1.This Act may be cited as
the Afghanistan and Pakistan
Reconstruction Opportunity Zones Act of 2009
.
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term entered means entered, or withdrawn from warehouse for
consumption, in the customs territory of the United States.
(4)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).
(5)The
term HTS means the Harmonized Tariff Schedule of the United
States.
(6)The
term NAFTA means the North American Free Trade Agreement concluded
between the United States, Mexico, and Canada on December 17, 1992.
(7)Reconstruction
Opportunity ZoneThe term Reconstruction Opportunity
Zone means any area that—
(A)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, promote good governance, 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)(7) (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
internationally recognized worker rights, as defined in section 507(4) of the
Trade Act of 1974 (19 U.S.C. 2467(4));
(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;
(C)prevent unlawful
transshipment, as described in section 6(b)(3); and
(D)protect
internationally recognized worker rights, as defined in section 507(4) of the
Trade Act of 1974 (19 U.S.C. 2467(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 by which a competent authority of the
country—
(1)collects 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)updates the
information required under paragraph (1) as changes occur; and
(3)provides 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) if the article is 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 effective domestic law 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 those 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, and
the number of workers employed in production.
(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)If
the President determines, based on sufficient evidence, that an entity has
engaged in unlawful transshipment described in paragraph (3), 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 or operated by the principals of the entity.
(3)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.
7.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 6, 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 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 treatment
(1)The 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, 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)).
(2)The President shall advise Congress—
(A)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; and
(B)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.
8.Duty-free treatment
provided under this Act shall remain in effect through September 30,
2023.