System (ELVIS) is a programme developed by CBP that uses electronic data transmissions for information, particularly visa stamps, normally found on commercial invoices. ELVIS also assists CBP efforts to monitor textile quotas, thereby ensuring that proper restraint levels are charged.

c) Quotas and Licensing Requirements on Chinese Textile and Apparel Merchandise

On 8 November 2005, the US and China signed a three-year Memorandum of Understanding (MOU) concerning trade in various textile and apparel products. The MOU establishes quotas for certain cotton, wool, man-made fibre, silk blend and other vegetable fibre textiles and textile products produced or manufactured in China and exported to the US during three one-year periods beginning on 1 January 2006 and extending through 31 December 2008.

CITA issued a Federal Register notice on 13 December 2005 instructing CBP to establish the 2006 quotas pursuant to the MOU. The quotas set forth in this directive were effective on 1 January 2006 and may be adjusted during the course of the year for carryforward.

In addition, the US and China established an ELVIS arrangement, which provides for the electronic transmission to CBP by the government of China of visa information describing the shipment and including the visa number assigned to the shipment. The ELVIS transmission certifies the country of origin and authorises the shipment to be charged against any applicable quota. The government of China is required to issue an ELVIS transmission for shipments of certain textile products produced or manufactured in China and exported on or after 1 January 2006. China will be free to issue additional documents, such as paper visas or certificates of origin, and while such documents will not be a requirement of entry into the US, CBP may review them on a case-by-case basis.

Baby socks in HTSUS subheadings 6111.20.6050, 6111.30.5050, and 6111.90.5050 will be counted in dozen pairs for quota and ELVIS purposes. These baby socks are subject to the quota level for category 332/432/632-T and the sub-level for category 332/432/632-B, but the correct category designation 239 will be required at the time of entry for quota and ELVIS purposes.

Additional Information

• CITA Federal Register notice:
  www.strtrade.com/wti/2005/december/15/cita_china.txt
  US-China MOU:
  www.ustr.gov/assets/World_Regions/North_Asia/China/asset_upload_file91_8344.pdf

B. Quotas and Licensing Requirements on Non-textile Products

a) Quotas 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 FTAs negotiated by the US.

b) Agricultural Quotas Administered by the USDA

Certain dairy products (shown in the table below) are subject to annual import quotas 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.

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.