[WPRT 107-4]
[From the U.S. Government Publishing Office]
107th Congress WMCP:
COMMITTEE PRINT
1st Session 107-4
_______________________________________________________________________
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
__________
OVERVIEW AND COMPILATION OF
U.S. TRADE STATUTES
__________
2001 EDITION
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13
JUNE 2001
Prepared for the use of Members of the Committee on Ways and Means by
members of its staff. This document has not been officially approved by
the Committee and may not reflect the views of its Members.
----------
U.S. GOVERNMENT PRINTING OFFICE
71-824 WASHINGTON : 2001
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC
20402
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
----------
ONE HUNDRED SEVENTH CONGRESS
WILLIAM M. THOMAS, California, Chairman
----------
Allison H. Giles, Chief of Staff
This document was prepared by the staff of the Committee on
Ways and Means and is issued under the authority of Chairman
William M. Thomas. This document has not been reviewed or
officially approved by the Members of the Committee.
LETTER OF TRANSMITTAL
----------
House of Representatives,
Committee on Ways and Means,
Washington, DC
Hon. William M. Thomas
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: In 1987, the Committee first published a
resource document entitled ``Overview and Compilation of U.S.
Trade Statutes'' for use by Committee Members and interested
parties in the international trade community. This document was
unique in that it contained not only an overview of the
operation of foreign trade statutes, but also an overview of
the operation of foreign trade statutes, but also an up-to-date
statutory text of such laws, which integrated numerous separate
acts of Congress into a single statutory compilation.
This document was so well received by Members of Congress,
congressional staff, government officials, the international
trade community and the general public that an updated version
was published in 1989 and updated and expanded versions were
published in 1991, 1993 1995, and 1997. In order to update the
changes in various trade statutes since the publication of the
1997 edition, the staff has prepared a new version,
incorporating all statutory provisions enacted through the
106th Congress.
As was the case with the earlier versions, the statutory
authorities selected are the major provisions of federal law
which are directly related to the conduct of U.S. international
trade. The compilation is not meant to be a comprehensive
treatise of every trade-related law or program, nor does it
cover provisions to regulate domestic commerce. The laws and
programs which are within the jurisdiction of the Committee on
Ways and Means are the main focus of this document and are
discussed in the greatest detail. In addition, some of the laws
and programs described may be within the jurisdiction of other
committees of the House of Representatives. These provisions
are included in order to provide a complete survey of the
principal trade authorities.
The document has been prepared by the Committees' trade
staff with assistance from the Office of the Legislative
Counsel and various government agencies, to which the staff
extends its most sincere thanks.
(III)
IV
Any suggestions on how to improve this document as a
reference tool in subsequent editions of this publication are
always welcome.
Sincerely yours,
Angela Ellard,
Staff Director & Counsel,
Subcommittee on Trade
PREFACE
The role of Congress in formulating international economic
policy and regulating international trade in based on a
specific constitutional grant of power. Article I of the U.S.
Constitution sets forth the various powers and responsibilities
of the legislature. Article I, section 8 lists certain specific
express powers of the Congress. Among these express powers are
the powers:
``to lay and collect taxes, duties, imposts and excises
. . . [and] to regulate commerce with foreign
nations, and among the several states. . . .''
The Congress therefore is the fundamental authority
responsible for federal government regulation of international
transactions. Within the House of Representatives, jurisdiction
over trade legislation lies in the Committee on Ways and Means,
based on its jurisdiction over taxes, tariffs, and trade
agreements, Throughout the history of U.S. trade law and
policy, the Committee on Ways and Means has been at the
forefront of its development. The Committee's jurisdiction
ranges from regulation of tariff affairs, to regulation of non-
tariff trade barriers such as quotas and standards, regulation
of unfair trade practices such as dumping, subsidization, or
counterfeiting, provisions of temporary relief from import
competition and adjustment assistance, providing for bilateral
and multilateral trade agreements with foreign trading
partners, and responsibility for authorizing and overseeing the
departments and agencies charged with implementation of the
trade laws and programs.
The difficulties of retaining and exercising full control
over international trade matters within the legislative branch
were recognized by Congress shortly after enactment of the
Smoot-Hawley Tariff Act of 1930. In 1934, the Congress enacted
the Reciprocal Trade Agreements Act which delegated to the
President authority to negotiate international trade agreements
for the reduction of tariffs. This Act, which marked the
beginning of the trade agreements program for the United
States, represented the first significant delegation of
authority from Congress to the President with respect to
international trade policy.
Since 1934, the delegation of authority from Congress to
the President has varied in scope and degree, reflecting
congressional concern over maintaining careful control of
international trade policy. When the trade agreements
negotiating authority granted to the President expired in 1967,
for example, it was not renewed again until 1974. In the Trade
Act of 1974, presidential negotiating authority was
substantially revised, extended to non-tariff as well as tariff
negotiations, and made subject to specific consultation and
notification requirements both prior to and during the course
of negotiation. The Omnibus Trade and Competitiveness Act of
1988, in addition to providing negotiating authority and
explicit negotiating
(V)
VI
objectives for the Uruguay Round, expands the consultation
requirements between the USTR and the Congress and requires the
formulation of an annual trade policy agenda. Both the Uruguay
Round Agreements Act and the North American Free Trade
Agreement Implementation Act provide for the involvement of
Congress in a number of key trade policy areas. The Trade and
Development Act of 2000 marks important changes in U.S.
preferential benefits for the Canbbean Basin and provides such
benefits for the first time to the nations of sub-Sahanan
Africa. Finally, legislation in 2000 concerning normal trade
relations for the People's Republic of China represents the
congressional views on the accession of this important country
to the World Trade Organization.
Due to the central role of Congress in formulating
international economic policy, an understanding of U.S.
international trade law and policy must begin with the
statutory authorities and programs which provide the foundation
for our trade policy. This document provides two essential
tools for those interested in obtaining a better understanding
of U.S. trade law and policy. Part I contains a general
overview of current provisions of our trade laws. This over
view was prepared by the staff of the Subcommittee on Trade
with the assistance of the Congressional Research Service and
provides a thorough yet understandable explanation of how these
laws operate. Part II contains a compilation of the actual text
of these laws, as amended. This updated statutory compilation
incorporates all major provisions of U.S. trade law and
includes all amendments to theses laws as of the beginning of
the 107th Congress. While this integrated text should not be
treated as a substitute for official public laws or the United
States Code, it is an accurate and highly useful document which
integrates numerous separate Acts of Congress into one text. We
hope this document will prove useful to official policymakers
as well as the interested public.
C O N T E N T S
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Page
Letter of transmittal............................................ iii
Preface.......................................................... v
Subject index.................................................... 1171
PART I: OVERVIEW
Chapter 1: Tariff and customs laws............................... 1
Harmonized Tariff Schedule of the United States.............. 1
Generalized System of Preferences (GSP)...................... 14
Title V of the Trade Act of 1974, as amended............. 14
Caribbean Basin Initiative (CBI)............................. 21
Caribbean Basin Trade Partnership Act........................ 22
Andean Initiative............................................ 34
African Growth and Opportunity Act........................... 37
Customs valuation............................................ 48
The GATT/WTO Customs Valuation Agreement................. 49
Current law.............................................. 51
Customs user fees............................................ 58
Other customs laws........................................... 63
Country-of-origin marking................................ 63
NAFTA rules of origin.................................... 66
Drawback................................................. 67
Protests and administrative review....................... 69
Copyrights and trademark enforcement..................... 71
Penalties................................................ 72
Import prohibitions/restrictions relating to dog and cat
fur products........................................... 74
Commercial operations.................................... 75
Foreign trade zones.......................................... 78
Chapter 2: Trade remedy laws..................................... 83
The antidumping and countervailing duty laws................. 83
CVD law: subsidy determination........................... 83
AD law: less-than-fair-value (LTFV) determination........ 89
AD and CVD laws: material injury determination........... 94
Issues common to AD and CVD investigations............... 95
Enforcement of U.S. rights under trade agreements and
response to certain foreign practices: sections 301-310
of the Trade Act of 1974, as amended................... 108
International consultations and dispute settlement....... 109
Enforcement authority and procedures (section 301)....... 110
Identification of intellectual property rights priority
countries (Special 301)................................ 116
Identification of trade liberalization priorities (Super
301)................................................... 123
Foreign direct investment................................ 127
Foreign anticompetitive practices........................ 128
Unfair practices in import trade (section 337 of the
Tariff Act of 1930, as amended)........................ 128
Import relief (safeguard) authorities.................... 132
Sections 201-204 of the Trade Act of 1974, as amended.... 132
Section 406 of the Trade Act of 1974: market disruption
by imports from Communist countries.................... 139
Sections 421-423 of the Trade Act of 1974, as amended:
market disruption by imports from the People's Republic
of China............................................... 140
Section 1102 of the Trade Agreements Act of 1979: public
auction of import licenses............................. 142
Trade adjustment assistance.................................. 142
Chapters 2, 3, and 5 of title II of the Trade Act of
1974, as amended....................................... 142
TAA program for workers.................................. 144
NAFTA Worker Security Act................................ 149
TAA program for firms.................................... 151
Chapter 3: Other laws regulating imports......................... 153
Authorities to restrict imports of agricultural and textile
products................................................... 153
Section 204 of the Agricultural Act of 1956, as amended.. 153
Multifiber Arrangement (MFA)......................... 153
Uruguay Round Agreement on Textiles and Clothing..... 156
Bilateral textile agreements......................... 158
Textiles and apparel trade under the North American Free
Trade Agreement........................................ 159
Section 22 of the Agricultural Adjustment Act of 1933.... 159
Agriculture trade under the North American Free Trade
Agreement Implementation Act........................... 160
Agriculture trade under the Uruguay Round Agreements Act. 162
Meat Import Act of 1979.................................. 164
Reciprocal meat inspection requirement................... 164
Sugar tariff-rate quotas under Harmonized Tariff Schedule
authorities............................................ 165
Import prohibitions on certain agricultural commodities
under marketing orders (section 8e of the Agricultural
Adjustment Act, as amended)............................ 166
Authorities to restrict imports under certain environmental
laws....................................................... 167
Marine Mammal Protection Act of 1972, as amended......... 167
International Dolphin Conservation Act of 1992........... 168
Endangered Species Act of 1973, as amended............... 169
Tariff Act of 1930, as amended: wild mammals and birds... 169
Section 8 of the Fishermen's Protective Act of 1967, as
amended (``Pelly Amendment'').......................... 170
High Seas Driftnet Fisheries Enforcement Act............. 170
Wild Bird Conservation Act of 1992....................... 171
Atlantic Tunas Convention Act of 1995.................... 171
Conservation of Sea Turtles.............................. 172
National security import restrictions........................ 174
Section 232 of the Trade Expansion Act of 1962........... 174
Section 233 of the Trade Expansion Act of 1962........... 175
Balance of payments authority (section 122 of the Trade Act
of 1974)................................................... 176
Product standards............................................ 178
Agreement on Technical Barriers to Trade................. 179
Uruguay Round Agreement on Technical Barriers to Trade... 181
The North American Free Trade Agreement.................. 182
Title IV of the Trade Agreements Act of 1979, as amended. 182
Government procurement....................................... 183
Buy American Act......................................... 184
1979 GATT Agreement on Government Procurement............ 184
1994 WTO Agreement on Government Procurement............. 186
The North American Free Trade Agreement.................. 187
Title III of the Trade Agreements Act of 1979, as amended 188
Title VII of the Omnibus Trade and Competitiveness Act of
1988, as amended....................................... 189
Chapter 4: Laws regulating export activities..................... 195
Export controls.............................................. 195
Background............................................... 195
Export Administration Act of 1979........................ 196
Export Administration Amendments Act of 1985............. 198
Omnibus Trade and Competitiveness Act of 1988............ 199
Export promotion of goods and services....................... 200
Export Enhancement Act of 1988........................... 200
Fair Trade in Auto Parts Act of 1988..................... 201
Agricultural export sales and promotion...................... 202
Public Law 480........................................... 202
Export credit guarantee and export promotion programs.... 202
Chapter 5: Authorities relating to political or economic security 205
International Emergency Economic Powers Act.................. 205
Trading With the Enemy Act................................... 211
Narcotics Control Trade Act.................................. 214
The International Security and Development Cooperation Act of
1985....................................................... 215
The Iran and Libya Sanctions Act of 1996..................... 215
Embargo on transactions with Cuba............................ 216
The Cuban Liberty and Democratic Solidarity Act.............. 218
Iraq Sanctions Act of 1990................................... 220
Exemptions for food and medicine from U.S. International
Trade Sanctions............................................ 220
The Hong Kong Policy Act..................................... 222
Section 27 of the Merchant Marine Act, 1920 (Jones Act)...... 222
Section 721 of the Defense Production Act of 1950, as amended
(``Exon/Florio'').......................................... 223
Chapter 6: Reciprocal trade agreements........................... 225
Reciprocal trade agreement objectives and authorities........ 225
Trade negotiating objectives............................. 226
General tariff authority................................. 227
Multilateral trade agreement authority................... 228
Bilateral trade agreement authority...................... 229
Reciprocal competitive opportunities..................... 230
Specific trade agreement authorities..................... 230
Trade negotiation procedural requirements................ 232
Congressional fast track implementing procedures............. 232
Uruguay Round Agreements..................................... 235
Uruguay Round Agreements Act............................. 237
Specific foreign trade barriers.............................. 241
Sections 181 and 182 of the Trade Act of 1974, as amended 241
Telecommunications Trade Act of 1988..................... 242
Normal Trade Relations (nondiscriminatory) treatment......... 246
North American trade relations............................... 259
North American Free Trade Agreement...................... 260
North American Free Trade Agreement Implementation Act of
1993................................................... 260
United States-Israel trade relations......................... 261
Title IV of the Trade and Tariff Act of 1984............. 262
United States-Israel Free Trade Area Agreement........... 263
United States-Israel Free Trade Area Implementation Act
of 1985................................................ 264
West Bank and Gaza Strip Free Trade Benefits............. 264
United States-Canada trade relations......................... 265
United States-Canada Free-Trade Agreement................ 266
United States-Canada Free-Trade Agreement Implementation
Act of 1988............................................ 267
Chapter 7: Organization of trade policy functions................ 269
Congress..................................................... 269
Executive branch............................................. 270
Interagency trade process................................ 270
Office of the U.S. Trade Representative.................. 271
Department of Commerce................................... 273
U.S. Customs Service..................................... 274
U.S. International Trade Commission.......................... 275
Private or public sector advisory committees................. 276
PART II: COMPILATION OF U.S. TRADE STATUTES
Chapter 8: Tariff and customs laws............................... 279
A. Implementation of the Harmonized Tariff Schedule of the
United States.............................................. 279
Sections 1201-1217 of the Omnibus Trade and
Competitiveness Act of 1988............................ 279
Section 484(e) of the Tariff Act of 1930, as amended..... 288
B. Excerpts from the Harmonized Tariff Schedule of the United
States (HTS) relating to special duty treatment............ 289
1. American goods returned (HTS item 9801.00.10)......... 289
2. American goods repaired or altered abroad (HTS items
9802.00.40, .50)....................................... 291
American metal articles processed abroad (HTS item
9802.00.60)........................................ 291
American components assembled abroad (HTS item
9802.00.80)........................................ 291
3. Personal (tourist) exemptions (HTS items 9804.00.65,
.70, .72).............................................. 296
4. Noncommercial Importations of Limited Value (HTS items
9816.00.20, and 9816.00.40)............................ 300
3. Classification of Personal Effect of Participants in
International Athletic Events (HTS items 9817.60.00)... 302
6. Products of U.S. insular possessions (General Note
3(a)(iv)).............................................. 304
7. Rates of duty on certain motor vehicles (General Note
3(d)).................................................. 305
C. Generalized System of Preferences......................... 307
Title V of the Trade Act of 1974, as amended............. 307
General Note 4 of the Harmonized Tariff Schedule......... 319
D. Caribbean Basin Initiative (CBI).......................... 321
Caribbean Basin Economic Recovery Act, as amended........ 321
Caribbean Basin Economic Recovery Expansion Act of 1990.. 348
Section 423 of the Tax Reform Act of 1986, as amended
(treatment of imports of ethyl alcohol)................ 354
General Note 7(a) of the Harmonized Tariff Schedule...... 358
E. Andean Initiative (Andean Trade Preference Act, as
amended)................................................... 358
F. African Growth and Opportunity Act........................ 367
G. Customs valuation (Section 402 of the Tariff Act of 1930,
as amended)................................................ 381
H. Customs user fees......................................... 389
Section 13031 of the Consolidated Budget Reconciliation
Act of 1985, as amended................................ 389
Sections 111(f), 112, and 113 of the Customs and Trade
Act of 1990, as amended................................ 402
Section 1893(f) of the Tax Reform Act of 1986, as amended 403
I. Other customs laws........................................ 403
1. Country of origin marking............................. 403
Section 304 of the Tariff Act of 1930, as amended.... 403
Section 1907 (b) and (c) of the Omnibus Trade and
Competitiveness Act of 1988........................ 410
Section 210 of the Motor Vehicle Information and Cost
Savings Act........................................ 411
2. Drawback (section 313 of the Tariff Act of 1930, as
amended)............................................... 415
3. Entry of merchandise (section 484 of the Tariff Act of
1930, as amended)...................................... 424
4. Protests and further administrative reviews........... 429
5. Copyrights and trademark enforcement.................. 435
Section 101 of the Copyright Revision Act of 1976.... 435
Section 526 of the Tariff Act of 1930, as amended.... 436
Section 431 of the Tariff Act of 1930, as amended.... 438
6. Penalties (sections 592 and 592A of the Tariff Act of
1930, as amended)...................................... 440
7. National Customs Automation Program (sections 411-414
of the Tariff Act of 1930, as amended)................. 452
8. Commercial operations................................. 456
Section 9503(c) of the Omnibus Budget Reconciliation
Act of 1987........................................ 456
Section 301 of the Customs Procedural Reform and
Simplification Act of 1978, as amended............. 456
J. Foreign Trade Zones (Act of June 18, 1934, as amended).... 459
K. Implementation of the GATT Agreement on Trade in Civil
Aircraft................................................... 468
Title VI of the Trade Agreements Act of 1979............. 468
Section 234 of the Trade and Tariff Act of 1984.......... 469
General Note 6 of the Harmonized Tariff Schedule......... 470
Chapter 9: Trade remedy laws..................................... 473
A. Authorities to respond to foreign subsidy and dumping
practices.................................................. 473
1. Countervailing duties................................. 473
Section 753 of the Tariff Act of 1930, as amended.... 473
Section 261 (a)-(c) of the Uruguay Round Agreements
Act................................................ 477
Subtitle A of title VII (sections 701-709) of the
Tariff Act of 1930, as amended..................... 478
2. Antidumping duties (subtitle B of title VII (sections
731-739) of the Tariff Act of 1930, as amended)........ 501
3. Administrative review of antidumping and
countervailing duties (subtitle C of title VII
(sections 751, 752, 761, and 762) of the Tariff Act of
1930, as amended)...................................... 527
4. General provisions relating to antidumping and
countervailing duties (subtitle D of the VII (sections
771-782) of the Tariff Act of 1930, as amended)........ 540
5. Continued dumping and subsidies offset................ 597
6. Judicial and panel review of antidumping and
countervailing duty actions............................ 600
Section 516A of the Tariff Act of 1930, as amended... 600
Section 129 of the Uruguay Round Agreements Act...... 613
7. Third-country dumping (section 1317 of the Omnibus
Trade and Competitiveness Act of 1988)................. 616
8. Antidumping petitions by third countries (section 783
of the Tariff Act of 1930, as amended)................. 617
9. Antidumping Act of 1916............................... 618
B. Enforcement of United States rights under trade agreements
and response to certain foreign trade practices............ 621
Sections 301-310 of the Trade Act of 1974, as amended.... 621
Sections 281 and 282 of the Uruguay Round Agreements Act,
as amended............................................. 637
Section 307(b) of the Trade and Tariff Act of 1984....... 645
Foreign air transportation (section 2 of the
International Air Transportation Fair Competitiveness
Act of 1974, as amended, and the Federal Aviation Act
of 1958, as amended)................................... 646
Section 19 of the Merchant Marine Act of 1920, as amended 648
Section 10002 of the Foreign Shipping Practices Act of
1988................................................... 651
C. Unfair practices in import trade (section 337 of the
Tariff Act of 1930, as amended)............................ 654
D. Safeguard actions (sections 201-204 of the Trade Act of
1974, as amended).......................................... 662
E. Relief from market disruption by imports from Communist
countries (section 406 of the Trade Act of 1974, as
amended)................................................... 680
F. Relief from market disruption by imports from the People's
Republic of China.......................................... 682
G. Authority to auction import licenses (section 1102 of the
Trade Agreements Act of 1979).............................. 691
H. Trade adjustment assistance (chapters 2, 3, 4, and 5 title
II of the Trade Act of 1974, as amended)................... 691
I. Sections 401 and 408 of the Trade and Development Act of
2000....................................................... 724
Chapter 10: Other laws regulation imports........................ 727
A. Authorities to restrict imports of agricultural and
textile products........................................... 727
Section 204 of the Agricultural Act of 1956, as amended.. 727
Section 22 of the Agricultural Adjustment Act of 1933, as
amended................................................ 727
Tariff-rate quotas and safeguards (sections 404 and 405
of the Uruguay Round Agreements Act)................... 729
Reciprocal meat inspection requirement (section 20(h) of
the Federal Meat Inspection Act)....................... 732
Sugar tariff-rate quotas under headnote authority........ 732
Import prohibitions on certain agricultural commodities
under marketing orders (section 8e of the Agricultural
Adjustment Act, as amended)............................ 736
B. Authorities to restrict imports under certain
environmental laws......................................... 738
Marine Mammal Protection Act of 1972, as amended
(excerpts)............................................. 738
Section 9 of the Endangered Species Act of 1973, as
amended................................................ 753
Section 527 of the Tariff Act of 1930, as amended........ 757
Section 8 of the Fishermen's Protective Act of 1967, as
amended................................................ 762
High Seas Driftnet Fisheries Enforcement Act (excerpts).. 764
Sections 105 and 108 of the Wild Bird Conservation Act of
1992................................................... 769
Atlantic Tunas Convention Act of 1975, as amended
(excerpts)............................................. 771
Conservation of Sea Turtles.............................. 773
C. National security import restrictions (sections 232 and
233 of the Trade Expansion Act of 1962, as amended)........ 774
D. Balance of payments authority (section 122 of the Trade
Act of 1974)............................................... 777
E. Implementation of the GATT Agreement of Technical Barriers
to Trade (product standards) (title IV of the Trade
Agreements Act of 1979).................................... 780
F. Government procurement.................................... 790
1. Buy American requirements............................. 790
Buy American Act (title III of the Act of March 3,
1933, as amended).................................. 790
Section 833 of the Defense Production Act of 1950, as
amended............................................ 795
Act of October 29, 1949.............................. 795
2. Implementation of the GATT Agreement on Government
Procurement (Title III of the Trade Agreements Act
1979, as amended)...................................... 796
Chapter 11: Laws regulation export activities.................... 811
A. Export controls........................................... 811
Export Administration Act of 1979, as amended............ 811
B. Export financing and promotion............................ 821
1. Agriculture export sales and promotion................ 821
Agricultural Trade Development and Assistance Act of
1954, as amended (excerpts)........................ 821
Agricultural Trade Act of 1978, as amended (excerpts) 821
Section 1123 of the Food Security Act of 1985........ 826
2. Export promotion of goods and services................ 827
Sections 2303, 2306, and 2312 of the Export
Enhancement Act of 1988, as amended................ 827
Chapter 12: Authorities relating to political or economic
security....................................................... 833
A. Economic authorities in national emergencies.............. 833
International Emergency Economic Powers Act, as amended.. 833
Section 5(b) of the Trading With the Enemy Act, as
amended................................................ 837
B. Trade sanctions against uncooperative major drug producing
or drug-transit countires (Narcotics Control Trade Act).... 839
C. Economic sanctions against terrorism or missile
proliferation.............................................. 845
Sections 504 and 505 of the International Security and
Development Cooperation Act of 1985.................... 845
Section 73 of the Arms Export Control Act................ 846
D. Economic sanctions against chemical and biological weapons 848
Chemical and Biological Weapons Control and Warfare
Elimination Act of 1991................................ 848
Section 81 of the Arms Export Control Act................ 856
E. Embargo on trade with Cuba................................ 859
Section 620(a) of the Foreign Assistance Act of 1961, as
amended................................................ 859
Cuban Democracy Act of 1992 (title XVII of the National
Defense Authorization Act for Fiscal Year 1993)........ 860
Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of
1996 (excerpts)........................................ 867
F. Economic sanctions against Iraq, Iran, and Libya.......... 875
Iraq Sanctions Act of 1990 (sections 586-586J of the
Foreign Assistance and Related Programs Appropriation
Act, 1991) (excerpts).................................. 875
Iran-Iraq Arms Non-Proliferation Act of 1992 (title XVI
of the National Defense Authorization Act for Fiscal
Year 1993)............................................. 880
Compliance with United Nations sanctions against Iraq.... 883
Iran and Libya Sanctions Act of 1996..................... 884
G. United States-Hong Kong Policy Act of 1992................ 900
H. Restrictions on transport of merchandise by foreign
vessels (section 27 of the Merchant Marine Act, 1920, as
amended)................................................... 907
I. Authority to review certain mergers, acquisitions, and
takeovers (section 721 of the Defense Production Act of
1950, as amended).......................................... 910
Chapter 13: Reciprocal trade agreements.......................... 913
A. U.S. negotiating objectives............................... 913
Section 1101 of the Omnibus Trade and Competitiveness Act
of 1988................................................ 913
Section 1124 and 3004 of the Omnibus Trade and
Competitiveness Act of 1988............................ 918
Sections 131, 132, 135, and 315 of the Uruguay Round
Agreements Act, as amended............................. 919
Section 409 of the Trade and Development Act of 2000..... 922
Section 108 of the North American Free Trade Agreement
Implementation Act..................................... 924
B. General trade agreement and implementation authorities.... 926
1. ``Fast track'' auhority (expired) (sections 1102,
1103, 1105, and 1107 of the Omnibus Trade and
Competitiveness Act of 1988, as amended)............... 926
2. Uruguay Round/WTO implementation, tariff
modifications, and dispute settlement (sections 101(a),
102, 111(a, c, and e), and 121-130 of the Uruguay Round
Agreements Act......................................... 935
C. Specific trade agreement authorities...................... 951
1. Compensation authority (section 123 of the Trade Act
of 1974, as amended)................................... 951
2. Termination and withdrawal authority (section 125 of
the Trade Act of 1974)................................. 952
3. Accession of State trading regimes to the GATT or the
WTO (section 1106 of the Omnibus Trade and
Competitiveness Act of 1988, as amended)............... 954
4. GATT and WTO authorizations........................... 955
Section 121 of the Trade Act of 1974, as amended..... 955
Section 101(c) of the Uruguay Round Agreements Act... 956
D. Trade negotiation procedural requirements................. 956
Sections 131-134 of the Trade Act of 1974, as amended.... 956
Sections 127(a) and (b) of the Trade Act of 1974......... 959
E. Identification of, and action on, specific foreign trade
barriers................................................... 959
1. National trade estimates report (section 181 of the
Trade Act of 1974, as amended)......................... 959
2. Intellectual property rights (section 182 of the Trade
Act of 1974, as amended)............................... 961
3. Telecommunications trade (Telecommunications Trade Act
of 1988)............................................... 965
F. Normal Trade Relations (nondiscriminatory) treatment...... 974
1. NTR principle......................................... 974
Section 5003 of Public Law 105-206: Clarification of
Designation of Normal Trade Relations.............. 974
Section 251 of the Trade Expansion Act of 1962....... 975
Section 126(a) of the Trade Act of 1974.............. 975
Section 1103(a)(3) of the Omnibus Trade and
Competitiveness Act of 1988........................ 975
2. Trade relations with nonmarket economy countries...... 976
General note 3(b) of the Harmonized Tariff Schedule.. 976
Title IV of the Trade Act of 1974, as amended........ 976
Sections 1 and 2 of Public Law 102-182 (NTR treatment
for Hungary and Czechoslovakia).................... 982
Title I of Public Law 102-182 (NTR treatment for
Estonia, Latvia, and Lithuania).................... 983
Section 1 of Public Law 102-420 (NTR withdrawal from
Serbia and Montenegro)............................. 985
Public Law 104-162................................... 985
Public Law 104-171................................... 986
Public Law 104-203................................... 987
Section 2424 of Public Law 106-36.................... 988
Sections 301-302 of Public Law 106-200............... 989
Public Law 106-286................................... 990
Sections 3001-3002 of Public Law 106-476: Extension
of Nondiscriminatory Treatment to Georgia.......... 1006
G. Trade relations with North America (North American Free
Trade Agreement Implementation Act, as amended)............ 1007
H. Bilateral trade relations with Israel..................... 1071
Section 102(b)(1) of the Trade Act of 1974, as amended... 1071
Title IV of the Trade and Tariff Act of 1984, as amended. 1072
United States-Israel Free Trade Area Implementation Act
of 1985, as amended.................................... 1075
I. Bilateral trade relations with Canada..................... 1081
United States-Canada Free-Trade Agreement Implementation
Act of 1988, as amended................................ 1081
Automotive Products Trade Act of 1965, as amended........ 1107
General note 5 of the Harmonized Tariff Schedule......... 1116
Chapter 14: Organization of trade policy functions............... 1119
A. Congress.................................................. 1119
1. Congressional advisers (section 161 of the Trade Act
of 1974, as amended)................................... 1119
2. Reports to Congress................................... 1121
Sections 162 and 163 of the Trade Act of 1974, as
amended............................................ 1121
Section 2202 of the Omnibus Trade and Competitiveness
Act of 1988........................................ 1124
3. Congressional fast track procedures with respect to
presidential actions (sections 151-154 of the Trade Act
of 1974, as amended)................................... 1125
4. Trade agreement implementation authority and amendment
procedures............................................. 1133
Sections 111(b) and 115 of the Uruguay Round
Agreements Act..................................... 1133
Sections 103 and 104 of the North American Free Trade
Agreement Implementation Act....................... 1134
Sections 2(a) and 3(c) of the Trade Agreements Act of
1979............................................... 1135
B. Executive branch.......................................... 1137
1. Interagency trade organization........................ 1137
Section 242 of the Trade Expansion Act of 1962, as
amended............................................ 1137
Reorganization Plan No. 3 of 1979.................... 1138
Section 306 of the Trade and Tariff Act of 1984...... 1142
2. Office of the United States Trade Representative
(section 141 of the Trade Act of 1974, as amended)..... 1144
C. United States International Trade Commission.............. 1149
1. Organization, general powers, procedures.............. 1149
Sections 330, 331, 333-335, and 339 of the Tariff Act
of 1930, as amended................................ 1149
Section 603 of the Trade Act of 1974................. 1156
Section 175(a)(1) of the Trade Act of 1974........... 1157
2. Investigations (section 443 of the Tariff Act of 1930,
as amended)............................................ 1157
D. Private or public sector advisory committees (section 135
of the Trade Act of 1974, as amended)...................... 1159
APPENDIX
Descriptions of major regional and multilateral trade
organizations.................................................. 1165
World Trade Organization (WTO)............................... 1165
Organization for Economic Cooperation and Development (OECD). 1166
United Nations Conference on Trade and Development (UNCTAD).. 1166
World Customs Organization................................... 1167
European Union (EU).......................................... 1167
Asia-Pacific Economic Cooperation (APEC)..................... 1167
MERCOSUR..................................................... 1168
Association of Southeast Asian Nations (ASEAN)............... 1168
Cairns Group................................................. 1169
PART I: OVERVIEW
----------
Chapter 1: TARIFF AND CUSTOMS LAWS
Harmonized Tariff Schedule of the United States
Historical background
The Harmonized Tariff Schedule of the United States (HTS)
was enacted by subtitle B of title I of the Omnibus Trade and
Competitiveness Act of 1988 \1\ and became effective on January
1, 1989.\2\ The HTS replaced the Tariff Schedules of the United
States (TSUS), enacted as title I of the Tariff Act of 1930 (19
U.S.C. 1202) by the Tariff Classification Act of 1962; \3\ the
TSUS had been in effect since August 31, 1963.
---------------------------------------------------------------------------
\1\ Public Law 100-418, approved August 23, 1988.
\2\ Presidential Proclamation No. 5911, November 19, 1988.
\3\ Public Law 87-456, approved May 24, 1962.
---------------------------------------------------------------------------
The HTS is based upon the internationally adopted
Harmonized Commodity Description and Coding System (known as
the Harmonized System or HS) of the Customs Cooperation
Council. Incorporated into a multilateral convention effective
as of January 1, 1988, the HS was derived from the earlier
Customs Cooperation Council Nomenclature, which in turn was a
new version of the older Brussels Tariff Nomenclature. The HS
is an up-to-date, detailed nomenclature structure intended to
be utilized by contracting parties as the basis for their
tariff, statistical and transport documentation programs.
The United States did not adopt either of the two previous
nomenclatures but, because it was a party to the convention
creating the Council and because of the potential benefits from
using a modern, widely adopted nomenclature, became involved in
the technical work to develop the HS. Section 608(c) of the
Trade Act of 1974 \4\ directed the U.S. International Trade
Commission (ITC) to investigate the principles and concepts
which should underlie such an international nomenclature and to
participate fully in the Council's technical work on the HS.
The ITC, the U.S. Customs Service (which represents the United
States at the Council), and other agencies were involved in
this work through the mid and late 1970's; in 1981, the
President requested that the ITC prepare a draft conversion of
the U.S. tariff into the nomenclature format of the HS, even as
the international efforts to complete the nomenclature
continued. The Commission's report and converted tariff were
issued in June 1983. After considerable review and the receipt
of comments from interested parties, legislation to repeal the
TSUS and replace it with the HTS was introduced. Following the
August 23, 1988 enactment of the Omnibus Trade and
Competitiveness Act, the United States became a party to the HS
Convention, joining over 75 other major trading partners.
---------------------------------------------------------------------------
\4\ Public Law 93-618, approved January 3, 1975.
---------------------------------------------------------------------------
Structure of the HTS
Under the HS Convention, the contracting parties are
obliged to base their import and export schedules on the HS
nomenclature, but the rates of duty are set by each contracting
party. The HS is organized into 21 sections and 96 chapters,
with accompanying general interpretive rules and legal notes.
Goods in trade are assigned in the system, in general, to
categories beginning with crude and natural products and
continue in further degrees of complexity through advanced
manufactured goods. These product headings are designated, at
the broadest coverage level, with 4-digit numerical codes and
are further subdivided into narrower categories assigned 2
additional digits. The contracting parties must employ all 4-
and 6-digit provisions and all international rules and notes
without deviation; they may also adopt still narrower
subcategories and additional notes for national purposes, and
they determine all rates of duty. Thus, a common product
description and numbering system to the 6-digit level of detail
exists for all contracting parties, facilitating international
trade in goods. Two final chapters, 98 and 99, are reserved for
national use (chapter 77 is reserved for future international
use).
The HTS therefore sets forth all the international
nomenclature through the 6-digit level and, where needed,
contains added subdivisions assigned 2 more digits, for a total
of 8 at the tariff-rate line (legal) level. Two final (non-
legal) digits are assigned as statistical reporting numbers
where further statistical detail is needed (for a total of 10
digits to be listed on entries). Chapter 98 comprises special
classification provisions (former TSUS schedule 8), and chapter
99 (former appendix to the TSUS) contains temporary
modifications pursuant to legislation or to presidential
action.
Each section's chapters contain numerous 4-digit headings
(which may, when followed by 4 zeroes, serve as U.S duty rate
lines) and 6- and 8-digit subheadings. Additional U.S. notes
may appear after HS notes in a chapter or section. Most of the
general headnotes of the former TSUS appear as general notes to
the HTS set forth before chapter 1, along with notes covering
more recent trade programs (and the non-legal statistical
notes). These notes contain definitions or rules on the scope
of the pertinent provisions, or set additional requirements for
classification purposes. In addition, the HTS contains a table
of contents, an index, footnotes, and other administrative
material, which are provided for ease of reference and, along
with the statistical reporting provisions, have no legal
significance or effect.
The HTS is not published as a part of the statutes and
regulations of the United States but is instead subsumed in a
document produced and updated regularly by the ITC entitled
``Harmonized Tariff Schedule of the United States: Annotated
for Statistical Reporting Purposes.'' Changes in the TSUS
became so frequent and voluminous that its inclusion in title
19 of the United States Code effectively ceased with the 1979
supplement to the 1976 edition. The Commission is charged by
section 1207 of the 1988 Omnibus Trade and Competitiveness Act
(19 U.S.C. 3007) with the responsibility of compiling and
publishing, ``at appropriate intervals,'' and keeping up to
date the HTS and any related materials. The initial document
appeared as USITC Publication 2030. That document, and
subsequent issuances, have included both the current legal text
of the HTS and all statistical provisions adopted under section
484(f) of the Tariff Act of 1930 (19 U.S.C. 1484(f)). It is
presented as a looseleaf publication so that pages being issued
in supplements to modify the schedule's basic edition for any
year edition may be inserted as replacements. Two or more
supplements may appear between the publication of each basic
edition.
Unlike the TSUS, which applied exclusively to imported
goods, the HTS can, for almost all goods, be used to document
both imports and exports. The small number of exceptions
enumerated before chapter 1 require particular exports to be
reported under schedule B provisions. That schedule, which
prior to 1989 served as the means of reporting all exports, has
been converted to the HS nomenclature structure. For certain
goods that are significant U.S. exports, variations in the
desired product description and detail compel the use of
schedule B reporting provisions that cannot be accommodated in
the HTS under the international nomenclature structure.
The HTS, like its predecessor the TSUS, is presented in a
tabular format containing 7 columns, each with a particular
type of information. A sample page of the HTS is set forth on
the next page.
HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (1997)
Annotated for Statistical Reporting Purposes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rates of duty
----------------------------------------------------------------------------------
Heading/ Stat. Article description Units of 1
subheading suffix quantity -------------------------------------------------------- 2
General Special
--------------------------------------------------------------------------------------------------------------------------------------------------------
7213 Bars and rods, hot-rolled, ..........................
in irregularly wound
coils, of iron or non
alloy steel:
7213.10.00 00 Concrete reinforcing kg............ 3.4% Free (E,IL,J) 20%
bars and rods.......... 0.4% (CA)
2.9% (MX)
7213.20.00 00 Other, of free-cutting kg............ 1.3% Free (E,IL,J) 5.5%
steel.................. 0.1% (CA)
1.1% (MX)
Other:..................
7213.91 Of circular cross ..........................
section measuring less
than 14 mm in
diameter:
7213.91.30 00 Not tempered, not kg............ 1.3% Free (E,IL,J) 5.5%
treated and not 0.1% (CA)
partly manufactured.. 1.1% (MX)
Other:
7213.91.45 00 Containing by weight kg............ 1.3% Free (E,IL,J) 5.5%
0.6 percent or more 0.1% (CA)
of carbon........... 1.1% (MX)
7213.91.60 00 Other................ kg............ 1.6% Free (E,IL,J) 6%
0.2% (CA)
1.3% (MX)
7213.99.00 Other.................. .............. 1.3% Free (E,IL,J) 5.5%
0.1% (CA)
1.1% (MX)
30 Of circular cross
section:
With a diameter of 14 kg
mm or more but less
than 19 mm..........
60 With a diameter of 19 kg
mm or more..........
90 Other................. kg
--------------------------------------------------------------------------------------------------------------------------------------------------------
The first column, entitled ``Heading/subheading,''
sets forth the 4-, 6-, or 8-digit number assigned to the
class of goods described to its right. It should be recalled
that 8-digit-level provisions bear the only numerical codes at
the legal level which are determined solely by the United
States, because the 4- and 6-digit designators are part of the
international convention.
The second column is labeled ``Stat. suffix,'' meaning
statistical suffix. Wherever a tariff rate line is annotated to
permit collection of trade data on narrower classes of
merchandise, the provisions adopted administratively by an
interagency committee under section 484(f) of the 1930 Act (19
U.S.C. 1484(f)) are given 2 more digits which must be included
on the entry filed with customs officials. Where no annotations
exist, 2 additional zeroes are added to the 8-digit legal code
applicable to the goods in question. The goods falling in all
10-digit statistical reporting numbers of a particular 8-digit
legal provision receive the same duty treatment.
The third column, ``Article description,'' contains the
detailed description of the goods falling within each tariff
provision and statistical reporting number.
In the fourth column, ``Units of quantity,'' the unit of
measure in which the goods in question are to be reported for
statistical purposes is set forth. These units are
administratively determined under section 484(f) of the Tariff
Act of 1930. In many instances, the unit of quantity is also
the basis for the assessment of the duty. For many categories
of products, two or three different figures in different units
must be reported (e.g., for some textiles, weight and square
meters; for some apparel, the number of garments, value, and
weight), with the second unit of quantity frequently being the
basis for administering a measure regulating imports, such as a
quota. If an ``X'' appears in this column, only the value of
the shipment must be reported.
The remaining columns appear under the common heading
``Rates of duty'' and are designated as column 1 (subdivided
into ``General'' and ``Special'' subcolumns) and column 2.
These columns contain the various rates of duty that apply to
the goods of the pertinent legal provision, depending on the
source of the goods and other criteria. Their application to
goods originating in particular countries is discussed below
under the heading ``Applicable duty treatment.''
A rate of duty generally has one of three forms: ad
valorem, specific or compound. An ad valorem rate of duty is
expressed in terms of a percentage to be assessed upon the
customs value of the goods in question. A specific rate is
expressed in terms of a stated amount payable on some quantity
of the imported goods, such as 17 cents per kilogram. Compound
duty rates combine both ad valorem and specific components
(such as 5 percent ad valorem plus 17 cents per kilogram).
Chapter 98 comprises special classification provisions
permitting, in specified circumstances, duty-free entry or
partial duty-free entry of goods which would otherwise be
subject to duty. The article descriptions in the provisions of
this chapter enunciate the circumstances in which goods are
eligible for this duty treatment. Some of the goods eligible
for such duty treatment include: articles reimported after
having been exported from the United States; goods subject to
personal exemptions (such as those for returning U.S.
residents); government importations; goods for religious,
educational, scientific, or other qualifying institutions;
samples; and, articles admitted under bond.
Chapter 99 contains temporary modifications of the duty
treatment of specified articles in the other chapters.
Additional duties and suspensions or reductions of duties
enacted by Congress are included, as are temporary
modifications (increases or decreases in duty rates) and import
restrictions (quotas, import fees, and so forth) proclaimed by
the President under trade agreements or pursuant to
legislation. Separate subchapters contain temporary special
duty treatment for certain goods of Canada or of Mexico
pursuant to the NAFTA. However, antidumping and countervailing
duties imposed under the authority of the Tariff Act of 1930,
as amended, are not included. These duties are announced in the
Federal Register.
Applicable duty treatment
Column 1--General.--The rates of duty appearing in the
``General'' subcolumn of column 1 of the HTS are imposed on
products of countries that have been extended most-favored-
nation (MFN) or non-discriminatory trade treatment by the
United States, unless such imports are claimed to be eligible
for treatment under one of the preferential tariff schemes
discussed below. The general duty rates are concessional and
have been set through reductions of full statutory rates in
negotiations with other countries, generally under the GATT.
Column 1--Special.--General Note 3 to the HTS sets forth
the special tariff treatment afforded to covered products of
designated countries or under specified measures. These
programs and the corresponding symbols by which they are
indicated in the ``Special'' subcolumn along with the
appropriate rates of duty are as follows:
Generalized System of Preferences [GSP] A or A*
Automotive Products Trade Act [APTA]... B
Agreement on Trade in Civil Aircraft C
[ATCA].
North American Free Trade Agreement:...
Goods of Canada...................... CA
Goods of Mexico...................... MX
Caribbean Basin Economic Recovery Act E or E*
[CBERA].
United States-Israel Free Trade Area... IL
Andean Trade Preference Act [ATPA]..... J or J*
The presence of one or more of these symbols indicates the
eligibility of the described articles under the respective
program. In the case of the GSP (when in effect), a symbol
followed by an asterisk indicates that, although the described
articles are generally eligible for duty-free entry, such
tariff treatment does not apply to products of the designated
beneficiary countries specified in General Note 4(d). In the
case of CBERA and the ATPA, the asterisk indicates that some of
the described articles are ineligible for duty-free entry.
These programs are discussed in greater detail below.
Column 2.--The column 2 rates of duty apply to products of
countries that have been denied MFN status by the United States
(see General Note 3(b)); these rates are the full statutory
rates, generally as enacted by the Tariff Act of 1930. (See
separate description of most-favored-nation treatment and HTS
General Note 3(b) for a list of countries subject to column 2
rates of duty.)
Special duty exemptions and preferences
Certain notable provisions in chapter 98 of the HTS grant
duty-free entry to various categories of American goods
returned from abroad and allow U.S. tourists to import foreign
articles free of duty. Other provisions in the general notes of
the HTS provide duty-free entry to imports from the U.S.
insular possessions, to imports of Canadian auto products under
the Automotive Products Trade Act, and to articles imported for
use in civil aircraft under the Agreement on Trade in Civil
Aircraft.
American goods returned (HTS subheading 9801.00.10).--
American goods not advanced or improved abroad may be returned
to the United States free of duty under HTS subheading
9801.00.10. The courts have interpreted this provision to allow
duty-free entry of American goods which had been exported for
sorting, separating (e.g., by grade, color, size, etc.),
culling out, and discarding defective items and repackaging in
certain containers, so long as the goods themselves were not
advanced in value or improved in condition while abroad.
American goods repaired or altered abroad (HTS subheading
9802.00.40).--HTS subheading 9802.00.40 provides that goods
exported from the United States for repairs or alterations
abroad are subject to duty upon their reimportation into the
United States (at the duty rate applicable to the imported
article) only upon the value of such repairs or alterations.
The provision applies to processing such as restoration,
renovation, adjustment, cleaning, correction of manufacturing
defects, or similar treatment that changes the condition of the
exported article but does not change its essential character.
The value of the repairs or processing for purposes of
assessing duties is generally determined, in accordance with
U.S. note 3 to subchapter II of chapter 98, by--
(1) the cost of the repairs or alterations to the
importer; or
(2) if no charge is made, the value of the repairs or
alterations, as set out in the customs entry.
However, if the customs officer finds that the amount shown in
the entry document is not reasonable, the value of the repairs
or alterations will be determined in accordance with the
valuation standards set out in section 402 of the Tariff Act of
1930, as amended.\5\
---------------------------------------------------------------------------
\5\ 19 U.S.C. 1401a.
---------------------------------------------------------------------------
American metal articles processed abroad (HTS subheading
9802.00.60).--HTS subheading 9802.00.60 provides that an
article of metal (except precious metal) which is exported from
the United States for processing abroad may be subject to duty
on the value of the processing only upon its return to the
United States. To qualify for this duty treatment, the exported
article (1) must have been manufactured or subjected to a
process of manufacture in the United States; and (2) must be
returned ``for further processing'' in the United States.
The term ``processing'' refers to such operations as
melting, molding, casting, machining, grinding, drilling,
tapping, threading, cutting, punching, rolling, forming,
plating, and galvanizing.
As in the case of articles imported under subheading
9802.00.40 (repairs or alterations), discussed above, the duty
on metal articles processed abroad is assessed against the
value of such processing, determined in accordance with U.S.
note 3 to subchapter II of chapter 98.
American components assembled abroad (HTS subheading
9802.00.80).--Articles assembled abroad from American-made
components may be exempt from duty on the value of such
components when the assembled article is imported into the
United States under HTS subheading 9802.00.80. This provision
enables American manufacturers of relatively labor-intensive
products to take advantage of low-cost labor and fiscal
incentives in other countries by exporting American parts for
assembly in such countries and returning the assembled products
to the United States, with partial exemption from U.S. duties.
Subheading 9802.00.80 applies to articles assembled abroad
in whole or in part of fabricated components, the product of
the United States, which--
(1) were exported in condition ready for assembly
without further fabrication;
(2) have not lost their physical identity in such
articles by change in form, shape, or otherwise; and
(3) have not been advanced in value or improved in
condition abroad except by being assembled and by
operations incidental to the assembly process such as
cleaning, lubricating, and painting.
The exported articles used in the imported goods must be
fabricated U.S. components, i.e., U.S.-manufactured articles
ready for assembly in their exported condition, except for
operations incidental to the assembly process. Integrated
circuits, compressors, zippers, and precut sections of a
garment are examples of fabricated components, but uncut bolts
of cloth, lumber, sheet metal, leather, and other materials
exported in basic shapes and forms are not considered to be
fabricated components for this purpose.
To be considered U.S. components, the exported articles do
not necessarily need to be fabricated from articles or
materials wholly produced in the United States. If a foreign
article or material undergoes a manufacturing process in the
United States resulting in its ``substantial transformation''
into a new and different article, then the component that
emerges may qualify as an exported product of the United States
for purposes of subheading 9802.00.80.
The assembly operations performed abroad can involve any
method used to join solid components together, such as welding,
soldering, gluing, sewing, or fastening with nuts and bolts.
Mixing, blending, or otherwise combining liquids, gases,
chemicals, food ingredients, and amorphous solids with each
other or with solid components is not regarded as
``assembling'' for purposes of subheading 9802.00.80.
The rate of duty that applies to the dutiable portion of an
assembled article is the same rate that would apply to the
imported article. The assembled article is also treated as
being entirely of foreign origin for purposes of any import
quota or similar restriction applicable to that class of
merchandise, and for purposes of country-of-origin marking
requirements. All requirements regarding labeling, radiation
standards, flame retarding properties, etc., that apply to
imported products apply equally to subheading 9802.00.80
merchandise.
An article imported under subheading 9802.00.80 is treated
as a foreign article for appraisement purposes. That is, the
full appraised value of the article must first be determined
under the usual appraisement provisions. The dutiable value,
however, is determined by deducting the cost or value of the
American-made fabricated components from the appraised value of
the assembled merchandise entered under subheading 9802.00.80.
Personal (tourist) exemption.--Subchapter IV of chapter 98
of the HTS sets forth various personal exemptions for residents
and non-residents that arrive in the United States from abroad.
The relevant customs regulations are set forth at 19 CFR 148 et
seq. In particular, HTS subheading 9804.00.65 provides that
U.S. residents returning from a journey abroad may import up to
400 dollars' worth of articles free of duty. The articles must
be for personal or household use and may include not more than
1 liter of alcoholic beverages, not more than 200 cigarettes
and not more than 100 cigars.
The technical amendment to the Balanced Budget Act of 1997
(Public Law 105-277) inadvertently removed the personal
exemption relating to domestically produced cigarettes re-
imported into the United States. As a result, travelers
bringing cigarettes puchased outside the United States did not
receive the personal exemption for these cigarettes (i.e., they
were not permitted to bring these cigarettes into the United
States). Section 4003 of the Tariff Suspension and Trade Act of
2000 (Public Law 106-476) re-instated that exemption.
Special rules provide increased duty-free allowances for
U.S. residents returning from U.S. insular possessions or from
beneficiary countries under the Caribbean Basin Economic
Recovery Act (CBERA) and under the Andean Trade Preference Act
(ATPA). An increased duty-free allowance of $1200 is provided
under HTS subheading 9804.00.70 for U.S. residents returning
from the U.S. insular possessions, and an increased duty-free
allowance of $600 is provided under HTS subheading 9804.00.72
for U.S. residents returning from beneficiary countries under
the CBERA and the ATPA. U.S. note 3 to chapter 98 provides
that, in addition to being exempt from customs duty, all such
articles are exempt from any internal revenue taxes as well.
The Tariff Suspension and Trade Act of 2000 (Public Law
106-476) provides for staged reductions of duty rates
applicable to merchandise accompanying persons entering the
United States, and merchandise from American Samoa, Guam, or
the U.S. Virgin Islands. Purchases for personal and household
use accompanying the returning traveler in excess of the $400
duty-free allowance had been subject to flat rate of duty of 10
percent, if the person claiming the benefit had not received
the benefit within the past thirty days. In addition, non-
commercial importations from U.S. insular possessions exceeding
$1200 (American Samoa, Guam, or the U.S. Virgin Islands) were
subject to a 5 percent rate of duty. This legislation provides
a staged reduction of the 10 percent duty-rate as follows: 5
percent effective January 1, 2000, 4 percent effective January
1, 2001, and 3 percent effective January 1, 2002. The
legislation also provides a staged reduction of the 5 percent
rate of duty for articles imported from American Samoa, Guam,
or the U.S. Virgin Islands as follows: 3 percent effective
January 1, 2000, 2 percent effective January 1, 2001, and 1.5
percent effective January 1, 2002.
The Miscellaneous Trade and Technical Corrections Act of
1996 (Public Law 104-295) amended the exemption from duty for
personal and household goods accompanying returning U.S.
residents. Section 321(a)(2)(B) of the Tariff Act of 1930
originally applied to returning residents arriving from foreign
countries other than the insular possessions. Due to a split in
tariff classification numbers, the tariff numbers applicable to
residents returning from a foreign country were inadvertently
dropped. The Miscellaneous Trade and Technical Corrections Act
of 1996 restored HTS number 9804.00.65 to correct the error and
allow the Customs Service to apply administrative exemptions
from duty for personal and household goods of returning
residents arriving from foreign countries other than insular
possessions. It ensures that U.S. residents returning from
foreign countries other than insular possessions are entitled
to bring articles for personal or household use free of duty,
if such articles are valued at not more than $400. The
provision was made retroactive to December 8, 1993, the date on
which the customs provisions within the NAFTA (Public Law 103-
182) became law.
In addition, the Miscellaneous Trade and Technical
Corrections Act of 1996 (Public Law 104-295) amended the
personal allowance exemption for merchandise purchased in duty-
free sales enterprises. Previously, under section 555(b)(6) of
the Tariff Act of 1930 (19 U.S.C. 1555(b)(6)), merchandise
purchased in duty-free sales enterprises which was brought back
to U.S. customs territory was not eligible for a duty-free
exemption under the personal allowance exemption for returning
U.S. residents. The Miscellaneous Trade and Technical
Corrections Act of 1996 amended section 555(b)(6) to make
merchandise purchased by returning U.S. residents in duty-free
enterprises eligible for a duty-free exemption under HTS
subheadings 9804.00.65, 9804.00.70, and 9804.00.72, if the
person meets the eligibility requirements of the exemption.
This provision does not apply in the case of travel involving
transit to, from, or through an insular possession of the
United States.
Duty-free treatment for personal effects of participants in
international sporting events.--The Miscellaneous Trade and
Technical Corrections Act of 1999 (Public Law 106-36) extended
until December 2002 duty-free treatment for the personal
effects of participants in, officials of, and accredited
members of delegations to certain international athletic events
held in the United States provided that these items are not
intended for sale or distribution in the United States. The
provision also exempted the articles covered under this
provision from taxes and fees and gave the Secretary of the
Treasury discretion to determine which athletic events,
articles, and persons are covered under this provision. The
Tariff Suspension and Trade Act of 2000 (Public Law 106-476)
made this exemption permanent under new HTS subheading
9817.60.00.
Products of U.S. insular possessions (General Note
3(a)(iv)).--Imports from the Virgin Islands, Guam, American
Samoa, Wake Island, Kingman Reef, Johnson Island, and Midway
Islands are entitled to duty-free entry under certain
conditions, designed to promote the economic development of
these U.S. insular possessions. This provision does not apply
to Puerto Rico, which is part of the ``customs territory of the
United States.''
As provided in General Note 3(a)(iv) of the HTS, an article
imported directly from a possession is exempt from duty if--
(1) it was grown or mined in the possession;
(2) it was produced or manufactured in the
possession, and the value of foreign materials
contained in that article does not exceed 70 percent of
its total value. Materials of U.S. origin are not
considered foreign for this purpose. Likewise,
materials that could be imported into the United States
duty free (except from Cuba or the Philippines) are not
counted as foreign materials for purposes of the 70
percent foreign-content limitation; or
(3) in the case of any article excluded from duty-
free entry under section 213(b) of the Caribbean Basin
Economic Recovery Act, it was produced or manufactured
in the possession, and the value of foreign materials
does not exceed 50 percent of its total value.
In addition, an article previously imported into the United
States with duty or tax paid thereon, shipped to a possession
without benefit of remission, refund, or drawback of such duty
or tax, may be returned to the United States duty free. General
Note 3(a)(iv) also provides that articles from insular
possessions are entitled to no less favorable duty treatment
than that accorded to eligible articles under the Generalized
System of Preferences and the Caribbean Basin Initiative
described below.
In applying the 70 percent foreign-materials test, Customs
determines the value of the foreign materials by their actual
purchase price, plus the transportation cost to the possession,
excluding any duties or taxes assessed by the possession and
excluding any post-landing charges. The value thus determined
is then compared with the appraised value of the products
imported into the United States, determined in accordance with
the usual appraisement methods. If the differential is 30
percent or more, the foreign materials limitation is satisfied.
This procedure is set out in 19 C.F.R. 7.8(d).
As previously noted, the product imported from a possession
must have been produced or manufactured there (unless grown or
mined there). It is not sufficient for foreign goods to be
shipped to a possession for nominal handling or manipulation,
followed by a price mark-up to meet the 70 percent test.
Extension of United States Insular Possession Program.--The
Miscellaneous Trade and Technical Corrections Act of 1999
(Public Law 106-36) (the Act) amended the U.S. notes to Chapter
71 by adding an additional U.S. Note 3. This amendment extends
to certain fine jewelry the same trade benefits enjoyed by
watch makers in U.S. insular possessions under the Production
Incentive Certificate (PIC) program. U.S. Note 5 allows
producers of watches located in U.S. insular possessions to
benefit from the PIC system, which permits watch producers to
import specified quantities of watches, watch movements, and
watch parts. The benefits provided under Note 5 are based on
the amount of wages paid to produce such watches in insular
possessions. New Note 3(a) permits the inclusion of wages paid
for jewelry production in the insular possessions as an offset
to duties paid on watches, watch movements, and watch parts
imported into the United States. Note 3(b) provides that the
extension of Note 5 benefits to jewelry may not result in any
increase in the authorized amount to benefits established by
Note 5, and Note 3 (c) prohibits diminishing of benefits that
had been available to watch poducers under paragraph (h)(iv) of
Note 5 to Chapter 91.
Canadian motor vehicles and original equipment entry
pursuant to the Automotive Products Trade Act of 1965 (APTA)
(General Note 5).--Throughout the HTS there are a number of
specific provisions which provide for duty-free entry of
imported motor vehicles and specified original equipment parts
that qualify as ``Canadian articles'' under General Note 5.
These provisions were added to the HTS pursuant to the
Automotive Products Trade Act of 1965,\6\ which was enacted to
implement the U.S.-Canadian Automotive Agreement. The purpose
of the Agreement was to create a North American common market
for motor vehicles and original equipment parts (replacement
parts are not covered).
---------------------------------------------------------------------------
\6\ Public Law 89-283, 19 U.S.C. 2001, et seq.
---------------------------------------------------------------------------
The term ``Canadian article'' refers to an article produced
in Canada but does not include any article produced with non-
Canadian or non-U.S. materials unless the article satisfies the
criteria set forth in the NAFTA (General Note 12).
Most of the product categories established by the APTA are
applicable to ``original motor-vehicle equipment,'' which is
defined in General Note 5(a)(ii) as a Canadian fabricated
component intended for use as original equipment in the
manufacture of a motor vehicle in the United States and which
was obtained from a Canadian supplier pursuant to ``a written
order, contract, or letter of intent of a bona fide motor-
vehicle manufacturer in the United States.'' The phrase ``bona
fide motor-vehicle manufacturer'' is defined as a person
determined by the Secretary of Commerce to have produced at
least 15 motor vehicles in the previous 12 months and to have
the capacity to produce at least 10 motor vehicles per week.
Civil aircraft products (ATCA) (General Note 6).--Title VI
of the Trade Agreements Act of 1979 gave the President the
authority to proclaim new headnote 3 to part 6C of schedule 6;
to make specific headnotes to designated TSUS items in order to
implement the Tokyo Round Agreement on Trade in Civil Aircraft;
and to provide duty-free treatment, in accordance with the
annex to the Agreement for the civil aircraft articles
described therein. These changes were implemented by
Presidential Proclamation 4707 of December 11, 1979. This duty
treatment is continued in the ``Special'' rates subcolumn of
the HTS.
The provisions work much like those implementing the APTA
in that a number of specific product breakouts are spread
throughout the HTS providing duty-free entry to specifically
described articles which are ``certified for use in civil
aircraft'' in accordance with General Note 6.
Section 234 of the Trade and Tariff Act of 1984 enacted on
October 30, 1984, gave the President the authority to make
additional tariff breakouts in designated TSUS items in order
to provide duty-free coverage comparable to the expanded
coverage provided by all other signatories to the Aircraft
Agreement pursuant to the extension of the annex to the
Agreement agreed to in Geneva on October 6, 1983. This duty
treatment has been continued in the ``Special'' rates subcolumn
of the HTS for the relevant articles.
The Miscellaneous Trade and Technical Corrections Act of
1996 (Public Law 104-295) significantly amended General Note 6.
The note now requires importers of duty-free civil aircraft
parts to maintain such supporting documentation as the
Secretary of the Treasury may require. Importers must also
certify that the imported article is a civil aircraft, or has
been imported for use in a civil aircraft and will be so used.
The importer may amend the entry or file a written statement to
claim duty-free treatment under General Note 6 at any time
before the liquidation of the entry becomes final, except that
any refund resulting from any such claim shall be without
interest.
The amendment to General Note 6 also changed the definition
of ``civil aircraft'' to mean any aircraft, aircraft engine, or
ground flight simulator (including parts, components, and
subassemblies thereof):
(A) that is used as original or replacement equipment
in the design, development, testing, evaluation,
manufacture, repair, maintenance, rebuilding,
modification, or conversion of aircraft; and
(B)(1) that is manufactured or operated pursuant to a
certificate issued by the Federal Aviation
Administration (FAA), or pursuant to the approval of
the airworthiness authority in the country of
exportation, if such approval is recognized by the FAA
as an acceptable substitute for an FAA certificate;
(2) for which an application for such certificate has
been submitted to, and accepted by, the FAA by an
existing type and production certificate holder; or
(3) for which an application for such approval or
certificate will be submitted in the future by an
existing type and production certificate holder,
pending the completion of design or other technical
requirements stipulated by the FAA. This section
applies only to quantities of parts, components, and
subassemblies as are required to meet the design and
technical requirements stipulated by the FAA. The
Commissioner of Customs may also require the importer
to estimate the quantities of parts, components, and
subassemblies covered under this section.
The term ``civil aircraft'' does not include any aircraft,
aircraft engine, or ground flight simulator purchased for use
by the Department of Defense or the U.S. Coast Guard, unless
such aircraft, aircraft engine, or ground flight simulator
satisfies the requirements outlined above.
Generalized System of Preferences (GSP)
TITLE V OF THE TRADE ACT OF 1974, AS AMENDED
The concept of a Generalized System of Preferences (GSP)
was first introduced in the United Nations Conference on Trade
and Development (UNCTAD) in 1964. Developing countries (LDCs)
asserted that one of the major impediments to accelerated
economic growth and development was their inability to compete
on an equal basis with developed countries in the international
trading system. Through tariff preferences in developed country
markets, the LDCs claimed they could increase exports and
foreign exchange earnings needed to diversify their economies
and reduce dependence on foreign aid.
After several international meetings and long internal
debate, in 1968 the United States joined other industrialized
countries in supporting the concept of GSP. As initially
conceived, GSP systems were to be (1) temporary, unilateral
grants of preferences by developed to developing countries; (2)
designed to extend benefits to sectors of developing country
economies which were not competitive internationally; and (3)
designed to include safeguard mechanisms to protect domestic
industries sensitive to import competition from articles
receiving preferential tariff treatment. In the early 1970's,
19 other members of the Organization for Economic Cooperation
and Development (OECD) also instituted and have since renewed
GSP schemes.
In order to implement their GSP systems, the developed
countries obtained a waiver from the most-favored-nation (MFN)
obligation of article I of the General Agreement on Tariffs and
Trade (GATT), which provides that trade must be conducted among
countries on a non-discriminatory basis. A 10-year MFN waiver
was granted in June 1971 and was made permanent in 1979 through
the ``enabling clause'' of the Texts Concerning a Framework for
the Conduct of World Trade concluded in the Tokyo Round of GATT
multilateral trade negotiations. The enabling clause, which has
no expiration date, provides the legal basis for ``special and
differential treatment'' for developing countries. The enabling
clause also requires that developing countries accept the
principle of graduation, under which such countries agree to
assume ``increased GATT responsibilities as their economies
progress.''
U.S. GSP basic authority
Statutory authority for the U.S. Generalized System of
Preferences program is set forth in title V of the Trade Act of
1974, as amended.\7\ Authority to grant GSP duty-free treatment
on eligible articles from beneficiary developing countries
(BDCs) became effective under that Act on January 3, 1975, for
a 10-year period expiring on January 3, 1985. The program was
actually implemented on January 1, 1976 under Executive Order
11888. Relatively minor amendments to the statute were made
under section 1802 of the Tax Reform Act of 1976 \8\ and
section 1111 of the Trade Agreements Act of 1979.\9\ Title V of
the Trade and Tariff Act of 1984 \10\ renewed the GSP program
for 8\1/2\ years until July 4, 1993, with significant
amendments effective on January 4, 1985, particularly with
respect to the criteria for designating beneficiary countries
and limitations on duty-free treatment.
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\7\ Public Law 93-618, approved January 3, 1975.
\8\ Public Law 94-455, approved October 4, 1976.
\9\ Public Law 96-39, approved July 26, 1979.
\10\ Public Law 98-573, title V, approved October 30, 1984.
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The GSP program was extended without amendment for 15
months, until September 30, 1994, by section 13802 of the
Omnibus Budget Reconciliation Act of 1993.\11\ The program was
again extended without amendment for 10 months, until July 31,
1995, by section 601 of the Uruguay Round Agreements Act.\12\
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\11\ Public Law 103-66, approved August 10, 1993.
\12\ Public Law 103-465, approved December 8, 1994.
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Subtitle J of title I of the Small Business Jobs Protection
Act of 1996 renewed the GSP program for 1 year and 10 months,
through May 31, 1997, with amendments effective October 1,
1996. This law also revised and reorganized title V.\13\ An
additional technical change was made by the Miscellaneous Trade
and Technical Corrections Act of 1996.\14\ Section 1011 of the
Omnibus Appropriations Bill for Fiscal Year 1999 (Public Law
105-277) extended to program through June 30, 1999, and section
508 of the Ticket to Work and Work Incentives Improvement Act
of 1999 (Public Law 106-170) extended it through September 30,
2001. The Africa Growth and Opportunity Act, signed into law by
the President on May 18, 2000 (Public Law 106-200) extended
regular and enhanced GSP benefits through September 30, 2008,
for eligible countries in sub-Saharan Africa.
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\13\ Public Law 104-188, approved August 20, 1996.
\14\ Public Law 104-295, approved October 11, 1996.
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The U.S. Trade Representative (USTR) administers the GSP
program and makes recommendations to the President through an
interagency committee that conducts annual reviews under
regulatory procedures of petitions by interested parties and
self-initiated actions to add or remove GSP eligibility for
individual products or countries.
Section 501 of the Trade Act of 1974, as amended,
authorizes the President to provide GSP duty-free treatment on
any eligible article from designated beneficiary developing
countries, subject to certain conditions and limits, having due
regard for (1) the effect of such action on furthering the
economic development of developing countries through the
expansion of their exports; (2) the extent other major
developed countries are undertaking a comparable effort to
assist developing countries by granting generalized preferences
on their products (i.e., burden-sharing); (3) the anticipated
impact on U.S. producers of like or directly competitive
products; and (4) the extent of the BDC's competitiveness with
respect to eligible articles. In 1999, the program provided
duty-free treatment on imports valued at about $13.7 billion
from 146 designated developing countries and territories.
Designation of beneficiary developing countries
Section 502 of the Trade Act of 1974 authorizes the
President to designate a country or territory as a BDC. It also
authorizes the President to designate any BDC as a least-
developed beneficiary developing country (LDBDC). However, the
President is expressly prohibited from designating the
following developed countries as BDCs:
Australia Japan
Canada Monaco
European Union New Zealand
member states Norway
Iceland Switzerland
The President is also prohibited from designating any
country for GSP benefits which:
(1) is a communist country unless (a) its products
receive non-discriminatory (MFN) treatment; (b) it is a
WTO member and a member of the International Monetary
Fund (IMF); and (c) it is not dominated or controlled
by international communism;
(2) is party to an arrangement and participates in
any action which withholds supplies of vital commodity
resources or raises their price to unreasonable levels,
causing serious disruption of the world economy;
(3) affords ``reverse preferences'' to other
developed countries which have or are likely to have a
significant adverse effect on U.S. commerce;
(4) has nationalized or expropriated U.S. property,
including patents, trademarks, or copyrights, or taken
actions with similar effect, unless the President
determines and reports to Congress there is adequate
and effective compensation, negotiations underway to
provide compensation, or a dispute over compensation is
in arbitration;
(5) fails to recognize as binding or to enforce
arbitral awards in U.S. favor;
(6) aids or abets by granting sanctuary from
prosecution to, any individual or group which has
committed international terrorism, or is the subject of
a determination by the Secretary of State under section
6(j)(1)(A) of the Export Administration Act of 1979 (50
U.S.C. app. 2405) regarding repeated support for
terrorism; or
(7) has not taken or is not taking steps to afford
internationally recognized workers rights to its
workers.\15\
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\15\ Defined by amendment under section 503 of the 1984 Act for
purposes of GSP to include:
``(A) the right to association;
``(B) the right to organize and bargain collectively;
``(C) a prohibition on the use of any form of forced or compulsory
labor;
``(D) a minimum age for the employment of children; and
``(E) acceptable conditions of work with respect to minimum wages,
hours of work, and occupational safety and health''.
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The President may waive conditions (4), (5), (6), and (7),
if he determines and reports with reasons to the Congress that
designation of the particular country is in the national
economic interest. Section 412 of the Trade and Development Act
of 2000 (Public Law 106-200) added a new eligibility criterion
to this list which prohits the President from designating a
country for GSP benefits if it has not implemented its
commitments to eliminate the worst forms of child labor.
In addition, the President must take certain other factors
into account under section 502(c) in designating BDCs: (1) an
expressed desire of the country to be designated; (2) the
country's level of economic development; (3) whether other
major developed countries extend GSP to the country; (4) the
extent the country has assured the United States it will
provide ``equitable and reasonable access'' to its markets and
basic commodity resources and refrain from engaging in
unreasonable export practices; (5) the extent the country is
providing adequate and effective means under its laws for
foreign nationals to secure, exercise, and enforce exclusive
rights in intellectual property; (6) the extent the country has
taken action to reduce trade distorting investment practices
and policies and reduce or eliminate barriers to trade in
services; and (7) whether the country has taken or is taking
steps to afford its workers internationally-recognized worker
rights.
If the President determines that a BDC has become a ``high
income'' country as defined by the World Bank, the President is
required to remove the country from eligibility under the
program. The statute provides for a transition period of up to
2 years for country graduation from the GSP program. In 1994
the World Bank designated countries with a per capita GNP of
approximately $8,600 as ``high income'' countries.
Before designating any country as a BDC, the President must
notify the Congress of his intention and the considerations
entering into the decision. Before terminating designation of
any beneficiary, the President must provide the Congress and
the country concerned at least 60 days advance notice of his
intention, together with the reasons. The President must
withdraw or suspend the designation if he determines the
country no longer meets the conditions for designation.
The countries currently designated as BDCs of GSP are
listed under General Note 4(a) of the Harmonized Tariff
Schedule of the United States (HTS). Countries designated as
LDBDCs are listed under General Note 4(b). On March 21, 1995,
the President notified Congress of his determination to
designate the West Bank and Gaza Strip as a beneficiary
country.\16\
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\16\ Message from the President of the United States transmitting
notification of his intent to add the West Bank and Gaza Strip to the
list of beneficiary developing countries under the Generalized System
of Preferences (GSP), pursuant to 19 U.S.C. 2462(a), House Document
104-47, March 21, 1995.
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On June 30, 1999, pursuant to section 502 of the Trade Act
of 1974, President Clinton designated Gabon and Mongolia as
beneficiary developing countries for purposes of GSP. He futher
determined, pursuant to section 502, that GSP benefits for
Mauritania, which were suspended on June 25, 1993, should be
reinstated.\17\ On August 27, 2000, pursuant to sections 501
and 502, President Clinton designated Nigeria as a beneficiary
country.\18\
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\17\ Presidential Proclamation No. 7206, June 30, 1999, 64 Fed.
Reg. 36229-36231.
\18\ Presidential Proclamation No. 7335, August 27, 2000, 65 Fed.
Reg. 52903.
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Eligible articles
The President designates articles under section 503
eligible for GSP duty-free treatment after considering advice
required through public hearings, from the U.S. International
Trade Commission (ITC) on the probable domestic economic
impact, and from executive branch agencies.
In general, GSP duty-free treatment is prohibited by
statute on textile and apparel articles which were not eligible
articles on January 1, 1994; watches, except those watches
entered after June 30, 1989, that the President specifically
determines, after public notice and comment, will not cause
material injury to watch or watch band, strap, or bracelet
manufacturing and assembly operations in the United States or
U.S. insular possessions; \19\ import-sensitive electronic
articles; import-sensitive steel articles; footwear, handbags,
luggage, flat goods (e.g., wallets, change purses, eyeglass
cases), work gloves, and leather wearing apparel which were
ineligible for GSP as of January 1, 1995; and import-sensitive
semi-manufactured and manufactured glass products. The
President must also exclude any other articles he determines to
be import sensitive in the context of GSP. Articles are
ineligible for GSP during any period they are subject to import
relief under sections 201-204 of the Trade Act of 1974 or to
national security actions under section 232 of the Trade
Expansion Act of 1962. Also, no quantity of an agricultural
product subject to a tariff-rate quota that exceeds the in-
quota quantity may be eligible for duty-free treatment under
GSP.
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\19\ This amendment was made by section 1903 of the Omnibus Trade
and Competitiveness Act of 1988, Public Law 100-418, approved August
23, 1988.
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The President may designate any article that is the growth,
product or manufacture of an LDBDC as an eligible article with
respect to LDBDCs after receiving advice from the ITC, if he
determines such an article is not import-sensitive in the
context of imports from LDBDCs. However, he may not designate
the statutorily exempt articles--textiles and apparel, footwear
and related articles, and watches. The President must notify
Congress at least 60 days in advance of LDBDC designations.
The USTR has established by regulation an interagency
procedure for annual review of petitions from any interested
party to have articles added to, or removed from, the GSP
eligible list. The interagency committee also considers
modifications on its own motion. However, section 503 prohibits
consideration of an article for designation of eligibility for
3 years following formal consideration and denial of that
article.
GSP duty-free treatment applies only to an eligible article
which is the growth, product, or manufacture of a BDC (i.e.,
has undergone ``substantial transformation'' in an exporting
BDC) \20\ and which meets the following rule-of-origin
requirements:
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\20\ An amendment made by section 226 of the Caribbean Basin
Economic Recovery Act of 1990, Public Law 101-382, title II, approved
August 20, 1990, 19 U.S.C. 2463(b), conformed GSP rules to treatment
under the Caribbean Basin Initiative.
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(1) the article must be imported directly from a BDC
into the U.S. customs territory; and
(2) the sum of (a) the cost or value of materials
produced in a beneficiary country, plus (b) the direct
cost of processing performed in such country is not
less than 35 percent of the appraised value of the
article when it enters into the U.S. customs territory.
Materials and processing costs in two or more beneficiary
countries which are members of the same association of
countries which is a customs union or free trade area may be
treated as one BDC and cumulated to meet the 35 percent minimum
local content. Materials imported into a BDC may be counted
toward the 35 percent minimum valued-added requirement only if
they are substantially transformed into new and different
articles in the BDC, before they are incorporated into the GSP
eligible article.
Treatment of sugar imports under GSP
Under the tariff-rate quota system for sugar,\21\ the
Secretary of Agriculture establishes the quota quantity that
can be entered at the lower tier import duty rate, and the U.S.
Trade Representative (USTR) allocates the quantity among sugar
exporting quantities. The quantities allocated to beneficiary
countries under the Generalized System of Preferences receive
duty-free treatment. Imports above the in-quota amount from
beneficiary countries are tariffed at the higher, over-quota
rate. Certificates of quota eligibility (CQE) are issued to the
exporting countries and must be returned with the shipment of
sugar in order to receive quota treatment.
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\21\ Presidential Proclamation No. 6763, December 23, 1994, 60 Fed.
Reg. 1007.
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Limitations on preferential treatment
The President has general authority under section 503(c) to
withdraw, suspend, or limit application of GSP and restore
column 1 normal trade relations (NTR) or most-favored-nation
(MFN) duties with respect to any article or any country after
considering the factors in sections 501 and 502(c), but he
cannot establish any intermediate rates of duty. Since 1981,
this authority has been used in the context of the annual
interagency review process for ``discretionary graduation''
from GSP of particular products from particular countries which
have demonstrated their competitiveness and to promote a
shifting of benefits to less advanced developing countries.
Pursuant to the authority of this section, the President on
January 29, 1988, notified the Congress of his intention to
remove Hong Kong, the Republic of Korea, Singapore, and Taiwan
from their status as beneficiaries under the GSP program,\22\
effective on January 2, 1989. Removal from GSP status was based
on the President's assessment that these four BDCs had
``achieved an impressive level of economic development and
competitiveness, which can be sustained without the preferences
provided by the program.'' Similarly, on October 17, 1996, the
President made a determination that Malaysia was ``sufficiently
advanced in economic development and improved trade
competitiveness'' and that designation of Malaysia as a
beneficiary developing country would be terminated efffective
January 1, 1997.\23\ Pursuant to 502(e) of the Act the
President also determined on October 17, 1996, that Cyprus,
Aruba, Macau, the Netherlands Antilles, Greenland, and the
Cayman Islands meet the definition of a ``high income'' country
as defined by official statistics of the World Bank,
terminating preferential treatment under GSP for imports from
these countries effective January 1, 1998. \24\
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\22\ Message from the President of the United States transmitting
notification of his intent to remove Hong Kong, the Republic of Korea,
Singapore, and Taiwan from the list of beneficiary developing countries
under the Generalized System of Preferences (GSP), pursuant to 19
U.S.C. 2462(a), House Document 100-162, February 1, 1988.
\23\ Presidential Proclamation No. 6942, October 17, 1996, 61 Fed.
Reg. 54719.
\24\ Ibid.
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On July 6, 2000, Clinton proclaimed that according to
section 502(e), Malta, French Polynesia, New Caledonia, and
Slovenia meet the definition of ``high income'' countries as
defined by the official statistics of the International Bank
for Reconstruction and Development. Therefore, he terminated
the preferential treatment under the GSP for articles that are
currently eligible for such treatment from these countries,
effective January 1, 2002. On July 6, 2000, President Clinton
announced the suspension of Belarus's GSP benefits ``because it
has not taken and is not taking steps to afford workers in that
country internationally recognized worker rights.'' \25\
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\25\ Presidential Proclamation No. 7328, July 6, 2000, 65 Fed. Reg.
42595-42596.
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In addition to the annual review of petitions on article or
country eligibility, section 503(c) establishes statutory
``competitive need'' limitations on GSP duty-free treatment,
subject to waiver under certain conditions. The basic purposes
of the competitive need limitations are to (1) establish a
benchmark for determining when products from particular
countries are competitive in the U.S. market and therefore no
longer warrant preferential tariff treatment; and (2) to
reallocate GSP benefits to less competitive producing
countries. The limits have also provided some measure of import
protection to domestic producers of like or directly
competitive products.
Under the competitive need limits, if imports of a
particular article from a particular BDC exceed either (1) a
value level adjusted annually (in calendar year 1996, $75
million, and in each subsequent year, the amount for the
preceding year plus $5 million); or (2) 50 percent of total
U.S. imports of the article in a particular calendar year, GSP
treatment on that article from that country must be removed and
the normal rate of duty imposed on all imports of the article
from that country by July 1 of the following year. GSP
treatment may be reinstated in a subsequent calendar year if
imports of the product from the excluded country have fallen
below the competitive need ceilings then in effect during the
preceding calendar year.
There are four statutory circumstances in which competitive
need limits may not apply:
(1) If the President determines that an article like
or directly competitive with a particular GSP article
was not produced in the United States on January 1,
1995, then that article is exempt from the 50-percent,
but not the dollar value, competitive need limit.
(2) The President may waive the 50-percent, but not
the dollar, competitive need limit on articles for
which total U.S. imports are de minimis, i.e., not more
than $13 million in calendar year 1996, and in each
subsequent year, the amount for the preceding year plus
$500,000.
(3) Neither of the competitive need limits applies to
any BDC the President determines to be a least
developed developing country.
(4) The President may waive the competitive need
limits for a particular country based on a
determination that (a) there has been an historical
preferential trade relationship between the United
States and such country; (b) there is a treaty or trade
agreement in force covering economic relations between
such country and the United States; and (c) such
country does not discriminate against or impose
unjustifiable or unreasonable barriers to U.S.
commerce. This waiver authority, which was designed for
possible exemption of the Philippines, has never been
utilized.
The President may waive competitive need limits on any
article if he (1) receives ITC advice on whether any U.S.
industry is likely to be adversely affected; (2) determines a
waiver is in the national economic interest based upon the
country designation factors under sections 501 and 502(c) as
amended; and (3) publishes his determination. In making the
national interest determination the President must give great
weight to (1) assurances of equitable and reasonable market
access in the BDC; and (2) the extent the country provides
adequate and effective intellectual property rights protection.
Total waivers for all countries above existing competitive need
limits cannot exceed 30 percent of total GSP duty-free imports
in any year, of which not more than one-half (i.e., 15 percent
of total GSP duty-free imports) may apply to waivers on
articles from countries which account for at least a 10-percent
share of total GSP duty-free imports or have a per capita GNP
of $5,000 or more in that year.
Other provisions
Section 504 requires the President to submit an annual
report to the Congress on the status of internationally-
recognized worker rights within each BDC, including the
findings of the Secretary of Labor with respect to each BDC's
implementation of its international commitments to eliminate
the worst forms of child labor.
Section 506 requires appropriate U.S. agencies to assist
BDCs to develop and implement measures designed to assure that
the agricultural sectors of their economies are not directed to
export markets to the detriment of foodstuff production for
their own citizens.
Caribbean Basin Initiative (CBI)
The Caribbean Basin Economic Recovery Act (CBERA),\26\
commonly referred to as the Caribbean Basin Initiative or CBI,
was enacted on August 5, 1983, authorizing the grant of certain
U.S. unilateral preferential trade and tax benefits for
Caribbean Basin countries and territories.
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\26\ Public Law 98-67, title II, approved August 5, 1983, 19 U.S.C.
2701 et seq.
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The centerpiece of the CBI is authority granted to the
President to provide unilateral duty-free treatment on U.S.
imports of eligible articles from designated Caribbean Basin
countries and territories. Duty-free treatment became effective
as of January 1, 1984, and currently applies to imports from 24
designated beneficiary countries or territories.\27\
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\27\ Anguilla, Cayman Islands, Suriname, and the Turks and Caicos
Islands are not currently designated; Aruba, originally part of the
Netherlands Antilles, is designated separately.
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The United States developed this program for responding to
the economic crisis in the Caribbean in close consultation with
governments and private sectors of potential recipients and
with other donor countries in the region. On February 24, 1982,
President Reagan outlined the CBI before the Organization of
American States and on March 17, 1982, he first submitted this
plan to the Congress. H.R. 7397, containing amended versions of
the trade and tax proposals, was passed by the House of
Representatives in the 97th Congress on December 17, 1982, but
was not acted on by the Senate. The President resubmitted the
House-passed version of the plan on February 23, 1983; the
Initiative as further amended became title II of the conference
report on H.R. 2973, to repeal the withholding of tax from
interest and dividends, agreed to by both Houses on July 28,
1983. Separate foreign assistance legislation increased aid to
the region as the third element of the program.
Following extensive congressional consideration and
consultations with representatives of the countries involved
and U.S. private sector interests on measures to improve the
program, the Caribbean Basin Economic Recovery Expansion Act of
1990, so-called CBI II, was enacted as title II of the Customs
and Trade Act of 1990.\28\ CBI II amended the CBERA to make the
trade benefits permanent by repealing the 12-year September 30,
1995, termination date and to make certain improvements in the
trade and tax benefits. The Act also included measures to
promote tourism and created a scholarship assistance program
for the region.
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\28\ Public Law 101-382, title II, approved August 20, 1990.
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Caribbean Basin Trade Partnership Act
Based on the success of the CBI program and in response to
the devastation caused to the region by Hurricanes Georges and
Mitch in September and October of 1998, H.R. 984, the Caribbean
and Central American Relief and Economic Stabilization Act, a
bill to grant NAFTA parity to nations in the Caribbean Basin
was introduced on March 9, 1999. It was approved by the Ways
and Means Committee on March 31, 2000. No further action on
H.R. 984 was taken in the House.
On June 22, 1999, the Senate Committee on Finance
considered draft legislation reported titled ``The United
States-Caribbean Basin Trade Enhancement Act.'' The provisions
in this version marked up by the Committee on Finance differed
from the trade provisions in H.R. 984, as approved by the
Committee on Ways and Means, by requiring that imports of
apparel products from the Caribbean Basin region qualifying for
duty-free and quota free entry be made of fabric of U.S.
origin.
On November 3, 1999, the Senate passed H.R. 434, the
African Growth and Opportunity Act, as amended, by a vote of
76-19. During Senate consideration of the bill, the text of S.
1389, ``The United States-Caribbean Basin Trade Enhancement
Act,'' was added as an amendment. The House passed the
conference report on H.R. 434 by a vote of 309-110 on May 4,
2000. The Senate passed the conference report by a vote of 77-
19 on May 11, 2000. On May 4, 2000, the conference report on
H.R. 434 was filed (H. Rept. 106-606), and the bill was signed
into law on May 18, 2000 (P.L. 106-200).
The new legislation, entitled the Caribbean Basin Trade
Partnership Act (CBTPA), builds on the Caribbean Basin Economic
Recovery Act and extends additional trade benefits through
2008. The CBTPA, an enhanced CBI program covering more
products, in based on the view that economic recovery in the
region will be achieved most effectively by creating
opportunities to expand international trade. Likewise, the
success of the original CBI program indicates that increasing
international trade with the CBI regions will also promote the
growth of United States exports, decrease illegal immigration,
and improve regional cooperation in efforts to fight drug
trafficking. Finally, CBTPA is intended to foster increased
opportunities for U.S. companies in the textile and apparel
sector to expand co-production arrangements with countries in
the CBI region, thereby sustaining and preserving manufacturing
operations in the United States that would otherwise be
relocated to the Far East.
In general, the CBTPA extends NAFTA declining or duty-free
tariff treatment to several categories of goods excluded from
the CBI. With respect to apparel products, the CBTPA extends
duty-free benefits to: (1) apparel made in the Caribbean Basin
from U.S. yarn and fabric; (2) knit apparel made in CBI from
regional fabric made with U.S. yarn and to knit-to-shape
apparel (except socks), up to a cap of 250 million square meter
equivalents, with a growth riate of 16% per year for the first
three years, and (3) an additional category of regional knit
apparel products up to a cap a 4.2 million dozen, growing 16%
per year for the first three years.
The CBTPA requires that eligible countries implement
Customs procedures to guard against transshipment.\29\ Under a
``one strike and you are out'' provision, if an exporter is
determined to have engaged in illegal transhipment of textile
and apparel products from a CBI country, the President is
required to deny all benefits under the bill to that exporter
for a period of two years.
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\29\ Presidential Proclamation 7351 of October 10, 2000 (65 Fed.
Reg. 60,236, October 4, 2000) designated Belize, Costa Rica, Dominican
Republic, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Nicaragua,
and Panama as countries that USTR has determined implement and follow
or are making substantial progress toward implementing and following,
the customs procedures required by the CBTPA and, therefore, are
eligible for enhanced apparel benefits provided under the Act.
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Beneficiary countries or territories
Section 212 of the CBERA lists the following 27 countries
and territories as potentially eligible for designation by the
President as CBI beneficiary countries:
Anguilla Guatemala
Antigua and Barbuda Guyana
Bahamas, The Haiti
Barbados Honduras
Belize Jamaica
Cayman Islands Montserrat
Costa Rica Netherlands Antilles
Dominica Nicaragua
Dominican Republic Panama
El Salvador Saint Christopher and Nevis
Grenada Saint Lucia
Saint Vincent and the Trinidad and Tobago
Grenadines Turks and Caicos Islands
Suriname Virgin Islands, British
The countries currently designated as CBI beneficiaries are
listed under General Note 7 of the Harmonized Tariff Schedule
of the United States.
General Designation Criteria
On October 2, 2000, USTR designated all 24 current
beneficiaries under the CBERA as ``CBTPA'' beneficiary
countries.\30\ As noted above, ten countries receive enhanced
apparel benefits.
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\30\ 65 Fed. Reg. 60,236.
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Section 212(b) of the CBERA, as amended, prohibits the
President from designating a country or territory as a
beneficiary of CBI trade or tax benefits if it:
(1) is a Communist country;
(2) has nationalized or expropriated U.S. property,
including any patent, trademark, or other intellectual
property, or taken actions with similar effect, without
compensation or submission to arbitration;
(3) fails to recognize or enforce awards arbitrated
in favor of U.S. citizens;
(4) affords preferential tariff treatment to products
of other developed countries that has or is likely to
have a significant adverse effect on U.S. commerce;
(5) broadcasts U.S. copyrighted material without the
owners' consent;
(6) has not signed an extradition agreement with the
United States; and
(7) has not or is not taking steps to afford
internationally-recognized worker rights (as defined
for the Generalized System of Preferences program) to
workers in the country (including any designated zone
in that country).
The President may waive conditions (1), (2), (3), (5), and
(7) if he determines that designation of the particular country
would be in the national economic or security interest of the
United States and so reports to the Congress.
In addition, the President must take into account certain
other factors under section 212(c) in determining whether to
designate a country a CBI beneficiary: (1) the country's
expressed desire to be designated; (2) economic conditions and
living standards in the country; (3) the extent the country has
assured the United States it will provide equitable and
reasonable access to its markets and basic commodity resources;
(4) the degree the country follows accepted rules of
international trade under the World Trade Organization and
applicable trade agreements; (5) the degree the country uses
export subsidies or imposes export performance or local content
requirements; (6) the degree the country's trade policies
contribute to regional revitalization; (7) the degree the
country is undertaking self-help measures; (8) whether or not
the country has taken or is taking steps to afford its workers
(including in any designated zone of the country)
internationally-recognized worker rights; (9) the extent the
country provides adequate and effective means under its law for
foreign nationals to secure, exercise, and enforce exclusive
rights in intellectual property; (10) the extent the country
prohibits its nationals from broadcasting U.S. copyrighted
materials without permission; and (11) the extent to which the
country is prepared to cooperate in the administration of the
CBI. The President must notify the Congress of his intention to
designate countries, together with the considerations entering
the decision.
The President may later withdraw or suspend the designation
of any country as a beneficiary country or withdraw, suspend,
or limit the application of duty-free treatment for any
eligible article of any country if he determines that, based on
changed circumstances, such country would be barred from
designation under the criteria set forth in subsection (b) of
section 212.\31\ The President is required to publish at least
30 days advance notice of such proposed action in the Federal
Register. During the 30-day notice period, USTR is required to
hold a public hearing and accept public comments on the
proposed action.
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\31\ Section 1909 of the Omnibus Trade and Competitiveness Act
(Public Law 100-418).
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The President must submit a complete report to the Congress
by October 1, 1993, and every 3 years thereafter regarding the
operation of the CBI. This report must include general reviews
of CBI beneficiary countries based upon all section 212
designation criteria.
Designation Criteria for CBTPA Benefits
In designating a country as eligible for the enhanced CBTPA
benefits, the President is to take into account the existing
eligibility criteria established under CBERA, as well other
appropriate criteria, including whether a country has
demonstrated a commitment to undertake its WTO obligations and
participate in negotiations toward the completion of the FTAA
or comparable trade agreement, the extent to which the country
provides intellectual property protection consistent with or
greater than that afforded under the Agreement on Trade-Related
Aspects of Intellectual Property Rights, the extent to which
the country provides internationally recognized worker rights,
whether the country has implemented its commitments to
eliminate the worst form of child labor, the extent to which a
country has taken steps to become a party to and implement the
Inter-American Convention Against Corruption, and the extent to
which the country applies transparent, nondiscriminatory and
competitive procedures in government procurement equivalent to
those included in the WTO Agreement on Government Procurement
and otherwise contributes to efforts in international fora to
develop and implement international rules in transparency in
government procurement.
Eligible articles
CBI duty-free treatment under section 213(a) of the CBERA
applies only to articles which meet three rule-of-origin
requirements:
(1) The article must be imported directly from a
beneficiary country into the U.S. customs territory;
(2) The article must contain a minimum 35 percent
local content of one or more beneficiary countries (up
to 15 percent of the total value of the article from
U.S.-made materials may count toward the 35 percent
requirement); and
(3) The article must be wholly the growth, product,
or manufacture of a beneficiary country or, if it
contains foreign materials, be substantially
transformed into a new or different article in a
beneficiary country.
Other provisions and regulations preclude minor pass-through
operations or transshipments from qualification.
Special criteria have been established for the duty-free
entry of ethanol under the CBI program. The Tax Reform Act of
1986 \32\ amended the 1983 CBI legislation to require
increasing amounts of CBI feedstock in order for ethanol to
qualify for duty-free treatment--30 percent in 1987; 60 percent
in 1988; and 75 percent in 1989 and thereafter. Several
companies were ``grandfathered'' for 2 years, allowing them to
operate under pre-1986 criteria through 1989.
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\32\ Public Law 99-514, section 423, approved October 22, 1986.
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The Omnibus Trade and Competitiveness Act of 1988 \33\
extended the ``grandfather'' through the end of 1989 for six
dehydration plants already built or under construction but
imposed an import cap of 20 million gallons per facility. The
Act also requested reports by the ITC and the General
Accounting Office (GAO) on whether or not the current local
feedstock requirements make CBI ethanol production economically
feasible. Those reports concluded that CBI ethanol production
would not be economically feasible under those local feedstock
requirements.
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\33\ Public Law 100-418, section 1910, approved August 23, 1988.
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The Steel Trade Liberalization Program Implementation Act
of 1989 \34\ provided that for calendar years 1990 and 1991,
ethanol (and any mixture thereof) that is only dehydrated
within a CBI beneficiary country or an insular possession
receives duty-free treatment only if it meets the applicable
local feedstock requirement: (1) no feedstock requirement is
imposed on imports up to a level of 60 million gallons or 7
percent of the domestic ethanol market (as determined by the
ITC, based on the 12-month period ending on the preceding
September 30), whichever is greater; (2) a local feedstock
requirement of 30 percent by volume applies to the next 35
million gallons of imports above the 60 million gallon or 7
percent level described above; and (3) a local feedstock
requirement of 50 percent by volume applies to any additional
imports. Ethyl alcohol (or a mixture thereof) that is produced
by a process of full fermentation in an insular possession or
beneficiary country continues to be eligible for duty-free
treatment in unlimited quantities without regard to feedstock
requirements.
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\34\ Public Law 101-221, section 7, approved December 12, 1989.
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The Customs and Trade Act of 1990 extended the above
provisions through 1992. The Omnibus Budget Reconciliation Act
of 1990 \35\ further extended them through September 30, 2000.
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\35\ Public Law 101-508, section 11502, approved November 5, 1990.
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Section 213(b) of the CBERA exempts the following articles
from CBI duty-free treatment: textiles and apparel subject to
textile agreements; footwear, handbags, luggage, flat goods
(such as wallets, change purses and key and eyeglass cases),
work gloves, and leather wearing apparel not eligible for duty-
free treatment under the GSP program as of August 5, 1983;
canned tuna; petroleum and petroleum products; and watches and
watch parts containing components from non-most-favored-nation
(column 2) sources.
Section 212 of CBI II amended section 213 of the CBERA to
authorize the President to proclaim a tariff reduction of 20
percent, but not more than 2.5 percent ad valorem on any
article, in the duties applicable to handbags, luggage, flat
goods, work gloves, and leather wearing apparel not designated
as eligible articles under the GSP program on August 5, 1983
from CBI beneficiary countries, to be phased in in five equal
annual stages beginning on January 1, 1992.
Section 222 of CBI II also extended duty-free treatment to
articles, other than textiles and apparel and petroleum and
petroleum products, that are processed or assembled wholly from
U.S. fabricated components or materials or processed wholly
from U.S. ingredients (except water) in a CBI beneficiary
country and neither the components, materials, and ingredients
after export from the United States nor the article itself
before importation into the United States enters the commerce
of any third country.
Under the tariff-rate quota system for sugar,\36\ the
Secretary of Agriculture establishes the quota quantity that
can be entered at the lower tier import duty rate, and the U.S.
Trade Representative (USTR) allocates the quantity among sugar
exporting quantities. The quantities allocated to beneficiary
countries under the Caribbean Basin Initiative receive duty-
free treatment. Imports above the in-quota amount from
beneficiary countries are tariffed at the higher, over-quota
rate. Certificates of quota eligibility (CQE) are issued to the
exporting countries and must be returned with the shipment of
sugar in order to receive quota treatment.
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\36\ Presidential Proclamation No. 6763, December 23, 1994, 60 Fed.
Reg. 1007.
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Section 213(c) requires the President to suspend duty-free
treatment on imports of sugar and beef products from any
beneficiary country that does not submit a satisfactory stable
food production plan within 90 days after its designation, or
while the country is not making a good faith effort to
implement the plan or the plan is not achieving its purpose.
The President must withhold suspension if the country agrees to
consultations within a reasonable period of time and undertakes
to formulate and implement remedial action.
The import relief procedures and authorities under sections
201-204 of the Trade Act of 1974, as amended, and national
security measures under section 232 of the Trade Expansion Act
of 1962 apply to imports from CBI beneficiary countries.
Section 213(e) authorizes the President to suspend CBI duty-
free treatment and proclaim a rate of duty or other relief
measures on CBI imports as on imports of the article from non-
CBI countries. Alternatively, the President may maintain duty-
free treatment or establish a margin of preference on imports
from CBI countries. In its report to the President on import
relief investigations covering CBI eligible articles, the ITC
must state whether its findings with respect to serious injury
to the domestic industry and its recommended remedy apply to
imports from CBI beneficiary countries.
Under a special procedure under section 213(b), petitioners
for import relief on agricultural perishable products may also
file a request with the Secretary of Agriculture for emergency
relief. Within 14 days, the Secretary must determine whether
there is reason to believe a CBI perishable product is being
imported in such increased quantities as to be a substantial
cause of serious injury to the domestic industry, and recommend
to the President emergency relief, if warranted. The President
must determine within 7 days after receiving the Secretary's
recommendation whether to take emergency action restoring the
normal rate of duty pending final action on the import relief
petition.
Section 215 requires the ITC to report annually to the
Congress on the actual economic impact and its assessment of
the probable future effects of the Act on the U.S. economy
generally and on specific domestic industries. Section 216 also
requires an annual report to the Congress by the Secretary of
Labor on the impact of the CBI on U.S. labor.
Enhanced Temporary Trade Benefits under the CBTPA
Under NAFTA, imported products from Mexico receive NAFTA
declining tariff or duty-free and quota-free treatment. Chapter
Four of NAFTA establishes rules of origin for identifying goods
that are to be treated as ``originating in the territories of
NAFTA parties'' and are therefore eligible for preferential
treatment accorded to originating goods under NAFTA, including
reduced duties and duty-free and quota-free treatment.
The CBTPA provides that NAFTA tariff treatment applies to
articles eligible under CBI that meet NAFTA rules of origin
(treating the United States and CBI beneficiary countries as
``parties'' under the agreement for this purpose). Customs
procedures applicable to exporters under NAFTA also must be met
for partnership countries (i.e. CBTPA eligible) to quality for
parity treatment. Imports of articles eligible under the CBI
but which do not meet the conditions of NAFTA parity would
continue to be excluded from the program.
Under the CBTPA, NAFTA tariff treatment applies to goods
excluded from the CBI, except to textiles and apparel. More
specifically, for imports of canned tuna, petroleum and
petroleum products, footwear, handbags, luggage, flat goods,
work gloves, and leather-wearing apparel, the legislation
provided an immediate reduction in tariffs equal to the
preference Mexican products enjoy under NAFTA. The applicable
duty paid by importers on such goods is equal to the duty
applicable to the same goods if entered from Mexico.
In order for their products to qualify for any of the
preferences afforded under this Act, whether applied to
textiles and apparel or other products, the beneficiary country
must comply with customs procedures equivalent to those
required under the NAFTA.
Temporary Trade Benefits for Apparel Imports Under CBTPA
The CBTPA provides duty-free, quota-free treatment to the
following apparel products:
(1) apparel articles assembled in an eligible CBI
beneficiary country from U.S. fabrics wholly formed from U.S.
yarns and cut in the United States that would enter the United
States under Harmonized Tariff Schedule (HTS) item number
9802.00.80 (a provision that otherwise allows an importer to
pay duty solely on the value-added abroad when U.S. components
are shipped abroad for assembly and re-imported into the United
States);
(2) apparel articles assembled in a CBTPA country from
fabrics wholly formed and cut in the United States, from yarns
wholly formed in the United States that are (I) entered under
subheading 9802.00.80 of the HTS or (II) entered under chapter
61 or 62 of the HTS, if, after such assembly, the articles
would have qualified for entry under subheading 9802.00.80 but
for the fact that the articles were embroidered or subjected to
stone-washing, enzyme-washing, acid washing, perma-pressing,
oven-baking, bleaching, garment-dyeing, screen printing, or
other similar processes;
(3) apparel articles cut in a CBTPA beneficiary country
from fabric wholly formed in the United States from yarns
wholly formed in the United States, if such articles are
assembled in such country with thread formed in the United
States;
(4) certain apparel articles knit-to-shape (other than
socks provided for in heading 6115 of the HTS) in a CBTPA
beneficiary country from yarns wholly formed in the United
States, and knit apparel articles (other than certain T-shirts,
as described below) cut and wholly assembled in one or more
CBTPA beneficiary countries from fabric formed in one or more
CBTPA beneficiary countries or the United States from yarns
wholly formed in the United States, in an amount not to exceed
250 million square meter equivalents (SMEs) during the one-year
period beginning on October 1, 2000. That amount will increase
by 16 percent, compounded annually, in each succeeding one-year
period through September 30, 2004. In each one-year period
thereafter through September 30, 2008, the amount will be the
amount that was in effect for the one-year period ending on
September 30, 2004, or such other amount as may be provided by
law. For T-shirts, other then underwear T-shirts, the amount
eligible for duty-free, quota-free treatment is 4.2 million
dozen during the one-year period beginning on October 1, 2000.
That amount will be increased by 16 percent, compounded
annually, in each succeeding 1-year period through September
30, 2004 and thereafter will be the amount in effect for the
period ending on September 30, 2004, or such other amount as
may be provided by law. The conference agreement provides that
it is the sense of Congress that the Congress should determine,
based on the record of expansion of exports from the United
States as a result of the preferential treatment of articles
under this provision, the percentage by which the amounts
referred to above the respect to knit-to-shape articles and T-
shirts should be compounded for the one-year periods occurring
after the period ending on September 30, 2004;
(5) certain brassieres, subject to the requirements set
forth in the Act;
(6) certain articles assembled from fibers, yarns or fabric
not widely available in commercial quantities, with reference
to the relevant provisions of the NAFTA; the conference
agreement also authorizes the President to extend duty-free and
quota-free treatment to certain other fibers, fabrics and
yarns. Any interested party may submit to the President a
request for extension of benefits to fibers, fabrics and yarns
not available. The requesting party will bear the burden of
demonstrating that a change is warranted by providing
sufficient evidence. The President must make a determination
within 60 calendar days of receiving a request from an
interested party;
(7) certain handloomed, handmade and folklore articles; and
(8) certain textile luggage, as described in the
legislation.
The CBTPA establishes certain special rules relating to apparel
products:
(1) Findings and trimmings.--Articles otherwise eligible
for preferential treatment shall not be ineligible for such
treatment because the article contains findings or trimmings of
foreign origin, if such findings and trimmings do not exceed 25
percent of the cost of the components of the assembled product.
However, sewing thread shall not be treated as a finding or
trimming for purposes of apparel articles cut in a CBTPA
beneficiary country from fabric wholly formed in the United
States from yarns wholly formed in the United States, where
preferential treatment in contingent upon assembly with thread
formed in the United States.
(2) Interlinings.-- Articles otherwise eligible for
preferential treatment shall not be ineligible for such
treatment because the articles contain certain interlinings, as
described in the legislation, of foreign origin, if the value
of such interlinings (and any findings and trimmings) does not
exceed 25 percent of the cost of the components of the
assembled articles. This rule will not apply if the President
determines that United States manufacturers are producing such
interlinings in the United States in commercial quantities;
(3) DeMinimis.--An article otherwise ineligible for
preferential treatment because the article contains fibers or
yarns not wholly formed in the United States or in one or more
beneficiary countries shall not be ineligible for such
treatment if the total weight of all such fibers or yarns is
not more then seven percent of the total weight of the good.
However, in order for an apparel article containing elastomeric
yarns to be eligible for preferential treatment, such yarns
must be wholly formed in the United States.
(4) Special Origin Rule.--An article otherwise eligible for
preferential treatment shall not be ineligible for such
treatment because the article contains nylon filament yarn
(other then eleastomeric yarn), if entered under certain tariff
headings from a country that is a party to an agreement with
the United States establishing a free trade area which entered
into force before January 1, 1995.
The CBTPA establishes a transition period that began on
October 1, 2000 and ends on the earlier of September 30, 2008,
or the date on which the Free Trade Area of the Americas or
another free trade agreement as described in the legislation
enters into force with respect to the United States and the
CBTPA beneficiary country.
Customs Procedures and Penalties for Transshipment
Under the NAFTA, Parties to the Agreement must observe
Customs procedures and documentation requirements, which are
established in Chapter 5 of NAFTA. Requirements regarding
Certificates of Origin for imports receiving preferential
tariffs are detailed in Article 502.1 of NAFTA. The CBTPA
requires the Secretary of the Treasury to prescribe regulations
that require, as a condition of entry, that any importer of
record claiming preferential tariff treatment for textile and
apparel products under the bill must comply with requirements
similar in all material respects to the requirements regarding
Certificates of Origin contained in Article 502.1 of NAFTA, for
a similar importation from Mexico. In addition, if an exporter
is determined under the laws of the United States to have
engaged in illegal transshipment of textile or apparel products
from a partnership country, then the President shall deny all
benefits under the bill to such exporter, and to any successors
of such exporter, for a period of two years.
In cases where the President has requested a beneficiary
country to take action to prevent transshipment and the country
has failed to do so, the President shall reduce the quantities
of textile and apparel articles that may be imported into the
United States from that country by three times the quantity of
articles transshipped, to the extent that such action is
consistent with WTO rules.
Other trade benefits
Under the antidumping and countervailing duty laws, imports
from two or more countries subject to investigation must
generally be aggregated for the purpose of determining whether
the unfair trade practice causes material injury to a U.S.
industry, absent certain exceptions. Section 224 of CBI II
created an exception to the general cumulation rule for imports
from CBI beneficiary countries. If imports from a CBI country
are under investigation in an antidumping or countervailing
duty case, imports from that country may not be aggregated with
imports from non-CBI countries under investigation for purposes
of determining whether the imports from the CBI country are
causing, or threatening to cause, material injury to a U.S.
industry. They may be aggregated with imports from other CBI
countries under investigation. Imports from CBI countries
continue to be cumulated with imports from non-CBI countries
for purposes of determining material injury in investigations
of imports from non-CBI countries.
CBI II also increased the duty-free tourist allowance for
U.S. residents returning directly or indirectly from a CBI
beneficiary country from $400 to $600 and allows such tourists
to enter 1 additional liter of alcoholic beverages duty free if
produced in a CBI beneficiary country.
Measures for Puerto Rico and U.S. insular possessions
The CBERA contains a number of provisions to maintain and
improve the competitive position of Puerto Rico and the U.S.
insular possessions (including the Virgin Islands, American
Samoa, Guam):
(1) Imports from Puerto Rico and the Virgin Islands
may be counted toward the 35 percent minimum local
content rule of origin requirement for CBI duty-free
treatment. Section 235 of the Tariff and Trade Act of
1984 amended section 213(a) also to permit articles
from CBI beneficiary countries to enter under bond for
processing or manufacture in Puerto Rico without
payment of duty upon withdrawal if they meet CBI rule
of origin requirements. As amended by CBI II, any
article which is the growth, product, or manufacture of
Puerto Rico qualifies for duty-free treatment under the
CBI if (a) the article is imported directly from a CBI
beneficiary country into the United States; (b) the
article was advanced in value in a CBI beneficiary
country; and (c) if any materials are added to the
article in a CBI beneficiary country, such materials
are a product of a beneficiary country or the United
States.
(2) The permissible foreign content was increased
from 50 to 70 percent for duty-free treatment of
imports of CBI eligible articles from U.S. insular
possessions.
(3) Duty-free entry of alcoholic beverages by
returning U.S. residents arriving directly from insular
possessions was increased from 4 to 5 liters provided
at least 1 liter is the product of an insular
possession. CBI II increased the duty-free allowance
for U.S. residents returning from U.S. insular
possessions from $800 to $1,200.
(4) Section 221 of the CBERA amended section 7652 of
the Internal Revenue Code to require that all excise
taxes collected on foreign rum imported into the United
States, whether or not from Caribbean countries, be
paid to the treasuries of Puerto Rico and the Virgin
Islands. Section 214(c) requires the President to
consider compensatory measures for the governments of
Puerto Rico and the Virgin Islands if there is a
reduction in the amount of rum excise tax rebates.
(5) The term ``industry'' under the import relief
provisions of section 201 of the Trade Act of 1974 was
clarified to enable producers in the insular
possessions to petition for import relief.
(6) Non-toxic rum stillage discharges in the Virgin
Islands are exempt from certain provisions of the
Federal Water Pollution Control Act if the discharges
are 1,500 feet from the shore and are determined by the
Governor of the Virgin Islands not to constitute a
health or environmental hazard.
Tax measures
Section 222 of the CBERA amended section 274(h) of the
Internal Revenue Code to allow deductions for business expenses
incurred while attending conventions and meetings in a
designated Caribbean Basin beneficiary country (or Bermuda) if
the country enters into an executive agreement with the United
States to provide, on a reciprocal basis, for information
relating to U.S. tax matters to be made available to U.S. tax
officials, including agreement to exchange bearer share and
bank account information for criminal tax purposes. No
deduction is available for attending a convention in a country
found by the Secretary of the Treasury to discriminate in its
tax laws against conventions held in the United States.
Under section 936 of the Internal Revenue Code, qualified
investment income earned in U.S. possessions is exempt from
U.S. tax. Most of the tax benefits claimed under this provision
are claimed by corporations in Puerto Rico. Prior to the Tax
Reform Act of 1986 (1986 Act), this investment income, commonly
referred to as ``qualified possessions source investment
income'' or QPSII, had to be derived from sources inside Puerto
Rico. Section 936(d)(4), added to the Code in the 1986 Act,
amended the definition of QPSII to allow for investments
outside of Puerto Rico. Under section 936(d)(4), interest
income will qualify as QPSII if derived from loans by qualified
financial institutions (including the Puerto Rican Government
Development Bank) for the acquisition of active business assets
and for the construction of development projects located in
eligible Caribbean Basin countries. Section 227 of CBI II
requires the government of Puerto Rico to take such steps as
may be necessary to ensure that at least $100,000,000 of new
investments which qualify under section 936(d)(4) in eligible
Caribbean Basin countries shall be made each calendar year.
Refinancings of existing investments shall not constitute ``new
investments'' for this purpose.
In general, section 1601y of the Small Business Job
Protection Act of 1996: (1) repealed the QPSII exclusion
effective July 1, 1996; (2) repealed the section 936 credit for
new businesses effective for taxable years beginning after
December 31, 1995; and (3) repealed the section 936 credit for
existing possession businesses effective for taxable years
beginning before January 1, 2006.\37\
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\37\ Public Law 104-188, section 1601, approved August 20, 1996, 26
U.S.C. 30A.
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Tourism promotion and scholarship assistance
Section 233 of CBI II required the Commissioner of Customs
to carry out preclearance operations during fiscal years 1991
and 1992 at a U.S. Customs Service facility in a Caribbean
Basin country which the Commissioner considered appropriate for
testing the extent to which the availability of preclearance
operations can assist in the development of tourism in the
region. The Commissioner of Customs and Commissioner of the
Immigration and Naturalization Service were to first determine
the viability of establishing such operations in either Aruba
or Jamaica. The Commissioner of Customs was required to submit
a report to the Congress as soon as practicable after September
30, 1992, regarding the program, including the efficacy of
extending preclearance operations to other Caribbean countries.
In December 1994, the Customs Service signed a bilateral
agreement with the government of Aruba regarding the future
construction of a preclearance facility.
Section 231 of CBI II requires the Administrator of the
Agency for International Development (AID) to establish and
administer a program of scholarship assistance, in cooperation
with state governments, universities, community colleges, and
businesses, to enable students (particularly the economically
and socially disadvantaged) from CBI beneficiary countries that
also receive U.S. foreign assistance to study in the United
States. The Administrator may make grants to states (including
the District of Columbia, Puerto Rico, and U.S. possessions and
territories) to provide scholarship assistance for
undergraduate degree programs and for training programs of at
least 1 year in study areas related to the critical development
needs of the students' respective countries. The federal share
for each year for which a state receives payment will be not
less than 50 percent, funded from amounts otherwise made
available for Latin American and Caribbean regional programs
under the economic support fund of the Foreign Assistance Act
of 1961. To the maximum extent practicable, each participating
state shall enlist private sector assistance to meet the non-
federal share of payments.
Meetings of Caribbean Trade Ministers and USTR
CBTPA directs the President to convene a meeting with the
trade ministers of partnership countries in order to establish
a schedule of regular meetings, to commence as soon as
practicable, of the trade ministers and USTR. The purpose of
the meetings is to advance consultations between the United
States and partnership countries concerning the likely timing
and procedures for initiating negotiations for partnership
countries to: (1) accede to NAFTA; or (2) enter into
comprehensive, mutually advantageous trade agreements with the
United States that contain comparable provisions to NAFTA, and
would make substantial progress in achieving the negotiation
objectives listed in Section 108(b)(5) of Public Law 103-182.
Andean Initiative
The Andean Trade Preference Act (ATPA), commonly referred
to as the Andean Initiative, was enacted on December 4, 1991 as
title II of Public Law 102-182, to authorize preferential trade
benefits for the Andean nations similar to those benefits to
beneficiary countries under the Caribbean Basin Initiative
program. On July 23, 1990, President Bush announced that he
would seek congressional approval of a special preferential
tariff program for four Andean countries--Bolivia, Ecuador,
Colombia, and Peru--to fulfill a commitment made at the
February 1990 Cartagena Drug Summit to expand economic
incentives to encourage these countries to move out of the
production, processing, and shipment of illegal drugs into
legitimate products. Increased access to the U.S. market
through tariff preferences was part of a package of measures
that included expanded agricultural development assistance,
additional product coverage under the Generalized System of
Preferences program, and negotiation of long-term trade and
investment liberalization building on the ``Enterprise for the
Americas Initiative'' announced by the President on June 27,
1990.
On October 5, 1990, President Bush transmitted to Congress
proposed implementing legislation. H.R. 661, the ``Andean Trade
Preference Act of 1991,'' was introduced on January 28, 1991
reflecting the Administration's proposal. The bill as reported
to the House on November 19 was amended during consideration by
the Committee on Ways and Means to conform the country
designation criteria, rule-of-origin requirements, and the
import relief and emergency relief criteria to the conditions
and procedures for granting duty-free treatment under the CBI
program. Certain preferential trade benefits, as well as the
tax benefits under the CBI program, were maintained for the
Caribbean Basin countries and not extended to the Andean
countries by the legislation. The authority for the Andean
Initiative was also limited to a 10-year period, to terminate
as of December 4, 2001. H.R. 661 as amended was incorporated in
a House amendment to a Senate amendment to H.R. 1724, passed by
both Houses in a conference report on November 26, 1991.
The ATPA went into effect on December 4, 1991. The
designations of Columbia and Bolivia as ATPA beneficiary
countries became effective July 22, 1992.\38\ Designations of
Ecuador \39\ and Peru \40\ became effective, respectively, on
April 30, 1993 and August 31, 1993.
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\38\ Presidential Proclamation 6455 and 6456; 57 Fed. Reg. 30069
and 30097.
\39\ Presidential Proclamation 6544; 58 Fed. Reg. 195547.
\40\ Presidential Proclamation 6585; 58 Fed. Reg. 43239.
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Beneficiary countries
The ATPA authorizes the President to proclaim duty-free
treatment on all eligible articles from Bolivia, Ecuador,
Colombia, and Peru as potential beneficiary countries.
Designation by the President of beneficiary status is subject
to seven conditions identical to the mandatory criteria for
designation under the CBI program and subject to the same
authority to waive certain conditions in the U.S. national
economic or security interest. A country is prohibited from
designation under these conditions if it is a communist
country, has nationalized or expropriated U.S. property without
compensation or submission to arbitration, fails to recognize
arbitral awards in favor of U.S. citizens, affords preferential
tariff treatment to products of other developed countries
having or likely to have a significant adverse effect on U.S.
commerce, broadcasts U.S. copyrighted material without the
owner's consent, has not signed an extradition agreement with
the United States, or has or is not taking steps to afford
internationally-recognized worker rights. In addition, the
President must take into account 12 discretionary factors prior
to designating any of the 4 countries, similar to factors under
the CBI, plus whether the country has met narcotics cooperation
certification criteria required to be eligible for U.S. foreign
aid.
Before designating any country, the President must notify
the Congress of his intention to make the designation and the
considerations entering into the decision. The President may
withdraw or suspend beneficiary country status or duty-free
treatment on any article if he determines subsequently that the
country should be barred from designation as a result of
changed circumstances.
Eligible articles
Duty-free treatment is granted under the ATPA to any
otherwise eligible article which is the growth, product, or
manufacture of a designated beneficiary country if (1) that
article is imported directly from a beneficiary country into
the U.S. customs territory; and (2) the sum of the cost or
value of materials produced in one or more Andean beneficiary
countries or one or more CBI beneficiary countries, plus the
direct costs of processing operations performed in one or more
Andean or CBI beneficiary countries is not less than 35 percent
of the appraised value of the article. Puerto Rico and the
Virgin Islands are also considered beneficiary countries for
this purpose. Up to 15 percent of the value attributable to the
cost or value of materials produced in the United States may be
applied toward the 35 percent minimum local content
requirement. These rules and requirements to preclude
transshipment or pass-through operations are identical to CBI
provisions, except that content from CBI beneficiary countries
may also be counted toward the minimum 35 percent local content
requirement for determining the product of an Andean country.
A statutory list of products that are ineligible for duty-
free treatment under the ATPA is also identical to the product
exclusion list under the CBI except that rum is also excluded
from ATPA eligibility in order to preserve preferential
benefits for Caribbean, Virgin Islands, and Puerto Rican
producers. Unlike under the CBI, duty-free treatment does not
apply to imports of certain excluded articles assembled or
processed wholly from U.S. components or materials.
In addition to rum, ATPA duty-free treatment does not apply
to textiles and apparel articles subject to textile agreements;
footwear not designated eligible for GSP duty-free treatment;
canned tuna; petroleum or petroleum products; certain watches
and watch parts; certain leather-related products; and sugar,
syrups, and molasses subject to over-quota rates of duty. As
under the CBI and GSP programs, duty-free treatment applies
only to imports of sugar entering within the tariff-quota
level; over-quota sugar imports remain subject to a high
tariff. As under the CBI, duty rate reductions of 20 percent,
not to exceed 2.5 percent ad valorem, implemented in five equal
annual stages beginning January 1, 1992, apply to imports of
Andean leather-related products (handbags, luggage, flat goods,
work gloves, and leather wearing apparel).
Import safeguard provisions
Authorities under the ATPA to grant import relief measures
and to take emergency action on imports of agricultural
perishables are identical to provisions under the CBI program.
The President may suspend duty-free treatment and proclaim a
duty rate on any eligible article under the import relief
provisions of the Trade Act of 1974 or the national security
provisions of the Trade Expansion Act of 1962. The U.S.
International Trade Commission must state in its report to the
President on any import relief investigation involving an
eligible article under the ATPA whether and to what extent its
injury findings and remedy recommendations apply to imports of
the article from beneficiary countries.
Under an emergency relief procedure for agricultural
perishables, petitions may be filed with the Secretary of
Agriculture at the same time as a petition for import relief is
filed with the ITC. Within 14 days, the Secretary advises the
President whether he has reason to believe that a perishable
product from a beneficiary country is being imported in such
increased quantities as to be a substantial cause of serious
injury or threat thereof to the domestic industry and that
emergency action is warranted, or publishes notice and advises
the petitioner of a determination not to recommend emergency
action. Within 7 days after receiving a recommendation, the
President must proclaim the withdrawal of duty-free treatment
or publish notice of his determination not to take emergency
action.
No proclamation under the ATPA shall affect fees imposed
pursuant to section 22 of the Agricultural Adjustment Act of
1933.
Other provisions
The ATPA increased the duty-free tourist allowance for U.S.
residents returning from Andean beneficiary countries from $400
to $600 and 1 additional liter of alcoholic beverages may enter
duty free if produced in an Andean beneficiary country.
The President must submit a triennial report to the
Congress on the operation of the program. The ITC must report
annually to the Congress on the economic impact of the ATPA on
U.S. industries and consumers and on the effectiveness of duty-
free treatment in promoting drug-related crop eradication and
crop substitution efforts of beneficiary countries. The
Secretary of Labor must also report annually on the impact of
the ATPA on U.S. labor.
African Growth and Opportunity Act
The African Growth and Opportunity Act, commonly referred
to as the African Trade Bill or AGOA, was enacted as title I of
the Trade and Development Act of 2000 \41\, to authorize the
grant of certain U.S. unilateral preferential trade benefits to
sub-Saharan African countries pursuing political and economic
reform.
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\41\ Public Law 106-200, approved May 18, 2000.
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Background
Section 134 of the Uruguay Round Agreements Act (URAA) \42\
required the President to produce a comprehensive trade and
development policy for African countries. The President's first
report was submitted to Congress on February 5, 1996. Among
other things, the President's report proposed the creation of
the Africa Trade and Development Coordinating Group, an
interagency group to be co-chaired by the National Security
Council and the National Economic Council.
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\42\ Public Law 103-465, approved December 8, 1994, 19 U.S.C. 3554.
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On September 26, 1996, H.R. 4198 was introduced in the
House of Representatives to authorize a new trade and
investment policy for sub-Saharan Africa. The bill called for
the designation of countries in sub-Saharan Africa pursuing
market-based economic reform to participate in the benefits of
the bill. H.R. 4198 proposed the creation of a United States-
Sub-Saharan Africa Trade and Economic Cooperation Forum to
provide a regular opportunity for the discussion of trade
liberalization among eligible countries and sought the
establishment of a United States-Sub-Saharan Africa Free Trade
Area. In addition, the bill provided for the elimination of
quotas on textile and apparel products from Kenya and
Mauritius, the only sub-Saharan African countries subject to
quota on these products. No action was taken on H.R. 4198 in
the 104th Congress.
The second of the President's five reports pursuant to
section 134 of the URAA was transmitted to Congress on February
18, 1997. The report set forth a policy framework structured
around five basic objectives, including trade liberalization
and promotion, investment liberalization and promotion,
development of the private sector, infrastructure enhancement,
and economic reform.
On April 24, 1997, H.R. 4198 was reintroduced in the 105th
Congress as H.R. 1432, the African Growth and Opportunity Act.
As introduced, H.R. 1432 included new language offering
enhanced benefits under the Generalized System of Preferences
(GSP) for sub-Saharan African countries meeting the bill's
eligibility requirements.
The third Presidential report required by section 134 of
the URAA was submitted to Congress on December 23, 1997. The
report indicated the Administration's strong support for the
passage of H.R. 1432 and described the five major components of
the Administration's Partnership for Economic Growth and
Opportunity in Africa: (1) enhanced trade benefits; (2)
technical assistance; (3) enhanced dialogue with African
countries; (4) financing and debt relief; and (5) continued
U.S. leadership in multilateral fora to support private sector
development, trade development, and institutional capacity
building in African countries.
H.R. 432 was passed by the House of Representatives on
March 11, 1998. No further action was taken on H.R. 1432 in the
105th Congress, S. 2400 was introduced in the Senate on July
21, 1998. Title I of S. 2400 was entitled the African Growth
and Opportunity Act and differed primarily from H.R. 1432 by
imposing a requirement that imports of textile and apparel
products from sub-Saharan Africa qualifying for duty-free and
quota-free entry be made from fabric of U.S. origin. S. 2400
was not considered by the Senate during the 105th Congress.
On January 15, 1999, the President's fourth report pursuant
to the URAA was submitted to Congress. The President's report
indicated the Administration's continued support for the
passage of the African Growth and Opportunity Act and laid out
the key policy objectives of the President's Partnership for
Economic Growth and Opportunity in Africa for stimulating
economic growth in sub-Saharan Africa and facilitating the
region's integration into the global economy.
On February 2, 1999, H.R. 1432 was reintroduced in the
106th Congress as H.R. 434, H.R. 434 was passed by the House of
Representatives on July 16, 1999.
On July 16, 1999, S. 1387, also entitled the African Growth
and Opportunity Act, was introduced in the Senate. The text of
S. 1387 was similar to title I of S. 2400 from the 105th
Congress.
On November 3, 1999, the Senate passed H.R. 434, as
amended. During Senate consideration of the bill, the House-
passed version of the African Growth and Opportunity Act was
replaced with the text of S. 1387. H.R. 434 was passed by the
Senate as the Trade and Development Act of 2000, with title I
comprising the African Growth and Opportunity Act.
On January 21, 2000, the President submitted his fifth and
final report required by section 134 of the URAA. The
President's report reiterated the Administration's support for
enactment of H.R. 434. In addition, it described the ways the
U.S. Government agencies work to support economic reform in
sub-Saharan Africa, enhance U.S.-sub-Saharan African economic
engagement, increase African integration into the multilateral
trading system, and promote sustainable economic development.
On May 4, 2000, the conference report on H.R. 434, the
Trade and Development Act of 2000, was filed (H. Rept. 106-606)
and passed by the House of Representatives. The African Growth
and Opportunity Act was contained in title I of the conference
report. The Senate passed the conference report on May 11,
2000. The bill was signed into law by the President on May 18,
2000 (P.L. 106-200). The trade provisions in the African Growth
and Opportunity Act have an effective date of October 1, 2000
through September 30, 2008.
Beneficiary Countries
Section 107 of the African Growth and Opportunity Act
(AGOA) lists the following 48 countries, or their successor
political entities, as potentially eligible for designation by
the President as beneficiary countries:
Angola Eritrea Nigeria
Benin Ethiopia Republic of Congo
Bostswana Gabon Rwanda
Burkina Faso Gambia Sao Tome and
Burundi Ghana Principe
Cameroon Guinea-Bissau Senegal
Cape Verde Kenya Seychelles
Central African Lesotho Sierra Leone
Republic Liberia Somalia
Chad Madagascar South Africa
Comoros Malawi Sudan
Democratic Mali Swaziland
Republic of Mauritania Tanzania
Congo Mauritius Togo
Cote d'Ivoire Mozambique Uganda
Djibouti Namibia Zambia
Equatoria Guinea Niger Zimbabwe
Section 111(a) of AGOA amends title V of the Trade Act of
1974 by inserting a new section 506A on the designation of sub-
Saharan African countries for the benefits of the Act. The new
section 506A authorizes the President to designate a country
listed in section 107 of AGOA as a beneficiary sub-Saharan
African country if: (1) the President determines that the
country meets the eligibility requirements set forth in section
104 of AGOA in effect on the date of enactment; and (2) the
country otherwise meets the GSP eligibility criteria.\43\
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\43\ Presidential Proclamation 7350 of October 2, 2000 (65 (Fed.
Reg. 59321, October 4, 2000) designated 34 countries in sub-Saharan
African as beneficiary sub-Saharan African countries for the purposes
of AGOA. All countries listed above except Angola, Burkina Faso,
Burundi, Comoros, Democratic Republic of Congo, Cote d'Ivoire,
Equatorial Guinea, Gambia, Liberia, Somalia, Sudan, Swaziland, Togo,
and Zimbabwe were designated by Presidential Proclamation 7350,
Swaziland was designated as a beneficiary country for the purposes of
AGOA by Presidential Proclamation 7400 of January 17, 2001 (66 Fed.
Reg. 7373, January 23, 2001).
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Section 104(a) of AGOA, as enacted, authorizes the
President to designate a sub-Saharan African country as an
eligible sub-Saharan African country if the President
determines that the country has established, or is making
continual progress toward establishing:
(1) 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;
(2) the rule of law, political pluralism, and the
right to due process, a fair trial, and equal
protection under the law;
(3) the elimination of barriers to United States
trade and investment, including by:
(A) the provision of national treatment and
measures to create and environment conducive to
domestic and foreign investment;
(B) the protection of intellectual property; and
(C) the resolution of bilateral trade and
investment disputes;
(4) economic policies to reduce poverty, increase the
availability of health care and educational
opportunities, expand physical infrastructure, promote
the development of private enterprise, and encourage
the formation of capital markets through micro-credit
or other programs;
(5) a system to combat corruption and bribery, such
as signing and implementing the Convention on Combating
Bribery of Foreign Public Officials in International
Business Transactions; and
(6) protection of internationally recognized worker
rights, including the right of association, the right
to organize and bargain collectively, a prohibition on
the use of any form of forced or compulsory labor, a
minimum age for the employment of children, and
acceptable conditions of work with respect to minimum
wages, hours of work, and occupational safety and
health.
In designating a country as an eligible sub-Saharan African
country, the President must also find under section 104(a) that
it: (1) does not engage in activities that undermine U.S.
national security or foreign policy interests; and (2) does not
engage in gross violations of internationally recognized human
rights or provide support for acts of international terrorism
and cooperates in international efforts to eliminate human
rights violations and terrorist activities.
If the President determines that a beneficiary sub-Saharan
African country is not making continual progress in meeting the
eligibility requirements, then under section 506A(a)(3) of the
Trade Act of 1974 the President must terminate the designation
of that country as a beneficiary sub-Saharan African country
effective on January 1, of the year following the year in which
the determination is made.
The President is required under section 106 of AGOA to
submit a comprehensive report to Congress, not late than 1 year
after the date of enactment of AGOA, and annually thereafter
through 2008, on the trade and investment policy of the United
States for sub-Saharan Africa and on the implementation of AGOA
and the amendments made by it. Section 506A(c) of the Trade Act
of 1974 requires the President to include his country
eligibility determinations, along with explanations of his
determinations and specific analysis of the eligibility
requirements, in the annual report.
Eligible articles
Section 111(A) of AGOA amends the GSP provisions in title V
of the Trade Act of 1974 by inserting a new section 506A.
Section 506A(b)(1) of the Trade Act of 1974 authorizes the
President to provide duty-free treatment for imports from
beneficiary sub-Saharan African countries of any article, other
than textiles or apparel products or textile luggage, that is
designated as import sensitive under the GSP statute, provided
that, after receiving advice from the U.S. International Trade
Commission (ITC), the President determines that the article is
not import sensitive in the context of imports from beneficiary
sub-Saharan African countries.\44\ The general rules of origin
governing duty-free entry under GSP apply, except that, in
determining whether products are eligible for the enhanced
benefits of AGOA, up to 15 percent of the appraised value of a
product at the time of importation may be derived from material
produced in the United States. In addition, under section
506A(b)(2) of the Trade Act of 1974, the cost or value of
materials produced in any beneficiary sub-Saharan African
country may be applied in determining whether a product meets
the applicable rules of origin for the enhanced GSP benefits of
AGOA. Section 111(b) of AGOA amends GSP to waive permanently
the competitive need limits that would otherwise apply to
beneficiary sub-Saharan African countries. Section 114 of AGOA
inserts a new section 506B in the Trade Act of 1974 providing
that the enhanced GSP benefits for sub-Saharan African
countries are in effect through September 30, 2008.
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\44\ Presidential Proclamation 7388 of December 18, 2000 (65 Fed.
Reg. 80723, December 21, 2000) lists the articles determined by the
President to be non-import sensitive in the context of imports from
beneficiary sub-Saharan African countries and therefore eligible for
duty-free treatment under the enhanced GSP benefits in AGOA.
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Section 112 of AGOA provides preferential treatment to
certain textile and apparel articles imported directly into the
customs territory of the United States from beneficiary sub-
Saharan African countries meeting the transshipment
requirements set forth in section 113 of AGOA (see description
below). Under section 112(b), the following textile and apparel
articles may enter the United States free of duty and
quantitative restrictions:
(1) apparel articles assembled in one or more
beneficiary sub-Saharan African countries from fabrics
wholly formed and cut in the United States, from yarns
wholly formed in the United States;
(2) apparel articles cut and assembled in one or more
beneficiary sub-Saharan African countries from fabrics
wholly formed in the United States from yarns wholly
formed in the United States, and assembled with thread
formed in the United States;
(3) sweaters knit-to-shape in one or more beneficiary
sub-Saharan African countries made from cashmere and
fine merino wool;
(4) apparel articles both cut (or knit-to-shape) and
sewn, or otherwise assembled, in one or more
beneficiary sub-Saharan African countries from fabric
or yarn not formed in the United States or a
beneficiary sub-Saharan African country, to the extent
that apparel articles of such fabrics or yarns would be
eligible for preferential treatment, without regard to
the source of the fabric or yarn, under Annex 401 of
the North American Free Trade Agreement (NAFTA); and
(5) certified handloomed, handmade and folklore
articles.\45\
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\45\ Executive Order 13191 of January 17, 2001 (66 Fed. Reg. 7271,
January 22, 2001) delegated authority to the Committee for the
Implementation of Textile Agreements (CITA), after consultation with
the Commissioner of the U.S. Customs Service, to consult with
beneficiary sub-Saharan African countries and to determine which, if
any, particular textile and apparel goods shall be treated as being
handloomed, handmade, or folklore articles for the purposes of section
112(b)(6) of AGOA.
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Section 112b(b)(3) of AGOA also provides that certain other
apparel articles, up to 1.5% of total U.S. apparel imports (in
square meter equivalents) for the first year of the bill,
growing in equal increments in each of the seven succeeding
one-year periods, to a maximum of 3.5% of U.S. apparel imports
in the last year of the bill, may enter the customs territory
of the United States from beneficiary sub-Saharan African
countries free of duty and quantitative restrictions. The
following apparel articles are eligible for preferential
treatment under this cap:
(1) through September 30, 2004, apparel articles
wholly assembled in one or more lesser developed
beneficiary sub-Saharan African countries (defined as
beneficiary sub-Saharan African countries with a per
capita gross national product of less than $1,500 in
1998, as measured by the World Bank),\46\ without
regard to the origin of the fabric; and
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\46\ Presidential Proclamation 7350of October 2, 2000 (65 Fed. Reg.
59321, October 4, 2000) lists designated beneficiary sub-Saharan
African countries to be considered as lesser developed beneficiary sub-
Saharan African countries for the purposes of section 112(b)(3)(B) of
AGOA. They are: Benin, Cape Verde, Cameroon, Central African Republic,
Chad, Republic of Congo, Djibouti, Eritrea, Ethiopia, Ghana, Guinea,
Guinea-Bissau, Kenya, Lesotho, Madagascar, Malawi, Mali, Mauritania,
Mozambique, Nigher, Nigeria, Rwanda, Sao Tome and Principe, Senegal,
Sierra Leone, Tanzania, Uganda, and Zambia. Swaziland was also
designated as a lesser developed beneficiary sub-Saharan African
country for the purposes of AGOA by Presidential Proclamation 7400 of
January 17, 2001 (66 Fed. Reg. 7373, January 23, 2001).
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(2) apparel articles wholly assembled in one or more
beneficiary sub-Saharan African countries from fabric
wholly formed in one or more beneficiary countries from
yarn originating either in the United States or in one
or more beneficiary countries.
Section 112(b)(3)(C) provides import relief within the cap
in the form of a tariff snapback if the Secretary of Commerce
determines that an article qualifying for duty-free treatment
under the cap from a single beneficiary sub-Saharan African
country is being imported in such increased quantities and
under such conditions as to cause ``serious damage, or threat
thereof'' to the domestic industry producing the like or
directly competitive article. In determining whether a domestic
industry has been seriously damaged, or is threatened with
serious damage, the Secretary is required to examine the effect
of the imports on relevant economic indicators such as domestic
production, sales, market share, capacity utilization,
inventories, employment, profits, exports, prices, and
investment.
The Secretary of Commerce is required to made a
determination on whether import relief is warranted if there
has been a surge in imports under the cap from a single
beneficiary sub-Saharan African country based on import data.
The Secretary is also required to initiate such an inquiry
within 10 days of receiving a written request and supporting
information from an interested party. Notice of the initiation
of an inquiry, and the Secretary's subsequent determination,
are to be published in the Federal Register. The Secretary of
Commerce is required to establish procedures to ensure
participation in the inquiry by interested parties. If relevant
information is not available on the record or any party
withholds information that has been requested by the Secretary,
the Secretary can make the determination on the basis of the
facts available. When the Secretary relies on information
submitted in the inquiry as facts available, the Secretary
must, to the extent practicable, corroborate the information
from independent sources that are reasonably available.
Section 112(b)(3)(C) defines the term ``interested party''
for the purposes of the subparagraph as: (1) any producer of a
like or directly competitive article; (2) a certified union or
recognized union or group or workers which is representative of
an industry engaged in the manufacture, production or sale in
the United States of a like or directly competitive article;
(3) a trade or business association representing producers or
sellers of like or directly competitive articles; (4) producers
engaged in the production of essential inputs for like or
directly competitive articles; (5) a certified union or group
of workers which is representative of an industry engaged in
the manufacture, production or sale of essential inputs for
like or directly competitive articles; (5) a certified union or
group of workers which is representative of an industry engaged
in the manufacture, production or sale of essential inputs for
like or directly competitive articles; or (6) a trade or
business association representing companies engaged in the
manufacture, production or sale of such essential inputs.
Section 112(b)(5)(B) of AGOA authorizes the President, at
the request of any interested party and subject to certain
requirements, to proclaim duty-free and quota-free treatment
for apparel articles both cut (or knit-to-shape) and sewn or
otherwise assembled in one or more beneficiary sub-Saharan
African countries, from fabric or yarn not formed in the United
States or a beneficiary sub-Saharan African country (in
addition to those fabrics and yarns already listed in Annex 401
of the NAFTA) if:
(1) the President determines that such yarns or
fabrics cannot be supplied by the domestic industry in
commercial quantities in a timely manner;\47\
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\47\ Executive Order 13191 of January 17, 2001 (66 Fed. Reg. 7271,
January 22, 2001) delegated authority to CITA to determine whether
yarns or fabrics cannot be supplied by the domestic industry in
commercial quantities in a timely manner for the purposes of section
112(b)(5)(B)(i) of AGOA.
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The President has obtained advice regarding the proposed
action from the appropriate advisory committee established
under section 135 of the Trade Act of 1974 \48\ and the ITC;
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\48\ 19 U.S.C. 2155.
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(3) within 60 calendar days after the request, the
President has submitted a report to the Committee on
Ways and Means in the House of Representatives and the
Committee on Finance in the Senate that sets forth:
(A) the action proposed to be proclaimed and the
reasons for such action; and
(B) the advice obtained from the advisory committee
and the ITC;
(4) a period of 60 calendar days, beginning with the
first day on which the President has met the reporting
requirements has expires; and
(5) the President has consulted with such committees
regarding the proposed action during the 60 day period.
Section 112(c) of AGOA provides for the elimination of
quotas on textile and apparel exports to the United States from
Kenya and Mauritius within 30 days after the countries adopt
efficient visa systems to guard against unlawful transshipment
of textile and apparel goods and the use of counterfeit
documents related to the importation of such articles into the
United States.\49\ The U.S. Customs Service is required to
provide technical assistance to Kenya and Mauritius in the
development and implementation of the visa systems.
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\49\ Presidential Proclamation 7350 of October 2, 2000 (65 Fed.
Reg. 59321, October 4, 2000) delegated authority to perform the
functions specified in section 112(c) of AGOA to USTR.
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With regard to findings and trimmings, section 112(d)(1)(A)
and AGOA provides that an article eligible for preferential
treatment shall not be ineligible for such treatment because it
contains findings or trimmings of foreign origin, if the value
of such findings and trimmings does not exceed 25 percent of
the costs of the components of the assemble article. Examples
of findings and trimmings are sewing thread, hooks and eyes,
snaps, buttons, ``bow buds,'' decorative lace trim, elastic
strips, and zippers, including zipper tapes and labels. Elastic
strips are considered findings or trimmings only if they are
each less then one inch in width and used in the production of
brassieres. For apparel articles free of duty and quantitative
restrictions under AGOA by virtue of being cut and assembled in
one or more beneficiary sub-Saharan African countries from
fabrics wholly formed in the United States from yarn formed in
the United States and assembled with U.S. thread, sewing thread
is not included in the findings and trimmings exception.
On certain interlinings of foreign origin, section
112(d)(1)(B) provides that an apparel article otherwise
eligible for preferential treatment shall not be ineligible
because it contains such interlinings, if their value (and any
findings and trimmings) does not exceed 25 percent of the cost
of the components of the assembled article. Interlinings
eligible for such treatment are defined are defined as a chest
type plate, a ``hymo'' piece, or ``sleeve header,'' of woven or
weft-inserted warp knit construction and of coarse animal hair
or man-made filaments. This treatment must be terminated if the
President makes a determination that U.S. manufacturers are
producing such interlinings in the United States in commercial
quantities.\50\
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\50\ Executive Order 13191 of January 17, 2001 (66 Fed. Reg. 7271,
January 22, 2001) delegated authority to the CITA to determine whether
U.S. manufacturers are producing interlinings in the United States in
commercial quantities for the purposes of section 112(d)(1)(B)(iii) of
AGOA. The Executive Order further directs CITA to establish procedures
to ensure appropriate public participation in such determination and
requires that CITA's determinations under the provision be published in
the Federal Register.
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A de minims rule is also established in section 112(d)(2)
to provide that an article otherwise eligible for preferential
treatment shall not be ineligible for such treatment because
the article contains fibers or yarns not wholly formed in the
United States or one or more beneficiary sub-Saharan African
countries if the total weight of all such fibers and yarns is
not more than seven percent of the total weight of the article.
Protections against transshipment
Section 113(a) of AGOA provides that the preferential
treatment provided to textile and apparel articles in section
112(a) shall not be extended to imports from a beneficiary sub-
Saharan African country unless that country:\51\
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\51\ Presidential Proclamation 7350 of October 2, 2000 (65 Fed.
Reg. 59321, October 4, 2000) delegated authority to make the findings
identified in section 113(a) of AGOA to USTR.
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(1) has adopted an efficient visa system, domestic
laws, and enforcement procedures applicable to covered
articles to prevent unlawful transshipment and the use
of counterfeit documents related to the entry of the
articles into the United States;\52\
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\52\ Executive Order 13191 of January 17, 2001 (66 Fed. Reg. 7271,
January 22, 2001) delegated authority to USTR to direct the
Commissioner of the U.S. Customs Service to take such actions as may be
necessary to ensure that textile and apparel articles described in
section 112(b) of AGOA that are entered, or withdrawn from warehouse,
for consumption are accompanied by an appropriate export visa if the
preferential treatment described in section 112(a) of AGOA is claimed
with respect to such articles.
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(2) has enacted legislation or promulgated
regulations to permit U.S. Customs Service verification
teams to have the access necessary to investigate
thoroughly allegations of transshipment;
(3) agrees to report, on a timely basis, export and
import information requested by the U.S. Customs
Service;
(4) will cooperate fully with the U.S. Customs
Service to prevent circumvention and transshipment as
provided in Article 5 of the WTO Agreement on Textiles
and Clothing;\53\
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\53\ Article 5 of the WTO Agreement on Textiles and Clothing
provides that cooperation to prevent circumvention transshipment
includes: investigation of circumvention practices; exchange of
documents, correspondence, reports, and other relevant information to
the extent available; and facilitation of plant vists and contacts.
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(5) agrees to require all producers and exporters of
covered articles in that country to maintain complete
records of the production and the export of covered
articles, including materials used in the production,
for at least two years after the production or export;
and
(6) agrees to report on a timely basis, at the
request of the U.S. Customs Service, documentation
establishing the country of origin of covered articles
as used by that country in implementing an effective
visa system.
Section 113(A) defines country of origin documentation to
include documentation such as production records, information
relating to the place of production, the number and
identification of the types of machinery used to production,
the number of workers employed in production, and certification
from both the manufacturer and the exporter.
Section 113(b)(1) requires importers to comply with U.S.
Customs Service requirements similar in all material respects
to the requirements regarding Certificates of Origin contained
in Article 502.1 of the NAFTA for a similar importation from a
NAFTA partner.\54\ Furthermore, in order to qualify for
preferential treatment and for a Certificate of Origin to be
valid with respect to any article for which preferential
treatment is claimed, the President is required to determine
that each country has implemented and follows, or is making
substantial progress toward implementing and following,
procedures similar in all material respects to the relevant
procedures and requirements under chapter 5 of the NAFTA on
Customs Procedures.\55\ Section 113(b)(2) states that the
Certificate of Origin is not required if such Certificate of
Origin would not be required under Article 503 of the NAFTA (as
implemented into U.S. Law) if the article were imported from
Mexico.\56\ Under section 113(b)(3), if the President
determines, based on sufficient evidence, that an exporter has
engaged in transshipment, then the President is required to
deny for a period of five years all benefits under section 112
of AGOA to such exporter, any successor, and any other entity
owned or operated by the principal of the exporter.\57\
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\54\ Article 502.1 of the NAFTA requires an importer that claims
preferential tariff treatment for a good imported into its territory
from the territory of another Party to: (1) make a written declaration,
based on a valid Certificate of Origin, that the good qualifies as an
Originating good; (2) have the Certificate in its possession at the
time the declaration is made; (3) provide, on the request of that
Party's customs administration, a copy of the Certificate; and (4)
promptly make a corrected declaration and pay any duties owed where the
importer has reason to believe that a Certificate on which a
declaration was based contains information that is not correct.
\55\ Presidential Proclamation 7350 of October 2, 2000 (65 Fed.
Reg. 59321) delegated authority to perform the functions specified in
section 113(b)(1)(B) of AGOA to USTR.
\56\ Article 503 of the NAFTA provides an exemption from the
Certificate of Origin requirements for: (1) a commercial importation of
a good whose value does not exceed $1,000, or such higher amount that a
Party may establish, except that it may require that the invoice
accompanying the importation include a statement certifying that the
good qualifies as an originating good; (2) a non-commercial importation
of a good whose value does not exceed $1,000, or such higher amount
that a Party may establish; or (3) an importation of a good for which
the NAFTA partner into whose territory the good is imported has waived
the requirement for a Certificate of Origin. These exceptions are
permitted provided that the importation does not form part of a series
of importations that may reasonably be considered to have been
undertaken or arranged for the purpose of avoiding the Certificate of
Origin requirements.
\57\ Executive Order 13191 of January 17, 2001 (66 Fed. Reg. 7271,
January 22, 2001) delegated authority to CITA to determine, after
consultation with the Commissioner of the U.S. Customs Service, based
on sufficient evidence, whether an exporter has engaged in
transshipment and to deny for a period of five years all benefits under
section 112 of AGOA to any such exporter, any successor of such
exporter, and any other entity owned or operated by the principal of
such exporter. The Executive Order further requires CITA to publish its
determinations under this section in the Federal Register.
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Transshipment is defined to have occurred in section
113(b)(4) when preferential treatment for a textile or apparel
article has been claimed under AGOA on the basis of material
false information concerning the country of origin,
manufacture, processing, or assembly of the article or any of
its components. False information is material if disclosure of
the true information would mean or would have meant that the
article is or was ineligible for preferential treatment.
Section 113(b)(5) requires the U.S. Customs service to
monitor and the Commissioner of Customs to report to Congress
on an annual basis beginning no later than March 31, 2001 on
the effectiveness of the visa systems, the implementation of
legislation and regulations described by sub-Saharan African
countries, and the measures taken to deter circumvention as
described in Article 5 of the WTO Agreement on Textiles and
Clothing.
Section 113(c) requires the U.S. Customs Service to provide
technical assistance to beneficiary sub-Saharan African
countries in the development and implementation of effective
visa systems and domestic laws. In addition, the U.S. Customs
Service is required to provide assistance in training sub-
Saharan African officials in anti-transshipment enforcement and
to the extent feasible, in developing and adopting electronic
visa systems. The U.S. Customs Service is also required in
section 113(c) to send production verification teams to at
least four beneficiary sub-Saharan African countries each year.
Section 113(d) authorizes additional resources to the U.S.
Customs Service to provide technical assistance to sub-Saharan
African countries and to increase transshipment enforcement.
United States-Sub-Saharan Africa Trade and Economic Cooperation Forum
In order to foster close economic ties between the United
States and sub-Saharan Africa, section 105 of AGOA requires the
President to convene annual high-level meetings between
appropriate officials of the United States Government and
officials of the governments of sub-Saharan African countries.
Not later than 12 months after the date of enactment,\58\ the
President, after consulting with Congress and the governments
concerned, is required to establish a United States-Sub-Saharan
Africa Trade and Economic Cooperation Forum.
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\58\ Public Law 106-200, approved May 18, 2000.
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In creating the Forum, section 105(c)(1) requires the
President to direct the Secretary of Commerce, the Secretary of
the Treasury, the Secretary of State, and the USTR to host the
first annual meeting with their counterparts from the
governments of sub-Saharan African countries meeting the
eligibility criteria in section 104. The purpose of the meeting
is to discuss expanding trade and investment relations between
the United States and sub-Saharan Africa and the implementation
of AGOA, including encouraging joint ventures between small and
large businesses. The President is also required to direct the
Secretaries and the USTR to invite to the meeting
representatives from appropriate sub-Saharan African regional
organizations and government officials from the other
appropriate countries in sub-Saharan Africa.
Section 105(c)(2) requires the President, in consultation
with Congress, to encourage U.S. nongovernmental organization
(NGOs) to host annual meetings with NGOs from sub-Saharan
Africa in conjunction with the annual Forum meetings. Section
105(c)(3) requires the President, in consultation with
Congress, to encourage similar meetings between representatives
of the U.S. and sub-Saharan African private sector.
Under section 105(c)(3), the President is required to meet,
to the extent practicable, with the heads of governments of
sub-Saharan African countries eligible under section 104, and
those sub-Saharan African countries that the President
determines are taking substantial positive steps toward meeting
those eligibility requirements, not less than once every two
years for the purpose of discussing expanding trade and
investment relations between the United States and sub-Saharan
African and the implementation of AGOA, including encouraging
joint ventures between small and large businesses.
Free trade agreements with sub-Saharan African countries
Congress declares in Section 116 of AGOA that free trade
agreements should be negotiated, where feasible, with
interested countries in sub-Saharan Africa, in order to serve
as the catalyst for increasing trade between the United States
and sub-Saharan Africa and increasing private sector investment
in sub-Saharan Africa.
Section 116(b)(1) requires the President, taking into
account the provisions of the treaty establishing the African
Economic Community and the willingness of the governments of
sub-Saharan African countries to engaged in negotiations to
enter into free trade agreements, to prepare and transmit to
Congress not later than 12 months after the date of enactment
\59\ a plan for the purpose of negotiating and entering into
one or more trade agreements with interested beneficiary sub-
Saharan African countries.
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\59\ Public Law 106-200, approved May 18, 2000.
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Customs Valuation
Historical background
In order to assess applicable duty rates under the
Harmonized Tariff Schedule of the United States (HTS) and to
collect appropriate import statistics, the dutiable value of
all imported merchandise must be determined. The process by
which Customs determines the dutiable value of imported
merchandise is referred to as ``appraisement'' or
``valuation.''
Merchandise exported to the United States on or after July
1, 1980, is subject to appraisement under a uniform system of
valuation established by title II of the Trade Agreements Act
of 1979. Title II, which implements the Customs Valuation
Agreement (entitled the Agreement on Implementation of Article
VII of the General Agreement on Tariffs and Trade) negotiated
as one of the Tokyo Round of multilateral trade negotiations
(MTN) agreements, was put into effect by Presidential
Proclamation 4768 of June 28, 1980.\60\
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\60\ 45 Fed. Reg. 45135 (1980).
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Title II revised section 402 of the Tariff Act of 1930 \61\
and repealed the American Selling Price (ASP) method of
valuation. However, under section 204(c) of the Trade
Agreements Act of 1979, the ASP method of valuation continues
to apply to certain rubber footwear exported to the United
States before July 1, 1981. Title II also repealed the
alternative valuation system under section 402a of the Tariff
Act of 1930.\62\
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\61\ 19 U.S.C. 1401a.
\62\ 19 U.S.C. 1402.
