1.This Act may be cited as the
Afghanistan-Pakistan Security and
Prosperity Enhancement Act
.
2.
(a)In
this Act:
(1)Agreement on
Textiles and ClothingThe 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)Category;
textile and apparel category numberThe terms
category and textile and apparel category number mean
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 September 1,
2007).
(3)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)The
term entered means entered, or withdrawn from warehouse for
consumption, in the customs territory of the United States.
(5)The
term entity means—
(A)a natural person,
corporation, company, business association, partnership, society, trust, any
other nongovernmental entity, organization, or group, whether or not for
profit;
(B)any governmental
entity or instrumentality of a government; and
(C)any successor,
subunit, or subsidiary of any entity described in subparagraph (A) or
(B).
(6)The
term HTS means the Harmonized Tariff Schedule of the United
States.
(7)The
term NAFTA means the North American Free Trade Agreement concluded
between the United States, Mexico, and Canada on December 17, 1992.
(8)Reconstruction
Opportunity ZoneThe term Reconstruction Opportunity
Zone means any area that—
(A)solely encompasses
portions of the territory of—
(i)Afghanistan;
or
(ii)1 or more of the
following areas of Pakistan:
(I)the Federally
Administered Tribal Areas;
(II)areas of
Pakistan-administered Kashmir that the President determines were harmed by the
earthquake of October 8, 2005;
(III)areas of
Baluchistan that are within 100 miles of Pakistan’s border with Afghanistan;
and
(IV)the North West
Frontier Province;
(B)has been
designated by the competent authorities in Afghanistan or Pakistan, as the case
may be, as an area in which merchandise may be introduced without payment of
duty or excise tax; and
(C)has been
designated by the President as a Reconstruction Opportunity Zone pursuant to
section 3(a).
(b)The
purposes of this Act are—
(1)to stimulate
economic activity and development in Afghanistan and the border region of
Pakistan, critical fronts in the struggle against violent extremism;
(2)to reflect the
strong support that the United States has pledged to Afghanistan and Pakistan
for their sustained commitment in the global war on terrorism;
(3)to support the
3-pronged United States strategy in Afghanistan and the border region of
Pakistan that leverages political, military, and economic tools, with
Reconstruction Opportunity Zones as a critical part of the economic component
of that strategy; and
(4)to offer a vital opportunity to improve
livelihoods of indigenous populations of Reconstruction Opportunity Zones,
promote good governance, improve economic and commercial ties between the
people of Afghanistan and Pakistan, and extend and strengthen the Governments
of Afghanistan and Pakistan.
3.Designation of
Reconstruction Opportunity Zones
(a)The President is authorized to designate an area within
Afghanistan or Pakistan described in section 2(a)(8) (A) and (B) as a
Reconstruction Opportunity Zone if the President determines that—
(1)Afghanistan or
Pakistan, as the case may be, meets the eligibility criteria set forth in
subsection (b);
(2)Afghanistan or
Pakistan, as the case may be, meets the eligibility criteria set forth in
subsection (c) of section 502 of the Trade Act of 1974 (19 U.S.C. 2462(c)) for
designation as a beneficiary developing country under that section and is not
ineligible under subsection (b) of such section; and
(3)designation of the
area as a Reconstruction Opportunity Zone is appropriate taking into account
the factors listed in subsection (c).
(b)Afghanistan or Pakistan, as the case may be, meets the
eligibility criteria set forth in this subsection if that 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)economic policies
to—
(i)reduce
poverty;
(ii)increase the
availability of health care and educational opportunities;
(iii)expand physical
infrastructure;
(iv)promote the
development of private enterprise; and
(v)encourage the
formation of capital markets through microcredit or other programs;
(D)a system to combat
corruption and bribery, such as ratifying and implementing the United Nations
Convention Against Corruption; and
(E)protection of core
labor standards;
(2)is eliminating or
has eliminated barriers to trade and investment, including by—
(A)providing national
treatment and measures to create an environment conducive to domestic and
foreign investment;
(B)protecting
intellectual property; and
(C)resolving
bilateral trade and investment disputes;
(3)does not engage in
activities that undermine United States national security or foreign policy
interests;
(4)does not engage in
gross violations of internationally recognized human rights;
(5)does not provide
support for acts of international terrorism; and
(6)cooperates in
international efforts to eliminate human rights violations and terrorist
activities.
(c)In determining whether to designate an area in
Afghanistan or Pakistan as a Reconstruction Opportunity Zone, the President
shall take into account—
(1)an expression by
the government of the country of its desire to have a particular area
designated as a Reconstruction Opportunity Zone under this Act;
(2)whether the
government of the country has provided the United States with a monitoring and
enforcement plan outlining specific steps the country will take to cooperate
with the United States to—
(A)facilitate
legitimate cross-border commerce;
(B)ensure that
articles for which duty-free treatment is sought pursuant to this Act satisfy
the applicable rules of origin described in section 4 (c) and (d) or section 5
(c) and (d), whichever is applicable; and
(C)prevent unlawful
transshipment, as described in section 6(b)(4).
(3)the potential for
such designation to create local employment and to promote local and regional
economic development;
(4)the physical
security of the proposed Reconstruction Opportunity Zone;
(5)the economic
viability of the proposed Reconstruction Opportunity Zone, including—
(A)whether there are
commitments to finance economic activity proposed for the Reconstruction
Opportunity Zone; and
(B)whether there is
existing or planned infrastructure for power, water, transportation, and
communications in the area;
(6)whether such
designation would be compatible with and contribute to the foreign policy and
national security objectives of the United States, taking into account the
information provided under subsection (d); and
(7)the views of
interested persons submitted pursuant to subsection (e).
