[House Report 114-101]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 114-101
======================================================================
AGOA EXTENSION AND ENHANCEMENT ACT OF 2015
_______
May 1, 2015.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Ryan of Wisconsin, from the Committee on Ways and Means, submitted
the following
R E P O R T
[To accompany H.R. 1891]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 1891) to extend the African Growth and Opportunity
Act, the Generalized System of Preferences, the preferential
duty treatment program for Haiti, and for other purposes,
having considered the same, report favorably thereon without
amendment and recommend that the bill do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND............................................2
A. Purpose and Summary................................... 2
B. Background and Need for Legislation................... 3
C. Legislative History................................... 7
II. EXPLANATION OF THE BILL...........................................8
Title I: Extension of African Growth and Opportunity Act. 8
Title II: Extension of Generalized System of Preferences. 17
Title III: Extension of Preferential Duty Treatment
Program for Haiti.................................... 19
Title IV: Other Provisions............................... 20
III.VOTES OF THE COMMITTEE...........................................21
IV. BUDGET EFFECTS OF THE BILL.......................................21
A. Committee Estimate of Budgetary Effects............... 21
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority........................ 22
C. Cost Estimate Prepared by the Congressional Budget
Office............................................... 22
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......28
A. Committee Oversight Findings and Recommendations...... 28
B. Statement of General Performance Goals and Objectives. 28
C. Information Relating to Unfunded Mandates............. 28
D. Applicability of House Rule XXI 5(b).................. 29
E. Tax Complexity Analysis............................... 29
F. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits.............................. 29
G. Duplication of Federal Programs....................... 29
H. Disclosure of Directed Rule Makings................... 30
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............30
A. Text of Existing Law Amended or Repealed by the Bill,
as Reported.......................................... 30
B. Changes in Existing Law Proposed by the Bill, as
Reported............................................. 90
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
African Growth and Opportunity Act
Title I reaffirms Congress's commitment to sub-Saharan
Africa by ensuring a long-term extension of the African Growth
and Opportunity Act, which is the cornerstone of the trade and
investment relationship between the United States and sub-
Saharan Africa.
First enacted in 2000, AGOA provides preferential duty
treatment to sub-Saharan African countries that continue to
make progress on economic and political reform; market
incentives and private sector growth; the eradication of
poverty; and the importance of women to economic growth and
development. Currently 39 countries receive benefits under
AGOA.
The bill reaffirms Congress's commitment to sub-Saharan
Africa through findings and statements of policy on the
importance of AGOA and expanding trade and investment ties
between the United States and sub-Saharan Africa. The bill
takes note of AGOA's successes in promoting trade and
investment ties between the United States and sub-Saharan
Africa, as well as its success in promoting economic growth,
development, poverty reduction, democracy, the rule of law, and
stability in sub-Saharan Africa. The bill also finds that the
elimination of barriers to trade will improve utilization of
AGOA and further strengthen trade and investment ties.
Benefits under AGOA are set to expire on September 30,
2015. The bill provides a long-term extension of AGOA for 10
years, including a 10-year extension of the third-country
fabric provisions.
The bill promotes greater regional integration by expanding
the rule of origin to allow for combining inputs from all AGOA
beneficiaries to count towards meeting the rule of origin for
AGOA-eligible products. The bill also simplifies customs
procedures to make it easier to complete paperwork on imports
from AGOA beneficiaries.
The bill includes statements of policy encouraging the
adoption of the WTO Trade Facilitation Agreement. The bill also
addresses unfair practices by the European Union that condition
access to the European market on signing trade agreements.
Under existing law, the President must annually evaluate
whether AGOA beneficiaries are making continual progress in
meeting the eligibility criteria in the statute. These criteria
include, for example, whether countries in sub-Saharan Africa
have established, or are making continual progress toward
meeting the criteria outlined in the original AGOA legislation.
While this bill does not change the eligibility criteria, it
does include several key improvements to the annual review
process. For example, the bill provides flexibility to allow
the Administration to withdraw, suspend, or limit benefits
under AGOA if it determines that such action would be more
effective than termination. In addition, the bill ensures
greater predictability and certainty by requiring the
Administration to notify Congress and any affected country at
least 60 days before removing a country from the program or
withdrawing, suspending, or limiting any benefits. The bill
also reinstates an exhaustive biennial report to Congress on
AGOA countries and utilization of the program, which will
further strengthen Congressional oversight of the program.
Furthermore, the bill improves transparency and
participation in the annual AGOA review process by making it
more public and ensuring that the Administration establishes
mechanisms for public input. One such mechanism is the creation
of a new petition process that allows any party, at any time,
to petition USTR about whether a country is meeting the AGOA
eligibility criteria. Another mechanism allows the President to
conduct out-of-cycle reviews of eligible countries and a sense
of Congress that the President should initiate a review of
South Africa or any other beneficiary country that is not in
compliance with Section 104(a) of AGOA within 30 days of
enactment.
Recognizing that those countries with strategies for taking
advantage of the benefits of AGOA tend to have the most success
under the program, the bill encourages AGOA beneficiaries to
develop biennial utilization strategies and commits the United
States to working with AGOA beneficiaries to develop and
implement such strategies.
The bill reaffirms the United States' commitment to deepen
and expand trade and investment relationships with sub-Saharan
Africa, including through the negotiation of free trade
agreements, by requiring the Administration to develop a long-
term strategy for negotiating trade agreements with sub-Saharan
Africa and setting clear statements of U.S. policy.
Title II would extend the Generalized System of Preferences
(GSP) through December 31, 2017, and provide retroactive
benefits to July 31, 2013 for products that would be eligible
as of the effective date. The program expired on July 31, 2013.
It would also make certain cotton articles eligible for Least-
Developed Beneficiary Developing Countries (LDBDCs),
implementing U.S. WTO commitments.
Title III would extend benefits now available to Haiti
under the Caribbean Basin Economic Recovery Act (CBERA), as
amended, through 2025.
Title IV would offset revenue for budgetary purposes.
B. Background and Need for Legislation
African Growth and Opportunity Act
AGOA has been the cornerstone of United States economic
engagement with sub-Saharan Africa since it was enacted in
2000. Congress has legislated five times since AGOA's original
enactment to extend and expand the benefits under AGOA.
Economic and political conditions have improved
dramatically since AGOA was first enacted. The AGOA Ambassadors
Working Group estimates that AGOA has generated about 350,000
direct jobs and 1 million indirect jobs in sub-Saharan Africa
and about 100,000 jobs in the United States.
Approximately 70 percent of imports from AGOA-eligible
countries entered under the AGOA program in 2013 (another 20
percent enter under GSP), though the level of utilization
varies from country to country. Since adoption of AGOA in 2000,
U.S. imports under the program grew more than three-fold,
rising from $7.6 billion in 2001 to $24.8 billion in 2013.
Petroleum products continue to account for the largest portion
of AGOA imports, with an 82 percent share of overall AGOA
imports in 2013. Apparel products account for only 1-2 percent
of total products imported under the AGOA program but support
tens of thousands of jobs in Africa.
Overall, AGOA has had a positive impact on foreign direct
investment flows to sub-Saharan Africa. Since enactment of
AGOA, U.S. investment has grown at an annual rate of 14
percent, and the U.S. investment stock has increased by about
six times. Despite this strong growth, U.S. direct investment
in sub-Saharan Africa accounts for only 1 percent of total U.S.
direct investment outflows.
Similarly, political conditions have strengthened in many
African countries. According to its report, AGOA: Eligibility
Process and Economic Development in Sub-Saharan Africa [GAO-15-
300], the General Accountability Office concluded that,
although isolating impacts is difficult, AGOA-eligible
countries had higher average income-per person than ineligible
countries and higher governance scores than ineligible
countries, including on rule of law and political stability
criteria.
Even as trade and investment have grown, significant
economic and political challenges remain in sub-Saharan Africa.
Major barriers remain to U.S.-African trade and investment as
well as intra-African trade, including high tariffs, forced
localization requirements, legal restrictions on investment,
and customs barriers, among others. Substantial supply-side
constraints, such as poor infrastructure, lack of regional
integration, and other obstacles, also contribute to depress
trade and investment flows.
Committee Oversight: As part of its oversight function, the
Committee has conducted a thorough process of reviewing AGOA
legislation and consulting with interested stakeholders about
the possibility of extending and renewing AGOA. This process
includes congressional hearings, participation in AGOA Forum
meetings by Committee Members and staff, informal consultations
with interested stakeholders including the African diplomatic
corps and senior African officials, as well as studies from the
International Trade Commission and the General Accountability
Office. All of these efforts have informed the Committee's
development of this legislation and confirmed the need to
extend AGOA for another ten years.
To supplement the research conducted by the International
Trade Commission, in December 2013 a group of bipartisan
leaders from the House Ways and Means Committee, Senate Finance
Committee, House Foreign Affairs Committee, and Senate Foreign
Relations Committee requested the General Accountability Office
(GAO) to conduct a study to examine the contribution of AGOA to
economic growth and political reform, barriers to AGOA
utilization, as well as potential ways to strengthen the
program. To date, GAO has produced four reports.
The first report, ``African Growth and Opportunity Act:
Observations on Competitiveness and Diversification of U.S.
Imports from Beneficiary Countries'' [GAO-14-722R], examined
the competitiveness and diversification of U.S. imports under
AGOA from 2001 to 2013. GAO found that U.S. imports from AGOA
countries have increased significantly since the program was
implemented in 2001 but remain a small share of total U.S.
imports. GAO also noted that while imports of non-oil and
mineral products have increased, oil and mineral products still
represent the vast majority of U.S. imports from sub-Saharan
Africa.
The second report, ``African Growth and Opportunity Act:
USAID Could Enhance Utilization by Working with More Countries
to Develop Export Strategies'' [GAO-15-218], examined U.S.
government trade capacity building (TCB) assistance in support
of AGOA, and the extent to which USAID has made efforts to
develop strategic approaches to AGOA utilization with sub-
Saharan African countries. The GAO report highlighted several
trade-related challenges in sub-Saharan Africa that benefit
from TCB assistance. In addition to lacking marketing
expertise, market information, and business contacts to
effectively export to the U.S. market, many AGOA-eligible
countries have poor infrastructure conditions that undermine
export competitiveness. GAO recommended encouraging AGOA
beneficiary countries to develop utilization strategies and to
use those strategies to coordinate TCB efforts.
The third report, ``African Growth and Opportunity Act:
Eligibility Process and Economic Development in Sub-Saharan
Africa'' [GAO-15-300], analyzed the annual AGOA eligibility
review process, the role of AGOA in supporting reform
objectives, and how sub-Saharan African countries have
developed since the enactment of AGOA. GAO determined that
AGOA-beneficiaries fared better on economic and development
metrics than sub-Saharan African countries that did not
participate in the program. GAO also found that since AGOA was
enacted, income per person has been higher in AGOA-eligible
countries, on average, than in ineligible countries. Moreover,
AGOA beneficiaries have received more foreign aid per person
and higher foreign direct investment than countries that have
not participated in the program.
The fourth report, ``African Growth and Opportunity Act:
Lessons Learned from Other Countries' Trade Arrangements with
Sub-Saharan Africa'' [GAO-15-393R], examined the
recommendations for AGOA made by the Administration and
recommended that Congress enact a long-term extension of AGOA
to reduce risks for investors, although it also cautioned that
a long-term extension could limit U.S. flexibility in making
changes to its trading arrangement with sub-Saharan African
countries. Moreover, GAO found that many U.S. domestic
commodity groups and producers have raised concerns about
expanding AGOA's product coverage. GAO examined changing the
rules of origin and concluded that some rules of origin changes
could increase use of AGOA preferences, but there is an
increased likelihood that the benefits would accrue to non-AGOA
countries. Lastly, GAO examined changing the eligibility
criteria and review processes and found that revising
eligibility criteria could limit preferences to fewer countries
and may negatively impact regional integration.
Generalized System of Preferences
Title V of the Trade Act of 1974, as amended, grants
authority to the President to provide duty-free treatment on
imports of eligible articles from designated beneficiary
developing countries (BDCs), subject to certain conditions and
limitations. To qualify for GSP benefits, each beneficiary
country is subject to mandatory and discretionary eligibility
criteria.
The purpose of the GSP program is to promote three broad
policy goals: (1) to foster economic development in developing
economies through increased trade rather than foreign aid; (2)
to promote U.S. trade interests by encouraging beneficiary
countries to open their markets and comply more fully with
international trading rules; and (3) to help maintain U.S.
international competitiveness by lowering costs for U.S.
business, as well as lowering prices for American consumers.
The program expired on July 31, 2013. This bill extends the
Generalized System of Preferences (GSP) until December 31, 2017
and provides retroactive relief to eligible products that were
imported during GSP's lapse.
The bill promotes export growth and economic development
for developing countries by continuing to provide duty-free
entry for approximately 5,000 agricultural and non-agricultural
products from 126 designated beneficiary countries and
territories. It also benefits U.S. companies by eliminating an
estimated $2 million a day in tariffs on imported goods,
supporting an estimated 80,000 jobs in the United States
through the movement of GSP products from ports to
manufacturers, farmers, and stores. Renewal of GSP fosters
innovation and U.S. competitiveness in the global marketplace
by lowering costs for intermediate goods, including components,
parts, and material imported from designated beneficiary
developing countries.
In addition, Title II implements certain commitments taken
by the United States relating to cotton. At the World Trade
Organization's Eighth Ministerial Conference, the United States
agreed to adopt duty-free and quota-free treatment for certain
upland cotton for LDBDCs. In 2012, the Administration, after
seeking input from the International Trade Commission (ITC) and
consulting with Congress, added the appropriate in-quota tariff
lines to the GSP program. This bill makes the out-of-quota
tariff lines eligible under GSP. The ITC analyzed whether there
would be any negative effect from making these products duty-
free and quota-free for LDBDCs, and it received no statements
of opposition.
Preference Programs for Haiti
Congress first provided expanded benefits on apparel
exports from Haiti to the United States in the Haitian
Hemispheric Opportunity through Partnership Encouragement Act
of 2006 (HOPE I). The program was extended and expanded in 2008
through HOPE II legislation. After the devastating earthquake
in 2010, Congress adopted the HELP Act, which included
additional flexibility and further extended the program.
In 2006, Haiti's exports to the United States totaled just
$496.1 million. In 2014, they totaled $908.2 million. While
conditions have improved, economic conditions in Haiti remain
challenging and long-term certainty is important to continuing
to attract investment to Haiti.
The bill would extend the HOPE and HELP programs for
products from Haiti until September 30, 2025. Such an extension
would promote export growth and economic development for Haiti
by continuing to provide duty-free entry for a variety of
products, including certain apparel products.
C. Legislative History
Background
H.R. 1891, to extend the African Growth and Opportunity
Act, the Generalized System of Preferences, the preferential
duty treatment program for Haiti, and for other purposes, was
introduced on April 17, 2015, and was referred to the Committee
on Ways and Means.
Committee hearings
On July 18, 2013, the Committee held a hearing on the U.S.
trade agenda with Ambassador Michael Froman, the United States
Trade Representative. The hearing included discussion about the
importance of the preferences programs and the upcoming
expiration of GSP.
On April 3, 2014, the Committee held a hearing on the U.S.
trade agenda with Ambassador Michael Froman, United States
Trade Representative. Among the issues covered was the need for
renewal of GSP and extension of AGOA and the importance of both
programs in furthering the U.S. trade agenda.
On July 29, 2014, the Subcommittee on Trade held a hearing
on U.S. trade with Africa and the African Growth and
Opportunity Act. The hearing focus included: (1) deepening and
expanding trade and investment ties with sub-Saharan Africa;
(2) the effectiveness of AGOA and potential revisions to the
program to promote improved utilization; (3) barriers to trade
in Africa; (4) barriers to regional integration in Africa; and
(5) capacity building and efforts to promote regional
integration and integration into global supply chains,
including through implementation of the WTO Trade Facilitation
Agreement.
On August 4-5, 2014, Representatives Young and Rangel
participated in the Africa Growth and Opportunity Act (AGOA)
Forum in Washington, D.C. and met with officials from the
United States and AGOA countries.
On February 3, 2015, the Committee held a hearing on the
U.S. trade agenda with Ambassador Michael Froman, United States
Trade Representative. The Committee heard testimony about the
importance of AGOA and GSP renewal, including the benefits of
the preferences programs for international development and the
U.S. economy.
On April 22, 2015, the Committee held a hearing on
expanding American trade with accountability and transparency
with Treasury Secretary Jack Lew, Agriculture Secretary Tom
Vilsack, and Commerce Secretary Penny Prtizker. The Committee
heard testimony on the Administration's support for this
legislation and timely renewal of the preference programs.
Committee action
The Committee on Ways and Means marked up H.R. 1891, to
extend the African Growth and Opportunity Act, the Generalized
System of Preferences, the preferential duty treatment program
for Haiti, and for other purposes, on April 23, 2015, and
ordered the bill favorably reported by voice vote (with a
quorum being present).
II. EXPLANATION OF THE BILL
TITLE I: EXTENSION OF AFRICAN GROWTH AND OPPORTUNITY ACT
SECTION 101: SHORT TITLE
Present law
No provision.
Explanation of provision
Section 101 entitles the bill the ``AGOA Extension and
Enhancement Act of 2015''.
Reason for change
The Committee believes that the short title reflects the
significant revision and expansion of the AGOA program.
Effective date
The provision is effective upon enactment.
SECTION 102: FINDINGS
Present law
This section supplements and updates findings in previous
AGOA legislation, including Section 102 of the African Growth
and Opportunity Act.
Explanation of provision
In Section 102, Congress finds that:
(1) Since its enactment, the African Growth and Opportunity
Act has been the centerpiece of trade relations between the
United States and sub-Saharan Africa and has enhanced trade,
investment, job creation, and democratic institutions
throughout Africa.
(2) Trade and investment, as facilitated by the African
Growth and Opportunity Act, promote economic growth,
development, poverty reduction, democracy, the rule of law, and
stability in sub-Saharan Africa.
(3) Trade between the United States and sub-Saharan Africa
has more than tripled since the enactment of the African Growth
and Opportunity Act in 2000, and United States direct
investment in sub-Saharan Africa has grown almost six-fold.
(4) It is in the interest of the United States to engage
and compete in emerging markets in sub-Saharan African
countries, to boost trade and investment between the United
States and sub-Saharan African countries, and to renew and
strengthen the African Growth and Opportunity Act.
(5) The long-term economic security of the United States is
enhanced by strong economic and political ties with the
fastest-growing economies in the world, many of which are in
sub-Saharan Africa.
(6) It is a goal of the United States to further integrate
sub-Saharan African countries into the global economy,
stimulate economic development in Africa, and diversify sources
of growth in sub-Saharan Africa.
(7) To that end, implementation of the Agreement on Trade
Facilitation of the World Trade Organization would strengthen
regional integration efforts in sub-Saharan Africa and
contribute to economic growth in the region.
(8) The elimination of barriers to trade and investment in
sub-Saharan Africa, including high tariffs, forced localization
requirements, restrictions on investment, and customs barriers,
will create opportunities for workers, businesses, farmers, and
ranchers in the United States and sub-Saharan African
countries.
(9) The elimination of such barriers will improve
utilization of the African Growth and Opportunity Act and
strengthen regional and global integration, accelerate economic
growth in sub-Saharan Africa, and enhance the trade
relationship between the United States and sub-Saharan Africa.
Reason for change
These provisions supplement and update Congressional
findings to reflect the success of AGOA since its enactment and
continuing challenges in sub-Saharan Africa. This section
reaffirms Congress's commitment to sub-Saharan Africa through
findings on the importance of AGOA and expanding trade and
investment ties between the United States and sub-Saharan
Africa. This section takes note of AGOA's successes in
promoting trade and investment ties between the United States
and sub-Saharan Africa, as well as its success in promoting
economic growth, development, poverty reduction, democracy, the
rule of law, and stability in sub-Saharan Africa.
The Committee notes the positive effect that digital trade
has had in supporting development among AGOA beneficiaries. The
President should continue to encourage sub-Saharan Africa to
promote policies that expand Internet access and to eliminate
barriers to the digital economy in Africa, including through
the AGOA.
This section also finds that the elimination of barriers to
trade will improve utilization of AGOA and further strengthen
trade and investment ties. The Committee remains concerned by
persistent tariff and non-tariff barriers to trade and
investment in sub-Saharan Africa that impede trade and regional
integration. In addition to persistently high-tariffs, non-
tariff barriers impede U.S. exports sub-Saharan Africa as well
as regional trade.
Effective date
The provision is effective upon enactment.
SECTION 103: EXTENSION OF THE AFRICAN GROWTH AND OPPORTUNITY ACT
Present law
Under current law, AGOA and the special rule of origin on
third-country fabric expires on September 30, 2015.
Explanation of provision
Section 103 extends AGOA and the special rule of origin on
third-country fabric from September 30, 2015 to September 30,
2025.
Reason for change
The Committee believes that long-term extension is
important to encourage investment and support current
investors. Extension of the third-country fabric provision is
important to continue to support the development of the textile
and apparel industry in Africa and support integration of the
textile and apparel industry into global supply chains. At the
same time, the Committee is supportive of efforts underway to
develop a more integrated African supply chain so that further
renewal of third-country fabric provisions will not be
necessary.
Effective date
The provision is effective upon enactment.
SECTION 104: PROMOTING GREATER REGIONAL INTEGRATION
Present law
Section 506A(b) of the Trade Act of 1974 provides the rules
of origin for AGOA-eligible products.
Explanation of provision
Section 104(a) allows producers to include the direct costs
of processing operations performed in one or more beneficiary
sub-Saharan African countries or former beneficiary sub-Saharan
African countries in achieving the required minimum 35 percent
local value content.
Section 104(b) allows a producer to include value-added
from any AGOA-beneficiary country or former AGOA beneficiary
country in calculating the required minimum 35 percent local
value content.
Section 104(c) authorizes the President to amend the
Harmonized Tariff Schedule of the United States (HTSUS) to add
the special tariff treatment symbol ``D'' in the ``Special''
subcolumn of the HTSUS for every product with the special
tariff treatment symbol ``A'' in the ``Special'' subcolumn to
clarify that every article described in section 503(a)(1) of
title V of the Trade Act of 1974 that is the growth, product,
or manufacture of a beneficiary sub-Saharan African country
will be eligible for the preferential tariff treatment
described in amended section 506A(b)(2).
Reason for change
These provisions simplify the rules of origin for AGOA and
encourage further regional integration.
In order to encourage greater regional integration in
Africa, section 104(a) amends section 506A(b)(2) of the Trade
Act of 1974, as amended, to allow accumulation of the direct
costs of processing operations performed in one or more
beneficiary sub-Saharan African countries or former beneficiary
sub-Saharan African countries in achieving the required minimum
35 percent local value content. The Committee believes that
this will continue to promote greater regional integration in
Africa.
Section 104(b) ensures that the general rules of origin
governing duty-free treatment under the GSP program would apply
to any article described in section 503(a)(1) of title V of the
Trade Act of 1974 that is the growth, product or manufacture of
a beneficiary sub-Saharan African country. The general rule of
origin governing duty-free treatment under the GSP program
would continue to apply to imports from beneficiary sub-Saharan
African countries of any item, other than textiles or apparel
products or textile luggage, that is designated as import
sensitive under section 503(b)(1) of title V of the Trade Act
of 1974.
Section 104(c) authorizes the President to simplify import
paperwork and eliminates confusion by allowing importers of
products under AGOA to mark ``D'' in all instances for any
AGOA- or GSP-eligible product.
Effective date
The amendments made by sections 104(a) and (b) apply to
eligible products 30 days after enactment. Section 104(c) is
effective immediately upon enactment.
SECTION 105: MONITORING AND REVIEW OF ELIGIBILITY
Present law
Section 506A(a) of the Trade Act of 1974 authorizes the
President to designate sub-Saharan African countries as
eligible for AGOA benefits and requires the President to
monitor, review, and report to Congress annually on the
progress of each sub-Saharan country in meeting the eligibility
criteria set forth in the AGOA statute.
Explanation of provision
Section 105(a) amends section 506A(a)(3) of the Trade Act
of 1974 to require the President to provide at least 60 days'
notification and explanation to Congress and the sub-Saharan
African country in question of his intention to terminate the
designation of such country as a beneficiary sub-Saharan
African country.
Section 105(b) amends section 506A of the Trade Act of 1974
to allow the President to withdraw, suspend, or limit duty-free
treatment for certain articles if he determines that such
treatment would be more effective in promoting compliance with
eligibility requirements than terminating benefits. The
President is required to notify Congress and the country in
question at least 60 days in advance of any action, along with
the reasons for such action.
Section 105(c) amends section 506A of the Trade Act of 1974
to require the President to annually publish in the Federal
Register, as part of the annual monitoring and review of
countries, a notice of the annual review and a request for
public comments on whether beneficiary countries are meeting
the eligibility criteria. It also requires the United States
Trade Representative to hold a public hearing within 30 days of
the President's publication.
Section 105(c) also requires the President to create a new
petition process in which interested parties may file a
petition with the United States Trade Representative at any
time regarding the compliance of any AGOA beneficiary country.
Section 105(c) authorizes the President to initiate an out-
of-cycle review of any beneficiary sub-Saharan African country,
at any time, to determine whether it is making continual
progress in meeting the eligibility criteria. If a country
fails the out-of-cycle review, the President shall terminate or
withdraw, suspend, or limit the application of duty-free
treatment. The President shall consult with Congress before
initiating an investigation and report after a conclusion. In
addition, it is the sense of Congress that the President should
initiate a review of South Africa or any other beneficiary
country that is not in compliance with Section 104(a) of AGOA
within 30 days of enactment.
Reason for change
Under current practice, the President is not required to
provide advanced notice to Congress of his intent to terminate
the designation of a beneficiary country. As a result, the
President has often notified Congress fewer than 10 days before
benefits are to be terminated. This does not provide adequate
certainty and predictability for the program. Section 105(a)
brings notification obligations under AGOA in line with the
notification obligations under the GSP program.
The purpose of section 105(b) of the bill is to provide the
President with greater flexibility in administering the program
when a country is found to violate one or more of the
eligibility criteria. Under the current statute, the
President's only option is to terminate eligibility for the
program, effective January 1 of the following year. However, in
some cases, termination of all benefits is not necessarily the
most effective way to address the underlying problem. For
example, if a beneficiary's actions and policies with regards
to a specific sector of their economy violate the eligibility
criteria, then the most effective action to address the
violation may be to limit AGOA benefits with respect to that
sector, rather than for all products. Similarly, if there is an
event that contravenes the eligibility criteria that may be
temporary in nature, then suspension of benefits for a limited
period of time may be a more effective way to address the issue
than termination of benefits altogether. Finally, if an event
occurs that is so egregious that the Administration determines
benefits should be removed before January 1 of the following
year, this language gives the President the authority to
withdraw those benefits within 60 days, with termination to
follow on January 1 of the following year. The Committee
expects that the Administration will, in appropriate
circumstances, make full use of the additional flexibility
provided in this section to address situations where
beneficiary countries have taken steps which violate
eligibility criteria and which may limit or exclude
international trade and investment.
While this provision provides additional flexibility, the
default for a breach of the criteria remains termination of
benefits on January 1 of the following year because AGOA
provides benefits above and beyond GSP and includes additional
eligibility criteria. As such, before invoking the
flexibilities set out in the bill, the President must determine
that withdrawing, suspending, or limiting benefits under the
bill is more effective in promoting compliance with the
criteria than terminating benefits and shall notify Congress of
the rationale for this determination.
As the Committee has noted in the findings section, it has
heard significant concerns about new and continuing barriers to
trade in sub-Saharan Africa. Section 105(c) enhances existing
consultation requirements and creates a new petition process
that allows for interested parties to have their concerns
adequately aired at any time. The Committee intends for this
process to improve input into the AGOA-eligibility review
process and better inform the Administration of developments.
The Administration should take these petitions into account
when annually reviewing AGOA eligibility and in informing out-
of-cycle reviews.
Under current law the Administration can review a country's
eligibility at any time. However, the Committee believes that
statutorily establishing a formal out-of-cycle review provides
an additional tool to the Administration to regularly review a
country's eligibility. The Committee does not intend for out-
of-cycle reviews to be common. Instead, a formal out-of-cycle
review should be instituted by the Administration only when it
has exhausted all other options. Such a review should occur
prior to taking steps to terminate a country's eligibility or
withdraw, suspend, or limit benefits, should such action be
necessary. These reviews should be conducted promptly, and
reporting to Congress required by this provision should be
detailed. If the Administration determines not to take action
as a result of an out-of-cycle review, the Committee expects
regular consultations and continued monitoring of developments.
This section also includes a Sense of Congress provision
directing the Administration to initiate a review of South
Africa, and any other similarly situated country, within 30
days of enactment. The Committee remains very concerned by
several steps taken by South Africa, including imposition of
sanitary and phytosanitary measures that are not based on
science and restrict U.S. exports. For example, poultry and
poultry products face either express importation bans or SPS
measures tantamount to an importation ban. Similarly, South
Africa limits imports of certain cuts and ages of U.S. beef, as
well as other U.S. ruminant animals and products. With respect
to pork and pork products, South Africa maintains import
restrictions on U.S. pork that require unnecessary, and highly
onerous, export certificates that are not based on science.
The Committee is also concerned that some AGOA
beneficiaries have failed to fully implement their WTO
obligations. In particular, the Committee notes that South
Africa imposes anti-dumping duties on U.S. poultry using
methodologies that appear to be inconsistent with WTO
obligations. These duties have been in place for nearly as long
as the AGOA program and have effectively shut the market to
U.S. exports. Similarly, the Committee is concerned by recent
discussions of policies in South Africa that would restrict
investment in certain sectors and potentially even nationalize
existing investments.
Furthermore, the Committee is concerned by South Africa's
deteriorating foreign investment climate, including its
termination of bilateral investment treaties and recent
legislative proposals to limit foreign ownership in certain
sectors.
Effective date
The provision is effective upon enactment.
SECTION 106: BIENNIAL AGOA UTILIZATION STRATEGIES
Present law
No provision.
Explanation of provision
Section 106(a) establishes a Sense of Congress that
eligible sub-Saharan African countries should develop biennial
AGOA Utilization Strategies to more effectively and
strategically utilize benefits available under AGOA and that
the United States trade capacity building agencies should work
with and provide appropriate resources in developing and
implementing these strategies. It also encourages USTR to
consider requesting strategies from Regional Economic
Communities, as appropriate.
Section 106(b) establishes that AGOA Utilization Strategies
should identify strategic needs and priorities to bolster AGOA
utilization and sets forth suggested content.
Section 106(c) calls on AGOA eligible countries and USTR to
publish public versions of their utilization plans on the
Internet.
Reason for change
These provisions implement recommendations from the
Government Accountability Office that the United States
encourage the development of utilization strategies. At its
hearing last year on AGOA, the Committee also received
testimony that those countries that have unilaterally adopted
AGOA utilization strategies have more effectively grown and
diversified exports under AGOA. The Committee believes that
these AGOA utilization strategies should inform trade capacity
building efforts, including allocation of resources.
Effective date
The provision is effective upon enactment.
SECTION 107: DEEPENING AND EXPANDING TRADE AND INVESTMENT TIES BETWEEN
SUB-SAHARAN AFRICA AND THE UNITED STATES
Present law
This provision builds on findings in previous AGOA
legislation, including Section 103 of the African Growth and
Opportunity Act.
Explanation of provision
This section establishes the policy of the United States to
deepen and expand investment ties between sub-Saharan Africa
and the United States.
Section 107(a) establishes that the United States should
continue to seek all opportunities to deepen and expand ties
between sub-Saharan Africa and the United States through
accession by sub-Saharan African countries to the World Trade
Organization and negotiation of Trade and Investment Framework
Agreements, Bilateral Investment Treaties, and Free Trade
Agreements with individual countries and regional economic
communities.
Section 107(b) states that the United States should
continue to seek to agreements with individual countries as
well as regional economic communities, as appropriate.
Section 107(c) provides that the United States should
continue to promote the full implementation of commitments made
under WTO agreements to improve AGOA utilization and promote
trade and investment.
Section 107(d) provides that the United States should
continue to promote the negotiation of trade agreements that
cover substantially all trade between parties, and to object in
all forums if other countries negotiate agreements that do not
cover substantially all trade.
Reason for change
The Committee believes that deeper trade and investment
ties between sub-Saharan Africa and the United States will
further mutually-shared development and national security
goals. The Committee encourages the Administration to expand
our Trade and Investment Framework Agreements (TIFAs) and
Bilateral Investment Treaties (BITs), including by concluding
BITs with regional groupings. As countries become ready, the
United States should transition to FTAs for the most robust
trade relationship.
Section 107(c) addresses several important points. First,
sub-Saharan African countries that are already members of the
World Trade Organization should fully implement existing
commitments and be in compliance with their obligations. The
Committee believes that full implementation of these
commitments is important to encouraging more robust trade and
investment relationships.
Second, full implementation of the WTO Trade Facilitation
Agreement (TFA), which was agreed to in December 2013 at the
9th WTO Ministerial, will facilitate removing barriers to trade
and promoting infrastructure development within sub-Saharan
Africa. Analysis by the Peterson Institute for International
Economics suggests that implementation of the TFA could add $1
trillion to the global economy. The TFA also provides
flexibility to developing countries and least developed
countries (LDCs) as well as mechanisms for technical assistance
to support implementation. These provisions will be especially
significant in sub-Saharan Africa, where lower levels of
automation and transparency contribute to higher transaction
costs, and a significant percentage of countries are landlocked
(and therefore must transit other countries' borders just to
reach their export destination).
Already, Mauritius has submitted its ratification
instrument to the WTO. The Committee welcomes this important
step and encourages all AGOA beneficiaries to promptly take the
necessary steps to submit ratification instruments to the WTO
prior to the 10th WTO Ministerial in Kenya in December 2015.
Section 107(d) reflects the Committee's strong concerns
about the EU's efforts to push African countries from its own
unilateral preference program into reciprocal, bilateral trade
agreements--what it calls Economic Partnership Agreements
(EPAs), which do not cover substantially all trade. Of
particular concern, the tariff preferences in the EU-South
Africa EPA have now largely entered into force, and U.S.
exporters are at a significant disadvantage. These EPAs raise
WTO concerns because they are reported not to cover
substantially all trade and carve out many economically
significant and sensitive sectors. The EU continues to push
EPAs with many AGOA members that would further disadvantage
U.S. exporters.
The Committee believes that AGOA is--and should remain--a
unilateral preference program and does not intend to seek
reciprocity through AGOA. However, the Committee notes that the
EU's approach disadvantages U.S. companies seeking to do
business with Africa and raises serious policy and development
concerns.
Effective date
The provision is effective upon enactment.
SECTION 108: REPORTS
Present law
Reports required under AGOA have expired.
Explanation of provision
Section 108(a) requires the President to submit a biennial
comprehensive report to Congress on the trade and investment
relationship between the United States and sub-Saharan Africa.
The first such report must be submitted not later than one year
after the date of enactment.
Section 108(b) requires the United States Trade
Representative to submit to Congress every five years a report
that evaluates each AGOA eligible country's path toward
becoming a trade agreement partner, identifies sub-Saharan
countries that have expressed an interest in entering into a
free trade agreement with the United States, and establishes a
plan for negotiating and concluding such agreements. The first
such report must be submitted not later than one year after the
date of enactment.
Section 108(c) sunsets these reports consistent with the
duration of this Act.
Reason for change
Both of these reports were required under the original AGOA
legislation, but expired in 2007. The Committee found these
reports to be valuable and an important aspect of its
oversight. As a result, it is renewing both reports, with some
modifications to reflect developments.
The report required in section 108(a) should be
comprehensive in its review of each country's performance
against the required eligibility criteria. In particular, the
Committee expects that the Administration will thoroughly
review each aspect of the eligibility criteria and where an
AGOA-eligible country is making less than full progress towards
meeting the criteria, provide detailed information on the
actions the Administration will take to ensure that greater
progress is made.
The report required in section 108(b) is meant to
supplement and expand upon the section 108(a) report. In this
report, the Administration is expected to provide an analysis
that allows the Committee to evaluate and understand which
AGOA-eligible countries may soon be ready for trade agreement
negotiations and where gaps exist between existing U.S. trade
agreement practice and the domestic laws of those countries.
The Administration should also use this gap-analysis to inform
its selection of potential trade agreement negotiating
partners. In particular, the Committee notes that the
Administration should carefully evaluate the feasibility of
negotiating a trade agreement with each AGOA-eligible country
(or regional economic community, if appropriate) and not just
those AGOA-eligible countries that the Administration has
sought to negotiate with in the past.
Effective date
The provision is effective upon enactment.
SECTION 109: TECHNICAL AMENDMENTS
Present law
No provision.
Explanation of provision
Section 109 deletes section 104(b) of the African Growth
and Opportunity Act, as amended.
Reason for change
Section 104(b) of the African Growth and Opportunity Act is
duplicative of other provisions.
Effective date
The provision is effective upon enactment.
SECTION 110: DEFINITIONS
Present law
Section 506A of the Trade Act of 1974 and Section 107 of
the African Growth and Opportunity Act.
Explanation of provision
Section 110 defines terms used in this bill in the same way
as previous legislation.
Reason for change
This section ensures that the terms used in this bill have
the same meaning as previous legislation.
Effective date
The provision is effective upon enactment.
TITLE II: EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES
SECTION 201: EXTENSION OF THE GENERALIZED SYSTEM OF PREFERENCES
Present law
Title V of the Trade Act of 1974 contains the legislative
authorization for the GSP program. Section 505 of the Trade Act
of 1974, as amended, provides that no duty-free treatment under
Title V shall remain in effect after July 31, 2013.
Explanation of provision
Section 201 amends Section 505 of the Trade Act of 1974 to
extend the Generalized System of Preferences program until
December 31, 2017, and retroactively applies to goods imported
on or after July 31, 2013 that would have been eligible for
duty-free treatment under the GSP program as of the date of
enactment.
Reasons for change
The Committee believes GSP has been a highly effective
program in meeting its goals of fostering development in
developing economies through trade, promoting U.S. trade
interests by encouraging beneficiary countries to open their
markets and comply with international trade rules, and
maintaining U.S. competitiveness by lowering costs for U.S.
businesses and lowering prices for U.S. consumers. Further, to
prevent an unintended gap in duty-free treatment, the Committee
provides for a retroactive extension of the program.
Effective date
This provision applies to eligible imports 30 days after
enactment.
SECTION 202: AUTHORITY TO DESIGNATE CERTAIN COTTON ARTICLES AS ELIGIBLE
ARTICLES ONLY FOR LDBDCS UNDER GSP
Present law
Section 505(b) of the Trade Act of 1974 prohibits the
President from designating certain articles as eligible for
duty-free treatment.
Explanation of provision
Section 202 amends Section 503(b) of the Trade Act of 1974
to authorize the President to designate certain cotton
articles, classifiable under subheadings 5201.00.18,
5201.00.28, 5201.00.38, 5202.99.30, and 5203.00.30 of the
Harmonized Tariff Schedules of the United States, as eligible
articles for countries designated as least-developed
beneficiary developing countries under the GSP program.
Reasons for change
The Committee believes that authorizing the President to
designate certain cotton articles as eligible articles for
LDBDCs would encourage continued and enhanced economic
engagement between LDBDCs and the international marketplace.
The Committee, while recognizing the sensitivity of cotton
product imports, believes that the extension of eligibility to
cotton articles classifiable under subheading 5201.00.18,
5201.00.28, 5201.00.38, 5202.99.30, and 5203.00.30 will promote
the objectives of the GSP program and will not disadvantage the
integrity or competitiveness of the U.S. domestic cotton
industry.
Effective date
This provision is effective upon enactment.
SECTION 203: APPLICATION OF COMPETITIVE NEED LIMITATION AND WAIVER
UNDER GENERALIZED SYSTEM OF PREFERENCES WITH RESPECT TO ARTICLES OF
BENEFICIARY DEVELOPING COUNTRIES EXPORTED TO THE UNITED STATES DURING
CALENDAR YEAR 2014
Present law
Section 503(c)(2) and (d) of the Trade Act of 1974 provides
for the administration of competitive need limitations and
waivers. Present law requires the Administration to complete
this process by July 1 of each year.