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Prior to the Trade Agreements Act of 1979, separate
valuation standards--commonly referred to as the ``old law''
and the ``new law''--existed side by side. Section 402a of the
Tariff Act of 1930 was called the ``old law'' because it was
enacted as part of the Tariff Act of 1930. It provided for the
following order of progression in appraising merchandise: (1)
foreign value or export value, whichever is higher; (2) U.S.
value; (3) cost of production. It also provided for the
application of the ASP basis of appraisement for designated
articles such as benzenoid chemicals and certain footwear. The
ASP method was based on the value of a domestic product rather
than an imported product in order to protect the U.S. industry
from foreign competition.
During the early 1950's the Department of the Treasury
proposed eliminating the foreign value basis of appraisement,
which as its name implies is based on the value of merchandise
sold in foreign markets. The Department of the Treasury argued
that data for determining export value were more readily
available and the elimination of foreign value would streamline
the appraisement process by obviating the need to make
simultaneous appraisements under export value and foreign
value.
In response to these proposals, the Customs Simplification
Act of 1956 created a new group of valuation standards. These
standards were contained in section 402 of the Tariff Act of
1930 \63\ and referred to as the ``new law.'' The ``new law''
eliminated the foreign value standard and made export value the
primary basis for appraisement. With certain modifications,
both U.S. value and cost of production (renamed the constructed
value) were retained as the first and second alternative
standards. The meaning of each standard was modified, however,
by changes in the statutory language and by the inclusion in
the law of definitions for certain of the terms.
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\63\ 19 U.S.C. 1401a.
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However, Congress was unwilling to make these changes
applicable to all imported articles. Because the new provisions
were expected to have a duty-reducing effect for many articles,
the Secretary of the Treasury was instructed to prepare a list
of commodities which, if appraised under the new valuation
standards, would have been appraised at 95 percent or less of
the value at which they were actually appraised in the 12
months ending June 30, 1954 (i.e., dutiable value reduced by 5
percent or more). The articles so identified were published in
Treasury Decision 54521 (January 20, 1958), which is referred
to as ``the Final List'' and such articles continued to be
appraised under the ``old law'' standards of section 402a of
the Tariff Act. Thus, after the enactment of the Customs
Simplification Act of 1956,\64\ there were nine separate bases
of appraisement (five under the old law and four under the new)
applicable to imported products.
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\64\ Act of August 2, 1956, ch. 887.
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It was largely this complexity of U.S. valuation laws as
well as foreign objections to the American Selling Price basis
of appraisement which prompted our trading partners to enter
into negotiations at the Tokyo Round of MTN on the development
of a new system of customs valuation.
The GATT/WTO Customs Valuation Agreement
The Customs Valuation Agreement was signed by most major
U.S. trading partners at the conclusion of the Tokyo Round. The
WTO Agreement on Customs Valuation, which is essentially the
same document, is included in the Uruguay Round Agreements
applicable to all WTO members. Internationally-agreed rules
governing customs valuation will apply to the overwhelming
majority of trading countries. Newly joining developing
countries may delay implementation for up to 5 years.
The Agreement consists of four major parts in addition to a
preamble and three annexes. Part I sets out the substantive
rule of customs valuation, the substance of which was codified
in U.S. law by the Trade Agreements Act of 1979 as an amendment
to section 402 of the Tariff Act of 1930. Part II provides for
the international administration of the Agreement and for
dispute resolution among signatories. Part III provides for
special and differential treatment for developing countries,
and part IV contains so-called final provisions dealing with
matters such as acceptance and accession of the Agreement,
reservations, and servicing of the Agreement.
Administration and dispute resolution.--As mentioned above,
the Agreement establishes two committees--a ``Committee on
Customs Valuation'' (referred to as ``the Committee'') and a
``Technical Committee on Customs Valuation'' (referred to as
the ``Technical Committee'')--to administer the Agreement and
creates a mechanism for resolving disputes between parties to
the Agreement. The rules under the WTO Dispute Settlement
Understanding apply to disputes over the interpretation or
application of the Agreement.
The Committee, which is composed of representatives from
each of the parties, meets annually in Geneva ``to consult on
matters relating to the administration of the customs valuation
system by any party to Agreement as it might affect the
operation of this Agreement or the furtherance of its
objectives, and to carry out such other responsibilities as may
be assigned to it by the parties.'' The WTO secretariat acts as
the secretariat to the Committee, and the Office of the U.S.
Trade Representative is the U.S. representative to this
Committee.
The Technical Committee was created under the auspices of
the Customs Cooperation Council (CCC) to carry out the
responsibilities assigned to it by the parties and set forth in
annex II to the Agreement with a view towards achieving
uniformity in interpretation and application of the Agreement
at the technical level. Among the responsibilities assigned to
the Technical Committee are--
(1) to examine specific technical problems arising in
the administration of the customs valuation systems and
to give advisory opinions offering solutions to such
problems;
(2) to study, as requested, and prepare reports on
valuation laws, procedures and practices as they relate
to the Agreement; and
(3) to furnish such information and advice on customs
valuation matters as may be requested by parties to the
Agreement.
The Technical Committee meets periodically in Brussels, and
the U.S. Customs Service serves as the U.S. representative to
this technical committee.
Dispute resolution.--Several steps are provided for a party
to follow if it considers that any benefit accruing to it under
the Agreement is being nullified or impaired, or if any
objectives of the Agreement are being impeded by the actions of
another party.
First, the aggrieved party should request consultations
with the party in question with a view to reaching a mutually
satisfactory solution. If no mutually satisfactory solution is
reached between the parties within a reasonably short period of
time, the Committee shall meet at the request of either party
(within 30 days of receiving such request) and attempt to
facilitate a mutually satisfactory solution. If the dispute is
of a technical nature, the Technical Committee will be asked to
examine the matter and report to the Committee within 3 months.
In the absence of a mutually agreeable solution from the
Committee up to this point, the Committee shall, upon the
request of either party, establish a panel (within 3 months
from the date of the parties' request for the Committee to
investigate where the matter is not referred to the Technical
Committee, otherwise within 1 month from the date of the
Technical Committee's report) to examine the matter and make
such finding as will assist the Committee in making
recommendations or giving a ruling on the matter.
After the investigation is complete, the Committee shall
take appropriate action (in the form of recommendations or
rulings). If the Committee considers the circumstances to be
serious enough, it may authorize one or more parties to suspend
the application to any other party of obligations under the
valuation agreement.
Special and different treatment.--Part III of the Agreement
allows developing countries which are party to the Agreement--
(1) to delay application of its provisions for a
period of 5 years from the date the Agreement enters
into force;
(2) to delay application of articles 1, 2(b)(iii) and
6 (both of which provide for a determination of the
computed value of imported goods) for a period of 3
years; and
(3) to receive technical assistance (such as training
of personnel, assistance in preparing implementation
measures and advice on the application of the
Agreement's provisions) upon request, from developed
countries party to the Agreement.
Current Law \65\
Section 402 of the Tariff Act of 1930 \66\ as amended by
the Trade Agreements Act of 1979 establishes ``Transaction
Value'' as the primary basis for determining the value of
imported merchandise. Generally, transaction value is the price
actually paid or payable for the goods, with additions for
certain items not included in that price.
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\65\ Most of the description of current law was taken from
``Customs Valuation Under the Trade Agreements Act of 1979,''
Department of the Treasury, U.S. Customs Service, Office of Commercial
Operations, October 1981.
\66\ 19 U.S.C. 1401a.
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If the first valuation basis cannot be used, the secondary
bases are considered. These secondary bases, in the order of
precedence for use, are: transaction value of identical or
similar merchandise; deductive value; computed value. The order
of precedence of the last two bases can be reversed if the
importer so requests. Each of these bases is discussed in
detail below:
Transaction value of imported merchandise.--Several
concepts relating to the transaction value of imported
merchandise are also applicable to the transaction value of
identical or similar merchandise, as discussed in the next
section. These concepts, concerning the nature of transaction
value itself, are discussed in terms of the transaction value
of imported merchandise.
DEFINITIONS
The transaction value of imported merchandise (i.e., the
merchandise undergoing appraisement) is defined as the price
actually paid or payable for the merchandise when sold for
exportation to the United States, plus amounts equal to:
(1) the packing costs incurred by the buyer;
(2) any selling commission incurred by the buyers;
(3) the value of any assist; \67\
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\67\ An ``assist'' is any of the following items that the buyer of
imported merchandise provides directly or indirectly, and free of
charge or at reduced cost, for use in the production of or the sale for
export to the United States of the imported merchandise:
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Materials, components, parts, and similar items incorporated
in the imported merchandise;
Tools, dies, molds, and similar items used in producing the
imported merchandise;
Merchandise consumed in producing the imported merchandise;
Engineering, development, artwork, design work, and plans and
sketches that are undertaken outside the United States.
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The last item listed above (``Engineering, development . . .'')
will not be treated as an assist if the service or work is (1)
performed by a person domiciled within the United States, (2) performed
while that person is acting as an employee or agent of the buyer of the
imported merchandise, and (3) incident to other engineering,
development, artwork, design work, or plans or sketches undertaken
within the United States.
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(4) any royalty or license fee that the buyer is
required to pay as a condition of the sale; and
(5) the proceeds, accruing to the seller, of any
subsequent resale, disposal, or use of the imported
merchandise.
These amounts (1 through 5) are added only to the extent
that each is not included in the price, and is based on
information establishing the accuracy of the amount. If
sufficient information is not available, then the transaction
value cannot be determined; and the next basis of value, in
order of precedence, must be considered for appraisement.
The price actually paid (or payable) for the imported
merchandise is the total payment, excluding international
freight, insurance, and other C.I.F. charges, that the buyer
makes to the seller.
Amounts to be disregarded in determining transaction value
are:
(1) The cost, charges, or expenses incurred for
transportation, insurance, and related services
incident to the international shipment of the goods
from the country of exportation to the place of
importation in the United States.
(2) Any decrease in the price actually paid or
payable that is made or effected between the buyer and
seller after the date of importation of the goods into
the United States.
As well as, if identified separately:
(3) Any reasonable cost or charge incurred for
constructing, erecting, assembling, maintaining, or
providing technical assistance with respect to the
goods importation into the United States; or
transporting the goods after importation.
(4) The customs duties and other federal taxes,
including any federal excise tax for which sellers in
the United States are ordinarily liable.
LIMITATIONS ON THE APPLICABILITY OF TRANSACTION VALUE
The transaction value of imported merchandise is the
appraised value of that merchandise, provided certain
limitations do not exist. If any of these limitations are
present, then transaction value cannot be used as the appraised
value, and the next basis of value will be considered. The
limitations can be divided into four groups:
(1) Restrictions on the disposition or use of
merchandise.--The first category of limitations which preclude
the use of transaction value is the imposition of restrictions
by a seller on a buyer's disposition or use of the imported
merchandise. Exceptions are made to this rule. Thus, certain
restrictions are acceptable, and their presence will still
allow the use of transaction value. The acceptable restrictions
are: (a) those imposed or required by law, (b) those limiting
the geographical area in which the goods may be resold, and (c)
those not substantially affecting the value of the goods. An
example of the last restriction occurs when a seller stipulates
that a buyer of new-model cars cannot sell or exhibit the cars
until the start of the new sales year.
(2) Conditions for which a value cannot be determined.--If
the sale of, or the price actually paid or payable for, the
imported merchandise is subject to any condition or
consideration for which a value cannot be determined, then
transaction value cannot be used. Some examples of this group
include when the price of the imported merchandise depends on
(a) the buyer's also buying from the seller other merchandise
in specified quantities, (b) the price at which the buyer sells
other goods to the seller, or (c) a form of payment extraneous
to the imported merchandise, such as, the seller's receiving a
specified quantity of the finished product that results after
the buyer further processes the imported goods.
(3) Proceeds accruing to the seller.--If part of the
proceeds of any subsequent resale, disposal, or use of the
imported merchandise by the buyer accrues directly or
indirectly to the seller, then transaction value cannot be
used. There is an exception. If an appropriate adjustment can
be made for the partial proceeds the seller receives, then
transaction value can still be considered. Whether an
adjustment is made depends on whether the price actually paid
or payable includes such proceeds and, if it does not, the
availability of sufficient information to determine the amount
of such proceeds.
(4) Related-party transactions where the transaction value
is unacceptable.--Finally, the relationship between the buyer
and seller may preclude the application of transaction value.
The fact that the buyer and seller are related \68\ does not
automatically negate using their transaction value; however,
the transaction value must be acceptable under prescribed
procedures. To be acceptable for transaction value,
relationship between the buyer and seller must not have
influenced the price actually paid or payable. Alternatively,
the transaction value may be acceptable if the imported
merchandise closely approximates any one of the following test
values, provided these values relate to merchandise exported to
the United States at or about the same time as the imported
merchandise:
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\68\ For appraisement purposes, any of the following persons are
considered related--
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Members of the same family, including brothers and sisters
(whether by whole or half blood), spouse, ancestors, and lineal
descendants;
Any officer or director of an organization and such
organization;
An officer or director of an organization and an officer or
director of another organization, if each such individual is
also an officer or director in the other organization;
Partners;
Employer and employee;
Any person directly or indirectly owning, controlling, or
holding with power to vote, 5 percent or more of the
outstanding voting stock or shares of any organization and such
organization;
Two or more persons directly or indirectly controlling,
controlled by, or under common control with, any person.
(A) The transaction value of identical merchandise,
or of similar merchandise, in sales to unrelated buyers
in the United States,
(B) The deductive value or computed value for
identical merchandise or similar merchandise, or
(C) The transaction value of imported merchandise in
sales to unrelated buyers of merchandise, for
exportation to the United States, that is identical to
the imported merchandise under apprisement, except for
having been produced in a different country. No two
sales to unrelated buyers can be used for comparison
unless the sellers are unrelated.
The test values are used for comparison only. They do not
form a substitute basis of valuation.
In determining whether the transaction value is close to
one of the foregoing test values (A, B, or C), an adjustment is
made if the sales involved differ in commercial levels,
quantity levels; the costs, commissions, values, fees, and
proceeds described in (1) through (5) of the ``definition'' of
value; and the costs incurred by the seller in sales in which
he and the buyer are not related that are not incurred by the
seller in sales in which he and the buyer are related.
As stated, the test values are alternatives to the
relationship criterion. If one of the test values is met, it is
not necessary to examine the question of whether the
relationship influenced the price.
Transaction value of identical merchandise or similar
merchandise.--If the transaction value of imported merchandise
cannot be determined, then the customs value of the imported
goods being appraised is the transaction value of identical
merchandise. If merchandise identical to the imported goods
cannot be found or an acceptable transaction value for such
merchandise does not exist, then the customs value is the
transaction value of similar merchandise.
The same additions, exclusions, and limitations, previously
discussed in determining the transaction value of imported
merchandise, also apply in determining the transaction value of
identical or similar merchandise.
Besides the data common to all three transaction values,
certain factors specifically apply to the transaction value of
identical merchandise or similar merchandise. These factors
concern the exportation date, the level and quantity of sales,
the meaning, and the order of precedence of identical
merchandise and of similar merchandise.
(a) Exportation date.--The identical merchandise, or
similar merchandise, for which a transaction value is being
determined must have been sold for export to the United States
and exported at or about the same time as the merchandise being
appraised.
(b) Sales level/quantity.--The transaction value of
identical merchandise (or similar merchandise) must be based on
sales of identical merchandise (or similar merchandise) at the
same commercial level and, in substantially the same quantity,
as the sales of the merchandise being appraised. If no such
sale exists, then sales at either a different commercial level
or in different quantities, or both, can be used, but must be
adjusted to take account of any such difference. Any adjustment
must be based on sufficient information, that is, information
establishing the reasonableness and accuracy of the adjustment.
(c) Definition.--(1) The term ``identical merchandise''
means merchandise that is: identical in all respects to the
merchandise being appraised; produced in the same country as
the merchandise being appraised; and produced by the same
person as the merchandise being appraised.
If merchandise meeting all three criteria cannot be found,
then identical merchandise is merchandise satisfying the first
two criteria but produced by a different person than the
merchandise being appraised. Merchandise can be identical to
the merchandise being appraised and still show minor
differences in appearance. However, identical merchandise does
not include merchandise that incorporates or reflects
engineering, development, artwork, design work, and plans and
sketches provided free or at reduced cost by the buyer and
undertaken in the United States.
(2) The term ``similar merchandise'' means merchandise that
is produced in the same country and by the same person as the
merchandise being appraised; like the merchandise being
appraised in characteristics and component materials; and
commercially interchangeable with the merchandise being
appraised.
If merchandise meeting the foregoing criteria cannot be
found, then similar merchandise is merchandise having the same
country of production, like characteristics and component
materials, and commercial interchangeability but produced by a
different person.
In determining whether goods are similar, some of the
factors to be considered are the quality of the goods, their
reputation, and the existence of a trademark. It is noted,
however, that similar merchandise does not include merchandise
that incorporates or reflects engineering, development,
artwork, design work, and plans and sketches provided free or
at reduced cost by the buyer and undertaken in the United
States.
(d) Order of precedence.--Sometimes more than one
transaction value will be present, that is, for identical
merchandise produced by the same person, for identical
merchandise produced by another person, for similar merchandise
produced by the same person, and for similar merchandise
produced by another person. If this occurs, one value must take
precedence.
As stated previously, accepted sales at the same level and
quantity take precedence over sales at different levels and/or
quantities. The order of precedence can be summarized as:
(1) Identical merchandise produced by the same
person;
(2) Identical merchandise produced by another person;
(3) Similar merchandise produced by the same person;
and
(4) Similar merchandise produced by another person.
It is possible that two or more transaction values for
identical merchandise (or similar merchandise) will be
determined. In such a case, the lowest value will be used as
the appraised value of the imported merchandise.
Deductive value.--If the transaction value of imported
merchandise, of identical merchandise, or of similar
merchandise cannot be determined, then deductive value is
calculated for the merchandise being appraised. Deductive value
is the next basis of appraisement to be used, unless the
importer designated, at entry summary, computed value as the
preferred method of appraisement. If computed value was chosen
and subsequently determined not to exist for customs valuation
purposes, then the basis of appraisement reverts back to
deductive value.
If an assist is involved in a sale, that sale cannot be
used in determining deductive value. So any sale to a person
who supplies an assist for use in connection with the
production or sale for export of the merchandise concerned is
disregarded for deductive value.
Basically deductive value is the resale price in the United
States after importation of the goods, with deductions for
certain items. Generally, the deductive value is calculated by
starting with a unit price and making certain additions to and
deductions from that price.
One of three prices constitutes the unit price in deductive
value. The price used depends on when and in what condition the
merchandise concerned is sold in the United States. If the
merchandise is sold in the condition as imported at or about
the date of importation of the merchandise being appraised, the
price used is the unit price at which the greatest aggregate
quantity of the merchandise concerned is sold at or about such
date.
If the merchandise concerned is sold in the condition as
imported but not sold at or about the date of importation of
the merchandise being appraised, the price used is the unit
price at which the greatest aggregate quantity of the
merchandise concerned is sold after the date of importation of
the merchandise being appraised but before the close of the
90th day after the date of such importation.
Finally, if the merchandise concerned is not sold in the
condition as imported and not sold before the close of the 90th
day after the date of importation of the merchandise being
appraised. The price used is the unit price at which the
greatest aggregate quantity of the merchandise being appraised,
after further processing, is sold before the 180th day after
the date of such importation.
After determining the appropriate price, packing costs for
the merchandise concerned must be added to the price used for
deductive value, provided such costs have not otherwise been
included. These costs are added, regardless of whether the
importer or the buyer incurs the cost. Packing costs include
the cost of all containers and coverings of whatever nature;
and of packing, whether for labor or materials, used in placing
the merchandise in condition, packed ready for shipment to the
United States.
Certain other items are not a part of deductive value and
must be deducted from the unit price. The items are:
(1) Commissions or profit and general expenses.--Any
commission usually paid or agreed to be paid, or the
addition usually made for profit and general expenses,
applicable to sales in the United States of imported
merchandise that is of the same class or kind as the
merchandise concerned; and regardless of the country of
exportation.
(2) Transportation/insurance costs.--The usual and
associated costs of transporting and insuring the
merchandise concerned from the country of exportation
to the place of importation in the United States; and
from the place of importation to the place of delivery
in the United States, provided these costs are not
included as a general expense under the preceding
paragraph.
(3) Customs duties/federal taxes.--The customs duties
and other federal taxes payable on the merchandise
concerned because of its importation, plus any federal
excise tax on, or measured by the value of, such
merchandise for which sellers in the United States are
ordinarily liable; and
(4) Value of further processing.--The value added by
the processing of the merchandise after importation,
provided sufficient information exists concerning the
cost of processing. The price determined for deductive
value is reduced by the value of further processing,
only if the third unit price is used as deductive value
(i.e., the merchandise concerned is not sold in the
condition as imported and not sold before the close of
the 90th day after the date of importation, but is sold
before the 180th day after the date of importation).
Computed value.--The last basis of appraisement is computed
value. If customs valuation cannot be based on any of the
values previously discussed, then computed value is considered.
This value is also the one the importer can select at entry
summary to precede deductive value as a basis of appraisement.
Computed value consists of the sum of the following items:
(1) materials, fabrication, and other processing used
in producing the imported merchandise;
(2) profit and general expenses;
(3) any assist, if not included in (a) and (b); and
(4) packing costs.
The cost or value of the materials, fabrication, and other
processing of any kind used in producing the imported
merchandise is based on information provided by or on behalf of
the producer and on the commercial accounts of the producer, if
the accounts are consistent with generally accepted accounting
principles applied in the country of production of the goods.
The producer's profit and general expenses are used,
provided they are consistent with the usual profit and general
expenses reflected by producers in the country of exportation
in sales of merchandise of the same class or kind as the
imported merchandise.
If the value of an assist used in producing the merchandise
is not included as part of the producer's materials,
fabrication, other processing or general expenses, then the
prorated value of the assist will be included in computed
value. The value of any engineering, development, artwork,
design work, and plans and sketches undertaken in the United
States is included in computed value only to the extent that
such value has been charged to the producer.
Finally, the cost of all containers and coverings of
whatever nature and of packing, whether for labor or material,
used in placing merchandise in condition, packed ready for
shipment to the United States is included in computed value.
As can be seen, computed value relies to a certain extent
on information that has to be obtained outside the United
States, that is, from the producer of the merchandise. If a
foreign producer refuses to or is legally constrained from
providing the computed value information, or if the importer
cannot provide such information within a reasonable period of
time, then computed value cannot be determined.
Other.--If none of the previous five values can be used to
appraise the imported merchandise, then the customs value must
be based on a value derived from one of the five previous
methods, reasonably adjusted as necessary. The value so
determined should be based, to the greatest extent possible, on
previously determined values. Only data available in the United
States will be used.
Customs User Fees
Background
Prior to the 99th Congress, the U.S. Customs Service did
not have the legal authority to collect fees for processing
commercial merchandise, conveyances, and passengers entering
the United States. Only limited authority existed to charge
fees for services which were of special benefit to a particular
individual such as preclearance of passengers and private
aircraft. Special fees were also authorized on operators of
bonded warehouses, foreign trade zones, and the entry of
vessels into ports. Also, Customs was authorized to receive
reimbursement from carriers for overtime for services provided
during non-business hours and from local authorities for
services provided to certain small airports.
Section 13031 of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA) \69\ established a schedule
of flat-rate fees for processing conveyances and passengers
entering the United States. The Act imposed fees for Customs'
costs on a per arrival basis on commercial vessels, trucks,
railroad cars, private aircraft and boats, and passengers
arriving on commercial vessels or aircraft from countries other
than Mexico, Canada, U.S. insular possessions, and other
adjacent islands. The statute also imposed fees on the
processing of dutiable mail entries prepared by a customs
officer, and the issuance of customs broker permits.
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\69\ Public Law 99-272, approved April 7, 1986.
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Modifications to these fees, in the Tax Reform Act of
1986,\70\ included the placement of an annual cap on the
arrival of commercial vessels, the establishment of a lower
vessel fee for certain barges and bulk carriers, and an
increase in the fee for rail cars carrying passengers or
freight from $5 to $7.50, coupled with the elimination of the
fee on empty railroad cars.
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\70\ Public Law 99-514, approved October 22, 1986.
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The Omnibus Budget Reconciliation Act of 1986 (OBRA) \71\
expanded customs user fee authority to cover Customs' costs of
processing commercial merchandise entries--the so-called
Merchandise Processing Fee (MPF). The Act imposed an ad valorem
fee based on the customs value of all formal entries of
merchandise imported for consumption, including warehouse
withdrawals for consumption.
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\71\ Public Law 99-509, approved October 21, 1986.
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As amended by the Omnibus Budget Reconciliation Act of 1987
\72\ and the Technical and Miscellaneous Revenue Act of
1988,\73\ the U.S. portion of the value of articles
classifiable under items 9802.00.60 and 9802.00.80 of the
Harmonized Tariff Schedule of the United States (HTS) or to
products of the least developed developing countries (LDDC's),
products of eligible countries under the Caribbean Basin
Initiative (CBI), and products of U.S. insular possessions were
exempted from the MPF. Further, pursuant to section 203 of the
United States-Canada Free-Trade Agreement Implementation Act of
1988,\74\ the merchandise user fees were set to be phased out
with respect to articles of Canadian origin in accordance with
article 403 of the bilateral agreement.
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\72\ Public Law 100-203, section 9501, December 22, 1987.
\73\ Public Law 100-647, section 9001, November 10, 1988.
\74\ Public Law 100-449, approved September 28, 1988.
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Receipts from user fees are deposited in a dedicated
``Customs User Fee Account'' within the general fund of the
Treasury, with one subaccount of the receipts from the
merchandise processing fee and a second subaccount of the
receipts from the conveyance and passenger fees. Subject to
authorization and appropriations, all funds in the Account are
available to pay costs incurred by the Customs Service in
conducting commercial operations and are treated as receipts
offsetting expenditures of salaries and expenses for these
purposes, except for that portion of the fees required for the
direct reimbursement of appropriations for costs incurred by
the Customs Service in providing inspectional overtime and
preclearance services. Inspectional overtime and preclearance
services are reimbursed subject to a permanent indefinite
appropriation, and are not subject to OMB apportionment.
For fiscal year 1990, the merchandise processing fee was
set at 0.17 percent ad valorem. The legislative authority to
impose customs user fees was set to expire on September 30,
1990.
In February 1988 the General Agreement on Tariffs and Trade
(GATT) Council adopted a panel finding that the ad valorem
structure of the merchandise processing fee is inconsistent
with U.S. GATT obligations to the extent the fee exceeds the
approximate cost of customs processing for the individual
entry, and includes costs for Customs Service activities that
are not services to the particular importer (e.g., costs of
processing imports exempt from the fee).
Revised fee structure
The Customs and Trade Act of 1990,\75\ as amended by the
Omnibus Budget Reconciliation Act of 1990,\76\ completely
revised and reauthorized customs user fees through fiscal year
1995. The new fee structure was intended to bring the United
States into conformity with U.S. obligations under the GATT.
The conference report
(H. Rept. 101-650) sets forth the underlying rationale and
congressional intent behind the user fee revision:
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\75\ Public Law 101-382, title I, subtitle C, approved August 20,
1990.
\76\ Public Law 101-508, section 10001, approved November 5, 1990.
The new fee schedule is structured to respond to this
ruling and to bring the United States into conformity
with its GATT obligations. As required by the relevant
provisions of articles II and VIII of the GATT, the new
fee schedule limits the fees charged to the approximate
cost of the services rendered. It also limits the fee
to customs operations related to merchandise processing
and to the processing of imports covered by the fee.
Fee revenues also are established so as to approximate
the cost of the commercial customs services. As a
result, the new fee schedule represents the type of fee
permitted under GATT article VIII. It does not
represent an indirect protection to domestic products
nor does it represent a taxation of imports for
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domestic purposes.
The MPF for the first time differentiated between entries
or releases of merchandise that are entered formally and those
that are entered informally. Section 111 of the Customs and
Trade Act of 1990 authorized a capped ad valorem fee for each
formal entry and a three-tiered flat rate fee for each entry of
merchandise entered informally. The amount of the user fee
would depend upon whether the fee is filed manually or
electronically. A special reimbursement rule for air courier
facilities and other reimbursable facilities was also
established.
For formal entries, a fee of 0.17 percent ad valorem was
applied, subject to a maximum of $400 and a minimum of $21,
except that an additional $3 was assessed on each entry if
filed manually.
For informal entries (under $1,250), the following flat
rate fee schedule was applied:
$2--for automated, non-customs-prepared informal
entries;
$5--for manual, non-customs-prepared informal
entries;
$8--for customs-prepared informal entries.
In lieu of the above, air courier facilities and other
reimbursable facilities were subject to a reimbursement for
Customs' processing costs to be collected at a rate of twice
the assessment currently applied at courier hubs. Also, the
industry's current 80 percent offset was eliminated.
The Commissioner of Customs was authorized to use any
surplus from the schedule of flat-rate fees (the ``COBRA
fees'') to hire full- and part-time personnel, buy equipment,
or satisfy other direct expenses necessary to provide services
directly to the payers of the fee, subject to OMB apportionment
authority. A $30 million reserve of the surplus was required to
maintain staffing levels equal to those existing in the prior
year in the event customs collections were reduced. Other
provisions included new user fee enforcement authority,
treatment of railroad cars, and agriculture products processed
and packed in foreign trade zones.
The 1990 Budget Reconciliation Act extended customs user
fee authority through September 30, 1995. In addition, the
Secretary of the Treasury was provided new authority to adjust
the 0.17 percent ad valorem merchandise processing fee due to
changes in trade flows and other conditions, subject to a
maximum adjustment of 0.02 percent, plus or minus. The
provision also specified publication, consultation, and
legislative layover periods before an adjustment can be
effective.
The 1990 Budget Reconciliation Act also permitted small
user fee airports processing fewer than 25,000 informal entries
annually to collect the entry-by-entry fee, rather than paying
the new double reimbursement fee.
The 1993 Omnibus Budget Reconciliation Act extended customs
user fee authority until September 30, 1998. Section 13813 of
the Act also changed provisions of the COBRA fee statute as
part of a major reform of the customs inspector pay system (the
Customs Overtime Pay Reform Act) to authorize the use of COBRA
funds for a portion of customs officer premium pay and for
customs retirement-fund contributions related to customs
officer overtime pay. In addition, the COBRA account was made
subject to OMB budget apportionment authority.
The North American Free Trade Agreement Implementation Act
implemented U.S. obligations under the NAFTA to eliminate the
Merchandise Processing Fee immediately for Canadian goods
(consistent with U.S. obligations under the U.S.-Canada FTA),
and by June 30, 1999 for imports of Mexican goods. The fee may
not be increased with respect to Mexican goods after December
31, 1993.
The NAFTA Implementation Act provided for a temporary
increase in the $5 COBRA passenger fee to $6.50 through
September 30, 1997, when it would revert to $5. It also lifted
the current fee exemptions for passengers arriving from Mexico,
Canada, and the Caribbean for the same time period. These
additional fee receipts were dedicated, subject to
appropriation, to cover Customs' inspectional costs not covered
by existing customs user fees. The Act also extended all
customs user fees through September 30, 2003.
The Uruguay Round Agreements Act provided for an increase
in the Merchandise Processing Fee rate for formal entries to
0.21 percent ad valorem, and increased the maximum and minimum
fee amounts for formal entries from $400 to $485 and from $21
to $25, respectively. It also increased the rates from $5 to $6
for informal electronic entries and $8 to $9 for informal paper
entries. The revised fee was designed to cover a revenue
shortfall below Customs' commercial costs, as well as increases
in Customs' operating expenses. The Uruguay Round Agreements
Act also corrected a technical error in the Customs Overtime
Pay Reform Act (COPRA) to provide for reimbursement of customs
inspector premium pay to the extent it was greater than Federal
Employee Pay Act (FEPA) premium pay authorized to be paid to
customs inspectors prior to enactment of COPRA.
The Miscellaneous Trade and Technical Corrections Act of
1996 (Public Law 104-295) made three amendments with regard to
customs user fees and merchandise processing fees. First, the
Act amended section 13031(b) of the COBRA to clarify that the
ad valorem MPF in foreign trade zones is to be assessed only on
the foreign value of merchandise entered from a foreign trade
zone. In addition, the amendment clarified that the application
of the MPF to processed agricultural products will apply to all
entries from foreign trade zones after November 30, 1986, for
which liquidation has not been finalized. The provision was
necessary to clarify that the MPF applicable solely to foreign
merchandise entered from a foreign trade zone, exempting
domestic value, for agricultural products, also would apply to
non-agricultural products.
Second, the Act amended section 13031(b) of the COBRA with
regard to limitations on the collection of customs passenger
processing fees. As indicated above, the NAFTA Implementation
Act increased the COBRA passenger processing fee from $5 to
$6.50 and temporarily lifted the exemption on passengers
arriving from Canada, Mexico, and the Caribbean during the
period from January 1, 1994 through September 30, 1997. The
statute was also modified to apply the fee to so-called
``cruises to nowhere,'' that is, cruises which leave U.S.
customs territory and return, without calling on any port
outside the United States. The amendment clarified that Customs
should collect fees only one time in the course of a single
continuous voyage for a passenger aboard a commercial vessel
that calls on more than one U.S. port.
Third, the Act amended section 13031(b) of the COBRA to
clarify that Customs may provide reimbursable services to air
couriers operating in express consignment carrier facilities
and in centralized hub facilities during daytime hours. The
amendment also clarified that Customs may be reimbursed for all
services related to the determination to release cargo, and not
just ``inspectional'' services. These services are now
reimbursable whether they are performed on site or not.
Current law
Customs' authority to collect user fees under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (19
U.S.C. 58c) for passengers arriving into the United States
aboard a commercial vessel or aircraft from Canada, Mexico, a
U.S. territory or possession or the Caribbean expired on
September 30, 1997. As a result, Customs considered that its
authority to use the COBRA user fee account for preclearance
services for such passengers had also expired. Customs
continued to fund those positions out of its regular budget in
order to keep those services. However, due to budgetary
constraints, Customs was unable to fund all of the positions,
resulting in decreased preclearance services.
To address this issue, the Miscellaneous Trade and
Technical Corrections Act of 1999 (Public Law 106-36) (the Act)
made two amendments to Customs user fees under 13031 of the
Consolidated Omnibus Budget Reconciliation Act of 1985 (19
U.S.C. 58c). First, the Act amended section 58c(f)(3)(A)(iii)
to permit Customs access to the COBRA user fee account to pay
for the salaries for up to 50 full-time equivalent inspectional
positions to provide preclearance services. These services
would be provided only to the extent that funds remain
available after reimbursements for salaries for full-time and
part-time inspectional personnel and equipment that enhance
Customs' services for those persons or entities required to pay
fees under this section.
Second, the Act amended section 58c(a) by establishing (i)
a $5 fee for passengers arriving in the United States aboard a
commercial vessel or aircraft other than from Canada, Mexico,
U.S. territory or possession, or the Caribbean, and (ii) a
$1.75 fee for passengers arriving aboard a commercial vessel
from Canada, Mexico, U.S. territory or possession, or the
Caribbean.
The Act also amended section 58c(f) to authorize Customs
access to $50 million of the merchandise processing fees for
the Customs Automated Commercial System for FY 1999. In
addition, the Act mandated the Commissioner of Customs to
establish an advisory committee consisting of representatives
from the airline, cruise ships, and other transportation
industries subject to these fees. Under this provision, the
representatives would meet periodically and advise the
Commissioner on issues relating to these services and fees.
Finally, the Act authorized the Secretary of the Treasury
to implement a National Customs Reconciliation Test program
relating to an alternative mid-point interest accounting
methodology that may be used by an importer. The test period
was not to exceed October 1, 2000. Section 1451 of the Tariff
Suspension and Trade Act of 2000 (Public Law 106-476) made this
authorization permanent.
The Tariff Suspension and Trade Act of 2000 also amended
section 13031(b)(1)(A)(iii) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (19 U.S.C. 58c(b)(1)(A)(iii)) to
allow Customs to collect user fees from passengers arriving
aboard a ferry operating south of 27 degrees latitude and east
of 89 degrees longitude, whose operations began on or after
August 1, 1999. Prior to enactment of this legislation, because
of the limitations on user fees under the COBRA, Customs was
prevented from collecting user fees from such ferries, and as a
result, did not issue landing rights to such ferries.
Other Customs Laws
Country-of-Origin Marking
Section 304 of the Tariff Act of 1930, as amended,\77\
provides that, with certain exceptions, every imported article
of foreign origin (or its container in specified circumstances)
``shall be marked in a conspicuous place as legibly, indelibly,
and permanently as the nature of the article (or container)
will permit in such manner as to indicate to an ultimate
purchaser in the United States the English name of the country
of origin of the article.'' The purpose of this provision is to
provide information so that the ``ultimate purchaser'' in the
United States can choose between domestic and foreign-made
products, or between the products of different foreign
countries.
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\77\ 19 U.S.C. 1304.
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When imported articles ordinarily reach their ultimate
purchasers in packaged form, the containers or holders must, as
a general rule, be marked with the country of origin of their
contents, whether or not the article themselves are required to
be marked.
Exceptions.--The statute gives the Secretary of the
Treasury the authority to allow exceptions to the marking
requirement under prescribed circumstances. For example,
certain classes of merchandise are excepted from the country-
of-origin marking requirements because they are not physically
susceptible to marking or can only be marked at the cost of
injury to the article.
Marking requirements may also be waived as to articles
which arrive at the U.S. border unmarked, provided: the expense
of marking under Customs supervision would be economically
prohibitive; and the Customs Service is satisfied that the
importer or shipper did not fail to mark the merchandise before
shipment to the United States for the purpose of invoking this
exception and thereby avoiding the marking requirements.
Another exception to the marking requirement may be granted
for articles for which the ultimate purchaser necessarily knows
the country of origin. An exception is also provided for
articles to be processed by the importer for resale if the
processing would necessarily obliterate or conceal any marking.
If the processing undertaken by the importer is sufficient to
convert the imported article into a new and different article
of trade, any subsequent purchaser is not an ``ultimate
purchaser'' of the imported article.
Other classes of excepted merchandise include products of
American fisheries, products of U.S. possessions, products of
U.S. origin which have been exported and returned, and articles
entered for immediate transshipment and exportation from the
United States. In addition, articles qualifying for duty-free
treatment as being $1 or less in value, or as bona fide gifts
less than $10 in value each, are relieved of the marking
requirements, as are articles produced more than 20 years prior
to importation.
Finally, under section 1304(a)(3)(J), classes of articles
named in certain notices published by the Secretary of the
Treasury in the late 1930's are not subject to the marking
requirements. The articles named in such notices were those
which had been imported in substantial quantities during the 5-
year period ending December 31, 1936, and which had not been
required to bear country-of-origin markings during that period.
Such excepted articles are now found in the so-called ``J-
List.'' \78\
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\78\ 19 CFR 134.33.
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The Miscellaneous Trade and Technical Corrections Act of
1996 (Public Law 104-295) amended section 304 to exempt from
the country-of-origin marking requirements certain imported
coffees, teas, and spices. These items are specifically
identified by their respective Harmonized Tariff Schedule
numbers.
Section 334 of the Uruguay Round Agreements Act (URAA)
(Public Law 103-165) established the country of origin for
certain fabrics, silk handkerchiefs and scarves as the country
where the fabrics are made, even if they undergo dyeing,
printing, cutting, sewing, and other finishing operations in
another country (``the Breaux-Cardin rule''). Prior to Breaux-
Cardin, the rules or origin permitted the processes of dyeing
and printing to confer origin when accompanied by two or more
finishing operations for certain products. As a result of
Breaux-Cardin, silk scarves dyed, finished, or printed in Italy
(or other countries) from imported silk fabric that could
formerly be marked ``Made in Italy'' were now required to be
marked with the country of the silk fabric as the country of
origin.
The European Union brought a World Trade Organization
dispute against the United States relating to the Breaux-Cardin
rule. As part of the U.S. settlement of this dispute, Congress
added a new subsection (h) to section 304 of the Tariff Act of
1930 in the Miscellaneous Trade and Technical Corrections Act
of 1999 (Public Law 106-36). This provision exempted silk
fabric and scarves from the country of origin marking
requirement so that these articles were no longer required to
be marked as having the origin of the country where the fabric
was produced. This provision did not change the rules for
determining the country of origin. Thus, under the Act, a silk
scarf dyed and printed in Italy from silk fabric imported from
China could not be marked ``Made in Italy'' thus indicating
origin, but could be marked ``Designed in Italy,'' ``Dyed and
Printed in Italy,'' ``Crafted in Italy,'' or other similar
marking.
In August 1999, the United States and the EU settled the
dispute, and the United States agreed to amend the rule of
origin requirements under section 334 of the URAA. As a result,
Congress included in the Trade and Development Act of 2000
(Public Law 106-200) legislation which reinstated the rules of
origin that existed prior to the URAA for certain products.
Specifically, the legislation allows dyeing, printing, and two
or more finishing operations to confer origin on certain
fabrics and goods. In particular, the dyeing and printing rule
applies to fabrics classified under the Harmonized Tariff
Schedule (HTS) as silk, cotton, man-made, and vegetable fibers.
The rule also applies to the various products classified in 18
specific subheading of the HTS listed in the bill, except for
goods made from cotton, wool, or fiber blends containing 16
percent or more of cotton.
Marking of certain pipe and fittings.--An amendment to
section 304 of the Tariff Act of 1930 contained in section 207
of the Trade and Tariff Act of 1984 provided that no exceptions
may be made to the country-of-origin marking requirement for
imported pipe, pipe fittings, compressed gas cylinders, manhole
rings or frames, covers and assemblies thereof, and specifies
the type of marking which is acceptable for those products.
Marking of containers of imported mushrooms.--Section
1907(b) of the Omnibus Trade and Competitiveness Act of 1988
(OTCA) specifies that markings on imported preserved mushrooms
must indicate in English the countries in which the mushrooms
were grown.
Marking of Native-American style jewelry and arts and
crafts.--Section 1907(c) of the OTCA provided that the
Secretary of the Treasury prescribe and implement regulations
which require that all imported Native-American style jewelry
and Native-American style arts and crafts have the English name
of the country of origin indelibly and permanently marked in a
conspicuous place on such products.
Penalty for failure to mark.--Imported goods that are not
properly marked are liable for a 10 percent ad valorem duty in
addition to any other duty that might be applicable. The
payment of the 10 percent marking duty does not discharge the
importer's obligation to comply.\79\
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\79\ Globemaster, Inc. v. United States, 68 Cust. Ct. C.D. 4340,
340 F. Supp. 974 (1972).
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Imported articles or their containers that are found to be
improperly marked are generally retained in Customs custody
until such time as the importer, after notification, arranges
for their exportation, destruction, or proper marking under
Customs supervision, or until they are deemed abandoned to the
government. If such unmarked articles are part of a shipment
the balance of which has previously been released from Customs
custody, the importer will be notified and ordered to redeliver
the released articles to Customs for marking, exportation, or
destruction under Customs supervision.
Section 304(h) of the Tariff Act (19 U.S.C. 1304) provided
for a maximum fine of $5,000, or imprisonment of not more than
1 year upon conviction for any person who ``with intent to
conceal'' alters or removes the country-of-origin marking.
Section 1907(a) of the OTCA increased the maximum fine for
intentional alteration or removal of country-of-origin markings
to $100,000 on the first offense and $250,000 for subsequent
offenses.
Automobile labeling.--The American Automobile Labeling Act,
enacted as section 210 of the Motor Vehicle Information and
Cost Savings Act,\80\ requires manufacturers to affix, and
dealers to maintain, labels on cars and light-duty trucks
regarding the country of origin of component parts and the
location of assembly. For each line of cars, the label will
include the percentage (by value) of component parts which
originated in the United States or Canada, and the countries
and percentages from other manufacturers who contribute 15
percent or more to the component value of the vehicle. The
combined United States/Canadian percentage, which is based on
the longstanding special bilateral relationship in automotive
trade, must be clearly identified, listing clearly both
countries. No other countries are to be combined with the
United States and Canadian combined percentage. For each
individual vehicle, the label will also include the city, state
(where appropriate), and country where the vehicle was
assembled; the country of origin of the engine; and the country
of origin of the transmission. For the purpose of identifying
the country of assembly and the country of origin of the engine
and transmission, the United States will be identified
separately. All vehicles manufactured on or after October 1,
1994, for sale in the United States must be labeled.
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\80\ As added by Public Law 102-388, section 355 approved October
6, 1992.
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North American Free Trade Agreement.--Sections 207 and 208
of the North American Free Trade Agreement Implementation Act
implemented U.S. obligations under NAFTA articles 311, annex
311, and article 510 regarding country-of-origin marking for
NAFTA-origin goods, and the review and appeal of customs
marking decisions. Section 207 amends section 304 of the Tariff
Act of 1930, as amended, to provide certain limited exemptions
for the country-of-origin marking requirements for goods of
NAFTA origin. It exempted goods where the importer ``reasonably
knows'' that they are NAFTA-origin goods, and specifically
exempted original works of art, ceramic bricks, semiconductor
devices, and integrated circuits. Sections 207(a) and 208
amended sections 304 and 514 of the Tariff Act to provide NAFTA
exporters and producers with rights to challenge and protest
adverse NAFTA marking decisions by the Customs Service.
NAFTA Rules of Origin
Originating goods.--Section 202 of the North American Free
Trade Agreement Implementation Act enacts articles 401 through
415 of the NAFTA regarding rules of origin. The NAFTA rules
ensure that NAFTA preferential tariff treatment is granted only
to the products of the United States, Mexico, and Canada. Goods
are considered to originate in a NAFTA party if: (1) they are
wholly obtained or produced in the territory of one or more
NAFTA parties; (2) each of the non-originating materials used
in the good undergoes a change in tariff classification as a
result of production that occurs entirely within one or more of
the parties; (3) the good is produced entirely in one or more
of the parties exclusively from NAFTA-origin materials; or (4)
with certain exceptions, the good is produced entirely in one
or more of the NAFTA parties but one or more of the non-
originating parts does not undergo a change in tariff
classification; and the regional value content of the goods
meets certain thresholds (at least 60 percent of the value of
the goods or 50 percent of their net cost.)
Regional value-content.--Section 202(b) of the North
American Free Trade Agreement Implementation Act sets forth
methodologies for calculating regional value-content on the
basis of either ``transaction value'' or ``net cost of the
good.'' Regional value using the transaction value method is
computed by taking the difference between the transaction value
of the good and the value of non-originating materials used in
the production of the good, divided by the transaction value of
the good. Regional value using the net-cost method is computed
by dividing the difference between the net cost of the good and
the value of non-originating materials used in the production
of the good by the net cost of the good. A producer of a good
may use one of three ways to allocate applicable costs when
using the net-cost method. Under certain circumstances
delineated in section 202(b), the net-cost method is required
to be used.
Automotive goods.--Section 202(c) of the North American
Free Trade Agreement Implementation Act sets forth the regional
value-content requirement for motor vehicles. For passenger
motor vehicles, light trucks, and their engines and
transmissions, the regional value-content is increased in
stages from 50 percent for the first 4 years of NAFTA to 56
percent for the second 4 years and to 62.5 percent thereafter.
Other motor vehicles and other automotive parts are subject to
a 50 percent regional content requirement for the first 4
years, 55 percent for the second 4 years, and 60 percent
thereafter. A special rule applies to investors who newly
construct or refit a plant to produce a new vehicle. Section
202(c) provides that, for passenger vehicles and light trucks
and their automotive parts, the value of non-originating
materials must be ``traced'' back through the production
process for purposes of calculating the regional value-content.
An auto producer may average its calculation of regional value-
content using a number of different methodologies.
Certificate of Origin.--Section 205 of the North American
Free Trade Agreement Implementation Act amends section 508 of
the Tariff Act to require a NAFTA Certificate of Origin for
goods for which preferential tariff treatment is claimed, and
imposes recordkeeping requirements to substantiate the
Certificates subject to recordkeeping penalties.
Drawback
Under section 313(a) of the Tariff Act of 1930 (19 U.S.C.
1313(a)), ``drawback'' is payable upon the exportation of an
article manufactured or produced in the United States with the
use of duty-paid imported merchandise. To receive benefit of
drawback, the completed article must have been exported within
5 years from the date of importation of the pertinent duty-paid
merchandise. The amount of refund is equal to 99 percent of the
duties attributable to the foreign, duty-paid content of the
exported article. The procedural and other requirements
governing drawbacks are set forth in 19 CFR part 22.
The purpose of section 313(a) is to permit American-made
products to compete more effectively in world markets. It
enables domestic manufacturers and producers to select the most
advantageous sources for their raw materials and component
requirements without regard to duties, thereby permitting
savings in their production costs. It also encourages domestic
production and, as a result, the utilization of American labor
and capital.
An important feature of section 313(a) and a number of
other drawback provisions is the allowance of drawback on a
substitution basis. Pursuant to section 313(b), an exported
article incorporating components entirely of domestic origin
can nevertheless qualify for drawback, to the extent that duty
has been paid on the importation of components of the same kind
and quality as those used in the manufacture or production of
the exported article.
Section 202 of the Trade and Tariff Act of 1984 expanded
the application of current drawback provisions in three
important respects. First, it allows drawback if the same
person requesting drawback, subsequent to importation and
within 3 years of importation of the merchandise, exports from
the United States or destroys under Customs supervision
fungible merchandise (whether imported or domestic) which is
commercially identical to the merchandise imported.
Second, it allows drawback for all packaging materials
imported for packaging or repackaging imported merchandise.
Finally, the Act provides that any domestic merchandise
acquired in exchange for imported merchandise of the same kind
and quality shall be treated as the use of such imported
merchandise for drawback purposes if no certificate of delivery
is issued for such imported merchandise.
In addition to section 313(a), there are a variety of other
specific drawback provisions allowing for the refund of duties
and/or internal revenue taxes under specified circumstances for
the exportation of products such as flavoring extracts,
toiletries, distilled spirits, salts, and cured meats. Further,
under section 313(c), drawback is allowable when merchandise is
rejected by the importer because it fails to conform to the
sample upon which the purchase order was made, or because it
fails to conform to the importer's specifications, or because
the merchandise was shipped without the consignee's consent.
When such rejected merchandise is exported under Customs
supervision, 99 percent of the duties paid will be refunded
upon compliance with the pertinent regulations.
The Customs Modernization Act (section 632 of the North
American Free Trade Agreement Implementation Act) made a series
of changes to address questions which have arisen in the
implementation and administration of the drawback law. Section
632 made changes including: allowing manufacturing drawback for
unused articles that are destroyed rather than exported,
extending the period for drawback claims on rejected
merchandise to 3 years; with respect to same condition
drawback, changing the standard for allowing substitution of
merchandise for the imported merchandise from ``fungible'' to
``commercially interchangeable''; authorizing the electronic
filing of drawback claims and setting a period of 3 years from
the date of exportation or destruction in which to file a
claim; and simplifying accounting requirements for petroleum.
Section 622 established penalty provisions for the submission
of false drawback claims and created a ``Drawback Compliance
Program.''
The Miscellaneous Trade and Technical Corrections Act of
1999 (Public Law 106-36) amended section 313(p) of the Tariff
Act of 1930 (19 U.S.C. 1313(p)) to expand the scope of
petroleum products eligible for substitution drawback. The Act
also amended 313(q) of the Tariff Act of 1930 (19 U.S.C.
1313(q)) to permit drawback of imported materials used by a
manufacturer or any other person to manufacture packaging
materials where the packaging is ``used'' in exportation or is
destroyed.
The Tariff Suspension and Trade Act of 2000 (Public Law
106-476) further amended section 313(p) to broaden the scope of
petroleum products eligible for substitution drawback. This Act
also amended section 313 of the Tariff Act of 1930 (19 U.S.C.
1313) by adding new subsection (x) to permit drawback of
recycled materials.
NAFTA drawback.--Section 203 of the North American Free
Trade Agreement Implementation Act implemented limitations on
duty drawback included under NAFTA article 303. ``NAFTA
drawback'' refers to the formula used to compute the amount of
drawback that will be allowed for dutiable goods traded between
the NAFTA parties. The formula limits drawback to the lesser
of: (1) the total amount of customs duties paid or owed on the
non-NAFTA components initially imported; and (2) the total
amount of customs duties paid to another party on the goods
subsequently exported. It generally applies to all goods
imported into the United States, with certain exceptions. The
provision applies for exports to Canada on January 1, 1996, and
for exports to Mexico on January 1, 2001. It has the practical
effect of essentially eliminating drawback for NAFTA-origin
goods as NAFTA tariff reductions become effective. While no
limitations were imposed on same condition drawback, same
condition substitution drawback was eliminated upon the entry
into force of the Agreement, with certain exceptions. In no
case may drawback be paid with respect to countervailing or
antidumping duties on goods entering the United States.
Furthermore, section 210 of the Act generally prohibits
drawback for color television picture tubes.
Special rule for extending time for filing drawback
claims.--The Miscellaneous Trade and Technical Corrections Act
of 1996 (Public Law 104-295) amended section 313(r) of the
Tariff Act of 1930, as amended, to permit a temporary extension
of 1 year for filing drawback claims in cases where the
President has declared a major disaster on or after January 1,
1994, and the claimant files a request for such extension with
the Customs Service within 1 year from the date of enactment.
Protests and Administrative Review
Generally, liquidation of an entry represents a final
determination by Customs regarding an importer's duty liability
unless a protest is filed, in proper form, within 90 days after
the date of liquidation. A protest allows the importer to
secure further administrative review and preserve the right to
judicial review. Under current law, a protest must be filed in
the port where the underlying decision was made.
Sections 514, 515 and 516 of the Tariff Act of 1930,\81\ as
amended, provide for administrative review of decisions of the
Customs Service, requirements for filing protests, amendment of
protests, review and accelerated disposition, and further
administrative review. These provisions provide a statutory
means whereby the ``correctness'' of decisions by Customs may
be administratively reviewed.
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\81\ 19. U.S.C. 1514, 1515, and 1516.
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Under section 514, an importer is entitled to protest the
legality of decisions by Customs relating to:
(1) the appraised value of merchandise;
(2) the classification and rate and amount of duties
chargeable;
(3) all charges or exactions of whatever character
within the jurisdiction of the Secretary of the
Treasury;
(4) the exclusion of merchandise from entry or
delivery or a demand for redelivery to customs custody
under any provision of the customs laws, except a
determination appealable under section 337;
(5) the liquidation or reliquidation of an entry, or
reconciliation as to the issues contained therein, or
any modification thereof;
(6) the refusal to pay a claim for drawback; or
(7) the refusal to reliquidate an entry under
subsection (c) or (d) of section 520 (19 U.S.C. 1520).
In addition, section 514 provides the requirements for the
form, number and amendments of protest, and limitations on
protest or reliquidation.
Section 515 provides Customs a two-year period to respond
to a protest unless there is a request for accelerated
disposition. In a case of a request for accelerated
disposition, Customs is required to respond within 30 days.
This section also provides that the protest may be subject to
further review of the protest by another Customs officer
(usually Customs Headquarters), upon a timely request. The
Miscellaneous Trade and Technical Corrections Act of 1999
(Public Law 106-36) amended this section to require the
appropriate Customs officer to issue a decision on an
application for further review within 30 days of the
application, and if allowed, to forward the protest to the
Customs Officer who will be conducting the review.
If a protesting party believes that the application for
further review was erroneously or improperly denied, such a
party may file a request to the Commissioner of Customs, within
60 days after the notice of denial, that the denial be set
aside. If the Commissioner fails to act within the 60 days, the
request is deemed denied.
Section 516 is a unique Customs provision that entitles
American manufactures, producers, wholesalers, labor unions,
groups of workers, or trade or business associations the
statutory right to challenge Customs treatment of an imported
product of the same class or kind as the product they produce
or sell. Under this section, an interested domestic party may
file a petition with the Commissioner of Customs alleging that
appraised value, classification, or rate of duty is not
correct. Other interested party may submit comments.
If Customs agrees with the petition, in whole or in part,
it will publish a notice of its decision and will appraise,
classify, or assess duty on merchandise entered after a thirty-
day period in accordance with that decision. If Customs reaches
a negative decision on the petitioner's claims, it will notify
the petitioner. The petitioner may file a notice with Customs
within thirty days that he will contest the negative decision
in court.
Once the appropriate administrative procedures in Sections
514, 515, and 516 have been completed, the importer or domestic
party may have redress to the Court of International Trade
based on other statutory provisions.
Copyrights and Trademark Enforcement
Copyrights.--Section 602(a) of the Copyright Revision Act
of 1976 \82\ provides that the importation into the United
States of copies of a work acquired outside the United States
without authorization of the copyright owner is an infringement
of the copyright and are subject to seizure and forfeiture.
Forfeited articles are generally destroyed; however, the
articles may be returned to the country of export whenever
Customs is satisfied that there was no intentional violation.
Copyright owners seeking import protection from the U.S.
Customs Service must register their claim to copyright with the
U.S. Copyright Office and record their registration with
Customs in accordance with applicable regulations.\83\
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\82\ Public Law 94-553, section 101, approved October 19, 1976, 17
U.S.C. 602(a).
\83\ 19 CFR 133, subpart D.
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Trademarks and trade names.--Articles bearing counterfeit
trademarks, or marks which copy or simulate a registered
trademark registration of a U.S. or foreign corporation are
prohibited importation, provided a copy of the U.S. trademark
registration is filed with the Commissioner of Customs and
recorded in the manner provided by regulations.\84\ The U.S.
Customs Service also affords similar protection against
unauthorized shipments bearing trade names which are recorded
with Customs pursuant to regulations.\85\ It is also unlawful
to import articles bearing genuine trademarks owned by a U.S.
citizen or corporation without permission of the U.S. trademark
owner, if the foreign and domestic trademark owners are not
parent and subsidiary companies or otherwise under common
ownership and control, provided the trademark has been recorded
with Customs and the U.S. trademark owner has not authorized
the distribution of trademarked articles abroad.
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\84\ 19 CFR 133.1-133.7.
\85\ 19 CFR part 133, subpart B.
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The Anticounterfeiting Consumer Protection Act of 1996
(Public Law 104-153) strengthened the protection afforded
trademark owners against the importation of articles bearing a
counterfeit trademark. A ``counterfeit trademark'' is defined
as a spurious trademark which is identical to, or substantially
indistinguishable from, a registered trademark. First, the Act
redefined counterfeiting as a form of racketeering. Second, it
extended both the copyright and trademark laws, and the seizure
and forfeiture laws, to computer programs, computer
documentation, and packaging. Third, the Act amended the law
such that, upon seizure of counterfeit merchandise, the Customs
Service must notify the owner of the trademark, and, after
forfeiture, destroy the merchandise. Alternatively, if the
merchandise is not unsafe or a hazard to health, and the
Customs Service has the consent of the trademark owner, the
forfeited goods may be: (1) given to any federal, state, or
local government agency which has established a need for the
article; (2) given to a charitable institution; or (3) sold at
public auction, if more than 90 days have passed since the date
of forfeiture, and no eligible organization has established a
need for the article.
The Anticounterfeiting Consumer Protection Act of 1996 also
amended section 431 of the Tariff Act of 1930 to require public
disclosure of aircraft manifests in addition to vessel
manifests. Last, the Act amended section 484 of the Tariff Act
of 1930 to require the Customs Service to prescribe new
regulations governing the content of entry documentation so as
to aid in the determination of whether imported merchandise
bears a counterfeit trademark.
Penalties
Section 592 of the Tariff Act of 1930, as amended,\86\ is
the basic and most widely used customs penalty provision. It
prescribes monetary penalties against any person who imports,
attempts to import, or aids or procures the importation of
merchandise by means of false or fraudulent documents,
statements, omissions or practices, concerning any material
fact. The statute may be applied even though there is no loss
of revenue involved.
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\86\ 19 U.S.C. 1592.
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Section 592 infractions are divided into three categories
of culpability, each giving rise to a different maximum
penalty, as follows:
(1) Fraud.--This category involves an act of
commission or omission intentionally done for the
purpose of defrauding the United States of revenue, or
otherwise violating section 592. The maximum civil
penalty for a fraudulent violation is the domestic
value of the merchandise in the entry or entries
concerned.
(2) Gross negligence.--This category involves an act
of commission or omission with actual knowledge of, or
wanton disregard for, the relevant facts and a
disregard of section 592 obligations, whereby the
United States is or may be deprived of revenue, or
where section 592 is otherwise violated. The maximum
civil penalty for gross negligence is the lesser of the
domestic value of the merchandise or four times the
loss of revenue (actual or potential). If the
infraction does not affect the revenue, the maximum
penalty is 40 percent of the dutiable value of the
goods.
(3) Negligence.--This category involves a failure to
exercise due care in ascertaining the material facts or
in ascertaining the obligations under section 592. The
maximum civil penalty for negligence is the lesser of
the domestic value of the merchandise or twice the loss
of revenue (actual or potential). However, where there
is no loss-of-revenue issue, the penalty cannot exceed
20 percent of the dutiable value.
In addition to the civil penalties described above, a
criminal fraud statute provides for sanctions to those
presenting false information to customs officers. Title 18,
United States Code, section 542, provides a maximum of 2 years
imprisonment, or a $5,000 fine, or both, for each violation
involving an importation or attempted importation.
The Secretary of the Treasury is authorized to seize
merchandise if there is resasonable cause to believe that a
person has violated these provisions and the alleged violator
is insolvent; outside the jurisdiction of the United States; is
otherwise essential to protect the revenue; or to prevent the
importation of prohibited merchandise into the United States.
For proceedings commenced by the United States in the Court
of International Trade for monetary penalties, all issues shall
be tried de novo. The statute specifies the standard of proof
required to establish a violation. In fraud cases, the United
States has the burden to prove the violation by clear and
convincing evidence; in gross negligence cases, the government
has the burden to establish all the elements of the alleged
violation; and for negligence cases, the government has the
burden to establish the act or omission and the defendant has
the burden of proof that the act or omission did not occur as a
result of negligence.
The Customs Modernization Act (section 621 of the North
American Free Trade Agreement Implementation Act) amended
section 592 to apply existing penalties for false information
to information transmitted electronically; allow Customs to
recover unpaid taxes and fees resulting from 592 violations;
clarify that the mere non-intentional repetition of a clerical
error does not constitute a pattern of negligent conduct; and
define the commencement of a formal investigation for the
purposes of prior disclosure of alleged violations. It also
introduced the requirement that importers use ``reasonable
care'' in making entry and providing the initial classification
and appraisement; establishing a ``shared responsibility''
between Customs and importers; and allowing Customs to rely on
the accuracy of the information submitted and streamline entry
procedures (section 637 of the North American Free Trade
Agreement Implementation Act). To the extent that an importer
fails to use reasonable care, Customs may impose a penalty
under section 592.
Section 205 of the North American Free Trade Agreement
Implementation Act amended section 592 to apply identical
penalty provisions to importers making false declarations and
certificates of NAFTA origin.
The Anticounterfeiting Consumer Protection Act of 1996
(Public Law 104-153) made several amendments to the Tariff Act
of 1930, as amended. First, the Act extended the application of
customs civil penalties to include merchandise bearing a
counterfeit trademark. Second, the Act amended section 526 of
the Tariff Act of 1930 to require the consent of the trademark
owner prior to any action by the Secretary of the Treasury
regarding the disposition of seized merchandise. Third, the Act
linked the relevant civil penalties to the value that the
merchandise would have had if it were genuine, according to the
manufacturer's suggested retail price, in addition to any other
civil or criminal penalties. Last, the Act amended section
431(c)(1) of the Tariff Act of 1930 to require the advanced
public disclosure of aircraft manifests to assist Customs in
electronically screening passengers for inspection upon
arrival.
Recordkeeping.--The Customs Modernization Act (section 615
of the North American Free Trade Agreement Implementation Act)
provided new penalties for the failure to comply with a lawful
demand for records required for the entry of merchandise, and
established a ``Recordkeeping Compliance Program.'' For willful
failure to comply, the penalty is the lesser of up to $100,000,
or 75 percent of the value of the merchandise, and for
negligence, the lesser of up to $10,000 or 40 percent of the
value. The new penalties were authorized with the understanding
that Customs would routinely waive the production of records at
entry, while retaining the ability to audit those records at a
later time.
Import prohibitions/restrictions relating to dog and cat
fur products.--The Tariff Suspension and Trade Act of 2000
(Public Law 106-476) amended title III of the Tariff Act of
1930 by adding Section 308 (19 U.S.C. 1308) to prohibit all
commercial activities relating to trading with dog or cat fur
products. Specifically, this legislation prohibits the
importation or exportation of products made with dog or cat
fur, as well as domestic activities including the introduction
into interstate commerce, manufacture for introduction into
interstate commerce, sale or offer for sale, trade,
advertisement, transportation or distribution in interstate
commerce of products made with dog or cat fur. In addition to
criminal and civil penalties under existing law, a person
violating this section may be liable for additional civil
penalties, forfeiture, and debarment from importing, exporting,
transporting, distributing, manufacturing, or selling any fur
products in the United States. A person accused of violating
this section is entitled to an affirmative defense if he shows
by a preponderance of the evidence that he has exercised
reasonable care.
Section 308 authorizes the Secretary of the Treasury to
enforce the import and export prohibitions while the President
has enforcement authority relating to domestic activities. The
designated enforcement authorities are required to publish a
list of violators at least once a year, to submit an
enforcement plan to Congress within three months of the date of
enactment, a report within one year of that same date, and,
annually thereafter, a report on enforcement efforts and
adequacy of resources to execute this provision. Finally, the
legislation amends the Fur Products Labeling Act (15 U.S.C.
69(d)) to require the labeling of products containing even a de
minimus amount of dog or cat fur.
Requirements applicable to cigarette imports.--Title V of
the Tariff Suspension and Trade Act of 2000 (Public Law 106-
476) made several changes to laws governing the importation of
cigarettes. In particular, section 4004 of this legislation
amended the Tariff Act of 1930 to create a new title VIII
imposing certain requirements on imports of cigarettes. Section
4004 requires the following:
(1) the original manufacturer of cigarettes being
imported into the United States must certify that it
has timely submitted, or will timely submit, to the
Secretary of Health and Human Services the lists of
ingredients described in section 7 of the Federal
Cigarette Labeling and Advertising Act (FCLAA);
(2) the precise warning statements in the precise
format specified in section 4 of the FCLAA must be
permanently imprinted on the cigarette packaging. Prior
to the legislation, the Federal Trade Commission
allowed importers, under certain circumstances, to
comply with the requirements of FCLAA by affixing
adhesive labels with compliant warning statements;
(3) the importer must certify that it is in
compliance with a rotation plan approved by the Federal
Trade Commission pursuant to section 4(c) of the FCLAA,
unless the FTC grants a waiver; and
(4) if the cigarettes bear a United States registered
trademark, the owner of such trademark, or such owner's
authorized representative, must consent to the
importation of such cigarettes into the United States.
The legislation also requires Customs certification at the
time of entry that the importer, under the penalty of perjury,
has complied with the above requirements. Cigarettes imported
in personal use quantities, as well as those imported for
analysis, noncommercial use, reexport or repackaging, are
exempt from the above requirements. In addition to any other
applicable penalties under law, violators are subject to civil
penalties as well as forfeiture.
Commercial Operations
Advisory Committee.--Section 9503(c) of the Omnibus Budget
Reconciliation Act of 1987 (Public Law 100-203) established in
the Department of Treasury the ``Advisory Committee on
Commercial Operations of the United States Customs Service.''
The Assistant Secretary of Treasury for Enforcement is the
Committee Chairman, which is composed of 20 members.
In making appointments, the Secretary is to select
individuals or firms ``affected by the commercial operations''
of the Customs Service. A majority of the members may not
belong to the same political party. The Advisory Committee is
required to provide advice to the Secretary on all Customs
commercial operation matters and to report annually to the
House Ways and Means and Senate Finance Committees.
Management improvements.--The Customs and Trade Act of 1990
made numerous changes to improve Customs commercial operations.
Section 103 contained a biennial authorization of
appropriations for the U.S. Customs Service, including a
statutory funding floor for commercial operations and a ceiling
on non-commercial (enforcement) operations.
Section 121 made major amendments to the Customs Forfeiture
Fund statute (section 613A of the Tariff Act of 1930) and in
the administrative forfeiture proceedings authority (section
607 of the Tariff Act of 1930).
The Act also included several provisions recommended by the
House Ways and Means Subcommittee on Oversight.\87\ Section 123
required an annual national trade and customs law violation
estimate and enforcement strategy report. Section 124 required
an Administration report on possible expansion of Customs'
foreign preclearance operations and legislative proposals for
recovery for imported merchandise damaged during customs
examination. Finally, the Act required changes to Customs' cost
accounting systems and new labor distribution surveys.
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\87\ ``Report on Abuses and Mismanagement in the U.S. Customs
Service Commercial Operations''; February 8, 1990; WMCP: 101-22.
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In 1992, the annual Treasury appropriations legislation for
fiscal year 1993 (Public Law 102-393) created a unified
Treasury Asset Forfeiture Fund to be administered by the
Treasury Secretary. It succeeded the Customs Forfeiture Fund
(section 613A of the Tariff Act). The Committee on Ways and
Means maintains legislative jurisdiction over the Customs
portion of the Treasury Fund.
A major reform to the customs inspector pay system was
included in the Omnibus Budget Reconciliation Act of 1993.
Section 5 of the Act of February 13, 1911 (the ``1911'' Act)
was amended to address the existing inspector overtime pay
system (WMCP:102-17). It also authorized foreign language
bonuses and additional retirement benefits linked to a portion
of overtime hours worked.
Notification requirements.--Section 9501(c) of the Omnibus
Budget Reconciliation Act prohibited the establishment of any
new Centralized Examination Station (CES) unless Customs
provides written notice to both the House Ways and Means and
Senate Finance Committees not less than 90 days prior to the
proposed establishment.
The Omnibus Budget Reconciliation Act of 1987 required the
Commissioner of Customs to notify the House Ways and Means and
Senate Finance Committees at least 180 days prior to taking any
action which would: (a) result in any significant reduction in
force of employees by means of attrition; (b) result in any
reduction in hours of operation or services rendered at any
customs office; (c) eliminate or relocate any customs office;
(d) eliminate any port, or significantly reduce the number of
employees assigned to any customs office or any port of entry.
Customs modernization.--The Customs Modernization Act
(title VI of the North American Free Trade Agreement
Implementation Act) represented the most extensive set of
changes to the customs laws since the Customs Procedural Reform
Act of 1978. The major provisions of the Act removed archaic
statutory provisions requiring paper documentation, and
provided authority for full electronic processing of all
customs-related transactions under the National Customs
Automation Program (NCAP) (section 631). In return for waiving
paperwork requirements, importers were required to maintain and
produce information after the fact. Section 631 further sets
forth the NCAP goals of ensuring uniform importer treatment,
facilitating business activity, while improving compliance with
the customs laws. It authorized new automation initiatives for
remote-entry filing and periodic entry and duty payment, and
required adequate planning, testing, and evaluation of all new
automated systems before implementation.
The Act provided for accreditation of independent
laboratories and public access to all Customs rulings and
decisions. It also provided additional projections for
importers by reforming Customs' seizure authority under section
596(c) of the Tariff Act of 1930 (19 U.S.C. 1595a(c));
established a new statute of limitations on duty violations,
provided procedural safeguards for regulatory audits; allowed
judicial review of detentions; clarified the conditions under
which duty drawback claims may be made; and authorized payment
for damaged merchandise for non-commercial shipments.
In the on-going effort to fully implement the Mod Act, the
Miscellaneous Trade and Technical Corrections Act of 1999
(Public Law 106-36) (the Act) amended section 411 of the Tariff
Act of 1930 (19 U.S.C. 1411) to require Customs, pursuant to
the NCAP, to establish a program for the automation of
electronic filing of commercial importation data from foreign-
trade zones no later than January 1, 2000.
The Tariff Suspension and Trade Act of 2000 (Public Law
106-476) also made needed changes to facilitate trade relating
to large shipments that could not be shipped as an entirety.
Prior to this legislation, large articles, including machinery,
which could not fit on a single conveyance, particularly a
truck or plane, were required to be classified as parts or in
their condition upon arrival in the customs territory of the
United States, causing classification or entry problems for
both Customs and the importer. This legislation amended section
1484 of title 19 to provide Customs the authority to treat
goods purchased and invoiced as a single entity and shipped
unassembled or disassembled in separate shipments over a period
of time as a single transaction for customs entry purposes. The
legislation requires importers to request such treatment in
advance of entry and also requires the Secretary of the
Treasury to issue regulations setting forth the information
required for this type of entry.
The Act also requires the Secretary of the Treasury to
review, in consultation with U.S. importers and other
interested parties, Customs procedures, related laws, and
regulations in order to determine the minimum data required for
determining admissibility of goods entering the United States.
The legislation requires that the Secretary submit a report to
Congress and make recommendations for changes in law,
regulations, or procedures. The purpose of this report is to
improve the efficiency of the entry process while meeting
timely administrative needs for statistics and data collection.
Reorganization.--Pursuant to section 301 of the Customs
Procedural Reform and Implementation Act of 1978 (19 U.S.C.
2075), on September 30, 1994, the Commissioner of Customs
notified the House Ways and Means and Senate Finance Committees
of his intention to implement a major reorganization of Customs
commercial operations, including concentrating services at
existing port facilities, reducing Headquarters staff,
eliminating regional and district offices, and establishing
Customs Management and Strategic Trade Centers.
Antiterrorism.--The Comprehensive Antiterrorism Act of 1995
(Public Law 104-132), designed to prevent and punish acts of
terrorism, makes it unlawful to import plastic explosives which
do not contain detection devices. The Act amends the Tariff Act
of 1930 to facilitate Customs interdiction of these plastic
explosives under its seizure and forfeiture authority.
Foreign Trade Zones
The Foreign Trade Zones Act of 1934,\89\ as amended,
authorizes the establishment of foreign trade zones. A foreign
trade zone (FTZ) is a special enclosed area within or adjacent
to ports of entry, usually located at industrial parks or in
terminal warehouse facilities. Although operated under the
supervision and enforcement of the Customs Service, they are
considered outside the customs territory of the United States.
With certain exceptions, any foreign or domestic merchandise
may be brought into a foreign trade zone for storage, sale,
exhibition, break-of-bulk, repacking, distribution, mixing with
foreign or domestic merchandise, assembly, manufacturing, or
other processing. Foreign merchandise imported into an FTZ is
not subject to duty, formal entry procedures or quotas unless
and until it is subsequently imported into U.S. customs
territory.
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\89\ Act of June 18, 1934, ch. 590, 48 Stat. 998, 19 U.S.C. 81a-
81u.
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The framework that governs the establishment and operation
of FTZs has three principal components. First, the Foreign
Trade Zones Act of 1934 (the Act) authorizes the establishment
of FTZs and, as amended in 1950, allows manufacturing in
FTZs.\90\ Second, regulations, promulgated by both the Customs
Service \91\ and the Department of Commerce,\92\ expand on the
Act. A 1952 amendment to the regulations provided for the
establishment of ``subzones'' in addition to general purpose
zones. Third, the decision in Armco Steel Corp. v. Stans in
1970 validated the use of zone manufacturing to avoid customs
duties and interpreted several key provisions of the Act.\93\
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\90\ Boggs amendment of 1959, ch. 296, 64 Stat. 246, 19 U.S.C. 81c.
\91\ 19 CFR 146.0-48 (1980).
\92\ 15 CFR 400.100-1406 (1980).
\93\ 431 F.2d 779 (2d Cir. 1970), aff'g 303 F. Supp. 262 (S.D.N.Y.
1969).
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The original purpose of the Foreign Trade Zones Act of 1934
was to expedite and encourage foreign commerce. Initially, FTZs
were little more than transshipment or consignment centers for
the storage, repackaging, or light processing of foreign goods
pending re-exportation. The 1934 Act prohibited the manufacture
and exhibition of goods in FTZs. In 1950, however, Congress
removed this prohibition and added manufacturing to the list of
activities permitted, and authorized exhibition in zones.
The amendment to the FTZ regulations in 1952 that provided
for the establishment of subzones is important to manufacturing
and assembly operations in zones. The essential distinction
between the two types of zones is that individual subzones are
generally used by only one firm, whereas there is no limitation
on the number of firms that can operate in a general-purpose
zone. Subzones were established to assist companies which were
unable to relocate to or take advantage of an existing general-
purpose zone.\94\ Under the regulations, only a grantee of a
previously approved general zone may apply to establish a
subzone.
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\94\ 15 CFR 400.304 (1983).
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Authority for establishing these facilities is granted to
qualified corporations, or political subdivisions, who must
submit applications to the Department of Commerce's Foreign
Trade Zones Board, comprised of the Secretary of Commerce
(Chair), and the Secretary of the Treasury.\95\ Public Law 104-
201, authorizing appropriations for fiscal year 1997 for the
military activities of the Department of Defense, amended the
Foreign Trade Zones Act to remove the Secretary of Army from
membership on the Board. The Board's regulations set forth the
basic requirements for applying and qualifying for an FTZ. The
statute provides that every officially designated port of entry
is entitled to at least one FTZ. Public hearings are often held
by the Board staff in the locale involved. While most
applications are non-controversial, occasionally domestic
industries or labor that are sensitive to imports will oppose a
subzone application. The sharp growth of manufacturing in
subzones, particularly by the automobile industry, has led to
increased criticism of the practice by U.S. parts producers,
who are concerned that the practice may reduce their effective
tariff protection.
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\95\ 19 U.S.C. 81a(b) (1976). The jurisdiction and authority of the
Board are set forth in 15 CFR 400.200-203 (1980).
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Section 3, which contains the basic substantive provisions
of the Act, allows merchandise to be imported into FTZs without
being subject to U.S. customs laws. The section regulates the
tariff treatment of FTZ merchandise according to its status as
foreign or domestic, and as privileged or non-privileged.
One may apply for privileged status for foreign merchandise
in an FTZ, provided the merchandise has not yet been
manipulated or manufactured so as to effect a change in its
tariff classification. Foreign merchandise that is not
privileged, recovered waste, and merchandise that was
originally domestic but can no longer be identified as such,
are deemed to be non-privileged foreign merchandise. Domestic
merchandise that would otherwise have been eligible for
privileged status but for which no application was made is
considered non-privileged merchandise.
The status of merchandise becomes significant when it
enters U.S. customs territory. Customs appraises and classifies
privileged foreign merchandise to determine the taxes and
duties owed according to the condition of the merchandise when
it enters an FTZ. The importer pays the previously determined
taxes and duties when bringing the merchandise into U.S.
customs territory regardless of any manufacturing or
manipulation of the goods with other foreign or domestic
privileged merchandise.
In contrast, merchandise that is composed entirely of, or
derived entirely from, non-privileged merchandise, either
foreign or domestic, or of a combination of privileged and non-
privileged merchandise, is appraised and classified according
to its condition when constructively transferred out of an FTZ
and into U.S. customs territory. Thus, the duty and taxes
payable on non-privileged or combined merchandise are those
applicable to its classification and value when it enters U.S.
customs territory and not when it enters the zone. This
distinction is an important potential advantage of zone-based
operations.
The United States-Canada Free-Trade Agreement
Implementation Act \96\ amended section 3(a) of the Foreign
Zones Act to provide that, with the exception of ``drawback
eligible goods,'' goods withdrawn from a foreign trade zone
will be treated as if they are withdrawn for consumption in the
United States, thus subject to applicable customs duties. The
North American Free Trade Agreement Implementation Act \97\
further amended section 3(a) to provide that ``goods subject to
NAFTA drawback'' and withdrawn from a foreign trade zone will
be treated as if they are withdrawn for consumption in the
United States, and are thus subject to the applicable customs
duties. The customs duties may be reduced or waived in an
amount that is the lesser of the customs duties paid to the
other NAFTA country upon import of the manufactured goods. The
amendment also provides for the same treatment should Canada
cease to be a NAFTA country and the suspension of the United
States-Canada Free-Trade Agreement is terminated.
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\96\ Public Law 100-449, approved September 28, 1988.
\97\ Public Law 100-182, approved December 8, 1993.
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In addition, an amendment to section 3 with respect to the
calculation of relative values in the operations of petroleum
refineries in a foreign trade zone was enacted in section 9002
of the Technical and Miscellaneous Revenue Act of 1988.\98\
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\98\ Public Law 100-647, approved November 10, 1988.
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Final revised regulations--the first changes to those
regulations since 1980--were issued by the FTZ Board on October
8, 1991 (15 CFR Part 400) clarifying criteria for the
establishment and review of FTZ (including subzone) operations.
Among other provisions, the revised regulations authorize the
review of zone and subzone operations to determine whether
those operations provide a net economic benefit to the United
States.
Use of weekly entry filing.--Section 484 of the Tariff Act
of 1930 (19 U.S.C. 1484) sets forth the procedures for the
entry of merchandise imported into the United States. Under
section 484, the Customs Service has permitted limited weekly
entry filing for foreign trade zones (FTZ) since May 12, 1986,
for merchandise which is manufactured or changed into its final
form just prior to its transfer from the zone (manufacturing
operations). Customs regulations governing entry into and
removal from an FTZ are contained in Part 146 of the Customs
Regulations (19 C.F.R. Part 146). The regulations permit zone
users to make a weekly entry filing for all entries removed for
an entire weekly period, allowing them to pay a single
merchandise processing fee (MPF) for the entire weekly entry
filing instead of an MPF for each entry removed from the zone.
On March 14, 1997, in a Federal Register Notice (62 FR
12129), Customs proposed a rulemaking that would have expanded
the weekly entry filing to include merchandise involved in
activities other than manufacturing operations (non-
manufacturing operations). The expanded weekly entry filing
required electronic filing, which was expected to reduce the
number of paper entries, facilitate entry processing, and
reduce paper work and associated costs form the zones. Customs
tested the expanded weekly entry procedure in a pilot program
authorized in September 1994 for a selected number of zones.
In a Federal Register Notice dated March 17, 1999, Customs
withdrew the proposed amendment to the Customs regulations,
reasoning that the proposed expanded weekly entry program would
significantly reduce the collection of merchandise processing
fees. As a result, weekly entry filing from a zone could only
be used for entries involving manufacturing operations.
Section 410 of the Trade and Development Act of 2000
(Public Law 106-200) amended section 484 of the Tariff Act of
1930 to establish a new section 19 U.S.C. 1484(a)(3). This
legislation allows merchandise withdrawn from a foreign-trade
zone during a week (i.e., any 7 calendar day period) to be the
subject of a single entry filing, at the option of the zone
operator or user. This statutory change allows zone users the
option of making weekly entry filing for both manufacturing and
non-manufacturing operations, and the merchandise processing
fee would be collected as if all entries during one week were
made as a single entry.
Deferral of duty on certain production equipment.--The
Miscellaneous Trade and Technical Corrections Act of 1996
(Public Law 104-295) amended section 3 of the Foreign Trade
Zones Act to permit the deferral of payment of duty on certain
production equipment admitted into FTZs. The provision allows
for duty on imported production equipment and components
installed in a U.S. FTZ to be deferred until the equipment is
ready to be placed into use for production. By allowing a
manufacturer to assemble, install, and test the equipment
before duties would be levied, this change is meant to
encourage production in FTZs.
Chapter 2: TRADE REMEDY LAWS
The Antidumping and Countervailing Duty Laws
Two important trade remedy laws are the antidumping (AD)
and countervailing duty (CVD) laws. Although these laws are
aimed at different forms of unfair trade, they have many
procedural and substantive similarities.
CVD Law: Subsidy Determination
The purpose of the CVD law is to offset any unfair
competitive advantage that foreign manufacturers or exporters
might enjoy over U.S. producers as a result of foreign
countervailable subsidies. Countervailing duties equal to the
net amount of the countervailable subsidies are imposed upon
importation of the subsidized goods into the United States.
Subtitle A of title VII of the Tariff Act of 1930, as added
by the Trade Agreements Act of 1979 and amended by the Trade
and Tariff Act of 1984, the Omnibus Trade and Competitiveness
Act of 1988, and the Uruguay Round Agreements Act of 1994,\1\
provides that a countervailing duty shall be imposed, in
addition to any other duty, equal to the amount of net
countervailable subsidy, if two conditions are met. First, the
Department of Commerce (DOC) must determine that a
countervailable subsidy is being provided, directly or
indirectly, ``with respect to the manufacture, production, or
export of a class or kind of merchandise imported, or sold (or
likely to be sold) into the United States'' and must determine
the amount of the net countervailable subsidy. Second, the U.S.
International Trade Commission (ITC) must determine that ``an
industry in the United States is materially injured, or is
threatened with material injury, or the establishment of an
industry in the United States is materially retarded, by reason
of imports of that merchandise or by reason of sales (or the
likelihood of sales) of that merchandise for importation.'' The
law applies to imports from World Trade Organization (WTO)
member countries, which have assumed obligations equivalent to
those of the Agreement on Subsidies and Countervailing
Measures, commonly referred to as the Subsidies Agreement, or
countries with whom the United States has a treaty requiring
unconditional most-favored-nation treatment with respect to
articles imported into the United States. A countervailing duty
may not be imposed on imports from these countries unless it is
established that a countervailable benefit has been imposed and
a determination has been made that such subsidized imports
injure or threaten to injure domestic producers of that
merchandise (i.e., the injury test). However, imports from
countries which do not fall into one of these three categories
are generally not afforded an injury test in CVD cases.
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\1\ 19 U.S.C. 1671.
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Historical background: prior to the General Agreement on Tariffs and
Trade (GATT) rules
The first U.S. statute dealing with foreign unfair trade
practices was a CVD law passed in 1897. The provisions of the
1897 statute remained substantially the same until 1979, when
the U.S. CVD law was changed to conform with the agreement
reached in the Tokyo Round of multilateral trade negotiations.
The law prior to 1979 required the Secretary of the
Treasury to assess countervailing duties on imported dutiable
merchandise benefiting from the payment or bestowal of a
``bounty or grant.'' The 1897 law authorized countervailing
duties against any bounty or grant on the export of foreign
articles. In 1922, Congress amended the provision to cover
bounties or grants on the manufacture or production of
merchandise as well as on its export. The amount of the
countervailing duty was to equal the net amount of the ``bounty
or grant.'' Prior to the amendments made by the Trade Act of
1974, the CVD law applied only to dutiable merchandise and
afforded no injury test.
The Trade Act of 1974 made two important changes to the CVD
law, although the substantive requirements of the CVD law
remained virtually the same. First, it extended the application
of the CVD law for the first time to duty-free imports, subject
to a finding of injury as required by the international
obligations of the United States (i.e., duty-free imports from
GATT members).
Second, the Trade Act of 1974 made extensive changes in
many procedural aspects of the law, which had the effect of
limiting executive branch discretion in administering the CVD
statute. The responsibilities for CVD investigations were also
split, with the Department of Treasury being responsible for
subsidy determinations and the ITC being responsible for injury
determinations. In 1979, under President Carter's
Reorganization Plan No. 3, the responsibility for administering
the subsidy portions of the CVD statute was transferred from
the Department of the Treasury to the DOC.\2\
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\2\ Exec. Order No. 12188, January 4, 1980, 44 Fed. Reg. 69273.
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Tokyo Round Subsidies Code
During the Tokyo Round of trade negotiations in the 1970's,
a multilateral agreement governing the use of subsidies and
countervailing measures was concluded and signed by the United
States. In order to enforce obligations with regard to the use
of subsidies, the Agreement provided for improved international
procedure for notification, consultation and dispute settlement
and, where a breach of an obligation concerning the use of
subsidies is found to exist, or a right to relief exists
countermeasures are contemplated. In addition to the
availability of either remedial measures or countermeasures
through the dispute settlement process, countries could also
take traditional countervailing duty action to offset subsidies
upon a showing of material injury to a domestic industry by
reason of subsidized imports. The agreement set out criteria
for material injury determinations.
The key provisions of the Agreement were as follows: (1)
prohibition of export subsidies on non-primary products as well
as primary mineral products; (2) description of export
subsidies which superseded the requirement that an export
subsidy must result in export prices lower than prices for
domestic sales, and inclusion of an updated illustrative list
of subsidy practices; (3) recognition of the harmful trade
effects of domestic subsidies and therefore, the permissibility
of relief (including countermeasures) where such subsidies
injure domestic producers and nullify or impair benefits of
concessions under the GATT (including tariff bindings); or
cause serious prejudice to the other signatories; (4)
commitment by signatories to ``take into account'' conditions
of world trade and production (e.g., prices, capacity, etc.) in
fashioning their subsidy practices; (5) improved discipline on
the use of export subsidies for agriculture; (6) provisions
governing the use and phase-out of export subsidies by
developing countries; (7) tight dispute settlement process; (8)
greater transparency regarding subsidy practices including
provisions for GATT notification of practices of other
countries; (9) an injury and causation test designed to afford
relief where subsidized imports (whether an export or domestic
subsidy is involved) impact on U.S. producers either through
volume or through effect on prices; and (10) greater
transparency in the administration of CVD laws and regulations.
Congress approved the GATT Subsidies Code under section
2(a) of the Trade Agreements Act of 1979. Section 101 of the
1979 Act added a new title VII to the Tariff Act of 1930,
containing the new provisions of the CVD law to conform to U.S.
obligations under the Subsidies Code. One of the most
fundamental changes made by the 1979 Act was the requirement of
an injury test in all CVD cases involving imports from
``countries under the Agreement''--countries which either are
signatories to the Subsidies Code or have assumed substantially
equivalent obligations to those under the Code. For countries
that were not ``countries under the Agreement,'' a special
section of the CVD statute applied. Specifically, section 303
of the Tariff Act of 1930, as amended, permitted countervailing
duties to be imposed without an injury test for such countries.
In addition, section 303 applied a different definition of
subsidy. Other changes made by the 1979 Act included the grant
of provisional relief for the first time, reduction of the time
periods for investigation, and greater opportunities for
participation by interested parties.
Uruguay Round Subsidies Agreement
The Uruguay Round Subsidies Agreement goes beyond the Tokyo
Round Code by: (1) providing definitions of key terms such as
``subsidy'' and ``serious prejudice'' for the first time in any
GATT agreement; (2) prohibiting export subsidies and subsidies
based on the use of domestic instead of imported goods; (3)
creating a special presumption of serious prejudice for
egregious subsidies; (4) defining and significantly
strengthening the procedures for showing when serious prejudice
exists in foreign markets; (5) creating a ``green light''
category (which lapsed January 1, 2000) of government
assistance that is non-actionable and non-countervailable; (6)
requiring most developing countries to phase out export
subsidies and import substitution subsidies; and (7) applying
the WTO dispute settlement mechanism, which will end the
present ability of the subsidizing government to block adoption
of unfavorable panel reports.
In 1994, Congress implemented the Agreement on Subsidies
and Countervailing Measures of the Uruguay Round Multilateral
Trade Negotiations (Subsidies Agreement) under title II of the
Uruguay Round Trade Agreements Act. Part 2 of subtitle B under
title II contains the repeal of section 303 of the Tariff Act
of 1930 and the new provisions of the CVD law to conform to
U.S. obligations under the Subsidies Agreement.
The Act provides for the application of an injury test to
all members of the WTO. The definition of a subsidy applicable
to non-WTO members was incorporated in section 701 of the
Tariff Act of 1930. Accordingly, section 303 was repealed
because it was no longer necessary. The Uruguay Round
Agreements Act provides a special procedure for making injury
determinations for those CVD orders, previously issued under
section 303, which apply to goods from a country not a
signatory to the Code but now a member of the WTO.
Highlights of the Uruguay Round Subsidies Agreement and CVD Statute
Definition of a subsidy.--Section 251 of the Uruguay Round
Agreements Act provides that a subsidy is determined to exist
if there is a financial contribution by a government or any
public body, or any form of income or price support, which
confers a benefit. Examples of financial contribution include a
direct transfer of funds (e.g., grants, loans, equity
infusions), a potential direct transfer (e.g., loan
guarantees), the foregoing of revenue otherwise due (e.g., tax
credits), the provision of goods or services, other than
general infrastructure, or the purchase of goods. This may also
include cases where a government entrusts or directs a private
body to carry out these functions. The Uruguay Round Agreements
Act also provides guidelines for determining when there is a
``benefit to the recipient'' in the case of an equity infusion,
a loan, a loan guarantee, or provision of goods or services.
Specificity.--In determining whether a countervailable
subsidy exists, the statute provides that a subsidy will be
deemed to be ``specific'' if it is provided in law or in fact
to a specific enterprise or industry, or group of enterprises
or industries. Export subsidies (i.e., those contingent upon
export performance), import substitution subsidies (i.e., those
contingent on the use of domestic over imported goods), and
certain domestic subsidies if provided to a specific enterprise
or industry, or group of enterprises or industries are
included. A subsidy limited to certain enterprises within a
designated geographical region is considered specific.
Prohibited ``red light'' subsidies.--The Agreement
identifies two types of subsidies that are prohibited under all
circumstances: (1) subsidies based on export performance and
(2) subsidies based on the use of domestic rather than imported
goods. Article III includes those covered in the illustrative
list of export subsidies provided in annex I to the Agreement
such as more favorable transport and freight terms for exports,
special tax deductions based on export, and export credit
guarantees or insurance programs providing rates that are
inadequate to cover long-term operating costs. The Uruguay
Round Agreements Act establishes procedures for investigating
prohibited subsidies; if Commerce has reason to believe that
foreign goods are benefiting from a prohibited subsidy, the
United States Trade Representative (USTR) will then determine
whether to initiate a section 301 investigation.
Non-actionable ``green light'' subsidies.--The Agreement
identifies three types of non-countervailable or ``green
light'' subsidies: (1) certain research subsidies (excluding
those provided to the aircraft industry); (2) subsidies to
disadvantaged regions; and (3) subsidies for adaptation of
existing facilities to new environmental requirements. The
Uruguay Round Agreements Act provides expressly that the
``green light'' provisions on research and pre-competitive
development activity do not apply to civil aircraft products.
The Agreement stipulates that the provisions on non-
actionable subsidies apply for 5 years, unless extended or
modified. Because the Subsidies Committee of the WTO was unable
to reach a consensus on extending the application of these
provisions in their existing or modified form, the ``green
light'' provisions automatically lapsed as of January 1, 2000.
Accordingly, with the exception of non-specific subsidies,
which remain non-actionable and non-countervailable, subsidies
formerly qualifying as non-actionable ``green light'' subsidies
now fall within the actionable category.
Enforcement of U.S. rights.--Sections 281 and 282 of the
Uruguay Round Agreements Act set forth a mechanism for
enforcing U.S. rights under the Uruguay Round Subsidies
Agreement, reviewing the operation of provisions in the
Agreement relating to green light subsidies, and ensuring
prompt and effective implementation of successful WTO dispute
settlement proceedings.
Section 282 of the Uruguay Round Agreements Act \3\
provides for an ongoing review of the Subsidies Agreement and
establishes objectives for that review. Footnote 25 of the
Subsidies Agreement required the Subsidies Committee to review
the operation of the green light category of research subsidies
within 18 months from the date of entry into force: January 1,
1995. Under section 282, the Administration was required to
include all green light subsidies in its review.
---------------------------------------------------------------------------
\3\ Public Law 103-465, 19 U.S.C. 3572.
---------------------------------------------------------------------------
Section 282(c) provides that subparagraphs B, C, D, and E
of section 771 of the Tariff Act of 1930, which established the
non-countervailable status of ``green light'' subsides under
U.S. law, expire 66 months after the date of entry into force
of the WTO unless extended by Congress. USTR is directed to
consult with the appropriate congressional committees and the
private sector and then submit legislation to implement an
extension of the ``green light'' subsidies, if such an
extension is agreed upon by the WTO. A bill to provide such an
extension would be considered under ``fast track'' procedures.
Because the Subsidies Committee of the WTO was unable to reach
a consensus on extending the ``green light'' subsidies
provisions by December 31, 1999, subparagraphs B, C, D, and E
of section 771 of the Tariff act of 1930 expired on July 1,
2000.
Rules for developing countries.--The Uruguay Round
Agreements Act provides different treatment for developing
country subsidies because the Subsidies Agreement provides an
8- to 10-year window for developing countries with annual GNP
per capita at or above $1,000 to phase out all export
subsidies. For least developed countries and countries with GNP
per capita below $1,000, the phase-out period for export
subsidies for competitive products is 8 years. Developing
countries are allowed a 5-year phase-out period, and the least-
developed countries an 8-year period, to eliminate prohibited
import substitution subsidies.
Subsidy determinations
As noted above, section 701 of the Tariff Act of 1930, as
amended,\4\ provides for the imposition of additional duties
whenever a countervailable subsidy is bestowed by a foreign
country upon the manufacture or production for export of any
article which is subsequently imported into the United States.
Reference to the sale of merchandise includes the entering into
of any leasing arrangement regarding the merchandise that is
equivalent to the sale of the merchandise. The countervailing
duty will apply whether the merchandise is imported directly or
from third countries, and whether or not in the same condition
as when exported.
---------------------------------------------------------------------------
\4\ 19 U.S.C. 1671.
---------------------------------------------------------------------------
Again, as noted above, section 701(c) applies to a country
which is not a ``Subsidies Agreement country.'' Under section
701(c), a country which is not a ``Subsidies Agreement
country'' is not entitled to an injury test. In addition,
certain provisions pertaining to suspension agreements, special
rules for regional industries, critical circumstances, and the
5-year review of countervailing duty orders do not apply to
such a country.
Countervailing duties are imposed in the amount of the net
countervailable subsidy as determined by the DOC. To determine
the amount of net countervailable subsidy on which the CVD will
be based, the DOC may subtract from gross countervailable
subsidy the amount of:
(1) any application fee, deposit, or similar payment
paid to qualify for or receive the subsidy;
(2) any loss in the countervailable subsidy value
resulting from deferred receipt mandated by government
order; and
(3) export taxes, duties, or other charges levied on
the exports to the United States specifically intended
to offset the countervailable subsidy.
Upstream subsidies
The Trade and Tariff Act of 1984 modified the application
of the CVD law to ``upstream subsidies''--subsidies bestowed on
inputs which are then incorporated into the manufacture of a
final product which is exported to the United States. Section
268 of Uruguay Round Agreements Act further modified the law by
establishing criteria for determining the existence of an
upstream subsidy. Additional criteria were necessary given the
additions of the statutory definition of subsidy and the new
category of import substitution subsidies.
Section 771(A) of the Tariff Act of 1930, as amended, which
provides for upstream subsidies, is unrelated to the basic
definition of a subsidy. The potential for an upstream subsidy
exists only when a sector-specific benefit meeting all the
other criteria of being a countervailable subsidy is provided
to the input producer. A determination that the subsidy is also
bestowing a ``competitive benefit'' on the merchandise is also
required. The provision is also limited to countervailable
subsidies paid or bestowed by the country in which the final
product is manufactured.
With regard to the ``competitive benefit'' criterion, the
DOC must decide that a competitive benefit has been bestowed
when the price for the input used in manufacture or production
of the merchandise subject to investigation is lower than the
price the manufacturer or producer would otherwise pay for the
input from another seller in an arm's length transaction.
Whenever the DOC has reasonable grounds to believe or suspect
an upstream subsidy is being paid or bestowed, the DOC must
investigate whether it is in fact and, if so, include the
amount of any competitive benefit, not to exceed the amount of
upstream subsidy, in the amount of any CVD imposed on the
merchandise under investigation.
Agricultural subsidies
Section 771(5B) provides a separate, special rule for the
calculation of countervailable subsidies on certain processed
agricultural products.
AD Law: Less-Than-Fair-Value (LTFV) Determination
Dumping generally refers to a form of international price
discrimination, whereby goods are sold in one export market
(such as the United States) at prices lower than the prices at
which comparable goods are sold in the home market of the
exporter, or in its other export markets.
Three provisions of U.S. law address different types of
dumping practices. The Antidumping Act of 1916 provides for
criminal and civil penalties for the sale of imported articles
at a price substantially less than the actual market value or
wholesale price, with the intent of destroying or injuring an
industry in the United States. Title VII of the Tariff Act of
1930, as amended, provides for the assessment and collection of
AD duties by the U.S. government after an administrative
determination that foreign merchandise is being sold in the
U.S. market at less than fair value and that such imports are
materially injuring the U.S. industry. Finally, section 1317 of
the Omnibus Trade and Competitiveness Act of 1988 establishes
procedures for the USTR to request a foreign government to take
action against third-country dumping that is injuring a U.S.
industry, and section 232 of the Uruguay Round Agreements Act
permits a third country to request that an order be issued
against dumped imports from another country that are materially
injuring an industry in a third country.
Historical background \5\
In 1916 the Congress enacted the Antidumping Act of 1916,
providing a civil cause of action in federal court for private
damages as well as for criminal penalties against parties who
dump foreign merchandise in the United States.\6\ The
requirements under this statute, however, particularly the need
to show evidence of intent, are difficult to meet, and the need
for a different type of AD law was subsequently considered by
Congress. In 1921 the Antidumping Act of 1921 was passed, which
provided the statutory basis, until 1979, for an administrative
investigation by the Department of the Treasury of alleged
dumping practices and for imposition of AD duties.\7\ In 1954,
the administration of the AD law was split, and the function of
determining injury was transferred from the Treasury Department
to the U.S. Tariff Commission (now the ITC). The function of
determining sales at less than fair value was left with the
Treasury Department until 1979.
---------------------------------------------------------------------------
\5\ For another useful discussion of the history of the development
of U.S. antidumping laws, see Congressional Budget Office, How the GATT
affects U.S. Antidumping and Countervailing-Duty Policy, Sept. 1994.
\6\ Act of September 8, 1916, ch. 463, sec. 801, 39 Stat. 798, 15
U.S.C. 72.
---------------------------------------------------------------------------
For a description of the challenge to the Antidumping Act of
1916 in the WTO brought by the European Union and Japan, see
the discussion of WTO Panel Reviews at the end of the AD/CVD
section.
---------------------------------------------------------------------------
\7\ Act of May 27, 1921, ch. 14, 42 Stat. 11, 19 U.S.C. 160 (now
repealed).
---------------------------------------------------------------------------
During the post-World War II negotiations to establish an
International Trade Organization, the United States proposed a
draft article on dumping, based on the Antidumping Act of 1921.
This draft became the basis for article VI of the GATT, which
is the international framework governing national AD laws.
During the 1960's, AD actions and their potential for
abuse, rather than the dumping practice itself, became a source
of great concern to many nations. As a result, during the
Kennedy Round of multilateral trade negotiations, the GATT
Antidumping Code of 1967 was established. The 1967 Code had
three main functions: (1) to clarify and elaborate on the broad
concepts of article VI of the GATT; (2) to supplement article
VI by establishing appropriate procedural requirements for AD
investigations; and (3) to bring all GATT signatory countries
into conformity with article VI. The GATT Antidumping Code came
into force on July 1, 1968, and provided for the establishment
of a GATT Committee on Antidumping Practices, whose function
was to review annually the operation of national antidumping
laws.
During the Tokyo Round of multilateral trade negotiations
in the 1970's, the GATT Antidumping Code was amended to conform
to the newly negotiated Agreement Relating to Subsidies and
Countervailing Measures, also negotiated at that time and
involving changes in article VI of the GATT. The GATT Agreement
on Implementation of article VI of the GATT, Relating to
Antidumping Measures, came into force on January 1, 1980.\8\
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\8\ Agreement on Implementation of article VI of the General
Agreement on Tariffs and Trade, MTN/NTM/W/232, reprinted in House Doc.
No. 96-153, pt. I at 311.
---------------------------------------------------------------------------
The Congress approved the revised GATT Antidumping Code
under section 2(a) of the Trade Agreements Act of 1979.\9\
Title I of the 1979 Act repealed the Antidumping Act of 1921
and added a new title VII to the Tariff Act of 1930
implementing the provisions of the Agreement in a new U.S.
antidumping law. In addition to the substantive and procedural
changes made by the 1979 Act, the responsibility for making
dumping determinations was transferred from the Department of
the Treasury to the DOC in 1979.\10\ The AD law was further
amended by title VI of the Trade and Tariff Act of 1984,\11\
and title I, subtitle C, part 2 of the Omnibus Trade and
Competitiveness Act of 1988.
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\9\ Public Law 96-39, approved July 26, 1979.
\10\ Reorganization Plan No. 3 of 1979, 44 Fed. Reg. 69,273 (Dec.
3, 1979); and Exec. Order No. 12188, January 2, 1980, 45 Fed. Reg. 989.
\11\ Public Law 98-573, approved October 30, 1984. Technical
corrections to the 1984 amendments were included in section 1886 of the
Tax Reform Act of 1986, Public Law 99-514, approved October 22, 1986.
---------------------------------------------------------------------------
Finally, during the Uruguay Round negotiations, provisions
related to antidumping were further amended through the
Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994 (the Antidumping
Agreement). Article VI of the original GATT remained unchanged
in the 1994 GATT Agreement.
Effective January 1, 1995, the Congress implemented the
Antidumping Agreement under title II of the Uruguay Round
Agreements Act. The Act made considerable substantive and
procedural changes to the U.S. AD statute.
Basic provisions
Section 731 of the Tariff Act of 1930, as amended,\12\
provides that an AD duty shall be imposed, in addition to any
other duty, if two conditions are met. First, the DOC must
determine that ``a class or kind of foreign merchandise is
being, or is likely to be, sold in the United States at less
than its fair value.'' The determination of whether LTFV sales
exist, and what is the margin of dumping, is based on a
comparison of ``normal value'' with the ``export price'' of
each import sale made during the relevant time period under
investigation. Second, the ITC must determine that ``an
industry in the United States is materially injured, or is
threatened with material injury, or the establishment of an
industry in the United States is materially retarded, by reason
of imports of that merchandise.'' If the DOC determines that
LTFV sales exist and the ITC determines that material injury
exists, an AD order is issued imposing AD duties equal to the
amount by which normal value (i.e., the price in the foreign
market) exceeds the export price (i.e., U.S. price) for the
merchandise (the dumping margin).
---------------------------------------------------------------------------
\12\ 19 U.S.C. 1673.
---------------------------------------------------------------------------
Basis of comparison: normal value
Normal value is determined by one of three methods, in
order of preference: home market sales, third-country sales, or
constructed value. If a foreign like product is sold in the
market of the exporting country for home consumption, then
normal value is to be based on such sales. If home market sales
do not exist, or are so few as to form an inadequate basis for
comparison, then the price at which the foreign like product is
sold for exportation to countries other than the United States
becomes the basis for normal value. If neither home market
sales nor third-country sales form an adequate basis for
comparison, then normal value is the constructed value of the
imported merchandise. Constructed value is determined by a
formula set forth in the statute, which is the sum of costs of
production, plus the actual amount of profit and for selling,
general and administrative expenses. If actual data is not
available, then a surrogate for profit and such expenses may be
used, as specified in the statute.
Normal value based on home market or third-country sales is
a single price, in U.S. dollars, which represents the weighted
average of prices in the home market or third-country market
during the period under investigation. Sales made at less than
the cost of production may be disregarded in the determination
of normal value under certain circumstances. Adjustments are to
be made for differences in merchandise, quantities sold,
circumstances of sale, and differences in level of trade to
provide for comparability of normal value with export price.
Section 223(a)(7) of the Uruguay Round Agreements Act and the
accompanying Statement of Administrative Action (SAA) changed
the requirements for making level of trade adjustments to
provide that the DOC is to make a level of trade adjustment
(i.e., deduct the price difference between the two levels of
trade) if sales are made at different levels of trade and the
appropriate adjustment can be established. The level of trade
adjustment was intended to provide the normal value counterpart
to the related party profit deduction in constructed export
price sales (described below) so that the effect is to compare
a U.S. sale to a sale in the home market at the same point in
the commercial transaction. Finally, averaging or sampling
techniques may be used in the determination of normal value
whenever a significant volume of sales is involved or a
significant number of price adjustments is required.
If the exporting country is a non-market economy, the
normal value is constructed by valuing the non-market economy
producer's ``factors of production'' in a market economy
country which is a significant producer of comparable
merchandise and which is at a level of economic development
comparable to the non-market economy, and adding amounts for
general expenses, profits, and packing. The ``factors of
production'' include labor, raw materials, energy and other
utilities, and representative capital costs.
In determining whether a country is a non-market economy,
the DOC will consider: the convertibility of the country's
currency, whether wages are determined through free bargaining
between labor and management, whether foreign investment is
permitted, the extent of government ownership, and the extent
of government control over the allocation of resources and the
pricing and output decisions of enterprises. The DOC's
determination of whether a country is a non-market economy is
not subject to judicial review.
Export price
The margin of dumping, and the amount of antidumping duty
to be imposed, is determined by comparing the normal value with
the export price of each entry into the United States of
foreign merchandise subject to the investigation. Export price
in general refers to either ``export price'' or the
``constructed export price'' of the merchandise, whichever is
appropriate. ``Export price'' is the price at which merchandise
is purchased or agreed to be purchased prior to date of
importation to the United States. It is typically used where
the purchaser is unrelated to the foreign manufacturer and is
based on the price agreed to before importation into the United
States. However, it may be used if the purchaser and foreign
manufacturer are related but the purchaser is merely the
processor of sales-related documentation and does not set the
price to the first unrelated customer. ``Constructed export
price'' is the price at which merchandise is sold or agreed to
be sold in the United States before or after importation, by or
for the account of the producer or exporter to the first
unrelated purchaser. Typically, it is used if the purchaser and
exporter are related.
Export price is adjusted to derive an ex-factory price,
including the subtraction of certain delivery expenses and U.S.
import duties. Additional subtractions are made from
constructed export price, including selling commissions,
indirect selling expenses, and expenses and profit for further
manufacturing in the United States. In addition, the Uruguay
Round Agreements Act provides for the deduction of an amount
for related party profit, if any, earned in a sale through a
related distributor to an end-user in the United States.
Third country dumping
Section 1318 of the Omnibus Trade and Competitiveness Act
of 1988 was enacted in response to concern over the injurious
effects of foreign dumping in third country markets. Section
1318 establishes procedures for domestic industries to petition
the USTR to pursue U.S. rights under article 12 of the GATT
Antidumping Code. A domestic industry that produces a product
like or directly competitive with merchandise produced by a
foreign country may submit a petition to USTR if it has reason
to believe that such merchandise is being dumped in a third
country market and such dumping is injuring the U.S. industry.
If USTR determines there is a reasonable basis for the
allegations in the petition, USTR shall submit to the
appropriate authority of the foreign government an application
requesting that antidumping action be taken on behalf of the
United States. Article 12 of the GATT Antidumping Code requires
that such an application ``be supported by price information to
show that the imports are being dumped and by detailed
information to show that the alleged dumping is causing injury
to the domestic industry concerned.'' (paragraph 2, article
12). Accordingly, at the request of the U.S. Trade
Representative, the appropriate officers of the DOC and the ITC
are to assist USTR in preparing any such application.
After submitting an application to the foreign government,
USTR must seek consultations with its representatives regarding
the requested action. If the foreign government refuses to take
any AD action, USTR must consult with the domestic industry on
whether action under any other U.S. law is appropriate.
The Uruguay Round Antidumping Agreement added a provision
providing authority to issue an order upon the request of a
third country, under certain circumstances. The Uruguay Round
Agreements Act provides that the government of a WTO member may
file with USTR a petition requesting that an investigation be
conducted to determine if imports from another country are
being dumped in the United States, causing material injury to
an industry in the petitioning country. USTR, after
consultation with the DOC and the ITC, and after obtaining the
approval of the WTO Council for Trade in Goods, is to determine
whether to initiate an investigation. If the DOC determines
that imports are dumped and the ITC determines that an industry
in the petitioning country is materially injured by such
imports, the DOC is to issue an AD order.
AD and CVD Laws: Material Injury Determination
Prior to issuance of an AD or CVD order, the ITC must
determine that the domestic industry is being materially
injured, or threatened with material injury, or the
establishment of a domestic industry is materially retarded, by
reason of dumped or subsidized imports. The standard of injury
under the AD and CVD laws is ``material injury,'' defined by
section 771(7) of the Tariff Act of 1930 as harm which is not
inconsequential, immaterial, or unimportant.
The ITC determination of injury basically involves a two-
prong inquiry: first, with respect to the fact of material
injury, and second, with respect to the causation of such
material injury (i.e., that dumping caused the injury, and not
other factors). The ITC is required to analyze the volume of
imports, the effect of imports on U.S. prices of like
merchandise, and the effects that imports have on U.S.
producers of like products, taking into account many factors,
including lost sales, market share, profits, productivity,
return on investment, and utilization of production capacity.
Also relevant are the effects on employment, inventories,
wages, the ability to raise capital, and negative effects on
the development and production activities of the U.S. industry.
Finally, in AD investigations, the ITC is to consider the
magnitude of the dumping margin.
Section 222(b)(2) of the Uruguay Round Agreements Act (19
U.S.C. 1677(7)(C)(iv)) states that, in determining market share
and the factors affecting financial performance, the ITC is to
focus primarily on the merchant market for the domestic like
product if domestic producers internally transfer significant
production of the domestic like product for the production of a
downstream article (i.e., captive production not for sale on
the merchant market). The SAA accompanying the implementing
legislation makes clear that captively produced imports are not
to be included in the import penetration ratio for the merchant
market if they do not compete with merchant market
production.\13\
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\13\ The Uruguay Round Agreements Act Statement of Administrative
Action at 853.
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Section 771(7) of the Tariff Act of 1930, as amended,
requires the ITC to cumulatively assess the volume and effect
of like imports from two or more countries subject to
investigation if the imports compete with each other and with
like products of the domestic industry in the U.S. market, as
long as the relevant petitions were filed on the same day or
investigations were initiated on the same day (for cases which
were self-initiated). However, the ITC is to immediately
terminate an investigation with respect to a country (and,
hence, may not cumulate imports from that country) if imports
from that country are ``negligible.'' Section 222(d) of the
Uruguay Round Agreements Act amended the negligibility standard
so that imports from a country are to be considered negligible
if they account for less than 3 percent of the volume of all
imports of such merchandise and if imports from all countries
accounting for less than 3 percent do not exceed 7 percent of
imports. Finally, the ITC has discretion not to cumulate
imports when the imports subject to investigation are products
of Israel.
Issues Common to AD and CVD Investigations
Initiation of investigation
AD and CVD investigations may be self-initiated by the DOC
or may be initiated as a result of a petition filed by an
interested party. Petitions may be filed by any of the
following, on behalf of the affected industry: (1) a
manufacturer, producer, or wholesaler in the United States of a
like product; (2) a certified or recognized union or group of
workers which is representative of the affected industry; (3) a
trade or business association with a majority of members
producing a like product; (4) a coalition of firms, unions, or
trade associations that have individual standing; or (5) a
coalition or trade association representative of processors, or
processor and growers, in cases involving processed
agricultural products. The DOC is required to provide technical
assistance to small businesses to enable them to prepare and
file petitions.
Petitions are to be filed simultaneously with both the DOC
and ITC. Within 20 days after the filing of a petition, the DOC
must decide whether or not the petition is legally sufficient
to commence an investigation. If so, an investigation is
initiated with respect to imports of a particular product from
a particular country.
Because of new standing provisions in the Uruguay Round
Agreements, section 212 of the Uruguay Round Agreements Act
requires DOC to determine, as part of its initiation
determination, whether the petition has been filed by or on
behalf of the industry. A petitioner has standing if: (1) the
domestic producers or workers who support the petition account
for at least 25 percent of the total production of the like
product; and (2) the domestic producers or workers who support
the petition account for more than 50 percent of the production
of the domestic like product produced by that portion of the
industry expressing support for or opposition to the petition.
The SAA accompanying the Act specifies that if the management
of a firm expresses a position in direct opposition to the
views of the workers in that firm, DOC will treat the
production of that firm as representing neither support for nor
opposition to the petition.\14\ The DOC is to poll the industry
if the petition does not meet the second test set forth above.
In such circumstances, the DOC is permitted 40 days in which to
determine whether it will initiate an investigation. Standing
of the industry may not be challenged to the agency after an
investigation is initiated but may be challenged later in
court.
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\14\ Uruguay Round Agreements Act Statement of Administrative
Action at 862.
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Section 609 of the Trade and Tariff Act of 1984 establishes
a procedure in AD investigations by which the DOC may monitor
imports from additional supplier countries for up to 1 year in
order to determine whether persistent dumping exists with
respect to that product and self-initiation of additional
dumping cases is warranted.
Preliminary ITC injury determination
The ITC must determine whether there is a ``reasonable
indication'' of material injury, based on the information
available to it at the time. The petitioner bears the burden of
proof with respect to this issue. If the ITC preliminary
determination is negative, the investigation is terminated. If
it is positive, the investigation continues. The ITC is to make
this determination within 45 days of the date of filing of the
petition or self-initiation, or within 25 days after the date
on which the ITC receives notice of initiation if the DOC has
extended the period for initiation in order to poll the
industry to determine standing.
Preliminary DOC determination
If the ITC makes an affirmative preliminary injury
determination, then the DOC must determine whether dumping or
subsidization is occurring.
In AD cases, the DOC must determine whether there is a
``reasonable basis to believe or suspect that the merchandise
is being sold, or is likely to be sold, at less than fair
value,'' within 140 days after initiation. The preliminary
determination is based on the information available to the DOC
at the time. If affirmative, the preliminary determination must
include an estimated average amount by which the normal value
exceeds the export price. An expedited preliminary
determination within 90 days of initiation of the investigation
may be made based on information received during the first 60
days if such information is sufficient and the parties provide
a written waiver of verification and an agreement to have an
expedited preliminary determination. A preliminary
determination may also be expedited for cases involving short
life cycle merchandise, if the foreign producer has been
subject to prior affirmative dumping determinations on similar
products. On the other hand, the preliminary determination may
be postponed until 190 days after initiation by the DOC, at the
petitioner's request or in cases which the DOC determines are
extraordinarily complicated.
In subsidy cases, the DOC must determine whether there is a
``reasonable basis to believe or suspect that a countervailable
subsidy is being provided,'' within 65 days after initiation of
the investigation. In cases involving upstream subsidies, the
time period may be extended to 250 days. If affirmative, the
preliminary determination must include an estimated amount of
the net countervailable subsidy. An expedited preliminary
determination may be made based on information received during
the first 50 days if such information is sufficient and the
parties provide a written waiver of verification and agree to
an expedited preliminary determination. On the other hand, the
preliminary determination may be postponed until 130 days after
initiation at the petitioner's request or in cases which the
DOC determines are extraordinarily complicated.
The effect of an affirmative preliminary determination is
twofold: (1) The DOC must order the suspension of liquidation
of all entries of foreign merchandise subject to the
determination from the date of publication of the preliminary
determination. The DOC must also order the posting of a cash
deposit, bond, or other appropriate security for each
subsequent entry of the merchandise equal to the estimated
margin of dumping or the amount of the net countervailable
subsidy; and (2) the ITC must begin its final injury
investigation, and the DOC must make all information available
to the ITC which is relevant to an injury determination. If the
preliminary determination is negative, no suspension of
liquidation occurs, and the DOC investigation simply continues
into the final stage.
In AD investigations in which the petitioner alleges
critical circumstances, the DOC must determine, on the basis of
information available at the time, whether (1) there is a
history of dumping and material injury in the United States or
elsewhere of the subject merchandise, or the importer knew or
should have known that the merchandise was being sold at less
than fair value and that there was likely to be material injury
by reason of such sales; and (2) there have been massive
imports of the merchandise over a relatively short period.
In CVD investigations involving ``countries under the
Agreement'' in which the petitioner alleges critical
circumstances, the DOC must determine, on the basis of
information available at the time, whether (1) the alleged
countervailable subsidy is inconsistent with the GATT Subsidies
Agreement; and (2) there have been massive imports of the
merchandise over a relatively short period.
In both AD and CVD investigations, this critical
circumstances determination may be made beginning prior to a
preliminary determination of subsidies or sales at less than
fair value. If the DOC determines critical circumstances exist,
then any suspension of liquidation ordered is to retroactively
apply to unliquidated entries of merchandise entered up to 90
days prior to the date suspension of liquidation was ordered.
Final DOC determination
In AD investigations, the DOC must issue its final LTFV
determination within 75 days after the date of its preliminary
determination, unless a timely request for extension is
granted, in which case the final determination must be made
within 135 days. In CVD investigations, the DOC must issue a
final subsidy determination within 75 days after the date of
its preliminary determination, unless the investigation
involves upstream subsidies, in which case special extended
time limits apply. If there are simultaneous investigations
under the AD and CVD laws involving imports of the same
merchandise, the final CVD determination may be postponed until
the date of the final determination in the AD investigation at
the request of a petitioner.
In both LTFV and subsidy investigations, the investigation
is terminated if the final determination is negative, including
any suspension of liquidation which may be in effect, and all
estimated duties are refunded and all appropriate bonds or
other security are released. If the final determination is
affirmative, the DOC orders the suspension of liquidation and
posting of a cash deposit, bond, or other security (if such
actions have not already been taken as a result of the
preliminary determination), and awaits notice of the ITC final
injury determination.
Final ITC injury determination
Within 120 days of a DOC affirmative preliminary
determination or 45 days of a DOC affirmative final
determination, whichever is longer, the ITC must make a final
determination of material injury. If the DOC preliminary
determination is negative, and the DOC final determination is
affirmative, the ITC has until 75 days after the final
affirmative determination to make its injury determination.
Termination or suspension of investigations
Either the DOC or ITC may terminate an AD or CVD
investigation upon withdrawal of the petition by petitioner, or
by the DOC if the investigation was self-initiated. The DOC may
not, however, terminate an investigation on the basis of a
quantitative restriction agreement limiting U.S. imports of the
merchandise subject to investigation unless the DOC is
satisfied that termination on the basis of such agreement is in
the public interest.
The DOC may suspend a CVD investigation on the basis of one
of three types of agreements entered into with the foreign
government or with exporters who account for substantially all
of the imports under investigation. The three types of
agreements are: (1) an agreement to eliminate the subsidy
completely or to offset completely the amount of the net
countervailable subsidy within 6 months after suspension of the
investigation; (2) an agreement to cease exports of the
subsidized merchandise to the United States within 6 months of
suspension of the investigation; and (3) an agreement to
eliminate completely the injurious effect of subsidized exports
to the United States (which, unlike under the AD law, may be
based on quantitative restrictions).
The DOC may suspend an AD investigation on the basis of one
of three types of agreements entered into with exporters who
account for substantially all of the imports under
investigation: (1) an agreement to cease exports of the
merchandise to the United States within 6 months of suspension
of the investigation; (2) an agreement to revise prices to
eliminate completely any sales at less than fair value; and (3)
an agreement to revise prices to eliminate completely the
injurious effect of exports of such merchandise to the United
States. Unlike CVD cases, AD investigations cannot generally be
suspended on the basis of quantitative restriction agreements.
The one exception is where the AD investigation involves
imports from a non-market economy country.
The DOC may not, however, accept any suspension agreement
in either an AD or CVD investigation unless it is satisfied
that suspension of the investigation is in the public interest,
and effective monitoring of the agreement is practicable. If
the DOC determines not to accept a suspension agreement, it is
to provide to the exporters who would have been subject to the
agreement both the reasons for not accepting the agreement and
an opportunity to submit comments, where practicable.
Prior to actual suspension of an investigation, the DOC
must provide notice of its intent to suspend and an opportunity
for comment by interested parties. When the DOC decides to
suspend the investigation, it must publish notice of the
suspension, and issue an affirmative preliminary LTFV or
subsidy determination (unless previously issued). The ITC also
suspends its investigation. Any suspension of liquidation
ordered as a result of the affirmative preliminary LTFV
determination, however, is to be terminated, and all deposits
of estimated duties or bonds posted are to be refunded or
released.
If, within 20 days after notice of suspension is published,
the DOC receives a request for continuation of the
investigation from a domestic interested party or from
exporters accounting for a significant proportion of exports of
the merchandise, then both the DOC and ITC must continue their
investigations.
The DOC has responsibility for overseeing compliance with
any suspension agreement. Intentional violations of suspension
agreements are subject to civil penalties.
AD or CVD order
An AD or CVD order may be issued only if both the DOC and
ITC issue affirmative final determinations, in both title VII
AD and CVD investigations and in section 303 CVD investigations
requiring an injury test.
A DOC final LTFV determination must include its
determinations of normal value and export price, which are the
basis for assessment of AD duties and for deposit of estimated
AD duties on future entries. Within 7 days of notice of an
affirmative final ITC determination, the DOC must issue an AD
duty order which (1) directs the Customs Service to assess AD
duties equal to the amount by which normal value exceeds the
export price, i.e., the dumping margin; (2) describes the
merchandise to which the AD duty applies; and (3) requires the
deposit of estimated AD duties pending liquidation of entries,
at the same time as estimated normal customs duties are
deposited. The DOC must publish notice of its final
determination, which shall be the basis for assessment of AD
duties and for deposit of estimated AD duties on future
entries.
For CVD investigations, the DOC must issue a CVD order
within 7 days of notice of an affirmative final ITC
determination, which (1) directs the Customs Service to assess
countervailing duties equal to the amount of the net
countervailable subsidy; (2) describes the merchandise to which
the countervailing duty applies; and (3) requires the deposit
of estimated countervailing duties pending liquidation of
entries, at the same time as estimated normal customs duties
are deposited. The DOC must publish notice of its determination
of net countervailable subsidy which shall be the basis for
assessment of countervailing duties and for deposit of
estimated countervailing duties on future entries.
Differences between estimated and final duties
If a cash deposit or bond collected as security for
estimated AD or countervailing duties pursuant to an
affirmative preliminary or final LTFV or CVD determination is
greater than the amount of duty assessed pursuant to an AD or
CVD order, then the difference between the deposit and the
amount of final duty will be refunded for entries prior to
notice of the final injury determination. Sections 707 and 737
of the Tariff Act of 1930, as amended, provide that if the cash
deposit or bond is lower than the final duty under the order,
then the difference is disregarded. No interest accrues in
either case.\15\
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\15\ With respect to AD determinations, section 40 of the Trade Law
Technical Corrections and Miscellaneous Amendments Act of 1996
clarifies that the cap on the amount of the AD duty applies not only to
cash deposits but to bonds as well, making it consistent with the cap
applied in CVD determinations.
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If estimated AD or countervailing duties deposited for
entries after notice of the final injury determination are
greater than the amount of final AD or countervailing duties
determined under an AD or CVD order, then the difference will
be refunded, together with interest on the amount of
overpayment. If estimated duties are less than the amount of
final duties, then the difference will be collected together
with interest on the amount of such underpayment.
Administrative review
The DOC is required, upon request, to conduct an annual
review of outstanding AD and CVD orders and suspension
agreements. For all entries of merchandise subject to an AD
review, the DOC must determine the normal value, export price,
and the amount of dumping margin. For all entries of
merchandise subject to a CVD review, the DOC must review and
determine the amount of any net countervailable subsidy. These
determinations will provide the basis for assessment of AD and
countervailing duties on all entries subject to the review, and
for deposits of estimated duties on entries subsequent to the
period of review.
The results of its annual review must be published together
with a notice of any AD or countervailing duty to be assessed,
estimated duty to be deposited, or investigation to be resumed.
Under the Uruguay Round Agreements Act, time limits were added
to the administrative review process so that final
determinations are due in 1 year (with extensions up to an
additional 6 months available).
Changed circumstances review
Under the statute, a review of a final determination or of
a suspension agreement is to be conducted by the DOC or ITC
whenever it receives information or a request showing changed
circumstances sufficient to warrant such review. Without good
cause shown, however, no final determination or suspension
agreement can be reviewed within 24 months of its notice. The
party seeking revocation of an order has the burden of
persuasion as to whether there are changed circumstances
sufficient to warrant revocation.
Sunset review
The Uruguay Round Agreements provide for the termination,
or sunset, of AD and CVD orders and suspension agreements after
5 years unless the authorities determine that such expiry would
be likely to lead to the continuation or recurrence of dumping,
subsidization or injury. Accordingly, section 220 of the
Uruguay Round Agreements Act provides that orders may be
revoked and suspension agreements terminated after 5 years if
the terms are met. The DOC publishes a notice of initiation of
a sunset review not later than 30 days before the fifth
anniversary of the order. A party interested in maintaining the
order must respond to the notice by providing information to
the DOC and ITC concerning the likely effects of revocation.
The DOC is to conclude its investigation within 240 days of
initiation, and the ITC within 360 days of initiation. These
deadlines may be extended if the investigation is
extraordinarily complicated.
In AD cases, the DOC is to determine whether revocation of
an order or termination of a suspension agreement would be
likely to lead to continuation or recurrence of dumping. In
making this determination, the DOC is to consider the weighted
average dumping margins determined in the investigation and
subsequent reviews and the volume of imports of the subject
merchandise for the period before and the period after the
issuance of the order or acceptance of the suspension
agreement. The DOC may consider other enumerated factors, upon
good cause shown. In addition, the DOC is to provide to the ITC
the magnitude of the margin of dumping that is likely to
prevail if the order is revoked or the suspended investigation
terminated.
In CVD cases, the DOC is to determine whether revocation of
an order or termination of a suspension agreement would be
likely to lead to continuation or recurrence of a
countervailable subsidy. In making this determination, the DOC
is to consider the net countervailable subsidy determined in
the investigation and subsequent reviews and whether any change
in the program which gave rise to the net countervailable
subsidy has occurred that is likely to be of effect. The DOC
may consider other enumerated factors, upon good cause shown.
In addition, the DOC is to provide to the ITC the amount of the
net countervailable subsidy that is likely to prevail if the
order is revoked or the suspended investigation terminated.
In both AD and CVD cases, the ITC is to determine whether
revocation would be likely to lead to the likelihood of
continuation or recurrence of material injury within a
reasonably foreseeable period of time. In making this
determination, the ITC is to consider the likely volume, price
effect, and impact of subject imports on the industry if the
order is revoked or the suspension agreement terminated. The
ITC is to take into account its prior injury determinations,
whether any improvement in the state of the industry is related
to the order or the suspension agreement, and whether the
industry is vulnerable to material injury if the order is
revoked or the suspension agreement terminated.
In AD sunset reviews, the ITC may also consider the
magnitude of the dumping margin. In CVD sunset reviews, the ITC
may also consider the magnitude of the net countervailable
subsidy. The nature of the countervailable subsidy as well as
whether the subsidy is covered by article 3 (export subsidies
or subsidies contingent on the use of domestic over imported
goods) or article 6.1 (subsidies causing serious prejudice) of
the Subsidies Agreement must be considered.
The ITC may cumulatively assess the volume and effect of
imports of the subject merchandise from all countries subject
to sunset reviews if such imports are likely to compete with
each other and with domestic like products in the U.S. market.
However, the ITC is not to cumulate imports a country if those
imports are not likely to have a discernible adverse impact on
the domestic industry.
In addition, the new provision specifies that 2 years after
the issuance of an order in which the subject merchandise is
sold in the United States by an importer related to the
exporter, and where the DOC determines that there is a
reasonable basis to believe or suspect that duty absorption is
occurring, the DOC is to examine in AD reviews whether duties
have been absorbed by a foreign producer or exporter subject to
the order. The ITC is to take such findings into account in its
sunset injury review. The SAA accompanying the bill provides,
however, that the provision is not to apply as a duty as cost
provision, in which AD duties are deducted from export price if
the related importer is being reimbursed for duties by the
manufacturer, effectively doubling AD duties.\16\
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\16\ Uruguay Round Agreements Act Statement of Administrative
Action at 885.
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Section 220 of the Uruguay Round Agreements Act provides
that orders already in effect as of the January 1, 1995 date of
implementation be deemed as issued on that date. Pursuant to
the schedule laid out in section 220 for the review of
transition orders, DOC began its review 18 months prior to
their fifth anniversary date (July 1, 1998). Section 220
provides that individual reviews shall be completed within 18
months of initiation, and that the review of all transition
orders shall be completed not later than 18 months after the
fifth anniversary of the date such orders were issued (July 1,
2001).
Expedited reviews with security in lieu of deposits
In AD cases only, the DOC may permit, for not more than 90
days after publication of an order, the posting of a bond or
other security in lieu of the deposit of estimated AD duties if
certain conditions exist. The DOC must be satisfied that it
will be able to determine, within such 90-day period, the
normal value and the export price for all merchandise entered
on or after an affirmative LTFV determination (either
preliminary or final, whichever is the first affirmative
determination) and before publication of an affirmative final
injury determination. Also, in order for the DOC to undertake
this expedited review, the preliminary determination in the
investigation must not have been extended because the case was
``extraordinarily complicated,'' the final determination must
not have been extended, the DOC must receive information
indicating that the revised margin would be significantly less
than the dumping margin specified in the AD order, and there
must be adequate sales to the United States since the
preliminary (or final) determination to form a basis for
comparison. The determination of such new dumping margin will
then provide the basis for assessment of AD duties on the
entries for which the posting of bond or other security has
been permitted, and will also provide the basis for deposits of
estimated AD duties on future entries.
Anticircumvention authority
In 1988, specific authority was added to U.S. law to
authorize the DOC to take action to prevent or address attempts
to circumvent an outstanding AD or CVD order. The authority
addresses four particular types of circumvention: assembly of
merchandise in the United States, assembly of merchandise in a
third country, minor alterations of merchandise, and later-
developed merchandise. Under certain circumstances and after
considering certain specified factors, the DOC may extend the
scope of the AD or CVD order to include parts and components
(in cases involving U.S. assembly), third country merchandise
(in cases involving third country assembly), altered
merchandise, or later-developed merchandise.
As part of the Uruguay Round negotiations on AD, the United
States sought the inclusion of an anticircumvention provision
in the Antidumping Agreement. The negotiators, however, were
unable to agree on a text concerning anticircumvention and
referred the matter to the Committee on Antidumping Practices
for resolution. Accordingly, the Agreement is silent concerning
anticircumvention authority.
The Uruguay Round Agreements Act modified the
anticircumvention provision of the 1988 Act to focus on the
nature of the assembly operation in the United States or third
country as well as on whether the parts and components from the
country subject to the order are a ``significant portion'' of
the total value of the merchandise assembled in the United
States or third country.
Best information available
In order to promote transparency, the Uruguay Round
signatories agreed to detailed guidelines concerning the use of
``best information available'' (BIA). In seeking to implement
those guidelines, the Uruguay Round Agreements Act preserves
the ability of the agencies to rely on adverse inferences upon
a finding that the party has failed to cooperate by not acting
to the best of its ability to comply with a request. At the
same time, however, the new law also contains limitations on
the use of BIA, many of which are designed to assist small
companies in providing information. For example, the agency is
to consider the ability of an interested party to provide the
information in the requested form and manner, and may modify
the requirements upon a reasoned and timely explanation by that
party. In addition, if the agency determines that a response
does not comply with the request, the agency must, to the
extent practicable, provide an opportunity to remedy the
deficiency.
The Agreements provide that the authorities are not
justified in disregarding less than ideal information if the
party acted to the best of its ability. Section 231 of the
Uruguay Round Agreements Act provides that the agencies are not
to decline to consider information that is timely submitted,
verifiable, and not so incomplete that it cannot serve as a
reliable basis for the determination, if the submitting party
acted to the best of its ability to meet the requirements, and
if the information can be used without undue difficulties.
The Act further provides that if an agency relies on
secondary information rather than on information submitted by a
respondent, it must, to the extent practicable, corroborate
that information from independent sources reasonably at its
disposal.
Continued Dumping and Subsidy Offset Act
Title X of the Agriculture and Related Agencies
Appropriations Act for Fiscal Year 2001 contained the Continued
Dumping and Subsidy Offset Act of 2000,\17\ commonly referred
to as the Byrd Amendment, which provides for the annual
distribution of AD and countervailing duties assessed pursuant
to a CVD order, an AD order, or a finding under the Antidumping
Act of 1921 to the affected domestic producers for qualifying
expenditures. The provision amends title VII of the Tariff Act
of 1930 by inserting a new section 754. The amendments made by
the new section apply to all AD and CVD assessments made on or
after October 1, 2000 with respect to orders in effect from
January 1, 1999.
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\17\ Public Law 106-387, approved October 28, 2000, 19 U.S.C. 754.
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Under the new section 754, the term ``affected domestic
producer'' is defined as a manufacturer, producer, farmer,
rancher, or worker representative (including associations of
such persons) that: (1) was a petitioner or interested party in
support of the petition with respect to which an AD order, a
finding under the Antidumping Act of 1921, or a CVD order has
been entered; and (2) remains in operation. Companies,
businesses, or persons that have ceased the production of the
product covered by the order or finding, or who have been
acquired by a company or business that is related to a company
that opposed the investigation, shall not be considered an
``affected domestic producer.''
Section 754(d)(1) requires the ITC to forward a list to the
Commissioner of the U.S. Customs Service of petitioners and
persons with respect to each order or finding, and a list of
persons that indicated support of a petition by letter or
through questionnaire response. The ITC was required to submit
its list related to orders and findings in effect on January 1,
1999 within 60 days of the date of enactment of the section
(i.e., by December 29, 2000). Thereafter, the ITC is to submit
lists to the Commissioner of Customs within 60 days after the
date an AD or CVD order or finding is issued. In those cases
where an injury determination was not required or the ITC's
records do not permit identification of petition supporters,
the ITC is to consult with the DOC to determine the identity of
the petitioner and those domestic parties who have entered
appearances during administrative reviews.
The Commissioner of Customs is responsible in section
754(c) for prescribing procedures for the annual distribution
of the AD and countervailing duties assessed. Distribution is
to be made not later than 60 days after the first day of a
fiscal year from duties assessed during the preceding fiscal
year. At least 30 days prior to a distribution, the
Commissioner is required to publish in the Federal Register a
notice of intention to distribute and the list of affected
domestic producers potentially eligible for the distribution
based on the list obtained from the ITC. The Commissioner is to
request certifications from each potentially eligible affected
domestic producer indicating: (1) that the producer desires to
receive a distribution; (2) that the producer is eligible to
receive the distribution as an affected domestic producer; and
(3) the qualifying expenditures incurred by the producer since
the issuance of the order or finding for which distribution has
not previously been made.
The Commissioner distributes all funds (including all
interest earned on the funds) from assessed duties received in
the preceding fiscal year to affected domestic industries based
on the certifications received. The distributions are to be
made on a pro rata basis based on new and remaining qualifying
expenditures. A ``qualifying expenditure'' is defined as an
expenditure incurred after the issuance of the AD finding or
order or CVD order in any of the following categories: (1)
manufacturing facilities; (2) equipment; (3) research and
development; (4) personnel training; (5) acquisition of
technology; (6) health care benefits to employees paid for by
the employer; (7) pension benefits to employees paid by the
employer; (8) environmental equipment, training, or technology;
(9) acquisition of raw materials and other inputs; and (10)
working capital or other funds needed to maintain production.
For each order or finding in effect on the date of
enactment of the section, the Commissioner of Customs was
required to establish a special account in the U.S. Treasury
within 14 days. Thereafter, the Commissioner is to establish a
special account in the U.S. Treasury with respect to each order
or finding within 14 days after the date of that an AD order or
finding or CVD order takes effect. The Commissioner is
responsible for depositing all AD or countervailing duties
(including interest earned on such duties) that are assessed
after the effective date of this section into the special
account appropriate for each AD order or finding or CVD order.
The Commissioner is to prescribe the time and manner in
which distribution of the funds in a special account shall be
made.
A special account is to terminate after: (1) the order or
finding with respect to which the account was established has
terminated; (2) all entries relating to the order or finding
are liquidated and duties assessed collected; (3) the
Commissioner has provided notice and a final opportunity to
obtain distribution; and (4) 90 days has elapsed from the date
of notice and final opportunity to obtain distribution.
On December 21, 2000, Australia, Brazil, Chile, the
European Union (EU), India, Indonesia, Japan, Korea, and
Thailand requested consultations with the United States in the
World Trade Organization (WTO) regarding the Continued Dumping
and Subsidy Offset Act of 2000. Canada and Mexico requested to
join the WTO consultations previously requested on January 16,
2001 and January 22, 2001 respectively.
Judicial review
An interested party dissatisfied with a final AD or CVD
determination or review may file an action in the U.S. Court of
International Trade (CIT) for judicial review. To obtain
judicial review of the administrative action, a summons and
complaint must be filed concurrently within 30 days of
publication of the final determination. As set forth in section
516A of the Tariff Act of 1930, as amended, the standard of
review used by the Court is whether the determination is
supported by ``substantial evidence on the record'' or
``otherwise not in accordance with law.'' Appeal of negative
preliminary determinations is based on whether the
determination is ``arbitrary, capricious, an abuse of
discretion, or [is] otherwise not in accordance with law.''
Judicial review of interlocutory decisions, previously
permitted, was eliminated by section 623 of the Trade and
Tariff Act of 1984. Decisions of the CIT are subject to appeal
to the U.S. Court of Appeals for the Federal Circuit.
As a result of provisions in the North American Free Trade
Agreement (NAFTA) and its implementing legislation, final
determinations in AD or CVD proceedings involving products of
Canada and Mexico are reviewed by a NAFTA panel instead of by
the CIT, if either the United States, Canadian or Mexican
government so requests. The panel will apply U.S. law and U.S.
standards of judicial review to decide whether U.S. law was
applied correctly by the DOC and the ITC.
WTO panel review
As part of the Uruguay Round Agreements, the parties agreed
to a strengthened dispute resolution process under the World
Trade Organization (WTO), in which parties are permitted to
bring their disputes to a review body for resolution. The
Uruguay Round Agreements Act contains provisions relating to
the adoption of panel reports in AD and CVD cases.
Section 129 of the Uruguay Round Agreements Act provides
that if a dispute settlement panel or appellate body finds that
an action by the ITC is not in conformity with U.S.
obligations, USTR may request that the ITC issue an advisory
report on whether the statute permits it to take steps that
would render its determination not inconsistent with those
findings. If the ITC issues an affirmative report, USTR may
request that it issue a determination not inconsistent with the
findings of the panel or appellate body. If, by virtue of that
determination, an AD or CVD order is no longer supported by an
affirmative determination, USTR, after consultation with
Congress, may direct the ITC to revoke the order. However, the
President may, again after consultation with Congress, reduce,
modify, or terminate the agency action.
If a dispute settlement panel or appellate body finds that
an action by the DOC is not in conformity with U.S.
obligations, USTR may request that the DOC issue a
determination that would render its determination not
inconsistent with those findings, after consultation with
Congress. USTR may further request that the DOC implement that
determination.
Any ITC and DOC action implemented as a result of dispute
settlement is to apply to liquidated entries of the subject
merchandise entered on or after the date on which USTR directs
the ITC to revoke an order or the DOC to implement a
determination.
WTO panel determinations
In 1997, the Republic of Korea challenged the DOC's AD
review of dynamic random access memory (DRAM) semiconductors
from Korea, alleging that the DOC's decision not to revoke the
AD order was inconsistent with the Antidumping Agreement and
GATT 1994. A WTO panel was established on January 16, 1998. The
panel ruled in favor of Korea on January 29, 1999. While the
panel rejected almost all of Korea's claims, if found that the
``not likely'' standard in the DOC's regulations did not meet
the requirements of Article 11.2 of the Antidumping Agreement.
Neither side appealed the decision. On April 15, 1999, the
United States indicated its intention to comply with the panel
decision. The DOC amended its regulations and made a
redetermination under the revised regulations to retain the AD
order on DRAMs from Korea. Korea challenged U.S. compliance
with the panel decision and on April 6, 2000 requested that the
panel be reconvened to examine U.S. implementation. The parties
then reached a mutually satisfactory solution regarding this
matter, and Korea withdrew its request on October 20, 2000.
Specifically, the DOC agreed to terminate the AD order on
January 1, 2000 in exchange for Korea's agreement to collect
cost and price data on DRAMs of one megabit and above. This
information will be made available to the DOC within 14 days
after the filing of a new AD case.
The Foreign Sales Corporation (FSC) provisions of the U.S.
tax code (sections 921-927 of the Internal Revenue Code)
provide exporters with a partial tax exemption on certain
foreign income of FSCs, which are foreign subsidiaries of U.S.
companies. The EU challenged these provisions, claiming that
these rules constituted prohibited export subsidies and import
substitution subsidies under the Subsidies Agreement, and that
they violated the export subsidy provisions of the Agreement on
Agriculture. A WTO panel was established on September 22, 1998.
The panel found in favor of the EU on October 8, 1999 on U.S.
violations of the Subsidies Agreement and the Agreement on
Agriculture. In the panel's view, in the case of a tax measure,
a subsidy exists if ``but for'' the measure, a firm's tax
liability would be increased and the existence of the subsidy
results in revenue foregone to the government. Applying this
standard to the FSC provisions, the panel concluded that those
provisions constituted a subsidy. Moreover, the panel found the
subsidy to be ``contingent on export performance.'' On February
24, 2000, the Appellate Body upheld the panel's findings on
U.S. violations of the Subsidies Agreement, but reversed the
panel's findings regarding the Agreement on Agriculture. The
panel and Appellate Body reports were adopted on March 20,
2000, and on April 7, 2000, the United States announced its
intention to come into compliance with its WTO obligations. The
United States amended the FSC provisions of the U.S. tax code
to address the panel report in Public Law 106-519, approved
November 15, 2000. On December 7, 2000, the EU filed a request
for establishment of a panel to review the legislation, and the
panel was established on December 20, 2000.
Title VII of the Revenue Act of 1916, commonly referred to
as the Antidumping Act of 1916, establishes a civil cause of
action in federal court for private damages as well as criminal
penalties against parties who dump foreign merchandise in the
United States. The EU challenged this provision of U.S. law,
claiming that the statute violates U.S. obligations under the
Antidumping Agreement and GATT 1994. A WTO panel was formed on
January 29, 1999. The panel ruled in favor of the EU on March
31, 2000. Separately, Japan sought its own rulings on the same
matter from the same panelists; that report was circulated on
May 29, 2000. The panel found that the 1916 Act is inconsistent
with WTO rules because the specific intent requirement of the
Act does not satisfy the material injury test required by the
Antidumping Agreement. The panel also found that the civil and
criminal penalties in the 1916 Act go beyond the provisions of
the Antidumping Agreement. The Appellate Body proceedings on
both cases were consolidated into one, and on August 28, 2000
the Appellate Body affirmed the panel reports. The United
States is in arbitration on a compliance schedule and is
seeking a deadline of 15 months from the Appellate Body
decision (November 2001).
The EU challenged the imposition of countervailing duties
on certain hot-rolled lead and bismuth carbon steel (lead bar)
from the United Kingdom, contending that the DOC had imposed
countervailing duties on two private successor companies of
government-owned British Steel Corporation (BSC) based on a
methodology that attributed a portion of the massive subsidies
originally received by BSC to the two successor companies. The
EU alleged violations of Articles 1.1(b), 10, 14, and 19.4 of
the Subsidies Agreement. A WTO panel was established on
February 17, 1999. Brazil and Mexico both intervened as third
parties. The panel ruled in favor of the EU on December 23,
1999. In reaching its decision, the panel disagreed with how
the DOC accounts for the privatization of a government-owned
company and insisted that an investigating authority (such as
the DOC) must re-measure the benefit of pre-privatization
subsidies based on circumstances at the time of the
privatization. Specifically, in order to impose countervailing
duties, the investigating authority must demonstrate that the
producer or exporter of the particular imports continues to
enjoy the benefit of a subsidy (i.e., as in a competitive
advantage) at the time of the production or exportation of
those goods. The panel further explained that the successor
privatized company should not be considered as having realized
any benefit from pre-privatization subsidies if fair market
value was paid for the government-owned company. In the case of
BSC, the panel found that none of the benefit from the pre-
privatization subsidies would be attributed to the two
successor, privatized companies. The CVD order in question was
revoked on January 1, 2000 under the DOC's ``sunset review''
procedures. On November 13, 2000, the EU requested
consultations with the United States on 14 similar CVD cases in
which the United States imposed duties on privatized European
companies on the basis that the previous subsidies they had
received had been passed through to the new owners.
Consultations were held with the EU on December 7, 2000. On
December 21, 2000, Brazil requested similar consultations with
the United States.
Enforcement of U.S. Rights Under Trade Agreements and Response to
Certain Foreign Practices: Sections 301-310 of the Trade Act of 1974,
as amended
Chapter 1 of title III (sections 301-310) of the Trade Act
of 1974, as amended,\18\ provides the authority and procedures
to enforce U.S. rights under international trade agreements and
to respond to certain unfair foreign practices. The predecessor
statute, section 252 of the Trade Expansion Act of 1962,\19\
was repealed and section 301 established in its place under the
Trade Act of 1974. Section 301 was amended under title IX of
the Trade Agreements Act of 1979 \20\ in two principal
respects: (1) to include specific authority to enforce U.S.
rights and to respond to actions by foreign countries
inconsistent with or otherwise denying U.S. benefits under
trade agreements; and (2) to place specific time limits on the
procedures for investigating and taking action on petitions.
Some further amendments were enacted under sections 304 and
307(b) of the Trade and Tariff Act of 1984 \21\ to clarify
certain authorities and practices covered by section 301, and
to authorize certain actions with respect to foreign export
performance requirements.
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\18\ Public Law 93-618, approved January 3, 1975, 19 U.S.C. 2411.
\19\ Public Law 87-794, section 252, approved October 11, 1962.
\20\ Public Law 96-39, title IX, approved July 26, 1979.
\21\ Public Law 98-573, approved October 30, 1984.
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The current statute reflects major modifications made by
sections 1301-1303 of the Omnibus Trade and Competitiveness Act
of 1988 \22\ to what is commonly called ``section 301,'' as
well as enactment of additional authorities commonly known as
``Super 301'' \23\ to deal with priority practices and priority
countries and ``Special 301'' to deal with priority
intellectual property rights (IPR) practices. The principal
amendments in 1988 to strengthen the basic section 301
authority were: (1) to require the U.S. Trade Representative
(USTR) to make unfair trade practice determinations in all
cases, and to transfer authority to determine and implement
section 301 action from the President to the USTR, subject to
the specific direction, if any, of the President; (2) to make
section 301 action mandatory in cases of trade agreement
violations or other ``unjustifiable'' practices, except in
certain circumstances; (3) to include additional types of
practices as specifically actionable under section 301; (4) to
tighten and specify time limits on all investigations and
actions; and (5) to require monitoring and enforcement of
foreign settlement agreements and to provide for modification
and termination of section 301 actions.
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\22\ Public Law 100-418, approved August 23, 1988.
\23\ The Statutory authority for Super 301 expired in 1990. Since
then, the President has chosen to renew Super 301 authorities three
times by Executive Order. On March 31, 1999, the President issued
Executive Order 13116 (64 Fed. Reg. 16333), which renewed Super 301
authorities through 2001.
---------------------------------------------------------------------------
Further modifications were made by the Uruguay Round
Agreements Act \24\ to sections 301-310 and 182 of the Trade
Act of 1974 to conform to the time limits under the WTO
Understanding on Rules and Procedures Governing the Settlement
of Disputes (Dispute Settlement Understanding) and to clarify
and strengthen the scope and application of these domestic
authorities.
---------------------------------------------------------------------------
\24\ Public Law 103-465, approved December 8, 1993.
---------------------------------------------------------------------------
International Consultations and Dispute Settlement
Article XII and XIII of the General Agreement on Tariffs
and Trade (GATT), as elaborated upon by the Texts Concerning a
Framework for the Conduct of World Trade concluded in the Tokyo
Round of multilateral trade negotiations (MTN),\25\ provided
the general consultation and dispute settlement procedures
applicable to GATT rights and obligations. In addition, the
GATT agreements concluded in the MTN on specific non-tariff
barriers each contained procedures for consultation and
resolution of disputes among signatories concerning practices
covered by each agreement.
---------------------------------------------------------------------------
\25\ MTN/FR/W/20/Rev. 2, reprinted in House Doc. No. 96-153, pt. I
at 619.
---------------------------------------------------------------------------
As part of the Uruguay Round, the parties agreed to the
Understanding on Rules and Procedures Governing the Settlement
of Disputes which establishes a single, integrated Dispute
Settlement Body dealing with disputes arising under any of the
WTO agreements. One of the most marked changes in this new
dispute resolution mechanism is that all of the key decisions
in the dispute settlement process, including the establishment
of panels, adoption of panel and Appellate Body reports, and
the authorization to retaliate will be automatic unless there
is a unanimous vote against the action. Accordingly, parties
may no longer block panel reports adverse to them. In addition,
timetables are established for each phase of the dispute
resolution process. Moreover, an Appellate Body is established
to examine issues of law covered in a panel report and legal
interpretations developed by the panel. Retaliation, in the
form of suspended concessions or obligations, is to be limited
to the sector that is at issue in the proceeding, unless it is
not practicable or effective. Issues related to the level of
retaliation may be submitted to binding arbitration.
In 1998, the European Union (EU) initiated a dispute
settlement case against the United States challenging the WTO
consistency of section 301. Specifically, the EU claimed that
section 301 violated the Dispute Settlement Understanding (DSU)
because certain statutory deadlines could require the USTR to
take action before WTO panel proceedings were finished. The EU
complaint was not based on U.S. actions in a particular section
301 case.
On December 22, 1999, a WTO panel rejected the EU's
complaint. The panel found that section 301 provides the USTR
with adequate discretion to comply with the DSU rules in all
cases, and that the USTR had in fact exercised that discretion
in accordance with U.S. WTO obligations in every section 301
determination involving an alleged violation of U.S. WTO
rights. The EU did not appeal the panel decision. The decision
was adopted by the WTO Dispute Settlement Body on January 27,
2000.
Carousel Retaliation
Section 407 of the Trade and Development Act of 2000 (P.L.