(d)Information
relating to compatibility with and contribution to foreign policy and national
security objectives of the United StatesIn determining whether
designation of a Reconstruction Opportunity Zone would be compatible with and
contribute to the foreign policy and national security objectives of the United
States in accordance with subsection (c)(6), the President shall take into
account whether Afghanistan or Pakistan, as the case may be, has provided the
United States with a plan outlining specific steps it will take to verify the
ownership and nature of the activities of entities to be located in the
proposed Reconstruction Opportunity Zone. The specific steps outlined in a
country’s plan shall include a mechanism to annually register each entity by a
competent authority of the country and—
(1)to collect from
each entity operating in, or proposing to operate in, a Reconstruction
Opportunity Zone, information including—
(A)the name and
address of the entity;
(B)the name and
location of all facilities owned or operated by the entity that are operating
in or proposed to be operating in a Reconstruction Opportunity Zone;
(C)the name,
nationality, date and place of birth, and position title of each person who is
an owner, director, or officer of the entity; and
(D)the nature of the
activities of each entity;
(2)to update the
information required under paragraph (1) as changes occur; and
(3)to provide such
information promptly to the Secretary of State.
(e)Opportunity for
public commentBefore the President designates an area as a
Reconstruction Opportunity Zone pursuant to subsection (a), the President shall
afford an opportunity for interested persons to submit their views concerning
the designation.
(f)Before the President designates an area as a
Reconstruction Opportunity Zone pursuant to subsection (a), the President shall
notify Congress of the President’s intention to make the designation, together
with the reasons for making the designation.
4.Duty-free
treatment for certain nontextile and nonapparel articles
(a)The President is authorized to proclaim duty-free
treatment for—
(1)any article from a
Reconstruction Opportunity Zone that the President has designated as an
eligible article under section 503(a)(1)(A) of the Trade Act of 1974 (19 U.S.C.
2463(a)(1)(A));
(2)any article from a
Reconstruction Opportunity Zone located in Afghanistan that the President has
designated as an eligible article under section 503(a)(1)(B) of the Trade Act
of 1974 (19 U.S.C. 2463(a)(1)(B)); or
(3)any article from a
Reconstruction Opportunity Zone that is not a textile or apparel article,
regardless of whether the article has been designated as an eligible article
under section 503(a)(1)(A) or (B) of the Trade Act of 1974 (19 U.S.C.
2463(a)(1) (A) or (B)), if, after receiving the advice of the International
Trade Commission pursuant to subsection (b), the President determines that such
article is not import-sensitive in the context of imports from a Reconstruction
Opportunity Zone.
(b)Advice
concerning certain eligible articlesBefore proclaiming duty-free
treatment for an article pursuant to subsection (a)(3), the President shall
publish in the Federal Register and provide the International Trade Commission
a list of articles which may be considered for such treatment. The provisions
of sections 131 through 134 of the Trade Act of 1974 (19 U.S.C. 2151 through
2154) shall apply to any designation under subsection (a)(3) in the same manner
as such sections apply to action taken under section 123 of the Trade Act of
1974 (19 U.S.C. 2133) regarding a proposed trade agreement.
(c)
(1)The duty-free treatment proclaimed with respect to an
article described in paragraph (1) or (3) of subsection (a) shall apply to any
article subject to such proclamation which is the growth, product, or
manufacture of 1 or more Reconstruction Opportunity Zones if—
(A)that article is
imported directly from a Reconstruction Opportunity Zone into the customs
territory of the United States; and
(B)(i)with respect to an
article that is an article of a Reconstruction Opportunity Zone in Pakistan,
the sum of—
(I)the cost or value of the materials
produced in 1 or more Reconstruction Opportunity Zones in Pakistan or
Afghanistan,
(II)the direct costs of processing
operations performed in 1 or more Reconstruction Opportunity Zones in Pakistan
or Afghanistan, and
(III)the cost or value of materials produced
in the United States, determined in accordance with paragraph (2),
is not less than 35 percent of the appraised value
of the article at the time it is entered into the United States; or(ii)with respect to an article that is
an article of a Reconstruction Opportunity Zone in Afghanistan, the sum
of—
(I)the cost or value of the materials
produced in 1 or more Reconstruction Opportunity Zones in Pakistan or
Afghanistan,
(II)the cost or value of the materials
produced in 1 or more countries that are members of the South Asian Association
for Regional Cooperation,
(III)the direct costs of processing
operations performed in 1 or more Reconstruction Opportunity Zones in Pakistan
or Afghanistan, and
(IV)the cost or value of materials produced
in the United States, determined in accordance with paragraph (2),
is not less than 35 percent of the appraised value
of the article at the time it is entered into the United States.(2)Determination of
35 percent for articles from reconstruction opportunity zones in Pakistan and
AfghanistanIf the cost or value of materials produced in the
customs territory of the United States is included with respect to an article
described in paragraph (1)(B), for purposes of determining the 35-percent
appraised value requirement under clause (i) or (ii) of paragraph (1)(B), not
more than 15 percent of the appraised value of the article at the time the
article is entered into the United States may be attributable to the cost or
value of such United States materials.
(d)Rules of origin
for certain articles of Reconstruction Opportunity Zones in
afghanistan
(1)The duty-free treatment proclaimed with respect to an
article described in paragraph (2) of subsection (a) shall apply to any article
subject to such proclamation which is the growth, product, or manufacture of 1
or more Reconstruction Opportunity Zones in Afghanistan if—
(A)that article is
imported directly from a Reconstruction Opportunity Zone in Afghanistan into
the customs territory of the United States; and
(B)with respect to
that article, the sum of—
(i)the
cost or value of the materials produced in 1 or more Reconstruction Opportunity
Zones in Afghanistan,
(ii)the
cost or value of the materials produced in 1 or more countries that are members
of the South Asian Association for Regional Cooperation,
(iii)the direct costs
of processing operations performed in 1 or more Reconstruction Opportunity
Zones in Afghanistan, and
(iv)the
cost or value of materials produced in the United States, determined in
accordance with paragraph (2),
is not
less than 35 percent of the appraised value of the product at the time it is
entered into the United States.(2)Determination of
35 percent for articles from reconstruction opportunity zones in pakistan and
afghanistanIf the cost or value of materials produced in the
customs territory of the United States is included with respect to an article
described in paragraph (1)(B), for purposes of determining the 35-percent
appraised value requirement under paragraph (1)(B), not more than 15 percent of
the appraised value of the article at the time the article is entered into the
United States may be attributable to the cost or value of such United States
materials.
