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U.S. STATE DEPARTMENT INITIATING NEW GUIDELINES FOR THE COUNTRY OF ORIGIN MARKING OF ISRAELI AND PALESTINIAN GOODS PRODUCED IN THE WEST BANK

In a November 19, 2020 Press Statement, the U.S. State Department announced its initiation of new guidelines with respect to the country of origin marking of certain Israeli and Palestinian goods to reflect current U.S. foreign policy.  Under this announcement, goods imported into the United States that were produced within areas where Israel exercises authority (most notably Area C under the Oslo Accords[1]) would be required to marked as “Israel”, “Product of Israel”, or “Made in Israel.”  In contrast, goods in areas of the West Bank where the Palestinian Authority exercises authority would be required to be marked as products of  “West Bank” and goods produced in Gaza would be required to be marked as products of  “Gaza.”

The above announcement represents a change from a 1995 Treasury Decision directing that goods produced in the West Bank or Gaza be marked “West Bank” or “Gaza” regardless of which entity exercised authority in the area in which the goods were produced.  The marking  “West Bank/Gaza” would no longer be accepted in recognition that the two territories are politically and administratively separate.

The above change should not alter the duty-free treatment of qualifying goods produced in the area, but it could impact which program is to be claimed.  Specifically, General Note 8, HTSUS covers claims under the Israel FTA, while General Note 3(v), HTSUS covers products of the West Bank, the Gaza Strip or a qualifying industrial zone.

This is an unfolding issue and there has not yet been a corresponding announcement from CBP.  As such, the timing of this change and its impact on existing production commitments is unknown.

Please do not hesitate to contact our office with any questions.

[1] Under the Oslo Accords, Israel transferred to the Palestinian Authority land designated therein as Area A and Area B.  Area C remained under Israeli control pending a future agreement between the two Parties.

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