106-200) addresses effective operation of the WTO dispute
settlement mechanism and lack of compliance with WTO panel
decisions, particularly in cases brought by the United States
in disputes with the EU involving bananas and beef. Section 407
amended sections 301-310 of the Trade Act of 1974 to require
the USTR to make periodic revisions of retaliation lists 120
days from the date the retaliation list is made and every 180
days thereafter. The purpose of this provision is to facilitate
efforts by the USTR to enforce rights of the United States if
another WTO member fails to comply with the results of a
dispute settlement proceeding.
Enforcement Authority and Procedures (Section 301)
Sections 301-309 of the Trade Act of 1974, as amended,
provide the domestic counterpart to the WTO consultation and
dispute settlement procedures. They contain the authority under
U.S. domestic law to take retaliatory action, including import
restrictions if necessary, to enforce U.S. rights against
violations of trade agreements by foreign countries and
unjustifiable, unreasonable, or discriminatory foreign trade
practices which burden or restrict U.S. commerce. Section 301
authority applies to practices and policies of countries
whether or not the measures are covered by, or the countries
are members of, GATT/WTO or other trade agreements. The USTR
administers the statutory procedures through an interagency
committee.
Basis and form of authority
Under section 301, if the USTR determines that a foreign
act, policy, or practice violates or is inconsistent with a
trade agreement, or is unjustifiable and burdens or restricts
U.S. commerce, then action by the USTR to enforce the trade
agreement rights or to obtain the elimination of the act,
policy, or practice is mandatory, subject to the specific
direction, if any, of the President. The USTR is not required
to act, however, if (1) a WTO/GATT panel has reported, or a
dispute settlement ruling under a trade agreement finds, that
U.S. trade agreement rights have not been denied or violated;
(2) the USTR finds that the foreign country is taking
satisfactory measures to grant U.S. trade agreement rights, has
agreed to eliminate or phase out the practice or to an imminent
solution to the burden or restriction on U.S. commerce, or has
agreed to provide satisfactory compensatory trade benefits; or
(3) the USTR finds, in extraordinary cases, that action would
have an adverse impact on the U.S. economy substantially out of
proportion to the benefits of action, or finds that action
would cause serious harm to the U.S. national security. Any
action taken must affect goods or services of the foreign
country in an amount equivalent in value to the burden or
restriction being imposed by that country on U.S. commerce.
If the USTR determines that the act, policy, or practice is
unreasonable or discriminatory and burdens or restricts U.S.
commerce and action by the United States is appropriate, then
the USTR has discretionary authority to take all appropriate
and feasible action, subject to the specific direction, if any,
of the President, to obtain the elimination of the act, policy,
or practice.
With respect to the form of action, the USTR is authorized
to (1) suspend, withdraw, or prevent the application of
benefits of trade agreement concessions to carry out a trade
agreement with the foreign country involved; (2) impose duties
or other import restrictions on the goods of, and
notwithstanding any other provision of law, fees or
restrictions on the services of, the foreign country for such
time as the USTR deems appropriate; (3) withdraw or suspend
perferential duty treatment under the Generalized System of
Preferences (GSP), the Carribean Basin Initiative, or the
Andean Trade Preferences Act; or (4) enter into binding
agreements that commit the foreign country to (a) eliminate or
phase out the act, policy, or practice, (b) eliminate any
burden or restriction on U.S. commerce resulting from the act,
policy, or practice, or (c) provide the United States with
compensatory trade benefits that are satisfactory to the USTR.
The USTR may also take all other appropriate and feasible
action within the power of the President that the President may
direct the USTR to take.
With respect to services, the USTR may also restrict the
terms and conditions or deny the issuance of any access
authorization (e.g., license, permit, order) to the U.S. market
issued under federal law, notwithstanding any other law
governing the authorization. Such action can apply only
prospectively to authorizations granted or applications pending
on or after the date a section 301 petition is filed or the
USTR initiates an investigation. Before imposing fees or other
restrictions on services subject to federal or state
regulation, the USTR must consult as appropriate with the
federal or state agency concerned.
Under section 301, action may be taken on a non-
discriminatory basis or solely against the products or services
of the country involved and with respect to any goods or sector
regardless of whether they were involved in the particular act,
policy, or practice. The statute does not require that action
taken under section 301 be consistent with U.S. obligations
under international agreements, but the dispute-settlement
provisions of such agreement could be utilized.
If the USTR determines that action is to be in the form of
import restrictions, it must give preference to tariffs over
other forms of import restrictions and consider substituting on
an incremental basis an equivalent duty for any other form of
import restriction imposed. Any action with respect to export
targeting must reflect, to the extent possible, the full
benefit level of the targeting over the period during which the
action taken has an effect.
Coverage of authority
The term ``unjustifiable'' refers to acts, policies, or
practices which violate or are inconsistent with U.S.
international legal rights, such as denial of national or
normal trade relations (NTR) treatment, right of establishment,
or protection of intellectual property rights.
The term ``unreasonable'' refers to acts, policies, or
practices which are not necessarily in violation of or
inconsistent with U.S. international legal rights, but are
otherwise unfair and inequitable. In determining whether an
act, policy, or practice is unreasonable, reciprocal
opportunities in the United States for foreign nationals and
firms must be taken into account, to the extent appropriate.
Unreasonable measures include, but are not limited to, acts,
policies, or practices which (1) deny fair and equitable (a)
opportunities for the establishment of an enterprise, (b)
provision of adequate and effective IPR protection,
notwithstanding the fact that the foreign country may be in
compliance with the specific obligations of the Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPs),
(c) non-discriminatory market access opportunities for U.S.
persons that rely upon intellectual property (IP) protection,
or (d) market opportunities, including foreign government
toleration of systematic anticompetitive activities by or among
enterprises in the foreign country that have the effect of
restricting, on a basis inconsistent with commercial
considerations, access of U.S. goods or services to a foreign
market; (2) constitute export targeting; or (3) constitute a
persistent pattern of conduct denying internationally-
recognized worker rights, unless the USTR determines the
foreign country has taken or is taking actions that demonstrate
a significant and tangible overall advancement in providing
those rights and standards throughout the country or such acts,
policies, or practices are not inconsistent with the level of
economic development of the country.
The term ``export targeting'' refers to any government plan
or scheme consisting of a combination of coordinated actions
bestowed on a specific enterprise, industry, or group thereof,
which has the effect of assisting that entity to become more
competitive in the export of a class or kind of merchandise.
The term ``discriminatory'' includes, where appropriate,
any act, policy, or practice which denies national or NTR
treatment to U.S. goods, services, or investment.
The term ``commerce'' includes, but is not limited to,
services (including transfers of information) associated with
international trade, whether or not such services are related
to specific goods, and foreign direct investment by U.S.
persons with implications for trade in goods or services.
Petitions and investigations
Any interested person may file a petition under section 302
with the USTR requesting that action be taken under section 301
and setting forth the allegations in support of the request.
The USTR reviews the allegations and must determine within 45
days after receipt of the petition whether to initiate an
investigation. The USTR may also self-initiate an investigation
after consulting with appropriate private sector advisory
committees. Public notice of determinations is required, and in
the case of decisions to initiate, publication of a summary of
the petition and an opportunity for the presentation of views,
including a public hearing if timely requested by the
petitioner or any interested person.
In determining whether to initiate an investigation of any
act, policy, or practice specifically enumerated as actionable
under section 301, the USTR has the discretion to determine
whether action under section 301 would be effective in
addressing that act, policy, or practice.
Section 303 requires the use of international procedures
for resolving the issues to proceed in parallel with the
domestic investigation. The USTR must, on the same day as the
determination is made, initiate an investigation and request
consultations with the foreign country concerned regarding the
issues involved. The USTR may delay the request for up to 90
days in order to verify or improve the petition to ensure an
adequate basis for consultation.
If the issues are covered by a trade agreement and are not
resolved during the consultation period, if any, specified in
the agreement, then the USTR must promptly request formal
dispute settlement under the agreement before the earlier of
the close of that consultation period or 150 days after the
consultations began. The USTR must seek information and advice
from the petitioner, if any, and from appropriate private
sector advisory committees in preparing presentations for
consultations and dispute settlement proceedings.
USTR unfairness and action determinations and implementation
Section 304 sets forth specific time limits within which
the USTR must make determinations of whether an act, policy, or
practice meets the unfairness criteria of section 301 and, if
affirmative, what action, if any, should be taken. These
determinations are based on the investigation under section 302
and, if a trade agreement is involved, on the international
consultations and, if applicable, on the results of the dispute
settlement proceedings under the agreement.
The USTR must make these determinations:
(1) within 18 months after the date the investigation
is initiated or 30 days after the date the dispute
settlement procedure is concluded, whichever is
earlier, in all cases involving a trade agreement;
(2) within 12 months after the date the investigation
is initiated in cases not involving trade agreements;
or
(3) within 6 months after the date the investigation
is initiated in cases involving IPR priority countries
if the USTR does not consider that a trade agreement,
including TRIPs, is involved, or within 9 months if the
USTR determines such cases (1) involve complex or
complicated issues that require additional time, (2)
the foreign country is making substantial progress on
legislative or administrative measures that will
provide adequate and effective protection, or (3) the
foreign country is undertaking enforcement measures to
provide adequate and effective protection.
The applicable deadline is postponed by up to 90 days if
consultations with the foreign country involved were so
delayed.
Before making the determinations, the USTR must provide an
opportunity for the presentation of views, including a public
hearing if requested by an interested person, and obtain advice
from the appropriate private sector advisory committees. If
expeditious action is required, the USTR must comply with these
requirements after making the determinations. The USTR may also
request the views of the International Trade Commission on the
probable impact on the U.S. economy of taking the action. Any
determinations must be published in the Federal Register.
Section 305 requires the USTR to implement any section 301
actions within 30 days after the date of the determination to
take action. The USTR may delay implementation by not more than
180 days if (1) the petitioner or, in the case of a self-
initiated investigation, a majority of the domestic industry,
requests a delay; or (2) the USTR determines that substantial
progress is being made, or that a delay is necessary or
desirable to obtain U.S. rights or a satisfactory solution. In
cases involving IPR priority countries (see discussion below),
implementation of actions may be delayed by not more than 90
days beyond the 30 days and only if extraordinary circumstances
apply.
If the USTR determines to take no action in a case
involving an affirmative determination of export targeting, the
USTR must take alternative action in the form of establishing
an advisory panel to recommend measures to promote the
competitiveness of the affected domestic industry. The panel
must submit a report on its recommendations to the USTR and the
Congress within 6 months. On the basis of this report and
subject to the specific direction, if any, of the President,
the USTR may take administrative actions authorized under any
other law and propose legislation to implement any other
actions that would restore or improve the international
competitiveness of the domestic industry. USTR must submit a
report to the Congress within 30 days after the panel report is
submitted on the actions taken and proposals made.
Monitoring of foreign compliance; modification and termination of
actions
Section 306 requires the USTR to monitor the implementation
of each measure undertaken or settlement agreement entered into
by a foreign country under section 301. If the USTR considers
that a foreign country is not satisfactorily implementing a
measure or agreement, the USTR must determine what further
action will be taken under section 301. Such foreign non-
compliance is treated as a violation of a trade agreement
subject to mandatory section 301 action, subject to the same
time limits and procedures for implementation as other action
determinations. If the USTR considers that the foreign country
has failed to implement a recommendation made pursuant to
dispute settlement proceedings under the WTO, the USTR must
make this determination no later than 30 days after the
expiration of the reasonable period of time provided for such
implementation in the DSU. Before making the determination on
further action, the USTR must consult with the petitioner, if
any, and with representatives of the domestic industry
concerned, and provide interested persons an opportunity to
present views.
Section 307 authorizes the USTR to modify or terminate a
section 301 action, subject to the specific direction, if any,
of the President, if (1) any of the exceptions to mandatory
section 301 action in the case of trade agreement violations or
unjustifiable acts, policies, or practices applies; (2) the
burden or restriction on U.S. commerce of the unfair practice
has increased or decreased; or (3) discretionary section 301
action is no longer appropriate. Before modifying or
terminating any section 301 action, the USTR must consult with
the petitioner, if any, and with representatives of the
domestic industry concerned, and provide an opportunity for
other interested persons to present views.
Any section 301 action terminates automatically if it has
been in effect for 4 years and neither the petitioner nor any
representative of the domestic industry which benefits from the
action has submitted to the USTR in the final 60 days of that
4-year period a written request for continuation. The USTR must
give the petitioner and representatives of the domestic
industry at least 60 days advance notice by mail of
termination. If a request for continuation is submitted, the
USTR must conduct a review of the effectiveness of section 301
or other actions in achieving the objectives and the effects of
actions on the U.S. economy, including consumers.
Information requests; reporting requirements
Under section 308, the USTR is to make available
information (other than confidential) upon receipt of a written
request by any person concerning (1) the nature and extent of a
specific trade policy or practice of a foreign country with
respect to particular goods, services, investment, or IPR to
the extent such information is available in the federal
government; (2) U.S. rights under any trade agreement and the
remedies which may be available under that agreement and U.S.
laws; and (3) past and present domestic and international
proceedings or actions with respect to the policy or practice.
If the information is not available, within 30 days after
receipt of the request, the USTR must request the information
from the foreign government or decline to request the
information and inform the person in writing of the reasons.
The USTR must submit a semiannual report to the Congress
describing petitions filed and determinations made,
developments in and the status of investigations and
proceedings, actions taken or the reasons for no action under
section 301, and the commercial effects of section 301 actions
taken. The USTR must also keep the petitioner regularly
informed of all determinations and developments regarding
section 301 investigations.
Identification of Intellectual Property Rights Priority Countries
(Special 301)
Section 182 of the Trade Act of 1974, added by section 1303
of the Omnibus Trade and Competitiveness Act of 1988, requires
the USTR to identify, within 30 days after submission of the
annual National Trade Estimates (foreign trade barriers) report
to the Congress required by section 181 the 1974 Act (i.e., by
April 30) those foreign countries that (1) deny adequate and
effective protection of IPR or fair and equitable market access
to U.S. persons that rely upon IP protection; and (2) those
countries under paragraph (1) determined by the USTR to be
``priority foreign countries.'' The USTR is to identify as
priority countries only those that have the most onerous or
egregious acts, policies, or practices with the greatest
adverse impact on the relevant U.S. products, and that are not
entering into good faith negotiations or making significant
progress in bilateral or multilateral negotiations to provide
adequate and effective IPR protection. In identifying foreign
countries, the USTR is to take into account the history of IP
laws and practices of the foreign country as well as efforts of
the United States, and the response of the foreign country, to
achieve adequate and effective protection and enforcement of
IPR. A country may be identified notwithstanding the fact that
it may be in compliance with the specific obligations of the
TRIPs Agreement. The USTR at any time may revoke or make an
identification of a priority country, but must include in the
semiannual section 301 report to the Congress a detailed
explanation of the reasons for a revocation.
In addition, as a matter of administrative practice, the
USTR has established a ``priority watch list'' of countries
whose acts, policies, and practices meet some, but not all, of
the criteria for priority foreign country identification. The
problems of these countries warrant active work for resolution
and close monitoring to determine whether further Special 301
action is needed. Also, the USTR maintains a ``watch list'' of
countries that warrant special attention because they maintain
IP practices or barriers to market access that are of
particular concern. Finally, the USTR has added a ``Special
Mention'' category.
Section 302(b) requires the USTR to initiate a section 301
investigation within 30 days after identification of a priority
country with respect to any act, policy, or practice of that
country that was the basis of the identification, unless the
USTR determines initiation of an investigation would be
detrimental to U.S. economic interests and reports the reasons
in detail to the Congress. The procedural and other
requirements of section 301 authority generally apply to these
cases, except that investigations must be concluded and
determinations made on whether the measures are actionable and
an appropriate response within a tighter time limit of 6
months, which may be extended to 9 months if certain statutory
criteria are met.
History of Special 301
On May 26, 1989, after the first annual Special 301 review,
the USTR announced that because of significant progress made in
various negotiations, no priority countries had been identified
under Special 301. Rather, under administrative authority, 25
countries were singled out whose practices deserved special
attention, of which 17 countries were placed on a newly created
watch list and 8 countries were placed on a new priority watch
list to be reviewed again no later than November 1, 1989.
On November 1, 1989, the USTR announced that progress had
been made in negotiations to obtain improved IPR protection and
enforcement with each of the eight countries on the priority
watch list. Korea, Taiwan, and Saudi Arabia were moved to the
watch list because of their significant progress. The other
five countries (Brazil, India, Mexico, People's Republic of
China (PRC), and Thailand) remained on the priority watch list.
No country was designated as a ``priority foreign country''
making it subject to section 301 investigation.
In January 1990, Mexico was removed from all Special 301
lists after outlining a program for improved IP protection and
enforcement. On April 27, 1990, the USTR noted that because
significant progress had been made in negotiations with
countries previously identified under Special 301, no country
would be designated as a ``priority foreign country'' in 1990.
At that time, Portugal also was removed from all lists, due to
improved protection of IPR in that country.
On April 26, 1991, the USTR announced the identification of
the PRC, India, and Thailand as ``priority foreign countries.''
All three countries had been on the priority watch list since
the first annual review in 1989 with no significant progress
made. Section 301 investigations of the China and India
protection deficiencies began on May 26; Thailand's practices
were already the subject of two section 301 investigations.
Brazil was retained and the European Community (EC) and
Australia were added to the priority watch list; 23 countries
were retained or placed on the watch list, and Malaysia was
removed. On November 26, the USTR announced that negotiations
with the PRC had not succeeded; a draft list of Chinese
products that might be subject to retaliatory tariffs was
published for public comment the following day. On December 16,
the USTR announced that January 16, 1992 would be the firm
deadline for concluding any further negotiations with China and
determining the specific response to inadequate protection. On
November 26, the deadline for the India investigation was
extended because of progress made and the complex issues
involved.
On January 16, 1992, the USTR announced that the United
States and China had signed a Memorandum of Understanding that
committed China to provide improved protection for U.S. IPR and
ended the Special 301 investigation. On April 29, the USTR
announced the addition of Taiwan and the retention of India and
Thailand as ``priority foreign countries.'' Six countries--
Egypt, Hungary, Korea, the Philippines, Poland, and Turkey--
were placed on the priority watch list; Australia, Brazil, and
the EC were retained on that list. Twenty-two countries were
placed or retained on the watch list. Duty-free treatment on
imports of certain eligible products from India under the GSP
program was suspended on April 29. On October 9, USTR
reaffirmed the determination in the section 301 investigation
of Thailand's patent protection made on March 13, but again
deferred action in order to negotiate with the new Thai
government. The section 301 case on Thai copyright practices
was terminated in December 1991; implementation of measures by
the Thai government to eliminate the unreasonable practices is
being monitored. Thailand has been denied full benefits under
the GSP program since 1989.
On April 30, 1993, the USTR announced the retention of
Brazil, India, and Thailand as ``priority foreign countries''
and placed 10 countries on the priority watch list and 17
countries on the watch list. The USTR also announced new steps
to resolve outstanding IPR problems with priority watch list
countries by initiating ``immediate action plans'' for Hungary
and Taiwan to be completed by July 31, 1993; conducting ``out-
of-cycle'' reviews during 1993 (including deadlines and
benchmarks for evaluating performance) for Korea, Argentina,
Egypt, Poland, and Turkey; and intensifying consultations with
Australia, the EC, and Saudi Arabia. ``Out-of-cycle'' reviews
would also be conducted with 5 of the 17 watch list countries:
Cyprus, Italy, Pakistan, Spain, and Venezuela. Canada, Germany,
and Paraguay were removed from the watch list. On May 6, the
USTR announced that a special review would be conducted on July
31 of Thailand's progress.
On August 2, 1993, the USTR announced the results of
reviews conducted in July: a comprehensive agreement with
Hungary that would result in its removal from the priority
watch list; reexamination within 30 days of Thailand's status
based on further progress achieved and comprehensive review in
early 1994 of further Thai efforts; and that Taiwan's status
would be reviewed based on progress in completing elements of
the ``immediate action plan.'' On September 9, the USTR
announced that, as a result of the July review, Thailand's
identification as a ``priority foreign country'' would be
revoked, Thailand would be placed on the priority watch list,
and another review of its progress would be conducted in early
1994. On November 30, the USTR announced that the PRC would be
moved from the watch list to the priority watch list because of
its failure to enforce IPR laws and regulations.
On April 30, 1994, the USTR announced that Argentina,
China, and India would be designated as ``priority foreign
countries'' if satisfactory progress was not reached by June
30. Six countries were placed on the priority watch list: the
EU, Japan, Korea, Saudi Arabia, Thailand, and Turkey. Eighteen
countries were placed on the watch list, with ``out-of-cycle''
reviews to be conducted of Egypt, El Salvador, Greece, and the
United Arab Emirates. An additional ``special mention''
category was also announced of nine countries where there is
need for greater effort or further improvement or IP problems
are beginning to become serious: Brazil, Canada, Germany,
Honduras, Israel, Panama, Paraguay, Russia, and Singapore. The
USTR also announced that significant progress had been made
with a number of countries. On June 30, the USTR announced the
designation of China as a ``priority foreign country'' and the
immediate initiation of a section 301 investigation. Argentina
and India were placed on the priority watch list, with India
also to be subject to an ``out-of-cycle'' review in January
1995. On August 12, 1994, the USTR initiated a review to
consider whether Thailand should be restored to full
beneficiary developing country status under the GSP program
because of progress on IPR protection.
On February 7, 1995, the USTR concluded its section 301
investigation of China and determined that certain acts,
policies, and practices of the Chinese government with respect
to the enforcement of IPR and the provision of market access to
persons who rely on IP protection are unreasonable and
constitute a burden or restriction on U.S. commerce. The USTR
determined further that trade action was appropriate in the
form of increasing duties to 100 percent ad valorem for certain
products, effective February 26, 1995. However, on February 26,
1995, based on an agreement with China, the USTR determined not
to impose sanctions, terminated the investigation, and revoked
China's identification as a priority foreign country.
On April 29, 1995, the USTR announced no priority foreign
country designations. However, USTR stated that the number of
out-of-cycle reviews would be increased so that progress may be
reviewed during the course of the year, rather than only at the
end of April when the annual review occurs. The USTR placed
Brazil, Greece, Japan, Saudi Arabia, and Turkey on the priority
watch list and stated that they would be subject to review
during the course of the year. Other countries on the priority
watch list included the EU, India, and Korea. The USTR placed
24 countries on the watch list and stated that it would conduct
out-of-cycle reviews with 4 of these countries: Argentina, the
United Arab Emirates, Indonesia, and South Africa. The USTR
also noted growing concerns about IP property in five countries
and highlighted developments and expectations for progress in
six countries.
On January 19, 1996, the USTR announced the results of
Special 301 out-of-cycle reviews. Specifically, Turkey and
Japan would remain on the watch list, and the investigation
concerning Indonesia would be continued because more
information was expected concerning Indonesia's enforcement
activities.
On April 30, 1996, the USTR announced that it would
initiate four WTO dispute settlement actions against Portugal,
Turkey, India, and Pakistan for failure to fulfill certain WTO
obligations related to IPR. In addition, the USTR identified 35
trading partners that deny adequate and effective protection of
IPR or deny fair and equitable market access to U.S. persons
that rely upon intellectual property protection, as well as 19
trading partners that would be monitored. Specifically, the
USTR designated China as a priority foreign country because of
its failure to implement the 1995 IP agreement. Eight countries
were placed on the priority watch list: Argentina, Greece, the
European Union, India, Indonesia, Japan, Korea, and Turkey. The
USTR announced placement of 26 countries on the watch list,
with out-of-cycle reviews to be conducted with respect to El
Salvador, Italy, Paraguay, the Philippines, Russia, Saudi
Arabia, and Thailand.
On June 17, 1996, the USTR announced that, based on
measures that China had taken and would take in the future to
implement key elements of the 1995 Agreement, it would not
impose sanctions and would revoke China's status as a priority
foreign country. On October 21, 1996, the USTR announced the
termination of the WTO consultations with Portugal based on
measures that Portugal agreed to take to implement its WTO
obligations.
On October 2, 1996, the USTR announced the results of
certain out-of-cycle reviews. Specifically, the USTR placed
Bulgaria and Bolivia on the watch list, maintained Paraguay on
the watch list, deferred the decision on Greece, and determined
that South Africa would remain unlisted.
Finally, on December 20, 1996, the USTR announced out-of-
cycle review decisions. It retained Greece, Russia, and Saudi
Arabia on the priority watch list, maintained reviews for
Argentina and the Philippines, and determined that Hong Kong
would not be placed on the watch list but that U.S. government
monitoring would continue.
On April 30, 1997, the USTR released its 1997 Special 301
annual review. In the review, the USTR announced that it would
initiate WTO dispute settlement actions against four countries
designated as priority foreign countries: Denmark, Sweden,
Ireland and Ecuador. In addition, the USTR announced that
Greece and Luxembourg would be designated priority foreign
countries, but that dispute settlement proceedings would not be
initiated if the countries met their TRIPs obligations in the
coming months. The USTR also placed 10 countries on the
priority watch list: Argentina, Ecuador, Egypt, the EU, Greece,
India, Indonesia, Paraguay, Russia, and Turkey. Thirty-six
countries were placed on the watch list. Of the 36 watch-list
countries, the USTR announced that it would conduct out-of-
cycle reviews for 7: Bulgaria, Canada, Hong Kong, Luxembourg,
Panama, Thailand and Italy. Finally, the USTR stated that China
would continue to be subject to monitoring under section 306.
On October 27, 1997, the USTR issued certain out-of-cyle
review decisions. The USTR announced that Luxembourg had made
progress toward implementing its WTO obligations under the
TRIPs, and that as a result, the United States would not
initiate a dispute settlement proceeding at that time. However,
Luxembourg was placed on the Special 301 watch list. Out-of-
cycle determinations were also made for: Ecuador (remained on
the priority watch list); Italy (remained on the watch list);
Thailand (remained on the watch list); and Panama (removed from
the watch list.) Finally, the USTR cited Australia for actions
to remove protections for sound recordings.
On January 16, 1998, the USTR released its next set of out-
of-cycle review determinations. USTR designated Paraguay as a
priority foreign country, and announced that a special 301
investigation would be initiated within 30 days. Other results
of the review include: Bulgaria's elevation to the priority
watch list; Turkey's retention on the priority watch list;
Brazil and Hong Kong's continued designation on the watch list;
and an expression of concern about Ecuador's continued failure
to implement its TRIPs obligations by the deadline established
under the terms of its WTO accession.
On March 30, 1998, the USTR announced that the
Administration would suspend a portion of Honduras' benefits
under GSP and the Caribbean Basin Initiative because of IPR
violations. (Benefits were restored on June 30, 1998.)
On May 1, 1998, the USTR released its 1998 Special 301
annual review. In the review, the USTR announced that it would
initiate WTO dispute settlement actions against Greece and the
EU. (Greece was designated a priority foreign country in the
1997 Special 301 annual review.) In addition, the USTR placed
15 countries on the priority watch list: Israel, Macau,
Argentina, Ecuador, Egypt, the EU, Greece, India, Indonesia,
Russia, Turkey, Bulgaria, Italy, the Dominican Republic, and
Kuwait. An out-of-cycle review would be conducted for Bulgaria.
The USTR also placed 31 countries on the watch list. Of the 31
watch list countries, USTR announced that out-of-cycle reviews
would be conducted for four: Hong Kong, Colombia, Jordan, and
Vietnam. Finally, USTR indicated that China would continue to
be subject to monitoring under section 306.
On November 2, 1998, the USTR announced the results of its
out-of-cycle review for Bulgaria. USTR moved Bulgaria from the
priority watch list to the watch list based on Bulgaria's
improved enforcement of intellectual property rights.
On February 19, 1999, the USTR announced the results of its
out-of-cycle reviews of Hong Kong, Ecuador, Colombia and
Vietnam. USTR removed Hong Kong from the Special 301 watch list
because of Hong Kong's efforts to combat piracy. Ecuador
remained on the priority watch list, and Colombia and Vietnam
remained on the watch list.
On April 30, 1999, the USTR released its 1999 Special 301
annual review. In the review, the USTR announced that it would
initiate WTO dispute settlement actions against Argentina,
Canada, and the EU. Sixteen countries were placed on the
priority watch list: Israel, Ukraine, Macau, Argentina, Peru,
Egypt, the E.U., Greece, India, Indonesia, Russia, Turkey,
Italy, the Dominican Republic, Guatemala, and Kuwait. The USTR
also placed 37 countries on the watch list. USTR announced that
it would conduct out-of-cycle reviews for Malaysia, Hong Kong,
Israel, Kuwait, South Africa, Colombia, Poland, the Czech
Republic, and Korea. The USTR also announced that China and
Paraguay would be subject to monitoring under section 306.
Finally, USTR reported on the progress of TRIPs cases
previously filed in the WTO. The U.S. case against Sweden ended
in December 1998, when the United States and Sweden notified
the WTO that they had reached a mutually satisfactory
resolution to the U.S. complaint. The cases against Ireland,
Greece and Denmark were still pending. The United States
continued to raise questions about India's compliance with the
December 1997 dispute settlement decision on patent protection
for pharmaceuticals and agricultural chemicals.
On December 10, 1998, the USTR announced the results of its
out-of-cycle review for Jordan. USTR removed Jordan from the
watch list.
On December 19, 1999, the USTR announced the results of its
out-of-cycle review for Colombia, the Czech Republic, Hong
Kong, and Malaysia. As a result of the reviews, USTR decided
not to put Hong Kong and Malaysia on the watch list. Colombia
and the Czech Republic remained on the list.
In December 1999, the USTR initiated out-of-cycle reviews
to examine the progress of developing countries toward
implementing their TRIPs obligations. The review was prompted
by concern that many developing countries would not be in
compliance by the January 1, 2000 deadline for implementation
of TRIPs obligations. The review revealed that a number of
countries are still in the process of finalizing implementing
legislation. The USTR indicated its intent to continue to work
with such countries bilaterally and through the review process
in the WTO TRIPS Council meetings. In instances where
additional progress was not likely in the near term, or where
the United States was been unable to resolve concerns through
bilateral consultation, USTR pursued the matter in dispute
settlement (e.g. the actions initiated against Argentina and
Brazil pursuant to the 2000 Special 301 annual review).
On May 1, 2000, the USTR released its 2000 Special 301
annual review. In the review, the USTR announced initiation of
WTO dispute settlement proceedings against Argentina and
Brazil, and the continuation of proceedings against Denmark.
The USTR also noted continued concern about Ireland's failure
to fully implement TRIPs obligations.
Sixteen countries were placed on the priority watch list in
the 2000 review: Argentina, Dominican Republic, E.U., Egypt,
Greece, Guatemala, India, Israel, Italy, Korea, Malaysia, Peru,
Poland, Russia, Turkey and Ukraine. Of the countries placed on
the priority watch list, the USTR announced that out-of-cycle
reviews would be conducted for Italy and Korea. Thirty-nine
countries were placed on the watch list, of which, only one,
Macay, was designated for an out-of-cycle review. EL Salvador
and West Bank/Gaza Strip were also scheduled for out-of-cycle
reviews. Finally, the USTR announced the China and Paraguay
would continue to be subject to monitoring under section 306.
The USTR also used the occasion of the annual Special 301
report to review the Clinton Administration's effort to
coordinate IPR enforcement with global health policy. On
December 1, 1999, President Clinton announced that the United
States was committed to helping developing countries gain
access to essential medicines, including those for the
prevention and treatment of HIV/AIDs. The USTR and the
Secretary of Health and Human Resources implemented the
President's announcement by developing a cooperative approach
on health-related IPR matters. Under the new policy, when a
foreign government expressed concern that a U.S. trade law
related to IP protection significantly impeded the foreign
country's ability to address a health crisis in that country,
the USTR would seek and give full weight to the advice of the
Secretary of Health and Human Services regarding the health
considerations involved. The USTR cited on-going consultations
with Thailand over the compulsory licensing of an HIV/AIDs drug
as an example of how the new policy had been applied. The USTR
also indicated that the Special 301 Committee took health and
development issues into account in making its Special 301
recommendations. On May 10, 2000, President Clinton issued
Executive Order 13155 formalizing this policy with respect to
sub-Saharan African countries and access to HIV/AIDS drugs.
On November 8, 2000, the USTR announced the results of its
out-of-cycle reviews for El Salvador, Italy, Poland and
Ireland. As result of the reviews, Italy, and Poland were moved
from the priority watch list to the watch list. Ireland was
removed from the watch list, and El Salvador was not placed on
the watch list. The USTR also noted that the Bahamas had taken
steps to bring its copyright laws into compliance with its
international obligations.
On January 19, 2001, the USTR announced the results of its
out-of-cycle reviews for Ukraine, Macau, Korea, the United Arab
Emirates, Hungary, Slovenia, and the West Bank/Gaza Strip. The
decision on designation of Ukraine as a priority foreign
country was deferred until March 1, 2001. Korea remained on the
priority watch list, while Macau and Hungary remained on the
watch list. The United Arab Emirates and Slovenia did not
receive a listing. The review of the West Bank/Gaza was put on
indefinite hold due to regional unrest.
Identification of Trade Liberalization Priorities (Super 301)
Section 310 of the Trade Act of 1974, as amended by section
1302 of the Omnibus Trade and Competitiveness Act of 1988,
required the USTR, within 30 days after the National Trade
Estimates (foreign trade barriers) report to the Congress in
1989 and 1990, to identify U.S. trade liberalization
priorities.
This identification included priority practices as well as
priority foreign countries and estimates of the amount by which
U.S. exports would be increased if the barrier did not exist.
USTR was required to initiate section 301 investigations on all
priority practices identified for each of the priority
countries within 21 days after submitting the report to the
House Ways and Means and Senate Finance Committees. In its
consultations with the foreign country, USTR was required to
seek to negotiate an agreement which provided for the
elimination of, or compensation for, the priority practices
within 3 years after the initiation of the investigation. This
authority, however, expired in 1990.
On March 3, 1994, President Clinton issued Executive Order
12901 requiring the USTR, within 6 months of the submission of
the National Trade Estimates report for 1994 and 1995, to
review U.S. trade expansion priorities and identify priority
foreign country practices, the elimination of which would
likely have the most significant potential to increase U.S.
exports. On September 27, 1995, President Clinton issued
Executive Order 12973, which extended the terms of Executive
Order 12901 to 1996 and 1997. The order required the USTR to
submit to the House Ways and Means and Senate Finance
Committees and to publish in the Federal Register a report on
the priority foreign country practices identified. The report
was not submitted in 1998, because the authority expired in
1997, and was not renewed until March 31, 1999, pusuant to
Executive Order 13116.
Under the terms of the executive order, the USTR must
initiate section 301 investigations within 21 days of the
submission of the report with respect to all priority foreign
country practices identified. The normal section 301
authorities, procedures, time limits, and other requirements
generally apply to these investigations. In consultations
requested with the foreign country under section 303, the USTR
must seek to negotiate an agreement providing for the
elimination of the practices as quickly as possible or, if that
is not feasible, compensatory trade benefits. The USTR will
monitor any agreements pursuant to section 306. The semiannual
report under section 309 will include the status of any
investigation and, where appropriate, the extent to which it
has led to increased U.S. export opportunities.
Section 314(f) of the Uruguay Round Agreements Act codified
the terms of the executive order for the year 1995 as an
amendment to section 310 of the 1974 Act.
History of Super 301
On May 26, 1989, the USTR submitted the 1989 report to the
two committees on trade liberalization priorities, identifying
six ``priority'' practices from three ``priority countries.''
They were:
(1) Japan.--Ban on government procurement of foreign
satellites; exclusionary government procurement of
supercomputers; restrictions on imports of wood
products.
(2) Brazil.--Import bans and other licensing
restrictions.
(3) India.--Trade-related investment measures;
insurance market barriers.
Section 301 investigations were initiated on each of the
six priority practices on June 16, 1989. The Administration
also launched a separate initiative with Japan in July 1989 to
address the causes of the slow adjustment of the United States
and Japanese trade imbalances (the Structural Impediments
Initiative (SII)).
In its 1990 report to the committees on April 27, 1990, the
USTR identified India again as a ``priority country'' with the
same two practices identified again as ``priority practices''
because the issues remained unresolved. The report stated that
satisfactory solutions had been reached with Japan on its three
priority practices and that the priority practice of Brazil was
expected to be resolved. Letters were exchanged between the
USTR and Japanese Ambassador regarding unilateral actions by
the Japanese government to improve access for U.S. firms to its
satellite market and to specify detailed new procurement
procedures; to improve access for U.S. firms to its
supercomputer procurement market through open, competitive, and
transparent purchasing procedures; and to improve market access
for U.S. wood products. The report identified the successful
completion of the Uruguay Round of GATT multilateral trade
negotiations as the top trade liberalization priority.
On June 14, 1990, the USTR determined that India's priority
practices were unreasonable and burden or restrict U.S.
commerce, but that retaliation would be inappropriate given the
ongoing Uruguay Round negotiations on services and investment.
If necessary, a post-Uruguay Round review would determine
whether section 301 action was warranted.
On June 28, 1990, the U.S.-Japan Working Group on the
Structural Impediments Initiative issued an SII Joint Report,
following up on an interim report issued in April. This final
report contained commitments by both governments on steps to
address various structural impediments to the adjustment of
trade and current account imbalances, with followup through
regular high-level meetings, progress review, and annual
reports.
On May 1, 1992, and on April 30, 1993, the USTR reported on
its monitoring of Japan's implementation of its commitments
regarding the three practices and on progress made in the
liberalization of Brazil's import regime. The report also
reaffirmed the decision in 1990 to review, if necessary,
India's investment and insurance practices following conclusion
of the GATT Uruguay Round to determine whether section 301
action was warranted.
The USTR announced in the 1993 report that a special review
would be undertaken, pursuant to section 306, of Japanese
actions under the U.S.-Japan Supercomputer Agreement because of
U.S. government concern that Japan might not be adhering to the
terms of that Agreement. Based upon this review and the conduct
and outcome of procurements scheduled in coming months, the
USTR would determine whether Japan was in compliance with the
Agreement. If the USTR determined Japan was not in compliance,
the USTR would initiate trade action against Japan under
section 301.
On April 30, 1994, the USTR announced that the special
review of Japanese actions under the 1990 Supercomputer
Agreement would continue as a result of several major areas of
concern. Monitoring would continue of the operation of the new
procedures for Japanese procurement of satellites and of
implementation of the Wood Products Agreement. Improvements in
India's investment and insurance regimes would be pursued in
bilateral discussions.
Pursuant to Executive Order 12901 of March 3, 1994, the
USTR reported on October 3, 1994 that it had decided not to
identify any priority foreign country practices. Japan's market
access for wood and paper was described as perhaps warranting
identification in the future, and various foreign practices
were determined not to be appropriate for identification
because they were already being otherwise addressed.
On September 28, 1995, the USTR reported that it again had
decided not to identify any priority foreign practices.
However, the USTR found that certain practices may in the
future warrant identification as priority foreign country
practices: Japan market access for paper and paper products,
Japan market access for wood products, and China market access
for agricultural products. In addition, the USTR listed certain
practices as not appropriate for identification because they
were being otherwise addressed.
On October 1, 1996, the USTR announced that it again had
decided not to identify any priority foreign country practices.
However, it initiated new actions in the WTO concerning
Indonesia's national auto policy, Brazil's auto program,
Australia's export subsidies, and Argentina's import duties. It
also announced the adoption of a strategic enforcement strategy
in the automotive trade sector. The USTR also listed several
other bilateral priorities that may warrant identification as
priority foreign country practices in the future: Japan market
access for insurance, Japan telecommunications, Japan market
access for paper and paper products, China market access for
agricultural products, Korea telecommunications, Germany
electrical equipment, EU Ecolabeling Directive, EU design-
restrictive standards, and Saudi Arabia International
Conformity Certification Program.
On October 8, 1997, the USTR submitted its report on trade
expansion priorities to the Senate Finance Committee and the
House Ways and Means Committee. The report identified one
priority foreign country, announced initiation of dispute
settlement proceedings in four other cases, identified a number
of practices that might warrant identification as a priority
foreign country practice in the future, and described the
progress made in addressing previously identified market access
barriers.
The priority foreign country practice was Korean barriers
to auto imports. The dispute settlement cases were on: (1)
Japanese market access barriers to fruit; (2) Canadian export
subsidies and import quotas on dairy products; (3) E.U.
circumvention of export subsidy commitments on dairy products;
and (4) Australian export subsidies on automotive leather.
Practices that warranted further monitoring and could require
future action included: (1) the E.U. specified risk material
ban, cosmetic initiative, design standards, the eco-labeling
directive, and units of measurement directive; (2) French
restrictions on pet food imports; (3) Australian pest risk
analysis; (4) Argentinian footwear import restrictions; (4)
Brazilian import financing measures; and (5) Taiwanese market
access barriers to pharmaceuticals.
Finally, the USTR identified three countries in which on-
going negotiations were yielding some success, but that
required continued monitoring. The countries and practices
identified were: (1) Japan--market access for flat glass and
paper and paper products; (2) China--IPR enforcement, sanitary
and phytosanitary measures, market access for meat products,
registration of financial information providers, and market
access for insurance providers; and (3) Korea--impediments to
entry and distribution of cosmetics, import clearance
procedures, and steel subsidies.
On April 30, 1999, pursuant to Executive Order 13116 of
March 31, 1999, the USTR submitted its report to the Committees
on trade expansion priorities and priority foreign country
practices. In the 1999 report, the USTR did not identify any
priority foreign country practices. The USTR did find that a
number of practices warranted the initiation of WTO dispute
settlement proceedings, announced initiation of one section 301
investigation, and identified a number of practices that might
warrant identification as a priority foreign country practice
in the future.
With respect to initiation of WTO proceedings, the USTR
indicated that it would request WTO dispute settlement
consultations with the E.U. on government subsidies for
avionics equipment and geographical indications, and with India
on automotive trade and investment measures. The USTR reported
that it had requested the formation of a WTO dispute settlement
panel on Korean restrictions on beef imports and their
distribution, and had initiated dispute settlement procedures
on Korean measures related to airport construction. The USTR
also reported that it was working within the Committee on
Customs Valuation to examine non-compliance with the WTO
Customs Valuation Agreement with respect to Brazil, India and
Mexico, and on the general use of reference pricing by a number
of WTO Members.
USTR also reported that it had initiated an investigation
under section 301 of the Trade Act of 1974 on Canadian
regulations affecting tourism in the U.S.-Canada border region.
Practices that warranted further monitoring and could
require future action included: (1) Canadian restrictions on
agriculture exports and discrimination against U.S. magazines;
(2) Japanese insurance deregulation, market access restrictions
on autos, auto parts, and flat glass; (3) Korean treatment of
pharmaceuticals; (4) Mexico's application of antidumping
measures on high-fructose corn syrup and telecommunication
barriers.
On April 30, 2000, the USTR submitted its report to the
Committees on trade expansion priorities and priority foreign
country practices. In the 2000 report, the USTR again did not
identify any priority foreign country practices. The USTR did
find that a number of practices warranted the initiation of WTO
dispute settlement proceedings, and identified a number of
practices that might warrant identification as a priority
foreign country practice in the future.
With respect to initiation of WTO proceedings, the USTR
indicated that it would request WTO dispute settlement
consultations in two customs valuation cases: (1) Brazil on
reference prices for certain textile products; and (2) Romania
on discriminatory reference prices for products such as
clothing, poultry, and certain types of distilled spirits. The
USTR also announced that it would request the establishment of
a panel on India's automotive trade and investment measures,
and would request consultations with the Philippines on local
content requirements for motorcycles, automobiles and certain
commercial vehicles.
Practices that warranted further monitoring and could
require future action included: (1) E.U. subsidization of
Airbus; (2) Japanese market access restrictions and competition
problems in the flat glass, auto/auto parts, and public works
sectors; (3) Korea market access barriers to pharmaceuticals
and autos; (4) Mexico's use of a minimum price regime for
certain imported products; (5) Indian tariffs on textiles; and
(6) Malaysian trade and investment measures on motor vehicles.
Foreign Direct Investment
Section 307(b) of the Trade and Tariff Act of 1984 requires
the U.S. Trade Representative to seek the reduction and
elimination of foreign export performance requirements through
consultations and negotiations with the country concerned if
the USTR determines, with interagency advice, that U.S. action
is appropriate to respond to such requirements that adversely
affect U.S. economic interests. In addition, the USTR may
impose duties or other import restrictions on the products or
services of the country involved, including exclusion from
entry into the United States of products subject to these
requirements. The USTR may provide compensation for such action
subject to the provisions of section 123 of the Trade Act of
1974 if necessary or appropriate to meet U.S. international
obligations.
Section 307(b) authority does not apply to any foreign
direct investment, or to any written commitment relating to
foreign direct investment that is binding, made directly or
indirectly by any U.S. person prior to October 30, 1984 (date
of enactment of the 1984 Act).
Foreign Anticompetitive Practices
Section 311 of the Uruguay Round Agreements Act provides
for including an identification of foreign anticompetitive
practices, the toleration of which by foreign governments is
adversely affecting exports of U.S. goods or services, as part
of the National Trade Estimate report to be submitted each
year. The USTR is to consult with the Attorney General in
preparing this section of the report.
Unfair Practices in Import Trade
Section 337 of the Tariff Act of 1930, as amended
Section 337 of the Tariff Act of 1930 \26\ declares
unlawful unfair methods of competition and unfair acts in the
importation or sale of articles (other than articles relating
to certain intellectual property rights), the threat or effect
of which is to (1) destroy or substantially injure an industry
in the United States; (2) prevent the establishment of such an
industry; or (3) restrain or monopolize trade and commerce in
the United States. Section 337 also declares unlawful the
importation or sale of articles that (1) infringe a valid and
enforceable U.S. patent or registered copyright; or are made,
produced, processed, or mined under a process covered by a
valid and enforceable U.S. patent; (2) infringe a valid and
enforceable U.S.-registered trademark; (3) infringe a
registered mask work of a semiconductor chip product; or
infringe exclusive rights in a protected design. For this
separate class of intellectual property rights, the importation
or sale of infringing articles is unlawful only if an industry
in the United States producing the articles protected by the
patent, copyright, trademark, mask work, or design exists or is
in the process of being established. It is not necessary to
establish that the industry is injured by reason of such
imports, as is the case with non-intellectual property rights
violations. A U.S. industry is considered to exist if there is
(1) significant investment in plant and equipment; (2)
significant employment of labor or capital; or (3) substantial
investment in the exploitation of the patent, copyright,
trademark, mask work, or design, including engineering,
research and development, or licensing.
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\26\ Public Law 71-361, section 337, approved June 17, 1930, 19
U.S.C. 1337.
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The U.S. International Trade Commission (ITC) is
responsible for investigating alleged violations of section
337. Upon finding a violation, the ITC may issue an exclusion
order and/or a cease and desist order, subject to presidential
disapproval.
Section 337 is unique among the trade remedy laws in that
it is the only one subject to the provisions of the
Administrative Procedure Act (APA).\27\ All ITC investigations
and determinations under section 337 must be conducted on the
record after publication of notice and opportunity for hearing
in conformity with the APA.\28\
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\27\ Act of June 11, 1946, ch. 324, sections 1-12, 5 U.S.C. 551 et
seq.
\28\ 19 U.S.C. 1337(c).
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The language of section 337 closely parallels that of
section 5 of the Federal Trade Commission Act,\29\ and
therefore the scope of section 337 has been compared to that of
the antitrust and unfair competition statutes. The ITC has
significant discretion in determining what practices are
``unfair'' under section 337. In practice, however, the
overwhelming majority of cases dealt with under section 337 has
been in the area of patent infringement. Among the few non-
patent cases have been cases involving group boycotts, price
fixing, predatory pricing, false labeling, false advertising,
and trademark infringement.
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\29\ Public Law 63-203, approved September 26, 1914, 38 Stat. 717,
15 U.S.C. 45.
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Whenever, in the course of a section 337 investigation, the
ITC has reason to believe that the matter before it involves
dumping or subsidization of imports within the purview of the
antidumping or countervailing duty laws, it must notify the
administering authority of those laws for appropriate
action.\30\ If the alleged violation of section 337 is based
solely on such dumping or subsidization practices, the ITC must
terminate (or not initiate) the section 337 investigation. If
it is based in part on such practices, and in part on other
alleged practices, then the ITC may continue (or initiate) an
investigation under section 337. This provision is designed to
avoid duplication and conflicts in the administration of the
unfair trade practice laws.
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\30\ 19 U.S.C. 1337(b)(3).
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The Audio Home Recording Act of 1992 \31\ added alleged
copyright infringements with respect to which action is
prohibited by the new 17 U.S.C. 1008, to the practices for
which the ITC must terminate or not institute an investigation
under section 337. Section 1008 prohibits action under title 17
alleging copyright infringement based on the manufacture,
importation, or distribution of a digital audio technology
(DAT) recorder and related items.
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\31\ Public Law 102-563, approved October 28, 1992.
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General Agreement on Tariffs and Trade (GATT) panel determination
In response to a complaint by the European Community (EC)
about the application of section 337, the GATT Council agreed
on October 7, 1987 to establish a panel to review the U.S. law.
On November 23, 1988, the panel found that section 337 is
inconsistent with the national treatment provision article
III:4 of the GATT because it afforded less favorable treatment
to imported products alleged to infringe U.S. patents than that
given in federal district court to challenged domestically
manufactured goods. Specifically, the panel pointed to the
complainants' choice of two fora in which to challenge imported
products, without a corresponding choice available to challenge
products of U.S. origin; the potential disadvantage to
producers or importers of challenged products of foreign origin
resulting from the tight time-limits that apply to producers of
challenged products of U.S. origin; and the possibility that
producers or importers of challenged products of foreign origin
may have to defend their products both before the ITC and in
federal district court while no corresponding exposure exists
with respect to U.S.-made goods. The panel recommended that the
GATT contracting parties request the United States to bring its
procedures for patent infringement cases involving imports into
conformity with the GATT.
The panel report was adopted at a GATT Council meeting on
November 9, 1989. The United States amended section 337 to
address the panel report in the Uruguay Round Agreements
Act.\32\ At the request of the EC, the United States and the EC
held WTO consultations on Febraury 28, 2000 to discuss the
compliance of section 337, as amended, with U.S. obligations on
national treatment and under the agreement on Trade--Related
Aspects of Intellectual Property Rights (TRIPS).
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\32\ Public Law 103-465.
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Procedure
The ITC is required to investigate any alleged violation of
section 337 on complaint under oath or upon its own initiative.
The Uruguay Round Agreements Act amended the provision so that
there are no longer any deadlines for the investigation.
Instead, the ITC must, within 45 days of initiation, set a
target date and conclude its investigation at the earliest
practicable time. Before this amendment, the ITC was required
to meet strict deadlines for conducting investigations.
In the course of each investigation, the ITC is required to
consult with and seek advice and information from the
Department of Health and Human Services, the Department of
Justice, the Federal Trade Commission, and other appropriate
departments and agencies.
In deciding whether an article has infringed a valid U.S.
patent, the ITC applies the same statutory and decisional
domestic patent law as would a district court. U.S. patent
holders may file parallel actions in federal district court and
the Commission. Respondents sued in both fora under the same
underlying cause of action may obtain a stay of district court
proceedings until the ITC determination becomes final.
The Uruguay Round Agreements Act added a provision
permitting respondents to raise counterclaims in section 337
investigations. Such claims, however, would be immediately
removed to district court and cannot be litigated at the ITC.
Although damages are not an available remedy at the ITC as
they are in district court, the ITC is empowered to issue
limited exclusion orders, general exclusion orders, and cease
and desist orders, which provide relief at the border.
Specifically, if a violation of section 337 is found, the ITC
must direct that the foreign articles be excluded from entry
into the United States, unless it determines that such articles
should not be excluded in consideration of the effect of
exclusion on:
(1) the public health and welfare;
(2) competitive conditions in the U.S. economy;
(3) the production of like or directly competitive
articles in the United States; and
(4) U.S. consumers.
The Uruguay Round Agreements Act added a provision
establishing that the ITC is not permitted to issue a general
exclusion order (i.e., an exclusion order that affects all
shipments of the merchandise under investigation, as opposed to
an order that affects merchandise from only those persons
determined to be violating section 337) unless such a general
order is necessary to prevent circumvention of specific orders,
and there is a pattern of violation and identifying those
persons responsible for the infringement is difficult.
In appropriate circumstances, the ITC may issue temporary
exclusion orders during the course of an investigation if it
determines that there is reason to believe that there is a
violation of section 337. In the event of a temporary exclusion
order, entry is to be permitted only under bond. If petitioned
by a complainant for issuance of a temporary exclusion order,
the ITC must determine whether or not to issue such an order
within 90 days after initiation of an investigation, with a
possible extension of 60 days in more complicated cases. In
such circumstances, the ITC may require the complainant to post
a bond as a prerequisite for issuing an order. If the ITC later
determines that the respondent has not violated these
provisions, the bond may be forfeited to the respondent.
In addition to or in lieu of issuing an exclusion order,
the ITC may issue an appropriate cease and desist order to be
served on the violating party or parties, unless it finds that
such order should not be issued in consideration of the effect
of such order on the same public interest factors listed above.
The ITC may at any time, upon such notice and in such
manner as it deems proper, modify or revoke any cease and
desist order, and issue an exclusion order in its place. If a
temporary cease and desist order is issued, the ITC may require
the complainant to post a bond, which may be forfeited to the
respondent if the ITC later determines that the respondent has
not violated these provisions.
Any person who violates a cease and desist order issued
under this section shall be subject to a civil penalty of up to
the greater of $100,000 per day or twice the domestic value of
the articles entered or sold on such day in violation of the
order.
In the event that a person has been served with notice of
proceedings and fails to appear to answer the complaint in
cases where the complainant seeks relief limited solely to that
person, the ITC must presume the facts alleged by the
complainant to be true. If requested by the complainant, the
ITC must issue an exclusion order and/or a cease and desist
order against the person in default, unless it finds that such
order should not be issued for the same public interest reasons
listed above. Similarly, if no person appears to contest the
investigation and violation is established, the ITC may issue a
general exclusion order.
The ITC may order seizure and forfeiture of goods subject
to an exclusion order if an attempt has been made to import the
goods and the owner or importer has been notified that a
further attempt to import the goods would lead to seizure and
forfeiture.
Presidential and judicial review
Following an ITC determination of a violation of section
337, the President may, within 60 days after receiving
notification, disapprove the ITC determination for ``policy
reasons.'' The statute does not specify what types of policy
reasons may provide the basis for disapproval. Upon
presidential disapproval, actions taken by the ITC cease to
have effect. If the President does not disapprove the ITC
determination, or if he approves it, then the ITC determination
becomes final. Any person adversely affected by a final ITC
determination under section 337 may appeal the determination to
the U.S. Court of Appeals for the Federal Circuit.
Import Relief (Safeguard) Authorities
Sections 201-204 of the Trade Act of 1974, as amended
Background
Chapter 1 of title II (sections 201-204) of the Trade Act
of 1974,\33\ as amended by section 1401 of the Omnibus Trade
and Competitiveness Act of 1988,\34\ and sections 301-304 of
the Uruguay Round Agreements Act,\35\ sets forth the authority
and procedures for the President to take action, including
import relief, to facilitate efforts by a domestic industry
which has been seriously injured by imports to make a positive
adjustment to import competition.
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\33\ 19 U.S.C. 2251-2254.
\34\ Public Law 100-418, approved August 23, 1988. The 1988
amendments significantly rearranged chapter 1 of title II of the Trade
Act of 1974 and added a new section 204. Prior to these amendments, the
subject matter contained in sections 201-204 was found in sections 201-
203 of the Trade Act.
\35\ Public Law 103-465, approved December 8, 1994. Minor
amendments were also made by sections 315 and 317 of the North American
Free Trade Agreement Implementation Act, Public Law 103-182, approved
December 8, 1993.
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From the outset of the trade agreements program in 1934,
U.S. policy of seeking liberalization of trade barriers has
been accompanied by recognition that difficult economic
adjustment problems could result for particular sectors of the
economy and, if serious injury results from increased
competition by not necessarily unfairly traded imports, then
domestic industries should be provided a period of relief to
allow them to adjust to new conditions of trade. Beginning with
bilateral trade agreements in the early 1940's, U.S. trade
agreements, and eventually U.S. domestic law, have provided for
a so-called ``escape clause'' or ``safeguard'' mechanism for
import relief. This mechanism, while amended over the years,
has provided authority for the President to withdraw or modify
concessions and impose duties or other restrictions for a
limited period of time on imports of any article which causes
or threatens serious injury to the domestic industry producing
a like or directly competitive article, following an
investigation and determination by the U.S. International Trade
Commission (ITC) (formerly the U.S. Tariff Commission).
Under this basic trade agreements authority in section 350
of the Tariff Act of 1930, the President issued three executive
orders setting forth procedures and criteria for escape-clause
relief, which governed from 1947 to 1951. Section 7 of the
Trade Agreement Extension Act of 1951 contained the first
statutory procedure and criteria for escape-clause action,
which governed from 1951 until replaced by sections 301, 351
and 352 of the Trade Expansion Act of 1962. The 1962
provisions, which also introduced the concept of trade
adjustment assistance (see separate section), were repealed and
replaced by sections 201-203 of the Trade Act of 1974. In 1988,
the 1974 provisions were rewritten to place a greater emphasis
on the responsibility of domestic industry to use the relief
period to undertake positive adjustment.
Primarily at U.S. insistence, an escape clause (safeguard)
provision modeled after language in the 1947 executive order
was included in article XIX of the original General Agreement
on Tariffs and Trade (GATT 1947). As a result of the GATT
Uruguay Round of Multilateral Trade Negotiations, which
resulted in the Agreement Establishing the World Trade
Organization, GATT 1947 was replaced by GATT 1994. Article XIX
was not changed in GATT 1994.\36\ In the course of the
negotiations, GATT members negotiated a new Agreement on
Safeguards, which provides rules for the application of article
XIX of GATT 1994. The rules provide for, among other things,
greater transparency in procedures and limitations on the
duration of relief measures. However, in a departure from GATT
1947 article XIX, which authorized retaliation by members
adversely affected by the measure when appropriate compensation
was not forthcoming, the Agreement provides that a member
country may not exercise its right to take retaliatory action
during the first 3 years that a safeguard measure is in effect,
provided that the safeguard measure resulted from an absolute
increase in imports and otherwise conforms to the Agreement.
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\36\ The language of GATT article XIX is as follows: ``If, as a
result of unforeseen developments and of the effect of the obligations
incurred by a contracting party under this agreement, including tariff
concessions, any product imported into the territory of that
contracting party in such increased quantities and under such
conditions as to cause or threaten serious injury to domestic producers
in that territory of like or directly competitive products, the
contracting party shall be free, in respect of such product and to the
extent and for such time as may be necessary to prevent such injury, to
suspend the obligation in whole or in part or to withdraw or modify the
concession.''
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World Trade Organization (WTO) panel determinations
By Presidential Proclamation 7103 of May 30, 1998, the
United States imposed a Safeguard Measure in the form of a
quantitative limitation on imports of wheat gluten from the
European Union (EU). The EU challenged the imposition of the
safeguard measure, claiming that it violated Articles 2.1 and 4
of the Agreement on Safeguards and Article XIX:1(a) of the GATT
1994. A WTO panel was formed on July 25, 1999. On July 31,
2000, the panel issued a ruling in favor of the EU.
Specifically, the panel found that the causation analysis
applied by the ITC violated U.S. obligations under Articles 2.1
and 4 of the safeguards Agreement because it did not ensure
that injury caused by other factors was not attributed to
imports. The panel also found the ITC's exclusion of imports
from Canada (a NAFTA partner) from the application of the
safeguard measure after imports from all sources were included
in the investigation for the purposes of determining serious
injury caused by increased imports to violate U.S. obligations
under Articles 2.1 and 4 of the Safeguards Agreement. In
addition, the panel found that the United States violated
Articles 12.1(b) and 12.3 of the Safeguards Agreement by
failing to: (1) notify immediately the initiation of the
investigation and the finding of serious injury; (2) provide
adequate opportunity for prior consultations on the safeguard
measure; and (3) endeavor to maintain a substantially
equivalent level of concessions and other obligations to that
existing under GATT 1994 between it and the exporting Members
that would be affected by such a measure. The United States
filed its notice of appeal on September 26, 2000. On December
22, 2000, the Appellate Body issued its report, reversing in
part and affirming in part the panel decision. The Appellate
Body reversed the panel's interpretation of Article 4.2(b) of
the Safeguards Agreement that imports ``alone,'' `` in and of
themselves,'' or ``per se,'' must be capable of causing
``serious injury,'' as well as the Panel's conclusion on the
issue of causation. However, the panel found that the United
States acted inconsistently with its obligations under Article
4.2(b) of the Safeguards Agreement because the ITC's causation
analysis did not ensure that injury caused by other factors was
not attributed to imports. The Appellate Body also reversed the
panel's finding on immediate notification, finding that the
United States did not act inconsistently with its obligations
under Article 12.1(c) of the Safeguards Agreement.
On July 22, 1999, the United States imposed a safeguard
measure on imports of lamb meat from Australia and New Zealand.
A WTO panel was formed on November 18, 1999, at the request of
Australia and New Zealand, which argued that the safeguard
measure violated U.S. obligations under GATT 1994 and the
Agreement on Safeguards. The panel issued its report on
December 14, 2000, finding certain aspects of the U.S.
safeguard measure to be inconsistent with WTO rules.
Specifically, the panel found that the United States acted
inconsistently with Article XIX:1(a) of GATT 1994 by failing to
demonstrate as a matter of fact the existence of ``unforeseen
developments.'' In addition, the panel found that the United
States acted inconsistently with Article 4.1(c) of the
Agreement on Safeguards because the ITC defined the domestic
industry as including input producers (i.e., growers and
feeders of live lamb) as producers of the like product at issue
(i.e. lamb meat). The panel found that the United States also
acted inconsistently with Article 4.1(c) of the Safeguards
Agreement because the ITC failed to obtain data on producers
representing a major proportion of the total domestic industry
as defined by the investigation. The panel further found,
similar to the panel ruling in the wheat gluten case (described
above) which was subsequently overturned by the Appellate Body,
that the causation analysis applied by the ITC violated U.S.
obligations under Article 4.2(b) of the Agreement on Safeguards
because it did not ensure that injury caused by other factors
was not attributed to imports. The United States plans to
appeal the panel's ruling.
Petitions and investigations
An entity representative of an industry (including a trade
association, firm, union or group of workers) may file a
petition under section 202 of the Trade Act of 1974 with the
ITC. The petition must include a statement describing the
specific purposes for which action is being sought, which may
include facilitating the orderly transfer of resources to more
productive pursuits, enhancing competitiveness, or other means
of adjustment to new conditions of competition. Alternatively,
the President, U.S. Trade Representative, or the House
Committee on Ways and Means or Senate Committee on Finance may
request an investigation.
Upon petition, request, or on its own motion, the ITC
conducts an investigation ``to determine whether an article is
being imported into the United States in such increased
quantities as to be a substantial cause of serious injury, or
the threat thereof, to the domestic industry producing an
article like or directly competitive with the imported
article.'' Substantial cause is defined as ``a cause which is
important and not less than any other cause.''
In making its determination, the Commission must take into
account all relevant economic factors, including certain
factors specified in the statute,\37\ and must consider the
condition of the domestic industry over the course of the
relevant business cycle. The Commission may determine to treat
as the domestic industry: (1) only the portion or subdivision
producing the like or directly competitive article of a
producer of more than one article; and (2) only production
concentrated in a major geographic area under certain
circumstances. The Commission is required, to the extent
information is available, in the case of a domestic producer
which also imports, to treat as part of the domestic industry
only the domestic production of such producer.
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\37\ These factors include: with respect to serious injury, the
significant idling of productive facilities in the industry, the
inability of a significant number of firms to operate at a reasonable
level of profit, and significant unemployment or underemployment within
the industry; with respect to threat of serious injury, a decline in
sales or market share, a higher and growing inventory (whether
maintained by domestic producers, importers, wholesalers, or
retailers), and a downward trend in production, profits, wages,
productivity or employment (or increasing underemployment) in the
domestic industry concerned; the extent to which firms in the domestic
industry are unable to generate adequate capital to finance the
modernization of their domestic plants and equipment, or are unable to
maintain existing levels of expenditures for research and development,
the extent to which the U.S. market is the focal point for the
diversion of exports of the article concerned by reason of restraints
on exports of such article to, or on imports of such article into,
third country markets; and with respect to substantial cause, an
increase in imports (either actual or relative to domestic production)
and a decline in the proportion of the domestic producers. The presence
or absence of any factor is not necessarily dispositive.
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A public hearing is required during the course of the
investigation. Whenever during the investigation the Commission
has reason to believe increased imports are attributable in
part to unfair trade practices, then it must promptly notify
the agency administering the appropriate remedial law.
Normally the ITC must make its injury determination within
120 days of receipt of the petition or request. However, if the
ITC determines that the investigation is extraordinarily
complicated, it may take up to 30 additional days to make an
injury determination. If the petition alleges that critical
circumstances exist, the ITC must first determine, within 60
days of receipt of a petition containing such an allegation,
whether critical circumstances exist. The ITC begins the injury
phase of its investigation only after it has made its
determination with respect to critical circumstances. If the
ITC makes an affirmative injury finding, then it must recommend
the action that would address the injury and be the most
effective in facilitating efforts by the domestic industry to
make a positive adjustment; such recommended action must be
either a tariff, tariff-rate quota, quantitative restriction,
adjustment measures, or a combination thereof.
The ITC's remedy recommendation and report must be
submitted to the President within 180 days of the petition
(within 240 days if critical circumstances are alleged). The
report must also be made available to the public, and a summary
of the report must be published in the Federal Register.
Adjustment plans and commitments
Under title II, as amended, petitioners are encouraged to
submit, at any time prior to the ITC injury determination, a
plan to promote positive adjustment to import competition. The
law provides that positive adjustment occurs when (1) the
domestic industry is able to compete successfully with imports
after actions taken under section 204 terminate, or the
domestic industry experiences an orderly transfer of resources
to other productive pursuits; and (2) dislocated workers in the
industry experience an orderly transition to productive
pursuits.
The domestic industry may be considered to have made a
positive adjustment to import competition even though the
industry is not of the same size and composition as the
industry at the time the investigation was initiated.
Before submitting an adjustment plan, the petitioner and
other members of the domestic industry that wish to participate
may consult with the U.S. Trade Representative and other
federal government officials for purposes of evaluating the
adequacy of the proposals being considered for inclusion in the
plan.
In addition, during the ITC investigation, the ITC is
required to seek information (on a confidential basis to the
extent appropriate) on actions being taken, or planned to be
taken, or both, by firms and workers in the industry to make a
positive adjustment to import competition. Any party may
individually submit to the ITC commitments regarding actions
such party intends to take to facilitate positive adjustment to
import competition.
Provisional relief
Under section 202(d) of the Trade Act, the President may
provide provisional relief in the case of imports of a
perishable agricultural product, provided that the imported
product has been the subject of ITC monitoring for at least 90
days prior to the filing of the petition with the ITC and the
ITC has made an affirmative preliminary determination. The ITC
has 21 days from the date on which the petition is filed to
make its determination and report any finding with respect to
provisional relief, and the President has 7 days after
receiving an ITC report containing an affirmative determination
to determine what, if any, action to take.
The Uruguay Round Agreements Act revised, both
substantively and procedurally, the critical circumstances
provision in section 202. Under the revised provisions, if
critical circumstances are alleged in the petition, the ITC
must, within 60 days of receipt of a petition containing such
an allegation, determine whether critical circumstances exist
and, if so, recommend an appropriate remedy to the President.
The ITC would find critical circumstances to exist when it
determines, on the basis of available information, that there
is ``clear evidence'' that increased imports of an article are
a substantial cause of serious injury, or the threat thereof,
to the domestic industry, and ``delay in taking action . . .
would cause damage to that industry that would be difficult to
repair.'' After receiving a report containing an affirmative
ITC determination, the President has 30 days in which to
determine what, if any, action to take.
Provisional relief is to take the form of an increase in,
or imposition of, a duty on imports, if such form of relief is
feasible and would prevent or remedy the serious injury. Such
actions generally remain in effect pending completion of the
full ITC investigation and transmission of the ITC's report.
However, no provisional relief action may remain in effect for
more than 200 days.
Presidential action
Within 60 days of receiving an affirmative ITC
determination and report, the President shall take all
appropriate and feasible action within his power which he
determines will facilitate efforts by the domestic industry to
make a positive adjustment and will provide greater economic
and social benefits than costs. Any import relief provided may
not exceed the amount necessary to prevent or remedy the
serious injury.
In determining what action is appropriate, the President is
required to consider a number of factors, including the
adjustment plan (if any), individual commitments, probable
effectiveness of action to promote positive adjustment, other
factors related to the national economic interest, and the
national security interest.
The actions authorized to be taken by the President include
an increase in or imposition of a duty, imposition of a tariff-
rate quota system, a modification or imposition of a
quantitative restriction, implementation of one or more
adjustment measures (including trade adjustment assistance),
negotiation of agreements with foreign countries limiting the
export from foreign countries and the import into the United
States of an article, and any other action within his power.
The President may take action under this title for an
initial period of up to 4 years, and may extend such action, at
a level not to exceed that previously in effect, one or more
times. However, the total period of relief, including any
extensions, may not exceed 8 years. As provided in section 311
of the North American Free Trade Agreement Implementation
Act,\38\ a relief action is not to apply to imports of an
article when imported from Canada or Mexico unless imports of
such article from such country account for a substantial share
of imports of such article and contribute importantly to the
serious injury or threat thereof.
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\38\ Public Law 103-182, approved December 8, 1993, 19 U.S.C. 3371.
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The Trade Policy Committee, chaired by the U.S. Trade
Representative, is required to make a recommendation to the
President as to what action the President should take. On the
day the President takes action under this title, he must submit
to Congress a document describing the action and the reasons
for taking the action. If the action taken by the President
differs from the action recommended by the ITC, the President
shall state in detail the reasons for the difference. If the
President decides that there is no appropriate and feasible
action to take with respect to a domestic industry, the
President is required to transmit to Congress on the day of
such decision a document that sets forth in detail the reasons
for the decision.
Congress may adopt a joint resolution of disapproval within
90 legislative days under the expedited procedures of section
152 of the Trade Act if the President takes action which is
different from that recommended by the ITC or if the President
declines to take any action. Under these procedures,
resolutions are referred to the House Committee on Ways and
Means and the Senate Committee on Finance, which are subject to
a motion to discharge if the resolution has not been reported
within 30 legislative days. No amendments to the motion or to
the resolution are in order. Within 30 days after enactment of
such a resolution, the President must proclaim the relief
recommended by the Commission.
Monitoring, modification, and termination of action
If presidential action is taken, the ITC is required to
monitor developments in the industry, including efforts by the
domestic industry to adjust and, if the initial period or an
extension of the action exceeds 3 years, submit a report on the
results of such monitoring at the midpoint of the initial
period or extension, as appropriate. The Commission is required
to hold a public hearing in the course of preparing each such
report.
After receiving an ITC report on the results of such
monitoring, the President may reduce, modify, or terminate
action if either (1) the domestic industry requests it on the
basis that it has made a positive adjustment, or (2) the
President determines that changed circumstances warrant such
reduction, modification, or termination. Upon request of the
President, the ITC must advise the President as to the probable
economic effects on the domestic industry of any proposed
reduction, modification, or termination of action.
Prior to the termination of relief, the ITC is required, at
the request of the President or upon petition of the concerned
industry, to conduct an investigation to determine whether the
relief action continues to be necessary to prevent or remedy
serious injury and whether there is evidence that the industry
is making a positive adjustment to import competition. The ITC
must hold a public hearing in the course of each such
investigation and transmit its report to the President no later
than 60 days before termination of the relief action, unless
the President specifies a different date.
After any action taken under this title has terminated, the
ITC must evaluate the effectiveness of the action in
facilitating positive adjustment by the domestic industry to
import competition, and submit a report to the President and to
the Congress within 180 days of the termination of the action.
Subsequent relief actions
If relief was provided, no new relief action may be taken
with respect to the same subject matter for a period of time
equal to the period of import relief granted, or for 2 years,
whichever is greater.
However, in the case of an action that is in effect for 180
days or less, the President may take a new action with respect
to the same subject matter if at least 1 year has elapsed since
the previous action went into effect and an action has not been
taken more than twice in the 5-year period preceding the
effective date of the new action.
Section 406 of the Trade Act of 1974: Market Disruption by Imports From
Communist Countries
Section 406 of the Trade Act of 1974 \39\ was established
to provide a remedy against market disruption caused by imports
from Communist countries. The provision applies to imports from
any Communist country, irrespective of whether it has received
or currently receives non-discriminatory most-favored-nation
treatment. Enactment of section 406 resulted from concern that
traditional remedies for unfair trade practices, such as the
antidumping and countervailing duty laws, may be insufficient
to deal with a sudden and rapid influx of substantial imports
that can result from Communist country control of their pricing
levels and distribution process.
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\39\ Public Law 93-618, approved January 3, 1975, and amended by
section 1411 of the Omnibus Trade and Competitiveness Act of 1988
(Public Law 100-418), 19 U.S.C. 2436.
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The provisions of section 406 of the Trade Act of 1974, as
amended by the Omnibus Trade and Competitiveness Act of 1988,
are in many ways similar to those under sections 201-203 of the
Trade Act, except that section 406 provides a lower standard of
injury causation and a faster relief procedure, and the
investigation focuses on imports from a specific country.
Under section 406(a), the ITC conducts investigations to
determine whether imports of an article produced in a Communist
country (any country dominated or controlled by communism) are
causing market disruption with respect to a domestically
produced article. Market disruption exists whenever imports of
an article, like or directly competitive with an article
produced by a domestic industry, are increasing rapidly so as
to be a significant cause of material injury, or threat
thereof, to such domestic industry. Imports are increasing
rapidly if there has been a significant increase in imports,
either actual or relative to domestic production, during a
recent period of time. In making a determination of market
disruption, the ITC is required to consider, among other
factors, the volume of imports, the effect of imports on
prices, the impact of imports on domestic producers, and
evidence of disruptive pricing practices or other efforts to
unfairly manage trade patterns.
The ITC conducts such investigations at the request of the
President or the U.S. Trade Representative, upon resolution of
either the House Committee on Ways and Means or the Senate
Committee on Finance, on its own motion, or upon the filing of
a petition by an entity (including a trade association, firm,
union, or a group of workers) which is representative of an
industry. The Commission must complete its investigation within
3 months including a public hearing.
If the ITC finds that market disruption exists, it must
also recommend to the President relief in the form of rates of
duty or quantitative restrictions that will prevent or remedy
such market disruption. The President then has 60 days to
advise Congress as to what, if any, relief he will proclaim.
Any import relief must be proclaimed within 15 days after the
determination to provide it, except that the President has an
additional 60 days to negotiate an orderly marketing agreement
if he decides to provide relief in that form. Relief applies
only to imports from the subject Communist country. Relief is
limited to a maximum 5-year period subject to one renewal of up
to 3 years.
Section 406(c) authorizes the President, prior to an ITC
determination, to take temporary emergency action with respect
to imports from a Communist country whenever he finds that
there are reasonable grounds to believe there is market
disruption. When taking such action, the President must also
request the Commission to conduct an investigation under
section 406(a). Any emergency relief ceases to apply on the day
the Commission makes a negative finding or on the effective
date of action by the President following an affirmative ITC
finding.
Sections 421-423 of the Trade Act of 1974, as amended: Market
Disruption by Imports from the People's Republic of China
Section 103 of Public Law 106-286, approved October 10,
2000, authorizing the extension of permanent normal trade
relations to the People's Republic of China created a new
chapter of title IV of the Trade Act of 1974 to implement the
anti-surge mechanism established under the U.S.-China Bilateral
Trade Agreement, concluded on November 15, 1999. This provision
was intended to replace section 406 of the Trade Act of 1974,
which would no longer apply to China once that country joins
the WTO.
Section 421 of the new chapter permits the provision of
relief to U.S. domestic industries and workers where products
of Chinese origin are being imported in such increased
quantities and under such conditions as to cause or threaten to
cause market disruption to the domestic producers as a whole of
like or directly competitive products. The relief is to be
imposed only to the extent and for such period as the President
considers necessary to prevent or remedy the market disruption.
Procedures are modeled after Section 406, with certain
modifications to conform to language of the bilateral trade
agreement. U.S. industries or workers claiming injury due to
import surges from China may file a petition with the ITC or
the ITC can initiate an investigation at the request of the
President or on motion of the House Ways and Means Committee or
the Senate Finance Committee. According to the U.S.-China
Agreement and under the legislation, market disruption occurs
when subject imports ``are increasing rapidly, either
absolutely or relatively, so as to be a significant cause of
material injury or threat of material injury to the domestic
industry.''
In determining whether market disruption exists, the ITC
considers objective factors, including: (1) the volume of
imports of the product subject to the investigation; (2) the
effect of imports of such product on prices in the United
States of like or directly competitive articles, and (3) the
effect of imports of such product on the domestic industry
producing like or directly competitive articles. The presence
or absence of any factor listed above is not necessarily
dispositive of whether market disruption exists.
Within 60 days after receipt of the petition, request or
motion (90 days, where the petitioner alleges critical
circumstances), the ITC is to make a determination as to
whether the subject imports are causing or threatening market
disruption. Not later than 20 days after the ITC makes an
affirmative determination with respect to market disruption,
the ITC is to issue a report to the President and to the USTR
setting forth the reasons for its determination and
recommendation(s) of actions necessary to prevent or remedy
market disruption. Within twenty days, the USTR is to publish a
notice of proposed action in the Federal Register, seeking
views and evidence on the appropriateness of the proposed
action and whether it would be in the public interest. The USTR
is also required to hold a hearing on the proposed action.
If the ITC's determination is affirmative with respect to
market disruption, the President is required to request
consultations with the Chinese to remedy the market disruption.
If the United States and China are unable to reach agreement
within the 60 day consultation period established in the
bilateral agreement and under section 421, then the President
is required to decide what action, if any, to take within 25
days after the end of consultations. Any relief proclaimed is
to become effective in 15 days. If the President determines
that an agreement with China concluded under this section is
not preventing or remedying the market disruption at issue,
then the President is to initiate new consultations and
proceedings under section 421. However, if China is not
complying with the terms of the agreement entered into under
the U.S.-China Bilateral Agreement, then the President is
required to provide prompt relief consistent with the terms of
the Bilateral Agreement.
The entire period from petition to proclamation of relief
is 150 days, which is identical to the duration under section
406 of the Trade Act.
Section 421 also establishes clear standards for the
application of Presidential discretion in providing relief to
injured industries and workers. If the ITC makes an affirmative
determination on market disruption, there is a presumption in
favor of providing relief. That presumption can be overcome
only if the President finds that providing relief would have an
adverse impact on the United States economy clearly greater
than the benefits of such action, or, in extraordinary cases,
that such action would cause serious harm to the national
security of the United States.
The provision also sets forth authority to the President to
modify, reduce or terminate relief, as well an opportunity for
the President to request a report from the ITC on the probable
effects of such action. In addition, section 421 allows for
extension of relief under certain circumstances.
The President is authorized to provide a provisional
safeguard in cases where ``delay would cause damage which it
would be difficult to repair,'' as permitted under the U.S.-
China Bilateral Agreement. If such circumstances are alleged,
the ITC is required to make a determination on critical
circumstances and a preliminary determination on market
disruption within 45 days of receipt of the petition, request,
or motion. If those determinations are affirmative, the
President is required to determine whether to provide such
provisional relief within 20 days.
Finally, section 422 implements a provision in the U.S.-
China Bilateral Agreement concerning trade diversion. That
provision addresses circumstances in which a safeguard applied
by a third country with respect to Chinese goods ``causes or
threatens to cause significant diversions of trade'' into the
United States. If, on the basis of the monitoring results
provided by the Customs Service and other reasonably available
relevant evidence, the ITC determines that an action by another
WTO Member threatens or causes significant trade diversion, the
USTR is required to request consultations with China and/or the
Member imposing the safeguard. If, as provided in the U.S.-
China Bilateral Agreement, consultations fail to lead to an
agreement to address the trade diversion within 60 days, the
President is required to determine, within 40 days after
consultations end, what action, if any, to take to prevent or
remedy the trade diversion. The total time from petition to
relief under the trade diversion provision is 150 days. Section
422 also requires the ITC to examine changes in imports into
the United States from China since the time that the WTO Member
commenced the investigation that led to a request for
consultations.
The product-specific safeguard is available for 12 years
after China's accession to the WTO.
Section 1102 of the Trade Agreements Act of 1979: Public Auction of
Import Licenses
Section 1102 of the Trade Agreements Act of 1979 authorizes
the President to sell import licenses by public auction, under
such terms and conditions as the President deems appropriate.
Any regulations prescribed under this authority must, to the
extent practicable and consistent with efficient and fair
administration, ensure against inequitable sharing of imports
by a relatively small number of the larger importers.
Import licenses which are potentially subject to this
auction authority are identified in section 1102 by the law
authorizing the import restriction. For example, import
licenses used to administer a quantitative restriction under
the escape clause (section 203 of the Trade Act of 1974), the
market disruption clause (section 406 of the Trade Act of 1974)
or section 301 of the Trade Act of 1974 may be sold by public
auction. Any quantitative import restriction imposed under the
International Emergency Economic Powers Act or the Trading With
the Enemy Act may also be administered by an auctioned import
license. Certain agricultural import quotas, however (such as
certain meat quotas, cheese quotas, and dairy quotas) are
exempt from the auction authority and therefore may not be
administered by means of auctioned licenses.
Trade Adjustment Assistance
Chapters 2, 3, and 5 of Title II of the Trade Act of 1974, as amended
The trade adjustment assistance (TAA) programs were first
established under the Trade Expansion Act of 1962 for the
purpose of assisting in the special adjustment problems of
workers and firms dislocated as a result of a federal policy of
reducing barriers to foreign trade. As a result of limited
eligibility and usage of the programs, criteria and benefits
were expanded under title II of the Trade Act of 1974 (Public
Law 93-618). The Omnibus Budget Reconciliation Act of 1981
(OBRA) (Public Law 97-35), reformed the program for workers as
proposed by the Administration. The amendments, particularly in
program eligibility and benefits, were intended to reduce
program cost significantly and to shift the focus of TAA from
income compensation for temporary layoffs to return-to-work
through training and other adjustment measures for the long-
term or permanently unemployed. The OBRA also made relatively
minor modifications in the firm program. Both programs were
extended at that time for 1 year, to terminate on September 30,
1983.
Public Law 98-120, a bill to amend the International Coffee
Agreement Act of 1980, approved on October 12, 1983, extended
the worker and firm TAA programs for 2 years, until September
30, 1985. Sections 2671-2673 of the Deficit Reduction Act of
1984 (Public Law 98-369) amended the program for workers to
increase the availability of worker training allowances and the
level of job search and relocation benefits, and amended the
program for firms to increase the availability of industrywide
technical assistance.
The worker and firm TAA programs were further extended
under temporary legislation in the 99th Congress until December
19, 1985. The Consolidated Omnibus Budget Reconciliation Act of
1985 (COBRA) (Public Law 99-272), approved April 7, 1986,
reauthorized the TAA programs for workers and firms for 6 years
retroactively from December 19, 1985, until September 30, 1991,
with amendments.
Sections 1421-1430 of the Omnibus Trade and Competitiveness
Act of 1988 (OTCA) (Public Law 100-418), enacted on August 23,
1988, made significant amendments in the worker TAA program,
particularly concerning the eligibility criteria for cash
benefits, funding, and administration. A training requirement
as a condition for income support to encourage and enable
workers to obtain early reemployment became effective as of
November 21, 1988. This replaced a 1986 amendment that
instituted a job-search requirement as a condition for
receiving cash benefits. The amendments also expanded TAA
eligibility coverage of workers and firms, contingent upon the
imposition of an import fee to fund program costs. The OTCA
extended TAA program authorization for an additional 2 years
until September 30, 1993.
Section 136 of the Customs and Trade Act of 1990, (Public
Law 101-382), approved on August 20, 1990, extended the
completion and reporting period for the supplemental wage
allowance demonstration projects for workers required by the
1988 amendments. Section 106 of Public Law 102-318, approved
July 3, 1992, to extend the emergency unemployment compensation
program, provided for weeks of active military duty in a
reserve status (including service during Operation Desert
Storm) to qualify toward the minimum number of weeks of prior
employment required for TAA eligibility.
Section 13803 of the Omnibus Budget Reconciliation Act
(OBRA 1993) of 1993, Public Law 103-66, approved August 10,
1993, reauthorized the TAA programs for workers and firms for
an additional 5 years through fiscal year 1998, with assistance
to terminate on September 30, 1998. Section 13803 of the OBRA
1993 also reduced the level of the ``cap'' on training
entitlement funding from $80 million to $70 million for fiscal
year 1997 only.
Sections 501-506 of the North American Free Trade Agreement
(NAFTA) Implementation Act, Public Law 103-182, approved
December 8, 1993, set forth the ``NAFTA Worker Security Act,''
establishing the NAFTA transitional adjustment assistance
program, effective January 1, 1994 through September 30, 1998,
for workers as a new subchapter D (section 250) under chapter 2
of title II of the Trade Act of 1974.
Renewal of the TAA programs for workers and firms, as well
as the NAFTA-related TAA program, through June 30, 1999 was
contained in section 1012 of the Omnibus Appropriations Act for
Fiscal Year 1999.\40\ Section 1012 also reduced the level of
the ``cap'' on NAFTA-related training entitlement funding from
$30 million per fiscal year to $15 million for the period
between October 1, 1998 and June 30, 1999.
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\40\ Public Law 105-277, approved October 21, 1998.
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Section 702 of the Consolidated Appropriations Act for
Fiscal Year 2000 \41\ reauthorized the TAA programs for workers
and firms, including the NAFTA-related TAA program, through
September 30, 2001. Section 702 also restored the ``cap'' on
NAFTA-related training entitlement funding to $30 million per
fiscal year.
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\41\ Public Law 106-113, approved November 29, 1999.
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TAA Program for Workers
TAA for workers under sections 221 through 250 of the Trade
Act of 1974, as amended, consists of trade readjustment
allowances (TRAs), employment services, training and additional
TRAs allowances while in training, and job search and
relocation allowances for certified and otherwise qualified
workers. The program is administered by the Employment and
Training Administration (ETA) of the Department of Labor
through state agencies under cooperative agreements between
each state and the Secretary of Labor. ETA processes petitions
and issues certifications or denials of petitions by groups of
workers for eligibility to apply for TAA. The state agencies
act as federal agents in providing program information,
processing applications, determining individual worker
eligibility for benefits, issuing payments, and providing
reemployment services and training opportunities.
Certification requirements
A two-step process is involved in the determination of
whether an individual worker will receive TAA: (1)
certification by the Secretary of Labor of a petitioning group
of workers in a particular firm as eligible to apply; and (2)
approval by the state agency administering the program of the
application for benefits of an individual worker covered by a
certification.
The process begins by a group of three or more workers,
their union, or authorized representative filing a petition
with the ETA for certification of group eligibility. To certify
a petitioning group of workers as eligible to apply for
adjustment assistance, the Secretary must determine that three
conditions are met:
(1) a significant number or proportion of the workers
in the firm or subdivision of the firm have been or are
threatened to be totally or partially laid off;
(2) sales and/or production of the firm or
subdivision have decreased absolutely; and
(3) increased imports of articles like or directly
competitive with articles produced by the firm or
subdivision of the firm have ``contributed
importantly'' to both the layoffs and the decline in
sales and/or production.
The OTCA amendments expanded the potential eligibility
coverage to include workers in any firm or subdivision of a
firm that engages in exploration or drilling for oil or natural
gas.
The Secretary is required to make the eligibility
determination within 60 days after a petition is filed. A
certification of eligibility to apply for TAA covers workers
who meet the requirements and whose last total or partial
separation from the firm or subdivision before applying for
benefits occurred within 1 year prior to the filing of the
petition.
State agencies must give written notice by mail to each
worker to apply for TAA where it is believed the worker is
covered by a certification of eligibility and also must publish
notice of each certification in newspapers of general
circulation in areas where certified workers reside. State
agencies must also advise each adversely affected worker, at
the time that worker applies for UI, of TAA program benefits as
well as the procedures, deadlines, and qualifying requirements
for applying. State agencies must advise each such worker to
apply for training before or at the same time the worker
applies for TRA benefits, and promptly interview each certified
worker and review suitable training opportunities available.
Qualifying requirements for trade readjustment allowances
In order to receive entitlement to payment of a TAA for any
week of unemployment, an individual must be an adversely
affected worker covered by a certification, file an application
with the State agency, and meet the following qualifying
requirements:
(1) The worker's first qualifying separation from
adversely affected employment occurred within the
period of the certification applicable to that worker,
i.e, on or after the ``impact date'' in the
certification (the date on which total or partial
layoffs in the firm or subdivision thereof began or
threatened to begin, but never more than 1 year prior
to the date of the petition), within 2 years after the
date the Secretary of Labor issued the certification
covering the worker, and before the termination date
(if any) of the certification.
(2) The worker was employed during the 52-week period
preceding the week of the first qualifying separation
at least 26 weeks at wages of $30 or more per week in
adversely affected employment with a single firm or
subdivision of a firm. A week of unemployment includes
the week in which layoff occurs and up to 7 weeks of
employer-authorized vacation, sickness, injury,
maternity, or military leave, or service as a full-time
union representative. Weeks of disability covered by
workmen's compensation and, as amended in 1992, weeks
of active duty in a military reserve status may also
count toward the 26-week minimum.
(3) The worker was entitled to unemployment insurance
(UI), has exhausted all rights to any UI entitlement,
including any extended benefits (EB) or federal
supplemental compensation (FSC) (if in existence), and
does not have an unexpected waiting period for any UI.
(4) The worker must not be disqualified with respect
to the particular week of unemployment for EB by reason
of the work acceptance and job search requirements
under section 202(a)(3) of the Federal-State Extended
Unemployment Compensation Act of 1970. All TRA
claimants in all states are subject to the provisions
of the EB ``suitable work'' test under that Act (i.e.,
must accept any offer of suitable work, actively engage
in seeking work, and register for work) after the end
of their regular UI benefit period as a precondition
for receiving any weeks of TRA payments. The EB work
test does not apply to workers enrolled or
participating in a TAA-approved training program; the
test does apply to workers for whom TAA-approved
training is certified as not feasible or appropriate.
(5) The worker must be enrolled in, or have completed
following separation from adversely affected employment
within the certification period, a training program
approved by the Secretary of Labor in order to receive
basic TAA payments, unless the Secretary has determined
and submitted a written statement to the individual
worker certifying that approval of training is not
``feasible or appropriate'' (e.g., training is not
available that meets the criteria for approval, funding
is not available to pay the full training costs, there
is a reasonable prospect that the worker will be
reemployed by the firm from which he was separated). No
cash benefits may be paid to a worker who, without
justifiable cause, has failed to begin participation or
has ceased participation in an approved training
program until the worker begins or resumes
participation, or to a worker whose waiver of
participation in training is revoked in writing by the
Secretary.
This training requirement to encourage and enable workers
to obtain early reemployment became effective under the OTCA
amendments as of November 21, 1988; this 1988 amendment
replaced a 1986 amendment that instituted a job search
requirement as a condition for receiving cash benefits.
Cash benefit levels and duration
A worker is entitled to TRA payments for weeks of
unemployment beginning the later of (a) the first week
beginning more than 60 days after the filing date of the
petition that resulted in the certification under which the
worker is covered (i.e., weeks following the statutory deadline
for certification), or (b) the first week after the worker's
first total qualifying separation.
The TRA cash benefit amount payable to a worker for a week
of total unemployment is equal to, and a continuation of, the
most recent weekly benefit amount of UI payable to that worker
preceding that worker's first exhaustion of UI following the
worker's first total qualifying separation under the
certification, reduced by any federal training allowance and
disqualifying income deductible under UI law.
The maximum amount of basic TRA benefits payable to a
worker for the period covered by any certification is 52 times
the TRA payable for a week of total unemployment minus the
total amount of UI benefits to which the worker was entitled in
the benefit period in which the first qualifying separation
occurred (e.g., a worker receiving 39 weeks of UI regular and
extended benefits could receive a maximum 13 weeks of basic TRA
benefits). UI and TRA payments combined are limited to a
maximum 52 weeks in all cases involving extended compensation
benefits (i.e., a worker who received 52 or more weeks of
unemployment benefits would not be entitled to basic TRA). TRA
benefits are not payable to workers participating in on-the-job
training.
The eligibility period for collecting basic TRA is the 104-
week period that immediately follows the week in which a total
qualifying separation occurs. If the worker has a subsequent
total qualifying separation under the same certification, the
eligibility period for basic TRA moves from the prior
eligibility period to 104 weeks after the week in which the
subsequent total qualifying separation occurs.
A worker may receive up to 26 additional weeks of TRA
benefits after collecting basic benefits (up to a total maximum
of 78 weeks) if that worker is participating in approved
training. To receive the additional benefits, the worker must
apply for the training program within 210 days after
certification or first qualifying separation, whichever date is
later. Additional benefits may be paid only during the 26-week
period that follows the last week of entitlement to basic TRA,
or that begins with the first week of training if the training
begins after the exhaustion of basic TRA.
A worker participating in approved training continues to
receive basic and additional TRA payments during breaks in such
training if the break does not exceed 14 days, if the worker
was participating in the training before the beginning of the
break, resumes participation in the training after the break
ends, and the break is provided for in the training schedule.
Weeks when TRA is not payable because of this break provision
count against the eligibility periods for both basic and
additional TRA.
Training and other employment services, job research and relocation
allowances
Training and other employment services and job search and
relocation allowances are available through state agencies to
certified workers whether or not they have exhausted UI
benefits and become eligible for TRA payments.
Employment services consist of counseling, vocational
testing, job search and placement, and other supportive
services, provided for under any other federal law.
Training, preferably on-the-job, shall be approved for a
worker if the following six conditions are met:
(1) there is no suitable employment available;
(2) the worker would benefit from appropriate
training;
(3) there is a reasonable expectation of employment
following training completion;
(4) approved training is reasonably available from
government agencies or private sources;
(5) the worker is qualified to undertake and complete
such training; and
(6) such training is suitable for the worker and
available at a reasonable cost.
If training is approved, the worker is entitled to payment
of the costs from the Secretary directly or through a voucher
system, unless they have been paid or are reimbursable under
another federal law. On-the-job training costs are payable only
if such training is not at the expense of currently employed
workers. The 1988 amendments added remedial education as a
separate and distinct approvable training program.
The OTCA amendments converted training from an entitlement
to the extent appropriated funds were available, to an
entitlement without regard to the availability of funds to pay
the training costs. As of the OTCA amendments, approved
training is an entitlement in any case where the six criteria
for approval are reasonably met, up to an $80 million statutory
ceiling on annual fiscal year training costs (including job
search and relocation allowances and subsistence payments)
payable from TAA funds. Up to this limit workers are entitled
to have the costs of approved training paid on their behalf. If
the Secretary foresees that the $80 million ceiling would be
exceeded in any fiscal year, the Secretary will decide how
remaining TAA funds shall be apportioned among the states for
the balance of that year.
As a result of the OTCA amendments, costs of approved TAA
training may be paid solely from TAA funds, solely from other
federal or state programs or private funds, or from a mix of
TAA and public or private funds, except if the worker in the
case of a non-governmental program would be required to
reimburse any portion of the costs from TAA funds. Duplicate
payment of training costs is prohibited, and workers are not
entitled to payment of training costs from TAA funds to the
extent these costs are paid or shared from other sources.
Training may still be approved if the fiscal year TAA funding
entitlement limit is reached, provided the training costs are
paid from outside sources.
Supplemental assistance is available to defray reasonable
transportation and subsistence expenses for separate
maintenance when training is not within the worker's commuting
distance, equal to the lesser of actual per diem expenses or 50
percent of the prevailing federal per diem rate for subsistence
and prevailing mileage rates under federal regulations for
travel expenses.
Job search allowances are available to certified workers
who cannot obtain suitable employment within their commuting
area, are totally laid off, and who apply within 1 year after
certification or last total layoff, whichever is later, or
within 6 months after concluding training. The allowance for
reimbursement is equal to 90 percent of necessary job search
expenses, based on the same increased supplemental assistance
rates described above, up to a maximum amount of $800. The
Secretary of Labor is required to reimburse workers for
necessary expenses incurred to participate in an approved job
search program.
Relocation allowances are available to certified workers
totally laid off at the time of relocation who have been able
to obtain an offer of or actual suitable employment only
outside their commuting area, who apply within 14 months after
certification or last total layoff, whichever is later, or
within 6 months after concluding training, and whose relocation
takes place within 6 months after application of completion of
training. As amended in 1981 and 1984, the allowance is equal
to 90 percent of reasonable and necessary expenses for
transporting the worker, family, and household effects, based
on the same increased supplemental assistance rates described
above, plus a lump sum payment of three times the worker's
average weekly wage up to a maximum amount of $800.
Funding
Federal funds, as an appropriated entitlement from general
revenues under the Federal Unemployment Benefit Account (FUBA)
in the Department of Labor, cover the portion of the worker's
total entitlement represented by the continuation of UI benefit
levels in the form of TRA payments, as well as payments for
training and job search and relocation allowances, and state-
related administrative expenses. Funds made available under
grants to states defray expenses of any employment services and
other administrative expenses. For fiscal year 2001, $342.4
million has been appropriated for trade readjustment allowances
and related administrative expenses. Funding for training, job
search and relocation allowances, and related expenses is an
annual appropriated entitlement under the Training and
Employment Services account of the Department of Labor.
The states are reimbursed from Treasury general revenues
for benefit payments and other costs incurred under the
program. A penalty under section 239 of the Trade Act of 1974
provides for reduction by 15 percent of the credits for state
unemployment taxes which employers are allowed against their
liability for federal unemployment tax if a state has not
entered into or has not fulfilled its commitments under a
cooperative agreement.
NAFTA Worker Security Act
Subchapter D of chapter 2 (section 250) of title II of the
Trade Act of 1974 establishes a NAFTA transitional adjustment
assistance program for workers who may be adversely impacted by
the NAFTA. Import-impacted workers may also petition for
assistance under TAA, but cannot obtain benefits under both
programs.
A group of workers (including workers in any agricultural
firm or subdivision of an agricultural firm) shall be certified
as eligible to apply for adjustment assistance under subchapter
D if the Secretary determines that a significant number or
proportion of the workers in the firm or subdivision of the
firm have become or are threatened to become totally or
partially separated, and either:
(1) Sales and/or production of the firm or
subdivision have decreased absolutely, imports from
Mexico or Canada of articles like or directly
competitive with articles produced by such firm or
subdivision have increased, and the increase in imports
contributed importantly to the workers' separation or
threat of separation and to the decline in the sales or
production of the firm or subdivision; or
(2) There has been a shift in production by the
workers' firm or subdivision to Mexico or Canada of
articles like or directly competitive with articles
produced by the firm or subdivision.
A group of workers or their union or other duly authorized
representative may file a petition for certification of
eligibility to apply for adjustment assistance under subchapter
D with the governor of the state in which the worker's firm or
subdivision is located. Upon receipt of the petition, the
governor must notify the Secretary of Labor. Within 10 days
thereafter, the governor must make a preliminary finding as to
whether the petition meets the certification criteria and
transmit the petition, together with a statement of the finding
and reasons therefor, to the Secretary for action. If the
preliminary finding is affirmative, the governor will ensure
that rapid response and basic readjustment services authorized
under other federal law are made available to the workers.
Within 30 days after receiving the petition, the Secretary
must determine whether the petition meets the certification
criteria. Upon an affirmative determination, the Secretary will
issue to workers covered by the petition a certification of
eligibility to apply for comprehensive assistance. Upon denial
of certification, the Secretary will review the petition to
determine if the workers meet the requirements of the TAA
program for certification.
Certified workers under the NAFTA program receive
employment services, training, trade readjustment allowances,
and job search and relocation allowances in the same manner and
to the same extent as workers covered under a TAA
certification, with the following exceptions: (1) the total
amount of payments for training costs for any fiscal year do
not exceed $30 million; (2) with respect to TRA benefits, the
authority of the Secretary of Labor to waive the training
requirement does not apply with respect to payments under
subchapter D; and (3) to receive TRA benefits, the worker must
be enrolled in a training program approved by the Secretary by
the later of the last day of the 16th week of the worker's
initial UI benefit period or the last day of the 6th week after
the week in which the Secretary issues a certification covering
the worker. In extenuating circumstances, the Secretary may
extend the time for enrollment for not more than 30 days.
The NAFTA program took effect on January 1, 1994, the date
the NAFTA entered into force for the United States. No worker
can be certified as eligible to receive assistance under
subchapter D whose last total or partial separation occurred
before January 1, except for those workers whose last layoff
occurred after December 8 (the date of enactment of the NAFTA
Implementation Act) and before January 1 who would otherwise be
eligible to receive assistance under subchapter D.
For fiscal year 2001, $64.15 million has been appropriated
for NAFTA trade adjustment assistance.
TAA Program for Firms
Sections 251 through 264 of the Trade Act of 1974, as
amended, contain the procedures, eligibility requirements,
benefits and their terms and conditions, and administrative
provisions of the TAA program for firms adversely impacted by
increased import competition. The program is administered by
the Economic Development Administration within the Department
of Commerce. Amendments in 1986 under the COBRA eliminated
financial assistance (direct loan or loan guarantee) benefits,
increased government participation in technical assistance, and
expanded the criteria for firm certification.
Program benefits consist exclusively of technical
assistance for petitioning firms which qualify under a two-step
procedure: (1) certification by the Secretary of Commerce that
the petitioning firm is eligible to apply, and (2) approval by
the Secretary of Commerce of the application by a certified
firm for benefits, including the firm's proposal for economic
adjustment.
To certify a firm as eligible to apply for adjustment
assistance, the Secretary must determine that three conditions
are met:
(1) a significant number or proportion of the workers
in the firm have been or are threatened to be totally
or partially laid off;
(2) sales and/or production of the firm have
decreased absolutely, or sales and/or production that
accounted for at least 25 percent of total production
or sales of the firm during the 12 months preceding the
most recent 12-month period for which data are
available have decreased absolutely; and
(3) increased imports of articles like or directly
competitive with articles produced by the firm have
``contributed importantly'' to both the layoffs and the
decline in sales and/or production.
The 1988 amendments expanded potential eligibility coverage
of the program to include firms that engage in exploration or
drilling for oil or natural gas. Unlike the worker program,
this extension applies only prospectively after August 23,
1988.
A certified firm may file an application with the Secretary
of Commerce for trade adjustment assistance benefits at any
time within 2 years after the date of the certification of
eligibility. The application must include a proposal by the
firm for its economic adjustment. The Secretary may furnish
technical assistance to the firm in preparing its petition for
certification and/or in developing a viable economic adjustment
proposal.
The Secretary approves the firm's application for
assistance only if he determines that its adjustment proposal
(a) is reasonably calculated to make a material contribution to
the economic adjustment of the firm; (b) gives adequate
consideration to the interests of the workers in the firm; and
(c) demonstrates that the firm will make all reasonable efforts
to use its own resources for economic development.
Benefits
Technical assistance may be given to implement the firm's
economic adjustment proposal in addition to, or in lieu of,
precertification assistance or assistance in developing the
proposal. It may be furnished through existing government
agencies or through private individuals, firms, and
institutions (including private consulting services), or by
grants to intermediary organizations, including regional TAA
Centers. As amended by the COBRA, the federal government may
bear the full cost of technical assistance to a firm in
preparing its petition for certification. However, the federal
share cannot exceed 75 percent of the cost of assistance
furnished through private individuals, firms, or institutions
for developing or implementing an economic adjustment proposal.
Grants may be made to intermediate organizations to defray up
to 100 percent of their administrative expenses in providing
technical assistance.
The Secretary of Commerce also may provide technical
assistance of up to $10 million annually per industry to
establish industrywide programs for new product or process
development, export development, or other uses consistent with
adjustment assistance objectives. The assistance may be
furnished through existing agencies, private individuals,
firms, universities, and institutions, and by grants,
contracts, or cooperative agreements to associations, unions,
or other non-profit organizations of industries in which a
substantial number of firms or workers have been certified.
Funding
Funds to cover all costs of the program are subject to
annual appropriations to the EDA of the Department of Commerce
from general revenues. For fiscal year 2001, $10.5 million was
appropriated for the program.
Chapter 3: OTHER LAWS REGULATING IMPORTS
Authorities To Restrict Imports of Agricultural and Textile Products
Section 204 of the Agricultural Act of 1956, as amended
Section 204 of the Agricultural Act of 1956, as amended,\1\
authorizes the President to negotiate agreements with foreign
governments to limit their exports of agricultural or textile
products to the United States. The President is authorized to
issue regulations governing the entry of products subject to
international agreements concluded under this section.
Furthermore, if a multilateral agreement is concluded among
countries accounting for a significant part of world trade in
the articles concerned, the President may also issue
regulations governing entry of those same articles from
countries which are not parties to the multilateral agreement,
or countries to which the United States does not apply the
Agreement.
---------------------------------------------------------------------------
\1\ Public Law 84-540, ch. 327, approved May 28, 1956, 70 Stat.
200, as amended by Public Law 87-488, approved June 19, 1962, 76 Stat.
104, 7 U.S.C. 1854 and Public Law 103-465, approved Dec. 8, 1994.
---------------------------------------------------------------------------
The authority provided under section 204 has been used to
negotiate bilateral agreements restricting the exportation of
certain meats to the United States,\2\ as well as to implement
an agreement with the European Communities (EC) restricting
U.S. importation of certain cheeses from the EC.\3\ Section 204
also provided the legal basis for the GATT Arrangement
Regarding International Trade in Textiles, commonly referred to
as the Multifiber Arrangement (MFA),\4\ for U.S. bilateral
agreements with 47 \5\ textile-exporting nations, and currently
provides the basis for U.S. implementation of the Uruguay Round
Agreement on Textiles and Clothing (ATC), which replaces the
now expired MFA.
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\2\ Exec. Order No. 11539, June 30, 1970, 35 Fed. Reg. 10733, as
amended by Exec. Order No. 12188, Jan. 2, 1980, 45 Fed. Reg. 989.
\3\ Exec. Order No. 11851, April 10, 1975, 40 Fed. Reg. 16645.
\4\ Arrangement Regarding International Trade in Textiles, T.I.A.S.
7840 (1973) (expired 1994).
\5\ In force as of January 1, 2001.
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MULTIFIBER ARRANGEMENT (MFA)
The Multifiber Arrangement was a multilateral agreement
negotiated under the auspices of the General Agreement on
Tariffs and Trade. The MFA provided a general framework and
guiding principles for the negotiation of bilateral agreements
between textile importing and exporting countries, or for
unilateral action by an importing country if an agreement
cannot be reached. In effect since 1974, the MFA was
established to deal with problems of market disruption in
textile trade, while permitting developing countries to share
in expanded export opportunities.
Background
The first voluntary agreement to limit exports of cotton
textiles to the United States was negotiated with Japan in
1957. Through the 1950's cotton textile imports, especially
from Japan, continued to increase and generate pressure for
import restraints. In 1956, the Congress passed the
Agricultural Act of 1956 which, among other things, provided
negotiating authority for agreements restricting imports of
textile products. Pursuant to this authority, the United States
negotiated a 5-year voluntary restraint agreement on cotton
textile exports from Japan, announced in January 1957.
As textile and apparel imports from low-wage developing
countries began to rise, pressure mounted for a more
comprehensive approach to the import problem. On May 2, 1961,
President Kennedy announced a Seven Point Textile Program, one
point of which called for an international conference of
textile importing and exporting countries to develop an
international agreement governing textile trade. On July 17,
1961, a textile conference was convened under the auspices of
the GATT. The discussions culminated in the promulgation of the
Short-Term Arrangement on Cotton Textile Trade (STA) on July
21, 1961.\6\ The STA covered the year October 1, 1961, to
September 30, 1962, and established a GATT Cotton Textiles
Committee to negotiate a long-range cotton textile agreement.
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\6\ T.I.A.S. 4884 (1961) (expired 1962).
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From October 1961 through February 1962, the STA
signatories met in Geneva and negotiated a Long-Term
Arrangement for Cotton Textile Trade (LTA), to last for 5 years
beginning October 1, 1962.\7\ The LTA provided for negotiation
of bilateral agreements between cotton textile importing and
exporting countries, and for imposition of quantitative
restraints on particular categories of cotton textile products
from particular countries when there was evidence of market
disruption. In June of 1962, section 204 of the Agricultural
Act of 1956 was amended to give the President authority to
control imports from countries which did not sign the LTA.\8\
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\7\ T.I.A.S. 5240 (1962) (expired 1973).
\8\ Public Law 87-488, approved June 19, 1962, 76 Stat. 104.
---------------------------------------------------------------------------
In the fall of 1965 the LTA was reviewed, and criticism
within the U.S. textile industry mounted with respect to the
LTA's failure to cover man-made fiber textiles. In 1967,
however, the LTA was extended for 3 additional years with no
additional fiber coverage. In 1970, the LTA was again extended
for 3 more years.
Meanwhile, multifiber agreements limiting imports not only
of cotton but also of wool and man-made fiber textiles were
negotiated by the Nixon administration on a bilateral basis. On
October 15, 1971, bilateral multifiber agreements were
announced with Japan, Hong Kong, South Korea, and Taiwan. A
multilateral agreement, incorporating the provisions of the
bilaterals with Hong Kong, South Korea, and Taiwan, was also
signed to allow the United States the authority, under section
204 of the Agricultural Act of 1956 as amended in 1962, to
impose quantitative restrictions unilaterally on non-signatory
countries.
The following year, in June 1972, efforts to negotiate a
multifiber agreement on a broader multilateral basis led to the
establishment of a GATT working party to conduct a
comprehensive study of conditions of world trade in textiles.
The working group submitted its study to the GATT Council early
in 1973. In the fall of that year, multilateral negotiations
for a multifiber agreement began after passage of a 3-month
extension of the LTA. The first Multifiber Arrangement (MFA I)
was concluded on December 20, 1973, and came into force January
1, 1974, supplanting the LTA.
MFA provisions
The MFA was modeled after the LTA and provided for
bilateral agreements between textile importing and exporting
nations under which industrial countries have negotiated quotas
on imports of textiles and clothing primarily from developing
countries (article 4), and for unilateral actions following a
finding of market disruption (article 3).\9\ Quantitative
restrictions were based on past volumes of trade, with the
right, within certain limits, to transfer the quota amounts
between products and between years. The MFA also provided
generally for a minimum annual growth rate of 6 percent.\10\
Quotas already in place had to be conformed to the MFA or
abolished within a year. The products covered by MFA I, II, and
III included all manufactured products whose chief value is
represented by cotton, wool, man-made fibers or a blend
thereof. Also included were products whose chief weight is
represented by cotton, wool, man-made fibers or a blend
thereof. MFA IV expanded product coverage to include products
made of vegetable fibers such as linen and ramie, and silk
blends as well.
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\9\ Market disruption exists when domestic producers are suffering
``serious damage'' or the threat thereof. Factors to be considered in
determining whether the domestic producers are seriously damaged
include: turnover, market share, profit, export performance,
employment, volume of disruptive and other imports, production,
utilization of capacity, productivity, and investments. Such damage
must be caused by a sharp, substantial increase of particular products
from particular sources which are offered at prices substantially below
those prevailing in the importing country.
\10\ The annual growth rate applies to overall levels of imports
from a particular supplier country. Higher or lower growth rates can
apply to particular products, as long as the overall growth rate with
respect to that supplier country is 6 percent.
---------------------------------------------------------------------------
Overall management of the MFA was undertaken by the GATT
Textiles Committee, which is made up of representatives of
countries participating in the MFA and is chaired by the GATT
Director General. A Textile Surveillance Body (TSB) was
established to supervise the detailed implementation of the
MFA.
MFA I was in effect for 4 years, until the end of 1977.
During MFA renewal negotiations in July 1977 the EC succeeded
in putting in the renewal protocol a provision allowing jointly
agreed ``reasonable departures'' from the MFA requirements in
negotiating bilateral agreements. The MFA was then renewed for
4 more years.\11\
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\11\ T.I.A.S. 8939 (1977).
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MFA II was in effect through December 1981. On December 22,
1981, a protocol was initialed extending the MFA for an
additional 4\1/2\ years, and providing a further interpretation
of MFA requirements in light of 1981 conditions.\12\ MFA III
expired on July 31, 1986. MFA IV went into effect on August 1,
1986 for a 5-year period. MFA IV was extended on July 31, 1991
for 17 months from August 1, 1991 until December 31, 1992, with
the expectation that the results of the GATT Uruguay Round of
Multilateral Trade Negotiations would come into force
immediately thereafter. On December 10, 1992, the MFA was
extended for a fifth time, until December 31, 1993, and then
for a final time until December 31, 1994.
---------------------------------------------------------------------------
\12\ T.I.A.S. 10323 (1981).
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URUGUAY ROUND AGREEMENT ON TEXTILES AND CLOTHING
One aim of the Uruguay Round was to integrate the textiles
and clothing sector into the GATT. The resulting Agreement on
Textiles and Clothing (ATC) establishes a 10-year phase-out of
the quotas established under the MFA. Although the MFA expired
on December 31, 1994, the bilateral agreements negotiated
between individual importing and supplier governments remain in
force. If the signatories to those bilateral arrangements are
members of the World Trade Organization (WTO), the quota levels
established under those agreements are now governed by the ATC.
This means that the quotas must be adjusted in accordance with
ATC rules.
As a general matter, the ATC was designed to generate
increased opportunities for trade in the textiles and apparel
sector. It liberalizes the current trading rules in two ways:
by increasing and then removing quotas in three phases over a
10-year transition period and by requiring all participants to
provide improved access to their markets.
Thus, on January 1, 1995, each importing signatory to the
WTO, including the United States, Canada, and the members of
the European Union, was required to ``integrate'' into normal
GATT rules (including GATT 1947's article XIX and the Uruguay
Round's Agreement on Safeguards) textile and apparel products
accounting for at least 16 percent of the trade covered by the
ATC, using 1990 as the base year. Integration means that any
existing quotas on integrated products under MFA rules
automatically become void and no new quotas may be imposed upon
such products unless there has been a determination of serious
injury under GATT article XIX, the safeguards provision.
On January 1, 1998, the importing nations were required to
integrate another 17 percent of trade, and on January 1, 2002,
an additional 18 percent. Beginning in 2005, all textile and
apparel trade will fall under normal GATT/WTO rules. Under the
terms of the ATC, the Agreement cannot be extended beyond 10
years.
The U.S. Committee for the Implementation of Textile
Agreements (CITA) currently is the inter-agency group
responsible for administering the U.S. quota program and
implementation of ATC. CITA is composed of representatives from
the Departments of Commerce, State, Labor, and Treasury, and
the Office of the U.S. Trade Representative. The Commerce
Department official is chair of the committee and heads the
Office of Textiles and Apparel (OTEXA) in the Department of
Commerce which implements the terms of the agreements and
decisions made by CITA. A primary function of CITA is to
monitor imports and to determine when calls for consultations
are to be made. The CITA announced in October 1994 which
products it would integrate on January 1, 1995.\13\
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\13\ (59 Fed. Reg. 51942)
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Under the Uruguay Round Agreements Act (URAA), CITA decided
by April 30, 1995 which products will be included in each of
the next two integration ``tranches,'' with the most sensitive
products to be integrated last.\14\ No changes may be made in
the integration schedule, unless required by law or in order to
carry out U.S. international obligations, or to correct
technical errors or reclassifications.
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\14\ (60 Fed. Reg. 5625)
---------------------------------------------------------------------------
The ATC requires that existing growth rates--the amounts by
which quota levels are to rise each year--be gradually
increased. According to the ATC, the increase in growth rates
is to be applied in three stages, with each stage's growth to
be applied on top of existing rates. Thus, during stage one,
the first 3 years of the ATC, the level of annual growth for
each individual quota is to be increased by 16 percent. During
stage two, the annual growth rate is to increase another 25
percent, and during stage three, which covers the last 3 years
of the phase-out process, the ``growth on growth'' rate is 27
percent. These increases are intended to replace the
renegotiation of bilateral textile agreements.
There is one potential exception to the ATC's growth-on-
growth provision. A country may seek to preclude a supplier
country from obtaining such benefits if the supplier provides
inadequate market access for textile products. Any WTO member
may bring a market access complaint before the WTO's Textile
Monitoring Board (which replaces the MFA's TSB), which then may
authorize the importing nation not to increase growth rates for
the relevant supplier at the next stage of the transition.
Rules of origin
The URAA also directed the U.S. Treasury Department to
change by July 1, 1996, the rules of origin for textile and
apparel products. Rules of origin determine which country's
quotas should be charged for particular imports when
manufacturing of the goods occurs in more than one country. The
U.S. domestic industry sought the rules change on the ground
that suppliers were purposely splitting their manufacturing
operations among various countries as a means of avoiding quota
restrictions.
For apparel products, the rules change means that the place
of assembly will generally determine the origin of a product.
Under Customs Service regulations in effect prior to July 1,
1996, the origin of apparel depends upon the complexity of the
assembly operation. For garments requiring only simple
assembly, such as the sewing together of four or five pieces,
the country in which those pieces were cut was usually
considered the country of origin. For more tailored garments,
the country of assembly was the country of origin under the old
rule. According to the new rule, textile products manufactured
in several countries are deemed to originate where the ``most
important'' assembly process occurred, regardless of where the
product was cut. Under both the earlier rule and the rule
established in 1996, the origin of knitted garments is the
country in which the knit-to-shape pieces were formed.
For non-apparel products, the country in which the fabric
is woven or knit generally is the country of origin under the
new rule. Prior to the URAA changes, the country in which the
fabric is printed and dyed and subject to additional
``finishing operations'' or in which it is cut and then sewn
was often the country of origin for quota purposes.
Products covered by the United States-Israel Free Trade
Area Agreement are exempt from the rules change.
BILATERAL TEXTILE AGREEMENTS
Under authority of section 204 of the Agricultural Act of
1956, as amended, and in conformity with the MFA, the President
negotiated bilateral agreements restricting textile exports
from supplier countries. There were 42 such bilateral
agreements in force as of December 31, 1994, 27 of which were
with members of the World Trade Organization. Provisions of
bilateral agreements in effect with WTO members were carried
over and remain in effect under the new ATC. Quota levels
established under these agreements provide the base levels for
the annual growth provisions of the ATC.
As of January 1, 2001, the United States has bilateral
agreements governed by the ATC with 39 members of the WTO. The
United States has agreements (not governed by the ATC) with
eight non-WTO members
Bilateral textile agreements apply to textile products,
fiber and fabric, and apparel. Each agreement contains
flexible, specific, and/or aggregate limits with respect to the
type and volume of textile products that the supplier country
can export to the United States. Limits are usually set in
terms of square meter equivalents (SME's). They allow, under
certain conditions, for carryover (from the prior year to
current year within the same product category), carryforward
(from the subsequent year to the current year within the same
product category), and swing (from one product category to
another product category within the same year) of unused
portions of quotas. These provisions may be applied only with
respect to specific import limits set forth in the bilateral
agreement. Each agreement also provides for adjustment of
import levels in accordance with specified growth rates. The
bilateral with Taiwan provides for an export control system to
be administered by this exporting country to assure compliance
with the terms of the Agreement.\15\
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\15\ Exec. Order 11651, 3 CFR 676 (1971-75 Comp.).
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The ATC alters somewhat the process by which new quotas may
be established during the 10-year phase-out process, compared
with the system that existed under the MFA. Under the ATC's
``transitional safeguard'' mechanism, if CITA determines that
imports of a particular product are causing ``serious damage''
or the ``actual threat thereof,'' it will be able to establish
quotas on unrestrained suppliers of that product.
Under the MFA, before CITA could request consultations with
a particular country (or ``issue a call'') for the purpose of
negotiating a quota, it had to determine that imports of a
certain category of products from that country were causing--or
threatening to cause--``market disruption.'' Thus, under the
MFA, the injury determination was both product and country
specific. Under the ATC, the injury must only be product
specific, and once an injury determination is made, a country
can seek a quota with any supplier whose exports of that
product are ``increasing sharply and substantially.'' If
consultations fail to produce an agreement on restrictive
levels, and a country is able to demonstrate that such imports
are causing or threatening serious damage, the country may take
unilateral action to establish a quota at a level based upon
trade during a recent 12-month period. Such quotas will be
permitted to remain in place for up to 3 years (although the
quota must be increased annually), unless the product is
integrated into normal WTO rules before then. All calls will be
subject to review by the WTO's Textiles Monitoring Board.
Textiles and Apparel Trade Under the North American Free Trade
Agreement
NAFTA created a number of special rules affecting trade in
textiles among the United States, Canada and Mexico. The NAFTA
textiles rules of origin determine which goods are
``originating'' and therefore eligible for preferential
treatment, i.e., reduced or duty-free entry. Products of Canada
or Mexico that do not meet the NAFTA origin rules, or one of
the several exceptions to those rules, are not precluded from
entering the United States. However, they may be subject to
normal (non-preferential) duties or, for Mexican goods, to
quota requirements.
A ``yarn-forward'' rule of origin applies to most textile
products, although there are a number of exceptions. Yarn-
forward means that the finished textile or apparel product must
be made from fabric formed in North America from yarn spun in
North America.
NAFTA also includes ``tariff preference levels'' (TPLs)
that permit a limited number of Canadian and Mexican textile
and apparel products to enter the United States each year at
the preferential NAFTA tariff rate even though the products do
not meet the ``yarn forward'' origin rules, and therefore are
not ``originating'' goods. These are essentially annual tariff
rate quotas. Once imports reach the TPL limit, most-favored-
nation (MFN) duties will be applied to any additional non-
originating products entered during the rest of the year.
Most quotas on Mexican-made textile and apparel products
were eliminated upon implementation of the NAFTA, but a few
quotas remain. The remaining quotas apply only to products that
do not meet the preferential NAFTA origin rules but are
considered to be products of Mexico for other purposes. The
remaining U.S. quotas on Mexican goods are scheduled to be
removed by the year 2004.
Section 22 of the Agricultural Adjustment Act of 1933
Section 22 of the Agricultural Adjustment Act of 1933, as
amended (7 U.S.C. 624), authorizes the President to impose fees
or quotas on imported products that undermine any U.S.
Department of Agriculture (USDA) domestic commodity program.
This authority is designed to prevent imports from interfering
with USDA efforts to stabilize domestic agricultural commodity
prices. However, in the Uruguay Round Agreement on Agriculture,
the United States agreed to convert all quotas and fees on
imports from any country to which the United States applies the
WTO Agreement to tariff-rate quotas. Section 22 authority is
available now only for imports from countries to which the
United States does not apply the WTO Agreement.
Basic provisions
Under section 22, the Secretary of Agriculture advises the
President when the Secretary has reason to believe that--
(1) imports of an article are rendering, or tending
to render ineffective, or materially interfering with,
any domestic, agricultural-commodity price-support
program, or other agricultural program; or
(2) imports of an article are reducing substantially
the amount of any product processed in the United
States from any agricultural commodity or product
covered by such programs.
If the President agrees that there is reason for the
Secretary's belief, the President must order an ITC
investigation and report. Using this report as his basis, the
President must determine whether the statutory conditions
warranting imposition of a section 22 quota or fee exist.
If the President makes an affirmative determination, he is
required to impose, by proclamation, either import fees (which
may not exceed 50 percent ad valorem) or import quotas (which
may not exceed 50 percent of the quantity imported during a
representative period) sufficient to prevent imports of the
product concerned from harming or interfering with the relevant
agricultural program.
Application
Between 1935 and 1985, section 22 was used to impose import
restrictions on 12 different commodities or food product
groups: (1) wheat and wheat flour; (2) rye, rye flour, and rye
meal; (3) barley, hulled or unhulled, including rolled, ground,
and barley malt; (4) oats, hulled or unhulled, and unhulled
ground oats; (5) cotton, certain cotton wastes, and cotton
products; (6) certain dairy products; (7) shelled almonds; (8)
shelled filberts; (9) peanuts and peanut oil; (10) tung nuts
and tung oil; (11) flaxseed and linseed oil; and (12) sugars,
syrups, and sugar-containing products. Section 22 fees and
quotas have since been terminated for most of these
commodities. Prior to implementation of the Uruguay Round
Agreement on agriculture in late 1994, import quotas were in
place to protect certain cotton, specific dairy products,
peanuts, and certain sugar-containing products, such as
sweetened cocoa, pancake flours, and ice-tea mixes. Import fees
were in place on refined sugar.
Agriculture Trade Under the North American Free Trade Agreement
Implementation Act
Background
NAFTA is the first free trade agreement entered into by the
United States that employs the concept of ``tariffication'' of
agricultural quantitative restrictions. Under this method, a
country replaces each of its non-tariff barriers with a
``tariff-equivalent,'' which is a tariff set at a level that
will provide protection for a product equivalent to the non-
tariff barrier that the tariff replaces. In the case of several
agricultural goods listed in the tariff schedules of each NAFTA
country, the NAFTA countries converted quantitative
restrictions to tariffs or tariff-rate quotas.
Pursuant to the NAFTA, U.S. section 22 quotas and fees were
converted to tariff-rate quotas, under which ``qualifying''
Mexican dairy products, cotton, sugar-containing products, and
peanuts will enter the United States duty free up to a certain
quantity of imports (the ``in quota'' quantity.) A ``qualifying
good'' is an agricultural good that meets, based on its Mexican
content alone, the NAFTA rules of origin contained in section
202 of the NAFTA Implementation Act.
To a large extent, the NAFTA agriculture agreement amounts
to three bilateral agreements rather than a trilateral accord.
For agriculture goods traded between United States and Canada,
the NAFTA incorporates the agricultural market access
provisions of chapter 7 of the United States-Canada Free-Trade
Agreement (CFTA). The NAFTA sets out separate agricultural
market access agreements between Mexico and the United States
and between Mexico and Canada. In addition the NAFTA includes
several obligations governing agriculture trade common to all
three countries.
Basic provisions
Section 321(b) of the North American Free Trade Agreement
Implementation Act authorizes the President, pursuant to the
NAFTA, to exempt any ``qualifying good'' from any quantitative
limitation or fee imposed under section 22 of the Agricultural
Adjustment Act for as long as Mexico is a NAFTA country.
As discussed above, the United States agreed to convert its
import quotas to tariff rate quotas under section 22 of the
Agricultural Adjustment Act for imports from Mexico of dairy
products, cotton, sugar-containing products and peanuts.
Article 302(4) of the NAFTA permits the allocation of the in-
quota quantity under these tariff rate quotas, provided that
such measures do not have trade restrictive effects on imports
in addition to those caused by the imposition of the tariff-
rate quotas. Section 321(c) of the NAFTA Act directs the
President to take such action as may be necessary to ensure
that imports of goods subject to tariff rate quotas do not
disrupt the orderly marketing of commodities in the United
States.
Section 321(f) of the Act is a free-standing provision that
establishes an end-use certificate requirement for imports of
wheat or barley imported into the United States from any
foreign country or instrumentality that requires end-use
certificates on wheat or barley produced in the United States.
Section 308 of the NAFTA Act amends the CFTA Act, which
implemented the tariff ``snapback'' provided for in article 702
of the CFTA, to provide that the President may impose a
temporary duty on imports of a listed Canadian fresh fruit or
vegetable if a certain import price and other conditions exist.
Section 309 establishes a price-based snapback for imports
of frozen concentrated orange juice into the United States from
Mexico. The tariff on imports of Mexican frozen concentrated
orange juice in excess of the threshold quantity will
``snapback'' or revert to the lesser of the prevailing most-
favored-nation rate or the rate of duty on that product in
effect as of July 1, 1991, if futures prices for frozen
concentrated orange juice in the United States fall below a
historical average price for 5 consecutive days. This tariff
snapback is automatically triggered and removed upon a
determination by the Secretary of Agriculture.
Agriculture Trade Under the Uruguay Round Agreements Act
Background
The Uruguay Round Agreement on Agriculture strengthens
multilateral rules for trade in agricultural products and
requires WTO members to reduce export subsidies, trade
distorting domestic support programs and import protection. The
Agreement establishes rules and reduction commitments over 6
years for developed countries and 10 years for developing
countries on export subsidies, domestic subsidies, and market
access. The Agreement is intended to be the beginning of a
reform process for world trade in agriculture and provides for
the initiation of a second round of negotiations concerning
agriculture trade beginning in the year 2000.
Export subsidies must be reduced from 36 percent (budget
outlays) and 21 percent (volume) from a 1986-1990 base period
for specific products and categories. Trade distorting domestic
subsidies must be bound and reduced by 20 percent from a 1986-
1990 base period. non-tariff import barriers are subject to
comprehensive tariffication, and minimum or current market
access commitments. The United States thus agreed to convert
quotas and fees authorized under section 22 of the Agricultural
Adjustment Act to tariff-rate equivalents in the form of
tariff-rate quotas. In the Uruguay Round, all U.S. agriculture
tariffs were bound and subject to specific reduction
commitments.
The operation of these rules is linked to particular
commitments by each WTO member contained in that WTO member's
schedule annexed to the Marrakesh Protocol to the GATT 1994.
Each WTO member's schedule sets forth the WTO members'
commitments regarding the access it will provide to its market
for imports of agriculture products and the maximum amount of
domestic support and export subsidies it will provide to
agricultural products. Under article 3 of the Agreement, the
domestic support and export subsidy commitments in each WTO
member's schedule are an integral part of GATT 1994.
Article 2 and annex 1 of the Agreement define agricultural
products covered as those products classified in chapters 1-24
of the Harmonized Tariff Schedule (HTS) (excluding fish and
fish products) and under 13 headings or subheadings in other
chapters of the HTS, including cotton, wool, hides and fur
skins.
The United States was obligated to implement its
commitments over a 6-year period beginning in 1995. The rights
and obligations in the Agriculture Agreement supplement those
in GATT 1994, including the Agreements on Subsidies and
Countervailing Measures and Application of Sanitary and
Phytosanitary Measures.
Basic provisions
Section 401(a)(1) of the Uruguay Round Trade Agreements Act
amends section 22 of the Agricultural Adjustment Act of 1933,
such that no quota or fee shall be imposed under this section
with respect to any import that is the product of a country or
separate customs territory to which the United States applies
the WTO Agreements. Accordingly, when products of WTO members
only are involved, there would be no need to conduct a section
22 investigation. Section 22 authority is retained with respect
to imports from countries and separate customs territories to
which the United States does not apply the WTO agreements.
These amendments were effective upon entry into force of the
WTO Agreement, January 1, 1995.
The conversion of U.S. quantitative import restrictions to
tariff-rate quotas and staged tariff reductions was implemented
by Presidential Proclamation No. 6763 issued on December 13,
1994. Effective on January 1, 1995, this proclamation amended
the HTS of the United States under general authority provided
to the President in the Uruguay Round Agreements Act. The
President proclaimed tariff-rate quotas for the following
products subject to tariffication by the United States: dairy
products, sugar, sugar-containing products, peanuts, cotton and
beef. In general tariff-rate quotas replaced previously
applicable restrictions as of January 1, 1995. In some cases,
however, the United States began implementing its increased
access commitments after the entry into force of the WTO
Agreement, if the quota year for those products began at a
different time of year.
Section 404(a) of the Uruguay Round Agreements Act
authorizes the President to take such action as may be
necessary to implement the tariff-rate quotas set out in the
U.S. agricultural tariff concessions in schedule XX of the
Agreement and to ensure that imports of agricultural products
do not disrupt the orderly marketing of commodities in the
United States. Section 404(b) authorizes the President, upon
the advice of the Secretary of Agriculture, to temporarily
increase the in-quota quantity of an agricultural import that
is subject to a tariff-rate quota when the President determines
and proclaims that that the supply of the same, directly
competitive, or substitutable agricultural product will be
inadequate because of natural disaster, disease or a major
national market disruption to meet domestic demand at
reasonable prices.
In administering the tariff-rate quota, the President is
authorized to allocate, among supplying countries or customs
areas, the in-quota quantity of a tariff-rate quota for any
agricultural product, and to modify any allocation as he deems
appropriate.
Section 404(e) of the Uruguay Round Agreements Act amends
the Caribbean Basin Economic Recovery Act (CBERA), the Andean
Trade Preference Act (ATPA), the Generalized System of
Preferences (GSP) statute, and General Note 3(a) to the HTS
(relating to insular possessions) to specify that any duty
preference afforded these laws will be available only for the
in-quota amount of a tariff-rate quota. Over-quota imports from
CBERA, ATPA, or GSP countries, or U.S. insular possessions will
in all cases be subject to the higher rate of duty. Section
405(b) requires the President, if he determines that it is
appropriate, to invoke either a volume-based or price-based
special safeguard for agricultural goods and to determine,
consistent with article 5, the amount of the additional duty to
be imposed, the period during which such duty will be imposed,
and any other terms and conditions applicable to the duty.
Meat Import Act of 1979
The Meat Import Act of 1979, as amended, required the
President to impose quotas on imports of beef, veal, mutton,
and goat meat when the aggregate quantity of such imports on an
annual basis was expected to exceed a prescribed trigger level.
As a matter of practice, the import-limiting effect of the Meat
Import Act was achieved, prior to the conclusion of the Uruguay
Round, through the negotiation of voluntary restraint
agreements with major supplier countries of the covered
products. Section 403 of the Uruguay Round Act repealed the
Meat Import Act of 1979 in order to conform to U.S. commitments
under the Agreement on Agriculture not to maintain this type of
quantitative import restriction. The Uruguay Round Act
substitutes a tariff-rate quota on meat imports for the
previous import restrictions.
Reciprocal Meat Inspection Requirement
Section 4604 of the Omnibus Trade and Competitiveness Act
of 1988 \16\ amends section 20 of the Federal Meat Inspection
Act (21 U.S.C. 620) to authorize strict enforcement of all
standards which are applicable to meat articles in domestic
commerce, for meat articles imported into the United States. If
the Secretary of Agriculture determines that a foreign country
applies meat inspection standards that are not related to
public health concerns about end-product quality which are
substantiated by reliable analytical methods, the Secretary
must consult with the U.S. Trade Representative and they shall
make a recommendation to the President as to what action should
be taken. The President may require that a meat article
produced in a plant in such foreign country may not be
permitted entry into the United States unless the Secretary
determines that the meat article has met the standards
applicable to meat articles in commerce within the United
States. The annual report required generally under section 20
of the Federal Meat Inspection Act shall include the name of
each foreign country that applies standards for the importation
of meat articles from the United States that are not based on
public health concerns.
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\16\ Public Law 100-418, approved August 23, 1988, 102 Stat. 1107,
1408, amending section 20 of Public Law 90-201, 21 U.S.C. 620.
---------------------------------------------------------------------------
Enactment of this provision resulted from congressional
concern over the European Community's (EC) hormone ban, which
since 1989 has effectively banned all meat exports from the
United States to the EC that were produced from livestock
treated with hormones, despite scientific evidence establishing
the safety of U.S. production methods. At the time of
enactment, bilateral consultations with the EC were underway,
and Congress wanted to strengthen the Administration's
authority to respond to the EC action. The authority added by
section 4604 was intended to be used either in addition to, or
instead of, other authorities (such as section 301 of the Trade
Act of 1974).
Sugar Tariff-Rate Quotas Under Harmonized Tariff Schedule Authorities
Additional U.S. note 5 to chapter 17 of the Harmonized
Tariff Schedule of the United States (HTS) authorizes the
Secretary of Agriculture, in consultation with other agencies,
to establish, for each fiscal year, the quantity of sugars and
syrups that may be entered at the lower tariff rates under two
tariff-rate quotas (TRQ's). The TRQ's cover sugars and syrups
described in HTS subheadings 1701.11, 1701.12, 1701.91,
1701.99, 1702.90, and 2106.90. This authority was proclaimed to
implement the results of the Uruguay Round of multilateral
trade negotiations as reflected in the provisions of schedule
XX (United States), annexed to the Agreement Establishing the
World Trade Organization.\17\
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\17\ Pres. Proc. No. 6763, Dec. 23, 1994, 60 Fed. Reg. 1007.
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Background
The United States has always been a net importer of sugar,
at times importing more than half of the nation's sugar
consumption. However, sugar imports have been restricted almost
continuously since 1934 in order to maintain and foster the
domestic sugarcane and sugar beet industries. From the
enactment of the Jones Costigan Sugar Act of 1934 \18\ through
the expiration of the Sugar Act of 1948 on December 31,
1974,\19\ sugar imports were restricted by a statutory quota.
Historically, this system of import protection has maintained a
U.S. price for sugar well above the world price.
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\18\ Pub. L. No. 73-213, ch. 263, approved May 9, 1934, 48 Stat.
670.
\19\ Pub. L. No. 80-388, ch. 519, approved August 8, 1947, 61 Stat.
922. See also the Sugar Act of 1937, Pub. L. No. 75-414, ch. 898,
approved September 1, 1937, 50 Stat. 903.
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Shortly before the expiration of the Sugar Act of 1948, an
absolute import quota was proclaimed by President Ford,
although the quota quantity was so large as to be non-
restrictive.\20\ The quota derived from a note that had been
negotiated in the Annecy (1949) and Torquay (1951) Rounds of
multilateral trade negotiations and was proclaimed as a
headnote to the Tariff Schedule of the United States (TSUS)
following the conclusion of the Kennedy Round (1963-1967). On
May 5, 1982, President Reagan modified this headnote quota to:
(1) make it restrictive; (2) allocate the quota among supplying
countries in accordance with their shares of the U.S. market
during the period from 1975 through 1981; and (3) authorize the
Secretary of Agriculture to establish and modify the quota
amount in subsequent periods.\21\
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\20\ Pres. Proc. No. 4334, November 16, 1974, 39 Fed. Reg. 40739.
\21\ Pres. Proc. No. 4941, May 5, 1982, 47 Fed. Reg. 19661.
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By 1988, the quota had been reduced to the lowest ratio of
imports to domestic production in the nation's history. The
government of Australia challenged the legality of the sugar
import quota under the provisions of the General Agreement on
Tariffs and Trade (GATT), and in 1989, a GATT dispute
settlement panel found the quota illegal. In 1990, President
Bush issued Proclamation No. 6179 \22\ to convert the absolute
import quota into a tariff-rate quota, thereby bringing it into
conformity with the GATT TRQ panel decision. During the Uruguay
Round of multilateral trade negotiations, the quota was
reconverted into two TRQ's, one for imports of raw cane sugar
and the other for imports of refined sugar, including syrups.
The United States agreed to bind its minimum total sugar/syrups
TRQ at 1,139,195 metric tons (MT). In addition, the United
States agreed to reduce the second tier (over quota) tariff
rates by 15 percent over 6 years.\23\
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\22\ Pres. Proc. No. 6179, September 13, 1990, 55 Fed. Reg. 38293.
\23\ See Pres. Proc. No. 6763, December 23, 1994.
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Under the tariff-rate quota system, the Secretary of
Agriculture establishes the quota quantity that can be entered
at the lower tier of tariff rates, and the USTR allocates this
quantity among the 40 eligible sugar exporting countries. The
quantities allocated to beneficiary countries under the GSP,
the CBI and the ATPA receive duty-free treatment. Certificates
of Quota Eligibility (CQE) are issued to the exporting
countries and must be executed and returned with the shipment
of sugar in order to receive quota treatment.\24\ Imports of
raw cane sugar are permitted in addition to the quota quantity
on condition that such sugar is to be refined and used in the
production of certain polyhydric alcohols or to be re-exported
in refined form or in sugar-containing products.\25\
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\24\ See 15 C.F.R. part 2011.
\25\ See additional U.S. note 6 to chapter 17 of the HTS and 7
C.F.R. part 1530.
---------------------------------------------------------------------------
The quantity of sugar which may be imported duty free from
Mexico is governed by paragraphs 13-22 of section A of annex
703.2 of the North American Free Trade Agreement (NAFTA). Since
1982, Mexico has been included within a basket category known
as the ``other specified countries and areas'' and has been
allocated a minimum quota amount, currently set at 7,258 MT raw
value. The NAFTA guarantees the greater of this access or
Mexico's net surplus production, but no greater than 25,000 MT
during the first 6 years or 250,000 MT during the remaining 8
years of the NAFTA implementation period. Additional sugar may
enter at a duty rate that is being eliminated in stages through
2008. During each of the first 14 years of the NAFTA, Mexico
and the United States will jointly determine whether either has
been or is projected to be a net surplus producer.\26\ All
sugar imports from Mexico will enter duty free after the 14-
year transition period.
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\26\ For purposes of the NAFTA formulas, high fructose corn syrup
(HFCS) is included in determining the consumption of sugar.
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Import Prohibitions on Certain Agricultural Commodities Under Marketing
Orders
Section 8e of the Agricultural Adjustment Act, as amended
Section 8e of the Agricultural Adjustment Act, as
amended,\27\ restricts the importation of certain specified
commodities which do not meet relevant grade, size, quality or
maturity requirements imposed under the marketing order in
effect for such commodity. The specified commodities include
tomatoes, raisins, olives (other than Spanish-style green
olives), prunes, avocados, mangoes, limes, grapefruit, green
peppers, Irish potatoes, cucumbers, oranges, onions, walnuts,
dates, filberts, table grapes, eggplants, kiwifruit,
nectarines, plums, pistachios, and apples.
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\27\ 7 U.S.C. 608e-1.
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Any restriction under this authority may not be made
effective until after the Secretary of Agriculture gives
reasonable notice (of not less than 3 days) and receives the
concurrence of the U.S. Trade Representative. The Secretary of
Agriculture may promulgate such rules and regulations as he
deems necessary, to carry out the provision of this section.
Whenever the Secretary of Agriculture finds that the
application of the restrictions under a marketing order to an
imported commodity is not practicable because of variations in
characteristics between the domestic and imported commmodity,
he/she must establish with respect to the imported commodity
such grade, size, quality, and maturity restrictions by
varieties, types, or other classification as he/she finds will
be equivalent or comparable to those imposed upon the domestic
commodity under such order.
Section 4603 of the Omnibus Trade and Competitiveness Act
of 1988 amended section 8e to provide additional authority for
the Secretary to establish an additional period of time (not to
exceed 35 days) for restrictions to apply to imported
commodities, if the Secretary determines that such additional
period of time is necessary to effectuate the purposes of the
Act and to prevent the circumvention of the requirement of a
seasonal marketing order. In making this determination, the
Secretary must consider: (1) the extent to which imports during
the previous year were marketed during the period of the
marketing order and such imports did not meet the requirements
of the marketing order; (2) if the importation into the United
States of such commodity did, or was likely to, circumvent the
grade, size, quality or maturity standards of a seasonal
marketing order; and (3) the availability and price of
commodities of the variety covered by the marketing order
during any additional period the marketing order requirements
are to be in effect.
Section 1308 of the Food, Agriculture, Conservation, and
Trade Act of 1990 (the ``1990 farm bill'') amended section 8e
to require the Secretary to consult with the USTR prior to any
import restriction or regulation being made effective. The USTR
must advise the Secretary within 60 days of being notified, to
ensure that the proposed grade size, quality, or maturity
provisions are not inconsistent with U.S. international
obligations. If the Secretary receives the concurrence of the
USTR, the proposed prohibition or regulation may proceed.
Authorities To Restrict Imports Under Certain Environmental Laws
Marine Mammal Protection Act of 1972, as amended
The Marine Mammal Protection Act (MMPA), enacted in 1972,
\28\ places a ban on the importation of marine mammals and
marine mammal products, except in limited circumstances, such
as for scientific research. The MMPA also directs the Secretary
of the Treasury to ban the importation of commercial fish or
products from fish which have been caught with commercial
fishing technology which results in the incidental kill or
incidental serious injury of ocean mammals in excess of U.S.
standards. In carrying out the ban, the Secretary, in the case
of yellowfin tuna harvested with purse seine nets in the
eastern tropical Pacific Ocean, and products therefrom, to be
exported to the United States, must require that the government
of the exporting nation provide certain documentary evidence
relating to that country's marine mammal conservation programs.
The Secretary must also require the government of any
intermediary nation from which yellowfin tuna or tuna products
will be exported to the United States to certify and provide
reasonable proof that it has acted to prohibit the importation
of such tuna and tuna products from any nation from which
direct export to the United States of such tuna and tuna
products is banned under the Act.
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\28\ Public Law 92-522, approved October 21, 1972, 16 U.S.C. 1361
et seq.
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In 1984, the MMPA was amended to require that each nation
wishing to export tuna to the United States document that it
has adopted a dolphin conservation program ``comparable'' to
that of the United States, and that the average rate of
mortality of its purse seine fleet is comparable to that of the
U.S. fleet. If these requirements are not met, an embargo on
the import of yellowfin tuna and tuna products from that nation
will be invoked. In 1988, the MMPA was further amended with
respect to these ``comparability'' provisions by requiring that
the regulatory programs of other nations in the eastern
tropical Pacific tuna fishery be at least as restrictive as
those of the United States. The 1988 amendments also require
that the government of any intermediary nation from which
yellowfin tuna or tuna products will be exported to the United
States certify and provide reasonable proof that it has acted
to prohibit the importation of tuna and tuna products from
embargoed nations.
In August 1990, Mexico's yellowfin tuna was embargoed under
the comparability provision. Mexico challenged the U.S. embargo
under procedures of the General Agreement on Tariffs and Trade
(GATT) and in September 1991, a GATT panel found in favor of
Mexico. Venezuelan exports of yellowfin tuna to the United
States also were embargoed and Venezuela began a GATT case
against the United States in May 1992. A third GATT challenge
was brought by the European Community (EC) in June 1992, after
a federal district court ruled that the MMPA also required a
secondary embargo of tuna products from some 20 intermediary
nations, including those of the EC, that had failed to certify
and offer reasonable proof that they had acted to prohibit the
importation of tuna from the primary embargoed nations. On May
20, 1994, a GATT dispute settlement panel issued a report
finding that U.S. tuna embargoes were inconsistent with GATT
rules.
International Dolphin Conservation Program Act
The International Dolphin Conservation Program Act (Public
Law 105-52), approved August 15, 1997, established the
International Dolphin Conservation Program to implement into
U.S. law the Declaration on Panama concerning tuna fishing in
the Eastern Tropical Pacific Ocean.
In 1992, Eastern Tropical Pacific nations concluded the La
Jolla Agreement, a non-binding international agreement
establishing an International Dolphin Conservation Program
under the auspices of the Inter-American Tropical Tuna
Commission. The agreement established annual limits on
incidental dolphin mortality, required observers on tuna
vessels, established a review panel to monitor fleet
compliance, and created a scientific research and education
program and advisory board. The agreement established a dolphin
mortality limit for each vessel, and when that limit was
reached, such vessel would be required to discontinue ``setting
on dolphins'' for the remainder of the year.
In October 1995, 12 nations signed the Declaration of
Panama, including the Unites States, Belize, Colombia, Costa
Rica, Ecuador, France, Honduras, Mexico, Panama, Spain,
Vanuatu, and Venezuela. The Panama Declaration endorses the
success of the La Jolla Agreement and adjusts the marketing
policy of dolphin safe tune in recognition of this success. In
exchange for modifications to U.S. law, foreign signatories
agreed to modify and formalize the La Jolla Agreement as a
binding agreement. Signatories agreed to adopt conservation and
management measures to ensure long-term sustainability of tuna
and living marine resources, assess the catch and bycatch of
tuna and take steps to reduce of eliminate the bycatch,
implement the binding agreement through enactment of domestic
legislation, enhance mechanisms for reviewing compliance with
the International Dolphin Conservation Program, and establish
annual quotas for dolphin mortality limiting total annual
dolphin mortality to fewer than 5,000 animals.
The International Dolphin Conservation Program Act
implements the Declaration of Panama in U.S. law by changing
the circumstances under which the import ban on yellowfin tune
in section 101 of the MMPA would be imposed. Specifically, the
bill permits importation of yellowfin tuna if the harvesting
nation complies with international standards, as follows: (1)
the tuna was harvested by vessels of a nation that participates
in the International Dolphin Conservation Program, the
harvesting nation is either a member of has initiated steps to
become a member of the Inter-American Tropical Tuna Commission,
and the nation has implemented its obligations under the
Program and the Commission; and (2) total dolphin mortality
permitted under the Program is limited.
Endangered Species Act of 1973, as amended
The Endangered Species Act \29\ authorizes the Secretary of
the Interior to create lists of species or subspecies which are
considered endangered or threatened, and to prohibit the
importation or interstate sale of these species or subspecies.
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\29\ Public Law 93-205, approved December 28, 1973, 16 U.S.C. 1531
et seq.
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Tariff Act of 1930, as Amended: Wild Mammals or Birds
Section 527 of the Tariff Act of 1930, as amended,\30\
prohibits the importation of any wild mammal or bird, alive or
dead, or any part of product of any wild mammal or bird, if the
laws or regulations of the country where the wild mammal or
birdlives restrict its ``talking, killing, possession, or
exportation to the United States,'' unless the wild mammal or
bird is accompanied by a certification of the U.S. consul that
it ``has not be acquired or exported in violation of the laws
or regulations of such country. . .''
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\30\ 19 U.S.C. 1527
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Any mammal or bird, alive or dead, or any part of product
thereof, imported into the United States in violation of the
above is subject to seizure and forfeiture under the customs
laws. The import prohibition in the Tariff Act of 1930 does not
apply in the case of (1) articles the importation of which is
prohibited by any other law; (2) articles imported for
scientific or educaional purposes, or are migratory; or (3)
certain migratory game birds.
African Elephant Conservation Act
Title II of the Endangered Species Act Amendments of 1988
(Public Law 100-478) contained the African Elephant
Conservation Act,\31\ requiring the Secretary of the Interior
to establish a moratorium on the importation of raw and worked
ivory from an ivory producing country that does not meet
specific criteria, including being a party to the Convention on
the International Trade in Endangered Species of Wild Fauna and
Flora (CITES).
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\31\ 16 U.S.C. 4201-4245
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Rhinoceros and Tiger Conservation Act of 1994, as Amended
Section 7 of the Rhinoceros and Tiger Conservation Act of
1994,\32\ as amended by the Rhino and Tiger Product Labeling
Act,\33\ prohibits selling, importing, or exporting, or
attempting to sell, import, or export, any product, item or
substance intended for human consumption containing or
purporting to contain any substance derived from any species of
rhinoceros or tiger.
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\32\ 15 U.S.C. 5301-5306.
\33\ Public Law 105-312, approved October 30, 1998.
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Section 8 of the Fishermen's Protective Act of 1967, as amended
(``Pelly Amendment'')
Under section 8 of the Fishermen's Protective Act of 1967,
as amended (the so-called ``Pelly Amendment''), \34\ the
President, based on certain findings by the Secretary of
Commerce or the Secretary of the Interior, has the
discretionary authority to impose import sanctions on any
products from any country which conducts fishery practices or
engages in trade which diminishes the effectiveness of
international programs for fishery conservation or
international programs for endangered or threatened species.
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\34\ Public Law 93-205, approved December 28, 1973, 22 U.S.C. 1978.
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High Seas Driftnet Fisheries Enforcement Act
The High Seas Driftnet Fisheries Enforcement Act was
enacted in 1992 \35\ to assist in the international enforcement
of U.N. Resolution Number 46-215, which prohibits
large-scale driftnet fishing on the high seas after December
31, 1992. The Act sets forth certain import sanctions
applicable to countries whose nationals or vessels engage in
driftnet fishing on the high seas on or after December 31,
1992, and lays out the procedures to be followed in applying
those import sanctions.
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\35\ Public Law 102-582, approved November 2, 1992.
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Specifically, the Act requires the Secretary of Commerce
not later than December 31, 1992, and periodically thereafter,
to identify each country the nationals or vessels of which
conduct large-scale driftnet fishing beyond the exclusive
economic zone of any country and to notify the President and
that country of the identification. The President must enter
into consultations within 30 days with any country so
identified to obtain its agreement to effect the immediate
termination of the large-scale driftnet fishing. If these
consultations have not been satisfactorily concluded within 90
days, the President shall direct the Secretary of the Treasury
to prohibit the importation of shellfish, fish and fish
products, and sport fishing equipment from the country in
question. If such country has not terminated its large-scale
driftnet fishing within 6 months after its identification or
has retaliated against the United States for any initial import
sanctions taken against it, such country shall be subject to
additional import sanctions, at the President's discretion,
under the Fishermen's Protective Act of 1967, as amended.
Wild Bird Conservation Act of 1992
The Wild Bird Conservation Act of 1992 \36\ establishes
various bans on the importation of exotic birds. For those
birds listed on any of the three appendices on the Convention
on International Trade in Endangered Species of Wild Fauna and
Flora (CITES), the nature of the ban depends on how threatened
is the particular species of bird. There is an immediate import
ban for birds that have been identified under CITES as being
under immediate threat. For all other birds listed by CITES, an
import ban goes into effect 1 year after the date of enactment
of the Act. During this 1 year, the Secretary of the Interior
is authorized to suspend the importation of such species on an
emergency basis under certain conditions. None of the import
bans will apply to species of birds that are included on an
approved list of species to be maintained by the Secretary. To
be included on such an approved list, the species must either
be regularly bred in captivity in a qualified facility or be
protected under a conservation program in the country of origin
that meets specifically enumerated criteria.
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\36\ Public Law 102-440, approved October 23, 1992.
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For exotic birds not listed under the CITES agreement, the
Secretary is authorized to impose an import ban or quota on
such species if he finds such action is necessary for the
conservation of the species.