(e)An
article shall not be treated as the growth, product, or manufacture of 1 or
more Reconstruction Opportunity Zones, and no material shall be included for
purposes of determining the 35-percent appraised value requirement under
subsection (c)(1) or (d)(1), by virtue of having merely undergone—
(1)simple combining
or packaging operations; or
(2)mere dilution with
water or with another substance that does not materially alter the
characteristics of the article or material.
(f)Direct costs of
processing operations
(1)As used in subsections (c)(1)(B)(i)(II),
(c)(1)(B)(ii)(III), and (d)(1)(B)(iii), the term direct costs of
processing operations includes, but is not limited to—
(A)all actual labor
costs involved in the growth, production, manufacture, or assembly of the
article, including—
(i)fringe
benefits;
(ii)on-the-job
training; and
(iii)costs of
engineering, supervisory, quality control, and similar personnel; and
(B)dies, molds,
tooling, and depreciation on machinery and equipment which are allocable to the
article.
(2)As used in subsections (c)(1)(B)(i)(II),
(c)(1)(B)(ii)(III), and (d)(1)(B)(iii), the term direct costs of
processing operations does not include costs which are not directly
attributable to the article or are not costs of manufacturing the article, such
as—
(A)profit; and
(B)general expenses
of doing business which are either not allocable to the article or are not
related to the growth, production, manufacture, or assembly of the article,
such as administrative salaries, casualty and liability insurance, advertising,
and salesmen’s salaries, commissions, or expenses.
(g)The
Secretary of the Treasury, after consultation with the United States Trade
Representative, shall prescribe such regulations as may be necessary to carry
out this section. The regulations may provide that, in order for an article to
be eligible for duty-free treatment under this section, the article—
(1)shall be wholly
the growth, product, or manufacture of 1 or more Reconstruction Opportunity
Zones; or
(2)shall be a new or
different article of commerce which has been grown, produced, or manufactured
in 1 or more Reconstruction Opportunity Zones.
5.Duty-free
treatment for certain textile and apparel articles
(a)The President is authorized to proclaim duty-free
treatment for any textile or apparel article described in subsection (b),
if—
(1)the article is a
covered article described in subsection (b); and
(2)the President
determines that the country in which the Reconstruction Opportunity Zone is
located has satisfied the requirements set forth in section 6.
(b)A covered article described in this subsection is an
article in 1 of the following categories:
(1)Articles of
Reconstruction Opportunity ZonesAn article that is the product
of 1 or more Reconstruction Opportunity Zones and falls within the scope of 1
of the following textile and apparel category numbers, as set forth in the HTS
(as in effect on September 1, 2007):
237641751
330642752
331643758
333644759
334650831
335
651832
336653833
341654834
342665835
350669836
351733838
353734839
354735840
360736842
361738843
362739844
363740845
369741846
465742850
469743851
630744852
631745858
633746859
634747863
635748899
636750
(2)Articles of
Reconstruction Opportunity Zones in AfghanistanThe article is
the product of 1 or more Reconstruction Opportunity Zones in Afghanistan and
falls within the scope of 1 of the following textile and apparel category
numbers, as set forth in the HTS (as in effect on September 1, 2007):
201439459
414440464
431442670
433444800
434445810
435446870
436448871
438
(3)Certain other
textile and apparel articlesThe article is the product of 1 or
more Reconstruction Opportunity Zones and falls within the scope of 1 of the
following textile and apparel category numbers as set forth in the HTS (as in
effect on September 1, 2007) and is covered by the corresponding description
for such category:
(A)An article in category 239 (relating to cotton and man-made
fiber babies’ garments) except for baby socks and baby booties described in
subheading 6111.20.6050, 6111.30.5050, or 6111.90.5050 of the HTS.
(B)An article in category 338 (relating to men’s and boys’
cotton knit shirts) if the article is a certain knit-to-shape garment that
meets the definition included in Statistical Note 6 to Chapter 61 of the HTS,
and is provided for in subheading 6110.20.1026, 6110.20.2067 or 6110.90.9067 of
the HTS.
(C)An article in category 339 (relating to women’s and girls’
cotton knit shirts and blouses) if the article is a knit-to-shape garment that
meets the definition included in Statistical Note 6 to Chapter 61 of the HTS,
and is provided for in subheading 6110.20.1031, 6110.20.2077, or 6110.90.9071
of the HTS.
(D)An article in category 359 (relating to other cotton apparel)
except swimwear provided for in subheading 6112.39.0010, 6112.49.0010,
6211.11.8010, 6211.11.8020, 6211.12.8010, or 6211.12.8020 of the HTS.
(E)An article in category 632 (relating to man-made fiber
hosiery) if the article is panty hose provided for in subheading 6115.21.0020
of the HTS.
(F)An article in category 638 (relating to men’s and boys’
man-made fiber knit shirts) if the article is a knit-to-shape garment that
meets the definition included in Statistical Note 6 to Chapter 61 of the HTS,
and is provided for in subheading 6110.30.2051, 6110.30.3051, or 6110.90.9079
of the HTS.
(G)An article in category 639 (relating to women’s and girls’
man-made fiber knit shirts and blouses) if the article is a knit-to-shape
garment that meets the definition included in Statistical Note 6 to Chapter 61
of the HTS, and is provided for in subheading 6110.30.2061, 6110.30.3057, or
6110.90.9081 of the HTS.