Explanation of provision
Section 203 allows the Administration to complete the
competitive need limitation and waiver determinations by
October 1, 2015 for products entered in 2014.
Reasons for change
This provision allows additional time for the
Administration to conduct its annual competitive need
limitations and waivers review.
Effective date
This provision is effective immediately upon enactment.
TITLE III: EXTENSION OF PREFERENTIAL DUTY TREATMENT PROGRAM FOR HAITI
SECTION 301: EXTENSION OF PREFERENTIAL DUTY TREATMENT PROGRAM FOR HAITI
Present law
Under the Caribbean Basin Economic Recovery Act, benefits
under Section 213A(b)(1)(B)(v)(I) begin to expire on December
20, 2017 and under Section 213A(h) all benefits expire on
September 30, 2020.
Explanation of provision
Section 301 amends Section 213A of the Caribbean Basin
Economic Recovery Act to extend benefits to Haiti through
September 30, 2025.
Reasons for change
The Committee believes the HOPE and HELP programs have
played an important role in helping to improve the economic
conditions in Haiti and supporting recovery since the
devastating earthquake in 2010. Studies suggest that HOPE/HELP
support an estimated 30,000 jobs in Haiti that are created by
the apparel industry, the core export industry and primary
source of employment growth. A long-term extension of HOPE/HELP
will further encourage foreign investment and job creation by
extending trade preferences to reinvigorate the apparel
industry and attract new and expanded foreign direct
investment. This extension also reaffirms U.S. foreign policy
and national security interests by promoting trade and long-
term investments in Haiti.
Effective date
This provision is effective upon enactment.
TITLE IV: OTHER PROVISIONS
SECTION 401: CUSTOMS USER FEES
Present law
Under Section 13031(a) of the Consolidated Omnibus Budget
Reconciliation Act of 1985, the Secretary of the Treasury is
authorized to charge and collect fees for the provision of
certain customs services. Pursuant to Section 13031(j)(3), the
Secretary of the Treasury may not charge fees for the provision
of certain customs services after September 30, 2024.
Explanation of the provision
Section 401(a) amends Section 13031(j)(3)(A) of the
Consolidated Omnibus Budget Reconciliation Act of 1985 to
extend the period that the Secretary of the Treasury may charge
for certain customs services for imported goods from September
30, 2024 to July 7, 2025.
Section 401(b) extends the ad valorem rate for the
Merchandise Processing Fee collected by Customs and Border
Protection that offsets the costs incurred in processing and
inspecting imports, from June 30, 2021 to June 30, 2025.
Reasons for change
The Committee believes it is appropriate to extend the
merchandise processing fees for budgetary offset purposes.
Effective date
This provision is effective upon enactment.
SECTION 402: TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES
Present law
In general, corporations are required to make quarterly
estimated tax payments of their income tax liability.\1\ For a
corporation whose taxable year is a calendar year, these
estimated tax payments must be made by April 15, June 15,
September 15, and December 15. The amount of any required
estimated payment is 25 percent of the required annual
payment.\2\ The required annual payment is 100 percent of the
tax liability for the taxable year or the preceding taxable
year. The option to use the preceding taxable year is not
available if the preceding taxable year was not a 12-month
taxable year or the corporation did not file a return in the
preceding taxable year showing a liability for tax. Further, in
the case of a corporation with taxable income of at least $1
million in any of the three immediately preceding taxable
years, the option to use the preceding taxable year is only
available for the first installment of such corporation's
taxable year.\3\ In addition, in the case of a corporation with
assets of at least $1 billion (determined as of the end of the
preceding taxable year), payments due in July, August or
September of 2017, are increased to 100.25 percent of the
payment otherwise due.\4\ For each of the periods affected, the
next required payment is reduced accordingly (i.e., payments
due in October, November, or December of 2017 are reduced to
99.75 percent of the payment otherwise due).
---------------------------------------------------------------------------
\1\Sec. 6655.
\2\Sec. 6655(d)(1).
\3\Sec. 6655(d)(2) and (g)(2).
\4\African Growth and Opportunity Act, Pub. L. No. 112-163, sec. 4.
---------------------------------------------------------------------------
Explanation of the provision
In the case of a corporation with assets of at least $1
billion (determined as of the end of the preceding taxable
year), the provision increases the amount of the required
installment of estimated tax otherwise due in July, August, or
September of 2020 by 5.25 percent of such amount (determined
without regard to any increase in such amount not contained in
the Internal Revenue Code) (i.e., payments due in July, August
or September of 2020, are increased to 105.25 percent of the
payment otherwise due). The next required installment is
reduced accordingly (i.e., payments due in October, November,
or December of 2020 are reduced to 94.75 percent of the payment
otherwise due).
Reasons for change
The Committee believes it is appropriate to adjust the
quarterly estimated tax payment requirements for corporations
with $1 billion or more in assets to ensure that the
legislation complies with certain Senate procedural
requirements.
Effective date
The proposal is effective on the date of enactment of the
Act.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the vote of the Committee on Ways and Means in its
consideration of H.R. 1891, to extend the African Growth and
Opportunity Act, the Generalized System of Preferences, the
preferential duty treatment program for Haiti, and for other
purposes, on April 23, 2015.
The bill, H.R. 1891, was ordered favorably reported by
voice vote (with a quorum being present).
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 1891, as
reported.
The bill, as reported, is estimated to have the following
effect on Federal budget receipts for fiscal years 2015-2025:
FISCAL YEARS
[Millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2015-20 2015-25
--------------------------------------------------------------------------------------------------------------------------------------------------------
... 3,781 -3,781 3,781
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pursuant to clause 8 of rule XIII of the Rules of the House
of Representatives, the following statement is made by the
Joint Committee on Taxation with respect to the provisions of
the bill amending the Internal Revenue Code of 1986: the gross
budgetary effect (before incorporating macroeconomic effects)
in any fiscal year is less than 0.25 percent of the current
projected gross domestic product of the United States for that
fiscal year; therefore, the bill is not ``major legislation''
for purposes of requiring that the estimate include the
budgetary effects of changes in economic output, employment,
capital stock and other macroeconomic variables.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
revenue provision of the bill involves no new or increased
budget authority.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 29, 2015.
Hon. Paul Ryan,
Chairman, Committee on Ways and Means, House of Representatives,
Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1891, a bill to
extend the African Growth and Opportunity Act, the Generalized
System of Preferences, the preferential duty treatment program
for Haiti, and for other purposes.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Mark
Grabowicz for federal spending and Ann Futrell and Susan Willie
for federal revenues.
Sincerely,
Keith Hall, Director.
Enclosure.
H.R. 1891--A bill to extend the African Growth and Opportunity Act, the
Generalized System of Preferences, the preferential duty
treatment program for Haiti, and for other purposes
Summary: H.R. 1891 would extend the reduced tariff rates
currently imposed on products imported under the African Growth
and Opportunity Act (AGOA), the Generalized System of
Preferences (GSP), and the Haitian Hemispheric Opportunity
through Partnership Encouragement Act. The bill also would
shift some corporate income tax payments between fiscal years
and increase the rate of certain fees collected by Customs and
Border Protection (CBP) as well as extend the authority to
collect those fees.
CBO and the staff of the Joint Committee on Taxation (JCT)
estimate that enacting H.R. 1891 would reduce both direct
spending and revenues by about $5.8 billion over the 2015-2025
period--resulting in a reduction in deficits over the 11-year
period of $16 million. Pay-as-you-go procedures apply because
enacting the legislation would affect direct spending and
revenues. CBO estimates that certain Congressional reports
called for under H.R. 1891 would cost $1 million over the 2015-
2020 period, assuming availability of appropriated funds.
CBO has determined that the nontax provisions of the bill
contain no intergovernmental mandates as defined in the
Unfunded Mandates Reform Act (UMRA) and would not affect the
budgets of state, local, or tribal governments. JCT has
determined that the tax provisions of the bill contain no
intergovernmental or private-sector mandates.
CBO has determined that the nontax provisions of H.R. 1891
contain private-sector mandates on entities required to pay
merchandise processing fees. CBO estimates the aggregate cost
of the mandates would exceed the annual threshold established
in UMRA for private-sector mandates ($154 million in 2015,
adjusted annually for inflation).
Estimated cost to the Federal Government: The estimated
budgetary effects of H.R. 1891 are shown in the following
table. The costs of this legislation fall within budget
functions 750 (administration of justice) and 370 (advancement
of commerce).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------------------------------
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2015-2020 2015-2025
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
Estimated Budget Authority........................................ 0 0 0 0 0 0 -162 -873 -916 -962 -2,948 0 -5,861
Estimated Outlays................................................. 0 0 0 0 0 0 -162 -873 -916 -962 -2,948 0 -5,861
CHANGES IN REVENUES
Extension of African Growth and Opportunity Act................... * -121 -130 -238 -284 -298 -312 -329 -345 -365 -387 -1,071 -2,809
Extension of General System of Preferences........................ -1,051 -627 -665 -173 0 0 0 0 0 0 0 -2,516 -2,516
Extension of Preferential Duty Treatment for Haiti................ 0 0 0 0 -12 -17 -75 -97 -101 -106 -112 -29 -520
Shift in Payment of Corporate Estimated Tax....................... 0 0 0 0 0 3,781 -3,781 0 0 0 0 3,781 0
-----------------------------------------------------------------------------------------------------------------------------
Total Changes in Revenues..................................... -1,051 -748 -795 -411 -296 3,466 -4,168 -426 -446 -471 -499 165 -5,845
NET INCREASE OR DECREASE (-) IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES
Impact on Deficit................................................. 1,051 748 795 411 296 -3,466 4,006 -447 -470 -491 -2,449 -165 -16
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sources: Congressional Budget Office and the Staff of the Joint Committee on Taxation
Notes: This estimate assumes enactment of H.R. 1891 by July 1, 2015; * = between -$500,000 and zero.
For direct spending, negative numbers indicate a decrease in outlays; for revenues, negative numbers indicate a reduction in revenues.
Components may not sum to totals because of rounding.
CBO estimates that implementing H.R. 1891 would cost about $1 million over the 2015-2020 period, assuming availability of appropriated funds, to prepare Congressional reports.
Basis of estimate: For this estimate, CBO assumes that H.R.
1891 will be enacted by July 1, 2015.
Direct spending
Under current law, the authority to charge merchandise
processing fees collected by Customs and Border Protection will
expire after September 30, 2024. The bill would extend the
authority to collect those fees through July 7, 2025. The bill
also would raise the rate of the merchandise processing fee
from 0.21 percent to 0.3464 percent of the value of goods
entering the U.S. for the period beginning July 1, 2021, and
ending June 30, 2025. CBO estimates those actions would
increase offsetting receipts (certain collections that are
treated as reductions in direct spending) by about $5.9 billion
over the 2021-2025 period. To project collections of
merchandise processing fees, CBO assumes that the fees
collected in future years will grow at the same rate seen in
recent years--about 5 percent. In 2014 collections from the
merchandise processing fee totaled $2.3 billion. By 2024 CBO
estimates those collections will total about $2.7 billion under
current law. CBO expects that the proposed increase in the fee
rate would have a very minor effect on the value of goods
entering the U.S.
Revenues
CBO's estimates of the revenue effects of proposals to
lower tariff rates charged on imports from certain countries or
on certain goods are based on historical data about the value
and volume of those goods entering the United States. Using
that historical data, CBO develops a baseline of future
collections that accounts for expected growth in trade over the
next ten years. To estimate tariff collections under the
proposed legislation, CBO considers both general growth in
trade as well as changes in demand that are likely to result
from lower rates. The changes in revenues for each of the
programs discussed below reflect the difference between the
baseline estimate of collections for each program using
effective tariff rates under current law and projected
collections under each proposal using the proposed duty rate,
net of payroll and income tax offsets. CBO assumes that the
lower tariffs under the legislation would result in an increase
in overall imports, as well as a diversion of imports from
countries that would not be eligible for lower tariffs to those
that would.
Extension of African Growth and Opportunity Act. Under AGOA
the U.S. provides nonreciprocal tariff reductions to roughly 40
eligible sub-Saharan countries for certain goods that the U.S.
imports. The bill would extend the authority for reduced
tariffs under AGOA, which are set to expire at the end of
September 30, 2015, through September 30, 2025. The bill also
would extend the special rule that may apply to certain lesser-
developed sub-Saharan countries under AGOA. The special rule
also expires on September 30, 2015. Under this rule a lesser-
developed country may export duty-free to the United States any
apparel good that is assembled within the country, regardless
of the origin of the fabric or yarn. In addition, the bill
would revise the rules of origin for AGOA beneficiary countries
under GSP to expand the value of products that would qualify
for duty free treatment.
CBO estimates that extending and amending AGOA would reduce
revenues by $2.8 billion over the 2015-2025 period, net of
payroll and income tax offsets. That estimate includes the
revenue loss after December 31, 2017, from imports that are
eligible for duty free treatment under GSP (which the bill
extends through December 31, 2017).
Extension of General System of Preferences. Under the GSP
the U.S. affords nonreciprocal tariff reductions to
approximately 130 developing countries. Generally, duty-free
treatment of imported goods from GSP-designated developing
countries is extended to products that are predominately
produced only in those countries. The bill would renew GSP,
which expired on July 31, 2013, and continue its authority
through December 31, 2017. Under the bill, importers or
exporters that would have otherwise qualified for reduced
tariffs under GSP could obtain refunds for tariffs paid after
July 30, 2013, that would not have been payable had GSP been in
effect. CBO estimates that renewing GSP would reduce revenues
by $2.5 billion over the 2015-2025 period, net of payroll and
income tax offsets. This estimate includes the cost, through
December 31, 2017, of imports that are eligible for duty free
treatment under the African Growth Opportunity Act (which
expires in September 2015).
Extension of preferential duty treatment for Haiti. Under
the Haitian Hemispheric Opportunity through Partnership
Encouragement Act, certain textile and apparel goods imported
to the U.S. from Haiti are eligible for duty-free treatment if
restrictions regarding the source of the yarns and fabrics used
in the imported goods are met. Portions of this program will
begin to expire in 2016; H.R. 1891 would extend this duty-free
status through 2025. CBO estimates that enacting this provision
would reduce revenues by $520 million over the 2015-2025
period, net of payroll and income tax offsets.
Shift in payment of corporate estimated tax. H.R. 1891
would shift payments of corporate estimated taxes between
fiscal years 2020 and 2021. For corporations with at least $1
billion in assets, the bill would increase the portion of
corporate estimated payments due from July through September in
2020. The staff of JCT estimates that those changes would
increase revenues by $3.8 billion in 2020 and reduce revenues
by the same amount in 2021.
Spending Subject to Appropriation
H.R. 1891 would require the United States Trade
Representative to prepare a series of reports on trade
activities with sub-Saharan African countries and their
interest in entering into free trade agreements with the United
States. Based on the cost of similar reports, CBO estimates
that the costs to prepare that series would be significantly
less than $500,000 annually, and would total about $1 million
over the 2015-2020 period.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays and revenues that are
subject to those pay-as-you-go procedures are shown in the
following table.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 1891, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON WAYS AND MEANS ON APRIL 23, 2015
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------------------------------------
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2015-2020 2015-2025
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE DEFICIT
Statutory Pay-As-You-Go Impact.............................. 1,051 748 795 411 296 -3,466 4,006 -447 -470 -491 -2,449 -165 -16
Memorandum:
Changes in Outlays...................................... 0 0 0 0 0 0 -162 -873 -916 -962 -2,948 0 -5,861
Changes in Revenues..................................... -1,051 -748 -795 -411 -296 3,466 -4,168 -426 -446 -471 -499 165 -5,845
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated impact on state, local, and tribal governments:
CBO has determined that the nontax provisions of the bill
contain no intergovernmental mandates as defined in UMRA and
would not affect the budgets of state, local, or tribal
governments. JCT has determined that the tax provisions of the
bill contain no intergovernmental mandates.
Estimated impact on the private sector: CBO has determined
that the nontax provisions of H.R. 1891 would impose private-
sector mandates, as defined in UMRA, on entities required to
pay merchandise processing fees. The bill would extend those
fees through July 7, 2025; the fee rates would increase
beginning July 1, 2021, and ending June 30, 2025. Some of the
entities that are required to pay merchandise processing fees
may also accrue savings related to the preferential tariff
treatment accorded to certain products that would be extended
under the bill. However, CBO estimates that the aggregate costs
of the mandates would exceed the annual threshold established
in UMRA for private-sector mandates ($154 million in 2015,
adjusted annually for inflation).
JCT has determined that the tax provisions of H.R. 1891
contain no private-sector mandates as defined in UMRA.
Previous CBO estimate: On April 17, 2015, CBO transmitted
an estimate of the effects on direct spending and revenues of
H.R. 1891, as introduced by the House Committee on Ways and
Means on April 17, 2015. Estimated costs for both versions of
H.R. 1891 are the same.
Estimate prepared by: Federal Costs: Mark Grabowicz;
Federal Revenues: Ann Futrell, Susan Willie, and staff of the
Joint Committee on Taxation; Impact on State, Local, and Tribal
Governments: Jon Sperl; Impact on the Private Sector: Paige
Piper/Bach.
Estimate approved by: Theresa Gullo, Assistant Director for
Budget Analysis.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee advises that it was as a result of the
Committee's review of the provisions of H.R. 1891 that the
Committee concluded that it is appropriate to report the bill
favorably to the House of Representatives with the
recommendation that the bill do pass.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
D. Applicability of House Rule XXI 5(b)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' The Committee has
carefully reviewed the bill, and states that the bill does not
involve any Federal income tax rate increases within the
meaning of the rule.
E. Tax Complexity Analysis
The following statement is made pursuant to clause 3(h)(1)
of rule XIII of the Rules of the House of Representatives.
Section 4022(b) of the Internal Revenue Service Restructuring
and Reform Act of 1998 requires the staff of the Joint
Committee on Taxation (in consultation with the Internal
Revenue Service and the Treasury Department) to provide a tax
complexity analysis. The complexity analysis is required for
all legislation reported by the Senate Committee on Finance,
the House Committee on Ways and Means, or any committee of
conference if the legislation includes a provision that
directly or indirectly amends the Internal Revenue Code and has
widespread applicability to individuals or small businesses.
Pursuant to clause 3(h)(1) of rule XIII of the Rules of the
House of Representatives, the staff of the Joint Committee on
Taxation has determined that a complexity analysis is not
required under section 4022(b) of the IRS Reform Act because
the bill contains no provisions that amend the Internal Revenue
Code and that have ``widespread applicability'' to individuals
or small businesses, within the meaning of the rule.
F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill, and states that the revenue
provisions of the bill do not contain any congressional
earmarks, limited tax benefits, or limited tariff benefits
within the meaning of the rule.
G. Duplication of Federal Programs
In compliance with Sec. 3(j)(2) of H. Res. 5 (114th
Congress), the Committee states that no provision of the bill
establishes or reauthorizes: (1) a program of the Federal
Government known to be duplicative of another Federal program,
(2) a program included in any report from the Government
Accountability Office to Congress pursuant to section 21 of
Public Law 111-139, or (3) a program related to a program
identified in the most recent Catalog of Federal Domestic
Assistance, published pursuant to the Federal Program
Information Act (Public Law 95-220, as amended by Public Law
98-169).
H. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of H. Res. 5 (114th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
Text of Existing Law Amended or Repealed by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
TRADE ACT OF 1974
* * * * * * *
TITLE V--GENERALIZED SYSTEM OF PREFERENCES
* * * * * * *
SEC. 503. DESIGNATION OF ELIGIBLE ARTICLES.
(a) Eligible Articles.--
(1) Designation.--
(A) In general.--Except as provided in
subsection (b), the President is authorized to
designate articles as eligible articles from
all beneficiary developing countries for
purposes of this title by Executive order or
Presidential proclamation after receiving the
advice of the International Trade Commission in
accordance with subsection (e).
(B) Least-developed beneficiary developing
countries.--Except for articles described in
subparagraphs (A), (B), and (E) of subsection
(b)(1) and articles described in paragraphs (2)
and (3) of subsection (b), the President may,
in carrying out section 502(d)(1) and
subsection (c)(1) of this section, designate
articles as eligible articles only for
countries designated as least-developed
beneficiary developing countries under section
502(a)(2) if, after receiving the advice of the
International Trade Commission in accordance
with subsection (e) of this section, the
President determines that such articles are not
import-sensitive in the context of imports from
least-developed beneficiary developing
countries.
(C) Three-year rule.--If, after receiving the
advice of the International Trade Commission
under subsection (e), an article has been
formally considered for designation as an
eligible article under this title and denied
such designation, such article may not be
reconsidered for such designation for a period
of 3 years after such denial.
(2) Rule of origin.--
(A) General rule.--The duty-free treatment
provided under this title shall apply to any
eligible article which is the growth, product,
or manufacture of a beneficiary developing
country if--
(i) that article is imported directly
from a beneficiary developing country
into the customs territory of the
United States; and
(ii) the sum of--
(I) the cost or value of the
materials produced in the
beneficiary developing country
or any two or more such
countries that are members of
the same association of
countries and are treated as
one country under section
507(2), plus
(II) the direct costs of
processing operations performed
in such beneficiary developing
country or such member
countries,
is not less than 35 percent of the
appraised value of such article at the
time it is entered.
(B) Exclusions.--An article shall not be
treated as the growth, product, or manufacture
of a beneficiary developing country by virtue
of having merely undergone--
(i) simple combining or packaging
operations, or
(ii) mere dilution with water or mere
dilution with another substance that
does not materially alter the
characteristics of the article.
(3) Regulations.--The Secretary of the Treasury,
after consulting with the United States Trade
Representative, shall prescribe such regulations as may
be necessary to carry out paragraph (2), including, but
not limited to, regulations providing that, in order to
be eligible for duty-free treatment under this title,
an article--
(A) must be wholly the growth, product, or
manufacture of a beneficiary developing
country, or
(B) must be a new or different article of
commerce which has been grown, produced, or
manufactured in the beneficiary developing
country.
(b) Articles That May Not Be Designated As Eligible
Articles.--
(1) Import sensitive articles.--The President may not
designate any article as an eligible article under
subsection (a) if such article is within one of the
following categories of import-sensitive articles:
(A) Except as provided in paragraph (4),
textile and apparel articles which were not
eligible articles for purposes of this title on
January 1, 1994, as this title was in effect on
such date.
(B) Watches, except those watches entered
after June 30, 1989, that the President
specifically determines, after public notice
and comment, will not cause material injury to
watch or watch band, strap, or bracelet
manufacturing and assembly operations in the
United States or the United States insular
possessions.
(C) Import-sensitive electronic articles.
(D) Import-sensitive steel articles.
(E) Footwear, handbags, luggage, flat goods,
work gloves, and leather wearing apparel which
were not eligible articles for purposes of this
title on January 1, 1995, as this title was in
effect on such date.
(F) Import-sensitive semimanufactured and
manufactured glass products.
(G) Any other articles which the President
determines to be import-sensitive in the
context of the Generalized System of
Preferences.
(2) Articles against which other actions taken.--An
article shall not be an eligible article for purposes
of this title for any period during which such article
is the subject of any action proclaimed pursuant to
section 203 of this Act (19 U.S.C. 2253) or section 232
or 351 of the Trade Expansion Act of 1962 (19 U.S.C.
1862, 1981).
(3) Agricultural products.--No quantity of an
agricultural product subject to a tariff-rate quota
that exceeds the in-quota quantity shall be eligible
for duty-free treatment under this title.
(4) Certain hand-knotted or hand-woven carpets.--
Notwithstanding paragraph (1)(A), the President may
designate as an eligible article or articles under
subsection (a) carpets or rugs which are hand-loomed,
hand-woven, hand-hooked, hand-tufted, or hand-knotted,
and classifiable under subheading 5701.10.16,
5701.10.40, 5701.90.10, 5701.90.20, 5702.10.90,
5702.42.20, 5702.49.10, 5702.51.20, 5702.91.30,
5702.92.00, 5702.99.10, 5703.10.00, 5703.20.10, or
5703.30.00 of the Harmonized Tariff Schedule of the
United States.
(c) Withdrawal, Suspension, or Limitation of Duty-Free
Treatment; Competitive Need Limitation.--
(1) In general.--The President may withdraw, suspend,
or limit the application of the duty-free treatment
accorded under this title with respect to any article,
except that no rate of duty may be established with
respect to any article pursuant to this subsection
other than the rate which would apply but for this
title. In taking any action under this subsection, the
President shall consider the factors set forth in
sections 501 and 502(c).
(2) Competitive need limitation.--
(A) Basis for withdrawal of duty-free
treatment.--
(i) In general.--Except as provided
in clause (ii) and subject to
subsection (d), whenever the President
determines that a beneficiary
developing country has exported
(directly or indirectly) to the United
States during any calendar year
beginning after December 31, 1995--
(I) a quantity of an eligible
article having an appraised
value in excess of the
applicable amount for the
calendar year, or
(II) a quantity of an
eligible article equal to or
exceeding 50 percent of the
appraised value of the total
imports of that article into
the United States during any
calendar year,
the President shall, not later than
July 1 of the next calendar year,
terminate the duty-free treatment for
that article from that beneficiary
developing country.
(ii) Annual adjustment of applicable
amount.--For purposes of applying
clause (i), the applicable amount is--
(I) for 1996, $75,000,000,
and
(II) for each calendar year
thereafter, an amount equal to
the applicable amount in effect
for the preceding calendar year
plus $5,000,000.
(B) Country defined.--For purposes of this
paragraph, the term ``country'' does not
include an association of countries which is
treated as one country under section 507(2),
but does include a country which is a member of
any such association.
(C) Redesignations.--A country which is no
longer treated as a beneficiary developing
country with respect to an eligible article by
reason of subparagraph (A) may, subject to the
considerations set forth in sections 501 and
502, be redesignated a beneficiary developing
country with respect to such article if imports
of such article from such country did not
exceed the limitations in subparagraph (A)
during the preceding calendar year.
(D) Least-developed beneficiary developing
countries and beneficiary sub-saharan african
countries.--Subparagraph (A) shall not apply to
any least-developed beneficiary developing
country or any beneficiary sub-Saharan African
country.
(E) Articles not produced in the united
states excluded.--Subparagraph (A)(i)(II) shall
not apply with respect to any eligible article
if a like or directly competitive article was
not produced in the United States on January 1,
1995.
(F) De minimis waivers.--
(i) In general.--The President may
disregard subparagraph (A)(i)(II) with
respect to any eligible article from
any beneficiary developing country if
the aggregate appraised value of the
imports of such article into the United
States during the preceding calendar
year does not exceed the applicable
amount for such preceding calendar
year.
(ii) Applicable amount.--For purposes
of applying clause (i), the applicable
amount is--
(I) for calendar year 1996,
$13,000,000, and
(II) for each calendar year
thereafter, an amount equal to
the applicable amount in effect
for the preceding calendar year
plus $500,000.
(d) Waiver of Competitive Need Limitation.--
(1) In general.--The President may waive the
application of subsection (c)(2) with respect to any
eligible article of any beneficiary developing country
if, before July 1 of the calendar year beginning after
the calendar year for which a determination described
in subsection (c)(2)(A) was made with respect to such
eligible article, the President--
(A) receives the advice of the International
Trade Commission under section 332 of the
Tariff Act of 1930 on whether any industry in
the United States is likely to be adversely
affected by such waiver,
(B) determines, based on the considerations
described in sections 501 and 502(c) and the
advice described in subparagraph (A), that such
waiver is in the national economic interest of
the United States, and
(C) publishes the determination described in
subparagraph (B) in the Federal Register.
(2) Considerations by the president.--In making any
determination under paragraph (1), the President shall
give great weight to--
(A) the extent to which the beneficiary
developing country has assured the United
States that such country will provide equitable
and reasonable access to the markets and basic
commodity resources of such country, and
(B) the extent to which such country provides
adequate and effective protection of
intellectual property rights.
(3) Other bases for waiver.--The President may waive
the application of subsection (c)(2) if, before July 1
of the calendar year beginning after the calendar year
for which a determination described in subsection
(c)(2) was made with respect to a beneficiary
developing country, the President determines that--
(A) there has been a historical preferential
trade relationship between the United States
and such country,
(B) there is a treaty or trade agreement in
force covering economic relations between such
country and the United States, and
(C) such country does not discriminate
against, or impose unjustifiable or
unreasonable barriers to, United States
commerce,
and the President publishes that determination in the
Federal Register.
(4) Limitations on waivers.--
(A) In general.--The President may not
exercise the waiver authority under this
subsection with respect to a quantity of an
eligible article entered during any calendar
year beginning after 1995, the aggregate
appraised value of which equals or exceeds 30
percent of the aggregate appraised value of all
articles that entered duty-free under this
title during the preceding calendar year.
(B) Other waiver limits.--(i) The President
may not exercise the waiver authority provided
under this subsection with respect to a
quantity of an eligible article entered during
any calendar year beginning after 1995, the
aggregate appraised value of which exceeds 15
percent of the aggregate appraised value of all
articles that have entered duty-free under this
title during the preceding calendar year from
those beneficiary developing countries which
for the preceding calendar year--
(I) had a per capita gross national
product (calculated on the basis of the
best available information, including
that of the International Bank for
Reconstruction and Development) of
$5,000 or more; or
(II) had exported (either directly or
indirectly) to the United States a
quantity of articles that was duty-free
under this title that had an aggregate
appraised value of more than 10 percent
of the aggregate appraised value of all
articles that entered duty-free under
this title during that year.
(ii) Not later than July 1 of each year, the
President should revoke any waiver that has
then been in effect with respect to an article
for 5 years or more if the beneficiary
developing country has exported to the United
States (directly or indirectly) during the
preceding calendar year a quantity of the
article--
(I) having an appraised value in
excess of 1.5 times the applicable
amount set forth in subsection
(c)(2)(A)(ii) for that calendar year;
or
(II) exceeding 75 percent of the
appraised value of the total imports of
that article into the United States
during that calendar year.
(C) Calculation of limitations.--There shall
be counted against the limitations imposed
under subparagraphs (A) and (B) for any
calendar year only that value of any eligible
article of any country that--
(i) entered duty-free under this
title during such calendar year; and
(ii) is in excess of the value of
that article that would have been so
entered during such calendar year if
the limitations under subsection
(c)(2)(A) applied.
(5) Effective period of waiver.--Any waiver granted
under this subsection shall remain in effect until the
President determines that such waiver is no longer
warranted due to changed circumstances.
(e) International Trade Commission Advice.--Before
designating articles as eligible articles under subsection
(a)(1), the President shall publish and furnish the
International Trade Commission with lists of articles which may
be considered
for designation as eligible articles for purposes of this
title. The provisions of sections 131, 132, 133, and 134 shall
be complied with as though action under section 501 and this
section were action under section 123 to carry out a trade
agreement entered into under section 123.
(f) Special Rule Concerning Puerto Rico.--No action under
this title may affect any tariff duty imposed by the
Legislature of Puerto Rico pursuant to section 319 of the
Tariff Act of 1930 on coffee imported into Puerto Rico.
* * * * * * *
SEC. 505. DATE OF TERMINATION.
No duty-free treatment provided under this title shall remain
in effect after July 31, 2013.
* * * * * * *
SEC. 506A. DESIGNATION OF SUB-SAHARAN AFRICAN COUNTRIES FOR CERTAIN
BENEFITS.
(a) Authority To Designate.--
(1) In general.--Notwithstanding any other provision
of law, the President is authorized to designate a
country listed in section 107 of the African Growth and
Opportunity Act as a beneficiary sub-Saharan African
country eligible for the benefits described in
subsection (b)--
(A) if the President determines that the
country meets the eligibility requirements set
forth in section 104 of that Act, as such
requirements are in effect on the date of the
enactment of that Act; and
(B) subject to the authority granted to the
President under subsections (a), (d), and (e)
of section 502, if the country otherwise meets
the eligibility criteria set forth in section
502.
(2) Monitoring and review of certain countries.--The
President shall monitor, review, and report to Congress
annually on the progress of each country listed in
section 107 of the African Growth and Opportunity Act
in meeting the requirements described in paragraph (1)
in order to determine the current or potential
eligibility of each country to be designated as a
beneficiary sub-Saharan African country for purposes of
this section. The President's determinations, and
explanations of such determinations, with specific
analysis of the eligibility requirements described in
paragraph (1)(A), shall be included in the annual
report required by section 106 of the African Growth
and Opportunity Act.
(3) Continuing compliance.--If the President
determines that a beneficiary sub-Saharan African
country is not making continual progress in meeting the
requirements described in paragraph (1), the President
shall terminate the designation of that country as a
beneficiary sub-Saharan African country for purposes of
this section, effective on January 1 of the year
following the year in which such determination is made.
(b) Preferential Tariff Treatment for Certain Articles.--
(1) In general.--The President may provide duty-free
treatment for any article described in section
503(b)(1)(B) through (G) that is the growth, product,
or manufacture of a beneficiary sub-Saharan African
country described in subsection (a), if, after
receiving the advice of the International Trade
Commission in accordance with section 503(e), the
President determines that such article is not import-
sensitive in the context of imports from beneficiary
sub-Saharan African countries.
(2) Rules of origin.--The duty-free treatment
provided under paragraph (1) shall apply to any article
described in that paragraph that meets the requirements
of section 503(a)(2), except that--
(A) if the cost or value of materials
produced in the customs territory of the United
States is included with respect to that
article, an amount not to exceed 15 percent of
the appraised value of the article at the time
it is entered that is attributed to such United
States cost or value may be applied toward
determining the percentage referred to in
subparagraph (A) of section 503(a)(2); and
(B) the cost or value of the materials
included with respect to that article that are
produced in one or more beneficiary sub-Saharan
African countries or former beneficiary sub-
Saharan African countries shall be applied in
determining such percentage.
(c) Beneficiary Sub-Saharan African Countries, Etc.--For
purposes of this title--
(1) the terms ``beneficiary sub-Saharan African
country'' and ``beneficiary sub-Saharan African
countries'' mean a country or countries listed in
section 107 of the African Growth and Opportunity Act
that the President has determined is eligible under
subsection (a) of this section.
(2) the term ``former beneficiary sub-Saharan African
country'' means a country that, after being designated
as a beneficiary sub-Saharan African country under the
African Growth and Opportunity Act, ceased to be
designated as such a country by reason of its entering
into a free trade agreement with the United States.
SEC. 506B. TERMINATION OF BENEFITS FOR SUB-SAHARAN AFRICAN COUNTRIES.
In the case of a beneficiary sub-Saharan African country, as
defined in section 506A(c), duty-free treatment provided under
this title shall remain in effect through September 30, 2015.
* * * * * * *
----------
AFRICAN GROWTH AND OPPORTUNITY ACT
* * * * * * *
TITLE I--EXTENSION OF CERTAIN TRADE BENEFITS TO SUB-SAHARAN AFRICA
Subtitle A--Trade Policy for Sub-Saharan Africa
* * * * * * *
SEC. 104. ELIGIBILITY REQUIREMENTS.
(a) In General.--The President is authorized to designate a
sub-Saharan African country as an eligible sub-Saharan African
country if the President determines that the country--
(1) has established, or is making continual progress
toward establishing--
(A) a market-based economy that protects
private property rights, incorporates an open
rules-based trading system, and minimizes
government interference in the economy through
measures such as price controls, subsidies, and
government ownership of economic assets;
(B) the rule of law, political pluralism, and
the right to due process, a fair trial, and
equal protection under the law;
(C) the elimination of barriers to United
States trade and investment, including by--
(i) the provision of national
treatment and measures to create an
environment conducive to domestic and
foreign investment;
(ii) the protection of intellectual
property; and
(iii) the resolution of bilateral
trade and investment disputes;
(D) economic policies to reduce poverty,
increase the availability of health care and
educational opportunities, expand physical
infrastructure, promote the development of
private enterprise, and encourage the formation
of capital markets through micro-credit or
other programs;
(E) a system to combat corruption and
bribery, such as signing and implementing the
Convention on Combating Bribery of Foreign
Public Officials in International Business
Transactions; and
(F) protection of internationally recognized
worker rights, including the right of
association, the right to organize and bargain
collectively, a prohibition on the use of any
form of forced or compulsory labor, a minimum
age for the employment of children, and
acceptable conditions of work with respect to
minimum wages, hours of work, and occupational
safety and health;
(2) does not engage in activities that undermine
United States national security or foreign policy
interests; and
(3) does not engage in gross violations of
internationally recognized human rights or provide
support for acts of international terrorism and
cooperates in international efforts to eliminate human
rights violations and terrorist activities.
(b) Continuing Compliance.--If the President determines that
an eligible sub-Saharan African country is not making continual
progress in meeting the requirements described in subsection
(a)(1), the President shall terminate the designation of the
country made pursuant to subsection (a).
* * * * * * *
Subtitle B--Trade Benefits
* * * * * * *
SEC. 112. TREATMENT OF CERTAIN TEXTILES AND APPAREL.
(a) Preferential Treatment.--Textile and apparel articles
described in subsection (b) that are imported directly into the
customs territory of the United States from a beneficiary sub-
Saharan African country described in section 506A(c) of the
Trade Act of 1974, shall enter the United States free of duty
and free of any quantitative limitations in accordance with the
provisions set forth in subsection (b), if the country has
satisfied the requirements set forth in section 113.
(b) Products Covered.--Subject to subsection (c), the
preferential treatment described in subsection (a) shall apply
only to the following textile and apparel products:
(1) Apparel articles assembled in one or more
beneficiary sub-saharan african countries.--Apparel
articles sewn or otherwise assembled in one or more
beneficiary sub-Saharan African countries from fabrics
wholly formed and cut, or from components knit-to-
shape, in the United States from yarns wholly formed in
the United States, or both (including fabrics not
formed from yarns, if such fabrics are classifiable
under heading 5602 or 5603 of the Harmonized Tariff
Schedule of the United States and are wholly formed and
cut in the United States) that are--
(A) entered under subheading 9802.00.80 of
the Harmonized Tariff Schedule of the United
States; or
(B) entered under chapter 61 or 62 of the
Harmonized Tariff Schedule of the United
States, if, after such assembly, the articles
would have qualified for entry under subheading
9802.00.80 of the Harmonized Tariff Schedule of
the United States but for the fact that the
articles were embroidered or subjected to
stone-washing, enzyme-washing, acid washing,
perma-pressing, oven-baking, bleaching,
garment-dyeing, screen printing, or other
similar processes.
(2) Other apparel articles assembled in one or more
beneficiary sub-saharan african countries.--Apparel
articles sewn or otherwise assembled in one or more
beneficiary sub-Saharan African countries with thread
formed in the United States from fabrics wholly formed
in the United States and cut in one or more beneficiary
sub-Saharan African countries from yarns wholly formed
in the United States, or from components knit-to-shape
in the United States from yarns wholly formed in the
United States, or both (including fabrics not formed
from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the Harmonized Tariff Schedule
of the United States and are wholly formed in the
United States).
(3) Apparel articles from regional fabric or yarns.--
Apparel articles wholly assembled in one or more
beneficiary sub-Saharan African countries from fabric
wholly formed in one or more beneficiary sub-Saharan
African countries from yarns originating in the United
States or one or more beneficiary sub-Saharan African
countries or former beneficiary sub-Saharan African
countries, or both (including fabrics not formed from
yarns, if such fabrics are classified under heading
5602 or 5603 of the Harmonized Tariff Schedule of the
United States and are wholly formed in one or more
beneficiary sub-Saharan African countries), or from
components knit-to-shape in one or more beneficiary
sub-Saharan African countries from yarns originating in
the United States or one or more beneficiary sub-
Saharan African countries or former beneficiary sub-
Saharan African countries, or both, or apparel articles
wholly formed on seamless knitting machines in a
beneficiary sub-Saharan African country from yarns
originating in the United States or one or more
beneficiary sub-Saharan African countries or former
beneficiary sub-Saharan African countries, or both,
whether or not the apparel articles are also made from
any of the fabrics, fabric components formed, or
components knit-to-shape described in paragraph (1) or
(2) (unless the apparel articles are made exclusively
from any of the fabrics, fabric components formed, or
components knit-to-shape described in paragraph (1) or
(2)), subject to the following:
(A) Limitations on benefits.--
(i) In general.--Preferential
treatment under this paragraph shall be
extended in the 1-year period beginning
October 1, 2003, and in each of the 11
succeeding 1-year periods, to imports
of apparel articles in an amount not to
exceed the applicable percentage of the
aggregate square meter equivalents of
all apparel articles imported into the
United States in the preceding 12-month
period for which data are available.