The Act also authorizes the Secretary to allow, through the
issuance of import permits, the importation of any exotic bird
upon determination that such importation is not detrimental to
the species' survival and that the bird is being imported for
certain enumerated purposes, such as scientific research or
cooperative breeding programs.
Atlantic Tunas Convention Act of 1975
In 1966, the International Convention for the Conservation
of Atlantic Tunas (ICCAT) was established, and the U.S. Senate
ratified ICCAT in 1967. The Atlantic Tunas Convention Act
(ATCA), which authorizes U.S. involvement in ICCAT, was enacted
in 1975. ATCA authorizes the Secretary of Commerce to
administer and enforce ICCAT and ATCA, including the
promulgation of regulations to establish open and closed
seasons, fish size requirements and catch limitations,
incidental catch restrictions, and observer coverage. In
addition, the Secretary is authorized to prohibit the entry
into the United States of any fish subject to regulations
recommended by ICCAT and taken in a manner which would diminish
the effectiveness of ICCAT's conservation efforts.
The Atlantic Tunas Convention Act of 1995 made certain
changes to the ATCA concerning the identification and
notification of countries violating the terms of ICCAT
recommendation. Specifically, the legislation made no change to
the ATCA authority to restrict imports of fish if fished in a
manner that tends to diminish the effectiveness of a
recommendation by the ICCAT, instead of imposing additional,
and in some cases mandatory, standards. The Act added
provisions requiring Commerce to identify, notify, and publish
a list of countries whose fishing vessels are fishing or have
fished during the previous year in the Convention area in a
manner inconsistent with the objectives of an ICCAT
recommendation. In addition, it provided that the President may
enter into consultations with identified nations. The purpose
of the Act was to lead to the development of an international
consensus concerning multilateral management of Atlantic tunas,
instead of expanding the circumstances under which unilateral
sanctions are authorized.
Section 609 of Public Law 101-162: Conservation of Sea Turtles
Section 609 of Public Law 101-162, a bill making
appropriations for the Departments of Commerce, Justice, State,
the Judiciary, and related agencies for fiscal year 1990,\37\
calls upon the Secretary of State, in consultation with the
Secretary of Commerce, to initiate negotiations for the
development of bilateral or multilateral agreements for the
protection and conservation of sea turtles, in particular with
foreign governments of such countries which are engaged in
commercial fishing operations likely to affect adversely sea
turtles. Section 609 further provides that shrimp harvested
with technology that may adversely affect certain sea turtles
may not be imported into the United States, unless the
President certified to Congress by May 1, 1991, and annually
thereafter, that the harvesting nation has a regulatory program
and an incidental rate comparable to that of the United States,
or that the particular fishing environment of the harvesting
nation does not pose a threat to sea turtles.
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\37\ Public Law 101-162, approved November 21, 1989.
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In 1991, the State Department issued guidelines for
assessing the comparability of foreign regulatory programs with
the U.S. program.\38\ To be found comparable, a foreign
nation's program had to include a commitment to require all
shrimp trawl vessels to use turtle excluder devices (TEDs) at
all times, or alternatively, a commitment to engage in a
statistically reliable and verifiable scientific program to
reduce the mortality or sea turtles associated with shrimp
fishing. The 1991 guidelines also determined that the scope of
section 609 was limited to the wider Caribbean/western Atlantic
region and that the import restriction did not apply to
aquaculture shrimp, the harvesting of which does not adversely
affect sea turtles.
---------------------------------------------------------------------------
\38\ 56 Fed. Reg. 1051 (January 10, 1991).
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In 1993, the State Department issued revised guidelines
providing that to receive a certification in 1993 and
subsequent years, affected nations had to maintain their
commitment to require TEDs on all commercial Shrimp trawl
vessels by May 1, 1994.
In December 1995, the U.S. Court of International Trade
(CIT) found that the 1991 and 1993 guidelines were contrary to
law in limiting the geographical scope of section 609 and
directed the State Department to prohibit the importation of
shrimp or products of shrimp wherever harvested in the wild
with commercial fishing technology that may affect adversely
sea turtles by May 1, 1996.\39\
---------------------------------------------------------------------------
\39\ Earthe Island Institute v. Warren Christopher, 913 F. Supp.
559 (CIT 1995).
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In April 1996, the State Department published revised
guidelines \40\ to comply with the CIT order of December 1995.
The new guidelines extended section 609 to shrimp harvested
from all foreign nations. The State Department further
determined that as of May 1, 1996, all shipments of shrimp and
shrimp products into the United States were to be accompanied
by a declaration attesting that the shrimp or shrimp product in
question was harvested ``either under conditions that do not
adversely affect sea turtles . . . or in waters subject to
the jurisdiction of a nation currently certified pursuant to
section 609.''
---------------------------------------------------------------------------
\40\ 61 Fed. Reg. 17342 (April 19, 1996).
---------------------------------------------------------------------------
In October 1996, the CIT ruled that the embargo on shrimp
and shrimp products enacted by section 609 applied to all
``shrimp products harvested in the wild by citizens or vessels
of nations which have not be certified''.\41\ The Court found
that the 1996 guidelines were contrary to section 609 when
allowing, with a Shrimp Exporter's Declaration form, imports of
shrimp from non-certified countries if the shrimp was harvested
with commercial fishing technology that did not adversely
affect sea turtles. The CIT also refused to postpone the
worldwide enforcement of section 609.\42\
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\41\ Earth Island Institute v. Warren Christopher, 942 Fed. Supp.
597 (CIT 1996).
\42\ Earth Island Institute v. Warren Christopher, 948 Fed. Supp.
1062 (CIT 1996).
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In 1997, Thailand, Malaysia, Pakistan, and India filed a
challenge in the World Trade Organization (WTO) to the U.S.
restrictions on imports of shrimp and shrimp products harvested
in a manner harmful to endangered species of sea turtles. A
dispute settlement panel was formed on February 25, 1997. The
panel ruled in favor of the complainants on April 6, 1998,
finding that the U.S. import restrictions were inconsistent
with WTO rules. The United States appealed the decision, and on
October 12, 1998, the Appellate Body of the WTO reversed the
panel ruling, confirming that WTO rules allow countries to
condition access to their markets on compliance with certain
policies such as environmental conservation, and agreeing that
the U.S. ``shrimp-turtle law'' was a permissible measure
adopted for the purpose of sea turtle conservation. The
Appellate Body, however, found fault with certain aspects of
the U.S. implementation of the statute. In particular, it found
that the State Department's procedures for determining whether
countries meet the requirements of the law did provide adequate
due process, because exporting nations were not afforded formal
opportunities to be heard and were not given formal written
explanations of adverse decisions. The Appellate Body also
found that the United States had unfairly discriminated between
the complaining countries and Western Hemisphere nations by not
exerting as great an effort to negotiate a sea turtle
conservation agreement with the complaining countries and by
not providing them the same opportunities to receive technical
assistance.
On November 25, 1998, the United States indicated its
intention not only to comply with the panel rulings but also
the firm commitment of the United States to protect endangered
species of sea turtles. In July 1999, the State Department
revised its procedures, pursuant to the panel decision, to
provide more due process to countries apply for certification
under section 609. The United States also provided the
complaining countries with additional technical assistance in
the adoption of sea turtle conservation measures. In July 2000,
the State Department began negotiations on a sea turtle
conservation agreement with countries of the Indian Ocean
region, including the complaining countries in the WTO case.
The next meeting of negotiators is expected to take place
during the first half of 2001.
On October 23, 2000, Malaysia requested that the original
WTO panel examine whether the United States fully implemented
the panel's recommendations, arguing that it was necessary for
the United States to repeal its ``shrimp-turtle law'' in order
to comply. The other complaining countries in the WTO panel
proceedings did not join Malaysia in the request. A decision on
U.S. compliance with the panel report, which can be appealed to
the WTO Appellate Body by either party, is expected in the
spring of 2001.
National Security Import Restrictions
Section 232 of the Trade Expansion Act of 1962
Section 232 of the Trade Expansion Act of 1962, as
amended,\43\ authorizes the President to impose restrictions on
imports which threaten to impair the national security. This
authority has been used by the President to impose quotas and
fees on imports of petroleum and petroleum products from time
to time and to embargo imports of refined petroleum products
from Libya. Public Law 96-223 (imposing a windfall profit tax
on domestic crude oil) amended section 232 to authorize the
Congress to disapprove by joint resolution an action of the
President to adjust oil imports. On June 9, 1995, the President
found, pursuant to section 232, that oil imports threaten to
impair the national security but determined not to take action
to adjust imports of petroleum because the costs of such an
adjustment to the economy outweighed the benefits.\44\
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\43\ Public Law 87-794, approved October 11, 1962, 19 U.S.C. 1862,
amended by section 127 of the Trade Act of 1974, Public Law 93-618,
approved January 3, 1975, by section 402 of the Crude Oil Windfall
Profit Tax Act of 1980, Public Law 96-223, approved April 2, 1980, and
further amended by section 1501 of the Omnibus Trade and
Competitiveness Act of 1988, Public Law 100-418, approved August 23,
1988.
\44\ 60 Fed. Reg. 30,514 (June 9, 1995).
---------------------------------------------------------------------------
On April 28, 2000, the President pursuant to section 232,
concurred with the findings of the Secretary of Commence that
imports of crude oil threaten to impair the national security.
He also accepted the Secretary's recommendation that trade
remedies not be imposed but that existing policies to enhance
conservation and limit the dependence on foreign oil be
continued.\45\
---------------------------------------------------------------------------
\45\ 36 Weekly Comp. Pres. Doc. 945.
---------------------------------------------------------------------------
Section 232 as amended requires the Secretary of Commerce
to conduct immediately an investigation to determine the
effects on national security of imports of an article, upon the
request of any U.S. government department or agency,
application of an interested party, or upon his own motion. The
Secretary must report the findings of his investigation and his
recommendations for action or inaction to the President within
270 days after beginning the investigation. If the Secretary
finds the article ``is being imported * * * in such quantities
or under such circumstances as to threaten to impair the
national security,'' he must so advise the President. The
President must decide within 90 days after receiving the
Secretary's report whether to take action. If the President
decides to take action, he must implement such action within 15
days, and take such action for such time as he deems necessary
to ``adjust'' the imports of the article and its derivatives so
imports will not threaten to impair the national security. The
President must submit a written statement to the Congress
within 30 days explaining action taken and the reasons
therefor.
Upon initiation of an investigation, the Secretary of
Commerce must immediately notify the Secretary of Defense, and
consult with him on methodological and policy questions. Upon
request of the Secretary of Commerce, the Secretary of Defense
must provide an assessment of the defense requirements of any
article subject to investigation.
The Secretary of Commerce must hold public hearings or
otherwise afford interested parties an opportunity to present
information and advice relevant to the investigation if it is
appropriate and after reasonable notice. The Secretary must
also seek information and advice from, and consult with, other
appropriate agencies. Among the factors which the Secretary and
the President must consider are domestic production needs for
projected national defense requirements; domestic industry
capacity to meet these requirements; existing and anticipated
availability of resources, supplies, and services essential to
the national defense; the growth requirements of such
industries, supplies, services; imports in terms of their
quantities, availability, character, and use as they affect
such industries and U.S. capacity to meet national security
requirements; the impact of foreign competition on the economic
welfare of domestic industries; and any substantial
unemployment, revenue declines, loss of skills or investment,
or other serious effects resulting from displacement of any
domestic products by excessive imports.
Section 233 of the Trade Expansion Act of 1962
Section 233 of the Trade Expansion Act of 1962 \46\ was
added by section 121 of the Export Administration Amendments of
1985 (Public Law 99-64) as a means of enforcing national
security export controls imposed under that Act. The provision
was amended by section 2447 of the Omnibus Trade and
Competitiveness Act of 1988, to conform to sanctions authority
added to the Export Administration Act.
---------------------------------------------------------------------------
\46\ 19 U.S.C. 1864.
---------------------------------------------------------------------------
Under section 233 as amended, any person who violates any
national security export control imposed under section 5 of the
Export Administration Act of 1979, or any regulation, order, or
license issued under that section, may be subject to controls
imposed by the President on imports of goods or technology into
the United States.
The provision has never been used.
Balance of Payments Authority
Section 122 of the Trade Act of 1974
Section 122 of the Trade Act of 1974 \47\ authorizes the
President to increase or reduce restrictions on imports into
the United States to deal with balance of payments problems.
---------------------------------------------------------------------------
\478\ Public Law 93-618, approved January 3, 1975; 19 U.S.C. 2132.
---------------------------------------------------------------------------
Tighter restrictions in the form of an import surcharge
(not to exceed 15 percent ad valorem), import quota, or a
combination of the two may be imposed for up to 150 days
(unless extended by act of Congress) whenever fundamental
international payments problems make such restrictions
necessary to deal with large and serious U.S. balance of
payments deficits, to prevent an imminent and significant
depreciation of the dollar, or to cooperate with other
countries in correcting an international balance of payments
disequilibrium.
Existing imports restrictions may be eased for a period of
up to 150 days (unless extended by act of Congress) through a
reduction in the rate of duty on any article (not to exceed 5
percent ad valorem), an increase in the value or quantity of
imports subject to any type of import restriction, or a
suspension of any import restriction. Such restrictions may be
eased whenever fundamental international payments problems
require special measures to deal with large and serious balance
of payments surpluses or to prevent significant appreciation of
the dollar. Trade liberalizing measures must be broad and
uniform as to articles covered. The President may not, however,
liberalize imports of those products for which increased
imports will cause or contribute to material injury to domestic
firms or workers, impairment of national security, or otherwise
be contrary to the national interest.
Certain conditions also are placed on the President's use
of import restrictions for balance of payments purposes. Quotas
may be imposed only if international agreements to which the
United States is a party permit them as a balance of payments
measure and only to the extent that the imbalance cannot be
dealt with through an import surcharge. If the President
determines that import restrictions are contrary to the
national interest, he may refrain from imposing them but must
inform and consult with Congress.
Section 122(d) requires that import restrictions be applied
on a non-discriminatory basis; it also requires that quotas aim
to distribute foreign trade with the United States in a manner
that reflects existing trade patterns. If the President finds,
however, that the purposes of the provision would best be
served by action against one or more countries with large and
persistent balance of payment surpluses, he may exempt all
other countries from such action. This section also expresses
the sense of Congress that the President seek modifications in
international agreements to allow the use of surcharges instead
of quotas for balance of payments adjustment purposes. If such
international reforms are achieved, the President's authority
to exempt all but one or two surplus countries from import
restrictions must be applied in a manner consistent with the
new international rules.
Section 122(e) provides that import restrictions be of
broad and uniform application as to produce coverage, unless
U.S. economic needs dictate otherwise. Exceptions under this
section are limited to the unavailability of domestic supply at
reasonable prices, the necessary importation of raw materials
and similar factors, or if uniform restrictions will be
unnecessary or ineffective (i.e., if products already are
subject to import restrictions, are in transit, or are subject
to binding contracts). The section prohibits the use of balance
of payments authority or the exceptions authority to protect
domestic industries from import competition. Any quantitative
restriction imposed may not be more restrictive than the level
of imports entered during the most recent representative
period, and must take into account any increase in domestic
consumption since the most recent representative period.
The President is authorized to modify, suspend, or
terminate any proclamation issued under the section, either
during the initial 150-day period or during any subsequent
extension by act of Congress.
Section 122 authority has never been invoked.
Background
Anticipating that oil-consuming nations would face large
balance of payments deficits in an era of rapidly increasing
oil prices, and believing that neither a reduction in the price
of oil nor the necessary international monetary cooperation
were certain to take place, Congress considered it necessary to
authorize the President to impose surcharges or other import
restrictions for balance of payments purposes, even though
Congress assumed that under existing circumstances such
authority was not likely to be used.\48\ The use of surcharges
for balance of payments purposes had gained de facto acceptance
among industrialized GATT member countries during the two
decades preceding the 1974 Trade Act, but explicit GATT rules
had never been adopted.
---------------------------------------------------------------------------
\48\ Senate Report 93-1298 at 87-88.
---------------------------------------------------------------------------
When it passed the Trade Act of 1974, Congress urged the
President to seek changes in international agreements allowing
the use of surcharges as well as (and in preference to) quotas
for balance-of-payments adjustment purposes and providing rules
for their use.\49\ The Tokyo Round of GATT multilateral trade
negotiations in 1979 adopted, as part of the so-called
Framework Agreement, the Declaration on Trade Measures Taken
for Balance-of-Payments Purposes,\50\ which elaborated on the
rules for the use of import restrictions for balance-of-
payments adjustments. While this Declaration noted the wide
use, for balance-of-payments adjustments, of import
restrictions other than quotas (which alone are addressed in
the GATT) and implicitly sanctioned it, it still did not
fundamentally alter GATT rules in this area by explicitly
allowing such other restrictions.
---------------------------------------------------------------------------
\49\ Senate Report 93-1298 at 88.
\50\ MTN/FR/W/20/Rev. 2, reprinted in House Doc. 96-153, pt. I, at
626.
---------------------------------------------------------------------------
The balance-of-payments issue was revisited in the Omnibus
Trade and Competitiveness Act of 1988, which stated as one of
the principal negotiating objectives of the United States the
development of ``rules to address large and persistent global
current account imbalances of countries.'' \51\
---------------------------------------------------------------------------
\51\ Public Law 100-418, section 122(d)(4), section 1101(b)(5); 19
U.S.C. 2901(b)(5).
---------------------------------------------------------------------------
The Understanding on the Balance-of-Payments Provisions of
the General Agreements on Tariffs and Trade 1994 specifically
provides for (and gives preference to) ``price-based measures''
for balance-of-payments adjustments, including import
surcharges and deposit requirements, and limits the imposition
of new quantitative restrictions. The Understanding also
provides that preference should be given to those measures
which have the least disruptive effect on trade, and that
restrictive import measures taken for balance-of-payments
purposes may only be applied to control the general level of
imports, may not exceed what is necessary to address the
balance-of-payments situation, and must be applied in a
transparent manner. Finally, the Understanding sets forth
consultation procedures for the use of all restrictive import
measures taken for balance-of-payments purposes. Article XII of
the General Agreement on Trade in Services permits members to
adopt or maintain restrictions on trade in services in the
event of serious balance-of-payments and external financial
difficulties.\52\
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\52\ The United States prevailed in a WTO challenge to certain
import restrictions by India on more than 2,700 tariff items. The WTO
found that these restrictions were no longer justified under the
balance-of-payments exceptions. India agreed to remove all restrictions
by April 2001.
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Product Standards
U.S. policy regarding the application of standards and
certification procedures to imported products is based on the
Uruguay Round Agreement on Technical Barriers to Trade and its
U.S. implementing legislation as part of the Uruguay Round
Agreements Act,\53\ chapter 9 of the North American Free Trade
Agreement and its U.S. implementing legislation as part of the
North American Free Trade Agreement Implementation Act,\54\ and
the Agreement on Technical Barriers to Trade under the General
Agreement on Tariffs and Trade (GATT) and its U.S. implementing
legislation under title IV of the Trade Agreement Act of
1979.\55\
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\53\ Public Law 103-465, approved December 8, 1994.
\54\ Public Law 103-182, approved December 8, 1993.
\55\ Public Law 96-39, approved July 26, 1979, 19 U.S.C. 2531-2573.
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Differences in product standards, listing and approval
procedures, and certification systems often can impede trade
and can be manipulated to discriminate against imports. Imports
may be tested to determine whether they conform with domestic
standards under conditions more onerous than those applicable
to domestic products. Certification systems, which indicate
whether products conform to standards, may limit access for
imports or may discriminate by denying the right of a
certification mark on imported products. Prior to the 1979
Agreement, however, there was virtually no multilateral
cooperation or supervision to promote international
harmonization and to discourage nationalistic discriminatory
practices.
Agreement on Technical Barriers to Trade
The Agreement on Technical Barriers to Trade,\56\ commonly
referred to as the Standards Code, was one of the agreements on
non-tariff measures concluded during the 1973-1979 Tokyo Round
of GATT multilateral trade negotiations. The Code went into
force on January 1, 1980. The Code does not attempt to create
standards for individual products, or to set up specific
testing and certification systems. Rather, it establishes, for
the first time, international rules among governments
regulating the procedures by which standards and certification
systems are prepared, adopted and applied, and by which
products are tested for conformity with standards. The Code was
a major U.S. negotiating objective during the Tokyo Round,
particularly given the formation of a European regional
electrical certification system closed to outside suppliers.
---------------------------------------------------------------------------
\56\ MTN/NTM/W/192 Rev. 5, reprinted in House Doc. No. 96-153, pt.
I, at 211.
---------------------------------------------------------------------------
The Standards Code seeks to eliminate national product
standardization and testing practices and certification
procedures as barriers to trade among the signatory countries
and to encourage the use of open procedures in the adoption of
standards. At the same time, it does not limit the ability of
countries to reasonably protect the health, safety, security,
environment, or consumer interests of their citizens.
Generally, U.S. standards-setting processes have followed these
basic norms, whereas other countries' standards-related
activities have generally been closed to participation from
foreign countries; these signatories are obliged to change
their practices in order to comply with Code principles.
The Code's provisions are applicable to all products, both
agricultural and industrial. They are not applicable to
standards involving services, technical specifications included
in government procurement contracts, or standards established
by individual companies for their own use. The Code addresses
governmental and non-governmental standards, both voluntary and
mandatory, developed by central governments, state and local
governments, and private sector organizations. Only central
governments, however, are directly bound by Code obligations,
whereas regional, state, local, and private organizations are
subject to a second level of obligation whereby signatories
``shall take such reasonable measures as may be available to
them'' to ensure compliance.
The Code is prospective, applying to new and revised
standards-related activities. If a signatory country believes,
however, that an existing regulation developed and put into
effect before the Code came into force conflicts with the basic
tenets of the Code, then that signatory may use the Code's
dispute settlement mechanism to help resolve the problem.
The Standards Code contains the following key provisions
obligating signatories to follow several general principles
pertaining to standards-related activities:
(1) The most important and fundamental principle
obligates signatory governments not to develop,
intentionally or unintentionally, product standards,
technical regulations, or certification systems which
create unnecessary obstacles to foreign trade. The Code
recognizes nations' sovereign right to formulate
standards and certification systems to protect life,
health and environment, but such regulations should be
as least disruptive as possible to international trade.
(2) The second fundamental principle is that national
or regional certification systems are to grant access
to foreign or non-member signatory suppliers under
conditions no less favorable than those granted to
domestic or member country suppliers, a major change in
most signatory policies. Signatories can no longer
refuse to give their national certification marks to
imported products, provided that the imported products
fully meet the technical requirements of the
certification system. Also regional certification
bodies must be open to suppliers from all Code
signatories.
(3) Signatories must provide foreign imported
products the same treatment as domestic goods with
respect to standards, technical regulations, and
testing and certification procedures, i.e., an
extension of the national treatment provision of GATT
which prohibits discrimination against imported
products.
(4) When developing new or revising existing product
standards or technical regulations, governments are to
use existing or proposed international standards as the
basis where it is appropriate. Other signatories may
request an explanation if a government fails to follow
this principle.
(5) Whenever appropriate, signatories are encouraged
to specify technical regulations and standards in terms
of performance rather than design or descriptive
characteristics.
If a foreign product must be tested to determine whether it
meets domestic standards before it can be imported, the Code
provides a number of criteria that signatories are to follow to
ensure non-discriminatory treatment. For example, foreign goods
should not have to undergo costlier or more complex testing
than domestic products in comparable situations. In addition,
signatories are obligated to use the same methods and
administrative procedures on imported as well as domestic
goods. The Code does not obligate signatories to recognize test
results or certification marks from another country. It does,
however, encourage signatories to accept, whenever possible,
test results, certifications or marks of conformity from
foreign bodies, or self-certification from foreign producers
even when the test methods differ from their own, provided that
the importing country is satisfied that the exporting country's
products meet the required standards.
Another important element of the Standards Code is the
obligation of signatories to open up the process of developing
or applying standards and certification procedures to each
other. Governments must make available proposed mandatory or
voluntary standards and certification procedures for comment
during the drafting stage by other signatories before they
become final regulations. Each signatory government must
establish an inquiry point to respond to all reasonable
questions from other signatories concerning their central,
local, and state government standards and certification
procedures.
Finally, the Code establishes a Committee of Signatories
which meets periodically to oversee implementation and
administration of the Agreement, as well as to discuss any new
issues or problems which arise. The Committee may set up panels
of experts or working parties as required to conduct Committee
business or handle disputes.
Uruguay Round Agreement on Technical Barriers to Trade
As part of the Uruguay Round, the signatories built on
experience gained under the 1979 Standards Code in the
Agreement on Technical Barriers to Trade (TBT Agreement). Much
of the new Agreement restates, clarifies, or expands the 1979
Code.
The inclusion of the new Agreement as one of the WTO
agreements means that all WTO members will be automatically
bound by the Agreement, whereas a number of countries had
chosen not to join the Standards Code. In addition, the
Agreement will be enforceable through the WTO Dispute
Settlement Understanding, unlike the 1979 Code, which contained
a separate procedure limiting response to Code violations to
withdrawing concessions under the Code.
The new Agreement seeks to eliminate barriers in the form
of national product standardization and testing practices and
conformity assessment procedures. At the same time, it permits
signatories to protect the health, safety, security,
environment, or consumer interests of their citizens. Like the
1979 Code, the Agreement obligates signatories to take
reasonable measures to secure compliance by local government
and non-governmental bodies.
With respect to technical regulations, the Agreement
establishes rules covering the preparation, adoption, and
application of technical regulations. The Agreement specifies
that technical regulations are not to be more trade-restrictive
than necessary to fulfill a legitimate objective. A complaining
member must identify a specific alternative measure that is
reasonably available. In addition, each government is required
to review periodically its technical regulations in light of
the Agreement's requirements. Each government is to use
relevant international standards as a basis for technical
regulations, except where they would be an ineffective or
inappropriate means to fulfill the government's legitimate
objectives. The Agreement recognizes the concept of equivalency
between countries' technical regulations. It carries forward
the procedural requirements of the Code to assure transparency.
Finally, it reflects an expansion beyond the Code with respect
to the issuance of technical regulations by local and non-
governmental bodies. WTO members must provide notice of
technical regulations issued by local bodies at the next level
below central governments, and must take active measures in
support of observance by local government and non-governmental
bodies.
With respect to standards, central government bodies are
required to comply with the terms of the Code of Good Practice
for the Preparation, Adoption and Application of Standards.
Other standardizing bodies are not bound by the Code of Good
Practice, but each central government must take reasonable
measures to ensure their compliance.
The new Agreement updates and expands disciplines regarding
conformity assessment procedures. Whereas the 1979 Code applied
only to testing, the new Agreement applies to all aspects of
conformity assessment, including laboratory accreditation and
quality system registration. Central governments are required
to take reasonable measures to apply these same disciplines to
local governments and non-governmental bodies.
The Agreement on the Application of Sanitary and
Phytosanitary Measures (S&P Agreement) establishes a number of
general requirements and procedures to ensure that a sanitary
or phytosanitary measure is in fact to protect human, animal,
and plant life and health from risks of plant- or animal-borne
pests or diseases, or additives, contaminants, toxins, or
disease-causing organisms in foods, beverages, or feedstuffs.
While the TBT Agreement relies on a non-discrimination test,
the S&P Agreement relies on whether a measure has a basis in
science and is based on a risk assessment. Discrimination is
allowed as long as it is not arbitrary or unjustifiable.
The North American Free Trade Agreement
Chapter 9 of the NAFTA establishes rules on standards-
related measures among the United States, Mexico, and Canada.
The provisions are based on the text of the then-draft Uruguay
Round Agreement on Technical Barriers to Trade and the United
States-Canada Free-Trade Agreement. The rules apply only to
standards-related measures that may directly or indirectly
affect trade in goods or services between the NAFTA countries
and to measures taken by NAFTA countries concerning those
standards-related measures. In addition, chapter 7 of the NAFTA
covers sanitary and phytosanitary measures.
Title IV of the Trade Agreements Act of 1979, as amended
Congress approved the Agreement on Technical Barriers to
Trade under section 2 of the Trade Agreements Act of 1979.
Title IV of that Act implements the obligations of the
Standards Code in U.S. law.\57\ Since U.S. practices were
already in conformity with the Code, title IV did not amend,
repeal, or replace any existing law. It does ensure that
adequate structures exist within the federal government to
inform the U.S. private sector about the standards-related
activities of other nations, facilitate the ability of the
United States to comment on foreign standards-making and
certifications, and process domestic complaints on foreign
practices. Title IV was then amended to reflect U.S.
obligations under the Uruguay Round Agreement on Technical
Barriers to Trade and the NAFTA.
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\57\ 19 U.S.C. 2531-2573.
---------------------------------------------------------------------------
Section 402 of the 1979 Act requires all federal agencies
to abide by the above-described principles and provisions of
the Agreement. In addition, section 403 states the ``sense of
Congress'' that no State agency and no private person should
engage in any standards-related activity, i.e., development or
implementation of product standards or certification system,
that creates unnecessary obstacles to foreign trade, and
requires the President to ``take such reasonable measures as
may be available'' to promote their observance of Agreement
obligations.
The U.S. Trade Representative (USTR) is designated to
coordinate U.S. trade policies related to standards, and
discussions and negotiations with foreign countries on
standards issues, and to oversee implementation of the
Agreement. The Departments of Agriculture and Commerce are
required to work with the USTR on agricultural and non-
agricultural issues respectively and to establish technical
offices to fulfill a number of functions, particularly
supplying notices to interested parties of proposed foreign
government standards and receiving and transmitting private
sector comments. The Department of Commerce maintains the
National Center for Standards and Certification within the
National Bureau of Standards as the national inquiry point
required under the Code.
Title IV contains provisions concerning administrative and
judicial proceedings regarding standards-related activities. No
private rights of action are created by title IV; private
parties can petition the U.S. government to invoke provisions
of the Agreement against practices of other signatories.
Subtitle E sets forth governing standards and measures
under the NAFTA. Subtitle F contains provisions concerning U.S.
participation in international standardsetting activities.
Government Procurement
U.S. policy on government purchases of foreign goods and
services is based on the Buy American Act of 1933,\58\ the
multilateral Agreement on Government Procurement under the 1994
WTO and General Agreement on Tariffs and Trade (GATT), and its
implementing legislation under title III of the Trade
Agreements Act of 1979,\59\ as amended by the Uruguay Round
Agreements Act. The ``Buy American Act of 1988'' (title VII of
the Omnibus Trade and Competitiveness Act of 1988) \60\
established standards and procedures to prohibit procurement
from foreign countries whose governments discriminate against
U.S. products or services in awarding contracts. In addition,
separate provisions in appropriation acts and other legislation
apply more restrictive Buy American-type provisions on
particular types of purchases.
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\58\ Act of March 3, 1933, ch. 212, title III, 47 Stat. 1520, 41
U.S.C. 10a-10d.
\59\ Public Law 96-39, title III, approved July 26, 1979, 19 U.S.C.
2511-2518.
\60\ Public Law 100-418, title VII, approved August 23, 1988, 41
U.S.C. 10a note.
---------------------------------------------------------------------------
Governments are among the world's largest purchasers of
non-strategic goods. Most of this vast market has traditionally
been closed to foreign producers by means of formal and
informal administrative systems of national discrimination in
favor of domestic producers. Although U.S. preferences for
domestic suppliers are clearly set out by law and regulation,
other countries usually have achieved their discrimination by
highly invisible administrative practices and procedures.
Buy American Act
The Buy American Act of 1933, as implemented by Executive
Orders 10582 and 11051, requires the U.S. government to
purchase domestic goods and services unless the head of the
agency or department involved determines the prices of the
domestic supplies are ``unreasonable'' or their purchase would
be inconsistent with the U.S. public interest. Executive Order
10582, issued in 1954, states that if the domestic price of a
good or service is 6 percent or more above the foreign price,
then it is to be considered unreasonable and the foreign
product may be purchased. The order also permits agencies to
use a differential above 6 percent if it would serve the
national interest. The Department of Defense has been using a
50 percent differential since 1962 for its procurement, except
this differential is waived on military purchases under
reciprocal Memoranda of Understanding (MOUs) with NATO
countries. The order also indicated that a differential could
be applied in cases where a domestic bid generated employment
in a labor surplus area as designated by the Secretary of
Labor. No specific percentage was stated, but generally a 12
percent differential has been allowed for bids which benefit
economically distressed areas. These price differentials may be
waived under section 301(a) of the Trade Agreements Act of 1979
for articles covered by the GATT Agreement on Government
Procurement from signatory countries.
U.S.-made products are defined by law as those manufactured
in the United States substantially all from articles,
materials, or supplies mined, produced, or manufactured in the
United States. By regulations, ``substantially all'' has been
defined to mean that more than 50 percent of the component
costs of a product has been incurred in the United States.
1979 GATT Agreement on Government Procurement
The first Agreement on Government Procurement, also known
as the Government Procurement Code,\61\ was concluded as one of
the agreements on non-tariff measures during the 1975-1979
Tokyo Round of GATT multilateral trade negotiations. The Code
went into effect on January 1, 1981 and remained in force until
the 1994 WTO Agreement on Government Procurement went into
effect on January 1, 1996.
---------------------------------------------------------------------------
\61\ MTN/NTM/W/211/Rev. 2, reprinted in House Doc. No. 96-153, pt.
I, at 69.
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Because not all objectives were achieved in the original
Code and revisions might be necessary in light of actual
experience, the signatories agreed to renegotiations beginning
at the end of 1984 to broaden the coverage and improve the
operation of the Code. The GATT Committee on Government
Procurement completed the first phase of these renegotiations
in November 1986 with agreement (1) on a Protocol of Amendments
to improve the functioning of the Code, effective January 1,
1988; (2) to continue negotiations on increasing the number of
entities (government agencies) and procurements covered by the
Code, particularly in the sectors of telecommunications, heavy
electrical and transportation equipment; and (3) to continue to
work towards the coverage of service contracts under the Code.
The second phase of Code renegotiations began in February 1987
and continued in the context of the Uruguay Round of GATT
multilateral trade negotiations.
The 1979 Code is designed to discourage discrimination
against foreign suppliers at all stages of the procurement
process, from the determination of the characteristic of the
product to be purchased to tendering procedures, to contract
performance. The Code prescribes specific rules on the drafting
of the specifications for goods to be purchased, advertising of
prospective purchases, time allocated for the submission of the
bids, qualification of suppliers, opening and evaluation of
bids, awards of contracts, and on hearing and reviewing
protests.
Signatories must publish their procurement laws and
regulations and make them consistent with the Code rules.
Purchasing entities have discretion in their choice of
purchasing procedures, provided they extend equitable treatment
to all suppliers and allow the maximum degree of competition
possible.
Each government agency covered by the Code is required to
publish a notice of each proposed purchase in an appropriate
publication available to the public, and to provide all
suppliers with enough information to permit them to submit
responsive tenders. Losing bidders must be informed of all
awards and be provided upon request with pertinent information
concerning the reasons they were not selected and the name and
relative advantages of the winning bidder. Signatories must
also provide data on their procurements on an annual basis.
The adoption or use of technical specifications which act
to create unnecessary obstacles to international trade is
prohibited. The Code mandates the use, where appropriate, of
technical specifications based on performance rather than
design, and of specifications based on recognized national or
international standards.
While the Code does not prohibit the granting of an offset
or the requirement that technology be licensed as a condition
of award, signatories recognize that offsets and requirements
for licensing of technology should be limited and used in a
non-discriminatory way.
The Code is largely self-policing. Rules and procedures are
structured to help provide solutions to problems between
potential suppliers and procuring agencies. As a next step, the
Code provides for bilateral consultations between the procuring
government and the government of the aggrieved supplier. As a
last resort, the Code dispute settlement mechanism under the
Committee of Signatories provides for conciliation or
establishment of a fact-finding panel.
Coverage of the agreement
The Code applies solely to those agencies listed by each
signatory in an annex on contracts valued above a specific
minimum contract value expressed in terms of Special Drawing
Rights (SDR). The original Code established a threshold value
of 150,000 SDR; the 1988 Protocol of Amendments to the Code
lowered the minimum contract value to SDR 130,000.
The benefits of the Code apply to purchases of goods
originating in the territory of signatory countries. As a
result of the 1988 amendments, leasing contracts are also
subject to the Code. It does not apply to government services
except those incidental to the purchase of goods, construction
contracts, purchases by Ministries of Agriculture for farm
support programs or human feeding programs such as the U.S.
school lunch program. Procurements by state and local
governments, including those with federal funds such as under
the Surface Transportation Act, are not subject to the Code.
For the United States, the Code does not apply to the
Department of Transportation, the Department of Energy, the
Tennessee Valley Authority, the Corps of Engineers of the
Department of Defense, the Bureau of Reclamation of the
Department of the Interior, and the Automated Data and
Telecommunications Service of the General Services
Administration (GSA). In addition, government chartered
corporations which are not bound by the Buy American Act, such
as the U.S. Postal Service, COMSAT, AMTRAK, and CONRAIL, are
not covered.
United States Code coverage also does not apply to set-
aside programs reserving purchases for small and minority
businesses, prison and blind-made goods, or to the requirements
contained in Department of Defense and GSA Appropriations Acts
that certain products (i.e., textiles, clothing, shoes, food,
stainless steel flatware, certain specialty metals, buses, hand
tools, ships, and major ship components) be purchased only from
domestic sources.
On April 13, 1993, the United States and European Union
reached an agreement in Marrakesh under the GATT Government
Procurement Code to nearly double to $200 billion the bidding
opportunities available on a bilateral basis.
1994 WTO Agreement on Government Procurement
The 1994 Government Procurement Agreement negotiated in the
Uruguay Round makes important improvements in the Tokyo Round
Code, which required central government agencies in member
countries to observe non-discriminatory, fair, and transparent
procedures in the purchase of certain goods. The new Agreement
covers the procurement of both goods and services, including
construction services, and applies to purchases by subcentral
governments and government-owned enterprises, as well as
central governments.
In addition to improvements in coverage, the Agreement also
requires members to follow significantly improved procurement
procedures. It prohibits the use of offsets unless a country
specifically negotiates an exception to the Agreement in its
schedule. The Agreement requires the establishment of a
domestic bid challenge system and introduces added flexibility
to accommodate advances in procurement techniques.
The Agreement allows each signatory to negotiate coverage
on a reciprocal, bilateral basis with the other signatories.
The United States concluded comprehensive coverage packages
with several countries. The United States will apply the new
Agreement to specified U.S. subcentral governments and
government-owned entities only for those countries that opened
their government procurement markets in sectors of high
priority to the United States, although it may expand coverage
with other signatories in the future.
The Agreement applies to purchases by government entities
above certain special drawing right (SDR) thresholds:
Central government purchases
Goods and services: 130,000 SDRs ($182,000)
Construction services: 5 million SDRs ($7
million)
Subcentral government purchases
Goods and services, U.S. and Canada: 355,000
SDRs ($500,000)
Goods and services, other: 200,000 SDRs
($280,000)
Construction services, Japan and Korea: 15
million SDRs ($21 million)
Construction services, other: 5 million SDRs
($7 million)
Government-owned enterprise purchases
Goods and services, U.S. federally-funded
utilities: $250,000
Goods and services, other: 400,000 SDRs
($560,000)
Construction services, Japan and Korea: 15
million SDRs ($21 million)
Construction services, other: 5 million SDRs
($7 million)
During the negotiations, each signatory negotiated the
exclusion of certain procurement from the obligations imposed
by the new Agreement. In the case of the United States, these
exclusions carry forward those in the U.S. schedule to the 1979
Code. In addition, certain states excluded specified
procurement, and set-asides on behalf of small and minority
businesses are also excluded. The 1994 Agreement applies to all
U.S. executive branch agencies with certain exceptions,
including the Federal Aviation Administration.
Signatories to the 1996 Code include the following members
of the 1979 Code--Austria, Belgium, Canada, Denmark, European
Communities, Finland, France, Germany, Greece, Hong Kong,
Iceland, Ireland, Israel, Italy, Japan, Korea, Liechtenstein,
Luxembourg, Netherlands, Netherlans with respect to Aruba,
Norway, Portugal, Singapore, Spain, Sweden, Switzerland, United
Kingdom, and the United States. The United States terminated
its participation in the 1979 Code on the entry into force of
the 1996 Code.
The North American Free Trade Agreement
The NAFTA signatories agreed to eliminate buy national
restrictions on the majority of non-defense related purchases
by their federal governments of goods and services provided by
firms in North America. The Agreement marked the first time
that Mexico had committed to eliminate discriminatory
government procurement practices.
The Agreement applies only to purchases above a specified
threshold:
(1) Purchases of goods over $25,000 by U.S. federal
agencies from Canadian suppliers and vice versa;
(2) For other federal government procurement in the
three countries, purchases of goods and services over
$50,000 and purchases of construction services over
$6.5 million; and
(3) For federal government-owned enterprises,
purchases of goods and services over $250,000 and
purchases of construction services over $8 million.
The Agreement does not apply to certain kinds of purchases
by the U.S. government including purchases under small or
minority business set-aside programs, certain national
security, agriculture, and Agency for International Development
procurements, and procurements by state and local governments.
Title III of the Trade Agreements Act of 1979, as amended
Congress approved the first Agreement on Government
Procurement under section 2 of the Trade Agreements Act of 1979
and amended that statute in the Uruguay Round and NAFTA
implementing bills to reflect U.S. obligations under those
agreements. Title III of that Act implements the obligations of
the Code in U.S. law with respect to purchases by covered
government entities.\62\
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\62\ 19 U.S.C. 2511-2518.
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Executive Order 12260, issued on December 31, 1980,
requires all U.S. government agencies covered by the Code to
observe its provisions. Section 301 of the 1979 Act authorizes
the President to waive the application of discriminatory
government procurement law, such as the Buy American Act, and
labor surplus set-asides that are not for a small business. The
waiver authority applies only to purchases covered by the Code
and only to foreign countries designated by the President that
meet one of four statutory conditions basically requiring the
country to provide appropriate reciprocal, competitive
government procurement opportunities to U.S. products and
suppliers, unless the country is a least developed country.
Buy American Act preferences still apply to contracts below
the SDR threshold, purchases by non-covered entities, and
procurement from countries not eligible for a waiver regardless
of contract size. Special Buy American-type restrictions under
other laws (e.g., small business set asides, required domestic
sourcing of particular goods) are also not affected.
Section 302 of the 1979 Act, as amended, is designed to
encourage other countries to participate in the Code and
provide appropriate reciprocal competitive opportunities. For
this purpose, the President is required, after the date on
which any waiver first takes effect, to prohibit the
procurement of products otherwise covered by the Code from non-
designated countries. The President may, however, (1) waive the
prohibition on procurement of products by a foreign country or
instrumentality that has not yet become a party to the
Agreement but has agreed to apply transparent and competitive
procedures to its government procurement equivalent to those in
the Agreement and to maintain and enforce effective
prohibitions on bribery and other corrupt practices in
connection with government procurement; (2) authorize agency
heads to waive prohibitions on a case-by-case basis when in the
national interest; and (3) authorize the Secretary of Defense
to waive the prohibition for products of any country which
enters into a reciprocal procurement agreement with the
Department of Defense. All such waivers are subject to
interagency review and general policy guidance.
Section 303 authorizes the President to waive as of January
1, 1980 the application of the Buy American Act for purchases
by any government entity of civil aircraft and related articles
irrespective of value from countries party to the GATT
Agreement on Trade in Civil Aircraft.
Section 304 sets forth negotiating objectives in
conjunction with the renegotiation of the Code within 3 years
to improve its operation and broaden the coverage. This
negotiation is ongoing. The President is directed to seek more
open and equitable foreign market access and the harmonization,
reduction, or elimination of devices distorting government
procurement trade. The President must also seek equivalent
competitive opportunities in developed countries for U.S.
exports in appropriate product sectors as the United States
affords their products, such as in the heavy electrical,
telecommunications, and transport equipment sectors. The
President must report to the committees of jurisdiction during
the renegotiations if he determines they are not progressing
satisfactorily and are not likely to result within 12 months in
expanded agreement coverage of principal developed country
purchasers in appropriate product sectors. The President is
also directed to indicate appropriate actions to seek sector
reciprocity with such countries in government procurement, and
may recommend legislation to prohibit procurement by entities
not covered by the Code from such countries.
Title III of the 1979 Act, as amended, also contains a
number of reporting requirements to the Congress on various
aspects of the Code and its economic impact and implementation.
Title VII of the Omnibus Trade and Competitiveness Act of 1988, as
amended
Background
Title VII of the Omnibus Trade and Competitiveness Act of
1988 (``Buy American Act of 1988'') \63\ as amended by the
Uruguay Round Agreements Act, amended both the Buy American Act
of 1933 and title III of the Trade Agreements Act of 1979 to
address discrimination by foreign governments in the
procurement of U.S. products or services. Title VII statutory
authority ceased to be effective on April 30, 1996. On March
31, 1999, President Clinton issued Executive Order 13116, which
reinstituted Title VII procedures.
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\63\ 41 U.S.C. 10a note.
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Title VII prohibits U.S. government procurement of products
and services from certain parties, including (1) signatories
``not in good standing'' to the Agreement; (2) signatories in
good standing that discriminate against U.S. firms in their
government procurement of products or services not covered by
the Agreement; and (3) non-signatories to the Agreement whose
governments discriminate against U.S. products or services in
their procurement.
In the case of countries that discriminate on procurement
not covered by the Agreement, prohibitions are to be imposed
when a foreign government maintains a significant and
persistent pattern or practice of discrimination against
procurement of U.S. products or services that results in
identifiable harm to U.S. business. In cases of signatories to
the Agreement, federal agencies would be prohibited from
procuring only non-Agreement covered products from these
countries unless that country has also been designated as a
country ``not in good standing.''
Least developed countries are exempt from the procurement
prohibition, as are products and services procured and used by
the federal government outside the United States and its
territories. A prohibition may also be waived, on a contract-
by-contract or class of contracts basis, when in the public
interest or to avoid the creation of a monopoly situation. The
President or head of a federal agency may also authorize the
award of a contract or class of contracts, notwithstanding a
prohibition, if insufficient competition exists to assure the
procurement of products or services of requisite quality at
competitive prices. Normally the Congress must be notified at
least 30 days before the prohibition is waived on a contract or
class of contract.
The President must submit to appropriate congressional
committees, by April 30 each year, a report on the extent to
which countries discriminate against U.S. products or services
in making government procurements. The report must identify (1)
signatories to the Agreement that are not in compliance with
its requirements; (2) signatories to the Agreement whose
products and services are acquired in significant amounts by
the U.S. government, who are in compliance with the Agreement,
but maintain a significant and persistent pattern or practice
of discrimination in the government procurement of products and
services not covered by the Agreement which results in
identifiable harm to U.S. businesses; (3) non-signatories to
the Agreement whose products or services are acquired in
significant amounts by the U.S. government and who maintain in
their government procurement a significant and persistent
pattern or practice of discrimination which results in
identifiable harm to U.S. businesses; (4) non-signatories to
the Agreement, which fail to apply transparent and competitive
procedures equivalent to those in the Agreement, and whose
products and services are required in significant amounts by
the U.S. government; and (5) non-signatories to the Agreement
which fail to maintain and enforce effective prohibitions on
bribery and other corrupt practices in connection with
government procurement, and whose products and services are
required in significant amounts by the U.S. government. The law
requires the President to take into account a number of
specific factors in identifying countries and to describe the
practices and their impact in the annual report.
By the date the annual report is submitted, the U.S. Trade
Representative (USTR) must request consultations with any
identified country, unless that country was also identified in
the preceding annual report. If the country is a signatory
identified as not in compliance with the Agreement and does not
comply within 60 days after the annual report is issued, the
USTR must request formal dispute settlement proceedings under
the Agreement, unless they are already underway pursuant to a
previous identification. If dispute settlement is not concluded
within 18 months or has concluded and the country has not taken
action required as a result of the procedures to the
satisfaction of the President, the country is considered ``not
in good standing'' and the President is required to revoke the
waiver of Buy American restrictions granted under the Trade
Agreements Act of 1979, as amended. The President will not
limit procurement from the foreign country if, before the end
of 18 months following initiation of dispute settlement, the
country has complied with the Agreement, has taken action
recommended as a result of the procedures to the satisfaction
of the President, or the procedures result in a determination
requiring no action by the country. The President may also
terminate the sanctions and reinstate a waiver at any time
under such circumstances.
Within 60 days after the annual report is issued, the
President must impose the procurement prohibition on any
country identified as discriminating on procurements not
covered by the Agreement and which has not eliminated its
discriminatory procurement practices. The President may
terminate the sanctions at such time as he determines the
country has eliminated the discrimination.
With respect to either category of countries, if the
President determines that imposing or continuing the sanctions
would harm the U.S. public interest, the President may modify
or restrict the application of the sanctions to the extent
necessary to impose appropriate limitations that are equivalent
in their effect to the discrimination against U.S. products or
services in government procurement by that country. The
President also cannot impose sanctions if it would (1) limit
U.S. government procurement to, or create a preference for,
products or services of a single supplier; or (2) create a
situation where there could be or are an insufficient number of
actual or potential bidders to assure U.S. government
procurement of goods or services of requisite quality at
competitive prices.
By April 30 of each year, the President must submit to the
Congress a general report on actions taken under title VII,
including an evaluation of the adequacy and effectiveness of
such actions as a means toward eliminating foreign
discriminatory government procurement practices against U.S.
businesses and, if appropriate, legislative recommendations for
enhancing the usefulness of title VII or any other measures to
eliminate or respond to foreign discriminatory foreign
procurement practices.
History of actions under title VII
In its first report on April 27, 1990, the U.S. Trade
Representative determined that no country met the statutory
criteria under title VII. Seven procurement markets of
particular significance to U.S. suppliers were identified for
close review over the following year before the 1991 report:
the European Community (EC), the Federal Republic of Germany,
France, Italy, Greece, Japan, and Australia.
In its second annual report on April 26, 1991, the USTR
identified Norway as meeting the statutory requirements for
identification as a country in violation of its obligations
under the GATT Government Procurement Agreement when it awarded
a sole source contract for an electronic toll booth collection
system for the city of Trondheim. The report also announced
that while some progress was made with the EC on non-Code-
covered government procurement in the telecommunications
equipment and heavy electrical equipment sectors, an early
review would be conducted of the practices of the EC, Germany,
France, and Italy in these areas in January 1992 if U.S.
concerns had not been addressed. Procurement practices of
Greece, Australia, and Japan were also identified for further
monitoring.
In its February 21, 1992 report on the ``early review,''
the USTR found that the EC met the requirements for
identification under title VII with respect to discriminatory
procurement practices of government-owned telecommunications
and electrical utilities in certain of its member states.
Specifically, the report cited the EC's September 1990
``Utilities Directive,'' scheduled to go into effect by January
1, 1993, establishing procurement rules for all EC
telecommunications and heavy electrical utilities requiring
them to favor EC goods and services over those of the United
States and other foreign countries, subject to waiver if a
negotiated market access agreement, such as a new GATT
Government Procurement Code, were reached with other countries.
The report stated the President's intention to implement
appropriate sanctions by January 1993 if ongoing negotiations
with the EC were not successful in resolving U.S. concerns,
subject to EC implementation of the discriminatory provisions
of its Utilities Directive. On April 22, at the conclusion of
the consultation period provided under title VII, the President
reaffirmed the identification of the EC, but announced that the
statutory sanctions would be modified.
The third annual report on April 29, 1993 continued the
identification of Norway for the same practice and stated that
dispute settlement proceedings were expected to conclude in the
near future. The report also reaffirmed the President's
intention with respect to the EC and cited certain procurement
markets in Australia, Japan, and China for further monitoring.
The fourth annual report on April 30, 1993, identified
Japan for discrimination in procurement of construction,
architectural and engineering services. The report continued
the identification of the EC pending EC Council of Ministers
approval of an agreement on heavy electrical equipment and
because the EC did not agree to waive the Utilities Directive
for telecommunications equipment. Since no agreement had been
reached on telecommunications discrimination, the United States
would proceed to impose title VII sanctions. Actions of other
countries which have agreements with the EC that may require
implementation of the discriminatory provisions of the EC
Utilities Directive would also be monitored. Procurement
practices falling short of statutory requirements for
identification were noted of continuing concern in Australia,
China, and Japan. On May 28, 1993, the United States imposed
sanctions. Effective March 10, 1994, USTR terminated those
sanctions with respect to the Federal Republic of Germany on
the basis of assurances that it would not apply the
discriminatory provisions of the Utilities Directive to
procurement of U.S. goods by its telecommunications utilities.
On January 19, 1994, USTR announced the termination of
sanctions, scheduled to go into effect on January 20, on the
basis of an announcement by Japan of an action plan to reform
its public sector construction market.
On April 30, 1994, USTR annunced that sanctions imposed
against the European Union (EU) on May 28, 1993 for
discrimination in the telecommunications sector would remain in
force since the United States and EU could not reach agreement
as part of the overall U.S.-EU agreement reached on April 13
under the GATT Government Procurement Code.
As a result of some progress towards resuming negotiations
on telecommunications and medical technology government
procurement, Japan was not identified in the fifth annual
report, subject to review within 60 days on the basis of
Japanese actions in the interim. The report also described
concerns with procurement practices of Australia, China, and
Brazil, and in the Japanese supercomputer and computer sectors.
On June 30, 1994, the USTR announced the postponement until
not later than July 31 of the decision on whether to identify
Japan for its discriminatory procurement practices in the
telecommunications and medical technology sectors because of
intensive negotiations underway on these priority sectors
identified under the July 1993 U.S.-Japan Framework Agreement.
On July 31, the USTR announced the identification of Japan and
commencement of the title VII 60-day consultation and
negotiation period as a result of Japan's failure to address
sufficiently discrimination in the two sectors. On October 4,
1994, the USTR determined that sanctions scheduled to go into
effect on Japanese goods and services should be terminated as
the result of an agreement between the United States and Japan.
On April 29, 1995, the USTR announced no new
identifications with respect to title VII but highlighted
several areas as deserving special attention. First, the USTR
pointed to the issue of corruption in foreign procurement and
lack of transparency in procurement procedures. Second, the
USTR intends to monitor German implementation of the 1993 U.S.-
EU Memorandum of Understanding (MOU) on Government Procurement.
Third, the United States will monitor Japanese compliance with
the agreements on telecommunications and medical technology to
assure tangible progress. Moreover, the USTR announced that the
report will include information on the procurement practices of
Australia, Brazil, and China, in addition to Japanese
procurement practices in the supercomputers and computers
sectors. Finally, the USTR noted that the sanctions first
applied in 1993 against the EU for discrimination in the
telecommunications sector continue and are being extended to
the three new member states--Austria, Finland, and Sweden.
On April 30, 1996, the USTR identified Germany for
discrimination in the heavy electrical equipment sector and its
failure to adequately implement its obligations under the U.S.-
EU MOU on Government Procurement. Effective January 1, 1996,
the U.S.-EU commitments under the 1993 MOU were incorporated
into the World Trade Organization Government Procurement
Agreement (WTO GPA) and the MOU expired. The Administration
expressed concern that the inadequacies of Germany's
implementation of the MOU might carry over into its
implementation of the WTO GPA. At the end of a 90-day
consultation period, the USTR announced on October 1, 1996,
that Germany had agreed to take steps that would effectively
ensure open competition in the German heavy electrical
equipment market. Title VII action was not terminated but the
imposition of sanctions was further delayed pending passage of
a satisfactory legislative reform package expected within one
year.
USTR also noted in the 1996 report that the Administration
received no comments on specific cases or practices of bribery
and corruption for the second year since amendments under the
1994 Uruguay Round Agreement Act added bribery and corruption
as a category for identification. Noting that many U.S. firms
do not come forward publicly with cases of bribery and
corruption influencing contract awards for fear of commercial
backlash in future contracts, the Administration stated its
intention to continue working toward the establishment of
multilateral mechanisms for eliminating bribery and corruption
in government procurement.\64\ Finally, the report describes
the Administration's concerns with the procurement practices of
Australia, Brazil and China, as well as its concern with
Japan's procurement practices in the areas of public works
building, supercomputers and computers.
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\64\ On May 1, 1998, President Clinton transmitted to Congress the
Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions, adopted on November 21, 1997,
under the auspices of the Organization for Economic Cooperation and
Development. The Senate ratified the Convention on July 31, 1998.
---------------------------------------------------------------------------
On March 31, 1999, President Clinton issued Executive Order
13116, which reinstituted the procedures of Title VII after
their lapse on April 30, 1996. On May 12, 1999, USTR issued its
Title VII report, determining not to identify any new countries
under Title VII because the practices of concern were either
being addressed under another trade dispute mechanism, did not
meet the criteria for identification, or were already under
scrutiny as a result of previous identifications. The
Administration also noted that the United States would move
forward with WTO dispute settlement proceedings to challenge
Korea's government procurement practices in the construction of
Inchon International Airport. Two Title VII determinations
remained outstanding from prior reviews: the 1992
identification of the EU for discriminatory procurement
practices of government-owned telecommunications entities in
certain member states; and 1996 identification of Germany for
discrimination in the heavy electrical sector.\65\
---------------------------------------------------------------------------
\65\ 64 FR 25525 (May 12, 1999).
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On May 8, 2000, USTR issued its annual report, determining
again that no new practices met the criteria for Title VII
identification. USTR noted, however, that as in previous years,
there remain a number of foreign government procurement
practices of concern which the Administration is pursuing in
bilateral and multilateral fora, including WTO dispute
settlement when appropriate, or that require continued
monitoring and study. USTR also determined to terminate the
1996 identification of Germany for discrimination in the heavy
electrical sector, based on Germany's implementation of new
legislation that appears to effectively address U.S. concerns.
However, USTR's identification of the EU for discriminatory
procurement practices of government-owned telecommunications
entities in certain member states remains outstanding.\66\
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\66\ 65 FR 26652 (May 8, 2000).
Chapter 4: LAWS REGULATING EXPORT ACTIVITIES
Export Controls
Background
Through statute, Congress has authorized the President to
control the export of various commodities. The three most
significant programs for controlling different types of exports
deal with nuclear materials and technology, defense articles
and services, and non-military dual-use goods and technology.
Under each program, licenses of various types are required
before an export can be undertaken. The Nuclear Regulatory
Commission is responsible for the licensing of nuclear
materials and technology under the Atomic Energy Act. The
Department of State is responsible for the licensing of exports
of defense articles and services and maintains the Munitions
Control List under the Arms Export Control Act.
Export licensing requirements for most commercial goods and
technical data are authorized by the Export Administration Act
under the jurisdiction of the Bureau of Export Administration
in the Department of Commerce. The three basic purposes of
export controls are to protect the national security, to
further U.S. foreign policy interests, and to protect
commodities in short supply. The Secretary of Defense is
authorized to review certain applications for national security
purposes while the Secretary of State reviews specified license
applications for foreign policy purposes.
The export of goods or technical data subject to the
commodity control list (CCL) must be authorized by licenses
(either individual validated licenses or bulk licenses
authorizing multiple shipments) which are granted on the basis
of such factors as intended end-use and the probability and
likely effect of diversion to military use. Exports and
reexports from a foreign country of U.S.-origin commodities and
technical data or of foreign products containing U.S.-origin
components or technology are also regulated. There are seven
countries for which shipment of almost all commodities requires
a license for export: Iran, Iraq, Libya, Serbia, Sudan, North
Korea, and Cuba.
The foreign policy export control authority was used by
President Carter to embargo the export of grain to the Soviet
Union after the 1979 Soviet invasion of Afghanistan. President
Reagan used it again in 1981 until late 1983, following the
imposition of martial law in Poland, to embargo sales by U.S.
firms and their foreign subsidiaries of oil and gas
transmission and refining commodities and technology for use by
the Soviet Union on its natural gas pipeline to Western Europe.
Crime control and detection instruments and equipment are
subject to control for foreign policy reasons to countries
which may engage in persistent gross violations of human
rights. Certain other goods and technology are controlled to
five countries (Libya, Iran, Syria, South Yemen, and Cuba) due
to their repeated support of international terrorism.
Sanctions against international terrorism were enacted as
amendments to the Export Administration Act of 1979 under the
Anti-Terrorism and Arms Export Amendments Act of 1989 \1\ and
the National Defense Authorization Act for Fiscal Year 1991.\2\
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\1\ Public Law 101-222, section 4, approved December 12, 1989.
\2\ Public Law 101-510, section 1702, approved November 5, 1990.
---------------------------------------------------------------------------
The short supply control authority was used to help control
raw materials prices during the Korean conflict. In 1973
President Nixon prohibited soybean exports as a response to
rapidly increasing prices. The export of crude oil carried on
the Trans-Alaska Pipeline is prohibited. Exports of crude oil
and refined and unprocessed western red cedar harvested from
federal or state lands are subject to validated licensing
requirements.
The U.S. government has employed export controls
continuously since 1940. The first controls were imposed to
avoid or mitigate the scarcity of various critical commodities
during World War II and to assure their equitable distribution
within the U.S. economy and to U.S. allies. Export controls
were expected to terminate after shortages created by World War
II were substantially eliminated. However, the cold war led to
enactment of the Export Control Act of 1949, designed to
control all U.S. exports to Communist countries.
The Export Control Act of 1949 provided for the control of
items in short supply, for controls to further U.S. foreign
policy goals, and for the examination of exports to Communist
countries which might have military application. The 1949 Act,
amended and extended as appropriate, remained in effect for 20
years. The 1949 Act was then replaced by the Export
Administration Act of 1969, which was in turn replaced by the
Export Administration Act of 1979.
The 1969 Act maintained the basic export control system set
up by the Export Control Act, but called for a removal of
controls on goods and technologies that were freely available
from foreign sources and that were only marginally of military
value. The 1969 Act was amended in 1972, 1974, and 1977.
A significant expansion of controls was brought about in
1977 when Congress amended the 1969 Act to authorize the
control of goods and technology exported by any person subject
to the jurisdiction of the United States, thus permitting the
Department of Commerce to exercise control over foreign-origin
goods and technical data reexported by U.S.-owned or U.S.-
controlled companies abroad. Anti-boycott policies (originally
established by Congress in 1965) were also substantially
strengthened in 1977.
Export Administration Act of 1979
The Export Administration Act of 1979 \3\ as reauthorized
and amended in 1985 and 1988 replaced the 1969 Act as amended,
which expired on September 30, 1979. The 1979 Act provides the
broad and primary authority for controlling the export from the
United States to potential adversary nations of civilian goods
and technology which could contribute significantly to the
military capability of controlled countries (consisting of
Communist countries, as defined in section 620(f) of the
Foreign Assistance Act of 1961) if diverted to military
application (national security controls under section 5). Like
the previous law, the 1979 Act also authorized the President to
impose export controls for foreign policy reasons or to fulfill
international obligations (foreign policy controls under
section 6) and to protect the domestic economy from an
excessive drain of scarce materials and to reduce the
inflationary impact of foreign demand (short supply controls
under section 7). The Act also continues the 1977 anti-boycott
program (section 8) which prohibits U.S. persons from taking
action with the intent to comply with, further, or support any
foreign country boycott against any country friendly to the
United States (primarily Arab states against Israel).
---------------------------------------------------------------------------
\3\ Public Law 96-72, as amended by P.L. 96-533, P.L. 97-145, P.L.
98-108, P.L. 98-207, P.L. 98-222, P.L. 99-64, P.L. 99-399, P.L. 99-441,
P.L. 99-633, P.L. 100-180, P.L. 100-418, P.L. 100-449, P.L. 101-222,
and P.L. 101-510, 50 U.S.C. App. 2401.
---------------------------------------------------------------------------
In its 1979 review of the Export Administration Act of
1969, the Congress made substantial changes in the statute.
Separate and distinct procedures and criteria were established
for imposing national security and foreign policy controls.
Precise time deadlines were set for the processing of export
license applications. Development of a ``militarily critical
technologies list'' (MCTL) was mandated, both as a means of
reviewing the adequacy and focus of the existing commodity
control list of categories of goods and technologies subject to
Commerce export controls, and as a possible means of arriving
at a more limited control list containing only the most
militarily significant technologies. Foreign availability of
goods controlled by the United States was, for the first time,
made a factor in decisions to license such items for export.
The Act also formally authorized U.S. participation in the
informal multilateral export control body known as COCOM
(Coordinating Committee on Multilateral Export Controls) in
which the NATO countries (with the exception of Iceland) and
Japan also participate. Since 1950, COCOM has attempted to
coordinate the export control policies of the Western allies
with respect to Communist countries. Representatives of the
participating governments meet periodically to set guidelines
for controls on exports to Communist countries. The 1979 Act
directed the President to negotiate with other COCOM
governments in an effort to reach agreement on reducing the
scope of export controls, holding periodic high-level meetings
on COCOM policy, publishing the list of items controlled by
COCOM, and introducing more effective procedures for enforcing
COCOM export controls.
The 1979 Act authorized the administration of export
controls until September 30, 1983. The Act was extended
temporarily three times during the 98th Congress, through
October 15, 1983, subsequently through February 28, 1984, and
finally until March 30, 1984,\4\ while the Congress considered
proposals for major changes in the law. During the lapses in
authority in 1983 and after the 1979 Act terminated on March
30, 1984, and House-Senate differences could not be resolved
prior to congressional adjournment on October 12, 1985, the
President administered export controls under the authority of
the International Emergency Economic Powers Act and Executive
Order 12470 of March 30, 1984, as an interim method of control
until new authority could be passed by Congress. The Export
Administration Amendments Act of 1985 \5\ which reauthorized
the 1979 Act for 4 years until September 30, 1989, with
comprehensive amendments, was enacted on July 12, 1985.
---------------------------------------------------------------------------
\4\ Public Law 98-108, approved October 1, 1983; Public Law 98-207,
approved December 5, 1983; Public Law 98-222, approved February 29,
1984.
\5\ Public Law 99-64.
---------------------------------------------------------------------------
Export Administration Amendments Act of 1985
The 1985 Act left intact the basic structure of U.S.
national security, foreign policy, and short-supply export
controls. The main goals of the 1985 Act were to improve U.S.
export competitiveness and to promote national security
interests through stricter controls and better enforcement.
Increased U.S. competitiveness was to be achieved by easing
the total licensing burden on U.S. businesses. Export licensing
requirements were eliminated in the case of certain relatively
low-technology items, and the Secretary of Commerce was
directed to review and revise the commodity control list at
least once a year. The approval process for license
applications was to be streamlined as well. The 1985 amendments
also addressed the issue of foreign availability by specifying
a process to provide for the review and decontrol of goods
found to be widely available and unable to be brought under
control.
The promotion of national security interests was to be
achieved by providing stricter controls for the export of
critical items and strengthening the enforcement of U.S. export
controls. The 1985 Act required the United States to undertake
negotiations with COCOM countries to achieve greater
coordination and compliance with multilateral controls, fewer
exceptions to the control list, and strengthened and uniform
enforcement. It created new criminal offenses against illegal
diversions and added to the broad range of sanctions against
violators of U.S. export controls.
The Act also restrained the President's authority to impose
new foreign policy export controls, particularly to embargo
agricultural exports. Additional requirements for consultations
with industry and Congress prior to the imposition of foreign
policy controls and greater attention to specified criteria,
including the foreign availability of competing products, are
to be considered prior to decisons to extend, expand, or impose
export controls.
The 1985 Act also imposed limitations on, but did not
entirely eliminate, the discretion of the President to impose
foreign policy controls on exports subject to existing
contracts. The Act prohibits controls on exports of goods or
technology under existing contracts except where the President
determines and certifies to the Congress that a breach of the
peace poses a serious and direct threat to U.S. strategic
interests and the prohibition or curtailment of such contracts
would be instrumental in remedying the situation posing the
direct threat.
The Act set forth stiffer penalties for violators and
granted new powers for enforcement to the Department of
Commerce and the U.S. Customs Service and clarified the
respective roles of these agencies. Commerce retained the
primary responsibility for licensing and domestic enforcement
whereas Customs was given primary responsibility for
enforcement at all U.S. ports of exit and entry as well as all
enforcement responsibility overseas. The legislation itself was
silent on the controversial issue of the role and authority of
the Department of Defense in reviewing export license
applications for U.S. shipments to Western nations.
The Act created a new Under Secretary of Export
Administration and two Assistant Secretaries in the Department
of Commerce and a new National Security Council Office in the
Department of Defense. Congress also directed that an Office of
Foreign Availability be established in the Department of
Commerce.
Omnibus Trade and Competitiveness Act of 1988
Congressional dissatisfaction with the implementation of
the Export Administration Amendments Act of 1985 led to the
introduction of new legislation during both the 99th and 100th
Congresses. The Omnibus Trade and Competitiveness Act of 1988
\6\ contained major revisions of the Export Administration Act
of 1979. Like the 1985 amendments, the 1988 Act emphasized the
reduction of export disincentives and the strengthening of
export enforcement. A clarification of the dispute resolution
process was also a part of the Act. The authorization date for
the Export Administration Act was extended by 1 year to
September 30, 1990.
---------------------------------------------------------------------------
\6\ Public Law 100-418, title II, subtitle D, approved August 23,
1988.
---------------------------------------------------------------------------
The 1988 Act provided for the reduction of export
disincentives through a streamlining of licensing requirements,
control list reduction, and improved procedures for making
foreign availability determinations. The 1988 Act also provided
for the use of distribution licenses for multiple exports to
the People's Republic of China.
The 1988 Act provided for stronger enforcement of U.S. and
multilateral export controls.
In the case of persons convicted of violations of the
Export Administration Act of 1979 or the International
Emergency Economic Powers Act,\7\ the Department of Commerce
was authorized to bar such persons from applying for or using
export licenses. Such authority was also extended to parties
related through affiliation, ownership, control, or position of
responsibility to any person convicted of violations.
---------------------------------------------------------------------------
\7\ Public Law 95-223, approved December 28, 1977.
---------------------------------------------------------------------------
In response to the sale by Toshiba Machine Company of Japan
and Kongsberg Trading Company of Norway of advanced milling
machinery to the Soviet Union, the Congress passed the
Multilateral Export Control Enhancement Amendments Act.\8\
Section 2443 of that Act requires the President to impose, for
a period of 3 years, a ban on U.S. government contracting with
and procurement from the two cited companies and their parent
companies. That section also required the President to prohibit
the importation of all products produced by Toshiba Machine
Company and Kongsberg Trading Company for a period of 3 years.
The sanctions required by section 2443 were imposed by
President Reagan on December 27, 1988 \9\ and remained in
effect until December 28, 1991.
---------------------------------------------------------------------------
\8\ Public Law 100-418, sections 2441-2447, approved August 23,
1988.
\9\ Executive Order 12661, dated December 27, 1988; ``Implementing
the Omnibus Trade and Competitiveness Act of 1988 and Related
International Trade Matters.''
---------------------------------------------------------------------------
The Export Administration Act of 1979 expired on September
30, 1990. The 101st Congress passed legislation (H.R. 4653) to
reauthorize the Act, but the President exercised a pocket-veto
in November 1990. During the 102d Congress, the House and
Senate passed bills and produced a conference report
reauthorizing the Export Administration Act of 1979. The
conference report failed to be considered before the 102d
Congress adjourned sine die. Since September 30, 1990, the
President exercised the authorities provided in the
International Emergency Economic Powers Act to continue in
effect the existing system of export controls.
During the 103d Congress, the Export Administration Act was
extended twice. On March 27, 1994, Public Law 103-10, the
Export Administration Fiscal Year 1994 Authorization bill,
extended the Act through June 30, 1994.\10\ Public Law 103-277
provided for an additional extension until August 20, 1994 as
discussions between the Administration and the Congress
continued on revisions to the Act.\11\ Because the Congress did
not take final action on a revised Export Administration Act
before the close of the session, the President once again used
the International Emergency Economic Powers Act authorities to
continue the existing export control system. On August 19,
1994, President Clinton issued an executive order continuing
the export control regulations provided under the Act.\12\ The
President announced a continuation of the emergency on August
15, 1995 (60 Fed. Reg. 42,767) and again on August 14, 1996 (61
Fed. Reg. 42,527).
---------------------------------------------------------------------------
\10\ Public Law 103-10, approved March 27, 1994.
\11\ Public Law 103-277, approved July 5, 1994.
\12\ Executive Order 12924, dated August 19, 1994; ``Continuation
of Export Control Regulations.''
---------------------------------------------------------------------------
The President continued the national emergency on August
13, 1997 (62 Fed. Reg. 43,629), August 13, 1998 (63 Fed. Reg.
44,121), August 10, 1999 (64 Fed. Reg. 44,101), and August 3,
2000 (65 Fed. Reg. 48,347). On November 13, the President
signed into law an extension of the Export Administration Act
of 1979 until August 20, 2001.\13\
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\13\ Public Law 106-508.
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Export Promotion of Goods and Services
Export Enhancement Act of 1988
The Export Enhancement Act, enacted under title XXIII of
the Omnibus Trade and Competitiveness Act of 1988,\14\ includes
provisions which establish in statute the United States and
Foreign Commercial Service in the International Trade
Administration of the Department of Commerce. The basic purpose
of the Service is to promote the export of U.S. goods and
services, particularly by small- and medium-sized businesses,
and to promote and protect U.S. business interests abroad.
Section 2306 requires the Service to make a special effort to
encourage U.S. exports of goods and services to Japan, South
Korea, and Taiwan.
---------------------------------------------------------------------------
\14\ Public Law 100-418, approved August 23, 1988, 15 U.S.C. 4721
et seq.
---------------------------------------------------------------------------
Section 2303 authorizes the Secretary of Commerce to
establish a market development cooperator program in the
International Trade Administration to develop, maintain, and
expand foreign markets for U.S. non-agricultural goods and
services. The program is implemented through contracts with
non-profit industry organizations, trade associations, state
departments of trade and their regional associations, and
private industry firms or groups of firms (all referred to as
``cooperators''). The Secretary was also directed to establish,
as part of the program, a partnership program with cooperators
under which cooperators may detail individuals to the Service
for 1 to 2 years. This program is modeled after a similar
program established by the Foreign Agricultural Service in the
late 1950's to develop overseas commercial market opportunities
for American agricultural exports.
In order to facilitate exporting by U.S. businesses,
section 2304 requires the Secretary to provide assistance for
trade shows in the United States which bring together
representatives of U.S. businesses seeking to export goods or
services, particularly participation by small businesses, and
representatives of foreign companies or governments seeking to
buy such U.S. goods or services. Sections 2312 and 2313 added
to the Act made by title II of the Export Enhancement Act of
1992 \15\ expanded export promotion efforts. Section 2312
establishes in statute the Trade Promotion Coordinating
Committee (TPCC) and directs it to coordinate the export
promotion and export financing activities of the federal
government and to develop a governmentwide strategic plan for
carrying out federal export promotion and financing programs,
including establishment of priorities. The Chair of the TPCC
must submit an annual report to the Congress on the strategic
plan developed. Section 2313 states the U.S. policy to foster
the export of U.S. environmental technologies, goods, and
services, and establishes the Environmental Trade Promotion
Working Group within the TPCC for this purpose.
---------------------------------------------------------------------------
\15\ Public Law 102-429, approved October 21, 1992.
---------------------------------------------------------------------------
The Jobs Through Export Expansion Act of 1994 amended
section 2313 to provide for the establishment of an
environmental technologies trade advisory committee, including
representatives of the private sector and the states, to advise
the TPCC working group. The amendment also requires the working
group to develop export plans for five priority countries and
the placement of environmental technology specialists in each
of the priority countries.\16\
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\16\ Public Law 103-392, approved October 22, 1994, 15 U.S.C. 4701
note.
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Fair Trade in Auto Parts Act of 1988
The Fair Trade in Auto Parts Act of 1988, sections 2121-
2125 of the Omnibus Trade and Competitiveness Act of 1988,\17\
required the Secretary of Commerce to establish an initiative
to increase the sale of U.S.-made auto parts and accessories to
Japanese markets, including to U.S. subsidiaries of Japanese
firms. The Secretary also was required to establish a Special
Advisory Committee to advise and assist the Secretary in
carrying out the initiative to increase U.S. auto parts sales
in Japanese markets. The authorities granted under sections
2121-2125 expired on December 31, 1998.
---------------------------------------------------------------------------
\17\ Public Law 100-418, approved August 23, 1988, 15 U.S.C. 4701.
---------------------------------------------------------------------------
In response to low sales of U.S. auto parts and accessories
to Japanese auto firms based both in Japan and in the United
States, Congress adopted the Fair Trade in Auto Parts Act of
1988. This action followed negotiations in 1986-87 between the
U.S. and Japanese governments aimed at improving U.S. access to
the Japanese auto parts markets. The provision was intended to
provide for a longer-term effort to increase data collection,
information exchange, and generally improved U.S. market access
in the Japanese auto parts sector.\18\ The U.S.-Japan
Automotive Agreement expired on December 31, 2000.
---------------------------------------------------------------------------
\18\ Market Oriented Sector Specific Talks on Transportation
Machinery, initiated on August 26, 1986 and concluded on August 18,
1987.
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Agricultural Export Sales and Promotion
To help finance sales of U.S. farm commodities abroad, the
U.S. Department of Agriculture (USDA) administers several sales
and credit programs. These include the concessional sales
program under the authority of the Agricultural Trade
Development and Assistance Act of 1954, as amended, commonly
known as Public Law 480,\19\ and the commercial programs of the
Commodity Credit Corporation (CCC).
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\19\ Public Law 83-480, approved July 10, 1954, 7 U.S.C. 1701-
1736d.
---------------------------------------------------------------------------
Public Law 480
Public Law 480 was reauthorized through the end of 2002 by
the Federal Agriculture Improvement and Reform Act of 1996.\20\
Title I of Public Law 480 authorizes sales of U.S. agricultural
commodities to developing countries or private entities for
dollars on credit terms or for local currencies. Credit is
provided at concessional interest rates for repayment periods
up to 30 years. The Secretary of Agriculture may allow a grace
period of up to 5 years before repayment must begin. Title II
authorizes donations of U.S. agricultural commodities for
emergency humanitarian relief and for development projects.
Title II is implemented primarily through U.S. private
voluntary organizations or cooperatives and the United Nations
world food program. Title III authorizes donations to
governments of least developed countries for direct feeding
programs, emergency food reserves, and recipient government
sales which are used to finance economic development
activities. As a result of reforms made by Public Law 104-127,
USDA is responsible for administering title I, while the U.S.
Agency for International Development (USAID) is responsible for
administering titles II and III.
---------------------------------------------------------------------------
\20\ Public Law 104-127, approved April 4, 1996.
---------------------------------------------------------------------------
Export Credit Guarantee and Export Promotion Programs
USDA, using the resources of the Commodity Credit
Corporation (CCC), offers both commercial credit and export
promotion programs designed to maintain and expand overseas
markets for U.S. farm products.
In operating two export credit guarantee programs, the CCC
guarantees U.S. banks against defaults on payments due from
foreign banks on the agricultural export sales they finance.
Guarantees are made against political risks such as warfare,
expropriation, exchange controls, and other foreign government
actions, and against economic risks such as a foreign bank
failure or a country's debt repayment problems. The U.S. banks
deal directly with foreign purchasers to set loan repayment
terms and interest rates, but must meet certain requirements to
qualify for CCC guarantees.
The GSM-102 program guarantees credits for up to 3 years
for commercial export sales of U.S. agricultural commodities
from privately owned stocks. The GSM-103 program guarantees
credits for longer periods of 3 to 10 years. The Federal
Agriculture Improvement and Reform Act of 1996 (the ``farm
bill'') authorized the CCC to make available for each fiscal
year 1996 through 2002, $5.5 billion in credit guarantees. The
Secretary of Agriculture is given flexibility to allocate these
funds between short-term (up to 3 years) and intermediate-term
(3 to 10 years) guarantees. In addition, the farm bill
authorizes another $1 billion of export credit guarantees or
direct credits for fiscal years 1996 through 2002 for countries
that are classified as ``emerging markets.'' Emerging markets
are countries taking steps toward a market-oriented economy and
have potential to become viable commercial markets for U.S.
agricultural exports.\21\
---------------------------------------------------------------------------
\21\ Public Law 104-127, approved April 4, 1996.
---------------------------------------------------------------------------
Title III of the Agricultural Trade Act of 1978, as amended
by the Uruguay Round Trade Agreements Act of 1994 \22\ and the
1996 farm bill,\23\ authorizes the export enhancement program
(EEP).
---------------------------------------------------------------------------
\22\ Public Law 103-465, approved December 8, 1994, 19 U.S.C. 3501
note.
\23\ Public Law 104-127, approved April 4, 1996.
---------------------------------------------------------------------------
The EEP was first established by the Congress in the Food
Security Act of 1985 \24\ (the 1985 farm bill) to counter
foreign exporters' use of subsidies as a means of increasing
their agricultural exports. The Uruguay Round Agreements Act
revised the definition of the EEP ``to encourage the commercial
sale of U.S. agricultural commodities in world markets at
competitive prices.'' The Uruguay Round Agreements Act also
provided that EEP would be ``carried out in a market sensitive
manner'' and ``not limited to responses to unfair trade
practices.'' \25\ Under EEP, the CCC makes cash bonuses
available to private U.S. exporters on a bid basis to
compensate them for making competitively-priced sales in
overseas markets. The 1996 farm bill reauthorized EEP for
fiscal years 1996 through 2002 and set annual maximum spending
levels: $350 million in fiscal year 1996; $250 million in
fiscal year 1997; $500 million in fiscal year 1998; $550
million in fiscal year 1999; $579 million in fiscal year 2000;
and $478 million annually in fiscal years 2001 and 2002.
---------------------------------------------------------------------------
\24\ Public Law 99-198, approved December 23, 1985.
\25\ Public Law 103-465, approved December 8, 1994, 7 U.S.C. 5601
note.
---------------------------------------------------------------------------
The CCC also administers the market access program (MAP) in
order to ``encourage the development, maintenance, and
expansion of commercial export markets for agricultural
commodities through cost-share assistance to eligible trade
organizations that implement a foreign market development
program.'' The MAP was established under the 1996 farm bill as
the successor to the market promotion program (MPP) authorized
by the 1990 farm bill. MPP had replaced the targeted export
assistance program (TEA) of the Food Security Act of 1985.
Unlike the TEA, priority is no longer accorded to exports which
encounter unfair trade practices or barriers in foreign
markets.
Chapter 5: AUTHORITIES RELATING TO POLITICAL OR ECONOMIC SECURITY
International Emergency Economic Powers Act
In 1977, Congress passed the International Emergency
Economic Powers Act (IEEPA).\1\ The Act grants the President
authority to regulate a comprehensive range of financial and
commercial transactions in which foreign parties are involved
but allows the President to exercise this authority only in
order ``to deal with an unusual and extraordinary threat, which
has its source in whole or in part outside the United States,
to the national security, foreign policy, or economy of the
United States, if the President declares a national emergency .
. . with respect to such threat.''
---------------------------------------------------------------------------
\1\ Public Law 95-223, title II, approved December 28, 1977, 91
Stat. 1626, 50 U.S.C. 1701-1706.
---------------------------------------------------------------------------
Background
Public Law 95-223, of which IEEPA constitutes title II,
redefined the President's authorities to regulate international
economic transactions in times of national emergency as well as
war, until then provided by section 5(b) of the Trading With
the Enemy Act (TWEA) (50 App. U.S.C. 5(b)), by eliminating
TWEA's applicability to national emergencies \2\ and instead
providing such authorities in a separate statute of somewhat
narrower scope and subject to congressional review.
---------------------------------------------------------------------------
\2\ Title I of Public Law 95-223 also provides for the continuation
in force, through annual presidential extensions, of certain measures
implemented on the basis of national emergencies declared under the
TWEA. For further detail, see section on the Trading With the Enemy
Act.
---------------------------------------------------------------------------
The authorities granted to the President under IEEPA
broadly parallel those contained in section 5(b) of the TWEA
but are somewhat fewer and more circumscribed. While under the
TWEA the existence of any declared national emergency, whether
or not connected with the circumstances requiring emergency
action, was used as the basis for such action, the IEEPA allows
emergency measures against an external threat only if a
national emergency has been declared with respect to the same
threat. Furthermore, certain authorities contained in the TWEA
and still applicable in times of war are not included in the
IEEPA, such as the powers to vest foreign property, to regulate
purely domestic transactions, to regulate gold or bullion, or
to seize records. Nevertheless, the President's authorities
under the IEEPA still remain extensive. The President may ``by
means of instructions, licenses, or otherwise . . .
investigate, regulate, prevent, or prohibit'' virtually any
foreign economic transaction, from import or export of goods
and currency to transfer of exchange or credit. The only
international transactions exempted from this authority are
personal communications not involving a transfer of anything of
value, charitable donations of necessities of life to relieve
human suffering (except in certain circumstances), transactions
in publications or various other informational materials not
otherwise controlled by export control law or prohibited by
espionage law, or personal transactions ordinarily incident to
travel.
IEEPA requires the President to consult with Congress,
whenever possible before declaring a national emergency, and
while it remains in force. Once a national emergency goes into
effect, the President must submit to Congress a detailed report
explaining and justifying his actions and listing the countries
against which such actions are to be taken, and why.
Application
Since its enactment, the authority conferred by the IEEPA
has been exercised on several occasions and for different
purposes: to impose a variety of economic sanctions on foreign
countries and to continue in force the authority of the Export
Administration Act during several periods when statutory
authority has lapsed.
In response to the seizure of the American Embassy and
hostages in Teheran, President Carter, using the IEEPA
authority, on November 14, 1979, declared a national emergency
and ordered the blocking of all property of the government of
Iran and of the Central Bank of Iran within the jurisdiction of
the United States.\3\ The measure and its later amendments were
implemented through Iranian Assets Control Regulations (31 CFR
535). Sanctions against Iran were broadened on April 7,
1980,\4\ and April 17, 1980,\5\ to constitute eventually an
embargo on all commercial, financial, and transportation
transactions with Iran, with minimal exceptions. The trade
embargo was revoked by President Carter on January 19, 1981,
after the release of the Teheran hostages, but the national
emergency has remained in effect and has been extended every
year since.\6\
---------------------------------------------------------------------------
\3\ Executive Order 12170, November 14, 1979, 44 Fed. Reg. 65,729.
\4\ Executive Order 12205, April 7, 1980, 45 Fed. Reg. 24,099.
\5\ Executive Order 12211, April 27, 1980, 45 Fed. Reg. 26,685.
\6\ Following Iranian attacks on U.S. flag ships in the Iran-Iraq
war, an embargo was reimposed on October 29, 1987 (Executive Order
12613, 52 Fed. Reg. 41,940), on imports of goods and services from Iran
under the authority of section 505 of the International Security and
Development Cooperation Act of 1985 (22 U.S.C. 2349aa-9) and
implemented through Iranian Transactions Regulations (31 CFR part 560).
The embargo is still in force.
---------------------------------------------------------------------------
President Clinton invoked his authority under IEEPA and
other statutes on March 15, 1995 to prohibit the entry of any
U.S. person or any entity controlled by a U.S. person into a
contract involving the financing or overall supervision and
management of the development of the petroleum resources
located in Iran.\7\ The President imposed additional sanctions
on May 8, 1995.\8\ The sanctions were than amended in 1997.\9\
---------------------------------------------------------------------------
\7\ Executive Order 12957, March 15, 1995, 60 Fed. Reg. 14,615.
\8\ Executive Order 12959, May 6, 1995, 60 Fed. Reg. 24,757. See
also discussion on the Iran and Libya Sanctions Act of 1996.
\9\ Executive Order 13059 (62 Fed. Reg. 44,531); 34 Weekly Comp.
Pres. doc. 2324 (Nov. 16, 1998); 31 C.F.R. Part 560.
---------------------------------------------------------------------------
On May 1, 1985, President Reagan, under his IEEPA powers,
declared a national emergency because of the ``Nicaraguan
government's aggressive activities in Central America'' and
prohibited all imports of Nicaraguan goods and services, all
exports to Nicaragua (other than those destined for the
organized democratic resistance) and transactions related
thereto, and all activities of Nicaraguan ships and aircraft at
U.S. sea- and airports.\10\ The declaration of emergency and
the imposed sanctions were terminated on March 13, 1990.\11\
---------------------------------------------------------------------------
\10\ Executive Order 12513, May 1, 1985, 50 Fed. Reg. 18,629. The
embargo is implemented by Nicaraguan Trade Control Regulations (31 CFR
part 540).
\11\ Executive Order 12707, March 13, 1990, 55 Fed. Reg. 9,707.
---------------------------------------------------------------------------
IEEPA was also used by President Reagan to declare a
national emergency with respect to South Africa because of its
``policy and practice of apartheid'' and impose, using also
several other authorities, effective on October 11, 1985, an
embargo on certain trade (including specifically the
importation of krugerrands) and financial transactions with the
government of South Africa.\12\ The embargo, implemented
through South African Transactions Regulations (31 CFR 545),
was later greatly expanded, and additional economic sanctions
were imposed by the Comprehensive Anti-Apartheid Act of
1986,\13\ upon the enactment of which the President allowed the
declaration of the South African emergency to expire.\14\
---------------------------------------------------------------------------
\12\ Executive Order 12532, September 9, 1985, 50 Fed. Reg. 36,861;
Executive Order 12535, October 1, 1985, 50 Fed. Reg. 40,325.
\13\ Public Law 99-440, approved October 2, 1986, 100 Stat. 1086,
22 U.S.C. 5001 et seq.
\14\ Weekly Compilation of Presidential Documents, v. 23, no. 36,
September 14, 1987, p. 997.
---------------------------------------------------------------------------
Under the South African Democratic Transition Support Act
of 1993, Congress repealed certain sections of the
Comprehensive Anti-Apartheid Act and provided for the total
repeal of the Act upon certification by the President that an
interim government, elected on a non-racial basis through free
and fair elections, had taken office in South Africa.\15\
President Clinton sent such certification to Congress on June
8, 1994.\16\
---------------------------------------------------------------------------
\15\ Public Law 103-149, approved November 23, 1993, 22 U.S.C. 5001
note.
\16\ Message to the Congress on Elections in South Africa, 30
Weekly Compilation of Documents 1258 (June 8, 1994).
---------------------------------------------------------------------------
President Reagan similarly used the IEEPA authority, among
several others, to impose economic sanctions on Libya because
of Libyan-supported terrorist attacks on the Rome and Vienna
airports. On January 7, 1986, he declared a national emergency
and prohibited all trade (with minimal exceptions) and
transportation transactions with Libya, extension of credit to
the Libyan government, and personal travel to or within
Libya.\17\ On the following day, he ordered the blocking of all
property and interests of the Libyan government and its
instrumentalities in the United States.\18\ These measures are
implemented by Libyan Sanctions Regulations (31 CFR 550). The
emergency with respect to Libya and the sanctions were extended
annually.\19\
---------------------------------------------------------------------------
\17\ Executive Order 12543, January 7, 1986, 51 Fed. Reg. 875.
\18\ Executive Order 12544, January 8, 1986, 51 Fed. Reg. 1,235.
\19\ 35 Weekly Comp. Pres. Doc. 1415 (July 19, 1999). See also the
discussion concerning the Iran and Libya Sanctions Act of 1996.
---------------------------------------------------------------------------
Again, on April 8, 1988, under the IEEPA authority,
President Reagan declared a national emergency with respect to
Panama and ordered the imposition of economic sanctions on that
country \20\ because of ``the actions of Manuel Antonio Noriega
and Manuel Solis Palma, to challenge the duly constituted
authorities of the government of Panama.'' The order involved
the blocking of all property and interests of the government of
Panama, including all its agencies and instrumentalities and
controlled entities, that are or may come within the United
States. The blocking applies specifically to payments of
transfers of any kind or financial transactions for the benefit
of the Noriega-Solis regime from the United States or by any
physical or legal U.S. person located in Panama. The order,
implemented through Panamanian Transactions Regulations (31 CFR
565), was revoked on April 5, 1990.\21\
---------------------------------------------------------------------------
\20\ Executive Order 12635, April 8, 1988, 53 Fed. Reg. 12,134.
\21\ Executive Order 12710, April 5, 1990, 55 Fed. Reg. 13,099.
---------------------------------------------------------------------------
On August 2, 1990, in response to the Iraqi invasion of
Kuwait, President Bush, under section 204(b) of the IEEPA,
declared a national emergency, blocked Iraqi and Kuwaiti
government property and prohibited all transactions with Iraq,
except exports and imports of informational materials and
donations to relieve human suffering.\22\ Additional
restrictions, including a prohibition of all transactions with
Kuwait, were imposed a week later. Regulations implementing the
restrictions were promulgated with respect to Kuwait on
November 30, 1990, and with respect to Iraq on January 18,
1991.\23\ While Kuwaiti sanctions were revoked after the
liberation of Kuwait,\24\ the Iraqi national emergency and
Iraqi sanctions remain in force.
---------------------------------------------------------------------------
\22\ Executive Order 12722 and 12723, August 2, 1990, 55 Fed. Reg.
31,803 and 31,805.
\23\ Kuwaiti Assets Control Regulations, 55 Fed. Reg. 49,856, 31
CFR 570; Iraqi Sanctions Regulations, 56 Fed. Reg. 2,112, 31 CFR 575.
\24\ Executive Order 12771, July 25, 1991, 56 Fed. Reg. 35,993.
---------------------------------------------------------------------------
President Bush also used his authority under the IEEPA and
other acts to declare a national emergency on November 16, 1990
with respect to the threat posed to the national security and
foreign policy of the United States by the proliferation of
chemical and biological weapons.\25\ Under this declaration,
the President ordered that trade sanctions be imposed against
foreign persons determined by the Secretary of State as having
used or made substantial preparations to use chemical or
biological weapons in violation of international law. This
order was implemented under the Export Administration
Regulations on Proliferation Controls.\26\ The national
emergency was expanded by President Clinton to include the
proliferation of nuclear weapons on November 14, 1994 \27\ and
on July 28, 1998.\28\
---------------------------------------------------------------------------
\25\ Executive Order 12735, November 16, 1990, 55 Fed. Reg. 48,587.
\26\ 15 CFR part 778.
\27\ Executive Order 12938, November 14, 1994, 59 Fed. Reg. 59,099.
\28\ Executive Order 13094 (63 Fed. Reg. 40,803); 31 C.F.R. Part
539.
---------------------------------------------------------------------------
President Bush used his authority under IEEPA and other
acts on October 4, 1991 to declare a national emergency with
respect to the illegal seizure of power from the democratically
elected government of Haiti.\29\ Under this declaration, all
property and interests of the de facto regime in Haiti were
blocked. The order was expanded by the President on October 28,
1991 to prohibit trade and other transactions with Haiti.\30\
These measures were subsequently implemented by the Haitian
Transactions Regulations.\31\ After the signing of the
Governors Island Agreement on July 3, 1993, U.S. trade
restrictions against Haiti were suspended, and new financial
and other transactions with the government of Haiti were
authorized consistent with U.N. Security Council Resolution
861. The rule, however, did not unblock property of the
government of Haiti that was blocked before August 30, 1993.
Due to the failure of the de facto regime in Haiti to fulfill
its obligations under the Governors Island Agreement, the
restrictions against trade, as well as financial and other
transactions, with Haiti were reimposed on October 19,
1993.\32\ In response to the restoration of the democratically
elected government of Haiti, President Clinton terminated the
national emergency on October 14, 1994.\33\
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\29\ Executive Order 12775, October 4, 1991, 56 Fed. Reg. 50,641.
\30\ Executive Order 12779, October 28, 1991, 56 Fed. Reg. 55,975.
\31\ 31 CFR part 580.
\32\ Presidential Notice of September 30, 1993 (58 Fed. Reg.
51,563); Haitian Transactions Regulations, 31 CFR part 580.
\33\ Executive Order 12932, October 14, 1994, 59 Fed. Reg. 52,403.
---------------------------------------------------------------------------
In response to the involvement of Serbia and Montenegro
with groups attempting to seize territory in Croatia and
Bosnia-Hercegovina, President Bush declared a national
emergency under the IEEPA and other authorities on May 30,
1992, blocking all property and interests of the governments of
Serbia and Montenegro in the United States.\34\ Additional
orders were later issued by the President to prohibit trade and
other transactions with Serbia and Montenegro.\35\ The orders
were implemented in the Federal Republic of Yugoslavia (Serbia
and Montenegro) Sanctions Regulations (31 CFR 585). The
emergency with respect to Serbia and Montenegro was most
recently extended by the President on May 25, 1994, and was
expended in scope on October 25, 1994 to include the Bosnian
Serb military and the areas of the Republic of Bosnia and
Herzegovina under the control of those forces.\36\ In response
to this situation and the crisis in Kosovo, President Clinton
issued additional Executive orders, most recently on January
17, 2001.\37\
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\34\ Executive Order 12808, May 30, 1992, 57 Fed. Reg. 23,299.
\35\ Executive Order 12810, June 5, 1992, 57 Fed. Reg. 24,347;
Executive Order 12831, January 15, 1993, 58 Fed. Reg. 5,253; Executive
Order 13121.
\36\ Presidential Notice of May 25, 1994 (59 Fed. Reg. 27,429);
Executive Order 12934, October 25, 1994, 59 Fed. Reg. 54,119.
\37\ Executive Order 13192 (66 Fed. Reg. 7379).
---------------------------------------------------------------------------
On September 26, 1993, President Clinton declared a
national emergency under the IEEPA and other acts with respect
to the actions and policies of the National Union for the Total
Independence of Angola (UNITA).\38\ As a result of this
emergency, the President's order prohibited the sale or supply
of arms and related material or petroleum and petroleum
products to Angola, except through designated points of entry.
These restrictions, implemented by the UNITA (Angola) Sanctions
Regulations, were most recently extended by the President on
August 18, 1998.\39\
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\38\ Executive Order 12865, September 26, 1993, 58 Fed. Reg.
51,005.
\39\ UNITA (Angola) Sanctions Regulations, 58 Fed. Reg. 64,904, 31
CFR part 590; Executive Order 13098 (63 Fed. Reg. 44,771).
---------------------------------------------------------------------------
President Clinton also invoked his authority under the
IEEPA and other acts to declare a national emergency on January
23, 1995 with respect to the disruption of the Middle East
peace process by foreign terrorists.\40\ In this declaration,
the President prohibited all transactions with persons
designated by the Secretary of State, in coordination with the
Secretary of the Treasury and the Attorney General, as having
committed or posing a significant risk of committing acts of
violence to disrupt the Middle East peace process.
---------------------------------------------------------------------------
\40\ Executive Order 12947, January 23, 1995, 60 Fed. Reg. 5,079.
---------------------------------------------------------------------------
On July 4, 1999, President Clinton used his IEEPA authority
against the Taliban in Afghanistan.\41\
---------------------------------------------------------------------------
\41\ Executive Order 13129 (64 Fed. Reg. 36,750). The President
continued the emergency on July 5, 2000 (65 Fed. Reg. 41,549).
---------------------------------------------------------------------------
President Clinton also issued IEEPA declarations with
respect to Burma's repression of democratic oppression
(Executive Order 13047 (62Fed. Reg. 28,301)) and the
accumulation of weapons-usable fissile material by the Russian
Federation (Executive Order 13159 (65 Fed. Reg. 39,279). On
November 3, 1997, the President declared a national emergency
under IEEPA with respect to Sudan because of its support for
international terrorism, ongoing efforts to destablize
neighboring governments, and the prevalence of human rights
violations.\42\ That determination was continued.\43\
---------------------------------------------------------------------------
\42\ Executive Order 13067 (62 Fed. Reg. 59,989).
\43\ 65 Fed. Reg. 66,163 (November 2, 2000).
---------------------------------------------------------------------------
Just as with the TWEA, the IEEPA authority also has been
used on several occasions to continue in force the
administration of export controls when extensions of the Export
Administration Act of 1979 (EAA) have not been enacted in time
to continue the export control authority in force by statutory
extension. Upon the expiration of the EAA on October 15, 1983,
President Reagan used the IEEPA authority to declare a national
emergency and to continue in force the existing regulations for
the administration of export controls.\44\ After the EAA was
temporarily extended by law \45\ retroactively to October 15,
1983, and through February 29, 1984, the President revoked its
extension under the IEEPA and rescinded the declaration of
economic emergency.\46\ On February 29, 1984, the EAA was again
extended by law \47\ through March 30, 1984, when the authority
for administering the export control provisions again had to be
extended by the President under the IEEPA authority upon the
declaration of a national economic emergency.\48\ The extension
and the declared emergency remained in force during the
protracted, if unsuccessful, House-Senate attempts at resolving
the disagreements on the reauthorization of the EAA during the
98th Congress and in the 99th Congress until July 12, 1985,
when the EAA was again extended by law,\49\ the executive
extension of export controls was revoked and the emergency
rescinded.\50\ The President invoked the IEEPA authority on
September 30, 1990 to maintain existing export controls upon
expiration of the EAA on that date, pending enactment of
further reauthorizing legislation.
---------------------------------------------------------------------------
\44\ Executive Order 12444, October 14, 1983, 48 Fed. Reg. 48,215.
\45\ Public Law 98-207, approved December 5, 1983, 97 Stat. 1391.
\46\ Executive Order 12451, December 20, 1983, 48 Fed. Reg. 56,563.
\47\ Public Law 98-222, approved February 29, 1984, 98 Stat. 36.
\48\ Executive Order 12470, March 30, 1984, 49 Fed. Reg. 13,099.
\49\ Export Administration Act of 1979, Reauthorization; Public Law
99-64, approved July 12, 1985, 99 Stat. 120.
\50\ Executive Order 12525, July 12, 1985, 50 Fed. Reg. 28,757.
---------------------------------------------------------------------------
The 1990 extension of the export control authority under
the IEEPA was maintained in force by means of annual
continuations of the export control emergency until legislation
was passed in the 106th Congress.\51\
---------------------------------------------------------------------------
\51\ Most recently by Presidential Notice of August 15, 1996 (61
Fed. Reg. 42,527).
---------------------------------------------------------------------------
Congress has passed legislation that would apply IEEPA
authority in the case of trafficking in persons.\52\
---------------------------------------------------------------------------
\52\ Section 111 of Public Law 106-386, approved October 28, 2000.
---------------------------------------------------------------------------
Trading With the Enemy Act
The Trading With the Enemy Act \53\ (TWEA) prohibits trade
with any enemy or ally of an enemy during time of war. From
enactment in 1917 until 1977, the scope of the authority
granted to the President under this Act was expanded to provide
the statutory basis for control of domestic as well as
international financial transactions and was not restricted to
trading with ``the enemy.'' In response to the use of the Act's
authority under section 5(b) during peacetime for domestic
purposes that were often unrelated to a preexisting declared
state of emergency, Congress amended the Act in 1977. In 1977
Congress removed from the TWEA the authority of the President
to control economic transactions during peacetime
emergencies.\54\ Similar authorities, though more limited in
scope and subject to the accountability and reporting
requirements of the National Emergencies Act,\55\ were
conferred upon the President by the International Emergency
Economic Powers Act, enacted in 1977 as title II of Public Law
95-223.\56\ Presidential authority during wartime to regulate
and control foreign transactions and property interests were
retained under the Trading With the Enemy Act. In addition, the
1977 legislation authorized the continuation of various foreign
policy controls implemented under the Trading With the Enemy
Act, such as trade embargoes and foreign assets controls. The
retention of such existing controls, however, was made subject
to 1-year extensions conditioned upon a presidential
determination that the extension is in the national interest.
---------------------------------------------------------------------------
\53\ Public Law 65-91, approved October 6, 1917, ch. 106, 40 Stat.
411, 50 App. U.S.C. 1-44.
\54\ Public Law 95-223, title I, approved December 28, 1977.
\55\ The National Emergencies Act provided a statutory role for
Congress in the declaration and termination of national emergencies.
Public Law 94-412, approved September 14, 1976, 90 Stat. 1255, 50
U.S.C. 1601 et seq.
\56\ See discussion of International Emergency Economic Powers Act,
supra.
---------------------------------------------------------------------------
Background
The Trading With the Enemy Act was passed in 1917 ``to
define, regulate, and punish trading with the enemy.'' The Act
was designed to provide a set of authorities for use by the
President in time of war declared by Congress. In its original
19 sections, the TWEA provided general prohibitions against
trading with the enemy; authorized the President to regulate
and prohibit international economic transactions by means of
license or otherwise; established an office to administer U.S.-
held foreign property; and set up procedures for claims to such
property by non-enemy persons, among other provisions. The
original 1917 Act appeared not to authorize the control of
domestic transactions and limited its use to wartime
exigencies.
Over the years, through use and amendment of section 5(b),
the basic authorizing provision, the scope of presidential
actions under the TWEA was greatly expanded. First, the Act was
expanded to control domestic as well as international
transactions. Second, the authorities of the Act were used to
apply to presidentially declared periods of ``national
emergency'' as well as war declared by Congress. From 1933,
when Congress retroactively approved President Roosevelt's
declaration of a national banking emergency by expanding the
use of section 5(b) to include national emergencies, until
1977, when Congress amended section 5(b) by passage of title I
of Public Law 95-223, the President was authorized in time of
war or national emergency to:
(1) regulate or prohibit any transaction in foreign
exchange, any banking transfer, and the importing or
exporting of money or securities;
(2) prohibit the withdrawal from the United States of
any property in which any foreign country or national
has an interest;
(3) vest, or take title to, any such property; and
(4) use such property in the interest and for the
benefit of the United States.
The Trading With the Enemy Act did not provide a statement
of findings and standards to guide the administration of
section 5(b). There was no provision in the Act for
congressional participation or review or for presidential
reporting at specified periods for actions undertaken under
section 5(b). There was no fixed time period for terminating a
state of emergency. Nor was there any practical constraint on
limiting actions taken under emergency authority to measures
related to the emergency.
Application
By 1977 a state of national emergency had been declared by
the President on four occasions and left unrescinded. In 1933
President Roosevelt declared a national emergency to close the
banks temporarily and to issue emergency banking regulations.
In 1950 President Truman declared a national emergency in
connection with the Korean conflict. President Nixon declared a
national emergency in 1970 to deal with the Post Office strike
and another in 1971 based on the balance-of-payment crisis. As
one measure to remedy this crisis, President Nixon at the same
time imposed an import surcharge without specifically referring
to section 5(b), but later did take recourse to it as an
additional authority when the action was challenged in
court.\57\
---------------------------------------------------------------------------
\57\ In mid-1974, the U.S. Customs Court found the President's
action unconstitutional with respect to all invoked authorities, but
this decision was later reversed on appeal with respect to section
5(b). U.S. v. Yoshida International, 526, F.2d 560 (C.C.P.A. 1975). The
surcharge was terminated after having been in force for somewhat over 4
months, long before the lower court's decision.
---------------------------------------------------------------------------
Based on these states of emergency, Presidents have used
the powers of section 5(b) to deal with a number of varied
events. In 1940 and 1941, President Roosevelt used section 5(b)
to freeze the U.S.-held assets of the Axis powers and countries
occupied by them to prevent their falling into the hands of the
enemy powers. In August 1941, President Roosevelt, under
section 5(b) authority, ordered the imposition of consumer
credit controls by the Federal Reserve Board as an anti-
inflationary measure. These executive uses by President
Roosevelt were retroactively ratified by Congress.
The 1950 Korean emergency has been used in conjunction with
section 5(b) powers for a wide range of controls among them the
imposition of a total embargo on transactions with China and
North Korea in December 1950 which was extended to North
Vietnam in May 1964 and to Cambodia and South Vietnam in April
1975.\58\ In 1968, President Johnson, citing the authority of
section 5(b) and the continued existence of the 1950 emergency,
imposed foreign direct investment controls on U.S. investors.
These controls remained in effect until they were eliminated by
legislation in 1974. During the period 1969 through 1976,
Presidents have invoked the 1950 and 1971 emergencies to extend
temporarily export control regulations.
---------------------------------------------------------------------------
\58\ In mid-1971, trade embargo on China was in practice lifted,
and on January 31, 1980, the applicability of any restrictive measures
imposed under section 5(b) was terminated with respect to China (45
Fed. Reg. 7,224).
---------------------------------------------------------------------------
Four sets of regulations controlling international
transactions with specific countries, imposed under the former
national emergency authority of section 5(b) and during the
Korean national emergency, were promulgated pursuant to the 1-
year extension authority of title I of Public Law 95-223.
First, under the Foreign Assets Control Regulations, virtually
all transactions between the United States and North Korea,
Vietnam, and Cambodia were prohibited unless licensed by the
Department of the Treasury. The regulations also blocked all
assets of those countries held in the United States.
Recently, however, the embargo with respect to Cambodia and
Vietnam was lifted and the property of these countries in the
United States was unblocked.\59\ Also, on October 21, 1994, the
United States and North Korea agreed, in the context of broader
negotiations, to begin reducing barriers to trade and
investment. Based on these mutual commitments, a limited number
of restrictions under the embargo against North Korea were
lifted.\60\
---------------------------------------------------------------------------
\59\ Foreign Assets Control Regulations; Unblocking of Cambodian
Assets, 59 Fed. Reg. 60,558, 31 CFR part 500; Foreign Assets Control
Regulations, Unblocking of Vietnamese Assets, 60 Fed. Reg. 12,885, 31
CFR part 500.
\60\ Foreign Assets Control Regulations, North Korean Travel and
Financial Transactions; Information and Informational Materials, 60
Fed. Reg. 8,933, 31 CFR part 500.
---------------------------------------------------------------------------
Second, the Cuban Assets Control Regulations,\61\ based on
section 5(b) as well as on foreign assistance legislation, (see
also section on Embargo on transactions with Cuba) impose a
similar ban on virtually all transactions with Cuba.
---------------------------------------------------------------------------
\61\ 31 CFR part 515.
---------------------------------------------------------------------------
Third, Transaction Control Regulations,\62\ prohibiting any
person within the United States \63\ from engaging in any trade
or trade-financing transaction involving transfer of strategic
commodities from a foreign country to a Communist country
(still including formerly Communist countries), are also based
on section 5(b) of the Trading With the Enemy Act.
---------------------------------------------------------------------------
\62\ 31 CFR part 505.
\63\ Any ``person within the United States'' includes foreign
subsidiaries of U.S. firms.
---------------------------------------------------------------------------
Fourth, the wartime anti-Axis Foreign Funds Control
Regulations,\64\ issued under the authority of section 5(b),
are still in effect. The regulations continue to block the
assets of Estonia, Latvia, and Lithuania pending the settlement
of claims by U.S. citizens for compensation of property
confiscated after the war by the Soviet governments.
---------------------------------------------------------------------------
\64\ 31 CFR part 520.
---------------------------------------------------------------------------
Narcotics Control Trade Act
The Drug Enforcement, Education, and Control Act of 1986
\65\ contains a number of measures to respond to the serious
problem of illegal drug smuggling into the United States and
the growing threat of foreign sourced drug production. Among
these measures are revisions to many basic customs laws to
deter illegal drug imports and to increase enforcement
capabilities of the U.S. Customs Service against drug traffic.
---------------------------------------------------------------------------
\65\ Public Law 99-570, approved October 27, 1986.
---------------------------------------------------------------------------
Title IX of the Act amended the Trade Act of 1974 by adding
title VIII, entitled the ``Narcotics Control Trade Act,'' to
create new authority for the President to take appropriate
trade actions as of March 1 of each year against uncooperative
major drug-producing or drug-transit countries. Section 806 of
the Foreign Relations Authorization Act, Fiscal Years 1988 and
1989,\66\ and section 4408 of the Anti-Drug Abuse Act of 1988
\67\ expanded the sanctions available and the critieria for
determining and certifying that a country has cooperated fully
with the United States. Similar criteria apply under the
Foreign Assistance Act of 1961 for denying foreign aid to
uncooperative countries.
---------------------------------------------------------------------------
\66\ Public Law 100-204, approved December 22, 1987, 19 U.S.C.
2492.
\67\ Public Law 100-690, approved November 18, 1988.
---------------------------------------------------------------------------
For every major drug-producing or drug-transit country, the
President is required to deny to any or all of its products
preferential tariff treatment under the Generalized System of
Preferences (GSP), the Caribbean Basin Initiative (CBI), or any
other law; to raise or impose duties of up to 50 percent ad
valorem on any or all of its products; to suspend air carrier
transportation to or from the United States and the country and
to terminate any air service agreement with the country; to
withdraw U.S. personnel and resources from participating in any
arrangement with the country for customs preclearance; or to
take any combination of these actions considered necessary to
achieve the objectives of the Act.
Such sanctions do not apply if the President determines and
certifies to the Congress, at the time the annual report
required by section 481(e) of the Foreign Assistance Act of
1961 or section 489A after September 30, 1994 is submitted,
that during the previous year the country has cooperated fully
with the United States or has taken adequate steps on its own:
(1) in satisfying goals agreed to in a bilateral or
multilateral narcotics agreement with the United States; (2) in
preventing illegal drugs from being sold illegally to U.S.
government personnel or their dependents or from being
transported into the United States; (3) in preventing and
punishing the laundering of drug-related profits or monies; and
(4) in preventing and punishing bribery and other public
corruption which facilitate production, processing, or shipment
of illegal drugs.
A country that would not otherwise qualify for
certification may be exempted from sanctions if the President
determines and certifies to the Congress that the vital
national interests of the United States require that sanctions
not be applied. A country designated as a major drug-producing
or drug-transit country in the previous year may not be
determined to be cooperating fully unless it has in place a
bilateral or multilateral narcotics agreement.
The Congress may disapprove the President's determination
and require the application of sanctions through enactment of a
joint resolution within 45 legislative days. Actions remain in
effect until the President submits a certification of
cooperation and Congress does not enact a joint resolution of
disapproval within 45 legislative days.
In addition, section 803 prohibits the President from
allocating any quota for imports of sugar to any country which
has a government involved in illegal drug trade or which is
failing to cooperate with the United States in narcotics
enforcement activities.
The Urgent Assistance for Democracy in Panama Act of 1990
\68\ deemed the conditions under the Narcotics Control Trade
Act to have been satisfied by Panama, because of U.S. vital
national interests and because the Endara government had
indicated its willingness and was taking steps to cooperate
fully with the United States to control narcotics production,
trafficking, and money laundering. Consequently, GSP and CBI
trade benefits removed under the Noriega regime by presidential
proclamation on March 23, 1988 were restored to the new
government of Panama.
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\68\ Public Law 101-243, approved February 14, 1990, section 103.
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The International Security and Development Cooperation Act of 1985
Section 505 of the International Security and Development
Act of 1985 \69\ gives the President discretionary authority to
restrict or ban imports from any country which the United
States determines ``supports terrorism or terrorist
organizations or harbors terrorists or terrorist
organizations.'' The section requires advance consultations
with Congress before invoking the authority and a semi-annual
report to Congress with respect to actions taken since the last
report and any changes which may have occurred since the last
report. Section 504 of the Act gives the President specific
authority to prohibit all imports to the United States from
Libya or the export to Libya of any goods or technologies
subject to U.S. jurisdiction.
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\69\ Public Law 99-83, approved August 8, 1985, 22 U.S.C. 2349 aa-
8, aa-9.
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The Iran and Libya Sanctions Act of 1996
U.S. imports of goods and services of Iran have been
prohibited since 1987. In May 1993 President Clinton
articulated a policy of ``dual containment'' of Iran and Iraq.
Administration officials said that Iran needed to be isolated
because of its: (1) support for international terrorism; (2)
efforts to undermine the Arab-Israeli peace process; (3)
attempts to subvert other governments in the Middle East; (4)
programs to develop weapons of mass destruction; and (5) poor
human rights record. On March 15, 1995, the President declared
a national emergency to respond to Iran's actions and policies
and issued an executive order prohibiting U.S. persons from
entering contracts to finance or manage Iran's petroleum
resources.
On April 30, 1995, after an internal policy review found
that continued trade with Iran was undermining U.S. efforts to
isolate Iran, President Clinton announced that he would impose
significant new economic sanctions on Iran. Executive Order
12959, issued May 8, prohibits trade in goods, services, or
technology with Iran, re-export to Iran of U.S. goods or
technology from third countries controlled for export, as well
as any financing, loans, or related services for trade with
Iran. New investment is also prohibited in Iran. The
prohibitions also apply to foreign branches of U.S. companies.
However, the ban provides for the licensing of crude oil swap
arrangements with Iran in the Caspian Sea and Central Asia, and
does not prohibit the importation to the United States of
Iranian oil that is refined outside Iran.
Out of a concern that the trade ban did not succeed in
shifting international attitudes toward Iran, the President
signed the Iran and Libya Sanctions Act \70\ on August 5, 1996,
which mandates sanctions against foreign investment in the
petroleum sectors of Iran and Libya as well as exports of
weapons, oil equipment, and aviation equipment to Libya in
violation of U.N. Resolutions 748 and 883. Congressional
findings in this legislation state that the efforts of the
government of Iran to acquire weapons of mass destruction and
the means to deliver them, as well as its support for
international terrorism, endanger the interests of the United
States. In the case of Libya, Congress found that Libya's
failure to comply with U.N. Resolutions 731, 748, and 883, its
support of international terrorism, and its efforts to acquire
weapons of mass destruction constitute a threat to
international peace and security that endangers the national
security of the United States.
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\70\ Public Law 104-172, approved August 5, 1996, 50 U.S.C. 1701.
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Under the Iran and Libya Sanctions Act, the President must
impose, on any foreign person (individual, firm or government
enterprise) that invests more than $40 million in any one year
in the petroleum resources of Iran or Libya, or violates the
U.N. prohibited transactions with Libya, at least two of the
following six sanctions: (1) denial of Export-Import Bank loans
for U.S. exports to the sanctioned entity; (2) denial of
specific U.S. licenses for exports to the sanctioned entity
(assuming the exports require a license to be exported); (3)
denial of U.S. bank loans of over $10 million in one year to
the sanctioned entity; (4) disallowing a sanctioned entity, if
it is a financial institution, to serve as a primary dealer in
U.S. government bonds or as a repository of U.S. government
funds; (5) import sanctions taken by the President in
accordance with the International Emergency Economic Powers Act
(IEEPA); and (6) prohibition on U.S. government procurement
from or contracting with the sanctioned person.
The law provides for the waiving of sanctions for firms of
countries that join a multilateral sanctions regime against
Iran and lowers the threshold of permissible investment from
$40 million to $20 million for firms of countries that do not
join such a regime. The Act ``sunsets'' in 5 years.
Embargo on Transactions With Cuba
While almost totally restrictive controls had been placed
on U.S. exports to Cuba even earlier \71\ under the general
authority of the Export Control Act of 1949, specific authority
for a total trade embargo on Cuba was contained in section
620(a) of the Foreign Assistance Act of 1961.\72\ Based on this
authority ``to establish and maintain a total embargo upon all
trade between the United States and Cuba,'' President Kennedy
proclaimed the embargo and directed the Secretaries of the
Treasury (for imports) and of Commerce (for exports) to
implement it. Both Secretaries were also given the authority to
modify the embargo in the national interest.\73\
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\71\ 25 Fed. Reg. 1006, October 20, 1960.
\72\ Public Law 87-195, approved September 4, 1961, 22 U.S.C.
2370(a)(1).
\73\ Proclamation 6447, 27 Fed. Reg. 1,085, February 7, 1962.
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The export embargo already being in force, the added ban on
imports from Cuba was implemented through Cuban Import
Regulations,\74\ to which were subsequently added, in general
terms, all transactions falling within the authority of the
Trading With the Enemy Act (TWEA), based on the specific
addition of TWEA to the statutory authority for the
regulations.\75\ Under this broader authority, Cuban Assets
Control Regulations applicable to imports from Cuba as well as,
in great detail, to non-trade transactions with Cuba were
promulgated.\76\ After several changes, these regulations still
remain in force. The embargo on transactions with Cuba is
implemented at present for exports by the Export Administration
Regulations (15 U.S.C. 768-799.2), particularly sections 770,
785.1, and 799.1, and for imports and other transactions by the
Cuban Assets Control Regulations (15 CFR 515). (These
regulations were later codified by the Cuban Liberty and
Democratic Solidarity Act, discussed below. A ban on imports
from Cuba and a tightening of the regulations on non-tourist
travel to Cuba was included in the Trade Sanctions Reform and
Export Enhancement Act of 2000, discussed below.)
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\74\ 31 CFR 515, 27 Fed. Reg. 1,116, February 7, 1962.
\75\ 27 Fed. Reg. 2,765, March 24, 1962.
\76\ 28 Fed. Reg. 6,974, July 9, 1963.
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The provisions of section 620(a) of the Foreign Assistance
Act of 1961 and the regulatory exercise with respect to Cuba of
authorities under the TWEA, the International Emergency
Economic Powers Act, and the Export Administration Act of 1979,
however, were preempted by the Cuban Democracy Act of 1992
(title XVII of the National Defense Authorization Act of 1992)
\77\ to the extent that they have been either restated or
modified by provisions of that Act. Section 1705 of the Act
specifically permits donations of food to Cuban non-
governmental organizations and individuals; with some
exceptions and subject to specific licenses and end-use
verification, exports of medicines and medical supplies and
equipment; providing telecommunications services and
appropriate facilities, and issuing licenses for related
payments; direct mail service between the United States and
Cuba; and assistance for promoting non-violent democratic
change in Cuba.
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\77\ Public Law 102-484, approved October 23, 1992; 22 U.S.C. 6001
et seq.
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On the other hand, section 1706 enacts specific
restrictions: it prohibits the issuance of licenses for any
transactions of American-owned firms in foreign countries with
Cuba, previously permitted by the relevant regulation; \78\
requires specific license for a ship to load or unload any
freight in a U.S. port if it has traded, within the past 180
days, with a Cuban port; or to enter a U.S. port or obtain ship
stores if it is carrying goods or passengers to or from Cuba,
or Cuban goods. These restrictions do not apply to activities
allowed by sections 1705 or 1707 of the Act, or to transactions
in informational materials unless subject to national security
or espionage controls. The President is required to set strict
controls on remittances to Cubans for the purpose of financing
their travel to the United States.
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\78\ 31 CFR 515 and 559.
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The law authorizes a relaxation of the embargo by
permitting humanitarian aid to Cuba under foreign assistance
and Food-for-Peace legislation if the President determines that
the Cuban government has made and is implementing commitments
to hold free elections and respect internationally recognized
worker rights and basic democratic freedoms, and is not
materially supporting groups in other countries seeking violent
overthrow of the government. The President also is authorized
to waive the restrictions of section 1706 if he determines that
the Cuban government has taken steps that provide various
political, human rights, and economic freedoms, and is directed
to take various actions (including steps to end the trade
embargo) to assist a freely and democratically elected Cuban
government. The Act empowers the Secretary of the Treasury to
enforce its provisions under the authority of the TWEA, to
which provisions for civil penalties, forfeitures, and judicial
review are added.
The Cuban Liberty and Democratic Solidarity Act
In 1996, the Cuban Liberty and Democratic Solidarity Act
was enacted to further strengthen U.S. sanctions against
Cuba.\79\ The legislation, which is commonly referred to as
``Helms-Burton'' or the ``Libertad Act,'' contains a number of
new sanction provisions. Title I of the Act codifies all Cuban
embargo executive orders and regulations in force on March 12,
1996. No authority is granted to the President under the law to
waive any of the codified embargo provisions.
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\79\ Public Law 104-114, approved March 12, 1996.
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In title III, the Helms-Burton legislation allows U.S.
nationals, including Cuban-Americans who became US. citizens
after their properties were confiscated, to sue for money
damages in U.S. federal court those persons who traffic in
their confiscated property. The President has the authority to
delay implementation of title III provisions for a period of up
to 6 months at a time if he determines that such a delay would
be in the national interest and would expedite a transition to
democracy in Cuba. On July 16, 1996, the President announced
that he would allow title III to go into effect, but would
suspend for 6 months the right of individuals to file lawsuits.
In making his announcement, the President indicated that the
liability of foreign companies under Helms-Burton would be
established during the suspension period and that legal action
could be taken against them immediately upon the lifting of the
suspension. Since then, the implementation of title III
provisions has been suspended by the President at 6 month
intervals, most recently on January 16, 2001.
Under the provisions in title IV of the Helms-Burton
legislation, certain aliens involved in the confiscation or
trafficking of U.S. property in Cuba are denied admission to
the United States. The ban applies to corporate officers,
principals, or shareholders with a controlling interest of an
entity involved in this activity. It also applies to the
spouses, minor children, and agents of aliens who are excluded
under the provision. This provision of the Act is mandatory and
is waiveable on a case-by-case basis for travel to the United
States only for humanitarian medical reasons or to participate
in legal actions regarding confiscated property. On June 17,
1996, the guidelines for implementing title IV provisions were
published in the Federal Register. \80\ This notice stipulated
that the admission sanction would not apply to persons having
business dealings solely with persons excluded under the
title's provisions. To date, the State Department has banned
from the United States a number of executives and their
families from three companies because of their investment in
confiscated U.S. property in Cuba: Crupos Domos, a Mexican
telecommunications company; Sherritt International, a Canadian
mining company; and BM Group, an Israeli citrus company. In
1997. Grupos Domos disinvested from U.S.-claimed property, and
as a result its executives are again eligible to enter the
United States. Action against executives from STET, an Italian
telecommunications company was averted by a July 1997 agreement
in which the company agreed to pay the U.S.-based ITT
Corporation $25 million for the use of ITT-claimed property in
Cuba for 10 years. Currently, the State Department is
investigating a Spanish hotel company, Sol Melia, for allegedly
investing in property that was confiscated from U.S. citizens
in Cuba's Holguin province in 1961.
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\80\ 61 Fed. Reg. 30655.
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In addition to these major provisions, section 103 of the
Helms-Burton legislation prohibits loans, credits, or other
financing by any U.S. national, U.S. agency, or permanent
resident alien for financing transactions involving any
property confiscated by the Cuban government, the claim to
which is owned by a U.S. national. Section 106(d) of the Act
requires that U.S. assistance for Russia be withheld by an
amount equal to the sum of assistance and credits provided (on
or after March 12, 1996) in support of the Russian intelligence
facility at Lourdes, Cuba. The President, however, may waive
this provision if such assistance is in the U.S. national
security interest, and if he certifies that Russia is not
sharing intelligence data collected at Lourdes with officials
or agents of the Cuban government.
Section 104 of the Act requires the United States to vote
against Cuba's admission to the international financial
institutions (IFIs) until a democratic government is in power.
The provision also requires the reduction of U.S. payment to
any IFI if it approves a loan or other assistance to Cuba over
the opposition of the United States. Finally, title II of the
law contains numerous conditions for determining when a
``transition'' government and a ``democratic'' government is in
power in Cuba, conditions which would qualify Cuba for various
types of U.S. assistance and would lead to suspension of U.S.
trade sanctions against Cuba.
Iraq Sanctions Act of 1990
The Iraq Sanctions Act of 1990 was enacted as part of the
Foreign Assistance and Related Program Appropriations Act for
fiscal year 1991,\81\ in response to Iraq's invasion of Kuwait
on August 2, 1990. The Act makes a number of declarations
concerning Iraq's invasion of Kuwait and requires the President
to consult with the Congress on U.S. actions taken in response.
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\81\ Public Law 101-513, approved November 5, 1990; sections 586
through 586J.
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Section 586C enacts into law the trade embargo and other
economic sanctions imposed on Iraq by presidential executive
order under authority of the International Emergency Economic
Powers Act and the National Emergencies Act.\82\ Those
sanctions entailed a near-total prohibition on transactions
between the United States and Iraq, including a ban on: imports
and exports; most travel and fulfillment of contracts; and
credits and loans. The executive orders also froze all assets
of the governments of Iraq and Kuwait. Section 586C requires
the President to notify Congress at least 15 days before the
termination of any of the above sanctions. Section 586E imposes
civil and criminal penalties on persons violating the executive
orders.
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\82\ Executive Orders 12724 and 12725 (August 9, 1990), and, to the
extent that they were still in effect on the date of enactment,
Executive Orders 12722 and 12723 (August 2, 1990).
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The Iraq Sanctions Act also imposes sanctions on Iraq
beyond those imposed by executive order. Section 586G imposes a
wide range of sanctions, including a ban on the following
transactions: arms sales; exports of certain goods and
technology, including nuclear technology and equipment; U.S.
government credits and credit guarantees; and other forms of
assistance. Those sanctions may be waived by the President if
he makes a certification of fundamental changes in Iraqi
leadership, policies, or actions, under criteria set forth in
section 586H.
The Act contains provisions aimed at increasing compliance
by third countries with U.N. Security Council sanctions against
Iraq. Section 586D denies assistance under the Foreign
Assistance Act of 1961 or the Arms Export Control Act to any
country not in compliance with the U.N. sanctions, subject to
certain exceptions. It also authorizes the President to ban
imports into the United States from any country that has not
imposed a ban on trade with Iraq, if he considers that such
action would promote the effectiveness of the U.N. and U.S.
sanctions against Iraq. Section 586I denies export licenses for
super-computer exports to any country the President determines
is assisting Iraq to improve its capabilities in rocket
technology or chemical, biological, or nuclear weapons.
Finally, the Iraq Sanctions Act mandates a number of
studies and reports to Congress concerning international
exports to Iraq of nuclear, biological, chemical and ballistic
missile technology; Iraq's offensive military capability; and
third country sanctions against Iraq.
Exemptions for Food and Medicine from U.S. Unilateral Trade Sanctions
On April 28, 1999, President Clinton announced that
existing unilateral economic sanctions programs would be
amended to modify licensing policies to permit case-by-case
review of specific proposals for the commercial sale of
agriculture commodities and products, as well as medicine and
medical equipment, where the United States has the discretion
to do so.\83\ Licenses are issued by the Treasury's Office of
Foreign Assets Control.
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\83\ 64 Fed. Reg. 41,784; 31 C.F.R. Parts 538, 550, and 560.
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Trade Sanctions Reform and Export Enhancement Act of 2000
The ``Trade Sanctions Reform and Export Enhancement Act of
2000'' was enacted as title IX of Public Law 106-387, the FY
2001 agriculture appropriations bill.\84\ The Act made two
principal changes to existing U.S. unilateral trade sanctions
on Cuba and other countries against which the United States has
imposed unilateral economic sanctions for foreign policy
purposes. First, the Act prohibits 120 days after enactment
(February 25, 2001), subject to certain exceptions, the use of
unilateral agricultural or medical sanctions with respect to
Cuba and other countries against which the United States has
imposed economic sanctions for foreign policy reasons.
Unilateral agricultural or medical sanctions are defined by the
Act not to include any multilateral regime where the other
members of that regime have agreed to impose substantially
equivalent measures or a mandatory decision of the United
Nations Security Council. The Act contains certain other
exceptions with respect to circumstances related to war,
biological and chemical weapons and items controlled under the
Arms Export Control Act, the Export Administration Act.
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\84\ P.L. 106-387, approved October 28, 2000.
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The Act prohibits the availability of any U.S. governmental
assistance, or financing by the U.S. government or a private
person, of commercial exports to Iran, Libya, North Korea or
Sudan, or exports to Cuba. In these cases, sales must be paid
for by cash in advance or through third country financing. In
the case of Iran, Libya, North Korea and the Sudan, the
legislation authorizes the President to waive this prohibition
for national security or foreign policy reasons.
Second, the Act codifies existing embargo regulations by
prohibiting both the importation of merchandise from Cuba and
travel for tourism to Cuba. In particular, licensed travel to
Cuba may not include travel for tourist activities. In
addition, the Act imposes tighter restrictions on non-tourist
travel that was previously allowed by regulations of the
Treasury Department, listed in 31 Code of Federal Regulations
515.560, paragraph (c), by restricting such travel to that
expressly authorized in those regulations.
With respect to new unilateral sanctions, the Act prohibits
the imposition of unilateral agricultural sanctions or medical
sanctions unless; (1) no later than 60 days before the proposed
sanction is imposed the President submits a reports to Congress
that describes the activity proposed to be prohibited,
restricted, or conditioned, and describes the actions by the
foreign country or foreign entity that justify the sanction;
and (2) a joint resolution is enacted stating the approval of
the Congress for the President's report. The Act sunsets any
unilateral agricultural or medical sanction that is imposed not
later than 2 years after the effective date of the sanction
unless the President submits another report to Congress and
another joint resolution is enacted.
The Hong Kong Policy Act
On July 1, 1997, China assumed sovereignty over Hong Kong
according to the terms of the Sino-British Joint Declaration of
1994. The question of how Hong Kong will fare under Chinese
rule is important to U.S. interests because of: (1) the large
U.S. economic presence in Hong Kong and; (2) any adverse
developments in Hong Kong will affect U.S.-China relations.
Under the Sino-British Joint Declaration, China committed to
preserving a high degree of autonomy under the so-called ``one-
China, two-systems'' policy.
The Hong Kong Policy Act which was passed by Congress in
1992 sets forth declarations and conditions for how the United
States should conduct bilateral relations with Hong Kong after
July 1, 1997.\85\ This legislation: (1) declares that support
for democratization is a fundamental principle of the United
States that should apply to U.S. policy toward Hong Kong after
1997; (2) declares U.S. support for the Sino-British Joint
Declaration and makes a number of findings of what is provided
for under this agreement; (3) requires that the United States
apply the same laws toward Hong Kong after 1997 as were in
force before then, but permits the President to suspend the
application of any law beginning in July 1, 1997, if he
determines that China is not giving Hong Kong sufficient
autonomy, and; (4) requires the Secretary of State to report to
Congress every 18 months on the situation in Hong Kong,
including the development of its democratic institutions.
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\85\ Public Law 102-383, approved October 5, 1992.
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As part of legislation granting China unconditional normal
trade relations upon its accession to the WTO, Congress
included a provision which states the sense of Congress that
immediately upon approval of China's accession by the WTO
General Council, the United States should request that the
Council consider Taiwan's accession as the next order of
business during the same Council session. Furthermore, the
legislation provides that the United States should be prepared
to aggressively counter any effort by any WTO Member to block
Taiwan's accession after approval of the PRC's accession.\86\
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\86\ Title VI of Public Law 106-286, approved October 10, 2000.
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Section 27 of the Merchant Marine Act, 1920 (Jones Act)
The Jones Act is a cabotage law that restricts the
transportation of property by water between points in the
United States, its possessions and territories (with very few
exceptions) to vessels built and (if applicable) substantially
repaired in U.S. shipyards, owned by U.S. citizens, manned by
U.S. citizen crews, and registered in the United States. The
first act passed by the First Congress was a cabotage measure
that made it extremely expensive for foreign-flag, foreign-
built vessels to operate in our coasting trades. Early cabotage
laws (1789, 1790, 1817) were, it is claimed, in response to
similar laws enforced by England, France, and other European
countries.
During World War I, U.S. cabotage prohibitions were relaxed
temporarily, but reinstated in 1920 by section 27 of the
Merchant Marine Act, 1920, now usually referred to as the Jones
Act. The penalty for violation is forfeiture of the cargo.
Section 721 of the Defense Production Act of 1950, as amended (``Exon/
Florio'')
The proposed purchase in 1988 of an 80 percent share of
Fairchild Semiconductor Corporation by Fujitsu, Ltd. sparked
congressional interest concerning takeovers of American firms
by foreign companies which raise national security
considerations. Section 5021 of the Omnibus Trade and
Competitiveness Act of 1988 amended title VII of the Defense
Production Act of 1950 \87\ to add provisions (commonly known
as ``Exon/Florio,'' the chief congressional sponsors) because
of concerns that the federal government lacked specific
authority to prevent such acquisitions.
---------------------------------------------------------------------------
\87\ 50 U.S.C. App. 2170, as added by Public Law 100-418, section
5021, approved August 23, 1988.
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The provisions authorize the President, after he makes
certain findings, to take actions for such time as he considers
appropriate to suspend or prohibit any acquisition, merger, or
takeover of a person engaged in interstate commerce in the
United States by or with foreign persons so that such control
will not threaten to impair the national security. To activate
this authority, the President has to find that there is
credible evidence that leads him to believe the foreign
interest exercising control might take action that threatens to
impair the national security and that other laws do not provide
adequate and appropriate authority to protect the national
security in the matter. The President has to report the
findings to the Congress with a detailed explanation.
In making any decision to exercise the authority under this
provision, the President may consider such factors as: (1)
domestic production needed for projected national defense
requirements; (2) the capability and capacity of domestic
industries to meet national defense requirements; and (3) the
control of domestic industries and commercial activities by
foreign citizens as it affects the capability and capacity of
the United States to meet the requirements of national
security. The standard of review is ``national security''; the
provision affects only overseas investment flowing into the
United States and is not intended to authorize investigations
of investments that could not result in foreign control of
persons engaged in interstate commerce nor to have any effects
on transactions which are outside the realm of national
security.
Among the actions available to the President is the ability
to suspend a transaction. The President may also seek
appropriate relief in the district courts of the United States
in order to implement and enforce the provisions, including
broad injunctive and equitable relief including, but not
limited to divestment relief.
Chapter 6: RECIPROCAL TRADE AGREEMENTS
Reciprocal Trade Agreement Objectives and Authorities
Section 1102 of the Omnibus Trade and Competitiveness Act
of 1988 \1\ provided authorities for the President to enter
into reciprocal bilateral and multilateral trade agreements
with foreign countries to reduce or eliminate tariff or
nontariff barriers and other trade-distorting measures. Section
1102 replaced similar authorities under section 102 of the
Trade Act of 1974 \2\ that expired on January 3, 1988. Except
for the authority to proclaim modifications in U.S. tariffs
under multilateral agreements, trade agreements entered into
under section 1102 were subject to congressional approval of
implementing legislation under special expedited, so-called
``fast track'' procedures. The basic purpose of the section
1102 authorities was to provide the means to achieve U.S.
negotiating objectives set forth under section 1101 of the 1988
Act and to enable U.S. participation in the Uruguay Round of
multilateral trade negotiations under the auspices of the
General Agreement on Tariffs and Trade (GATT) launched in
September 1986. The authorities were also used for the North
American Free Trade Agreement (NAFTA). The authorities expired
on June 1, 1993, except that on July 2, 1993, section 1102 was
amended to extend the fast track procedures to April 16, 1994
for the sole purpose of concluding the Uruguay Round
negotiations.\3\
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\1\ Public Law 100-418, approved August 23, 1988, 19 U.S.C. 2902.
\2\ Public Law 93-618, approved January 3, 1975, 19 U.S.C. 2112.
\3\ Public Law 103-49, approved July 2, 1993, 19 U.S.C. 2902(e).
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Although the fast track procedures have now expired with
respect to new agreements, certain limited, residual authority
remains with respect to tariffs.\4\ In addition, there are
special trade agreement authorities that apply in limited
circumstances or to deal with specific situations: (1) trade
agreements entered into under section 123 of the Trade Act of
1974,\5\ as amended by the 1988 Act, to grant new concessions
as compensation for import relief actions or any judicial or
administrative tariff reclassification; (2) withdrawal,
suspension, or modification of trade agreement obligations
under section 125 of the Trade Act of 1974; \6\ (3) agreements
with major state trading regimes acceding to the World Trade
Organization (WTO); (4) trade agreements and remedies under
sections 1371-1382 of the Omnibus Trade and Competitiveness Act
of 1988 \7\ to obtain more open foreign market access in
telecommunications trade; and (5) bilateral trade agreements
with certain Communist countries providing for
nondiscriminatory (most-favored-nation) treatment under certain
conditions.
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\4\ See discussion on specific trade agreement authorities which
follows.
\5\ Public Law 93-618, 19 U.S.C. 2133.
\6\ Public Law 93-618, 19 U.S.C. 2135.
\7\ Public Law 100-418, 19 U.S.C. 3101.
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Trade Negotiating Objectives
Section 1101 of the Omnibus Trade and Competitiveness Act
of 1988 \8\ set forth overall and principal trade negotiating
objectives of the United States. Any multilateral or bilateral
trade agreement entered into under the authorities of the
expired section 1102 of the 1988 Act was required to make
progress in meeting the applicable objectives described in
section 1101.
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\8\ Public Law 100-418, 19 U.S.C. 2901.
---------------------------------------------------------------------------
Section 1124 of the 1988 Act \9\ requires the Secretary of
the Treasury to take action to initiate bilateral currency
negotiations on an expedited basis with a foreign party to
trade agreement negotiations if the Secretary advises the
President during the course of those negotiations that the
country satisfies the criteria under section 3004(b) of the
1988 Act relating to exchange rate manipulation.
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\9\ Public Law 100-418, 22 U.S.C. 5304 note.
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Sections 131, 135 and 315 of the Uruguay Round Agreements
Act \10\ provide U.S. objectives for seeking a WTO working
party on worker rights; extended negotiations in financial
services, telecommunications, and civil aircraft; and
intellectual property right protection. More specifically,
section 131 requires the President to seek the establishment of
a WTO working party to examine the relationship of
international trade and worker rights. Section 135 sets forth
principal U.S. negotiating objectives for the extended
negotiations in the WTO on financial services, basic
telecommunications, and on trade in civil aircraft. Section 315
sets forth objectives for the Administration to pursue in the
field of intellectual property, which include accelerating the
implementation of the TRIPs agreement, seeking the enactment of
effective intellectual property rights laws abroad, and
securing fair, equitable and nondiscriminatory market access
opportunities for U.S. intellectual property based industries.
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\10\ Public Law 103-465, approved December 8, 1994, 19 U.S.C. 3551,
3555, 3581.
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The NAFTA Implementation Act includes a provision regarding
congressional intent for future free trade agreements. In this
regard, section 108 of the Act \11\ sets forth considerations
and preliminary procedures for possible future free trade area
agreements and accession by foreign countries to NAFTA. Article
2204 of the NAFTA sets forth the basis for the accession of any
country or group of countries. In the United States, accession
would require congressional approval and implementing
legislation. Section 108 stipulates that congressional approval
of NAFTA with respect to Canada or Mexico does not constitute
approval of its extension to other countries. Section 108 also
requires the President to report to Congress on his
recommendations for future trade agreement countries and sets
forth general U.S. negotiating objectives for accession.
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\11\ Public Law 103-182, approved December 8, 1993, 19 U.S.C. 3317.
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Section 409 of the Trade and Development Act of 2000
(Public Law 106-200) contains specific agricultural negotiating
objectives of the United States for the World Trade
Organization's negotiations on agriculture mandated by the
Uruguay Round Trade Agreements. Section 409 also mandates
consultations with Congress at Specific points during the
negotiations.
General Tariff Authority
Since enactment of the Reciprocal Trade Agreements Act of
1934, the Congress periodically has delegated authority to the
President to negotiate and to proclaim reductions in tariffs
under reciprocal trade agreements, subject to specific
conditions and limitations, without requiring further
congressional action. The most recent grant of such authority
was contained in section 1102(a) of the Omnibus Trade and
Competitiveness Act of 1988.
Prior to its expiration, section 1102(a) granted the
President authority to enter into multilateral tariff
agreements with foreign countries and to proclaim reductions in
U.S. rates of duty required or appropriate to carry out such
agreements, subject to the following limitations:
(1) Reductions of existing U.S. duties cannot exceed
50 percent of existing rates of duty, except that
duties of 5 percent ad valorem or below may be reduced
to zero.
(2) Staging authority requires that duty reductions
on any article cannot exceed 3 percent ad valorem per
year, or one-tenth of the total reduction, whichever is
greater, except that staging is not required if the
U.S. International Trade Commission determines there is
no U.S. production of the article.
(3) Under rounding authority, annual duty reductions
may exceed the limits by the lesser of the difference
between the limit and the next lower whole number or
one-half of 1 percent ad valorem in order to simplify
computations.
Any duty reductions negotiated in a trade agreement that exceed
50 percent of an existing duty higher than 5 percent ad valorem
or any tariff increases would have to be approved by the
Congress under the special fast track legislative procedures
that apply to nontariff agreements.\12\
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\12\ See also the discussion on specific trade agreement
authorities, which follows.
---------------------------------------------------------------------------
The Uruguay Round Agreements Act provides certain limited,
residual proclamation authority to the President with respect
to tariffs. Specifically, section 111(a) provides very limited
authority to the President to modify duties, change duty
staging, and increase duties ``as the President determines to
be necessary or appropriate to carry out schedule XX.'' In
addition, section 111(b)(1) provides that, subject to
consultation and layover requirements, the President may
proclaim tariff modification or staged rate reduction if the
United States so agrees in a WTO negotiation and if it applies
to the duty on an article in a tariff category that ``was the
subject of reciprocal duty elimination'' (so-called ``zero-for-
zero elimination'') ``or harmonization negotiations'' during
the Uruguay Round.\13\ Acceleration of staging on other
categories of tariffs would not be permitted under this
authority. Finally, section 111(b)(2) provides that the
President may make modifications necessary to correct
``technical errors'' in schedule XX.
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\13\ This authority was used by the President in implementing U.S.
obligations under the Information Technology Agreement concluded in
December 1996. Pres. Proc. No. 7011, June 30, 1997, 62 Fed. Reg. 35909.
---------------------------------------------------------------------------
The North American Free Trade Agreement Implementation Act
of 1993 also provides some limited proclamation authority with
respect to tariffs. Specifically, section 201(a) provides the
President with the very limited authority to modify duties,
change duty staging, and increase duties as he ``determines to
be necessary or appropriate to carry out or apply'' the
Agreement. In addition, section 201(b) provides that, subject
to consultation and layover requirements, the President may
proclaim: tariff modifications or continuations, or staged rate
modifications if the United States, Canada, and Mexico agree;
continuation of duty-free treatment; and increased duties ``as
the President determines to be necessary or appropriate to
maintain the general level of reciprocity and mutually
advantageous concessions with respect to Canada and Mexico
provided for by the Agreement.''
The Uruguay Round Agreements Act also provides authority
for the President to increase duties on articles from countries
which are not WTO members. Section 111(c) of the Act \14\
authorizes the President, after congressional consultation, to
increase duties on imports from countries that are not members
of the WTO, or to which the United States does not apply the
WTO, if he determines that the country is not according
adequate trade benefits to the United States, including
substantially equivalent competitive opportunities. The maximum
rate of duty that may be proclaimed is the higher of the pre-
Uruguay Round most-favored-nation (MFN) rate or the MFN rate of
duty that will apply under the Uruguay Round schedule XX.
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\14\ Public Law 103-465, 19 U.S.C. 3521.
---------------------------------------------------------------------------
Multilateral Trade Agreement Authority
Trade negotiations prior to the Tokyo Round concentrated
primarily on reducing or eliminating tariffs. Relatively little
effort and progress was made to reduce nontariff barriers or
other trade-distorting measures such as subsidies. Section 102
of the Trade Act of 1974 resulted from considerable concern
about the growing importance and proliferation of such
practices to the detriment of U.S. export trade and the need to
develop new or more adequate international trading rules and
mechanisms for their discipline. The purpose of section 102
was: (1) to make clear the importance of reducing, eliminating,
or harmonizing nontariff barriers and other trade-distorting
measures through a congressional policy mandate and specific
authority for the President to negotiate and enter into
reciprocal nontariff barrier trade agreements as the major
focus of the Tokyo Round of GATT multilateral trade
negotiations; (2) to expedite and reduce the uncertainties of
the legislative process for approval and implementation of such
trade agreements, thereby encouraging and facilitating
negotiations with foreign governments; and (3) to increase and
formalize the role of the Congress during the negotiating
process and in the development of implementing legislation. The
authority applied to U.S. foreign direct investment as well as
to trade in both goods and services.
Section 102 of the Trade Act of 1974 authorized the
President to enter into reciprocal trade agreements for 5
years, until January 3, 1980, subject to congressional
consultation requirements and approval of the agreements in
implementing legislation considered under special expedited
fast track procedures. Section 102 authority was used
successfully to approve the agreements negotiated in the Tokyo
Round and to make the changes in U.S. laws necessary for their
domestic implementation under the Trade Agreements Act of 1979.
That law extended the section 102 authority for an additional 8
years, until January 3, 1988, to enable the President to
negotiate improvements or adjustments in existing agreements
and to negotiate and enter into new agreements on non-tariff
measures not dealt with in the Tokyo Round.
Section 102 authority was replaced by similar authority
under section 1102(b) of the Omnibus Trade and Competitiveness
Act of 1988. A trade agreement could be entered into under this
authority only if it made progress in meeting the applicable
objectives set forth in section 1101 of the 1988 Act.
Section 1102(b) authorized the President to enter into
trade agreements with foreign countries providing for the
reduction or elimination of any nontariff barriers or other
distortions to trade, or for the prohibition of or limitations
on the imposition of such barriers or distortions, before June
1, 1993, subject to implementation under the special fast track
congressional approval procedures. The President was to provide
the Congress at least 90 calendar days advance notice, i.e., no
later than March 2, 1993, of his intention to enter into a
trade agreement no later than May 31.
On July 2, 1993, section 1102 was amended to extend the
fast track approval procedures to April 16, 1994 for the
Uruguay Round negotiations, provided the President notified the
Congress of his intent to enter into an agreement at least 120
days in advance (i.e., by December 15, 1993). The amendments
also granted the private sector advisory committees an
additional 30 days (but before January 15, 1994) to submit
their reports on the proposed agreement.
Bilateral Trade Agreement Authority
The expired section 1102(c) of the Omnibus Trade and
Competitiveness Act of 1988 authorized the President to enter
into bilateral tariff and nontariff agreements with foreign
countries, subject to the same congressional consultation
requirements and special fast track procedures for approval of
implementing legislation as apply to multilateral agreements.
The authority to enter into bilateral trade agreements applied
to trade agreements entered into before June 1, 1993, and was
subject to the same minimum 90-day advance notice requirement
as the multilateral authority.
Section 1102(c) authorized the elimination or reduction of
any U.S. duty or for the elimination or reduction of nontariff
barriers or other trade distorting measures. No trade benefit
under the Agreement could be extended to a third country. The
authority was similar to that which was used for the bilateral
free trade agreements between the United States and Israel and
the United States and Canada. The provision set forth three
requirements for the negotiation of a bilateral agreement:
(1) The foreign country must request the negotiation
of a bilateral trade agreement;
(2) The agreement must make progress in meeting
applicable U.S. trade negotiating objectives; and
(3) The President must provide written notice of the
negotiations to the House Committee on Ways and Means
and the Senate Committee on Finance and consult with
these committees regarding the negotiation of an
agreement. The negotiations may proceed unless either
Committee disapproves the negotiations within 60
legislative days prior to the 90 calendar day advance
notice required of entry into an agreement.
These multilateral and bilateral trade agreement
authorities, which were originally due to expire as of June 1,
1991, were extended for an additional 2 years under procedures
provided under section 1103(b) of the 1988 Act. On March 1,
1991, President Bush submitted a report to the Congress
requesting extension of the fast track trade agreement
authorities as essential in particular for (1) completing the
Uruguay Round of GATT multilateral trade negotiations, (2)
proposed negotiations of NAFTA with Mexico and Canada, and (3)
pursuit of free trade agreements with Latin American countries
under the Enterprise for the Americas Initiative announced by
the President on June 27, 1990.\15\ In a subsequent letter on
May 1, 1991, the President made commitments to the Congress in
response to concerns raised about the proposed NAFTA
negotiations. Neither House of Congress disapproved extension
of the trade agreement authority for an additional 2-year
period prior to the June 1, 1991 expiration date for
disapproval.
---------------------------------------------------------------------------
\15\ ``The Extension of Fast Track Procedures,'' Message from the
President of the United States, House Document 102-51, March 4, 1991.
---------------------------------------------------------------------------
Reciprocal Competitive Opportunities
Prior to its expiration, section 1105(b) of the Omnibus
Trade and Competitiveness Act of 1988 \16\ required the
President to determine before June 1, 1993 (the final
expiration date of trade agreement authority) whether any major
industrial country had failed to make trade agreement
concessions which provide competitive opportunities for the
United States substantially equivalent to such concessions
provided by the United States. If the determination was
affirmative with respect to any country, the President was to
recommend to the Congress legislation to terminate or deny
trade agreement concessions in order to restore equivalence.
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\16\ Public Law 100-418, 19 U.S.C. 2904.
---------------------------------------------------------------------------
Specific Trade Agreement Authorities
Sections 123 and 125 of the Trade Act of 1974, as amended
by the Trade and Tariff Act of 1984 and the Omnibus Trade and
Competitiveness Act of 1988, as well as section 111 of the
Uruguay Round Agreements Act and section 201 of the North
American Free Trade Agreement Implementation Act, contain
authorities to enter into and/or to proclaim changes in U.S.
duties under trade agreements in certain specific limited
circumstances.
Compensation agreements
Section 123 of the Trade Act authorizes the President to
enter into trade agreements granting new concessions and to
proclaim modifications or continuation of existing duties or
duty-free treatment as he determines required or appropriate as
compensation to foreign countries for restrictions imposed as
import relief under section 203 of the Trade Act or for any
judicial or administrative tariff reclassification. No duty
reduction can exceed 30 percent of its existing level. The
purpose of such concessions is to meet international
obligations under the WTO to maintain the general level of
reciprocal and mutually advantageous concessions with countries
whose trade is adversely affected by import relief measures or
certain tariff reclassifications, and provide an alternative to
the right of such countries under the WTO to take retaliatory
action.
Termination and withdrawal authority
Section 125 of the Trade Act contains the traditional
requirement that every trade agreement entered into is subject
to termination or withdrawal within 3 years after its effective
date, or upon 6 months advance notice thereafter. The President
may terminate any proclamation at any time.
Section 125(c) provides the President explicit domestic
legal authority to proclaim increased duties or other import
restrictions as he deems necessary or appropriate to implement
U.S. international trade agreement rights or obligations to
withdraw, suspend, or modify any trade agreement concessions.