(H)An article in category 647 (relating to men’s and boys’
man-made fiber trousers) if the article is ski/snowboard pants that meets the
definition included in Statistical Note 4 to Chapter 62 of the HTS, and is
provided for in subheading 6203.43.3510, 6210.40.5031, or 6211.20.1525 of the
HTS.
(I)An article in category 648 (relating to women’s and girls’
man-made fiber trousers) if the article is ski/snowboard pants that meets the
definition included in Statistical Note 4 to Chapter 62 of the HTS, and is
provided for in subheading 6204.63.3010, 6210.50.5031, or 6211.20.1555 of the
HTS.
(J)An article in category 659 (relating to other man-made fiber
apparel) except for swimwear provided for in subheading 6112.31.0010,
6112.31.0020, 6112.41.0010, 6112.41.0020, 6112.41.0030, 6112.41.0040,
6211.11.1010, 6211.11.1020, 6211.12.1010, or 6211.12.1020 of the HTS.
(K)An article in category 666 (relating to other man-made fiber
furnishings) except for window shades and window blinds provided for in
subheading 6303.12.0010 or 6303.92.2030 of the HTS.
(4)The article is the product of 1 or more Reconstruction
Opportunity Zones and falls within the scope of 1 of the following statistical
reporting numbers of the HTS (as in effect on September 1,
2007):
4202.12.80106210.20.30006304.99.1000
4202.12.80506210.20.70006304.99.2500
4202.22.40106210.30.30006304.99.4000
4202.22.70006210.30.70006304.99.6030
4202.22.80706210.40.30006306.22.9010
4202.92.30106210.40.70006306.29.1100
4202.92.60106210.50.30006306.29.2100
4202.92.90106210.50.70006306.40.4100
4202.92.90156211.20.08106306.40.4900
5601.29.00106211.20.08206306.91.0000
5702.39.20906211.32.00036306.99.0000
5702.49.20006211.33.00036307.10.2030
5702.50.59006211.42.00036307.20.0000
5702.99.20006211.43.00036307.90.7200
5703.90.00006212.10.30006307.90.7500
5705.00.2090
6212.10.70006307.90.8500
6108.22.10006212.90.00506307.90.8950
6111.90.70006213.90.05006307.90.8985
6113.00.10056214.10.10006310.90.1000
6113.00.10106216.00.08006406.99.1580
6113.00.10126216.00.13006501.00.6000
6115.29.40006216.00.19006502.00.2000
6115.30.10006216.00.26006502.00.4000
6115.99.40006216.00.31006502.00.9060
6116.10.08006216.00.35006504.00.3000
6116.10.13006216.00.46006504.00.6000
6116.10.44006217.10.10106504.00.9045
6116.10.65006217.10.85006504.00.9075
6116.10.95006301.90.00206505.10.0000
6116.92.08006302.29.00106505.90.8015
6116.93.08006302.39.00206505.90.9050
6116.99.35006302.59.30106505.90.9076
6117.10.40006302.99.10009404.90.2000
6117.80.30106303.99.00309404.90.8523
6117.80.85006304.19.30309404.90.9523
6210.10.20006304.91.00609404.90.9570
6210.10.7000
(c)Rules of origin
for certain covered articles
(1)Except with respect to an article listed in paragraph (2)
of subsection (b), duty-free treatment may be proclaimed for an article listed
in subsection (b) only if the article is imported directly into the customs
territory of the United States from a Reconstruction Opportunity Zone
and—
(A)the article is
wholly the growth, product, or manufacture of 1 or more Reconstruction
Opportunity Zones;
(B)the article is a
yarn, thread, twine, cordage, rope, cable, or braiding, and—
(i)the
constituent staple fibers are spun in, or
(ii)the
continuous filament fiber is extruded in,
1 or more
Reconstruction Opportunity Zones;(C)the article is a
fabric, including a fabric classifiable under chapter 59 of the HTS, and the
constituent fibers, filaments, or yarns are woven, knitted, needled, tufted,
felted, entangled, or transformed by any other fabric-making process in 1 or
more Reconstruction Opportunity Zones; or
(D)the article is any
other textile or apparel article that is cut (or knit-to-shape) and sewn or
otherwise assembled in 1 or more Reconstruction Opportunity Zones from its
component pieces.
(2)
(A)Certain made-up
articles, textile articles in the piece, and certain other textiles and textile
articlesNotwithstanding paragraph (1)(D) and except as provided
in subparagraphs (C) and (D) of this paragraph, subparagraph (A), (B), or (C)
of paragraph (1), as appropriate, shall determine whether a good that is
classifiable under 1 of the following headings or subheadings of the HTS shall
be considered to meet the rules of origin of this subsection: 5609, 5807, 5811,
6209.20.50.40, 6213, 6214, 6301, 6302, 6303, 6304, 6305, 6306, 6307.10,
6307.90, 6308, and 9404.90.
(B)Certain
knit-to-shape textiles and textile articlesNotwithstanding
paragraph (1)(D) and except as provided in subparagraphs (C) and (D) of this
paragraph, a textile or apparel article that is wholly formed on seamless
knitting machines or by hand-knitting in 1 or more Reconstruction Opportunity
Zones shall be considered to meet the rules of origin of this
subsection.
(C)Certain dyed and
printed textiles and textile articlesNotwithstanding paragraph
(1)(D), an article classifiable under subheading 6117.10, 6213.00, 6214.00,
6302.22, 6302.29, 6302.52, 6302.53, 6302.59, 6302.92, 6302.93, 6302.99,
6303.92, 6303.99, 6304.19, 6304.93, 6304.99, 9404.90.85, or 9404.90.95 of the
HTS, except for an article classifiable under 1 of such subheadings as of
cotton or of wool or consisting of fiber blends containing 16 percent or more
by weight of cotton, shall be considered to meet the rules of origin of this
subsection if the fabric in the article is both dyed and printed in 1 or more
Reconstruction Opportunity Zones, and such dyeing and printing is accompanied
by 2 or more of the following finishing operations: bleaching, shrinking,
fulling, napping, decating, permanent stiffening, weighting, permanent
embossing, or moireing.
