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October 2026, question 70

Valuation, Appraisement and Duty Assessment · Rules of origin and trade programs

Which ONE of the following articles qualifies for preferential tariff treatment under the Caribbean Basin Economic Recovery Act (CBERA)?

  1. Hula hoops that are, by value, 25% United States content and 10% Aruban content.
  2. Beach umbrellas that are, by value, 15% Jamaican content and 15% Costa Rican content.
  3. Rum that is, by value, 100% Puerto Rican content. The rum is shipped to the Bahamas to add Bahamas-origin coconut flavor, bottled, and later exported from the Bahamas to the United States.
  4. Souvenir mugs that are, by value, 40% Haitian content that is shipped to Bermuda for warehousing outside customs control and later exported from Bermuda to the United States.
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CBP's answer: C. C: Rum that is, by value, 100% Puerto Rican content. The rum is shipped to the Bahamas to add Bahamas-origin coconut flavor, bottled, and later exported from the Bahamas to the United States.

Under General Note 7(b)(v), an article that is the growth, product or manufacture of Puerto Rico gets CBERA duty-free treatment if it is imported directly from the beneficiary country, was advanced in value or improved in condition there, and any materials added there are products of a beneficiary country or the United States. The Puerto Rican rum was flavored and bottled in the Bahamas with Bahamian coconut flavor and shipped directly from there, so C qualifies. A and B fall short of the 35 percent beneficiary-country content test in 7(b)(i)(B), and D was shipped through Bermuda, which is not listed as a beneficiary country in the note.

the article was by any means advanced in value or improved in condition in a beneficiary country General Note 7
is not less than 35 per centum of the appraised value of such article at the time it is entered General Note 7

Search for: the article was by any means advanced in value or improved in condition in a beneficiary country

CBP's key cites: General Note 7

Question and key from CBP's October 2026 exam and answer key. The walk-through is ours; quotes are from the pinned editions in the reference viewer (HTSUS 2026 Basic, 19 CFR 2025 edition).