Note: the information on this page can be time sensitive.
Rules, regulations, and government policies often change. This page
was published on Apparel Search in February
2015. This information will be left for historical reference
and we will make updates periodically if possible. However, please
do NOT rely strictly on the information listed on this page. Please
contact the appropriate government resources to determine the most accurate
and current details regarding the Qualifying Industry Zones.
In 1996, the U.S. Congress established the Qualifying
Industrial Zone (QIZ) initiative to support the peace process in the Middle
East. The QIZ initiative allows
Egypt and
Jordan
to export products to the United States duty-free, as long as these
products contain inputs from
Israel. The
QIZ legislation authorizes the President to proclaim elimination of duties
on articles produced in the West Bank, Gaza Strip, and qualifying
industrial zones in Jordan and Egypt. The
Office of the United
States Trade Representative (USTR), in consultation with other U.S.
Government agencies, designates QIZs. Until December 2004, all QIZs had
been established in Jordan.
In order for QIZ products to be eligible for duty-free
entry into the United States, the article must be a new and different article
of commerce that has been grown, produced or manufactured in the zone, and
at least 35 percent of the appraised value of a product at the time it enters
into the U.S. must consist of the cost or value of materials produced and
direct cost of producing operations performed in the QIZ.
Generally speaking, U.S. tariffs on textile and apparel
goods are relatively high, which makes production of these goods in QIZs
especially attractive.
For general importing information, see the U.S. Customs
and Border Protection guide, Importing into the United States.
Technical questions can be addressed in writing to:
U.S. Customs and Border Protection (CBP)
Office of Regulations and Rulings
Special Classifications and Markings Branch
1300 Pennsylvania Ave. N.W.
Washington, D.C. 20229
Note: Include complete information about manufacturing
processes, the origin of inputs and other details relevant to determining
whether the product qualifies for duty-free treatment.
JORDAN
Presidential Proclamation 6955 established QIZs in
Jordan, the West Bank, and the Gaza Strip on November 21, 1996. For a list
of the QIZ locations see the Jordan Investment Board (JIB) website.
Products manufactured in QIZs must comply with strict
rules of origin:
1) 35% Jordanian content, of which 11.7% must come
from a Jordan QIZ. 8% from Israel (7% for high tech goods).
the remainder of the minimum may be fulfilled by content from a Jordan QIZ,
Israel, USA or West Bank / Gaza.
2) 20% Jordanian content + 15% U.S. content
Furthermore, the U.S.-Jordan FTA rules of Origin require
that Jordanian exports to the United States must have 35 percent Jordanian
content in order to receive FTA duty benefits.
The duty free benefits provided by QIZs remain particularly
important for Jordanian products for which duty free treatment has not yet
been phased-in under the United States-Jordan FTA. Under the FTA, tariffs
on the majority of apparel, textile made-up goods, footwear and travel goods
are being phased out in stages and will not become duty-free until January
1, 2010. Under the QIZ initiative, these goods would enjoy immediate elimination
of tariffs and quotas, and would require a lower level of Jordanian inputs.
Thus for some high-tariff goods, QIZ-produced products enjoy a comparative
advantage.
The first Jordan QIZ, Irbid Qualifying Industrial
Zone, was created in November 1997. Subsequently, the following zones have
been designated in Jordan, by agreement between the Government of Israel
and the Government of Jordan: the Gateway Projects Industrial Zone, and
the expansion of the Irbid QIZ in November 1998; the Al-Kerak Industrial
Estate, the Ad-Dulayi Industrial Park, and the Al-Tajamouat Industrial City
in September 1999; the Industry and Information Technology Park Development
Company (Jordan Cyber City Co.), and the Aqaba Industrial Estate in August
2000; the Mushatta International Complex, and the Al Qastal Industrial Zone
in November 2000; the Hillwood-Hashemite University LLC (“Zarqa Industrial
Zone”), and the expansion of the Ad-Dulayi Industrial Park in March 2001;
the Al Hallabat Industrial Park, and the expansion of the Al Tajamouat Industrial
Park in July 2003; and Shoubak, Shouneh Wistah, Madaba/dalilet, Irbid/al-Westieyn,
and Al-Tafileh in January 2009.
For more information on Jordan QIZs:
Jordan Investment Board (JIB) website
EGYPT
In December 2004, three QIZs were designated in Egypt:
the Greater Cairo zone, the Alexandria zone and the Suez Canal Zone zone.
Subsequently, the following QIZs have been designated in Egypt, established
in Egypt by agreement between the Government of Israel and the Government
of Egypt: the Central Delta Zone, and the expansion of the Greater Cairo
and Suez Canal zones in August 2005; and the Beni Suief and Al Minya zones
in January 2009. For a current list of the QIZ locations, see the Egyptian
Ministry of Trade and Industry QIZ website.
The Egyptian Government has reported that the textile
and apparel industry, which is the oldest and largest domestic industry,
has benefited the most from the QIZ initiative. Ready-made textile and apparel
products make up the largest volume of exports to the U.S. under the QIZ
initiative. Specific apparel items include jackets, pants, shirts, tops,
T-shirts, shorts, jackets, twin-sets and pullovers. Textile products include
towels and bed sheets. The leather products and athletic footwear industries
are also expected to gain from the QIZ initiative. Egyptian companies working
under the QIZ initiative primarily import fabrics. These imports are followed
by chemicals, zippers, threads, packaging material and other apparel accessories.
In order for an Egypt QIZ article to be eligible for
duty-free entry into the United States, QIZ factories must add at least
35% to the value of the article. The 35% minimum content can include costs
incurred in Israel, Egypt, or the United States. Egypt and Israel have agreed
that each must contribute at least one-third (11.7%) of the 35% minimum
content requirement. However, the Israeli content requirement was lowered
to 10.5% in October 2007.
For more information on Egypt QIZs:
Egyptian Ministry of Trade and Industry QIZ website
If you have any questions about this program, please
contact the U.S. Department of Commerce Office of Textiles and Apparel.
Learn more from the following:
International Trade Administration
Office of Textiles and Apparel (OTEXA)
U.S. Department of Commerce
Washington, DC 20230
Phone: (202) 482-5078 | Fax: (202) 482-2331
OTEXA@trade.gov
Source:
http://web.ita.doc.gov/tacgi/fta.nsf/7a9d3143265673ee85257a0700667a6f/196ed79f4f79ac0085257a070066961d?OpenDocument
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