(ii) Applicable percentage.--For
purposes of this subparagraph, the term
``applicable percentage'' means--
(I) 4.747 percent for the 1-
year period beginning October
1, 2003, increased in each of
the 5 succeeding 1-year periods
by equal increments, so that
for the 1-year period beginning
October 1, 2007, the applicable
percentage does not exceed 7
percent; and
(II) for each succeeding 1-
year period until September 30,
2015, not to exceed 7 percent.
(B) Surge mechanism.--
(i) Import monitoring.--The Secretary
of Commerce shall monitor imports of
articles described in this paragraph on
a monthly basis to determine if there
has been a surge in imports of such
articles. In order to permit public
access to preliminary international
trade data and to facilitate the early
identification of potentially
disruptive import surges, the Director
of the Office of Management and Budget
may grant an exception to the
publication dates established for the
release of data on United States
international trade in covered
articles, if the Director notifies
Congress of the early release of the
data.
(ii) Determination of damage or
threat thereof.--Whenever the Secretary
of Commerce determines, based on the
data described in clause (i), or
pursuant to a written request made by
an interested party, that there has
been a surge in imports of an article
described in this paragraph from a
beneficiary sub-Saharan African
country, the Secretary shall determine
whether such article from such country
is being imported in such increased
quantities as to cause serious damage,
or threat thereof, to the domestic
industry producing a like or directly
competitive article. If the Secretary's
determination is affirmative, the
President shall suspend the duty-free
treatment provided for such article
under this paragraph. If the inquiry is
initiated at the request of an
interested party, the Secretary shall
make the determination within 60 days
after the date of the request.
(iii) Factors to consider.--In
determining whether a domestic industry
has been seriously damaged, or is
threatened with serious damage, the
Secretary shall examine the effect of
the imports on relevant economic
indicators such as domestic production,
sales, market share, capacity
utilization, inventories, employment,
profits, exports, prices, and
investment.
(iv) Procedure.--
(I) Initiation.--The
Secretary of Commerce shall
initiate an inquiry within 10
days after receiving a written
request and supporting
information for an inquiry from
an interested party. Notice of
initiation of an inquiry shall
be published in the Federal
Register.
(II) Participation by
interested parties.--The
Secretary of Commerce shall
establish procedures to ensure
participation in the inquiry by
interested parties.
(III) Notice of
determination.--The Secretary
shall publish the determination
described in clause (ii) in the
Federal Register.
(IV) Information available.--
If relevant information is not
available on the record or any
party withholds information
that has been requested by the
Secretary, the Secretary shall
make the determination on the
basis of the facts available.
When the Secretary relies on
information submitted in the
inquiry as facts available, the
Secretary shall, to the extent
practicable, corroborate the
information from independent
sources that are reasonably
available to the Secretary.
(v) Interested party.--For purposes
of this subparagraph, the term
``interested party'' means any producer
of a like or directly competitive
article, a certified union or
recognized union or group of workers
which is representative of an industry
engaged in the manufacture, production,
or sale in the United States of a like
or directly competitive article, a
trade or business association
representing producers or sellers of
like or directly competitive articles,
producers engaged in the production of
essential inputs for like or directly
competitive articles, a certified union
or group of workers which is
representative of an industry engaged
in the manufacture, production, or sale
of essential inputs for the like or
directly competitive article, or a
trade or business association
representing companies engaged in the
manufacture, production, or sale of
such essential inputs.
(4) Sweaters knit-to-shape from cashmere or merino
wool.--
(A) Cashmere.--Sweaters, in chief weight of
cashmere, knit-to-shape in one or more
beneficiary sub-Saharan African countries and
classifiable under subheading 6110.10 of the
Harmonized Tariff Schedule of the United
States.
(B) Merino wool.--Sweaters, 50 percent or
more by weight of wool measuring 21.5 microns
in diameter or finer, knit-to-shape in one or
more beneficiary sub-Saharan African countries.
(5) Apparel articles wholly assembled from fabric or
yarn not available in commercial quantities in the
united states.--
(A) In general.--Apparel articles that are
both cut (or knit-to-shape) and sewn or
otherwise assembled in one or more beneficiary
sub-Saharan African countries, to the extent
that apparel articles of such fabrics or yarns
would be eligible for preferential treatment,
without regard to the source of the fabrics or
yarns, under Annex 401 to the NAFTA.
(B) Additional apparel articles.--At the
request of any interested party and subject to
the following requirements, the President is
authorized to proclaim the treatment provided
under subparagraph (A) for yarns or fabrics not
described in subparagraph (A) if--
(i) the President determines that
such yarns or fabrics cannot be
supplied by the domestic industry in
commercial quantities in a timely
manner;
(ii) the President has obtained
advice regarding the proposed action
from the appropriate advisory committee
established under section 135 of the
Trade Act of 1974 (19 U.S.C. 2155) and
the United States International Trade
Commission;
(iii) within 60 calendar days after
the request, the President has
submitted a report to the Committee on
Ways and Means of the House of
Representatives and the Committee on
Finance of the Senate that sets forth--
(I) the action proposed to be
proclaimed and the reasons for
such action; and
(II) the advice obtained
under clause (ii);
(iv) a period of 60 calendar days,
beginning with the first day on which
the President has met the requirements
of subclauses (I) and (II) of clause
(iii), has expired; and
(v) the President has consulted with
such committees regarding the proposed
action during the period referred to in
clause (iii).
(C) Removal of designation of fabrics or
yarns not available in commercial quantities.--
If the President determines that any fabric or
yarn was determined to be eligible for
preferential treatment under subparagraph (A)
on the basis of fraud, the President is
authorized to remove that designation from that
fabric or yarn with respect to articles entered
after such removal.
(6) Handloomed, handmade, folklore articles and
ethnic printed fabrics.--
(A) In general.--A handloomed, handmade,
folklore article or an ethnic printed fabric of
a beneficiary sub-Saharan African country or
countries that is certified as such by the
competent authority of such beneficiary country
or countries. For purposes of this section, the
President, after consultation with the
beneficiary sub-Saharan African country or
countries concerned, shall determine which, if
any, particular textile and apparel goods of
the country (or countries) shall be treated as
being handloomed, handmade, or folklore
articles or an ethnic printed fabric.
(B) Requirements for ethnic printed fabric.--
Ethnic printed fabrics qualified under this
paragraph are--
(i) fabrics containing a selvedge on
both edges, having a width of less than
50 inches, classifiable under
subheading 5208.52.30 or 5208.52.40 of
the Harmonized Tariff Schedule of the
United States;
(ii) of the type that contains
designs, symbols, and other
characteristics of African prints--
(I) normally produced for and
sold on the indigenous African
market; and
(II) normally sold in Africa
by the piece as opposed to
being tailored into garments
before being sold in indigenous
African markets;
(iii) printed, including waxed, in
one or more eligible beneficiary sub-
Saharan countries; and
(iv) fabrics formed in the United
States, from yarns formed in the United
States, or from fabric formed in one or
more beneficiary sub-Saharan African
country from yarn originating in either
the United States or one or more
beneficiary sub-Saharan African
countries.
(7) Apparel articles assembled in one or more
beneficiary sub-saharan african countries from united
states and beneficiary sub-saharan african country
components.--Apparel articles sewn or otherwise
assembled in one or more beneficiary sub-Saharan
African countries with thread formed in the United
States from components cut in the United States and one
or more beneficiary sub-Saharan African countries or
former beneficiary sub-Saharan African countries from
fabric wholly formed in the United States from yarns
wholly formed in the United States, or from components
knit-to-shape in the United States and one or more
beneficiary sub-Saharan African countries or former
beneficiary sub-Saharan African countries from yarns
wholly formed in the United States, or both (including
fabrics not formed from yarns, if such fabrics are
classifiable under heading 5602 or 5603 of the
Harmonized Tariff Schedule of the United States).
(8) Textile articles originating entirely in one or
more lesser developed beneficiary sub-saharan african
countries.--Textile and textile articles classifiable
under chapters 50 through 60 or chapter 63 of the
Harmonized Tariff Schedule of the United States that
are products of a lesser developed beneficiary sub-
Saharan African country and are wholly formed in one or
more such countries from fibers, yarns, fabrics, fabric
components, or components knit-to-shape that are the
product of one or more such countries.
(c) Lesser Developed Countries.--
(1) Preferential treatment of products through
september 30, 2015.--
(A) Products covered.--In addition to the
products described in subsection (b) the
preferential treatment described in subsection
(a) shall apply through September 30, 2015, to
apparel articles wholly assembled, or knit-to-
shape and wholly assembled, or both, in one or
more lesser developed beneficiary sub-Saharan
African countries, regardless of the country of
origin of the fabric or the yarn used to make
such articles, in an amount not to exceed the
applicable percentage of the aggregate square
meter equivalents of all apparel articles
imported into the United States in the
preceding 12-month period for which data are
available.
(B) Applicable percentage.--For purposes of
subparagraph (A), the term ``applicable
percentage'' means--
(i) 2.9285 percent for the 1-year
period beginning on October 1, 2005;
and
(ii) 3.5 percent for the 1-year
period beginning on October 1, 2006,
and each 1-year period thereafter
through September 30, 2015.
(2) Applicability of other provisions.--Subsection
(b)(3)(B) applies to apparel articles eligible for
preferential treatment under this subsection to the
same extent as that subsection applies to apparel
articles eligible for preferential treatment under
subsection (b)(3).
(3) Definition.--In this subsection, the term
``lesser developed beneficiary sub-Saharan African
country'' means--
(A) a beneficiary sub-Saharan African country
that had a per capita gross national product of
less than $1,500 in 1998, as measured by the
International Bank for Reconstruction and
Development;
(B) Botswana;
(C) Namibia; and
(D) Mauritius.
(d) Treatment of Quotas on Textile and Apparel Imports from
Kenya and Mauritius.--The President shall eliminate the
existing quotas on textile and apparel articles imported into
the United States--
(1) from Kenya within 30 days after that country
adopts an effective visa system to prevent unlawful
transshipment of textile and apparel articles and the
use of counterfeit documents relating to the
importation of the articles into the United States; and
(2) from Mauritius within 30 days after that country
adopts such a visa system.
The Customs Service shall provide the necessary technical
assistance to Kenya and Mauritius in the development and
implementation of the visa systems.
(e) Special Rules.--
(1) Findings and trimmings.--
(A) General rule.--An article otherwise
eligible for preferential treatment under this
section shall not be ineligible for such
treatment because the article contains findings
or trimmings of foreign origin, if the value of
such findings and trimmings do not exceed 25
percent of the cost of the components of the
assembled article. Examples of findings and
trimmings are sewing thread, hooks and eyes,
snaps, buttons, ``bow buds'', decorative lace
trim, elastic strips, and zippers, including
zipper tapes and labels. Elastic strips are
considered findings or trimmings only if they
are each less than 1 inch in width and used in
the production of brassieres.
(B) Certain interlinings.--
(i) General rule.--An article
otherwise eligible for preferential
treatment under this section shall not
be ineligible for such treatment
because the article contains certain
interlinings of foreign origin, if the
value of such interlinings (and any
findings and trimmings) does not exceed
25 percent of the cost of the
components of the assembled article.
(ii) Interlinings described.--
Interlinings eligible for the treatment
described in clause (i) include only a
chest type plate, a ``hymo'' piece, or
``sleeve header'', of woven or weft-
inserted warp knit construction and of
coarse animal hair or man-made
filaments.
(iii) Termination of treatment.--The
treatment described in this
subparagraph shall terminate if the
President makes a determination that
United States manufacturers are
producing such interlinings in the
United States in commercial quantities.
(C) Exception.--In the case of an article
described in subsection (b)(2), sewing thread
shall not be treated as findings or trimmings
under subparagraph (A).
(2) De minimis rule.--An article otherwise eligible
for preferential treatment under this section shall not
be ineligible for such treatment because the article
contains fibers or yarns not wholly formed in the
United States or one or more beneficiary sub-Saharan
African countries or former beneficiary sub-Saharan
African countries if the total weight of all such
fibers and yarns is not more than 10 percent of the
total weight of the article.
(3) Certain components.--An article otherwise
eligible for preferential treatment under this section
will not be ineligible for such treatment because the
article contains--
(A) any collars or cuffs (cut or knit-to-
shape),
(B) drawstrings,
(C) shoulder pads or other padding,
(D) waistbands,
(E) belt attached to the article,
(F) straps containing elastic, or
(G) elbow patches,
that do not meet the requirements set forth in
subsections (b) and (c), regardless of the country of
origin of the item referred to in the applicable
subparagraph of this paragraph.
(f) Definitions.--In this section and section 113:
(1) Agreement on textiles and clothing.--The term
``Agreement on Textiles and Clothing'' means the
Agreement on Textiles and Clothing referred to in
section 101(d)(4) of the Uruguay Round Agreements Act
(19 U.S.C. 3511(d)(4)).
(2) Beneficiary sub-saharan african country, etc.--
The terms ``beneficiary sub-Saharan African country''
and ``beneficiary sub-Saharan African countries'' have
the same meaning as such terms have under section
506A(c) of the Trade Act of 1974.
(3) NAFTA.--The term ``NAFTA'' means the North
American Free Trade Agreement entered into between the
United States, Mexico, and Canada on December 17, 1992.
(4) Former sub-saharan african country.--The term
``former sub-Saharan African country'' means a country
that, after being designated as a beneficiary sub-
Saharan African country under this Act, ceased to be
designated as such a beneficiary sub-Saharan country by
reason of its entering into a free trade agreement with
the United States.
(5) Enter; entered.--The terms ``enter'' and
``entered'' refer to the entry, or withdrawal from
warehouse for consumption, in the customs territory of
the United States.
(g) Effective Date.--This section takes effect on October 1,
2000, and shall remain in effect through September 30, 2015.
* * * * * * *
----------
CARIBBEAN BASIN ECONOMIC RECOVERY ACT
* * * * * * *
TITLE II--CARIBBEAN BASIN INITIATIVE
* * * * * * *
Subtitle A--Duty-Free Treatment
* * * * * * *
SEC. 213A. SPECIAL RULES FOR HAITI.
(a) Definitions.--In this section:
(1) Initial applicable 1-year period.--The term
``initial applicable 1-year period'' means the 1-year
period beginning on December 20, 2006.
(2) Appropriate congressional committees.--.\5\ The
term ``appropriate congressional committees'' means the
Committee on Finance of the Senate and the Committee on
Ways and Means of the House of Representatives.
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\5\The period following the point dash in paragraph (2) is so in
law. See section 15403(1)(C) of Public Law 110-246.
---------------------------------------------------------------------------
(3) Core labor standards.--The term ``core labor
standards'' means--
(A) freedom of association;
(B) the effective recognition of the right to
bargain collectively;
(C) the elimination of all forms of
compulsory or forced labor;
(D) the effective abolition of child labor
and a prohibition on the worst forms of child
labor; and
(E) the elimination of discrimination in
respect of employment and occupation.
(4) Enter; entry.--The terms ``enter'' and ``entry''
refer to the entry, or withdrawal from warehouse for
consumption, in the customs territory of the United
States.
(5) Imported directly from haiti or the dominican
republic.--Articles are ``imported directly from Haiti
or the Dominican Republic'' if--
(A) the articles are shipped directly from
Haiti or the Dominican Republic into the United
States without passing through the territory of
any intermediate country; or
(B) the articles are shipped from Haiti or
the Dominican Republic into the United States
through the territory of an intermediate
country, and--
(i) the articles in the shipment do
not enter into the commerce of any
intermediate country, and the invoices,
bills of lading, and other shipping
documents specify the United States as
the final destination; or
(ii) the invoices and other documents
do not specify the United States as the
final destination, but the articles in
the shipment--
(I) remain under the control
of the customs authority in the
intermediate country;
(II) do not enter into the
commerce of the intermediate
country except for the purpose
of a sale other than at retail;
and
(III) have not been subjected
to operations in the
intermediate country other than
loading, unloading, or other
activities necessary to
preserve the articles in good
condition.
(6) Knit-to-shape.--A good is ``knit-to-shape'' if 50
percent or more of the exterior surface area of the
good is formed by major parts that have been knitted or
crocheted directly to the shape used in the good, with
no consideration being given to patch pockets,
appliquees, or the like. Minor cutting, trimming, or
sewing of those major parts shall not affect the
determination of whether a good is ``knit-to-
shape.''\6\
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\6\So in law. The closing quotes should appear before the closing
period.
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(7) TAICNAR program.--The term ``TAICNAR Program''
means the Technical Assistance Improvement and
Compliance Needs Assessment and Remediation Program
established pursuant to subsection (e).
(8) Wholly assembled.--A good is ``wholly assembled''
in Haiti if all components, of which there must be at
least two, pre-existed in essentially the same
condition as found in the finished good and were
combined to form the finished good in Haiti. Minor
attachments and minor embellishments (for example,
appliquees, beads, spangles, embroidery, and buttons)
not appreciably affecting the identity of the good, and
minor subassemblies (for example, collars, cuffs,
plackets, and pockets), shall not affect the
determination of whether a good is ``wholly assembled''
in Haiti.
(b) Apparel and Other Textile Articles.--
(1) Value-added rule for apparel articles.--
(A) In general.--Apparel articles described
in subparagraph (B) of a producer or entity
controlling production that are imported
directly from Haiti or the Dominican Republic
shall enter the United States free of duty
during the initial applicable 1-year period and
any 1-year period thereafter, subject to the
limitations set forth in subparagraphs (B) and
(C), and subject to subparagraph (D).
(B) Apparel articles described.--
(i) In general.--In the initial
applicable 1-year period and any 1-year
period thereafter, apparel articles
described in this paragraph are apparel
articles that are wholly assembled, or
are knit-to-shape, in Haiti from any
combination of fabrics, fabric
components, components knit-to-shape,
and yarns, only if, for each entry in
that 1-year period, the sum of--
(I) the cost or value of the
materials produced in Haiti or
one or more countries described
in clause (iii), or any
combination thereof, plus
(II) the direct costs of
processing operations (as
defined in section 213(a)(3))
performed in Haiti or one or
more countries described in
clause (iii), or any
combination thereof,
is not less than the applicable
percentage (as defined in clause
(v)(I)\7\) of the declared customs
value of such apparel articles.
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\7\The amendment made by section 15402(a)(3)(A)(iv) of Public Law
110-246 was carried out to reflect the probable intent of Congress.
Such amendment states to strike ``subparagraph (E)(I)'' and insert
``clause (v)(I)'', which probably should have been made to strike
``subparagraph (E)(i)''.
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(ii) Deductions.--In calculating cost
or value under clause (i)(I), there
shall be deducted the cost or value
of--
(I) any foreign materials
that are used in the production
of the apparel articles in
Haiti; and
(II) any foreign materials
that are used in the production
of the materials described in
clause (i)(I).
(iii) Countries described.--The
countries referred to in clause (i) are
the following:
(I) The United States.
(II) Any country that is a
party to a free trade agreement
with the United States that is
in effect on the date of the
enactment of the Haitian
Hemispheric Opportunity through
Partnership Encouragement Act
of 2006, or that enters into
force thereafter.
(III) Any country designated
as a beneficiary country under
section 213(b)(5)(B) of this
Act.
(IV) Any country designated
as a beneficiary country under
section 506A(a)(1) of the Trade
Act of 1974 (19 U.S.C.
2466a(a)(1)), if a finding has
been made by the President or
the President's designee, and
published in the Federal
Register, that the country has
satisfied the requirements of
section 113 of the African
Growth and Opportunity Act (19
U.S.C. 3722).
(V) Any country designated as
a beneficiary country under
section 204(b)(6)(B) of the
Andean Trade Preference Act (19
U.S.C. 3203(b)(6)(B)).
(iv) Annual aggregation.--
(I) Initial applicable 1-year
period.--In the initial
applicable 1-year period, the
requirements under clause (i)
relating to applicable
percentage may also be met for
articles of a producer or an
entity controlling production
that enter during the initial
applicable 1-year period by
aggregating--
(aa) the cost or
value of materials
under subclause (I) of
clause (i), and
(bb) the direct costs
of processing
operations under
subclause (II) of
clause (i),
of all apparel articles of that
producer or entity controlling
production that are wholly
assembled, or are knit-to-
shape, in Haiti and are entered
during the initial applicable
1-year period.
(II) Other 1-year periods.--
In any 1-year period after the
initial applicable 1-year
period, the requirements under
clause (i) relating to
applicable percentage may also
be met for articles of a
producer or an entity
controlling production that
enter during the 1-year period
by aggregating--
(aa) the cost or
value of materials
under subclause (I) of
clause (i), and
(bb) the direct costs
of processing
operations under
subclause (II) of
clause (i),
of all apparel articles of that
producer or entity controlling
production that are wholly
assembled, or are knit-to-
shape, in Haiti and are entered
during the preceding 1-year
period.
(III) Deductions.--In
calculating cost or value under
subclause (I)(aa) or (II)(aa),
there shall be deducted the
cost or value of--
(aa) any foreign
materials that are used
in the production of
the apparel articles in
Haiti; and
(bb) any foreign
materials that are used
in the production of
the materials described
in subclause (I)(aa) or
(II)(aa) (as the case
may be).
(IV) Inclusion in calculation
of other articles receiving
preferential treatment.--
Entries of apparel articles
that receive preferential
treatment under any provision
of law other than this
subparagraph or are subject to
the ``General'' column 1 rate
of duty under the HTS are not
included in the annual
aggregation under subclause (I)
or (II) unless the producer or
entity controlling production
elects, at the time the annual
aggregation calculation is
made, to include such entries
in such aggregation.
(v) Definitions.--In this paragraph:
(I) Applicable percentage.--
The term ``applicable
percentage'' means--
(aa) 50 percent or
more during the initial
applicable 1-year
period and the
succeeding 8 1-year
periods;
(bb) 55 percent or
more during the 1-year
period beginning on
December 20, 2015, and
the 1-year period
beginning on December
20, 2016; and
(cc) 60 percent or
more during the 1-year
period beginning on
December 20, 2017.
(II) Foreign material.--The
term ``foreign material'' means
a material produced in a
country other than Haiti or any
country described in clause
(iii).
(vi) Development of procedure to
ensure compliance.--
(I) In general.--U.S. Customs
and Border Protection of the
Department of Homeland Security
shall develop and implement
methods and procedures to
ensure ongoing compliance with
the requirements set forth in
clauses (i) and (iv).
(II) Noncompliance.--If U.S.
Customs and Border Protection
finds that a producer or an
entity controlling production
has not satisfied such
requirements in the initial
applicable 1-year period or any
1-year period thereafter,
either for individual entries
entered pursuant to clause (i)
or for entries entered in
aggregate pursuant to clause
(iv), then apparel articles
described in clause (i) of that
producer or entity shall be
ineligible for preferential
treatment under paragraph (1)
during any succeeding 1-year
period until--
(aa) the cost or
value of materials
under subclause (I) of
clause (i), plus
(bb) the direct costs
of processing
operations under
subclause (II) of
clause (i),
of that producer or entity
controlling production, is not
less than the applicable
percentage under clause (v)(I),
plus 10 percent, of the
aggregate declared customs
value of all apparel articles
of that producer or entity
controlling production that are
wholly assembled, or are knit-
to-shape, in Haiti and are
entered during the preceding 1-
year period.
(III) Retroactive application
of duty-free treatment.--If--
(aa) a producer or an
entity controlling
production is
ineligible for
preferential treatment
under subparagraph (A)
in the initial
applicable 1-year
period or any 1-year
period thereafter
because that producer
or entity controlling
production did not
satisfy the
requirements of clause
(i) or (iv), and
(bb) that producer or
entity controlling
production satisfies
the requirements of
subclause (II) of this
clause in that 1-year
period,
then, notwithstanding section
514 of the Tariff Act of 1930
(19 U.S.C. 1514) or any other
provision of law, upon proper
request filed with U.S. Customs
and Border Protection before
the 90th day after U.S. Customs
and Border Protection
determines that item (bb)
applies, the entry of any
articles--
(AA) that was made
during that 1-year
period, and
(BB) with respect to
which there would have
been preferential
treatment under
subparagraph (A) if the
producer or entity
controlling production
had satisfied the
requirements in clause
(i) or (iv) (as the
case may be),
shall be liquidated or
reliquidated as though such
preferential treatment under
subparagraph (A) applied to
such entry.
(vii) Fabrics not available in
commercial quantities.--
(I) In general.--For purposes
of determining the applicable
percentage under clause (i) or
(iv), there may be included in
that percentage--
(aa) the cost of
fabrics or yarns to the
extent that apparel
articles of such
fabrics or yarns would
be eligible for
preferential treatment,
without regard to the
source of the fabrics
or yarns, under Annex
401 of the NAFTA; and
(bb) the cost of
fabrics or yarns that
are designated as not
being available in
commercial quantities
for purposes of--
(AA) section
213(b)(2)(A)(v) of this
Act,
(BB) section
112(b)(5) of the
African Growth and
Opportunity Act,
(CC) section
204(b)(3)(B)(i)(III) or
(ii) of the Andean
Trade Preference Act,
or
(DD) any other
provision, relating to
determining whether a
textile or apparel
article is an
originating good
eligible for
preferential treatment,
of a law that
implements a free trade
agreement that enters
into force with respect
to the United States,
without regard to the source of
the fabrics or yarns.
(II) Removal of designation
of fabrics or yarns not
available in commercial
quantities.--If the President
determines that--
(aa) any fabric or
yarn described in
subclause (I)(aa) was
determined to be
eligible for
preferential treatment,
or
(bb) any fabric or
yarn described in
subclause (I)(bb) was
designated as not being
available in commercial
quantities,
on the basis of fraud, the
President is authorized to
remove the eligibility or
designation (as the case may
be) of that fabric or yarn with
respect to articles entered
after such removal.
(C) Quantitative limitations.--The
preferential treatment described in
subparagraph (A) shall be extended, during each
of the 1-year periods set forth in the
following table, to not more than the
corresponding percentage of the aggregate
square meter equivalents of all apparel
articles imported into the United States in the
most recent 12-month period for which data are
available:
During: the corresponding percentage is:
the initial applicable 1-year period............... 1 percent.
each of the succeeding 11 1-year periods........... 1.25 percent.
No preferential treatment shall be provided
under subparagraph (A) after December 19, 2018.
(D) Other preferential treatment not affected
by quantitative limitations.--Any apparel
article that qualifies for preferential
treatment under paragraph (2), (3), (4), or (5)
or any other provision of this title shall not
be subject to, or included in the calculation
of, the quantitative limitations under
subparagraph (C).
(2) Special rule for woven articles and certain knit
articles.--
(A) Special rule for articles of chapter 62
of the hts.--
(i) General rule.--Any apparel
article classifiable under chapter 62
of the HTS that is wholly assembled, or
knit-to-shape, in Haiti from any
combination of fabrics, fabric
components, components knit-to-shape,
or yarns and is imported directly from
Haiti or the Dominican Republic shall
enter the United States free of duty,
subject to clauses (ii) and (iii),
without regard to the source of the
fabric, fabric components, components
knit-to-shape, or yarns from which the
article is made.
(ii) Limitation.--Except as provided
in paragraph (2A), the preferential
treatment described in clause (i) shall
be extended, in the 1-year period
beginning October 1, 2008, and in each
of the 11 succeeding 1-year periods, to
not more than 70,000,000 square meter
equivalents of apparel articles
described in such clause.
(iii) Other preferential treatment
not affected by quantitative
limitation.--Any apparel article that
qualifies for preferential treatment
under paragraph (1), (3), (4), or (5)
or subparagraph (B) of this paragraph
or any other provision of this title
shall not be subject to, or included in
the calculation of, the quantitative
limitation under clause (ii).
(B) Special rule for certain articles of
chapter 61 of the hts.--
(i) General rule.--Any apparel
article classifiable under chapter 61
of the HTS that is wholly assembled, or
knit-to-shape, in Haiti from any
combination of fabrics, fabric
components, components knit-to-shape,
or yarns and is imported directly from
Haiti or the Dominican Republic shall
enter the United States free of duty,
subject to clauses (ii), (iii), and
(iv), without regard to the source of
the fabric, fabric components,
components knit-to-shape, or yarns from
which the article is made.
(ii) Exclusions.--The preferential
treatment described in clause (i) shall
not apply to the following:
(I) The following apparel
articles of cotton, for men or
boys, that are classifiable
under subheading 6109.10.00 of
the HTS:
(aa) All white T-
shirts, with short
hemmed sleeves and
hemmed bottom, with
crew or round neckline
or with V-neck and with
a mitered seam at the
center of the V, and
without pockets, trim,
or embroidery.
(bb) All white
singlets, without
pockets, trim, or
embroidery.
(cc) Other T-shirts,
but not including
thermal undershirts.
(II) T-shirts for men or boys
that are classifiable under
subheading 6109.90.10.
(III) The following apparel
articles of cotton, for men or
boys, that are classifiable
under subheading 6110.20.20 of
the HTS:
(aa) Sweatshirts.
(bb) Pullovers, other
than sweaters, vests,
or garments imported as
part of playsuits.
(IV) Sweatshirts for men or
boys, of man-made fibers and
containing less than 65 percent
by weight of man-made fibers,
that are classifiable under
subheading 6110.30.30 of the
HTS.
(iii) Limitation.--Except as provided
in paragraph (2A), the preferential
treatment described in clause (i) shall
be extended, in the 1-year period
beginning October 1, 2008, and in each
of the 11 succeeding 1-year periods, to
not more than 70,000,000 square meter
equivalents of apparel articles
described in such clause.
(iv) Other preferential treatment not
affected by quantitative limitation.--
Any apparel article that qualifies for
preferential treatment under paragraph
(1), (3), (4), or (5) or subparagraph
(A) of this paragraph or any other
provision of this title shall not be
subject to, or included in the
calculation of, the quantitative
limitation under clause (iii).
(2A) Special rule for certain woven articles and
certain knit articles entered during fiscal year 2010
and succeeding 1-year periods.--
(A) In general.--Except as provided in
subparagraphs (B) and (C) and subject to
subparagraph (D), if 52,000,000 square meter
equivalents of apparel articles described in
paragraph (2)(A)(i) or (2)(B)(i) enter the
United States during the 1-year period
beginning October 1, 2009, or any of the
succeeding 1-year periods, the President shall
extend the preferential treatment described in
paragraph (2)(A)(i) or (2)(B)(i) (as the case
may be) to not more than 200,000,000 square
meter equivalents of apparel articles described
in paragraph (2)(A)(i) or (2)(B)(i) (as the
case may be) during that 1-year period, and
shall publish notice of the extension in the
Federal Register.
(B) Exception for certain woven articles.--
(i) In general.--In the case of
apparel articles described in clause
(ii), subparagraph (A) shall be applied
by substituting ``70,000,000'' for
``200,000,000''.
(ii) Apparel articles described.--
Apparel articles described in this
clause are apparel articles described
in paragraph (2)(A)(i) that are the
following:
(I) Category 347.--Apparel
articles in category 347 that
fall within the following
statistical reporting numbers
of the HTS (as in effect on the
day before the date of the
enactment of this paragraph):
6203.19.1020.......................... 6203.42.4011................. 6203.42.4061
6203.19.9020......................... 6203.42.4016................. 6203.49.8020
6203.22.3020......................... 6203.42.4026................. 6210.40.9033
6203.22.3030......................... 6203.42.4036................. 6211.20.1520
6203.42.4003......................... 6203.42.4046................. 6211.20.3810
6203.42.4006......................... 6203.42.4051................. 6211.32.0040
(II) Category 348.--Apparel
articles in category 348 that
fall within the following
statistical reporting numbers
of the HTS (as in effect on the
day before the date of the
enactment of this paragraph):
6204.12.0030.......................... 6204.62.4011................. 6204.69.9010
6204.19.8030......................... 6204.62.4021................ 6210.50.9060
6204.22.3040......................... 6204.62.4031................ 6211.20.1550
6204.22.3050......................... 6204.62.4041................ 6211.20.6810
6204.29.4034........................ 6204.62.4051................ 6211.42.0030
6204.62.3000........................ 6204.62.4056................ 6217.90.9050
6204.62.4003........................ 6204.62.4066................ .........................................
6204.62.4006........................ 6204.69.6010................. .........................................
(III) Category 647.--Apparel
articles in category 647 that
fall within the following
statistical reporting numbers
of the HTS (as in effect on the
day before the date of the
enactment of this paragraph):
6203.23.0060.......................... 6203.43.4020................. 6203.49.8030
6203.23.0070........................ 6203.43.4030................ 6210.40.5031
6203.29.2030........................ 6203.43.4040................ 6210.40.5039
6203.29.2035........................ 6203.49.1500................ 6211.20.1525
6203.43.2500......................... 6203.49.2015................ 6211.20.3820
6203.43.3510........................ 6203.49.2030................ 6211.33.0030
6203.43.3590........................ 6203.49.2045................ .........................................
6203.43.4010......................... 6203.49.2060................. .........................................
(IV) Category 648.--Apparel
articles in category 648 that
fall within the following
statistical reporting numbers
of the HTS (as in effect on the
day before the date of the
enactment of this paragraph):
6204.23.0040.......................... 6204.63.3510................. 6204.69.6030
6204.23.0045......................... 6204.63.3530................ 6204.69.9030
6204.29.2020........................ 6204.63.3532................. 6210.50.5031
6204.29.2025......................... 6204.63.3540................ 6210.50.5039
6204.29.4038......................... 6204.69.2510................. 6211.20.1555
6204.63.2000........................ 6204.69.2530................ 6211.20.6820
6204.63.3010........................ 6204.69.2540................ 6211.43.0040
6204.63.3090........................ 6204.69.2560................ 6217.90.9060
(C) Exception for certain knit articles.--
(i) In general.--In the case of
apparel articles described in clause
(ii), subparagraph (A) shall be applied
by substituting ``85,000,000'' for
``200,000,000''.
(ii) Apparel articles described.--
Apparel articles described in this
clause are apparel articles described
in paragraph (2)(B)(i) that fall within
the following statistical reporting
numbers of the HTS (as in effect on the
day before the date of the enactment of
this paragraph), other than shirts with
plackets and pointed collars:
6105.10.0010.......................... 6109.10.0040................. 6110.30.3053
6109.10.0018......................... 6109.10.0045................. 6110.30.3059
6109.10.0027......................... 6110.20.2079................. .........................................
(D) Verification with respect to
transshipment for certain apparel articles.--
(i) In general.--Not later than April
1, July 1, October 1, and January 1 of
each year, the Commissioner responsible
for United States Customs and Border
Protection shall verify that apparel
articles imported into the United
States under this paragraph are not
being unlawfully transshipped (within
the meaning of subsection (f)) into the
United States.
(ii) Report to president.--If the
Commissioner determines pursuant to
clause (i) that apparel articles
imported into the United States under
this paragraph are being unlawfully
transshipped into the United States,
the Commissioner shall report that
determination to the President.
(iii) Authority to reduce
quantitative limitation.--If, in any 1-
year period with respect to which the
President extends preferential
treatment as described in this
paragraph, the Commissioner reports to
the President pursuant to clause (ii)
regarding unlawful transshipments, the
President--
(I) may modify the
quantitative limitation under
this paragraph as the President
considers appropriate to
account for such
transshipments; and
(II) if the President
modifies the limitation under
subclause (I), shall publish
notice of the modification in
the Federal Register.
(E) Category defined.--In this paragraph, the
term ``category'' means the number assigned
under the U.S. Textile and Apparel Category
System of the Office of Textiles and Apparel of
the Department of Commerce, as listed in the
HTS under the applicable heading or subheading
(as in effect on the day before the date of the
enactment of this paragraph).
(3) Apparel and other articles subject to certain
assembly rules.--
(A) Brassieres.--Any apparel article
classifiable under subheading 6212.10 of the
HTS that is wholly assembled, or knit-to-shape,
in Haiti from any combination of fabrics,
fabric components, components knit-to-shape, or
yarns and is imported directly from Haiti or
the Dominican Republic shall enter the United
States free of duty, without regard to the
source of the fabric, fabric components,
components knit-to-shape, or yarns from which
the article is made.
(B) Other apparel articles.--Any of the
following apparel articles that is wholly
assembled, or knit-to-shape, in Haiti from any
combination of fabrics, fabric components,
components knit-to-shape, or yarns and is
imported directly from Haiti or the Dominican
Republic shall enter the United States free of
duty, without regard to the source of the
fabric, fabric components, components knit-to-
shape, or yarns from which the article is made:
(i) Any apparel article that is of a
type listed in chapter rule 3, 4, or 5
for chapter 61 of the HTS (as such
chapter rules are contained in section
A of the Annex to Proclamation 8213 of
the President of December 20, 2007) as
being excluded from the scope of such
chapter rule, when such chapter rule is
applied to determine whether an apparel
article is an originating good for
purposes of general note 29(n) to the
HTS, except that, for purposes of this
clause, reference in such chapter rules
to ``6104.12.00'' shall be deemed to be
a reference to ``6104.19.60''.
(ii)(I) Subject to subclause (II),
any apparel article that is of a type
listed in chapter rule 3(a), 4(a), or
5(a) for chapter 62 of the HTS, as such
chapter rules are contained in
paragraph 9 of section A of the Annex
to Proclamation 8213 of the President
of December 20, 2007.
(II) Subclause (I) shall not include
any apparel article to which
subparagraph (A) of this paragraph
applies.
(C) Luggage and similar items.--Any article
classifiable under subheading 4202.12, 4202.22,
4202.32 or 4202.92 of the HTS that is wholly
assembled in Haiti and is imported directly
from Haiti or the Dominican Republic shall
enter the United States free of duty, without
regard to the source of the fabric, components,
or materials from which the article is made.
(D) Headgear.--Any article classifiable under
heading 6501, 6502, or 6504 of the HTS, or
under subheading 6505.90 of the HTS, that is
wholly assembled, knit-to-shape, or formed in
Haiti from any combination of fabrics, fabric
components, components knit-to-shape, or yarns
and is imported directly from Haiti or the
Dominican Republic shall enter the United
States free of duty, without regard to the
source of the fabric, fabric components,
components knit-to-shape, or yarns from which
the article is made.
(E) Certain sleepwear.--Any of the following
apparel articles that is wholly assembled, or
knit-to-shape, in Haiti from any combination of
fabrics, fabric components, components knit-to-
shape, or yarns and is imported directly from
Haiti or the Dominican Republic shall enter the
United States free of duty, without regard to
the source of the fabric, fabric components,
components knit-to-shape, or yarns from which
the article is made:
(i) Pajama bottoms and other
sleepwear for women and girls, of
cotton, that are classifiable under
subheading 6208.91.30, or of man-made
fibers, that are classifiable under
subheading 6208.92.00.
(ii) Pajama bottoms and other
sleepwear for girls, of other textile
materials, that are classifiable under
subheading 6208.99.20.
(F) Certain other apparel articles.--
(i) In general.--Any of the apparel
articles described in clause (ii) that
is wholly assembled, or knit-to-shape,
in Haiti from any combination of
fabrics, fabric components, components
knit-to-shape, or yarns and is imported
directly from Haiti or the Dominican
Republic shall enter the United States
free of duty, without regard to the
source of the fabric, fabric
components, components knit-to-shape,
or yarns from which the article is
made.