Section 125(d) authorizes the President to withdraw,
suspend, or modify substantially equivalent trade agreement
obligations and proclaim increased duties or other import
restrictions in response to withdrawal suspension, or
modification by foreign countries of trade obligations
benefitting the United States without granting adequate
compensation (i.e., ``self-compensation'' authority). This
authority was used in November 1982 by President Reagan to
suspend most-favored-nation status for Poland indefinitely,
based upon Poland's nonfulfillment of trade obligations
undertaken in its accession to the GATT, and in view of
increased repression of the Polish people by the martial law
government.
No duty increase imposed under section 125(d) can exceed
the higher of 50 percent or 20 percent ad valorem above the
rate existing on January 1, 1975. Public hearings are required
prior to taking any action, or promptly thereafter if
expeditious action is necessary.
Section 125(e) requires duties or other import restrictions
to remain in effect at negotiated levels for 1 year after U.S.
termination of, or withdrawal from, a trade agreement, unless
the President proclaims restoration of the previous level. The
President must submit his recommendations to the Congress
within 60 days as to the appropriate rates of duty on all
affected articles. This provision prevents automatic, sudden
``snapbacks'' to higher preagreement duties that could create
serious economic impact.
Accession of major state trading regimes to the WTO
Section 1106 of the Omnibus Trade and Competitiveness Act
of 1988,\17\ as amended, requires the President to determine,
before any major foreign country accedes to the WTO, whether
state trading enterprises (1) account for a significant share
of that country's exports or of its goods subject to import
competition, and (2) whether those enterprises unduly burden or
restrict or adversely affect U.S. trade or the U.S. economy or
are likely to have such results. If both determinations are
affirmative, the WTO cannot apply between the United States and
that country until either (1) the country enters into an
agreement with the United States for its state trading
enterprises to operate in accordance with commercial
considerations, or (2) Congress approves fast track legislation
submitted by the President extending application of the WTO to
the country.
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\17\ Public Law 100-418, 19 U.S.C. 2905.
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Trade Negotiation Procedural Requirements
Sections 131-135 of the Trade Act of 1974,\18\ as amended
by the Omnibus Trade and Competitiveness Act of 1988, require
that certain procedures be followed in connection with any
proposed trade agreement under section 123 of the 1974 Act or
expired section 1102 of the 1988 Act. These prenegotiation
procedures require advice from the International Trade
Commission on the probable economic effect of duty
modifications on U.S. industries (section 131), advice from
executive branch agencies and other sources (section 132),
public hearings (section 133), and advice from private sector
advisory committees (section 135). In addition, executive
liaison with the Congress is required through congressional
designated official advisers to negotiations (section 161),
transmittal of trade agreements (section 162), and annual
reports on the trade agreements program and related matters
(section 163). (See also discussion of Congress in chapter 7,
infra.)
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\18\ Public Law 93-618, 19 U.S.C. 2151.
---------------------------------------------------------------------------
Section 127 of the Trade Act of 1974 \19\ requires the
reservation from any negotiations involving reduction or
elimination of duties or other import restrictions of any
article while it is subject to an import relief action under
section 203 of that Act or to a national security action under
section 232 of the Trade Expansion Act of 1962, or if the
President determines that the national security would be
impaired.
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\19\ Public Law 93-618, 19 U.S.C. 2137.
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Congressional Fast Track Implementing Procedures
In contrast to traditional tariff proclamation authority,
nontariff barrier agreements entered into under section 102 of
the Trade Act of 1974, or the expired section 1102(b) of the
Omnibus Trade and Competitiveness Act of 1988, and bilateral
trade agreements entered into under expired section 1102(c)
authority under the 1988 Act could not enter into force for the
United States and become binding as a matter of domestic law
unless and until the President complied with specific
requirements for consultation with the Congress and
implementing legislation approving the Agreement and any
changes in U.S. law was enacted into law.
The purpose of the approval process is to preserve the
constitutional role and fulfill the legislative responsibility
of the Congress with respect to agreements which often involve
substantial changes in domestic laws. The consultation and
notification requirements prior to entry into an agreement and
introduction of an implementing bill ensure that congressional
views and recommendations with respect to provisions of the
proposed agreement and possible changes in U.S. law or
administrative practice are fully taken into account and any
problems resolved in advance of formal congressional action. At
the same time, the procedure ensures certain and expeditious
action on the results of the negotiation and on the
implementing bill with no amendments. Sections 102 of the 1974
Act, and 1102(d) and 1103 of the 1988 Act set forth the
consultation and documentation requirements,\20\ and 151-154 of
the 1974 Act \21\ prescribed the following procedures for
congressional fast track approval, as follows:
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\20\ Public Law 100-418, 19 U.S.C. 2903.
\21\ Public Law 93-618, 19 U.S.C. 2191.
---------------------------------------------------------------------------
(1) Before entering into any trade agreement, the
President is required to consult with the House
Committee on Ways and Means, the Senate Committee on
Finance, and with each other committee in the House and
Senate with jurisdiction over legislation involving
subject matter affected by the Agreement. The
consultation includes (a) the nature of the Agreement;
(b) how and to what extent the Agreement will achieve
applicable purposes, policies, and objectives; and (c)
all matters relating to agreement implementation.
(2) The President is required to give the Congress at
least 90 calendar days (120 calendar days for the
Uruguay Round Agreements) advance notice of his
intention to enter into a trade agreement, and promptly
publish the intention in the Federal Register. The
purpose of this notice period is to provide the
congressional committees of jurisdiction an opportunity
to review the proposed agreement before it was signed,
to determine the changes in U.S. laws that would be
necessary or appropriate to implement the obligations
under the Agreement, and to meet with Administration
officials to develop the text of an acceptable
implementing bill.
(3) After entering into the Agreement, the President
is required to submit a copy of the final legal text to
the Congress, together with a draft implementing bill,
a statement of any administrative action proposed to
implement the Agreement, and supporting information
((a) an explanation of how the bill and proposed
administrative action would change or affect existing
law; and (b) a statement asserting that the Agreement
made progress in achieving applicable purposes,
policies, and objectives; the reasons the Agreement
made such progress and why and to what extent it did
not achieve other purposes, policies, and objectives;
how the Agreement served the interests of U.S.
commerce; why the implementing bill and proposed
administrative action were required or appropriate to
carry out the Agreement; efforts made by the President
to obtain international exchange rate equilibrium and
any effect the Agreement may have regarding increased
monetary stability; and the extent, if any, to which
each foreign party to the Agreement maintained non-
commercial state trading enterprises that may adversely
affect, nullify, or impair the benefits to the United
States under the Agreement and how the Agreement
applied to or affected purchases and sales by such
enterprises).
There is no statutory time limit for submission of
the Agreement and draft bill after entry into the
Agreement. The timetable is worked out between the
congressional leadership and the Administration to
accommodate the need for committees of jurisdiction to
have adequate opportunity to develop an acceptable
draft bill text while also ensuring expeditious formal
action on the actual implementing legislation.
(4) The implementing bill is introduced by the
leadership in both Houses of Congress on the same day
it is submitted by the President and referred to the
committees of jurisdiction. The committees have 45
legislative days in which to report the bill; they are
discharged automatically from further consideration
after that period.
(5) Each House votes on the bill within 15
legislative days after the measure has been received
reported or discharged from the committees. A motion in
the House to proceed to consideration of the
implementing bill is highly privileged and not
debatable. Motions to recommit or reconsider the vote
are not in order. Amendments are not in order.
No amendments to the implementing bill are in order in
either the House or the Senate once the bill had been
introduced; the committee and floor actions in the House and
Senate consist of ``up or down'' votes on the bill as
introduced. The total maximum period for congressional
consideration from date of introduction is 60 legislative days
if the bill was not a revenue measure. Since the Senate must
act on a House-passed revenue bill, the maximum period for
congressional consideration of a revenue implementing bill from
date of introduction is 90 legislative days (15 additional days
for Senate committee action on the House-passed measure and 15
additional days for Senate floor action). After the legislation
is signed by the President, the Agreement goes into effect
under the terms of the Agreement and the implementing bill.
Section 1103(c) of the 1988 Act instituted a ``reverse fast
track'' procedure that terminated the application of that
special procedure for the approval of trade agreements if both
the Committee on Ways and Means and the Committee on Rules in
the House and the Committee on Finance in the Senate reported,
and both the House and Senate separately passed, resolutions of
disapproval within any 60 legislative day period. The basis for
the disapproval was failure or refusal of the U.S. Trade
Representative (USTR) to consult with the Congress on trade
negotiations and trade agreements as set forth in the
consultation requirements. The fast track procedure applied to
floor consideration of the resolution, which was nonamendable.
In addition, the 1974 and 1988 Acts provided for
congressional advisers and consultations with committees of
jurisdiction throughout the course of trade agreement
negotiations (section 161 of the 1974 Act) and an advisory
committee structure for private sector input during
negotiations and reports on the results (section 135 of the
1974 Act). The congressional consultation requirements and fast
track procedures applied to the implementing legislation for
the Tokyo Round of GATT multilateral trade negotiations in
1979, the United States-Israel Free Trade Agreement and the
United States-Canada Free-Trade Agreement, the North American
Free Trade Agreement, and the Uruguay Round of GATT
multilateral trade negotiations, including the Agreement
Establishing the World Trade Organization.
Special fast track procedures under section 3(c) of the
Trade Agreements Act of 1979 also applied to implementation of
changes in the Tokyo Round Agreements and to the United States-
Canada Free-Trade Agreement for an initial 30-month period.
Section 3(c), which currently applies to implementation of
changes in the United States-Israel Free Trade Agreement and
the GATT Agreement on Civil Aircraft,\22\ requires the
President to submit a draft bill and statement of any
administrative action to the Congress whenever he determines it
is necessary or appropriate to amend, repeal, or enact a
statute to implement any requirement, amendment, or
recommendation concerning an agreement. The President is
required to consult at least 30 days in advance with the House
Committee on Ways and Means and the Senate Committee on Finance
and any other committees of jurisdiction on the subject matter
and implementation.
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\22\ Public Law 96-39, approved July 26, 1979, 19 U.S.C. 2504.
---------------------------------------------------------------------------
While the authorities to enter into new trade agreements
for congressional approval under fast track implementing
procedures expired upon conclusion of the Uruguay Round
negotiations, the fast track legislative procedures under
sections 151-154 of the 1974 Act continue to apply to (1)
resolutions approving bilateral commercial agreements extending
normal trade relations (NTR) treatment to countries which are
subject to the provisions of title IV of the Trade Act of 1974;
(2) joint resolutions disapproving annual presidential
determinations to extend authority to waive freedom of
emigration requirements under title IV; (3) joint resolutions
disapproving presidential reports of country compliance with
freedom of emigration requirements under title IV; (4) joint
resolutions disapproving presidential import relief actions
under section 203 of the Trade Act of 1974 which differ from
recommendations of the International Trade Commission; and (5)
joint resolutions withdrawing congressional approval of the WTO
Agreement after 5 years and every 5 years thereafter. While the
procedures applicable to implementing bills and resolutions and
to joint disapproval resolutions are similar, the time periods
for committee and House and Senate consideration differ
(shorter periods for disapproval resolutions), and the overall
time periods for congressional consideration is generally
subject to the terms of the statute involved.
Although statutory, the fast track legislative procedures
were enacted as an exercise of the rulemaking powers of each
House of Congress, and are part of each House's rules. The
procedures may be changed in the same manner as any other
rules.
Uruguay Round Agreements
The Uruguay Round Agreements represented the culmination of
negotiations among 125 countries over an 8-year period launched
in Punta del Este, Uruguay in September 1986 under the auspices
of the GATT and concluded in Geneva, Switzerland on December
15, 1993. On that date President Clinton provided the Congress
the required 120-day advance notice of his intention to enter
into the Agreements. The Agreements were signed in Marrakesh,
Morocco on April 15, 1994 by 111 countries, including the
United States, thereby undertaking the commitment to bring the
results before their respective legislatures for approval.
Sections 1101-1103 of the Omnibus Trade and Competitiveness
Act of 1988, as extended by Public Law 103-49, set forth U.S.
negotiating objectives and authority and implementing
procedures necessary for U.S. participation. As required by
Public Law 103-49, the private sector advisory committees
established under section 135 of the Trade Act of 1974
submitted their reports assessing the Agreements to the
President, the USTR and the Congress on January 14, 1994.
On September 27, 1994, President Clinton sent a letter of
transmittal to the House and Senate covering: (1) transmittal
of the final texts of the Uruguay Round agreements, including
the Agreement establishing the World Trade Organization; (2)
the draft implementing bill and Statement of Administrative
Action; and (3) supporting documents, as required by section
1103 of the 1988 Act.\23\
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\23\ Public Law 100-418, 19 U.S.C. 2903.
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As provided under section 151 of the Trade Act of 1974,\24\
as amended, the implementing legislation was introduced in the
House on September 27 as H.R. 5110 by Majority Leader Gephardt,
for himself and Minority Leader Michel by request, and jointly
referred to eight committees of jurisdiction for a period
ending October 3, 1994. On November 29, 1994, H.R. 5110 passed
the House and was sent to the Senate for consideration, where
it passed on December 1. On December 8, 1994, the bill was
signed into law by the President.
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\24\ Public Law 93-618, 19 U.S.C. 2191.
---------------------------------------------------------------------------
The Uruguay Round Agreements are the broadest, most
comprehensive trade agreements in history. The Agreements cut
global tariffs by more than one-third, and reduce or eliminate
numerous nontariff measures, such as quotas, restrictive
licensing systems, and discriminatory product standards.
The agreements also contain multilateral rules covering
such matters as technical barriers to trade, trade-related
investment measures (TRIMs), rules of origin, import licensing
procedures, safeguards, trade-related aspects of intellectual
property rights (TRIPs), antidumping/countervailing duties,
agriculture trade, and government procurement. In addition, the
General Agreement on Trade in Services (GATS) establishes a
framework of rules for trade and investment in services
sectors, including most-favored-nation (MFN) and national
treatment, market access, transparency, and the free flow of
payments and transfers. Many of these agreements are addressed
in detail in other chapters of this book.
The Agreement Establishing the World Trade Organization
establishes an international organization which encompasses the
existing GATT institutional structure and extends it to the new
Uruguay Round disciplines on services, intellectual property,
and investment.
The Understanding on Rules and Procedures Governing the
Settlement of Disputes creates new procedures for settlement of
disputes arising under any of the Uruguay Round agreements and
provides time limits for each step in the process. The
Understanding creates a more automatic process, including the
right to a panel, adoption of panel reports unless there is a
consensus to reject the report, appellate legal review on
request, time limits for country conformity with panel rulings
and recommendations, and authorization of retaliation if such
limits are not met.
Uruguay Round Agreements Act
The Uruguay Round Agreements Act approves the trade
agreements resulting from the Uruguay Round of multilateral
trade negotiations under the auspices of the General Agreement
on Tariffs and Trade (GATT) entered into by the President on
April 15, 1994. The legislation and the Statement of
Administrative Action (SAA) proposed to implement the
Agreements were submitted to the Congress on September 27,
1994. The legislation includes provisions that are necessary or
appropriate to implement the Uruguay Round Agreements in U.S.
domestic law. Also included are provisions to offset the
projected cost of the implementing legislation in order to
comply with the ``pay-as-you-go'' requirements of the Budget
Enforcement Act.
The legislation contains general provisions on: (1)
approval and entry into force of the Uruguay Round Agreements,
and the relationship of the Agreements to U.S. laws (section
101 of the Act \25\); (2) authorities to implement the results
of tariff negotiations (section 111 of the Act \26\); (3)
procedures regarding implementation of dispute settlement
proceedings affecting the United States and oversight of
activities of the World Trade Organization (WTO) (sections 121-
130 of the Act \27\); and (4) objectives regarding extended
Uruguay Round negotiations and other related provisions
(sections 131, 135 and 315 of the Act \28\).
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\25\ Public Law 103-465, 19 U.S.C. 3511.
\26\ Public Law 103-465, 19 U.S.C. 3521.
\27\ Public Law 103-465, 19 U.S.C. 3531-3538.
\28\ Public Law 103-465, 19 U.S.C. 3551, 3555, and 3581.
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Specifically, sections 121-130 of the Act \29\ contain
procedural requirements for notice, consultation, and reporting
to ensure access to, and advice by, congressional committees,
private sector advisory committees, and the public regarding
the dispute settlement mechanism under the WTO. In order to
ensure that the WTO continues the practice followed by the GATT
of decisionmaking by consensus, USTR must consult with Congress
before any vote is taken in the WTO that would substantially
affect U.S. rights or obligations under the Agreement or
another multilateral trade agreement, or potentially entails a
change in federal or state law. Within 30 days after the end of
any year in which the WTO takes such a vote, USTR will submit a
report to the appropriate congressional committees describing
the decision, U.S. efforts to achieve consensus, country
voting, how the decision affects the United States, and the
President's response. The dispute settlement procedures set
forth in the Act also include a provision requiring USTR to
inform, consult, and report to Congress, private sector
advisory committees, and the public during each stage of the
process. Promptly after the establishment of a panel, USTR will
publish a notice in the Federal Register identifying the
parties to the dispute, setting forth the major issues raised
and the legal basis of the complaint, identifying the specific
measures cited in the request for the panel, and seeking
written comments from the public on the issues raised. The USTR
will take into account any advice received from Congress and
the advisory committees and the written comments in preparing
U.S. submissions to the panel or Appellate Body. In addition,
USTR is required to submit an annual report to the Congress on
the structure, budget and activities of the WTO, and details of
dispute settlement actions.
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\29\ Public Law 103-465, 19 U.S.C. 3531-3538.
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The legislation contains a number of other provisions which
affect the administration of U.S. trade laws. Included in the
legislation are provisions amending the U.S. antidumping and
countervailing duty laws in response to the Uruguay Round
Antidumping and Subsidies/Countervailing Measures Agreements.
The legislation implement in U.S. domestic law various
provisions of the Uruguay Round Agreements relating to import
safeguard measures; foreign trade barriers and unfair trade
practices in import trade (section 337 of the Tariff Act of
1930); textiles and apparel trade; government procurement; and
technical barriers to trade (product standards). Also included
are provisions implementing the Agreement on Agriculture and
the Agreement on Trade-Related Aspects of Intellectual Property
Rights. The legislation also contains provisions extending
expiring programs and amendments to certain customs laws
related to the Uruguay Round Agreements, conforming amendments
to various laws to reflect the implementation of the
Agreements, as well as a number of revenue and other non-trade
provisions to meet budgetary offset requirements. These
provisions are discussed in greater detail in other chapters of
this book.
Post Uruguay Round Negotiations
The GATS was the first multilateral, legally enforceable
agreement covering trade and investment in services. The GATS
was designed to reduce or eliminate governmental measures that
prevent services from being freely provided across national
borders or that discriminate against locally-established
service firms with foreign ownership. After the WTO went into
effect, negotiations continued on certain services under the
auspices of the WTO: information technology, basic
telecommunications services, financial services, and maritime
services.
Information Technology Agreement
During the December 1996 WTO Ministerial Meeting in
Singapore, trade ministers from 28 WTO-member countries
endorsed an agreement liberalizing market access in the
information technology industry. This Information Technology
Agreement (ITA) eliminated tariffs on information technology
products by the year 2000 on a wide range of technology
products. The ITA was finalized on March 26, 1997, and entered
into force on July 1, 1997. As of this writing, the ITA has 55
participants representing over 95 percent of global trade in
this sector.
ITA product coverage includes computers and computer
equipment, semiconductors and integrated circuits, computer
software products, telecommunications equipment, semiconductor
manufacturing equipment and computer-based analytical
instruments. Some limited staging up to 2005 was granted on a
country-by-country basis for individual products. The ITA, thus
far, is the only global sectoral agreement in which
participating governments have agreed on a uniform list of
products on which all duties will be eliminated. The products
subject to the ITA were covered by the residual proclamation
authority provided by section 111(b) of the Uruguay Round
Agreements Act and, thus, no additional implementing authority
was necessary.\30\
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\30\ Pres. Proc. No. 7011, June 30, 62 Fed. Reg. 35,909.
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Work to review possibilities for product coverage expansion
(also as ITA-II continued in 2000), as did efforts to address
non-tariff measures affecting trade in ITA-covered products.
WTO Basic Telecommunication Services Agreement
As part of the GATS, WTO members have made both basic and
value-added telecommunications commitments. Specifically, the
Fourth Protocol to the GATS--generally referred to as the WTO
Basic Telecommunications Services Agreement--is the legal
instrument embodying basic telecommunications services
commitments of seventy WTO members under the GATS. The
agreement entered into force on February 6, 1998, and since
that time, an additional ten WTO members have made
telecommunications services commitments, some upon their
accession to the WTO. Due in large part to this agreement,
mutually advantageous market opportunities for U.S.
telecommunications equipment and service suppliers expanded
greatly.
The WTO basic telecommunications services agreement built
upon the Annex on telecommunications, part of the General
Agreement on Trade in Services (GATS), itself a component of
the Uruguay Round Final Act. The Annex requires WTO members to
ensure that all service suppliers seeking to take advantage of
scheduled commitments have reasonable and non-discriminatory
access to, and the use of, public basic telecommunications
networks and services. The agreement covers basic
telecommunications services only. Participants agreed at the
start of the talks to disregard differences in how countries
might define ``basic'' telecommunications, and to negotiate on
all public and private information (voice or data) from sender
to receiver. Whereas the Annex on telecommunications addresses
access to existing services and networks by users, the WTO
basic telecommunications agreement addresses the ability to
enter telecommunications markets and sell services. Examples of
the services covered by this agreement include voice telephony,
data transmission, telex, telegraph, facsimile, private leased
circuit services (i.e., the sale or lease of transmission
capacity), fixed and mobile satellite systems and services,
cellular telephony, mobile data services, paging, and personal
communications systems.
As of January 2001, the basic telecommunications services
agreement encompasses 80 countries. Other countries in the
process of acceding to the WTO are also expected to make
commitments in the telecommunications sector. In December 2000,
the United States put forward a new proposal on
telecommunications and related services as part of a package of
U.S. sectoral proposals.
1997 Financial Services Agreement
With respect to extended negotiations on financial
services, the United States, because of insufficient market-
opening commitments from many of its trading partners,
committed in July 1995 to protect the existing investments of
foreign financial service providers in the United States but
reserved the right to provide differing levels of treatment
with respect to any new activities by such providers, or with
respect to new entrants to the U.S. financial services market.
The interim agreement expired at the end of 1997. Negotiations
were renewed in April 1997 and ended December 1997 with a new
agreement that covered 95 percent of the global financial
services market as measured in revenue. Of the seventy WTO
Members that made improved commitments in financial services
during these negotiations, 53 countries met the original
deadline of January 29, 1999, for completing domestic
ratification procedures and notifying their acceptance of the
1997 Agreement--the Fifth Protocol to the GATS. Another ten
Members have completed these procedures since then, meaning
that the number of countries whose 1997 commitments have
entered into force stands at 63.
The 1997 Financial Services Agreement opened would
financial services markets to an unprecedented degree. Fifty-
two countries guaranteed broad market access terms across all
insurance sectors-encompassing life, non-life, reinsurance,
brokerage and auxiliary services. Another fourteen countries
committed to open critical sub-sectors of their insurance
markets of particular interest to U.S. industry. Fifty-nine
countries committed to permit 100 percent foreign ownership of
subsidiaries or branches in banking. And forty-four countries
guaranteed to allow 100 percent foreign ownership of
subsidiaries or branches in the securities sector.
The United States has efforts underway as part of the
current round of WTO/GATS negotiations to build upon the
results of the 1997 negotiations. In December 2000, the United
States submitted an initial financial services sectoral
proposal to the GATS Council in Special Session as part of a
package of U.S. sectoral proposals. Discussion of this and
other proposals will continue in 2001.
Maritime Services
With respect to maritime services, the United States (and
most other countries) did not table an offer. The negotiations
were suspended on June 28, 1996, without an agreement, and must
be resumed in the context of the next GATS round. The United
States continues to suspend its NTR obligations in this sector.
WTO ``Build-in-Agenda'' on Agriculture and Services
The so-called built-in-agenda was an integral part of the
Uruguay Round Agreements and constituted an important element
in the balance of rights and obligations of the commitments of
WTO members. The built-in agenda called for the resumption of
negotiations by the year 2000 to further liberalize trade in
agriculture and services, as well as the examination of
government procurement practices and enforcement of
intellectual property rights. The WTO Ministerial conference
that was hosted by the United States in Seattle, Washington,
from November 30 through December 4, 1999, was to have formally
launched these negotiations.
At the Seattle ministerial meeting, the key issue for
member countries to consider was a frame work for a new round
of multilateral trade negotiations. Representatives of the 135-
member countries of the WTO considered the procedures and
substance of the built-in agenda, as well as other issues
inducing transparency, possible reforms to the dispute
settlement system, treatment of electronic commerce, and the
accelerated Tariff Liberalization effort for industrial
tariffs. Following four days of meetings, a decision was
announced to suspend negotiations, with direction for member
countries to engage in further consultations on how to proceed
with a new round.
New GATS negotiations began at the start of 2000 and aim to
reduce or eliminate the adverse effects on trade in services of
measures as a means of providing effective market access. The
deadline for submission of negotiating and other proposals for
new GATS discussions was set for December 2000 and in July
2000, the United States presented a broad proposal. Services
work is currently focused on addressing technical questions
that in some cases are controversial, such as a review of
possible disciplines in services for safeguard, subsidies, and
government procurement. The procedural phase of the GATS talks
is tentatively scheduled to conclude in March 2001, and this
work on rules could eventually proceed in tandem with market
access negotiations.
Global agricultural talks were launched in March 2000.
Central to these negotiations is whether and how to further
reduce trade barriers and limit export and domestic subsidies.
New issues such as the operations of state trading enterprises
and trade in biotechnology products also seem likely to be
brought to the negotiating table. A timetable for completing
agricultural negotiations has not been set, and difficult
issues which contributed to the failure of the Seattle
ministerial will have to be addressed once again in these
sectoral negotiations.
Specific Foreign Trade Barriers
Sections 181 and 182 of the Trade Act of 1974, as amended
Section 181 of the Trade Act of 1974,\31\ added by section
303 of the Trade and Tariff Act of 1984 and amended by the
Omnibus Trade and Competitiveness Act of 1988 and the Uruguay
Round Agreements Act, requires an annual report on foreign
trade barriers and their impact, known as the National Trade
Estimates report. The USTR, through the interagency trade
mechanism, must identify, analyze, and estimate the impact on
U.S. commerce of foreign acts, policies, and practices which
constitute significant barriers to or distortions of U.S.
exports of goods or services and U.S. foreign direct
investment. The report must also include information on any
action taken (or reasons for no action taken) to eliminate any
measure identified, as well as information with respect to
section 301, negotiations or consultations with foreign
governments, and foreign anticompetitive practices that
adversely affect U.S. exports. The report is submitted to the
appropriate committees of the House and to the Senate Committee
on Finance. After submission of the report, the USTR must
consult and take into account the views of these congressional
committees.
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\31\ Public Law 93-618, 19 U.S.C. 2241.
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Section 182 of the Trade Act of 1974,\32\ as added by
section 1303(b) of the 1988 Act and amended by the North
American Free Trade Agreement Implementation Act and the
Uruguay Round Agreements Act, requires the USTR to identify
priority foreign countries that deny adequate and effective
protection or fair and equitable market access for U.S.
intellectual property rights, for purposes of action under
section 301 (see further description under chapter 2).
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\32\ Public Law 93-618, 19 U.S.C. 2242.
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Telecommunications Trade Act of 1988
The Telecommunications Trade Act of 1988, under sections
1371-1382 of the Omnibus Trade and Competitiveness Act of 1988
and as amended by the Uruguay Round Agreements Act, provides
specific trade negotiating authority and remedies to address
the lack of foreign market openness in telecommunications
trade. The Telecommunications Act requires the U.S. Trade
Representative to investigate and designate foreign priority
countries, taking into account acts, policies, and practices
that deny mutually advantageous market opportunities to U.S.
telecommunications exporters and their subsidiaries. Countries
may be added or deleted from the list of designated countries
at any time.
The President is required to negotiate with the priority
countries, drawing from a list of general and specific
negotiating objectives, for the purpose of entering into
bilateral or multilateral agreements that provide mutually
advantageous market opportunities. If no agreement is reached,
the Act requires the President to take whatever authorized
actions are appropriate and most likely to achieve the general
negotiating objectives, as defined by the specific objectives
established by the President. The actions authorized are
broadly similar to authorities available to the USTR under
section 301 of the Trade Act of 1974, as amended.
The Telecommunications Trade Act requires the USTR to
conduct annual reviews to determine if a country has violated a
telecommunications trade agreement or otherwise denies mutually
advantageous market opportunities. In the case of an
affirmative determination, it shall be treated as a trade
agreement violation under section 301 of the Trade Act of 1974,
as amended. In general, that section requires that in cases
involving foreign violations of trade agreements or other
``unjustifiable'' practices, the USTR must take retaliatory
action in an amount equivalent in value to the foreign burden
or restriction on U.S. commerce. Certain waivers are available
to the USTR, under which no retaliation is required.
Negotiating authority was provided concomitant with the
general trade agreement authority provided in the Omnibus Trade
and Competitiveness Act of 1988 (i.e., until its expiration in
1993). Compensation authority also is provided, in the event
that action is taken that violates U.S. obligations under the
WTO.
Background and current status
The Telecommunications Trade Act was intended to address
the imbalance in market access for telecommunications goods and
services between the United States and other countries that
arose from increased deregulation of the U.S. market and court-
ordered divestiture by American Telephone and Telegraph (AT&T)
of its local operating companies on January 1, 1984. These
actions resulted in a U.S. market virtually devoid of barriers
to the entry of foreign competitors. At the same time, however,
major foreign markets were characterized by strict government
regulations, procurement policies, standards, and other
practices that resulted in limited competitive opportunities
for U.S. and other foreign firms in those markets. Although the
period authorized for telecommunications trade negotiations is
coterminus with multilateral trade negotiating authority in the
1988 Act, the separate negotiating authority is designed to
permit increased flexibility in negotiating agreements in
telecommunications trade. It permits the USTR to focus on
priority countries whose barriers or practices pose the
greatest impediment to market access by U.S. telecommunications
firms and to tailor the negotiating priorities to address the
specific circumstances in each country.
In February 1989, the USTR (acting on behalf of the
President) identified the European Community (EC) and Korea as
priority foreign countries ``that deny U.S. telecommunications
goods and services firms'' mutually advantageous market
opportunites, based on information received during a 6-month
consultation period with the private sector and Congress and
initiated negotiations. The initial term for those negotiations
was 18 months from the date of enactment (August 1988). At the
end of the 18-month period in February 1990, the USTR extended
the negotiations for an additional 1-year term, based on a
finding that substantial progress had been made and that
further progress was likely if the negotiations were continued.
In February 1991, the USTR once again used the discretion
provided in the Act to extend the negotiations with the EC and
Korea for an additional year, on the basis of past and expected
progress in the talks.
The 1-year extension in 1991 was the last authorized under
the Telecommunications Trade Act. The Act provides that if an
agreement with each priority country which achieves the U.S.
negotiating objectives was not reached by the end of that 1-
year period, the President must take ``whatever actions
authorized . . . that are appropriate and most likely to
achieve'' the negotiating objectives. In taking such action,
the President is directed first to take those actions which
most directly affect trade in telecommunications products and
services of the priority foreign country, unless he determines
that action against other economic sectors would be more
effective in achieving the negotiating objectives.
On February 21, 1992, the USTR announced that the United
States and Korea had concluded the last of a series of
agreements that would open access for competitive U.S.
telecommunications goods and services providers in the Korean
market on a fair and equitable basis. As a result, the
President determined that Korea met the negotiating objectives
set forth in section 1374 of the Omnibus Trade and
Competitiveness Act of 1988 and no further action would be
necessary. The annual review in 1993 of these agreements
brought into question Korean compliance. After negotiations,
Korea undertook in a clarifying letter to the United States a
number of additional steps to ensure proper implementation of
these agreements. On August 1, 1996, the USTR announced that
changes in the Korean telecommunications market since 1992 have
resulted in new barriers and identified Korea as a priority
foreign country. The USTR stated that it would seek to
negotiate an agreement with Korea to achieve U.S. objectives.
While progress had been made with respect to the EC,
several issues remained unresolved; in particular, the
objective of securing nondiscriminatory access to EC
government-owned telecommunications utilities for U.S. goods
and services has not been met. Since the President specified
action to address this issue under title VII of the 1988 Act
(see description under Government Procurement), further action
under section 1374 was not considered to be appropriate,
thereby concluding this proceeding.
In 1989, as part of the section 1377 review, USTR found
Japan to be in violation of the Market-Oriented Sector-Specific
(MOSS) Agreements in Telecommunications negotiated with Japan
during the latter half of the 1980's. The MOSS Agreements
consist of a series of commitments made by Japan concerning the
regulation of and trade in telecommunications goods and
services. As a result of the USTR finding and the ensuing
initiation of retaliatory proceedings under section 1377(c),
the United States and Japan reached the Third-Party Radio and
Cellular Telephone Agreement in June 1989. The annual review of
this agreement identified a potentially serious enforcement
problem with cellular telephone provisions. U.S. meetings with
Japan in the fall of 1993 failed to resolve this problem, and
as a result, on February 15, 1994, the United States determined
that Japan was not in compliance with the Agreement. Ensuring
negotiations led to an agreement concluded on March 12, 1994
which resolved U.S. concerns. On April 11, 1994, the government
of Japan forwarded to USTR a deployment plan called for under
the March 12 agreement. As a result, USTR terminated its
affirmative determination under section 1377 on April 12.
During the 1990 section 1377 review, the United States
identified two MOSS Agreements compliance problems: provision
of international value-added network services (IVANS) and
foreign access to Japan's network channel terminating equipment
(NCTE). Under the MOSS Agreements, the United States and Japan
agreed in November 1988 on steps Japan would take to further
liberalize its market for IVANS, resulting in the conclusion of
an agreement on August 1, 1990. Subsequent agreements in 1991
addressed technical concerns. Negotiations on NCTE issues
resulted in the July 25, 1990 agreement that committed Japan to
liberalize its NCTE market. The agreement provides for the non-
discriminatory treatment of foreign manufacturers in Japan and
provides terms governing NCTE use with current and future
services.
As part of the United States-Japan Framework for a New
Economic Partnership initiated July 10, 1993, the United States
and Japan identified government procurement of
telecommunications products and services as a priority area for
negotiation. These negotiations and subsequent agreements are
discussed in greater detail in the Government Procurement
chapter of this book.
Under the WTO basic telecommunications services agreement,
interventions by U.S. officials on behalf of U.S. industry
abroad, in instances where trading partners' WTO obligations
are implicated, have increased and led in several instances to
resolution of complaints without resort to investigations under
section 1377. Notwithstanding this favorable trend, monitoring
and enforcement activities under section 1377 have increased
substantially given that, pursuant to the WTO basic
telecommunications agreement, the number of trading partners
subject to annual review under section 1377 includes the entire
WTO membership.
The 1998 section 1377 review focused on implementation of
bilateral and WTO commitments by Taiwan, Canada, Japan, and
Mexico. In each case, the U.S. earned new agreements or
important satisfaction of U.S. industry concerns. With respect
to Taiwan, U.S. carriers requested a review of Taiwan's
compliance with a 1996 agreement on wireless U.S. carriers
requested a review of Taiwan's compliance with a 1996 agreement
on wireless services. They noted that interconnection rates
charged by the dominant carrier Chunghwa Telecommunications Co.
(CHT) were significantly above cost and posed a major
competitive impediment in the wireless services market. These
rates appeared inconsistent with the terms of the 1996
agreement, which mandated cost-based interconnection rates.
Based on this complaint, USTR negotiated an agreement,
concluded on February 20, 1998, which required CHT to reduce
its interconnection rates by almost 30 percent in 1998, and to
ensure that these rates are completely cost-based by 2001.
Canada and Mexico were also identified in 1998 as countries
that appeared to be in violation of their commitments under the
WTO. A Canadian regulatory proceeding has since eliminated the
international bypass restriction that was the focus of U.S.
industry's complaint. Despite bilateral discussions with Mexico
in 1998 and 1999, several important issues regarding Mexico's
implementation of its WTO telecom commitments remain under
investigation, including Mexico's failure to produce lower net
domestic interconnection costs for new entrants, and the
question whether Telmex (the dominant Mexican carrier and
former monopoly operator) is engaging in anti-competitive
cross-subsidization of different telecom services. As a result,
the out-of-cycle review on Mexico was extended for decision and
in November 2000, the U.S. requested consultations as a first
step toward the establishment of a WTO dispute settlement panel
to examine Mexico's compliance of its telecommunications
commitments.
The 1999 section 1377 review focused on implementation of
bilateral and WTO commitments by the European Community and
Member States, Mexico, Germany and Japan. In each case,
substantial progress was made in meeting the concerns of the
U.S. industry. USTR's 1999 review of the European Community and
Member States focused on the ``third generation'' (3G) mobile
systems. Private sector and government representatives of the
United States, Europe and other regions concluded in the
International Telecommunications Union (ITU) in late-1999 a
five-mode international recommendation for future 3G systems,
which will allow all 3G systems to offer global roaming, high-
speed data and Internet access, full-motion video and other
sophisticated multimedia services. However, certain decisions
in Europe suggest a strategy to promote pan-European and global
adoption of a system using only two of the five modes, which
could disadvantage U.S. users as well as manufactures and
service suppliers in the United States, European and third
country markets. European Commission officials, in bilateral
discussions and in responses to a series of U.S. letters
expressing concern, have pledged repeatedly that EU Member
States will not excluded the possibility of licensing use of
the other three modes of the ITU recommendation. Most, if not
all, EU Member States that have already instituted
authorization systems for 3G services have hewed to this
pledge.
Japan came under close scrutiny in the 1377 review for
over-priced interconnection rates that effectively prevent
competition in Japan's local market, as well as for prohibiting
the routing of both domestic and international traffic via
combinations of owned and leased network facilities. Japan
committed to address these issues in the context of the Second
Joint Status Report under the Enhanced Initiative on
Deregulation and Competition Policy released in May 1999.
In 2000, out-of-cycle reviews were initiated under section
1377 regarding compliance by Germany, Mexico, the United
Kingdom, and South Africa. The review on Germany focused on
continued excessive delays by Deutsche Telekom (``DT'') in
providing interconnection to competing carriers; excessive
license fees charged by the German government; and a refusal by
DT to perform billing and collection services for new entrants
absent a regulatory mandate. With respect to South Africa, the
review focused on whether South Africa is failing to ensure
that its dominant telecommunications supplier (``Telkom'')
provide access to and use of the private lines needed for the
competitive supply of value-added network services (``VANS'').
Normal Trade Relations or Most-Favored-Nation (Nondiscriminatory)
Treatment
Nondiscriminatory treatment of trading partners has been a
basic element of international trade for several centuries,
although its scope, application, and terminology in U.S. law
have changed as the complexity of trade among the nations has
increased. Nondiscriminatory treatment and the principle
underlying it are often referred to as the ``most-favored-
nation'' (MFN) treatment or principle. While the MFN principle
remains firmly in place as a fundamental concept governing U.S.
trade relations, the term ``most-favored-nation'' was recently
replaced with the term ``normal trade relations'' in all U.S.
trade laws and regulations.\33\ This was done to clear up
confusion and more clearly reflect the principles of U.S. trade
policy. In the following summary, the term ``MFN'' is retained
to describe the international obligation, while ``NTR'' is used
to describe U.S. law since 1998.
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\33\ Public Law 105-206, approved July 22, 1998.
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MFN had its orgins in international commercial agrements,
whereby the signatories extend to each other treatment in trade
matters which is no less favorable than that accorded to a
nation which is the ``most favored'' in this respect. The
effect of such treatment is that all countries to which it
applies are ``the most favored'' ones; hence, all are treated
equally. In the context of U.S. tariff legislation, NTR means
that the products of a country given such treatment are subject
to lower rates of duty (found in column 1 of the Harmonized
Tariff Schedule (HTS) of the United States), which have
resulted from various rounds of reciprocal tariff negotiations.
Products from countries not eligible for NTR under U.S. law are
subject to higher rates of duty (found in column 2 of the HTS),
which are essentially the rates of duty enacted by the Tariff
Act of 1930.
Prior to 1934, the United States accorded MFN treatment to
its trading partners reciprocally only within the scope of
commercial agreements containing an MFN clause. Section 350 of
the Tariff Act of 1930, as added by the Trade Agreements Act of
1934, in effect required the nondiscriminatory application to
all countries of tariff and trade concessions granted in
bilateral agreements, whether or not those countries had
agreements with the United States containing the MFN clause.
By becoming a signatory of the General Agreement on Tariffs
and Trade, the United States, as of January 1, 1948, also
accepted the basic obligation of GATT Article I to accord
unconditional MFN status to all other signatories. Thus, MFN or
NTR status is extended by the United States to foreign
countries as a matter not only of U.S. domestic law but also as
an international obligation.
The unconditional and unlimited MFN policy was changed
after the enactment of section 5 of the Trade Agreements
Extension Act of 1951,\34\ which directed the President to
withdraw or suspend MFN status from the Soviet Union and all
countries under the control of international communism. This
action was prompted by the outbreak of the Korean War and the
support that these countries were giving to North Korea and
China. As implemented, this directive was applied to all then-
existing Communist countries except Yugoslavia.
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\34\ Public Law 49-50, ch. 141, approved June 16, 1951.
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In December 1960, President Eisenhower revoked the
suspension of MFN status with respect to Poland. President
Kennedy suspended MFN status with respect to Cuba in May 1962,
pursuant to a new legislative requirement contained in section
401 of the Tariff Classification Act of 1962.\35\ The Tariff
Classification Act also enacted the new Tariff Schedules of the
United States, which for the first time, included in a general
headnote a current list of countries without MFN status.
Section 231 of the Trade Expansion Act of 1962,\36\ as amended
by section 402 of the Foreign Assistance Act of 1963, expanded
the scope of the suspension of MFN status by applying it to
``any country or area dominated by Communism,'' unless the
President determined that the continued application of MFN
status to Communist countries to which it was being applied at
the time of the enactment of the Trade Expansion Act (i.e., to
Poland and Yugoslavia) was in the national interest. The
President made such a determination for both countries in March
1964.
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\35\ Public Law 87-566, approved May 24, 1962.
\36\ Public Law 87-794, approved October 11, 1962, 19 U.S.C. 1351.
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The statutory provisions affecting the U.S. MFN policy and
its practical implementation remained unchanged thereafter
until enactment of the Trade Act of 1974. Subsequent amendments
to U.S. MFN policy were made in the Customs and Trade Act of
1990.\37\ As discussed above, ``MFN'' terminology was changed
to ``NTR'' in all trade laws and regulations in the Internal
Revenue Service Restructuring and Reform Act of 1997.\38\
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\37\ Public Law 101-382, approved August 20, 1990.
\38\ Public Law 105-206, approved July 22, 1998.
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The Normal Trade Relation or MFN principle under present law
The basic statute currently in force with respect to the
NTR treatment of U.S. trading partners is section 126 of the
Trade Act of 1974.\39\ Section 126 contains the general
requirement that any duty or other import restriction
proclaimed to carry out any trade agreement applies on an MFN
basis to products of all foreign countries, except as otherwise
provided by law. The key provision embodying such exceptions
with respect to tariff treatment is General Note 3(b) of the
HTS, which contains the list of countries denied NTR tariff
status with respect to their exports to the United States. (See
list under chapter 1.) Section 1105(a) of the Omnibus Trade and
Competitiveness Act of 1988 \40\ applies section 126(a) to
trade agreements entered into under section 1102 of that Act,
which includes the North American Free Trade Agreement and the
Uruguay Round Agreements.
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\39\ Public Law 93-618, 19 U.S.C. 2136.
\40\ Public Law 100-418, 19 U.S.C. 2904.
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Other measures, most notably the Generalized System of
Preferences, the Caribbean Basin Initiative, the African Growth
and Opportunity Act, the Andean Initiative, the United States-
Israel Free Trade Area, the North American Free Trade
Agreement, and tariff treatment of least developed developing
countries, provide specifically for application of preferential
duty treatment for eligible countries and products under
certain circumstances. This preferential tariff status grants
terms that are more favorable than those granted to other
countries which otherwise receive NTR treatment from the United
States. (See separate sections and chapter 1.)
With respect to nontariff measures, section 1103(a) of the
Omnibus Trade and Tariff Act of 1988 requires the President to
recommend to the Congress that benefits and obligations of a
particular agreement apply solely to the parties to that
agreement or not apply uniformly to all parties, if such
application is consistent with the Agreement. The Agreement on
Subsidies and Countervailing Duties and the Agreement on
Government Procurement, negotiated during the Tokyo Round of
GATT multilateral trade negotiations, were implemented by the
United States on a non-MFN basis. The Uruguay Round Agreement
on Subsidies and Countervailing Measures now applies to all
countries that become members of the World Trade Organization.
The renegotiated GATT Government Procurement Agreement will
continue to be implemented on a non-MFN basis.
Nonmarket economy countries
The Trade Act of 1974 repealed section 231 of the Trade
Expansion Act of 1962. Title IV of the Trade Act of 1974,\41\
as amended, presently regulates the extension of NTR tariff
treatment to nonmarket economy countries. Section 401 directs
the President to continue to deny NTR treatment to any country
to which it was denied on the date of the enactment of the
Trade Act (i.e., all Communist countries as of January 3, 1975,
except Poland and Yugoslavia). Section 402 also denies NTR
treatment (as well as access to U.S. government credits, or
credit or investment guarantees) to any nonmarket economy
country ineligible for NTR treatment on the date of enactment
of the Trade Act and which the President determines denies or
seriously restricts or burdens its citizen's right to emigrate.
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\41\ Public Law 93-618, as amended by P.L. 96-39, P.L. 100-418, and
P.L. 101-382, 19 U.S.C. 2431.
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A country subject to the ban imposed by section 401 may
gain NTR status only by fulfilling two basic conditions: (1)
compliance with the requirements of the freedom of emigration
provisions under section 402 of the Trade Act; and (2)
conclusion of a bilateral commercial agreement with the United
States under section 405 of the Trade Act providing reciprocal
nondiscriminatory treatment.
The provisions of section 402, commonly referred to as the
Jackson-Vanik amendment, allow a non-NTR, nonmarket economy
country to receive NTR status (and access to U.S. financial
facilities) only if the President determines that it permits
free and unrestricted emigration of its citizens. If the
President determines that a country is in full compliance with
the Jackson-Vanik freedom of emigration requirements, he must
submit a report to the Congress by June 30 and December 31 of
each year that such country receives NTR treatment, describing
the nature of the country's emigration laws and policies. The
country's NTR status may be revoked if a joint resolution
disapproving the December 31 compliance report is enacted into
law within 90 legislative days of the delivery of the report to
Congress. If such a resolution is enacted, the country's NTR
status is rescinded, effective 60 calendar days after
enactment.
Section 402 also authorizes the President to waive the
requirements for full compliance of the particular country with
the Jackson-Vanik requirements, if he determines that such
waiver will substantially promote the objectives of the freedom
of emigration provisions and if he has received assurances that
the emigration practices of the country will lead substantially
to the achievement of those objectives. The President may, at
any time, terminate by executive order any waiver granted under
authority of section 402.
The President's waiver authority is subject to annual
renewal. The renewal procedure under section 402(d)(1) requires
the President, if he determines that waiver authority extension
will substantially promote freedom of emigration objectives, to
submit to the Congress a recommendation for a 12-month
extension of the waiver authority within 30 days prior to its
expiration (i.e., by June 3 each year), together with his
reasons for the recommendation and a determination with respect
to each country for which a waiver is in effect that the
continuation of the waiver will substantially promote the
freedom of emigration objectives.
Under the terms of the 1974 Act, as amended, the extension
of the waiver authority for an additional 12-month period is
automatic unless a joint resolution disapproving such extension
either generally or with respect to a specific country is
enacted into law within 60 days after the expiration of the
previous waiver authority. The enactment of such resolution
would rescind the waiver authority (and with it the grant of
the NTR status) with respect to countries covered by the
resolution, effective 60 days after its enactment.
Presidential authority to extend NTR status to a country
excluded under section 401 may be utilized only as long as a
bilateral commercial agreement between the United States and
the country involved remains in force. Sections 404 and 405 of
the Trade Act of 1974 as amended authorize the President to
conclude such agreements, which must contain various
provisions, including safeguards against disruptive imports,
intellectual property rights, trade promotion, and
consultations. Agreements and implementing proclamations can
take effect only if a joint resolution of approval is enacted
into law under the fast track procedures of section 151 of the
Trade Act. Agreements may remain in force for no more than 3
years, renewable for additional 3-year periods (without any
congressional approval) if past operation has been found
satisfactory.
Current provisions providing for the use of joint
resolutions to approve trade agreements with nonmarket economy
countries and to disapprove presidential waivers and compliance
reports were adopted as part of the Customs and Trade Act of
1990. The amendments were made in response to a 1983 Supreme
Court ruling in Immigration and Naturalization Service v.
Chadha et al., which raised serious questions about the
constitutionality of the use of concurrent or one-house
resolutions for congressional approval and disapproval actions,
as previously provided for in the Jackson-Vanik amendment. The
court ruled that any action of a legislative nature must be
taken by both houses of Congress and presented to the President
for signature or veto.
Application of MFN/NTR treatment
Presidential authority to waive the emigration requirements
for extension of NTR treatment under title IV of the Trade Act
of 1974 has been extended annually since 1976. Between 1976 and
1989, the waiver authority and the authority to conclude
bilateral trade agreements and grant MFN status was used only
three times. MFN treatment was extended to Romania effective
August 3, 1975; to Hungary effective July 7, 1978; and to the
People's Republic of China effective February 1, 1980. Waivers
were continued annually for all three countries and all three
underlying bilateral agreements were extended, when
appropriate, for additional 3-year periods by presidential
determinations of their satisfactory operation.
Although disapproval resolutions and alternative
conditional NTR legislation were considered by the Congress,
NTR treatment has continued uninterrupted for the People's
Republic of China under annual renewals of the waiver
authority.
People's Republic of China
On June 3, 1999, the President announced his decision to
waive for another year the freedom of emigration requirements
in Title IV of the Trade Act of 1974 with respect to People's
Republic of China, thereby granting normal trade relations
(NTR) treatment China between July 1, 1999, and June 30, 2000.
On May 15, 2000, Chairman Archer introduced H.R. 4444, to
authorize extension of nondiscriminatory treatment (normal
trade relations treatment) to the People's Republic of China.
As introduced, the bill would grant the President the authority
to determine that Title IV of the Trade Act should no longer
apply to the People's Republic of China upon its accession to
the WTO if he transmits a report to Congress certifying that
the terms and conditions for accession of China to the WTO are
at least equivalent to those agreed to in the November 15,
1999, bilateral agreement between the United States and China.
As amended by the Ways and Means Committee, H.R. 4444
included a provision codifying the import surge mechanism
negotiated as part of the 1999 U.S.-China bilateral agreement.
Procedures for this new ``import surge mechanism'' are modeled
after Section 406 of the Trade Act of 1974, as amended, with
certain changes to conform to the requirements of the bilateral
trade agreement. The legislation also: (1) establishes clear
standards for the application of Presidential discretion in
providing relief to injured industries and workers; (2)
authorizes the President to provide a provisional safeguard in
cases where ``delay would cause damage which it would be
difficult to repair,'' as permitted under the United States-
China Agreement; and (3) implements a provision in the
Agreement concerning trade diversion.
When H.R. 4444 was considered in the House, the House
adopted H. Res. 510, which provided for an amendment in the
nature of a substitute to H.R. 4444. The amendment included the
text of H.R. 4444, as reported from the Committee, and
additional language establishing a Congressional-Executive
Commission on China to focus on monitoring human rights,
including internationally recognized core labor standards and
religious freedom. The legislation also included provisions
that: (1) require USTR to submit an annual report on China's
compliance with WTO obligations; (2) provide that the United
States will seek an annual review of China's compliance with
its WTO obligations in the WTO as part of China's Protocol of
Accession; (3) establish a task force on the prohibition on the
importation of products of forced or prison labor; and (4)
authorize additional resources for monitoring and enforcing
China's compliance with trade agreements. The legislation also
contains a sense of Congress that the accession of Taiwan and
the People's Republic of China to the WTO should be considered
at the same WTO General Council meeting. Finally, the
legislation contains a number of other provisions not in the
jurisdiction of the Committee, such as the authorization of
funds to assist the development of rule of law and democracy in
China. H.R. 4444, as amended, passed the House on June 24,
2000, by a vote of 237-197. The bill was signed into law by the
President on October 10, 2000 (Public Law 106-286). The Ways
and Means Committee continues to monitor the progress China is
making in negotiations to join the WTO, which have not
concluded as of this printing.
On June 2, 2000, the President announced his decision to
waive for another year the freedom of emigration requirements
in Title IV of the Trade Act of 1974 with respect to China,
thereby granting China NTR status between July 1, 2000 and June
30, 2001.
Romania
In 1988, the President did not exercise the annual waiver
authority with respect to Romania, issuing a proclamation on
June 28, announcing his decision to allow the waiver to expire
and to withdraw MFN treatment in response to the decision by
the government of Romania to renounce the renewal of MFN
subject to the terms of Jackson-Vanik. Romania's MFN status and
its eligibility for U.S. government-supported export credits
expired on July 3, 1988. On March 11, 1992, the Department of
State issued a statement announcing that it had informed the
Romanian government that the United States was prepared to sign
a new bilateral trade agreement in light of Romania's progress
toward democratic pluralism and a market economy and its desire
for closer bilateral relations. The President issued a waiver
from the freedom of emigration requirements for Romania on
August 17, 1991, and signed a new bilateral trade agreement on
April 3, 1992. However, in view of the concerns raised about
the Romanian government's continued commitment to democratic
reform, House consideration of H.J. Res. 512, approving the
extension of MFN treatment to Romania, was defeated on
September 30. H.J. Res. 228, approving the extension of MFN,
was reintroduced on July 13, 1993. In recommending approval,
the House Ways and Means Committee report noted that there had
been substantial progress on democratization and human rights,
and additional significant improvements had been made since
1992. The resolution was subsequently passed by the House on
October 12, and the Senate on October 21. H.J. Res. 228 was
approved by the President and signed into law on November 2,
1993.\42\
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\42\ Public Law 103-133, approved November 2, 1993.
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Romania continued receiving MFN treatment under a
presidential waiver from the Jackson-Vanik freedom of
emigration criteria until the President found Romania to be in
full compliance with those requirements on May 19, 1995. On
March 26, 1996, H.R. 3161 was introduced to provide the
President with the authority to determine that title IV should
no longer apply with respect to Romania and to extend
unconditional MFN status to that country. Upon recommending
approval of the bill, the Committee noted that Romania is a
member of the World Trade Organization (WTO) and that an
extension of unconditional MFN is necessary in order for the
United States to avail itself of all rights under the WTO with
respect to Romania. H.R. 3161 passed the House on July 17, 1996
and the Senate on July 19. The bill was signed into law by the
President on August 3.\43\ On November 7, the President issued
a proclamation removing the application of title IV from
Romania and extending unconditional MFN treatment to the
products of that country.
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\43\ Public Law 104-171, approved August 3, 1996.
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Hungary and the Czech Republic
Since 1989, presidential authority under title IV has been
used frequently, in response to the collapse of Communist
domination in Eastern and Central Europe. On October 25, 1989,
Hungary became the first country ever found in full compliance
with the title IV freedom of emigration requirements, thereby
becoming eligible for open-ended NTR status, as long as the
trade agreement remained in force and Hungary remained in full
compliance.
On February 20, 1990, the President issued a waiver for
Czechoslovakia, making that country eligible to receive U.S.
government credits and credit and investment guarantees.
Following congressional approval of a trade agreement, MFN
treatment was extended to Czechoslovakia on November 17, 1990.
The President continued the waiver on June 3, 1991, and then
issued a determination on October 16 that Czechoslovakia's
emigration policies met the Jackson-Vanik freedom of emigration
requirements.
Sections 1 and 2 of Public Law 102-182, signed on December
4, 1991, provided for full normalization of MFN trading
relations with both Hungary and Czechoslovakia, based on
findings of their respect for fundamental human rights,
policies of free emigration, and the political and economic
reforms undertaken by both countries. Section 2 of that law
authorized the President to terminate the application of title
IV of the Trade Act of 1974 and extend MFN status to either or
both Hungary and Czechoslovakia. Unconditional MFN treatment
was granted to both countries in April 1992. Following the
dissolution of Czechoslovakia in 1993, the independent
countries of the Czech Republic and Slovakia retained their MFN
status, having assumed the rights and obligations of the
earlier agreement between the United States and Czechoslovakia.
German Democratic Republic (East Germany)
Section 142 of the Customs and Trade Act of 1990 authorized
the President to extend MFN treatment to the German Democratic
Republic (East Germany), thus superseding the requirements of
title IV, in light of the rapid progress then being made toward
German reunification. However, the Congress expressed the
strong view that such action should not be taken before MFN
status was granted to Czechoslovakia under authority of title
IV, since Czechoslovakia had followed all the procedures
required by that title. The authority of section 142 was never
used, however. The President issued a waiver for East Germany
on August 15, 1990; that formerly independent country received
MFN status on October 3, 1990 as part of a reunified Germany.
Former Soviet Union
The Bush Administration entered into negotiations for a new
bilateral trade agreement with the Soviet Union in response to
the advent of ``perestroika'' and ``glasnost'' under the
leadership of Soviet President Gorbachev, the subsequent
collapse of communist regimes in Eastern and Central Europe,
substantial increases in emigration rates, and to encourage
further reforms. That agreement with its side letters was
signed by Presidents Bush and Gorbachev on June 1, 1990. The
President issued a waiver from the freedom of emigration
requirements for the Soviet Union on December 29, 1990 and
again on June 3, 1991. However, Soviet violence and economic
sanctions against the independence movements in the Baltic
states and Soviet republics resulted in delay of the submission
of the Agreement to the Congress until August 2, 1991.
Following independence of the Baltic states in September, the
President resubmitted the trade agreement and presidential
proclamation on October 9 and a new joint resolution was
introduced omitting references to Estonia, Latvia, and
Lithuania. The joint resolution approving the extension of MFN
treatment to the products of the Soviet Union was passed by the
Congress in November and signed into law on December 9,
1991.\44\ Subsequently, bilateral trade agreements granting
reciprocal MFN treatment have been signed with governments of
the newly-independent republics of the former Soviet Union.\45\
No further congressional action is required as long as these
agreements ratified by the republics reflect only technical
changes in the previously approved original agreement signed by
the former Soviet Union.
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\44\ Public Law 102-197.
\45\ As of this writing, bilateral trade agreements have been
signed and ratified and conditional NTR treatment granted to the 12
republics of Russia, Ukraine, Kyrgyzstan, Moldova, Armenia, Belarus,
Georgia, Kazakhstan, Tajikistan, Turkmenistan, and Uzbekistan, and
Azerbaijan.
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Title IV of the Trade Act of 1974 applied to the Baltic
states of Estonia, Latvia, and Lithuania by virtue of their
forcible incorporation into the former Soviet Union. Following
restoration of their independence from the Soviet Union on
September 6, 1991, legislation \46\ extended MFN treatment to
the products of the three Baltic states, notwithstanding title
IV or any other provision of law and terminated the application
of title IV to these countries.
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\46\ Public Law 102-182, title I, approved December 4, 1991.
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Georgia
Georgia first received conditional normal trade relations
from the United States in 1992 under a Presidential waiver from
the freedom of emigration requirements in the Jackson-Vanik
amendment. In 1997, Georgia was found to be in full compliance
with the Jackson-Vanik requirements, but its trade status
remained subject to annual compliance reviews. On December 28,
1998, the President submitted a report to Congress, as required
by law, on the continued compliance of Georgia with the freedom
of emigration requirements if the Jackson-Vanik amendment
(House Document 106-5). The House received similar reports on
July 2, 1999 (No House Document Number), on January 7, 2000
(House Document 106-164), and on June 30, 2000 (House Document
106-265).
Public Law 106-476, signed into law on November 9, 2000,
authorized the President to extend normal trade relations to
Georgia.
Kyrgyzstan
Kyrgyzstan first received conditional normal trade
relations from the United States in 1992 under a Presidential
waiver from the freedom of emigration requirements in the
Jackson-Vanik amendment to the Trade Act of 1974. In 1997,
Kyrgyzstan was found to be in full compliance with the Jackson-
Vanik requirements, but its trade status remained subject to
annual complaiance reviews. On December 28, 1998, the President
submitted a report to Congress, as required by law, on the
continued compliance of Kyrgyzstan with the freedom of
emigration requirements in the Jackson-Vanik amendment (House
Document 106-5). Similar reports were submitted on July 2, 1999
(No House Document Number) and on January 7, 2000 (House
Document 106-104). Public Law 106-200, signed into law on May
18, 2000, authorized the President to extend unconditional
normal trade relations to Kyrgyzstan.
Moldova
Moldova first received conditional normal trade relations
from the United States in 1992 under a Presidential waiver from
the freedom of emigration requirements in the Jackson-Vanik
amendment to the Trade Act of 1974. In 1997, Moldova was found
to be in full compliance with the Jackson-Vanik requirements,
but its trade status remained subject to annual compliance
reviews. On December 28, 1998, the President submitted a report
to Congress, as required by law, on the continued compliance of
Moldova with the freedom of emigration requirements in the
Jackson-Vanik amendment (House Document 106-5). On July 2,
1999, the President submitted a report to Congress, as required
by law, on the continued compliance of Moldova with the freedom
of emigration requirements in the Jackson-Vanik amendment (No
House Document Number). On January 7 and June 30, 2000, the
President submitted similar reports (House Documents) 106-164
and 106-265).
Bulgaria and Mongolia
The President issued a waiver from the freedom of
emigration requirements for Bulgaria on January 22, 1991, and
for Mongolia on January 23, 1991; the waivers were continued
for both countries on June 3, 1991. Bilateral trade agreements
providing MFN treatment for products of each of these two
countries were submitted to the Congress on June 25, 1991.
Joint resolutions approving the extension of MFN treatment to
Bulgaria and Mongolia were passed by the Congress in October
and signed by the President on November 13, 1991.\47\
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\47\ Public Law 102-157 and Public Law 102-158.
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Bulgaria continued to receive MFN treatment under a
presidential waiver from the Jackson-Vanik freedom of
emigration criteria until the President found the country to be
in full compliance with the statutory requirements in June
1993. On January 5, 1996, H.R. 2853 was introduced to provide
the President with the authority to determine that title IV
should no longer apply with respect to Bulgaria and to extend
unconditional MFN status to the products of that country. In
recommending approval of the bill, the Committee noted that
Bulgaria was in the process of acceding to the WTO and that an
extension of unconditional MFN would be necessary in order for
the United States to avail itself of all rights under the WTO
at the time of Bulgaria's accession. H.R. 2853 passed the House
on March 5, 1996 and the Senate on June 28. The bill was signed
into law by the President on July 18.\48\ On September 27, the
President issued a proclamation effective October 1 removing
the application of title IV from Bulgaria and extending
unconditional MFN treatment to the products of that country.
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\48\ Public Law 104-162, approved July 18, 1996.
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Mongolia
In 1996, Mongolia was found to be in full compliance with
the Jackson-Vanik requirements, but its trade status remained
subject to annual compliance reviews. On February 11, 1999, the
President submitted a report to Congress, as required by law,
on the continued compliance of Mongolia with the freedom of
emigration requirements in the Jackson-Vanik amendment (House
Document 106-19). Public Law 106-36, signed into law on June
25, 1999, authorized the President to determine that title IV
of the Trade Act of 1974 (the Jackson-Vanik amendment) should
no longer apply to Mongolia and to proclaim the extension of
nondiscriminatory treatment (normal trade relations treatment)
to that country.
Prusuant to the provisions of Public Law 106-36, the
President issued Proclamation 7207 on July 1, 1999, determining
that title IV of the Trade Act of 1974 should no longer apply
to Mongolia and declaring the extension of nondiscriminatory
treatment to the products of that country.
Albania
On May 14, 1992, a bilateral trade agreement was signed
with Albania and a Presidential waiver was issued on May 20. A
joint resolution approving the granting of MFN treatment to the
products of Albania was enacted on August 26, 1992\49\ In 1997,
Albania was found to be in full complaince with the Jackson-
Vanik requirements, but its trade status remained submject to
annual compliance reviews for several years. On February 2,
1999, the President submitted a report to Congress, as required
by law, on the continued compliance of Albania with the freedom
of emigration requirements in the Jackson-Vankik amendment
(House Doucment 106-16). The President submitted a similar
report on February 9, 2000 (House Document 106-195). Public Law
106-200, signed into law on May 19, 2000, authroized the
President to determine that the Jackson-Vanik amendment should
no longer apply to Albania and to extend non-discriminatory
(normal trade relations treatment) to Albania. Pursuant to the
Provisions of Public Law 106-200, the President issued
Proclamation 7326 on June 29, 2000 determining that title IV of
the Trade Act of 1974 should no longer apply to Albania and
declaring the extension of nondiscriminatory NTR treatment to
the products of that country.
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\49\ Public Law 102-363.
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Armenia
Armenia first received conditional normal trade relations
from the United States in 1992 under a Presidential waiver from
the freedom of emigration requirements in Title IV of the Trade
Act of 1974 (the Jackson-Vanik amendment). In 1997, Armenia was
found to be in full compliance with the Jackson-Vanik
requirements, but its trade status remained subject to annual
compliance reviews. On December 28, 1998, the President
submitted a report to Congress, as required by law, on the
continued compliance of Armenia with the freedom of emigration
requirements in the Jackson-Vanik amendment (House Document
106-5). On July 2, 1999, the President submitted similar
report. (No House Document Number). On January 7, and June 30,
2000, the President submitted additional reports to Congress,
as required by law, on the continued compliance of Armenia with
the freedom of emigration requirements in the Jackson-Vanik
amendment (House Documents 106-164 and 106-265).
Poland
Poland is exempt from denial of MFN under title IV of the
Trade Act, but its unconditional MFN status was suspended by
presidential proclamation effective November 1, 1982, under the
authority of section 125(d) of the Trade Act. On February 23,
1987, President Reagan restored MFN status to Poland by
presidential proclamation as part of the last stage of removing
sanctions imposed on Poland in 1982 in response to its action
against Solidarity. MFN status for Afghanistan was suspended by
presidential proclamation effective February 14, 1986, under
the authority provided by section 118 of the Continuing
Appropriations Act for fiscal year 1986.\50\
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\50\ Public Law 99-190, approved December 19, 1985.
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The former Yugoslavia
The former Yugoslavia is also not subject to the provisions
of title IV. In response to the armed conflict and atrocities
in the former Yugoslavia, legislation was initiated and passed
late in the 102nd Congress withdrawing MFN treatment from
Serbia and Montenegro; the other four newly-independent
republics of Bosnia-Hercegovina, Croatia, Macedonia, and
Slovenia retain MFN status. The legislation authorizes the
President to restore MFN status to these two republics if he
certifies to the Congress that certain conditions are
fulfilled.\51\
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\51\ Public Law 102-420, approved October 16, 1992.
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Cambodia, Laos, and Vietnam
Because of a peculiarity in the wording of the initial MFN
status-suspending provision and its mandatory continuation by
section 401, Cambodia's MFN status was not subject to the terms
and conditions of the Jackson-Vanik amendment. Specifically,
the original administrative suspension in 1951 and its
enactment as part of the Trade Expansion Act of 1962 applied to
``any part of Cambodia, Laos, or Vietnam which may be under
Communist domination or control.'' This qualified application
of the suspension, based on the actual situation in each
country involved, was in effect at the time of enactment of
section 401, which predated the compete Communist takeover of
Cambodia in May 1975. The language of the provision was not
changed until enactment of the Harmonized Tariff Schedule (HTS)
in the Omnibus Trade and Competitiveness Act of 1988, which
listed ``Kampuchea'' in General Note 3(b) among those countries
whose products were denied MFN treatment. Upon the formation of
the freely elected Royal Cambodian government in 1993, the
United States and Cambodia negotiated an agreement on bilateral
trade relations and intellectual property rights protection,
calling for a reciprocal extension of MFN status. On May 16,
1995, H.R. 1642 was introduced to amend the HTS by striking
``Kampuchea'' to allow for an extension of unconditional MFN
treatment to Cambodia upon the effective date of a Federal
Register notice that a trade agreement obligating reciprocal
MFN treatment had entered into force. The bill also required
the President to report to Congress, no later than 18 months
after the date of enactment, on trade relations between the
United States and Cambodia under the bilateral agreement. H.R.
1642 passed the House on July 11, 1996 and the Senate on July
25. The bill was signed into law by the President on September
25.\52\ As of October 25, the products of Cambodia were
extended unconditional MFN treatment pursuant to a Federal
Register notice published by the U.S. Trade Representative that
a bilateral trade agreement between the United States and
Cambodia was signed on October 4.
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\52\ Public Law 104-203, approved September 25, 1996.
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Vietnam
Vietnam first received a Presidential waiver in 1998 from
the freedom of emigration requirements in the Jackson-Vanik
amendment to the Trade Act of 1974. However, because the
bilateral trade agreement between the United States has not
been transmitted to and approved by Congress, Vietnam is
ineligible under Title IV of the Trade Act of 1974 to receive
normal trade relations from the United States. The practical
effect of the Jackson-Vanik waiver is to make Vietnam eligible
for certain U.S. government credits, or investment or credit
guarantee programs, provided that Vietnam meets the relevant
program criteria. These programs, which lie outside the
jurisdiction of the Committee on Ways and Means, include the
Oversease Private Investment Corporation, the Export-Import
Bank, and agricultural credit programs administered by the U.S.
Depertment of Agriculture.
On June 3, 1999, the President transmitted a letter and
report to Congress on the continuation of Vietnam's Jackson-
Vanik waiver for the next 12-month period (House Document 106-
78). The President issued the waiver on the basis that it would
substantially promote achievement of the objectives in the
statute.
On June 2, 2000, the President transmitted another letter
and report to Congress on the continuation of Vietnam's
Jackson-Vanik waiver for an additional 12 month period (House
Document 106-252). During the 106th Congress the House defeated
two resolutions which would have disapproved Presidential
waiver determinations for Vietnam.
In July 2000, the United States and Vietnam signed a
bilateral commercial agreement. Upon approval of the agreement
by Congress, Vietnam would be eligible for conditional normal
trade relations, subject to a yearly determination by the
President.
North American Trade Relations
Section 1102 of the Omnibus Trade and Competitiveness Act
of 1988 \53\ authorized the President to enter into
multilateral or bilateral trade agreements, before June 1, 1993
(extended until April 15, 1994, only for the GATT Uruguay Round
of Multilateral Trade Negotiations) to reduce or eliminate
tariff or nontariff barriers and other trade-distorting
measures, subject to congressional consultation requirements
under sections 1102 and 1103 and approval of implementing
legislation under special fast track procedural rules of the
House and Senate under section 151 of the Trade Act of 1974.
The authorities provided the means to achieve the negotiating
objectives set forth under section 1101 of the 1988 Act.
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\53\ Public Law 100-418, approved August 23, 1988, 19 U.S.C. 2901
note.
---------------------------------------------------------------------------
On August 12, 1992, President Bush announced the completion
of negotiations of a comprehensive North American Free Trade
Agreement (NAFTA). On September 18, the President officially
notified Congress of his intention to enter into the Agreement,
accompanied by reports of 38 private sector advisory committees
on the draft Agreement as required by section 135 of the Trade
Act of 1974, as amended. This notice was followed on October 7
by the initialling of the draft legal text by the trade
ministers of the three participating countries in San Antonio,
Texas. The Agreement was signed on December 17, the expiration
of the 90-day minimum notice period.
Also on December 17, President-elect Clinton stated that he
could not support the NAFTA as negotiated without additional
side agreements covering the environment, workers, and import
surges. On August 13, 1993, U.S. Trade Representative Michael
Kantor announced completion of these supplemental agreements.
He also announced a basic agreement on a new institutional
structure for funding environmental infrastructure projects in
the U.S.-Mexico border region. The NAFTA side agreements were
signed in a White House ceremony on September 14, 1993.
On November 4, 1993, President Clinton sent two letters of
transmittal to the Congress covering: (1) the NAFTA text,
together with the draft implementing bill, Statement of
Administrative Action and supporting documents as required
under section 1103(a) of the 1988 Act for congressional
approval; and (2) the NAFTA supplemental agreements.
As provided under section 151 of the Trade Act of 1974, the
implementing legislation was introduced as H.R. 3450 in the
House and S. 1627 in the Senate on November 4. On November 17,
the House passed H.R. 3450. On November 20, the Senate passed
the bill. The bill was then signed by the President and became
public law on December 8, 1993. On December 15, 1993, President
Clinton issued Presidential Proclamation 6641 to implement as
of January 1, 1994 the tariff modification provisions under the
North American Free Trade Agreement as provided for under
section 1102(a) of the 1988 Act.\54\
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\54\ Proclamation No. 6641, 58 Fed. Reg. 68,191 (1993).
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North American Free Trade Agreement
The North American Free Trade Agreement is the most
comprehensive trade agreement ever negotiated and creates the
world's largest market for goods and services.
The cornerstone of the Agreement is the phased-out
elimination of all tariffs on trade between the United States,
Canada, and Mexico. With respect to United States-Canada
bilateral trade, all tariffs will be eliminated by 1999, as was
agreed in the United States-Canada Free-Trade Agreement. As for
United States-Mexico bilateral trade, most tariffs will be
eliminated by 2004, although a few U.S. tariffs on potentially
import-sensitive items will not be completely eliminated until
2009. The NAFTA also reduces or eliminates a number of
nontariff barriers to trade, liberalizes restrictions on
investment and services, sets forth strong and comprehensive
rules on intellectual property, and extends to the three
countries the international system established under the United
States-Canada Free-Trade Agreement for review of national
determinations of dumping and subsidy practices.
North American Free Trade Agreement Implementation Act of 1993
The North American Free Trade Agreement Implementation Act
of 1993 \55\ approved the Agreement (but not the supplemental
agreements) and Statement of Administrative Action submitted to
the Congress on November 4, 1993 and includes provisions which
are necessary or appropriate to implement the Agreement in U.S.
domestic law. U.S. law prevails over the Agreement if there is
a conflict. The Agreement establishes a federal-state
consultation process concerning NAFTA obligations affecting
state laws. The Act establishes a federal-state consultation
process to achieve conformity of state laws with the Agreement.
No person other than the United States has a cause of action or
defense under the Agreement.
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\55\ Public Law 103-182, approved December 8, 1993, 19 U.S.C. 3301
note.
---------------------------------------------------------------------------
The President is authorized to proclaim the modifications
in U.S. duties to implement the scheduled phaseout and
elimination of all tariffs required under various provisions of
the NAFTA and to maintain the general level of concessions. The
rules of origin in the Act, which are to ensure application of
NAFTA preferential tariff treatment only to goods originating
in Mexico or Canada, are enacted in the statute. The
legislation implements U.S. obligations under the NAFTA to
eliminate customs merchandising processing fees, restrict duty
drawback, and revise country-of-origin marking requirements;
amends penalties and recordkeeping requirements to enforce
NAFTA rules of origin and other customs requirements; and
requires monitoring of television and color picture tube
imports.
The legislation also includes procedures and criteria for
applying bilateral and global import relief measures on
Canadian and Mexican articles; implements NAFTA obligations
that apply to certain agricultural commodities, intellectual
property rights protection, temporary entry of business
persons, standards and sanitary and phytosanitary measures, and
corporate average fuel economy; and authorizes the waiver of
discriminatory government purchasing restrictions on NAFTA-
covered procurement.
The legislation implements into U.S. domestic law the
institutional provisions of the NAFTA establishing binational
panel and extraordinary challenge committee review of final
antidumping and countervailing duty determinations, in lieu of
domestic judicial review, including procedures and criteria for
the selection of panelists appointed by the United States, and
special procedures for the selection of federal judges for
panels and committees. Objectives for future negotiations with
NAFTA countries on subsidies and special procedures for
industries facing subsidized competition pending development of
subsidy rules are also included.
Institutional provisions include authorization of a U.S.
section of the NAFTA Secretariat, requirements relating to
selection of dispute settlement panelists, and a preliminary
process for considering possible future country accession to
NAFTA, subject to congressional approval.
Other provisions include the establishment of a NAFTA
transitional adjustment assistance program of comprehensive
benefits, including training and income support, for workers
who may be laid off due to increased U.S. imports from Mexico
or Canada or a shift in production to Mexico or Canada, and
authorizes state self-employment assistance programs. Also
included are a comprehensive report by the President on the
operation and economic impact of the NAFTA after 3 years, a
response to actions affecting U.S. cultural industries, a
report on the impact of the NAFTA on motor vehicle exports to
Mexico, a response to discriminatory tax measures, and
authorization of a Center for the Study of Western Hemisphere
Trade.
With respect to the supplemental agreements, the
legislation authorized U.S. participation in, and
appropriations for, the Commissions on Labor Cooperation,
Environmental Cooperation, and Border Environment Cooperation.
It also includes provisions relating to U.S. membership in the
North American Development Bank.
United States-Israel Trade Relations
Title IV of the Trade and Tariff Act of 1984 \56\ amended
section 102(b) of the Trade Act of 1974 to authorize the
President to enter into a bilateral reciprocal trade agreement
with Israel specifically providing for elimination or reduction
of U.S. duties on products of that country as well as nontariff
barriers, subject to congressional consultations and approval
of implementing legislation under the expedited procedures of
sections 102 and 151-154 of the Trade Act. As amended by
section 401, the requirements for advance consultations and 90-
day advance notice to Congress of intent to enter into a trade
agreement did not apply to a bilateral agreement with Israel.
Title IV also contains basic provisions of U.S. laws required
to be applied to the administration of the Agreement.
---------------------------------------------------------------------------
\56\ Public Law 98-573, title IV, approved October 30, 1984.
---------------------------------------------------------------------------
On November 29, 1983, President Reagan and Israeli Prime
Minister Shamir agreed to proceed with bilateral negotiations
on a United States-Israel free trade area, which the Israeli
government originally proposed in 1981. Negotiations by the
U.S. Trade Representative began in mid-January 1984 on the
elements of an agreement to eliminate tariffs and other trade-
distorting practices between the two countries. The Agreement
on the Establishment of a Free Trade Area Between the
government of the United States of America and the government
of Israel was signed on April 22, 1985. The President
transmitted to the Congress on April 29 the text of the
Agreement, a draft implementing bill, a statement of
administrative action, and an explanation of the effects on
existing law. The United States-Israel Free Trade Area
Implementation Act of 1985 \57\ approved the free trade area
agreement with changes in U.S. laws necessary and appropriate
for its domestic implementation. The implementing bill was
passed by both Houses of Congress in May and signed into law on
June 11, 1985.
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\57\ Public Law 99-47, approved June 11, 1985, 19 U.S.C. 2112.
---------------------------------------------------------------------------
Title IV of the Trade and Tariff Act of 1984
In addition to providing the basic authority for a
bilateral free trade area agreement with Israel, title IV of
the Trade and Tariff Act of 1984, as amended, sets forth the
rule-of-origin requirements that would apply to such an
agreement as well as the application of import relief laws.
Section 402 requires that any trade agreement entered into
under section 102(b) with Israel provide for the reduction or
elimination of duties only on articles that meet rule-of-origin
requirements similar to those under the Caribbean Basin
Initiative (CBI):
(1) The article must be the growth, product or
manufacture of Israel or foreign materials or
components must be substantially transformed into a new
or different article grown, produced, or manufactured
in Israel. Related provisions are designed to prevent
qualification of minor pass-through operations and
transshipments;
(2) The article must be imported directly from Israel
into the U.S. customs territory; and
(3) At least 35 percent of the total value of the
article must consist of materials produced in Israel
plus direct cost of processing operations performed in
Israel, of which 15 percent may be U.S. content.
Sections 403 and 406 of the 1984 Act make clear that
existing trade laws available to domestic industries for relief
from injurious import competition or unfair trade practices
continue to apply to imports under the trade agreement with
Israel. As under the CBI legislation, the President may suspend
the reduction or elimination of any duty under the trade
agreement with Israel and proclaim a duty as import relief
under section 203 of the Trade Act of 1974 or as a national
security measure under section 232 of the Trade Expansion Act
of 1962. Alternatively the President may establish a margin of
preference or maintain the duty reduction or elimination on
Israeli articles while imposing relief on imports from other
sources. The U.S. International Trade Commission must state in
its report to the President on import relief investigations
involving Israeli articles covered in a trade agreement whether
and to what extent its injury findings and recommended relief
apply to imports from Israel.
Section 404 of the Trade and Tariff Act of 1984 applies a
special procedure similar to that established under the CBI
whereby petitions may be filed with the Secretary of
Agriculture for emergency relief on perishable products from
Israel pending action on a petition filed for normal import
relief action. The Secretary must determine and report to the
President within 14 days a recommendation for emergency action
if he has reason to believe an agricultural perishable product
from Israel is being imported in such increased quantities as
to be a substantial cause or threat of serious injury to the
U.S. industry. The President must determine within 7 days
whether to take emergency action, which consists of withdrawing
the reduction or elimination of duty and restoring the original
rate pending final action on the import relief petition.
United States-Israel Free Trade Area Agreement
The free trade area with Israel was the first such
arrangement negotiated by the United States with any foreign
country aside from the bilateral free trade arrangement with
Canada in the automotive sector only. The Agreement is an
adjunct to existing multilateral obligations of both parties
under the GATT/WTO; existing rights and obligations between the
countries under the GATT or other agreements continue to apply
unless specifically modified by the terms of the Agreement.
The main element of the Agreement is the reciprocal
elimination of tariffs on all products traded between the two
countries by January 1, 1995 and the elimination of other
restrictive regulations of commerce on bilateral trade as
provided under Article XXIV of the GATT 1994 for free trade
areas. Duties were eliminated by both countries over 10 years
in four staging categories depending on the relative import
sensitivity of articles for domestic producers. Duties on
certain products were eliminated immediately as of September 1,
1985.
The Agreement also prohibits the introduction of new duties
or quantitative restrictions in bilateral trade unless they are
permitted by the Agreement or by the GATT. The government of
Israel undertook specific commitments concerning the reduction
and elimination of its export subsidy programs and limited its
GATT right as a developing country to apply duties to protect
infant industries. Both parties must review their veterinary
and plant health rules to insure nondiscrimination and not
undue trade obstruction, undertook limitations on the duration
of temporary restrictions that might be imposed in serious
balance-of-payments situations, and reaffirmed existing
bilateral obligations on intellectual property rights. The
Agreement prohibits the imposition of import licensing
requirements except in certain circumstances and of export or
domestic purchase performance requirements on investment. The
Agreement requires both countries to waive their Buy National
restrictions on government procurement contracts valued $50,000
or more for articles or services covered by the 1979 GATT
Agreement on Government Procurement.
The Agreement contains various safeguard provisions
consistent with title IV of the Trade and Tariff Act of 1984 to
permit import relief measures under certain circumstances, and
rule-of-origin requirements to ensure that free trade area
benefits accrue only to the two parties. Import restrictions
other than customs duties may also be maintained based on
agricultural policy considerations. A Joint Committee reviews
and administers the Agreement and provides for dispute
settlement.
In 1996, the United States and Israel entered into the
Agreement on Trade in Agricultural Products (ATAP), an adjunct
to the 1985 FTA Agreement. The ATAP expires on December 31,
2001.
United States-Israel Free Trade Area Implementation Act of 1985
The United States-Israel Free Trade Area Implementation Act
of 1985 approved the United States-Israel Free Trade Area
Agreement and statement of administrative action submitted to
the Congress on April 29, 1985 and made necessary and
appropriate changes in U.S. laws for its domestic
implementation.\58\ U.S. statutes prevail if a provision of the
Agreement is in conflict. No private rights of action or
remedies are created. Expedited legislative approval procedures
apply to subsequent changes in U.S. statutes to implement
requirements, amendments, or recommendations under the
Agreement.
---------------------------------------------------------------------------
\58\ Public Law 99-47, approved June 11, 1985, 19 U.S.C. 2112 note.
---------------------------------------------------------------------------
The President is authorized to proclaim the modifications
or continuance of existing duties or duty-free treatment to
implement the schedule for U.S. duty elimination under the
Agreement. Tariff elimination was completed as of January 1,
1995. The President may withdraw, suspend, or modify any duty
or duty-free treatment or proclaim additional duties necessary
to maintain the general level of concessions under the
Agreement.
The implementing legislation also amended title III of the
Trade Agreements Act of 1979 to lower the threshold contract
value to $50,000 or more on which the President may waive Buy
American restrictions on eligible products or services from
Israel covered by the GATT Agreement on Government Procurement.
As amended by the Uruguay Round Agreements Act, the $50,000
threshold may be applied to the broader central government
entity coverage of goods and services under the 1994 GATT
Agreement if there is a reciprocal agreement from Israel.
West Bank and Gaza Strip Free Trade Benefits
In an exchange of letters on October 17, 1995, among the
United States, the government of Israel, and the Palestinian
Authority, the U.S. Trade Representative agreed to seek
statutory authority to proclaim elimination of existing duties
on articles of the West Bank and Gaza Strip. The Palestinian
Authority agreed to accord U.S. products duty-free access to
the West Bank and Gaza Strip, to prevent illegal transshipment
of goods not qualifying for duty-free access, and to support
all efforts to end the Arab economic boycott of Israel. Because
the authority given to the President to proclaim reductions in
tariffs without congressional action contained in section
1102(a) of the Omnibus Trade and Competitiveness Act of 1988
had expired, new proclamation authority was required to
implement the terms of the exchange of letters.
Accordingly, Congress passed legislation amending the
United States-Israel Free Trade Area Implementation Act of
1985, adding a new section to provide the President
proclamation authority to modify tariffs on products from the
West Bank, Gaza Strip and qualifying industrial zones. \59\ The
provision applies to areas designated as industrial parks
between the Gaza Strip and Israel and between the West Bank and
Israel. The effect of the provision is to offer to goods from
the West Bank, Gaza Strip, and qualifying industrial zones
(located between Israel and Jordan or Israel and Egypt) the
same tariff treatment as is offered to Israel under the United
States-Israel Free Trade Agreement. The provision applies the
same rule-of-origin requirements as to products from the West
Bank, Gaza Strip, and qualifying industrial zones as are
already applicable to products from Israel.
---------------------------------------------------------------------------
\59\ Public Law 104-234, approved October 2, 1996.
---------------------------------------------------------------------------
United States-Canada Trade Relations
Section 102(b) of the Trade Act of 1974, as amended by
section 401 of the Trade and Tariff Act of 1984, authorized the
President to enter into bilateral reciprocal trade agreements
with foreign countries to eliminate or reduce tariffs on
bilateral trade as well as nontariff barriers if the following
procedural requirements were met:
(1) The foreign country requested the negotiation of
a bilateral trade agreement;
(2) The President gave at least 60 days advance
notice of negotiations to the House Committee on Ways
and Means and the Senate Committee on Finance and
consulted with these committees regarding negotiation
of such an agreement; and
(3) Neither Committee disapproved of the negotiation
of such an agreement before the end of that 60-day
period.
Agreements entered into under this authority were subject to
further congressional consultation requirements and approval of
implementing legislation under the expedited procedures of
sections 102 and 151-154 of the Trade Act. This bilateral trade
agreement authority expired on January 3, 1988.
In March 1985, President Reagan and Prime Minister Mulroney
directed their negotiators to explore ways to liberalize
between the two countries. On September 26, Canadian Prime
Minister Mulroney proposed bilateral trade negotiations on the
``broadest possible package of mutually beneficial reductions
in barriers to trade in goods and services.'' On December 10,
President Reagan notified the House Committee on Ways and Means
and the Senate Committee on Finance of the Administration's
desire to enter into bilateral trade negotiations with Canada
under the section 102 authority. On October 3, 1987, President
Reagan submitted the 90-day advance notice to the Congress of
his intention to enter into a trade agreement with Canada on
January 2, 1988, the day before expiration of the authority,
``contingent upon successful completion of the negotiations.''
On January 2, 1988, President Reagan and Prime Minister
Mulroney signed the United States-Canada Free-Trade Agreement
on behalf of their respective governments.
On July 25, 1988, the President transmitted to the Congress
a copy of the Agreement, a statement of administrative action,
proposed implementing legislation, and a statement of how the
Agreement serves the interests of U.S. commerce. The
implementing legislation passed the House on August 9 and the
Senate on September 19, and was signed into law by the
President on September 28, 1988. The Agreement entered into
force on January 1, 1989.
On January 1, 1994, the North American Free Trade Agreement
entered into force, covering trade among the United States,
Canada, and Mexico. The Agreement contains provisions
suspending the overlapping provisions of the two agreements
until such time as Canada may terminate its participation in
the NAFTA.
United States-Canada Free-Trade Agreement
The United States-Canada Free-Trade Agreement is one of the
most comprehensive bilateral trade agreements ever negotiated
and creates one of the world's largest internal markets for
goods and services. The two federal governments agreed to
ensure that state, provincial, and local governments take
necessary actions in areas under their jurisdiction to
implement the Agreement. Each party agreed to accord national
interest treatment to the goods, services, and investment of
the other party to the extent provided in the Agreement.
The central provision of the Agreement is the phased out
elimination of tariffs on all goods traded between the two
countries within 10 years, by January 1, 1998, in three staging
categories. Tariff elimination on particular products can be
implemented faster than scheduled by mutual agreement. The
Agreement contains rules of origin based primarily on changes
in tariff classifications to determine that only products with
sufficient content originating in either or both countries
receive the benefits of preferential tariff treatment. Customs
user fees and duty drawback programs must be phased out by 1994
for bilateral trade; duty waivers linked to performance
requirements, except certain waivers affecting automotive
trade, and duty remission programs for autos must be terminated
by 1988.
The Agreement eliminates and prohibits import and export
quotas or other restrictions, unless specifically permitted by
the Agreement or by the General Agreement on Tariffs and Trade
(GATT), and liberalizes or harmonizes laws and regulations
relating to technical standards. Other Agreement provisions
liberalize barriers affecting agriculture, automotive products,
wine and distilled spirits, energy, government procurement,
services, investment, temporary entry for business persons, and
financial services. Certain ``cultural industries'' are exempt
from the Agreement. Temporary import relief actions may be
taken on a bilateral or global basis under certain
circumstances to safeguard domestic industries from import-
related injury.
Institutional provisions are included for the avoidance or
settlement of disputes between the two parties concerning the
interpretation or application of the Agreement. A major element
of the Agreement is establishment of a mechanism for review by
binational panels and extraordinary challenge committees of
final antidumping and countervailing duty determinations on
products of the two countries in lieu of judicial review by
courts of either party using the request of either party.
United States-Canada Free-Trade Agreement Implementation Act of 1988
The United States-Canada Free-Trade Agreement
Implementation Act of 1988 \60\ approved the Agreement and
statement of administrative action submitted to the Congress on
July 25, 1988 and sets forth the relationship between
obligations under the Agreement and U.S. laws. The legislation
also makes changes in U.S. laws necessary or appropriate to
implement obligations under the Agreement, sets forth
negotiating objectives and authorities for further U.S.-Canada
trade liberalization, and specifies procedures for domestic
implementation of future changes in the Agreement. Technical
amendments to various provisions were included in the Customs
and Trade Act of 1990.\61\
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\60\ Public Law 100-449, approved September 28, 1988, 19 U.S.C.
2112 note.
\61\ Public Law 101-382, approved August 20, 1990.
---------------------------------------------------------------------------
U.S. laws prevail over the Agreement if there is a
conflict. No person other than the United States has a cause of
action or defense under the Agreement. Changes in U.S. law
necessary or appropriate to implement an amendment to the
Agreement could be approved under the fast track congressional
procedures during the 30-month period after the Agreement
entered into force. Certain actions may be implemented by
presidential proclamation subject to prior consultation and 60
calendar day congressional layover requirements.
The President is authorized to proclaim the modifications
in U.S. rates of duty necessary to implement the scheduled
phaseout and elimination of all tariffs on trade with Canada
within 10 years. The rules of origin set forth in the Agreement
to ensure application of preferential tariff treatment only to
goods originating in Canada are enacted in the statute. The
legislation implements U.S. obligations under the Agreement to
phase out customs user fees on Canadian goods, to eliminate
drawback with certain exceptions, and to exempt Canada from the
lottery ticket embargo; provides penalties and recordkeeping
requirements to enforce the rules of origin; and includes a
reporting and monitoring requirement on the consistency of
Canadian production-based duty remission programs with the GATT
and the Agreement.
The legislation also implements in U.S. domestic law
various provisions of the Agreement concerning particular
economic sectors, including agricultural products (authority to
impose temporary duties on imports of fresh fruits and
vegetables, exemption of Canadian meat from any import
limitations under the Meat Import Act (now repealed), authority
to exempt grain and grain products and sugar-containing
products from Canada from section 22 import quotas); exports to
Canada of Alaskan oil; exemption of Canadian uranium from U.S.
enrichment restrictions; a lower contract threshold ($25,000)
for exemption from Buy American restrictions on government
procurement of articles from Canada covered by the GATT
Agreement on Government Procurement; temporary entry of
business persons; and extension of financial services. The
legislation also includes procedures and criteria for the
application of bilateral or global safeguard measures on
Canadian articles as temporary relief from import-related
injury.
The implementing legislation sets forth various U.S.
negotiating objectives to expand the Agreement with respect to
services, investment, intellectual property rights, automotive
products, procurement, Canadian agricultural transportation
subsidies, potato trade, and enforcement of U.S. rights against
Canadian controls on fish. Objectives and authority to
negotiate an agreement on subsidies and special procedures for
industries facing subsidized competition pending development of
subsidy rules are also included.
The legislation also contains revisions to U.S. law to
implement the institutional provisions of the Agreement
establishing binational panel and extraordinary challenge
committee review, upon request, of final antidumping and
countervailing duty determinations, in lieu of judicial review.
The statute includes procedures and criteria for the selection
of the panelists appointed by the United States, establishes
the U.S. Secretariat, and authorizes appropriations for
administrative expenses.
The NAFTA incorporates or otherwise carries forward most
provisions of the United States-Canada FTA or supercedes the
bilateral agreement in certain areas, such as rules of origin.
The United States and Canada suspended the operation of the
bilateral agreement upon entry into force of the NAFTA for the
two countries for such time as the two governments remain
parties to the NAFTA. As provided in section 107 of the NAFTA
Implementation Act, certain provisions of the United States-
Canada FTA Implementation Act are suspended; other provisions
of that Act which carry out U.S. obligations under the United
States-Canada FTA that are in effect under the NAFTA remain in
place or are amended by the NAFTA Implementation Act.
Chapter 7: ORGANIZATION OF TRADE POLICY FUNCTIONS
Congress
The role of the Congress in trade derives from its powers
under the Constitution to regulate foreign commerce and to lay
and collect duties (see preface). Consequently, the trade
agreements program and application of duties or other import
restrictions are based upon and limited to specific legislation
or authorities delegated by the Congress. In order to ensure
proper implementation of these laws and authorities, in
accordance with legislative intent, Congress has included
various statutory requirements in the trade laws to limit their
application, to ensure congressional oversight of their
implementation, and to fulfill its responsibility for
legislating any necessary or appropriate changes in U.S. laws.
More specifically, for example, periodic delegations of
authority by the Congress to the President to proclaim changes
in U.S. tariff treatment in the context of trade agreements has
been limited in scope and periods of time, and use of the
authority subject to certain prenegotiation procedures to
protect domestic interests. On the other hand, Congress has
granted federal agencies permanent authorities to administer
certain laws and programs, such as trade remedy laws or trade
adjustment assistance, under certain specific guidelines and
subject to congressional oversight, including appropriations.
Specific statutory roles of the Congress became formalized
under the Trade Act of 1974 \1\ with the grant of authority to
the President under section 102 to enter into reciprocal trade
agreements affecting U.S. laws other than traditional changes
in tariff treatment. In authorizing implementation through an
expedited, no amendment procedure, Congress ensured its role
through statutory consultation and notification procedures
prior to submission of a draft implementing bill by the
executive. This relationship continued under authorities
granted by the Omnibus Trade and Competitiveness Act of 1988,
but has now expired with respect to new agreements (see chapter
6).
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\1\ Public Law 93-618, approved January 3, 1975, 19 U.S.C. 2101.
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Section 161 of the Trade Act of 1974 provides for
appointment at the beginning of each session of Congress of
five official congressional advisers by the Speaker of the
House from the Committee on Ways and Means and five official
advisers by the President of the Senate from the Committee on
Finance, and additional advisers where appropriate for specific
policy matters or negotiations, to U.S. delegations to
international negotiating sessions on trade agreements. The
U.S. Trade Representative (USTR) must keep each adviser and
designated committee staff members informed of U.S. objectives
and the status of negotiations and of any changes which may be
recommended in U.S. laws. Section 162 requires transmission of
any trade agreements to the Congress.
Section 163 requires annual reports from the President and
from the U.S. International Trade Commission (ITC) to keep the
Congress informed regarding actions taken under the various
trade laws and programs. Additional reports are required on
specific aspects of various authorities (e.g., from the ITC on
the domestic economic impact of the Caribbean Basin
Initiative).
Finally, Congress had maintained its institutional role
with the executive by requiring the USTR to advise the Congress
as well as the President on trade policy developments, through
requests to the ITC for studies and analyses under section 332
of the Tariff Act of 1930 of various current trade issues, and
through its power to authorize and appropriate funds for the
functions of major trade agencies.
Executive Branch
Interagency Trade Process
Trade policy is a major element of U.S. economic and
foreign policy. A decision to raise or lower tariffs, to impose
import quotas, or to take other trade policy actions affects
both domestic and foreign interests. In light of the far-
reaching effects of trade policy decisions, a large number of
U.S. government agencies have a role to play in the development
of policy. Various interagency coordinating mechanisms have
been used for bringing together conflicting views and interests
and resolving them so that there can be a consistent and
balanced national trade policy.
Until the late 1950s, the Department of State was the major
initiator and coordinator of international trade policy. The
Secretary of State chaired the interagency Trade Agreements
Committee which originally included eight agencies: the
Departments of State, Agriculture, Commerce, and Treasury, the
Tariff Commission, the Agricultural Adjustment Administration,
the National Recovery Administration, and the Office of the
Special Advisor to the President on Foreign Trade.
Congress authorized the President under section 242 of the
Trade Expansion Act of 1962 \2\ to establish a new interagency
trade organization to carry out specified trade policy
functions. The Trade Agreements Committee was replaced by the
Trade Policy Committee (TPC) in 1975.\3\ The TPC performs the
same functions authorized by section 242 of the 1962 Trade Act.
Two subordinate coordinating groups, the Trade Policy Review
Group (TPRG) and the Trade Policy Staff Committee (TPSC), were
subsequently created by the authority of the Special
Representative.\4\
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\2\ 19 U.S.C. 1801.
\3\ 40 Fed. Reg. 18419, April 28, 1975.
\4\ Exec. Order 11846, March 27, 1975, 40 Fed. Reg. 14291.
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Section 1621 of the Omnibus Trade and Competitiveness Act
of 1988 \5\ amended section 242 of the 1962 Act to provide that
this interagency organization will include the USTR as chair,
the Secretaries of Commerce, State, Treasury, Agriculture, and
Labor, and authorizes the USTR to invite other agencies to
attend meetings as appropriate. The functions of the
organization are: to assist and make recommendations to the
President in carrying out his functions under the trade laws
and to advise the USTR in carrying out its functions; to assist
the President and advise the USTR on the development and
implementation of U.S. international trade policy objectives;
and to advise the President and the USTR on the relationship
between U.S. international trade policy objectives and other
major policy areas.
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\5\ Public Law 100-418, section 1621, approved August 23, 1988.
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The TPSC is the working level interagency group, with
members drawn from the office-director level of member
agencies. Over 30 subcommittees and task forces support the
work of the TPSC. In the absence of consensus at the TPSC level
or in the case of particularly significant policy matters,
issues are referred to the Assistant Secretary-level TPRG.
Disagreements at the Assistant Secretary-level are referred to
the TPC for Cabinet-level review. When presidential trade
policy decisions are needed, the Chairman (USTR) submits the
recommendations and advice of the Committee to the President.
In 1993, President Clinton established the National
Economic Council as the final tier of the interagency trade
mechanism. Chaired by the President, the NEC is composed of the
Vice President, the Secretaries of State, Treasury,
Agriculture, Commerce, Labor, Housing and Urban Development,
Transportation, and Energy, the Administrator of the
Environmental Protection Agency, the Director of the Office of
Management and Budget, the USTR, the Chairman of the Council of
Economic Advisors, the National Security Advisor, and the
Assistants to the President for Economic Policy, Domestic
Policy and Science and Technology Policy.
Office of the U.S. Trade Representative
Section 241 of the Trade Expansion Act of 1962 established
the Office of the Special Representative for Trade
Negotiations.\6\ Congress' stated purpose for creating the
position was to provide better balance between competing
domestic and international interests in the formulation of U.S.
trade policy and negotiations. The Special Trade Representative
(STR), whose rank was ambassador extraordinary and
plenipotentiary, was to serve as the chief U.S. representative
for negotiations conducted under authority of the Act and for
other trade negotiations authorized by the President.
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\6\ Public Law 87-794, approved October 11, 1962, 19 U.S.C. 1801.
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Various executive orders issued by President Kennedy in
1963 established an Office of the Special Trade Representative
and provided for the appointment of two Deputy Special
Representatives for Trade Negotiations. These deputies, one
based in Washington, D.C., and the other in Geneva, Switzerland
(headquarters of the GATT Secretariat), were assigned major
responsibilities for the conduct of the 1963-67 multilateral
trade negotiations under the GATT, commonly known as the
Kennedy Round.\7\
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\7\ Public Law 97-456, approved January 12, 1983, added a third
deputy trade representative.
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Section 141 of the Trade Act of 1974 \8\ established the
office as an agency within the executive office of the
President and expanded the STR's duties to include
responsibility for the trade agreements program under the
Tariff Act of 1930, the Trade Expansion Act of 1962 and the
Trade Act of 1974. Other duties and responsibilities also were
assigned by the 1974 Trade Act and by Executive Order 11846 of
March 27, 1975, as amended. Section 141 indicated Congressional
intent to elevate the STR to Cabinet level by adding it to the
list of positions at level I of the executive schedule of
salaries, with the rank of ambassador. The STR was also made
directly responsible to the President and the Congress.
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\8\ Public Law 93-618, approved January 3, 1975, 19 U.S.C. 2171.
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Reorganization Plan No. 3 of 1979, implemented by Executive
Order 12188 of January 4, 1980,\9\ authorized certain changes
in the trade responsibilities of the STR. Plan No. 3
redesignated the Office of the Special Representative for Trade
Negotiations as the Office of the United States Trade
Representative (USTR). The new name reflected the plan's intent
for the Trade Representative to have overall responsibility, on
a permanent basis, for developing and coordinating the
implementation of U.S. trade policy.
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\9\ 44 Fed. Reg. 69273.
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The 1979 Reorganization Plan specified that the USTR is the
President's principal adviser and chief spokesman on trade,
including advice on the impact of international trade on other
U.S. government policies. The USTR also became Vice Chairman of
the Overseas Private Investment Corporation (OPIC), a nonvoting
member of the Export-Import Bank, and a member of the National
Advisory Committee on International Monetary and Financial
Policies. In addition to these responsibilities, section 306(c)
of the Trade and Tariff Act of 1984 \10\ specified that the
USTR, through the interagency organization, is responsible for
developing and coordinating U.S. policies on trade in services.
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\10\ Public Law 98-573, approved October 30, 1984.
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Section 1601 of the Omnibus Trade and Competitiveness Act
of 1988 \1\\1\ amended section 141 of the 1974 Act to the
responsibilities of the USTR first enumerated under
Reorganization Plan No. 3 and other statutes, as the following:
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\1\\1\ Public Law 100-418, section 1601, approved August 23, 1988.
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(1) to have primary responsibility for developing and
coordinating the implementation of U.S. international
trade policy;
(2) to serve as the principal adviser to the
President on international trade policy and advise the
President on the impact of other U.S. government
policies on international trade;
(3) to have lead responsibility for the conduct of,
and be chief U.S. representative for, international
trade negotiations, including commodity and direct
investment negotiations;
(4) to coordinate trade policy with other agencies;
(5) to act as the principal international trade
spokesman of the President;
(6) to report to the President and the Congress on,
and be responsible to the President and the Congress
for, the administration of the trade agreements
program, including advising on nontariff barriers,
international commodity agreements, and other matters
relating to the trade agreements program; and
(7) to be chairman of the Trade Policy Committee.
In addition, the Omnibus Trade and Competitiveness Act also
included the sense of Congress that the USTR be the senior
representative on any body the President establishes to advise
him on overall economic policies in which international trade
matters predominate and that the USTR be included in all
economic summits and other international meetings at which
international trade is a major topic. The USTR was made
responsible for identifying and coordinating agency resources
on unfair trade practices cases that may be actionable under
U.S. antidumping and countervailing duty statutes, section 337,
or section 301. The Act established an unfair trade practices
committee to advise the USTR.
Under the Omnibus Trade and Competitiveness Act of 1988,
the Congress further sought to elevate the importance of the
USTR in trade matters by shifting to the USTR from the
President responsibility for implementing actions under section
301 of that Act, subject to the specific direction, if any, of
the President.
The Uruguay Round Agreements Act specifies that the USTR is
to have lead responsibility for all negotiations on any matter
considered under the auspices of the World Trade Organization.
The Lobbying Disclosure Act of 1995 amended section 141 to
prohibit the appointment of a person who has directly
represented, aided, or advised a foreign entity (as defined by
section 207(f)(3) of title 18, U.S. Code) in any trade
negotiations, or trade dispute, with the United States as U.S.
Trade Representative or Deputy U.S. Trade Representative.\12\
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\12\ Public Law 104-65, approved December 19, 1995.
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Section 406 of the Trade and Development Act of 2000
(Public Law 106-200) amended the Trade Act of 1974 to establish
the position of Chief Agriculture Negotiator within USTR, with
the rank of Ambassador, to conduct trade negotiations and
enforce trade agreements relating to U.S. agriculture products
and services. Section 117 of that Act also established the
position of Assistant USTR for African Affairs to direct and
coordinate interagency activities on U.S.-Africa trade policy
and investment matters.
Section 141(g) of the Trade Act of 1974 provides for a 2-
year saauthorization of appropriations for USTR.
Department of Commerce
The Department of Commerce was established in 1903 as the
Department of Commerce and Labor.\13\ A 1913 act of Congress
split the Department of Commerce and Labor into two separate
departments.\14\ The mandate of the Commerce Department
originally was to promote the foreign and domestic commerce of
the United States. In subsequent years, its authority was
extended to other areas bearing on the economic and
technological development of the country. The titles of the
component units of the Department indicate the diversity of the
agency's current programs and services: Bureau of the Census;
Bureau of Economic Analysis; Economic Development
Administration; Bureau of Export Administration; International
Trade Administration; Minority Business Development Agency;
National Institute of Standards and Technology; National
Oceanic and Atmospheric Administration; National Technical
Information Service; National Telecommunications and
Information Administration; Patent and Trademark Office; and
U.S. Travel and Tourism Administration.
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\13\ 32 Stat. 827, 5 U.S.C. 591.
\14\ 37 Stat. 736, 15 U.S.C. 1501.
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While most of these agencies have some responsibilities
that affect U.S. trade, the U.S. Department of Commerce's major
trade responsibilities are centered in the International Trade
Administration and the Bureau of Export Administration.
The International Trade Administration (ITA), which was
established by the Secretary of Commerce on January 2,
1980,\15\ administers many of the Department's international
trade responsibilities and activities as prescribed by
Reorganization Plan No. 3 of 1979. The plan provides that the
Commerce Department has ``general operational responsibility
for major nonagricultural international trade functions,'' as
well as for any other functions assigned by law. Those include
export development, commercial representation abroad, the
administration of the antidumping and countervailing duty laws,
export controls, trade adjustment assistance to firms, research
and analysis, and compliance with international trade
agreements to which the United States is a party.
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\15\ 45 Fed. Reg. 11862, as amended by 46 Fed. Reg. 13537.
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The Bureau of Export Administration (BXA) controls exports
of commodities and technology for reasons of national security,
foreign policy, and short supply. BXA issues export licenses in
accordance with the export control regulations. Export control
regulations are developed in consultation with other agencies,
and some export license applications require interagency
review.
U.S. Customs Service
The second act of Congress, dated July 4, 1789, authorized
the collection of duties on imported goods, wares and
merchandise. The fifth act of Congress, passed in July 31,
1789, established customs districts and authorized customs
officers to collect import duties. On March 3, 1927, the Bureau
of Customs was established as a separate agency under the
Treasury Department.\16\ The Bureau was redesignated the United
States Customs Service on August 1, 1973.\17\
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\16\ 44 Stat. 1381.
\17\ Treasury Department Order 165-23, of April 4, 1973.
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The Customs Service collects import duties and enforces
more than 400 laws or regulations relating to international
trade. Among the many responsibilities falling to Customs are
assessing and collecting duties, excise taxes, penalties and
other fees due on imported goods; interdicting and seizing
illegally entered merchandise; processing persons, carriers,
cargo and mail into and out of the United States; helping
enforce U.S. laws against the transfer of certain technologies
to certain countries under export control authorities, laws on
copyright, patent and trademark rights; and administering
quotas and other import restrictions. The U.S. Customs Service
maintains close ties with private business associations,
international organizations, and foreign customs services.
The Commissioner of Customs is appointed by the President
and subject to confirmation by the Senate.
The Customs Procedural Reform and Simplification Act of
1978 provides for a 2-year authorization of appropriations for
Customs.
U.S. International Trade Commission
The U.S. International Trade Commission (ITC) is an
independent and quasi-judicial agency that conducts studies,
reports, and investigations, and makes recommendations to the
President and the Congress on a wide range of international
trade issues. The agency was established on September 8, 1916
\18\ as the U.S. Tariff Commission. In 1974 the name was
changed to the United States International Trade Commission by
section 171 of the Trade Act of 1974.\19\
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\18\ 39 Stat. 795.
\19\ 19 U.S.C. 2231.
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Commissioners are appointed by the President for 9-year
terms, unless they are appointed to fill an unexpired term. Any
Commissioner who has served for more than 5 years may not be
reappointed. Of the six commissioners, not more than three may
be of the same political party. The Chairman and Vice Chairman
are designated by the President for 2-year terms, and
successive Chairmen may not be of the same political party.
After June 17, 1996, a Commissioner with less than 1 year of
continuous service as a Commissioner may not be designated as
Chairman.
The Commission has numerous responsibilities for advice,
investigations, studies, and data collection and analysis which
may be grouped into the following general areas: advice on
trade negotiations; Generalized System of Preferences; import
relief for domestic industries; East-West trade; investigations
of injury caused by subsidized or dumped goods; import
interference with agricultural programs; unfair practices in
import trade; development of uniform statistical data; matters
related to the U.S. tariff schedules; international trade
studies; trade and tariff summaries.
Statutory authority for the Commission's responsibilities
is provided primarily by the Tariff Act of 1930, the
Agricultural Adjustment Act, the Trade Expansion Act of 1962,
the Trade Act of 1974, the Trade Agreements Act of 1979, the
Trade and Tariff Act of 1984, the Omnibus Trade and
Competitiveness Act of 1988, and the Uruguay Round Agreements
Act.
The Tariff Act of 1930 gives the Commission broad authority
to conduct studies and investigations relating to the impact of
international trade on U.S. industries. Various sections under
title VII of the Tariff Act authorize the Commission to
determine whether U.S. industries are materially injured by
imports which benefit from subsidies or are priced below fair
value.\20\ If the Secretary of Commerce decides to suspend an
antidumping or countervailing duty investigation upon reaching
an agreement to eliminate the injury caused by the subsidized
or dumped imports, the Commission is authorized to study
whether or not the injury in fact is being eliminated. Section
337 of the Tariff Act authorizes the ITC to investigate whether
unfair methods of competition or unfair acts are being
committed in the importation of goods into the United
States.\21\ The Commission is authorized to order actions to
remedy any such violations, subject to presidential
disapproval.
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\20\ Sections 704, 734, and 751; 19 U.S.C. 1671c, 1673c, and 1675c.
\21\ 19 U.S.C. 1337.
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Upon the request of the President, the House Committee on
Ways and Means, the Senate Committee on Finance, or on its own
motion, the ITC conducts studies and investigations under
section 332 of the Tariff Act of 1930 on a wide range of trade-
related issues.\22\ Public reports generally are issued
following such studies and investigations. The ITC also
publishes summaries outlining the types of products entering
the United States, their importance in U.S. consumption,
production, and trade, and other relevant information. The ITC
also is required to establish and maintain statistics on U.S.
trade and to review the international commodity code for
classifying products and reporting trade statistics among
countries.\23\
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\22\ 19 U.S.C. 1332.
\23\ 19 U.S.C. 1484(e).
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The Trade Expansion Act of 1962 and the Trade Act of 1974
expanded the duties of the ITC. Both laws require the
Commission to review developments within an industry receiving
import protection and to advise the President on the probable
impact of reducing or eliminating the protection.\24\
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\24\ 19 U.S.C. 1981, 2253.
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The Trade Act of 1974 gives the Commission a presidential
advisory role on the probable domestic economic effects of
trade concessions proposed during trade negotiations.\25\ The
ITC performs a similar advisory role in relation to duty-free
treatment under the Generalized System of Preferences.\26\
Under section 201 of the 1974 Trade Act,\27\ the Commission
conducts investigations to determine whether increased imports
are causing or threatening serious injury to the competing
domestic industry and reports its findings and recommendations
for relief to the President.
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\25\ 19 U.S.C. 2151.
\26\ 19 U.S.C. 2151, 2163.
\27\ 19 U.S.C. 2251.
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Sections 406 and 410 \28\ of the 1974 Trade Act provide for
ITC monitoring and investigation of various aspects of trade
with nonmarket economics.
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\28\ 19 U.S.C. 2240, 2436.
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Section 221 of the Trade and Tariff Act of 1984, amended by
section 1614 of the Omnibus Trade and Competitiveness Act of
1988, established a separate Trade Remedy Assistance Office
within the ITC to provide information to the public on remedies
and benefits available under U.S. trade laws and on the
procedures and filing dates for relief petitions.
Section 330(e)(2) of the Tariff Act of 1930 contains a 2-
year authorization of appropriations for the ITC.
Private or Public Sector Advisory Committees
The first formal mechanism providing for ongoing advice
from the private sector on international trade matters was
authorized by section 135 of the Trade Act of 1974.\29\ In view
of the positive contribution of the advisory committees to the
Tokyo Round of multilateral trade negotiations and to passage
of the implementing legislation--the Trade Agreements Act of
1979--Congress provided for continuation of the advisory
committee structure in section 1631 of the Omnibus Trade and
Competitiveness Act of 1988. Congress also expanded the
committees' responsibilities by authorizing them to provide
advice on the priorities and direction of U.S. trade policy, in
addition to their previous responsibilities.
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\29\ 19 U.S.C. 2155.
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The U.S. Trade Representative manages the advisory
committees in cooperation with the Departments of Agriculture,
Commerce, Labor, and other departments. The committee structure
is three-tiered, with the most senior level represented by the
Advisory Committee for Trade Policy and Negotiations (ACTPN).
The ACTPN is a 45-member body composed of presidential-
appointed representatives of government, labor, industry,
agriculture, small business, service industries, retailers,
consumer interests, and the general public. The group provides
overall guidance on trade policy matters, including trade
agreements and negotiations, and is chaired by a chairman
elected by the committee. The group convenes at the call of the
U.S. Trade Representative.
The second tier is made up of policy advisory committees
representing overall sectors of the economy (e.g., industry,
agriculture, labor, services) whose role is to advise the
government of the impact of various trade measures on their
respective sectors.
The third tier is composed of sector advisory committees
consisting of experts from various fields. Their role is to
provide specific, technical information and advice on trade
issues involving their particular sector. Members of the second
and third tier are appointed by the U.S. Trade Representative
and the Secretary of the relevant department or agency.
PART II: COMPILATION OF U.S. TRADE STATUTES
----------
Chapter 8: TARIFF AND CUSTOMS LAWS
A. IMPLEMENTATION OF THE HARMONIZED TARIFF SCHEDULE OF THE UNITED
STATES
Title I, Subtitle B (Sections 1201-1217) of the Omnibus Trade and
Competitiveness Act of 1988
[19 U.S.C. 3001 et seq.; P.L. 100-418, as amended by P.L. 100-647]
SEC. 1201. PURPOSES.
The purposes of this subtitle are--
(1) to approve the International Convention on the
Harmonized Commodity Description and Coding System;
(2) to implement in United States law the
nomenclature established internationally by the
Convention; and
(3) to provide that the Convention shall be treated
as a trade agreement obligation of the United States.
SEC. 1202. DEFINITIONS.
As used in this subtitle:
(1) The term ``Commission'' means the United States
International Trade Commission.
(2) The term ``Convention'' means the International
Convention on the Harmonized Commodity Description and
Coding System, done at Brussels on June 14, 1983, and
the Protocol thereto, done at Brussels on June 24,
1986, submitted to the Congress on June 15, 1987.
(3) The term ``entered'' means entered, or withdrawn
from warehouse for consumption, in the customs
territory of the United States.
(4) The term ``Federal agency'' means any
establishment in the executive branch of the United
States Government.
(5) The term ``old Schedules'' means title I of the
Tariff Act of 1930 (19 U.S.C. 1202) as in effect on the
day before the effective date of the amendment to such
title under section 1204(a).
(6) The term ``technical rectifications'' means
rectifications of an editorial character or minor
technical or clerical changes which do not affect the
substance or meaning of the text, such as--
(A) errors in spelling, numbering, or
punctuation;
(B) errors in indentation;
(C) errors (including inadvertent omissions)
in cross-references to headings or subheadings
or notes; and
(D) other clerical or typographical errors.
SEC. 1203. CONGRESSIONAL APPROVAL OF UNITED STATES ACCESSION TO THE
CONVENTION.
(a) Congressional Approval.--The Congress approves the
accession by the United States of America to the Convention.
(b) Acceptance of the Final Legal Text of the Convention by
the President.--The President may accept for the United States
the final legal instruments embodying the Convention. The
President shall submit a copy of each final instrument to the
Congress on the date it becomes available.
(c) Unspecified Private Remedies Not Created.--Neither the
entry into force with respect to the United States of the
Convention nor the enactment of this subtitle may be construed
as creating any private right of action or remedy for which
provision is not explicitly made under this subtitle or under
other laws of the United States.
(d) Termination.--The provisions of section 125(a) of the
Trade Act of 1974 (19 U.S.C. 2135(a)) do not apply to the
Convention.
SEC. 1204. ENACTMENT OF THE HARMONIZED TARIFF SCHEDULE.
(a) In General.--The Tariff Act of 1930 is amended by
striking out title I and inserting a new title I entitled
``Title I--Harmonized Tariff Schedule of the United States''
(hereinafter in this subtitle referred to as the ``Harmonized
Tariff Schedule'') which--
(1) consists of--
(A) the General Notes;
(B) the General Rules of Interpretation;
(C) the Additional U.S. Rules of
Interpretation;
(D) sections I to XXII, inclusive
(encompassing chapters 1 to 99, and including
all section and chapter notes, article
provisions, and tariff and other treatment
accorded thereto); and
(E) the Chemical Appendix to the Harmonized
Tariff Schedule;
all conforming to the nomenclature of the Convention
and as set forth in Publication No. 2030 of the
Commission entitled ``Harmonized Tariff Schedule of the
United States Annotated for Statistical Reporting
Purposes'' and Supplement No. 1, thereto; but
(2) does not include the statistical annotations,
notes, annexes, suffixes, check digits, units of
quantity, and other matters formulated under section
484(e) of the Tariff Act of 1930 (19 U.S.C. 1484(e)),
nor the table of contents, footnotes, index, and other
matters inserted for ease of reference, that are
included in such Publication No. 2030 or Supplement No.
1, thereto.
(b) Modifications to the Harmonized Tariff Schedule.--At the
earliest practicable date after the date of the enactment of
the Omnibus Trade and Competitiveness Act of 1988, the
President shall--
(1) proclaim such modifications to the Harmonized
Tariff Schedule as are consistent with the standards
applied in converting the old Schedules into the format
of the Convention, as reflected in such Publication No.
2030 and Supplement No. 1, thereto, and as are
necessary or appropriate to implement--
(A) the future outstanding staged rate
reductions authorized by the Congress in--
(i) the Trade Act of 1974 (19 U.S.C.
2101 et seq.) and the Trade Agreements
Act of 1979 (19 U.S.C. 2501 et seq.) to
reflect the tariff reductions that
resulted from the Tokyo Round of
multilateral trade negotiations, and
(ii) the United States-Israel Free
Trade Area Implementation Act of 1985
(19 U.S.C. 1202 note) to reflect the
tariff reduction resulting from the
United States-Israel Free Trade Area
Agreement,
(B) the applicable provisions of--
(i) statutes enacted,
(ii) executive actions taken, and
(iii) final judicial decisions
rendered,
after January 1, 1988, and before the effective
date of the Harmonized Tariff Schedule, and
(C) such technical rectifications as the
President considers necessary; and
(2) take such action as the President considers
necessary to bring trade agreements to which the United
States is a party into conformity with the Harmonized
Tariff Schedule.
(c) Status of the Harmonized Tariff Schedule.--
(1) The following shall be considered to be statutory
provisions of law for all purposes:
(A) The provisions of the Harmonized Tariff
Schedule as enacted by this subtitle.
(B) Each statutory amendment to the
Harmonized Tariff Schedule.
(C) Each modification or change made to the
Harmonized Tariff Schedule by the President
under authority of law (including section 604
of the Trade Act of 1974).
(2) Neither the enactment of this subtitle nor the
subsequent enactment of any amendment to the Harmonized
Tariff Schedule, unless such subsequent enactment
otherwise provides, may be construed as limiting the
authority of the President--
(A) to effect the import treatment necessary
or appropriate to carry out, modify, withdraw,
suspend, or terminate, in whole or in part,
trade agreements; or
(B) to take such other actions through the
modification, continuance, or imposition of any
rate of duty or other import restriction as may
be necessary or appropriate under the authority
of the President.
(3) If a rate of duty established in column 1 by the
President by proclamation or Executive order is higher
than the existing rate of duty in column 2, the
President may by proclamation or Executive order
increase such existing rate to the higher rate.
(4) If a rate of duty is suspended or terminated by
the President by proclamation or Executive order and
the proclamation or Executive order does not specify
the rate that is to apply in lieu of the suspended or
terminated rate, the last rate of duty that applied
prior to the suspended or terminated rate shall be the
effective rate of duty.
(d) Interim Informational Use of Harmonized Tariff Schedule
Classifications.--Each--
(1) proclamation issued by the President;
(2) public notice issued by the Commission or other
Federal agency; and
(3) finding, determination, order, recommendation, or
other decision made by the Commission or other Federal
agency;
during the period between the date of the enactment of the
Omnibus Trade and Competitiveness Act of 1988 and the effective
date of the Harmonized Tariff Schedule shall, if the
proclamation, notice, or decision contains a reference to the
tariff classification of any article, include, for
informational purposes, a reference to the classification of
that article under the Harmonized Tariff Schedule.
SEC. 1205. COMMISSION REVIEW OF, AND RECOMMENDATIONS REGARDING, THE
HARMONIZED TARIFF SCHEDULE.
(a) In General.--The Commission shall keep the Harmonized
Tariff Schedule under continuous review and periodically, at
such time as amendments to the Convention are recommended by
the Customs Cooperation Council for adoption, and as other
circumstances warrant, shall recommend to the President such
modifications in the Harmonized Tariff Schedule as the
Commission considers necessary or appropriate--
(1) to conform the Harmonized Tariff Schedule with
amendments made to the Convention;
(2) to promote the uniform application of the
Convention and particularly the Annex thereto;
(3) to ensure that the Harmonized Tariff Schedule is
kept up-to-date in light of changes in technology or in
patterns of international trade;
(4) to alleviate unnecessary administrative burdens;
and
(5) to make technical rectifications.
(b) Agency and Public Views Regarding Recommendations.--In
formulating recommendations under subsection (a), the
Commission shall solicit, and give consideration to, the views
of interested Federal agencies and the public. For purposes of
obtaining public views, the Commission--
(1) shall give notice of the proposed recommendations
and afford reasonable opportunity for interested
parties to present their views in writing; and
(2) may provide for a public hearing.
(c) Submission of Recommendations.--The Commission shall
submit recommendations under this section to the President in
the form of a report that shall include a summary of the
information on which the recommendations were based, together
with a statement of the probable economic effect of each
recommended change on any industry in the United States. The
report also shall include a copy of all written views submitted
by interested Federal agencies and a copy or summary, prepared
by the Commission, of the views of all other interested
parties.
(d) Requirements Regarding Recommendations.--The Commission
may not recommend any modification to the Harmonized Tariff
Schedule unless the modification meets the following
requirements:
(1) The modification must--
(A) be consistent with the Convention or any
amendment thereto recommended for adoption;
(B) be consistent with sound nomenclature
principles; and
(C) ensure substantial rate neutrality.
(2) Any change to a rate of duty must be consequent
to, or necessitated by, nomenclature modifications that
are recommended under this section.
(3) The modification must not alter existing
conditions of competition for the affected United
States industry, labor, or trade.
SEC. 1206. PRESIDENTIAL ACTION ON COMMISSION RECOMMENDATIONS.
(a) In General.--The President may proclaim modifications,
based on the recommendations by the Commission under section
1205, to the Harmonized Tariff Schedule if the President
determines that the modifications--
(1) are in conformity with United States obligations
under the Convention; and
(2) do not run counter to the national economic
interest of the United States.
(b) Lay-Over Period.--
(1) The President may proclaim a modification under
subsection (a) only after the expiration of the 60-day
period beginning on the date on which the President
submits a report to the Committee on Ways and Means of
the House of Representatives and the Committee on
Finance of the Senate that sets forth the proposed
modification and the reasons therefor.
(2) The 60-day period referred to in paragraph (1)
shall be computed by excluding--
(A) the days on which either House is not in
session because of an adjournment of more than
3 days to a day certain or an adjournment of
the Congress sine die; and
(B) any Saturday and Sunday, not excluded
under subparagraph (A), when either House is
not in session.
(c) Effective Date of Modifications.--Modifications
proclaimed by the President under subsection (a) may not take
effect before the 15th day after the date on which the text of
the proclamation is published in the Federal Register.
SEC. 1207. PUBLICATION OF THE HARMONIZED TARIFF SCHEDULE.
(a) In General.--The Commission shall compile and publish, at
appropriate intervals, and keep up to date the Harmonized
Tariff Schedule and related information in the form of printed
copy; and, if, in its judgment, such format would serve the
public interest and convenience--
(1) in the form of microfilm images; or
(2) in the form of electronic media.
(b) Content.--Publications under subsection (a), in whatever
format, shall contain--
(1) the then current Harmonized Tariff Schedule;
(2) statistical annotations and related statistical
information formulated under section 484(e) of the
Tariff Act of 1930 (19 U.S.C. 1484(e)); and
(3) such other matters as the Commission considers to
be necessary or appropriate to carry out the purposes
enumerated in the Preamble to the Convention.
SEC. 1208. IMPORT AND EXPORT STATISTICS.
The Secretary of Commerce shall compile, and make publicly
available, the import and export trade statistics of the United
States. Such statistics shall be conformed to the nomenclature
of the Convention.
SEC. 1209. COORDINATION OF TRADE POLICY AND THE CONVENTION.
The United States Trade Representative is responsible for
coordination of United States trade policy in relation to the
Convention. Before formulating any United States position with
respect to the Convention, including any proposed amendments
thereto, the United States Trade Representative shall seek, and
consider, information and advice from interested parties in the
private sector (including a functional advisory committee) and
from interested Federal agencies.
SEC. 1210. UNITED STATES PARTICIPATION ON THE CUSTOMS COOPERATION
COUNCIL REGARDING THE CONVENTION.
(a) Principal United States Agencies.--
(1) Subject to the policy direction of the Office of
the United States Trade Representative under section
1209, the Department of the Treasury, the Department of
Commerce, and the Commission shall, with respect to the
activities of the Customs Cooperation Council relating
to the Convention--
(A) be primarily responsible for formulating
United States Government positions on technical
and procedural issues; and
(B) represent the United States Government.
(2) The Department of Agriculture and other
interested Federal agencies shall provide to the
Department of the Treasury, the Department of Commerce,
and the Commission technical advice and assistance
relating to the functions referred to in paragraph (1).
(b) Development of Technical Proposals.--
(1) In connection with responsibilities arising from
the implementation of the Convention and under section
484(e) of the Tariff Act of 1930 (19 U.S.C. 1484(e))
regarding United States programs for the development of
adequate and comparable statistical information on
merchandise trade, the Secretary of the Treasury, the
Secretary of Commerce, and the Commission shall prepare
technical proposals that are appropriate or required to
assure that the United States contribution to the
development of the Convention recognizes the needs of
the United States business community for a Convention
which reflects sound principles of commodity
identification, modern producing methods, and current
trading patterns and practices.
(2) In carrying out this subsection, the Secretary of
the Treasury, the Secretary of Commerce, and the
Commission shall--
(A) solicit and consider the views of
interested parties in the private sector
(including a functional advisory committee) and
of interested Federal agencies;
(B) establish procedures for reviewing, and
developing appropriate responses to, inquiries
and complaints from interested parties
concerning articles produced in and exported
from the United States; and
(C) where appropriate, establish procedures
for--
(i) ensuring that the dispute
settlement provisions and other
relevant procedures available under the
Convention are utilized to promote
United States export interests, and
(ii) submitting classification
questions to the Harmonized System
Committee of the Customs Cooperation
Council.
(c) Availability of Customs Cooperation Council
Publications.--As soon as practicable after the date of the
enactment of the Omnibus Trade and Competitiveness Act of 1988,
and periodically thereafter as appropriate, the Commission
shall see to the publication of--
(1) summary records of the Harmonized System
Committee of the Customs Cooperation Council; and
(2) subject to applicable copyright laws, the
Explanatory Notes, Classification Opinions, and other
instruments of the Customs Cooperation Council relating
to the Convention.
SEC. 1211. TRANSITION TO THE HARMONIZED TARIFF SCHEDULE.
(a) Existing Executive Actions.--
(1) The appropriate officers of the United States
Government shall take whatever actions are necessary to
conform, to the fullest extent practicable, with the
tariff classification system of the Harmonized Tariff
Schedule all proclamations, regulations, rulings,
notices, findings, determinations, orders,
recommendations, and other written actions that--
(A) are in effect on the day before the
effective date of the Harmonized Tariff
Schedule; and
(B) contain references to the tariff
classification of articles under the old
Schedules.
(2) Neither the repeal of the old Schedules, nor the
failure of any officer of the United States Government
to make the conforming changes required under paragraph
(1), shall affect to any extent the validity or effect
of the proclamation, regulation, ruling, notice,
finding, determination, order, recommendation, or other
action referred to in paragraph (1).
(b) Generalized System of Preferences Conversion.--
(1) The review of the proposed conversion of the
Generalized System of Preferences program to the
Convention tariff nomenclature, initiated by the Office
of the United States Trade Representative by notice
published in the Federal Register on December 8, 1986
(at page 44,163 of volume 51 thereof), shall be treated
as satisfying the requirements of sections 503(a) and
504(c)(3) of the Trade Act of 1974 (19 U.S.C. 2463(a),
2464(c)(3)).
(2) In applying section 504(c)(1) of the Trade Act of
1974 (19 U.S.C. 2464(c)(1)) for calendar year 1989, the
reference in such section to July 1 shall be treated as
a reference to September 1.
(c) Import Restrictions Under the Agricultural Adjustment
Act.--
(1) Whenever the President determines that the
conversion of an import restriction proclaimed under
section 22 of the Agricultural Adjustment Act (7 U.S.C.
624) from part 3 of the Appendix to the old Schedules
to subchapter IV of chapter 99 of the Harmonized Tariff
Schedule results in--
(A) an article that was previously subject to
the restriction being excluded from the
restriction; or
(B) an article not previously subject to the
restriction being included within the
restriction;
the President may proclaim changes in subchapter IV of
chapter 99 of the Harmonized Tariff Schedule to conform
that subchapter to the fullest extent possible to part
3 of the Appendix to the old Schedules.
(2) Whenever the President determines that the
conversion from headnote 2 of subpart A of part 10 of
schedule 1 of the old Schedules to Additional U.S. Note
2, chapter 17, of the Harmonized Tariff Schedule
results in--
(A) an article that was previously covered by
such headnote being excluded from coverage; or
(B) an article not previously covered by such
headnote being included in coverage;
the President may proclaim changes in Additional U.S.
Note 2, chapter 17 of the Harmonized Tariff Schedule to
conform that note to the fullest extent possible to
headnote 2 of subpart A of part 10 of schedule 1 of the
old Schedules.
(3) No change to the Harmonized Tariff Schedule may
be proclaimed under paragraph (1) or (2) after June 30,
1990.
(d) Certain Protests and Petitions Under the Customs Law.--
(1)(A) This subtitle may not be considered to divest
the courts of jurisdiction over--
(i) any protest filed under section 514 of
the Tariff Act of 1930 (19 U.S.C. 1514); or
(ii) any petition by an American
manufacturer, producer, or wholesaler under
section 516 of such Act (19 U.S.C. 1516);
covering articles entered before the effective date of
the Harmonized Tariff Schedule.
(B) Nothing in this subtitle shall affect the
jurisdiction of the courts with respect to articles
entered after the effective date of the Harmonized
Tariff Schedule.
(2)(A) If any protest or petition referred to in
paragraph (1)(A) is sustained in whole or in part by a
final judicial decision, the entries subject to that
protest or petition and made before the effective date
of the Harmonized Tariff Schedule shall be liquidated
or reliquidated, as appropriate, in accordance with
such final judicial decision under the old Schedules.
(B) At the earliest practicable date after the
effective date of the Harmonized Tariff Schedule, the
Commission shall initiate an investigation under
section 332 of the Tariff Act of 1930 (19 U.S.C. 1332)
of those final judicial decisions referred to in
subparagraph (A) that--
(i) are published during the 2-year period
beginning on February 1, 1988; and
(ii) would have affected tariff treatment if
they had been published during the period of
the conversion of the old Schedules into the
format of the Convention.
No later than September 1, 1990, the Commission shall
report the results of the investigation to the
President, the Committee on Ways and Means, and the
Committee on Finance, and shall recommend those changes
to the Harmonized Tariff Schedule that the Commission
would have recommended if the final decisions concerned
had been made before the conversion into the format of
the Convention occurred.
(3) The President shall review all changes
recommended by the Commission under paragraph (2)(B)
and shall, as soon as practicable, proclaim such of
those changes, if any, which he decides are necessary
or appropriate to conform such Schedule to the final
judicial decisions. Any such change shall be effective
with respect to--
(A) entries made on or after the date of such
proclamation; and
(B) entries made on or after the effective
date of the Harmonized Tariff Schedule if,
notwithstanding section 514 of the Tariff Act
of 1930 (19 U.S.C. 1514), application for
liquidation or reliquidation thereof is made by
the importer to the customs officer concerned
within 180 days after the effective date of
such proclamation.
(4) If any protest or petition referred to in
paragraph (1)(A) is not sustained in whole or in part
by a final judicial decision, the entries subject to
that petition or protest and made before the effective
date of the Harmonized Tariff Schedule shall be
liquidated or reliquidated, as appropriate, in
accordance with the final judicial decision under the
old Schedules.
SEC. 1212. REFERENCE TO THE HARMONIZED TARIFF SCHEDULE.
Any reference in any law to the ``Tariff Schedules of the
United States'', ``the Tariff Schedules'', ``such Schedules'',
and any other general reference that clearly refers to the old
Schedules shall be treated as a reference to the Harmonized
Tariff Schedule.
[SEC. 1213. TECHNICAL AMENDMENTS.]
[SEC. 1214. CONFORMING AMENDMENTS.
Amendments to codified titles, the Tobacco Adjustment Act of
1983, the Federal Hazardous Substances Act, the Consumer
Product Safety Act, the Toxic Substances Control Act, the
Emergency Wetlands Resources Act of 1986, COBRA of 1985, the
Tariff Act of 1930, the Automotive Products Trade Act of 1965,
the Trade Act of 1974, the Trade Agreements Act of 1979, the
Act of March 2, 1897, the Controlled Substances Import and
Export Act, the Comprehensive Anti-Apartheid Act of 1986, the
Strategic and Critical Materials Stock Piling Act, the Internal
Revenue Code of 1986, the Caribbean Basin Economic Recovery
Act, the Act Relating to Reforestation Trust Fund, the Trade
and Tariff Act of 1984, the Meat Import Act of 1979, the
National Wool Act of 1954, and the Agricultural Act of 1949.]
[SEC. 1215. NEGOTIATING AUTHORITY FOR CERTAIN ADP EQUIPMENT.
Amendments to section 128(b) of the Trade Act of 1974 (19
U.S.C. 2138(b))]
SEC. 1216. COMMISSION REPORT ON OPERATION OF SUBTITLE.
The Commission, in consultation with other appropriate
Federal agencies, shall prepare, and submit to the Congress and
to the President, a report regarding the operation of this
subtitle during the 12-month period commencing on the effective
date of the Harmonized Tariff Schedule. The report shall be
submitted to the Congress and to the President before the close
of the 6-month period beginning on the day after the last day
of such 12-month period.
SEC. 1217. EFFECTIVE DATES.
(a) Accession to Convention and Provisions Other Than the
Implementation of the Harmonized Tariff Schedule.--Except as
provided in subsection (b), the provisions of this subtitle
take effect on the date of the enactment of the Omnibus Trade
and Competitiveness Act of 1988.
(b) Implementation of the Harmonized Tariff Schedule.--The
effective date of the Harmonized Tariff Schedule is January 1,
1989. On such date--
(1) the amendments made by sections 1204(a), 1213,
1214, and 1215 take effect and apply with respect to
articles entered on or after such date; and
(2) sections 1204(c), 1211, and 1212 take effect.
Section 484(e) of the Tariff Act of 1930, as amended
[19 U.S.C. 1484(e); P.L. 71-361, as amended by P.L. 93-618 and P.L. 95-
106]
SEC. 484. ENTRY OF MERCHANDISE.
* * * * * * *
(e) Statistical Enumeration.--The Secretary of the
Treasury, the Secretary of Commerce, and the United States
International Trade Commission are authorized and directed to
establish from time to time for statistical purposes an
enumeration of articles in such detail as in their judgment may
be necessary, comprehending all merchandise imported into the
United States and exported from the United States, and shall
seek, in conjunction with statistical programs for domestic
production, and programs for achieving international
harmonization of trade statistics, to establish the
comparability thereof with such enumeration of articles. All
import entries and export declarations shall include or have
attached thereto an accurate statement specifying, in terms of
such detailed enumeration, the kinds and quantities of all
merchandise imported and exported and the value of the total
quantity of each kind of
article.
B. EXCERPTS FROM THE HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES
(HTS) RELATING TO SPECIAL DUTY TREATMENT
1. American Goods Returned (HTS Item 9801.00.10)
HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES
SUBCHAPTER I
ARTICLES EXPORTED AND RETURNED, NOT ADVANCED OR IMPROVED IN CONDITION;
ANIMALS EXPORTED AND RETURNED
U.S. Notes
1. The provisions in this subchapter (except subheadings
9801.00.70 and 9801.00.80) shall not apply to any article:
(a) Exported with benefit of drawback;
(b) Of a kind with respect to the importation of
which an internal-revenue tax is imposed at the time
such article is entered, unless such article was
subject to an internal-revenue tax imposed upon
production or importation at the time of its
exportation from the United States and it shall be
proved that such tax was paid before exportation and
was not refunded; or
(c) Manufactured or produced in the United States in
a customs bonded warehouse or under subheading
9813.00.05 and exported under any provision of law.
* * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rates of duty
----------------------------------------------------------------------------------
Heading/ Stat. Article description Units of 1
subheading suffix quantity -------------------------------------------------------- 2
General Special
--------------------------------------------------------------------------------------------------------------------------------------------------------
9801.00.10 Products of the United .............. Free .......................... .........................
States when returned
after having been
exported, without having
been advanced in value or
improved in condition by
any process of
manufacture or other
means while abroad.......
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. American Goods Repaired or Altered Abroad (HTS Items 9802.00.40,
.50)
American Metal Articles Processed Abroad (HTS Item 9802.00.60)
American Components Assembled Abroad (HTS Item 9802.00.80)
HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES
SUBCHAPTER II
ARTICLES EXPORTED AND RETURNED, ADVANCED OR IMPROVED ABROAD
U.S. Notes
1. Except for goods subject to NAFTA drawback, this
subchapter shall not apply to any article exported:
(a) From continuous customs custody with remission,
abatement or refund of duty;
(b) With benefit of drawback;
(c) To comply with any law of the United States or
regulation of any Federal agency requiring exportation;
or
(d) After manufacture or production in the United
States under heading 9813.00.05.
2. (a) Except as provided in paragraph (b), any product of
the United States which is returned after having been advanced
in value or improved in condition abroad by any process of
manufacture or other means, or any imported article which has
been assembled abroad in whole or in part of products of the
United States, shall be treated for the purposes of this Act as
a foreign article, and, if subject to a duty which is wholly or
partly ad valorem, shall be dutiable, except as otherwise
prescribed in this part, on its full value determined in
accordance with section 402 of the Tariff Act of 1930, as
amended. If such product or such article is dutiable at a rate
dependent upon its value, the value for the purpose of
determining the rate shall be its full value under the said
section 402.
(b) No article (except a textile article, apparel article,
or petroleum, or any product derived from petroleum, provided
for in heading 2709 or 2710) may be treated as a foreign
article, or as subject to duty, if--
(i) the article is--
(A) assembled or processed in whole of
fabricated components that are a product of the
United States, or
(B) processed in whole of ingredients (other
than water) that are a product of the United
States,
in a beneficiary country; and
(ii) neither the fabricated components, materials or
ingredients, after exportation from the United States,
nor the article itself, before importation into the
United States, enters the commerce of any foreign
country other than a beneficiary country.
As used in this paragraph, the term ``beneficiary country''
means a country listed in general note 7(a).
3. Articles repaired, altered, processed or otherwise
changed in condition abroad.--The following provisions apply
only to subheadings 9802.00.40 through 9802.00.60, inclusive:
(a) The value of repairs, alterations, processing or
other change in condition outside the United States
shall be:
(i) The cost to the importer of such change;
or
(ii) If no charge is made, the value of such
change,
as set out in the invoice and entry papers; except
that, if the appraiser concludes that the amount so set
out does not represent a reasonable cost or value, then
the value of the change shall be determined in
accordance with section 402 of the Tariff Act of 1930,
as amended.
(b) No appraisement of the imported article in its
changed condition shall be required unless necessary to
a determination of the rate or rates of duty applicable
to such article.
(c) The duty, if any, upon the value of the change in
condition shall be at the rate which would apply to the
article itself, as an entirety without constructive
separation of its components, in its condition as
imported if it were not within the purview of this
subchapter. If the article, as returned to the United
States, is subject to a specific or compound rate of
duty, such rate shall be converted to the ad valorem
rate which when applied to the full value of such
article determined in accordance with said section 402
would provide the same amount of duties as the specific
or compound rate. In order to compute the duties due,
the ad valorem rate so obtained shall be applied to the
value of the change in condition made outside the
United States.
(d) For purposes of subheading 9802.00.60, the term
``metal'' covers (1) the base metals enumerated in
additional U.S. note 1 to section XV; (2) arsenic,
barium, boron, calcium, mercury, selenium, silicon,
strontium, tellurium, thorium, uranium and the rare-
earth elements; and (3) alloys of any of the foregoing.
4. Articles assembled abroad with components produced in
the United States.--The following provisions apply only to
subheading 9802.00.80 and 9802.00.90:
(a) The value of the products of the United States
assembled into the imported article shall be:
(i) The cost of such products at the time of
the last purchase; or
(ii) If no charge is made, the value of such
products at the time of the shipment for
exportation,
as set out in the invoice and entry papers; except
that, if the appraiser concludes that the amount so set
out does not represent a reasonable cost or value, then
the value of such products shall be determined in
accordance with section 402 of the Tariff Act of 1930,
as amended.
(b) The duty, if any, on the imported article shall
be at the rate which would apply to the imported
article itself, as an entirety without constructive
separation of its components, in its condition as
imported if it were not within the purview of this
subchapter. If the imported article is subject to a
specific or compound rate of duty, the total duties
shall be reduced in such proportion as the cost or
value of such products of the United States bears to
the full value of the imported article.
5. No imported article shall be accorded partial exemption
from duty under more than one provision in this subchapter.
6. Notwithstanding the partial exemption from ordinary
customs duties on the value of the metal product exported from
the United States provided under subheading 9802.00.60,
articles imported under subheading 9802.00.60 are subject to
all other duties, and any other restrictions or limitations,
imposed pursuant to title VII of the Tariff Act of 1930 (19
U.S.C. 1671 et seq.), or chapter 1 of title II or chapter 1 of
title III of the Trade Act of 1974 (19 U.S.C. 2251 et seq., 19
U.S.C. 2411 et seq.).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rates of duty
----------------------------------------------------------------------------------
Heading/ Stat. Article description Units of 1
subheading suffix quantity -------------------------------------------------------- 2
General Special
--------------------------------------------------------------------------------------------------------------------------------------------------------
Articles returned to the .......................... .......................... .........................
United States after
having been exported to
be advanced in value or
improved in condition by
any process of
manufacture or other
means:
Articles exported for .......................... .......................... .........................
repairs or alterations:
9802.00.40 Repairs or alterations .............. A duty upon the value of Free (B, C, CA, IL, MX) A duty upon the value of
made pursuant to a the repairs or the repairs or
warranty.............. alterations (see U.S. alterations (see U.S.
note 3 of this note 3 of this
subchapter) subchapter).
20 \1\ Internal combustion (\1\)......... .......................... .......................... .........................
engines . . .
dutiable value.
40 \1\ Other . . . dutiable (\1\)......... .......................... .......................... .........................
value.
9802.00.50 Other.................. .............. A duty upon the value of Free (IL, MX). A duty upon the value of
the repairs or A duty upon the value of the repairs or
alterations (see U.S. the repairs or alterations (see U.S.
note 3 of this alterations (see U.S. note 3 of this
subchapter) note 3 of this subchapter).
subchapter) (B, C, CA)
9802.00.60 00 \1\ Any article of metal (as (\1\ \3\)..... A duty upon the value of Free (IL). A duty upon the value of
defined in U.S. note such processing outside A duty upon the value of such processing outside
3(d) of this the United States (see such processing outside the United States (see
subchapter) U.S. note 3 of this the United States (see U.S. note 3 of this
manufactured in the subchapter) U.S. note 3 of this subchapter).
United States or subchapter) (B, C, CA,
subjected to a process MX)
of manufacture in the
United States, if
exported for further
processing, and if the
exported article as
processed outside the
United States, or the
article which results
from the processing
outside the United
States, is returned to
the United States for
further processing.....
9802.00.80 Articles, except goods of .............. A duty upon the full value Free (IL). A duty upon the full
heading 9802.00.90, of the imported article, A duty upon the full value value of the imported
assembled abroad in whole less the cost or value of of the imported article, article, less the cost
or in part of fabricated such products of the less the cost or value of or value of such
components, the product United States (see U.S. such products of the products of the United
of the United States, note 4 of this United States (see U.S. States (see U.S. note 4
which (a) were exported subchapter) note 4 of this of this subchapter).
in condition ready for subchapter) (B, C, CA,
assembly without further MX)
fabrication, (b) have not
lost their physical
identity in such articles
by change in form, shape
or otherwise, and (c)
have not been advanced in
value or improved in
condition abroad except
by being assembled and
except by operations
incidental to the
assembly process such as
cleaning, lubricating and
painting.................
--------------------------------------------------------------------------------------------------------------------------------------------------------
3. Personal (Tourist) Exemptions (HTS Items 9804.00.65, .70, .72)
HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES
SUBCHAPTER IV
PERSONAL EXEMPTIONS EXTENDED TO RESIDENTS AND NONRESIDENTS
U.S. Notes
* * * * * * *
2. In the case of persons arriving from a contiguous
country which maintains a free zone or free port, if the
Secretary of the Treasury deems it necessary in the public
interest and to facilitate enforcement of the requirement that
the exemption in subheading 9804.00.70 shall apply only to
articles acquired as an incident of the foreign journey, he
shall prescribe by regulation or instruction, the application
of which may be restricted to one or more ports of entry, that
such exemption shall be allowed only to residents who have
remained beyond the territorial limits of the United States for
not less than a specified period, not to exceed 24 hours, and,
after the expiration of 90 days after the date of such
regulation or instruction, allowance of the said exemption
shall be subject to the limitations so prescribed.
3. A person arriving in the United States:
(a) On duty as an employee of a vessel, vehicle or
aircraft, engaged in international traffic, or
(b) From a trip during which he was so employed,
shall not be entitled to the exemptions provided for in this
subchapter (other than those in heading 9804.00.80), unless he
is permanently leaving such employment without the intention of
resuming it on the same or another carrier.
4. As used in subheadings 9804.00.70 and 9804.00.72, the
term ``beneficiary country'' means a country listed in general
notes 7(a) or 11(a).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rates of duty
----------------------------------------------------------------------------------
Heading/ Stat. Article description Units of 1
subheading suffix quantity -------------------------------------------------------- 2
General Special
--------------------------------------------------------------------------------------------------------------------------------------------------------
Articles imported by or .......................... .......................... .........................
for the account of any
person arriving in the
United States who is a
returning resident
thereof (including
American citizens who are
residents of American
Samoa, Guam or the Virgin
Islands of the United
States) (con.):
Other articles acquired .......................... .......................... .........................
abroad as an incident
of the journey from
which the person is
returning if such
person arrives from the
Virgin Islands of the
United States or from a
contiguous country
which maintains a free
zone or free port, or
arrives from any other
country after having
remained beyond the
United States for a
period of not less than
48 hours, for his
personal or household
use, but not imported
for the account of any
other person nor
intended for sale, if
declared in accordance
with regulations of the
Secretary of the
Treasury and if such
person has not claimed
an exemption under
subheadings 9804.00.65,
9804.00.70, and
9804.00.72 within 30
days preceding his
arrival, and claims
exemption under only
one of such items on
his arrival:
9804.00.65 (\1\) Articles, accompanying .............. Free Free
a person, not over
$400, in aggregate
fair retail value in
the country of
acquisition, including
(but only in the case
of an individual who
has attained the age
of 21) not more than 1
liter of alcoholic
beverages and
including not more
than 200 cigarettes
and 100 cigars........
9804.00.70 (\1\) Articles whether or not Free Free
accompanying a person,
not over $1,200 in
aggregate fair market
value in the country
of acquisition,
including:
(a) but only in the
case of an individual
who has attained the
age of 21, not more
than 5 liters of
alcoholic beverages,
not more than 1 liter
of which shall have
been acquired
elsewhere than in
American Samoa, Guam
or the Virgin Islands
of the United States,
and not more than 4
liters of which shall
have been produced
elsewhere than in
such insular
possessions, and
(b) not more than
1,000 cigarettes, not
more than 200 of
which shall have been
acquired elsewhere
than in such insular
possessions, and not
more than 100 cigars,
if such person arrives
directly or indirectly
from such insular
possessions, not more
than $400 of which
shall have been
acquired elsewhere
than in such insular
possessions or up to
$600 of which have
been acquired in one
or more beneficiary
countries (but this
subheading does not
permit the entry of
articles not
accompanying a person
which were acquired
elsewhere than in such
insular possessions)..
9804.00.72 (\1\) Articles whether or not Free Free
accompanying a person,
not over $600 in
aggregate fair market
value in the country
of acquisition,
including--
(a) but only in the
case of an individual
who has attained the
age of 21, not more
than 1 liter of
alcoholic beverages
or not more than 2
liters if at least 1
liter is the product
of one or more
beneficiary
countries, and
(b) not more than 200
cigarettes, and not
more than 100 cigars,
if such person arrives
directly from a
beneficiary country,
not more than $400 of
which shall have been
acquired elsewhere
than in beneficiary
countries (but this
item does not permit
the entry of articles
not accompanying a
person which were
acquired elsewhere
than in beneficiary
countries)............
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4. Noncommercial Importations of Limited Value (HTS Items 9816.00.20,
and 9816.00.40)
HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES
SUBCHAPTER XVI
U.S. Note
1. For the purposes of this subchapter the rates of duty
for articles provided in this subchapter shall be assessed in
lieu of any other rates of duty, except free rates of duty on
such articles, unless the Secretary of the Treasury or his
delegate determines, in accordance with regulations, that the
application of the rate of duty provided in this subchapter to
any article in lieu of the rate of duty otherwise applicable
thereto adversely affects the economic interest of the United
States.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rates of duty
----------------------------------------------------------------------------------
Heading/ Stat. Article description Units of 1
subheading suffix quantity -------------------------------------------------------- 2
General Special
--------------------------------------------------------------------------------------------------------------------------------------------------------
Articles for personal or
household use, or as bona
fide gifts, not imported
for the account of
another person, valued in
the aggregate at not over
$1,000 fair retail value
in the country of
acquisition, if the
person claiming the
benefit of subheading
9816.00.20 or 9816.00.40,
or both has not received
the benefits thereof
within the 30 days
immediately preceding his
arrival:.