(D)Fabrics of silk,
cotton, man-made fiber, or vegetable fiberNotwithstanding
paragraph (1)(C), a fabric classifiable under the HTS as of silk, cotton,
man-made fiber, or vegetable fiber shall be considered to meet the rules of
origin of this subsection if the fabric is both dyed and printed in 1 or more
Reconstruction Opportunity Zones, and such dyeing and printing is accompanied
by 2 or more of the following finishing operations: bleaching, shrinking,
fulling, napping, decating, permanent stiffening, weighting, permanent
embossing, or moireing.
(d)Rules of origin
for covered articles that are products of 1 or more Reconstruction Opportunity
Zones in afghanistan
(1)Duty-free treatment may be proclaimed for an article listed
in paragraph (2) of subsection (b) only if the article is imported directly
into the customs territory of the United States from a Reconstruction
Opportunity Zone in Afghanistan and—
(A)the article is
wholly the growth, product, or manufacture of 1 or more Reconstruction
Opportunity Zones in Afghanistan,
(B)the article is a
yarn, thread, twine, cordage, rope, cable, or braiding, and—
(i)the
constituent staple fibers are spun in, or
(ii)the
continuous filament fiber is extruded in,
1 or more
Reconstruction Opportunity Zones in Afghanistan;(C)the article is a
fabric, including a fabric classifiable under chapter 59 of the HTS, and the
constituent fibers, filaments, or yarns are woven, knitted, needled, tufted,
felted, entangled, or transformed by any other fabric-making process in 1 or
more Reconstruction Opportunity Zones in Afghanistan; or
(D)the article is any
other textile or apparel article that is cut (or knit-to-shape) and sewn or
otherwise assembled in 1 or more Reconstruction Opportunity Zones in
Afghanistan from its component pieces.
(2)
(A)Certain made-up
articles, textile articles in the piece, and certain other textiles and textile
articlesNotwithstanding paragraph (1)(D) and except as provided
in subparagraphs (C) and (D) of this paragraph, subparagraph (A), (B), or (C)
of paragraph (1), as appropriate, shall determine whether a good that is
classifiable under 1 of the following headings or subheadings of the HTS shall
be considered to meet the rules of origin of this subsection: 5609, 5807, 5811,
6209.20.50.40, 6213, 6214, 6301, 6302, 6303, 6304, 6305, 6306, 6307.10,
6307.90, 6308, and 9404.90.
(B)Certain
knit-to-shape textiles and textile articlesNotwithstanding
paragraph (1)(D) and except as provided in subparagraphs (C) and (D) of this
paragraph, a textile or apparel article that is wholly formed on seamless
knitting machines or by hand-knitting in 1 or more Reconstruction Opportunity
Zones in Afghanistan shall be considered to meet the rules of origin of this
subsection.
(C)Certain dyed and
printed textiles and textile articlesNotwithstanding paragraph
(1)(D), an article classifiable under subheading 6117.10, 6213.00, 6214.00,
6302.22, 6302.29, 6302.52, 6302.53, 6302.59, 6302.92, 6302.93, 6302.99,
6303.92, 6303.99, 6304.19, 6304.93, 6304.99, 9404.90.85, or 9404.90.95 of the
HTS, except for an article classifiable under 1 of such subheadings as of
cotton or of wool or consisting of fiber blends containing 16 percent or more
by weight of cotton, shall be considered to meet the rules of origin of this
subsection if the fabric in the article is both dyed and printed in 1 or more
Reconstruction Opportunity Zones in Afghanistan, and such dyeing and printing
is accompanied by 2 or more of the following finishing operations: bleaching,
shrinking, fulling, napping, decating, permanent stiffening, weighting,
permanent embossing, or moireing.
(D)Fabrics of silk,
cotton, man-made fiber or vegetable fiberNotwithstanding
paragraph (1)(C), a fabric classifiable under the HTS as of silk, cotton,
man-made fiber, or vegetable fiber shall be considered to meet the rules of
origin of this subsection if the fabric is both dyed and printed in 1 or more
Reconstruction Opportunity Zones in Afghanistan, and such dyeing and printing
is accompanied by 2 or more of the following finishing operations: bleaching,
shrinking, fulling, napping, decating, permanent stiffening, weighting,
permanent embossing, or moireing.
(e)The
Secretary of the Treasury, after consultation with the United States Trade
Representative, shall prescribe such regulations as may be necessary to carry
out this section.
6.Protections
against unlawful transshipment
(a)Duty-free
treatment conditioned on enforcement measures
(1)The duty-free treatment described in section 5 shall not
be provided to covered articles that are imported from a Reconstruction
Opportunity Zone in a country unless the President determines that country
meets the following criteria:
(A)The country has
adopted an effective visa or electronic certification system, domestic laws,
and enforcement procedures applicable to covered articles to prevent unlawful
transshipment of the articles and the use of false documents relating to the
importation of the articles into the United States.
(B)The country 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 unlawful transshipment through such
country.
(C)The country agrees
to provide U.S. Customs and Border Protection with a monthly report on
shipments of covered articles from each facility engaged in the production of
those articles in a Reconstruction Opportunity Zone in that country.
(D)The country will
cooperate fully with the United States to address and take action necessary to
prevent circumvention, as described in article 5 of the Agreement on Textiles
and Clothing.
(E)The country agrees
to require each entity engaged in the production or manufacture of a covered
article in a Reconstruction Opportunity Zone in that country to register with
the competent government authority, to provide that authority with the
following information, and to update that information as changes occur:
(i)The
name and address of the entity, including the location of all textile or
apparel facilities owned or operated by that entity in Afghanistan or
Pakistan.