(ii) Articles described.--Apparel
articles described in this clause are
apparel articles in the following
category numbers that fall within the
following statistical reporting numbers
of the HTS (as in effect on the day
before the date of the enactment of
this subparagraph):
----------------------------------------------------------------------------------------------------------------
Category Number HTS Statistical
Reporting Number
----------------------------------------------------------------------------------------------------------------
334 6101.90.9010
6112.11.0010
6103.22.0010
6113.00.9015
----------------------------------------------------------------------------------------------------------------
335 6104.22.0010
6104.29.2010
6112.11.0020
----------------------------------------------------------------------------------------------------------------
336 6104.49.9010
----------------------------------------------------------------------------------------------------------------
338 6103.22.0050
6105.90.8010
6112.11.0030
----------------------------------------------------------------------------------------------------------------
339 6104.22.0060
6104.29.2049
6106.90.2510
6106.90.3010
6110.20.1031
6110.20.1033
6112.11.0040
----------------------------------------------------------------------------------------------------------------
342 6104.22.0030
6104.29.2022
6104.52.0010
6104.52.0020
6104.59.8010
----------------------------------------------------------------------------------------------------------------
350 6107.91.0040
6107.91.0090
----------------------------------------------------------------------------------------------------------------
351 6107.21.0010
6107.21.0020
6107.91.0030
6108.31.0010
6108.31.0020
----------------------------------------------------------------------------------------------------------------
433 6103.23.0007
6103.29.0520
6103.31.0000
6103.33.1000
6103.39.8020
----------------------------------------------------------------------------------------------------------------
434 6101.30.1500
6101.90.0500
6101.90.9020
6103.23.0005
6103.29.0510
----------------------------------------------------------------------------------------------------------------
435 6102.30.1000
6102.90.9010
6104.23.0010
6104.29.0510
6104.29.2012
6104.33.1000
6104.39.2020
----------------------------------------------------------------------------------------------------------------
438 6103.23.0025
6103.29.0550
6104.23.0020
6104.29.0560
6104.29.2051
6105.90.1000
6105.90.8020
6106.20.1020
6106.90.1010
6106.90.1020
6106.90.2520
6106.90.3020
6110.11.0070
6110.12.2070
6110.12.2080
6110.19.0070
6110.19.0080
6110.30.1550
6110.30.1560
----------------------------------------------------------------------------------------------------------------
633 6103.23.0037
6103.29.1015
6103.33.2000
6103.39.1000
6103.39.8030
----------------------------------------------------------------------------------------------------------------
634 6101.30.1000
6101.90.9030
6103.23.0036
6103.29.1010
6112.12.0010
6112.19.1010
6112.20.1010
6112.20.1030
6113.00.9025
----------------------------------------------------------------------------------------------------------------
635 6102.30.0500
6102.90.9015
6104.23.0026
6104.29.1010
6104.29.2014
6104.39.2030
6112.12.0020
6112.19.1020
6112.20.1020
6112.20.1040
6113.00.9030
----------------------------------------------------------------------------------------------------------------
636 6104.49.9030
6104.44.2020
----------------------------------------------------------------------------------------------------------------
638 6103.23.0075
6103.29.1050
6105.90.8030
6110.30.1050
6110.30.2051
6110.30.2053
6112.12.0030
6112.19.1030
----------------------------------------------------------------------------------------------------------------
639 6104.23.0036
6104.29.1050
6104.29.2055
6106.90.2530
6106.90.3030
6110.30.1060
6110.30.2061
6110.30.2063
6112.12.0040
6112.19.1040
----------------------------------------------------------------------------------------------------------------
651 6107.22.0010
6107.22.0015
6107.22.0025
6107.99.1030
6108.32.0015
----------------------------------------------------------------------------------------------------------------
(iii) Category defined.--In this
subparagraph, the term ``category'' has
the meaning given that term in
paragraph (2A)(E) of this subsection.
(G) Made-up textile articles.--
(i) In general.--Any of the made-up
textile articles described in clauses
(ii) and (iii) that is wholly
assembled, or knit-to-shape, in Haiti
from any combination of fabrics, fabric
components, components knit-to-shape,
or yarns and is imported directly from
Haiti or the Dominican Republic shall
enter the United States free of duty,
without regard to the source of the
fabric, fabric components, components
knit-to-shape, or yarns from which the
article is made.
(ii) Articles described.--Made-up
textile articles described in this
clause are articles in the following
category numbers that fall within the
following statistical reporting numbers
of the HTS (as in effect on the day
before the date of the enactment of
this subparagraph):
----------------------------------------------------------------------------------------------------------------
Category Number HTS Statistical
Reporting Number
----------------------------------------------------------------------------------------------------------------
363 6302.60.0020
6302.91.0015
6302.91.0035
6307.90.8940
----------------------------------------------------------------------------------------------------------------
369 6304.91.0020
6304.92.0000
6302.60.0010
6302.60.0030
6302.91.0005
6302.91.0050
6307.90.8910
6307.90.8945
5701.90.2020
5702.39.2010
5702.50.5600
5702.99.0500
5702.99.1500
5705.00.2020
5807.10.0510
5807.90.0510
6307.90.3010
6301.30.0010
6305.20.0000
6307.10.1020
6307.10.1090
6406.10.7700
9404.90.1000
9404.90.9505
6301.30.0020
6302.91.0045
----------------------------------------------------------------------------------------------------------------
465 5701.10.9000
5702.50.2000
5702.50.4000
5702.91.3000
5702.91.4000
5703.10.2000
5703.10.8000
5704.10.0010
5705.00.2005
5705.00.2015
5702.31.1000
5702.31.2000
----------------------------------------------------------------------------------------------------------------
469 6304.19.3040
6304.91.0050
6304.99.1500
6304.99.6010
5601.29.0020
6302.39.0010
6406.10.9020
----------------------------------------------------------------------------------------------------------------
665 5701.90.1030
5701.90.2030
5702.32.1000
5702.32.2000
5702.42.2090
5702.50.5200
5702.92.1000
5702.92.9000
5703.20.1000
5703.30.2000
5703.30.8030
5703.30.8080
5704.10.0090
5705.00.2030
5703.20.2010
5703.20.2090
----------------------------------------------------------------------------------------------------------------
666 6304.11.2000
6304.91.0040
6304.93.0000
6304.99.6020
6301.40.0010
6301.40.0020
6301.90.0010
----------------------------------------------------------------------------------------------------------------
669 5601.10.2000
5601.22.0090
5807.10.0520
5807.90.0520
6307.90.3020
6305.32.0010
6305.32.0020
6305.32.0050
6305.32.0060
6305.39.0000
6406.10.9040
6308.00.0020
----------------------------------------------------------------------------------------------------------------
899 6304.11.3000
6304.19.3060
6304.91.0070
6304.99.3500
6304.99.6040
5601.29.0090
6301.90.0030
6305.90.0000
6406.10.9060
----------------------------------------------------------------------------------------------------------------
900 5601.29.0010
5701.90.2010
6301.90.0020
----------------------------------------------------------------------------------------------------------------
(iii) Other articles described.--
Made-up textile articles described in
this clause are articles that fall
within statistical reporting number
6406.10.9090 of the HTS (as in effect
on the day before the date of the
enactment of this subparagraph).
(iv) Category defined.--In this
subparagraph, the term ``category'' has
the meaning given that term in
paragraph (2A)(E) of this subsection.
(4) Earned import allowance rule.--
(A) In general.--Apparel articles wholly
assembled, or knit-to-shape, in Haiti from any
combination of fabrics, fabric components,
components knit-to-shape, or yarns and imported
directly from Haiti or the Dominican Republic
shall enter the United States free of duty,
without regard to the source of the fabric,
fabric components, components knit-to-shape, or
yarns from which the articles are made, if such
apparel articles are accompanied by an earned
import allowance certificate that reflects the
amount of credits equal to the total square
meter equivalents of such apparel articles, in
accordance with the program established under
subparagraph (B). For purposes of determining
the quantity of square meter equivalents under
this subparagraph, the conversion factors
listed in ``Correlation: U.S. Textile and
Apparel Industry Category System with the
Harmonized Tariff Schedule of the United States
of America, 2008'', or its successor
publications, of the United States Department
of Commerce, shall apply.
(B) Earned import allowance program.--
(i) Establishment.--The Secretary of
Commerce shall establish a program to
provide earned import allowance
certificates to any producer or entity
controlling production for purposes of
subparagraph (A), based on the elements
described in clause (ii).
(ii) Elements.--The elements referred
to in clause (i) are the following:
(I) One credit shall be
issued to a producer or an
entity controlling production
for every two square meter
equivalents of qualifying woven
fabric or qualifying knit
fabric that the producer or
entity controlling production
can demonstrate that it
purchased for the manufacture
in Haiti of articles like or
similar to any article eligible
for preferential treatment
under subparagraph (A). The
Secretary of Commerce shall, if
requested by a producer or
entity controlling production,
create and maintain an account
for such producer or entity
controlling production, into
which such credits shall be
deposited.
(II) Such producer or entity
controlling production may
redeem credits issued under
subclause (I) for earned import
allowance certificates
reflecting such number of
earned credits as the producer
or entity may request and has
available.
(III) The Secretary of
Commerce may require any
textile mill or other entity
located in the United States
that exports to Haiti
qualifying woven fabric or
qualifying knit fabric to
submit, upon such export or
upon request, documentation,
such as a Shipper's Export
Declaration, to the Secretary
of Commerce--
(aa) verifying that
the qualifying woven
fabric or qualifying
knit fabric was
exported to a producer
in Haiti or to an
entity controlling
production; and
(bb) identifying such
producer or entity
controlling production,
and the quantity and
description of
qualifying woven fabric
or qualifying knit
fabric exported to such
producer or entity
controlling production.
(IV) The Secretary of
Commerce may require that a
producer or entity controlling
production submit documentation
to verify purchases of
qualifying woven fabric or
qualifying knit fabric.
(V) The Secretary of Commerce
may make available to each
person or entity identified in
documentation submitted under
subclause (III) or (IV)
information contained in such
documentation that relates to
the purchase of qualifying
woven fabric or qualifying knit
fabric involving such person or
entity.
(VI) The program under this
subparagraph shall be
established so as to allow, to
the extent feasible, the
submission, storage, retrieval,
and disclosure of information
in electronic format, including
information with respect to the
earned import allowance
certificates required under
subparagraph (A)(i).
(VII) The Secretary of
Commerce may reconcile
discrepancies in information
provided under subclause (III)
or (IV) and verify the accuracy
of such information.
(VIII) The Secretary of
Commerce shall establish
procedures to carry out the
program under this subparagraph
and may establish additional
requirements to carry out this
subparagraph. Such additional
requirements may include--
(aa) submissions by
textile mills or other
entities in the United
States documenting
exports of yarns wholly
formed in the United
States to countries
described in paragraph
(1)(B)(iii) for the
manufacture of
qualifying knit fabric;
and
(bb) procedures
imposed on producers or
entities controlling
production to allow the
Secretary of Commerce
to obtain and verify
information relating to
the production of
qualifying knit fabric.
(iii) Qualifying woven fabric
defined.--For purposes of this
subparagraph, the term ``qualifying
woven fabric'' means fabric wholly
formed in the United States from yarns
wholly formed in the United States,
except that--
(I) fabric otherwise eligible
as qualifying woven fabric
shall not be ineligible as
qualifying woven fabric because
the fabric contains nylon
filament yarn to which section
213(b)(2)(A)(vii)(IV) applies;
(II) fabric that would
otherwise be ineligible as
qualifying woven fabric because
the fabric contains yarns not
wholly formed in the United
States shall not be ineligible
as qualifying woven fabric if
the total weight of all such
yarns is not more than 10
percent of the total weight of
the fabric; and
(III) fabric otherwise
eligible as qualifying woven
fabric shall not be ineligible
as qualifying fabric because
the fabric contains yarns
covered by clause (i) or (ii)
of paragraph (5)(A).
(iv) Qualifying knit fabric
defined.--For purposes of this
subparagraph, the term ``qualifying
knit fabric'' means fabric or knit-to-
shape components wholly formed or knit-
to-shape in any country or any
combination of countries described in
paragraph (1)(B)(iii), from yarns
wholly formed in the United States,
except that--
(I) fabric or knit-to-shape
components otherwise eligible
as qualifying knit fabric shall
not be ineligible as qualifying
knit fabric because the fabric
or knit-to-shape components
contain nylon filament yarn to
which section
213(b)(2)(A)(vii)(IV) applies;
(II) fabric or knit-to-shape
components that would otherwise
be ineligible as qualifying
knit fabric because the fabric
or knit-to-shape components
contain yarns not wholly formed
in the United States shall not
be ineligible as qualifying
knit fabric if the total weight
of all such yarns is not more
than 10 percent of the total
weight of the fabric or knit-
to-shape components; and
(III) fabric or knit-to-shape
components otherwise eligible
as qualifying knit fabric shall
not be ineligible as qualifying
knit fabric because the fabric
or knit-to-shape components
contain yarns covered by clause
(i) or (ii) of paragraph
(5)(A).
(C)\8\ Enforcement provisions.--
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\8\Section 2(f) of Public Law 112-234 amends section 231A(b)(4) by
striking subparagraph (C) and redesignating subparagraph (D) as
subparagraph (C). The amendment was executed to section 213A since the
Act does not contain a section 231A in order to reflect the probable
intent of Congress.
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(i) Fraudulent claims of
preference.--Any person who makes a
false claim for preference under the
program established under subparagraph
(B) shall be subject to any applicable
civil or criminal penalty that may be
imposed under the customs laws of the
United States or under title 18, United
States Code.
(ii) Penalties for other fraudulent
information.--The Secretary of Commerce
may establish and impose penalties for
the submission to the Secretary of
Commerce of fraudulent information
under the program established under
subparagraph (B), other than a claim
described in clause (i).
(5) Short supply provision.--
(A) In general.--Any apparel article that is
wholly assembled, or knit-to-shape, in Haiti
from any combination of fabrics, fabric
components, components knit-to-shape, or yarns
and is imported directly from Haiti or the
Dominican Republic shall enter the United
States free of duty, without regard to the
source of the fabrics, fabric components,
components knit-to-shape, or yarns from which
the article is made, if the fabrics, fabric
components, components knit-to-shape, or yarns
comprising the component that determines the
tariff classification of the article are of any
of the following:
(i) Fabrics or yarns, to the extent
that apparel articles of such fabrics
or yarns would be eligible for
preferential treatment, without regard
to the source of the fabrics or yarns,
under Annex 401 of the NAFTA.
(ii) Fabrics or yarns, to the extent
that such fabrics or yarns are
designated as not being available in
commercial quantities for purposes of--
(I) section 213(b)(2)(A)(v)
of this Act;
(II) section 112(b)(5) of the
African Growth and Opportunity
Act;
(III) clause (i)(III) or (ii)
of section 204(b)(3)(B) of the
Andean Trade Preference Act; or
(IV) any other provision,
relating to determining whether
a textile or apparel article is
an originating good eligible
for preferential treatment, of
a law that implements a free
trade agreement entered into by
the United States that is in
effect at the time the claim
for preferential treatment is
made.
(B) Removal of designation of fabrics or
yarns not available in commercial quantities.--
If the President determines that--
(i) any fabric or yarn described in
clause (i) of subparagraph (A) was
determined to be eligible for
preferential treatment, or
(ii) any fabric or yarn described in
clause (ii) of subparagraph (A) was
designated as not being available in
commercial quantities,
on the basis of fraud, the President is
authorized to remove the eligibility or
designation (as the case may be) of that fabric
or yarn with respect to articles entered after
such removal.
(6) Other preferential treatment not affected.--The
duty-free treatment provided under this subsection is
in addition to any other preferential treatment under
this title.
(c) Special Rule for Certain Wire Harness Automotive
Components.--
(1) In general.--Any wire harness automotive
component that is the product or manufacture of Haiti
and is imported directly from Haiti into the customs
territory of the United States shall enter the United
States free of duty, during the 10-year period
beginning on the date of the enactment of the Haitian
Hemispheric Opportunity through Partnership
Encouragement Act of 2006, if Haiti has met the
requirements of subsection (d) and if the sum of--
(A) the cost or value of the materials
produced in Haiti or one or more countries
described in subsection (b)(2)(C), or any
combination thereof, plus
(B) the direct costs of processing operations
(as defined in section 213(a)(3)) performed in
Haiti or the United States, or both,
is not less than 50 percent of the declared customs
value of such wire harness automotive component.
(2) Wire harness automotive component.--For purposes
of this subsection, the term ``wire harness automotive
component'' means any article provided for in
subheading 8544.30.00 of the HTS, as in effect on the
date of the enactment of the Haitian Hemispheric
Opportunity through Partnership Encouragement Act of
2006.
(d) Eligibility Requirements.--
(1) In general.--Haiti shall be eligible for
preferential treatment under this section if the
President determines and certifies to Congress that
Haiti--
(A) has established, or is making continual
progress toward establishing--
(i) a market-based economy that
protects private property rights,
incorporates an open rules-based
trading system, and minimizes
government interference in the economy
through measures such as price
controls, subsidies, and government
ownership of economic assets;
(ii) the rule of law, political
pluralism, and the right to due
process, a fair trial, and equal
protection under the law;
(iii) the elimination of barriers to
United States trade and investment,
including by--
(I) the provision of national
treatment and measures to
create an environment conducive
to domestic and foreign
investment;
(II) the protection of
intellectual property; and
(III) the resolution of
bilateral trade and investment
disputes;
(iv) economic policies to reduce
poverty, increase the availability of
health care and educational
opportunities, expand physical
infrastructure, promote the development
of private enterprise, and encourage
the formation of capital markets
through microcredit or other programs;
(v) a system to combat corruption and
bribery, such as signing and
implementing the Convention on
Combating Bribery of Foreign Public
Officials in International Business
Transactions; and
(vi) protection of internationally
recognized worker rights, including the
right of association, the right to
organize and bargain collectively, a
prohibition on the use of any form of
forced or compulsory labor, a minimum
age for the employment of children, and
acceptable conditions of work with
respect to minimum wages, hours of
work, and occupational safety and
health;
(B) does not engage in activities that
undermine United States national security or
foreign policy interests; and
(C) does not engage in gross violations of
internationally recognized human rights or
provide support for acts of international
terrorism and cooperates in international
efforts to eliminate human rights violations
and terrorist activities.
(2) Time limit for determination.--The President
shall determine whether Haiti meets the requirements of
paragraph (1) not later than 90 days after the date of
the enactment of the Haitian Hemispheric Opportunity
through Partnership Encouragement Act of 2006.
(3) Continuing compliance.--If the President
determines that Haiti is not making continual progress
in meeting the requirements described in paragraph
(1)(A), the President shall terminate the preferential
treatment under this section.
(4) Petition process.--Any interested party may file
a request to have the status of Haiti reviewed with
respect to the eligibility requirements listed in
paragraph (1), and the President shall provide for this
purpose the same procedures as those that are provided
for reviewing the status of eligible beneficiary
developing countries with respect to the designation
criteria listed in subsections (b) and (c) of section
502 of the Trade Act of 1974 (19 U.S.C. 2642 (b) and
(c)).
(e) Technical Assistance Improvement and Compliance Needs
Assessment and Remediation Program.--
(1) Continued eligibility for preferences.--
(A) Presidential certification of compliance
by haiti with requirements.--Upon the
expiration of the 16-month period beginning on
the date of the enactment of the Haitian
Hemispheric Opportunity through Partnership
Encouragement Act of 2008, Haiti shall continue
to be eligible for the preferential treatment
provided under subsection (b) only if the
President determines and certifies to the
Congress that--
(i) Haiti has implemented the
requirements set forth in paragraphs
(2) and (3); and
(ii) Haiti has agreed to require
producers of articles for which duty-
free treatment may be requested under
subsection (b) to participate in the
TAICNAR Program described in paragraph
(3) and has developed a system to
ensure participation in such program by
such producers, including by developing
and maintaining the registry described
in paragraph (2)(B)(i).
(B) Extension.--The President may extend the
period for compliance by Haiti under
subparagraph (A) if the President--
(i) determines that Haiti has made a
good faith effort toward such
compliance and has agreed to take
additional steps to come into full
compliance that are satisfactory to the
President; and
(ii) provides to the appropriate
congressional committees, not later
than 6 months after the last day of the
16-month period specified in
subparagraph (A), and every 6 months
thereafter, a report identifying the
steps that Haiti has agreed to take to
come into full compliance and the
progress made over the preceding 6-
month period in implementing such
steps.
(C) Continuing compliance.--
(i) Termination of preferential
treatment.--If, after making a
certification under subparagraph (A),
the President determines that Haiti is
no longer meeting the requirements set
forth in subparagraph (A), the
President shall terminate the
preferential treatment provided under
subsection (b), unless the President
determines, after consulting with the
appropriate congressional committees,
that meeting such requirements is not
practicable because of extraordinary
circumstances existing in Haiti when
the determination is made.
(ii) Subsequent compliance.--If the
President, after terminating
preferential treatment under clause
(i), determines that Haiti is meeting
the requirements set forth in
subparagraph (A), the President shall
reinstate the application of
preferential treatment under subsection
(b).
(2) Labor ombudsman.--
(A) In general.--The requirement under this
paragraph is that Haiti has established an
independent Labor Ombudsman's Office within the
national government that--
(i) reports directly to the President
of Haiti;
(ii) is headed by a Labor Ombudsman
chosen by the President of Haiti, in
consultation with Haitian labor unions
and industry associations; and
(iii) is vested with the authority to
perform the functions described in
subparagraph (B).
(B) Functions.--The functions of the Labor
Ombudsman's Office shall include--
(i) developing and maintaining a
registry of producers of articles for
which duty-free treatment may be
requested under subsection (b), and
developing, in consultation and
coordination with any other appropriate
officials of the Government of Haiti, a
system to ensure participation by such
producers in the TAICNAR Program
described in paragraph (3);
(ii) overseeing the implementation of
the TAICNAR Program described in
paragraph (3);
(iii) receiving and investigating
comments from any interested party
regarding the conditions described in
paragraph (3)(B) in facilities of
producers listed in the registry
described in clause (i) and, where
appropriate, referring such comments or
the result of such investigations to
the appropriate Haitian authorities, or
to the entity operating the TAICNAR
Program described in paragraph (3);
(iv) assisting, in consultation and
coordination with any other appropriate
Haitian authorities, producers listed
in the registry described in clause (i)
in meeting the conditions set forth in
paragraph (3)(B); and
(v) coordinating, with the assistance
of the entity operating the TAICNAR
Program described in paragraph (3), a
tripartite committee comprised of
appropriate representatives of
government agencies, employers, and
workers, as well as other relevant
interested parties, for the purposes of
evaluating progress in implementing the
TAICNAR Program described in paragraph
(3), and consulting on improving core
labor standards and working conditions
in the textile and apparel sector in
Haiti, and on other matters of common
concern relating to such core labor
standards and working conditions.
(3) Technical assistance improvement and compliance
needs assessment and remediation program.--
(A) In general.--The requirement under this
paragraph is that Haiti, in cooperation with
the International Labor Organization, has
established a Technical Assistance Improvement
and Compliance Needs Assessment and Remediation
Program meeting the requirements under
subparagraph (C)--
(i) to assess compliance by producers
listed in the registry described in
paragraph (2)(B)(i) with the conditions
set forth in subparagraph (B) and to
assist such producers in meeting such
conditions; and
(ii) to provide assistance to improve
the capacity of the Government of
Haiti--
(I) to inspect facilities of
producers listed in the
registry described in paragraph
(2)(B)(i); and
(II) to enforce national
labor laws and resolve labor
disputes, including through
measures described in
subparagraph (E).
(B) Conditions described.--The conditions
referred to in subparagraph (A) are--
(i) compliance with core labor
standards; and
(ii) compliance with the labor laws
of Haiti that relate directly to core
labor standards and to ensuring
acceptable conditions of work with
respect to minimum wages, hours of
work, and occupational health and
safety.
(C) Requirements.--The requirements for the
TAICNAR Program are that the program--
(i) be operated by the International
Labor Organization (or any subdivision,
instrumentality, or designee thereof),
which prepares the biannual reports
described in subparagraph (D);
(ii) be developed through a
participatory process that includes the
Labor Ombudsman described in paragraph
(2) and appropriate representatives of
government agencies, employers, and
workers;
(iii) assess compliance by each
producer listed in the registry
described in paragraph (2)(B)(i) with
the conditions set forth in
subparagraph (B) and identify any
deficiencies by such producer with
respect to meeting such conditions,
including by--
(I) conducting unannounced
site visits to manufacturing
facilities of the producer;
(II) conducting confidential
interviews separately with
workers and management of the
facilities of the producer;
(III) providing to management
and workers, and where
applicable, worker
organizations in the facilities
of the producer, on a
confidential basis--
(aa) the results of
the assessment carried
out under this clause;
and
(bb) specific
suggestions for
remediating any such
deficiencies;
(iv) assist the producer in
remediating any deficiencies identified
under clause (iii);
(v) conduct prompt follow-up site
visits to the facilities of the
producer to assess progress on
remediation of any deficiencies
identified under clause (iii); and
(vi) provide training to workers and
management of the producer, and where
appropriate, to other persons or
entities, to promote compliance with
subparagraph (B).
(D) Biannual report.--The biannual reports
referred to in subparagraph (C)(i) are a
report, by the entity operating the TAICNAR
Program, that is published (and available to
the public in a readily accessible manner) on a
biannual basis, beginning 6 months after Haiti
implements the TAICNAR Program under this
paragraph, covering the preceding 6-month
period, and that includes the following:
(i) The name of each producer listed
in the registry described in paragraph
(2)(B)(i) that has been identified as
having met the conditions under
subparagraph (B).
(ii) The name of each producer listed
in the registry described in paragraph
(2)(B)(i) that has been identified as
having deficiencies with respect to the
conditions under subparagraph (B), and
has failed to remedy such deficiencies.
(iii) For each producer listed under
clause (ii)--
(I) a description of the
deficiencies found to exist and
the specific suggestions for
remediating such deficiencies
made by the entity operating
the TAICNAR Program;
(II) a description of the
efforts by the producer to
remediate the deficiencies,
including a description of
assistance provided by any
entity to assist in such
remediation; and
(III) with respect to
deficiencies that have not been
remediated, the amount of time
that has elapsed since the
deficiencies were first
identified in a report under
this subparagraph.
(iv) For each producer identified as
having deficiencies with respect to the
conditions described under subparagraph
(B) in a prior report under this
subparagraph, a description of the
progress made in remediating such
deficiencies since the submission of
the prior report, and an assessment of
whether any aspect of such deficiencies
persists.
(E) Capacity building.--The assistance to the
Government of Haiti referred to in subparagraph
(A)(ii) shall include programs--
(i) to review the labor laws and
regulations of Haiti and to develop and
implement strategies for bringing the
laws and regulations into conformity
with core labor standards;
(ii) to develop additional strategies
for facilitating protection of core
labor standards and providing
acceptable conditions of work with
respect to minimum wages, hours of
work, and occupational safety and
health, including through legal,
regulatory, and institutional reform;
(iii) to increase awareness of worker
rights, including under core labor
standards and national labor laws;
(iv) to promote consultation and
cooperation between government
representatives, employers, worker
representatives, and United States
importers on matters relating to core
labor standards and national labor
laws;
(v) to assist the Labor Ombudsman
appointed pursuant to paragraph (2) in
establishing and coordinating operation
of the committee described in paragraph
(2)(B)(v);
(vi) to assist worker representatives
in more fully and effectively
advocating on behalf of their members;
and
(vii) to provide on-the-job training
and technical assistance to labor
inspectors, judicial officers, and
other relevant personnel to build their
capacity to enforce national labor laws
and resolve labor disputes.
(4) Compliance with eligibility criteria.--
(A) Country compliance with worker rights
eligibility criteria.--In making a
determination of whether Haiti is meeting the
requirement set forth in subsection
(d)(1)(A)(vi) relating to internationally
recognized worker rights, the President shall
consider the reports produced under paragraph
(3)(D).
(B) Producer eligibility.--
(i) Identification of producers.--
Beginning in the second calendar year
after the President makes the
certification under paragraph (1)(A),
the President shall identify on a
biennial basis whether a producer
listed in the registry described in
paragraph (2)(B)(i) has failed to
comply with core labor standards and
with the labor laws of Haiti that
directly relate to and are consistent
with core labor standards.
(ii) Assistance to producers;
withdrawal, etc., of preferential
treatment.--For each producer that the
President identifies under clause (i),
the President shall seek to assist such
producer in coming into compliance with
core labor standards and with the labor
laws of Haiti that directly relate to
and are consistent with core labor
standards. If such efforts fail, the
President shall withdraw, suspend, or
limit the application of preferential
treatment under subsection (b) to
articles of such producer.
(iii) Reinstating preferential
treatment.--If the President, after
withdrawing, suspending, or limiting
the application of preferential
treatment under clause (ii) to articles
of a producer, determines that such
producer is complying with core labor
standards and with the labor laws of
Haiti that directly relate to and are
consistent with core labor standards,
the President shall reinstate the
application of preferential treatment
under subsection (b) to the articles of
the producer.
(iv) Consideration of reports.--In
making the identification under clause
(i) and the determination under clause
(iii), the President shall consider the
reports made available under paragraph
(3)(D).
(5) Reports by the president.--
(A) In general.--Not later than one year
after the date of the enactment of the Haitian
Hemispheric Opportunity through Partnership
Encouragement Act of 2008, and annually
thereafter, the President shall transmit to the
appropriate congressional committees a report
on the implementation of this subsection during
the preceding 1-year period.
(B) Matters to be included.--Each report
required by subparagraph (A) shall include the
following:
(i) An explanation of the efforts of
Haiti, the President, and the
International Labor Organization to
carry out this subsection.
(ii) A summary of each report
produced under paragraph (3)(D) during
the preceding 1-year period and a
summary of the findings contained in
such report.
(iii) Identifications made under
paragraph (4)(B)(i) and determinations
made under paragraph (4)(B)(iii).
(6) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
subsection the sum of $10,000,000 for the period
beginning on October 1, 2008, and ending on September
30, 2013.
(f) Conditions Regarding Enforcement of Circumvention.--
(1) In general.--The preferential treatment under
subsection (b)(1) shall not apply unless the President
certifies to Congress that Haiti is meeting the
following conditions:
(A) Haiti has adopted an effective visa
system, domestic laws, and enforcement
procedures applicable to articles described in
subsection (b) to prevent unlawful
transshipment of the articles and the use of
counterfeit documents relating to the
importation of the articles into the United
States.
(B) Haiti has enacted legislation or
promulgated regulations that would permit U.S.
Customs and Border Protection verification
teams to have the access necessary to
investigate thoroughly allegations of
transshipment through such country.
(C) Haiti agrees to report, on a timely
basis, at the request of U.S. Customs and
Border Protection, on the total exports from
and imports into that country of articles
described in subsection (b), consistent with
the manner in which the records are kept by
Haiti.
(D) Haiti agrees to cooperate fully with the
United States to address and take action
necessary to prevent circumvention as provided
in Article 5 of the Agreement on Textiles and
Clothing.
(E) Haiti agrees to require all producers and
exporters of articles described in subsection
(b) in that country to maintain complete
records of the production and the export of
such articles, including materials used in the
production, for at least 5 years after the
production or export (as the case may be).
(F) Haiti agrees to report, on a timely
basis, at the request of U.S. Customs and
Border Protection, documentation establishing
the country of origin of articles described in
subsection (b) as used by that country in
implementing an effective visa system.
(2) Definition of transshipment.--Transshipment
within the meaning of this subsection has occurred when
preferential treatment for a textile or apparel article
under this section has been claimed on the basis of
material false information concerning the country of
origin, manufacture, processing, or assembly of the
article or any of its components. For purposes of this
paragraph, false information is material if disclosure
of the true information would mean or would have meant
that the article is or was ineligible for preferential
treatment under this section.
(3) Limitation on goods shipped from the dominican
republic.--
(A) Limitation.--Notwithstanding subsection
(a)(5), relating to the definition of
``imported directly from Haiti or the Dominican
Republic'', articles described in subsection
(b) that are shipped from the Dominican
Republic, directly or through the territory of
an intermediate country, whether or not such
articles undergo processing in the Dominican
Republic, shall not be considered to be
``imported directly from Haiti or the Dominican
Republic'' until the President certifies to the
Congress that Haiti and the Dominican Republic
have developed procedures to prevent unlawful
transshipment of the articles and the use of
counterfeit documents related to the
importation of the articles into the United
States.
(B) Technical and other assistance.--The
Commissioner responsible for U.S. Customs and
Border Protection shall provide technical and
other assistance to Haiti and the Dominican
Republic to develop expeditiously the
procedures described in subparagraph (A).
(g) Regulations.--The President shall issue regulations to
carry out this section not later than 180 days after the date
of the enactment of the Haitian Hemispheric Opportunity through
Partnership Encouragement Act of 2006. The President shall
consult with the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate in
preparing such regulations.
(h) Termination.--Except as provided in subsection (b)(1),
the duty-free treatment provided under this section shall
remain in effect until September 30, 2020.
* * * * * * *
----------
CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF 1985
* * * * * * *
SEC. 13031. FEES FOR CERTAIN CUSTOMS SERVICES.
(a) Schedule of Fees.--In addition to any other fee
authorized by law, the Secretary of the Treasury shall charge
and collect the following fees for the provision of customs
services in connection with the following:
(1) For the arrival of a commercial vessel of 100 net
tons or more, $397.
(2) For the arrival of a commercial truck, $5.
(3) For the arrival of each railroad car carrying
passengers or commercial freight, $7.50.
(4) For all arrivals made during a calendar year by a
private vessel or private aircraft, $25.
(5)(A) Subject to subparagraph (B), for the arrival
of each passenger aboard a commercial vessel or
commercial aircraft from a place outside the United
States (other than a place referred to in subsection
(b)(1)(A)(i) of this section), $5.
(B) For the arrival of each passenger aboard a
commercial vessel from a place referred to in
subsection (b)(1)(A)(i) of this section, $1.75.
(6) For each item of dutiable mail for which a
document is prepared by a customs officer, $5.
(7) For each customs broker permit held by an
individual, partnership, association, or corporate
customs broker, $125 per year.
(8) For the arrival of a barge or other bulk carrier
from Canada or Mexico, $100.
(9)(A) For the processing of merchandise that is
formally entered or released during any fiscal year, a
fee in an amount equal to 0.21 percent ad valorem,
unless adjusted under subparagraph (B).
(B)(i) The Secretary of the Treasury may adjust the
ad valorem rate specified in subparagraph (A) to an ad
valorem rate (but not to a rate of more than 0.21
percent nor less than 0.15 percent) and the amounts
specified in subsection (b)(8)(A)(i) (but not to more
than $485 nor less than $21) to rates and amounts which
would, if charged, offset the salaries and expenses
that will likely be incurred by the Customs Service in
the processing of such entries and releases during the
fiscal year in which such costs are incurred.
(ii) In determining the amount of any adjustment
under clause (i), the Secretary of the Treasury shall
take into account whether there is a surplus or deficit
in the fund established under subsection (f) with
respect to the provision of customs services for the
processing of formal entries and releases of
merchandise.
(iii) An adjustment may not be made under clause (i)
with respect to the fee charged during any fiscal year
unless the Secretary of the Treasury--
(I) not later than 45 days after the date of
the enactment of the Act providing full-year
appropriations for the Customs Service for that
fiscal year, publishes in the Federal Register
a notice of intent to adjust the fee under this
paragraph and the amount of such adjustment;
(II) provides a period of not less than 30
days following publication of the notice
described in subclause (I) for public comment
and consultation with the Committee on Finance
of the Senate and the Committee on Ways and
Means of the House of Representatives regarding
the proposed adjustment and the methodology
used to determine such adjustment;
(III) upon the expiration of the period
provided under subclause (II), notifies such
committees in writing regarding the final
determination to adjust the fee, the amount of
such adjustment, and the methodology used to
determine such adjustment; and
(IV) upon the expiration of the 15-day period
following the written notification described in
subclause (III), submits for publication in the
Federal Register notice of the final
determination regarding the adjustment of the
fee.
(iv) The 15-day period referred to in clause
(iii)(IV) shall be computed by excluding--
(I) the days on which either House is not in
session because of an adjournment of more than
3 days to a day certain or an adjournment of
the Congress sine die; and
(II) any Saturday and Sunday, not excluded
under subclause (I), when either House is not
in session.
(v) An adjustment made under this subparagraph shall
become effective with respect to formal entries and
releases made on or after the 15th calendar day after
the date of publication of the notice described in
clause (iii)(IV) and shall remain in effect until
adjusted under this subparagraph.
(C) Any fee charged under this paragraph, whether or
not adjusted under subparagraph (B), is subject to the
limitations in subsection (b)(8)(A).
(10) For the processing of merchandise that is
informally entered or released, other than at--
(A) a centralized hub facility,
(B) an express consignment carrier facility,
or
(C) a small airport or other facility to
which section 236 of the Trade and Tariff Act
of 1984 applies, if more than 25,000 informal
entries were cleared through such airport or
facility during the fiscal year preceding such
entry or release, a fee of--
(i) $2 if the entry or release is
automated and not prepared by customs
personnel;
(ii) $6 if the entry or release is
manual and not prepared by customs
personnel; or
(iii) $9 if the entry or release,
whether automated or manual, is
prepared by customs personnel.
For provisions relating to the informal entry
or release of merchandise at facilities
referred to in subparagraphs (A), (B), and (C),
see subsection (b)(9).
(b) Limitations on Fees.--(1)(A) Except as provided in
subsection (a)(5)(B) of this section, no fee may be charged
under subsection (a) of this section for customs services
provided in connection with--
(i) the arrival of any passenger whose journey--
(I) originated in a territory or possession
of the United States; or
(II) originated in the United States and was
limited to territories and possessions of the
United States;
(ii) the arrival of any railroad car the journey of
which originates and terminates in the same country,
but only if no passengers board or disembark from the
train and no cargo is loaded or unloaded from such car
while the car is within any country other than the
country in which such car originates and terminates;
(iii) the arrival of a ferry, except for a ferry
whose operations begin on or after August 1, 1999, and
that operates south of 27 degrees latitude and east of
89 degrees longitude; or
(iv) the arrival of any passenger on board a
commercial vessel traveling only between ports which
are within the customs territory of the United States.
(B) The exemption provided for in subparagraph (A) shall not
apply in the case of the arrival of any passenger on board a
commercial vessel whose journey originates and terminates at
the same place in the United States if there are no intervening
stops.
(C) The exemption provided for in subparagraph (A)(i) shall
not apply to fiscal years 1994, 1995, 1996, and 1997.
(2) No fee may be charged under subsection (a)(2) for the
arrival of a commercial truck during any calendar year after a
total of $100 in fees has been paid to the Secretary of the
Treasury for the provision of customs services for all arrivals
of such commercial truck during such calendar year.
(3) No fee may be charged under subsection (a)(3) for the
arrival of a railroad car whether passenger or freight during
any calendar year after a total of $100 in fees has been paid
to the Secretary of the Treasury for the provision of customs
services for all arrivals of such passenger or freight rail car
during such calendar year.
(4)(A) No fee may be charged under subsection (a)(5) with
respect to the arrival of any passenger--
(i) who is in transit to a destination outside the
customs territory of the United States, and
(ii) for whom customs inspectional services are not
provided.
(B) In the case of a commercial vessel making a single voyage
involving 2 or more United States ports with respect to which
the passengers would otherwise be charged a fee pursuant to
subsection (a)(5), such fee shall be charged only 1 time for
each passenger.
(5) No fee may be charged under subsection (a)(1) for the
arrival of--
(A) a vessel during a calendar year after a total of
$5,955 in fees charged under paragraph (1) or (8) of
subsection (a) has been paid to the Secretary of the
Treasury for the provision of customs services for all
arrivals of such vessel during such calendar year,
(B) any vessel which, at the time of the arrival, is
being used solely as a tugboat, or
(C) any barge or other bulk carrier from Canada or
Mexico.
(6) No fee may be charged under subsection (a)(8) for the
arrival of a barge or other bulk carrier during a calendar year
after a total of $1,500 in fees charged under paragraph (1) or
(8) of subsection (a) has been paid to the Secretary of the
Treasury for the provision of customs services for all arrivals
of such barge or other bulk carrier during such calendar year.
(7) No fee may be charged under paragraph (2), (3), or (4) of
subsection (a) for the arrival of any--
(A) commercial truck,
(B) railroad car, or
(C) private vessel,
that is being transported, at the time of the arrival, by any
vessel that is not a ferry.
(8)(A)(i) Subject to clause (ii), the fee charged under
subsection (a)(9) for the formal entry or release of
merchandise may not exceed $485 or be less than $25, unless
adjusted pursuant to subsection (a)(9)(B).
(ii) A surcharge of $3 shall be added to the fee determined
after application of clause (i) for any manual entry or release
of merchandise.