9816.00.20 \1\ Accompanying a person, .............. (A) effective January 1, Free (CA, IL) 3 percent of 10 percent of the fair
arriving in the United 2000, 5 percent; (B) the fair retail value retail value
States (exclusive of duty- effective January 1, (MX)
free articles and 2001, 4 percent; (C)
articles acquired in effective January 1, 2002
American Samoa, Guam or 3 percent.
the Virgin Islands of the
United States)...........
9816.00.40 \1\ Imported by or for the .............. (A) effective January 1, Free (CA, IL) 1.5 percent 5 percent of the fair
account of a person 2000, 3 percent; (B) of the fair retail value retail value
(whether or not effective January 1, (MX)
accompanying him) 2001, 2 percent;
arriving directly or effective January 1, 2002
indirectly from American 1.5 percent.
Samoa, Guam or the Virgin
Islands of the United
States, acquired in such
insular possessions as an
incident of such person's
physical presence
--------------------------------------------------------------------------------------------------------------------------------------------------------
5. Classification of Personal Effect of Participants in International
Athletic Events (HTS Items 9817.60.00)
HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES
SUBCHAPTER XVII
U.S. Note
6. Any article exempt from duty under heading 9817.60.00
shall be free of taxes and fees that may otherwise be
applicable, but shall not be free or otherwise exempt or
excluded from routine or other inspections as may be required
by the Customs Service.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rates of duty
----------------------------------------------------------------------------------
Heading/ Stat. Article description Units of 1
subheading suffix quantity -------------------------------------------------------- 2
General Special
--------------------------------------------------------------------------------------------------------------------------------------------------------
9817.60.00 Any of the following
articles not intended for
sale of distribution to
the public: personal
effects of aliens who are
participants in,
officials of, or
accredited members of
delegations to, an
international athletic
event held in the United
States, such as the
Olympics and Paralympics,
the Goodwill Games, the
Special Olympics World
Games, the World Cup
Soccer Games, or any
similar international
athletic event as the
Secretary of the Treasury
may determine, and of
persons who are immediate
family members of or
servants to any of the
foregoing persons;
equipment and materials
imported in connection
with any such foregoing
event by or on behalf of
the foregoing persons or
the organizing committee
of such an event,
articles to be used in
exhibitions depicting the
culture of a country
participating in such an
event; and if consistent
with the foregoing, such
other articles as the
Secretary of the Treasury
may allow................
--------------------------------------------------------------------------------------------------------------------------------------------------------
6. Products of U.S. Insular Possessions
General Note 3(a)(iv)
Products of Insular Possessions
(A) Except as provided in additional U.S. note 5 of chapter
91 and except as provided in additional U.S. note 2 of chapter
96, and except as provided in section 423 of the Tax Reform Act
of 1986, goods imported from insular possessions of the United
States which are outside the customs territory of the United
States are subject to the rates of duty set forth in column 1
of the tariff schedule, except that all such goods the growth
or product of any such possession, or manufactured or produced
in any such possession from materials the growth, product or
manufacture of any such possession or of the customs territory
of the United States, or of both, which do not contain foreign
materials to the value of more than 70 percent of their total
value (or more than 50 percent of their total value with
respect to goods described in section 213(b) of the Caribbean
Basin Economic Recovery Act), coming to the customs territory
of the United States directly from any such possession, and all
goods previously imported into the customs territory of the
United States with payment of all applicable duties and taxes
imposed upon or by reason of importation which were shipped
from the United States, without remission, refund or drawback
of such duties or taxes, directly to the possession from which
they are being returned by direct shipment, are exempt from
duty.
(B) In determining whether goods produced or manufactured
in any such insular possession contain foreign materials to the
value of more than 70 percent, no material shall be considered
foreign which either--
(1) at the time such goods are entered, or
(2) at the time such material is imported into the
insular possession,
may be imported into the customs territory from a foreign
country, and entered free of duty; except that no goods
containing material to which (2) of this subparagraph applies
shall be exempt from duty under subparagraph (A) unless
adequate documentation is supplied to show that the material
has been incorporated into such goods during the 18-month
period after the date on which such material is imported into
the insular possession.
(C) Subject to the limitations imposed under subsections
(a), (c), and (d) of section 503 of the Trade Act of 1974,
goods designated as eligible under section 503 of such Act
which are imported from an insular possession of the United
States shall receive duty treatment no less favorable than the
treatment afforded such goods imported from a beneficiary
developing country under title V of such Act.
(D) Subject to the provisions in section 213 of the
Caribbean Basin Economic Recovery Act, goods which are imported
from insular possessions of the United States shall receive
duty treatment no less favorable than the treatment afforded
such goods when they are imported from a beneficiary country
under such Act.
(E) Subject to the provisions in section 204 of the Andean
Trade Preference Act, goods which are imported from insular
possessions of the United States shall receive duty treatment
no less favorable than the treatment afforded such goods when
they are imported from a beneficiary country under such Act.
(F) No quantity of an agricultural product that is subject
to a tariff-rate quota that exceeds the in-quota quantity shall
be eligible for duty-free treatment under this paragraph.
Additional U.S Note 3(a) to Chapter 71
3.(a) Notwithstanding any provision in additional U.S. note
5 to chapter 91, any article of jewelry provided for in heading
7113 which is the product of the Virgin Islands, Guam, or
American Samoa (including any such article which contains any
foreign component) shall be eligible for the benefits provided
in paragraph (h) of additional U.S. note 5 to chapter 91,
subject to the provisions and limitations of that note and of
paragraphs (b), (c), and (d) of this note.
(b) Nothing in this note shall result in an increase or a
decrease in the aggregate amount referred to in paragraph
(b)(iii) of, or the quantitative limitation otherwise
established pursuant to the requirements of, additional U.S.
note 5 to chapter 91.
(c) Nothing in this note shall be construed to permit a
reduction in the amount available to watch producers under
paragraph (h)(iv) of additional U.S. note 5 to chapter 91.
(d) The Secretary of Commerce and the Secretary of the
Interior shall issue such regulations, not inconsistent with
the provisions of this note and additional U.S. note 5 to
chapter 91, as the Secretaries determine necessary to carry out
their respective duties under this note. Such regulations shall
not be inconsistent with substantial transformation
requirements but may define the circumstances under which
articles of jewelry shall be deemed to be `units' for purposes
of the benefits, provisions, and limitations of additional U.S.
note 5 to Chapter 91.
(e) Notwithstanding any other provision of law, during the
2-year period beginning 45 days after the date of the enactment
of this note, any article of jewelry provided for in heading
7113 that is assembled in the Virgin Islands, Guam, or American
Samoa shall be treated as a product of the Virgin Islands,
Guam, or American Samoa for purposes of this note and General
Note 3(a)(iv) of this Schedule.
7. Rates of Duty on Certain Motor Vehicles
General Note 3(d)
(d) Certain Motor Vehicles Manufactured in Foreign Trade
Zones.
(i) Duty imposed.--Notwithstanding any other
provision of law, the duty imposed on a qualified
article shall be the amount determined by multiplying
the applicable foreign value content of such article by
the applicable rate of duty for such article.
(ii) Qualified article.--For purposes of this
subdivision, the term ``qualified article'' means an
article that is--
(A) classifiable under any of subheadings
8702.10 through 8704.90 of the Harmonized
Tariff Schedule of the United States,
(B) produced or manufactured in a foreign
trade zone before January 1, 1996,
(C) exported therefrom to a NAFTA country
(as defined in section 2(4) of the North
American Free Trade Agreement Implementation
Act (19 U.S.C. 3301(4)), and
(D) subsequently imported from that NAFTA
country into the customs territory of the
United States--
(I) on or after the effective date
of this subdivision, or
(II) on or after January 1, 1994,
and before such effective date, if the
entry of such article is unliquidated,
under protest, or in litigation, or
liquidation is otherwise not final on
such effective date.
(iii) Applicable foreign value content.
(A) Applicable foreign value content.--For
purposes of this subdivision, the term
``applicable foreign value content'' means the
amount determined by multiplying the value of a
qualified article by the applicable percentage.
(B) Applicable percentage.--The term
``applicable percentage'' means the FTZ
percentage for the article plus 5 percentage
points.
(iv) Other definitions and special rules.--For
purposes of this subdivision--
(A) FTZ percentage.--The FTZ percentage for
a qualified article shall be the percentage
determined in accordance with subparagraph (I),
(II), or (III) of this paragraph, whichever is
applicable.
(I) Report for year published.--If,
at the time a qualified article is
entered, the FTZ Annual Report for the
year in which the article was
manufactured has been published, the
FTZ percentage for the article shall be
the percentage of foreign status
merchandise set forth in that report
for the subzone in which the qualified
article was manufactured, or if not
manufactured in a subzone, the foreign
trade zone in which the qualified
article was manufactured.
(II) Report for year not
published.--If, at the time a qualified
article is entered, the FTZ Annual
Report for the year in which the
article was manufactured has not been
published, the FTZ percentage for the
article shall be the percentage of
foreign status merchandise set forth in
the most recently published FTZ Annual
Report for the subzone in which the
article was manufactured, or if not
manufactured in a subzone, the foreign
trade zone in which the qualified
article was manufactured.
(B) Applicable rate of duty.--The term
``applicable duty rate'' means the rate of duty
set forth in any of subheadings 8702.10 through
8704.90 of the Harmonized Tariff Schedule of
the United States that is applicable to the
qualified article and which would apply to that
article if the article were directly entered
for consumption into the United States from the
foreign trade zone with non-privileged foreign
status having been claimed for all foreign
merchandise used in the manufacture or
production of the qualified article.
(C) Foreign trade zone; subzone.--The terms
``foreign trade zone'' and ``subzone'' mean a
zone or subzone established pursuant to the Act
of June 18, 1934, commonly known as the Foreign
Trade Zones Act (19 U.S.C. 81a et seq.).
(D) FTZ annual report.--The term ``FTZ
Annual Report'' means the Annual Report to the
Congress published in accordance with section
16 of the Foreign Trade Zones Act (19 U.S.C.
81p(c)).
(E) Non-privileged foreign status.--The term
``non-privileged foreign status'' means that
privilege has not been requested with respect
to an article pursuant to section 3 of the
Foreign Trade Zones Act.
C. GENERALIZED SYSTEM OF PREFERENCES
Title V of the Trade Act of 1974, as amended
[19 U.S.C. 2461 et seq.; P.L. 93-618, as amended by P.L. 94-455, P.L.
96-39, P.L. 98-573, P.L. 99-47, P.L. 99-514, P.L. 99-570, P.L. 100-418,
P.L. 101-179, P.L. 101-382, P.L. 103-66, P.L. 103-465, P.L. 104-188,
P.L. 104-295, P.L. 106-36, P.L. 106-170, and P.L. 106-200]
SEC. 501. AUTHORITY TO EXTEND PREFERENCES.
The President may provide duty-free treatment for any
eligible article from any beneficiary developing country in
accordance with the provisions of this title. In taking any
such action, the President shall have due regard for--
(1) the effect such action will have on furthering
the economic development of developing countries
through the expansion of their exports;
(2) the extent to which other major developed
countries are undertaking a comparable effort to assist
developing countries by granting generalized
preferences with respect to imports of products of such
countries;
(3) the anticipated impact of such action on United
States producers of like or directly competitive
products; and
(4) the extent of the beneficiary developing
country's competitiveness with respect to eligible
articles.
SEC. 502. DESIGNATION OF BENEFICIARY DEVELOPING COUNTRIES.
(a) Authority To Designate Countries.--
(1) Beneficiary developing countries.--The President
is authorized to designate countries as beneficiary
developing countries for purposes of this title.
(2) Least-developed beneficiary developing
countries.--The President is authorized to designate
any beneficiary developing country as a least-developed
beneficiary developing country for purposes of this
title, based on the considerations in section 501 and
subsection (c) of this section.
(b) Countries Ineligible for Designation.--
(1) Specific countries.--The following countries may
not be designated as beneficiary developing countries
for purposes of this title:
(A) Australia.
(B) Canada.
(C) European Union member states.
(D) Iceland.
(E) Japan.
(F) Monaco.
(G) New Zealand.
(H) Norway.
(I) Switzerland.
(2) Other bases for ineligibility.--The President
shall not designate any country a beneficiary
developing country under this title if any of the
following applies:
(A) Such country is a Communist country,
unless--
(i) the products of such country
receive nondiscriminatory treatment,
(ii) such country is a WTO Member (as
such term is defined in section 2(10)
of the Uruguay Round Agreements Act)
(19 U.S.C. 3501(10)) and a member of
the International Monetary Fund, and
(iii) such country is not dominated
or controlled by international
communism.
(B) Such country is a party to an arrangement
of countries and participates in any action
pursuant to such arrangement, the effect of
which is--
(i) to withhold supplies of vital
commodity resources from international
trade or to raise the price of such
commodities to an unreasonable level,
and
(ii) to cause serious disruption of
the world economy.
(C) Such country affords preferential
treatment to the products of a developed
country, other than the United States, which
has, or is likely to have, a significant
adverse effect on United States commerce.
(D)(i) Such country--
(I) has nationalized, expropriated,
or otherwise seized ownership or
control of property, including
patents, trademarks, or copyrights,
owned by a United States citizen or by
a corporation, partnership, or
association which is 50 percent or more
beneficially owned by United States
citizens,
(II) has taken steps to repudiate or
nullify an existing contract or
agreement with a United States citizen
or a corporation, partnership, or
association which is 50 percent or more
beneficially owned by United States
citizens, the effect of which is to
nationalize, expropriate, or otherwise
seize ownership or control of property,
including patents, trademarks, or
copyrights, so owned, or
(III) has imposed or enforced taxes
or other
exactions, restrictive maintenance or
operational conditions, or other
measures with respect to property,
including patents, trademarks, or
copyrights, so owned, the effect of
which is to nationalize, expropriate,
or otherwise seize ownership or control
of such property, unless clause (ii)
applies.
(ii) This clause applies if the President
determines that--
(I) prompt, adequate, and effective
compensation has been or is being made
to the citizen, corporation,
partnership, or association referred to
in clause (i),
(II) good faith negotiations to
provide prompt, adequate, and effective
compensation under the applicable
provisions of international law are in
progress, or the country described in
clause (i) is otherwise taking steps to
discharge its obligations under
international law with respect to such
citizen, corporation, partnership, or
association, or
(III) a dispute involving such
citizen, corporation, partnership, or
association over compensation for such
a seizure has been submitted to
arbitration under the provisions of the
Convention for the Settlement of
Investment Disputes, or in another
mutually agreed upon forum, and the
President promptly furnishes a copy of
such determination to the Senate and
House of Representatives.
(E) Such country fails to act in good faith
in recognizing as binding or in enforcing
arbitral awards in favor of United States
citizens or a corporation, partnership, or
association which is 50 percent or more
beneficially owned by United States citizens,
which have been made by arbitrators appointed
for each case or by permanent arbitral bodies
to which the parties involved have submitted
their dispute.
(F) Such country aids or abets, by granting
sanctuary from prosecution to, any individual
or group which has committed an act of
international terrorism or the Secretary of
State makes a determination with respect to
such country under section 6(j)(1)(A) of the
Export Administration Act of 1979.
(G) Such country has not taken or is not
taking steps to afford internationally
recognized worker rights to workers in the
country (including any designated zone in that
country).
(H) Such country has not implemented its
commitments to eliminate the worst forms of
child labor.
Subparagraphs (D), (E), (F), (G) and (H) (to the extent
described in section 507(6)(D)) shall not prevent the
designation of any country as a beneficiary developing
country under this title if the President determines
that such designation will be in the national economic
interest of the United States and reports such
determination to the Congress with the reasons
therefor.
(c) Factors Affecting Country Designation.--In determining
whether to designate any country as a beneficiary developing
country under this title, the President shall take into
account--
(1) an expression by such country of its desire to
be so designated;
(2) the level of economic development of such
country, including its per capita gross national
product, the living standards of its inhabitants, and
any other economic factors which the President deems
appropriate;
(3) whether or not other major developed countries
are extending generalized preferential tariff treatment
to such country;
(4) the extent to which such country has assured the
United States that it will provide equitable and
reasonable access to the markets and basic commodity
resources of such country and the extent to which such
country has assured the United States that it will
refrain from engaging in unreasonable export practices;
(5) the extent to which such country is providing
adequate and effective protection of intellectual
property rights;
(6) the extent to which such country has taken
action to--
(A) reduce trade distorting investment
practices and policies (including export
performance requirements); and
(B) reduce or eliminate barriers to trade in
services; and
(7) whether or not such country has taken or is
taking steps to afford to workers in that country
(including any designated zone in that country)
internationally recognized worker rights.
(d) Withdrawal, Suspension, or Limitation of Country
Designation.--
(1) In general.--The President may withdraw, suspend,
or limit the application of the duty-free treatment
accorded under this title with respect to any country.
In taking any action under this subsection, the
President shall consider the factors set forth in
section 501 and subsection (c) of this section.
(2) Changed circumstances.--The President shall,
after complying with the requirements of subsection
(f)(2), withdraw or suspend the designation of any
country as a beneficiary developing country if, after
such designation, the President determines that as the
result of changed circumstances such country would be
barred from designation as a beneficiary developing
country under subsection (b)(2). Such country shall
cease to be a beneficiary developing country on the day
on which the President issues an Executive order or
Presidential proclamation revoking the designation of
such country under this title.
(3) Advice to congress.--The President shall, as
necessary, advise the Congress on the application of
section 501 and subsection (c) of this section, and the
actions the President has taken to withdraw, to
suspend, or to limit the application of duty-free
treatment with respect to any country which has failed
to adequately take the actions described in subsection
(c).
(e) Mandatory Graduation of Beneficiary Developing
Countries.--If the President determines that a beneficiary
developing country has become a `high income' country, as
defined by the official statistics of the International Bank
for Reconstruction and Development, then the President shall
terminate the designation of such country as a beneficiary
developing country for purposes of this title, effective on
January 1 of the second year following the year in which such
determination is made.
(f) Congressional Notification.--
(1) Notification of designation.--
(A) In general.--Before the President
designates any country as a beneficiary
developing country under this title, the
President shall notify the Congress of the
President's intention to make such designation,
together with the considerations entering into
such decision.
(B) Designation as least-developed
beneficiary developing country and beneficiany
sub-Saharan African countries.--At least 60
days before the President designates any
country as a least-developed beneficiary
developing country, the President shall notify
the Congress of the President's intention to
make such designation or any beneficiany sub-
Saharan African country.
(2) Notification of termination.--If the President
has designated any country as a beneficiary developing
country under this title, the President shall not
terminate such designation unless, at least 60 days
before such termination, the President has notified the
Congress and has notified such country of the
President's intention to terminate such designation,
together with the considerations entering into such
decision.
SEC. 503. DESIGNATION OF ELIGIBLE ARTICLES.
(a) Eligible Articles.--
(1) Designation.--
(A) In general.--Except as provided in
subsection (b), the President is authorized to
designate articles as eligible articles from
all beneficiary developing countries for
purposes of this title by Executive order or
Presidential proclamation after receiving the
advice of the International Trade Commission in
accordance with subsection (e).
(B) Least-developed beneficiary developing
countries.--Except for articles described in
subparagraphs (A), (B), and (E) of subsection
(b)(1) and articles described in paragraphs (2)
and (3) of subsection (b), the President may,
in carrying out section 502(d)(1) and
subsection (c)(1) of this section, designate
articles as eligible articles only for
countries designated as least-developed
beneficiary developing countries under section
502(a)(2) if, after receiving the advice of the
International Trade Commission in accordance
with subsection (e) of this section, the
President determines that such articles are not
import-sensitive in the context of imports from
least-developed beneficiary developing
countries.
(C) Three-year rule.--If, after receiving the
advice of the International Trade Commission
under subsection (e), an article has been
formally considered for designation as an
eligible article under this title and denied
such designation, such article may not be
reconsidered for such designation for a period
of 3 years after such denial.
(2) Rule of origin.--
(A) General rule.--The duty-free treatment
provided under this title shall apply to any
eligible article which is the growth, product,
or manufacture of a beneficiary developing
country if--
(i) that article is imported directly
from a beneficiary developing country
into the customs territory of the
United States; and
(ii) the sum of--
(I) the cost or value of the
materials produced in the
beneficiary developing country
or any two or more such
countries that are members of
the same association of
countries and are treated as
one country under section
507(2), plus
(II) the direct costs of
processing operations performed
in such beneficiary developing
country or such member
countries, is not less than 35
percent of the appraised value
of such article at the time it
is entered.
(B) Exclusions.--An article shall not be
treated as the growth, product, or manufacture
of a beneficiary developing country by virtue
of having merely undergone--
(i) simple combining or packaging
operations, or
(ii) mere dilution with water or mere
dilution with another substance that
does not materially alter the
characteristics of the article.
(3) Regulations.--The Secretary of the Treasury,
after consulting with the United States Trade
Representative, shall prescribe such regulations as may
be necessary to carry out paragraph (2), including, but
not limited to, regulations providing that, in order to
be eligible for duty-free treatment under this title,
an article--
(A) must be wholly the growth, product, or
manufacture of a beneficiary developing
country, or
(B) must be a new or different article of
commerce which has been grown, produced, or
manufactured in the beneficiary developing
country.
(b) Articles That May Not Be Designated As Eligible
Articles.--
(1) Import sensitive articles.--The President may not
designate any article as an eligible article under
subsection (a) if such article is within one of the
following categories of import-sensitive articles:
(A) Textile and apparel articles which were
not eligible articles for purposes of this
title on January 1, 1994, as this title was in
effect on such date.
(B) Watches, except those watches entered
after June 30, 1989, that the President
specifically determines, after public notice
and comment, will not cause material injury to
watch or watch band, strap, or bracelet
manufacturing and assembly operations in the
United States or the United States insular
possessions.
(C) Import-sensitive electronic articles.
(D) Import-sensitive steel articles.
(E) Footwear, handbags, luggage, flat goods,
work gloves, and leather wearing apparel which
were not eligible articles for purposes of this
title on January 1, 1995, as this title was in
effect on such date.
(F) Import-sensitive semimanufactured and
manufactured glass products.
(G) Any other articles which the President
determines to be import-sensitive in the
context of the Generalized System of
Preferences.
(2) Articles against which other actions taken.--An
article shall not be an eligible article for purposes
of this title for any period during which such article
is the subject of any action proclaimed pursuant to
section 203 of this Act (19 U.S.C. 2253) or section 232
or 351 of the Trade Expansion Act of 1962 (19 U.S.C.
1862, 1981).
(3) Agricultural products.--No quantity of an
agricultural product subject to a tariff-rate quota
that exceeds the in-quota quantity shall be eligible
for duty-free treatment under this title.
(c) Withdrawal, Suspension, or Limitation of Duty-Free
Treatment; Competitive Need Limitation.--
(1) In general.--The President may withdraw, suspend,
or limit the application of the duty-free treatment
accorded under this title with respect to any article,
except that no rate of duty may be established with
respect to any article pursuant to this subsection
other than the rate which would apply but for this
title. In taking any action under this subsection, the
President shall consider the factors set forth in
sections 501 and 502(c).
(2) Competitive need limitation.--
(A) Basis for withdrawal of duty-free
treatment.--
(i) In general.--Except as provided
in clause (ii) and subject to
subsection (d), whenever the President
determines that a beneficiary
developing country has exported
(directly or indirectly) to the United
States during any calendar year
beginning after December 31, 1995--
(I) a quantity of an eligible
article having an appraised
value in excess of the
applicable amount for the
calendar year, or
(II) a quantity of an
eligible article equal to or
exceeding 50 percent of the
appraised value of the total
imports of that article into
the United States during any
calendar year, the President
shall, not later than July 1 of
the next calendar year,
terminate the duty-free
treatment for that article from
that beneficiary developing
country.
(ii) Annual adjustment of applicable
amount.--For purposes of applying
clause (i), the applicable amount is--
(I) for 1996, $75,000,000,
and
(II) for each calendar year
thereafter, an amount equal to
the applicable amount in effect
for the preceding calendar year
plus $5,000,000.
(B) Country defined.--For purposes of this
paragraph, the term ``country'' does not
include an association of countries which is
treated as one country under section 507(2),
but does include a country which is a member of
any such association.
(C) Redesignations.--A country which is no
longer treated as a beneficiary developing
country with respect to an eligible article by
reason of subparagraph (A) may, subject to the
considerations set forth in sections 501 and
502, be redesignated a beneficiary developing
country with respect to such article if imports
of such article from such country did not
exceed the limitations in subparagraph (A)
during the preceding calendar year.
(D) Least-developed beneficiary developing
countries and beneficiary sub-saharan african
countries.--Subparagraph (A) shall not apply to
any least-developed beneficiary developing
country or any beneficiary sub-Saharan African
country.
(E) Articles not produced in the united
states excluded.--Subparagraph (A)(i)(II) shall
not apply with respect to any eligible article
if a like or directly competitive article was
not produced in the United States on January 1,
1995.
(F) De minimis waivers.--
(i) In general.--The President may
disregard subparagraph (A)(i)(II) with
respect to any eligible article from
any beneficiary developing country if
the aggregate appraised value of the
imports of such article into the United
States during the preceding calendar
year does not exceed the applicable
amount for such preceding calendar
year.
(ii) Applicable amount.--For purposes
of applying clause (i), the applicable
amount is--
(I) for calendar year 1996,
$13,000,000, and
(II) for each calendar year
thereafter, an amount equal to
the applicable amount in effect
for the preceding calendar year
plus $500,000.
(d) Waiver of Competitive Need Limitation.--
(1) In general.--The President may waive the
application of subsection (c)(2) with respect to any
eligible article of any beneficiary developing country
if, before July 1 of the calendar year beginning after
the calendar year for which a determination described
in subsection (c)(2)(A) was made with respect to such
eligible article, the President--
(A) receives the advice of the International
Trade Commission under section 332 of the
Tariff Act of 1930 on whether any industry in
the United States is likely to be adversely
affected by such waiver,
(B) determines, based on the considerations
described in sections 501 and 502(c) and the
advice described in subparagraph (A), that such
waiver is in the national economic interest of
the United States, and
(C) publishes the determination described in
subparagraph (B) in the Federal Register.
(2) Considerations by the president.--In making any
determination under paragraph (1), the President shall
give great weight to--
(A) the extent to which the beneficiary
developing country has assured the United
States that such country will provide equitable
and reasonable access to the markets and basic
commodity resources of such country, and
(B) the extent to which such country provides
adequate and effective protection of
intellectual property rights.
(3) Other bases for waiver.--The President may waive
the application of subsection (c)(2) if, before July 1
of the calendar year beginning after the calendar year
for which a determination described in subsection
(c)(2) was made with respect to a beneficiary
developing country, the President determines that--
(A) there has been a historical preferential
trade relationship between the United States
and such country,
(B) there is a treaty or trade agreement in
force covering economic relations between such
country and the United States, and
(C) such country does not discriminate
against, or impose unjustifiable or
unreasonable barriers to, United States
commerce,
and the President publishes that determination in the
Federal Register.
(4) Limitations on waivers.--
(A) In general.--The President may not
exercise the waiver authority under this
subsection with respect to a quantity of an
eligible article entered during any calendar
year beginning after 1995, the aggregate
appraised value of which equals or exceeds 30
percent of the aggregate appraised value of all
articles that entered duty-free under this
title during the preceding calendar year.
(B) Other waiver limits.--The President may
not exercise the waiver authority provided
under this subsection with respect to a
quantity of an eligible article entered during
any calendar year beginning after 1995, the
aggregate appraised value of which exceeds 15
percent of the aggregate appraised value of all
articles that have entered duty-free under this
title during the preceding calendar year from
those beneficiary developing countries which
for the preceding calendar year--
(i) had a per capita gross national
product (calculated on the basis of the
best available information, including
that of the International Bank for
Reconstruction and Development) of
$5,000 or more; or
(ii) had exported (either directly or
indirectly) to the United States a
quantity of articles that was duty-free
under this title that had an aggregate
appraised value of more than 10 percent
of the aggregate appraised value of all
articles that entered duty-free under
this title during that year.
(C) Calculation of limitations.--There shall
be counted against the limitations imposed
under subparagraphs (A) and (B) for any
calendar year only that value of any eligible
article of any country that--
(i) entered duty-free under this
title during such calendar year; and
(ii) is in excess of the value of
that article that would have been so
entered during such calendar year if
the limitations under subsection
(c)(2)(A) applied.
(5) Effective period of waiver.--Any waiver granted
under this subsection shall remain in effect until the
President determines that such waiver is no longer
warranted due to changed circumstances.
(e) International Trade Commission Advice.--Before
designating articles as eligible articles under subsection
(a)(1), the President shall publish and furnish the
International Trade Commission with lists of articles which may
be considered
for designation as eligible articles for purposes of this
title. The provisions of sections 131, 132, 133, and 134 shall
be complied with as though action under section 501 and this
section were action under section 123 to carry out a trade
agreement entered into under section 123.
(f) Special Rule Concerning Puerto Rico.--No action under
this title may affect any tariff duty imposed by the
Legislature of Puerto Rico pursuant to section 319 of the
Tariff Act of 1930 on coffee imported into Puerto Rico.(19
U.S.C. 2463)
SEC. 504. REVIEW AND REPORT TO CONGRESS.
The President shall submit an annual report to the Congress
on the status of internationally recognized worker rights
within each beneficiary developing country, including the
findings of the Secretary of Labor with respect to the
beneficiary country's implementation of its international
commitments to eliminate the worst forms of child labor.
SEC. 505. DATE OF TERMINATION.
No duty-free treatment provided under this title shall remain
in effect after September 30, 2001.
SEC. 506. AGRICULTURAL EXPORTS OF BENEFICIARY DEVELOPING COUNTRIES.
The appropriate agencies of the United States shall assist
beneficiary developing countries to develop and implement
measures designed to assure that the agricultural sectors of
their economies are not directed to export markets to the
detriment of the production of foodstuffs for their citizenry.
SEC. 506A. DESIGNATION OF SUB-SAHARAN AFRICAN COUNTRIES FOR CERTAIN
BENEFITS.
(a) Authority to Designate.--
(1) In general.--Notwithsanding any other provision
of law, the President is authorized to designate a
country listed in section 107 of the African Growth and
Opportunity Act as a beneficiary sub-Saharan African
country eligible for the benefits described in
subsection (b)--
(A) if the President determines that the
country meets the eligibility requirements set
forth in section 104 of that Act, as such
requirements are in effect on the date of the
enactment of that Act: and
(B) subject to the authority granted to the
President under subsections (a), (d), and (e)
of section 502, if the country otherwise meets
the eligibility criteria set forth in section
502.
(2) Monitoring and review of certain countries.--The
President shall monitor, review, and report to Congress
annually on the progress of each country listed in
section 107 of the African Growth and Opportunity Act
in meeting the requirements described in paragraph (1)
in order to determine the current or potential
eligibility of each country to be designated as a
beneficiary sub-Saharan African country for purposes of
this section. The President's determinations, and
explanations of such determinations, with specific
analysis of the eligibility requirements described in
paragraph (1)(A), shall be included in the annual
report required by section 106 of the African Growth
and Opportunity Act.
(3) Continuing compliance.--If the President
determines that a beneficiary sub-Saharan African
country is not making continual progress in meeting the
requirements described in paragraph (1), the President
shall terminate the designation of that country as a
beneficiary sub-Saharan African country for purposes of
this section, effective on January 1 of the year
following the year in which such determination is made.
(b) Preferential Tariff Treatment for Certain
Articles.--
(1) In general.--The President may provide duty-free
treatment for any article described in section
503(b)(1)(B) through (G) that is the growth, product,
or manufacture of a beneficiary sub-Saharan African
country described in subsection (a), if after receiving
the advice of the International Trade Commission in
accordance with section 503(e), the President
determines that such article is not import-sensitive in
the context of imports from beneficiary sub-Saharan
African countries.
(2) Rules of origin.--The duty-free treatment
provided under paragraph (1) shall apply to any article
described in that paragraph that meets the requirements
of section 503(a)(2), except that--
(A) if the cost or value of materials produced in the
customs territory of the United States is included with
respect to that article, an amount not to exceed 15
exceed 15 percent of the appraised value of the article
at the time it is entered that is attributed to such
United States cost or value may be applied toward
determining the percentage referred to in subparagraph
(A) of section 503(a)(2); and
(B) the cost or value of the materials included with
respect to that article that are produced in one or
more beneficiary sub-Saharan African countries shall be
applied in determining such percentage.
(c) Beneficiary Sub-Saharan African Countries, Etc.--
For purposes of this title, the terms ``beneficiary
sub-Saharan African country'' and ``beneficiary sub-
Saharan African countries'' mean a country or countries
listed in section 107 of the African Growth and
Opportunity Act that the President has determined is
eligible under subsection (a) of this section.
SEC. 506B. TERMINATION OF BENEFITS FOR SUB-SAHARAN AFRICAN COUNTRIES.
In the case of a beneficiary sub-Saharan African country, as
defined in section 506A(c), duty-free treatment provided under
this title shall remain in effect through September 30, 2008.
SEC. 507. DEFINITIONS.
For purposes of this title:
(1) Beneficiary developing country.--The term
``beneficiary developing country'' means any country
with respect to which there is in effect an Executive
order or Presidential proclamation by the President
designating such country as a beneficiary developing
country for purposes of this title.
(2) Country.--The term ``country'' means any foreign
country or territory, including any overseas dependent
territory or possession of a foreign country, or the
Trust Territory of the Pacific Islands. In the case of
an association of countries which is a free trade area
or customs union, or which is contributing to
comprehensive regional economic integration among its
members through appropriate means, including, but not
limited to, the reduction of duties, the President may
by Executive order or Presidential proclamation provide
that all members of such association other than members
which are barred from designation under section 502(b)
shall be treated as one country for purposes of this
title.
(3) Entered.--The term ``entered'' means entered, or
withdrawn from warehouse for consumption, in the
customs territory of the United States.
(4) Internationally recognized worker rights.--The
term ``internationally recognized worker rights''
includes--
(A) the right of association;
(B) the right to organize and bargain
collectively;
(C) a prohibition on the use of any form of
forced or compulsory labor;
(D) a minimum age for the employment of
children; and
(E) acceptable conditions of work with
respect to
minimum wages, hours of work, and occupational
safety and health.
(5) Least-developed beneficiary developing country.--
The term ``least-developed beneficiary developing
country'' means a beneficiary developing country that
is designated as a least-developed beneficiary
developing country under section 502(a)(2).
(6) Worst forms of child labor.--The term ``worst
forms of child labor'' means--
(A) all forms of slavery or practices similar
to slavery, such as the sale or trafficking of
children, debt bondage and serfdom, or forced
or compulsory labor, including forced or
compulsory recruitment of children for use in
armed conflict;
(B) the use, procuring, or offering of a
child for prostitution, for the production of
pornography or for pornographic purposes;
(C) The use, procuring, or offering of a
child for illicit activities in particular for
the production and trafficking of drugs; and
(D) work which, by its nature or the
circumstances in which it is carried out, is
likely to harm the health, safety, or morals of
children.
The work referred to in subparagraph (D) shall be determined
by the laws, regulations, or competent authority of the
beneficiary developing country involved.
General Note 4 of the Harmonized Tariff Schedule
Products of Countries Designated Beneficiary Developing Countries for
Purposes of the Generalized System of Preferences (GSP)
(a) The following countries, territories and associations
of countries eligible for treatment as one country (pursuant to
section 502(a)(3) of the Trade Act of 1974 (19 U.S.C.
2462(a)(3)) are designated beneficiary developing countries for
the purposes of the Generalized System of Preferences, provided
for in Title V of the Trade Act of 1974, as amended (19 U.S.C.
2461 et seq.):
Independent Countries
Albania Ethiopia
Angola Fiji
Antigua and Barbuda Gabon
Argentina Gambia, The
Armenia Ghana
Bahrain Grenada
Bangladesh Guatemala
Barbados Guinea
Belarus Guinea-Bissau
Belize Guyana
Benin Haiti
Bhutan Honduras
Bolivia Hungary
Bosnia and Hercegovina India
Brazil Indonesia
Bulgaria Jamaica
Burkina Faso Jordan
Burundi Kazakhstan
Cambodia Kenya
Cameroon Kiribati
Cape Verde Kyrgyzstan
Central African Republic Latvia
Chad Lebanon
Chile Lesotho
Colombia Lithuania
Comoros Macedonia, Former Yugoslav
Congo (Brazzaville) Republic of
Congo (Kinshasa) Madagascar
Costa Rica Malawi
Cote d'Ivoire Mali
Croatia Malta
Czech Republic Mauritania
Djibouti Mauritius
Dominica Moldova
Dominican Republic Mongolia
Ecuador Morocco
Egypt Mozambique
El Salvador Namibia
Equatorial Guinea Nepal
Estonia Niger
Oman South Africa
Pakistan Sri Lanka
Panama Suriname
Papua New Guinea Swaziland
Paraguay Tanzania
Peru Thailand
Philippines Togo
Poland Tonga
Romania Trinidad and Tobago
Russia Tunisia
Rwanda Turkey
St. Kitts and Nevis Tuvalu
Saint Lucia Uganda
Saint Vincent and the Ukraine
Grenadines Uruguay
Sao Tome and Principe Uzbekistan
Senegal Vanuatu
Seychelles Venezuela
Sierra Leone Western Samoa
Slovakia Republic of Yemen
Slovenia Zambia
Solomon Islands Zimbabwe
Somalia
Non-Independent Countries and Territories
Anguilla Niue
British Indian Ocean Territory Norfolk Island
Christmas Island (Australia) Pitcairn Islands
Cocos (Keeling) Islands Saint Helena
Cook Islands Tokelau
Falkland Islands (Islas Malvinas) Turks and Caicos Islands
French Polynesia Virgin Islands, British
Gibraltar Wallis and Futuna
Heard Island and McDonald Islands West Bank and Gaza Strip
Montserrat Western Sahara
New Caledonia
Associations of Countries (treated as one country)
Member
Member Member Countries of Members
Countries of Members of the Countries of the West Countries of
the Association of the Caribbean African the Southern
Cartagena South East Common Market Economic and African
Agreement Asian Nations (CARICOM), Monetary Development
(Andean (ASEAN) except The Union Community
Group) Bahamas (WAEMU) (SADC)
Consisti Currently Consisting Consisting Currently
ng of: qualifying: of: of: qualifying:
Bolivia Cambodia Antigua and Benin Botswana
Barbuda
Colombia Indonesia Barbados Burkina Faso Mauritius
Ecuador Philippines Belize Cote Tanzania
d'Ivorie
Peru Thailand Dominica Guinea-
Bissau
Venezuel Grenada Mali
a
Guyana Niger
Jamaica Senegal
Montserrat Togo
St. Kitts and
Nevis
Saint Lucia
Saint Vincent
and
the
Grenadines
Trinidad and
Tobago
(b) The following beneficiary countries are designated as
least-developed beneficiary developing countries pursuant to
section 502(a)(2) of the Trade Act of 1974, as amended:
Angola Kiribati
Bangladesh Lesotho
Benin Madagascar
Bhutan Malawi
Burkina Faso Mali
Burundi Mozambique
Cambodia Nepal
Cape Verde Niger
Central African Republic Rwanda
Chad Sao Tome and Principe
Comoros Sierra Leone
Congo (Kinshasa) Somalia
Djibouti Tanzania
Equatorial Guinea Togo
Ethiopia Tuvalu
Gambia, The Uganda
Guinea Vanuatu
Guinea-Bissau Republic of Yemen
Haiti Zambia
Whenever an eligible article which is the growth, product or
manufacture of one of the countries designated as a least-
developed beneficiary developing country is imported into the
customs territory of the United States directly from such
country, such article shall be entitled to receive the duty-
free treatment provided for in subdivision (c) of this note
without regard to the limitations on preferential treatment of
eligible articles in section 503(c)(2)(A) of the Trade Act, as
amended (19 U.S.C. 2464(c)(2)(A)).
D. CARIBBEAN BASIN INITIATIVE (CBI)
Caribbean Basin Economic Recovery Act, as amended
[19 U.S.C. 2701 et seq.; P.L. 98-67, title II, as amended by P.L. 98-
573, P.L. 99-514, P.L. 99-570, P.L. 100-418, P.L. 100-647, P.L. 101-
382, P.L. 103-182, P.L. 103-465, P.L. 104-188, P.L. 104-295, and P.L.
106-200]
SEC. 201. SHORT TITLE.
This title may be cited as the ``Caribbean Basin Economic
Recovery Act''.
Subtitle A--Duty-Free Treatment
SEC. 211. AUTHORITY TO GRANT DUTY-FREE TREATMENT.
The President may proclaim duty-free treatment or other
preferential treatment for all eligible articles from any
beneficiary country in accordance with the provisions of this
title.
SEC. 212. BENEFICIARY COUNTRY.
(a)(1) For purposes of this title--
(A) The term ``beneficiary country'' means any
country listed in subsection (b) with respect to which
there is in effect a proclamation by the President
designating such country as a beneficiary country for
purposes of this title. Before the President designates
any country as a beneficiary country for purposes of
this title, he shall notify the House of
Representatives and the Senate of his intention to make
such designation, together with the considerations
entering into such decision.
(B) The term ``entered'' means entered, or withdrawn
from warehouse for consumption, in the customs
territory of the United States.
(C) The term ``HTS'' means Harmonized Tariff Schedule
of the United States (19 U.S.C. 1202).
(D) The term ``NAFTA'' means the North American Free
Trade Agreement entered into between the United States,
Mexico, and Canada on December 17, 1992.
(E) The terms ``WTO'' and ``WTO member'' have the
meanings given those terms in section 2 of the Uruguay
Round Agreements Act (19 U.S.C. 3501).
(2) If the President has designated any country as a
beneficiary country for purposes of this title, he shall not
terminate such designation (either by issuing a proclamation
for that purpose or by issuing a proclamation which has the
effect of terminating such designation) unless, at least sixty
days before such termination, he has notified the House of
Representatives and the Senate and has notified such country of
his intention to terminate such designation, together with the
considerations entering into such decision.
(b) In designating countries as ``beneficiary countries''
under this title the President shall consider only the
following countries and territories or successor political
entities:
Anguilla Honduras
Antigua and Barbuda Jamaica
Bahamas, The Montserrat
Barbados Netherlands Antilles
Belize Nicaragua
Cayman Islands Panama
Costa Rica Saint Lucia
Dominica Saint Vincent and the
Dominican Republic Grenadines
El Salvador Suriname
Grenada Trinidad and Tobago
Guatemala Saint Christopher-Nevis
Guyana Turks and Caicos Islands
Haiti Virgin Islands, British
In addition, the President shall not designate any country a
beneficiary country under this title--
(1) if such country is a Communist country;
(2) if such country--
(A) has nationalized, expropriated or
otherwise seized ownership or control of
property owned by a United States citizen or by
a corporation, partnership, or association
which is 50 per centum or more beneficially
owned by United States citizens,
(B) has taken steps to repudiate or nullify--
(i) any existing contract or
agreement with, or
(ii) any patent, trademark, or other
intellectual property of,
a United States citizen or a corporation,
partnership, or association which is 50 per
centum or more beneficially owned by United
States citizens, the effect of which is to
nationalize, expropriate, or otherwise seize
ownership or control of property so owned, or
(C) has imposed or enforced taxes or other
exactions, restrictive maintenance or
operational conditions, or other measures with
respect to property so owned, the effect of
which is to nationalize, expropriate, or
otherwise seize ownership or control of such
property, unless the President determines
that--
(i) prompt, adequate, and effective
compensation has been or is being made
to such citizen, corporation,
partnership, or association,
(ii) good-faith negotiations to
provide prompt, adequate, and effective
compensation under the applicable
provisions of international law are in
progress, or such country is otherwise
taking steps to discharge its
obligations under international law
with respect to such citizen,
corporation, partnership, or
association, or
(iii) a dispute involving such
citizen, corporation, partnership, or
association, over compensation for such
a seizure has been submitted to
arbitration under the provisions of the
Convention for the Settlement of
Investment Disputes, or in another
mutually agreed upon forum, and
promptly furnishes a copy of such determination to the
Senate and House of Representatives;
(3) if such country fails to act in good faith in
recognizing as binding or in enforcing arbitral awards
in favor of United States citizens or a corporation,
partnership or association which is 50 per centum or
more beneficially owned by United States citizens which
have been made by arbitrators appointed for each case
or by permanent arbitral bodies to which the parties
involved have submitted their dispute;
(4) if such country affords preferential treatment to
the products of a developed country, other than the
United States, which has, or is likely to have, a
significant adverse effect on United States commerce,
unless the President has received assurances
satisfactory to him that such preferential treatment
will be eliminated or that action will be taken to
assure that there will be no such significant adverse
effect, and he reports those assurances to the
Congress;
(5) if a government-owned entity in such country
engages in the broadcast of copyrighted material,
including films or television material, belonging to
United States copyright owners without their express
consent;
(6) unless such country is a signatory to a treaty,
convention, protocol, or other agreement regarding the
extradition of United States citizens; and
(7) if such country has not or is not taking steps to
afford internationally recognized worker rights (as
defined in section 507(4) of the Trade Act of 1974) to
workers in the country (including any designated zone
in that country).
Paragraphs (1), (2), (3), (5), and (7) shall not prevent the
designation of any country as a beneficiary country under this
Act if the President determines that such designation will be
in the national economic or security interest of the United
States and reports such determination to the Congress with his
reasons therefor.
(c) In determining whether to designate any country a
beneficiary country under this title, the President shall take
into account--
(1) an expression by such country of its desire to be
so designated;
(2) the economic conditions in such country, the
living standards of its inhabitants, and any other
economic factors which he deems appropriate;
(3) the extent to which such country has assured the
United States it will provide equitable and reasonable
access to the markets and basic commodity resources of
such country;
(4) the degree to which such country follows the
accepted rules of international trade provided for
under the WTO Agreement and the multilateral trade
agreements (as such terms are defined in paragraphs (9)
and (4), respectively, of section 2 of the Uruguay
Round Agreements Act);
(5) the degree to which such country uses export
subsidies or imposes export performance requirements or
local content requirements which distort international
trade;
(6) the degree to which the trade policies of such
country as they relate to other beneficiary countries
are contributing to the revitalization of the region;
(7) the degree to which such country is undertaking
self-help measures to promote its own economic
development;
(8) whether or not such country has taken or is
taking steps to afford to workers in that country
(including any designated zone in that country)
internationally recognized worker rights.
(9) the extent to which such country provides under
its law adequate and effective means for foreign
nationals to secure, exercise, and enforce exclusive
rights in intellectual property, including patent,
trademark, and copyright rights;
(10) the extent to which such country prohibits its
nationals from engaging in the broadcast of copyrighted
material, including films or television material,
belonging to United States copyright owners without
their express consent; and
(11) the extent to which such country is prepared to
cooperate with the United States in the administration
of the provisions of this title.
(d) General headnote 3(a) of the TSUS (relating to
products of the insular possessions) is amended by
adding at the end thereof the following parapgrah:
``(iv) Subject to the provisions in section 213 of
the Caribbean Basin Economic Recovery Act articles
which are imported from insular possessions of the
United States shall received duty treatment no less
favorable than the treatment afforded such articles
when they are imported from a beneficiary country under
such Act''.
(e)(1)(A) The President may, after the requirements of
subsection (a)(2) and paragraph (2) have been met--
(i) withdraw or suspend the designation of any
country as a beneficiary country, or
(ii) withdraw, suspend, or limit the application of
duty-free treatment under this subtitle to any article
of any country,
if, after such designation, the President determines that as a
result of changed circumstances such country would be barred
from designation as a beneficiary country under subsection (b).
(B) The President may, after the requirements of
subsection (a)(2) and paragraph (2) have been met--
(i) withdraw or suspend the designation of any
country as a CBTPA beneficiary country; or
(ii) withdraw, suspend, or limit the application of
preferential treatment under section 213(b)(2) and (3)
to any article of any country,
if, after such designation, the President determines that, as a
result of changed circumstances, the performance of such
country is not satisfactory under the criteria set forth in
section 213(b)(5)(B).
(2)(A) The President shall publish in the Federal Register
notice of the action the President proposes to take under
paragraph (1) at least 30 days prior to taking such action.
(B) The United States Trade Representative shall, within
the 30-day period beginning on the date on which the President
publishes under subparagraph (A) notice of proposed action--
(i) accept written comments from the public regarding
such proposed action,
(ii) hold a public hearing on such proposed action,
and
(iii) publish in the Federal Register--
(I) notice of the time and place of such
hearing prior to the hearing, and
(II) the time and place at which such written
comments will be accepted.
(3) If preferential treatment under section 213(b)(2)
and (3) is withdrawn, suspended, or limited with
respect to a CBTPA beneficiary country, such country
shall not be deemed to be a ``party'' for the purposes
of applying section 213(b)(5)(C) to imports of articles
for which preferential treatment has been withdraw,
suspended, or limited with respect to such country.
(f) Reporting Requirements.--
In general.--Not later than December 31, 2001, and
every 2 years thereafter during the period this title
is in effect, the United States Trade Representative
shall submit to Congress a report regarding the
operation of this title, including--
(A) with repect to subsections (b) and (c), the
results of a general review of beneficiary countries
based on the considerations described in such
subsections; and
(B) the performance of each beneficiary country or
CBTPA beneficiary country, as the case may be, under
the criteria set forth in section 213(b)(5)(B).
(2) Public comment.--Before submitting the report
described in paragraph (1), the United States Trade
Representative shall publish a notice in the Federal
Register requesting public comments on whether
beneficiary countries are meeting the criteria listed
in section 213(b)(5)(B).
SEC. 213. ELIGIBLE ARTICLES.
(a)(1) Unless otherwise excluded from eligibility by this
title, and subject to section 423 of the Tax Reform Act of
1986, and except as provided in subsection (b)(2) and (3), the
duty-free treatment provided under this title shall apply to
any article which is the growth, product, or manufacture of a
beneficiary country if--
(A) that article is imported directly from a
beneficiary country into the customs territory of the
United States; and
(B) the sum of (i) the cost or value of the materials
produced in a beneficiary country or two or more
beneficiary countries, plus (ii) the direct costs of
processing operations performed in a beneficiary
country or countries is not less than 35 per centum of
the appraised value of such article at the time it is
entered.
For purposes of determining the percentage referred to in
subparagraph (B), the term ``beneficiary country'' includes the
Common-wealth of Puerto Rico and the United States Virgin
Islands. If the cost or value of materials produced in the
customs territory of the United States (other than the
Commonwealth of Puerto Rico) is included with respect to an
article to which this paragraph applies, an amount not to
exceed 15 per centum of the appraised value of the article at
the time it is entered that is attributed to such United States
cost or value may be applied toward determining the percentage
referred to in subparagraph (B).
(2) The Secretary of the Treasury shall prescribe such
regulations as may be necessary to carry out this subsection
including, but not limited to, regulations providing that, in
order to be eligible for duty-free treatment under this title,
an article must be wholly the growth, product, or manufacture
of a beneficiary country, or must be a new or different article
of commerce which has been grown, produced, or manufactured in
the beneficiary country; but no article or material of a
beneficiary country shall be eligible for such treatment by
virtue of having merely undergone--
(A) simple combining or packaging operations, or
(B) mere dilution with water or mere dilution with
another substance that does not materially alter the
characteristics of the article.
(3) As used in this subsection, the phrase ``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 specific
merchandise, including fringe benefits, on-the-job
training and the cost of engineering, supervisory,
quality control, and similar personnel; and
(B) dies, molds, tooling, and depreciation on
machinery and equipment which are allocable to the
specific merchandise.
Such phrase does not include costs which are not directly
attributable to the merchandise concerned or are not costs of
manufacturing the product, such as (i) profit, and (ii) general
expenses of doing business which are either not allocable to
the specific merchandise or are not related to the growth,
production, manufacture, or assembly of the merchandise, such
as administrative salaries, casualty and liability insurance,
advertising, and salesmen's salaries, commissions or expenses.
(4) Notwithstanding section 311 of the Tariff Act of 1930,
the products of a beneficiary country which are imported
directly from any beneficiary country into Puerto Rico may be
entered under bond for processing or use in manufacturing in
Puerto Rico. No duty shall be imposed on the withdrawal from
warehouse of the product of such processing or manufacturing
if, at the time of such withdrawal, such product meets the
requirements of paragraph (1)(B).
(5) The duty-free treatment provided under this title shall
apply to an article (other than an article listed in subsection
(b)) which is the growth, product, or manufacture of the
Commonwealth of Puerto Rico if--
(A) the article is imported directly from the
beneficiary country into the customs territory of the
United States,
(B) the article was by any means advanced in value or
improved in condition in a beneficiary country, and
(C) if any materials are added to the article in a
beneficiary country, such materials are a product of a
beneficiary country or the United States.
(6) Notwithstanding paragraph (1), the duty-free treatment
provided under this title shall apply to liqueurs and
spirituous beverages produced in the territory of Canada from
rum if--
(A) such rum is the growth, product, or manufacture
of a beneficiary country or of the Virgin Islands of
the United States;
(B) such rum is imported directly from a beneficiary
country or the Virgin Islands of the United States into
the territory of Canada, and such liqueurs and
spirituous beverages are imported directly from the
territory of Canada into the customs territory of the
United States;
(C) when imported into the customs territory of the
United States such liqueurs and spirituous beverages
are classified in subheading 2208.90 or 2208.40 of the
HTS; and
(D) such rum accounts for at least 90 percent by
volume of the alcoholic content of such liqueurs and
spirituous beverages.
(b) Import-Sensitive Articles.--
(1) In general.--subject to paragraphs (2) through
(5), the duty-free treatment provided under this title
shall not apply to--
(A) textile and apparel articles which are subject to
textile agreements;
(B) footwear not designated at the time of the
effective date of this title as eligible articles for
the purpose of the generalized system of preferences
under title V of the Trade Act of 1974;
(C) tuna, prepared or preserved in any manner, in
airtight containers;
(D) petroleum, or any product derived from petroleum,
provided for in headings 2709 and 2710 of the HTS;
(E) watches and watch parts (including cases,
bracelets and straps), of whatever type including, but
not limited to, mechanical, quartz digital or quartz
analog, if such watches or watch parts contain any
material which is the product of any country with
respect to which HTS column 2 rates of duty apply; or
(F) articles to which reduced rates of duty apply
under subsection (h).
(2) Transition period treatment of certain textile and
apparel articles.--
(A) Articles covered.--During the transition period,
the preferential treatment described in subparagraph
(B) shall apply to the following articles:
(i) Apparel articles assembled in one or more CBTPA
beneficiary countries.--Apparel articles assembled in
one or more CBTPA beneficiary countries from fabrics
wholly formed and cut in the United States, from yarns
wholly formed in the United States, (including fabrics
not formed from yarns, if such fabrics are classifiable
under heading 5602 or 5603 of the HTS and are wholly
formed and cut in the United States) that are--
(I) entered under subheading 9802.00.80 of the HTS;
or
(II) entered under chapter 61 or 62 of the HTS, if,
after such assembly, the articles would have qualified
for entry under subheading 9802.00.80 of the HTS but
for the fact that the articles were embroidered or
subjected to stone-washing, enzyme-washing, acid
washing, perma-pressing, oven-baking, bleaching,
garmet-dyeing, screen printing, or other similar
processes.
(ii) Apparel articles cut and assembled in one or
more CBTPA beneficiary countries.--Apparel articles cut
in one or more CBTPA beneficiary countries from fabric
wholly formed in the United States from yarns wholly
formed in the United States (including fabrics not
formed from yarns, if such fabrics are classifiable
under heading 5602 or 5603 of the HTS and are wholly
formed in the United States), if such articles are
assembled in one or more such countries with thread
formed in the United States), if such articles are
assembled in one or more such countries with thread
formed in the United States.
(iii) Certain knit apparel articles.--(I)
Apparel articles knit to shape (other than
socks provided for in heading 6115 of the HTS)
in a CBTPA beneficiary country from yarns
wholly formed in the United States, and knit
apparel articles (other than t-shirts described
in subclause (III)) cut and wholly assembled in
one or more CBTPA beneficiary countries from
fabric formed in one or more CBTPA beneficiary
countries or the United States from yarns
wholly formed in the United States (including
fabrics not formed in one or more CBTPA
beneficiary countries), in an amount not
exceeding the amount set forth in subclause
(II).
(II) The amount referred to in
subclause (I) is--
(aa) 250,000,000 square meter
equivalents during the 1-year
period beginning on October 1,
2000, increased by 16 percent,
compounded annually, in each
succeeding 1-year period
through September 30, 2004 and
(bb) in each 1-year period
thereafter through September
30, 2008, the amount in effect
for the 1-year period ending on
September 30, 2004, or such
other amount as may be provided
by law.
(III) T-Shirts, other than underwear,
classifiable under subheadings
6109.10.00 and 6109.90.10 of the HTS,
made in one or more CBTPA beneficiary
countries from fabric formed in one or
more CBTPA beneficiary countries from
yarns wholly formed in the United
States, in an amount not exceeding the
amount set forth in subclause (IV).
(IV) the amount referred to in
subclause (III) is--
(aa) 4,200,000 dozen during
the 1-year period beginning on
October 1, 2000, increased by
16 percent, compounded
annually, in amount in effect
for the 1-year period ending on
September 30, 2004, or such
other amount as may be provided
by law.
(V)It is the sense of the Congress
that the Congress should determine,
based on the record of expansion of
exports from the United States as a
result of the preferential treatment of
articles under this clause, the
percentage by which the amount provided
in subclauses (II) and (IV) should
compounded for the 1-year periods
occurring after the 1-year period
ending on September 30, 2004.
(iv) Certain other apparel articles.--(i)
Subject to subclause (II), any apparel article
classifiable under subheading 6212.10 of the
HTS, if the article is both cut and sewn or
otherwise assembled in the United States, or
one or more of the CBTPA beneficiary countries,
or both.
(II) During the 1-year period
beginning on October 1, 2001, and
during each of the six succeeding 1-
year periods, apparel articles
described in subclause (I) of a
producer or an entity controlling
production shall be eligible for
preferential treatment under
subparagraph (B) only if the aggreagate
cost of fabric components formed in the
United States that are used in the
production of all such articles of that
producer or entity during the preceding
1-year period is at least 75 percent of
the aggregate declared customs value of
the fabric contained in all such
articles of that producer or entity
that are entered during the preceding
1-year period.
(III) The United States Customs
Service shall develop and implement
methods and procedures to ensure
ongoing compliance with the requirement
set forth in subclause (II). If the
Customs Service finds that a producer
or an entity controlling production has
not satisfied such requirement in a 1-
year period, then apparel articles
described in subclause (I) of that
producer or entity shall be ineligible
for preferential treatment under
subparagraph (B) during any succeeding
1-year period until the aggregate cost
of fabric components formed in the
United States used in the production of
such articles of that producer or
entity in the preceding 1-year period
is at least 85 percent of the aggregate
declared customs value of the fabric
contained in all such articles of that
producer or entity that are entered
during the preceding 1-year period.
(v) Apparel articles assembled from fabrics
or yarn not widely available in commercial
quantities.--(I) Apparel articles that are both
cut (or knit-to-shape) and sewn or otherwise
assembled in one or more CBTPA beneficiary
countries, from fabrics or yarn that is not
formed in the United States or in one or more
CBTPA beneficiary countries, to the extent that
apparel articles of such fabrics or yarn would
be eligible for preferential treatment, without
regard to the source of the fabrics or yarn,
under Annex 401 of the NAFTA.
(II) At the request of any interested
party, the President is authorized to
proclaim additional fabrics and yarn as
eligible for preferential treatment
under subclause (I) if--
(aa) the President determines
that such fabrics or yarn
cannot be supplied by the
domestic industry in commercial
quantities in a timely manner;
(bb) the President has
obtained advice regarding the
proposed action from the
appropriate advisory committee
established under section 135
of the Trade Act of 1974 (19
U.S.C. 2155) and the United
States International Trade
Commission;
(cc) within 60 days after the
request, the President has
submitted a report to the
Committee on Ways and Means of
the House of Representatives
and the Committee on Finance of
the Senate that sets forth the
action proposed to be
proclaimed and the reasons for
such actions, and the advice
obtained under division (bb);
(dd) a period of 60 calendar
days, beginning with the first
day on which the President has
met the requirements of
division (cc), has expired; and
(ee) the President has
consulted with such committees
regarding the proposed action
during the period referred to
in division (cc).
(vi) Handloomed, handmade, and folklore
articles.--A handloomed, handmade, or folklore
article of a CBTPA beneficiary country
identified under subparagraph (C) that is
certified as such by the competent authority of
such beneficiary country.
(vii) Special rules.--
(I) Exception for find
(aa) the President determines
that such fabrics or yarn
cannot be supplied by the
domestic industry in commercial
quantities in a timely manner;
(bb) the President has
obtained advice regarding the
proposed action from the
appropriate advisory committee
established under section 135
of the Trade Act of 1974 (19
U.S.C. 2155) and the United
States International Trade
Commission;
(cc) within 60 days after the
request, the President has
submitted a report to the
Committee on Ways and Means of
the House of Representatives
and the Committee on Finance of
the Senate that sets forth the
action proposed to be
proclaimed and the reasons for
such actions, and the advice
obtained under division (bb);
(dd) a period of 60 calendar
days, beginning with the first
day on which the President has
met the requirements of
division (cc), has expired; and
(ee) the President has
consulted with such committees
regarding the proposed action
during the period referred to
in division (cc).
(vi) Handloomed, handmade, and folklore
articles.--A handloomed, handmade, or folklore
article of a CBTPA beneficiary country
identified under subparagraph (C) that is
certified as such by the competent authority of
such by the competent authority of such
beneficiary country.Special rules.--
(I) Exception for findings and
trimmings.--(aa) An article otherwise
eligible for preferential treatment
under this paragraph shall not be
ineligible for such treatment because
the article contains findings or
trimmings of foreign origin, if such
findings do not exceed 25 percent of
the cost of the components of the
assembled product. Examples of findings
and trimmings are sewing thread, hooks
and eyes, snaps, buttons, `bow buds',
decorative lace, trim, elastic strips,
zippers, including zipper tapes and
labels, and other similar products.
Elastic strips are considered findings
or trimmings only if they are each less
than 1 inch in width and are used in
the production of brassieres.
(bb) In the case of an
article described in clause
(ii) of this subparagraph,
sewing thread shall not treated
as findings or trimmings under
this subclause.
(II) Certain interlining.--(aa) An
article otherwise eligible for
preferential treatment under this
paragraph shall not be ineligible for
such treatment because the article
contains certain interlinnings of
foreign origin, if the value of such
interlinings (and any findings and
trimmings) does not exceed 25 percent
of the cost of the components of the
assembled article.
(bb) Interlinings eligible
for the treatment described in
division (aa) include only a
chest type plate, ``hymo''
piece, or ``sleeve header'', of
woven or weft-inserted warp
knit construction and of coarse
animal hair or man-made
filaments.
(cc) Thre treatment described
in this subclause shall
terminate if the President
makes a determination that
United States manufacturers are
producing such interlinings in
the United States in commercial
quantities.
(III) De minimis rule.--An article
that would otherwise be ineligible for
preferential treatment under this
paragraph because the article contains
fibers or yarns not wholly formed in
the United States or in one or more
CBTPA beneficiary countries shall not
be ineligible for such treatment if the
total weight of all such fibers or
yarns is not more than 7 percent of the
total weight of the good.
Notwithstanding the preceding sentence,
an apparel article containing
elastomeric yarns shall be eligible for
preferential treatment under this
paragraph only if such yarns are wholly
formed in the United States.
(IV) Special origin rule.--An article
otherwise eligible for preferential
treatment under clause (i) or (ii) of
this subparagraph shall not be
ineligible for such treatment because
the article contains nylon filament
yarn (other than elastomeric yarn) that
is classifiable under subheading
5402.10.30, 5402.10.60, 5402.31.30,
5402.31.60, 5402.32.30, 5402.41.90,
5402.51.00, or 5402.61.00 of the HTS
duty-free a country that is a party to
an agreement with the United States
establishing a free trade area, which
entered into force before January 1,
1995.
(viii) Textile luggage.--Textile luggage--
(I) assembled in a CBTPA beneficiary
country from fabric wholly formed and
cut in the United States, from yarns
wholly formed in the United States,
that is entered under subheading
9802.00.80 of the HTS; or
(II) assembled from fabric cut in a
CBTPA beneficiary country from fabric
wholly formed in the United States from
yarns wholly formed in the United
States.
(B) Preferential treatment.--Except as provided in
subparagraph (e), during the transition period, the
articles to which this subparagraph applies shall enter
the United States free of duty and free and any
quantitative restrictions, limitations, or consultation
levels.
(C) Handloomed, handmade, and folklore articles.--
for purposes of subparagraph (A)(vi) the President
shall consult with representatives of the CBTPA
beneficiary countries concerned for the purpose of
identifying particular textile and apparel goods that
are mutually agreed upon as being handloomed, handmade,
or folklore goods of a kind described in section
2.3(a), (b), or (c) of the Annex or Appendix 3.1.B.11
of the Annex.
(D)Penalties for transshipment.--
(i) Penalties for exporters.--If the
President determines, based on sufficient
evidence, that an exporter has engaged in
transshipment with respect to textile or
apparel articles from a CBTPA beneficiary
country, then the President shall deny all
benefits under this title to such exporter, and
any successor of such exporter, for a period of
2 years.
(ii) Penalties for countries.--Whenever the
President finds, based on sufficient evidence,
that transshipment has occurred, the President
shall request that the CBTPA beneficiary
country or countries through whose territory
the transshipment has occurred take all
necessary and appropriate actions to prevent
such transshipment. If the President determines
that a country is not taking such actions, the
President shall reduce,the quantities of
textile and apparel articles that may be
imported into the United States from such
country by the quantity of the transshipped
articles multiplied by 3, to the extent
consistent with the obligations of the United
States under the WTO.
(iii) Transshipment described.transshipment
within the meaning of this subparagraph has
occurred when preferential treatment under
subparagraph (B) has been claimed for a textile
or apparel article on the basis of material
false information concerning the country of
origin, manufacture, processing, or assembly of
the article or any of its components. For
purposes of this clause, false information is
material if disclosure of the true information
would mean or would have meant that the article
is or was ineligible for preferential treatment
under subparagraph (B).
(E) Bilateral emergency actions.--
(i) In general.--The President may take
bilateral emergency tariff actions of a kind
described in section 4 of the Annex with
respect to any apparel article imported from a
CBTPA beneficiary country if the application of
tariff treatment under subparagraph (B) to such
article results in conditions that would be
cause for the taking of such actions under such
section 4 with respect to a like article
described in the same 8-digit subheading of the
HTS that is imported from Mexico.
(ii) Rules relating to bilateral emergency
action.--For purposes of applying bilateral
emergency action under this subparagraph--
(I) the requirements of paragraph (5)
of section 4 of the Annex (relating to
providing compensation) shall not
apply;
(II) the term ``transition period''
in section 4 of the Annex shall have
the meaning given that term in
paragraph (5)(D) of this subsection;
and
(III) the requirements to consult
specified in section 4 of the Annex
shall be treated as satisfied if the
President requests consultations with
the CBTPA beneficiary country in
question and the country does not agree
to consult within the time period
specified under section 4.
(3) Transition period treatment of certain
other articles originating in beneficiary
countries.--
(A) Equivalent tariff treatment.--
(i) In general.--Subject to clause
(ii), the tariff treatment accorded at
any time during the transition period
to any article referred to in any of
subparagraphs (B) through (F) of
paragraph (1) that is a CBTPA
originating good shall be identical to
the tariff treatment that is accorded
at such time under Annex 302.2 of the
NAFTA to an article described in the
same 8-digit subheading of the HTS that
is a good of Mexico and is imported
into the United States.
(ii) Exception.--Clause (1) does not
apply to any article accorded duty-free
treatment under U.S. Note 2(b) to
subchapter 11 of chapter 98 of the HTS.
(B) Relationship to subsection (h) duty
reductions.--If at any time during the
transition period the rate of duty that would
(but for action taken under subparagraph (A)(i)
in regard to such period) apply with respect to
any article under subsection (h) is a rate of
duty that is lower than the rate of duty
resulting from such action, then such lower
rate of duty shall be applied for the purposes
of implementing such action.
(4) Customs procedures.--
(A) In general.--
(i) Regulations.--Any importer that
claims preferential treatment under
paragraph (2) or (3) shall comply with
customs procedures similar in all
material respects to the requirements
of Article 502(l) of the NAFTA as
implemented pursuant to United States
law, in accordance with regulations
promulgated by the Secretary of the
Treasury.
(ii) Determination.--
(I) In general.--In order to
qualify for the preferential
treatment under paragraph (2)
or (3) and for a Certificate of
Origin to be valid with respect
to any article for which such
treatment is claimed, there
shall be in effect a
determination by the President
that each country described in
subclause (II)--
(aa) has implemented and
follows; or
(bb) 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.
(II) Country described.--A
country is described in this
subclause if it is a CBTPA
beneficiary country--
(aa) from which the article
is exported; or
(bb) in which materials used
in the production of the
article originate or in which
the article or such materials
undergo production that
contributes to a claim that the
article is eligible for
preferential treatment under
paragraph (2) or (3).
(B) Certificate of origin.--The Certificate
of Origin that otherwise would be required
pursuant to the provisions of subparagraph (A)
shall not be required in the case of an article
imported under paragraph (2) or (3) if such
Certificate of Origin would not be required
under Article 503 of the NAFTA (asimplemented
pursuant to United States law), if the article
were imported from Mexico.
(C) Report by ustr on cooperation of other
countries concerning circumvention.--The United
States Commissioner of Customs shall conduct a
study analyzing the extent to which each CBTPA
beneficiary country--
(i) has cooperated fully with the
United States, consistent with its
domestic laws and procedures, in
instances of circumvention or alleged
circumvention of existing quotas on
Imports of textile and apparel goods,
to establish necessary relevant facts
in the places of import, export, and,
where applicable, transshipment,
including investigation of
circumvention practices, exchanges of
documents, correspondence, reports, and
other relevant information, to the
extent such information is available;
(ii) has taken appropriate measures,
consistent with its domestic laws and
procedures, against exporters and
importers involved in instances of
false declaration concerning fiber
content, quantities, description,
classification, or origin of textile
and apparel goods; and
(iii) has penalized the individuals
and entities involved in any such
circumvention, consistent with its
domestic laws and procedures, and has
worked closely to seek the cooperation
of any third country to prevent such
circumvention from taking place in that
third country. The Trade Representative
shall submit to Congress, not later
than October 1, 2001, a report on the
study conducted under this
subparagraph.
(5) Definitions and special rules.--For
purposes of this subsection-
(A) Annex.--The term ``the Annex'' means
Annex 30009B of the NAFTA.
(B) CBTPA beneficiary country.--The term
``CBTPA beneficiary country'' means any
``beneficiary country'', as defined in section
212(a)(1)(A) of this title, which the President
designates as a CBTPA beneficiary country,
taking into account the criteria contained in
subsections (b) and (c) of section 212 and
other appropriate criteria, including the
following:
(i) Whether the beneficiary country
has demonstrated a commitment to--
(I) undertake its obligations
under the WTO, including those
agreements listed in section 10
1 (d) of the Uruguay Round
Agreements Act, on or ahead of
schedule; and
(II) participate in
negotiations toward the
completion of the FTAA or
another free trade agreement.
(ii) The extent to which the country
provides protection of intellectual
property rights consistent with or
greater than the protection afforded
under the Agreement on Trade-Related
Aspects of Intellectual Property Rights
described in section 10 1 (d)(l5) of
the Uruguay Round Agreements Act.
(iii) The extent to which the country
provides internationally recognized
worker rights, including--
(I) the right of association;
(II) the right to organize
and bargain collectively;
(III) a prohibition on the
use of any form of forced or
compulsory labor;
(IV) a minimum age for the
employment of children; and
(V) acceptable conditions of
work with respect to minimum
wages, hours of work, and
occupational safety and health;
(iv) Whether the country has
implemented its commitments to
eliminate the worst forms of child
labor, as defined in section 507(6) of
the Trade Act of 1974.
(v) The extent to which the country
has met the counter-narcotics
certification criteria set forth in
section 490 of the Foreign Assistance
Act of 1961 (22 U.S.C. 2291j) for
eligibility for United States
assistance.
(vi) The extent to which the country
has taken steps to become a party to
and implements the Inter-American
Convention Against Corruption.
(vii) The extent to which the
country--
(I) applies transparent,
nondiscriminatory, and
competitive procedures in
government procurement
equivalent to those contained
in the Agreement on Government
Procurement described in
section 10 1 (d)(1 7) of the
Uruguay Round Agreements Act;
and
(II) contributes to efforts
in international fora to
develop and implement
international rules in
transparency in government
procurement.
(C) CBTPA originating good.--
(i) In general.--The term ``CBTPA
originating good'' means a good that
meets the rules of origin for a good
set forth in chapter 4 of the NAFTA as
implemented pursuant to United States
law.
(ii) Application of chapter 4.--In
applying chapter 4 of the NAFTA with
respect to a CBTPA beneficiary country
for purposes of this subsection--
(I) no country other than the
United States and a CBTPA
beneficiary country may be
treated as being a party to the
NAFTA;
(II) any reference to trade
between the United States and
Mexico shall be deemed to refer
to trade between the United
States and a CBTPA beneficiary
country;
(III) any reference to a
party shall be deemed to refer
to a CBTPA beneficiary country
or the United States; and from
such action, then such lower
rate of duty shall be applied
for the purposes of
implementing such action.
(IV) any reference to parties
shall be deemed to refer to any
combination of CBTPA
beneficiary countries or to the
United States and one or more
CBTPA beneficiary countries (or
any combination thereof).
(D) Transition period.--The term ``transition
period'' means, with respect to a CBTPA
beneficiary country, the period that begins on
October 1, 2000, and ends on the earlier of--
(i) September 30, 2008; or
(ii) the date on which the FTAA or
another free trade agreement that makes
substantial progress in achieving the
negotiating objectives set forth in
108(b)(5) of Public Law (103-182) (19
U.S.C. 3317(b)(5)) enters into force
with respect to the United States and
the CBTPA beneficiary country.
(E) CBTPA.--The term ``CBTPA'' means the
Unites States-Caribbean Basin Trade Partnership
Act.
(F) FTAA.--The term ``FTAA'' means the Free
Trade Area of the Americans.
(c)(1) As used in this subsection--
(A) The term ``sugar and beef products''
means--
(i) sugars, sirups, and molasses
provided for in subheadings 1701.11.00,
1701.12.00, 1701.91.20, 1701.99.00,
1702.90.30, 1806.10.40, and 2106.90.10
of the Harmonized Tariff Schedule of
the United States, and
(ii) articles of beef or veal,
however provided for in chapters 2 and
16 of the Harmonized Tariff Schedule of
the United States.
(B) The term ``Plan'' means a stable food
production plan that consists of measures and
proposals designed to ensure that the present
level of food production in, and the
nutritional level of the population of, a
beneficiary country will not be adversely
affected by changes in land use and land
ownership that will result if increased
production of sugar and beef products is
undertaken in response to the duty-free
treatment extended under this title to such
products. A Plan must specify such facts
regarding, and such proposed actions by, a
beneficiary country as the President deems
necessary for purposes of carrying out this
subsection, including but not limited to--
(i) the current levels of food
production and nutritional health of
the population;
(ii) current level of production and
export of sugar and beef products;
(iii) expected increases in
production and export of sugar and beef
products as a result of the duty-free
access to the United States market
provided under this title;
(iv) measures to be taken to ensure
that the expanded production of those
products because of such duty-free
access will not occur at the expense of
stable food production; and
(v) proposals for a system to monitor
the impact of such duty-free access on
stable food production and land use and
land ownership parterns.
(2) Duty-free treatment extended under this title to sugar
and beef products that are the product of a beneficiary country
shall be suspended by the President under this subsection if--
(A) the beneficiary country, within the ninety-day
period beginning on the date of its designation as such
a country under section 212, does not submit a Plan to
the President for evaluation;
(B) on the basis of his evaluation, the President
determines that the Plan of a beneficiary country does
not meet the criteria set forth in paragraph (1)(B); or
(C) as a result of the monitoring of the operation of
the Plan under paragraph (5), the President determines
that a beneficiary country is not making a good faith
effort to implement its Plan, or that the measures and
proposals in the Plan, although being implemented, are
not achieving their purposes.
(3) Before the President suspends duty-free treatment by
reason of paragraph (2) (A), (B), or (C) to the sugar and beef
products of a beneficiary country, he must offer to enter into
consultation with the beneficiary country for purposes of
formulating appropriate remedial action which may be taken by
that country to avoid such suspension. If the beneficiary
country thereafter enters into consultation within a reasonable
time and undertakes to formulate remedial action in good faith,
the President shall withhold the suspension of duty-free
treatment on the condition that the remedial action agreed upon
be appropriately implemented by that country.
(4) The President shall monitor on a biennial basis the
operation of the Plans implemented by beneficiary countries,
and shall submit a written report to Congress by March 15
following the close of each biennium, that--
(A) specifies the extent to which each Plan, and
remedial actions, if any, agreed upon under paragraph
(4), have been implemented; and
(B) evaluates the results of such implementation.
(5) The President shall terminate any suspension of duty-
free treatment imposed under this subsection if he determines
that the beneficiary country has taken appropriate action to
remedy the factors on which the suspension was based.
(d) Tariff-Rate Quotas.--No quantity of an agricultural
product subject to a tariff-rate quota that exceeds the in-
quota quantity shall be eligible for duty-free treatment under
this title.
(e)(1) The President may by proclamation suspend the duty-
free treatment provided by this title with respect to any
eligible article and may proclaim a duty rate for such article
if such action is provided under chapter 1 of title II of the
Trade Act of 1974 or section 232 of the Trade Expansion Act of
1962.
(2) In any report by the International Trade Commission to
the President under section 201(f) of the Trade Act of 1974
regarding any article for which duty-free treatment has been
proclaimed by the President pursuant to this title, the
Commission shall state whether and to what extent its findings
and recommendations apply to such article when imported from
beneficiary countries.
(3) For purposes of section 2031 of the Trade Act of 1974,
the suspension of the duty-free treatment provided by this
title shall be treated as an increase in duty.
(4) No proclamation which provides solely for a suspension
referred to in paragraph (3) of this subsection with respect to
any article shall be taken under section 203 of the Trade Act
of 1974 unless the United States International Trade
Commission, in addition to making an affirmative determination
with respect to such article under section 202(b) of the Trade
Act of 1974, determines in the course of its investigation
under such section that the serious injury (or threat thereof)
substantially caused by imports to the domestic industry
producing a like or directly competitive article results from
the duty-free treatment provided by this title.
(5)(A) Any action taken under section 203 of the Trade Act
of 1974 that is in effect when duty-free treatment pursuant to
section 101 of this title is proclaimed shall remain in effect
until modified or terminated.
(B) If any article is subject to any such action at the
time duty-free treatment is proclaimed pursuant to section 211,
the President may reduce or terminate the application of such
action to the importation of such article from beneficiary
countries prior to the otherwise scheduled date on which such
reduction or termination would occur pursuant to the criteria
and procedures of section 203 of the Trade Act of 1974.
(f)(1) If a petition is filed with the International Trade
Commission pursuant to the provisions of section 201 of the
Trade Act of 1974 regarding a perishable product and alleging
injury from imports from beneficiary countries, then the
petition may also be filed with the Secretary of Agriculture
with a request that emergency relief be granted pursuant to
paragraph (3) of this subsection with respect to such article.
(2) Within fourteen days after the filing of a petition
under paragraph (1) of this subsection--
(A) if the Secretary of Agriculture has reason to
believe that a perishable product from a beneficiary
country is being imported into the United States in
such increased quantities as to be a substantial cause
of serious injury, or the threat thereof, to the
domestic industry producing a perishable product like
or directly competitive with the imported product and
that emergency action is warranted, he shall advise the
President and recommend that the President take
emergency action; or
(B) the Secretary of Agriculture shall publish a
notice of his determination not to recommend the
imposition of emergency action and so advise the
petitioner.
(3) Within seven days after the President receives a
recommendation from the Secretary of Agriculture to take
emergency action pursuant to paragraph (2) of this subsection,
he shall issue a proclamation withdrawing the duty-free
treatment provided by this title or publish a notice of his
determination not to take emergency action.
(4) The emergency action provided by paragraph (3) of this
subsection shall cease to apply--
(A) upon the taking of action under section 203 of
the Trade Act of 1974,
(B) on the day a determination by the President not
to take action under section 203 of such Act not to
take action becomes final,
(C) in the event of a report of the United States
International Trade Commission containing a negative
finding, on the day the Commission's report is
submitted to the President, or
(D) whenever the President determines that because of
changed circumstances such relief is no longer
warranted.
(5) For purposes of this subsection, the term ``perishable
product'' means--
(A) live plants and fresh cut flowers provided for in
chapter 6 of the HTS;
(B) fresh or chilled vegetables provided for in
headings 0701 through 0709 (except subheading
0709.52.00) and heading 0714 of the HTS;
(C) fresh fruit provided for in subheadings 0804.20
through 0810.90 (except citrons of subheading
0805.90.00, tamarinds and kiwi fruit of subheading
0810.90.20, and cashew apples, mameyes colorados,
sapodillas, soursops and sweetsops of subheading
0810.90.40) of the HTS; and
(D) concentrated citrus fruit juice provided for in
subheadings 2009.11.00, 2009.19.40, 2009.20.40,
2009.30.20, and 2009.30.60 of the HTS.
(g) No proclamation issued pursuant to this title shall
affect fees imposed pursuant to section 22 of the Agricultural
Adjustment Act (7 U.S.C. 624).
(h)(1) Subject to paragraph (2), the President shall
proclaim reductions in the rates of duty on handbags, luggage,
flat goods, work gloves, and leather wearing apparel that--
(A) are the product of any beneficiary country; and
(B) were not designated on August 5, 1983, as
eligible articles for purposes of the generalized
system of preferences under title V of the Trade Act of
1974.
(2) The reduction required under paragraph (1) in the rate
of duty on any article shall--
(A) result in a rate that is equal to 80 percent of
the rate of duty that applies to the article on
December 31, 1991, except that, subject to the
limitations in paragraph (3), the reduction may not
exceed 2.5 percent ad valorem; and
(B) be implemented in 5 equal annual stages with the
first one-fifth of the aggregate reduction in the rate
of duty being applied to entries, or withdrawals from
warehouse for consumption, of the article on or after
January 1, 1992.
(3) The reduction required under this subsection with
respect to the rate of duty on any article is in addition to
any reduction in the rate of duty on that article that may be
proclaimed by the President as being required or appropriate to
carry out any trade agreement entered into under the Uruguay
Round of trade negotiations; except that if the reduction so
proclaimed--
(A) is less than 1.5 percent ad valorem, the
aggregate of such proclaimed reduction and the
reduction under this subsection may not exceed 3.5
percent ad valorem, or
(B) is 1.5 percent ad valorem or greater, the
aggregate of such proclaimed reduction and the
reduction under this subsection may not exceed the
proclaimed reduction plus 1 percent ad valorem.
SEC. 214. MEASURES FOR PUERTO RICO AND UNITED STATES INSULAR
POSSESSIONS.
[(a) Amendments to general headnote 3(a) to the Tariff
Schedules of the United States, redesignated as general note
3(a)(iv) of the HTS, relating to products of insular
possessions (reprinted elsewhere).]
(b) Item 813.31 of the TSUS is amended by striking out ``4
liters'' and inserting in lieu thereof ``5 liters'', and by
inserting after ``United States,'', ``and not more than 4
liters of which shall have been produced elsewhere than in such
insular possessions,''.
(c) If the sum of the amounts of taxes covered into the
treasuries of Puerto Rico or the United States Virgin Islands
pursuant to section 7652(c) of the Internal Revenue Code of
1986 is reduced below the amount that would have been covered
over if the imported rum had been produced in Puerto Rico or
the United States Virgin Islands, then the President shall
consider compensation measures and, in this regard, may
withdraw the duty-free treatment on rum provided by this title.
The President shall submit a report to the Congress on the
measures he takes.
(d) Section 1112 of the Trade Agreements Act of 1979 (19
U.S.C. 2582) is repealed.
(e) No action pursuant to this title may affect any tariff
duty imposed by the Legislature of Puerto Rico pursuant to
section 319 of the Tariff Act of 1930 (19 U.S.C. 1319) on
coffee imported into Puerto Rico.
(f) For purposes of chapter 1 of title II of the Trade Act
of 1974, the term ``industry'' shall include producers located
in the United States insular possessions.
(g) Any discharge from a point source in the United States
Virgin Islands in existence on the date of the enactment of
this subsection which discharge is attributable to the
manufacture of rum (as defined in paragraphs (3) of section
7652(c) of the Internal Revenue Code of 1986) shall not be
subject to the requirements of section 301 (other than toxic
discharges), section 306 or section 403 of the Federal Water
Pollution Control Act if--
(1) such discharge occurs at least one thousand five
hundred feet into the territorial sea from the line of
ordinary low water from that portion of the coast which
is in direct contact with the sea, and
(2) the Governor of the United States Virgin Islands
determines that such discharge will not interfere with
the attainment or maintenance of that water quality
which shall assure protection of public water supplies,
and the protection and propagation of a balanced
population of shellfish, fish, and wildlife, and allow
recreational activities, in and on the water and will
not result in the discharge of pollutants in quantities
which may reasonably be anticipated to pose an
unacceptable risk to human health or the environment
because of bioaccumulation, persistency in the
environment, acute toxicity, chronic toxicity
(including carcinogenicity, mutagenicity, or
teratogenicity), or synergistic propensities.
SEC. 215. INTERNATIONAL TRADE COMMISSION REPORTS ON IMPACT OF THIS ACT.
(a) Reporting Requirement.--
(1) In general.--The United States International Trade
Commission (in this section referred to as the ``Commission'')
shall submit to Congress and the President, biennial reports
regarding the economic impact of this title on United States
industries and consumers and on the economy of the beneficiary
countries.
(2) First report.--The first report shall be
submitted not later than September 30, 2001.
(3) Treatment of Puerto Prico, etc.--For purposes of
this section, industries in the Commonwealth of Puerto
Rico and the insular possessions of the United States
are considered to be United States industries.
(b)(1) Each report required under subsection (a) shall
include, but not be limited to, an assessment by the Commission
regarding--
(A) the actual effect, during the period covered by
the report, of this Act on the United States economy
generally as well as on those specific domestic
industries which produce articles that are like, or
directly competitive with, articles being imported into
the United States from beneficiary countries; and
(B) the probable future effect which this Act will
have on the United States economy generally, as well as
on such domestic industries, before the provisions of
this Act terminate.
(2) In preparing the assessments required under paragraph
(1), the Commission shall, to the extent practicable--
(A) analyze the production, trade and consumption of
United States products affected by this Act, taking
into consideration employment, profit levels, and use
of productive facilities with respect to the domestic
industries concerned, and such other economic factors
in such industries as it considers relevant, including
prices, wages, sales, inventories, patterns of demand,
capital investment, obsolescence of equipment, and
diversification of production; and
(B) describe the nature and extent of any significant
change in employment, profit levels, and use of
productive facilities, and such other conditions as it
deems relevant in the domestic industries concerned,
which it believes are attributable to this Act.
(c)(1) Each report required under subsection (a) shall be
submitted to the Congress and to the President before the close
of the nine-month period beginning on the day after the last
day of the period covered by the report.
(2) The Commission shall provide opportunity for the
submission by the public, either orally or in writing, or both,
of information relating to matters that will be addressed in
the reports.
SEC. 216. IMPACT STUDY BY SECRETARY OF LABOR.
The Secretary of Labor, in consultation with other
appropriate Federal agencies, shall undertake a continuing
review and analysis of the impact which the implementation of
the provisions of this title have with respect to United States
labor; and shall make an annual written report to Congress on
the results of such review and analysis.
SEC. 217. FEASIBILITY STUDY REGARDING A CARIBBEAN TRADE INSTITUTE.
(a) The Secretary of State shall prepare a study regarding
the feasibility of establishing a Caribbean Trade Institute in
Harlem, New York City, supported by a combination of Federal
and private funds.
(b) The study shall include, but not be limited to, an
assessment of the extent to which, and the means by which, a
Caribbean Trade Institute could--
(1) facilitate cooperation between public and private
entities interested in engaging in or furthering
Caribbean trade;
(2) serve as a catalyst for greater cultural exchange
between the United States and Caribbean nations; and
(3) facilitate expansion of job opportunities both in
the United States and the Caribbean Basin.
The study shall also include suggestions regarding the
organization and staffing of such an institute.
(c) The study required by this section shall be submitted
to the Congress within six months after the date of the
enactment of this Act.
SEC. 218. EFFECTIVE DATE.
(a) This chapter shall take effect on August 5, 1983.
[(b) Repealed.]
SEC. 219. CENTER FOR THE STUDY OF WESTERN HEMISPHERIC TRADE.
(a) Establishment.--The Commissioner of Customs, after
consultation with appropriate officials in the State of Texas,
is authorized and directed to make grants to an institution (or
a consortium of such institutions) to assist such institution
in planning, establishing, and operating a Center for the Study
of Western Hemispheric Trade (hereafter in this section
referred to as the ``Center''). The Commissioner of Customs
shall make the first grant not later than December 1, 1994, and
the Center shall be established not later than February 1,
1995.
(b) Scope of the Center.--The Center shall be a year-round
program operated by an institution located in the State of
Texas (or a consortium of such institutions), the purpose of
which is to promote and study trade between and among Western
Hemisphere countries. The Center shall conduct activities
designed to examine--
(1) the impact of the NAFTA on the economies in, and
trade within, the Western Hemisphere;
(2) the negotiation of any future free trade
agreements, including possible accessions to the NAFTA;
and
(3) adjusting tariffs, reducing nontariff barriers,
improving relations among customs officials, and
promoting economic relations among countries in the
Western Hemisphere.
(c) Consultation; Selection Criteria.--The Commissioner of
Customs shall consult with appropriate officials of the State
of Texas and private sector authorities with respect to
selecting, planning, and establishing the Center. In selecting
the appropriate institution, the Commissioner of Customs shall
give consideration to--
(1) the institution's ability to carry out the
programs and activities described in this section; and
(2) any resources the institution can provide the
Center in addition to Federal funds provided under this
program.
(d) Programs and Activities.--The Center shall conduct the
following activities:
(1) Provide forums for international discussion and
debate for representatives from countries in the
Western Hemisphere regarding issues which affect trade
and other economic relations within the hemisphere,
including the impact of the NAFTA on individual
economies and the desirability and feasibility of
possible accessions to the NAFTA by such countries.
(2) Conduct studies and research projects on subjects
which affect Western Hemisphere trade, including
tariffs, customs, regional and national economics,
business development and finance, production and
personnel management, manufacturing, agriculture,
engineering, transportation, immigration,
telecommunications, medicine, science, urban studies,
border demographics, social anthropology, and
population.
(3) Publish materials, disseminate information, and
conduct seminars and conferences to support and educate
representatives from countries in the Western
Hemisphere who seek to do business with or invest in
other Western Hemisphere countries.
(4) Provide grants, fellowships, endowed chairs, and
financial assistance to outstanding scholars and
authorities from Western Hemisphere countries.
(5) Provide grants, fellowships, and other financial
assistance to qualified graduate students, from Western
Hemisphere countries, to study at the Center.
(6) Implement academic exchange programs and other
cooperative research and instructional agreements with
the complementary North/South Center at the University
of Miami at Coral Gables. (1) Sec. 2(a) of the Dante B.
Fascell North-South Center Act (Public Law 106929; 113
Stat. 54) provided that any reference in any provisions
of law to the North/South Center ``shall be deemed to
be a reference to the `Dante B. Fascell North-South
Center'.''
(e) Definitions.--For purposes of this section--
(1) Nafta.--The term ``NAFTA'' means the North
American Free Trade Agreement.
(2) Western hemisphere countries.--The terms
``Western Hemisphere countries'', ``countries in the
Western Hemisphere'', and ``Western Hemisphere'' means
Canada, the United States, Mexico, countries located in
South America, beneficiary countries (as defined by
section 212), the Commonwealth of Puerto Rico, and the
United States Virgin Islands.
(f) Fees for Seminars and Publications.--Notwithstanding
any other provision of law, a grant made under this section may
provide that the Center may charge a reasonable fee for
attendance at seminars and conferences and for copies of
publications, studies, reports, and other documents the Center
publishes. The Center may waive such fees in any case in which
it determines imposing a fee would impose a financial hardship
and the purposes of the Center would be served by granting such
a waiver.
(g) Duration of Grant.--The Commissioner of Customs is
directed to make grants to any institution or institutions
selected as the Center for fiscal years 1994, 1995, 1996, and
1997.
(h) Report.--The Commissioner of Customs shall, no later
than July 1, 1994, and annually thereafter for years for which
grants are made, submit a written report to the Committee on
Finance of the Senate and the Committee on Ways and Means of
the House of Representatives. The first report shall include--
(1) a statement identifying the institution or
institutions selected as the Center;
(2) the reasons for selecting the institution or
institutions as the Center; and
(3) the plan of such institution or institutions for
operating the Center.
Each subsequent report shall include information with respect
to the operations of the Center, the collaboration of the
Center with, and dissemination of information to, Government
policymakers and the business community with respect to the
study of Western Hemispheric trade by the Center, and the plan
and efforts of the Center to continue operations after grants
under this section have expired.
Subtitle B--Tax Provisions
SEC. 221. PAYMENT OF EXCISE TAXES COLLECTED ON RUM TO PUERTO RICO AND
THE UNITED STATES VIRGIN ISLANDS.
[Amends section 7652 of the Internal Revenue Code of 1954
(relating to shipments to the United States) by inserting after
subsection (b) the following new subsection, applicable to
articles imported into the United States after June 30, 1983:
[``(e) Shipments of Rum to the United States.--
[``(1) Excise taxes on rum covered into treasuries of
puerto rico and virgin islands.--All taxes collected
under section 5001(a)(1) on rum imported into the
United States (less the estimated amount necessary for
payment of refunds and drawbacks) shall be covered into
the treasuries of Puerto Rico and the Virgin Islands.
[``(2) Secretary prescribes formula.--The Secretary
shall, from time to time, prescribe by regulation a
formula for the division of such tax collections
between Puerto Rico and the Virgin Islands and the
timing and methods for transferring such tax
collections.
[``(3) Rum defined.--For purposes of this subsection,
the term `rum' means any article classified under
subheading 2208.40.00 of the Harmonized Tariff Schedule
of the United States (19 U.S.C. 1202).
[``(4) Coordination with subsections (a) and (b).--
Paragraph (1) shall not apply with respect to any rum
subject to tax under subsection (a) or (b).''.]
SEC. 222. TREATMENT OF CARIBBEAN CONVENTIONS, ETC.
[Amends subsection (h) of section 274 of the Internal
Revenue Code of 1954 (relating to attendance at conventions,
etc.) by adding at the end thereof the following new paragraph,
applicable to conventions, seminars, or other meetings
beginning after June 30, 1983:
[``(6) Treatment of conventions in certain caribbean
countries.--
[``(A) In general.--For purposes of this
subsection, the term `North American area'
includes, with respect to any convention,
seminar, or similar meeting, any beneficiary
country if (as of the time such meeting
begins)--
[``(i) there is in effect a bilateral
or multilateral agreement described in
subparagraph (C) between such country
and the United States providing for the
exchange of information between the
United States and such country, and
[``(ii) there is not in effect a
finding by the Secretary that the tax
laws of such country discriminate
against conventions held in the United
States.
[``(B) Beneficiary country.--For purposes of
this paragraph, the term `beneficiary country'
has the meaning given to such term by section
212(a)(1)(A) of the Caribbean Basin Economic
Recovery Act; except that such term shall
include Bermuda.
[``(C) Authority to conclude exchange of
information agreements.--
[``(i) In general.--The Secretary is
authorized to negotiate and conclude an
agreement for the exchange of
information with any beneficiary
country. Except as provided in clause
(ii), an exchange of information
agreement shall provide for the
exchange of such information (not
limited to information concerning
nationals or residents of the United
States or the beneficiary country) as
may be necessary or appropriate to
carry out and enforce the tax laws of
the United States and the beneficiary
country (whether criminal or civil
proceedings), including information
which may otherwise be subject to
nondisclosure provisions of the local
law of the beneficiary country such as
provisions respecting bank secrecy and
bearer shares. The exchange of
information agreement shall be
terminable by either country on
reasonable notice and shall provide
that information received by either
country will be disclosed only to
persons or authorities (including
courts and administrative bodies)
involved in the administration or
oversight of, or in the determination
of appeals in respect of, taxes of the
United States or the beneficiary
country and will be used by such
persons or authorities only for such
purposes.
[``(ii) Nondisclosure of qualified
confidential information sought for
civil tax purposes.--An exchange of
information agreement need not provide
for the exchange of qualified
confidential information which is
sought only for civil tax purposes if--
[``(I) the Secretary of the
Treasury, after making all
reasonable efforts to negotiate
an agreement which includes the
exchange of such information,
determines that such an
agreement cannot be negotiated
but that the agreement which
was negotiated will
significantly assist in the
administration and enforcement
of the tax laws of the United
States, and
[``(II) the President
determines that the agreement
as negotiated is in the
national security interest of
the United States.
[``(iii) Qualified confidential
information defined.--For purposes of
this subparagraph, the term `qualified
confidential information' means
information which is subject to the
nondisclosure provisions of any local
law of the beneficiary country
regarding bank secrecy or ownership of
bearer shares.
[``(iv) Civil tax purposes.--For
purposes of this subparagraph, the
determination of whether information is
sought only for civil purposes shall be
made by the requesting party.
[``(D) Coordination with section 6103.--Any
exchange of information agreement negotiated
under subparagraph (C) shall be treated as an
income tax convention for purposes of section
6103(k)(4).
[``(E) Determinations published in the
federal register.--The following shall be
published in the Federal Register--
[``(i) any determination by the
President under subparagraph (C)(ii)
(including the reasons for such
determination),
[``(ii) any determination by the
Secretary under subparagraph (C)(ii)
(including the reasons for such
determination), and
[``(iii) any finding by the Secretary
under subparagraph (A)(ii) (and any
termination thereof).'']
SEC. 223. REPORT WITH RESPECT TO USE OF CARIBBEAN BASIN TAX HAVENS.
The Secretary of the Treasury shall, not later than ninety
days after the date of the enactment of this Act, report to the
Committee on Ways and Means of the House of Representatives and
the Committee on Finance of the Senate on--
(1) the level at which Caribbean Basin tax havens are
being used to evade or avoid Federal taxes, and the
effect on Federal revenues of such use,
(2) any information he may have on the relationship
of such use to drug trafficking and other criminal
activities, and
(3) current antitax haven enforcement activities of
the Department of the Treasury.
Subtitle C--Sense of the Congress Regarding Sugar Imports
SEC. 231. SUGAR IMPORTS.
It is the sense of the Congress that sugar from any
Communist country in the Caribbean Basin or in Central America
should not be imported into the United States.
Caribbean Basin Economic Recovery Expansion Act of 1990
[19 U.S.C. 2701-2707, 2701 note, 20 U.S.C. 226, 26 U.S.C. 936; P.L.
101-382; title II]
Subtitle A--Short Title and Findings
SEC. 201. SHORT TITLE.
This title may be cited as the ``Caribbean Basin Economic
Recovery Expansion Act of 1990''.
SEC. 202. CONGRESSIONAL FINDINGS.
The Congress finds that--
(1) a stable political and economic climate in the
Caribbean region is necessary for the development of
the countries in that region and for the security and
economic interests of the United States;
(2) the Caribbean Basin Economic Recovery Act was
enacted in 1983 to assist in the achievement of such a
climate by stimulating the development of the export
potential of the region; and
(3) the commitment of the United States to the
successful development of the region, as evidenced by
the enactment of the Caribbean Basin Economic Recovery
Act, should be reaffirmed, and further strengthened, by
amending that Act to improve its operation.
Subtitle B--Amendments to the Caribbean Basin Economic Recovery Act and
Related Provisions
[SEC. 211. REPEAL OF TERMINATION DATE ON DUTY-FREE TREATMENT UNDER THE
ACT.
Repeals section 218 of the Caribbean Basin Economic
Recovery Act.]
[SEC. 212. DUTY REDUCTION FOR CERTAIN LEATHER-RELATED PRODUCTS.
Amendments to section 213 of the Caribbean Basin Economic
Recovery Act providing duty reductions on certain leather-
related products (reprinted elsewhere).]
[SEC. 213. WORKER RIGHTS.
Amendments to section 212 of the Caribbean Basin Economic
Recovery Act on worker rights criteria (reprinted elsewhere).]
[SEC. 214. REPORTS.
Amendments to section 212 of the Caribbean Basin Economic
Recovery Act requiring reports to the Congress (reprinted
elsewhere).]
[SEC. 215. TREATMENT OF ARTICLES GROWN, PRODUCED, OR MANUFACTURED IN
PUERTO RICO.
Amendments to section 213 of the Caribbean Basin Economic
Recovery Act relating to duty-free treatment for articles of
Puerto Rico (reprinted elsewhere).]
SEC. 216. APPLICATION OF ACT IN EASTERN CARIBBEAN AREA.
It is the sense of the Congress that there should be
undertaken special efforts in order to improve the ability of
the Organization of Eastern Caribbean States countries and
Belize to benefit from the Caribbean Basin Economic Recovery
Act.
[SEC. 221. INCREASE IN DUTY-FREE TOURIST ALLOWANCES.
Amendments to subchapter IV of chapter 98 of the Harmonized
Tariff Schedule of the United States to increase duty-free
tourist allowances.]
[SEC. 222. DUTY-FREE TREATMENT FOR ARTICLES ASSEMBLED IN BENEFICIARY
COUNTRIES FROM COMPONENTS PRODUCED IN THE UNITED
STATES.
Amendments to U.S. Note 2 of subchapter II of chapter 98 of
the Harmonized Tariff Schedule of the United States providing
duty-free treatment for certain imports wholly of U.S.
components or materials.]
SEC. 223. RULES OF ORIGIN FOR PRODUCTS OF BENEFICIARY COUNTRIES.
(a) ITC Investigation.--
(1) The United States International Trade Commission
shall immediately undertake, pursuant to section 332(g)
of the Tariff Act of 1930, an investigation for the
purpose of assessing whether revised rules of origin
for products of countries designated as beneficiary
countries under the Caribbean Basin Economic Recovery
Act are appropriate. If the Commission makes an
affirmative assessment, it shall develop recommended
revised rules of origin.
(2) The Commission shall submit a report on the
results of the investigation under paragraph (1),
together with the text of recommended rules, if any, to
the President and the Congress no later than 9 months
after the date of the enactment of this Act.
(b) Legislative Recommendations.--If the President
considers that the implementation of revised rules of origin
for products of beneficiary countries would be appropriate, the
President shall transmit to the Congress suggested legislation
containing such rules of origin. In formulating such suggested
legislation, the President shall--
(1) take into account the report and recommended
rules submitted under subsection (a); and
(2) obtain the advice of--
(A) the appropriate advisory committees
established under section 135 of the Trade Act
of 1974,
(B) the governments of the beneficiary
countries,
(C) the Committee on Ways and Means of the
House of Representatives and the Committee on
Finance of the Senate, and
(D) other interested parties.
[SEC. 224. CUMULATION INVOLVING BENEFICIARY COUNTRY PRODUCTS UNDER THE
COUNTERVAILING DUTY AND ANTIDUMPING DUTY LAWS.
Amendments to section 771(7) of the Tariff Act of 1930
relating to cumulation (reprinted elsewhere).]
[SEC. 225. ETHYL ALCOHOL.
Amendment to section 7(b) of the Steel Trade Liberalization
Program Implementation Act relating to imports of ethyl
alcohol.]
[SEC. 226. CONFORMING AMENDMENT.
Amendment to section 503(b) of the Trade Act of 1974
relating to rules of origin under the Generalized System of
Preferences program (reprinted elsewhere).]
SEC. 227. REQUIREMENT FOR INVESTMENT OF SECTION 936 FUNDS IN CARIBBEAN
BASIN COUNTRIES.
[Amends paragraph (4) of section 936(d) of the Internal
Revenue Code of 1986 (relating to investment in Caribbean Basin
countries) by adding at the end thereof the following new
subparagraph, applicable to calendar years after 1989:
[``(D) Requirement for investment in caribbean basin
countries.--
[``(i) In general.--For each calendar year,
the government of Puerto Rico shall take such
steps as may be necessary to ensure that at
least $100,000,000 of qualified Caribbean Basin
country investments are made during such
calendar year.
[``(ii) Qualified caribbean basin country
investment.--For purposes of clause (i), the
term `qualified Caribbean Basin country
investment' means any investment if--
[``(I) the income from such
investment is treated as qualified
possession source investment income by
reason of subparagraph (A), and
[``(II) such investment is not
(directly or indirectly) a refinancing
of a prior investment (whether or not
such prior investment was a qualified
Caribbean Basin country investment).'']
Subtitle C--Scholarship Assistance and Tourism Promotion
SEC. 231. COOPERATIVE PUBLIC AND PRIVATE SECTOR PROGRAM FOR PROVIDING
SCHOLARSHIPS TO STUDENTS FROM THE CARIBBEAN AND
CENTRAL AMERICA.
(a) Statement of Purpose.--It is the purpose of this
section to encourage the establishment of partnerships between
State governments, universities, community colleges, and
businesses to support scholarships for talented socially and
economically disadvantaged students from eligible countries in
the Caribbean and Central America to study in the United States
in order to--
(1) improve the diversity and quality of educational
opportunities for such students;
(2) assist the development efforts of eligible
countries by providing training and educational
assistance to persons who can help address the social
and economic needs of these countries;
(3) expand opportunities for cross-cultural studies
and exchanges and improve the exchange of understanding
and principles of democracy;
(4) promote positive and productive relationships
between the United States and its neighbor countries in
the Caribbean and Central American regions;
(5) give added visibility and focus to the
``scholarship diplomacy'' efforts of the United States
Government by leveraging the monies available for this
purpose through the development of partnerships among
Federal, State, and local governments and the business
and academic communities; and
(6) promote community involvement with the
scholarship program as a tool for broadening and
strengthening the ``American experience'' for foreign
students.
(b) Establishment of Scholarship Program.--The
Administrator of the Agency for International Development shall
establish and administer a program of scholarship assistance,
in cooperation with State governments, universities, community
colleges, and businesses, to provide scholarships to enable
socially and economically disadvantaged students from eligible
countries in the Caribbean and Central America to study in the
United States.
(c) Grants to States.--In carrying out this section, the
Administrator may make grants to States to provide scholarship
assistance for undergraduate degree programs and for training
programs of one year or longer in study areas related to the
critical development needs of the students' respective
countries.
(d) Agreement With States.--The Administrator and each
participating State shall agree on a program regarding the
educational opportunities available within the State, the
selection and assignment of scholarship recipients, and related
issues. To the maximum extent practicable, each State shall be
given flexibility in designing its program.
(e) Federal Share.--The Federal share for each year for
which a State receives payments under this section shall be not
less than 50 percent.
(f) Non-Federal Share.--The non-Federal share of payments
under this section may be in cash, including the waiver of
tuition or the offering of in-State tuition or housing waivers
or subsidies, or in-kind fairly evaluated, including the
provision of books or supplies.
(g) Forgiveness of Scholarship Assistance.--The obligation
of any recipient to reimburse any entity for any or all
scholarship assistance provided under this section shall be
forgiven upon the recipient's prompt return to his or her
country of domicile for a period which is at least one year
longer than the period spent studying in the United States with
scholarship assistance.
(h) Private Sector Participation.--To the maximum extent
practicable, each participating State shall enlist the
assistance of the private sector to enable the State to meet
the non-Federal share of payments under this section. Wherever
appropriate, each participating State shall encourage the
private sector to offer internships or other opportunities
consistent with the purposes of this section to students
receiving scholarships under this section.
(i) Funding.--Any funds used in carrying out this section
shall be derived from funds allocated for Latin American and
Caribbean regional programs under chapter 4 of part II of the
Foreign Assistance Act of 1961 (22 U.S.C. 2346 and following;
relating to the economic support fund).
(j) Definitions.--As used in this section--
(1) The term ``eligible country'' means any country--
(A) which is receiving assistance under
chapter 1 of part I of the Foreign Assistance
Act of 1961 (22 U.S.C. 2151 and following;
relating to development assistance) or chapter
4 of part II of that Act (22 U.S.C. 2346 and
following; relating to the economic support
fund); and
(B) which is designated by the President as a
beneficiary country pursuant to the Caribbean
Basin Economic Recovery Act.
(2) The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of
Puerto Rico, Guam, American Samoa, the Virgin Islands,
the Trust Territory of the Pacific Islands, and the
Commonwealth of the Northern Mariana Islands.
SEC. 232. PROMOTION OF TOURISM.
(a) Congressional Finding.--The Congress finds that the
tourism industry must be recognized as a central element in the
economic development and political stability of the Caribbean
Basin region because of the potential that the industry has for
increasing employment and foreign exchange earnings,
establishing important linkages with other related sectors, and
having a positive complementary effect on trade with the United
States.
(b) Federal Agency Priority.--It is the sense of the
Congress that increased tourism and related activities should
be developed in the Caribbean Basin region as a central part of
the Caribbean Basin Initiative program and, to that end, the
appropriate agencies of the United States Government should
assign a high priority to projects that promote the tourism
industry in the Caribbean Basin.
(c) Study.--The Secretary of Commerce shall complete the
study begun in 1986 regarding tourism development strategies
for the Caribbean Basin region. The study shall include--
(1) information on the mutual benefits received by
the United States and the Caribbean Basin economies as
a result of tourist activity in the area; and
(2) proposals for developing increased linkages
between the tourism industry and local industries in
the region such as the agribusiness.
SEC. 233. PILOT PRECLEARANCE PROGRAM.
(a) Establishment of Program.--Subject to subsection (b),
the Commissioner of Customs shall carry out, during fiscal
years 1991 and 1992, preclearance operations at a facility of
the United States Customs Service in a country within the
Caribbean Basin which the Commissioner of Customs considers
appropriate for testing the extent to which the availability of
preclearance operations can assist in the development of
tourism.
(b) Restrictions Regarding Program.--
(1) The Commissioner of Customs may not consider a
country within the Caribbean Basin to be appropriate
for the testing referred to in subsection (a) if
preclearance operations are currently carried out by
the United States Customs Service in that country.
(2) Preclearance operations may not be commenced in
the country selected for testing under subsection (a)
unless the Commissioner of Customs and the Commissioner
of Immigration and Naturalization jointly certify
that--
(A) there exists a bilateral agreement
between the United States Government and the
government of such country which protects the
interests of the United States and affords
diplomatic protection to United States
employees working at the preclearance location;
(B) the facilities at the preclearance
location conform to Federal Inspection Services
standards and are suitable for the duties to be
performed therein;
(C) there is adequate security around the
structure used for the reception of
international arrivals;
(D) the government of such country grants the
United States Customs Service and the United
States Immigration and Naturalization Service
appropriate search, seizure, and arrest
authority; and
(E) United States employees and their
families will not be subject to fear of
reprisal, acts of terrorism, and threats of
intimidation.
(3) In determining the country in which to establish
the operation described in paragraph (1), the
Commissioner of Customs and the Commissioner of
Immigration and Naturalization shall first determine
the viability of establishing such operations in either
Aruba or Jamaica. If the Commissioners determine, after
full consultation with the governments of such
countries, that it is not viable to establish pre-
clearance operations in either Aruba or Jamaica, they
shall so report to the Committee on Finance of the
Senate and the Committee on Ways and Means of the House
of Representatives, including an explanation of how
this determination was reached. Such report shall be
submitted to those Committees within six months after
the date of the enactment of this Act. Following the
submission of such a report, the Commissioners shall
take all necessary steps, consistent with the
requirements of this section, to establish such
operations in another country.
(c) Report.--As soon as practicable after September 30,
1992, the Commissioner of Customs shall submit to the Congress
a report regarding the preclearance operations program carried
out under subsection (a). The report shall include--
(1) a summary of the preclearance operations,
including the number of individuals processed, any
administrative problems encountered, and cost of the
operations;
(2) an evaluation of the extent to which the
preclearance operations contributed to--
(A) the stimulation of the tourism industry
of the country concerned, and
(B) expedited customs processing at United
States ports of entry;
(3) the opinion of the Commissioner of Customs
regarding the efficacy of extending preclearance
operations to other countries within the Caribbean
Basin that are developing tourism industries, and if
the opinion is affirmative, the identity of those
countries to which such operations should be extended
and the estimated costs and results of such extensions;
and
(4) such other matters that the Commissioner of
Customs considers relevant.
Subtitle D--Miscellaneous Provisions
[SEC. 241. TRADE BENEFITS FOR NICARAGUA.
Authority to designate Nicaragua as a beneficiary
developing country during 1990.]
SEC. 242. AGRICULTURAL INFRASTRUCTURE SUPPORT.
It is the sense of Congress that in order to facilitate
trade with, and the economic development of, the countries
designated as beneficiary countries under the Caribbean Basin
Economic Recovery Act, the Secretary of Agriculture should, in
consultation with the Agribusiness Promotion Council,
coordinate with the Agency for International Development the
development of programs to encourage improvements in the
transportation and cargo handling infrastructure in these
countries for the purpose of improving agricultural trade
between these countries and the United States. Such programs
should focus on improving distribution of agricultural
commodities and products in these countries, and the
phytosanitary institutions, quarantine capabilities, and
pesticide regulations of these countries regarding agricultural
commodities and products.
[SEC. 243. EXTENSION OF TRADE BENEFITS TO THE ANDEAN REGION.
Findings and sense of the Congress on providing trade
benefits to the Andean region.]
Section 423 of the Tax Reform Act of 1986, as amended (Treatment of
Imports of Ethyl Alcohol)
[19 U.S.C. 2703 note; P.L. 99-514, as amended by P.L. 100-418 and P.L.
101-221]
SEC. 423. ETHYL ALCOHOL AND MIXTURES THEREOF FOR FUEL USE.
(a) In General.--Except as provided in subsection (b), no
ethyl alcohol or a mixture thereof may be considered--
(1) for purposes of general headnote 3(a) of the
Tariff Schedules of the United States, to be--
(A) the growth or product of an insular
possession of the United States,
(B) manufactured or produced in an insular
possession from materials which are the growth,
product, or manufacture of any such possession,
or
(C) otherwise eligible for exemption from
duty under such headnote as the growth or
product of an insular possession; or
(2) for purposes of section 213 of the Caribbean
Basin Economic Recovery Act, to be--
(A) an article that is wholly the growth,
product, or manufacture of a beneficiary
country,
(B) a new or different article of commerce
which has been grown, produced, or manufactured
in a beneficiary country,
(C) a material produced in a beneficiary
country, or
(D) otherwise eligible for duty-free
treatment under such Act as the growth,
product, or manufacture of a beneficiary
country;
unless the ethyl alcohol or mixture thereof is an indigenous
product of that insular possession or beneficiary country.
(b) Exception.--
(1) Subject to the limitation in paragraph (2),
subsection (a) shall not apply to ethyl alcohol that is
imported into the United States during calendar years
1987, 1988, and 1989 and produced in--
(A) an azeotropic distillation facility
located in a beneficiary country, if that
facility was established before, and in
operation on, July 1, 1987,
(B) an azeotropic distillation facility--
(i) at least 50 percent of the total
value of the equipment and components
of which were--
(I) produced in the United
States, and
(II) owned by a corporation
at least 50 percent of the
total value of the outstanding
shares of stock of which were
owned by a United States person
(or persons) on or before
January 1, 1986, and
(ii) substantially all of the
equipment and components of which were,
on or before January 1, 1986--
(I) located in the United
States under the possession or
control of such corporation,
(II) ready for shipment to,
and installation in, a
beneficiary country or an
insular possession of the
United States, and
(iii) which--
(I) has on the date of
enactment of this Act, or
(II) will have at the time
such facility is placed in
service (based on estimates
made before the date of
enactment of this Act),
a stated capacity to produce not more
than 42,000,000 gallons of such product
per year, or
(C) a distillation facility operated by a
corporation which, before the date of enactment
of the Omnibus Trade Act of 1987--
(i) has completed engineering and
design of a full-scale fermentation
facility in the United States Virgin
Islands, and
(ii) has obtained authorization from
authorities of the United States Virgin
Islands to operate a full-scale
fermentation facility.
(2) The exception provided under paragraph (1) shall
cease to apply during each of calendar years 1987,
1988, and 1989 to ethyl alcohol produced in a facility
described in subparagraph (A), (B), or (C) of paragraph
(1) after 20,000,000 gallons of ethyl alcohol produced
in that facility are entered into the United States
during that year.
(c) Definitions.--For purposes of this section--
(1) The term ``ethyl alcohol or a mixture thereof''
means (except for purposes of subsection (e)) ethyl
alcohol or any mixture thereof described in item 901.50
of the Appendix to the Tariff Schedules of the United
States.
(2) Ethyl alcohol or a mixture thereof that is
produced by a process of full fermentation in an
insular possession or beneficiary country shall be
treated as being an indigenous product of that
possession or country.
(3)(A) Ethyl alcohol and mixtures thereof that are
only dehydrated within an insular possession or
beneficiary country (hereinafter in this paragraph
referred to as ``dehydrated alcohol and mixtures'')
shall be treated as being indigenous products of that
possession or country only if the alcohol or mixture,
when entered, meets the applicable local feedstock
requirement.
(B) The local feedstock requirement with respect to
any calendar year is--
(i) 0 percent with respect to the base
quantity of dehydrated alcohol and mixtures
that is entered;
(ii) 30 percent with respect to the
35,000,000 gallons of dehydrated alcohol and
mixtures next entered after the base quantity;
and
(iii) 50 percent with respect to all
dehydrated alcohol and mixtures entered after
the amount specified in clause (ii) is entered.
(C) For purposes of this paragraph:
(i) The term ``base quantity'' means, with
respect to dehydrated alcohol and mixtures
entered during any calendar year, the greater
of--
(I) 60,000,000 gallons; or
(II) an amount (expressed in gallons)
equal to 7 percent of the United States
domestic market for ethyl alcohol, as
determined by the United States
International Trade Commission, during
the 12-month period ending on the
preceding September 30;
that is first entered during that calendar
year.
(ii) The term ``local feedstock'' means
hydrous ethyl alcohol which is wholly produced
or manufactured in any insular possession or
beneficiary country.
(iii) The term ``local feedstock
requirement'' means the minimum percent, by
volume, of local feedstock that must be
included in dehydrated alcohol and mixtures.
(4) The term ``beneficiary country'' has the meaning
given to such term under section 212 of the Caribbean
Basin Economic Recovery Act (19 U.S.C. 2702).
(5) The term ``United States person'' has the meaning
given to such term by section 7701(a)(3) of the
Internal Revenue Code of 1986.
(6) The term ``entered'' means entered, or withdrawn
from warehouse, for consumption in the customs
territory of the United States.
(d) Amendment to Appendix to Schedules.--The item
designation for item 901.50 of the Appendix to the Tariff
Schedules of the United States is amended to read as follows:
``Ethyl alcohol (provided for in item 427.88, part 2D, schedule
4) or any mixture containing such ethyl alcohol (provided for
in part 1, 2, or 10, schedule 4) if such ethyl alcohol or
mixture is to be used as fuel or in producing a mixture of
gasoline and alcohol, a mixture of a special fuel and alcohol,
or any other mixture to be used as fuel (including motor fuel
provided for in item 475.25), or is suitable for any such
uses.''
(e) Drawbacks.--
(1) For purposes of subsections (b) and (j)(2) of
section 313 of the Tariff Act of 1930 (19 U.S.C. 1313),
as amended by section 1888(2) of this Act, any ethyl
alcohol (provided for in item 427.88 of the Tariff
Schedules of the United States) or mixture containing
such ethyl alcohol (provided for in part 1, 2, or 10 of
schedule 4 of such Schedules) which is subject to the
additional duty imposed by item 901.50 of the Appendix
to such Schedules may be treated as being fungible
with, or of being of the same kind and quality as, any
other imported ethyl alcohol (provided for in item
427.88 of such Schedules) or mixture containing such
ethyl alcohol (provided for in part 1, 2, or 10 of
schedule 4 of such Schedules) only if such other
imported ethyl alcohol or mixture thereof is also
subject to such additional duty.
(2) Paragraph (1) shall not apply with respect to
ethyl alcohol (provided for in item 427.88 of the
Tariff Schedules of the United States) or mixture
containing such ethyl alcohol (provided for in part 1,
2, or 10 of schedule 4 of such Schedules) that is
exempt from the additional duty imposed by item 901.50
of the Appendix to such Schedules by reason of--
(A) subsection (b), or
(B) any agreement entered into under section
102(b) of the Trade Act of 1974.
(f) Conforming Amendments.--
[(1) Amendment to general note 3(a)(iv) of the
Harmonized Tariff Schedule of the United States
relating to products of insular possessions.
[(2) Amendment to section 213(a)(1) of the Caribbean
Basin Economic Recovery Act (19 U.S.C. 2703(a)(1)
relating to eligible articles.]
(3) The headnotes to subpart A of part 1 of the
Appendix to the Tariff Schedules of the United States
are amended by adding at the end thereof the following:
``2. For purposes of item 901.50, the phrase `is suitable
for any such uses' does not include ethyl alcohol (provided for
in item 427.88, part 2D, schedule 4) that is certified by the
importer of record to the satisfaction of the Commissioner of
Customs (hereinafter in this headnote referred to as the
`Commissioner') to be ethyl alcohol or a mixture containing
such ethyl alcohol imported for uses other than liquid motor
fuel use or use in producing liquid motor fuel related
mixtures. If the importer of record certifies nonliquid motor
fuel use for purposes of establishing actual use or suitability
under item 901.50, the Commissioner shall not liquidate the
entry of ethyl alcohol until he is satisfied that the ethyl
alcohol has in fact not been used for liquid motor fuel use or
use in producing liquid motor fuel related mixtures. If he is
not satisfied within a reasonable period of time not less than
18 months from the date of entry, then the duties provided for
in item 901.50 shall be payable retroactive to the date of
entry. Such duties shall also become payable, retroactive to
the date of entry, immediately upon the diversion to liquid
motor fuel use of any ethyl alcohol or ethyl alcohol mixture
certified upon entry as having been imported for nonliquid
motor fuel use.''
(g) Effective Period.--
(1) The provisions of, and the amendments made by,
this section (other than subsection (e)) shall apply to
articles entered--
(A) after December 31, 1986, and
(B) before the expiration of the effective
period of item 901.50 of the Appendix to the
Tariff Schedules of the United States.
(2) The provisions of subsection (e) shall take
effect on the date of the enactment of this Act.
General Note 7(a) of the Harmonized Tariff Schedule
Products of Countries Designated as Beneficiary Countries for Pur-
poses of the Caribbean Basin Economic Recovery Act (CBERA).
(a) The following countries and territories or successor
political entities are designated beneficiary countries for the
purposes of the CBERA, pursuant to section 212 of that Act (19
U.S.C. 2702):
Antigua and Barbuda Haiti
Aruba Honduras
Bahamas Jamaica
Barbados Montserrat
Belize Netherlands Antilles
Costa Rica Nicaragua
Dominica Panama
Dominican Republic St. Kitts and Nevis
El Salvador Saint Lucia
Grenada Saint Vincent and the Grenadines
Guatemala Trinidad and Tobago
Guyana Virgin Islands, British
E. ANDEAN INITIATIVE
Andean Trade Preference Act, as amended
[19 U.S.C. 3201-3202; P.L. 102-182, title II, as amended by
P.L. 102-583, P.L. 103-465, and P.L. 104-188, and P.L. 106-200]
SEC. 201. SHORT TITLE.
This title may be cited as the ``Andean Trade Preference
Act''.
SEC. 202. AUTHORITY TO GRANT DUTY-FREE TREATMENT.
The President may proclaim duty-free treatment for all
eligible articles from any beneficiary country in accordance
with the provisions of this title.
SEC. 203. BENEFICIARY COUNTRY.
(a) Definitions.--For purposes of this title--
(1) The term ``beneficiary country'' means any
country listed in subsection (b)(1) with respect to
which there is in effect a proclamation by the
President designating such country as a beneficiary
country for purposes of this title.
(2) The term ``entered'' means entered, or withdrawn
from warehouse for consumption, in the customs
territory of the United States.
(3) The term ``HTS'' means Harmonized Tariff Schedule
of the United States.
(b) Countries Eligible for Designation; Congressional
Notification.--(1) In designating countries as beneficiary
countries under this title, the President shall consider only
the following countries or successor political entities:
Bolivia
Ecuador
Colombia
Peru.
(2) Before the President designates any country as a
beneficiary country for purposes of this title, he shall notify
the House of Representatives and the Senate of his intention to
make such designation, together with the considerations
entering into such decision.
(c) Limitations on Designation.--The President shall not
designate any country a beneficiary country under this title--
(1) if such country is a Communist country;
(2) if such country--
(A) has nationalized, expropriated or
otherwise seized ownership or control of
property owned by a United States citizen or by
a corporation, partnership, or association
which is 50 percent or more beneficially owned
by United States citizens,
(B) has taken steps to repudiate or nullify--
(i) any existing contract or
agreement with, or
(ii) any patent, trademark, or other
intellectual property of,
a United States citizen or a corporation,
partnership, or association, which is 50
percent or more beneficially owned by United
States citizens, the effect of which is to
nationalize, expropriate, or otherwise seize
ownership or control of property so owned, or
(C) has imposed or enforced taxes or other
exactions, restrictive maintenance or
operational conditions, or other measures with
respect to property so owned, the effect of
which is to nationalize, expropriate, or
otherwise seize ownership or control of such
property, unless the President determines
that--
(i) prompt, adequate, and effective
compensation has been or is being made
to such citizen, corporation,
partnership, or association,
(ii) good-faith negotiations to
provide prompt, adequate, and effective
compensation under the applicable
provisions of international law are in
progress, or such country is otherwise
taking steps to discharge its
obligations under international law
with respect to such citizen,
corporation, partnership, or
association, or
(iii) a dispute involving such
citizen, corporation, partnership, or
association, over compensation for such
a seizure has been submitted to
arbitration under the provisions of the
Convention for the Settlement of
Investment Disputes, or in another
mutually agreed upon forum, and
promptly furnishes a copy of such determination
to the Senate and House of Representatives;
(3) if such country fails to act in good faith in
recognizing as binding or in enforcing arbitral awards
in favor of United States citizens or a corporation,
partnership, or association which is 50 percent or more
beneficially owned by United States citizens, which
have been made by arbitrators appointed for each case
or by permanent arbitral bodies to which the parties
involved have submitted their dispute;
(4) if such country affords preferential treatment to
the products of a developed country, other than the
United States, and if such preferential treatment has,
or is likely to have, a significant adverse effect on
United States commerce, unless the President--
(A) has received assurances satisfactory to
him that such preferential treatment will be
eliminated or that action will be taken to
assure that there will be no such significant
adverse effect, and
(B) reports those assurances to the Congress;
(5) if a government-owned entity in such country
engages in the broadcast of copyrighted material,
including films or television material, belonging to
United States copyright owners without their express
consent or such country fails to work towards the
provision of adequate and effective protection of
intellectual property rights;
(6) unless such country is a signatory to a treaty,
convention, protocol, or other agreement regarding the
extradition of United States citizens; and
(7) if such country has not or is not taking steps to
afford internationally recognized worker rights (as
defined in section 507(4) of the Trade Act of 1974) to
workers in the country (including any designated zone
in that country).
Paragraphs (1), (2), (3), (5), and (7) shall not prevent the
designation of any country as a beneficiary country under this
title if the President determines that such designation will be
in the national economic or security interest of the United
States and reports such determination to the Congress with his
reasons therefor.
(d) Factors Affecting Designation.--In determining whether
to designate any country a beneficiary country under this
title, the President shall take into account--
(1) an expression by such country of its desire to be
so designated;
(2) the economic conditions in such country, the
living standards of its inhabitants, and any other
economic factors which he deems appropriate;
(3) the extent to which such country has assured the
United States it will provide equitable and reasonable
access to the markets and basic commodity resources of
such country;
(4) the degree to which such country follows the
accepted rules of international trade provided for
under the WTO Agreement and the multilateral trade
agreements (as such terms are defined in paragraphs (9)
and (4), respectively, of section 2 of the Uruguay
Round Agreements Act);
(5) the degree to which such country uses export
subsidies or imposes export performance requirements or
local content requirements which distort international
trade;
(6) the degree to which the trade policies of such
country as they relate to other beneficiary countries
are contributing to the revitalization of the region;
(7) the degree to which such country is undertaking
self-help measures to protect its own economic
development;
(8) whether or not such country has taken or is
taking steps to afford to workers in that country
(including any designated zone in that country)
internationally recognized worker rights;
(9) the extent to which such country provides under
its law adequate and effective means for foreign
nationals to secure, exercise, and enforce exclusive
rights in intellectual property, including patent,
trademark, and copyright rights;
(10) the extent to which such country prohibits its
nationals from engaging in the broadcast of copyrighted
material, including films or television material,
belonging to United States copyright owners without
their express consent;
(11) whether such country has met the narcotics
cooperation certification criteria set forth in section
481(h)(2)(A) [deemed to be a reference to section 490
of the Foreign Assistance Act of 1991 by section 6(a)
of Public Law 102-583] of the Foreign Assistance Act of
1961 for eligibility for United States assistance; and
(12) the extent to which such country is prepared to
cooperate with the United States in the administration
of the provisions of this Act.
(e) Withdrawal or Suspension of Designation.--(1) The
President may--
(A) withdraw or suspend the designation of any
country as a beneficiary country, or
(B) withdraw, suspend, or limit the application of
duty-free treatment under this title to any article of
any country,
if, after such designation, the President determines that as a
result of changed circumstances such a country should be barred
from designation as a beneficiary country.
(2)(A) The President shall publish in the Federal Register
notice of the action the President proposes to take under
paragraph (1) at least 30 days before taking such action.
(B) The United States Trade Representative shall, within
the 30-day period beginning on the date on which the President
publishes under subparagraph (A) notice of proposed action--
(i) accept written comments from the public regarding
such proposed action,
(ii) hold a public hearing on such proposed action,
and
(iii) publish in the Federal Register--
(I) notice of the time and place of such
hearing prior to the hearing, and
(II) the time and place at which such written
comments will be accepted.
(f) Report.--On or before the 3rd, 6th, and 9th
anniversaries of the date of the enactment of this title, the
President shall submit to the Congress a complete report
regarding the operation of this title, including the results of
a general review of beneficiary countries based on the
considerations described in subsection (c) and (d). In
reporting on the considerations described in subsection
(d)(11), the President shall report any evidence that the crop
eradication and crop substitution efforts of the beneficiary
are directly related to the effects of this title.
SEC. 204. ELIGIBLE ARTICLES.
(a) In General.--(1) Unless otherwise excluded from
eligibility by this title, the duty-free treatment provided
under this title shall apply to any article which is the
growth, product, or manufacture of a beneficiary country if--
(A) that article is imported directly from a
beneficiary country into the customs territory of the
United States; and
(B) the sum of--
(i) the cost or value of the materials
produced in a beneficiary country or 2 or more
beneficiary countries under this Act, or a
beneficiary country under the Caribbean Basin
Economic Recovery Act or 2 or more such
countries, plus
(ii) the direct costs of processing
operations performed in a beneficiary country
or countries (under this Act or the Caribbean
Basin Economic Recovery Act),
is not less than 35 percent of the appraised value of
such article at the time it is entered.
For purposes of determining the percentage referred to in
subparagraph (B), the term ``beneficiary country'' includes the
Commonwealth of Puerto Rico and the United States Virgin
Islands. If the cost or value of materials produced in the
customs territory of the United States (other than the
Commonwealth of Puerto Rico) is included with respect to an
article to which this paragraph applies, an amount not to
exceed 15 percent of the appraised value of the article at the
time it is entered that is attributed to such United States
cost or value may be applied toward determining the percentage
referred to in subparagraph (B).
(2) The Secretary of the Treasury shall prescribe such
regulations as may be necessary to carry out subsection (a)
including, but not limited to, regulations providing that, in
order to be eligible for duty-free treatment under this title,
an article must be wholly the growth, product, or manufacture
of a beneficiary country, or must be a new or different article
of commerce which has been grown, produced, or manufactured in
the beneficiary country; but no article or material of a
beneficiary country shall be eligible for such treatment by
virtue of having merely undergone--
(A) simple combining or packaging operations, or
(B) mere dilution with water or mere dilution with
another substance that does not materially alter the
characteristics of the article.
(3) As used in this subsection, the phrase ``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 specific
merchandise, including fringe benefits, on-the-job
training and the cost of engineering, supervisory,
quality control, and similar personnel; and
(B) dies, molds, tooling, and depreciation on
machinery and equipment which are allocable to the
specific merchandise.
Such phrase does not include costs which are not directly
attributable to the merchandise concerned or are not costs of
manufacturing the product, such as (i) profit, and (ii) general
expense of doing business which are either not allocable to the
specific merchandise or are not related to the growth,
production, manufacture, or assembly of the merchandise, such
as administrative salaries, casualty and liability insurance,
advertising, interest, and salesmen's salaries, commissions or
expenses.
(4) If the President, pursuant to section 223 of the
Caribbean Basin Economic Recovery Expansion Act of 1990,
considers that the implementation of revised rules of origin
for products of beneficiary countries designated under the
Caribbean Basin Economic Recovery Act (19 U.S.C. 2701 et seq.)
would be appropriate, the President may include similarly
revised rules of origin for products of beneficiary countries
designated under this title in any suggested legislation
transmitted to the Congress that contains such rules of origin
for products of beneficiary countries under the Caribbean Basin
Economic Recovery Act.
(b) Exceptions to Duty-Free Treatment.--The duty free
treatment provided under this title shall not apply to--
(1) textile and apparel articles which are subject to
textile agreements;
(2) footwear not designated at the time of the
effective date of this Act as eligible for the purpose
of the generalized system of preferences under title V
of the Trade Act of 1974;
(3) tuna, prepared or preserved in any manner, in
airtight containers;
(4) petroleum, or any product derived from petroleum,
provided for in headings 2709 and 2710 of the HTS;
(5) watches and watch parts (including cases,
bracelets and straps), of whatever type including, but
not limited to, mechanical, quartz digital or quartz
analog, if such watches or watch parts contain any
material which is the product of any country with
respect to which HTS column 2 rates of duty apply;
(6) articles to which reduced rates of duty apply
under subsection (c).
(7) sugars, syrups, and molasses classified in
subheadings 1701.11.03, 1701.12.02, 1701.99.02,
1702.90.32, 1806.10.42, and 2106.90.12 of the HTS; or
(8) rum and tafia classified in subheading 2208.40.00
of the HTS.
(c) Duty Reductions for Certain Goods.--(1) Subject to
paragraph (2), the President shall proclaim reductions in the
rates of duty on handbags, luggage, flat goods, work gloves,
and leather wearing apparel that--
(A) are the product of any beneficiary country; and
(B) were not designated on August 5, 1993, as
eligible articles for purposes of the generalized
system of preferences under title V of the Trade Act of
1974.
(2) The reduction required under paragraph (1) in the rate
of duty on any article shall--
(A) result in a rate that is equal to 80 percent of
the rate of duty that applies to the article on
December 31, 1991, except that, subject to the
limitations in paragraph (3), the reduction may not
exceed 2.5 percent ad valorem; and
(B) be implemented in 5 equal annual stages with the
first \1/5\ of the aggregate reduction in the rate of
duty being applied to entries, or withdrawals from
warehouse for consumption, of the article on or after
January 1, 1992.
(3) The reduction required under this subsection with
respect to the rate of duty on any article is in addition to
any reduction in the rate of duty on that article that may be
proclaimed by the President as being required or appropriate to
carry out any trade agreement entered into under the Uruguay
Round of trade negotiations; except that if the reduction so
proclaimed--
(A) is less than 1.5 percent ad valorem, the
aggregate of such proclaimed reduction and the
reduction under this subsection may not exceed 3.5
percent ad valorem, or
(B) is 1.5 percent ad valorem or greater, the
aggregate of such proclaimed reduction and the
reduction under this subsection may not exceed the
proclaimed reduction plus 1 percent ad valorem.
(d) Suspension of Duty-Free Treatment.--(1) The President
may by proclamation suspend the duty-free treatment provided by
this title with respect to any eligible article and may
proclaim a duty rate for such article if such action is
proclaimed under chapter 1 of title II of the Trade Act of 1974
or section 232 of the Trade Expansion Act of 1962.
(2) In any report by the United States International Trade
Commission to the President under section 202(f) of the Trade
Act of 1974 regarding any article for which duty-free treatment
has been proclaimed by the President pursuant to this title,
the Commission shall state whether and to what extent its
findings and recommendations apply to such article when
imported from beneficiary countries.
(3) For purposes of section 203 of the Trade Act of 1974,
the suspension of the duty-free treatment provided by this
title shall be treated as an increase in duty.
(4) No proclamation providing solely for a suspension
referred to in paragraph (3) of this subsection with respect to
any article shall be taken under section 203 of the Trade Act
of 1974 unless the United States International Trade
Commission, in addition to making an affirmative determination
with respect to such article under section 202(b) of the Trade
Act of 1974, determines in the course of its investigation
under such section that the serious injury (or threat thereof)
substantially caused by imports to the domestic industry
producing a like or directly competitive article results from
the duty-free treatment provided by this title.
(5)(A) Any action taken under section 203 of the Trade Act
of 1974 that is in effect when duty-free treatment is
proclaimed under section 202 of this title shall remain in
effect until modified or terminated.
(B) If any article is subject to any such action at the
time duty-free treatment is proclaimed under section 202 of
this title, the President may reduce or terminate the
application of such action to the importation of such article
from beneficiary countries prior to the otherwise scheduled
date on which such reduction or termination would occur
pursuant to the criteria and procedures of section 204 of the
Trade Act of 1974.
(e) Emergency Relief With Respect to Perishable Products.--
(1) If a petition is filed with the United States International
Trade Commission pursuant to the provisions of section 201 of
the Trade Act of 1974 regarding a perishable product and
alleging injury from imports from beneficiary countries, then
the petition may also be filed with the Secretary of
Agriculture with a request that emergency relief be granted
pursuant to paragraph (3) of this subsection with respect to
such article.
(2) Within 14 days after the filing of a petition under
paragraph (1) of this subsection--
(A) if the Secretary of Agriculture has reason to
believe that a perishable product from a beneficiary
country is being imported into the United States in
such increased quantities as to be a substantial cause
of serious injury, or the threat thereof, to the
domestic industry producing a perishable product like
or directly competitive with the imported product and
that emergency action is warranted, he shall advise the
President and recommend that the President take
emergency action; or
(B) the Secretary of Agriculture shall publish a
notice of his determination not to recommend the
imposition of emergency action and so advise the
petitioner.
(3) Within 7 days after the President receives a
recommendation from the Secretary of Agriculture to take
emergency action pursuant to paragraph (2) of this subsection,
he shall issue a proclamation withdrawing the duty-free
treatment provided by this title or publish a notice of his
determination not to take emergency action.
(4) The emergency action provided by paragraph (3) of this
subsection shall cease to apply--
(A) upon the taking of action under section 203 of
the Trade Act of 1974,
(B) on the day a determination by the President not
to take action under section 203(b)(2) of such Act
becomes final,
(C) in the event of a report of the United States
International Trade Commission containing a negative
finding, on the day of the Commission's report is
submitted to the President, or
(D) whenever the President determines that because of
changed circumstances such relief is no longer
warranted.
(5) For purposes of this subsection, the term ``perishable
product'' means--
(A) live plants and fresh cut flowers provided for in
chapter 6 of the HTS;
(B) fresh or chilled vegetables provided for in
headings 0701 through 0709 (except subheading
0709.52.00) and heading 0714 of the HTS;
(C) fresh fruit provided for in subheadings 0804.20
through 0810.90 (except citrons of subheadings
0805.90.00, tamarinds and kiwi fruit of subheading
0810.90.20, and cashew apples, mameyes colorados,
sapodillas, soursops and sweetsops of subheading
0810.90.40) of the HTS; or
(D) concentrated citrus fruit juice provided for in
sub- headings 2009.11.00, 2009.19.40, 2009.20.40,
2009.30.20, and 2009.30.60 of the HTS.
(f) Section 22 Fees.--No proclamation issued pursuant to
this title shall affect fees imposed pursuant to section 22 of
the Agricultural Adjustment Act of 1933 (7 U.S.C. 624).
(g) Tariff-Rate Quotas.--No quantity of an agricultural
product subject to a tariff-rate quota that exceeds the in-
quota quantity shall be eligible for duty-free treatment under
this Act.
[SEC. 205. RELATED AMENDMENTS.
[(a) Amendment to Note 4 to subchapter IV of chapter 98 of
the HTS relating to duty-free tourist allowances.
[(b) Amendment to general note 3(a)(iv) of the HTS relating
to products of the insular possessions (reprinted elsewhere).]
SEC. 206. INTERNATIONAL TRADE COMMISSION REPORTS ON IMPACT OF THE
ANDEAN TRADE PREFERENCE ACT.
(a) Reporting Requirements.--The United States
International Trade Commission (hereinafter in this section
referred to as the ``Commission'') shall prepare, and submit to
the Congress, a report regarding the economic impact of this
title on United States industries and consumers, and, in
conjunction with other agencies, the effectiveness of this
title in promoting drug-related crop eradication and crop
substitution efforts of the beneficiary countries, during--
(1) and 24-month period beginning with the date of
enactment of this title; and
(2) each calendar year occurring thereafter until
duty-free treatment under this title is terminated
under section 208(b).
For purposes of this section, industries in the Commonwealth of
Puerto Rico and the insular possessions of the United States
shall be considered to be United States industries.
(b) Report Requirements.--(1) Each report required under
subsection (a) shall include, but not be limited to, an
assessment by the Commission regarding--
(A) the actual effect, during the period covered by
the report, of this title on the United States economy
generally as well as on those specific domestic
industries which produce articles that are like, or
directly competitive with, articles being imported into
the United States from beneficiary countries;
(B) the probable future effect that this title will
have on the United States economy generally, as well as
on such domestic industries, before the provisions of
this title terminate; and
(C) the estimated effect that this title has had on
the drug-related crop eradication and crop substitution
efforts of the beneficiary countries.
(2) In preparing the assessments required under paragraph
(1), the Commission shall, to the extent practicable--
(A) analyze the production, trade and consumption of
United States products affected by this title, taking
into consideration employment, profit levels, and use
of productive facilities with respect to the domestic
industries concerned, and such other economic factors
in such industries as it considers relevant, including
prices, wages, sales, inventories, patterns of demand,
capital investment, obsolescence of equipment, and
diversification of production; and
(B) describe the nature and extent of any significant
change in employment, profit levels, and use of
productive facilities, and such other conditions as it
deems relevant in the domestic industries concerned,
which it believes are attributable to this title.
(c) Submission Dates; Public Comment.--(1) Each report
required under subsection (a) shall be submitted to the
Congress before the close of the 9-month period beginning on
the day after the last day of the period covered by the report.
(2) The Commission shall provide an opportunity for the
submission by the public, either orally or in writing, or both,
of information relating to matters that will be addressed in
the reports.
SEC. 207. IMPACT STUDY BY SECRETARY OF LABOR.
The Secretary of Labor, in consultation with other
appropriate Federal agencies, shall undertake a continuing
review and analysis of the impact that the implementation of
the provisions of this title has with respect to United States
labor; and shall make an annual written report to Congress on
the results of such review and analysis.
SEC. 208. EFFECTIVE DATE AND TERMINATION OF DUTY-FREE TREATMENT.
(a) Effective Date.--This title shall take effect on the
date of enactment.
(b) Termination of Duty-Free Treatment.--No duty-free
treatment extended to beneficiary countries under this title
shall remain in effect 10 years after the date of the enactment
of this title.
F. AFRICAN GROWTH AND OPPORTUNITY ACT
[Excerpts]
[19 U.S.C. 2455a; 2466b, 3701-3706, 3722-3723; P.L. 106-200]
Title I--Extension of Certain Trade Benefits to Sub-Saharan Africa
Subtitle A--Trade Policy for Sub-Saharan Africa
SEC. 101. SHORT TITLE.
This title may be cited as the ``African Growth and
Opportunity Act''.
SEC. 102. FINDINGS.
Congress finds that--
(1) it is in the mutual interest of the United States
and the countries of sub-Saharan Africa to promote
stable and sustainable economic growth and development
in sub-Saharan Africa;
(2) the 48 countries of sub-Saharan Africa form a
region richly endowed with both natural and human
resources;
(3) sub-Saharan Africa represents a region of
enormous economic potential and of enduring political
significance to the United States;
(4) the region has experienced the strengthening of
democracy as countries in sub-Saharan Africa have taken
steps to encourage broader participation in the
political process;
(5) certain countries in sub-Saharan Africa have
increased their economic growth rates, taken
significant steps towards liberalizing their economies,
and made progress toward regional economic integration
that can have positive benefits for the region;
(6) despite those gains, the per capita income in
sub-Saharan Africa averages approximately $500
annually;
(7) trade and investment, as the American experience
has shown, can represent powerful tools both for
economic development and for encouraging broader
participation in a political process in which political
freedom can flourish;
(8) increased trade and investment flows have the
greatest impact in an economic environment in which
trading partners eliminate barriers to trade and
capital flows and encourage the development of a
vibrant private sector that offers individual African
citizens the freedom to expand their economic
opportunities and provide for their families;
(9) offering the countries of sub-Saharan Africa
enhanced trade preferences will encourage both higher
levels of trade and direct investment in support of the
positive economic and political developments under way
throughout the region; and
(10) encouraging the reciprocal reduction of trade
and investment barriers in Africa will enhance the
benefits of trade and investment for the region as well
as enhance commercial and political ties between the
United States and sub-Saharan Africa.
SEC. 103. STATEMENT OF POLICY.
Congress supports--
(1) encouraging increased trade and investment
between the United States and sub-Saharan Africa;
(2) reducing tariff and nontariff barriers and other
obstacles to sub-Saharan African and United States
trade;
(3) expanding United States assistance to sub-Saharan
Africa's regional integration efforts;
(4) negotiating reciprocal and mutually beneficial
trade agreements, including the possibility of
establishing free trade areas that serve the interests
of both the United States and the countries of sub-
Saharan Africa;
(5) focusing on countries committed to the rule of
law, economic reform, and the eradication of poverty;
(6) strengthening and expanding the private sector in
sub-Saharan Africa, especially enterprises owned by
women and small businesses;
(7) facilitating the development of civil societies
and political freedom in sub-Saharan Africa,
(8) establishing a United States-Sub-Saharan Africa
Trade and Economic Cooperation Forum; and
(9) the accession of the countries in sub-Saharan
Africa to the Organization for Economic Cooperation and
Development (OECD) Convention on Combating Bribery of
Foreign Public Officials in International Business
Transactions.
SEC. 104. ELIGIBILITY REQUIREMENTS.
(a) In General.--The President is authorized to designate a
sub-Saharan African country as an eligible sub-Saharan African
country if the President determines that the country--
(1) has established, or is making continual progress
toward establishing--
(A) a market-based economy that protects
private property rights, incorporates an open
rules-based trading system, and minimizes
government interference in the economy through
measures such as price controls, subsidies, and
government ownership of economic assets;
(B) the rule of law, political pluralism, and
the right to due process, a fair trial, and
equal protection under the law;
(C) the elimination of barriers to United
States trade and investment, including by--
(i) the provision of national
treatment and measures to create an
environment conducive to domestic and
foreign investment;
(ii) the protection of intellectual
property; and
(iii) the resolution of bilateral
trade and investment disputes;
(D) economic policies to reduce poverty,
increase the availability of health care and
educational opportunities, expand physical
infrastructure, promote the development of
private enterprise, and encourage the formation
of capital markets through micro-credit or
other programs;
(E) a system to combat corruption and
bribery, such as signing and implementing the
Convention on Combating Bribery of Foreign
Public Officials in International Business
Transactions; and
(F) protection of internationally recognized
worker rights, including the right of
association, the right to organize and bargain
collectively, a prohibition on the use of any
form of forced or compulsory labor, a minimum
age for the employment of children, and
acceptable conditions of work with respect to
minimum wages, hours of work, and occupational
safety and health;
(2) does not engage in activities that undermine
United States national security or foreign policy
interests; and
(3) does not engage in gross violations of
internationally recognized human rights or provide
support for acts of international terrorism and
cooperates in international efforts to eliminate human
rights violations and terrorist activities.
(b) Continuing Compliance.--If the President determines
that an eligible sub-Saharan African country is not making
continual progress in meeting the requirements described in
subsection (a)(1), the President shall terminate the
designation of the country made pursuant to subsection (a).
SEC. 105. UNITED STATES-SUB-SAHARAN AFRICA TRADE AND ECONOMIC
COOPERATION FORUM.
(a) Declaration of Policy.--The President shall convene
annual high-level meetings between appropriate officials of the
United States Government and officials of the governments of
sub-Saharan African countries in order to foster close economic
ties between the United States and sub-Saharan Africa.
(b) Establishment.--Not later than 12 months after the date
of the enactment of this Act, the President, after consulting
with Congress and the governments concerned, shall establish a
United States-Sub-Saharan Africa Trade and Economic Cooperation
Forum (in this section referred to as the ``Forum'').
(c) Requirements.--In creating the Forum, the President
shall meet the following requirements:
(1) The President shall direct the Secretary of
Commerce, the Secretary of the Treasury, the Secretary
of State, and the United States Trade Representative to
host the first annual meeting with their counterparts
from the governments of sub-Saharan African countries
eligible under section 104, and those sub-Saharan
African countries that the President determines are
taking substantial positive steps towards meeting the
eligibility requirements in section 104. The purpose of
the meeting shall be to discuss expanding trade and
investment relations between the United States and sub-
Saharan Africa and the implementation of this title
including encouraging joint ventures between small and
large businesses. The President shall also direct the
Secretaries and the United States Trade Representative
to invite to the meeting representatives from
appropriate sub-Saharan African regional organizations
and government officials from other appropriate
countries in sub-Saharan Africa.
(2)(A) The President, in consultation with the
Congress, shall encourage United States nongovernmental
organizations to host annual meetings with
nongovernmental organizations from sub-Saharan Africa
in conjunction with the annual meetings of the Forum
for the purpose of discussing the issues described in
paragraph (1).
(B) ThePresident, in consultation with the Congress,
shall encourage United States representatives of the
private sector to host annual meetings with
representatives of the private sector from sub-Saharan
Africa in conjunction with the annual meetings of the
Forum for the purpose of discussing the issues
described in paragraph (1).
(3) The President shall, to the extent practicable,
meet with the heads of governments of sub-Saharan
African countries eligible under section 104, and those
sub-Saharan African countries that the President
determines are taking substantial positive steps toward
meeting the eligibility requirements in section 104,
not less than once every 2 years for the purpose of
discussing the issues described in paragraph (1). The
first such meeting should take place not later than 12
months after the date of the enactment of this Act.
(d) Dissemination of Information by USIS.--In order to
assist in carrying out the purposes of the Forum, the United
States Information Service shall disseminate regularly, through
multiple media, economic information in support of the free
market economic reforms described in this title.
(e) HIV/AIDS Effect on the sub-Saharan African Workforce.--
In selecting issues of common interest to the United States-
Sub-Saharan Africa Trade and Economic Cooperation Forum, the
President shall instruct the United States delegates to the
Forum to promote a review by the Forum of the HIV/AIDS epidemic
in each sub-Saharan African country and the effect of the HIV/
AIDS epidemic on economic development in each country.
SEC. 106. REPORTING REQUIREMENT.
The President shall submit to the Congress, not later than
1 year after the date of the enactment of this Act, and
annually thereafter through 2008, a comprehensive report on the
trade and investment policy of the United States for sub-
Saharan Africa, and on the implementation of this title and the
amendments made by this title.
SEC. 107. SUB-SAHARAN AFRICA DEFINED.
For purposes of this title, the terms ``sub-Saharan
Africa'', ``sub-Saharan African country'', ``country in sub-
Saharan Africa'', and ``countries in sub-Saharan Africa'' refer
to the following or any successor political entities:
Republic of Angola (Angola).
Republic of Benin (Benin).
Republic of Botswana
(Botswana).
Burkina Faso (Burkina).
Republic of Burundi
(Burundi).
Republic of Cameroon
(Cameroon).
Republic of Cape Verde (Cape
Verde).
Centreal African Republic.
Republic of Chad (Chad).
Federal Islamic Republic of
the Comoros (Comoros).
Democratic Republic of Congo.
Republic of the Congo
(Congo).
Republic of Cote d'Ivoire
(Cote d'Ivoire).
Republic of Djibouti
(Djibouti).
Republic of Equatorial Guinea
(Equatorial Guinea).
State of Eritrea (Eritrea).
Ethiopia
Gabonese Republic (Gabon).
Republic of the Gambia
(Gambia).
Republic of Ghana (Ghana).
Republic of Guinea (Guinea).
Republic of Guinea-Bissau
(Guinea-Bissau).
Republic of Kenya (Kenya).
Kingdom of Lesotho (Lesotho).
Republic of Liberia
(Liberia).
Republic of Madagascar
(Madagascar).
Republic of Malawi (Malawi).
Republic of Mali (Mali).
Islamic Republic of
Mauritania (Mauritania).