(ii)The
telephone number, facsimile number, and electronic mail address of the
entity.
(iii)The names and
nationalities of the owners, directors, and corporate officers, and their
positions within the entity.
(iv)The
number of employees the entity employs and their occupations.
(v)A
general description of the covered articles the entity produces and the
entity's production capacity.
(vi)The
number and type of machines the entity uses to produce textile or apparel
articles at each facility.
(vii)The approximate
number of hours the machines operate per week.
(viii)The identity of
any supplier to the entity of textile or apparel goods, or fabrics, yarns, or
fibers used in the production of textile or apparel goods.
(ix)The
name of, and contact information for, each of the entity’s customers in the
United States.
(F)The country agrees
to provide to U.S. Customs and Border Protection on a timely basis all of the
information received by the competent government authority in accordance with
subparagraph (E) and to provide U.S. Customs and Border Protection with an
annual update of that information.
(G)The country agrees
to require that all producers and exporters of covered articles in a
Reconstruction Opportunity Zone in that country maintain complete records of
the production and the export of covered articles, including materials used in
the production, for at least 5 years after the production or export (as the
case may be).
(H)The country agrees
to provide, on a timely basis, at the request of U.S. Customs and Border
Protection, documentation establishing the eligibility of covered articles for
duty-free treatment under section 5.
(2)Documentation
establishing eligibility of articles for duty-free treatmentFor
purposes of paragraph (1)(H), documentation establishing the eligibility of a
covered article for duty-free treatment under section 5 includes documentation
such as production records, information relating to the place of production,
the number and identification of the types of machinery used in production, the
number of workers employed in production, and certification from both the
manufacturer and the exporter.
(b)Customs
procedures and enforcement
(1)
(A)The
Secretary of the Treasury, after consultation with the United States Trade
Representative, shall promulgate regulations setting forth customs procedures
similar in all material respects to the requirements of article 502(1) of the
NAFTA as implemented pursuant to United States law, which shall apply to any
importer that claims duty-free treatment for an article under section 5.
(B)In
order for articles produced in a Reconstruction Opportunity Zone to qualify for
the duty-free treatment under section 5, there shall be in effect a
determination by the President that Afghanistan or Pakistan, as the case may
be—
(i)has
implemented and follows, or
(ii)is
making substantial progress toward implementing and following,
procedures and requirements
similar in all material respects to the relevant procedures and requirements
under chapter 5 of the NAFTA.(2)A certificate of
origin that otherwise would be required pursuant to the provisions of paragraph
(1) shall not be required in the case of an article imported under section 5 if
such certificate of origin would not be required under article 503 of the
NAFTA, as implemented pursuant to United States law, if the article were
imported from Mexico.
(3)If
the President determines, based on sufficient evidence, that an entity has
engaged in unlawful transshipment described in paragraph (4), the President
shall deny for a period of 5 years beginning on the date of the determination
all benefits under section 5 to the entity, any successor of the entity, and
any other entity owned, operated, or controlled by the principals of the
entity.
(4)Unlawful
transshipment describedFor purposes of this section, unlawful
transshipment occurs when duty-free treatment for a covered article 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 the preceding sentence, false information is
material if disclosure of the true information would mean or would have meant
that the article is or was ineligible for duty-free treatment under section
5.
(5)Monitoring and
reports to congressU.S.
Customs and Border Protection shall monitor and the Commissioner responsible
for U.S. Customs and Border Protection shall submit to Congress, not later than
March 31 of each year, a report on the effectiveness of the visa or electronic
certification systems and the implementation of legislation and regulations
described in subsection (a) and on measures taken by Afghanistan and Pakistan
to prevent circumvention as described in article 5 of the Agreement on Textile
and Clothing.
(c)Additional
customs enforcementU.S.
Customs and Border Protection shall—
(1)make available
technical assistance to Afghanistan and Pakistan—
(A)in the development
and implementation of visa or electronic certification systems, legislation,
and regulations described in subsection (a)(1)(A) and (B); and
(B)to train their
officials in anti-transshipment enforcement;
(2)send production
verification teams to Afghanistan and Pakistan as necessary; and
(3)to the extent
feasible, place Afghanistan and Pakistan on the Electronic Visa (ELVIS) program
or relevant e-certification program.
(d)Authorization of
appropriationsTo carry out
subsection (c), there are authorized to be appropriated to U.S. Customs and
Border Protection $10,000,000 for each of the fiscal years 2010 through
2023.
7.Technical
assistance, capacity building, compliance assessment, and remediation
program
(a)In this section:
(1)Appropriate
congressional committeesThe
term appropriate congressional committees means the Committee on
Finance of the Senate and the Committee on Ways and Means of the House of
Representatives.
(2)Textile or
apparel exporting enterpriseThe term textile or apparel
exporting enterprise means a producer of textile or apparel articles
that is located in a Reconstruction Opportunity Zone and is seeking or
receiving any benefits under section 5.
(b)
(1)Presidential
certification of compliance by Afghanistan or Pakistan with
requirementsUpon the
expiration of the 16-month period beginning on the date on which the President
notifies Congress of the President’s intention to designate an area within
Afghanistan or Pakistan, as the case may be, as a Reconstruction Opportunity
Zone under section 3, each Reconstruction Opportunity Zone in Afghanistan or
Pakistan, as the case may be, shall continue to receive duty-free treatment
under this Act only if the President determines and certifies to Congress that
Afghanistan or Pakistan, as the case may be—
(A)has implemented
the requirements set forth in subsections (c) and (d); and
(B)has agreed to require textile or apparel
exporting enterprises to participate in the program described in subsection (d)
and has developed a system to ensure participation in such program by such
enterprises, including by developing and maintaining the registry described in
subsection (c)(2)(A).
