Regulations
Under the agreement (P.L. 104–234) requires that articles eligible for QIZ status must be manufactured in or directly imported from the areas administered by the Palestine Authority or another notified QIZ and meet the several conditions.
To quality for this scheme a product must be substantially transformed in the manufacturing process. Material and processing costs incurred in a QIZ must total not less than 35% of the appraised value of the product when imported into the United States. Of this 35%, 15% must be either US materials or materials from Israel, the West Bank, or the Gaza Strip, and/or Jordan or Egypt depending on the program. The remaining 20% of the 35% input must come from Israel and Jordan or Egypt. The remaining 65% can come from any part of the world. All importers must also certify that the article meet conditions for duty exemption.
Under the sharing agreements, the manufacturer from the Jordanian side must contribute at least 11.7% of the final produce, and the manufacturer on the Israeli side must contribute 8% (7% on high-tech products). Under the Israeli-Egyptian agreement, 11.7% of the inputs must be made in Israel.
The clothing and textile industry has benefited most from this arrangement. As tariffs on these goods into the United States are relatively high, exporters have used the duty-free benefits of QIZs to gain quick access to markets in the United States.
Read more about this topic: Qualifying Industrial Zone
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