Republic of Mauritius
(Mauritius).
Republic of Mozambique
(Mozambique).
Republic of Namibia
(Namibia).
Republic of Niger (Niger).
Federal Republic of Nigeria
(Nigeria).
Republic of Rwanda (Rwanda).
Democratic Republic of Sao
Tome and Principe (Sam Tome and
Principe).
Republic of Senegal
(Senegal).
Republic of Seychelles
(Seychelles).
Republic of Sierra Leone
(Sierra Leone).
Somalia.
Republic of South Africa
(South Africa).
Republic of Sudan (Sudan).
Kingdom of Swaziland
(Swaziland).
United Republic of Tanzania
(Tanzania).
Republic of Togo (Togo).
Republic of Uganda (Uganda).
Republic of Zambia (Zambia).
Republic of Zimbabwe
(Zimbabwe).
Subtitle B--Trade Benefits
SEC. 111. ELIGIBILITY FOR CERTAIN BENEFITS.
[Adds new section 506A to Title V of the Trade Act of 1974, reprinted
elsewhere]
SEC. 112. TREATMENT OF CERTAIN TEXTILES AND APPAREL.
(a) Preferential Treatment.--Textile and Apparel article
described in subsection (b) that are imported directly into the
customs territory of the United States from a beneficiary sub-
Saharan African country described in section 506A(c) of the
Trade Act of 1974, shall enter the United States free of duty
and free of any quantitative limitations in accordance with the
provisions set forth in subsection (b), if the country has
satisfied the requirements set forth in section 113.
(b) Products Covered.--The preferential treatment described
in subsection (a) shall apply only to the following textile and
apparel products:
(1) Apparel articles assembled in beneficiary sub-
saharan african countries.--Apparel articles assembled
in one or more beneficiary sub-Saharan African
countries from fabrics wholly formed and cut in the
United States, from yarns wholly formed in the United
States, (including fabrics not formed from yarns, if
such fabrics are classifiable under heading 5602 or
5603 of the Harmonized Tariff Schedule of the United
States and are wholly formed and cut in the United
States) that are--
(A) entered under subheading 9802.00.80 of
the Harmonized Tariff Schedule of the United
States; or
(B) entered under chapter 61 or 62 of the
Harmonized Tariff Schedule of the United
States, if, after such assembly, the articles
would have qualified for entry under subheading
9802.00.80 of the Harmonized Tariff Schedule of
the United States but for the fact that the
articles were embroidered or subjected to
stone-washing, enzyme-washing, acid washing,
perma-pressing, oven-baking, bleaching,
garment-dyeing, screen printing, or other
similar processes.
(2) Apparel articles cut and assembled in beneficiary
sub-saharan african countries.--Apparel articles cut in
one or more beneficiary sub-Saharan African countries
from fabric wholly formed in the United States from
yarns wholly formed in the United States, (including
fabrics not formed from yarns, if such fabrics are
classifiable under heading 5602 or 5603 of the
Harmonized Tariff Schedule of the United States and are
wholly formed in the United States) if such articles
are assembled in one or more beneficiary sub-Saharan
African countries with thread formed in the United
States.
(3) Apparel articles assembled from regional and
other fabric.--Apparel articles wholly assembled in one
or more beneficiary sub-Saharan African countries from
fabric wholly formed in one or more beneficiary sub-
Saharan African countries from yarn originating either
in the United States or one or more beneficiary sub-
Saharan African countries (including fabrics not formed
from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the Harmonized Tariff Schedule
of the United States and are wholly formed and cut in
one or more beneficiary sub-Saharan African countries),
subject to the following:
(A) Limitations on benefits.--
(i) In general.--Preferential
treatment under this paragraph shall be
extended in the 1-year period beginning
on October 1, 2000, and in each of the
seven succeeding 1-year periods, to
imports of apparel articles in an
amount not to exceed the applicable
percentage of the aggregate square
meter equivalents of all apparel
articles imported into the United
States in the preceding 12-month period
for which data are available.
(ii) Applicable percentage.--For
purposes of this subparagraph, the term
``applicable percentage'' means 1.5
percent for the 1-year period beginning
October 1, 2000, increased in each of
the seven succeeding 1-year periods by
equal increments, so that for the
period beginning October 1, 2007, the
applicable percentage does not exceed
3.5 percent.
(B) Special rule for lesser developed
countries.--
(i) In general.--Subject to
subparagraph (A), preferential
treatment shall be extended through
September 30, 2004, for apparel
articles wholly assembled in one or
more lesser developed beneficiary sub-
Saharan African countries regardless of
the country of origin of the fabric
used to make such articles.
(ii) Lesser developed beneficiary
sub-saharan african country.--For
purposes of this subparagraph the term
``lesser developed beneficiary sub-
Saharan African country'' means a
beneficiary sub-Saharan African country
that had a per capita gross national
product of less than $1,500 a year in
1998, as measured by the World Bank.
(C) Surge mechanism.--
(i) Import monitoring.--The Secretary
of Commerce shall monitor imports of
articles described in this paragraph on
a monthly basis to determine if there
has been a surge in imports of such
articles. In order to permit public
access to preliminary international
trade data and to facilitate the early
identification of potentially
disruptive import surges, the Director
of the Office of Management and Budget
may grant an exception to the
publication dates established for the
release of data on United States
international trade in covered
articles, if the Director notifies
Congress of the early release of the
data.
(ii) Determination of damage or
threat thereof.--Whenever the Secretary
of Commerce determines, based on the
data described in clause (i), or
pursuant to a written request made by
an interested party, that there has
been a surge in imports of an article
described in this paragraph from a
beneficiary sub-Saharan African
country, the Secretary shall determine
whether such article from such country
is being imported in such increased
quantities as to cause serious damage,
or threat thereof, to the domestic
industry producing a like or directly
competitive article. If the Secretary's
determination is affirmative, the
President shall suspend the duty-free
treatment provided for such article
under this paragraph. If the inquiry is
initiated at the request of an
interested party, the Secretary shall
make the determination within 60 days
after the date of the request.
(iii) Factors to consider.--In
determining whether a domestic industry
has been seriously damaged, or is
threatened with serious damage, the
Secretary shall examine the effect of
the imports on relevant economic
indicators such as domestic production,
sales, market share, capacity
utilization, inventories, employment,
profits, exports, prices, and
investment.
(iv) Procedure.--
(I) Initiation.--The
Secretary of Commerce shall
initiate an inquiry within 10
days after receiving a written
request and supporting
information for an inquiry from
an interested party. Notice of
initiation of an inquiry shall
be published in the Federal
Register.
(II) Participation by
interested parties.--The
Secretary of Commerce shall
establish procedures to ensure
participation in the inquiry by
interested parties.
(III) Notice of
determination.--The Secretary
shall publish the determination
described in clause (ii) in the
Federal Register.
(IV) Information available.--
If relevant information is not
available on the record or any
party withholds information
that has been requested by the
Secretary, the Secretary shall
make the determination on the
basis of the facts available.
When the Secretary relies on
information submitted in the
inquiry as facts available, the
Secretary shall, to the extent
practicable, corroborate the
information from independent
sources that are reasonably
available to the Secretary.
(v) Interested party.--For purposes
of this subparagraph, the term
``interested party'' means any producer
of a like or directly competitive
article, a certified union or
recognized union or group of workers
which is representative of an industry
engaged in the manufacture, production,
or sale in the United States of a like
or directly competitive article, a
trade or business association
representing producers or sellers of
like or directly competitive articles,
producers engaged in the production of
essential inputs for like or directly
competitive articles, a certified union
or group of workers which is
representative of an industry engaged
in the manufacture, production, or sale
of essential inputs for the like or
directly competitive article, or a
trade or business association
representing companies engaged in the
manufacture, production, or sale of
such essential inputs.
(4) Sweaters knit-to-shape from cashmere or merino
wool.--
(A) Cashmere.--Sweaters, in chief weight of
cashmere, knit-to-shape in one or more
beneficiary sub-Saharan African countries and
classifiable under subheading 6110.10 of the
Harmonized Tariff Schedule of the United
States.
(B) Merino wool.--Sweaters, 50 percent or
more by weight of wool measuring 18.5 microns
in diameter or finer, knit-to-shape in one or
more beneficiary sub-Saharan African countries.
(5) Apparel articles wholly assembled from fabric or
yarn not available in commercial quantities in the
united states.--
(A) In general.--Apparel articles that are
both cut (or knit-to-shape) and sewn or
otherwise assembled in one or more beneficiary
sub-Saharan African countries, from fabric or
yarn that is not formed in the United States or
a beneficiary sub-Saharan African county, to
the extent that apparel articles of such
fabrics or yarns would be eligible for
preferential treatment, without regard to the
source of the fabric or yarn, under Annex 401
to the NAFTA.
(B) Additional apparel articles.--At the
request of any interested party and subject to
the following requirements, the President is
authorized to proclaim the treatment provided
under subparagraph (A) for yarns or fabrics not
described in subparagraph (A) if--
(i) the President determines that
such yarns or fabrics cannot be
supplied by the domestic industry in
commercial quantities in a timely
manner;
(ii) the President has obtained
advice regarding the proposed action
from the appropriate advisory committee
established under section 135 of the
Trade Act of 1974 (19 U.S.C. 2155) and
the United States International Trade
Commission;
(iii) within 60 calendar days after
the request, the President has
submitted a report to the Committee on
Ways and Means of the House of
Representatives and the Committee on
Finance of the Senate that sets forth--
(I) the action proposed to be
proclaimed and the reasons for
such action; and
(II) the advice obtained
under clause (ii);
(iv) a period of 60 calendar days,
beginning with the first day on which
the President has met the requirements
of subclauses (I) and (II) of clause
(iii), has expired; and
(v) the President has consulted with
such committees regarding the proposed
action during the period referred to in
clause (iii).
(6) Handloomed, handmade, and folklore articles.--A
handloomed, handmade, or folklore article of a
beneficiary sub-Saharan African country or countries
that is certified as such by the competent authority of
such beneficiary country or countries. For purposes of
this paragraph, the President, after consultation with
the beneficiary sub-Saharan African country or
countries concerned, shall determine which, if any,
particular textile and apparel goods of the country (or
countries) shall be treated as being handloomed,
handmade, or folklore articles.
(c) Treatment of Quotas on Textile and Apparel Imports from
Kenya and Mauritius.--The President shall eliminate the
existing quotas on textile and apparel articles imported into
the United States--
(1) from Kenya within 30 days after that country
adopts an effective visa system to prevent unlawful
transshipment of textile and apparel articles and the
use of counterfeit documents relating to the
importation of the articles into the United States; and
(2) from Mauritius within 30 days after that country
adopts such a visa system.
The Customs Service shall provide the necessary technical
assistance to Kenya and Mauritius in the development and
implementation of the visa systems.
(d) Special Rules.--
(1) Findings and trimmings.--
(A) General rule.--An article otherwise
eligible for preferential treatment under this
section shall not be ineligible for such
treatment because the article contains findings
or trimmings of foreign origin, if the value of
such findings and trimmings do not exceed 25
percent of the cost of the components of the
assembled article. Examples of findings and
trimmings are sewing thread, hooks and eyes,
snaps, buttons, ``bow buds'', decorative lace
trim, elastic strips, and zippers, including
zipper tapes and labels. Elastic strips are
considered findings or trimmings only if they
are each less than 1 inch in width and used in
the production of brassieres.
(B) Certain interlinings.--
(i) General rule.--An article
otherwise eligible for preferential
treatment under this section shall not
be ineligible for such treatment
because the article contains certain
interlinings of foreign origin, if the
value of such interlinings (and any
findings and trimmings) does not exceed
25 percent of the cost of the
components of the assembled article.
(ii) Interlinings described.--
Interlinings eligible for the treatment
described in clause (i) include only a
chest type plate, a ``hymo'' piece, or
``sleeve header'', of woven or weft-
inserted warp knit construction and of
coarse animal hair or man-made
filaments.
(iii) Termination of treatment.--The
treatment described in this
subparagraph shall terminate if the
President makes a determination that
United States manufacturers are
producing such interlinings in the
United States in commercial quantities.
(C) Exception.--In the case of an article
described in subsection (b)(2), sewing thread
shall not be treated as findings or trimmings
under subparagraph (A).
(2) De minimis rule.--An article otherwise eligible
for preferential treatment under this section shall not
be ineligible for such treatment because the article
contains fibers or yarns not wholly formed in the
United States or one or more beneficiary sub-Saharan
African countries if the total weight of all such
fibers and yarns is not more than 7 percent of the
total weight of the article.
(e) Definitions.--In this section and section 113:
(1) Agreement on textiles and clothing.--The term
``Agreement on Textiles and Clothing'' means the
Agreement on Textiles and Clothing referred to in
section 101(d)(4) of the Uruguay Round Agreements Act
(19 U.S.C. 3511(d)(4)).
(2) Beneficiary sub-saharan african country, etc.--
The terms ``beneficiary sub-Saharan African country''
and ``beneficiary sub-Saharan African countries'' have
the same meaning as such terms have under section
506A(c) of the Trade Act of 1974.
(3) NAFTA.--The term ``NAFTA'' means the North
American Free Trade Agreement entered into between the
United States, Mexico, and Canada on December 17, 1992.
(f) Effective Date.--This section takes effect on October
1, 2000, and shall remain in effect through September 30, 2008.
SEC. 113. PROTECTIONS AGAINST TRANSSHIPMENT.
(a) Preferential Treatment Conditioned on Enforcement
Measures.--
(1) In general.--The preferential treatment under
section 112(a) shall not be provided to textile and
apparel articles that are imported from a beneficiary
sub-Saharan African country unless that country--
(A) has adopted an effective visa system,
domestic laws, and enforcement procedures
applicable to covered articles to prevent
unlawful transshipment of the articles and the
use of counterfeit documents relating to the
importation of the articles into the United
States;
(B) has enacted legislation or promulgated
regulations that would permit United States
Customs Service verification teams to have the
access necessary to investigate thoroughly
allegations of transshipment through such
country;
(C) agrees to report, on a timely basis, at
the request of the United States Customs
Service, on the total exports from and imports
into that country of covered articles,
consistent with the manner in which the records
are kept by that country;
(D) will cooperate fully with the United
States to address and take action necessary to
prevent circumvention as provided in Article 5
of the Agreement on Textiles and Clothing;
(E) agrees to require all producers and
exporters of covered articles in that country
to maintain complete records of the production
and the export of covered articles, including
materials used in the production, for at least
2 years after the production or export (as the
case may be); and
(F) agrees to report, on a timely basis, at
the request of the United States Customs
Service, documentation establishing the country
of origin of covered articles as used by that
country in implementing an effective visa
system.
(2) Country of origin documentation.--For purposes of
paragraph (1)(F), documentation regarding the country
of origin of the covered articles 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) In general.--
(A) Regulations.--Any importer that claims
preferential treatment under section 112 shall
comply with customs procedures similar in all
material respects to the requirements of
Article 502(1) of the NAFTA as implemented
pursuant to United States law, in accordance
with regulations promulgated by the Secretary
of the Treasury.
(B) Determination.--
(i) In general.--In order to qualify
for the preferential treatment under
section 112 and for a Certificate of
Origin to be valid with respect to any
article for which such treatment is
claimed, there shall be in effect a
determination by the President that
each country described in clause (ii)--
(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.
(ii) Country described.--A country is
described in this clause if it is a
beneficiary sub-Saharan African
country--
(I) from which the article is
exported; or
(II) in which materials used
in the production of the
article originate or in which
the article or such materials,
undergo production that
contributes to a claim that the
article is eligible for
preferential treatment.
(2) Certificate of origin.--The 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 112 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) Penalties for exporters.--If the President
determines, based on sufficient evidence, that an
exporter has engaged in transshipment as defined in
paragraph (4), then the President shall deny for a
period of 5 years all benefits under section 112 to
such exporter, any successor of such exporter, and any
other entity owned or operated by the principal of the
exporter.
(4) Transshipment described.--Transshipment within
the meaning of this subsection has occurred when
preferential treatment for a textile or apparel article
under this Act has been claimed on the basis of
material false information concerning the country of
origin, manufacture, processing, or assembly of the
article or any of its components. For purposes of this
paragraph, false information is material if disclosure
of the true information would mean or would have meant
that the article is or was ineligible for preferential
treatment under section 112.
(5) Monitoring and reports to congress.--The Customs
Service shall monitor and the Commissioner of Customs
shall submit to Congress, not later than March 31 of
each year, a report on the effectiveness of the visa
systems and the implementation of legislation and
regulations described in subsection (a) and on measures
taken by countries in sub-Saharan Africa which export
textiles or apparel to the United States to prevent
circumvention as described in article 5 of the
Agreement on Textiles and Clothing.
(c) Customs Service Enforcement.--The Customs Service
shall--
(1) make available technical assistance to the
beneficiary sub-Saharan African countries--
(A) in the development and implementation of
visa systems, legislation, and regulations
described in subsection (a)(1)(A); and
(B) to train their officials in anti-
transshipment enforcement;
(2) send production verification teams to at least
four beneficiary sub-Saharan African countries each
year; and
(3) to the extent feasible, place beneficiary sub-
Saharan African countries on the Electronic Visa
(ELVIS) program.
(d) Authorization of Appropriations.--There is authorized
to be appropriated to carry out subsection (c) the sum of
$5,894,913.
SEC. 114. TERMINATION.
[Adds new section 506B to Title V of the Trade Act of 1974, reprinted
elsewhere]
[SEC. 115. CLERICAL AMENDMENTS.]
SEC. 116. FREE TRADE AGREEMENTS WITH SUB-SAHARAN AFRICAN COUNTRIES.
(a) Declaration of Policy.--Congress declares that free
trade agreements should be negotiated, where feasible, with
interested countries in sub-Saharan Africa, in order to serve
as the catalyst for increasing trade between the United States
and sub-Saharan Africa and increasing private sector investment
in sub-Saharan Africa.
(b) Plan Requirement.--
(1) In general.--The President, taking into account
the provisions of the treaty establishing the African
Economic Community and the willingness of the
governments of sub-Saharan African countries to engage
in negotiations to enter into free trade agreements,
shall develop a plan for the purpose of negotiating and
entering into one or more trade agreements with
interested beneficiary sub-Saharan African countries.
(2) Elements of Plan.--The plan shall include the
following:
(A) The specific objectives of the United
States with respect to negotiations described
in paragraph (1) and a suggested timetable for
achieving those objectives.
(B) The benefits to both the United States
and the relevant sub-Saharan African countries
with respect to the applicable free trade
agreement or agreements.
(C) A mutually agreed-upon timetable for the
negotiations.
(D) The implications for and the role of
regional and sub-regional organizations in sub-
Saharan Africa with respect to such free trade
agreement or agreements.
(E) Subject matter anticipated to be covered
by the negotiations and United States laws,
programs, and policies, as well as the laws of
participating eligible African countries and
existing bilateral and multilateral and
economic cooperation and trade agreements, that
may be affected by the agreement or agreements.
(F) Procedures to ensure the following:
(i) Adequate consultation with the
Congress and the private sector during
the negotiations.
(ii) Consultation with the Congress
regarding all matters relating to
implementation of the agreement or
agreements.
(iii) Approval by the Congress of the
agreement or agreements.
(iv) Adequate consultations with the
relevant African governments and
African regional and subregional
intergovernmental organizations during
the negotiation of the agreement or
agreements.
(c) Reporting Requirement.--Not later than 12 months after
the date of the enactment of this Act, the President shall
prepare and transmit to the Congress a report containing the
plan developed pursuant to subsection (b).
G. CUSTOMS VALUATION
Section 402 of the Tariff Act of 1930, as amended
[19 U.S.C. 1401a; P.L. 71-361, as amended by P.L. 96-39 and P.L. 96-
490]
SEC. 402. VALUE.
(a) In General.--(1) Except as otherwise specifically
provided for in this Act, imported merchandise shall be
appraised, for the purposes of this Act, on the basis of the
following:
(A) The transaction value provided for under
subsection (b).
(B) The transaction value of identical merchandise
provided for under subsection (c), if the value
referred to in subparagraph (A) cannot be determined,
or can be determined but cannot be used by reason of
subsection (b)(2).
(C) The transaction value of similar merchandise
provided for under subsection (c), if the value
referred to in subparagraph (B) cannot be determined.
(D) The deductive value provided for under subsection
(d), if the value referred to in subparagraph (C)
cannot be determined and if the importer does not
request alternative valuation under paragraph (2).
(E) The computed value provided for under subsection
(e), if the value referred to in subparagraph (D)
cannot be determined.
(F) The value provided for under subsection (f), if
the value referred to in subparagraph (E) cannot be
determined.
(2) If the value referred to in paragraph (1)(C) cannot be
determined with respect to imported merchandise, the
merchandise shall be appraised on the basis of the computed
value provided for under paragraph (1)(E), rather than the
deductive value provided for under paragraph (1)(D), if the
importer makes a request to that effect to the customs officer
concerned within such time as the Secretary shall prescribe. If
the computed value of the merchandise cannot subsequently be
determined, the merchandise may not be appraised on the basis
of the value referred to in paragraph (1)(F) unless the
deductive value of the merchandise cannot be determined under
paragraph (1)(D).
(3) Upon written request therefor by the importer of
merchandise, and subject to provisions of law regarding the
disclosure of information, the customs officer concerned shall
provide the importer with a written explanation of how the
value of that merchandise was determined under this section.
(b) Transaction Value of Imported Merchandise.--(1) The
transaction value of imported merchandise is the price actually
paid or payable for the merchandise when sold for exportation
to the United States, plus amounts equal to--
(A) the packing costs incurred by the buyer with
respect to the imported merchandise;
(B) any selling commission incurred by the buyer with
respect to the imported merchandise;
(C) the value, apportioned as appropriate, of any
assist;
(D) any royalty or license fee related to the
imported merchandise that the buyer is required to pay,
directly or indirectly, as a condition of the sale of
the imported merchandise for exportation to the United
States; and
(E) the proceeds of any subsequent resale, disposal,
or use of the imported merchandise that accrue,
directly or indirectly, to the seller.
The price actually paid or payable for imported merchandise
shall be increased by the amounts attributable to the items
(and no others) described in subparagraphs (A) through (E) only
to the extent that each such amount (i) is not otherwise
included within the price actually paid or payable; and (ii) is
based on sufficient information. If sufficient information is
not available, for any reason, with respect to any amount
referred to in the preceding sentence, the transaction value of
the imported merchandise concerned shall be treated, for
purposes of this section, as one that cannot be determined.
(2)(A) The transaction value of imported merchandise
determined under paragraph (1) shall be the appraised value of
that merchandise for the purposes of this Act only if--
(i) there are not restrictions on the disposition or
use of the imported merchandise by the buyer other than
restrictions that--
(I) are imposed or required by law,
(II) limit the geographical area in which the
merchandise may be resold, or
(III) do not substantially affect the value
of the merchandise;
(ii) the sale of, or the price actually paid or
payable for, the imported merchandise is not subject to
any condition or consideration for which a value cannot
be determined with respect to the imported merchandise;
(iii) no part of the proceeds of any subsequent
resale, disposal, or use of the imported merchandise by
the buyer will accrue directly or indirectly to the
seller, unless an appropriate adjustment therefor can
be made under paragraph (1)(E); and
(iv) the buyer and seller are not related, or the
buyer and seller are related but the transaction value
is acceptable, for purposes of this subsection, under
subparagraph (B).
(B) The transaction value between a related buyer and
seller is acceptable for the purposes of this subsection if an
examination of the circumstances of the sale of the imported
merchandise indicates that the relationship between such buyer
and seller did not influence the price actually paid or
payable; or if the transaction value of the imported
merchandise closely approximates--
(i) the transaction value of identical merchandise,
or of similar merchandise, in sales to unrelated buyers
in the United States; or
(ii) the deductive value or computed value for
identical merchandise or similar merchandise;
but only if each value referred to in clause (i) or (ii) that
is used for comparison relates to merchandise that was exported
to the United States at or about the same time as the imported
merchandise.
(C) In applying the values used for comparison purposes
under subparagraph (B), there shall be taken into account
differences with respect to the sales involved (if such
differences are based on sufficient information whether
supplied by the buyer or otherwise available to the customs
officer concerned) in--
(i) commercial levels;
(ii) quantity levels;
(iii) the costs, commissions, values, fees, and
proceeds described in paragraph (1); and
(iv) the costs incurred by the seller in sales in
which he and the buyer are not related that are not
incurred by the seller in sales in which he and the
buyer are related.
(3) The transaction value of imported merchandise does not
include any of the following, if identified separately from the
price actually paid or payable and from any cost or other item
referred to in paragraph (1):
(A) Any reasonable cost or charge that is incurred
for--
(i) the construction, erection, assembly, or
maintenance of, or the technical assistance
provided with respect to, the merchandise after
its importation into the United States; or
(ii) the transportation of the merchandise
after such importation.
(B) The customs duties and other Federal taxes
currently payable on the imported merchandise by reason
of its importation, and any Federal excise tax on, or
measured by the value of such merchandise for which
vendors in the United States are ordinarily liable.
(4) For purposes of this subsection--
(A) The term ``price actually paid or payable'' means
the total payment (whether direct or indirect, and
exclusive of any costs, charges, or expenses incured
for transportation, insurance, and related services
incident to the international shipment of the
merchandise from the country of exportation to the
place of importation in the United States) made, or to
be made, for imported merchandise by the buyer to, or
for the benefit of, the seller.
(B) Any rebate of, or other decrease in, the price
actually paid or payable that is made or otherwise
effected between the buyer and the seller after the
date of the importation of the merchandise into the
United States shall be disregarded in determining the
transaction value under paragraph (1).
(c) Transaction Value of Identical Merchandise and Similar
Merchandise.--(1) The transaction value of identical
merchandise, or of similar merchandise, is the transaction
value (acceptable as the appraised value for purposes of this
Act under subsection (b) but adjusted under paragraph (2) of
this subsection) of imported merchandise that is--
(A) with respect to the merchandise being appraised,
either identical merchandise or similar merchandise, as
the case may be; and
(B) exported to the United States at or about the
time that the merchandise being appraised is exported
to the United States.
(2) Transaction values determined under this subsection
shall be based on sales of identical merchandise or similar
merchandise, as the case may be, at the same commercial level
and in substantially the same quantity as the sales of the
merchandise being appraised. If no such sale is found, sales of
identical merchandise or similar merchandise at either a
different commercial level or in different quantities, or both,
shall be used, but adjusted to take account of any such
difference. Any adjustment made under this paragraph shall be
based on sufficient information. If in applying this paragraph
with respect to any imported merchandise, two or more
transaction values for identical merchandise, or for similar
merchandise, are determined, such imported merchandise shall be
appraised on the basis of the lower or lowest of such values.
(d) Deductive Value.--(1) For purposes of this subsection,
the term ``merchandise concerned'' means the merchandise being
appraised, identical merchandise, or similar merchandise.
(2)(A) The deductive value of the merchandise being
appraised is whichever of the following prices (as adjusted
under paragraph (3)) is appropriate depending upon when and in
what condition the merchandise concerned is sold in the United
States:
(i) If the merchandise concerned is sold in the
condition as imported at or about the date of
importation of the merchandise being appraised, the
price is the unit price at which the merchandise
concerned is sold in the greatest aggregate quantity at
or about such date.
(ii) If the merchandise concerned is sold in the
condition as imported but not sold at or about the date
of importation of the merchandise being appraised, the
price is the unit price at which the merchandise
concerned is sold in the greatest aggregate quantity
after the date of importation of the merchandise being
appraised but before the close of the 90th day after
the date of such importation.
(iii) If the merchandise concerned was not sold in
the condition as imported and not sold before the close
of the 90th day after the date of importation of the
merchandise being appraised, the price is the unit
price at which the merchandise being appraised, after
further processing, is sold in the greatest aggregate
quantity before the 180th day after the date of such
importation. This clause shall apply to appraisement of
merchandise only if the importer so elects and notifies
the customs officer concerned of that election within
such time as shall be prescribed by the Secretary.
(B) For purposes of subparagraph (A), the unit price at
which merchandise is sold in the greatest aggregate quantity is
the unit price at which such merchandise is sold to unrelated
persons, at the first commercial level after importation (in
cases to which subparagraph (A) (i) or (ii) applies) or after
further processing (in cases to which subparagraph (A)(iii)
applies) at which such sales take place, in a total volume that
is (i) greater than the total volume sold at any other unit
price, and (ii) sufficient to establish the unit price.
(3)(A) The price determined under paragraph (2) shall be
reduced by an amount equal to--
(i) any commission usually paid or agreed to be paid,
or the addition usually made for profit and general
expenses, in connection with sales in the United States
of imported merchandise that is of the same class or
kind, regardless of the country of exportation, as the
merchandise concerned;
(ii) the actual costs and associated costs of
transportation and insurance incurred with respect to
international shipments of the merchandise concerned
from the country of exportation to the United States;
(iii) the usual costs and associated costs of
transportation and insurance incurred with respect to
shipments of such merchandise from the place of
importation to the place of delivery in the United
States, if such costs are not included as a general
expense under clause (i);
(iv) the customs duties and other Federal taxes
currently payable on the merchandise concerned by
reason of its importation, and any Federal excise tax
on, or measured by the value of, such merchandise for
which vendors in the United States are ordinarily
liable; and
(v) (but only in the case of a price determined under
paragraph (2)(A)(iii)) the value added by the
processing of the merchandise after importation to the
extent that the value is based on sufficient
information relating to cost of such processing.
(B) For purposes of applying paragraph (A)--
(i) the deduction made for profits and general
expenses shall be based upon the importer's profits and
general expenses, unless such profits and general
expenses are inconsistent with those reflected in sales
in the United States of imported merchandise of the
same class or kind, in which case the deduction shall
be based on the usual profit and general expenses
reflected in such sales, as determined from sufficient
information; and
(ii) any State or local tax imposed on the importer
with respect to the sale of imported merchandise shall
be treated as a general expense.
(C) The price determined under paragraph (2) shall be
increased (but only to the extent that such costs are not
otherwise included) by an amount equal to the packing costs
incurred by the importer or the buyer, as the case may be, with
respect to the merchandise concerned.
(D) For purposes of determining the deductive value of
imported merchandise, and sale to a person who supplies any
assist for use in connection with the production or sale for
export of the merchandise concerned shall be disregarded.
(e) Computed Value.--(1) The computed value of imported
merchandise is the sum of--
(A) the cost of the value of the materials and the
fabrication and other processing of any kind employed
in the production of the imported merchandise;
(B) an amount for profit and general expenses equal
to that usually reflected in sales of merchandise of
the same class or kind as the imported merchandise that
are made by the producers in the country of exportation
for export to the United States;
(C) any assist, if its value is not included under
subparagraph (A) or (B); and
(D) the packing costs.
(2) For purposes of paragraph (1)--
(A) the cost or value of materials under paragraph
(1)(A) shall not include the amount of any internal tax
imposed by the country of exportation that is directly
applicable to the materials or their disposition if the
tax is remitted or refunded upon the exportation of the
merchandise in the production of which the materials
were used; and
(B) the amount for profit and general expenses under
paragraph (1)(B) shall be based upon the producer's
profits and expenses, unless the producer's profits and
expenses are inconsistent with those usually reflected
in sales of merchandise of the same class or kind as
the imported merchandise that are made by producers in
the country of exportation for export to the United
States, in which case the amount under paragraph (1)(B)
shall be based on the usual profit and general expenses
of such producers in such sales, as determined from
sufficient information.
(f) Value if Other Values Cannot Be Determined or Used.--
(1) If the value of imported merchandise cannot be determined,
or otherwise used for purposes of this Act, under subsections
(b) through (e), the merchandise shall be appraised for the
purposes of this Act on the basis of a value that is derived
from the methods set forth in such subsection, with such
methods being reasonably adjusted to the extent necessary to
arrive at a value.
(2) Imported merchandise may not be appraised, for the
purposes of this Act, on the basis of--
(A) the selling price in the United States of
merchandise produced in the United States;
(B) a system that provides for the appraisement of
imported merchandise at the higher of two alternative
values;
(C) the price of the merchandise in the domestic
market of the country of exportation;
(D) a cost of production, other than a value
determined under subsection (e) for merchandise being
appraised;
(E) the price of the merchandise for export to a
country other than the United States;
(F) minimum values for appraisement; or
(G) arbitrary or fictitious values.
This paragraph shall not apply with respect to the
ascertainment, determination, or estimation of foreign market
value or United States price under title VII.
(g) Special Rules.--(1) For purposes of this section, the
persons specified in any of the following subparagraphs shall
be treated as persons who are related:
(A) Members of the same family, including brothers,
and sisters (whether by whole or half blood), spouse,
ancestors, and lineal descendants.
(B) Any officer or director of an organization and
such organization.
(C) An officer or director of an organization and an
officer or director of another organization, if each
such individual is also an officer or director in the
other organization.
(D) Partners.
(E) Employer and employee.
(F) Any person directly or indirectly owning,
controlling, or holding with power to vote, 5 percent
or more of the outstanding voting stock or shares of
any organization and such organization.
(G) Two or more persons directly or indirectly
controlling, controlled by, or under common control
with, any person.
(2) For purposes of this section, merchandise (including,
but not limited to, identical merchandise and similar
merchandise) shall be treated as being of the same class or
kind as other merchandise if it is within a group or range of
merchandise produced by a particular industry or industry
sector.
(3) For purposes of this section, information that is
submitted by an importer, buyer, or producer in regard to the
appraisement of merchandise may not be rejected by the customs
officer concerned on the basis of the accounting method by
which that information was prepared, if the preparation was in
accordance with generally accepted accounting principles. The
term ``generally accepted accounting principles'' refers to any
generally recognized consensus or substantial authoritative
support regarding--
(A) which economic resources and obligations should
be recorded as assets and liabilities;
(B) which changes in assets and liabilities should be
recorded;
(C) how the assets and liabilities and changes in
them should be measured;
(D) what information should be disclosed and how it
should be disclosed; and
(E) which financial statements should be prepared.
The applicability of a particular set of generally accepted
accounting principles will depend upon the basis on which the
value of the merchandise is sought to be established.
(h) Definitions.--As used in this section--
(1)(A) The term ``assist'' means any of the following
if supplied directly or indirectly, and free of charge
or at reduced cost, by the buyer of imported
merchandise for use in connection with the production
or the sale for export to the United States of the
merchandise:
(i) Materials, components, parts, and similar
items incorporated in the imported merchandise.
(ii) Tools, dies, molds, and similar items
used in the production of the imported
merchandise.
(iii) Merchandise consumed in the production
of the imported merchandise.
(iv) Engineering, development, artwork,
design work, and plans and sketches that are
undertaken elsewhere than in the United States
and are necessary for the production of the
imported merchandise.
(B) No service or work to which subparagraph (A)(iv)
applies shall be treated as an assist for purposes of
this section if such service or work--
(i) is performed by an individual who is
domiciled within the United States;
(ii) is performed by that individual while he
is acting as an employee or agent of the buyer
of the imported merchandise; and
(iii) is incidental to other engineering,
development, artwork, design work, or plans or
sketches that are undertaken within the United
States.
(C) For purposes of this section, the following apply
in determining the value of assists described in
subparagraph (A)(iv):
(i) The value of an assist that is available
in the public domain is the cost of obtaining
copies of the assist.
(ii) If the production of an assist occurred
in the United States and one or more foreign
countries, the value of the assist is the value
thereof that is added outside the United
States.
(2) The term ``identical merchandise'' means--
(A) merchandise that is identical in all
respects to, and was produced in the same
country and by the same person as, the
merchandise being appraised; or
(B) if merchandise meeting the requirement
under subparagraph (A) cannot be found (or for
purposes of applying subsection (b)(2)(B)(i),
regardless of whether merchandise meeting such
requirements can be found), merchandise that is
identical in all repects to, and was produced
in the same country as, but not produced by the
same person as, the merchandise being
appraised.
Such term does not include merchandise that
incorporates or reflects any engineering, development,
artwork, design work, or plan or sketch that--
(I) was supplied free or at reduced cost by
the buyer of the merchandise for use in
connection with the production or the sale for
export to the United States of the merchandise;
and
(II) is not an assist because undertaken
within the United States.
(3) The term ``packing costs'' means the cost of all
containers and coverings of whatever nature and of
packing, whether for labor or materials, used in
placing merchandise in condition, packed ready for
shipment to the United States.
(4) The term ``similar merchandise'' means--
(A) merchandise that--
(i) was produced in the same country
and by the same person as the
merchandise being appraised,
(ii) is like the merchandise being
appraised in characteristics and
component material, and
(iii) is commercially interchangeable
with the merchandise being appraised;
or
(B) if merchandise meeting the requirements
under subparagraph (A) cannot be found (or for
purposes of applying subsection (b)(2)(B)(i),
regardless of whether merchandise meeting such
requirements can be found), merchandise that--
(i) was produced in the same country
as, but not produced by the same person
as, the merchandise being appraised,
and
(ii) meets the requirements set forth
in subparagraph (A) (ii) and (iii).
Such term does not include merchandise that
incorporates or reflects any engineering, development,
artwork, design work, or plan or sketch that--
(I) was supplied free or at reduced cost by
the buyer of the merchandise for use in
connection with the production or the sale for
export to the United States of the merchandise;
and
(II) is not an assist because undertaken
within the United States.
(5) The term ``sufficient information'', when
required under this section for determining--
(A) any amount--
(i) added under subsection (b)(1) to
the price actually paid or payable,
(ii) deducted under subsection (d)(3)
as profit or general expense or value
from further processing, or
(iii) added under subsection (e)(2)
as profit or general expense;
(B) and difference taken into account for
purposes of subsection (b)(2)(C); or
(C) any adjustment made under subsection
(c)(2);
means information that establishes the accuracy of such
amount, difference, or adjustment.
H. CUSTOMS USER FEES
Section 13031 of the Consolidated Budget Reconciliation Act of 1985, as
amended
[19 U.S.C. 58c; P.L. 99-272, as amended by P.L. 99-509, P.L. 99-514,
P.L. 100-203, P.L. 100-418, P.L. 100-449, P.L. 100-647, P.L. 101-207,
P.L. 101-382, P.L. 101-508, P.L. 103-66, P.L. 103-182, P.L. 103-465,
P.L. 104-295, P.L. 106-36, P.L. 106-476]
SEC. 13031. FEES FOR CERTAIN CUSTOMS SERVICES.
(a) Schedule of Fees.--In addition to any other fee
authorized by law, the Secretary of the Treasury shall charge
and collect the following fees for the provision of customs
services in connection with the following:
(1) For the arrival of a commercial vessel of 100 net
tons or more, $397.
(2) For the arrival of a commercial truck, $5.
(3) For the arrival of each railroad car carrying
passengers or commercial freight, $7.50.
(4) For all arrivals made during a calendar year by a
private vessel or private aircraft, $25.
(5)(A) Subject to subparagraph (B), for the arrival
of each passenger aboard a commercial vessel or
commercial aircraft from a place outside the United
States (other than a place referred to in subsection
(b)(1)(A)(i) of this section), $5.
(B)For the arrival of each passenger aboard a
commercial vessel from a place referred to in
subsection (b)(1)(A)(i) of this section, $1.75.
(6) For each item of dutiable mail for which a
document is prepared by a customs officer, $5.
(7) For each customs broker permit held by an
individual, partnership, association, or corporate
customs broker, $125 per year.
(8) For the arrival of a barge or other bulk carrier
from Canada or Mexico, $100.
(9)(A) For the processing of merchandise that is
formally entered or released during any fiscal year, a
fee in an amount equal to 0.21 percent ad valorem,
unless adjusted under subparagraph (B).
(B)(i) The Secretary of the Treasury may adjust the
ad valorem rate specified in subparagraph (A) to an ad
valorem rate (but not to a rate of more than 0.21
percent nor less than 0.15 percent) and the amounts
specified in subsection (b)(8)(A)(i) (but not to more
than $485 nor less than $21) to rates and amounts which
would, if charged, offset the salaries and expenses
that will likely be incurred by the Customs Service in
the processing of such entries and releases during the
fiscal year in which such costs are incurred.
(ii) In determining the amount of any adjustment
under clause (i), the Secretary of the Treasury shall
take into account whether there is a surplus or deficit
in the fund established under subsection (f) with
respect to the provision of customs services for the
processing of formal entries and releases of
merchandise.
(iii) An adjustment may not be made under clause (i)
with respect to the fee charged during any fiscal year
unless the Secretary of the Treasury--
(I) not later than 45 days after the date of
the enactment of the Act providing full-year
appropriations for the Customs Service for that
fiscal year, publishes in the Federal Register
a notice of intent to adjust the fee under this
paragraph and the amount of such adjustment;
(II) provides a period of not less than 30
days following publication of the notice
described in subclause (I) for public comment
and consultation with the Committee on Finance
of the Senate and the Committee on Ways and
Means of the House of Representatives regarding
the proposed adjustment and the methodology
used to determine such adjustment;
(III) upon the expiration of the period
provided under subclause (II), notifies such
committees in writing regarding the final
determination to adjust the fee, the amount of
such adjustment, and the methodology used to
determine such adjustment; and
(IV) upon the expiration of the 15-day period
following the written notification described in
subclause (III), submits for publication in the
Federal Register notice of the final
determination regarding the adjustment of the
fee.
(iv) The 15-day period referred to in clause
(iii)(IV) shall be computed by excluding--
(I) the days on which either House is not in
session because of an adjournment of more than
3 days to a day certain or an adjournment of
the Congress sine die; and
(II) any Saturday and Sunday, not excluded
under subclause (I), when either House is not
in session.
(v) An adjustment made under this subparagraph shall
become effective with respect to formal entries and
releases made on or after the 15th calendar day after
the date of publication of the notice described in
clause (iii)(IV) and shall remain in effect until
adjusted under this subparagraph.
(C) If for any fiscal year, the Secretary of the
Treasury determines not to make an adjustment under
subparagraph (B), the Secretary shall, within the time
prescribed under subparagraph (B)(iii)(I), submit a
written report to the Committee on Finance of the
Senate and the Committee on Ways and Means of the House
of Representatives detailing the reasons for
maintaining the current fee and the methodology used
for computing such fee.
(D) Any fee charged under this paragraph, whether or
not adjusted under subparagraph (B), is subject to the
limitations in subsection (b)(8)(A).
(10) For the processing of merchandise that is
informally entered or released, other than at--
(A) a centralized hub facility,
(B) an express consignment carrier facility,
or
(C) a small airport or other facility to
which section 236 of the Trade and Tariff Act
of 1984 applies, if more than 25,000 informal
entries were cleared through such airport or
facility during the fiscal year preceding such
entry or release,
a fee of--
(i) $2 if the entry or release is automated
and not prepared by customs personnel;
(ii) $6 if the entry or release is manual and
not prepared by customs personnel; or
(iii) $9 if the entry or release, whether
automated or manual, is prepared by customs
personnel.
For provisions relating to the informal entry or
release of merchandise at facilities referred to in
subparagraphs (A), (B), and (C), see subsection (b)(9).
(b) Limitations on Fees.--(1)(A) Except as provided in
subsection (a)(5)(B) of this section, no fee may be charged
under subsection (a) of this section for customs services
provided in connection with--
(i) the arrival of any passenger whose journey--
(I) originated in--
(aa) Canada,
(bb) Mexico,
(cc) a territory or possession of the
United States, or
(dd) any adjacent island (within the
meaning of section 101(b)(5) of the
Immigration and Nationality Act (8
U.S.C. 1101(b)(5))), or
(II) originated in the United States and was
limited to--
(aa) Canada,
(bb) Mexico,
(cc) territories and possessions of
the United States, and
(dd) such adjacent islands;
(ii) the arrival of any railroad car the journey of
which originates and terminates in the same country,
but only if no passengers board or disembark from the
train and no cargo is loaded or unloaded from such car
while the car is within any country other than the
country in which such car originates and terminates;
(iii) the arrival of a ferry, except for a ferry
whose operations begin on or after August 1, 1999, and
that operates south of 27 degrees latitude and east of
89 degrees longitude; or
(iv) the arrival of any passenger on board a
commercial vessel traveling only between ports which
are within the customs territory of the United States.
(B) The exemption provided for in subparagraph (A) shall
not apply in the case of the arrival of any passenger on board
a commercial vessel whose journey originates and terminates at
the same place in the United States if there are no intervening
stops.
(C) The exemption provided for in subparagraph (A)(i) shall
not apply to fiscal years 1994, 1995, 1996, and 1997.
(2) No fee may be charged under subsection (a)(2) for the
arrival of a commercial truck during any calendar year after a
total of $100 in fees has been paid to the Secretary of the
Treasury for the provision of customs services for all arrivals
of such commercial truck during such calendar year.
(3) No fee may be charged under subsection (a)(3) for the
arrival of a railroad car whether passenger or freight during
any calendar year after a total of $100 in fees has been paid
to the Secretary of the Treasury for the provision of customs
services for all arrivals of such passenger or freight rail car
during such calendar year.
(4)(A) No fee may be charged under subsection (a)(5) with
respect to the arrival of any passenger--
(i) who is in transit to a destination outside the
customs territory of the United States, and
(ii) for whom customs inspectional services are not
provided.
(B) In the case of a commercial vessel making a single
voyage involving 2 or more United States ports with respect to
which the passengers would otherwise by charged a fee pursuant
to subsection (a)(5), such fee shall be charged only 1 time for
each passenger.
(5) No fee may be charged under subsection (a)(1) for the
arrival of--
(A) a vessel during a calendar year after a total of
$5,955 in fees charged under paragraph (1) or (8) of
subsection (a) has been paid to the Secretary of the
Treasury for the provision of customs services for all
arrivals of such vessel during such calendar year,
(B) any vessel which, at the time of the arrival, is
being used solely as a tugboat, or
(C) any barge or other bulk carrier from Canada or
Mexico.
(6) No fee may be charged under section (a)(8) for the
arrival of a barge or other bulk carrier during a calendar year
after a total of $1,500 in fees charged under paragraph (1) or
(8) of subsection (a) has been paid to the Secretary of the
Treasury for the provision of customs services for all arrivals
of such barge or other bulk carrier during such calendar year.
(7) No fee may be charged under paragraphs (2), (3), or (4)
of subsection (a) for the arrival of any--
(A) commercial truck,
(B) railroad car, or
(C) private vessel,
that is being transported, at the time of the arrival, by any
vessel that is not a ferry.
(8)(A)(i) Subject to clause (ii), the fee charged under
subsection (a)(9) for the formal entry or release of
merchandise may not exceed $485 or be less than $25, unless
adjusted pursuant to subsection (a)(9)(B).
(ii) A surcharge of $3 shall be added to the fee determined
after application of clause (i) for any manual entry or release
of merchandise.
(B) No fee may be charged under subsection (a)(9) or (10)
for the processing of any article that is--
(i) provided for under any item in chapter 98 of the
Harmonized Tariff Schedule of the United States, except
subheading 9802.00.60 or 9802.00.80,
(ii) a product of an insular possession of the United
States, or
(iii) a product of any country listed in subdivision
(c)(ii)(B) or (c)(v) of general note 3 to such
Schedule.
(C) For purposes of applying subsection (a)(9) or (10)--
(i) expenses incurred by the Secretary of the
Treasury in the processing of merchandise do not
include costs incurred in--
(I) air passenger processing,
(II) export control, or
(III) international affairs, and
(ii) any reference to a manual formal or informal
entry or release includes any entry or release filed by
a broker or importer that requires the inputting of
cargo selectivity data into the Automated Commercial
System by customs personnel, except when--
(I) the broker or importer is certified as an
ABI cargo release filer under the Automated
Commercial System at any port within the United
States, or
(II) the entry or release is filed at ports
prior to the full implementation of the cargo
selectivity data system by the Customs Service
at such ports.
(D) The fee charged under subsection (a)(9) or (10) with
respect to the processing of merchandise shall--
(i) be paid by the importer of record of the
merchandise;
(ii) except as otherwise provided in this paragraph,
be based on the value of the merchandise as determined
under section 402 of the Tariff Act of 1930;
(iii) in the case of merchandise classified under
subheading 9802.00.60 of the Harmonized Tariff Schedule
of the United States, be applied to the value of the
foreign repairs or alterations to the merchandise;
(iv) in the case of merchandise classified under
heading 9802.00.80 of such Schedule, be applied to the
full value of the merchandise, less the cost or value
of the component United States products;
(v) in the case of agricultural products of the
United States that are processed and packed in a
foreign trade zone, be applied only to the value of
material used to make the container for such
merchandise, if such merchandise is subject to entry
and the container is of a kind normally used for
packing such merchandise; and
(vi) in the case of merchandise entered from a
foreign trade zone (other than merchandise to which
clause (v) applies), be applied only to the value of
the privileged or nonprivileged foreign status
merchandise under section 3 of the Act of June 18, 1934
(commonly known as the Foreign Trade Zones Act, 19
U.S.C. 81c).
With respect to merchandise that is classified under subheading
9802.00.60 or heading 9802.00.80 of such Schedule and is duty-
free, the Secretary may collect the fee charged on the
processing of the merchandise under subsection (a)(9) or (10)
on the basis of aggregate data derived from financial and
manufacturing reports used by the importer in the normal course
of business, rather than on the basis of entry-by-entry
accounting.
(E) For purposes of subsection (a)(9) and (10), merchandise
is entered or released, as the case may be, if the merchandise
is--
(i) permitted or released under section 448(b) of the
Tariff Act of 1930,
(ii) entered or released from customs custody under
section 484(a)(1)(A) of the Tariff Act of 1930, or
(iii) withdrawn from warehouse for consumption.
(9)(A) With respect to the processing of merchandise that
is informally entered or released at a centralized hub
facility, an express consignment carrier facility, or a small
airport or other facility, the following reimbursements and
payments are required:
(i) In the case of a small airport or other
facility--
(I) the reimbursement which such facility is
required to make during the fiscal year under
section 9701 of title 31, United States Code or
section 236 of the Trade and Tariff Act of
1984; and
(II) an annual payment by the facility to the
Secretary of the Treasury, which is in lieu of
the payment of fees under subsection (a)(10)
for such fiscal year, in an amount equal to the
reimbursement under subclause (I).
(ii) In the case of an express consignment carrier
facility or centralized hub facilty--
(I) an amount, for which the Customs Service
shall be reimbursed under section 524 of the
Tariff Act of 1930, equal to the cost of the
services provided by the Customs Service for
the facility during the fiscal year; and
(II) an annual payment by the facility to the
Secretary of the Treasury, which is in lieu of
the payment of fees under subsection (a)(10)
for such fiscal year, in an amount equal to the
reimbursement made under subclause (I).
(B) For purposes of this paragraph:
(i) The terms ``centralized hub facility'' and
``express consignment carrier facility'' have the
respective meanings that are applied to such terms in
part 128 of chapter I of title 19, Code of Federal
Regulations. Nothing in this paragraph shall be
construed as prohibiting the Secretary of the Treasury
from processing merchandise that is informally entered
or released at any centralized hub facility or express
consignment carrier facility during the normal
operating hours of the Customs Service, subject to
reimbursement and payment under subparagraph (A).
(ii) The term ``small airport or other facility''
means any airport or facility to which section 236 of
the Trade and Tariff Act of 1984 applies, if more than
25,000 informal entries were cleared through such
airport or facility during the preceding fiscal year.
(10)(A) The fee charged under subsection (a)(9) or (10)
with respect to goods of Canadian origin (as determined under
section 202 of the United States-Canada Free-Trade Agreement
Implementation Act of 1988) when the United States-Canada Free-
Trade Agreement is in force shall be in accordance with article
403 of that Agreement.
(B) For goods qualifying under the rules of origin set out
in section 202 of the North American Free Trade Agreement
Implementation Act, the fee under subsection (a)(9) or (10)--
(i) may not be charged with respect to goods that
qualify to be marked as goods of Canada pursuant to
Annex 311 of the North American Free Trade Agreement,
for such time as Canada is a NAFTA country, as defined
in section 2(4) of such Implementation Act; and
(ii) may not be increased after December 31, 1993,
and may not be charged after June 29, 1999, with
respect to goods that qualify to be marked as goods of
Mexico pursuant to such Annex 311, for such time as
Mexico is a NAFTA country. Any service for which an
exemption from such fee is provided by reason of this
paragraph may not be funded with money contained in the
Customs User Fee Account.
(11) No fee may be charged under subsection (a)(9) or (10)
with respect to products of Israel if an exemption with respect
to the fee is implemented under section 112 of the Customs and
Trade Act of 1990.
(c) Definitions.--For purposes of this section--
(1) The term ``ferry'' means any vessel which is
being used--
(A) to provide transportation only between
places that are no more than 300 miles apart,
and
(B) to transport only--
(i) passengers, or
(ii) vehicles, or railroad cars,
which are being used, or have been
used, in transporting passengers or
goods.
(2) The term ``arrival'' means arrival at a port of
entry in the customs territory of the United States.
(3) The term ``customs territory of the United
States'' has the meaning given to such term by general
note 2 of the Harmonized Tariff Schedule of the United
States.
(4) The term ``customs broker permit'' means a permit
issued under section 641(c) of the Tariff Act of 1930
(19 U.S.C. 1641(c)).
(5) The term ``barge or other bulk carrier'' means
any vessel which--
(A) is not self-propelled, or
(B) transports fungible goods that are not
packaged in any form.
(d) Collection.--(1) Each person that issues a document or
ticket to an individual for transportation by a commercial
vessel or commercial aircraft into the customs territory of the
United States shall--
(A) collect from that individual the fee charged
under subsection (a)(5) at the time the document or
ticket is issued; and
(B) separately identify on that document or ticket
the fee charged under subsection (a)(5) as a Federal
inspection fee.
(2) If--
(A) a document or ticket for transportation of a
passenger into the customs territory of the United
States is issued in a foreign country; and
(B) the fee charged under subsection (a)(5) is not
collected at the time such document or ticket is
issued;
the person providing transportation to such passenger shall
collect such fee at the time such passenger departs from the
customs territory of the United States and shall provide such
passenger a receipt for the payment of such fee.
(3) The person who collects fees under paragraph (1) or (2)
shall remit those fees to the Secretary of the Treasury at any
time before the date that is 31 days after the close of the
calendar quarter in which the fees are collected.
(4)(A) Notice of the date on which payment of the fee
imposed by subsection (a)(7) is due shall be published by the
Secretary of the Treasury in the Federal Register by no later
than the date that is 60 days before such due date.
(B) A customs broker permit may be revoked or suspended for
nonpayment of the fee imposed by subsection (a)(7) only if
notice of the date on which payment of such fee is due was
published in the Federal Register at least 60 days before such
due date.
(C) The customs broker's license issued under section
641(b) of the Tariff Act of 1930 (19 U.S.C. 1641(b)) may not be
revoked or suspended merely by reason of nonpayment of the fee
imposed under subsection (a)(7).
(e)(1) Notwithstanding section 451 of the Tariff Act of
1930 (19 U.S.C. 1451) or any other provision of law (other than
paragraph (2)), the customs services required to be provided to
passengers upon arrival in the United States shall be
adequately provided in connection with scheduled airline
flights at customs serviced airports when needed and at no cost
(other than the fees imposed under subsection (a)) to airlines
and airline passengers.
(2)(A) This subsection shall not apply with respect to any
airport, seaport, or other facility to which section 236(c) of
the Trade and Tariff Act of 1984 (19 U.S.C. 58b(c)) applies.
(B) Subparagraph (C) of paragraph (6) shall not apply with
respect to any foreign trade zone or subzone that is located
at, or in the vicinity of, an airport, seaport, or other
facility to which section 236 of the Trade and Tariff Act of
1984 applies.
(3) Notwithstanding section 451 of the Tariff Act of 1930
(19 U.S.C. 1451) or any provision of law--
(A) the customs services required to be provided to
passengers upon arrival in the United States shall be
adequately provided in connection with scheduled
airline flights when needed at places located outside
the customs territory of the United States at which a
customs officer is stationed for the purpose of
providing such customs services, and
(B) other than the fees imposed under subsection (a),
the airlines and airline passengers shall not be
required to reimburse the Secretary of the Treasury for
the costs of providing overtime customs inspectional
services at such places.
(4) Notwithstanding any other provision of law, all customs
services (including, but not limited to, normal and overtime
clearance and preclearance services) shall be adequately
provided, when requested, for--
(A) the clearance of any commercial vessel, vehicle,
or aircraft or its passengers, crew, stores, material,
or cargo arriving, departing, or transiting the United
States;
(B) the preclearance at any customs facility outside
the United States of any commercial vessel, vehicle or
aircraft or its passengers, crew, stores, material, or
cargo; and
(C) the inspection or release of commercial cargo or
other commercial shipments being entered into, or
withdrawn from, the customs territory of the United
States.
(5) For purposes of this subsection, customs services shall
be treated as being ``adequately provided'' if such of those
services that are necessary to meet the needs of parties
subject to customs inspection are provided in a timely manner
taking into account factors such as--
(A) the unavoidability of weather, mechanical, and
other delays;
(B) the necessity for prompt and efficient passenger
and baggage clearance;
(C) the perishability of cargo;
(D) the desirability or unavoidability of late night
and early morning arrivals from various time zones;
(E) the availability (in accordance with regulations
prescribed under subsection (g)(2)) of customs
personnel and resources; and
(F) the need for specific enforcement checks.
(6) Notwithstanding any other provision of law except
paragraph (2), during any period when fees are authorized under
subsection (a), no charges, other than such fees, may be
collected--
(A) for any--
(i) cargo inspection, clearance, or other
customs activity, expense, or service performed
(regardless whether performed outside of normal
business hours on an overtime basis), or
(ii) customs personnel provided, in
connection with the arrival or departure of any
commercial vessel, vehicle, or aircraft, or its
passengers, crew, stores, material, or cargo,
in the United States;
(B) for any preclearance or other customs activity,
expense, or service performed, and any customs
personnel provided, outside the United States in
connection with the departure of any commercial vessel,
vehicle, or aircraft, or its passengers, crew, stores,
material, or cargo, for the United States; or
(C) in connection with--
(i) the activation or operation (including
Customs Service supervision) of any foreign
trade zone or subzone established under the Act
of June 18, 1934 (commonly known as the Foreign
Trade Zones Act, 19 U.S.C. 81a et seq.), or
(ii) the designation or operation (including
Customs Service supervision) of any bonded
warehouse under section 555 of the Tariff Act
of 1930 (19 U.S.C. 1555).
(f) Disposition of Fees.--(1) There is established in the
general fund of the Treasury a separate account which shall be
known as the ``Customs User Fee Account''. Notwithstanding
section 524 of the Tariff Act of 1930 (19 U.S.C. 1524), there
shall be deposited as offsetting receipts into the Customs User
Fee Account all fees collected under subsection (a) except--
(A) the portion of such fees that is required under
paragraph (3) for the direct reimbursement of
appropriations, and
(B) the portion of such fees that is determined by
the Secretary to be excess fees under paragraph (5).
(2) Except as otherwise provided in this subsection, all
funds in the Customs User Fee Account shall be available, to
the extent provided for appropriations Acts, to pay the costs
(other than costs for which direct reimbursement under
paragraph (3) is required) incurred by the United States
Customs Service in conducting commercial operations, including,
but not limited to, all costs associated with commercial
passenger, vessel, vehicle, aircraft, and cargo processing. So
long as there is a surplus of funds in the Customs User Fee
Account, the Secretary of the Treasury may not reduce personnel
staffing levels for providing commercial clearance and
preclearance services.
(3)(A) The Secretary of the Treasury, in accordance with
section 524 of the Tariff Act of 1930 and subject to
subparagraph (B), shall directly reimburse, from the fees
collected under subsection (a) (other than the fees under
subsection (a)(9) and (10) and the excess fees determined by
the Secretary under paragraph (5)), each appropriation for the
amount paid out of that appropriation for the costs incurred by
the Secretary--
(i) in--
(I) paying overtime compensation under
section 5(a) of the Act of February 13, 1911,
(II) paying premium pay under section 5(b) of
the Act of February 13, 1911, but the amount
for which reimbursement may be made under this
subclause may not, for any fiscal year, exceed
the difference between the total cost of all
the premium pay for such year calculated under
section 5(b) and the cost of the night and
holiday premium pay that the Customs Service
would have incurred for the same inspectional
work on the day before the effective date of
section 13813 of the Omnibus Budget
Reconciliation Act of 1993,
(III) paying agency contributions to the
Civil Service Retirement and Disability Fund to
match deductions from the overtime compensation
paid under subclause (I),
(IV) providing all preclearance services for
which the recipients of such services are not
required to reimburse the Secretary of the
Treasury, and
(V) paying foreign language proficiency
awards under section 13812(b) of the Omnibus
Budget Reconciliation Act of 1993,
(ii) to the extent funds remain available after
making reimbursements under clause (i), in providing
salaries for full-time and part-time inspectional
personnel and equipment that enhance customs services
for those persons or entities that are required to pay
fees under paragraphs (1) through (8) of subsection (a)
(distributed on a basis proportionate to the fees
collected under paragraphs (1) through (8) of
subsection(a)), and
(iii) to the extent funds remain available after
making reimbursements under clause (ii), in providing
salaries for up to 50 full-time equivalent inspectional
positions to provide preclearance services.
The transfer of funds required under subparagraph (C)(iii) has
priority over reimbursements under this subparagraph to carry
out subclauses (II), (III), (IV), and (V) of clause (i). Funds
described in clause (ii) shall only be available to reimburse
costs in excess of the highest amount appropriated for such
costs during the period beginning with fiscal year 1990 and
ending with the current fiscal year.
(B) Reimbursement of appropriations under this paragraph--
(i) shall be subject to apportionment or similar
administrative practices;
(ii) shall be made at least quarterly; and
(iii) to the extent necessary, may be made on the
basis of estimates made by the Secretary of the
Treasury and adjustments shall be made in subsequent
reimbursements to the extent that the estimates were in
excess of, or less than, the amounts required to be
reimbursed.
(C)(i) For fiscal year 1991 and subsequent fiscal years,
the amount required to reimburse costs described in
subparagraph (A)(i) shall be projected from actual
requirements, and only the excess of collections over such
projected costs for such fiscal year shall be used as provided
in subparagraph (A)(ii).
(ii) The excess of collections over inspectional overtime
and preclearance costs (under subparagraph (A)(i)) reimbursed
for fiscal years 1989 and 1990 shall be available in fiscal
year 1991 and subsequent fiscal years for the purposes
described in subparagraph (A)(ii), except that $30,000,000 of
such excess shall remain without fiscal year limitation in a
contingency fund and, in any fiscal year in which receipts are
insufficient to cover the costs described in subparagraph (A)
(i) and (ii), shall be used for--
(I) the costs of providing the services described in
subparagraph (A)(i), and
(II) after the costs described in subclause (I) are
paid, the costs of providing the personnel and
equipment described in subparagraph (A)(ii) at the
preceding fiscal year level.
(iii) For each fiscal year, the Secretary of the Treasury
shall calculate the difference between--
(I) the estimated cost for overtime compensation that
would have been incurred during that fiscal year for
inspectional services if section 5 of the Act of
February 13, 1911 (19 U.S.C. 261 and 267), as in effect
before the enactment of section 13811 of the Omnibus
Budget Reconciliation Act of 1993, had governed such
costs, and
(II) the actual cost for overtime compensation,
premium pay, and agency retirement contributions that
is incurred during that fiscal year in regard to
inspectional services under section 5 of the Act of
February 13, 1911, as amended by section 13811 of the
Omnibus Budget Reconciliation Act of 1993, and under
section 8331(3) of title 5, United States Code, as
amended by section 13812(a)(1) of such Act of 1993,
plus the actual cost that is incurred during that
fiscal year for foreign language proficiency awards
under section 13812(b) of such Act of 1993,
and shall transfer from the Customs User Fee Account to the
General Fund of the Treasury an amount equal to the difference
calculated under this clause, or $18,000,000, whichever amount
is less. Transfers shall be made under this clause at least
quarterly and on the basis of estimates to the same extent as
are reimbursements under subparagraph (B)(iii).
(D) At the close of each fiscal year, the Secretary of the
Treasury shall submit a report to the Committee on Finance of
the Senate and the Committee on Ways and Means of the House of
Representatives summarizing the expenditures, on a port-by-port
basis, for which reimbursement has been provided under
subparagraph (A)(ii).
(4) At the close of fiscal year 1988 and each even-numbered
fiscal year occurring thereafter, the Secretary of the Treasury
shall submit a report to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the
Senate regarding how the fees imposed under subsection (a)
(other than the excess fees determined by the Secretary under
paragraph (5)) should be adjusted in order that the balance of
the Customs User Fee Account approximates a zero balance.
Before making recommendations regarding any such adjustments,
the Secretary of the Treasury shall provide adequate
opportunity for public comment. The recommendations shall, as
precisely as possible, propose fees which reflect the actual
costs to the United States Government for the commercial
services provided by the United States Customs Service.
(5) At the close of each of fiscal years 1994, 1995, 1996,
and 1997, the Secretary of the Treasury shall determine the
amount of the fees collected under paragraph (5)(A) of
subsection (a) for that fiscal year that exceeds the amount of
such fees that would have been collected for such fiscal year
if the fees that were in effect on the day before the effective
date of this paragraph applied to such fiscal year. The amount
of the excess fees determined under the preceding sentence
shall be deposited in the Customs User Fee Account and shall be
available for reimbursement of inspectional costs (including
passenger processing costs) not otherwise reimbursed under this
section, and shall be available only to the extent provided in
appropriations Acts.
(6) Of the amounts collected in fiscal year 1999 under
paragraphs (9) and (10) of subsection (a), $50,000,000 shall be
available to the Customs Service, subject to appropriations
Acts, for automated commercial systems. Amounts made available
under this paragraph shall remain available until expended.
(g) Regulations and Enforcement.--(1) The Secretary of the
Treasury may prescribe such rules and regulations as may be
necessary to carry out the provisions of this section.
Regulations issued by the Secretary of the Treasury under this
subsection with respect to the collection of the fees charged
under subsection (a)(5) and the remittance of such fees to the
Treasury of the United States shall be consistent with the
regulations issued by the Secretary of the Treasury for the
collection and remittance of the taxes imposed by subchapter C
of chapter 33 of the Internal Revenue Code of 1954, but only to
the extent the regulations issued with respect to such taxes do
not conflict with the provisions of this section.
(2) Except to the extent otherwise provided in regulations,
all administrative and enforcement provisions of customs laws
and regulations, other than those laws and regulations relating
to drawback, shall apply with respect to any fee prescribed
under subsection (a) of this section, and with respect to
persons liable therefor, as if such fee is a customs duty. For
purposes of the preceding sentence, any penalty expressed in
terms of a relationship to the amount of the duty shall be
treated as not less than the amount which bears a similar
relationship to the amount of the fee assessed. For purposes of
determining the jurisdiction of any court of the United States
or any agency of the United States, any fee prescribed under
subsection (a) of this section shall be treated as if such fee
is a customs duty.
[(h) Conforming Amendments.]
(i) Effect on Other Authority.--Except with respect to
customs services for which fees are imposed under subsection
(a), nothing in this section shall be construed as affecting
the authority of the Secretary of the Treasury to charge fees
under section 214(b) of the Customs Procedural Reform and
Simplification Act of 1978 (19 U.S.C. 58a).
(j) Effective Dates.--(1) Except as otherwise provided in
this subsection, the provisions of this section, and the
amendments and repeals made by this section shall apply with
respect to customs services rendered after the date that is 90
days after the date of enactment of this Act.
(2) Fees may be charged under subsection (a)(5) only with
respect to customs services rendered in regard to arriving
passengers using transportation for which documents or tickets
were issued after the date that is 90 days after such date of
enactment.
(3) Fees may not be charged under subsection (a) after
September 30, 2003.
(k) Advisory Committee.--The Commissioner of Customs shall
establish an advisory committee whose membership shall consist
of representatives from the airline, cruise ship, and other
transportation industries who may be subject to fees under
subsection (a). The advisory committee shall not be subject to
termination under section 14 of the Federal Advisory Committee
Act. The advisory committee shall meet on a periodic basis and
shall advise the Commissioner on issues related to the
performance of the inspectional services of the United States
Customs Service. Such advice shall include, but not be limited
to, such issues as the time periods during which such services
should be performed, the proper number and deployment of
inspection officers, the level of fees, and the appropriateness
of any proposed fee. The Commissioner shall give consideration
to the views of the advosory committee in the exercise of his
or her duties.
Sections 111(f), 112, and 113 of the Customs and Trade Act of 1990, as
amended
[19 U.S.C. 58c note, 19 U.S.C. 2082; P.L. 101-382, as amended by P.L.
101-508]
SEC. 111. CUSTOMS USER FEES.
* * * * * * *
(f) Aggregation of Merchandise Processing Fees.--
(1) Notwithstanding any provision of section 13031 of
the Consolidated Omnibus Budget Reconciliation Act of
1985 (19 U.S.C. 58c), in the case of entries of
merchandise made under the temporary monthly entry
programs established by the Commissioner of Customs
before July 1, 1989, for the purpose of testing entry
processing improvements, the fee charged under section
13031(a)(9) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 for each day's importations
at each port by the same importer from the same
exporter shall be the lesser of--
(A) $400, or
(B) the amount determined by applying the ad
valorem rate currently in effect under such
section 13031(a)(9) to the total value of each
day's importations at each port by the same
importer from the same exporter.
(2) The fees described in paragraph (1) that are
payable under the program described in paragraph (1)
shall be paid with each monthly consumption entry.
Interest shall accrue on the fees paid monthly in
accordance with section 6621 of the Internal Revenue
Code of 1986.
SEC. 112. EXEMPTION OF ISRAELI PRODUCTS FROM CERTAIN USER FEES.
If the United States Trade Representative determines that
the Government of Israel has provided reciprocal concessions in
exchange for the exemption of the products of Israel from the
fees imposed under section 13031(a) (9) and (10) of the
Consolidated Omnibus Budget Reconciliation Act of 1985 (as
amended by section 111), such fees may not be charged with
respect to any product of Israel that is entered, or withdrawn
from warehouse for consumption, on or after the 15th day (which
day may not be before October 1, 1990) after the date on which
the determination is published in the Federal Register.
Section 1893(f) of the Tax Reform Act of 1986, as amended
[19 U.S.C. 58c note; P.L. 99-514, as amended by P.L. 100-203]
SEC. 1893. TECHNICAL AMENDMENTS RELATING TO CUSTOMS USER FEES.
* * * * * * *
(f) Reinstating Limit on Charges for Other Inspection
Services.--Section 53 of the Airport and Airway Development Act
of 1970 (49 U.S.C. 1741), as amended by section 13031(h)(2) of
the Consolidated Omnibus Budget Reconciliation Act of 1985, is
further amended by adding at the end thereof the following new
subsection:
``(e)(1) The cost of any inspection or quarantine service
which is required to be performed by the Federal Government or
any agency thereof at airports of entry or other places of
inspection as a consequence of the operation of aircraft, and
which is performed during regularly established hours of
service on Sundays or holidays shall be reimbursed by the
owners or operators of such aircraft only to the same extent as
if such service had been performed during regularly established
hours of service on weekdays. Notwithstanding any other
provision of law, administrative overhead costs associated with
any inspection or quarantine, service required to be performed
by the United States Government, or any agency thereof, at
airports of entry as a result of the operation of aircraft,
shall not be assessed against the owners or operators thereof.
``(2) Nothing in this subsection may be construed as
requiring reimbursement for costs incurred by the Secretary of
the Treasury in providing customs services described in section
13031(e)(1) of the Consolidated Omnibus Budget Reconciliation
Act of 1985.''.
I. OTHER CUSTOMS LAWS
1. Country of Origin Marking
Section 304 of the Tariff Act of 1930, as amended
[19 U.S.C. 1304; P.L. 71-361, as amended by P.L. 98-573, P.L. 99-514,
P.L. 100-418, P.L. 103-182, P.L. 104-295 and P.L. 106-36]
SEC. 304. MARKING OF IMPORTED ARTICLES AND CONTAINERS.
(a) Marking of Articles.--Except as hereinafter provided,
every article of foreign origin (or its container, as provided
in subsection (b) hereof) imported into the United States shall
be marked in a conspicuous place as legibly, indelibly, and
permanently as the nature of the article (or container) will
permit in such manner as to indicate to an ultimate purchaser
in the United States the English name of the country of origin
of the article. The Secretary of the Treasury may by
regulations--
(1) Determine the character of words and phrases or
abbreviations thereof which shall be acceptable as
indicating the country of origin and prescribe any
reasonable method of marking, whether by printing,
stenciling, stamping, branding, labeling, or by any
other reasonable method, and a conspicuous place on the
article (or container) where the marking shall appear;
(2) Require the addition of any other words or
symbols which may be appropriate to prevent deception
or mistake as to the origin of the article or as to the
origin or any other article with which such imported
article is usually combined subsequent to importation
but before delivery to an ultimate purchaser; and
(3) Authorize the exception of any article from the
requirements of marking if--
(A) Such article is incapable of being
marked;
(B) Such article cannot be marked prior to
shipment to the United States without injury;
(C) Such article cannot be marked prior to
shipment to the United States, except at an
expense economically prohibitive of its
importation;
(D) The marking of a container of such
article will reasonably indicate the origin of
such article;
(E) Such article is a crude substance;
(F) Such article is imported for use by the
importer and not intended for sale in its
imported or any other form;
(G) Such article is to be processed in the
United States by the importer or for his
account otherwise than for the purpose of
concealing the origin of such article and in
such manner that any mark contemplated by this
section would necessarily be obliterated,
destroyed, or permanently concealed;
(H) An ultimate purchaser, by reason of the
character of such article or by reason of the
circumstances of its importation, must
necessarily know the country of origin of such
article even though it is not marked to
indicate its origin;
(I) Such article was produced more than
twenty years prior to its importation into the
United States;
(J) Such article is of a class or kind with
respect to which the Secretary of the Treasury
has given notice by publication in the weekly
Treasury Decisions within two years after July
1, 1937, that articles of such class or kind
were imported in substantial quantities during
the five-year period immediately preceding
January 1, 1937, and were not required during
such period to be marked to indicate their
origin: Provided, That this subdivision shall
not apply after September 1, 1938, to sawed
lumber and timbers, telephone, trolley,
electric-light, and telegraph poles of wood,
and bundles of shingles; but the President is
authorized to suspend the effectiveness of this
proviso if he finds such action required to
carry out any trade agreement entered into
under the authority of the Act of June 12, 1934
(U.S.C., 1934 edition, title 19, sections 1351,
1352, 1353, 1354), as extended; or
(K) Such article cannot be marked after
importation except at an expense which is
economically prohibitive, and the failure to
mark the article before importation was not due
to any purpose of the importer, producer,
seller, or shipper to avoid compliance with
this section.
(b) Marking of Containers.--Whenever an article is excepted
under subdivision (3) of subsection (a) of this section from
the requirements of marking, the immediate container if any, of
such article, or such other container or containers of such
article as may be prescribed by the Secretary of the Treasury,
shall be marked in such manner as to indicate to an ultimate
purchaser in the United States the English name of the country
of origin of such article, subject to all provisions of this
section, including the same exceptions as are applicable to
articles under subdivision (3) of subsection (a) of this
section. If articles are excepted from marking requirements
under clause (F), (G), or (H) of subdivision (3) of subsection
(a) of this section, their usual containers shall not be
subject to the marking requirements of this section. Usual
containers in use as such at the time of importation shall in
no case be required to be marked to show the country of their
own origin.
(c) Marking of Certain Pipe and Fittings.--(1) Except as
provided in paragraph (2), no exception may be made under
subsection (a)(3) with respect to pipes of iron, steel, or
stainless steel, to pipe fittings of steel, stainless steel,
chrome-moly steel, or cast and malleable iron each of which
shall be marked with the English name of the country of origin
by means of die stamping, cast-in mold lettering, etching,
engraving, or continuous paint stenciling.
(2) If, because of the nature of an article, it is
technically or commercially infeasible to mark it by one of the
five methods specified in paragraph (1), the article may be
marked by an equally permanent method of marking or, in the
case of small diameter pipe, tube, and fittings, by tagging the
containers or bundles.
(d) Marking of Compressed Gas Cylinders.--No exception may
be made under subsection (a)(3) with respect to compressed gas
cylinders designed to be used for the transport and storage of
compressed gases whether or not certified prior to exportation
to have been made in accordance with the safety requirements of
sections 178.36 through 178.68 of title 49, Code of Federal
Regulations, each of which shall be marked with the English
name of the country of origin by means of die stamping,
molding, etching, raised lettering, or an equally permanent
method of marking.
(e) Marking of Certain Manhole Rings or Frames, Covers and
Assemblies Thereof.--No exception may be made under subsection
(a)(3) with respect to manhole rings or frames, covers, and
assemblies thereof each of which shall be marked on the top
surface with the English name of the country of origin by means
of die stamping, cast-in-mold lettering, etching, engraving, or
an equally permanent method of marking.
(f) Marking of Certain Coffee and Tea Products.--The
marking requirements of subsections (a) and (b) shall not apply
to articles described in subheadings 0901.21, 0901.22, 0902.10,
0902.20, 0902.30, 0902.40, 2101.10, and 2101.20 of the
Harmonized Tariff Schedule of the United States, as in effect
on January 1, 1995.
(g) Marking of Spices.--The marking requirements of
subsections (a) and (b) shall not apply to articles provided
for under subheadings 0904.11, 0904.12, 0904.20, 0905.00,
0906.10, 0906.20, 0907.00, 0908.10, 0908.20, 0908.30, 0909.10,
0909.20, 0909.30, 0909.40, 0909.50, 0910.10, 0910.20, 0910.30,
0910.40, 0910.50, 0910.91, 0910.99, 1106.20, 1207.40, 1207.50,
1207.91, 1404.90, and 3302.10, and items classifiable in
categories 0712.90.60, 0712.90.8080, 1209.91.2000,
1211.90.2000, 1211.90.8040, 1211.90.8050, 1211.90.8090,
2006.00.3000, 2918.13.2000, 3203.00.8000, 3301.90.1010,
3301.90.1020, and 3301.90.1050, of the Harmonized Tariff
Schedule of the United States, as in effect on January 1, 1995.
(h) Marking of Certain Silk Products.--The marking
requirements of subsections (a) and (b) shall not apply either
to--
(1) articles provided for in subheading 6214.10.10 of
the Harmonized Tariff Schedule of the united States, as
in effect on January 1, 1997; or
(2) articles provided for in heading 5007 of the
Harmonized Tariff Schedule of the United States as in
effect on January 1, 1997.
(i) Additional Duties for Failure to Mark.--If at the time
of importation any article (or its container, as provided in
subsection (b) of this section) is not marked in accordance
with the requirements of this section, and if such article is
not exported or destroyed or the article (or its container, as
provided in subsection (b) of this section) marked after
importation in accordance with the requirements of this section
(such exportation, destruction, or marking to be accomplished
under customs supervision prior to the liquidation of the entry
covering the article, and be allowed whether or not the article
has remained in continuous customs custody), there shall be
levied, collected, and paid upon such article a duty of 10 per
centum ad valorem, which shall be deemed to have accrued at the
time of importation, shall not be construed to be penal, and
shall not be remitted wholly or in part nor shall payment
thereof be avoidable for any cause. Such duty shall be levied,
collected, and paid in addition to any other duty imposed by
law and whether or not the article is exempt from the payment
of ordinary customs duties. The compensation and expenses of
customs officers and employees assigned to supervise the
exportation, destruction, or marking to exempt articles from
the application of the duty provided for in this subsection
shall be reimbursed to the Government by the importer.
(j) Delivery Withheld Until Marked.--No imported article
held in customs custody for inspection, examination, or
appraisement shall be delivered until such article and every
other article of the importation (or their containers), whether
or not released from customs custody, shall have been marked in
accordance with the requirements of this section or until the
amount of duty estimated to be payable under subsection (i) of
this section has been deposited. Nothing in this section shall
be construed as excepting any article (or its container) from
the particular requirements of marking provided for in any
other provision of law.
(k) Treatment of Goods of a NAFTA Country.--
(1) Application of section.--In applying this section
to an article that qualifies as a good of a NAFTA
country (as defined in section 2(4) of the North
American Free Trade Agreement Implementation Act) under
the regulations issued by the Secretary to implement
Annex 311 of the North American Free Trade Agreement--
(A) the exemption under subsection (a)(3)(H)
shall be applied by substituting ``reasonably
know'' for ``necessarily know'';
(B) the Secretary shall exempt the good from
the requirements for marking under subsection
(a) if the good--
(i) is an original work of art, or
(ii) is provided for under subheading
6904.10, heading 8541, or heading 8542
of the Harmonized Tariff Schedule of
the United States; and
(C) subsection (b) does not apply to the
usual container of any good described in
subsection (a)(3) (E) or (I) or subparagraph
(B) (i) or (ii) of this paragraph.
(2) Petition rights of nafta exporters and producers
regarding marking determinations.--
(A) Definitions.--For purposes of this
paragraph:
(i) The term ``adverse marking
decision'' means a determination by the
Customs Service which an exporter or
producer of merchandise believes to be
contrary to Annex 311 of the North
American Free Trade Agreement.
(ii) A person may not be treated as
the exporter or producer of merchandise
regarding which an adverse marking
decision was made unless such person--
(I) if claiming to be the
exporter, is located in a NAFTA
country and is required to
maintain records in that
country regarding exportations
to NAFTA countries; or
(II) if claiming to be the
producer, grows, mines,
harvests, fishes, traps, hunts,
manufactures, processes, or
assembles such merchandise in a
NAFTA country.
(B) Intervention or petition regarding
adverse marking decisions.--If the Customs
Service makes an adverse marking decision
regarding any merchandise, the Customs Service
shall, upon written request by the exporter or
producer of the merchandise, provide to the
exporter or producer a statement of the basis
for the decision. If the exporter or producer
believes that the decision is not correct, it
may intervene in any protest proceeding
initiated by the importer of the merchandise.
If the importer does not file a protest with
regard to the decision, the exporter or
producer may file a petition with the Customs
Service setting forth--
(i) a description of the merchandise;
and
(ii) the basis for its claim that the
merchandise should be marked as a good
of a NAFTA country.
(C) Effect of determination regarding
decision.--If, after receipt and consideration
of a petition filed by an exporter or producer
under subparagraph (B), the Customs Service
determines that the adverse marking decision--
(i) is not correct, the Customs
Service shall notify the petitioner of
the determination and all merchandise
entered, or withdrawn from warehouse
for consumption, more than 30 days
after the date that notice of the
determination under this clause is
published in the weekly Custom Bulletin
shall be marked in conformity with the
determination; or
(ii) is correct, the Customs Service
shall notify the petitioner that the
petition is denied.
(D) Judicial review.--For purposes of
judicial review, the denial of a petition under
subparagraph (C)(ii) shall be treated as if it
were a denial of a petition of an interested
party under section 516 regarding an issue
arising under any of the preceding provisions
of this section.
(l) Penalties.--Any person who, with intent to conceal the
information given thereby or contained therein, defaces,
destroys, removes, alters, covers, obscures, or obliterates any
mark required under the provisions of this Act shall--
(1) upon conviction for the first violation of this
subsection, be fined not more than $100,000, or
imprisoned for not more than 1 year, or both; and
(2) upon conviction for the second or any subsequent
violation of this subsection, be fined not more than
$250,000, or imprisoned for not more than 1 year, or
both.
Rule of Origin for Textile and Apparel Products
Section 334 of the Uruguary Round Agreements Act, as amended
[19 U.S.C. 3592; P.L. 103-465 as amended by P.L. 104-295 and P.L. 106-
200]
SEC. 334. RULES OF ORIGIN FOR TEXTILE AND APPAREL PRODUCTS.
(a) Regulatory Authority.--The Secretary of the Treasury
shall prescribe rules and delivery in a quantity simplementing
the principles contained in subsection (b) of this section for
determining the origin of textiles and apparel products. Such
rules shall be promulgated in final form not later than July 1,
1995.
(b) Principles.--
(1) In general.--Except as otherwise provided for by
statute, a textile or apparel product, for purposes of
the customs laws and the administration of quantitative
restrictions, originates in a country, territory, or
insular possession, and is the growth, product, or
manufacture of that country, territory, or insular
possession, if--
(A) the product is wholly obtained or
produced in that country, territory, or
possession;
(B) the product is a yarn, thread, twine,
cordage, rope, cable, or braiding and--
(i) the constituent staple fibers are
spun in that country, territory, or
possession, or
(ii) the continuous filament is
extruded in that country, territory, or
possession;
(C) the product is a fabric, including a
fabric classified 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 that country, territory, or
possession; or
(D) the product is any other textile or
apparel product that is wholly assembled in
that country, territory, or possession from its
component pieces.
(2) Special rules.--
(A) Notwithstanding paragraph (1)(d) and
except as paraded in subparagraphs (B) and (C);
(i) the origin of a good that is
classified under one of the following
HTS headings or subheadings shall be
determined under subparagraph (A), (B),
(C) of paragraph (1), as appropriate:
5609, 5807, 5811, 6209.20.40, 6213,
6214, 6301, 6302, 6303, 6304, 6305,
6306, 6307.10, 6307.90, 6308, or
9404.90; and
(ii) a textile or apparel product
which is knit to shape shall be
considered to originate in, and be the
growth, product, or manufacture of, the
country, territory, or possession in
which it is knit.
(B) Notwithstanding paragraph (1)(C), fabric
classified under the HTS as of silk, cotton,
man-made fiber, or vegetable fiber shall be
considered to originate in, and be the growth,
product, or manufacture of, the country,
territory, or possession in which the fabric is
both dyed and printed when accompanied by two
or more of the following finishing operations:
bleaching, shrinking, fulling, napping,
decating, permanent stiffening, weighting,
permanent embossing, or moireing.
(C) Notwithstanding paragraph (1)(D) goods
classified under HTS heading 6117.10, 6213.00,
6214.00, 6302.22, 6302.29, 6302.52, 6302.53,
6302.59, 6302.93, 6302.99, 6303.92, 6303.99,
6304.19, 6304.93, 6304.99, 9404.90.85, or
9404.90.95, except for goods classified under
such headings as of cotton or of wool or
consisting of fiber blends containing 16
percent or more by weight of cotton, shall be
considered to originate in, and be the growth,
product, or manufacture of, the country,
territory, or possession in which the fabric is
both dyed and printed when accompanied by two
or more of the following finishing operations:
bleaching, shrinking, fulling, napping,
decating, permanent stiffening, weighting,
permanent embossing, or moireing;
(3) Multicountry rule--If the origin of a good cannot
be determined under paragraph (1) or (2), then that
good shall be considered to originate in, and be the
growth, product, or manufacture of--
(A) the country, territory, or possession in
which the most important assembly or
manufacturing process occurs, or
(B) if the origin of the good cannot be
determined under subparagraph (A), the last
county, territory, or possession in which
important assembly or manufacturing occurs.
(4) Components Cut in the United States.--
(A) The value of a component that is cut to
shape (but not to length, width, or both) in
the United States from foreign fabric and
exported to another country, territory, or
insular possession for assembly into an article
that is then returned to the United States--
(i) shall not be included in the
dutiable value of such article, and
(ii) may be applied toward
determining the percentage referred to
in General Note 7(b)(i)(B) of the HTS,
subject to the limitation provided in
that note.
(B) No article (except a textile or apparel
product) assembled in whole of components
described in subparagraph (A), or of such
components and components that are products of
the United States, in a beneficiary country as
defined in General Note 7(a) of the HTS shall
be treated as a foreign article, or as subject
to duty if--
(i) the components after exportation
from the United States, and
(ii) the article itself before
importation in the United States do not
enter into the commerce of any foreign
country other than such a beneficiary
country.
(5) Exception for United States-Israel Free Trade
Agreement--This section shall not affect, for purposes
of the customs laws and administration of quantitative
restrictions, the status of goods that, under rulings
and administrative practices in effect immediately
before the enactment of this Act, would have originated
in, or been the growth, product, or manufacture of, a
country that is a party to an agreement with the United
States establishing a free trade area, which entered
into force before January 1, 1987. For such purposes,
such rulings and administrative practices that were
applied, immediately before the enactment of this Act,
to determine the origin of textile and apparel products
covered by such agreement shall continue to apply after
the enactment of this Act, and on and after the
effective date described in subsection (c) of this
section, unless such rulings and practices are modified
by the mutual consent of the parties to the agreement.
(c) Effective Date.--This section shall apply to goods
entered, or withdrawn from warehouse, for consumption on or
after July 1, 1996, except that this section shall not apply to
goods if--
(1) the contract for the sale of such goods to the
United States is entered into before July 20, 1994;
(2) all of the material terms of sale in such
contract, including the price and quantity of the
goods, are fixed and determinable before July 20, 1994;
(3) a copy of the contract is filed with the
Commissioner of Customs within 60 days after December
8, 1994, together with a certification that the
contract meets the requirements of paragraphs (1) and
(2); and
(4) the goods are entered, or withdrawn from
warehouse, for consumption on or before January 1,
1998.
The origin of goods to which this section does not apply shall
be determined in accordance with the applicable rules in effect
on July 20, 1994.
Section 1907 (b) and (c) of the Omnibus Trade and Competitiveness Act
of 1988
[19 U.S.C. 1304; P.L. 100-418]
SEC. 1907. IMPORT MARKING PROVISIONS.
* * * * * * *
(b) Marking of Containers of Imported Mushrooms.--Imported
preserved mushrooms shall not be considered to be in compliance
with section 304 of the Tariff Act of 1930 (19 U.S.C. 1304) or
any other law relating to the marking of imported articles
unless the containers thereof indicate in English the country
in which the mushrooms were grown.
(c) Native-American Style Jewelry and Native-American Style
Arts and Crafts.--By no later than the date that is 1 year
after the date of enactment of this Act, the Secretary of the
Treasury shall prescribe and implement regulations under
section 304 of the Tariff Act of 1930 (19 U.S.C. 1304) which
require, to the greatest extent possible, that all Native-
American style jewelry and Native-American style arts and
crafts that are imported into the United States have the
English name of the country of origin of such jewelry or arts
and crafts indelibly marked in a conspicuous place on such
jewelry or arts and crafts by a permanent method of marking.
[Section 207(b) of the NAFTA Implementation Act provides
that: Articles that qualify as goods of a NAFTA country under
regulations issued by the Secretary in accordance with Annex
311 of the Agreement are exempt from the marking requirements
promulgated by the Secretary of the Treasury under section
1907(c) of the Omnibus Trade and Competitiveness Act of 1988
(Public Law 100-418), but are subject to the requirements of
section 304 of the Tariff Act of 1930 (19 U.S.C. 1304).]
Section 210 of the Motor Vehicle Information and Cost Savings Act
[15 U.S.C. 1901 et seq.; P.L. 92-513, as added by P.L. 102-388, section
355]
SEC. 210. LABELING REQUIREMENTS FOR AUTOMOBILES.
(a) Short Title.--This section may be cited as the
``American Automobile Labeling Act''.
(b) Label Requirement.--(1) Each manufacturer of a new
passenger motor vehicle distributed in commerce for sale in the
United States shall annually establish for each model year and
cause to be affixed, and each dealer shall cause to be
maintained, on each such vehicle manufactured on or after
October 1, 1994, in a prominent place, one or more labels--
(A) indicating the percentage (by value) of passenger
motor vehicle equipment installed on such vehicle
within a carline which originated in the United States
and Canada to be identified with the words ``U.S./
Canadian content'';
(B) indicating the final assembly point by city,
State (where appropriate), and country of such
automobile;
(C) in the case of any country (other than the United
States and Canada) in which 15 percent or more (by
value) of equipment installed on passenger motor
vehicles within a carline originated, indicating the
names of at least the 2 countries in which the greatest
amount (by value) of such equipment originated and the
percentage (by value) of the equipment originating in
each such country;
(D) indicating the country of origin of the engine
for each passenger motor vehicle; and
(E) indicating the country of origin of the
transmission for each passenger motor vehicle.
(2) The percentages required to be indicated by this
section may be rounded to the nearest 5 percent by the
manufacturers. Such percentage shall be established at the
beginning of each model year for such carline and shall be
applicable to that carline for the entire model year.
(3) The disclosure requirement of subparagraph (1)(B) of
this section supersedes the disclosure requirement of section
3(b) of the Automobile Information Disclosure Act (15 U.S.C.
1232(b)). A manufacturer who indicates the final assembly point
as required by this section shall be deemed to have satisfied
the disclosure requirement imposed by section 3(b) of the
Automobile Information Disclosure Act.
(c) Form and Content of Label.--The form and content of the
label required under subsection (b), and the manner and
location in which such label shall be affixed, shall be
prescribed by the Secretary by rule. The Secretary shall permit
a manufacturer to comply with this section by allowing such
manufacturer to disclose the information required under this
section on the label required by section 3 of the Automobile
Information Disclosure Act (15 U.S.C. 1232), on the label
required by section 506 of the Motor Vehicle Information and
Cost Savings Act (15 U.S.C. 2006), or on a readily visible
separate label.
(d) Regulations.--The Secretary, in consultation with the
Secretary of Commerce and the Secretary of the Treasury, shall
promulgate such regulations as may be necessary to carry out
this section, including regulations to establish a procedure to
verify the labeling information required by this section. Such
regulations shall provide to the ultimate purchaser of a new
passenger motor vehicle the best and most understandable
information possible about the foreign and U.S./Canada origin
of the equipment of such vehicles without imposing costly and
unnecessary burdens on the manufacturers. The regulations shall
be promulgated promptly after the enactment of this section in
order to provide adequate lead time for all manufacturers to
comply with this section. The regulations shall include
provisions applicable to outside and allied suppliers to
require such suppliers to certify whether a component provided
by such suppliers is U.S./Canada or foreign and to provide such
other information as may be necessary, as determined by the
Secretary, to enable the manufacturer to reasonably comply with
the provisions of this section and to reply on such
certification and information. The regulations applicable to
all suppliers shall be enforceable as a regulation of the
Secretary under the appropriate provisions of this Act.
(e) Violations and Penalties.--Any manufacturer of
automobiles distributed in commerce for sale in the United
States who willfully fails to affix to any new automobile so
manufactured or imported by him for sale in the United States
the label required by this section, or any dealer who fails to
maintain such label as required by this section, shall be fined
not more than $1,000. Such failure with respect to each
automobile shall constitute a separate offense.
(f) Definitions.--For purposes of this section--
(1) The term ``manufacturer'' means any person
engaged in the manufacturing or assembling of new
automobiles, including any person importing new
automobiles, including any person importing new
automobiles for resale and any person who acts for and
is under the control of such manufacturer, assembler,
or importer in connection with the distribution of new
automobiles.
(2) The term ``person'' means an individual,
partnership, corporation, business trust, or any
organized group of persons.
(3) The term ``passenger motor vehicle'' has the
meaning provided in section 2(1) of this Act, except
that it shall include any multipurpose vehicle and
light duty truck that is rated at 8,500 pounds gross
vehicle weight or less.
(4) The term ``passenger motor vehicle equipment''
means any system, subassembly, or component received at
the final vehicle assembly point for installation on,
or attachment to, such vehicle at the time of its
initial shipment by the manufacturer to a dealer for
sale to an ultimate purchaser. The term ``component''
shall not include minor parts, such as attachment
hardware (nuts, bolts, clips, screws, pins, braces,
etc.) and such other similar items as the Secretary, in
consultation with manufacturers and labor, may
prescribe by rule.
(5) The terms ``originated in the United States and
Canada'', ``U.S./Canadian'', and ``of U.S./Canadian
origin'', in referring to automobile equipment, mean:
(A) for outside suppliers, the purchase price
of automobile equipment which contains at least
70 percent value added in the United States and
Canada; and
(B) for allied suppliers, the manufacturer
shall determine the foreign content of any
passenger motor vehicle equipment supplied by
the allied supplier by adding up the purchase
price of all foreign material purchased from
outside suppliers that comprise the individual
passenger motor vehicle equipment and
subtracting such purchase price from the total
purchase price of such equipment. Determination
of foreign or U.S./Canadian origin from outside
suppliers will be consistent with subparagraph
(A).
(6) The term ``new passenger motor vehicle'' means a
passenger motor vehicle the equitable or legal title to
which has never been transferred by a manufacturer,
distributor, or dealer to an ultimate purchaser.
(7) The term ``dealer'' means any person or resident
located in the United States, including any territory
of the United States, or the District of Columbia,
engaged in the sale or distribution of new automobiles
to the ultimate purchaser.
(8) The term ``Secretary'' means the Secretary of
Transportation.
(9) The term ``State'' includes each of the several
States, the District of Columbia, the Commonwealth of
Puerto Rico, Guam, the Virgin Islands, the Canal Zone,
and American Samoa.
(10)(A) The term ``value added in the United States
and Canada'' means a percentage derived as follows:
Value Added equals the total purchase price, minus
total purchase price of foreign content, divided by the
total purchase price.
Costs incurred or profits made at the final vehicle assembly
point and beyond (i.e., advertising, assembly, labor, interest
payments, profits, etc.) shall not be included in such
calculation.
(B) In determining the origin and value added of
engines and transmissions, the following groupings will
be used:
(1) Engines of same displacement produced at
the same plant.
(2) Transmissions of the same type produced
at the same plant.
(11) The term ``carline'' means a name denoting a
group of vehicles which has a degree of commonality in
construction (e.g., body, chassis). Carline does not
consider any level of decor or opulence and is not
generally distinguished by such characteristics as roof
line, number of doors, seats, or windows, except for
light duty trucks. Light duty trucks are considered to
be different carlines than passenger cars.
(12) The term ``country of origin'', in referring to
the origin of an engine or transmission, means the
country in which 50 percent or more of the dollar value
added of an engine or transmission originated. If no
country accounts for 50 percent or more of the dollar
value, then the country of origin is the country from
which the largest share of the value added originated.
The estimate of the percentage of the dollar value
shall be based upon the purchase price of direct
materials as received at individual engine or
transmission plants of engines of the same displacement
and transmissions of the same transmission type. For
the purpose of determining the country of origin for
engines and transmissions, the United States and Canada
shall be treated separately.
(13) When used in reference to passenger motor
vehicle equipment which is of U.S./Canadian origin, the
term ``percentage (by value)'' means the resulting
percentage when the percentage (by value) of such
equipment not of U.S./Canadian origin that will be
installed or included on such vehicles produced within
a carline is subtracted from 100 percent. Value shall
be expressed in terms of purchase price. For both
outside suppliers and allied suppliers the value used
shall be the purchase price of the passenger motor
vehicle equipment as paid at the final assembly point.
(14) The term ``final assembly point'' shall mean the
plant, factory, or other place at which a new passenger
motor vehicle is produced or assembled by a
manufacturer and from which such vehicle is delivered
to a dealer or importer in such a condition that all
component parts necessary to the mechanical operation
of such automobile are included with such vehicle
whether or not such component parts are permanently
installed in or on such vehicle.
(15) The term ``allied supplier'' means a supplier of
passenger motor vehicle equipment that is wholly owned
by the manufacturer, or in the case of a joint venture
vehicle assembly arrangement, any supplier that is
wholly owned by one member of the joint venture
arrangement.
(16) The terms ``foreign'' or ``foreign content''
mean passenger motor vehicle equipment not determined
to be U.S./Canadian origin.
(17) The term ``outside supplier'' means a supplier
of passenger motor vehicle equipment to a
manufacturer's allied supplier or anyone other than an
allied supplier who ships directly to the
manufacturer's final assembly point.
(g) Effect on State Law.--(1) Whenever a content labeling
requirement established under this section is in effect, no
State or political subdivision of a State shall have the
authority to adopt or enforce any law or regulation relating to
the content of vehicles covered by such Federal requirement.
(2) Nothing in this section shall be construed to prevent
any State or political subdivision thereof from establishing
requirements with respect to content of automobiles procured
for its own use.
2. Drawback
Section 313 of the Tariff Act of 1930, as amended
[19 U.S.C. 1313; P.L. 71-361, as amended by Act of June 26, 1936; Act
of Aug. 8, 1951; Act of Aug. 8, 1953; Act of Aug. 6, 1956; P.L. 85-673;
P.L. 90-630; P.L. 91-692; P.L. 96-609; P.L. 98-573; P.L. 99-514, P.L.
100-449, P.L. 101-382, P.L. 103-182, P.L. 103-465, P.L. 104-295, P.L.
106-36, and P.L. 106-476]
SEC. 313. DRAWBACK AND REFUNDS.
(a) Articles Made From Imported Merchandise.--Upon the
exportation or destruction under customs supervision of
articles manufactured or produced in the United States with the
use of imported merchandise provided that those articles have
not been used prior to such exportation or destruction, the
full amount of the duties paid upon the merchandise so used
shall be refunded as drawback, less 1 per centum of such
duties, except that such duties shall not be so refunded upon
the exportation or destruction of flour or by-products produced
from imported wheat. Where two or more products result from the
manipulation of imported merchandise, the drawback shall be
distributed to the several products in accordance with their
relative values at the time of separation.
(b) Substitution for Drawback Purposes.--If imported duty-
paid merchandise and any other merchandise (whether imported or
domestic) of the same kind and quality are used in the
manufacture or production of articles within a period not to
exceed three years from the receipt of such imported
merchandise by the manufacturer or producer of such articles,
there shall be allowed upon the exportation, or destruction
under customs supervision, of any such articles,
notwithstanding the fact that none of the imported merchandise
may actually have been used in the manufacture or production of
the exported or destroyed articles, an amount of drawback equal
to that which would have been allowable had the merchandise
used therein been imported, but only if those articles have not
been used prior to such exportation or destruction; but the
total amount of drawback allowed upon the exportation or
destruction under customs supervision of such articles,
together with the total amount of drawback allowed in respect
of such imported merchandise under any other provision of law,
shall not exceed 99 per centum of the duty paid on such
imported merchandise.
(c) Merchandise Not Conforming to Sample or
Specifications.--Upon the exportation, or destruction under the
supervision of the Customs Service, of merchandise--
(1) not conforming to sample or specifications,
shipped without the consent of the consignee, or
determined to be defective as of the time of
importation;
(2) upon which the duties have been paid;
(3) which has been entered or withdrawn for
consumption; and
(4) which, within 3 years after release from the
custody of the Customs Service, has been returned to
the custody of the Customs Service for exportation or
destruction under the supervision of the Customs
Service;
the full amount of the duties paid upon such merchandise, less
1 percent, shall be refunded as drawback.
(d) Flavoring Extracts; Medicinal or Toilet Preparations;
Bottled Distilled Spirits and Wines.--Upon the exportation of
flavoring extracts, medicinal or toilet preparations (including
perfumery) manufactured or produced in the United States in
part from domestic alcohol on which an internal-revenue tax has
been paid, there shall be allowed a drawback equal in amount to
the tax found to have been paid on the alcohol so used.
Upon the exportation of bottled distilled spirits and wines
manufactured or produced in the United States on which an
internal-revenue tax has been paid or determined, there shall
be allowed, under regulations to be prescribed by the
Commissioner of Internal Revenue, with the approval of the
Secretary of the Treasury, a drawback equal in amount to the
tax found to have been paid or determined on such bottled
distilled spirits, the preceding sentence shall not apply
unless the claim for drawback is filed by the bottler or
packager of the spirits have been stamped or restamped, and
marked, especially for export, under regulations prescribed by
the Commissioner of Internal Revenue, with the approval of the
Secretary of the Treasury.
(e) Imported Salt for Curing Fish.--Imported salt in bond
may be used in curing fish taken by vessels licensed to engage
in the fisheries, and in curing fish on the shores of the
navigable waters of the United States, whether such fish are
taken by licensed or unlicensed vessels, and upon proof that
the salt has been used for either of such purposes, the duties
on the same shall be remitted.
(f) Exportation of Meats Cured With Imported Fish.--Upon
the exportation of meats, whether packed or smoked, which have
been cured in the United States with imported salt, there shall
be refunded, upon satisfactory proof that such meats have been
cured with imported salt, the duties paid on the salt so used
in curing such exported meats, in amounts not less than $100.
(g) Materials for Construction and Equipment of Vessels
Built for Foreigners.--The provisions of this section shall
apply to materials imported and used in the construction and
equipment of vessels built for foreign account and ownership,
or for the government of any foreign country, notwithstanding
that such such vessels may not within the strict meaning of the
term be articles exported.
(h) Jet Aircraft Engines.--Upon the exportation of jet
aircraft engines manufactured or produced abroad that have been
overhauled, repaired, rebuilt, or reconditioned in the United
States with the use of imported merchandise, including parts,
there shall be refunded, upon satisfactory proof that such
imported merchandise has been so used, the duties which have
been paid thereon, in amounts not less than $100.
(i) Time Limitation on Exportation.--No drawback shall be
allowed under the provisions of this section unless the
completed article is exported within five years after
importation of the imported merchandise.
(j) Unused Merchandise Drawback.--
(1) If imported merchandise, on which was paid any
duty, tax, or fee imposed under Federal law because of
its importation--
(A) is, before the close of the 3-year period
beginning on the date of importation--
(i) exported, or
(ii) destroyed under customs
supervision; and
(B) is not used within the United States
before such exportation or destruction;
then upon such exportation or destruction 99 percent of
the amount of each duty, tax, or fee so paid shall be
refunded as drawback. The exporter (or destroyer) has
the right to claim drawback under this paragraph, but
may endorse such right to the importer or any
intermediate party.
(2) Subject to paragraph (4), if there is, with
respect to imported merchandise on which was paid any
duty, tax, or fee imposed under Federal law because of
its importation, any other merchandise (whether
imported or domestic), that--
(A) is commercially interchangeable with such
imported merchandise;
(B) is, before the close of the 3-year period
beginning on the date of importation of the
imported merchandise, either exported or
destroyed under customs supervision; and
(C) before such exportation or destruction--
(i) is not used within the United
States, and
(ii) is in the possession of,
including ownership while in bailment,
in leased facilities, in transit to, or
in any other manner under the
operational control of, the party
claiming drawback under this paragraph,
if that party--
(I) is the importer of the
imported merchandise, or
(II) received from the person
who imported and paid any duty
due on the imported merchandise
a certificate of delivery
transferring to the party the
imported merchandise,
commercially interchangeable
merchandise, or any combination
of imported and commercially
interchangeable merchandise
(and any such transferred
merchandise, regardless of its
origin, will be treated as the
imported merchandise and any
retained merchandise will be
treated as domestic
merchandise);
then upon the exportation or destruction of such other
merchandise the amount of each such duty, tax, and fee
paid regarding the imported merchandise shall be
refunded as drawback, but in no case may the total
drawback on the imported merchandise, whether available
under this paragraph or any other provision of law or
any combination thereof, exceed 99 percent of that
duty, tax, or fee.
(3) The performing of any operation or combination of
operations (including, but not limited to, testing,
cleaning, repacking, inspecting, sorting, refurbishing,
freezing, blending, repairing, reworking, cutting,
slitting, adjusting, replacing components, relabeling,
disassembling, and unpacking), not amounting to
manufacture or production for drawback purposes under
the preceding provisions of this section on--
(A) the imported merchandise itself in cases
to which paragraph (1) applies, or
(B) the commercially interchangeable
merchandise in cases to which paragraph (2)
applies,
shall not be treated as a use of that merchandise for
purposes of applying paragraph (1)(B) or (2)(C).
(4) Effective upon the entry into force of the North
American Free Trade Agreement, the exportation to a
NAFTA country, as defined in section 2(4) of the North
American Free Trade Agreement Implementation Act, of
merchandise that is fungible with and substituted for
imported merchandise, other than merchandise described
in paragraphs (1) through (8) of section 203(a) of that
Act, shall not constitute an exportation for purposes
of paragraph (2).
(k) For purposes of subsections (a) and (b), the use of any
domestic merchandise acquired in exchange for imported
merchandise of the same kind and quality shall be treated as
the use of such imported merchandise if no certificate of
delivery is issued with respect to such imported merchandise.
(l) Regulations.--Allowance of the privileges provided for
in this section shall be subject to compliance with such rules
and regulations as the Secretary of the Treasury shall
prescribe, which may include, but need not be limited to, the
authority for the electronic submission of drawback entries and
the designation of the person to whom any refund or payment of
drawback shall be made.
(m) Source of Payment.--Any drawback of duties that may be
authorized under the provisions of this chapter shall be paid
from the customs receipts of Puerto Rico, if the duties were
originally paid into the Treasury of Puerto Rico.
(n)(1) For purposes of this subsection and subsection (o)--
(A) the term ``NAFTA Act'' means the North American
Free Trade Agreement Implementation Act;
(B) the terms ``NAFTA country'' and ``good subject to
NAFTA drawback'' have the same respective meanings that
are given such terms in sections 2(4) and 203(a) of the
NAFTA Act; and
(C) a refund, waiver, or reduction of duty under
paragraph (2) of this subsection or paragraph (1) of
subsection (o) is subject to section 508(b)(2)(B).
(2) For purposes of subsections (a), (b), (f), (h), (p),
and (q), if an article that is exported to a NAFTA country is a
good subject to NAFTA drawback, no customs duties on the good
may be refunded, waived, or reduced in an amount that exceeds
the lesser of--
(A) the total amount of customs duties paid or owed
on the good on importation into the United States, or
(B) the total amount of customs duties paid on the
good to the NAFTA country.
(3) If Canada ceases to be a NAFTA country and the
suspension of the operation of the United States-Canada Free-
Trade Agreement thereafter terminates, then for purposes of
subsections (a), (b), (f), (h), (j)(2), and (q), the shipment
to Canada during the period such Agreement is in operation of
an article made from or substituted for, as appropriate, a
drawback eligible good under section 204(a) of the United
States-Canada Free-Trade Implementation Act of 1988 does not
constitute an exportation.
(o)(1) For purposes of subsection (g), if--
(A) a vessel is built for the account and ownership
of a resident of a NAFTA country or the government of a
NAFTA country, and
(B) imported materials that are used in the
construction and equipment of the vessel are goods
subject to NAFTA drawback,
the amount of customs duties refunded, waived, or reduced on
such materials may not exceed the lesser of the total amount of
customs duties paid or owed on the materials on importation
into the United States or the total amount of customs duties
paid on the vessel to the NAFTA country.
(2) If Canada ceases to be a NAFTA country and the
suspension of the operation of the United States-Canada Free-
Trade Agreement thereafter terminates, then for purposes of
subsection (g), vessels built for Canadian account and
ownership, or for the Government of Canada, may not be
considered to be built for any foreign account and ownership,
or for the government of any foreign country, except to the
extent that the materials in such vessels are drawback eligible
goods under section 204(a) of the United States-Canada Free-
Trade Implementation Act of 1988. [Section 213(c) of the North
American Free Trade Agreement Implementation Act provides that
these amendments made by section 203(b) of that Act apply
(A) with respect to exports from the United States to
Canada--
(i) on January 1, 1996, if Canada is a NAFTA
country on that date, and
(ii) after such date for so long as Canada
continues to be a NAFTA country; and
(B) with respect to exports from the United States to
Mexico--
(i) on January 1, 2001, if Mexico is a NAFTA
country on that date; and
(ii) after such date for so long as Mexico
continues to be a NAFTA country.]
(p) Substitution of Finished Petroleum Derivatives.--\1\
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\1\ Section 2420(e) of P.L. 106-36 provides that the amendments
made to subsections 313(p)(1), 313(p)(2), 313(p)(3),
313(p)(3)(A)(1)(II), and 313(p)(3)(A)(ii) ``shall take effect as if
included in the amendment made by section 632(a)(6) of the North
American Free Trade Agreement Implementation Act. For purposes of
section 632(b) of that Act, the 3-year requirement set forth in section
313(r) of the Tariff Act of 1930 shall not apply to any drawback claim
filed within 6 months after the date of the enactment of this Act for
which that 3-year period would have expired.''
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(1) In general.--Notwithstanding any other provision
of this section, if--
(A) an article (hereafter referred to in this
subsection as the ``exported article'') of the
same kind and quality as a qualified article is
exported;
(B) the requirements set forth in paragraph
(2) are met; and
(C) a drawback claim is filed regarding the
exported article; drawback shall be allowed as
described in paragraph (4).
(2) Requirements.--The requirements referred to in
paragraph (1) are as follows:
(A) The exporter of the exported article--
(i) manufactured or produced a
qualified article in a quantity equal
to or greater than the quantity of the
exported article,
(ii) purchased or exchanged, directly
or indirectly, a qualified article from
a manufacturer or producer described in
subsection (a) or (b) in a quantity
equal to or greater than the quantity
of the exported article,
(iii) imported a qualified article in
a quantity equal to or greater than the
quantity of the exported article, or
(iv) purchased or exchanged, directly
or indirectly, a qualified article from
an importer in a quantity equal to or
greater than the quantity of the
exported article.
(B) In the case of the requirement described
in subparagraph (A)(ii), the manufacturer or
producer produced the qualified article in a
quantity equal to or greater than the quantity
of the exported article.
(C) In the case of the requirement of
subparagraph (A)(i) or (A)(ii), the exported
article is exported during the period that the
qualified article described in subparagraph
(A)(i) or (A)(ii) (whichever is applicable) is
manufactured or produced, or within 180 days
after the close of such period.
(D) In the case of the requirement of
subparagraph (A)(i) or (A)(ii), the specific
petroleum refinery or production facility which
made the qualified article concerned is
identified.
(E) In the case of the requirement of
subparagraph (A)(iii) or (A)(iv), the exported
article is exported within 180 days after the
date of entry of an imported qualified article
described in subparagraph (A)(iii) or (A)(iv)
(whichever is applicable).
(F) Except as otherwise specifically provided
in this subsection, the drawback claimant
complies with all requirements of this section,
including providing certificates which
establish the drawback eligibility of articles
for which drawback is claimed.
(G) The manufacturer, producer, importer,
transferor, exporter, and drawback claimant of
the qualified article and the exported article
maintain all records required by regulation.
(3) Definition of qualified article, etc.--For
purposes of this subsection--
(A) The term `qualified article' means an
article--
(i) described in--
(I) headings 2707, 2708,
2709.00, 2710, 2711, 2712,
2713, 2714, 2715, 2901, and
2902, and subheadings
2903.21.00, 2909.19.14,
2917.36, 2917.39.04,
2917.39.15, 2926.10.00,
3811.21.00 and 3811.90.00 of
the Harmonized Tariff Schedule
of the United States, or
(II) headings 3901 through
3914 of such Schedule (as such
headings apply to the primary
forms provided under Note 6 to
chapter 39 of the Harmonized
Tariff Schedule of the United
States), and
(ii) which is--
(I) manufactured or produced
as described in subsection (a)
or (b) from crude petroleum or
a petroleum derivative,
(II) imported duty-paid, or
(III) an article of the same
kind and quality as described
in subparagraph (B), or any
combination thereof, that is
transferred, as so certified in
a certificate of delivery or
certificate of manufacture and
delivery in a quantity not
greater than the quantity of
articles purchased or
exchanged. The transferred
merchandise described in
subclause (III), regardless of
its origin, so designated on
the certificate of delivery or
certificate of manufacture and
deliver shall be the qualified
article for purposes of this
section. A party who issues a
certificate of delivery, or
certificate of manufacture and
delivery, shall also certify to
the Commissioner of Customs
that it has not, and will not,
issue such certificates for a
quantity greater than the
amount eligible for drawback
and that appropriate records
will be maintained to
demonstrate that fact.
(B) An article, including an imported,
manufactured, substituted, or exported article,
is of the same kind and quality as the
qualified article for which it is substituted
under this subsection if it is a product that
is commercially interchangeable with or
referred to under the same eight-digit
classification of the Harmonized Tariff
Schedule of the United States as the qualified
article. If an article is referred to under the
same eight-digit classification of the
Harmonized Tariff Schedule of the United States
as the qualified article on January 1, 2000,
then whether or not the article has been
reclassified under another eight-digit
classification after January 1, 2000, the
article shall be deemed to be an article that
is referred to under the same eight-digit
classification of such Schedule as the
qualified article for purposes of the preceding
sentence.
(C) The term ``drawback claimant'' means the
exporter of the exported article or the
refiner, producer, or importer of either the
qualified article or the exported article. Any
person eligible to file a drawback claim under
this subparagraph may designate another person
to file such claim.
(4) Limitation on drawback.--The amount of drawback
payable under this subsection shall not exceed the
amount of drawback that would be attributable to the
article--
(A) manufactured or produced under subsection
(a) or (b) by the manufacturer or producer
described in clause (i) or (ii) of paragraph
(2)(A), or
(B) imported under clause (iii) or (iv) of
paragraph (2)(A), had the claim qualified for
drawback under subsection (j).
(q) Packaging Material.--
(1) In General.--Packaging material, when used on or
for articles or merchandise exported or destroyed under
subsection (a), (b), (c), or (j), shall be eligible
under such subsection for refund, as drawback, of 99
percent of any duty, tax, or fee imposed under Federal
law on the importation of such material.
(2) Additional eligibility.--Packaging material
produced in the United States, which is used by the
manufacturer or any other person on or for articles
which are exported or destroyed under subsection (a) or
(b), shall be eligible under such subsection for
refund, as drawback, of 99 percent of any duty, tax, or
fee importation of such material used to manufacture or
produce the packaging material.
(r) Filing Drawback Claims.--
(1) A drawback entry and all documents necessary to
complete a drawback claim, including those issued by
the Customs Service, shall be filed or applied for, as
applicable, within 3 years after the date of
exportation or destruction of the articles on which
drawback is claimed, except that any landing
certificate required by regulation shall be filed
within the time limit prescribed in such regulation.
Claims not completed within the 3-year period shall be
considered abandoned. No extension will be granted
unless it is established that the Customs Service was
responsible for the untimely filing.
(2) A drawback entry for refund filed pursuant to any
subsection of this section shall be deemed filed
pursuant to any other subsection of this section should
it be determined that drawback is not allowable under
the entry as originally filed but is allowable under
such other subsection.
(3)(A) The Customs Service may, notwithstanding the
limitation set forth in paragraph (1), extend the time
for filing a drawback claim for a period not to exceed
18 months, if--
(i) the claimant establishes to the
satisfaction of the Customs Service that the
claimant was unable to file the drawback claim
because of an event declared by the President
to be a major disaster on or after January 1,
1994; and
(ii) the claimant files a request for such
extension with the Customs Service--
(I) within 1 year from the last day
of the 3-year period referred to in
paragraph (1), or
(II) within 1 year after the date of
the enactment of this paragraph,
whichever is later.
(B) If an extension is granted with respect to a
request filed under this paragraph, the periods of time
for retaining records set forth in subsection (t) of
this section and section 508(c)(3) shall be extended
for an additional 18 months or, in a case to which
subparagraph (A)(ii) applies, for a period not to
exceed 1 year from the date the claim is filed.
(C) For purposes of this paragraph, the term `major
disaster' has the meaning given that term in section
102(2) of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5122(2)).
(s) Designation of Merchandise by Successor.--
(1) For purposes of subsection (b), a drawback
successor may designate imported merchandise used by
the predecessor before the date of succession as the
basis for drawback on articles manufactured by the
drawback successor after the date of succession.
(2) for purposes of subsection (j)(2), a drawback
successor may designate--
(A) imported merchandise which the
predecessor, before the date of succession,
imported; or
(B) imported merchandise, commercially
interchangeable merchandise, or any combination
of imported and commercially interchangeable
merchandise for which the predecessor received,
before the date of succession, from the person
who imported and paid any duty due on the
imported merchandise a certificate of delivery
transferring to the predecessor such
merchandise;
as the basis for drawback on merchandise possessed by
the drawback predecessor after the date of succession.
(3) For purposes of this subsection, the term
``drawback successor'' means an entity to which another
entity (in this subsection referred to as the
``predecessor'') has transferred by written agreement,
merger, or corporate resolution--
(A) all or substantially all of the rights,
privileges, immunities, powers, duties, and
liabilities of the predecessor; or
(B) the assets and other business interests
of a division, plant, or other business unit of
such predecessor, but only if in such transfer
the value of the transferred realty,
personalty, and intangibles (other than
drawback rights, inchoate or otherwise) exceeds
the value of all transferred drawback rights,
inchoate or otherwise.
(4) No drawback shall be paid under this subsection
until either the predecessor or the drawback successor
(who shall also certify that it has the predecessor's
records) certifies that--
(A) the transferred merchandise was not and
will not be claimed by the predecessor, and
(B) the predecessor did not and will not
issue any certificate to any other person that
would enable that person to claim drawback.
(t) Drawback Certificates.--Any person who issues a
certificate which would enable another person to claim drawback
shall be subject to the recordkeeping provisions of this Act,
with the retention period beginning on the date that such
certificate is issued.
(u) Eligibility of Entered or Withdrawn Merchandise.--
Imported merchandise that has not been regularly entered or
withdrawn for consumption shall not satisfy any requirement for
use, exportation, or destruction under this section.
(v) Multiple Drawback Claims.--Merchandise that is exported
or destroyed to satisfy any claim for drawback shall not be the
basis of any other claim for drawback; except that appropriate
credit and deductions for claims covering components or
ingredients of such merchandise shall be made in computing
drawback payments.
(w) Limited Applicability for Certain Agricultural
Products.--
(1) In general.--No drawback shall be available with
respect to an agricultural product subject to the over-
quota rate of duty established under a tariff-rate
quota, except pursuant to subsection (j)(1).
(2) Application to tobacco.--Notwithstanding
paragraph (1), drawback shall also be available
pursuant to subsection (a) with respect to any tobacco
subject to the over-quota rate of duty established
under a tariff-rate quota.
(x) Drawback for Recovered Materials.--For purposes of
subsections (a), (b), and (c), the term ``destruction''
includes a process by which materials are recovered from
imported merchandise or from an article manufactured from
imported merchandise. In determining the amount of duties to be
refunded as drawback to a claimant under this subsection, the
value of recovered materials (including the value of any tax
benefit or royalty payment) that accrues to the drawback
claimant shall be deducted from the value of the imported
merchandise that is destroyed, or from the value of the
merchandise used, or designated as used, in the manufacture of
the article.
3. Entry of Merchandise
Section 484 of the Tariff Act of 1930, as amended
[19 U.S.C. 1484; P.L. 71-361, as amended by P.L. 103-182, P.L. 104-295,
P.L. 104-153, P.L. 106-200, and P.L. 106-476]
SEC. 484. ENTRY OF MERCHANDISE.
(a) Requirement and Time.--
(1) Except as provided in sections 490, 498, 552, and
553, one of the parties qualifying as ``importer of
record'' under paragraph (2)(B), either in person or by
an agent authorized by the party in writing, shall,
using reasonable care--
(A) make entry therefor by filing with the
Customs Service--
(i) such documentation or, pursuant
to an electronic data interchange
system, such information as is
necessary to enable the Customs Service
to determine whether the merchandise
may be released from customs custody,
and
(ii) notification whether an import
activity summary statement will be
filed; and
(B) complete the entry by filing with the
Customs Service the declared value,
classification and rate of duty applicable to
the merchandise, and such other documentation
or, pursuant to an electronic data interchange
system, such other information as is necessary
to enable the Customs Service to--
(i) properly assess duties on the
merchandise,
(ii) collect accurate statistics with
respect to the merchandise, and
(iii) determine whether any other
applicable requirement of law (other
than a requirement relating to release
from customs custody) is met.
(2)(A) The documentation or information required
under paragraph (1) with respect to any imported
merchandise shall be filed or transmitted in such
manner and within such time periods as the Secretary
shall by regulation prescribe. Such regulations shall
provide for the filing of import activity summary
statements, covering entries or warehouse withdrawals
made during a calendar month, within such time period
as is prescribed in regulations but not to exceed the
20th day following such calendar month.
(B) When an entry of merchandise is made under this
section, the required documentation or information
shall be filed or electronically transmitted either by
the owner or purchaser of the merchandise or, when
appropriately designated by the owner, purchaser, or
consignee of the merchandise, a person holding a valid
license under section 641. When a consignee declares on
entry that he is the owner or purchaser of merchandise
the Customs Service may, without liability, accept the
declaration. For the purposes of this Act, the importer
of record must be one of the parties who is eligible to
file the documentation or information required by this
section.
(C) The Secretary, in prescribing regulations to
carry out this subsection, shall establish procedures
which insure the accuracy and timeliness of import
statistics, particularly statistics relevant to the
classification and valuation of imports. Corrections of
errors in such statistical data shall be transmitted
immediately to the Director of the Bureau of the
Census, who shall make corrections in the statistics
maintained by the Bureau. The Secretary shall also
provide, to the maximum extent practicable, for the
protection of the revenue, the enforcement of laws
governing the importation and exportation of
merchandise, the facilitation of the commerce of the
United States, and the equal treatment of all importers
of record of imported merchandise.
(b) Reconciliation.--\2\
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\2\ Section 18(a) of the Miscellaneous Trade and Technical
Corrections Act of 1996 (Public Law 104-295) changed the definition of
``reconciliation'' in section 410(s) of the Tariff Act of 1930 to read
as follows: ``The term `reconciliation' means an electronic process,
initiated at the request of an importer, under which the elements of an
entry (other than those elements related to the admissibility of the
merchandise) that are undetermined at the time the importer files or
transmits the documentation or information required by section
484(a)(1)(B), or the import activity summary statement, are provided to
the Customs Service at a later time.''
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(1) In general.--A party may elect to file a
reconciliation with regard to such entry elements as
are identified by the party pursuant to regulations
prescribed by the Secretary. If the party so elects,
the party shall declare that a reconciliation will be
filed. The declaration shall be made in such manner as
the Secretary shall prescribe and at the time the
documentation or information required by subsection
(a)(1)(B) or the import activity summary statement is
filed with, or transmitted to, the Customs Service, or
at such later time as the Customs Service may, in its
discretion, permit. The reconciliation shall be filed
by the importer of record at such time and in such
manner as the Secretary prescribes but not later than
15 months after the date the importer declares his
intent to file the reconciliation. In the case of
reconciling issues relating to the assessment of
antidumping and countervailing duties, the
reconciliation shall be filed not later than 90 days
after the date the Customs Service advises the importer
that the period of review for antidumping or
countervailing duty purposes has been completed. Before
filing a reconciliation, an importer of record shall
post bond or other security pursuant to such
regulations as the Secretary may prescribe.
(2) Regulations regarding ad/cv duties.--The
Secretary shall prescribe, in consultation with the
Secretary of Commerce, such regulations as are
necessary to adapt the reconciliation process for use
in the collection of antidumping and countervailing
duties.
(c) Release of Merchandise.--The Customs Service may permit
the entry and release of merchandise from customs custody in
accordance with such regulations as the Secretary may
prescribe. No officer of the Customs Service shall be liable to
any person with respect to the delivery of merchandise released
from customs custody in accordance with such regulations.
(d) Signing and Contents.--(1) Entries shall be signed by
the importer of record, or his agent, unless filed pursuant to
an electronic data interchange system. If electronically filed,
each transmission of data shall be certified by an importer of
record or his agent, one of whom shall be resident in the
United States for purposes of receiving service of process, as
being true and correct to the best of his knowledge and belief,
and such transmission shall be binding in the same manner and
to the same extent as a signed document. The entry shall set
forth such facts in regard to the importation as the Secretary
may require and shall be accompanied by such invoices, bills of
lading, certificates, and documents, or their electronically
submitted equivalents, as are required by regulation.
(2) The Secretary, in prescribing regulations governing the
content of entry documentation, shall require that entry
documentation contain such information as may be necessary to
determine whether the imported merchandise bears an infringing
trademark in violation of section 42 of the Act of July 5, 1946
(commonly referred to as the ``Trademark Act of 1946''; 15
U.S.C. 1124), or any other applicable law, including a
trademark appearing on the goods or packaging.
(e) Production of Invoice.--The Secretary may provide by
regulation for the production of an invoice, parts thereof, or
the electronic equivalents thereof, in such manner and form,
and under such terms and conditions, as the Secretary considers
necessary.
(f) Statistical Enumeration.--The Secretary, the Secretary
of Commerce, and the United States International Trade
Commission shall establish from time to time for statistical
purposes an enumeration of articles in such detail as in their
judgment may be necessary, comprehending all merchandise
imported into the United States and exported from the United
States, and shall seek, in conjunction with statistical
programs for domestic production and programs for achieving
international harmonization of trade statistics, to establish
the comparability thereof with such enumeration of articles.
All import entries and export declarations shall include or
have attached thereto an accurate statement specifying, in
terms of such detailed enumeration, the kinds and quantities of
all merchandise imported and exported and the value of the
total quantity of each kind of article.
(g) Statement of Cost of Production.--Under such
regulations as the Secretary may prescribe, the Customs Service
may require a verified statement from the manufacturer or
producer showing the cost of producing the imported
merchandise, if the Customs Service considers such verification
necessary for the appraisement of such merchandise.
(h) Admissibility of Data Electronically Transmitted.--Any
entry or other information transmitted by means of an
authorized electronic data interchange system shall be
admissible in any and all administrative and judicial
proceedings as evidence of such entry or information.
(i) Special Rule For Foreign Trade Zone Operations.--
(1) In general.--Notwithstanding any other provision
of law and except as provided in paragraph (3), all
merchandise (including merchandise of different
classes, types, and categories), withdrawn from a
foreign trade zone during any 7-day period, shall, at
the option of the operator or user of the zone, be the
subject of a single of a single estimated entry or
release filed on or before the first day of the 7-day
period in which the merchandise is to be withdrawn from
the zone. The estimated entry or release shall be
treated as a single entry and a single release of
merchandise for purposes of section 13031(a)(9)(A) of
the Consolidated Omnibus Budget Reconciliation Act of
1985 (19 U.S.C. 58c(a)(9)(A)) and all fee exclusions
and limitations of such section 13031 shall apply,
including the maximum and minimum fee amounts provided
for under subsection (b)(8)(A)(i) of such section. The
entry summary for the estimated entry or release shall
cover only the merchandise actually withdrawn from the
foreign trade zone during the 7-day period.
(2) Other requirements.--The secretary of the
Treasury may require that the operator or user of the
zone--
(A) use an electronic data interchange approved
by the Customs Service--
(i) to file the entries described in
paragraph (1); and
(ii) to pay the applicable duties,
fees, and taxes with respect to the
entries; and
(B) satisfy the Customs Service that
accounting, transportation, and other controls
over the merchandise are adequate to protect
the revenue and meet the requirements of other
Federal agencies.
(3) Exception.--The provisions of paragraph (1) shall
not apply to merchandise the entry of which is
prohibited by law or merchandise for which the filing
of an entry summary is required before the merchandise
is released from customs custody.
(4) Foreign trade zone; zone.--In this subsection, the
terms `foreign trade zone' and `zone' mean a zone
established purusant to the Act of June 18, 1934,
commonly known as the Foreign Trade Zones Act (19
U.S.C. 81a et seq.).
(j) Treatment of Multiple Entries of merchandise as Single
Transaction.--In the case of merchandise that is purchased and
invoiced as a single entity but--
(1) is shipped in an unassembled or disassembled
condition in separate shipments due to the size or
nature of the merchandise, or
(2) is shipped in separate shipments due to the
inability of the carrier to include all of the
merchandise in a single shipment (at the instruction of
the carrier), the Customs Service may, upon application
by an importer in advance, treat such separate
shipments for entry purposes as a single
transaction.''.
(k) Regulations.--Not later than 6 months after the date of
the enactment of this Act, the Secretary of the Treasury shall
issue regulations to carry out section 484(j) of the Tariff Act
of 1930, as added by subsection (a).
REPORT ON CUSTOMS PROCEDURES
[P.L. 106-476 (section 1461)]
SEC. 1461. REPORT ON CUSTOMS PROCEDURES
(a) Review and Report.--The Secretary of the Treasury
shall--
(1) review, in consultation with United States
importers and other interested parties, including
independent third parties selected by the Secretary for
the purpose of conducting such review, customs
procedures and related laws and regulations applicable
to goods and commercial conveyances entering the United
States; and
(2) report to the Congress, not later than 180 days
after the date of the enactment of this Act, on changes
that should be made to reduce reporting and record
retention requirements for commercial parties,
specifically addressing changes needed to--
(A) separate fully and remove the linkage
between data reporting required to determine
the adminissibility and release of goods and
data reporting for other purposes such as
collection of revenue and statistics;
(B) reduce to a minimum data required for
determining the admissibility of goods and
release of goods, consistent with the
protection of public health, safety, or
welfare, or achievement of other policy goals
of the United States;
(C) eliminate or find more efficient means of
collecting data for other purposes that are
unnecessary, overly burdensome, or redundant;
and
(D) enable the implementation, as soon as
possible, of the import activity summary
statement authorized by section 411 of the
Tariff Act of 1930 (19 U.S.C. 1411) as a means
of--
(i) fully separating and removing the
linkage between the functions of
collecting revenue and statistics and
the function of determining the
admissibility of goods that must be
performed for each shipment of goods
entering the United States; and
(ii) allowing for periodic,
consolidated filing of data not
required for determinations of
adminissibility.
(b) Specific Matters.--In preparing the report required by
subsection (a), the Secretary of the Treasury shall
specifically report on the following:
(1) Import procedures, including specific data items
collected, that are required prior and subsequent to
the release of goods or conveyances, identifying the
rationale and legal basis for each procedure and data
requirement, uses of data collected, and procedures or
data requirements that could be eliminated, or deferred
and consolidated into periodic reports such as the
import activity summary statement.
(2) The identity of data and factors necessary to
determine whether physical inspections should be
conducted.
(3) The cost of data collection.
(4) Potential alternative sources and methodologies
for collecting data, taking into account the costs and
other consequences to importers, exporters, carriers,
and the Government of choosing alternative sources.
(5) Recommended changes to the law, regulations of
any agency, or other measures that would improve the
efficiency of procedures and systems of the United
States Government for regulating international trade,
without compromising the effectiveness of procedures
and systems required by law.
4. Protests and Further Administrative Reviews
Sec. 514-516 of the Tariff Act of 1930, as amended.
[19 U.S.C. 1514-1516; P.L. 71-361, as amended by P.L. 91-271, P.L. 96-
39, P.L. 96-417, P.L. 98-573, P.L. 99-514, P.L. 100-418, P.L. 100-449,
P.L. 103-182, P.L. 104-295 and P.L. 106-36]
SEC. 514. PORTEST AGAINST DECISIONS OF THE CUSTOMS SERVICE
(a) Finality of decisions; return of papers.--Except as
provided in subsection (b) of this section, section 501 [19
USCS Sec. 1501] (relating to voluntary reliquidations), section
516 [19 USCS Sec. 1516] (relating to petitions by domestic
interested parties[.]), and section 520 [19 USCS Sec. 1520]
(relating to refunds and errors) of this Act, decisions of the
Customs Service, including the legality of all orders and
findings entering into the same, as to--
(1) the appraised value of merchandise;
(2) the classification and rate and amount of duties
chargeable;
(3) all charges or exactions of whatever character
within the jurisdiction of the Secretary of the
Treasury;
(4) the exclusion of merchandise from entry or
delivery or a demand for redelivery to customs custody
under any provision of the customs laws, except a
determination appealable under section 337 of this Act
[19 USCS Sec. 1337];
(5) the liquidation or reliquidation of an entry, or
reconciliation as to the issues contained therein, or
any modification thereof;
(6) the refusal to pay a claim for drawback; or
(7) the refusal to reliquidate an entry under
subsection (c) or (d) of section 520 of this Act [19
USCS Sec. 1520];
shall be final and conclusive upon all persons (including
the United Sta4s and any officer thereof) unless a protest is
filed in accordance with this section, or unless a civil action
contesting the denial of a protest, in whole or in part, is
commenced in the United States Court of International Trade in
accordance with chapter 169 of title 28 of the United States
Code [28 USCS Sec. Sec. 2631 et seq.] within the time
prescribed by section 2636 [28 USCS Sec. 2636]. When a judgment
or order of the United States Court of International Trade has
become final, the papers transmitted shall be returned,
together with a copy of the judgment or order to the Customs
Service, which shall take action accordingly.
(b) Finality and conclusiveness of customs officers'
determinations.--With respect to determinations made under
section 303 of this Act [19 USCS Sec. 1303] or title VII of
this Act [19 USCS Sec. Sec. 1671 et seq.] Which are reviewable
under section 516A of this title [19 USCS Sec. 1516a],
determinations of the Customs Service are final and conclusive
upon all persons (including the United States and any officer
thereof) unless a civil action contesting a determination
listed in section 516A of this title [19 USCS Sec. 1516a] is
commenced in the United States Court of International Trade, or
review by a binational panel of a determination to which
section 516A(g)(2) [19 USCS Sec. 1516a (g)(2)] applies is
commenced pursuant to section 516A(g) [19 USCS Sec. 1516a(g)]
and article 1904 of The North American Free Trade Agreement or
the United States-Canada Free-Trade Agreement.
(c) Form, number, and amendment of protest; filing of
protest.--
(1) A protest of a decision made under subsection (a)
shall be filed in writing, or transmitted
electronically pursuant to an electronic data
interchange system, in accordance with regulations
prescribed by the Secretary. A protest must set forth
distinctly and specifically--
(A) each decision described in subsection (a)
as to which protest is made;
(B) each category of merchandise affected by
each decision set forth under paragraph (1);
(C) the nature of each objection and the
reasons therefor; and
(D) any other matter required by the
Secretary by regulation.
Only one protest may be filed for each entry of
merchandise, except that where the entry covers
merchandise of different categories, a separate protest
may be filed for each category. In addition, separate
protests filed by different authorized persons with
respect to any one category of merchandise, or with
respect to a determination of origin under section 202
of the North American Free Trade Agreement
Implementation Act [19 USCS Sec. 3332], that is the
subject of a protest are deemed to be part of a single
protest. A protest may be amended, under regulations
prescribed by the Secretary, to set forth objections as
to a decision or decisions described in subsection (a)
which were not the subject of the original protest, in
the form and manner prescribed for a protest, any time
prior to the expiration of the time in which such
protest could have been filed under this section. New
grounds in support of objections raised by a valid
protest or amendment thereto may be presented for
consideration in connection with the review of such
protest pursuant to section 515 of this Act [19 USCS
Sec. 1515] at any time prior to the disposition of the
protest in accordance with that section.
(2) Except as provided in sections 485(d) and 557(b)
of this Act [19 USCS Sec. Sec. 1485(d) and 1557(b)],
protests may be filed with respect to merchandise which
is the subject of a decision specified in subsection
(a) of this section by--
(A) the importers or consignees shown on the
entry papers, or their sureties;
(B) any person paying any charge or exaction;
(C) any person seeking entry or delivery;
(D) any person filing a claim for drawback;
(E) with respect to a determination of origin
under section 202 of the North American Free
Trade Agreement Implementation Act [19 USCS
Sec. 3332], any exporter or producer completed
and signed a NAFTA Certificate of Origin
covering the merchandise; or
(F) any authorized agent of any of the
persons described in clauses (A) through (E).
(3) A protest of a decision, order, or finding
described in subsection (a) shall be filed with the
Customs Service within ninety days after but not
before--
(A) notice of liquidation or reliquidation,
or
(B) in circumstances where subparagraph (A)
is inapplicable, the date of the decision as to
which protest is made.
A protest by a surety which has an unsatisfied legal
claim under its bond may be filed within 90 days from
the date of mailing of notice of demand for payment
against its bond. If another party has not filed a
timely protest, the surety's protest shall certify that
it is not being filed collusively to extend another
authorized person's time to protest as specified in
this subsection.
(d) Limitation on protest of reliquidation. The
reliquidation of an entry shall not open such entry so that a
protest may be filed against the decision of the Customs
Service upon any question not involved in such reliquidation.
(e) Advance notice of certain determination. Except as
provided in subsection (f), an exporter or producer referred to
in subsection (c)(2)(E) shall be provided notice in advance of
an adverse determination of origin under section 202 of the
North American Free Trade Agreement Implementation Act (19 USCS
Sec. 3332]. The Secretary may, by regulations, prescribe the
time period in which such advance notice shall be issued and
authorize the Customs Service to provide in the notice the
entry number and any other entry information considered
necessary to allow the exporter or producer to exercise the
rights provided by this section.
(f) Denial of preferential treatment. If the Customs
Service finds indications of a pattern of conduct by an
exporter or producer of false or unsupported representations
that goods qualify under the rules of origin set out in section
202 of the North American Free Trade Agreement Implementation
Act [19 USCS Sec. 3332]--
(1) the Customs Service, in accordance with
regulations issued by the Secretary, may deny
preferential tariff treatment to entries of identical
goods exported or produced by that person; and
(2) the advance notice requirement in subsection (e)
shall not apply to that person; until the person
establishes to the satisfaction of the Customs Service
that its representations are in conformity with section
202 [19 USCS Sec. 3332].
SEC. 515. REVIEW OF PROTESTS
(a) Administrative Review and Modification of Decisions.--
Unless a request for an accelerated disposition of a protest is
filed in accordance with subsection (b) of this section the
appropriate customs officer, within two years from the date a
protest was filed in accordance with section 514 of this Act
[19 USCS Sec. 1514], shall review the protest and shall allow
or deny such protest in whole or in part. Thereafter, any
duties, charge, or exaction found to have been assessed or
collected in excess shall be remitted or refunded and any
drawback found due shall be paid. Upon the request of the
protesting party, filed within the time allowed for the filing
of a protest under section 514 of this Act [19 USCS Sec. 1514],
a protest may be subject to further review by another
appropriate customs officer, under the circumstances and in the
form and manner that may be prescribed by the Secretary in
regulations, but subject to the two-year limitation prescribed
in the first sentence of this subsection. Within 30 days from
the date an application for further review is filed, the
appropriate customs officer shall allow or deny the application
and, if allowed, the protest shall be forwarded to the customs
officer who will be conducting the further review. Notice of
the denial of any protest shall be mailed in the form and
manner prescribed by the Secretary. Such notice shall included
a statement of the reasons for the denial, as well as a
statement informing the protesting party of his right to file a
civil action contesting the denial of a protest under section
514 of the Tariff Act of 1930 [19 USCS Sec. 1514].
(b) Request for Accelerated Disposition of Protest. A
request for accelerated disposition of a protest filed in
accordance with section 514 of this Act [19 USCS Sec. 1514] may
be mailed by certified or registered mail to the appropriate
customs officer any time after ninety days following the filing
of such protest. For purposes of section 1581 of title 28 of
the United States Code [28 USCS Sec. 1581], a protest which has
not been allowed or denied in whole or in part within thirty
days following the date of mailing by certified or registered
mail of a request for accelerated disposition shall be deemed
denied on the thirtieth day following mailing of such request.
(c) Request for Set Aside of Denial of Further Review. If a
protesting party believes that an application for further
review was erroneously or improperly denied or was denied
without authority for such action, it may file with the
Commissioner of Customs a written request that the denial of
the application for further review be set aside. Such request
must be filed within 60 days after the date of the notice of
the denial. The Commissioner of Customs may review such request
and, based solely on the information before the Customs Service
at the time the application for further review was denied, may
set aside the denial of the application for further review and
void the denial of protest, if appropriate. If the Commissioner
of Customs fails to act within 60 days after the date of the
request, the request shall be considered denied. All denials of
protests are effective from the date of original denial for
purposes of section 2536 of title 28, United States Code. If an
action is commenced in the Court of International Trade that
arises out of a protest or an application for further review,
all administrative action pertaining to such protest or
application shall terminate and any administrative action taken
subsequent to the commencement of the action is null and void.
(d) Voiding Denial of Protest.--If a protest is timely and
properly filed, but is denied contrary to proper instructions,
the Customs Service may on its own initiative, or pursuant to a
written request by the protesting party filed with the
appropriate port director within 90 days after the date of the
protest denial, void the denial of the protest.
SEC. 516. PETITIONS BY THE DOMESTIC INTERESTED PARTIES
(a) Request for Classification and Rate of Duty; Petition.
(1) The Secretary shall, upon written request by an
interested party furnish the classification and the
rate of duty imposed upon designated imported
merchandise of a class or kind manufactured, produced,
or sold at wholesale by such interested party. If the
interested party believes that the appraised value, the
classification, or rate of duty is not correct, it may
file a petition with the Secretary setting forth--
(A) a description of the merchandise,
(B) the appraised value, the classification,
or the rate of duty that it believes proper,
and
(C) the reasons for its belief.
(2) As used in this section, the term ``interested
party'' means a person who--
(A) a manufacturer, producer, or wholesaler
in the United States;
(B) a certified union or recognized union or
group of workers which is representative of an
industry engaged in the manufacture,
production, or wholesale in the United States;
or
(C) a trade or business association a
majority of whose members are manufacturers,
producers, or wholesalers in the United States,
of goods of the same class or kind as the
designated imported merchandise.
Such term includes as association, a majority of who
members is composed of persons described in subparagraph (A),
(B), or (C).
(3) Any producer of a raw agricultural product who is
considered under section 771(4)(E) [19 USCS
Sec. 1677(4)(E)] to be part of the industry producing a
processed agricultural product of the same class or
kind as the designated imported merchandise shall, for
purposes of this section, be treated as an interested
party producing such processed agricultural product.
(b) Determiniation on Petition.--If, after receipt and
consideration of a petition filed by such an interested party,
the Secretary determines that the appraised value, the
classification, or rate of duty is not correct, he shall
determine the proper appraised value, classification, or rate
of duty and shall notify the petitioner of this determination.
All such merchandise entered for consumption or withdrawn from
warehouse for consumption more than thirty days after the date
such notice to the petitioner is published in the weekly
Customs Bulletin shall be appraised, classified, or assessed as
to the rate of duty in accordance with the Secretary's
determination.
(c) Contest by Petitioner of Appraised Value,
Classification, or Rate of Duty.--If the Secretary determines
that the appraised value, classification, or rate of duty with
respect to which a petition was filed pursuant to subsection
(a) of this section is correct, he shall notify the petitioner.
If dissatisfied with the determination of the Secretary, the
petitioner may file with the Secretary, not later than thirty
days after the date of the notification, notice that it desires
to contest the appraised value, classification, or rate of
duty. Upon receipt of notice from the petitioner, the Secretary
shall cause publication to be made of his determination as to
the proper appraised value, classification, or rate of duty and
of the petitioner's desire to contest, and shall thereafter
furnish the petitioner with such information as to the entries
and consignees of such merchandise, entered after the
publication of the determination of the Secretary, at such
ports of entry designated by the petitioner in his notice of
desire to contest, as will enable the petitioner to contest the
appraised value, classification, or rate of duty imposed upon
such merchandise in the liquidation of one such entry at such
port. The Secretary shall direct the appropriate customs
officer at such ports to immediately notify the petitioner by
mail when the first of such entries is liquidated.
(d) Appraisal, Classification, and Liquidation of Entries
of Merchandise Covered by Published Decisions of the
Secretary.--Notwithstanding the filing of an action pursuant to
chapter 169 of title 28 of the United States Code [28 USCS
Sec. Sec. 2631 et seq.], merchandise of the character covered
by the published decision of the Secretary (when entered for
consumption or withdrawn from warehouse for consumption on or
before the date of publication of a decision of the United
States Court of International Trade or of the United States
Court of Appeals for the Federal Circuit, not in harmony with
the published decision of the Secretary) shall be appraised or
classified, or both, and the entries liquidated, in accordance
with the decision of the Secretary and, except as otherwise
provided in this chapter, the final liquidations of these
entries shall be conclusive upon all parties.
(e) Consignee or His Agent as Party in Interest Before the
Court of International Trade.--The consignee or his agent shall
have the right to appear and to be heard as a party in interest
before the United States Court of International Trade.
(f) Appraisement, Classification, and Assessment of Duty of
Merchandise Covered by Published Decision of the Secretary in
Accordance With Final Judicial Decision of Court of
International Trade or Court of Appeals for the Federal Circuit
Sustaining Cause of Action in Whole or in Part; Suspension of
Liquidation of Entries; Publication.--If the cause of action is
sustained in whole or in part by a decision of the United
States Court of International Trade or of the United States
Court of Appeals for the Federal Circuit, merchandise of the
character covered by the published decision of the Secretary,
which is entered for consumption or withdrawn from warehouse
for consumption after the date of publication in the Federal
Register by the Secretary or the administering authority of a
notice of the court decision, shall be subject to appraisement,
classification, and assessment of duty in accordance with the
final judicial decision in the action, and the liquidation of
entries covering the merchandise so entered or withdrawn shall
be suspended until final disposition is made of the action,
whereupon the entries shall be liquidated, or if necessary,
reliquidated in accordance with the final decision. Such notice
of the court decision shall be published within ten days from
the date of the issuance of the court decision.
(g) Regulations Implementing Required Procedures.--
Regulations shall be prescribed by the Secretary to implement
the procedures required under this Section.
5. Copyrights and Trademark Enforcement
Section 101 of the Copyright Revision Act of 1976
[17 U.S.C. 602; P.L. 94-553]
SEC. 602. INFRINGING IMPORTATION OF COPIES OR PHONORECORDS.
(a) Importation into the United States, without the
authority of the owner of copyright under this title, of copies
or phonorecords of a work that have been acquired outside the
United States is an infringement of the exclusive right to
distribute copies or phonorecords under section 106, actionable
under section 501. This subsection does not apply to--
(1) importation of copies or phonorecords under the
authority or for the use of the Government of the
United States or of any State or political subdivision
of a State, but not including copies or phonorecords
for use in schools, or copies of any audiovisual work
imported for purposes other than archival use;
(2) importation, for the private use of the importer
and not for distribution, by any person with respect to
no more than one copy or phonorecord of any one work at
any one time, or by any person arriving from outside
the United States with respect to copies or
phonorecords forming part of such person's personal
baggage; or
(3) importation by or for any organization operated
for scholarly, educational, or religious purposes and
not for private gain, with respect to no more than one
copy of any audiovisual work solely for its archival
purposes, and no more than five copies or phonorecords
of any other work for its library lending or archival
purposes, unless the importation of such copies or
phonorecords is part of an activity consisting of
systematic reproduction or distribution, engaged in by
such organization in violation of the provisions of
section 108(g)(2).
(b) In a case where the making of the copies or
phonorecords would have constituted an infringement of
copyright if this title had been applicable, their importation
is prohibited. In a case where the copies of phonorecords were
lawfully made, the United States Customs Service has no
authority to prevent their importation unless the provisions of
section 601 are applicable. In either case, the Secretary of
the Treasury is authorized to prescribe, by regulation, a
procedure under which any person claiming an interest in the
copyright in a particular work may, upon payment of a specified
fee, be entitled to notification by the Customs Service of the
importation of articles that appear to be copies or
phonorecords of the work.
Section 526 of the Tariff Act of 1930, as amended
[19 U.S.C. 1526; P.L. 71-361, as amended by P.L. 93-596, P.L. 95-410,
P.L. 103-182, and P.L. 104-153]
SEC. 526. MERCHANDISE BEARING AMERICAN TRADEMARK.
(a) Importation Prohibited.--Except as provided in
subsection (d) of this section, it shall be unlawful to import
into the United States any merchandise of foreign manufacture
if such merchandise, or the label, sign, print, package,
wrapper, or receptacle, bears a trademark owned by a citizen
of, or by a corporation or association created or organized
within, the United States, and registered in the Patent and
Trademark Office by a person domiciled in the United States,
under the provisions of the Act entitled ``An Act to authorize
the registration of trade-marks used in commerce with foreign
nations or among the several States or with Indian tribes, and
to protect the same,'' approved February 20, 1905, as amended
[sections 81 to 109 of title 15], and if a copy of the
certificate of registration of such trademark is filed with the
Secretary of the Treasury, in the manner provided in section 27
of such Act [15 U.S.C. 106], unless written consent of the
owner of such trademark is produced at the time of making
entry.
(b) Seizure and Forfeiture.--Any such merchandise imported
into the United States in violation of the provisions of this
section shall be subject to seizure and forfeiture for
violation of the customs laws.
(c) Injunction and Damages.--Any person dealing in any such
merchandise may be enjoined from dealing therein within the
United States or may be required to export or destroy such
merchandise or to remove or obliterate such trade-mark and
shall be liable for the same damages and profits provided for
wrongful use of a trade-mark, under the provisions of such Act
of February 20, 1905, as amended [sections 81 to 109 of title
15].
(d) Exemptions; Publications in Federal Register;
Forfeiture; Rules and Regulations.--
(1) The trademark provisions of this section and
section 42 of the Act of July 5, 1946 (60 Stat. 440; 15
U.S.C. 1124), do not apply to the importation of
articles accompanying any person arriving in the United
States when such articles are for his personal use and
not for sale if (A) such articles are within the limits
of types and quantities determined by the Secretary
pursuant to paragraph (2) of this subsection, and (B)
such person has not been granted an exemption under
this subsection within thirty days immediately
preceding his arrival.
(2) The Secretary shall determine and publish in the
Federal Register lists of the types of articles and the
quantities of each which shall be entitled to the
exemption provided by this subsection. In determining
such quantities of particular types of trade-marked
articles, the Secretary shall give such consideration
as he deems necessary to the numbers of such articles
usually purchased at retail for personal use.
(3) If any article which has been exempted from the
restrictions on importation of the trade-mark laws
under this subsection is sold within one year after the
date of importation, such article, or its value (to be
recovered from the importer), is subject to forfeiture.
A sale pursuant to a judicial order or in liquidation
of the estate of a decedent is not subject to the
provisions of this paragraph.
(4) The Secretary may prescribe such rules and
regulations as may be necessary to carry out the
provisions of this subsection.