(2)The President may extend the period for
compliance by Afghanistan or Pakistan under paragraph (1) if the
President—
(A)determines that Afghanistan or Pakistan, as
the case may be, 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
(B)provides to the appropriate congressional
committees, not later than 6 months after the last day of the 16-month period
specified in paragraph (1), and every 6 months thereafter, a report identifying
the steps that Afghanistan or Pakistan, as the case may be, has agreed to take
to come into full compliance and the progress made over the preceding 6-month
period in implementing such steps.
(3)
(A)Termination of
preferential treatmentIf,
after making a certification under paragraph (1), the President determines that
Afghanistan or Pakistan is no longer meeting the requirements set forth in
paragraph (1), the President shall terminate the eligibility of Afghanistan or
Pakistan, as the case may be, provided under section 3(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 Afghanistan or Pakistan, as the case may be, when the
determination is made.
(B)If the President,
after terminating eligibility of Afghanistan or Pakistan, as the case may be,
under subparagraph (A), determines that Afghanistan or Pakistan, as the case
may be, is meeting the requirements set forth in paragraph (1), the President
shall reinstate the eligibility of Afghanistan or Pakistan, as the case may be,
under section 3(b).
(c)
(1)The requirement under
this subsection is that Afghanistan or Pakistan, as the case may be, has
designated a labor official within the national government that—
(A)reports directly to the President of
Afghanistan or Pakistan, as the case may be;
(B)is chosen by the President of Afghanistan
or Pakistan, as the case may be, in consultation with labor unions and industry
associations; and
(C)is vested with the
authority to perform the functions described in paragraph (2).
(2)The functions of the labor official shall
include—
(A)developing and maintaining a registry of
textile or apparel exporting enterprises, and developing, in consultation and
coordination with any other appropriate officials of the Government of
Afghanistan or Pakistan, as the case may be, a system to ensure participation
by such enterprises in the program described in subsection (d);
(B)overseeing the
implementation of the program described in subsection (d);
(C)receiving and investigating comments from
any interested party regarding the conditions described in subsection (d)(2) in
facilities of textile or apparel exporting enterprises listed in the registry
described in subparagraph (A) and, where appropriate, referring such comments
or the result of such investigations to the appropriate authorities of
Afghanistan or Pakistan, as the case may be, or to the entity operating the
program described in subsection (d);
(D)assisting, in consultation and coordination
with any other appropriate authorities Afghanistan or Pakistan, as the case may
be, textile or apparel exporting enterprises listed in the registry described
in subparagraph (A) in meeting the conditions set forth in subsection (d)(2);
and
(E)coordinating, with the assistance of the
entity operating the program described in subsection (d), 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 program described in
subsection (d), and consulting on improving core labor standards and working
conditions in the textile and apparel sector in Afghanistan or Pakistan, as the
case may be, and on other matters of common concern relating to such core labor
standards and working conditions.
(d)Technical
assistance, capacity building, compliance assessment, and remediation
program
(1)The requirement under
this subsection is that Afghanistan or Pakistan, as the case may be, in
cooperation with the International Labor Organization, has established a
program meeting the requirements under paragraph (3)—
(A)to assess compliance by textile or apparel
exporting enterprises listed in the registry described in subsection (c)(2)(A)
with the conditions set forth in paragraph (2) and to assist such enterprises
in meeting such conditions; and
(B)to provide assistance to improve the
capacity of the Government of Afghanistan or Pakistan, as the case may
be—
(i)to inspect facilities of textile or apparel
exporting enterprises listed in the registry described in subsection (c)(2)(A);
and
(ii)to
enforce national labor laws and resolve labor disputes, including through
measures described in paragraph (5).
(2)The conditions referred to in paragraph (1) are—
(A)compliance with
core labor standards; and
(B)compliance with the labor laws of
Afghanistan or Pakistan, as the case may be, 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.
(3)The requirements for the program are that
the program—
(A)be operated by the
International Labor Organization (or any subdivision, instrumentality, or
designee thereof), which prepares the annual reports described in paragraph
(4);
(B)be developed through a participatory
process that includes the labor official described in subsection (c) of
Afghanistan or Pakistan, as the case may be, and appropriate representatives of
government agencies, employers, and workers;
(C)assess compliance by each textile or
apparel exporting enterprise listed in the registry described in subsection
(c)(2)(A) with the conditions set forth in paragraph (2) and identify any
deficiencies by such enterprise with respect to meeting such conditions,
including by—
(i)conducting site
visits to facilities of the enterprise;
(ii)conducting
confidential interviews with workers and management of the facilities of the
enterprise; and
(iii)providing to
management and workers, and where applicable, worker organizations in the
enterprise, on a confidential basis—
(I)the results of the
assessment carried out under this subparagraph; and
(II)specific
suggestions for remediating any such deficiencies;
(D)assist the textile
or apparel exporting enterprise in remediating any deficiencies identified
under subparagraph (C);
(E)conduct prompt
follow-up site visits to the facilities of the textile or apparel exporting
enterprise to assess progress on remediation of any deficiencies identified
under subparagraph (C); and
(F)provide training
to workers and management of the textile or apparel exporting enterprise, and
where appropriate, to other persons or entities, to promote compliance with
paragraph (2).
(4)The annual reports
referred to in paragraph (3)(A) are a report, by the entity operating the
program, that is published (and available to the public in a readily accessible
manner) on an annual basis, beginning 1 year after Afghanistan or Pakistan, as
the case may be, has implemented the program under this subsection, covering
the preceding 1-year period, and that includes the following:
(A)The name of each textile or apparel
exporting enterprise listed in the registry described in subsection (c)(2)(A)
that has been identified as having met the conditions under paragraph
(2).
