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IdentifierCreatedClassificationOrigin
06RABAT1552 2006-08-17 09:14:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Rabat
Cable title:  

PRESSING FOR CLARIFICATION OF MOROCCO'S

Tags:   ETRD BEXP MO 
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1. (SBU) Summary and Action request; Commercial and Econ
Counselors called on Ahmed Maani, Acting Director of
International Cooperation of the Moroccan Customs
Administration on August 10 to review the status of two
recent cases where U.S. imports have been denied preferential
entry into Morocco because they were transhipped via European
ports, despite provisions in the bilateral Free Trade
Agreement that appear to allow such transhipment. Maani, who
is also head of Custom's Taxation Division, stressed that he
was not in a position to render a judgement on the case since
he was only filling in on a temporary basis. Nevertheless,
he was aware of the two cases and said that Customs' intial
determination was that the two shipments violated the "direct
shipment" provisions of the accord as the relevant shipping
documents did not indicate the original dispatcher, but
instead the European subsidiaries transhipping the goods. In
general, he said that Morocco's interpretation of the accord
is that preferential treatment should only be accorded those
goods that are transhipped for "legitimate transportation
reasons," and that documents must show that the shipment
originated in the U.S. and was destined for Morocco.



2. (SBU) Post notes that this interpretation differs to some
degree from that applied in other Free Trade Agreements, and
would appreciate Department and other agencies view of the
matter, as well as information on how U.S. Customs is
applying the provision. End Summary and Action request.



3. (SBU) Background: The first case involved shipment of
chemicals from Du Pont DeNemours to Morocco via Du Pont's
European subsidiary; the second a shipment of glass products
from Solutia, Inc. to Morocco via its European subsidiary.
In both cases, the companies indicate that the shipments were
packaged with other shipments to other European and African
destinations, and were transferred in Anvers to smaller
containers and shipped on to Morocco. Both shipments were
accompanied by a certificate of origin indicating their
American provenance. For both shipments, however, the
Moroccan bill of lading showed not the U.S. shipper but that
shipper's European subsidiary as the originator.



4. (SBU) Maani, who was clearly briefed on the cases,
stressed that he is overseeing the International Cooperation
division on an interim basis, and is not in a position to
render a decision but only to convey USG concerns to his
superiors. He noted that the companies' appeals had been
received and transmitted to the Casablanca port for its
input. Emphasizing the accord's three principles that goods
must figure in the list of those benefitting from its
provisions, must be of U.S. origin, and must be "directly
shipped" to Morocco, he agreed that the final issue was the
only one in question. While indirect shipments are permitted
by the agreement, he said they are examined more closely,
given the potential for abuse. In general, he said, Morocco
understands that direct shipment may not be practical for
logistical reasons. If transhipment is undertaken for
transportation reasons it is acceptable. The shipping
documents, he stressed, however, must show sourcing from the
U.S. and a Moroccan final destination, and not European
intermediaries. Resale, he added, is not permitted, nor any
treatment other than discharge and reloading under Customs'
control. He noted earlier discussions (reftel) regarding a
shipment of California almonds that were shipped to Morocco
soon after the Free Trade Agreement entered into force, that
were also denied preferential treatment. Those almonds, he
noted, violated the direct shipment provision both because
they were stored in Europe in anticipation of the agreement,
and because they were "bought from an intermediary."



5. (SBU) Asked whether the goods in these two cases should
not benefit from the EU-Moroccan trade agreement, if Morocco
is interpreting their origin as European, Maani said no, as
the EU agreement stipulates a European certificate of origin,
which could not be provided here. He added that certificates
of origin are not required under the U.S. accord, though they
are usually provided. Customs has the right to demand
additional documents under the U.S. FTA, though it has not
done so, since full enforcement of the allowed provisions
would bring trade between the two countries to a standstill.
He asked that we inquire about the way in which U.S. Customs
is applying the provisions, but stressed that Morocco

believes it is operating within the letter and spirit of the
accord.



6. (SBU) Comment: Post notes that other Free Trade Agreements
(such as that between the U.S. and Jordan) have language
covering situations where invoices and other documents do not
show the final destination, as Morocco is insisting, and
would appreciate Department and U.S. agencies view how the
issue should be interpreted under the U.S.-Morocco agreement.
Particularly useful, both for guidance and to respond to
Maani, would be information on how U.S. Customs is applying
the agreement to transhipments. End Comment.
******************************************
Visit Embassy Rabat's Classified Website;
http://www.state.sgov.gov/p/nea/rabat
******************************************

RILEY