(B) No fee may be charged under subsection (a) (9) or (10)
for the processing of any article that is--
(i) provided for under any item in chapter 98 of the
Harmonized Tariff Schedule of the United States, except
subheading 9802.00.60 or 9802.00.80,
(ii) a product of an insular possession of the United
States, or
(iii) a product of any country listed in subdivision
(c)(ii)(B) or (c)(v) of general note 3 to such
Schedule.
(C) For purposes of applying subsection (a) (9) or (10)--
(i) expenses incurred by the Secretary of the
Treasury in the processing of merchandise do not
include costs incurred in--
(I) air passenger processing,
(II) export control, or
(III) international affairs, and
(ii) any reference to a manual formal or informal
entry or release includes any entry or release filed by
a broker or importer that requires the inputting of
cargo selectivity data into the Automated Commercial
System by customs personnel, except when--
(I) the broker or importer is certified as an
ABI cargo release filer under the Automated
Commercial System at any port within the United
States, or
(II) the entry or release is filed at ports
prior to the full implementation of the cargo
selectivity data system by the Customs Service
at such ports.
(D) The fee charged under subsection (a)(9) or (10) with
respect to the processing of merchandise shall--
(i) be paid by the importer of record of the
merchandise;
(ii) except as otherwise provided in this paragraph,
be based on the value of the merchandise as determined
under section 402 of the Tariff Act of 1930;
(iii) in the case of merchandise classified under
subheading 9802.00.60 of the Harmonized Tariff Schedule
of the United States, be applied to the value of the
foreign repairs or alterations to the merchandise;
(iv) in the case of merchandise classified under
heading 9802.00.80 of such Schedule, be applied to the
full value of the merchandise, less the cost or value
of the component United States products;
(v) in the case of agricultural products of the
United States that are processed and packed in a
foreign trade zone, be applied only to the value of
material used to make the container for such
merchandise, if such merchandise is subject to entry
and the container is of a kind normally used for
packing such merchandise; and
(vi) in the case of merchandise entered from a
foreign trade zone (other than merchandise to which
clause (v) applies), be applied only to the value of
the privileged or nonprivileged foreign status
merchandise under section 3 of the Act of June 18, 1934
(commonly known as the Foreign Trade Zones Act, 19
U.S.C. 81c).
With respect to merchandise that is classified under subheading
9802.00.60 or heading 9802.00.80 of such Schedule and is duty-
free, the Secretary may collect the fee charged on the
processing of the merchandise under subsection (a) (9) or (10)
on the basis of aggregate data derived from financial and
manufacturing reports used by the importer in the normal course
of business, rather than on the basis of entry-by-entry
accounting.
(E) For purposes of subsection (a) (9) and (10), merchandise
is entered or released, as the case may be, if the merchandise
is--
(i) permitted or released under section 448(b) of the
Tariff Act of 1930,
(ii) entered or released from customs custody under
section 484(a)(1)(A) of the Tariff Act of 1930, or
(iii) withdrawn from warehouse for consumption.
(9)(A) With respect to the processing of letters, documents,
records, shipments, merchandise, or any other item that is
valued at an amount that is $2,000 or less (or such higher
amount as the Secretary of the Treasury may set by regulation
pursuant to section 498 of the Tariff Act of 1930), except such
items entered for transportation and exportation or immediate
exportation at a centralized hub facility, an express
consignment carrier facility, or a small airport or other
facility, the following reimbursements and payments are
required:
(i) In the case of a small airport or other
facility--
(I) the reimbursement which such facility is
required to make during the fiscal year under
section 9701 of title 31, United States Code or
section 236 of the Trade and Tariff Act of
1984; and
(II) an annual payment by the facility to the
Secretary of the Treasury, which is in lieu of
the payment of fees under subsection (a)(10)
for such fiscal year, in an amount equal to the
reimbursement under subclause (I).
(ii) Notwithstanding subsection (e)(6) and subject to
the provisions of subparagraph (B), in the case of an
express consignment carrier facility or centralized hub
facility--
(I) $.66 per individual airway bill or bill
of lading; and
(II) if the merchandise is formally entered,
the fee provided for in subsection (a)(9), if
applicable.
(B)(i) Beginning in fiscal year 2004, the Secretary of the
Treasury may adjust (not more than once per fiscal year) the
amount described in subparagraph (A)(ii) to an amount that is
not less than $.35 and not more than $1.00 per individual
airway bill or bill of lading. The Secretary shall provide
notice in the Federal Register of a proposed adjustment under
the preceding sentence and the reasons therefor and shall allow
for public comment on the proposed adjustment.
(ii) Notwithstanding section 451 of the
Tariff Act of 1930, the payment required by
subparagraph (A)(ii) (I) or (II) shall be the
only payment required for reimbursement of the
Customs Service in connection with the
processing of an individual airway bill or bill
of lading in accordance with such subparagraph
and for providing services at express
consignment carrier facilities or centralized
hub facilities, except that the Customs Service
may require such facilities to cover expenses
of the Customs Service for adequate office
space, equipment, furnishings, supplies, and
security.
(iii)(I) The payment required by subparagraph
(A)(ii) and clause (ii) of this subparagraph
shall be paid on a quarterly basis by the
carrier using the facility to the Customs
Service in accordance with regulations
prescribed by the Secretary of the Treasury.
(II) 50 percent of the amount of payments
received under subparagraph (A)(ii) and clause
(ii) of this subparagraph shall, in accordance
with section 524 of the Tariff Act of 1930, be
deposited in the Customs User Fee Account and
shall be used to directly reimburse each
appropriation for the amount paid out of that
appropriation for the costs incurred in
providing services to express consignment
carrier facilities or centralized hub
facilities. Amounts deposited in accordance
with the preceding sentence shall be available
until expended for the provision of customs
services to express consignment carrier
facilities or centralized hub facilities.
(III) Notwithstanding section 524 of the
Tariff Act of 1930, the remaining 50 percent of
the amount of payments received under
subparagraph (A)(ii) and clause (ii) of this
subparagraph shall be paid to the Secretary of
the Treasury, which is in lieu of the payment
of fees under subsection (a)(10) of this
section.
(C) For purposes of this paragraph:
(i) The terms ``centralized hub facility'' and
``express consignment carrier facility'' have the
respective meanings that are applied to such terms in
part 128 of chapter I of title 19, Code of Federal
Regulations. Nothing in this paragraph shall be
construed as prohibiting the Secretary of the Treasury
from processing merchandise that is informally entered
or released at any centralized hub facility or express
consignment carrier facility during the normal
operating hours of the Customs Service, subject to
reimbursement and payment under subparagraph (A).
(ii) The term ``small airport or other facility''
means any airport or facility to which section 236 of
the Trade and Tariff Act of 1984 applies, if more than
25,000 informal entries were cleared through such
airport or facility during the preceding fiscal year.
(10)(A) The fee charged under subsection (a) (9) or (10) with
respect to goods of Canadian origin (as determined under
section 202 of the United States-Canada Free-Trade Agreement
Implementation Act of 1988) when the United States-Canada Free-
Trade Agreement is in force shall be in accordance with article
403 of that Agreement.
(B) For goods qualifying under the rules of origin set out in
section 202 of the North American Free Trade Agreement
Implementation Act, the fee under subsection (a) (9) or (10)--
(i) may not be charged with respect to goods that
qualify to be marked as goods of Canada pursuant to
Annex 311 of the North American Free Trade Agreement,
for such time as Canada is a NAFTA country, as defined
in section 2(4) of such Implementation Act; and
(ii) may not be increased after December 31, 1993,
and may not be charged after June 29, 1999, with
respect to goods that qualify to be marked as goods of
Mexico pursuant to such Annex 311, for such time as
Mexico is a NAFTA country.
Any service for which an exemption from such fee is provided by
reason of this paragraph may not be funded with money contained
in the Customs User Fee Account.
(11) No fee may be charged under subsection (a) (9) or (10)
with respect to products of Israel if an exemption with respect
to the fee is implemented under section 112 of the Customs and
Trade Act of 1990.
(12) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Chile Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(13) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Singapore Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(14) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 203 of the United States-Australia Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(15) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 203 of the Dominican Republic-Central America-United
States Free Trade Agreement Implementation Act. Any service for
which an exemption from such fee is provided by reason of this
paragraph may not be funded with money contained in the Customs
User Fee Account.
(16) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Bahrain Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(17) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Oman Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(18) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 203 of the United States-Peru Trade Promotion Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(19) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Korea Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(20) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 203 of the United States-Colombia Trade Promotion
Agreement Implementation Act. Any service for which an
exemption from such fee is provided by reason of this paragraph
may not be funded with money contained in the Customs User Fee
Account.
(21) No fee may be charged under subsection (a)(9) or (10)
with respect to goods that qualify as originating goods under
section 203 of the United States-Panama Trade Promotion
Agreement Implementation Act. Any service for which an
exemption from such fee is provided by reason of this paragraph
may not be funded with money contained in the Customs User Fee
Account.
(c) Definitions.--For purposes of this section--
(1) The term ``ferry'' means any vessel which is
being used--
(A) to provide transportation only between
places that are no more than 300 miles apart,
and
(B) to transport only--
(i) passengers, or
(ii) vehicles, or railroad cars,
which are being used, or have been
used, in transporting passengers or
goods.
(2) The term ``arrival'' means arrival at a port of
entry in the customs territory of the United States.
(3) The term ``customs territory of the United
States'' has the meaning given to such term by general
note 2 of the Harmonized Tariff Schedule of the United
States.
(4) The term ``customs broker permit'' means a permit
issued under section 641(c) of the Tariff Act of 1930
(19 U.S.C. 1641(c)).
(5) The term ``barge or other bulk carrier'' means
any vessel which--
(A) is not self-propelled, or
(B) transports fungible goods that are not
packaged in any form.
(d) Collection.--(1) Each person that issues a document or
ticket to an individual for transportation by a commercial
vessel or commercial aircraft into the customs territory of the
United States shall--
(A) collect from that individual the fee charged
under subsection (a)(5) at the time the document or
ticket is issued; and
(B) separately identify on that document or ticket
the fee charged under subsection (a)(5) as a Federal
inspection fee.
(2) If--
(A) a document or ticket for transportation of a
passenger into the customs territory of the United
States is issued in a foreign country; and
(B) the fee charged under subsection (a)(5) is not
collected at the time such document or ticket is
issued;
the person providing transportation to such passenger shall
collect such fee at the time such passenger departs from the
customs territory of the United States and shall provide such
passenger a receipt for the payment of such fee.
(3) The person who collects fees under paragraph (1) or (2)
shall remit those fees to the Secretary of the Treasury at any
time before the date that is 31 days after the close of the
calendar quarter in which the fees are collected.
(4)(A) Notice of the date on which payment of the fee imposed
by subsection (a)(7) is due shall be published by the Secretary
of the Treasury in the Federal Register by no later than the
date that is 60 days before such due date.
(B) A customs broker permit may be revoked or suspended for
nonpayment of the fee imposed by subsection (a)(7) only if
notice of the date on which payment of such fee is due was
published in the Federal Register at least 60 days before such
due date.
(C) The customs broker's license issued under section 641(b)
of the Tariff Act of 1930 (19 U.S.C. 1641(b)) may not be
revoked or suspended merely by reason of nonpayment of the fee
imposed under subsection (a)(7).
(e) Provision of Customs Services.--
(1) Notwithstanding section 451 of the Tariff Act of 1930 (19
U.S.C. 1451) or any other provision of law (other than
paragraph (2)), the customs services required to be provided to
passengers upon arrival in the United States shall be
adequately provided in connection with scheduled airline
flights at customs serviced airports when needed and at no cost
(other than the fees imposed under subsection (a)) to airlines
and airline passengers.
(2)(A) This subsection shall not apply with respect to any
airport to which section 236 of the Trade and Tariff Act of
1984 (19 U.S.C. 58b) applies.
(B) Subparagraph (C) of paragraph (6) shall not apply with
respect to any foreign trade zone or subzone that is located
at, or in the vicinity of, an airport to which section 236 of
the Trade and Tariff Act of 1984 applies.
(3) Notwithstanding section 451 of the Tariff Act of 1930 (19
U.S.C. 1451) or any other provision of law--
(A) the customs services required to be provided to
passengers upon arrival in the United States shall be
adequately provided in connection with scheduled
airline flights when needed at places located outside
the customs territory of the United States at which a
customs officer is stationed for the purpose of
providing such customs services, and
(B) other than the fees imposed under subsection (a),
the airlines and airline passengers shall not be
required to reimburse the Secretary of the Treasury for
the costs of providing overtime customs inspectional
services at such places.
(4) Notwithstanding any other provision of law, all customs
services (including, but not limited to, normal and overtime
clearance and preclearance services) shall be adequately
provided, when requested, for--
(A) the clearance of any commercial vessel, vehicle,
or aircraft or its passengers, crew, stores, material,
or cargo arriving, departing, or transiting the United
States;
(B) the preclearance at any customs facility outside
the United States of any commercial vessel, vehicle or
aircraft or its passengers, crew, stores, material, or
cargo; and
(C) the inspection or release of commercial cargo or
other commercial shipments being entered into, or
withdrawn from, the customs territory of the United
States.
(5) For purposes of this subsection, customs services shall
be treated as being ``adequately provided'' if such of those
services that are necessary to meet the needs of parties
subject to customs inspection are provided in a timely manner
taking into account factors such as--
(A) the unavoidability of weather, mechanical, and
other delays;
(B) the necessity for prompt and efficient passenger
and baggage clearance;
(C) the perishability of cargo;
(D) the desirability or unavoidability of late night
and early morning arrivals from various time zones;
(E) the availability (in accordance with regulations
prescribed under subsection (g)(2)) of customs
personnel and resources; and
(F) the need for specific enforcement checks.
(6) Notwithstanding any other provision of law except
paragraph (2), during any period when fees are authorized under
subsection (a), no charges, other than such fees, may be
collected--
(A) for any--
(i) cargo inspection, clearance, or other
customs activity, expense, or service performed
(regardless whether performed outside of normal
business hours on an overtime basis), or
(ii) customs personnel provided,
in connection with the arrival or departure of any
commercial vessel, vehicle, or aircraft, or its
passengers, crew, stores, material, or cargo, in the
United States;
(B) for any preclearance or other customs activity,
expense, or service performed, and any customs
personnel provided, outside the United States in
connection with the departure of any commercial vessel,
vehicle, or aircraft, or its passengers, crew, stores,
material, or cargo, for the United States; or
(C) in connection with--
(i) the activation or operation (including
Customs Service supervision) of any foreign
trade zone or subzone established under the Act
of June 18, 1934 (commonly known as the Foreign
Trade Zones Act, 19 U.S.C. 81a et seq.), or
(ii) the designation or operation (including
Customs Service supervision) of any bonded
warehouse under section 555 of the Tariff Act
of 1930 (19 U.S.C. 1555).
(f) Disposition of Fees.--(1) There is established in the
general fund of the Treasury a separate account which shall be
known as the ``Customs User Fee Account''. Notwithstanding
section 524 of the Tariff Act of 1930 (19 U.S.C. 1524), there
shall be deposited as offsetting receipts into the Customs User
Fee Account all fees collected under subsection (a) except--
(A) the portion of such fees that is required under
paragraph (3) for the direct reimbursement of
appropriations, and
(B) amounts deposited into the Customs Commercial and
Homeland Security Automation Account under paragraph
(4).
(2) Except as otherwise provided in this subsection, all
funds in the Customs User Fee Account shall be available, to
the extent provided for in appropriations Acts, to pay the
costs (other than costs for which direct reimbursement under
paragraph (3) is required) incurred by the United States
Customs Service in conducting customs revenue functions as
defined in section 415 of the Homeland Security Act of 2002
(other than functions performed by the Office of International
Affairs referred to in section 415(8) of that Act), and for
automation (including the Automation Commercial Environment
computer system), and for no other purpose. To the extent that
funds in the Customs User Fee Account are insufficient to pay
the costs of such customs revenue functions, customs duties in
an amount equal to the amount of such insufficiency shall be
available, to the extent provided for in appropriations Acts,
to pay the costs of such customs revenue functions in the
amount of such insufficiency, and shall be available for no
other purpose. The provisions of the first and second sentences
of this paragraph specifying the purposes for which amounts in
the Customs User Fee Account may be made available shall not be
superseded except by a provision of law which specifically
modifies or supersedes such provisions. So long as there is a
surplus of funds in the Customs User Fee Account, the Secretary
of the Treasury may not reduce personnel staffing levels for
providing commercial clearance and preclearance services.
(3)(A) The Secretary of the Treasury, in accordance with
section 524 of the Tariff Act of 1930 and subject to
subparagraph (B), shall directly reimburse, from the fees
collected under subsection (a) (other than the fees under
subsection (a) (9) and (10) and the excess fees determined by
the Secretary under paragraph (4)), each appropriation for the
amount paid out of that appropriation for the costs incurred by
the Secretary--
(i) in--
(I) paying overtime compensation under
section 5(a) of the Act of February 13, 1911,
(II) paying premium pay under section 5(b) of
the Act of February 13, 1911, but the amount
for which reimbursement may be made under this
subclause may not, for any fiscal year, exceed
the difference between the total cost of all
the premium pay for such year calculated under
section 5(b) and the cost of the night and
holiday premium pay that the Customs Service
would have incurred for the same inspectional
work on the day before the effective date of
section 13813 of the Omnibus Budget
Reconciliation Act of 1993,
(III) paying agency contributions to the
Civil Service Retirement and Disability Fund to
match deductions from the overtime compensation
paid under subclause (I),
(IV) providing all preclearance services for
which the recipients of such services are not
required to reimburse the Secretary of the
Treasury, and
(V) paying foreign language proficiency
awards under section 13812(b) of the Omnibus
Budget Reconciliation Act of 1993,
(ii) to the extent funds remain available after
making reimbursements under clause (i), in providing
salaries for full-time and part-time inspectional
personnel and equipment that enhance customs services
for those persons or entities that are required to pay
fees under paragraphs (1) through (8) of subsection (a)
(distributed on a basis proportionate to the fees
collected under paragraphs (1) through (8) of
subsection (a), and
(iii) to the extent funds remain available after
making reimbursements under clause (ii), in providing
salaries for up to 50 full-time equivalent inspectional
positions to provide preclearance services.
The transfer of funds required under subparagraph (C)(iii) has
priority over reimbursements under this subparagraph to carry
out subclauses (II), (III), (IV), and (V) of clause (i). Funds
described in clause (ii) shall only be available to reimburse
costs in excess of the highest amount appropriated for such
costs during the period beginning with fiscal year 1990 and
ending with the current fiscal year.
(B) Reimbursement of appropriations under this paragraph--
(i) shall be subject to apportionment or similar
administrative practices;
(ii) shall be made at least quarterly; and
(iii) to the extent necessary, may be made on the
basis of estimates made by the Secretary of the
Treasury and adjustments shall be made in subsequent
reimbursements to the extent that the estimates were in
excess of, or less than, the amounts required to be
reimbursed.
(C)(i) For fiscal year 1991 and subsequent fiscal years, the
amount required to reimburse costs described in subparagraph
(A)(i) shall be projected from actual requirements, and only
the excess of collections over such projected costs for such
fiscal year shall be used as provided in subparagraph (A)(ii).
(ii) The excess of collections over inspectional overtime and
preclearance costs (under subparagraph (A)(i)) reimbursed for
fiscal years 1989 and 1990 shall be available in fiscal year
1991 and subsequent fiscal years for the purposes described in
subparagraph (A)(ii), except that $30,000,000 of such excess
shall remain without fiscal year limitation in a contingency
fund and, in any fiscal year in which receipts are insufficient
to cover the costs described in subparagraph (A) (i) and (ii),
shall be used for--
(I) the costs of providing the services described in
subparagraph (A)(i), and
(II) after the costs described in subclause (I) are
paid, the costs of providing the personnel and
equipment described in subparagraph (A)(ii) at the
preceding fiscal year level.
(iii) For each fiscal year, the Secretary of the Treasury
shall calculate the difference between--
(I) the estimated cost for overtime compensation that
would have been incurred during that fiscal year for
inspectional services if section 5 of the Act of
February 13, 1911 (19 U.S.C. 261 and 267), as in effect
before the enactment of section 13811 of the Omnibus
Budget Reconciliation Act of 1993, had governed such
costs, and
(II) the actual cost for overtime compensation,
premium pay, and agency retirement contributions that
is incurred during that fiscal year in regard to
inspectional services under section 5 of the Act of
February 13, 1911, as amended by section 13811 of the
Omnibus Budget Reconciliation Act of 1993, and under
section 8331(3) of title 5, United States Code, as
amended by section 13812(a)(1) of such Act of 1993,
plus the actual cost that is incurred during that
fiscal year for foreign language proficiency awards
under section 13812(b) of such Act of 1993,
and shall transfer from the Customs User Fee Account to the
General Fund of the Treasury an amount equal to the difference
calculated under this clause, or $18,000,000, whichever amount
is less. Transfers shall be made under this clause at least
quarterly and on the basis of estimates to the same extent as
are reimbursements under subparagraph (B)(iii).
(D) Nothing in this paragraph shall be construed to preclude
the use of appropriated funds, from sources other than the fees
collected under subsection (a), to pay the costs set forth in
clauses (i), (ii), and (iii) of subparagraph (A).
(4)(A) There is created within the general fund of the
Treasury a separate account that shall be known as the
``Customs Commercial and Homeland Security Automation
Account''. In each of fiscal years 2003, 2004, and 2005 there
shall be deposited into the Account from fees collected under
subsection (a)(9)(A), $350,000,000.
(B) There is authorized to be appropriated from the Account
in fiscal years 2003 through 2005 such amounts as are available
in that Account for the development, establishment, and
implementation of the Automated Commercial Environment computer
system for the processing of merchandise that is entered or
released and for other purposes related to the functions of the
Department of Homeland Security. Amounts appropriated pursuant
to this subparagraph are authorized to remain available until
expended.
(C) In adjusting the fee imposed by subsection (a)(9)(A) for
fiscal year 2006, the Secretary of the Treasury shall reduce
the amount estimated to be collected in fiscal year 2006 by the
amount by which total fees deposited to the Account during
fiscal years 2003, 2004, and 2005 exceed total appropriations
from that Account.
(5) Of the amounts collected in fiscal year 1999 under
paragraphs (9) and (10) of subsection (a), $50,000,000 shall be
available to the Customs Service, subject to appropriations
Acts, for automated commercial systems. Amounts made available
under this paragraph shall remain available until expended.
(g) Regulations and Enforcement.--(1) The Secretary of the
Treasury may prescribe such rules and regulations as may be
necessary to carry out the provisions of this section.
Regulations issued by the Secretary of the Treasury under this
subsection with respect to the collection of the fees charged
under subsection (a)(5) and the remittance of such fees to the
Treasury of the United States shall be consistent with the
regulations issued by the Secretary of the Treasury for the
collection and remittance of the taxes imposed by subchapter C
of chapter 33 of the Internal Revenue Code of 1954, but only to
the extent the regulations issued with respect to such taxes do
not conflict with the provisions of this section.
(2) Except to the extent otherwise provided in regulations,
all administrative and enforcement provisions of customs laws
and regulations, other than those laws and regulations relating
to drawback, shall apply with respect to any fee prescribed
under subsection (a) of this section, and with respect to
persons liable therefor, as if such fee is a customs duty. For
purposes of the preceding sentence, any penalty expressed in
terms of a relationship to the amount of the duty shall be
treated as not less than the amount which bears a similar
relationship to the amount of the fee assessed. For purposes of
determining the jurisdiction of any court of the United States
or any agency of the United States, any fee prescribed under
subsection (a) of this section shall be treated as if such fee
is a customs duty.
(h) Conforming Amendments.--(1) Subsection (i) of section 305
of the Rail Passenger Service Act (45 U.S.C. 545(i)) is amended
by striking out the last sentence thereof.
(2) Subsection (e) of section 53 of the Airport and Airway
Development Act of 1970 (49 U.S.C. 1741(e)) is repealed.
(i) Effect on Other Authority.--Except with respect to
customs services for which fees are imposed under subsection
(a), nothing in this section shall be construed as affecting
the authority of the Secretary of the Treasury to charge fees
under section 214(b) of the Customs Procedural Reform and
Simplification Act of 1978 (19 U.S.C. 58a).
(j) Effective Dates.--(1) Except as otherwise provided in
this subsection, the provisions of this section, and the
amendments and repeals made by this section, shall apply with
respect to customs services rendered after the date that is 90
days after the date of enactment of this Act.
(2) Fees may be charged under subsection (a)(5) only with
respect to customs services rendered in regard to arriving
passengers using transportation for which documents or tickets
were issued after the date that is 90 days after such date of
enactment.
(3)(A) Fees may not be charged under paragraphs (9) and (10)
of subsection (a) after September 30, 2024.
(B)(i) Subject to clause (ii), Fees may not be charged under
paragraphs (1) through (8) of subsection (a) after September
30, 2024.
(ii) In fiscal year 2006 and in each succeeding fiscal year
for which fees under paragraphs (1) through (8) of subsection
(a) are authorized--
(I) the Secretary of the Treasury shall charge fees
under each such paragraph in amounts that are
reasonably related to the costs of providing customs
services in connection with the activity or item for
which the fee is charged under such paragraph, except
that in no case may the fee charged under any such
paragraph exceed by more than 10 percent the amount
otherwise prescribed by such paragraph;
(II) the amount of fees collected under such
paragraphs may not exceed, in the aggregate, the
amounts paid in that fiscal year for the costs
described in subsection (f)(3)(A) incurred in providing
customs services in connection with the activity or
item for which the fees are charged under such
paragraphs;
(III) a fee may not be collected under any such
paragraph except to the extent such fee will be
expended to pay the costs described in subsection
(f)(3)(A) incurred in providing customs services in
connection with the activity or item for which the fee
is charged under such paragraph; and
(IV) any fee collected under any such paragraph shall
be available for expenditure only to pay the costs
described in subsection (f)(3)(A) incurred in providing
customs services in connection with the activity or
item for which the fee is charged under such paragraph.
(k) Advisory Committee.--The Commissioner of Customs shall
establish an advisory committee whose membership shall consist
of representatives from the airline, cruise ship, and other
transportation industries who may be subject to fees under
subsection (a). The advisory committee shall not be subject to
termination under section 14 of the Federal Advisory Committee
Act. The advisory committee shall meet on a periodic basis and
shall advise the Commissioner on issues related to the
performance of the inspectional services of the United States
Customs Service. Such advice shall include, but not be limited
to, such issues as the time periods during which such services
should be performed, the proper number and deployment of
inspection officers, the level of fees, and the appropriateness
of any proposed fee. The Commissioner shall give consideration
to the views of the advisory committee in the exercise of his
or her duties.
* * * * * * *
----------
SECTION 503 OF THE UNITED STATES-KOREA FREE TRADE AGREEMENT
IMPLEMENTATION ACT
SEC. 503. RATE FOR MERCHANDISE PROCESSING FEES.
For the period beginning on December 1, 2015, and ending on
June 30, 2021, section 13031(a)(9) of the Consolidated Omnibus
Budget Reconciliation Act of 1985 (19 U.S.C. 58c(a)(9)) shall
be applied and administered--
(1) in subparagraph (A), by substituting ``0.3464''
for ``0.21''; and
(2) in subparagraph (B)(i), by substituting
``0.3464'' for ``0.21''.
B. Changes in Existing Law Proposed by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italic, existing law in
which no change is proposed is shown in roman):
TRADE ACT OF 1974
* * * * * * *
TITLE V--GENERALIZED SYSTEM OF PREFERENCES
* * * * * * *
SEC. 503. DESIGNATION OF ELIGIBLE ARTICLES.
(a) Eligible Articles.--
(1) Designation.--
(A) In general.--Except as provided in
subsection (b), the President is authorized to
designate articles as eligible articles from
all beneficiary developing countries for
purposes of this title by Executive order or
Presidential proclamation after receiving the
advice of the International Trade Commission in
accordance with subsection (e).
(B) Least-developed beneficiary developing
countries.--Except for articles described in
subparagraphs (A), (B), and (E) of subsection
(b)(1) and articles described in paragraphs (2)
and (3) of subsection (b), the President may,
in carrying out section 502(d)(1) and
subsection (c)(1) of this section, designate
articles as eligible articles only for
countries designated as least-developed
beneficiary developing countries under section
502(a)(2) if, after receiving the advice of the
International Trade Commission in accordance
with subsection (e) of this section, the
President determines that such articles are not
import-sensitive in the context of imports from
least-developed beneficiary developing
countries.
(C) Three-year rule.--If, after receiving the
advice of the International Trade Commission
under subsection (e), an article has been
formally considered for designation as an
eligible article under this title and denied
such designation, such article may not be
reconsidered for such designation for a period
of 3 years after such denial.
(2) Rule of origin.--
(A) General rule.--The duty-free treatment
provided under this title shall apply to any
eligible article which is the growth, product,
or manufacture of a beneficiary developing
country if--
(i) that article is imported directly
from a beneficiary developing country
into the customs territory of the
United States; and
(ii) the sum of--
(I) the cost or value of the
materials produced in the
beneficiary developing country
or any two or more such
countries that are members of
the same association of
countries and are treated as
one country under section
507(2), plus
(II) the direct costs of
processing operations performed
in such beneficiary developing
country or such member
countries,
is not less than 35 percent of the
appraised value of such article at the
time it is entered.
(B) Exclusions.--An article shall not be
treated as the growth, product, or manufacture
of a beneficiary developing country by virtue
of having merely undergone--
(i) simple combining or packaging
operations, or
(ii) mere dilution with water or mere
dilution with another substance that
does not materially alter the
characteristics of the article.
(3) Regulations.--The Secretary of the Treasury,
after consulting with the United States Trade
Representative, shall prescribe such regulations as may
be necessary to carry out paragraph (2), including, but
not limited to, regulations providing that, in order to
be eligible for duty-free treatment under this title,
an article--
(A) must be wholly the growth, product, or
manufacture of a beneficiary developing
country, or
(B) must be a new or different article of
commerce which has been grown, produced, or
manufactured in the beneficiary developing
country.
(b) Articles That May Not Be Designated As Eligible
Articles.--
(1) Import sensitive articles.--The President may not
designate any article as an eligible article under
subsection (a) if such article is within one of the
following categories of import-sensitive articles:
(A) Except as provided in paragraph (4),
textile and apparel articles which were not
eligible articles for purposes of this title on
January 1, 1994, as this title was in effect on
such date.
(B) Watches, except those watches entered
after June 30, 1989, that the President
specifically determines, after public notice
and comment, will not cause material injury to
watch or watch band, strap, or bracelet
manufacturing and assembly operations in the
United States or the United States insular
possessions.
(C) Import-sensitive electronic articles.
(D) Import-sensitive steel articles.
(E) Footwear, handbags, luggage, flat goods,
work gloves, and leather wearing apparel which
were not eligible articles for purposes of this
title on January 1, 1995, as this title was in
effect on such date.
(F) Import-sensitive semimanufactured and
manufactured glass products.
(G) Any other articles which the President
determines to be import-sensitive in the
context of the Generalized System of
Preferences.
(2) Articles against which other actions taken.--An
article shall not be an eligible article for purposes
of this title for any period during which such article
is the subject of any action proclaimed pursuant to
section 203 of this Act (19 U.S.C. 2253) or section 232
or 351 of the Trade Expansion Act of 1962 (19 U.S.C.
1862, 1981).
(3) Agricultural products.--No quantity of an
agricultural product subject to a tariff-rate quota
that exceeds the in-quota quantity shall be eligible
for duty-free treatment under this title.
(4) Certain hand-knotted or hand-woven carpets.--
Notwithstanding paragraph (1)(A), the President may
designate as an eligible article or articles under
subsection (a) carpets or rugs which are hand-loomed,
hand-woven, hand-hooked, hand-tufted, or hand-knotted,
and classifiable under subheading 5701.10.16,
5701.10.40, 5701.90.10, 5701.90.20, 5702.10.90,
5702.42.20, 5702.49.10, 5702.51.20, 5702.91.30,
5702.92.00, 5702.99.10, 5703.10.00, 5703.20.10, or
5703.30.00 of the Harmonized Tariff Schedule of the
United States.
(5) Certain cotton articles.--Notwithstanding
paragraph (3), the President may designate as an
eligible article or articles under subsection (a)(1)(B)
only for countries designated as least-developed
beneficiary developing countries under section
502(a)(2) cotton articles classifiable under subheading
5201.00.18, 5201.00.28, 5201.00.38, 5202.99.30, or
5203.00.30 of the Harmonized Tariff Schedule of the
United States.
(c) Withdrawal, Suspension, or Limitation of Duty-Free
Treatment; Competitive Need Limitation.--
(1) In general.--The President may withdraw, suspend,
or limit the application of the duty-free treatment
accorded under this title with respect to any article,
except that no rate of duty may be established with
respect to any article pursuant to this subsection
other than the rate which would apply but for this
title. In taking any action under this subsection, the
President shall consider the factors set forth in
sections 501 and 502(c).
(2) Competitive need limitation.--
(A) Basis for withdrawal of duty-free
treatment.--
(i) In general.--Except as provided
in clause (ii) and subject to
subsection (d), whenever the President
determines that a beneficiary
developing country has exported
(directly or indirectly) to the United
States during any calendar year
beginning after December 31, 1995--
(I) a quantity of an eligible
article having an appraised
value in excess of the
applicable amount for the
calendar year, or
(II) a quantity of an
eligible article equal to or
exceeding 50 percent of the
appraised value of the total
imports of that article into
the United States during any
calendar year,
the President shall, not later than
July 1 of the next calendar year,
terminate the duty-free treatment for
that article from that beneficiary
developing country.
(ii) Annual adjustment of applicable
amount.--For purposes of applying
clause (i), the applicable amount is--
(I) for 1996, $75,000,000,
and
(II) for each calendar year
thereafter, an amount equal to
the applicable amount in effect
for the preceding calendar year
plus $5,000,000.
(B) Country defined.--For purposes of this
paragraph, the term ``country'' does not
include an association of countries which is
treated as one country under section 507(2),
but does include a country which is a member of
any such association.
(C) Redesignations.--A country which is no
longer treated as a beneficiary developing
country with respect to an eligible article by
reason of subparagraph (A) may, subject to the
considerations set forth in sections 501 and
502, be redesignated a beneficiary developing
country with respect to such article if imports
of such article from such country did not
exceed the limitations in subparagraph (A)
during the preceding calendar year.
(D) Least-developed beneficiary developing
countries and beneficiary sub-saharan african
countries.--Subparagraph (A) shall not apply to
any least-developed beneficiary developing
country or any beneficiary sub-Saharan African
country.
(E) Articles not produced in the united
states excluded.--Subparagraph (A)(i)(II) shall
not apply with respect to any eligible article
if a like or directly competitive article was
not produced in the United States on January 1,
1995.
(F) De minimis waivers.--
(i) In general.--The President may
disregard subparagraph (A)(i)(II) with
respect to any eligible article from
any beneficiary developing country if
the aggregate appraised value of the
imports of such article into the United
States during the preceding calendar
year does not exceed the applicable
amount for such preceding calendar
year.
(ii) Applicable amount.--For purposes
of applying clause (i), the applicable
amount is--
(I) for calendar year 1996,
$13,000,000, and
(II) for each calendar year
thereafter, an amount equal to
the applicable amount in effect
for the preceding calendar year
plus $500,000.
(d) Waiver of Competitive Need Limitation.--
(1) In general.--The President may waive the
application of subsection (c)(2) with respect to any
eligible article of any beneficiary developing country
if, before July 1 of the calendar year beginning after
the calendar year for which a determination described
in subsection (c)(2)(A) was made with respect to such
eligible article, the President--
(A) receives the advice of the International
Trade Commission under section 332 of the
Tariff Act of 1930 on whether any industry in
the United States is likely to be adversely
affected by such waiver,
(B) determines, based on the considerations
described in sections 501 and 502(c) and the
advice described in subparagraph (A), that such
waiver is in the national economic interest of
the United States, and
(C) publishes the determination described in
subparagraph (B) in the Federal Register.
(2) Considerations by the president.--In making any
determination under paragraph (1), the President shall
give great weight to--
(A) the extent to which the beneficiary
developing country has assured the United
States that such country will provide equitable
and reasonable access to the markets and basic
commodity resources of such country, and
(B) the extent to which such country provides
adequate and effective protection of
intellectual property rights.
(3) Other bases for waiver.--The President may waive
the application of subsection (c)(2) if, before July 1
of the calendar year beginning after the calendar year
for which a determination described in subsection
(c)(2) was made with respect to a beneficiary
developing country, the President determines that--
(A) there has been a historical preferential
trade relationship between the United States
and such country,
(B) there is a treaty or trade agreement in
force covering economic relations between such
country and the United States, and
(C) such country does not discriminate
against, or impose unjustifiable or
unreasonable barriers to, United States
commerce,
and the President publishes that determination in the
Federal Register.
(4) Limitations on waivers.--
(A) In general.--The President may not
exercise the waiver authority under this
subsection with respect to a quantity of an
eligible article entered during any calendar
year beginning after 1995, the aggregate
appraised value of which equals or exceeds 30
percent of the aggregate appraised value of all
articles that entered duty-free under this
title during the preceding calendar year.
(B) Other waiver limits.--(i) The President
may not exercise the waiver authority provided
under this subsection with respect to a
quantity of an eligible article entered during
any calendar year beginning after 1995, the
aggregate appraised value of which exceeds 15
percent of the aggregate appraised value of all
articles that have entered duty-free under this
title during the preceding calendar year from
those beneficiary developing countries which
for the preceding calendar year--
(I) had a per capita gross national
product (calculated on the basis of the
best available information, including
that of the International Bank for
Reconstruction and Development) of
$5,000 or more; or
(II) had exported (either directly or
indirectly) to the United States a
quantity of articles that was duty-free
under this title that had an aggregate
appraised value of more than 10 percent
of the aggregate appraised value of all
articles that entered duty-free under
this title during that year.
(ii) Not later than July 1 of each year, the
President should revoke any waiver that has
then been in effect with respect to an article
for 5 years or more if the beneficiary
developing country has exported to the United
States (directly or indirectly) during the
preceding calendar year a quantity of the
article--
(I) having an appraised value in
excess of 1.5 times the applicable
amount set forth in subsection
(c)(2)(A)(ii) for that calendar year;
or
(II) exceeding 75 percent of the
appraised value of the total imports of
that article into the United States
during that calendar year.
(C) Calculation of limitations.--There shall
be counted against the limitations imposed
under subparagraphs (A) and (B) for any
calendar year only that value of any eligible
article of any country that--
(i) entered duty-free under this
title during such calendar year; and
(ii) is in excess of the value of
that article that would have been so
entered during such calendar year if
the limitations under subsection
(c)(2)(A) applied.
(5) Effective period of waiver.--Any waiver granted
under this subsection shall remain in effect until the
President determines that such waiver is no longer
warranted due to changed circumstances.
(e) International Trade Commission Advice.--Before
designating articles as eligible articles under subsection
(a)(1), the President shall publish and furnish the
International Trade Commission with lists of articles which may
be considered
for designation as eligible articles for purposes of this
title. The provisions of sections 131, 132, 133, and 134 shall
be complied with as though action under section 501 and this
section were action under section 123 to carry out a trade
agreement entered into under section 123.
(f) Special Rule Concerning Puerto Rico.--No action under
this title may affect any tariff duty imposed by the
Legislature of Puerto Rico pursuant to section 319 of the
Tariff Act of 1930 on coffee imported into Puerto Rico.
* * * * * * *
SEC. 505. DATE OF TERMINATION.
No duty-free treatment provided under this title shall remain
in effect after [July 31, 2013] December 31, 2017.
* * * * * * *
SEC. 506A. DESIGNATION OF SUB-SAHARAN AFRICAN COUNTRIES FOR CERTAIN
BENEFITS.
(a) Authority To Designate.--
(1) In general.--Notwithstanding any other provision
of law, the President is authorized to designate a
country listed in section 107 of the African Growth and
Opportunity Act as a beneficiary sub-Saharan African
country eligible for the benefits described in
subsection (b)--
(A) if the President determines that the
country meets the eligibility requirements set
forth in section 104 of that Act, as such
requirements are in effect on the date of the
enactment of that Act; and
(B) subject to the authority granted to the
President under subsections (a), (d), and (e)
of section 502, if the country otherwise meets
the eligibility criteria set forth in section
502.
