Trade Agreement Act Compliant
Many federal contracts are governed by a wide range of national preferential regimes – the Buy American Act (BAA), the Trade Agreements Act (TAA), the Berry Amendment and the Cargo Preference Act, to name a few. In Acetris Health, LLC v. United States, the Court of Appeals for the Federal Circuit recently dismissed a government appeal and clarified the test to determine whether a drug – or other product – complies with the ATA. This important decision is at odds with CBP`s long-standing analytical approach to drugs, as well as the Department of Veterans Affairs (VA)`s call to discontinue CBP`s acquisition by the Confederation. The TAA generally prohibits the purchase of „foreign or instrumental products“ that are not parties to the WTO agreement or that are „designated“ by the President for the purposes of the TAA. 19 U.S.C No. 2512 (a) (1). The TAA country of origin test defines „a product of a country“ as follows: in addition to the FAR clause on trade agreements, the government has argued that the tablets are not compliant because they are not „fully“ manufactured in the United States and that the manufacture of the final tablets in New Jersey has not „substantially“ transformed the Indian active substance into a new product. This argument required the government to read the „full“ adverb of the country of origin`s legal test, if it exists, in the TERMS agreements clause of the FAR, as long as it does not exist. The adverb „complete“ also does not exist in the BAA or its regulatory implementation.
(Added highlight.) Given that domestic manufacturing, the Court of Justice held that it was not necessary to determine the separate question of whether the tablets were also substantially modified in the United States. The FAR says that both prong are sufficient to make a final product „U.S.-made“ and therefore be in compliance with the trade agreements clause. Therefore, under the TAA and its RULES of application in the FAR, the VA incorrectly found that the protester`s entecavir did not comply with the TAA and its regulatory implementation in the FAR. A foreign-made product containing foreign components must pass the „essential transformation“ test described in the Federal Acquisition Regulation (FAR) 25.001 (c) (2) to be considered compliant. This test determines whether the country in which the product has undergone a „substantial transformation“ is on the list of countries that comply with the AAT. Va then launched a new invitation for the entecavir, which in turn was under the responsibility of the TAA. In response to an original question, the VA replied that CBP`s previous provision was final and that, therefore, any entecavir produced with an active substance of Indian origin was considered to be non-compliant with TAA and unacceptable. The protester presented a timely pre-award protest, which called into question the VA`s interpretation of TAA and argued that „although its products are made from foreign [active ingredients], they are not products from India (under TAA) and are „finished products made in the United States“ (under the FAR) because they are made of tablets in the United States.“ Here is a complete list of TAA-compliant countries.