(B)The name of each textile or apparel
exporting enterprise listed in the registry described in subsection (c)(2)(A)
that has been identified as having deficiencies with respect to the conditions
under paragraph (2), and has failed to remedy such deficiencies.
(C)For each textile
or apparel exporting enterprise listed under subparagraph (B)—
(i)a
description of the deficiencies found to exist and the specific suggestions for
remediating such deficiencies made by the entity operating the program;
(ii)a
description of the efforts by the enterprise 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.
(D)For each textile
or apparel exporting enterprise identified as having deficiencies with respect
to the conditions described under paragraph (2) in a prior report under this
paragraph, 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.
(5)The assistance to
the Government of Afghanistan or Pakistan referred to in paragraph (1)(B) shall
include programs—
(A)to review the labor laws and regulations of
Afghanistan or Pakistan, as the case may be, and to develop and implement
strategies for improving labor laws and regulations;
(B)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;
(C)to increase awareness of core labor
standards and national labor laws;
(D)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;
(E)to assist the labor official of Afghanistan
or Pakistan, as the case may be, designated pursuant to subsection (c) in
establishing and coordinating operation of the committee described in
subsection (c)(2)(E);
(F)to assist worker representatives in more
fully and effectively advocating on behalf of their members; and
(G)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.
(e)Compliance with
eligibility criteria
(1)Country
compliance with core labor standards eligibility criteriaIn
making a determination of whether Afghanistan or Pakistan is meeting the
requirement set forth in section 3(b)(1)(E) relating to core labor standards,
the President shall consider the reports produced under subsection
(d)(4).
(2)
(A)Identification
of producersBeginning 2
years after the President makes the certification under subsection (b)(1), the
President shall identify on a biennial basis whether a textile or apparel
exporting enterprise listed in the registry described in subsection (c)(2)(A)
has failed to comply with core labor standards and with the labor laws of
Afghanistan or Pakistan, as the case may be, that directly relate to and are
consistent with core labor standards.
(B)Assistance to
enterprises; withdrawal, etc., of preferential treatmentFor each textile or apparel exporting
enterprise that the President identifies under subparagraph (A), the President
shall seek to assist such enterprise in coming into compliance with core labor
standards and with the labor laws of Afghanistan or Pakistan, as the case may
be, 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 section 5 to articles of such
enterprise.
(C)Reinstating
preferential treatmentIf the
President, after withdrawing, suspending, or limiting the application of
preferential treatment under subparagraph (B) to articles of a textile or
apparel exporting enterprise, determines that such enterprise is complying with
core labor standards and with the labor laws of Afghanistan or Pakistan, as the
case may be, that directly relate to and are consistent with core labor
standards, the President shall reinstate the application of preferential
treatment under section 5 to the articles of the enterprise.
(D)In making the
identification under subparagraph (A) and the determination under subparagraph
(C), the President shall consider the reports made available under subsection
(d)(4).
(f)
(1)Not later than one
year after the date of the enactment of this Act, and annually thereafter, the
President shall transmit to the appropriate congressional committees a report
on the implementation of this section during the preceding 1-year
period.
(2)Each report required by paragraph (1) shall include the
following:
(A)An explanation of
the efforts of Afghanistan and Pakistan, the President, and the International
Labor Organization to carry out this section.
(B)A summary of each
report produced under subsection (d)(4) during the preceding 1-year period and
a summary of the findings contained in such report.
(C)Identifications made under subsection
(e)(2)(A) and determinations made under subsection (e)(2)(C).
(g)Authorization of
appropriationsThere is
authorized to be appropriated to carry out this section $20,000,000 for the
period beginning on October 1, 2009, and ending on September 30, 2014.
8.Any interested party
may file a request to have the status of Afghanistan or Pakistan reviewed with
respect to the eligibility requirements listed in this Act, 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)).
9.Limitations on
providing duty-free treatment
(a)
(1)Except
as provided in paragraph (2), and subject to subsection (b) and the conditions
described in sections 3 through 7, the President shall exercise the President’s
authority under this Act, and the President shall proclaim any duty-free
treatment pursuant to that authority.
(2)The
President may waive the application of duty-free treatment under this Act with
respect to Reconstruction Opportunity Zones in Afghanistan and Pakistan or
enterprises receiving benefits under section 4 or 5 if the President determines
that providing such treatment is inconsistent with the national interests of
the United States. In making such determination, the President shall
consider—
(A)obligations of the
United States under international agreements;
(B)the national
economic interests of the United States; and
(C)the foreign policy
interests of the United States, including the economic development of
Afghanistan and the border region of Pakistan.
(b)Withdrawal,
suspension, or limitation of duty-free treatmentThe President may withdraw, suspend, or
limit the application of the duty-free treatment proclaimed under this Act. In
taking any action to withdraw, suspend, or limit duty-free treatment with
respect to Reconstruction Opportunity Zones in Afghanistan and Pakistan or
enterprises receiving benefits under section 4 or 5, the President shall
consider the factors set forth in section 3 (b) and (c) of this Act, and
section 502 (b) and (c) of the Trade Act of 1974 (19 U.S.C. 2462 (b) and (c)).
In taking any action to withdraw, suspend, or limit duty-free treatment with
respect to enterprises receiving benefits under section 4 or 5, the President
shall consider the information described in section 3(d) relating to
verification of the ownership and nature of the activities of such enterprises
and any other relevant information the President determines to be
appropriate.
(c)The President shall advise Congress—
(1)of any action the President takes to
withdraw, suspend, or limit the application of duty-free treatment with respect
to Reconstruction Opportunity Zones in Afghanistan or Pakistan or enterprises
receiving benefits under section 4 or 5; and
(2)if either
Afghanistan or Pakistan fails to adequately take the actions described in
section 3 (b) and (c) of this Act or section 502 (b) and (c) of the Trade Act
of 1974.
10.Duty-free treatment
provided under this Act shall remain in effect through September 30,
2024.