(2) Monitoring and review of certain countries.--The
President shall monitor, review, and report to Congress
annually on the progress of each country listed in
section 107 of the African Growth and Opportunity Act
in meeting the requirements described in paragraph (1)
in order to determine the current or potential
eligibility of each country to be designated as a
beneficiary sub-Saharan African country for purposes of
this section. The President's determinations, and
explanations of such determinations, with specific
analysis of the eligibility requirements described in
paragraph (1)(A), shall be included in the annual
report required by section 106 of the African Growth
and Opportunity Act.
(3) Continuing compliance.--[If the President]
(A) In general._If the President determines that a
beneficiary sub-Saharan African country is not making
continual progress in meeting the requirements
described in paragraph (1), the President shall
terminate the designation of that country as a
beneficiary sub-Saharan African country for purposes of
this section, effective on January 1 of the year
following the year in which such determination is made.
(B) Notification.--The President may not
terminate the designation of a country as a
beneficiary sub-Saharan African country under
subparagraph (A) unless, at least 60 days
before the termination of such designation, the
President notifies Congress and notifies the
country of the President's intention to
terminate such designation, together with the
considerations entering into the decision to
terminate such designation.
(b) Preferential Tariff Treatment for Certain Articles.--
(1) In general.--The President may provide duty-free
treatment for any article described in section
503(b)(1)(B) through (G) that is the growth, product,
or manufacture of a beneficiary sub-Saharan African
country described in subsection (a), if, after
receiving the advice of the International Trade
Commission in accordance with section 503(e), the
President determines that such article is not import-
sensitive in the context of imports from beneficiary
sub-Saharan African countries.
(2) Rules of origin.--The duty-free treatment
provided under paragraph (1) shall apply to any article
described in that paragraph that meets the requirements
of section 503(a)(2), except that--
(A) if the cost or value of materials
produced in the customs territory of the United
States is included with respect to that
article, an amount not to exceed 15 percent of
the appraised value of the article at the time
it is entered that is attributed to such United
States cost or value may be applied toward
determining the percentage referred to in
subparagraph (A) of section 503(a)(2); [and]
(B) the cost or value of the materials
included with respect to that article that are
produced in one or more beneficiary sub-Saharan
African countries or former beneficiary sub-
Saharan African countries shall be applied in
determining such percentage[.]; and
(C) the direct costs of processing operations
performed in one or more such beneficiary sub-
Saharan African countries or former beneficiary
sub-Saharan African countries shall be applied
in determining such percentage.
(3) Rules of origin under this title.--The exceptions
set forth in subparagraphs (A), (B), and (C) of
paragraph (2) shall also apply to any article described
in section 503(a)(1) that is the growth, product, or
manufacture of a beneficiary sub-Saharan African
country for purposes of any determination to provide
duty-free treatment with respect to such article.
(c) Withdrawal, Suspension, or Limitation of Preferential
Tariff Treatment.--
(1) In general.--The President may withdraw, suspend,
or limit the application of duty-free treatment
provided for any article described in subsection (b)(1)
of this section or section 112 of the African Growth
and Opportunity Act with respect to a beneficiary sub-
Saharan African country if the President determines
that withdrawing, suspending, or limiting such duty-
free treatment would be more effective in promoting
compliance by the country with the requirements
described in subsection (a)(1) than terminating the
designation of the country as a beneficiary sub-Saharan
African country for purposes of this section.
(2) Notification.--The President may not withdraw,
suspend, or limit the application of duty-free
treatment under paragraph (1) unless, at least 60 days
before such withdrawal, suspension, or limitation, the
President notifies Congress and notifies the country of
the President's intention to withdraw, suspend, or
limit such duty-free treatment, together with the
considerations entering into the decision to terminate
such designation.
(d) Review and Public Comments on Eligibility
Requirements.--
(1) In general.--In carrying out subsection (a)(2),
the President shall publish annually in the Federal
Register a notice of review and request for public
comments on whether beneficiary sub-Saharan African
countries are meeting the eligibility requirements set
forth in section 104 of the African Growth and
Opportunity Act and the eligibility criteria set forth
in section 502 of this Act.
(2) Public hearing.--The United States Trade
Representative shall, not later than 30 days after the
date on which the President publishes the notice of
review and request for public comments under paragraph
(1)--
(A) hold a public hearing on such review and
request for public comments; and
(B) publish in the Federal Register, before
such hearing is held, notice of--
(i) the time and place of such
hearing; and
(ii) the time and place at which such
public comments will be accepted.
(3) Petition process.--
(A) In general.--Not later than 60 days after
the date of the enactment of this subsection,
the President shall establish a process to
allow any interested person, at any time, to
file a petition with the Office of the United
States Trade Representative with respect to the
compliance of any country listed in section 107
of the African Growth and Opportunity Act with
the eligibility requirements set forth in
section 104 of such Act and the eligibility
criteria set forth in section 502 of this Act.
(B) Use of petitions.--The President shall
take into account all petitions filed pursuant
to subparagraph (A) in making determinations of
compliance under subsections (a)(3)(A) and (c)
and in preparing any reports required by this
title as such reports apply with respect to
beneficiary sub-Saharan African countries.
(4) Out-of-cycle reviews.--
(A) In general.--The President may, at any
time, initiate an out-of-cycle review of
whether a beneficiary sub-Saharan African
country is making continual progress in meeting
the requirements described in paragraph (1).
The President shall give due consideration to
petitions received under paragraph (3) in
determining whether to initiate an out-of-cycle
review under this subparagraph.
(B) Congressional notification.--Before
initiating an out-of-cycle review under
subparagraph (A), the President shall notify
and consult with Congress.
(C) Consequences of review.--If, pursuant to
an out-of-cycle review conducted under
subparagraph (A), the President determines that
a beneficiary sub-Saharan African country does
not meet the requirements set forth in section
104(a) of the African Growth and Opportunity
Act (19 U.S.C. 3703(a)), the President shall,
subject to the requirements of subsections
(a)(3)(B) and (c)(2), terminate the designation
of the country as a beneficiary sub-Saharan
African country or withdraw, suspend, or limit
the application of duty-free treatment with
respect to articles from the country.
(D) Reports.--After each out-of-cycle review
conducted under subparagraph (A) with respect
to a country, the President shall submit to the
Committee on Finance of the Senate and the
Committee on Ways and Means of the House of
Representatives a report on the review and any
determination of the President to terminate the
designation of the country as a beneficiary
sub-Saharan African country or withdraw,
suspend, or limit the application of duty-free
treatment with respect to articles from the
country under subparagraph (C).
(E) Sense of congress.--Recognizing that
concerns have been raised about the compliance
with section 104(a) of the African Growth and
Opportunity Act (19 U.S.C. 3703(a)) of some
beneficiary sub-Saharan African countries, the
President should initiate an out-of-cycle
review under subparagraph (A) with respect to
South Africa, the most developed of the
beneficiary sub-Saharan African countries, and
other beneficiary countries as appropriate, not
later than 30 days after the date of the
enactment of this subsection.
[(c)] (e) Beneficiary Sub-Saharan African Countries, Etc.--
For purposes of this title--
(1) the terms ``beneficiary sub-Saharan African
country'' and ``beneficiary sub-Saharan African
countries'' mean a country or countries listed in
section 107 of the African Growth and Opportunity Act
that the President has determined is eligible under
subsection (a) of this section.
(2) the term ``former beneficiary sub-Saharan African
country'' means a country that, after being designated
as a beneficiary sub-Saharan African country under the
African Growth and Opportunity Act, ceased to be
designated as such a country by reason of its entering
into a free trade agreement with the United States.
SEC. 506B. TERMINATION OF BENEFITS FOR SUB-SAHARAN AFRICAN COUNTRIES.
In the case of a beneficiary sub-Saharan African country, as
defined in section 506A(c), duty-free treatment provided under
this title shall remain in effect through [September 30, 2015]
September 30, 2025.
* * * * * * *
----------
AFRICAN GROWTH AND OPPORTUNITY ACT
* * * * * * *
TITLE I--EXTENSION OF CERTAIN TRADE BENEFITS TO SUB-SAHARAN AFRICA
Subtitle A--Trade Policy for Sub-Saharan Africa
* * * * * * *
SEC. 104. ELIGIBILITY REQUIREMENTS.
[(a) In General.--] The President is authorized to designate
a sub-Saharan African country as an eligible sub-Saharan
African country if the President determines that the country--
(1) has established, or is making continual progress
toward establishing--
(A) a market-based economy that protects
private property rights, incorporates an open
rules-based trading system, and minimizes
government interference in the economy through
measures such as price controls, subsidies, and
government ownership of economic assets;
(B) the rule of law, political pluralism, and
the right to due process, a fair trial, and
equal protection under the law;
(C) the elimination of barriers to United
States trade and investment, including by--
(i) the provision of national
treatment and measures to create an
environment conducive to domestic and
foreign investment;
(ii) the protection of intellectual
property; and
(iii) the resolution of bilateral
trade and investment disputes;
(D) economic policies to reduce poverty,
increase the availability of health care and
educational opportunities, expand physical
infrastructure, promote the development of
private enterprise, and encourage the formation
of capital markets through micro-credit or
other programs;
(E) a system to combat corruption and
bribery, such as signing and implementing the
Convention on Combating Bribery of Foreign
Public Officials in International Business
Transactions; and
(F) protection of internationally recognized
worker rights, including the right of
association, the right to organize and bargain
collectively, a prohibition on the use of any
form of forced or compulsory labor, a minimum
age for the employment of children, and
acceptable conditions of work with respect to
minimum wages, hours of work, and occupational
safety and health;
(2) does not engage in activities that undermine
United States national security or foreign policy
interests; and
(3) does not engage in gross violations of
internationally recognized human rights or provide
support for acts of international terrorism and
cooperates in international efforts to eliminate human
rights violations and terrorist activities.
[(b) Continuing Compliance.--If the President determines that
an eligible sub-Saharan African country is not making continual
progress in meeting the requirements described in subsection
(a)(1), the President shall terminate the designation of the
country made pursuant to subsection (a).]
* * * * * * *
Subtitle B--Trade Benefits
* * * * * * *
SEC. 112. TREATMENT OF CERTAIN TEXTILES AND APPAREL.
(a) Preferential Treatment.--Textile and apparel articles
described in subsection (b) that are imported directly into the
customs territory of the United States from a beneficiary sub-
Saharan African country described in section 506A(c) of the
Trade Act of 1974, shall enter the United States free of duty
and free of any quantitative limitations in accordance with the
provisions set forth in subsection (b), if the country has
satisfied the requirements set forth in section 113.
(b) Products Covered.--Subject to subsection (c), the
preferential treatment described in subsection (a) shall apply
only to the following textile and apparel products:
(1) Apparel articles assembled in one or more
beneficiary sub-saharan african countries.--Apparel
articles sewn or otherwise assembled in one or more
beneficiary sub-Saharan African countries from fabrics
wholly formed and cut, or from components knit-to-
shape, in the United States from yarns wholly formed in
the United States, or both (including fabrics not
formed from yarns, if such fabrics are classifiable
under heading 5602 or 5603 of the Harmonized Tariff
Schedule of the United States and are wholly formed and
cut in the United States) that are--
(A) entered under subheading 9802.00.80 of
the Harmonized Tariff Schedule of the United
States; or
(B) entered under chapter 61 or 62 of the
Harmonized Tariff Schedule of the United
States, if, after such assembly, the articles
would have qualified for entry under subheading
9802.00.80 of the Harmonized Tariff Schedule of
the United States but for the fact that the
articles were embroidered or subjected to
stone-washing, enzyme-washing, acid washing,
perma-pressing, oven-baking, bleaching,
garment-dyeing, screen printing, or other
similar processes.
(2) Other apparel articles assembled in one or more
beneficiary sub-saharan african countries.--Apparel
articles sewn or otherwise assembled in one or more
beneficiary sub-Saharan African countries with thread
formed in the United States from fabrics wholly formed
in the United States and cut in one or more beneficiary
sub-Saharan African countries from yarns wholly formed
in the United States, or from components knit-to-shape
in the United States from yarns wholly formed in the
United States, or both (including fabrics not formed
from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the Harmonized Tariff Schedule
of the United States and are wholly formed in the
United States).
(3) Apparel articles from regional fabric or yarns.--
Apparel articles wholly assembled in one or more
beneficiary sub-Saharan African countries from fabric
wholly formed in one or more beneficiary sub-Saharan
African countries from yarns originating in the United
States or one or more beneficiary sub-Saharan African
countries or former beneficiary sub-Saharan African
countries, or both (including fabrics not formed from
yarns, if such fabrics are classified under heading
5602 or 5603 of the Harmonized Tariff Schedule of the
United States and are wholly formed in one or more
beneficiary sub-Saharan African countries), or from
components knit-to-shape in one or more beneficiary
sub-Saharan African countries from yarns originating in
the United States or one or more beneficiary sub-
Saharan African countries or former beneficiary sub-
Saharan African countries, or both, or apparel articles
wholly formed on seamless knitting machines in a
beneficiary sub-Saharan African country from yarns
originating in the United States or one or more
beneficiary sub-Saharan African countries or former
beneficiary sub-Saharan African countries, or both,
whether or not the apparel articles are also made from
any of the fabrics, fabric components formed, or
components knit-to-shape described in paragraph (1) or
(2) (unless the apparel articles are made exclusively
from any of the fabrics, fabric components formed, or
components knit-to-shape described in paragraph (1) or
(2)), subject to the following:
(A) Limitations on benefits.--
(i) In general.--Preferential
treatment under this paragraph shall be
extended in the 1-year period beginning
October 1, 2003, and in each of the [11
succeeding] 21 succeeding 1-year
periods, to imports of apparel articles
in an amount not to exceed the
applicable percentage of the aggregate
square meter equivalents of all apparel
articles imported into the United
States in the preceding 12-month period
for which data are available.
(ii) Applicable percentage.--For
purposes of this subparagraph, the term
``applicable percentage'' means--
(I) 4.747 percent for the 1-
year period beginning October
1, 2003, increased in each of
the 5 succeeding 1-year periods
by equal increments, so that
for the 1-year period beginning
October 1, 2007, the applicable
percentage does not exceed 7
percent; and
(II) for each succeeding 1-
year period until [September
30, 2015] September 30, 2025,
not to exceed 7 percent.
(B) Surge mechanism.--
(i) Import monitoring.--The Secretary
of Commerce shall monitor imports of
articles described in this paragraph on
a monthly basis to determine if there
has been a surge in imports of such
articles. In order to permit public
access to preliminary international
trade data and to facilitate the early
identification of potentially
disruptive import surges, the Director
of the Office of Management and Budget
may grant an exception to the
publication dates established for the
release of data on United States
international trade in covered
articles, if the Director notifies
Congress of the early release of the
data.
(ii) Determination of damage or
threat thereof.--Whenever the Secretary
of Commerce determines, based on the
data described in clause (i), or
pursuant to a written request made by
an interested party, that there has
been a surge in imports of an article
described in this paragraph from a
beneficiary sub-Saharan African
country, the Secretary shall determine
whether such article from such country
is being imported in such increased
quantities as to cause serious damage,
or threat thereof, to the domestic
industry producing a like or directly
competitive article. If the Secretary's
determination is affirmative, the
President shall suspend the duty-free
treatment provided for such article
under this paragraph. If the inquiry is
initiated at the request of an
interested party, the Secretary shall
make the determination within 60 days
after the date of the request.
(iii) Factors to consider.--In
determining whether a domestic industry
has been seriously damaged, or is
threatened with serious damage, the
Secretary shall examine the effect of
the imports on relevant economic
indicators such as domestic production,
sales, market share, capacity
utilization, inventories, employment,
profits, exports, prices, and
investment.
(iv) Procedure.--
(I) Initiation.--The
Secretary of Commerce shall
initiate an inquiry within 10
days after receiving a written
request and supporting
information for an inquiry from
an interested party. Notice of
initiation of an inquiry shall
be published in the Federal
Register.
(II) Participation by
interested parties.--The
Secretary of Commerce shall
establish procedures to ensure
participation in the inquiry by
interested parties.
(III) Notice of
determination.--The Secretary
shall publish the determination
described in clause (ii) in the
Federal Register.
(IV) Information available.--
If relevant information is not
available on the record or any
party withholds information
that has been requested by the
Secretary, the Secretary shall
make the determination on the
basis of the facts available.
When the Secretary relies on
information submitted in the
inquiry as facts available, the
Secretary shall, to the extent
practicable, corroborate the
information from independent
sources that are reasonably
available to the Secretary.
(v) Interested party.--For purposes
of this subparagraph, the term
``interested party'' means any producer
of a like or directly competitive
article, a certified union or
recognized union or group of workers
which is representative of an industry
engaged in the manufacture, production,
or sale in the United States of a like
or directly competitive article, a
trade or business association
representing producers or sellers of
like or directly competitive articles,
producers engaged in the production of
essential inputs for like or directly
competitive articles, a certified union
or group of workers which is
representative of an industry engaged
in the manufacture, production, or sale
of essential inputs for the like or
directly competitive article, or a
trade or business association
representing companies engaged in the
manufacture, production, or sale of
such essential inputs.
(4) Sweaters knit-to-shape from cashmere or merino
wool.--
(A) Cashmere.--Sweaters, in chief weight of
cashmere, knit-to-shape in one or more
beneficiary sub-Saharan African countries and
classifiable under subheading 6110.10 of the
Harmonized Tariff Schedule of the United
States.
(B) Merino wool.--Sweaters, 50 percent or
more by weight of wool measuring 21.5 microns
in diameter or finer, knit-to-shape in one or
more beneficiary sub-Saharan African countries.
(5) Apparel articles wholly assembled from fabric or
yarn not available in commercial quantities in the
united states.--
(A) In general.--Apparel articles that are
both cut (or knit-to-shape) and sewn or
otherwise assembled in one or more beneficiary
sub-Saharan African countries, to the extent
that apparel articles of such fabrics or yarns
would be eligible for preferential treatment,
without regard to the source of the fabrics or
yarns, under Annex 401 to the NAFTA.
(B) Additional apparel articles.--At the
request of any interested party and subject to
the following requirements, the President is
authorized to proclaim the treatment provided
under subparagraph (A) for yarns or fabrics not
described in subparagraph (A) if--
(i) the President determines that
such yarns or fabrics cannot be
supplied by the domestic industry in
commercial quantities in a timely
manner;
(ii) the President has obtained
advice regarding the proposed action
from the appropriate advisory committee
established under section 135 of the
Trade Act of 1974 (19 U.S.C. 2155) and
the United States International Trade
Commission;
(iii) within 60 calendar days after
the request, the President has
submitted a report to the Committee on
Ways and Means of the House of
Representatives and the Committee on
Finance of the Senate that sets forth--
(I) the action proposed to be
proclaimed and the reasons for
such action; and
(II) the advice obtained
under clause (ii);
(iv) a period of 60 calendar days,
beginning with the first day on which
the President has met the requirements
of subclauses (I) and (II) of clause
(iii), has expired; and
(v) the President has consulted with
such committees regarding the proposed
action during the period referred to in
clause (iii).
(C) Removal of designation of fabrics or
yarns not available in commercial quantities.--
If the President determines that any fabric or
yarn was determined to be eligible for
preferential treatment under subparagraph (A)
on the basis of fraud, the President is
authorized to remove that designation from that
fabric or yarn with respect to articles entered
after such removal.
(6) Handloomed, handmade, folklore articles and
ethnic printed fabrics.--
(A) In general.--A handloomed, handmade,
folklore article or an ethnic printed fabric of
a beneficiary sub-Saharan African country or
countries that is certified as such by the
competent authority of such beneficiary country
or countries. For purposes of this section, the
President, after consultation with the
beneficiary sub-Saharan African country or
countries concerned, shall determine which, if
any, particular textile and apparel goods of
the country (or countries) shall be treated as
being handloomed, handmade, or folklore
articles or an ethnic printed fabric.
(B) Requirements for ethnic printed fabric.--
Ethnic printed fabrics qualified under this
paragraph are--
(i) fabrics containing a selvedge on
both edges, having a width of less than
50 inches, classifiable under
subheading 5208.52.30 or 5208.52.40 of
the Harmonized Tariff Schedule of the
United States;
(ii) of the type that contains
designs, symbols, and other
characteristics of African prints--
(I) normally produced for and
sold on the indigenous African
market; and
(II) normally sold in Africa
by the piece as opposed to
being tailored into garments
before being sold in indigenous
African markets;
(iii) printed, including waxed, in
one or more eligible beneficiary sub-
Saharan countries; and
(iv) fabrics formed in the United
States, from yarns formed in the United
States, or from fabric formed in one or
more beneficiary sub-Saharan African
country from yarn originating in either
the United States or one or more
beneficiary sub-Saharan African
countries.
(7) Apparel articles assembled in one or more
beneficiary sub-saharan african countries from united
states and beneficiary sub-saharan african country
components.--Apparel articles sewn or otherwise
assembled in one or more beneficiary sub-Saharan
African countries with thread formed in the United
States from components cut in the United States and one
or more beneficiary sub-Saharan African countries or
former beneficiary sub-Saharan African countries from
fabric wholly formed in the United States from yarns
wholly formed in the United States, or from components
knit-to-shape in the United States and one or more
beneficiary sub-Saharan African countries or former
beneficiary sub-Saharan African countries from yarns
wholly formed in the United States, or both (including
fabrics not formed from yarns, if such fabrics are
classifiable under heading 5602 or 5603 of the
Harmonized Tariff Schedule of the United States).
(8) Textile articles originating entirely in one or
more lesser developed beneficiary sub-saharan african
countries.--Textile and textile articles classifiable
under chapters 50 through 60 or chapter 63 of the
Harmonized Tariff Schedule of the United States that
are products of a lesser developed beneficiary sub-
Saharan African country and are wholly formed in one or
more such countries from fibers, yarns, fabrics, fabric
components, or components knit-to-shape that are the
product of one or more such countries.
(c) Lesser Developed Countries.--
(1) Preferential treatment of products through
[september 30, 2015] september 30, 2025.--
(A) Products covered.--In addition to the
products described in subsection (b) the
preferential treatment described in subsection
(a) shall apply through [September 30, 2015]
September 30, 2025, to apparel articles wholly
assembled, or knit-to-shape and wholly
assembled, or both, in one or more lesser
developed beneficiary sub-Saharan African
countries, regardless of the country of origin
of the fabric or the yarn used to make such
articles, in an amount not to exceed the
applicable percentage of the aggregate square
meter equivalents of all apparel articles
imported into the United States in the
preceding 12-month period for which data are
available.
(B) Applicable percentage.--For purposes of
subparagraph (A), the term ``applicable
percentage'' means--
(i) 2.9285 percent for the 1-year
period beginning on October 1, 2005;
and
(ii) 3.5 percent for the 1-year
period beginning on October 1, 2006,
and each 1-year period thereafter
through [September 30, 2015] September
30, 2025.
(2) Applicability of other provisions.--Subsection
(b)(3)(B) applies to apparel articles eligible for
preferential treatment under this subsection to the
same extent as that subsection applies to apparel
articles eligible for preferential treatment under
subsection (b)(3).
(3) Definition.--In this subsection, the term
``lesser developed beneficiary sub-Saharan African
country'' means--
(A) a beneficiary sub-Saharan African country
that had a per capita gross national product of
less than $1,500 in 1998, as measured by the
International Bank for Reconstruction and
Development;
(B) Botswana;
(C) Namibia; and
(D) Mauritius.
(d) Treatment of Quotas on Textile and Apparel Imports from
Kenya and Mauritius.--The President shall eliminate the
existing quotas on textile and apparel articles imported into
the United States--
(1) from Kenya within 30 days after that country
adopts an effective visa system to prevent unlawful
transshipment of textile and apparel articles and the
use of counterfeit documents relating to the
importation of the articles into the United States; and
(2) from Mauritius within 30 days after that country
adopts such a visa system.
The Customs Service shall provide the necessary technical
assistance to Kenya and Mauritius in the development and
implementation of the visa systems.
(e) Special Rules.--
(1) Findings and trimmings.--
(A) General rule.--An article otherwise
eligible for preferential treatment under this
section shall not be ineligible for such
treatment because the article contains findings
or trimmings of foreign origin, if the value of
such findings and trimmings do not exceed 25
percent of the cost of the components of the
assembled article. Examples of findings and
trimmings are sewing thread, hooks and eyes,
snaps, buttons, ``bow buds'', decorative lace
trim, elastic strips, and zippers, including
zipper tapes and labels. Elastic strips are
considered findings or trimmings only if they
are each less than 1 inch in width and used in
the production of brassieres.
(B) Certain interlinings.--
(i) General rule.--An article
otherwise eligible for preferential
treatment under this section shall not
be ineligible for such treatment
because the article contains certain
interlinings of foreign origin, if the
value of such interlinings (and any
findings and trimmings) does not exceed
25 percent of the cost of the
components of the assembled article.
(ii) Interlinings described.--
Interlinings eligible for the treatment
described in clause (i) include only a
chest type plate, a ``hymo'' piece, or
``sleeve header'', of woven or weft-
inserted warp knit construction and of
coarse animal hair or man-made
filaments.
(iii) Termination of treatment.--The
treatment described in this
subparagraph shall terminate if the
President makes a determination that
United States manufacturers are
producing such interlinings in the
United States in commercial quantities.
(C) Exception.--In the case of an article
described in subsection (b)(2), sewing thread
shall not be treated as findings or trimmings
under subparagraph (A).
(2) De minimis rule.--An article otherwise eligible
for preferential treatment under this section shall not
be ineligible for such treatment because the article
contains fibers or yarns not wholly formed in the
United States or one or more beneficiary sub-Saharan
African countries or former beneficiary sub-Saharan
African countries if the total weight of all such
fibers and yarns is not more than 10 percent of the
total weight of the article.
(3) Certain components.--An article otherwise
eligible for preferential treatment under this section
will not be ineligible for such treatment because the
article contains--
(A) any collars or cuffs (cut or knit-to-
shape),
(B) drawstrings,
(C) shoulder pads or other padding,
(D) waistbands,
(E) belt attached to the article,
(F) straps containing elastic, or
(G) elbow patches,
that do not meet the requirements set forth in
subsections (b) and (c), regardless of the country of
origin of the item referred to in the applicable
subparagraph of this paragraph.
(f) Definitions.--In this section and section 113:
(1) Agreement on textiles and clothing.--The term
``Agreement on Textiles and Clothing'' means the
Agreement on Textiles and Clothing referred to in
section 101(d)(4) of the Uruguay Round Agreements Act
(19 U.S.C. 3511(d)(4)).
(2) Beneficiary sub-saharan african country, etc.--
The terms ``beneficiary sub-Saharan African country''
and ``beneficiary sub-Saharan African countries'' have
the same meaning as such terms have under section
506A(c) of the Trade Act of 1974.
(3) NAFTA.--The term ``NAFTA'' means the North
American Free Trade Agreement entered into between the
United States, Mexico, and Canada on December 17, 1992.
(4) Former sub-saharan african country.--The term
``former sub-Saharan African country'' means a country
that, after being designated as a beneficiary sub-
Saharan African country under this Act, ceased to be
designated as such a beneficiary sub-Saharan country by
reason of its entering into a free trade agreement with
the United States.
(5) Enter; entered.--The terms ``enter'' and
``entered'' refer to the entry, or withdrawal from
warehouse for consumption, in the customs territory of
the United States.
(g) Effective Date.--This section takes effect on October 1,
2000, and shall remain in effect through [September 30, 2015]
September 30, 2025.
* * * * * * *
----------
CARIBBEAN BASIN ECONOMIC RECOVERY ACT
* * * * * * *
TITLE II--CARIBBEAN BASIN INITIATIVE
* * * * * * *
Subtitle A--Duty-Free Treatment
* * * * * * *
SEC. 213A. SPECIAL RULES FOR HAITI.
(a) Definitions.--In this section:
(1) Initial applicable 1-year period.--The term
``initial applicable 1-year period'' means the 1-year
period beginning on December 20, 2006.
(2) Appropriate congressional committees.--.--The
term ``appropriate congressional committees'' means the
Committee on Finance of the Senate and the Committee on
Ways and Means of the House of Representatives.
(3) Core labor standards.--The term ``core labor
standards'' means--
(A) freedom of association;
(B) the effective recognition of the right to
bargain collectively;
(C) the elimination of all forms of
compulsory or forced labor;
(D) the effective abolition of child labor
and a prohibition on the worst forms of child
labor; and
(E) the elimination of discrimination in
respect of employment and occupation.
(4) Enter; entry.--The terms ``enter'' and ``entry''
refer to the entry, or withdrawal from warehouse for
consumption, in the customs territory of the United
States.
(5) Imported directly from haiti or the dominican
republic.--Articles are ``imported directly from Haiti
or the Dominican Republic'' if--
(A) the articles are shipped directly from
Haiti or the Dominican Republic into the United
States without passing through the territory of
any intermediate country; or
(B) the articles are shipped from Haiti or
the Dominican Republic into the United States
through the territory of an intermediate
country, and--
(i) the articles in the shipment do
not enter into the commerce of any
intermediate country, and the invoices,
bills of lading, and other shipping
documents specify the United States as
the final destination; or
(ii) the invoices and other documents
do not specify the United States as the
final destination, but the articles in
the shipment--
(I) remain under the control
of the customs authority in the
intermediate country;
(II) do not enter into the
commerce of the intermediate
country except for the purpose
of a sale other than at retail;
and
(III) have not been subjected
to operations in the
intermediate country other than
loading, unloading, or other
activities necessary to
preserve the articles in good
condition.
(6) Knit-to-shape.--A good is ``knit-to-shape'' if 50
percent or more of the exterior surface area of the
good is formed by major parts that have been knitted or
crocheted directly to the shape used in the good, with
no consideration being given to patch pockets,
appliquees, or the like. Minor cutting, trimming, or
sewing of those major parts shall not affect the
determination of whether a good is ``knit-to-shape.''
(7) TAICNAR program.--The term ``TAICNAR Program''
means the Technical Assistance Improvement and
Compliance Needs Assessment and Remediation Program
established pursuant to subsection (e).
(8) Wholly assembled.--A good is ``wholly assembled''
in Haiti if all components, of which there must be at
least two, pre-existed in essentially the same
condition as found in the finished good and were
combined to form the finished good in Haiti. Minor
attachments and minor embellishments (for example,
appliquees, beads, spangles, embroidery, and buttons)
not appreciably affecting the identity of the good, and
minor subassemblies (for example, collars, cuffs,
plackets, and pockets), shall not affect the
determination of whether a good is ``wholly assembled''
in Haiti.
(b) Apparel and Other Textile Articles.--
(1) Value-added rule for apparel articles.--
(A) In general.--Apparel articles described
in subparagraph (B) of a producer or entity
controlling production that are imported
directly from Haiti or the Dominican Republic
shall enter the United States free of duty
during the initial applicable 1-year period and
any 1-year period thereafter, subject to the
limitations set forth in subparagraphs (B) and
(C), and subject to subparagraph (D).
(B) Apparel articles described.--
(i) In general.--In the initial
applicable 1-year period and any 1-year
period thereafter, apparel articles
described in this paragraph are apparel
articles that are wholly assembled, or
are knit-to-shape, in Haiti from any
combination of fabrics, fabric
components, components knit-to-shape,
and yarns, only if, for each entry in
that 1-year period, the sum of--
(I) the cost or value of the
materials produced in Haiti or
one or more countries described
in clause (iii), or any
combination thereof, plus
(II) the direct costs of
processing operations (as
defined in section 213(a)(3))
performed in Haiti or one or
more countries described in
clause (iii), or any
combination thereof,
is not less than the applicable
percentage (as defined in clause
(v)(I)) of the declared customs value
of such apparel articles.
(ii) Deductions.--In calculating cost
or value under clause (i)(I), there
shall be deducted the cost or value
of--
(I) any foreign materials
that are used in the production
of the apparel articles in
Haiti; and
(II) any foreign materials
that are used in the production
of the materials described in
clause (i)(I).
(iii) Countries described.--The
countries referred to in clause (i) are
the following:
(I) The United States.
(II) Any country that is a
party to a free trade agreement
with the United States that is
in effect on the date of the
enactment of the Haitian
Hemispheric Opportunity through
Partnership Encouragement Act
of 2006, or that enters into
force thereafter.
(III) Any country designated
as a beneficiary country under
section 213(b)(5)(B) of this
Act.
(IV) Any country designated
as a beneficiary country under
section 506A(a)(1) of the Trade
Act of 1974 (19 U.S.C.
2466a(a)(1)), if a finding has
been made by the President or
the President's designee, and
published in the Federal
Register, that the country has
satisfied the requirements of
section 113 of the African
Growth and Opportunity Act (19
U.S.C. 3722).
(V) Any country designated as
a beneficiary country under
section 204(b)(6)(B) of the
Andean Trade Preference Act (19
U.S.C. 3203(b)(6)(B)).
(iv) Annual aggregation.--
(I) Initial applicable 1-year
period.--In the initial
applicable 1-year period, the
requirements under clause (i)
relating to applicable
percentage may also be met for
articles of a producer or an
entity controlling production
that enter during the initial
applicable 1-year period by
aggregating--
(aa) the cost or
value of materials
under subclause (I) of
clause (i), and
(bb) the direct costs
of processing
operations under
subclause (II) of
clause (i),
of all apparel articles of that
producer or entity controlling
production that are wholly
assembled, or are knit-to-
shape, in Haiti and are entered
during the initial applicable
1-year period.
(II) Other 1-year periods.--
In any 1-year period after the
initial applicable 1-year
period, the requirements under
clause (i) relating to
applicable percentage may also
be met for articles of a
producer or an entity
controlling production that
enter during the 1-year period
by aggregating--
(aa) the cost or
value of materials
under subclause (I) of
clause (i), and
(bb) the direct costs
of processing
operations under
subclause (II) of
clause (i),
of all apparel articles of that
producer or entity controlling
production that are wholly
assembled, or are knit-to-
shape, in Haiti and are entered
during the preceding 1-year
period.
(III) Deductions.--In
calculating cost or value under
subclause (I)(aa) or (II)(aa),
there shall be deducted the
cost or value of--
(aa) any foreign
materials that are used
in the production of
the apparel articles in
Haiti; and
(bb) any foreign
materials that are used
in the production of
the materials described
in subclause (I)(aa) or
(II)(aa) (as the case
may be).
(IV) Inclusion in calculation
of other articles receiving
preferential treatment.--
Entries of apparel articles
that receive preferential
treatment under any provision
of law other than this
subparagraph or are subject to
the ``General'' column 1 rate
of duty under the HTS are not
included in the annual
aggregation under subclause (I)
or (II) unless the producer or
entity controlling production
elects, at the time the annual
aggregation calculation is
made, to include such entries
in such aggregation.
(v) Definitions.--In this paragraph:
(I) Applicable percentage.--
The term ``applicable
percentage'' means--
(aa) 50 percent or
more during the initial
applicable 1-year
period and the
succeeding 8 1-year
periods;
(bb) 55 percent or
more during the 1-year
period beginning on
December 20, 2015, and
the 1-year period
beginning on December
20, 2016; and
[(cc) 60 percent or
more during the 1-year
period beginning on
December 20, 2017.]
(cc) 60 percent or
more during the 1-year
period beginning on
December 20, 2017, and
each of the 7
succeeding 1-year
periods.
(II) Foreign material.--The
term ``foreign material'' means
a material produced in a
country other than Haiti or any
country described in clause
(iii).
(vi) Development of procedure to
ensure compliance.--
(I) In general.--U.S. Customs
and Border Protection of the
Department of Homeland Security
shall develop and implement
methods and procedures to
ensure ongoing compliance with
the requirements set forth in
clauses (i) and (iv).
(II) Noncompliance.--If U.S.
Customs and Border Protection
finds that a producer or an
entity controlling production
has not satisfied such
requirements in the initial
applicable 1-year period or any
1-year period thereafter,
either for individual entries
entered pursuant to clause (i)
or for entries entered in
aggregate pursuant to clause
(iv), then apparel articles
described in clause (i) of that
producer or entity shall be
ineligible for preferential
treatment under paragraph (1)
during any succeeding 1-year
period until--
(aa) the cost or
value of materials
under subclause (I) of
clause (i), plus
(bb) the direct costs
of processing
operations under
subclause (II) of
clause (i),
of that producer or entity
controlling production, is not
less than the applicable
percentage under clause (v)(I),
plus 10 percent, of the
aggregate declared customs
value of all apparel articles
of that producer or entity
controlling production that are
wholly assembled, or are knit-
to-shape, in Haiti and are
entered during the preceding 1-
year period.
(III) Retroactive application
of duty-free treatment.--If--
(aa) a producer or an
entity controlling
production is
ineligible for
preferential treatment
under subparagraph (A)
in the initial
applicable 1-year
period or any 1-year
period thereafter
because that producer
or entity controlling
production did not
satisfy the
requirements of clause
(i) or (iv), and
(bb) that producer or
entity controlling
production satisfies
the requirements of
subclause (II) of this
clause in that 1-year
period,
then, notwithstanding section
514 of the Tariff Act of 1930
(19 U.S.C. 1514) or any other
provision of law, upon proper
request filed with U.S. Customs
and Border Protection before
the 90th day after U.S. Customs
and Border Protection
determines that item (bb)
applies, the entry of any
articles--
(AA) that was made
during that 1-year
period, and
(BB) with respect to
which there would have
been preferential
treatment under
subparagraph (A) if the
producer or entity
controlling production
had satisfied the
requirements in clause
(i) or (iv) (as the
case may be),
shall be liquidated or
reliquidated as though such
preferential treatment under
subparagraph (A) applied to
such entry.
(vii) Fabrics not available in
commercial quantities.--
(I) In general.--For purposes
of determining the applicable
percentage under clause (i) or
(iv), there may be included in
that percentage--
(aa) the cost of
fabrics or yarns to the
extent that apparel
articles of such
fabrics or yarns would
be eligible for
preferential treatment,
without regard to the
source of the fabrics
or yarns, under Annex
401 of the NAFTA; and
(bb) the cost of
fabrics or yarns that
are designated as not
being available in
commercial quantities
for purposes of--
(AA) section
213(b)(2)(A)(v) of this
Act,
(BB) section
112(b)(5) of the
African Growth and
Opportunity Act,
(CC) section
204(b)(3)(B)(i)(III) or
(ii) of the Andean
Trade Preference Act,
or
(DD) any other
provision, relating to
determining whether a
textile or apparel
article is an
originating good
eligible for
preferential treatment,
of a law that
implements a free trade
agreement that enters
into force with respect
to the United States,
without regard to the source of
the fabrics or yarns.
(II) Removal of designation
of fabrics or yarns not
available in commercial
quantities.--If the President
determines that--
(aa) any fabric or
yarn described in
subclause (I)(aa) was
determined to be
eligible for
preferential treatment,
or
(bb) any fabric or
yarn described in
subclause (I)(bb) was
designated as not being
available in commercial
quantities,
on the basis of fraud, the
President is authorized to
remove the eligibility or
designation (as the case may
be) of that fabric or yarn with
respect to articles entered
after such removal.
(C) Quantitative limitations.--The
preferential treatment described in
subparagraph (A) shall be extended, during each
of the 1-year periods set forth in the
following table, to not more than the
corresponding percentage of the aggregate
square meter equivalents of all apparel
articles imported into the United States in the
most recent 12-month period for which data are
available:
During: the corresponding percentage is:
the initial applicable 1-year period............... 1 percent.
each of the succeeding 11 1-year periods........... 1.25 percent.
No preferential treatment shall be provided
under subparagraph (A) after [December 19,
2018] December 19, 2025.
(D) Other preferential treatment not affected
by quantitative limitations.--Any apparel
article that qualifies for preferential
treatment under paragraph (2), (3), (4), or (5)
or any other provision of this title shall not
be subject to, or included in the calculation
of, the quantitative limitations under
subparagraph (C).
(2) Special rule for woven articles and certain knit
articles.--
(A) Special rule for articles of chapter 62
of the hts.--
(i) General rule.--Any apparel
article classifiable under chapter 62
of the HTS that is wholly assembled, or
knit-to-shape, in Haiti from any
combination of fabrics, fabric
components, components knit-to-shape,
or yarns and is imported directly from
Haiti or the Dominican Republic shall
enter the United States free of duty,
subject to clauses (ii) and (iii),
without regard to the source of the
fabric, fabric components, components
knit-to-shape, or yarns from which the
article is made.
(ii) Limitation.--Except as provided
in paragraph (2A), the preferential
treatment described in clause (i) shall
be extended, in the 1-year period
beginning October 1, 2008, and in each
of the [11 succeeding 1-year periods]
16 succeeding 1-year periods, to not
more than 70,000,000 square meter
equivalents of apparel articles
described in such clause.
(iii) Other preferential treatment
not affected by quantitative
limitation.--Any apparel article that
qualifies for preferential treatment
under paragraph (1), (3), (4), or (5)
or subparagraph (B) of this paragraph
or any other provision of this title
shall not be subject to, or included in
the calculation of, the quantitative
limitation under clause (ii).
(B) Special rule for certain articles of
chapter 61 of the hts.--
(i) General rule.--Any apparel
article classifiable under chapter 61
of the HTS that is wholly assembled, or
knit-to-shape, in Haiti from any
combination of fabrics, fabric
components, components knit-to-shape,
or yarns and is imported directly from
Haiti or the Dominican Republic shall
enter the United States free of duty,
subject to clauses (ii), (iii), and
(iv), without regard to the source of
the fabric, fabric components,
components knit-to-shape, or yarns from
which the article is made.
(ii) Exclusions.--The preferential
treatment described in clause (i) shall
not apply to the following:
(I) The following apparel
articles of cotton, for men or
boys, that are classifiable
under subheading 6109.10.00 of
the HTS:
(aa) All white T-
shirts, with short
hemmed sleeves and
hemmed bottom, with
crew or round neckline
or with V-neck and with
a mitered seam at the
center of the V, and
without pockets, trim,
or embroidery.
(bb) All white
singlets, without
pockets, trim, or
embroidery.
(cc) Other T-shirts,
but not including
thermal undershirts.
(II) T-shirts for men or boys
that are classifiable under
subheading 6109.90.10.
(III) The following apparel
articles of cotton, for men or
boys, that are classifiable
under subheading 6110.20.20 of
the HTS:
(aa) Sweatshirts.
(bb) Pullovers, other
than sweaters, vests,
or garments imported as
part of playsuits.
(IV) Sweatshirts for men or
boys, of man-made fibers and
containing less than 65 percent
by weight of man-made fibers,
that are classifiable under
subheading 6110.30.30 of the
HTS.
(iii) Limitation.--Except as provided
in paragraph (2A), the preferential
treatment described in clause (i) shall
be extended, in the 1-year period
beginning October 1, 2008, and in each
of the [11 succeeding 1-year periods]
16 succeeding 1-year periods, to not
more than 70,000,000 square meter
equivalents of apparel articles
described in such clause.
(iv) Other preferential treatment not
affected by quantitative limitation.--
Any apparel article that qualifies for
preferential treatment under paragraph
(1), (3), (4), or (5) or subparagraph
(A) of this paragraph or any other
provision of this title shall not be
subject to, or included in the
calculation of, the quantitative
limitation under clause (iii).
(2A) Special rule for certain woven articles and
certain knit articles entered during fiscal year 2010
and succeeding 1-year periods.--
(A) In general.--Except as provided in
subparagraphs (B) and (C) and subject to
subparagraph (D), if 52,000,000 square meter
equivalents of apparel articles described in
paragraph (2)(A)(i) or (2)(B)(i) enter the
United States during the 1-year period
beginning October 1, 2009, or any of the
succeeding 1-year periods, the President shall
extend the preferential treatment described in
paragraph (2)(A)(i) or (2)(B)(i) (as the case
may be) to not more than 200,000,000 square
meter equivalents of apparel articles described
in paragraph (2)(A)(i) or (2)(B)(i) (as the
case may be) during that 1-year period, and
shall publish notice of the extension in the
Federal Register.
(B) Exception for certain woven articles.--
(i) In general.--In the case of
apparel articles described in clause
(ii), subparagraph (A) shall be applied
by substituting ``70,000,000'' for
``200,000,000''.
(ii) Apparel articles described.--
Apparel articles described in this
clause are apparel articles described
in paragraph (2)(A)(i) that are the
following:
(I) Category 347.--Apparel
articles in category 347 that
fall within the following
statistical reporting numbers
of the HTS (as in effect on the
day before the date of the
enactment of this paragraph):
6203.19.1020.......................... 6203.42.4011................. 6203.42.4061
6203.19.9020......................... 6203.42.4016................. 6203.49.8020
6203.22.3020......................... 6203.42.4026................. 6210.40.9033
6203.22.3030......................... 6203.42.4036................. 6211.20.1520
6203.42.4003......................... 6203.42.4046................. 6211.20.3810
6203.42.4006......................... 6203.42.4051................. 6211.32.0040
(II) Category 348.--Apparel
articles in category 348 that
fall within the following
statistical reporting numbers
of the HTS (as in effect on the
day before the date of the
enactment of this paragraph):
6204.12.0030.......................... 6204.62.4011................. 6204.69.9010
6204.19.8030......................... 6204.62.4021................ 6210.50.9060
6204.22.3040......................... 6204.62.4031................ 6211.20.1550
6204.22.3050......................... 6204.62.4041................ 6211.20.6810
6204.29.4034......................... 6204.62.4051................ 6211.42.0030
6204.62.3000......................... 6204.62.4056................ 6217.90.9050
6204.62.4003......................... 6204.62.4066................ .........................................
6204.62.4006......................... 6204.69.6010................. .........................................
(III) Category 647.--Apparel
articles in category 647 that
fall within the following
statistical reporting numbers
of the HTS (as in effect on the
day before the date of the
enactment of this paragraph):
6203.23.0060.......................... 6203.43.4020................. 6203.49.8030
6203.23.0070......................... 6203.43.4030................ 6210.40.5031
6203.29.2030......................... 6203.43.4040................ 6210.40.5039
6203.29.2035......................... 6203.49.1500................ 6211.20.1525
6203.43.2500......................... 6203.49.2015................ 6211.20.3820
6203.43.3510......................... 6203.49.2030................ 6211.33.0030
6203.43.3590......................... 6203.49.2045................ .........................................
6203.43.4010......................... 6203.49.2060................. .........................................
(IV) Category 648.--Apparel
articles in category 648 that
fall within the following
statistical reporting numbers
of the HTS (as in effect on the
day before the date of the
enactment of this paragraph):
6204.23.0040.......................... 6204.63.3510................. 6204.69.6030
6204.23.0045......................... 6204.63.3530................ 6204.69.9030
6204.29.2020......................... 6204.63.3532................. 6210.50.5031
6204.29.2025......................... 6204.63.3540................ 6210.50.5039
6204.29.4038......................... 6204.69.2510................. 6211.20.1555
6204.63.2000......................... 6204.69.2530................ 6211.20.6820
6204.63.3010......................... 6204.69.2540................ 6211.43.0040
6204.63.3090......................... 6204.69.2560................ 6217.90.9060
(C) Exception for certain knit articles.--
(i) In general.--In the case of
apparel articles described in clause
(ii), subparagraph (A) shall be applied
by substituting ``85,000,000'' for
``200,000,000''.
(ii) Apparel articles described.--
Apparel articles described in this
clause are apparel articles described
in paragraph (2)(B)(i) that fall within
the following statistical reporting
numbers of the HTS (as in effect on the
day before the date of the enactment of
this paragraph), other than shirts with
plackets and pointed collars:
6105.10.0010.......................... 6109.10.0040................. 6110.30.3053
6109.10.0018......................... 6109.10.0045................. 6110.30.3059
6109.10.0027......................... 6110.20.2079................. .........................................
(D) Verification with respect to
transshipment for certain apparel articles.--
(i) In general.--Not later than April
1, July 1, October 1, and January 1 of
each year, the Commissioner responsible
for United States Customs and Border
Protection shall verify that apparel
articles imported into the United
States under this paragraph are not
being unlawfully transshipped (within
the meaning of subsection (f)) into the
United States.
(ii) Report to president.--If the
Commissioner determines pursuant to
clause (i) that apparel articles
imported into the United States under
this paragraph are being unlawfully
transshipped into the United States,
the Commissioner shall report that
determination to the President.
(iii) Authority to reduce
quantitative limitation.--If, in any 1-
year period with respect to which the
President extends preferential
treatment as described in this
paragraph, the Commissioner reports to
the President pursuant to clause (ii)
regarding unlawful transshipments, the
President--
(I) may modify the
quantitative limitation under
this paragraph as the President
considers appropriate to
account for such
transshipments; and
(II) if the President
modifies the limitation under
subclause (I), shall publish
notice of the modification in
the Federal Register.
(E) Category defined.--In this paragraph, the
term ``category'' means the number assigned
under the U.S. Textile and Apparel Category
System of the Office of Textiles and Apparel of
the Department of Commerce, as listed in the
HTS under the applicable heading or subheading
(as in effect on the day before the date of the
enactment of this paragraph).
(3) Apparel and other articles subject to certain
assembly rules.--
(A) Brassieres.--Any apparel article
classifiable under subheading 6212.10 of the
HTS that is wholly assembled, or knit-to-shape,
in Haiti from any combination of fabrics,
fabric components, components knit-to-shape, or
yarns and is imported directly from Haiti or
the Dominican Republic shall enter the United
States free of duty, without regard to the
source of the fabric, fabric components,
components knit-to-shape, or yarns from which
the article is made.
(B) Other apparel articles.--Any of the
following apparel articles that is wholly
assembled, or knit-to-shape, in Haiti from any
combination of fabrics, fabric components,
components knit-to-shape, or yarns and is
imported directly from Haiti or the Dominican
Republic shall enter the United States free of
duty, without regard to the source of the
fabric, fabric components, components knit-to-
shape, or yarns from which the article is made:
(i) Any apparel article that is of a
type listed in chapter rule 3, 4, or 5
for chapter 61 of the HTS (as such
chapter rules are contained in section
A of the Annex to Proclamation 8213 of
the President of December 20, 2007) as
being excluded from the scope of such
chapter rule, when such chapter rule is
applied to determine whether an apparel
article is an originating good for
purposes of general note 29(n) to the
HTS, except that, for purposes of this
clause, reference in such chapter rules
to ``6104.12.00'' shall be deemed to be
a reference to ``6104.19.60''.
(ii)(I) Subject to subclause (II),
any apparel article that is of a type
listed in chapter rule 3(a), 4(a), or
5(a) for chapter 62 of the HTS, as such
chapter rules are contained in
paragraph 9 of section A of the Annex
to Proclamation 8213 of the President
of December 20, 2007.
(II) Subclause (I) shall not include
any apparel article to which
subparagraph (A) of this paragraph
applies.
(C) Luggage and similar items.--Any article
classifiable under subheading 4202.12, 4202.22,
4202.32 or 4202.92 of the HTS that is wholly
assembled in Haiti and is imported directly
from Haiti or the Dominican Republic shall
enter the United States free of duty, without
regard to the source of the fabric, components,
or materials from which the article is made.
(D) Headgear.--Any article classifiable under
heading 6501, 6502, or 6504 of the HTS, or
under subheading 6505.90 of the HTS, that is
wholly assembled, knit-to-shape, or formed in
Haiti from any combination of fabrics, fabric
components, components knit-to-shape, or yarns
and is imported directly from Haiti or the
Dominican Republic shall enter the United
States free of duty, without regard to the
source of the fabric, fabric components,
components knit-to-shape, or yarns from which
the article is made.
(E) Certain sleepwear.--Any of the following
apparel articles that is wholly assembled, or
knit-to-shape, in Haiti from any combination of
fabrics, fabric components, components knit-to-
shape, or yarns and is imported directly from
Haiti or the Dominican Republic shall enter the
United States free of duty, without regard to
the source of the fabric, fabric components,
components knit-to-shape, or yarns from which
the article is made:
(i) Pajama bottoms and other
sleepwear for women and girls, of
cotton, that are classifiable under
subheading 6208.91.30, or of man-made
fibers, that are classifiable under
subheading 6208.92.00.
(ii) Pajama bottoms and other
sleepwear for girls, of other textile
materials, that are classifiable under
subheading 6208.99.20.
(F) Certain other apparel articles.--
(i) In general.--Any of the apparel
articles described in clause (ii) that
is wholly assembled, or knit-to-shape,
in Haiti from any combination of
fabrics, fabric components, components
knit-to-shape, or yarns and is imported
directly from Haiti or the Dominican
Republic shall enter the United States
free of duty, without regard to the
source of the fabric, fabric
components, components knit-to-shape,
or yarns from which the article is
made.
(ii) Articles described.--Apparel
articles described in this clause are
apparel articles in the following
category numbers that fall within the
following statistical reporting numbers
of the HTS (as in effect on the day
before the date of the enactment of
this subparagraph):
----------------------------------------------------------------------------------------------------------------
Category Number HTS Statistical
Reporting Number
----------------------------------------------------------------------------------------------------------------
334 6101.90.9010
6112.11.0010
6103.22.0010
6113.00.9015
----------------------------------------------------------------------------------------------------------------
335 6104.22.0010
6104.29.2010
6112.11.0020
----------------------------------------------------------------------------------------------------------------
336 6104.49.9010
----------------------------------------------------------------------------------------------------------------
338 6103.22.0050
6105.90.8010
6112.11.0030
----------------------------------------------------------------------------------------------------------------
339 6104.22.0060
6104.29.2049
6106.90.2510
6106.90.3010
6110.20.1031
6110.20.1033
6112.11.0040
----------------------------------------------------------------------------------------------------------------
342 6104.22.0030
6104.29.2022
6104.52.0010
6104.52.0020
6104.59.8010
----------------------------------------------------------------------------------------------------------------
350 6107.91.0040
6107.91.0090
----------------------------------------------------------------------------------------------------------------
351 6107.21.0010
6107.21.0020
6107.91.0030
6108.31.0010
6108.31.0020
----------------------------------------------------------------------------------------------------------------
433 6103.23.0007
6103.29.0520
6103.31.0000
6103.33.1000
6103.39.8020
----------------------------------------------------------------------------------------------------------------
434 6101.30.1500
6101.90.0500
6101.90.9020
6103.23.0005
6103.29.0510
----------------------------------------------------------------------------------------------------------------
435 6102.30.1000
6102.90.9010
6104.23.0010
6104.29.0510
6104.29.2012
6104.33.1000
6104.39.2020
----------------------------------------------------------------------------------------------------------------
438 6103.23.0025
6103.29.0550
6104.23.0020
6104.29.0560
6104.29.2051
6105.90.1000
6105.90.8020
6106.20.1020
6106.90.1010
6106.90.1020
6106.90.2520
6106.90.3020
6110.11.0070
6110.12.2070
6110.12.2080
6110.19.0070
6110.19.0080
6110.30.1550
6110.30.1560
----------------------------------------------------------------------------------------------------------------
633 6103.23.0037
6103.29.1015
6103.33.2000
6103.39.1000
6103.39.8030
----------------------------------------------------------------------------------------------------------------
634 6101.30.1000
6101.90.9030
6103.23.0036
6103.29.1010
6112.12.0010
6112.19.1010
6112.20.1010
6112.20.1030
6113.00.9025
----------------------------------------------------------------------------------------------------------------
635 6102.30.0500
6102.90.9015
6104.23.0026
6104.29.1010
6104.29.2014
6104.39.2030
6112.12.0020
6112.19.1020
6112.20.1020
6112.20.1040
6113.00.9030
----------------------------------------------------------------------------------------------------------------
636 6104.49.9030
6104.44.2020
----------------------------------------------------------------------------------------------------------------
638 6103.23.0075
6103.29.1050
6105.90.8030
6110.30.1050
6110.30.2051
6110.30.2053
6112.12.0030
6112.19.1030
----------------------------------------------------------------------------------------------------------------
639 6104.23.0036
6104.29.1050
6104.29.2055
6106.90.2530
6106.90.3030
6110.30.1060
6110.30.2061
6110.30.2063
6112.12.0040
6112.19.1040
----------------------------------------------------------------------------------------------------------------
651 6107.22.0010
6107.22.0015
6107.22.0025
6107.99.1030
6108.32.0015
----------------------------------------------------------------------------------------------------------------
(iii) Category defined.--In this
subparagraph, the term ``category'' has
the meaning given that term in
paragraph (2A)(E) of this subsection.
(G) Made-up textile articles.--
(i) In general.--Any of the made-up
textile articles described in clauses
(ii) and (iii) that is wholly
assembled, or knit-to-shape, in Haiti
from any combination of fabrics, fabric
components, components knit-to-shape,
or yarns and is imported directly from
Haiti or the Dominican Republic shall
enter the United States free of duty,
without regard to the source of the
fabric, fabric components, components
knit-to-shape, or yarns from which the
article is made.
(ii) Articles described.--Made-up
textile articles described in this
clause are articles in the following
category numbers that fall within the
following statistical reporting numbers
of the HTS (as in effect on the day
before the date of the enactment of
this subparagraph):
----------------------------------------------------------------------------------------------------------------
Category Number HTS Statistical
Reporting Number
----------------------------------------------------------------------------------------------------------------
363 6302.60.0020
6302.91.0015
6302.91.0035
6307.90.8940
----------------------------------------------------------------------------------------------------------------
369 6304.91.0020
6304.92.0000
6302.60.0010
6302.60.0030
6302.91.0005
6302.91.0050
6307.90.8910
6307.90.8945
5701.90.2020
5702.39.2010
5702.50.5600
5702.99.0500
5702.99.1500
5705.00.2020
5807.10.0510
5807.90.0510
6307.90.3010
6301.30.0010
6305.20.0000
6307.10.1020
6307.10.1090
6406.10.7700
9404.90.1000
9404.90.9505
6301.30.0020
6302.91.0045
----------------------------------------------------------------------------------------------------------------
465 5701.10.9000
5702.50.2000
5702.50.4000
5702.91.3000
5702.91.4000
5703.10.2000
5703.10.8000
5704.10.0010
5705.00.2005
5705.00.2015
5702.31.1000
5702.31.2000
----------------------------------------------------------------------------------------------------------------
469 6304.19.3040
6304.91.0050
6304.99.1500
6304.99.6010
5601.29.0020
6302.39.0010
6406.10.9020
----------------------------------------------------------------------------------------------------------------
665 5701.90.1030
5701.90.2030
5702.32.1000
5702.32.2000
5702.42.2090
5702.50.5200
5702.92.1000
5702.92.9000
5703.20.1000
5703.30.2000
5703.30.8030
5703.30.8080
5704.10.0090
5705.00.2030
5703.20.2010
5703.20.2090
----------------------------------------------------------------------------------------------------------------
666 6304.11.2000
6304.91.0040
6304.93.0000
6304.99.6020
6301.40.0010
6301.40.0020
6301.90.0010
----------------------------------------------------------------------------------------------------------------
669 5601.10.2000
5601.22.0090
5807.10.0520
5807.90.0520
6307.90.3020
6305.32.0010
6305.32.0020
6305.32.0050
6305.32.0060
6305.39.0000
6406.10.9040
6308.00.0020
----------------------------------------------------------------------------------------------------------------
899 6304.11.3000
6304.19.3060
6304.91.0070
6304.99.3500
6304.99.6040
5601.29.0090
6301.90.0030
6305.90.0000
6406.10.9060
----------------------------------------------------------------------------------------------------------------
900 5601.29.0010
5701.90.2010
6301.90.0020
----------------------------------------------------------------------------------------------------------------
(iii) Other articles described.--
Made-up textile articles described in
this clause are articles that fall
within statistical reporting number
6406.10.9090 of the HTS (as in effect
on the day before the date of the
enactment of this subparagraph).
(iv) Category defined.--In this
subparagraph, the term ``category'' has
the meaning given that term in
paragraph (2A)(E) of this subsection.
(4) Earned import allowance rule.--
(A) In general.--Apparel articles wholly
assembled, or knit-to-shape, in Haiti from any
combination of fabrics, fabric components,
components knit-to-shape, or yarns and imported
directly from Haiti or the Dominican Republic
shall enter the United States free of duty,
without regard to the source of the fabric,
fabric components, components knit-to-shape, or
yarns from which the articles are made, if such
apparel articles are accompanied by an earned
import allowance certificate that reflects the
amount of credits equal to the total square
meter equivalents of such apparel articles, in
accordance with the program established under
subparagraph (B). For purposes of determining
the quantity of square meter equivalents under
this subparagraph, the conversion factors
listed in ``Correlation: U.S. Textile and
Apparel Industry Category System with the
Harmonized Tariff Schedule of the United States
of America, 2008'', or its successor
publications, of the United States Department
of Commerce, shall apply.
(B) Earned import allowance program.--
(i) Establishment.--The Secretary of
Commerce shall establish a program to
provide earned import allowance
certificates to any producer or entity
controlling production for purposes of
subparagraph (A), based on the elements
described in clause (ii).
(ii) Elements.--The elements referred
to in clause (i) are the following:
(I) One credit shall be
issued to a producer or an
entity controlling production
for every two square meter
equivalents of qualifying woven
fabric or qualifying knit
fabric that the producer or
entity controlling production
can demonstrate that it
purchased for the manufacture
in Haiti of articles like or
similar to any article eligible
for preferential treatment
under subparagraph (A). The
Secretary of Commerce shall, if
requested by a producer or
entity controlling production,
create and maintain an account
for such producer or entity
controlling production, into
which such credits shall be
deposited.
(II) Such producer or entity
controlling production may
redeem credits issued under
subclause (I) for earned import
allowance certificates
reflecting such number of
earned credits as the producer
or entity may request and has
available.
(III) The Secretary of
Commerce may require any
textile mill or other entity
located in the United States
that exports to Haiti
qualifying woven fabric or
qualifying knit fabric to
submit, upon such export or
upon request, documentation,
such as a Shipper's Export
Declaration, to the Secretary
of Commerce--
(aa) verifying that
the qualifying woven
fabric or qualifying
knit fabric was
exported to a producer
in Haiti or to an
entity controlling
production; and
(bb) identifying such
producer or entity
controlling production,
and the quantity and
description of
qualifying woven fabric
or qualifying knit
fabric exported to such
producer or entity
controlling production.
(IV) The Secretary of
Commerce may require that a
producer or entity controlling
production submit documentation
to verify purchases of
qualifying woven fabric or
qualifying knit fabric.
(V) The Secretary of Commerce
may make available to each
person or entity identified in
documentation submitted under
subclause (III) or (IV)
information contained in such
documentation that relates to
the purchase of qualifying
woven fabric or qualifying knit
fabric involving such person or
entity.
(VI) The program under this
subparagraph shall be
established so as to allow, to
the extent feasible, the
submission, storage, retrieval,
and disclosure of information
in electronic format, including
information with respect to the
earned import allowance
certificates required under
subparagraph (A)(i).
(VII) The Secretary of
Commerce may reconcile
discrepancies in information
provided under subclause (III)
or (IV) and verify the accuracy
of such information.
(VIII) The Secretary of
Commerce shall establish
procedures to carry out the
program under this subparagraph
and may establish additional
requirements to carry out this
subparagraph. Such additional
requirements may include--
(aa) submissions by
textile mills or other
entities in the United
States documenting
exports of yarns wholly
formed in the United
States to countries
described in paragraph
(1)(B)(iii) for the
manufacture of
qualifying knit fabric;
and
(bb) procedures
imposed on producers or
entities controlling
production to allow the
Secretary of Commerce
to obtain and verify
information relating to
the production of
qualifying knit fabric.
(iii) Qualifying woven fabric
defined.--For purposes of this
subparagraph, the term ``qualifying
woven fabric'' means fabric wholly
formed in the United States from yarns
wholly formed in the United States,
except that--
(I) fabric otherwise eligible
as qualifying woven fabric
shall not be ineligible as
qualifying woven fabric because
the fabric contains nylon
filament yarn to which section
213(b)(2)(A)(vii)(IV) applies;
(II) fabric that would
otherwise be ineligible as
qualifying woven fabric because
the fabric contains yarns not
wholly formed in the United
States shall not be ineligible
as qualifying woven fabric if
the total weight of all such
yarns is not more than 10
percent of the total weight of
the fabric; and
(III) fabric otherwise
eligible as qualifying woven
fabric shall not be ineligible
as qualifying fabric because
the fabric contains yarns
covered by clause (i) or (ii)
of paragraph (5)(A).
(iv) Qualifying knit fabric
defined.--For purposes of this
subparagraph, the term ``qualifying
knit fabric'' means fabric or knit-to-
shape components wholly formed or knit-
to-shape in any country or any
combination of countries described in
paragraph (1)(B)(iii), from yarns
wholly formed in the United States,
except that--
(I) fabric or knit-to-shape
components otherwise eligible
as qualifying knit fabric shall
not be ineligible as qualifying
knit fabric because the fabric
or knit-to-shape components
contain nylon filament yarn to
which section
213(b)(2)(A)(vii)(IV) applies;
(II) fabric or knit-to-shape
components that would otherwise
be ineligible as qualifying
knit fabric because the fabric
or knit-to-shape components
contain yarns not wholly formed
in the United States shall not
be ineligible as qualifying
knit fabric if the total weight
of all such yarns is not more
than 10 percent of the total
weight of the fabric or knit-
to-shape components; and
(III) fabric or knit-to-shape
components otherwise eligible
as qualifying knit fabric shall
not be ineligible as qualifying
knit fabric because the fabric
or knit-to-shape components
contain yarns covered by clause
(i) or (ii) of paragraph
(5)(A).
(C) Enforcement provisions.--
(i) Fraudulent claims of
preference.--Any person who makes a
false claim for preference under the
program established under subparagraph
(B) shall be subject to any applicable
civil or criminal penalty that may be
imposed under the customs laws of the
United States or under title 18, United
States Code.
(ii) Penalties for other fraudulent
information.--The Secretary of Commerce
may establish and impose penalties for
the submission to the Secretary of
Commerce of fraudulent information
under the program established under
subparagraph (B), other than a claim
described in clause (i).
(5) Short supply provision.--
(A) In general.--Any apparel article that is
wholly assembled, or knit-to-shape, in Haiti
from any combination of fabrics, fabric
components, components knit-to-shape, or yarns
and is imported directly from Haiti or the
Dominican Republic shall enter the United
States free of duty, without regard to the
source of the fabrics, fabric components,
components knit-to-shape, or yarns from which
the article is made, if the fabrics, fabric
components, components knit-to-shape, or yarns
comprising the component that determines the
tariff classification of the article are of any
of the following:
(i) Fabrics or yarns, to the extent
that apparel articles of such fabrics
or yarns would be eligible for
preferential treatment, without regard
to the source of the fabrics or yarns,
under Annex 401 of the NAFTA.
(ii) Fabrics or yarns, to the extent
that such fabrics or yarns are
designated as not being available in
commercial quantities for purposes of--
(I) section 213(b)(2)(A)(v)
of this Act;
(II) section 112(b)(5) of the
African Growth and Opportunity
Act;
(III) clause (i)(III) or (ii)
of section 204(b)(3)(B) of the
Andean Trade Preference Act; or
(IV) any other provision,
relating to determining whether
a textile or apparel article is
an originating good eligible
for preferential treatment, of
a law that implements a free
trade agreement entered into by
the United States that is in
effect at the time the claim
for preferential treatment is
made.
(B) Removal of designation of fabrics or
yarns not available in commercial quantities.--
If the President determines that--
(i) any fabric or yarn described in
clause (i) of subparagraph (A) was
determined to be eligible for
preferential treatment, or
(ii) any fabric or yarn described in
clause (ii) of subparagraph (A) was
designated as not being available in
commercial quantities,
on the basis of fraud, the President is
authorized to remove the eligibility or
designation (as the case may be) of that fabric
or yarn with respect to articles entered after
such removal.
(6) Other preferential treatment not affected.--The
duty-free treatment provided under this subsection is
in addition to any other preferential treatment under
this title.
(c) Special Rule for Certain Wire Harness Automotive
Components.--
(1) In general.--Any wire harness automotive
component that is the product or manufacture of Haiti
and is imported directly from Haiti into the customs
territory of the United States shall enter the United
States free of duty, during the 10-year period
beginning on the date of the enactment of the Haitian
Hemispheric Opportunity through Partnership
Encouragement Act of 2006, if Haiti has met the
requirements of subsection (d) and if the sum of--
(A) the cost or value of the materials
produced in Haiti or one or more countries
described in subsection (b)(2)(C), or any
combination thereof, plus
(B) the direct costs of processing operations
(as defined in section 213(a)(3)) performed in
Haiti or the United States, or both,
is not less than 50 percent of the declared customs
value of such wire harness automotive component.
(2) Wire harness automotive component.--For purposes
of this subsection, the term ``wire harness automotive
component'' means any article provided for in
subheading 8544.30.00 of the HTS, as in effect on the
date of the enactment of the Haitian Hemispheric
Opportunity through Partnership Encouragement Act of
2006.
(d) Eligibility Requirements.--
(1) In general.--Haiti shall be eligible for
preferential treatment under this section if the
President determines and certifies to Congress that
Haiti--
(A) has established, or is making continual
progress toward establishing--
(i) a market-based economy that
protects private property rights,
incorporates an open rules-based
trading system, and minimizes
government interference in the economy
through measures such as price
controls, subsidies, and government
ownership of economic assets;
(ii) the rule of law, political
pluralism, and the right to due
process, a fair trial, and equal
protection under the law;
(iii) the elimination of barriers to
United States trade and investment,
including by--
(I) the provision of national
treatment and measures to
create an environment conducive
to domestic and foreign
investment;
(II) the protection of
intellectual property; and
(III) the resolution of
bilateral trade and investment
disputes;
(iv) economic policies to reduce
poverty, increase the availability of
health care and educational
opportunities, expand physical
infrastructure, promote the development
of private enterprise, and encourage
the formation of capital markets
through microcredit or other programs;
(v) a system to combat corruption and
bribery, such as signing and
implementing the Convention on
Combating Bribery of Foreign Public
Officials in International Business
Transactions; and
(vi) protection of internationally
recognized worker rights, including the
right of association, the right to
organize and bargain collectively, a
prohibition on the use of any form of
forced or compulsory labor, a minimum
age for the employment of children, and
acceptable conditions of work with
respect to minimum wages, hours of
work, and occupational safety and
health;
(B) does not engage in activities that
undermine United States national security or
foreign policy interests; and
(C) does not engage in gross violations of
internationally recognized human rights or
provide support for acts of international
terrorism and cooperates in international
efforts to eliminate human rights violations
and terrorist activities.
(2) Time limit for determination.--The President
shall determine whether Haiti meets the requirements of
paragraph (1) not later than 90 days after the date of
the enactment of the Haitian Hemispheric Opportunity
through Partnership Encouragement Act of 2006.
(3) Continuing compliance.--If the President
determines that Haiti is not making continual progress
in meeting the requirements described in paragraph
(1)(A), the President shall terminate the preferential
treatment under this section.
(4) Petition process.--Any interested party may file
a request to have the status of Haiti reviewed with
respect to the eligibility requirements listed in
paragraph (1), and the President shall provide for this
purpose the same procedures as those that are provided
for reviewing the status of eligible beneficiary
developing countries with respect to the designation
criteria listed in subsections (b) and (c) of section
502 of the Trade Act of 1974 (19 U.S.C. 2642 (b) and
(c)).
(e) Technical Assistance Improvement and Compliance Needs
Assessment and Remediation Program.--
(1) Continued eligibility for preferences.--
(A) Presidential certification of compliance
by haiti with requirements.--Upon the
expiration of the 16-month period beginning on
the date of the enactment of the Haitian
Hemispheric Opportunity through Partnership
Encouragement Act of 2008, Haiti shall continue
to be eligible for the preferential treatment
provided under subsection (b) only if the
President determines and certifies to the
Congress that--
(i) Haiti has implemented the
requirements set forth in paragraphs
(2) and (3); and
(ii) Haiti has agreed to require
producers of articles for which duty-
free treatment may be requested under
subsection (b) to participate in the
TAICNAR Program described in paragraph
(3) and has developed a system to
ensure participation in such program by
such producers, including by developing
and maintaining the registry described
in paragraph (2)(B)(i).
(B) Extension.--The President may extend the
period for compliance by Haiti under
subparagraph (A) if the President--
(i) determines that Haiti has made a
good faith effort toward such
compliance and has agreed to take
additional steps to come into full
compliance that are satisfactory to the
President; and
(ii) provides to the appropriate
congressional committees, not later
than 6 months after the last day of the
16-month period specified in
subparagraph (A), and every 6 months
thereafter, a report identifying the
steps that Haiti has agreed to take to
come into full compliance and the
progress made over the preceding 6-
month period in implementing such
steps.
(C) Continuing compliance.--
(i) Termination of preferential
treatment.--If, after making a
certification under subparagraph (A),
the President determines that Haiti is
no longer meeting the requirements set
forth in subparagraph (A), the
President shall terminate the
preferential treatment provided under
subsection (b), unless the President
determines, after consulting with the
appropriate congressional committees,
that meeting such requirements is not
practicable because of extraordinary
circumstances existing in Haiti when
the determination is made.
(ii) Subsequent compliance.--If the
President, after terminating
preferential treatment under clause
(i), determines that Haiti is meeting
the requirements set forth in
subparagraph (A), the President shall
reinstate the application of
preferential treatment under subsection
(b).
(2) Labor ombudsman.--
(A) In general.--The requirement under this
paragraph is that Haiti has established an
independent Labor Ombudsman's Office within the
national government that--
(i) reports directly to the President
of Haiti;
(ii) is headed by a Labor Ombudsman
chosen by the President of Haiti, in
consultation with Haitian labor unions
and industry associations; and
(iii) is vested with the authority to
perform the functions described in
subparagraph (B).
(B) Functions.--The functions of the Labor
Ombudsman's Office shall include--
(i) developing and maintaining a
registry of producers of articles for
which duty-free treatment may be
requested under subsection (b), and
developing, in consultation and
coordination with any other appropriate
officials of the Government of Haiti, a
system to ensure participation by such
producers in the TAICNAR Program
described in paragraph (3);
(ii) overseeing the implementation of
the TAICNAR Program described in
paragraph (3);
(iii) receiving and investigating
comments from any interested party
regarding the conditions described in
paragraph (3)(B) in facilities of
producers listed in the registry
described in clause (i) and, where
appropriate, referring such comments or
the result of such investigations to
the appropriate Haitian authorities, or
to the entity operating the TAICNAR
Program described in paragraph (3);
(iv) assisting, in consultation and
coordination with any other appropriate
Haitian authorities, producers listed
in the registry described in clause (i)
in meeting the conditions set forth in
paragraph (3)(B); and
(v) coordinating, with the assistance
of the entity operating the TAICNAR
Program described in paragraph (3), a
tripartite committee comprised of
appropriate representatives of
government agencies, employers, and
workers, as well as other relevant
interested parties, for the purposes of
evaluating progress in implementing the
TAICNAR Program described in paragraph
(3), and consulting on improving core
labor standards and working conditions
in the textile and apparel sector in
Haiti, and on other matters of common
concern relating to such core labor
standards and working conditions.
(3) Technical assistance improvement and compliance
needs assessment and remediation program.--
(A) In general.--The requirement under this
paragraph is that Haiti, in cooperation with
the International Labor Organization, has
established a Technical Assistance Improvement
and Compliance Needs Assessment and Remediation
Program meeting the requirements under
subparagraph (C)--
(i) to assess compliance by producers
listed in the registry described in
paragraph (2)(B)(i) with the conditions
set forth in subparagraph (B) and to
assist such producers in meeting such
conditions; and
(ii) to provide assistance to improve
the capacity of the Government of
Haiti--
(I) to inspect facilities of
producers listed in the
registry described in paragraph
(2)(B)(i); and
(II) to enforce national
labor laws and resolve labor
disputes, including through
measures described in
subparagraph (E).
(B) Conditions described.--The conditions
referred to in subparagraph (A) are--
(i) compliance with core labor
standards; and
(ii) compliance with the labor laws
of Haiti that relate directly to core
labor standards and to ensuring
acceptable conditions of work with
respect to minimum wages, hours of
work, and occupational health and
safety.
(C) Requirements.--The requirements for the
TAICNAR Program are that the program--
(i) be operated by the International
Labor Organization (or any subdivision,
instrumentality, or designee thereof),
which prepares the biannual reports
described in subparagraph (D);
(ii) be developed through a
participatory process that includes the
Labor Ombudsman described in paragraph
(2) and appropriate representatives of
government agencies, employers, and
workers;
(iii) assess compliance by each
producer listed in the registry
described in paragraph (2)(B)(i) with
the conditions set forth in
subparagraph (B) and identify any
deficiencies by such producer with
respect to meeting such conditions,
including by--
(I) conducting unannounced
site visits to manufacturing
facilities of the producer;
(II) conducting confidential
interviews separately with
workers and management of the
facilities of the producer;
(III) providing to management
and workers, and where
applicable, worker
organizations in the facilities
of the producer, on a
confidential basis--
(aa) the results of
the assessment carried
out under this clause;
and
(bb) specific
suggestions for
remediating any such
deficiencies;
(iv) assist the producer in
remediating any deficiencies identified
under clause (iii);
(v) conduct prompt follow-up site
visits to the facilities of the
producer to assess progress on
remediation of any deficiencies
identified under clause (iii); and
(vi) provide training to workers and
management of the producer, and where
appropriate, to other persons or
entities, to promote compliance with
subparagraph (B).
(D) Biannual report.--The biannual reports
referred to in subparagraph (C)(i) are a
report, by the entity operating the TAICNAR
Program, that is published (and available to
the public in a readily accessible manner) on a
biannual basis, beginning 6 months after Haiti
implements the TAICNAR Program under this
paragraph, covering the preceding 6-month
period, and that includes the following:
(i) The name of each producer listed
in the registry described in paragraph
(2)(B)(i) that has been identified as
having met the conditions under
subparagraph (B).
(ii) The name of each producer listed
in the registry described in paragraph
(2)(B)(i) that has been identified as
having deficiencies with respect to the
conditions under subparagraph (B), and
has failed to remedy such deficiencies.
(iii) For each producer listed under
clause (ii)--
(I) a description of the
deficiencies found to exist and
the specific suggestions for
remediating such deficiencies
made by the entity operating
the TAICNAR Program;
(II) a description of the
efforts by the producer to
remediate the deficiencies,
including a description of
assistance provided by any
entity to assist in such
remediation; and
(III) with respect to
deficiencies that have not been
remediated, the amount of time
that has elapsed since the
deficiencies were first
identified in a report under
this subparagraph.
(iv) For each producer identified as
having deficiencies with respect to the
conditions described under subparagraph
(B) in a prior report under this
subparagraph, a description of the
progress made in remediating such
deficiencies since the submission of
the prior report, and an assessment of
whether any aspect of such deficiencies
persists.
(E) Capacity building.--The assistance to the
Government of Haiti referred to in subparagraph
(A)(ii) shall include programs--
(i) to review the labor laws and
regulations of Haiti and to develop and
implement strategies for bringing the
laws and regulations into conformity
with core labor standards;
(ii) to develop additional strategies
for facilitating protection of core
labor standards and providing
acceptable conditions of work with
respect to minimum wages, hours of
work, and occupational safety and
health, including through legal,
regulatory, and institutional reform;
(iii) to increase awareness of worker
rights, including under core labor
standards and national labor laws;
(iv) to promote consultation and
cooperation between government
representatives, employers, worker
representatives, and United States
importers on matters relating to core
labor standards and national labor
laws;
(v) to assist the Labor Ombudsman
appointed pursuant to paragraph (2) in
establishing and coordinating operation
of the committee described in paragraph
(2)(B)(v);
(vi) to assist worker representatives
in more fully and effectively
advocating on behalf of their members;
and
(vii) to provide on-the-job training
and technical assistance to labor
inspectors, judicial officers, and
other relevant personnel to build their
capacity to enforce national labor laws
and resolve labor disputes.
(4) Compliance with eligibility criteria.--
(A) Country compliance with worker rights
eligibility criteria.--In making a
determination of whether Haiti is meeting the
requirement set forth in subsection
(d)(1)(A)(vi) relating to internationally
recognized worker rights, the President shall
consider the reports produced under paragraph
(3)(D).
(B) Producer eligibility.--
(i) Identification of producers.--
Beginning in the second calendar year
after the President makes the
certification under paragraph (1)(A),
the President shall identify on a
biennial basis whether a producer
listed in the registry described in
paragraph (2)(B)(i) has failed to
comply with core labor standards and
with the labor laws of Haiti that
directly relate to and are consistent
with core labor standards.
(ii) Assistance to producers;
withdrawal, etc., of preferential
treatment.--For each producer that the
President identifies under clause (i),
the President shall seek to assist such
producer in coming into compliance with
core labor standards and with the labor
laws of Haiti that directly relate to
and are consistent with core labor
standards. If such efforts fail, the
President shall withdraw, suspend, or
limit the application of preferential
treatment under subsection (b) to
articles of such producer.
(iii) Reinstating preferential
treatment.--If the President, after
withdrawing, suspending, or limiting
the application of preferential
treatment under clause (ii) to articles
of a producer, determines that such
producer is complying with core labor
standards and with the labor laws of
Haiti that directly relate to and are
consistent with core labor standards,
the President shall reinstate the
application of preferential treatment
under subsection (b) to the articles of
the producer.
(iv) Consideration of reports.--In
making the identification under clause
(i) and the determination under clause
(iii), the President shall consider the
reports made available under paragraph
(3)(D).
(5) Reports by the president.--
(A) In general.--Not later than one year
after the date of the enactment of the Haitian
Hemispheric Opportunity through Partnership
Encouragement Act of 2008, and annually
thereafter, the President shall transmit to the
appropriate congressional committees a report
on the implementation of this subsection during
the preceding 1-year period.
(B) Matters to be included.--Each report
required by subparagraph (A) shall include the
following:
(i) An explanation of the efforts of
Haiti, the President, and the
International Labor Organization to
carry out this subsection.
(ii) A summary of each report
produced under paragraph (3)(D) during
the preceding 1-year period and a
summary of the findings contained in
such report.
(iii) Identifications made under
paragraph (4)(B)(i) and determinations
made under paragraph (4)(B)(iii).
(6) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
subsection the sum of $10,000,000 for the period
beginning on October 1, 2008, and ending on September
30, 2013.
(f) Conditions Regarding Enforcement of Circumvention.--
(1) In general.--The preferential treatment under
subsection (b)(1) shall not apply unless the President
certifies to Congress that Haiti is meeting the
following conditions:
(A) Haiti has adopted an effective visa
system, domestic laws, and enforcement
procedures applicable to articles described in
subsection (b) to prevent unlawful
transshipment of the articles and the use of
counterfeit documents relating to the
importation of the articles into the United
States.
(B) Haiti has enacted legislation or
promulgated regulations that would permit U.S.
Customs and Border Protection verification
teams to have the access necessary to
investigate thoroughly allegations of
transshipment through such country.
(C) Haiti agrees to report, on a timely
basis, at the request of U.S. Customs and
Border Protection, on the total exports from
and imports into that country of articles
described in subsection (b), consistent with
the manner in which the records are kept by
Haiti.
(D) Haiti agrees to cooperate fully with the
United States to address and take action
necessary to prevent circumvention as provided
in Article 5 of the Agreement on Textiles and
Clothing.
(E) Haiti agrees to require all producers and
exporters of articles described in subsection
(b) in that country to maintain complete
records of the production and the export of
such articles, including materials used in the
production, for at least 5 years after the
production or export (as the case may be).
(F) Haiti agrees to report, on a timely
basis, at the request of U.S. Customs and
Border Protection, documentation establishing
the country of origin of articles described in
subsection (b) as used by that country in
implementing an effective visa system.
(2) Definition of transshipment.--Transshipment
within the meaning of this subsection has occurred when
preferential treatment for a textile or apparel article
under this section has been claimed on the basis of
material false information concerning the country of
origin, manufacture, processing, or assembly of the
article or any of its components. For purposes of this
paragraph, false information is material if disclosure
of the true information would mean or would have meant
that the article is or was ineligible for preferential
treatment under this section.
(3) Limitation on goods shipped from the dominican
republic.--
(A) Limitation.--Notwithstanding subsection
(a)(5), relating to the definition of
``imported directly from Haiti or the Dominican
Republic'', articles described in subsection
(b) that are shipped from the Dominican
Republic, directly or through the territory of
an intermediate country, whether or not such
articles undergo processing in the Dominican
Republic, shall not be considered to be
``imported directly from Haiti or the Dominican
Republic'' until the President certifies to the
Congress that Haiti and the Dominican Republic
have developed procedures to prevent unlawful
transshipment of the articles and the use of
counterfeit documents related to the
importation of the articles into the United
States.
(B) Technical and other assistance.--The
Commissioner responsible for U.S. Customs and
Border Protection shall provide technical and
other assistance to Haiti and the Dominican
Republic to develop expeditiously the
procedures described in subparagraph (A).
(g) Regulations.--The President shall issue regulations to
carry out this section not later than 180 days after the date
of the enactment of the Haitian Hemispheric Opportunity through
Partnership Encouragement Act of 2006. The President shall
consult with the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate in
preparing such regulations.
(h) Termination.--Except as provided in subsection (b)(1),
the duty-free treatment provided under this section shall
remain in effect until [September 30, 2020] September 30, 2025.
* * * * * * *
----------
CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF 1985
* * * * * * *
SEC. 13031. FEES FOR CERTAIN CUSTOMS SERVICES.
(a) Schedule of Fees.--In addition to any other fee
authorized by law, the Secretary of the Treasury shall charge
and collect the following fees for the provision of customs
services in connection with the following:
(1) For the arrival of a commercial vessel of 100 net
tons or more, $397.
(2) For the arrival of a commercial truck, $5.
(3) For the arrival of each railroad car carrying
passengers or commercial freight, $7.50.
(4) For all arrivals made during a calendar year by a
private vessel or private aircraft, $25.
(5)(A) Subject to subparagraph (B), for the arrival
of each passenger aboard a commercial vessel or
commercial aircraft from a place outside the United
States (other than a place referred to in subsection
(b)(1)(A)(i) of this section), $5.
(B) For the arrival of each passenger aboard a
commercial vessel from a place referred to in
subsection (b)(1)(A)(i) of this section, $1.75.
(6) For each item of dutiable mail for which a
document is prepared by a customs officer, $5.
(7) For each customs broker permit held by an
individual, partnership, association, or corporate
customs broker, $125 per year.
(8) For the arrival of a barge or other bulk carrier
from Canada or Mexico, $100.
(9)(A) For the processing of merchandise that is
formally entered or released during any fiscal year, a
fee in an amount equal to 0.21 percent ad valorem,
unless adjusted under subparagraph (B).
(B)(i) The Secretary of the Treasury may adjust the
ad valorem rate specified in subparagraph (A) to an ad
valorem rate (but not to a rate of more than 0.21
percent nor less than 0.15 percent) and the amounts
specified in subsection (b)(8)(A)(i) (but not to more
than $485 nor less than $21) to rates and amounts which
would, if charged, offset the salaries and expenses
that will likely be incurred by the Customs Service in
the processing of such entries and releases during the
fiscal year in which such costs are incurred.
(ii) In determining the amount of any adjustment
under clause (i), the Secretary of the Treasury shall
take into account whether there is a surplus or deficit
in the fund established under subsection (f) with
respect to the provision of customs services for the
processing of formal entries and releases of
merchandise.
(iii) An adjustment may not be made under clause (i)
with respect to the fee charged during any fiscal year
unless the Secretary of the Treasury--
(I) not later than 45 days after the date of
the enactment of the Act providing full-year
appropriations for the Customs Service for that
fiscal year, publishes in the Federal Register
a notice of intent to adjust the fee under this
paragraph and the amount of such adjustment;
(II) provides a period of not less than 30
days following publication of the notice
described in subclause (I) for public comment
and consultation with the Committee on Finance
of the Senate and the Committee on Ways and
Means of the House of Representatives regarding
the proposed adjustment and the methodology
used to determine such adjustment;
(III) upon the expiration of the period
provided under subclause (II), notifies such
committees in writing regarding the final
determination to adjust the fee, the amount of
such adjustment, and the methodology used to
determine such adjustment; and
(IV) upon the expiration of the 15-day period
following the written notification described in
subclause (III), submits for publication in the
Federal Register notice of the final
determination regarding the adjustment of the
fee.
(iv) The 15-day period referred to in clause
(iii)(IV) shall be computed by excluding--
(I) the days on which either House is not in
session because of an adjournment of more than
3 days to a day certain or an adjournment of
the Congress sine die; and
(II) any Saturday and Sunday, not excluded
under subclause (I), when either House is not
in session.
(v) An adjustment made under this subparagraph shall
become effective with respect to formal entries and
releases made on or after the 15th calendar day after
the date of publication of the notice described in
clause (iii)(IV) and shall remain in effect until
adjusted under this subparagraph.
(C) Any fee charged under this paragraph, whether or
not adjusted under subparagraph (B), is subject to the
limitations in subsection (b)(8)(A).
(10) For the processing of merchandise that is
informally entered or released, other than at--
(A) a centralized hub facility,
(B) an express consignment carrier facility,
or
(C) a small airport or other facility to
which section 236 of the Trade and Tariff Act
of 1984 applies, if more than 25,000 informal
entries were cleared through such airport or
facility during the fiscal year preceding such
entry or release, a fee of--
(i) $2 if the entry or release is
automated and not prepared by customs
personnel;
(ii) $6 if the entry or release is
manual and not prepared by customs
personnel; or
(iii) $9 if the entry or release,
whether automated or manual, is
prepared by customs personnel.
For provisions relating to the informal entry
or release of merchandise at facilities
referred to in subparagraphs (A), (B), and (C),
see subsection (b)(9).
(b) Limitations on Fees.--(1)(A) Except as provided in
subsection (a)(5)(B) of this section, no fee may be charged
under subsection (a) of this section for customs services
provided in connection with--
(i) the arrival of any passenger whose journey--
(I) originated in a territory or possession
of the United States; or
(II) originated in the United States and was
limited to territories and possessions of the
United States;
(ii) the arrival of any railroad car the journey of
which originates and terminates in the same country,
but only if no passengers board or disembark from the
train and no cargo is loaded or unloaded from such car
while the car is within any country other than the
country in which such car originates and terminates;
(iii) the arrival of a ferry, except for a ferry
whose operations begin on or after August 1, 1999, and
that operates south of 27 degrees latitude and east of
89 degrees longitude; or
(iv) the arrival of any passenger on board a
commercial vessel traveling only between ports which
are within the customs territory of the United States.
(B) The exemption provided for in subparagraph (A) shall not
apply in the case of the arrival of any passenger on board a
commercial vessel whose journey originates and terminates at
the same place in the United States if there are no intervening
stops.
(C) The exemption provided for in subparagraph (A)(i) shall
not apply to fiscal years 1994, 1995, 1996, and 1997.
(2) No fee may be charged under subsection (a)(2) for the
arrival of a commercial truck during any calendar year after a
total of $100 in fees has been paid to the Secretary of the
Treasury for the provision of customs services for all arrivals
of such commercial truck during such calendar year.
(3) No fee may be charged under subsection (a)(3) for the
arrival of a railroad car whether passenger or freight during
any calendar year after a total of $100 in fees has been paid
to the Secretary of the Treasury for the provision of customs
services for all arrivals of such passenger or freight rail car
during such calendar year.
(4)(A) No fee may be charged under subsection (a)(5) with
respect to the arrival of any passenger--
(i) who is in transit to a destination outside the
customs territory of the United States, and
(ii) for whom customs inspectional services are not
provided.
(B) In the case of a commercial vessel making a single voyage
involving 2 or more United States ports with respect to which
the passengers would otherwise be charged a fee pursuant to
subsection (a)(5), such fee shall be charged only 1 time for
each passenger.
(5) No fee may be charged under subsection (a)(1) for the
arrival of--
(A) a vessel during a calendar year after a total of
$5,955 in fees charged under paragraph (1) or (8) of
subsection (a) has been paid to the Secretary of the
Treasury for the provision of customs services for all
arrivals of such vessel during such calendar year,
(B) any vessel which, at the time of the arrival, is
being used solely as a tugboat, or
(C) any barge or other bulk carrier from Canada or
Mexico.
(6) No fee may be charged under subsection (a)(8) for the
arrival of a barge or other bulk carrier during a calendar year
after a total of $1,500 in fees charged under paragraph (1) or
(8) of subsection (a) has been paid to the Secretary of the
Treasury for the provision of customs services for all arrivals
of such barge or other bulk carrier during such calendar year.
(7) No fee may be charged under paragraph (2), (3), or (4) of
subsection (a) for the arrival of any--
(A) commercial truck,
(B) railroad car, or
(C) private vessel,
that is being transported, at the time of the arrival, by any
vessel that is not a ferry.
(8)(A)(i) Subject to clause (ii), the fee charged under
subsection (a)(9) for the formal entry or release of
merchandise may not exceed $485 or be less than $25, unless
adjusted pursuant to subsection (a)(9)(B).
(ii) A surcharge of $3 shall be added to the fee determined
after application of clause (i) for any manual entry or release
of merchandise.
(B) No fee may be charged under subsection (a) (9) or (10)
for the processing of any article that is--
(i) provided for under any item in chapter 98 of the
Harmonized Tariff Schedule of the United States, except
subheading 9802.00.60 or 9802.00.80,
(ii) a product of an insular possession of the United
States, or
(iii) a product of any country listed in subdivision
(c)(ii)(B) or (c)(v) of general note 3 to such
Schedule.
(C) For purposes of applying subsection (a) (9) or (10)--
(i) expenses incurred by the Secretary of the
Treasury in the processing of merchandise do not
include costs incurred in--
(I) air passenger processing,
(II) export control, or
(III) international affairs, and
(ii) any reference to a manual formal or informal
entry or release includes any entry or release filed by
a broker or importer that requires the inputting of
cargo selectivity data into the Automated Commercial
System by customs personnel, except when--
(I) the broker or importer is certified as an
ABI cargo release filer under the Automated
Commercial System at any port within the United
States, or
(II) the entry or release is filed at ports
prior to the full implementation of the cargo
selectivity data system by the Customs Service
at such ports.
(D) The fee charged under subsection (a)(9) or (10) with
respect to the processing of merchandise shall--
(i) be paid by the importer of record of the
merchandise;
(ii) except as otherwise provided in this paragraph,
be based on the value of the merchandise as determined
under section 402 of the Tariff Act of 1930;
(iii) in the case of merchandise classified under
subheading 9802.00.60 of the Harmonized Tariff Schedule
of the United States, be applied to the value of the
foreign repairs or alterations to the merchandise;
(iv) in the case of merchandise classified under
heading 9802.00.80 of such Schedule, be applied to the
full value of the merchandise, less the cost or value
of the component United States products;
(v) in the case of agricultural products of the
United States that are processed and packed in a
foreign trade zone, be applied only to the value of
material used to make the container for such
merchandise, if such merchandise is subject to entry
and the container is of a kind normally used for
packing such merchandise; and
(vi) in the case of merchandise entered from a
foreign trade zone (other than merchandise to which
clause (v) applies), be applied only to the value of
the privileged or nonprivileged foreign status
merchandise under section 3 of the Act of June 18, 1934
(commonly known as the Foreign Trade Zones Act, 19
U.S.C. 81c).
With respect to merchandise that is classified under subheading
9802.00.60 or heading 9802.00.80 of such Schedule and is duty-
free, the Secretary may collect the fee charged on the
processing of the merchandise under subsection (a) (9) or (10)
on the basis of aggregate data derived from financial and
manufacturing reports used by the importer in the normal course
of business, rather than on the basis of entry-by-entry
accounting.
(E) For purposes of subsection (a) (9) and (10), merchandise
is entered or released, as the case may be, if the merchandise
is--
(i) permitted or released under section 448(b) of the
Tariff Act of 1930,
(ii) entered or released from customs custody under
section 484(a)(1)(A) of the Tariff Act of 1930, or
(iii) withdrawn from warehouse for consumption.
(9)(A) With respect to the processing of letters, documents,
records, shipments, merchandise, or any other item that is
valued at an amount that is $2,000 or less (or such higher
amount as the Secretary of the Treasury may set by regulation
pursuant to section 498 of the Tariff Act of 1930), except such
items entered for transportation and exportation or immediate
exportation at a centralized hub facility, an express
consignment carrier facility, or a small airport or other
facility, the following reimbursements and payments are
required:
(i) In the case of a small airport or other
facility--
(I) the reimbursement which such facility is
required to make during the fiscal year under
section 9701 of title 31, United States Code or
section 236 of the Trade and Tariff Act of
1984; and
(II) an annual payment by the facility to the
Secretary of the Treasury, which is in lieu of
the payment of fees under subsection (a)(10)
for such fiscal year, in an amount equal to the
reimbursement under subclause (I).
(ii) Notwithstanding subsection (e)(6) and subject to
the provisions of subparagraph (B), in the case of an
express consignment carrier facility or centralized hub
facility--
(I) $.66 per individual airway bill or bill
of lading; and
(II) if the merchandise is formally entered,
the fee provided for in subsection (a)(9), if
applicable.
(B)(i) Beginning in fiscal year 2004, the Secretary of the
Treasury may adjust (not more than once per fiscal year) the
amount described in subparagraph (A)(ii) to an amount that is
not less than $.35 and not more than $1.00 per individual
airway bill or bill of lading. The Secretary shall provide
notice in the Federal Register of a proposed adjustment under
the preceding sentence and the reasons therefor and shall allow
for public comment on the proposed adjustment.
(ii) Notwithstanding section 451 of the
Tariff Act of 1930, the payment required by
subparagraph (A)(ii) (I) or (II) shall be the
only payment required for reimbursement of the
Customs Service in connection with the
processing of an individual airway bill or bill
of lading in accordance with such subparagraph
and for providing services at express
consignment carrier facilities or centralized
hub facilities, except that the Customs Service
may require such facilities to cover expenses
of the Customs Service for adequate office
space, equipment, furnishings, supplies, and
security.
(iii)(I) The payment required by subparagraph
(A)(ii) and clause (ii) of this subparagraph
shall be paid on a quarterly basis by the
carrier using the facility to the Customs
Service in accordance with regulations
prescribed by the Secretary of the Treasury.
(II) 50 percent of the amount of payments
received under subparagraph (A)(ii) and clause
(ii) of this subparagraph shall, in accordance
with section 524 of the Tariff Act of 1930, be
deposited in the Customs User Fee Account and
shall be used to directly reimburse each
appropriation for the amount paid out of that
appropriation for the costs incurred in
providing services to express consignment
carrier facilities or centralized hub
facilities. Amounts deposited in accordance
with the preceding sentence shall be available
until expended for the provision of customs
services to express consignment carrier
facilities or centralized hub facilities.
(III) Notwithstanding section 524 of the
Tariff Act of 1930, the remaining 50 percent of
the amount of payments received under
subparagraph (A)(ii) and clause (ii) of this
subparagraph shall be paid to the Secretary of
the Treasury, which is in lieu of the payment
of fees under subsection (a)(10) of this
section.
(C) For purposes of this paragraph:
(i) The terms ``centralized hub facility'' and
``express consignment carrier facility'' have the
respective meanings that are applied to such terms in
part 128 of chapter I of title 19, Code of Federal
Regulations. Nothing in this paragraph shall be
construed as prohibiting the Secretary of the Treasury
from processing merchandise that is informally entered
or released at any centralized hub facility or express
consignment carrier facility during the normal
operating hours of the Customs Service, subject to
reimbursement and payment under subparagraph (A).
(ii) The term ``small airport or other facility''
means any airport or facility to which section 236 of
the Trade and Tariff Act of 1984 applies, if more than
25,000 informal entries were cleared through such
airport or facility during the preceding fiscal year.
(10)(A) The fee charged under subsection (a) (9) or (10) with
respect to goods of Canadian origin (as determined under
section 202 of the United States-Canada Free-Trade Agreement
Implementation Act of 1988) when the United States-Canada Free-
Trade Agreement is in force shall be in accordance with article
403 of that Agreement.
(B) For goods qualifying under the rules of origin set out in
section 202 of the North American Free Trade Agreement
Implementation Act, the fee under subsection (a) (9) or (10)--
(i) may not be charged with respect to goods that
qualify to be marked as goods of Canada pursuant to
Annex 311 of the North American Free Trade Agreement,
for such time as Canada is a NAFTA country, as defined
in section 2(4) of such Implementation Act; and
(ii) may not be increased after December 31, 1993,
and may not be charged after June 29, 1999, with
respect to goods that qualify to be marked as goods of
Mexico pursuant to such Annex 311, for such time as
Mexico is a NAFTA country.
Any service for which an exemption from such fee is provided by
reason of this paragraph may not be funded with money contained
in the Customs User Fee Account.
(11) No fee may be charged under subsection (a) (9) or (10)
with respect to products of Israel if an exemption with respect
to the fee is implemented under section 112 of the Customs and
Trade Act of 1990.
(12) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Chile Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(13) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Singapore Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(14) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 203 of the United States-Australia Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(15) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 203 of the Dominican Republic-Central America-United
States Free Trade Agreement Implementation Act. Any service for
which an exemption from such fee is provided by reason of this
paragraph may not be funded with money contained in the Customs
User Fee Account.
(16) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Bahrain Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(17) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Oman Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(18) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 203 of the United States-Peru Trade Promotion Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(19) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 202 of the United States-Korea Free Trade Agreement
Implementation Act. Any service for which an exemption from
such fee is provided by reason of this paragraph may not be
funded with money contained in the Customs User Fee Account.
(20) No fee may be charged under subsection (a) (9) or (10)
with respect to goods that qualify as originating goods under
section 203 of the United States-Colombia Trade Promotion
Agreement Implementation Act. Any service for which an
exemption from such fee is provided by reason of this paragraph
may not be funded with money contained in the Customs User Fee
Account.
(21) No fee may be charged under subsection (a)(9) or (10)
with respect to goods that qualify as originating goods under
section 203 of the United States-Panama Trade Promotion
Agreement Implementation Act. Any service for which an
exemption from such fee is provided by reason of this paragraph
may not be funded with money contained in the Customs User Fee
Account.
(c) Definitions.--For purposes of this section--
(1) The term ``ferry'' means any vessel which is
being used--
(A) to provide transportation only between
places that are no more than 300 miles apart,
and
(B) to transport only--
(i) passengers, or
(ii) vehicles, or railroad cars,
which are being used, or have been
used, in transporting passengers or
goods.
(2) The term ``arrival'' means arrival at a port of
entry in the customs territory of the United States.
(3) The term ``customs territory of the United
States'' has the meaning given to such term by general
note 2 of the Harmonized Tariff Schedule of the United
States.
(4) The term ``customs broker permit'' means a permit
issued under section 641(c) of the Tariff Act of 1930
(19 U.S.C. 1641(c)).
(5) The term ``barge or other bulk carrier'' means
any vessel which--
(A) is not self-propelled, or
(B) transports fungible goods that are not
packaged in any form.
(d) Collection.--(1) Each person that issues a document or
ticket to an individual for transportation by a commercial
vessel or commercial aircraft into the customs territory of the
United States shall--
(A) collect from that individual the fee charged
under subsection (a)(5) at the time the document or
ticket is issued; and
(B) separately identify on that document or ticket
the fee charged under subsection (a)(5) as a Federal
inspection fee.
(2) If--
(A) a document or ticket for transportation of a
passenger into the customs territory of the United
States is issued in a foreign country; and
(B) the fee charged under subsection (a)(5) is not
collected at the time such document or ticket is
issued;
the person providing transportation to such passenger shall
collect such fee at the time such passenger departs from the
customs territory of the United States and shall provide such
passenger a receipt for the payment of such fee.
(3) The person who collects fees under paragraph (1) or (2)
shall remit those fees to the Secretary of the Treasury at any
time before the date that is 31 days after the close of the
calendar quarter in which the fees are collected.
(4)(A) Notice of the date on which payment of the fee imposed
by subsection (a)(7) is due shall be published by the Secretary
of the Treasury in the Federal Register by no later than the
date that is 60 days before such due date.
(B) A customs broker permit may be revoked or suspended for
nonpayment of the fee imposed by subsection (a)(7) only if
notice of the date on which payment of such fee is due was
published in the Federal Register at least 60 days before such
due date.
(C) The customs broker's license issued under section 641(b)
of the Tariff Act of 1930 (19 U.S.C. 1641(b)) may not be
revoked or suspended merely by reason of nonpayment of the fee
imposed under subsection (a)(7).
(e) Provision of Customs Services.--
(1) Notwithstanding section 451 of the Tariff Act of 1930 (19
U.S.C. 1451) or any other provision of law (other than
paragraph (2)), the customs services required to be provided to
passengers upon arrival in the United States shall be
adequately provided in connection with scheduled airline
flights at customs serviced airports when needed and at no cost
(other than the fees imposed under subsection (a)) to airlines
and airline passengers.
(2)(A) This subsection shall not apply with respect to any
airport to which section 236 of the Trade and Tariff Act of
1984 (19 U.S.C. 58b) applies.
(B) Subparagraph (C) of paragraph (6) shall not apply with
respect to any foreign trade zone or subzone that is located
at, or in the vicinity of, an airport to which section 236 of
the Trade and Tariff Act of 1984 applies.
(3) Notwithstanding section 451 of the Tariff Act of 1930 (19
U.S.C. 1451) or any other provision of law--
(A) the customs services required to be provided to
passengers upon arrival in the United States shall be
adequately provided in connection with scheduled
airline flights when needed at places located outside
the customs territory of the United States at which a
customs officer is stationed for the purpose of
providing such customs services, and
(B) other than the fees imposed under subsection (a),
the airlines and airline passengers shall not be
required to reimburse the Secretary of the Treasury for
the costs of providing overtime customs inspectional
services at such places.
(4) Notwithstanding any other provision of law, all customs
services (including, but not limited to, normal and overtime
clearance and preclearance services) shall be adequately
provided, when requested, for--
(A) the clearance of any commercial vessel, vehicle,
or aircraft or its passengers, crew, stores, material,
or cargo arriving, departing, or transiting the United
States;
(B) the preclearance at any customs facility outside
the United States of any commercial vessel, vehicle or
aircraft or its passengers, crew, stores, material, or
cargo; and
(C) the inspection or release of commercial cargo or
other commercial shipments being entered into, or
withdrawn from, the customs territory of the United
States.
(5) For purposes of this subsection, customs services shall
be treated as being ``adequately provided'' if such of those
services that are necessary to meet the needs of parties
subject to customs inspection are provided in a timely manner
taking into account factors such as--
(A) the unavoidability of weather, mechanical, and
other delays;
(B) the necessity for prompt and efficient passenger
and baggage clearance;
(C) the perishability of cargo;
(D) the desirability or unavoidability of late night
and early morning arrivals from various time zones;
(E) the availability (in accordance with regulations
prescribed under subsection (g)(2)) of customs
personnel and resources; and
(F) the need for specific enforcement checks.
(6) Notwithstanding any other provision of law except
paragraph (2), during any period when fees are authorized under
subsection (a), no charges, other than such fees, may be
collected--
(A) for any--
(i) cargo inspection, clearance, or other
customs activity, expense, or service performed
(regardless whether performed outside of normal
business hours on an overtime basis), or
(ii) customs personnel provided,
in connection with the arrival or departure of any
commercial vessel, vehicle, or aircraft, or its
passengers, crew, stores, material, or cargo, in the
United States;
(B) for any preclearance or other customs activity,
expense, or service performed, and any customs
personnel provided, outside the United States in
connection with the departure of any commercial vessel,
vehicle, or aircraft, or its passengers, crew, stores,
material, or cargo, for the United States; or
(C) in connection with--
(i) the activation or operation (including
Customs Service supervision) of any foreign
trade zone or subzone established under the Act
of June 18, 1934 (commonly known as the Foreign
Trade Zones Act, 19 U.S.C. 81a et seq.), or
(ii) the designation or operation (including
Customs Service supervision) of any bonded
warehouse under section 555 of the Tariff Act
of 1930 (19 U.S.C. 1555).
(f) Disposition of Fees.--(1) There is established in the
general fund of the Treasury a separate account which shall be
known as the ``Customs User Fee Account''. Notwithstanding
section 524 of the Tariff Act of 1930 (19 U.S.C. 1524), there
shall be deposited as offsetting receipts into the Customs User
Fee Account all fees collected under subsection (a) except--
(A) the portion of such fees that is required under
paragraph (3) for the direct reimbursement of
appropriations, and
(B) amounts deposited into the Customs Commercial and
Homeland Security Automation Account under paragraph
(4).
(2) Except as otherwise provided in this subsection, all
funds in the Customs User Fee Account shall be available, to
the extent provided for in appropriations Acts, to pay the
costs (other than costs for which direct reimbursement under
paragraph (3) is required) incurred by the United States
Customs Service in conducting customs revenue functions as
defined in section 415 of the Homeland Security Act of 2002
(other than functions performed by the Office of International
Affairs referred to in section 415(8) of that Act), and for
automation (including the Automation Commercial Environment
computer system), and for no other purpose. To the extent that
funds in the Customs User Fee Account are insufficient to pay
the costs of such customs revenue functions, customs duties in
an amount equal to the amount of such insufficiency shall be
available, to the extent provided for in appropriations Acts,
to pay the costs of such customs revenue functions in the
amount of such insufficiency, and shall be available for no
other purpose. The provisions of the first and second sentences
of this paragraph specifying the purposes for which amounts in
the Customs User Fee Account may be made available shall not be
superseded except by a provision of law which specifically
modifies or supersedes such provisions. So long as there is a
surplus of funds in the Customs User Fee Account, the Secretary
of the Treasury may not reduce personnel staffing levels for
providing commercial clearance and preclearance services.
(3)(A) The Secretary of the Treasury, in accordance with
section 524 of the Tariff Act of 1930 and subject to
subparagraph (B), shall directly reimburse, from the fees
collected under subsection (a) (other than the fees under
subsection (a) (9) and (10) and the excess fees determined by
the Secretary under paragraph (4)), each appropriation for the
amount paid out of that appropriation for the costs incurred by
the Secretary--
(i) in--
(I) paying overtime compensation under
section 5(a) of the Act of February 13, 1911,
(II) paying premium pay under section 5(b) of
the Act of February 13, 1911, but the amount
for which reimbursement may be made under this
subclause may not, for any fiscal year, exceed
the difference between the total cost of all
the premium pay for such year calculated under
section 5(b) and the cost of the night and
holiday premium pay that the Customs Service
would have incurred for the same inspectional
work on the day before the effective date of
section 13813 of the Omnibus Budget
Reconciliation Act of 1993,
(III) paying agency contributions to the
Civil Service Retirement and Disability Fund to
match deductions from the overtime compensation
paid under subclause (I),
(IV) providing all preclearance services for
which the recipients of such services are not
required to reimburse the Secretary of the
Treasury, and
(V) paying foreign language proficiency
awards under section 13812(b) of the Omnibus
Budget Reconciliation Act of 1993,
(ii) to the extent funds remain available after
making reimbursements under clause (i), in providing
salaries for full-time and part-time inspectional
personnel and equipment that enhance customs services
for those persons or entities that are required to pay
fees under paragraphs (1) through (8) of subsection (a)
(distributed on a basis proportionate to the fees
collected under paragraphs (1) through (8) of
subsection (a), and
(iii) to the extent funds remain available after
making reimbursements under clause (ii), in providing
salaries for up to 50 full-time equivalent inspectional
positions to provide preclearance services.
The transfer of funds required under subparagraph (C)(iii) has
priority over reimbursements under this subparagraph to carry
out subclauses (II), (III), (IV), and (V) of clause (i). Funds
described in clause (ii) shall only be available to reimburse
costs in excess of the highest amount appropriated for such
costs during the period beginning with fiscal year 1990 and
ending with the current fiscal year.
(B) Reimbursement of appropriations under this paragraph--
(i) shall be subject to apportionment or similar
administrative practices;
(ii) shall be made at least quarterly; and
(iii) to the extent necessary, may be made on the
basis of estimates made by the Secretary of the
Treasury and adjustments shall be made in subsequent
reimbursements to the extent that the estimates were in
excess of, or less than, the amounts required to be
reimbursed.
(C)(i) For fiscal year 1991 and subsequent fiscal years, the
amount required to reimburse costs described in subparagraph
(A)(i) shall be projected from actual requirements, and only
the excess of collections over such projected costs for such
fiscal year shall be used as provided in subparagraph (A)(ii).
(ii) The excess of collections over inspectional overtime and
preclearance costs (under subparagraph (A)(i)) reimbursed for
fiscal years 1989 and 1990 shall be available in fiscal year
1991 and subsequent fiscal years for the purposes described in
subparagraph (A)(ii), except that $30,000,000 of such excess
shall remain without fiscal year limitation in a contingency
fund and, in any fiscal year in which receipts are insufficient
to cover the costs described in subparagraph (A) (i) and (ii),
shall be used for--
(I) the costs of providing the services described in
subparagraph (A)(i), and
(II) after the costs described in subclause (I) are
paid, the costs of providing the personnel and
equipment described in subparagraph (A)(ii) at the
preceding fiscal year level.
(iii) For each fiscal year, the Secretary of the Treasury
shall calculate the difference between--
(I) the estimated cost for overtime compensation that
would have been incurred during that fiscal year for
inspectional services if section 5 of the Act of
February 13, 1911 (19 U.S.C. 261 and 267), as in effect
before the enactment of section 13811 of the Omnibus
Budget Reconciliation Act of 1993, had governed such
costs, and
(II) the actual cost for overtime compensation,
premium pay, and agency retirement contributions that
is incurred during that fiscal year in regard to
inspectional services under section 5 of the Act of
February 13, 1911, as amended by section 13811 of the
Omnibus Budget Reconciliation Act of 1993, and under
section 8331(3) of title 5, United States Code, as
amended by section 13812(a)(1) of such Act of 1993,
plus the actual cost that is incurred during that
fiscal year for foreign language proficiency awards
under section 13812(b) of such Act of 1993,
and shall transfer from the Customs User Fee Account to the
General Fund of the Treasury an amount equal to the difference
calculated under this clause, or $18,000,000, whichever amount
is less. Transfers shall be made under this clause at least
quarterly and on the basis of estimates to the same extent as
are reimbursements under subparagraph (B)(iii).
(D) Nothing in this paragraph shall be construed to preclude
the use of appropriated funds, from sources other than the fees
collected under subsection (a), to pay the costs set forth in
clauses (i), (ii), and (iii) of subparagraph (A).
(4)(A) There is created within the general fund of the
Treasury a separate account that shall be known as the
``Customs Commercial and Homeland Security Automation
Account''. In each of fiscal years 2003, 2004, and 2005 there
shall be deposited into the Account from fees collected under
subsection (a)(9)(A), $350,000,000.
(B) There is authorized to be appropriated from the Account
in fiscal years 2003 through 2005 such amounts as are available
in that Account for the development, establishment, and
implementation of the Automated Commercial Environment computer
system for the processing of merchandise that is entered or
released and for other purposes related to the functions of the
Department of Homeland Security. Amounts appropriated pursuant
to this subparagraph are authorized to remain available until
expended.
(C) In adjusting the fee imposed by subsection (a)(9)(A) for
fiscal year 2006, the Secretary of the Treasury shall reduce
the amount estimated to be collected in fiscal year 2006 by the
amount by which total fees deposited to the Account during
fiscal years 2003, 2004, and 2005 exceed total appropriations
from that Account.
(5) Of the amounts collected in fiscal year 1999 under
paragraphs (9) and (10) of subsection (a), $50,000,000 shall be
available to the Customs Service, subject to appropriations
Acts, for automated commercial systems. Amounts made available
under this paragraph shall remain available until expended.
(g) Regulations and Enforcement.--(1) The Secretary of the
Treasury may prescribe such rules and regulations as may be
necessary to carry out the provisions of this section.
Regulations issued by the Secretary of the Treasury under this
subsection with respect to the collection of the fees charged
under subsection (a)(5) and the remittance of such fees to the
Treasury of the United States shall be consistent with the
regulations issued by the Secretary of the Treasury for the
collection and remittance of the taxes imposed by subchapter C
of chapter 33 of the Internal Revenue Code of 1954, but only to
the extent the regulations issued with respect to such taxes do
not conflict with the provisions of this section.
(2) Except to the extent otherwise provided in regulations,
all administrative and enforcement provisions of customs laws
and regulations, other than those laws and regulations relating
to drawback, shall apply with respect to any fee prescribed
under subsection (a) of this section, and with respect to
persons liable therefor, as if such fee is a customs duty. For
purposes of the preceding sentence, any penalty expressed in
terms of a relationship to the amount of the duty shall be
treated as not less than the amount which bears a similar
relationship to the amount of the fee assessed. For purposes of
determining the jurisdiction of any court of the United States
or any agency of the United States, any fee prescribed under
subsection (a) of this section shall be treated as if such fee
is a customs duty.
(h) Conforming Amendments.--(1) Subsection (i) of section 305
of the Rail Passenger Service Act (45 U.S.C. 545(i)) is amended
by striking out the last sentence thereof.
(2) Subsection (e) of section 53 of the Airport and Airway
Development Act of 1970 (49 U.S.C. 1741(e)) is repealed.
(i) Effect on Other Authority.--Except with respect to
customs services for which fees are imposed under subsection
(a), nothing in this section shall be construed as affecting
the authority of the Secretary of the Treasury to charge fees
under section 214(b) of the Customs Procedural Reform and
Simplification Act of 1978 (19 U.S.C. 58a).
(j) Effective Dates.--(1) Except as otherwise provided in
this subsection, the provisions of this section, and the
amendments and repeals made by this section, shall apply with
respect to customs services rendered after the date that is 90
days after the date of enactment of this Act.
(2) Fees may be charged under subsection (a)(5) only with
respect to customs services rendered in regard to arriving
passengers using transportation for which documents or tickets
were issued after the date that is 90 days after such date of
enactment.
(3)(A) Fees may not be charged under paragraphs (9) and (10)
of subsection (a) after [September 30, 2024] July 7, 2025.
(B)(i) Subject to clause (ii), Fees may not be charged under
paragraphs (1) through (8) of subsection (a) after September
30, 2024.
(ii) In fiscal year 2006 and in each succeeding fiscal year
for which fees under paragraphs (1) through (8) of subsection
(a) are authorized--
(I) the Secretary of the Treasury shall charge fees
under each such paragraph in amounts that are
reasonably related to the costs of providing customs
services in connection with the activity or item for
which the fee is charged under such paragraph, except
that in no case may the fee charged under any such
paragraph exceed by more than 10 percent the amount
otherwise prescribed by such paragraph;
(II) the amount of fees collected under such
paragraphs may not exceed, in the aggregate, the
amounts paid in that fiscal year for the costs
described in subsection (f)(3)(A) incurred in providing
customs services in connection with the activity or
item for which the fees are charged under such
paragraphs;
(III) a fee may not be collected under any such
paragraph except to the extent such fee will be
expended to pay the costs described in subsection
(f)(3)(A) incurred in providing customs services in
connection with the activity or item for which the fee
is charged under such paragraph; and
(IV) any fee collected under any such paragraph shall
be available for expenditure only to pay the costs
described in subsection (f)(3)(A) incurred in providing
customs services in connection with the activity or
item for which the fee is charged under such paragraph.
(k) Advisory Committee.--The Commissioner of Customs shall
establish an advisory committee whose membership shall consist
of representatives from the airline, cruise ship, and other
transportation industries who may be subject to fees under
subsection (a). The advisory committee shall not be subject to
termination under section 14 of the Federal Advisory Committee
Act. The advisory committee shall meet on a periodic basis and
shall advise the Commissioner on issues related to the
performance of the inspectional services of the United States
Customs Service. Such advice shall include, but not be limited
to, such issues as the time periods during which such services
should be performed, the proper number and deployment of
inspection officers, the level of fees, and the appropriateness
of any proposed fee. The Commissioner shall give consideration
to the views of the advisory committee in the exercise of his
or her duties.
* * * * * * *
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SECTION 503 OF THE UNITED STATES-KOREA FREE TRADE AGREEMENT
IMPLEMENTATION ACT
SEC. 503. RATE FOR MERCHANDISE PROCESSING FEES.
For the period beginning on December 1, 2015, and ending on
June 30, [2021] 2025, section 13031(a)(9) of the Consolidated
Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(a)(9))
shall be applied and administered--
(1) in subparagraph (A), by substituting ``0.3464''
for ``0.21''; and
(2) in subparagraph (B)(i), by substituting
``0.3464'' for ``0.21''.
[all]