(e) Merchandise Bearing Counterfeit Mark; Seizure and
Forfeiture; Disposition of Seized Goods.--Any such merchandise
bearing a counterfeit mark (within the meaning of section 45 of
the Act of July 5, 1946 (commonly referred to as the Lanham
Act, 60 Stat. 427; 15 U.S.C. 1127)) imported into the United
States in violation of the provisions of section 42 of the Act
of July 5, 1946 (60 Stat. 440; 15 U.S.C. 1124), shall be seized
and, in the absence of the written consent of the trademark
owner, forfeited for violations of the customs laws. Upon
seizure of such merchandise, the Secretary shall notify the
owner of the trademark, and shall, after forfeiture, destroy
the merchandise. Alternatively, if the merchandise is not
unsafe or a hazard to health, and the Secretary has the consent
of the trademark owner, the Secretary may obliterate the
trademark where feasible and dispose of the goods seized--
(1) by delivery to such Federal, State, and local
government agencies as in the opinion of the Secretary
have a need for such merchandise,
(2) by gift to such eleemosynary institutions as in
the opinion of the Secretary have a need for such
merchandise,
(3) more than 90 days after the date of forfeiture,
by sale by the Customs Service at public auction under
such regulations as the Secretary prescribes, except
that before making any such sale the Secretary shall
determine that no Federal, State, or local government
agency or eleemosynary institution has established a
need for such merchandise under paragraph (1) or (2).
(4) [Deleted]
(f) Civil Penalties.--(1) Any person who directs, assists
financially or otherwise, or aids and abets the importation of
merchandise for sale or public distribution that is seized
under subsection (e) shall be subject to a civil fine.
(2) For the first such seizure, the fine shall be not
more than the value that the merchandise would have had
if it were genuine, according to the manufacturer's
suggested retail price, determined under regulations
promulgated by the Secretary.
(3) For the second seizure and thereafter, the fine
shall be not more than twice the value that the
merchandise would have had if it were genuine, as
determined under regulations promulgated by the
Secretary.
(4) The imposition of a fine under this subsection
shall be within the discretion of the Customs Service,
and shall be in addition to any other civil or criminal
penalty or other remedy authorized by law.
Section 431 of the Tariff Act of 1930, as amended
[19 U.S.C. 1431; P.L. 71-361, as amended by P.L. 98-573, P.L. 100-690,
P.L. 103-182, P.L. 104-153, and P.L. 104-295]
SEC. 431. MANIFEST--REQUIREMENT, FORM, AND CONTENTS.
(a) In General.--Every vessel required to make entry under
section 434 or obtain clearance under section 4197 of the
Revised Statutes of the United States (46 U.S.C. App. 91) shall
have a manifest that complies with the requirements prescribed
under subsection (d).
(b) Production of Manifest.--Any manifest required by the
Customs Service shall be signed, produced, delivered or
electronically transmitted by the master or person in charge of
the vessel, aircraft, or vehicle, or by any other authorized
agent of the owner or operator of the vessel, aircraft, or
vehicle in accordance with the requirements prescribed under
subsection (d). A manifest may be supplemented by bill of
lading data supplied by the issuer of such bill. If any
irregularity of omission or commission occurs in any way in
respect to any manifest or bill of lading data, the owner or
operator of the vessel, aircraft or vehicle, or any party
responsible for such irregularity, shall be liable for any fine
or penalty prescribed by law with respect to such irregularity.
The Customs Service may take appropriate action against any of
the parties.
(c)(1) Except as provided in subparagraph (2), the following
information, when contained in a vessel manifest or aircraft
manifest, shall be available to public disclosure:
(A) The name and address of each importer or
consignee and the name and address of the shipper to
such importer or consignee, unless the importer or
consignee has made a biennial certification, in
accordance with procedures adopted by the Secretary of
the Treasury, claiming confidential treatment of such
information.
(B) The general character of the cargo.
(C) The number of packages and gross weight.
(D) The name of the vessel, aircraft, or carrier.
(E) The seaport or airport of loading.
(F) The seaport or airport of discharge.
(G) The country of origin of the shipment.
(H) The trademarks appearing on the goods or
packages.
(2) The information listed in paragraph (1) shall not be
available for public disclosure if--
(A) the Secretary of the Treasury makes an
affirmative finding on a shipment-by-shipment basis
that disclosure is likely to pose a threat of personal
injury or property damage; or
(B) the information is exempt under the provisions of
section 552(b)(1) of title 5 of the United States Code.
(3) The Secretary of the Treasury, in order to allow for the
timely dissemination and publication of the information listed
in paragraph (1), shall establish procedures to provide access
to manifests. Such procedures shall include provisions for
adequate protection against the public disclosure of
information not available for public disclosure from such
manifests.
(d) Regulations.--
(1) In general.--The Secretary shall by regulation--
(A) specify the form for, and the information
and data that must be contained in, the
manifest required by subsection (a);
(B) allow, at the option of the individual
producing the manifest and subject to paragraph
(2), letters and documents shipments to be
accounted for by summary manifesting
procedures;
(C) prescribe the manner of production for,
and the delivery or electronic transmittal of
the manifest required by subsection (a); and
(D) prescribe the manner for supplementing
manifests with bill of lading data under
subsection (b).
(2) Letters and documents shipments.--For purposes of
paragraph (1)(B)--
(A) the Customs Service may require with
respect to letters and documents shipments--
(i) that they be segregated by
country of origin, and
(ii) additional examination
procedures that are not necessary for
individually manifested shipments;
(B) standard letter envelopes and standard
document packs shall be segregated from larger
document shipments for purposes of customs
inspections; and
(C) the term ``letters and documents''
means--
(i) data described in General
Headnote 4(c) of the Harmonized Tariff
Schedule of the United States,
(ii) securities and similar evidences
of value described in heading 4907 of
such Schedule, but not monetary
instruments defined pursuant to chapter
53 of title 31, United States Code, and
(iii) personal correspondence,
whether on paper, cards, photographs,
tapes, or other media.
6. Penalties, Prohibitions, and Import Restrictions
(A) Penalties Prohibitions and Import Restrictions
Sections 592 and 592A of the Tariff Act of 1930, as amended
[19 U.S.C. 1592 and 1592A; P.L. 71-361, as amended by Act of Aug. 5,
1935, P.L. 95-410, P.L. 96-417, P.L. 103-182, P.L. 103-465, and P.L.
104-295]
SEC. 592. PENALTIES FOR FRAUD, GROSS NEGLIGENCE, AND NEGLIGENCE.
(a) Prohibition.--
(1) General rule.--Without regard to whether the
United States is or may be deprived of all or a portion
of any lawful duty, tax, or fee thereby, no person, by
fraud, gross negligence, or negligence--
(A) may enter, introduce, or attempt to enter
or introduce any merchandise into the commerce
of the United States by means of--
(i) any document or electronically
transmitted data or information,
written or oral statement, or act which
is material and false,
(ii) any omission which is material,
or
(B) may aid or abet any other person to
violate subparagraph (A).
(2) Exception.--Clerical errors or mistakes of fact
are not violations of paragraph (1) unless they are
part of a pattern of negligent conduct. The mere
nonintentional repetition by an electronic system of an
initial clerical error does not constitute a pattern of
negligible conduct.
(b) Procedures.--
(1) Pre-penalty notice.--
(A) In general.--If the Customs Service has
reasonable cause to believe that there has been
a violation of subsection (a) and determines
that further proceedings are warranted, it
shall issue to the person concerned a written
notice of its intention to issue a claim for a
monetary penalty. Such notice shall--
(i) describe the merchandise;
(ii) set forth the details of the
entry or introduction, the attempted
entry or introduction, or the aiding or
procuring of the entry or introduction;
(iii) specify all laws and
regulations allegedly violated;
(iv) disclose all the material facts
which establish the alleged violation;
(v) state whether the alleged
violation occurred as a result of
fraud, gross negligence, or negligence;
(vi) state the estimated loss of
lawful duties, taxes, and fees, if any,
and, taking into account all
circumstances, the amount of the
proposed monetary penalty; and
(vii) inform such person that he
shall have a reasonable opportunity to
make representations, both oral and
written, as to why a claim for a
monetary penalty should not be issued
in the amount stated.
(B) Exceptions.--The preceding subparagraph
shall not apply if--
(i) the importation with respect to
which the violation of subsection (a)
occurs is noncommercial in nature, or
(ii) the amount of the penalty in the
penalty claim issued under paragraph
(2) is $1,000 or less.
(2) Penalty claim.--After considering
representations, if any, made by the person concerned
pursuant to the notice issued under paragraph (1), the
Customs Service shall determine whether any violation
of subsection (a), as alleged in the notice, has
occurred. If the Customs Service determines that there
was no violation, it shall promptly issue a written
statement of the determination to the person to whom
the notice was sent. If the Customs Service determines
that there was a violation, it shall issue a written
penalty claim to such person. The written penalty claim
shall specify all changes in the information provided
under clauses (i) through (vi) of paragraph (1)(A).
Such person shall have a reasonable opportunity under
section 618 of this Act to make representations, both
oral and written, seeking remission or mitigation of
the monetary penalty. At the conclusion of any
proceeding under such section 618, the Customs Service
shall provide to the person concerned a written
statement which sets forth the final determination and
the findings of fact and conclusions of law on which
such determination is based.
(c) Maximum Penalties.--
(1) Fraud.--A fraudulent violation of subsection (a)
is punishable by a civil penalty in an amount not to
exceed the domestic value of the merchandise.
(2) Gross negligence.--A grossly negligent violation
of subsection (a) is punishable by a civil penalty in
an amount not to exceed--
(A) the lesser of--
(i) the domestic value of the
merchandise, or
(ii) four times the lawful duties,
taxes, and fees of which the United
States is or may be deprived, or
(B) if the violation did not affect the
assessment of duties, 40 percent of the
dutiable value of the merchandise.
(3) Negligence.--A negligent violation of subsection
(a) is punishable by a civil penalty in an amount not
to exceed--
(A) the lesser of--
(i) the domestic value of the
merchandise, or
(ii) two times the lawful duties,
taxes, and fees of which the United
States is or may be deprived, or
(B) if the violation did not affect the
assessment of duties, 20 percent of the
dutiable value of the merchandise.
(4) Prior disclosure.--If the person concerned
discloses the circumstances of a violation of
subsection (a) before, or without knowledge of, the
commencement of a formal investigation of such
violation, with respect to such violation, merchandise
shall not be seized and any monetary penalty to be
assessed under subsection (c) shall not exceed--
(A) if the violation resulted from fraud--
(i) an amount equal to 100 percent of
the lawful duties of which the United
States is or may be deprived, so long
as such person tenders the unpaid
amount of the lawful duties, taxes, and
fees at the time of disclosure, or
within 30 days (or such longer period
as the Customs Service may provide)
after notice by the Customs Service of
its calculation of such unpaid amount,
or
(ii) if such violation did not affect
the assessment of duties, 10 percent of
the dutiable value; or
(B) if such violation resulted from
negligence or gross negligence, the interest
(computed from the date of liquidation at the
prevailing rate of interest applied under
section 6621 of the Internal Revenue Code of
1954) on the amount of lawful duties of which
the United States is or may be deprived so long
as such person tenders the unpaid amount of the
lawful duties, taxes, and fees at the time of
disclosure, or within 30 days (or such longer
period as the Customs Service may provide)
after notice by the Customs Service of its
calculation of such unpaid amount.
The person asserting lack of knowledge of the
commencement of a formal investigation has the burden
of proof in establishing such lack of knowledge. For
purposes of this section, a formal investigation of a
violation is considered to be commenced with regard to
the disclosing party and the disclosed information on
the date recorded in writing by the Customs Service as
the date on which facts and circumstances were
discovered or information was received which caused the
Customs Service to believe that a possibility of a
violation of subsection (a) existed.
(5) Prior disclosure regarding nafta claims.--An
importer shall not be subject to penalties under
subsection (a) for making an incorrect claim for
preferential tariff treatment under section 202 of the
North American Free Trade Agreement Implementation Act
if the importer--
(A) has reason to believe that the NAFTA
Certificate of Origin (as defined in section
508(b)(1)) on which the claim was based
contains incorrect information; and
(B) in accordance with regulations issued by
the Secretary, voluntarily and promptly makes a
corrected declaration and pays any duties
owing.
(6) Seizure.--If the Secretary has reasonable cause
to believe that a person has violated the provisions of
subsection (a) and that such person is insolvent or
beyond the jurisdiction of the United States or that
seizure is otherwise essential to protect the revenue
of the United States or to prevent the introduction of
prohibited or restricted merchandise into the customs
territory of the United States, then such merchandise
may be seized and, upon assessment of a monetary
penalty, forfeited unless the monetary penalty is paid
within the time specified by law. Within a reasonable
time after any such seizure is made, the Secretary
shall issue to the person concerned a written statement
containing the reasons for the seizure. After seizure
of merchandise under this subsection, the Secretary
may, in the case of restricted merchandise, and shall,
in the case of any other merchandise (other than
prohibited merchandise), return such merchandise upon
the deposit of security not to exceed the maximum
monetary penalty which may be assessed under subsection
(c).
(d) Deprivation of Lawful Duties, Taxes, or Fees.--
Notwithstanding section 514 of this Act, if the United States
has been deprived of lawful duties, taxes, or fees as a result
of a violation of subsection (a) the Customs Service shall
require that such lawful duties, taxes and fees be restored,
whether or not a monetary penalty is assessed.
(e) Court of International Trade Proceedings.--
Notwithstanding any other provision of law, in any proceeding
commenced by the United States in the Court of International
Trade for the recovery of any monetary penalty claimed under
this section--
(1) all issues, including the amount of the penalty,
shall be tried de novo;
(2) if the monetary penalty is based on fraud, the
United States shall have the burden of proof to
establish the alleged violation by clear and convincing
evidence;
(3) if the monetary penalty is based on gross
negligence, the United States shall have the burden of
proof to establish all the elements of the alleged
violation; and
(4) if the monetary penalty is based on negligence,
the United States shall have the burden of proof to
establish the act or omission constituting the
violation, and the alleged violator shall have the
burden of proof that the act or omission did not occur
as a result of negligence.
(f) False Certifications Regarding Exports to NAFTA
Countries.--
(1) In general.--Subject to paragraph (3), it is
unlawful for any person to certify falsely, by fraud,
gross negligence, or negligence, in a NAFTA Certificate
of Origin (as defined in section 508(b)(1)) that a good
to be exported to a NAFTA country (as defined in
section 2(4) of the North American Free Trade Agreement
Implementation Act) qualifies under the rules of origin
set out in section 202 of that Act.
(2) Applicable provisions.--The procedures and
penalties of this section that apply to a violation of
subsection (a) also apply to a violation of paragraph
(1), except that--
(A) subsection (d) does not apply, and
(B) subsection (c)(5) applies only if the
person voluntarily and promptly provides, to
all persons to whom the person provided the
NAFTA Certificate of Origin, written notice of
the falsity of the Certificate.
(3) Exception.--A person may not be considered to
have violated paragraph (1) if--
(A) the information was correct at the time
it was provided in a NAFTA Certificate of
Origin but was later rendered incorrect due to
a change in circumstances; and
(B) the person voluntarily and promptly
provides written notice of the change to all
persons to whom the person provided the
Certificate of Origin.
SEC. 592A. SPECIAL PROVISIONS REGARDING CERTAIN VIOLATIONS.
(a) Publication of Names of Certain Violators.--
(1) Publication.--The Secretary of the Treasury is
authorized to publish in the Federal Register a list of
the name of any producer, manufacturer, supplier,
seller, exporter, or other person located outside the
customs territory of the United States--
(A) against whom the Customs Service has
issued a penalty claim under section 592, and
(B) if a petition with respect to that claim
has been filed under section 618, against whom
a final decision has been issued under such
section after exhaustion of administrative
remedies,
citing any of the violations of the customs laws
referred to in paragraph (2). Such list shall be
published not later than March 31 and September 30 of
each year.
(2) Violations.--The violations of the customs laws
referred to in paragraph (1) are the following:
(A) Using documentation, or providing
documentation subsequently used by the importer
of record, which indicates a false or
fraudulent country of origin or source of
textile or apparel products.
(B) Using counterfeit visas, licenses,
permits, bills of lading, or similar
documentation, or providing counterfeit visas,
licenses, permits, bills of lading, or similar
documentation that is subsequently used by the
importer of record, with respect to the entry
into the customs territory of the United States
of textile or apparel products.
(C) Manufacturing, producing, supplying, or
selling textile or apparel products which are
falsely or fraudulently labelled as to country
of origin or source.
(D) Engaging in practices which aid or abet
the transshipment, through a country other than
the country of origin, of textile or apparel
products in a manner which conceals the true
origin of the textile or apparel products or
permits the evasion of quotas on, or voluntary
restraint agreements with respect to, imports
of textile or apparel products.
(3) Removal from list.--Any person whose name has
been included in a list published under paragraph (1)
may petition the Secretary to be removed from such
list. If the Secretary finds that such person has not
committed any violations described in paragraph (2) for
a period of not less than 3 years after the date on
which the person's name was so published, the Secretary
shall remove such person from the list as of the next
publication of the list under paragraph (1).
(4) Reasonable care required for subsequent
imports.--
(A) Responsibility of importers and others.--
After the name of a person has been published
under paragraph (1), the Secretary of the
Treasury shall require any importer of record
entering, introducing, or attempting to
introduce into the commerce of the United
States textile or apparel products that were
either directly or indirectly produced,
manufactured, supplied, sold, exported, or
transported by such named person to show, to
the satisfaction of the Secretary, that such
importer has exercised reasonable care to
ensure that the textile or apparel products are
accompanied by documentation, packaging, and
labelling that are accurate as to its origin.
Such reasonable care shall not include reliance
solely on a source of information which is the
named person.
(B) Failure to exercise reasonable care.--If
the Customs Service determines that merchandise
is not from the country claimed on the
documentation accompanying the merchandise, the
failure to exercise reasonable care described
in subparagraph (A) shall be considered when
the Customs Service determines whether the
importer of record is in violation of section
484(a).
(b) List of High Risk Countries.--
(1) List.--The President or his designee, upon the
advice of the Secretaries of Commerce and Treasury, and
the heads of other appropriate departments and
agencies, is authorized to publish a list of countries
in which illegal activities have occurred involving
transshipped textile or apparel products or activities
designed to evade quotas of the United States on
textile or apparel products, if those countries fail to
demonstrate a good faith effort to cooperate with
United States authorities in ceasing such activities.
Such list shall be published in the Federal Register
not later than March 31 of each year. Any country that
is on the list and that subsequently demonstrates a
good faith effort to cooperate with United States
authorities in ceasing illegal activities described in
the first sentence shall be removed from the list, and
such removal shall be published in the Federal Register
as soon as practicable.
(2) Reasonable care required for subsequent
imports.--
(A) Responsibility of importers of record.--
The Secretary of the Treasury shall require any
importer of record entering, introducing, or
attempting to introduce into the commerce of
the United States textile or apparel products
indicated, on the documentation, packaging, or
labelling accompanying such products, to be
from any country on the list published under
paragraph (1) to show, to the satisfaction of
the Secretary, that such importer, consignee,
or purchaser has exercised reasonable care to
ascertain the true country of origin of the
textile or apparel products.
(B) Failure to exercise reasonable care.--If
the Customs Service determines that merchandise
is not from the country claimed on the
documentation accompanying the merchandise, the
failure to exercise reasonable care described
in subparagraph (A) shall be considered when
the Customs Service determines whether the
importer of record is in violation of section
484(a).
(3) Definition.--For purposes of this subsection, the
term ``country'' means a foreign country or territory,
including any overseas dependent territory or
possession of a foreign country.
(B) CONVICT AND FORCED LABOR MADE GOODS
[19 U.S.C. 1307, P.L. 71-361 as amended by P.L. 106-200]
SEC. 307. CONVICT MADE GOODS; IMPORTATION PROHIBITED
All goods, wares, articles, and merchandise mined, produced
or manufactured wholly or in part in any foreign country by
convict labor or/and forced labor or/and indentured labor under
penal sanctions shall not be entitled to entry at any of the
ports of the United States, and the importation thereof is
hereby prohibited, and the Secretary of the Treasury is
authorized and directed to prescribe such regulations as may be
necessary for the enforcement of this provision. The provisions
of this section relating to goods, wares, articles, and
merchandise mined, produced, or manufactured by forced labor
or/and indentured labor, shall take effect on January 1, 1932;
but in no case shall such provisions be applicable to goods,
wares, articles, or manufactured in such quantities in the
United States as to meet the consumptive demands of the United
States.
``Forced labor'', as herein used, shall mean all work or
service which is exacted from any person under the menace of
any penalty for its nonperformance and for which the worker
does not offer himself voluntarily. For purposes of this
section, the term ``forced labor or/and indentured labor''
includes forced or indentured child labor.
(C) PROHIBITION ON IMPORTATION OF DOG AND CAT FUR PRODUCTS.
[19 U.S.C. 1308, P.L. 71-361 as amended by P.L. 106-476]
SEC. 308. PROHIBITION ON IMPORTATION OF DOG AND CAT FUR PRODUCTS.
(a) Definitions.--In this section:
(1) Cat fur.--The term ``cat fur'' means the pelt or
skin of any animal of the species Felis catus.
(2) Interstate commerce.--The term ``interstate
commerce'' means the transportation for sale, trade, or
use between any State, territory, or possession of the
United States, or the District of Columbia, and any
place outside thereof.
(3) Cusoms laws.--The term ``customs laws of the
United States'' means any other law or regulation
enforced or administered by the United States Customs
Service.
(4) Designated authority.--The term ``designated
authority'' means the Secretary of the Treasury, with
respect to the prohibitions under subsection (b)(1)(A),
and the President (or the President's designee), with
respect to the prohibitions under subsection (b)(1)(B).
(5) Dog fur.--The term ``dog fur'' means the pelt or
skin of any animal of the species Canis familiaris
(6) Dog or cat fur product.--The term ``dog and cat
fur product'' means any item of merchandise which
consists, or is composed in whole or in part, of any
dog fur, cat fur, or both.
(7) Person.--The term ``person'' includes any
individual, partnership, corporation, association,
organization, business trust, government entity, or
other entity subject to the jurisdiction of the United
States.
(8) United states.--The term ``United States'' means
the customs territory of the United States, as defined
in general note 2 of the Harmonized Tariff Schedule of
the United States.
(b) Prohibitions.--
(1) In general.--It shall be unlawful for any person
to--
(A) import into, or export from the United
States any dog or cat fur product; or
(B) introduce into interstate commerce,
manufacture for introduction into interstate
commerce, sell, trade, or advertise in
interstate commerce, offer to sell, or
transport or distribute in interste commerce in
the United States, any dog or cat fur product.
(2) Exception.--This subsection shall not apply to
the importation, exportation, or transportation, for
noncommercial purposes, of a personal pet that is
deceased, including a pet preserved through taxidermy.
(c) Penalties and Enforcement.--
(1) Civil penalties.--
(A) In general.--Any person who
violates any provision of this section
or any regulation issued under this
section may, in addition to any other
civil or criminal penalty that may be
imposed under title 18, United States
Code, or any other provision of law, be
assessed a civil penalty by the
designated authority of not more than--
(i) $10,000 for each separate
knowing and intentional
violation;
(ii) $5,000 for each separate
grossly negligent violation; or
(iii) $3,000 for each
separate negligent violation.
(B) Debarment.--The designated authority may
prohibit a person from importing, exporting,
transporting, distributing, manufacturing, or
selling any fur product in the United States,
if the designated authority finds that the
person has engaged in a pattern or practice of
actions that has resulted in a final
administrative determination with respect to
the assessment of civil penalties for knowing
and intentional or grossly negligent violations
of any provision of this section or any
regulation issued under this section
(C) Factors in assessing penalties.--In
determining the amount of civil penalties under
this paragraph, the designated authority shall
take into account the degree of culpability,
any history or prior violations under this
section, ability to pay, the seriousness of the
violation, and such other matters as fairness
may require.
(D) Notice.--No penalty may be assessed under
this paragraph against a person unless the
person is given notice and opportunity for a
hearing with respect to such violation in
accordance with section 554 of title 5, United
States Code.
(2) Forfeiture.--Any dog or cat fur product
manufactured, taken, possessed, sold, purchased,
offered for sale or purchase, transported, delivered,
received, carried, shipped, imported, or exported
contrary to the provisions of this section or any
regulation issued under this section shall be subject
to forfeiture to the United States.
(3) Enforcement.--The Secretary of the Treasury shall
enforce the provisions of this section with respect to
the prohibitions under subsection (b)(1)(B).
(4) Regulations.--Not later than 270 days after the
date of the enactment of this section, the designated
authorities shall, after notice and opportunity for
comment, issue regulations to carry out the provisions
of this section. The regulations of the Secretary of
the Treasury shall provide for a process by which
testing laboratories, whether domestic or foreign, can
qualify for certification by the United States Customs
Service by demonstrating the reliability of the
procedures used for determining the type of fur
contained in articles intended for sale or consumption
in interstate commerce. Use of a laboratory certified
by the United States Customs Service to determine the
nature of fur contained in an item to which subsection
(b) applies is not required to avoid lability under
this section.--but may, in a case in which a person can
establish that the goods imported were tested by such a
laboratory and that the item was not found to be a dog
or cat fur product, prove dispositive in determining
whether that person exercised reasonable care for
purposes of paragraph (6).
(5) Reward.--The designated authority shall pay a
reward of not less then $500 to any person who
furnishes information that establishes or leads to a
civil penalty assessment, debarment, or forfeiture of
property for any violation of this section or any
regulation issued under this section.
(6) Affirmative defense.--Any person accused of a
violation under this section has a defense to any
proceeding brought under this section on account of
such violation if that person establishes by a
preponderance of the evidence that the person exercised
reasonable care--
(A) in determining the nature of the products
alleged to have resulted in such violation; and
(B) in ensuring that the products were
accompanied by documentation, packaging, and
labeling that were accurate as to the nature of
the products.
(7) Coordination with other laws.--Nothing in this
section shall be construed as superseding or limiting
in any manner the functions and responsibilities of the
Secretary of the Treasury under the customs laws of the
United States.
(d) Publication of Names of Certain Violators.--The
designated authorities shall, at least once each year, publish
in the Federal Register a list of the names of any producer,
manufacturer, supplier, seller, importer, or exporter, whether
or not located within the customs territory of the United
States or subject to the jurisdiction of the United States,
against whom a final administrative determination with respect
to the assessment of a civil penalty for a knowing and
intentional or a grossly negligent violation has been made
under this section.
(e) Reports.--In order to enable Congress to engage in
active continuing oversight of this section, the designated
authorities shall provide the following:
(1) Plan for enforcement.--Within 3 months after the
date of the enactment of this section, the designated
authorities shall submit to Congress a plan for the
enforcement of the provisions of this section,
including training and procedures to ensure that United
States Government personnel are equipped with state-of-
the-art technologies to identify potential dog or cat
fur products and to determine the true content of such
products.
(2) Report on enforcement efforts.--Not later than 1
year after the date of the enactment of this section,
and on an annual basis thereafter, the designated
authorities shall submit a report to Congress on the
efforts of the United States Government to enforce the
provisions of this section and the adequacy of the
resources to do so. The report shall include an
analysis of the training of United States Government
personnel to identify dog and cat fur products
effectively and to take appropriate action to enforce
this section. The report shall include the findings of
the designated authorities as to whether any government
has engaged in a pattern or practice of support for
trade in products the importation of which are
prohibited under this section.
(D) CIGARETTE IMPORTS
Title VIII--Requirements Application to Imports of Certain Cigarettes
[19 U.S.C. 1681, et seq., P.L. 71-361, as amended by P.L. 106-476]
SEC. 801. DEFINITIONS.
In this title:
(1) Secretary.--Except as otherwise indicated, the
term ``Secretary'' means the Secretary of the Treasury.
(2) Primary packaging.--The term ``primary
packaging'' refers to the permanent packaging inside of
the innermost cellophane or other transparent wrapping
and labels, if any. Warnings or other statements shall
be deemed `permanently imprinted' only if printed
directly on such primary packaging and not by way of
stickers or other similar devices.
SEC. 802. REQUIREMENTS FOR ENTRY OF CERTAIN CIGARETTES.
(a) General Rule.--Except as provided in subsection (b),
cigarettes may be imported into the United States only if--
(1) the original manufacturer of those cigarettes has
timely submitted, or has certified that it will timely
submit to the Secretary of Health and Human Services
the lists of the ingredients added to the tobacco in
the manufacture of such cigarettes as described in
section 7 of the Federal Cigarette Labeling and
Advertising Act (15 U.S.C. 1335a);
(2) the precise warning statements in the precise
format specified in section 4 of the Federal Cigarette
Labeling and Advertising Act (15 U.S.C. 1333) are
permanently imprinted on both--
(A) the primary packaging of all those
cigarettes; and
(B) any other pack, box, carton, or container
of any kind in which those cigarettes are to be
offered for sale or otherwise distributed to
consumers;
(3) the manufacturer or importer of those cigarettes
is in compliance with respect to those cigarettes being
imported into the United States with a rotation plan
approved by the Federal Trade Commission pursuant to
section 4(c) of the Federal Cigarette Labeling and
Advertising Act (15 U.S.C. 1333(c));
(4) if such cigarettes bear a United States trademark
registered for such cigarettes, the owner of such
United States trademark registration for cigarettes (or
a person authorized to act on behalf of such owner) has
consented to the importation of such cigarettes into
the United States; and
(5) the importer has submitted at the time of entry
all of the certificates described in subsection (c).
(b) Exemptions.--Cigarettes satisfying the conditions of
any of the following paragraphs shall not be subject to the
requirements of subsection (a):
(1) Personal-use cigarettes.--Cigarettes that are
imported into the United States in personal use
quantities that are allowed entry free of tax and duty
under subchapter IV of chapter 98 of the Harmonized
Tariff Schedule of the United States.
(2) Cigarettes imported into the united states for
analysis.--Cigarettes that are imported into the United
States solely for the purpose of analysis in quantities
suitable for such purpose, but only if the importer
submits at the time of entry a certificate signed,
under penalties of perjury, by the consignee (or a
person authorized by such consignee) providing such
facts as may be required by the Secretary to establish
that such consignee is a manufacturer of cigarettes, a
Federal or State government agency, a university, or is
otherwise engaged in bona fide research and stating
that such cigarettes will be used solely for analysis
and will not be sold in domestic commerce in the United
States.
(3) Cigarettes intended for noncommercial use,
reexport, or repackaging.--Cigarettes--
(A) for which the owner of such United States
trademark registration for cigarettes (or a
person authorized to act on behalf of such
owner) has consented to the importation of such
cigarettes into the United States; and
(B) for which the importer submits a
certificate signed by the manufacturer or
export warehouse (or a person authorized by
such manufacturer or export warehouse) to which
such cigarettes are to be delivered (as
provided in subparagraph (A)) stating, under
penalties of perjury, with respect to those
cigarettes, that it will not distribute those
cigarettes into domestic commerce unless prior
to such distribution all steps have been taken
to comply with paragraphs (1), (2), and (3) of
subsection (a), and, to the extent applicable,
section 5754(a)(1) (B) and (C) of the Internal
Revenue Code of 1986.
For purpose of this section, a trademark is registered in the
United States if it is registered in the United States Patent
and Trademark Office under the provisions of title I of the Act
of July 5, 1946 (popularly known as the `Trademark Act of
1946'), and a copy of the certificate of registration of such
mark has been filed with the Secretary. The Secretary shall
make available to interested parties a current list of the
marks so filed.
(c) Customs Certifications Required for Cigarette
Imports.--The certificates that must be submitted by the
importer of cigarettes at the time of entry in order to comply
with subsection (a)(5) are--
(1) a certificate signed by the manufacturer of such
cigarettes or an authorized official of such
manufacturer stating under penalties of perjury, with
respect to those cigarettes, that such manufacturer has
timely submitted, and will continue to submit timely,
to the Secretary of Health and Human Services the
ingredient reporting information required by section 7
of the Federal Cigarette Labeling and Advertising Act
(15 U.S.C. 1335a);
(2) a certificate signed by such importer or an
authorized official of such importer stating under
penalties of perjury that--
(A) the precise warning statements in the
precise format required by section 4 of the
Federal Cigarette Labeling and Advertising Act
(15 U.S.C. 1333) are permanently imprinted on
both--
(i) the primary packaging of all
those cigarettes; and
(ii) any other pack, box, carton, or
container of any kind in which those
cigarettes are to be offered for sale
or otherwise distributed to consumers;
and
(B) with respect to those cigarettes being
imported into the United States, such importer
has complied, and will continue to comply, with
a rotation plan approved by the Federal Trade
Commission pursuant to section 4(c) of the
Federal Cigarette Labeling and Advertising Act
(15 U.S.C. 1333(c)); and
(3)(A) if such cigarettes bear a United States trademark
registered for cigarettes, a certificate signed by the owner of
such United States trademark registration for cigarettes (or a
person authorized to act on behalf of such owner) stating under
penalties of perjury that such owner (or authorized person)
consents to the importation of such cigarettes into the United
States; and
(B) a certificate signed by the importer or an authorized
official of such importer stating under penalties of perjury
that the consent referred to in subparagraph (A) is accurate,
remains in effect, and has not been withdrawn.
The Secretary may provide by regulation for the submission of
certifications under this section in electronic form if, prior
to the entry of any cigarettes into the United States, the
person required to provide such certifications submits to the
Secretary a written statement, signed under penalties of
perjury, verifying the accuracy and completeness of all
information contained in such electronic submissions.
SEC. 803. ENFORCEMENT.
(a) Civil Penalty.--Any person who violates a provision of
section 802 shall, in addition to the tax and any other penalty
provided by law, be liable for a civil penalty for each
violation equal to the greater of $1,000 or 5 times the amount
of the tax imposed by chapter 52 of the Internal Revenue Code
of 1986 on all cigarettes that are the subject of such
violation.
(b) Forfeitures.--Any tobacco product, cigarette papers, or
tube that was imported into the United States or is sought to
be imported into the United States in violation of, or without
meeting the requirements of, section 802 shall be forfeited to
the United States. Notwithstanding any other provisions of law,
any product forfeited to the United States pursuant to this
title shall be destroyed.
7. National Customs Automation Program
Part I, Subpart B of Title IV (Sections 411-414) of the Tariff Act of
1930, as amended
[19 U.S.C. 1411, P.L. 103-182 as amended by P.L. 104-295 and P.L. 106-
36]
SEC. 411. NATIONAL CUSTOMS AUTOMATION PROGRAM.
(a) Establishment.--The Secretary shall establish the
National Customs Automation Program (hereinafter in this
subpart referred to as the ``Program'') which shall be an
automated and electronic system for processing commercial
importations and shall include the following existing and
planned components:
(1) Existing components:
(A) The electronic entry of merchandise.
(B) The electronic entry summary of required
information.
(C) The electronic transmission of invoice
information.
(D) The electronic transmission of manifest
information.
(E) Electronic payments of duties, fees, and
taxes.
(F) The electronic status of liquidation and
reliquidation.
(G) The electronic selection of high risk
entries for examination (cargo selectivity and
entry summary selectivity).
(2) Planned components:
(A) The electronic filing and status of
protests.
(B) The electronic filing (including remote
filing under section 414) of entry information
with the Customs Service at any location.
(C) The electronic filing of import activity
summary statements and reconciliation.
(D) The electronic filing of bonds.
(E) The electronic penalty process.
(F) The electronic filing of drawback claims,
records, or entries.
(G) Any other component initiated by the
Customs Service to carry out the goals of this
subpart.
(b) Participation in Program.--The Secretary shall by
regulation prescribe the eligibility criteria for participation
in the Program. Participation in the Program is voluntary.
(c) Foreign-Trade Zones.--Not later than January 1, 2000,
the Secretary shall provide for the inclusion of commercial
importation data from foreign-trade zones under the Program.
SEC. 412. PROGRAM GOALS.
The goals of the Program are to ensure that all regulations
and rulings that are administered or enforced by the Customs
Service are administered and enforced in a manner that--
(1) is uniform and consistent;
(2) is as minimally intrusive upon the normal flow of
business activity as practicable; and
(3) improves compliance.
SEC. 413. IMPLEMENTATION AND EVALUATION OF PROGRAM.
(a) Overall Program Plan.--
(1) In general.--Before the 180th day after the date
of the enactment of the North American Free Trade
Agreement Implementation Act, the Secretary shall
develop and transmit to the Committees an overall plan
for the Program. The overall Program plan shall set
forth--
(A) a general description of the ultimate
configuration of the Program;
(B) a description of each of the existing
components of the Program listed in section
411(a)(1); and
(C) estimates regarding the stages on which
planned components of the Program listed in
section 411(a)(2) will be brought on-line.
(2) Additional information.--In addition to the
information required under paragraph (1), the overall
Program plan shall include a statement regarding--
(A) the extent to which the existing
components of the Program currently meet, and
the planned components will meet, the Program
goals set forth in section 412; and
(B) the effects that the existing components
are currently having, and the effects that the
planned components will likely have, on--
(i) importers, brokers, and other
users of the Program, and
(ii) Customs Service occupations,
operations, processes, and systems.
(b) Implementation Plan, Testing, and Evaluation.--
(1) Implementation plan.--For each of the planned
components of the Program listed in section 411(a)(2),
the Secretary shall--
(A) develop an implementation plan;
(B) test the component in order to assess its
viability;
(C) evaluate the component in order to assess
its contribution toward achieving the program
goals; and
(D) transmit to the Committees the
implementation plan, the testing results, and
an evaluation report.
In developing an implementation plan under subparagraph
(A) and evaluating components under subparagraph (C),
the Secretary shall publish a request for comments in
the Customs Bulletin and shall consult with the trade
community, including importers, brokers, shippers, and
other affected parties.
(2) Implementation.--
(A) The Secretary may implement on a
permanent basis any Program component referred
to in paragraph (1) on or after the date which
is 30 days after paragraph (1)(D) is complied
with.
(B) For purposes of subparagraph (A), the 30
days shall be computed by excluding--
(i) the days either House is not in
session because of an adjournment of
more than 3 days to a day certain or an
adjournment of the Congress sine die,
and
(ii) any Saturday and Sunday, not
excluded under clause (i), when either
House is not in session.
(3) Evaluation and report.--The Secretary shall--
(A) develop a user satisfaction survey of
parties participating in the Program;
(B) evaluate the results of the user
satisfaction survey on a biennial basis (fiscal
years) and transmit a report to the Committees
on the evaluation by no later than the 90th day
after the close of each 2d fiscal year.
(C) with respect to the existing Program
component listed in section 411(a)(1)(G)
transmit to the Committees--
(i) a written evaluation of such
component before the 180th day after
the date of the enactment of this
section and before the implementation
of the planned Program components
listed in section 411(a)(2) (B) and
(C), and
(ii) a report on such component for
each of the 3 full fiscal years
occurring after the date of the
enactment of this section, which report
shall be transmitted not later than the
90th day after the close of each such
year; and
(D) not later than the 90th day after the
close of fiscal year 1994, and annually
thereafter through fiscal year 2000, transmit
to the Committees a written evaluation with
respect to the implementation and effect on
users of each of the planned Program components
listed in section 411(a)(2).
In carrying out the provisions of this paragraph, the
Secretary shall publish requests for comments in the
Customs Bulletin and shall consult with the trade
community, including importers, brokers, shippers, and
other affected parties.
(c) Committees.--For purposes of this section, and the term
``Committees'' means the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the
Senate.
SEC. 414. REMOTE LOCATION FILING.
(a) Core Entry Information.--
(1) In general.--A Program participant may file
electronically an entry of merchandise with the Customs
Service from a location other than the district
designated in the entry for examination (hereafter in
this section referred to as a ``remote location'') if--
(A) the Customs Service is satisfied that the
participant has the capabilities referred to in
paragraph (2)(A) regarding such method of
filing; and
(B) the participant elects to file from the
remote location.
(2) Requirements.--
(A) In general.--In order to qualify for
filing from a remote location, a Program
participant must have the capability to
provide, on an entry-by-entry basis, for the
following:
(i) The electronic entry of
merchandise.
(ii) The electronic entry summary of
required information.
(iii) The electronic transmission of
invoice information (when required by
the Customs Service).
(iv) The electronic payment of
duties, fees, and taxes.
(v) Such other electronic
capabilities within the existing or
planned components of the Program as
the Secretary shall by regulation
require.
(B) Restriction on exemption from
requirements.--The Customs Service may not
permit any exemption or waiver from the
requirements established by this section for
participation in remote entry filing.
(3) Conditions on filing under this section.--The
Secretary may prohibit a Program participant from
participating in remote location filing, and may remove
a Program participant from participation in remote
location filing, if the participant--
(A) fails to meet all the compliance
requirements and operational standards of
remote location filing; or
(B) fails to adhere to all applicable laws
and regulations.
(4) Alternative filing.--Any Program participant that
is eligible to file entry information electronically
from a remote location but chooses not to do so in the
case of any entry must file any paper documentation for
the entry at the designated location referred to in
subsection (d).
(b) Additional Entry Information.--
(1) In general.--A Program participant that is
eligible under subsection (a) to file entry information
from a remote location may, if the Customs Service is
satisfied that the participant meets the requirements
under paragraph (2), also electronically file from the
remote location additional information that is required
by the Customs Service to be presented before the
acceptance of entry summary information and at the time
of acceptance of entry summary information.
(2) Requirements.--The Secretary shall publish, and
periodically update, a list of those capabilities
within the existing and planned components of the
Program that a Program participant must have for
purposes of this subsection.
(3) Filing of additional information.--
(A) If information electronically
acceptable.--A Program participant that is
eligible under paragraph (1) to file additional
information from a remote location shall
electronically file all such information that
the Customs Service can accept electronically.
(B) Alternative filing.--If the Customs
Service cannot accept additional information
electronically, the Program participant shall
file the paper documentation with respect to
the information at the appropriate filing
location.
(C) Appropriate location.--For purposes of
subparagraph (B), the ``appropriate location''
is--
(i) before January 1, 1999, a
designated location; and
(ii) after December 31, 1998--
(I) if the paper
documentation is required for
release, a designated location;
or
(II) if the paper
documentation is not required
for release, a remote location
designated by the Customs
Service or a designated
location.
(D) Other.--A Program participant that is
eligible under paragraph (1) to file additional
information electronically from a remote
location but chooses not to do so must file the
paper documentation with respect to the
information at a designated location.
(c) Post-Entry Summary Information.--A Program participant
that is eligible to file electronically entry information under
subsection (a) and additional information under subsection (b)
from a remote location may file at any remote location
designated by the Customs Service any information required by
the Customs Service after entry summary.
(d) Definitions.--As used in this section:
(1) The term ``designated location'' means a customs
office located in the customs district designated by
the entry filer for purposes of customs examination of
the merchandise.
(2) The term ``Program participant'' means, with
respect to an entry of merchandise, any party entitled
to make the entry under section 484(a)(2)(B).
8. Commercial Operations
Section 9503(c) of the Omnibus Budget Reconciliation Act of 1987
[19 U.S.C. 2071 note; P.L. 100-203]
SEC. 9503. UNITED STATES CUSTOMS SERVICE AUTHORIZATIONS.
* * * * * * *
(c) Advisory Committee on Commercial Operations of the
United States Customs Service.--
(1) The Secretary of the Treasury shall establish an
advisory committee which shall be known as the
``Advisory Committee on Commercial Operations of the
United States Customs Service'' (hereafter in this
subsection referred to as the ``Advisory Committee'').
(2)(A) The Advisory Committee shall consist of 20
members appointed by the Secretary of the Treasury.
(B) In making appointments under subparagraph (A),
the Secretary of the Treasury shall ensure that--
(i) the membership of the Advisory Committee
is representative of the individuals and firms
affected by the commercial operations of the
United States Customs Service; and
(ii) a majority of the members of the
Advisory Committee do not belong to the same
political party.
(3) The Advisory Committee shall--
(A) provide advice to the Secretary of the
Treasury on all matters involving the
commercial operations of the United States
Customs Service; and
(B) submit an annual report to the Committee
on Finance of the Senate and the Committee on
Ways and Means of the House of Representatives
that shall--
(i) describe the operations of the
Advisory Committee during the preceding
year, and
(ii) set forth any recommendations of
the Advisory Committee regarding the
commercial operations of the United
States Customs Service.
(4) The Assistant Secretary of the Treasury for
Enforcement shall preside over meetings of the Advisory
Committee.
Section 301 of the Customs Procedural Reform and Simplification Act of
1978, as amended
[19 U.S.C. 2075; P.L. 95-410, as amended by P.L. 97-456, P.L. 98-573,
P.L. 99-272, P.L. 99-509, P.L. 100-203, P.L. 100-690, P.L. 101-207, and
P.L. 101-382]
SEC. 301. CUSTOMS SERVICE APPROPRIATIONS AUTHORIZATION.
(a) In General.--
(1) For the fiscal year beginning October 1, 1979,
and each fiscal year thereafter, there are authorized
to be appropriated to the Department of the Treasury
for the United States Customs Service only such sums as
may hereafter be authorized by law.
(2) The authorization of the appropriations for the
United States Customs Service for each fiscal year
after fiscal year 1987 shall specify--
(A) the amount authorized for the fiscal year
for the salaries and expenses of the Service in
conducting commercial operations; and
(B) the amount authorized for the fiscal year
for the salaries and expenses of the Service
for other than commercial operations.
(b) Authorization of Appropriations.--
(1) For noncommercial operations.--There are
authorized to be appropriated for the salaries and
expenses of the Customs Service that are incurred in
noncommercial operations not to exceed the following:
(A) $516,217,000 for fiscal year 1991.
(B) $542,091,000 for fiscal year 1992.
(2) For commercial operations.--(A) There are
authorized to be appropriated for the salaries and
expenses of the Customs Service that are incurred in
commercial operations not less than the following:
(i) $672,021,000 for fiscal year 1991.
(ii) $705,793,000 for fiscal year 1992.
(B) The monies authorized to be appropriated under
subparagraph (A) for any fiscal year, except for such
sums as may be necessary for the salaries and expenses
of the Customs Service that are incurred in connection
with the processing of merchandise that is exempt from
the fees imposed under section 13031(a)(9) and (10) of
the Consolidated Omnibus Budget Reconciliation Act of
1985, shall be appropriated from the Customs User Fee
Account.
(3) For air interdiction.--There are authorized to be
appropriated for the operation (including salaries and
expenses) and maintenance of the air interdiction
program of the Customs Service not to exceed the
following:
(A) $143,047,000 for fiscal year 1991.
(B) $150,199,000 for fiscal year 1992.
(c) Mandatory 10-Day Deferment.--No part of any sum that is
appropriated under the authority of subsection (b) of this
section may be used to implement any procedure relating to the
time of collection of estimated duties that shortens the
maximum 10-day deferment procedure in effect on January 1,
1981.
(d) Overtime Pay Limitations; Waiver.--No part of any sum
that is appropriated under subsection (b) of this section for
fiscal years after September 30, 1984, may be used for
administrative expenses to pay any employee of the United
States Customs Service overtime pay in an amount exceeding
$25,000; except that the Commissioner of Customs or his
designee may waive this limitation in individual cases in order
to prevent excessive costs or to meet emergency requirements of
the Service.
(e) Pay Comparability Authorization.--For the fiscal year
beginning October 1, 1982, and for each fiscal year thereafter,
there are authorized to be appropriated to the Department of
the Treasury for salaries of the United States Customs Service
such additional sums as may be provided by law to reflect pay
rate changes made in accordance with the Federal Pay
Comparability Act of 1970 [5 U.S.C.A. Sec. 5301 et seq.].
(f) If savings in salaries and expenses result from the
consolidation of administrative functions within the Customs
Service, the Commissioner of Customs shall apply those savings,
to the extent they are not needed to meet emergency
requirements of the Service, to strengthening the commercial
operations of the Service by increasing the number of
inspector, import specialist, patrol officer, and other line
operational positions.
(g)(1) The Commissioner of Customs shall ensure that
existing levels of commercial services, including inspection
and control, classification, and value, shall continue to be
provided by Customs personnel assigned to the headquarters
office of any Customs district designated by statute before
April 7, 1986. The number of such personnel assigned to any
such district headquarters shall not be reduced through
attrition or otherwise, and such personnel shall be afforded
the opportunity to maintain their proficiency through training
and workshops to the same extent provided to Customs personnel
in any other district. Automation and other modernization
equipment shall be made available, as needed on a timely basis,
to such headquarters to the same extent as such equipment is
made available to any other district headquarters.
(2) The Commissioner of Customs shall notify the Committee
on Finance of the Senate and the Committee on Ways and Means of
the House of Representatives at least 180 days prior to taking
any action which would--
(A) result in any significant reduction in force of
employees other than by means of attrition;
(B) result in any significant reduction in hours of
operation or services rendered at any office of the
United States Customs Service or any port of entry;
(C) eliminate or relocate any office of the United
States Customs Service;
(D) eliminate any port of entry; or
(E) significantly reduce the number of employees
assigned to any office of the United States Customs
Service or any port of entry.
(3) The total number of employees of the United States
Customs Service shall be equivalent to at least 17,174 full-
time employees.
J. FOREIGN TRADE ZONES
Act of June 18, 1934, as amended
[19 U.S.C. 81a-u; Act of June 18, 1934, as amended by Act of June 17,
1950, P.L. 85-791, P.L. 91-271, P.L. 96-609, P.L. 98-573, P.L. 99-514,
P.L. 100-418, P.L. 100-449, P.L. 100-647, P.L. 101-382, P.L. 103-182,
P.L. 104-201, and P.L. 104-295]
SECTION 1. DEFINITIONS.
When used in this chapter--
(a) The term ``Secretary'' means the Secretary of
Commerce;
(b) The term ``Board'' means the Board which is
established to carry out the provisions of this
chapter. The Board shall consist of the Secretary of
Commerce, who shall be chairman and executive officer
of the Board, and the Secretary of the Treasury;
(c) The term ``State'' includes any State, the
District of Columbia, and Puerto Rico;
(d) The term ``corporation'' means a public
corporation and a private corporation, as defined in
this chapter;
(e) The term ``public corporation'' means a State,
political subdivision thereof, a municipality, a public
agency of a State, political subdivision thereof, or
municipality, or a corporate municipal instrumentality
of one or more States;
(f) The term ``private corporation'' means any
corporation (other than a public corporation) which is
organized for the purpose of establishing, operating,
and maintaining a foreign-trade zone and which is
chartered under special Act enacted after June 18,
1934, of the State or States within which it is to
operate such zone;
(g) The term ``applicant'' means a corporation
applying for the right to establish, operate, and
maintain a foreign-trade zone;
(h) The term ``grantee'' means a corporation to which
the privilege of establishing, operating, and
maintaining a foreign-trade zone has been granted;
(i) The term ``zone'' means a ``foreign-trade zone''
as provided in this chapter.
SEC. 2. ESTABLISHMENT OF ZONES.
(a) Board Authorization To Grant Zones.--The Board is
authorized, subject to the conditions and restrictions of this
chapter and of the rules and regulations made thereunder, upon
application as hereinafter provided, to grant to corporations
the privilege of establishing, operating, and maintaining
foreign-trade zones in or adjacent to ports of entry under the
jurisdiction of the United States.
(b) Number of Zones Per Port of Entry.--Each port of entry
shall be entitled to at least one zone, but when a port of
entry is located within the confines of more than one State
such port of entry shall be entitled to a zone in each of such
States, and when two cities separated by water are embraced in
one port of entry, a zone may be authorized in each of said
cities or in territory adjacent thereto. Zones in addition to
those to which a port of entry is entitled shall be authorized
only if the Board finds that existing or authorized zones will
not adequately serve the convenience of commerce.
(c) Preference to Public Corporation.--In granting
applications preference shall be given to public corporations.
(d) Ownership of Harbor Facilities by State.--In case of
any State in which harbor facilities of any port of entry are
owned and controlled by the State and in which State harbor
facilities of any other port of entry are owned and controlled
by a municipality, the Board shall not grant an application by
any public corporation for the establishment of any zone in
such State, unless such application has been authorized by an
Act of the legislature of such State (enacted after June 18,
1934).
SEC. 3. ADMISSION OF FOREIGN MERCHANDISE; TREATMENT; SHIPMENT TO
CUSTOMS TERRITORY; APPRAISAL; RESHIPMENT TO ZONE.
(a) Foreign and domestic merchandise of every description,
except such as is prohibited by law, may, without being subject
to the customs laws of the United States, except as otherwise
provided in this chapter, be brought into a zone and may be
stored, sold, exhibited, broken up, repacked, assembled,
distributed, sorted, graded, cleaned, mixed with foreign or
domestic merchandise, or otherwise manipulated, or be
manufactured except as otherwise provided in this chapter, and
be exported, destroyed, or sent into customs territory of the
United States therefrom, in the original package or otherwise;
but when foreign merchandise is so sent from a zone into
customs territory of the United States it shall be subject to
the laws and regulations of the United States affecting
imported merchandise: Provided, That whenever the privilege
shall be requested and there has been no manipulation or
manufacture effecting a change in tariff classification, the
appropriate customs officer shall take under supervision any
lot or part of a lot of foreign merchandise in a zone, cause it
to be appraised and taxes determined and duties liquidated
thereon. Merchandise so taken under supervision may be stored,
manipulated, or manufactured under the supervision and
regulations prescribed by the Secretary of the Treasury, and
whether mixed or manufactured with domestic merchandise or not
may, under regulations prescribed by the Secretary of the
Treasury, be exported or destroyed, or may be sent into customs
territory upon the payment of such liquidated duties and
determined taxes thereon. If merchandise so taken under
supervision has been manipulated or manufactured, such duties
and taxes shall be payable on the quantity of such foreign
merchandise used in the manipulation or manufacture of the
entered article. Allowance shall be made for recoverable and
irrecoverable waste; and if recoverable waste is sent into
customs territory, it shall be dutiable and taxable in its
condition and quantity and at its weight at the time of entry.
Where two or more products result from the manipulation or
manufacture of merchandise in a zone the liquidated duties and
determined taxes shall be distributed to the several products
in accordance with their relative value at the time of
separation with due allowance for waste as provided for above:
Provided further, That subject to such regulations respecting
identity and the safeguarding of the revenue as the Secretary
of the Treasury may deem necessary, articles, the growth,
product, or manufacture of the United States, on which all
internal-revenue taxes have been paid, if subject thereto, and
articles previously imported on which duty and/or tax has been
paid, or which have been admitted free of duty and tax, may be
taken into a zone from the customs territory of the United
States, placed under the supervision of the appropriate customs
officer, and whether or not they have been combined with or
made part, while in such zone, of other articles, may be
brought back thereto free of quotas, duty, or tax: Provided
further, That if in the opinion of the Secretary of the
Treasury their identity has been lost, such articles not
entitled to free entry by reason of noncompliance with the
requirements made hereunder by the Secretary of the Treasury
shall be treated when they reenter customs territory of the
United States as foreign merchandise under the provisions of
the tariff and internal-revenue laws in force at that time:
Provided further, That under the rules and regulations of the
controlling Federal agencies, articles which have been taken
into a zone from customs territory for the sole purpose of
exportation, destruction (except destruction of distilled
spirits, wines, and fermented malt liquors), or storage shall
be considered to be exported for the purpose of--
(1) the draw-back, warehousing, and bonding, or any
other provisions of the Tariff Act of 1930, as amended,
and the regulations thereunder; and
(2) the statutes and bonds exacted for the payment of
drawback, refund, or exemption from liability for
internal-revenue taxes and for the purposes of the
internal-revenue laws generally and the regulations
thereunder.
Such a transfer may also be considered an exportation for the
purposes of other Federal laws insofar as Federal agencies
charged with the enforcement of those laws deem it advisable.
Such articles may not be returned to customs territory for
domestic consumption except where the Foreign-Trade Zones Board
deems such return to be in the public interest, in which event
the articles shall be subject to the provisions of paragraph
1615(f) of section 1201 of this title: Provided further, That
no operation involving any foreign or domestic merchandise
brought into a zone which operation would be subject to any
provision or provisions of section 1807, chapter 15, chapter
16, chapter 17, chapter 21, chapter 23, chapter 24 chapter 25,
chapter 26, or chapter 32 of the Internal Revenue Code if
performed in customs territory, or involving the manufacture of
any article provided for in paragraphs 367 or 368 of section
1001 of this title, shall be permitted in a zone except those
operations (other than rectification of distilled spirits and
wines, or the manufacture or production of alcoholic products
unfit for beverage purposes) which were permissible under this
chapter prior to July 1, 1949: Provided further, That articles
produced or manufactured in a zone and exported therefrom shall
on subsequent importation into the customs territory of the
United States be subject to the import laws applicable to like
articles manufactured in a foreign country, except that
articles produced or manufactured in a zone exclusively with
the use of domestic merchandise the identity of which has been
maintained in accordance with the second proviso of this
section may, on such importation, be entered as American goods
returned: Provided, further, That no merchandise that consists
of goods subject to NAFTA drawback, as defined in section
203(a) of the North American Free Trade Agreement
Implementation Act, that is manufactured or otherwise changed
in condition shall be exported to a NAFTA country, as defined
in section 2(4) of that Act, without an assessment of a duty on
the merchandise in its condition and quantity, and at its
weight, at the time of its exportation (or if the privilege in
the first proviso to this subsection was requested, an
assessment of a duty on the merchandise in its condition and
quantity, and at its weight, at the time of its admission into
the zone) and the payment of the assessed duty before the 61st
day, after the date of exportation of the article, except that
upon the presentation, before such 61st day, of satisfactory
evidence of the amount of any customs duties paid or owed to
the NAFTA country on the article, the customs duty may be
waived or reduced (subject to section 508(b)(2)(B) of the
Tariff Act of 1930) in an amount that does not exceed the
lesser of (1) the total amount of customs duties paid or owed
on the merchandise on importation into the United States, or
(2) the total amount of customs duties paid on the article to
the NAFTA country: Provided, further, That, if Canada ceases to
be a NAFTA country and the suspension of the operation of the
United States-Canada Free Trade Agreement thereafter
terminates, with the exception of drawback eligible goods under
section 204(a) of the United States-Canada Free-Trade Agreement
Implementation Act of 1988, no article manufactured or
otherwise changed in condition (except a change by cleaning,
testing or repacking) shall be exported to Canada during the
period such Agreement is in operation without the payment of a
duty that shall be payable on the article in its condition and
quantity, and at its weight, at the time of its exportation to
Canada unless the privilege in the first proviso to this
subsection was requested.
(b) The exemption from the customs laws of the United
States provided under subsection (a) shall not be available on
or before December 31, 1992, to bicycle component parts unless
such parts are reexported from the United States, whether in
the original package, as components of a completely assembled
bicycle, or otherwise.
(c)(1) Notwithstanding the provisions of the fifth proviso
of subsection (a), any article (within the meaning of section
5002(a)(14) of the Internal Revenue Code of 1986) may be
manufactured or produced from denatured distilled spirits which
have been withdrawn free of tax from a distilled spirits plant
(within the meaning of section 5002(a)(1) of the Internal
Revenue Code of 1986), and articles thereof, in a zone.
(2) Notwithstanding the provisions of the fifth proviso of
subsection (a), distilled spirits which have been removed from
a distilled spirits plant (as defined in section 5002(a)(1) of
the Internal Revenue Code of 1986) upon payment or
determination of tax may be used in the manufacture or
production of medicines, medicinal preparation, food products,
flavors, or flavoring extracts, which are unfit for beverage
purposes, in a zone. Such products will be eligible for
drawback under the internal revenue laws under the same
conditions applicable to similar manufacturing or production
operations occurring in customs territory.
(d) In regard to the calculation of relative values in the
operations of petroleum refineries in a foreign trade zone, the
time of separation is defined as the entire manufacturing
period. The price of products required for computing relative
values shall be the average per unit value of each product for
the manufacturing period. Definition and attribution of
products to feedstocks for petroleum manufacturing may be
either in accordance with Industry Standards of Potential
Production on a Practical Operating Basis as verified and
adopted by the Secretary of the Treasury (known as
producibility) or such other inventory control method as
approved by the Secretary of the Treasury that protects the
revenue.
(e) Production Equipment.--
(1) In general.--Notwithstanding any other provision
of law, if all applicable customs laws are complied
with (except as otherwise provided in this subsection),
merchandise which is admitted into a foreign trade zone
for use within such zone as production equipment or as
parts for such equipment, shall not be subject to duty
until such merchandise is completely assembled,
installed, tested, and used in the production for which
it was admitted.
(2) Admission procedures.--The person who admits the
merchandise described in paragraph (1) into the zone
shall, at the time of such admission, certify to the
Customs Service that the merchandise is admitted into
the zone pursuant to this subsection for use within the
zone as production equipment or as parts for such
equipment and that the merchandise will be entered and
estimated duties deposited when use of the merchandise
in production begins.
(3) Entry procedures.--At the time use of the
merchandise in production begins, the merchandise shall
be entered, as provided for in section 484 of the
Tariff Act of 1930, and estimated duties shall be
deposited with the Customs Service. The merchandise
shall be subject to tariff classification according to
its character, condition, and quantity, and at the rate
of duty applicable, at the time use of the merchandise
in production begins.
(4) Foreign trade zone.--For purposes of the
subsection, the term `foreign trade zone' includes a
subzone.
SEC. 4. CUSTOMS OFFICERS AND GUARDS.
The Secretary of the Treasury shall assign to the zone the
necessary customs officers and guards to protect the revenue
and to provide for the admission of foreign merchandise into
customs territory.
SEC. 5. VESSELS ENTERING OR LEAVING ZONE; COASTWISE TRADE.
Vessels entering or leaving a zone shall be subject to the
operation of all the laws of the United States, except as
otherwise provided in this chapter, and vessels leaving a zone
and arriving in customs territory of the United States shall be
subject to such regulations to protect the revenue as may be
prescribed by the Secretary of the Treasury. Nothing in this
chapter shall be construed in any manner so as to permit
vessels under foreign flags to carry goods or merchandise
shipped from one foreign trade zone to another zone or port in
the protected coastwise trade of the United States.
SEC. 6. APPLICATION FOR ESTABLISHMENT OF ZONE; EXPANSION OF ZONE.
(a) Application for Establishment; Requirements.--Each
application shall state in detail--
(1) The location and qualifications of the area in
which it is proposed to establish a zone, showing (A)
the land and water or land or water area or land area
alone if the application is for its establishment in or
adjacent to an interior port; (B) the means of
segregation from customs territory; (C) the fitness of
the area for a zone; and (D) the possibilities of
expansion of the zone area;
(2) The facilities and appurtenances which it is
proposed to provide and the preliminary plans and
estimate of the cost thereof, and the existing
facilities and appurtenances which it is proposed to
utilize;
(3) The time within which the applicant proposes to
commence and complete the construction of the zone and
facilities and appurtenances;
(4) The methods proposed to finance the undertaking;
(5) Such other information as the Board may require.
(b) Amendment of Application; Expansion of Zone.--The Board
may upon its own initiative or upon request permit the
amendment of the application. Any expansion of the area of an
established zone shall be made and approved in the same manner
as an original application.
SEC. 7. GRANTING OF APPLICATION.
If the Board finds that the proposed plans and location are
suitable for the accomplishment of the purpose of a foreign
trade zone under this chapter, and that the facilities and
appurtenances which it is proposed to provide are sufficient it
shall make the grant.
SEC. 8. RULES AND REGULATIONS.
The Board shall prescribe such rules and regulations not
inconsistent with the provisions of this chapter or the rules
and regulations of the Secretary of the Treasury made hereunder
and as may be necessary to carry out this chapter.
SEC. 9. COOPERATION OF BOARD WITH OTHER AGENCIES.
The Board shall cooperate with the State, subdivision, and
municipality in which the zone is located in the exercise of
their police, sanitary, and other powers in and in connection
with the free zone. It shall also cooperate with the United
States Customs Service, the United States Postal Service, the
Public Health Service, the Immigration and Naturalization
Service, and such other Federal agencies as have jurisdiction
in ports of entry described in section 81b of this title.
SEC. 10. COOPERATION OF OTHER AGENCIES WITH BOARD.
For the purpose of facilitating the investigations of the
Board and its work in the granting of the privilege, in the
establishment, operation, and maintenance of a zone, the
President may direct the executive departments and other
establishments of the Government to cooperate with the Board,
and for such purpose each of the several departments and
establishments is authorized, upon direction of the President,
to furnish to the Board such records, papers, and information
in their possession as may be required by him, and temporarily
to detail to the service of the Board such officers, experts,
or engineers as may be necessary.
SEC. 11. AGREEMENTS AS TO USE OF PROPERTY.
If the title to or the right of user of any of the property
to be included in a zone is in the United States, an agreement
to use such property for zone purposes may be entered into
between the grantee and the department or officer of the United
States having control of the same, under such conditions
approved by the Board and such department or officer, as may be
agreed upon.
SEC. 12. FACILITIES TO BE PROVIDED AND MAINTAINED.
Each grantee shall provide and maintain in connection with
the zone--
(1) Adequate slips, docks, wharves, warehouses,
loading and unloading and mooring facilities where the
zone is adjacent to water; or, in the case of an inland
zone, adequate loading, unloading, and warehouse
facilities;
(2) Adequate transportation connections with the
surrounding territory and with all parts of the United
States, so arranged as to permit of proper guarding and
inspection for the protection of the revenue;
(3) Adequate facilities for coal or other fuel and
for light and power;
(4) Adequate water and sewer mains;
(5) Adequate quarters and facilities for the officers
and employees of the United States, State, and
municipality whose duties may require their presence
within the zone;
(6) Adequate enclosures to segregate the zone from
customs territory for protection of the revenue,
together with suitable provisions for ingress and
egress of persons, conveyances, vessels, and
merchandise;
(7) Such other facilities as may be required by the
Board.
SEC. 13. PERMISSION TO OTHERS TO USE ZONE.
The grantee may, with the approval of the Board, and under
reasonable and uniform regulations for like conditions and
circumstances to be prescribed by it, permit other persons,
firms, corporations, or associations to erect such buildings
and other structures within the zone as will meet their
particular requirements: Provided, That such permission shall
not constitute a vested right as against the United States nor
interfere with the regulation of the grantee or the permittee
by the United States, nor interfere with or complicate the
revocation of the grant by the United States: And provided
further, That in the event of the United States or the grantee
desiring to acquire the property of the permittee no good will
shall be considered as accruing from the privilege granted to
the zone: And provided further, That such permits shall not be
granted on terms that conflict with the public use of the zone
as set forth in this chapter.
SEC. 14. OPERATION OF ZONE AS PUBLIC UTILITY; COST OF CUSTOMS SERVICE.
Each zone shall be operated as a public utility, and all
rates and charges for all services or privileges within the
zone shall be fair and reasonable, and the grantee shall afford
to all who may apply for the use of the zone and its facilities
and appurtenances uniform treatment under like conditions,
subject to such treaties or commercial conventions as are now
in force or may hereafter be made from time to time by the
United States with foreign governments and the cost of
maintaining the additional customs service required under this
chapter shall be paid by the operator of the zone.
SEC. 15. RESIDENTS OF ZONE.
(a) Persons Allowed To Reside in Zone.--No person shall be
allowed to reside within the zone except Federal, State, or
municipal officers or agents whose resident presence is deemed
necessary to the Board.
(b) Rules and Regulations for Employees Entering and
Leaving Zone.--The Board shall prescribe rules and regulations
regarding employees and other persons entering and leaving the
zone. All rules and regulations concerning the protection of
the revenue shall be approved by the Secretary of the Treasury.
(c) Exclusion From Zone of Goods or Process of Treatment.--
The Board may at any time order the exclusion from the zone of
any goods or process of treatment that in its judgment is
detrimental to the public interest, health, or safety.
(d) Retail Trade Within Zone.--No retail trade shall be
conducted within the zone except under permits issued by the
grantee and approved by the Board. Such permittees shall sell
no goods except such domestic or duty-paid or duty-free goods
as are brought into the zone from customs territory.
(e) Tangible personal property imported from outside the
United States and held in a zone for the purpose of storage,
sale, exhibition, repackaging, assembly, distribution, sorting,
grading, cleaning, mixing, display, manufacturing, or
processing, and tangible personal property produced in the
United States and held in a zone for exportation, either in its
original form or as altered by any of the above processes,
shall be exempt from State and local ad valorem taxation.
SEC. 16. ACCOUNTS AND RECORDKEEPING.
(a) Manner of Keeping Accounts.--The form and manner of
keeping the accounts of each zone shall be prescribed by the
Board.
(b) Annual Report by Grantee.--Each grantee shall make to
the Board annually, and at such other times as it may
prescribe, reports on zone operations.
(c) Report to Congress.--The Board shall make a report to
Congress annually containing a summary of zone operations.
SEC. 17. TRANSFER OF GRANT.
The grant shall not be sold, conveyed, transferred, set
over, or assigned.
SEC. 18. REVOCATION OF GRANTS.
(a) Procedure for Revocation.--In the event of repeated
willful violations of any of the provisions of this chapter by
the grantee, the Board may revoke the grant after four months
notice to the grantee and affording it an opportunity to be
heard. The testimony taken before the Board shall be reduced to
writing and filed in the records of the Board together with the
decision reached thereon.
(b) Attendance of Witnesses and Production of Evidence.--In
the conduct of any proceeding under this section for the
revocation of a grant the Board may compel the attendance of
witnesses and the giving of testimony and the production of
documentary evidence, and for such purpose may invoke the aid
of the district courts of the United States.
(c) Nature of Order of Revocation; Appeal.--An order under
the provisions of this section revoking the grant issued by the
Board shall be final and conclusive, unless within ninety days
after its service the grantee appeals to the court of appeals
for the circuit in which the zone is located by filing with the
clerk of said court a written petition praying that the order
of the Board be set aside. Such order shall be stayed pending
the disposition of appellate proceedings by the court. The
clerk of the court in which such a petition is filed shall
immediately cause a copy thereof to be delivered to the Board
and it shall thereupon file in the court the record in the
proceedings held before it under this section, as provided in
section 2112 of title 28. The testimony and evidence taken or
submitted before the Board, duly certified and filed as a part
of the record, shall be considered by the court as the evidence
in the case.
SEC. 19. OFFENSES.
In case of a violation of this chapter, or any regulation
under this chapter, by the grantee, any officer, agent or
employee thereof responsible for or permitting any such
violation shall be subject to a fine of not more than $1,000.
Each day during which a violation continues shall constitute a
separate offense.
SEC. 20. SEPARABILITY OF PROVISIONS.
If any provision of this chapter or the application of such
provision to certain circumstances be held invalid, the
remainder of this chapter and the application of such
provisions to circumstances other than those as to which it is
held invalid shall not be affected thereby.
SEC. 21. RIGHT TO ALTER, AMEND, OR REPEAL CHAPTER.
The right to alter, amend, or repeal this chapter is
reserved.
K. IMPLEMENTATION OF THE GATT AGREEMENT ON TRADE IN CIVIL AIRCRAFT
Title VI of the Trade Agreements Act of 1979
[19 U.S.C. 1202, 19 U.S.C. 2135; P.L. 96-39]
SEC. 601. CIVIL AIRCRAFT AND PARTS.
(a) General.--When the conditions under section 2(b) of
this Act on acceptance of the Agreement on Trade in Civil
Aircraft are fulfilled, the President may proclaim after
September 30, 1979, the changes provided for under the
following amendments:
(1) The headnotes to schedule 6, part 6, subpart C of
the Tariff Schedules of the United States are amended
by inserting the following new headnote:
``3. Certified for Use in Civil Aircraft.
``(a) Whenever the term `certified for use in civil
aircraft' is used in an item description in the
schedules, the importer shall file a written statement,
accompanied by such supporting documentation as the
Secretary of the Treasury may require, with the
appropriate customs officer stating that the imported
article has been imported for use in civil aircraft,
that it will be so used, and that the article has been
approved for such use by the Administrator of the
Federal Aviation Administration (FAA) or by the
airworthiness authority in the country of exportation,
if such approval is recognized by the FAA as an
acceptable substitute for FAA certification, or that an
application for approval for such use has been
submitted to, and accepted by, the Administrator of the
FAA.
``(b) For purposes of the schedules, the term `civil
aircraft' means all aircraft other than aircraft
purchased for use by the Department of Defense or the
United States Coast Guard.''.
(2) A duty rate of ``Free'' in rate column numbered 1
of the Tariff Schedules of the United States for those
articles classified in the following items which the
President determines would provide coverage comparable
to that provided by foreign countries in the Annex to
the Agreement on Trade in Civil Aircraft if such
articles are certified for use in civil aircraft in
accordance with headnote 3 to schedule 6, part 6,
subpart C of the Tariff Schedules of the United States:
518.51 661.35 684.50
544.41 661.90 684.70
642.20 661.95 685.24
647.03 662.50 685.29
647.05 664.10 685.40
652.09 676.15 685.60
653.39 676.30 685.70
653.94 678.50 686.22
660.44 680.47 686.24
660.46 680.50 686.60
660.52 680.55 688.12
660.54 680.56 688.40
660.85 682.07 694.15
660.97 682.40 694.20
661.10 682.60 694.40
661.12 683.60 694.60
661.15 684.30 709.45
661.20 684.40 710.08
710.14 711.84 727.47
710.16 711.98 727.48
710.30 712.05 727.55
710.46 712.47 745.45
711.36 712.49 772.45
711.37 715.15 772.65.
711.82 720.08
(3) Section 466 of the Tariff Act of 1930 (19 U.S.C.
1466) is amended by adding at the end thereof the
following new subsection:
``(f) The duty imposed under subsection (a) shall not
apply to the cost of repair parts, materials, or
expenses of repairs in a foreign country upon a United
States civil aircraft, within the meaning of headnote 3
to schedule 6, part 6, subpart C of the Tariff
Schedules of the United States.''.
(b) Termination and Withdrawal.--For purposes of section
125 of the Trade Act of 1974, the amendments made under
subsection (a), if any, shall be considered to be trade
agreement obligations entered into under the Trade Act of 1974
of benefit to foreign countries or instrumentalities.
Section 234 of the Trade and Tariff Act of 1984
[19 U.S.C. 1202, 19 U.S.C. 2135; P.L. 98-573]
SEC. 234. MODIFICATION OF DUTIES ON CERTAIN ARTICLES USED IN CIVIL
AVIATION.
(a) The President may proclaim modifications in the rate of
duty column numbered 1 and in the article descriptions,
including the superior headings thereto, for the articles
provided for in the following items in the Tariff Schedules of
the United States (19 U.S.C. 1202) in order to provide duty-
free coverage comparable to the expanded coverage provided by
all other signatories to the Agreement on Trade in Civil
Aircraft pursuant to the extension of the Annex to the
Agreement on Trade in Civil Aircraft on October 6, 1983, and
recorded in the decision of the Committee on March 22, 1984, if
such articles are certified for use in civil aircraft in
accordance with headnote 3 to schedule 6, part 6, subpart C of
such Schedules:
646.95 680.95 708.05
660.85 681.01 708.07
660.97 681.15 708.09
661.06 681.18 708.21
661.10 681.21 708.23
661.15 681.24 708.25
661.20 682.05 708.27
661.35 683.05 708.29
680.59 683.07 711.77
680.61 683.15 711.78
680.62 708.01 711.98
680.92 708.03 711.49
(b) For purposes of section 125 of the Trade Act of 1974,
the duty-free treatment, if any, proclaimed under subsection
(a) shall be considered to be trade agreement obligations
entered into under the Trade Act of 1974 of benefit to foreign
countries or instrumentalities.
General Note 6 of the Harmonized Tariff Schedule
Articles Eligible for Duty-Free Treatment Pursuant to the Agreement on
Trade in Civil Aircraft
(a) Whenever a product is entered under a provision for which
the rate of duty ``Free (C)'' appears in the ``Special''
subcolumn and a claim for such rate of duty is made, the
importer--
(i) shall maintain such supporting documentation as
the Secretary of the Treasury may require; and
(ii) shall be deemed to certify that the imported
article is a civil aircraft, or has been imported for
use in a civil aircraft and will be so used.
The importer may amend the entry or file a written
statement to claim a free rate of duty under this note
at any time before the liquidation of the entry becomes
final, except that, notwithstanding section 505(c) of
the Tariff Act of 1930 (19 U.S.C. 1505(c)), any refund
resulting from any such claim shall be without
interest.
(b)(i) For purposes of the tariff schedule, the term ``civil
aircraft'' means any aircraft, aircraft engine, or ground
flight simulator (including parts, components, and
subassemblies thereof)--
(A) that is used as original or replacement
equipment in the design, development, testing,
evaluation, manufacture, repair, maintenance,
rebuilding, modification, or conversion of
aircraft; and
(B)(1) that is manufactured or operated
pursuant to a certificate issued by the
Administrator of the Federal Aviation
Administration (hereafter referred to as the
``FAA'') under section 44704 of title 49,
United States Code, or pursuant to the approval
of the airworthiness authority in the country
of exportation, if such approval is recognized
by the FAA as an acceptable substitute for such
an FAA certificate;
(2) for which an application for such
certificate has been submitted to, and accepted
by, the Administrator of the FAA by an existing
type and production certificate holder pursuant
to section 44702 of title 49, United States
Code, and regulations promulgated thereunder;
or
(3) for which an application for such
approval or certificate will be submitted in
the future by an existing type and production
certificate holder, pending the completion of
design or other technical requirements
stipulated by the Administrator of the FAA.
(ii) The term ``civil aircraft'' does not include
any aircraft, aircraft engine, or ground flight
simulator (or parts, components, and subassemblies
thereof) purchased for use by the Department of Defense
or the United States Coast Guard, unless such aircraft,
aircraft engine, or ground flight simulator (or parts,
components, and subassemblies thereof) satisfies the
requirements of subdivisions (i)(A) and (i)(B)(1) or
(2).
(iii) Subdivision (i)(B)(3) shall apply only to such
quantities of the parts, components, and subassemblies
as are required to meet the design and technical
requirements stipulated by the Administrator. The
Commissioner of Customs may require the importer to
estimate the quantities of parts, components, and
subassemblies covered for purposes of such subdivision.
Chapter 9: TRADE REMEDY LAWS
A. AUTHORITIES TO RESPOND TO FOREIGN SUBSIDY AND DUMPING PRACTICES
1. Countervailing Duties
Section 753 of the Tariff Act of 1930, as amended
[19 U.S.C. 1675b; P.L. 71-361, as amended by P.L. 103-465 and P.L. 104-
295]
SEC. 753. SPECIAL RULES FOR INJURY INVESTIGATIONS FOR CERTAIN SECTION
303 OR SECTION 701(C) COUNTERVAILING DUTY ORDERS
AND INVESTIGATIONS.
(a) In General.--
(1) Investigation by the commission upon request.--In
the case of a countervailing duty order described in
paragraph (2), which--
(A) applies to merchandise that is the
product of a Subsidies Agreement country, and
(B)(i) is in effect on the date on which such
country becomes a Subsidies Agreement country,
or
(ii) is issued on a date that is after the
date described in clause (i) pursuant to a
court order in an action brought under section
516A,
the Commission, upon receipt of a request from an
interested party described in section 771(9) (C), (D),
(E), (F), or (G) for an injury investigation with
respect to such order, shall initiate an investigation
and shall determine whether an industry in the United
States is likely to be materially injured by reason of
imports of the subject merchandise if the order is
revoked.
(2) Description of countervailing duty orders.--A
countervailing duty order described in this paragraph
is an order issued under section 303 or section 701(c)
with respect to which the requirement of an affirmative
determination of material injury was not applicable at
the time such order was issued.
(3) Requirements of request for investigation.--A
request for an investigation under this subsection
shall be submitted--
(A) in the case of an order described in
paragraph (1)(B)(i), within 6 months after the
date on which the country described in
paragraph (1)(A) becomes a Subsidies Agreement
country, or
(B) in the case of an order described in
paragraph (1)(B)(ii), within 6 months after the
date the order is issued.
(4) Suspension of liquidation.--With respect to
entries of subject merchandise made on or after--
(A) in the case of an order described in
paragraph (1)(B)(i), the date on which the
country described in paragraph (1)(A) becomes a
Subsidies Agreement country, or
(B) in the case of an order described in
paragraph (1)(B)(ii), the date on which the
order is issued,
liquidation shall be suspended at the cash deposit rate
in effect on the date described in subparagraph (A) or
(B) (whichever is applicable).
(b) Investigation Procedure and Schedule.--
(1) Commission procedure.--
(A) In general.--Except as otherwise provided
in this section, the provisions of this title
regarding evidence in and procedures for
investigations conducted under subtitle A shall
apply to investigations conducted by the
Commission under this section.
(B) Time for commission determination.--
Except as otherwise provided in subparagraph
(C), the Commission shall issue its
determination under subsection (a)(1), to the
extent possible, not later than 1 year after
the date on which the investigation is
initiated under this section.
(C) Special rule to permit administrative
flexibility.--In the case of requests for
investigations received under this section
within 1 year after the date on which the WTO
Agreement enters into force with respect to the
United States, the Commission may, after
consulting with the administering authority,
initiate its investigations in a manner that
results in determinations being made in all
such investigations during the 4-year period
beginning on such date.
(2) Net countervailable subsidy; nature of subsidy.--
(A) Net countervailable subsidy.--The
administering authority shall provide to the
Commission the net countervailable subsidy that
is likely to prevail if the order which is the
subject of the investigation is revoked. The
administering authority normally shall choose a
net countervailable subsidy that was determined
under section 705 or subsection (a) or (b)(1)
of section 751. If the Commission considers the
magnitude of the net countervailable subsidy in
making its determination under this section,
the Commission shall use the net
countervailable subsidy provided by the
administering authority.
(B) Nature of subsidy.--The administering
authority shall inform the Commission of, and
the Commission, in making its determination
under this section, shall consider, the nature
of the countervailable subsidy and whether the
countervailable subsidy is a subsidy described
in Article 3 or Article 6.1 of the Subsidies
Agreement.\1\
---------------------------------------------------------------------------
\1\ Article 6.1 of the Uruguay Round Subsidies Agreement lapsed on
January 1, 2000.
---------------------------------------------------------------------------
(3) Effect of commission determination.--
(A) Affirmative determination.--Upon being
notified by the Commission that it has made an
affirmative determination under subsection
(a)(1)--
(i) the administering authority shall
order the termination of the suspension
of liquidation required pursuant to
subsection (a)(4), and
(ii) the countervailing duty order
shall remain in effect until revoked,
in whole or in part, under section
751(d).
For purposes of section 751(c), a countervailing duty
order described in this section shall be treated as
issued on the date of publication of the Commission's
determination under this subsection.
(B) Negative determination.--
(i) In general.--Upon being notified
by the Commission that it has made a
negative determination under subsection
(a)(1), the administering authority
shall revoke the countervailing duty
order, and shall refund, with interest,
any estimated countervailing duties
collected during the period liquidation
was suspended pursuant to subsection
(a)(4).
(ii) Limitation on negative
determination.--A determination by the
Commission that revocation of the order
is not likely to result in material
injury to an industry by reason of
imports of the subject merchandise
shall not be based, in whole or in
part, on any export taxes, duties, or
other charges levied on the export of
the subject merchandise to the United
States that were specifically intended
to offset the countervailable subsidy
received.
(4) Countervailing duty orders with respect to which
no request for injury investigation is made.--If, with
respect to a countervailing duty order described in
subsection (a), a request for an investigation is not
made within the time required by subsection (a)(3), the
Commission shall notify the administering authority
that a negative determination has been made under
subsection (a) and the provisions of paragraph (3)(B)
shall apply with respect to the order.
(c) Pending and Suspended Countervailing Duty
Investigations.--If, on the date on which a country becomes a
Subsidies Agreement country, there is a countervailing duty
investigation in progress or suspended under section 303 or
section 701(c) that applies to merchandise which is a product
of that country and with respect to which the requirement of an
affirmative determination of material injury was not applicable
at the time the investigation was initiated, the Commission
shall--
(1) in the case of an investigation in progress, make
a final determination under section 705(b) within 75
days after the date of an affirmative final
determination, if any, by the administering authority,
(2) in the case of a suspended investigation to which
section 704(i)(1)(B) applies, make a final
determination under section 705(b) within 120 days
after receiving notice from the administering authority
of the resumption of the investigation pursuant to
section 704(i), or within 45 days after the date of an
affirmative final determination, if any, by the
administering authority, whichever is later, or
(3) in the case of a suspended investigation to which
section 704(i)(1)(C) applies, treat the countervailing
duty order issued pursuant to such section as if it
were--
(A) an order issued under subsection
(a)(1)(B)(ii) for purposes of subsection
(a)(3); and
(B) an order issued under subsection
(a)(1)(B)(i) for purposes of subsection (a)(4).
(d) Publication in Federal Register.--The administering
authority or the Commission, as the case may be, shall publish
in the Federal Register a notice of the initiation of any
investigation, and a notice of any determination or revocation,
made pursuant to this section.
(e) Request for Simultaneous Expedited Review Under Section
751(c).--
(1) General rule.--
(A) Requests for reviews.--Notwithstanding
section 751(c)(6)(A) and except as provided in
subparagraph (B), an interested party may
request a review of an order under section
751(c) at the same time the party requests an
investigation under subsection (a), if the
order involves the same or comparable subject
merchandise. Upon receipt of such request, the
administering authority, after consulting with
the Commission, shall initiate a review of the
order under section 751(c). The Commission
shall combine such review with the
investigation under this section.
(B) Exception.--If the administering
authority determines that the interested party
who requested an investigation under this
section is a related party or an importer
within the meaning of section 771(4)(B), the
administering authority may decline a request
by such party to initiate a review of an order
under section 751(c) which involves the same or
comparable subject merchandise.
(2) Cumulation.--If a review under section 751(c) is
initiated under paragraph (1), such review shall be
treated as having been initiated on the same day as the
investigation under this section, and the Commission
may, in accordance with section 771(7)(G), cumulatively
assess the volume and effect of imports of the subject
merchandise from all countries with respect to which
such investigations are treated as initiated on the
same day.
(3) Time and procedure for commission
determination.--The Commission shall render its
determination in the investigation conducted under this
section at the same time as the Commission's
determination is made in the review under section
751(c) that is initiated pursuant to this subsection.
The Commission shall in all other respects apply the
procedures and standards set forth in section 751(c) to
such section 751(c) reviews.
Section 261 (a)-(c) of the Uruguay Round Agreements Act
[19 U.S.C. 1303; P.L. 103-465]
SEC. 261. REPEAL OF SECTION 303.
(a) In General.--Section 303 of the Tariff Act of 1930 (19
U.S.C. 1303) is repealed effective on the effective date of
this title.
(b) Savings Provisions.--
(1) Continuing effect of legal documents.--All
orders, determinations, and other administrative
actions--
(A) which have been issued pursuant to an
investigation conducted under section 303 of
the Tariff Act of 1930, and
(B) which are in effect on the effective date
of this title, or were final before such date
and are to become effective on or after such
date,
shall continue in effect according to their terms until
modified, terminated, superseded, set aside, or revoked
in accordance with law by the administering authority,
the International Trade Commission, or a court of
competent jurisdiction, or by operation of law. Except
as provided in paragraph (3), such orders or
determinations shall be subject to review under section
751 of the Tariff Act of 1930 and, to the extent
applicable, investigation under section 753 of such Act
(as added by this title).
(2) Proceedings not affected.--The provisions of
subsection (a) shall not affect any proceedings,
including notices of proposed rulemaking, pending
before the administering authority or the International
Trade Commission on the effective date of this title
with respect to such section 303. Orders shall be
issued in such proceedings, appeals shall be taken
therefrom, and payments shall be made pursuant to such
orders, in accordance with such section 303 as in
effect on the day before the effective date of this
title and, except as provided in paragraph (3), shall
be subject to review under section 751 of the Tariff
Act of 1930 and, to the extent applicable,
investigation under section 753 of such Act. Orders
issued in any such proceedings shall continue in effect
until modified, terminated, superseded, set aside, or
revoked in accordance with law by the administering
authority, a court of competent jurisdiction, or by
operation of law. Nothing in this section shall be
deemed to prohibit the discontinuance or modification
of any such proceeding under the same terms and
conditions and to the same extent that such proceeding
could have been discontinued or modified if this
section had not been enacted.
(3) Suits not affected.--The provisions of subsection
(a) shall not affect the review pursuant to section
516A of the Tariff Act of 1930 of a countervailing duty
order issued pursuant to an investigation conducted
under section 303 of such Act or a review of a
countervailing duty order issued under section 751 of
such Act, if such review is pending or the time for
filing such review has not expired on the effective
date of this title.
(c) Definition of Administering Authority.--For purposes of
this section, the term ``administering authority'' has the
meaning given such term by section 771(1) of the Tariff Act of
1930.
Subtitle A of Title VII (Sections 701-709) of the Tariff Act of 1930,
as amended
[19 U.S.C. 1671-1671h; P.L. 71-361, as amended by P.L. 96-39, P.L. 98-
181, P.L. 98-573, P.L. 99-514, P.L. 100-418, P.L. 100-647, P.L. 103-
465, and P.L. 104-295]
SEC. 701. COUNTERVAILING DUTIES IMPOSED.
(a) General Rule.--If--
(1) the administering authority determines that the
government of a country or any public entity within the
territory of a country is providing, directly or
indirectly, a countervailable subsidy with respect to
the manufacture, production, or export of a class or
kind of merchandise imported, or sold (or likely to be
sold) for importation, into the United States, and
(2) in the case of merchandise imported from a
Subsidies Agreement country, the Commission determines
that--
(A) an industry in the United States--
(i) is materially injured, or
(ii) is threatened with material
injury, or
(B) the establishment of an industry in the
United States is materially retarded,
by reason of imports of that merchandise or by reason
of sales (or the likelihood of sales) of that
merchandise for importation,
then there shall be imposed upon such merchandise a
countervailing duty, in addition to any other duty imposed,
equal to the amount of the net countervailable subsidy. For
purposes of this subsection and section 705(b)(1), a reference
to the sale of merchandise includes the entering into of any
leasing arrangement regarding the merchandise that is
equivalent to the sale of the merchandise.
(b) Subsidies Agreement Country.--For purposes of this title,
the term ``Subsidies Agreement country'' means--
(1) a WTO member country,
(2) a country which the President has determined has
assumed obligations with respect to the United States
which are substantially equivalent to the obligations
under the Subsidies Agreement, or
(3) a country with respect to which the President
determines that--
(A) there is an agreement in effect between
the United States and that country which--
(i) was in force on the date of the
enactment of the Uruguay Round
Agreements Act, and
(ii) requires unconditional most-
favored-nation treatment with respect
to articles imported into the United
States, and
(B) the agreement described in subparagraph
(A) does not expressly permit--
(i) actions required or permitted by
the GATT 1947 or GATT 1994, as defined
in section 2(1) of the Uruguay Round
Agreements Act, or required by the
Congress, or
(ii) nondiscriminatory prohibitions
or restrictions on importation which
are designed to prevent deceptive or
unfair practices.
(c) Countervailing Duty Investigations Involving Imports Not
Entitled to a Material Injury Determination.--In the case of
any article or merchandise imported from a country which is not
a Subsidies Agreement country--
(1) no determination by the Commission under section
703(a), 704, or 705(b) shall be required,
(2) an investigation may not be suspended under
section 704(c) or 704(l),
(3) no determination as to the presence of critical
circumstances shall be made under section 703(e) or
705(a)(2),
(4) section 706(c) shall not apply,
(5) any reference to a determination described in
paragraph (1) or (3), or to the suspension of an
investigation under section 704(c) or 704(l), shall be
disregarded, and
(6) section 751(c) shall not apply.
(d) Treatment of International Consortia.--For purposes of
this subtitle, if the members (or other participating entities)
of an international consortium that is engaged in the
production of subject merchandise receive countervailable
subsidies from their respective home countries to assist,
permit, or otherwise enable their participation in that
consortium through production or manufacturing operations in
their respective home countries, then the administering
authority shall cumulate all such countervailable subsidies, as
well as countervailable subsidies provided directly to the
international consortium, in determining any countervailing
duty upon such merchandise.
(e) Upstream Subsidy.--Whenever the administering authority
has reasonable grounds to believe or suspect that an upstream
subsidy, as defined in section 771A(a)(1), is being paid or
bestowed, the administering authority shall investigate whether
an upstream subsidy has in fact been paid or bestowed, and if
so, shall include the amount of the upstream subsidy as
provided in section 771A(a)(3).
SEC. 702. PROCEDURES FOR INITIATING A COUNTERVAILING DUTY
INVESTIGATION.
(a) Initiation by Administering Authority.--A countervailing
duty investigation shall be initiated whenever the
administering authority determines, from information available
to it, that a formal investigation is warranted into the
question of whether the elements necessary for the imposition
of a duty under section 701(a) exist.
(b) Initiation by Petition.--
(1) Petition requirements.--A countervailing duty
proceeding shall be initiated whenever an interested
party described in subparagraph (C), (D), (E), (F), or
(G) of section 771(9) files a petition with the
administering authority, on behalf of an industry,
which alleges the elements necessary for the imposition
of the duty imposed by section 701(a), and which is
accompanied by information reasonably available to the
petitioner supporting those allegations. The petition
may be amended at such time, and upon such conditions,
as the administering authority and the Commission may
permit.
(2) Simultaneous filing with commission.--The
petitioner shall file a copy of the petition with the
Commission on the same day as it is filed with the
administering authority.
(3) Petition based upon a derogation of an
international undertaking on official export credits.--
If the sole basis of a petition filed under paragraph
(1) is the derogation of an international undertaking
on official export credits, the administering authority
shall immediately notify the Secretary of the Treasury
who shall, in consultation with the administering
authority, within 5 days after the date on which the
administering authority initiates an investigation
under subsection (c), determine the existence and
estimated value of the derogation, if any, and shall
publish such determination in the Federal Register.
(4) Action with respect to petitions.--
(A) Notification of governments.--Upon
receipt of a petition filed under paragraph
(1), the administering authority shall--
(i) notify the government of any
exporting country named in the petition
by delivering a public version of the
petition to an appropriate
representative of such country; and
(ii) provide the government of any
exporting country named in the petition
that is a Subsidies Agreement country
an opportunity for consultations with
respect to the petition.
(B) Acceptance of communications.--The
administering authority shall not accept any
unsolicited oral or written communication from
any person other than an interested party
described in section 771(9) (C), (D), (E), (F),
or (G) before the administering authority makes
its decision whether to initiate an
investigation, except as provided in
subparagraph (A)(ii) and subsection (c)(4)(D),
and except for inquiries regarding the status
of the administering authority's consideration
of the petition.
(C) Nondisclosure of certain information.--
The administering authority and the Commission
shall not dis-close information with regard to
any draft petition sub-mitted for review and
comment before it is filed under paragraph (1).
(c) Petition Determination.--
(1) In general.--
(A) Time for initial determination.--Except
as provided in subparagraph (B), within 20 days
after the date on which a petition is filed
under subsection (b), the administering
authority shall--
(i) after examining, on the basis of
sources readily available to the
administering authority, the accuracy
and adequacy of the evidence provided
in the petition, determine whether the
petition alleges the elements necessary
for the imposition of a duty under
section 701(a) and contains information
reasonably available to the petitioner
supporting the allegations, and
(ii) determine if the petition has
been filed by or on behalf of the
industry.
(B) Extension of time.--In any case in which
the administering authority is required to poll
or otherwise determine support for the petition
by the industry under paragraph (4)(D), the
administering authority may, in exceptional
circumstances, apply subparagraph (A) by
substituting ``a maximum of 40 days'' for ``20
days''.
(C) Time limits where petition involves same
merchandise as an order that has been
revoked.--If a petition is filed under this
section with respect to merchandise that was
the subject merchandise of--
(i) a countervailing duty order that
was revoked under section 751(d) in the
24 months preceding the date the
petition is filed, or
(ii) a suspended investigation that
was terminated under section 751(d) in
the 24 months preceding the date the
petition is filed,
the administering authority and the Commission
shall, to the maximum extent practicable,
expedite any investigation initiated under this
section with respect to the petition.
(2) Affirmative determinations.--If the
determinations under clauses (i) and (ii) of paragraph
(1)(A) are affirmative, the administering authority
shall initiate an investigation to determine whether a
countervailable subsidy is being provided with respect
to the subject merchandise.
(3) Negative determinations.--If the determination
under clause (i) or (ii) of paragraph (1)(A) is
negative, the administering authority shall dismiss the
petition, terminate the proceeding, and notify the
petitioner in writing of the reasons for the
determination.
(4) Determination of industry support.--
(A) General rule.--For purposes of this
subsection, the administering authority shall
determine that the petition has been filed by
or on behalf of the industry, if--
(i) the domestic producers or workers
who support the petition account for at
least 25 percent of the total
production of the domestic like
product, and
(ii) the domestic producers or
workers who support the petition
account for more than 50 percent of the
production of the domestic like product
produced by that portion of the
industry expressing support for or
opposition to the petition.
(B) Certain positions disregarded.--
(i) Producers related to foreign
producers.--In determining industry
support under subparagraph (A), the
administering authority shall disregard
the position of domestic producers who
oppose the petition, if such producers
are related to foreign producers, as
defined in section 771(4)(B)(ii),
unless such domestic producers
demonstrate that their interests as
domestic producers would be adversely
affected by the imposition of a
countervailing duty order.
(ii) Producers who are importers.--
The administering authority may
disregard the position of domestic
producers of a domestic like product
who are importers of the subject
merchandise.
(C) Special rule for regional industries.--If
the petition alleges that the industry is a
regional industry, the administering authority
shall determine whether the petition has been
filed by or on behalf of the industry by
applying subparagraph (A) on the basis of
production in the region.
(D) Polling the industry.--If the petition
does not establish support of domestic
producers or workers accounting for more than
50 percent of the total production of the
domestic like product, the administering
authority shall--
(i) poll the industry or rely on
other information in order to determine
if there is support for the petition as
required by subparagraph (A), or
(ii) if there is a large number of
producers in the industry, the
administering authority may determine
industry support for the petition by
using any statistically valid sampling
method to poll the industry.
(E) Comments by interested parties.--Before
the administering authority makes a
determination with respect to initiating an
investigation, any person who would qualify as
an interested party under section 771(9) if an
investigation were initiated, may submit
comments or information on the issue of
industry support. After the administering
authority makes a determination with respect to
initiating an investigation, the determination
regarding industry support shall not be
reconsidered.
(5) Definition of domestic producers or workers.--For
purposes of this subsection, the term ``domestic
producers or workers'' means those interested parties
who are eligible to file a petition under subsection
(b)(1).
(d) Notification to Commission of Determination.--The
administering authority shall--
(1) notify the Commission immediately of any
determination it makes under subsection (a) or (c), and
(2) if the determination is affirmative, make
available to the Commission such information as it may
have relating to the matter under investigation, under
such procedures as the administering authority and the
Commission may establish to prevent disclosure, other
than with the consent of the party providing it or
under protective order, of any information to which
confidential treatment has been given by the
administering authority.
(e) Information Regarding Critical Circumstances.--If, at any
time after the initiation of an investigation under this
subtitle, the administering authority finds a reasonable basis
to suspect that the alleged countervailable subsidy is
inconsistent with the Subsidies Agreement, the administering
authority may request the Commissioner of Customs to compile
information on an expedited basis regarding entries of the
subject merchandise. Upon receiving such request, the
Commissioner of Customs shall collect information regarding the
volume and value of entries of the class or kind of merchandise
that is the subject of the investigation and shall transmit
such information to the administering authority at such times
as the administering authority shall direct (at least once
every 30 days), until a final determination is made under
section 705(a), the investigation is terminated, or the
administering authority withdraws the request.
SEC. 703. PRELIMINARY DETERMINATIONS.
(a) Determination by Commission of Reasonable Indication of
Injury.--
(1) General rule.--Except in the case of a petition
dismissed by the administering authority under section
702(c)(3), the Commission, within the time specified in
paragraph (2), shall determine, based on the
information available to it at the time of the
determination, whether there is a reasonable indication
that--
(A) an industry in the United States--
(i) is materially injured, or
(ii) is threatened with material
injury, or
(B) the establishment of an industry in the
United States is materially retarded,
by reason of imports of the subject merchandise and
that imports of the subject merchandise are not
negligible. If the Commission finds that imports of the
subject merchandise are negligible or otherwise makes a
negative determination under this paragraph, the
investigation shall be terminated.
(2) Time for commission determination.--The
Commission shall make the determination described in
paragraph (1)--
(A) in the case of a petition filed under
section 702(b)--
(i) within 45 days after the date on
which the petition is filed, or
(ii) if the time has been extended
pursuant to section 702(c)(1)(B),
within 25 days after the date on which
the Commission receives notice from the
administering authority of initiation
of the investigation, and
(B) in the case of an investigation initiated
under section 702(a), within 45 days after the
date on which the Commission receives notice
from the administering authority that an
investigation has been initiated under such
section.
(b)(1) Preliminary Determination by Administering
Authority.--Within 65 days after the date on which the
administering authority initiates an investigation under
section 702(c), or an investigation is initiated under section
702(a), but not before an affirmative determination by the
Commission under subsection (a) of this section, the
administering authority shall make a determination, based upon
the information available to it at the time of the
determination, of whether there is a reasonable basis to
believe or suspect that a countervailable subsidy is being
provided with respect to the subject merchandise.
(2) Notwithstanding paragraph (1), when the petition is one
subject to section 702(b)(3), the administering authority
shall, taking into account the nature of the countervailable
subsidy concerned, make the determination required by paragraph
(1) on an expedited basis and within 65 days after the date on
which the administering authority initiates an investigation
under section 702(c) unless the provisions of subsection (c) of
this section apply.
(3) Preliminary Determination Under Waiver of Verification.--
Within 55 days after the initiation of an investigation the
administering authority shall cause an official designated for
such purpose to review the information concerning the case
received during the first 50 days of the investigation, and, if
there appears to be sufficient information available upon which
the determination can reasonably be based, to disclose to the
petitioner and any interested party, then a party to the
proceedings that requests such disclosure, all available
nonconfidential information and all other information which is
disclosed pursuant to section 777. Within 3 days (not counting
Saturdays, Sundays, or legal public holidays) after such
disclosure, the petitioner and each party which is an
interested party described in subparagraph (C), (D), (E), (F),
or (G) of section 771(9) to whom such disclosure was made may
furnish to the administering authority an irrevocable written
waiver of verification of the information received by the
authority, and an agreement that it is willing to have a
determination made on the basis of the record then available to
the authority. If a timely waiver and agreement have been
received from the petitioner and each party which is an
interested party described in subparagraph (C), (D), (E), (F),
or (G) of section 771(9) to whom the disclosure was made, and
the authority finds that sufficient information is then
available upon which the preliminary determination can
reasonably be based, a preliminary determination shall be made
on an expedited basis on the basis of the record established
during the first 50 days after the investigation was initiated.
(4) \2\ De minimis countervailable subsidy.--
---------------------------------------------------------------------------
\2\ Indentation so in law.
---------------------------------------------------------------------------
(A) General rule.--In making a determination
under this subsection, the administering
authority shall disregard any de minimis
countervailable subsidy. For purposes of the
preceding sentence, a countervailable subsidy
is de minimis if the administering authority
determines that the aggregate of the net
countervailable subsidies is less than 1
percent ad valorem or the equivalent specific
rate for the subject merchandise.
(B) Exception for developing countries.--In
the case of subject merchandise imported from a
Subsidies Agreement country (other than a
country to which subparagraph (C) applies)
designated by the Trade Representative as a
developing country in accordance with section
771(36), a countervailable subsidy is de
minimis if the administering authority
determines that the aggregate of the net
countervailable subsidies does not exceed 2
percent ad valorem or the equivalent specific
rate for the subject merchandise.
(C) Certain other developing countries.--In
the case of subject merchandise imported from a
Subsidies Agreement country that is--
(i) a least developed country, as
determined by the Trade Representative
in accordance with section 771(36), or
(ii) a developing country with
respect to which the Trade
Representative has notified the
administering authority that the
country has eliminated its export
subsidies on an expedited basis within
the meaning of Article 27.11 of the
Subsidies Agreement,
subparagraph (B) shall be applied by
substituting ``3 percent'' for ``2 percent''.
(D) Limitations on application of
subparagraph (c).--
(i) In general.--In the case of a
country described in subparagraph
(C)(i), the provisions of subparagraph
(C) shall not apply after the date that
is 8 years after the date the WTO
Agreement enters into force.
(ii) Special rule for subparagraph
(C)(ii) countries.--In the case of a
country described in subparagraph
(C)(ii), the provisions of subparagraph
(C) shall not apply after the earlier
of--
(I) the date that is 8 years
after the date the WTO
Agreement enters into force, or
(II) the date on which the
Trade Representative notifies
the administering authority
that such country is providing
an export subsidy.
(5) \3\ Notification of article 8 violation.--If the
only subsidy under investigation is a subsidy with
respect to which the administering authority received
notice from the Trade Representative of a violation of
Article 8 of the Subsidies Agreement, paragraph (1)
shall be applied by substituting ``60 days'' for ``65
days''.\4\
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\3\ Indentation so in law.
\4\ Article 8 of the Uruguay Round Subsidies Agreement lapsed
January 1, 2000.
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(c) Extension of Period in Extraordinarily Complicated
Cases.--
(1) In general.--If--
(A) the petitioner makes a timely request for
an extension of the period within which the
determination must be made under subsection
(b), or
(B) the administering authority concludes
that the parties concerned are cooperating and
determines that--
(i) the case is extraordinarily
complicated by reason of--
(I) the number and complexity
of the alleged countervailable
subsidy practices;
(II) the novelty of the
issues presented;
(III) the need to determine
the extent to which particular
countervailable subsidies are
used by individual
manufacturers, producers, and
exporters; or
(IV) the number of firms
whose activities must be
investigated; and
(ii) additional time is necessary to
make the preliminary determination,
then the administering authority may postpone making
the preliminary determination under subsection (b)
until not later than the 130th day after the date on
which the administering authority initiates an
investigation under section 702(c), or an investigation
is initiated under section 702(a).
(2) Notice of postponement.--The administering
authority shall notify the parties to the
investigation, not later than 20 days before the date
on which the preliminary determination would otherwise
be required under subsection (b), if it intends to
postpone making the preliminary determination under
paragraph (1). The notification shall include an
explanation of the reasons for the postponement. Notice
of the postponement shall be published in the Federal
Register.
(d) Effect of Determination by the Administering Authority.--
If the preliminary determination of the administering authority
under subsection (b) is affirmative, the administering
authority--
(1)(A) shall--
(i) determine an estimated individual
countervailable subsidy rate for each exporter
and producer individually investigated, and, in
accordance with section 705(c)(5), an estimated
all-others rate for all exporters and producers
not individually investigated and for new
exporters and producers within the meaning of
section 751(a)(2)(B), or
(ii) if section 777A(e)(2)(B) applies,
determine a single estimated country-wide
subsidy rate, applicable to all exporters and
producers, and
(B) shall order the posting of a cash deposit, bond,
or other security, as the administering authority deems
appropriate, for each entry of the subject merchandise
in an amount based on the estimated individual
countervailable subsidy rate, the estimated all-others
rate, or the estimated country-wide subsidy rate,
whichever is applicable,
(2) shall order the suspension of liquidation of all
entries of merchandise subject to the determination
which are entered, or withdrawn from warehouse, for
consumption on or after the later of--
(A) the date on which notice of the
determination is published in the Federal
Register, or
(B) the date that is 60 days after the date
on which notice of the determination to
initiate the investigation is published in the
Federal Register, and
(3) shall make available to the Commission all
information upon which its determination was based and
which the Commission considers relevant to its injury
determination, under such procedures as the
administering authority and the Commission may
establish to prevent disclosure, other than with the
consent of the party providing it or under protective
order, of any information to which confidential
treatment has been given by the administering
authority.
The instructions of the administering authority under
paragraphs (1) and (2) may not remain in effect for more than 4
months.
(e) Critical Circumstances Determinations.--
(1) In general.--If a petitioner alleges critical
circumstances in its original petition, or by amendment
at any time more than 20 days before the date of a
final determination by the administering authority,
then the administering authority shall promptly (at any
time after the initiation of the investigation under
this subtitle) determine, on the basis of the
information available to it at that time, whether there
is a reasonable basis to believe or suspect that--
(A) the alleged countervailable subsidy is
inconsistent with the Subsidies Agreement, and
(B) there have been massive imports of the
subject merchandise over a relatively short
period.
(2) Suspension of liquidation.--If the determination
of the administering authority under paragraph (1) is
affirmative, then any suspension of liquidation ordered
under subsection (d)(2) shall apply, or, if notice of
such suspension of liquidation is already published, be
amended to apply, to unliquidated entries of
merchandise entered, or withdrawn from warehouse, for
consumption on or after the later of--
(A) the date which is 90 days before the date
on which the suspension of liquidation was
first ordered, or
(B) the date on which notice of the
determination to initiate the investigation is
published in the Federal Register.
(f) Notice of Determination.--Whenever the Commission or the
administering authority makes a determination under this
section, the Commission or the administering authority, as the
case may be, shall notify the petitioner, and other parties to
the investigation, and the Commission or the administering
authority (whichever is appropriate) of its determination. The
administering authority shall include with such notification
the facts and conclusions on which its determination is based.
Not later than 5 days after the date on which the determination
is required to be made under subsection (a)(2), the Commission
shall transmit to the administering authority the facts and
conclusions on which its determination is based.
(g) Time Period Where Upstream Subsidization Involved.--
(1) In general.--Whenever the administering authority
concludes prior to a preliminary determination under
section 703(b), that there is a reasonable basis to
believe or suspect that an upstream subsidy is being
bestowed, the time period within which a preliminary
determination must be made shall be extended to 250
days after the filing of a petition under section
702(b) or initiation of an investigation under section
702(a) (310 days in cases declared extraordinarily
complicated under section 703(c)), if the administering
authority concludes that such additional time is
necessary to make the required determination concerning
upstream subsidization.
(2) Exceptions.--Whenever the administering authority
concludes, after a preliminary determination under
section 703(b), that there is a reasonable basis to
believe or suspect that an upstream subsidy is being
bestowed--
(A) in cases in which the preliminary
determination was negative, the time period
within which a final determination must be made
shall be extended to 165 or 225 days, as
appropriate, under section 705(a)(1); or
(B) in cases in which the preliminary
determination is affirmative, the determination
concerning upstream subsidization--
(i) need not be made until the
conclusion of the first annual review
under section 751 of any eventual
countervailing duty order, or, at the
option of the petitioner, or
(ii) will be made in the
investigation and the time period
within which a final determination must
be made shall be extended to 165 or 225
days, as appropriate, under section
705(a)(1), as appropriate, except that
the suspension of liquidation ordered
in the preliminary determination shall
terminate at the end of 120 days from
the date of publication of that
determination and not be resumed unless
and until the publication of a
Countervailing Duty Order under section
706(a).
There may be an extension of time for the making of a
final determination under this subsection only if the
administering authority determines that such additional
time is necessary to make the required determination
concerning upstream subsidization.
SEC. 704. TERMINATION OR SUSPENSION OF INVESTIGATION.
(a) Termination of Investigation Upon Withdrawal of
Petition.--
(1) In general.--
(A) Withdrawal of petition.--Except as
provided in paragraphs (2) and (3), an
investigation under this subtitle may be
terminated by either the administering
authority or the Commission, after notice to
all parties to the investigation, upon
withdrawal of the petition by the petitioner or
by the administering authority if the
investigation was initiated under section
702(a).
(B) Refiling of petition.--If, within 3
months after the withdrawal of a petition under
subparagraph (A), a new petition is filed
seeking the imposition of duties on both the
subject merchandise of the withdrawn petition
and the subject merchandise from another
country, the administering authority and the
Commission may use in the investigation
initiated pursuant to the new petition any
records compiled in an investigation conducted
pursuant to the withdrawn petition. This
subparagraph applies only with respect to the
first withdrawal of a petition.
(2) Special rules for quantitative restriction
agreements.--
(A) In general.--Subject to subparagraphs (B)
and (C), the administering authority may not
terminate an investigation under paragraph (1)
by accepting, with the government of the
country in which the countervailable subsidy
practice is alleged to occur, an understanding
or other kind of agreement to limit the volume
of imports into the United States of the
subject merchandise unless the administering
authority is satisfied that termination on the
basis of that agreement is in the public
interest.
(B) Public interest factors.--In making a
decision under subparagraph (A) regarding the
public interest, the administering authority
shall take into account--
(i) whether, based upon the relative
impact on consumer prices and the
availability of supplies of the
merchandise, the agreement would have a
greater adverse impact on United States
consumers than the imposition of
countervailing duties;
(ii) the relative impact on the
international economic interests of the
United States; and
(iii) the relative impact on the
competitiveness of the domestic
industry producing the like
merchandise, including any such impact
on employment and investment in that
industry.
(C) Prior consultations.--Before making a
decision under subparagraph (A) regarding the
public interest, the administering authority
shall, to the extent practicable, consult
with--
(i) potentially affected consuming
industries; and
(ii) potentially affected producers
and workers in the domestic industry
producing the like merchandise,
including producers and workers not
party to the investigation.
(3) Limitation on termination by commission.--The
Commission may not terminate an investigation under
paragraph (1) before a preliminary determination is
made by the administering authority under section
703(b).
(b) Agreements To Eliminate or Offset Completely a
Countervailable Subsidy or To Cease Exports of Subject
Merchandise.--The administering authority may suspend an
investigation if the government of the country in which the
countervailable subsidy practice is alleged to occur agrees, or
exporters who account for substantially all of the imports of
the subject merchandise agree--
(1) to eliminate the countervailable subsidy
completely or to offset completely the amount of the
net countervailable subsidy, with respect to that
merchandise exported directly or indirectly to the
United States, within 6 months after the date on which
the investigation is suspended, or
(2) to cease exports of that merchandise to the
United States within 6 months after the date on which
the investigation is suspended.
(c) Agreements Eliminating Injurious Effect.--
(1) General rule.--If the administering authority
determines that extraordinary circumstances are present
in a case, it may suspend an investigation upon the
acceptance of an agreement from a government described
in subsection (b), or from exporters described in
subsection (b), if the agreement will eliminate
completely the injurious effect of exports to the
United States of the subject merchandise.
(2) Certain additional requirements.--Except in the
case of an agreement by a foreign government to
restrict the volume of imports of the subject
merchandise into the United States, the administering
authority may not accept an agreement under this
subsection unless--
(A) the suppression or undercutting of price
levels of domestic products by imports of that
merchandise will be prevented, and
(B) at least 85 percent of the net
countervailable subsidy will be offset.
(3) Quantitative restrictions agreements.--The
administering authority may accept an agreement with a
foreign government under this subsection to restrict
the volume of imports of subject merchandise into the
United States, but it may not accept such an agreement
with exporters.
(4) Definition of extraordinary circumstances.--
(A) Extraordinary circumstances.--For
purposes of this subsection, the term
``extraordinary circumstances'' means
circumstances in which--
(i) suspension of an investigation
will be more beneficial to the domestic
industry than continuation of the
investigation, and
(ii) the investigation is complex.
(B) Complex.--For purposes of this paragraph,
the term ``complex'' means--
(i) there are a large number of
alleged countervailable subsidy
practices and the practices are
complicated,
(ii) the issues raised are novel, or
(iii) the number of exporters
involved is large.
(d) Additional Rules and Conditions.--
(1) Public interest; monitoring.--The administering
authority shall not accept an agreement under
subsection (b) or (c) unless--
(A) it is satisfied that suspension of the
investigation is in the public interest, and
(B) effective monitoring of the agreement by
the United States is practicable.
Where practicable, the administering authority shall
provide to the exporters who would have been subject to
the agreement the reasons for not accepting the
agreement and, to the extent possible, an opportunity
to submit comments thereon. In applying subparagraph
(A) with respect to any quantitative restriction
agreement under subsection (c), the administering
authority shall take into account, in addition to such
other factors as are considered necessary or
appropriate, the factors set forth in subsection
(a)(2)(B) (i), (ii), and (iii) as they apply to the
proposed suspension and agreement, after consulting
with the appropriate consuming industries, producers,
and workers referred to in subsection (a)(2)(C) (i) and
(ii).
(2) Exports of merchandise to united states not to
increase during interim period.--The administering
authority may not accept any agreement under subsection
(b) unless that agreement provides a means of ensuring
that the quantity of the merchandise covered by that
agreement exported to the United States during the
period provided for elimination or offset of the
countervailable subsidy or cessation of exports does
not exceed the quantity of such merchandise exported to
the United States during the most recent representative
period determined by the administering authority.
(3) Regulations governing entry or withdrawals.--In
order to carry out an agreement concluded under
subsection (b) or (c), the administering authority is
authorized to prescribe regulations governing the
entry, or withdrawal from warehouse, for consumption of
subject merchandise.
(e) Suspension of Investigation Procedure.--Before an
investigation may be suspended under subsection (b) or (c) the
administering authority shall--
(1) notify the petitioner of, and consult with the
petitioner concerning, its intention to suspend the
investigation, and notify other parties to the
investigation and the Commission not less than 30 days
before the date on which it suspends the investigation,
(2) provide a copy of the proposed agreement to the
petitioner at the time of the notification, together
with an explanation of how the agreement will be
carried out and enforced (including any action required
of foreign governments), and of how the agreement will
meet the requirements of subsections (b) and (d), or
(c) and (d), and
(3) permit all interested parties described in
section 771(9) to submit comments and information for
the record before the date on which notice of
suspension of the investigation is published under
subsection (f)(1)(A).
(f) Effects of Suspension of Investigation.--
(1) In general.--If the administering authority
determines to suspend an investigation upon acceptance
of an agreement described in subsection (b) or (c),
then--
(A) it shall suspend the investigation,
publish notice of suspension of the
investigation, and issue an affirmative
preliminary determination under section 703(b)
with respect to the subject merchandise, unless
it has previously issued such a determination
in the same investigation,
(B) the Commission shall suspend any
investigation it is conducting with respect to
that merchandise, and
(C) the suspension of investigation shall
take effect on the day on which such notice is
published.
(2) Liquidation of entries.--
(A) Cessation of exports; complete
elimination of net countervailable subsidy.--If
the agreement accepted by the administering
authority is an agreement described in
subsection (b), then--
(i) notwithstanding the affirmative
preliminary determination required
under paragraph (1)(A), the liquidation
of entries of subject merchandise shall
not be suspended under section
703(d)(2),
(ii) if the liquidation of entries of
such merchandise was suspended pursuant
to a previous affirmative preliminary
determination in the same case with
respect to such merchandise, that
suspension of liquidation shall
terminate, and
(iii) the administering authority
shall refund any cash deposit and
release any bond or other security
deposited under section 703(d)(1)(B).
(B) Other agreements.--If the agreement
accepted by the administering authority is an
agreement described in subsection (c), then the
liquidation of entries of the subject
merchandise shall be suspended under section
703(d)(2), or, if the liquidation of entries of
such merchandise was suspended pursuant to a
previous affirmative preliminary determination
in the same case, that suspension of
liquidation shall continue in effect, subject
to subsection (h)(3), but the security required
under section 703(d)(1)(B) may be adjusted to
reflect the effect of the agreement.
(3) Where investigation is continued.--If, pursuant
to subsection (g), the administering authority and the
Commission continue an investigation in which an
agreement has been accepted under subsection (b) or
(c), then--
(A) if the final determination by the
administering authority or the Commission under
section 705 is negative, the agreement shall
have no force or effect and the investigation
shall be terminated, or
(B) if the final determinations by the
administering authority and the Commission
under such section are affirmative, the
agreement shall remain in force, but the
administering authority shall not issue a
countervailing duty order in the case so long
as--
(i) the agreement remains in force,
(ii) the agreement continues to meet
the requirements of subsections (b) and
(d) or (c) and (d), and
(iii) the parties to the agreement
carry out their obligations under the
agreement in accordance with its terms.
(g) Investigation To Be Continued Upon Request.--If the
administering authority, within 20 days after the date of
publication of the notice of suspension of an investigation,
receives a request for the continuation of the investigation
from--
(1) the government of the country in which the
countervailable subsidy practice is alleged to occur,
or
(2) an interested party described in subparagraph
(C), (D), (E), (F), or (G) of section 771(9) which is a
party to the investigation,
then the administering authority and the Commission shall
continue the investigation.
(h) Review of Suspension.--
(1) In general.--Within 20 days after the suspension
of an investigation under subsection (c), an interested
party which is a party to the investigation and which
is described in subparagraph (C), (D), (E), (F), or (G)
of section 771(9) may, by petition filed with the
Commission and with notice to the administering
authority, ask for a review of the suspension.
(2) Commission investigation.--Upon receipt of a
review petition under paragraph (1), the Commission
shall, within 75 days after the date on which the
petition is filed with it, determine whether the
injurious effect of imports of the subject merchandise
is eliminated completely by the agreement. If the
Commission's determination under this subsection is
negative, the investigation shall be resumed on the
date of publication of notice of such determination as
if the affirmative preliminary determination under
section 703(b) had been made on that date.
(3) Suspension of liquidation to continue during
review period.--The suspension of liquidation of
entries of the subject merchandise shall terminate at
the close of the 20-day period beginning on the day
after the date on which notice of suspension of the
investigation is published in the Federal Register, or,
if a review petition is filed under paragraph (1) with
respect to the suspension of the investigation, in the
case of an affirmative determination by the Commission
under paragraph (2), the date on which notice of the
affirmative determination by the Commission is
published. If the determination of the Commission under
paragraph (2) is affirmative, then the administering
authority shall--
(A) terminate the suspension of liquidation
under section 703(d)(2), and
(B) release any bond or other security, and
refund any cash deposit, required under section
703(d)(1)(B).
(i) Violation of Agreement.--
(1) In general.--If the administering authority
determines that an agreement accepted under subsection
(b) or (c) is being, or has been, violated, or no
longer meets the requirements of such subsection (other
than the requirement, under subsection (c)(1), of
elimination of injury) and subsection (d), then, on the
date of publication of its determination, it shall--
(A) suspend liquidation under section
703(d)(2) of unliquidated entries of the
merchandise made on or after the later of--
(i) the date which is 90 days before
the date of publication of the notice
of suspension of liquidation, or
(ii) the date on which the
merchandise, the sale or export to the
United States of which was in violation
of the agreement, or under an agreement
which no longer meets the requirements
of subsections (b) and (d) or (c) and
(d), was first entered, or withdrawn
from warehouse, for consumption.
(B) if the investigation was not completed,
resume the investigation as if its affirmative
preliminary determination under section 703(b)
were made on the date of its determination
under this paragraph,
(C) if the investigation was completed under
subsection (g), issue a countervailing duty
order under section 706(a) effective with
respect to entries of merchandise the
liquidation of which was suspended,
(D) if it considers the violation to be
intentional, notify the Commissioner of Customs
who shall take appropriate action under
paragraph (2), and
(E) notify the petitioner, interested parties
who are or were parties to the investigation,
and the Commission of its action under this
paragraph.
(2) Intentional violation to be punished by civil
penalty.--Any person who intentionally violates an
agreement accepted by the administering authority under
subsection (b) or (c) shall be subject to a civil
penalty assessed in the same amount, in the same
manner, and under the same procedure, as the penalty
imposed for a fraudulent violation of section 592(a) of
this Act.
(j) Determination Not To Take Agreement Into Account.--In
making a final determination under section 705, or in
conducting a review under section 751, in a case in which the
administering authority has terminated a suspension of
investigation under subsection (i)(1), or continued an
investigation under subsection (g), the Commission and the
administering authority shall consider all of the subject
merchandise, without regard to the effect of any agreement
under subsection (b) or (c).
(k) Termination of Investigations Initiated by Administering
Authority.--The administering authority may terminate any
investigation initiated by the administering authority under
section 702(a) after providing notice of such termination to
all parties to the investigation.
(l) Special Rule for Regional Industry Investigations.--
(1) Suspension agreements.--If the Commission makes a
regional industry determination under section
771(4)(C), the administering authority shall offer
exporters of the subject merchandise who account for
substantially all exports of that merchandise for sale
in the region concerned the opportunity to enter into
an agreement described in subsection (b) or (c).
(2) Requirements for suspension agreements.--Any
agreement described in paragraph (1) shall be subject
to all the requirements imposed under this section for
other agreements under subsection (b) or (c), except
that if the Commission makes a regional industry
determination described in paragraph (1) in the final
affirmative determination under section 705(b) but not
in the preliminary affirmative determination under
section 703(a), any agreement described in paragraph
(1) may be accepted within 60 days after the
countervailing duty order is published under section
706.
(3) Effect of suspension agreement on countervailing
duty order.--If an agreement described in paragraph (1)
is accepted after the countervailing duty order is
published, the administering authority shall rescind
the order, refund any cash deposit and release any bond
or other security deposited under section 703(d)(1)(B),
and instruct the Customs Service that entries of the
subject merchandise that were made during the period
that the order was in effect shall be liquidated
without regard to countervailing duties.
SEC. 705. FINAL DETERMINATIONS.
(a) Final Determinations by Administering Authority.--
(1) In general.--Within 75 days after the date of the
preliminary determination under section 703(b), the
administering authority shall make a final
determination of whether or not a countervailable
subsidy is being provided with respect to the subject
merchandise; except that when an investigation under
this subtitle is initiated simultaneously with an
investigation under subtitle B, which involves imports
of the same class or kind of merchandise from the same
or other countries, the administering authority, if
requested by the petitioner, shall extend the date of
the final determination under this paragraph to the
date of the final determination of the administering
authority in such investigation initiated under
subtitle B.
(2) Critical circumstances determinations.--If the
final determination of the administering authority is
affirmative, then that determination, in any
investigation in which the presence of critical
circumstances has been alleged under section 703(e),
shall also contain a finding as to whether--
(A) the countervailable subsidy is
inconsistent with the Subsidies Agreement, and
(B) there have been massive imports of the
subject merchandise over a relatively short
period.
Such findings may be affirmative even though the
preliminary determination under section 703(e)(1) was
negative.
(3) De minimis countervailable subsidy.--In making a
determination under this subsection, the administering
authority shall disregard any countervailable subsidy
that is de minimis as defined in section 703(b)(4).
(b) Final Determination by Commission.--
(1) In general.--The Commission shall make a final
determination of whether--
(A) an industry in the United States--
(i) is materially injured, or
(ii) is threatened with material
injury, or
(B) the establishment of an industry in the
United States is materially retarded,
by reason of imports, or sales (or the likelihood of
sales) for importation, of the merchandise with respect
to which the administering authority has made an
affirmative determination under subsection (a). If the
Commission determines that imports of the subject
merchandise are negligible, the investigation shall be
terminated.
(2) Period for injury determination following
affirmative preliminary determination by administering
authority.--If the preliminary determination by the
administering authority under section 703(b) is
affirmative, then the Commission shall make the
determination required by paragraph (1) before the
later of--
(A) the 120th day after the day on which the
administering authority makes its affirmative
preliminary determination under section 703(b),
or
(B) the 45th day after the day on which the
administering authority makes its affirmative
final determination under subsection (a).
(3) Period for injury determination following
negative preliminary determination by administering
authority.--If the preliminary determination by the
administering authority under section 703(b) is
negative, and its final determination under subsection
(a) is affirmative, then the final determination by the
Commission under this subsection shall be made within
75 days after the date of that affirmative final
determination.
(4) Certain additional findings.--
(A) Commission standard for retroactive
application.--
(i) In general.--If the finding of
the administering authority under
subsection (a)(2) is affirmative, then
the final determination of the
Commission shall include a finding as
to whether the imports subject to the
affirmative determination under
subsection (a)(2) are likely to
undermine seriously the remedial effect
of the countervailing duty order to be
issued under section 706.
(ii) Factors to consider.--In making
the evaluation under clause (i), the
Commission shall consider, among other
factors it considers relevant--
(I) the timing and the volume
of the imports,
(II) any rapid increase in
inventories of the imports, and
(III) any other circumstances
indicating that the remedial
effect of the countervailing
duty order will be seriously
undermined.
(B) If the final determination of the
Commission is that there is no material injury
but that there is threat of material injury,
then its determination shall also include a
finding as to whether material injury by reason
of imports of the merchandise with respect to
which the administering authority has made an
affirmative determination under subsection (a)
would have been found but for any suspension of
liquidation of entries of that merchandise.
(c) Effect of Final Determinations.--
(1) Effect of affirmative determination by the
administering authority.--If the determination of the
administering authority under subsection (a) is
affirmative, then--
(A) the administering authority shall make
available to the Commission all information
upon which such determination was based and
which the Commission considers relevant to its
determination, under such procedures as the
administering authority and the Commission may
establish to prevent disclosure, other than
with the consent of the party providing it or
under protective order, of any information to
which confidential treatment has been given by
the administering authority,
(B)(i) the administering authority shall--
(I) determine an estimated individual
countervailable subsidy rate for each
exporter and producer individually
investigated, and, in accordance with
paragraph (5), an estimated all-others
rate for all exporters and producers
not individually investigated and for
new exporters and producers within the
meaning of section 751(a)(2)(B), or
(II) if section 777A(e)(2)(B)
applies, determine a single estimated
country-wide subsidy rate, applicable
to all exporters and producers,
(ii) shall order the posting of a cash
deposit, bond, or other security, as the
administering authority deems appropriate, for
each entry of the subject merchandise in an
amount based on the estimated individual
countervailable subsidy rate, the estimated
all-others rate, or the estimated country-wide
subsidy rate, whichever is applicable, and
(C) in cases where the preliminary
determination by the administering authority
under section 703(b) was negative, the
administering authority shall order the
suspension of liquidation under paragraph (2)
of section 703(d).
(2) Issuance of order; effect of negative
determination.--If the determinations of the
administering authority and the Commission under
subsections (a)(1) and (b)(1) are affirmative, then the
administering authority shall issue a countervailing
duty order under section 706(a). If either of such
determinations is negative, the investigation shall be
terminated upon the publication of notice of that
negative determination and the administering authority
shall--
(A) terminate the suspension of liquidation
under section 703(d)(2), and
(B) release any bond or other security and
refund any cash deposit required under section
703(d)(1)(B).
(3) Effect of negative determinations under
subsections (a)(2) and (b)(4)(a).--If the determination
of the administering authority or the Commission under
subsection (a)(2) and (b)(4)(A), respectively, is
negative, then the administering authority shall--
(A) terminate any retroactive suspension of
liquidation required under paragraph (4) or
section 703(e)(2), and
(B) release any bond or other security, and
refund any cash deposit required, under section
703(d)(1)(B) with respect to entries of the
merchandise the liquidation of which was
suspended retroactively under section
703(e)(2).
(4) Effect of affirmative determination under
subsection (a)(2).--If the determination of the
administering authority under subsection (a)(2) is
affirmative, then the administering authority shall--
(A) in cases where the preliminary
determinations by the administering authority
under sections 703(b) and 703(e)(1) were both
affirmative, continue the retroactive
suspension of liquidation and the posting of a
cash deposit, bond, or other security
previously ordered under section 703(e)(2);
(B) in cases where the preliminary
determination by the administering authority
under section 703(b) was affirmative, but the
preliminary determination under section
703(e)(1) was negative, shall modify any
suspension of liquidation and security
requirement previously ordered under section
703(d) to apply to unliquidated entries of
merchandise entered, or withdrawn from
warehouse, for consumption on or after the date
which is 90 days before the date on which
suspension of liquidation was first ordered; or
(C) in cases where the preliminary
determination by the administering authority
under section 703(b) and was negative, shall
apply any suspension of liquidation and
security requirement ordered under subsection
705(c)(1)(B) to unliquidated entries of
merchandise entered, or withdrawn from
warehouse, for consumption on or after the date
which is 90 days before the date on which
suspension of liquidation is first ordered.
(5) Method for determining the all-others rate and
the country-wide subsidy rate.--
(A) All-others rate.--
(i) General rule.--For purposes of
this subsection and section 703(d), the
all-others rate shall be an amount
equal to the weighted average
countervailable subsidy rates
established for exporters and producers
individually investigated, excluding
any zero and de minimis countervailable
subsidy rates, and any rates determined
entirely under section 776.
(ii) Exception.--If the
countervailable subsidy rates
established for all exporters and
producers individually investigated are
zero or de minimis rates, or are
determined entirely under section 776,
the administering authority may use any
reasonable method to establish an all-
others rate for exporters and producers
not individually investigated,
including averaging the weighted
average countervailable subsidy rates
determined for the exporters and
producers individually investigated.
(B) Country-wide subsidy rate.--The
administering authority may calculate a single
country-wide subsidy rate, applicable to all
exporters and producers, if the administering
authority limits its examination pursuant to
section 777A(e)(2)(B). The estimated country-
wide rate determined under section
703(d)(1)(A)(ii) or paragraph (1)(B)(i)(II) of
this subsection shall be based on industry-wide
data regarding the use of subsidies determined
to be countervailable.
(d) Publication of Notice of Determinations.--Whenever the
administering authority or the Commission makes a determination
under this section, it shall notify the petitioner, other
parties to the investigation, and the other agency of its
determination and of the facts and conclusions of law upon
which the determination is based, and it shall publish notice
of its determination in the Federal Register.
(e) Correction of Ministerial Errors.--The administering
authority shall establish procedures for the correction of
ministerial errors in final determinations within a reasonable
time after the determinations are issued under this section.
Such procedures shall ensure opportunity for interested parties
to present their views regarding any such errors. As used in
this subsection, the term ``ministerial error'' includes errors
in addition, subtraction or other arithmetic function, clerical
errors resulting from inaccurate copying, duplication, or the
like, and any other type of unintentional error which the
administering authority considers ministerial.
SEC. 706. ASSESSMENT OF DUTY.
(a) Publication of Countervailing Duty Order.--Within 7 days
after being notified by the Commission of an affirmative
determination under section 705(b), the administering authority
shall publish a countervailing duty order which--
(1) directs customs officers to assess a
countervailing duty equal to the amount of the net
countervailable subsidy determined or estimated to
exist, within 6 months after the date on which the
administering authority receives satisfactory
information upon which the assessment may be based, but
in no event later than 12 months after the end of the
annual accounting period of the manufacturer or
exporter within which the merchandise is entered, or
withdrawn from warehouse, for consumption,
(2) includes a description of the subject
merchandise, in such detail as the administering
authority deems necessary, and
(3) requires the deposit of estimated countervailing
duties pending liquidation of entries of merchandise at
the same time as estimated normal customs duties on
that merchandise are deposited.
(b) Imposition of Duties.--
(1) General rule.--If the Commission, in its final
determination under section 705(b), finds material
injury or threat of material injury which, but for the
suspension of liquidation under section 703(d)(2),
would have led to a finding of material injury, then
entries of the merchandise subject to the
countervailing duty order, the liquidation of which has
been suspended under section 703(d)(2), shall be
subject to the imposition of countervailing duties
under section 701(a).
(2) Special rule.--If the Commission, in its final
determination under section 705(b), finds threat of
material injury, other than threat of material injury
described in paragraph (1), or material retardation of
the establishment of an industry in the United States,
then merchandise subject to a countervailing duty order
which is entered, or withdrawn from warehouse, for
consumption on or after the date of publication of
notice of an affirmative determination of the
Commission under section 705(b) shall be subject to the
imposition of countervailing duties under section
701(a), and the administering authority shall release
any bond or other security, and refund any cash deposit
made, to secure the payment of countervailing duties
with respect to entries of the merchandise entered, or
withdrawn from warehouse, for consumption before that
date.
(c) Special Rule for Regional Industries.--
(1) In general.--In an investigation under this
subtitle in which the Commission makes a regional
industry determination under section 771(4)(C), the
administering authority shall, to the maximum extent
possible, direct that duties be assessed only on the
subject merchandise of the specific exporters or
producers that exported the subject merchandise for
sale in the region concerned during the period of
investigation.
(2) Exception for new exporters and producers.--After
publication of the countervailing duty order, if the
administering authority finds that a new exporter or
producer is exporting the subject merchandise for sale
in the region concerned, the administering authority
shall direct that duties be assessed on the subject
merchandise of the new exporter or producer consistent
with the provisions of section 751(a)(2)(B).
SEC. 707. TREATMENT OF DIFFERENCE BETWEEN DEPOSIT OF ESTIMATED
COUNTERVAILING DUTY AND FINAL ASSESSED DUTY UNDER
COUNTERVAILING DUTY ORDER.
(a) Deposit of Estimated Countervailing Duty Under Section
703(d)(1)(B).--If the amount of a cash deposit, or the amount
of any bond or other security, required as security for an
estimated countervailing duty under section 703(d)(1)(B) is
different from the amount of the countervailing duty determined
under a countervailing duty order issued under section 706,
then the difference for entries of merchandise entered, or
withdrawn from warehouse, for consumption before notice of the
affirmative determination of the Commission under section
705(b) is published shall be--
(1) disregarded, to the extent that the cash deposit,
bond, or other security is lower than the duty under
the order, or
(2) refunded or released, to the extent that the cash
deposit, bond, or other security is higher than the
duty under the order.
(b) Deposit of Estimated Countervailing Duty Under Section
706(a)(3).--If the amount of an estimated countervailing duty
deposited under section 706(a)(3) is different from the amount
of the countervailing duty determined under a countervailing
duty order issued under section 706, then the difference for
entries of merchandise entered, or withdrawn from warehouse,
for consumption after notice of the affirmative determination
of the Commission under section 705(b) is published shall be--
(1) collected, to the extent that the deposit under
section 706(a)(3) is lower than the duty determined
under the order, or
(2) refunded, to the extent that the deposit under
section 706(a)(3) is higher than the duty determined
under the order,
together with interest as provided by section 778.
SEC. 708. EFFECT OF DEROGATION OF EXPORT-IMPORT BANK FINANCING.
Nothing in this title shall be interpreted as superseding the
provisions of section 1912 of the Export-Import Bank Act
Amendments of 1978, except that in the event of an assessment
of duty based on a derogation under section 706 or action under
section 703(d)(1)(B), the Secretary of the Treasury shall not
authorize the Bank to provide guarantees, insurance and credits
to competing United States sellers pursuant to section 1912 of
such Act.
SEC. 709. CONDITIONAL PAYMENT OF COUNTERVAILING DUTY.
(a) In General.--For all entries, or withdrawals from
warehouse, for consumption of merchandise subject to a
countervailing duty order on or after the date of publication
of such order, no customs officer may deliver merchandise of
that class or kind to the person by whom or for whose account
it was imported unless that person complies with the
requirement of subsection (b) and deposits with the appropriate
customs officer an estimated countervailing duty in an amount
determined by the administering authority.
(b) Importer Requirements.--In order to meet the requirements
of this subsection, a person shall--
(1) furnish, or arrange to have furnished, to the
appropriate customs officer such information as the
administering authority deems necessary for
ascertaining any countervailing duty to be imposed
under this subtitle,
(2) maintain and furnish to the customs officer such
records concerning such merchandise as the
administering authority, by regulation, requires, and
(3) pay, or agree to pay on demand, to the customs
officer the amount of countervailing duty imposed under
this subtitle on that merchandise.
2. Antidumping Duties
Subtitle B of Title VII (Sections 731-739) of the Tariff Act of 1930,
as amended
[19 U.S.C. 1673-1673h; P.L. 71-361, as amended by P.L. 96-39, P.L. 98-
573, P.L. 99-514, P.L. 100-418, P.L. 100-647, P.L. 103-465, and P.L.
104-295]
SEC. 731. ANTIDUMPING DUTIES IMPOSED.
If--
(1) the administering authority determines that a
class or kind of foreign merchandise is being, or is
likely to be, sold in the United States at less than
its fair value, and
(2) the Commission determines that--
(A) an industry in the United States--
(i) is materially injured, or
(ii) is threatened with material
injury, or
(B) the establishment of an industry in the
United States is materially retarded,
by reason of imports of that merchandise or by reason
of sales (or the likelihood of sales) of that
merchandise for importation,
then there shall be imposed upon such merchandise an
antidumping duty, in addition to any other duty imposed, in an
amount equal to the amount by which the normal value exceeds
the export price (or the constructed export price) for the
merchandise. For purposes of this subsection and section
735(b)(1), a reference to the sale of foreign merchandise
includes the entering into of any leasing arrangement regarding
the merchandise that is equivalent to the sale of the
merchandise.
SEC. 732. PROCEDURES FOR INITIATING AN ANTIDUMPING DUTY INVESTIGATION.
(a) Initiation by Administering Authority.--
(1) In general.--An antidumping duty investigation
shall be initiated whenever the administering authority
determines, from information available to it, that a
formal investigation is warranted into the question of
whether the elements necessary for the imposition of a
duty under section 731 exist.
(2) Cases involving persistent dumping.--
(A) Monitoring.--The administering authority
may establish a monitoring program with respect
to imports of a class or kind of merchandise
from any additional supplier country for a
period not to exceed one year if--
(i) more than one antidumping order
is in effect with respect to that class
or kind of merchandise;
(ii) in the judgment of the
administering authority there is reason
to believe or suspect an extraordinary
pattern of persistent injurious dumping
from one or more additional supplier
countries; and
(iii) in the judgment of the
administering authority this
extraordinary pattern is causing a
serious commercial problem for the
domestic industry.
(B) If during the period of monitoring
referred to in subparagraph (A), the
administering authority determines that there
is sufficient information to initiate a formal
investigation under this subsection regarding
an additional supplier country, the
administering authority shall immediately
initiate such an investigation.
(C) Definition.--For purposes of this
paragraph, the term ``additional supplier
country'' means a country regarding which no
antidumping investigation is currently pending,
and no antidumping duty order is currently in
effect, with respect to imports of the class or
kind of merchandise covered by subparagraph
(A).
(D) Expeditious action.--The administering
authority and the Commission, to the extent
practicable, shall expedite proceedings under
this subtitle undertaken as a result of a
formal investigation initiated under
subparagraph (B).
(b) Initiation by Petition.--
(1) Petition requirements.--An antidumping proceeding
shall be initiated whenever an interested party
described in subparagraph (C), (D), (E), (F), or (G) of
section 771(9) files a petition with the administering
authority, on behalf of an industry, which alleges the
elements necessary for the imposition of the duty
imposed by section 731, and which is accompanied by
information reasonably available to the petitioner
supporting those allegations. The petition may be
amended at such time, and upon such conditions, as the
administering authority and the Commission may permit.
(2) Simultaneous filing with commission.--The
petitioner shall file a copy of the petition with the
Commission on the same day as it is filed with the
administering authority.
(3) Action with respect to petitions.--
(A) Notification of governments.--Upon
receipt of a petition filed under paragraph
(1), the administering authority shall notify
the government of any exporting country named
in the petition by delivering a public version
of the petition to an appropriate
representative of such country.
(B) Acceptance of communications.--The
administering authority shall not accept any
unsolicited oral or written communication from
any person other than an interested party
described in section 771(9) (C), (D), (E), (F),
or (G) before the administering authority makes
its decision whether to initiate an
investigation, except as provided in subsection
(c)(4)(D), and except for inquiries regarding
the status of the administering authority's
consideration of the petition.
(C) Nondisclosure of certain information.--
The administering authority and the Commission
shall not dis-close information with regard to
any draft petition sub-mitted for review and
comment before it is filed under paragraph (1).
(c) Petition Determination.--
(1) In general.--
(A) Time for initial determination.--Except
as provided in subparagraph (B), within 20 days
after the date on which a petition is filed
under subsection (b), the administering
authority shall--
(i) after examining, on the basis of
sources readily available to the
administering authority, the accuracy
and adequacy of the evidence provided
in the petition, determine whether the
petition alleges the elements necessary
for the imposition of a duty under
section 731 and contains information
reasonably available to the petitioner
supporting the allegations, and
(ii) determine if the petition has
been filed by or on behalf of the
industry.
(B) Extension of time.--In any case in which
the administering authority is required to poll
or otherwise determine support for the petition
by the industry under paragraph (4)(D), the
administering authority may, in exceptional
circumstances, apply subparagraph (A) by
substituting ``a maximum of 40 days'' for ``20
days''.
(C) Time limits where petition involves same
merchandise as an order that has been
revoked.--If a petition is filed under this
section with respect to merchandise that was
the subject merchandise of--
(i) an antidumping duty order or
finding that was revoked under section
751(d) in the 24 months preceding the
date the petition is filed, or
(ii) a suspended investigation that
was terminated under section 751(d) in
the 24 months preceding the date the
petition is filed,
the administering authority and the Commission
shall, to the maximum extent practicable,
expedite any investigation initiated under this
section with respect to the petition.
(2) Affirmative determinations.--If the
determinations under clauses (i) and (ii) of paragraph
(1)(A) are affirmative, the administering authority
shall initiate an investigation to determine whether
the subject merchandise is being, or is likely to be,
sold in the United States at less than its fair value.
(3) Negative determinations.--If the determination
under clause (i) or (ii) of paragraph (1)(A) is
negative, the administering authority shall dismiss the
petition, terminate the proceeding, and notify the
petitioner in writing of the reasons for the
determination.
(4) Determination of industry support.--
(A) General rule.--For purposes of this
subsection, the administering authority shall
determine that the petition has been filed by
or on behalf of the industry, if--
(i) the domestic producers or workers
who support the petition account for at
least 25 percent of the total
production of the domestic like
product, and
(ii) the domestic producers or
workers who support the petition
account for more than 50 percent of the
production of the domestic like product
produced by that portion of the
industry expressing support for or
opposition to the petition.
(B) Certain positions disregarded.--
(i) Producers related to foreign
producers.--In determining industry
support under subparagraph (A), the
administering authority shall disregard
the position of domestic producers who
oppose the petition, if such producers
are related to foreign producers, as
defined in section 771(4)(B)(ii),
unless such domestic producers
demonstrate that their interests as
domestic producers would be adversely
affected by the imposition of an
antidumping duty order.
(ii) Producers who are importers.--
The administering authority may
disregard the position of domestic
producers of a domestic like product
who are importers of the subject
merchandise.
(C) Special rule for regional industries.--If
the petition alleges the industry is a regional
industry, the administering authority shall
determine whether the petition has been filed
by or on behalf of the industry by applying
subparagraph (A) on the basis of production in
the region.
(D) Polling the industry.--If the petition
does not establish support of domestic
producers or workers accounting for more than
50 percent of the total production of the
domestic like product, the administering
authority shall--
(i) poll the industry or rely on
other information in order to determine
if there is support for the petition as
required by subparagraph (A), or
(ii) if there is a large number of
producers in the industry, the
administering authority may determine
industry support for the petition by
using any statistically valid sampling
method to poll the industry.
(E) Comments by interested parties.--Before
the administering authority makes a
determination with respect to initiating an
investigation, any person who would qualify as
an interested party under section 771(9) if an
investigation were initiated, may submit
comments or information on the issue of
industry support. After the administering
authority makes a determination with respect to
initiating an investigation, the determination
regarding industry support shall not be
reconsidered.
(5) Definition of domestic producers or workers.--For
purposes of this subsection, the term ``domestic
producers or workers'' means those interested parties
who are eligible to file a petition under subsection
(b)(1).
(d) Notification to Commission of Determination.--The
administering authority shall--
(1) notify the Commission immediately of any
determination it makes under subsection (a) or (c), and
(2) if the determination is affirmative, make
available to the Commission such information as it may
have relating to the matter under investigation, under
such procedures as the administering authority and the
Commission may establish to prevent disclosure, other
than with the consent of the party providing it or
under protective order, of any information to which
confidential treatment has been given by the
administering authority.
(e) Information Regarding Critical Circumstances.--If, at any
time after the initiation of an investigation under this
subtitle, the administering authority finds a reasonable basis
to suspect that--
(1) there is a history of dumping in the United
States or elsewhere of the subject merchandise, or
(2) the person by whom, or for whose account, the
merchandise was imported knew, or should have known,
that the exporter was selling the subject merchandise
at less than its fair value,
the administering authority may request the Commissioner of
Customs to compile information on an expedited basis regarding
entries of the subject merchandise. Upon receiving such
request, the Commissioner of Customs shall collect information
regarding the volume and value of entries of the subject
merchandise and shall transmit such information to the
administering authority at such times as the administering
authority shall direct (at least once every 30 days), until a
final determination is made under section 735(a), the
investigation is terminated, or the administering authority
withdraws the request.
SEC. 733. PRELIMINARY DETERMINATIONS.
(a) Determination by Commission of Reasonable Indication of
Injury.--
(1) General rule.--Except in the case of a petition
dismissed by the administering authority under section
732(c)(3), the Commission, within the time specified in
paragraph (2), shall determine, based on the
information available to it at the time of the
determination, whether there is a reasonable indication
that--
(A) an industry in the United States--
(i) is materially injured, or
(ii) is threatened with material
injury, or
(B) the establishment of an industry in the
United States is materially retarded,
by reason of imports of the subject merchandise and
that imports of the subject merchandise are not
negligible. If the Commission finds that imports of the
subject merchandise are negligible or otherwise makes a
negative determination under this paragraph, the
investigation shall be terminated.
(2) Time for commission determination.--The
Commission shall make the determination described in
paragraph (1)--
(A) in the case of a petition filed under
section 732(b)--
(i) within 45 days after the date on
which the petition is filed, or
(ii) if the time has been extended
pursuant to section 732(c)(1)(B),
within 25 days after the date on which
the Commission receives notice from the
administering authority of initiation
of the investigation, and
(B) in the case of an investigation initiated
under section 732(a), within 45 days after the
date on which the Commission receives notice
from the administering authority that an
investigation has been initiated under such
section.
(b) Preliminary Determination by Administering Authority.--
(1) Period of antidumping duty investigation.--
(A) In general.--Except as provided in
subparagraph (B), within 140 days after the
date on which the administering authority
initiates an investigation under section
732(c), or an investigation is initiated under
section 732(a), but not before an affirmative
determination by the Commission under
subsection (a) of this section, the
administering authority shall make a
determination, based upon the information
available to it at the time of the
determination, of whether there is a reasonable
basis to believe or suspect that the
merchandise is being sold, or is likely to be
sold at less than fair value.
(B) If certain short life cycle merchandise
involved.--If a petition filed under section
732(b), or an investigation initiated under
section 732(a), concerns short life cycle
merchandise that is included in a product
category established under section 739(a),
subparagraph (A) shall be applied--
(i) by substituting ``100 days'' for
``140 days'' if manufacturers that are
second offenders account for a
significant proportion of the
merchandise under investigation, and
(ii) by substituting ``80 days'' for
``140 days'' if manufacturers that are
multiple offenders account for a
significant proportion of the
merchandise under investigation.
(C) Definitions of offenders.--For purposes
of subparagraph (B)--
(i) the term ``second offender''
means a manufacturer that is specified
in 2 affirmative dumping determinations
(within the meaning of section 739) as
the manufacturer of short life cycle
merchandise that is--
(I) specified in both such
determinations, and
(II) within the scope of the
product category referred to in
subparagraph (B).
(ii) the term ``multiple offender''
means a manufacturer that is specified
in 3 or more affirmative dumping
determinations (within the meaning of
section 739) as the manufacturer of
short life cycle merchandise that is--
(I) specified in each of such
determinations, and
(II) within the scope of the
product category referred to in
subparagraph (B).
(2) Preliminary determination under waiver of
verification.--Within 75 days after the initiation of
an investigation, the administering authority shall
cause an official designated for such purpose to review
the information concerning the case received during the
first 60 days of the investigation, and, if there
appears to be sufficient information available upon
which the preliminary determination can reasonably be
based, to disclose to the petitioner and any interested
party, then a party to the proceedings that requests
such disclosure, all available non-confidential
information and all other information which is
disclosed pursuant to section 777. Within 3 days (not
counting Saturdays, Sundays, or legal public holidays)
after such disclosure, the petitioner and each party
which is an interested party described in subparagraph
(C), (D), (E), (F), or (G) of section 771(9) to whom
such disclosure was made may furnish to the
administering authority an irrevocable written waiver
of verification of the information received by the
authority, and an agreement that it is willing to have
a preliminary determination made on the basis of the
record then available to the authority. If a timely
waiver and agreement have been received from the
petitioner and each party which is an interested party
described in subparagraph (C), (D), (E), (F), or (G) of
section 771(9) to whom the disclosure was made, and the
authority finds that sufficient information is then
available upon which the preliminary determination can
reasonably be based, a preliminary determination shall
be made within 90 days after the initiation of the
investigation on the basis of the record established
during the first 60 days after the investigation was
initiated.
(3) De minimis dumping margin.--In making a
determination under this subsection, the administering
authority shall disregard any weighted average dumping
margin that is de minimis. For purposes of the
preceding sentence, a weighted average dumping margin
is de minimis if the administering authority determines
that it is less than 2 percent ad valorem or the
equivalent specific rate for the subject merchandise.
(c) Extension of Period in Extraordinarily Complicated
Cases.--
(1) In general.--If--
(A) the petitioner makes a timely request for
an extension of the period within which the
determination must be made under subsection
(b)(1), or
(B) the administering authority concludes
that the parties concerned are cooperating and
determines that--
(i) the case is extraordinarily
complicated by reason of--
(I) the number and complexity
of the transactions to be
investigated or adjustments to
be considered,
(II) the novelty of the
issues presented, or
(III) the number of firms
whose activities must be
investigated, and
(ii) additional time is necessary to
make the preliminary determination,
then the administering authority may postpone making
the preliminary determination under subsection (b)(1)
until not later than the 190th day after the date on
which the administering authority initiates an
investigation under section 732(c), or an investigation
is initiated under section 732(a). No extension of a
determination date may be made under this paragraph for
any investigation in which a determination date
provided for in subsection (b)(1)(B) applies unless the
petitioner submits written notice to the administering
authority of its consent to the extension.
(2) Notice of postponement.--The administering
authority shall notify the parties to the
investigation, not later than 20 days before the date
on which the preliminary determination would otherwise
be required under subsection (b)(1), if it intends to
postpone making the preliminary determination under
paragraph (1). The notification shall include an
explanation of the reasons for the postponement, and
notice of the postponement shall be published in the
Federal Register.
(d) Effect of Determination by the Administering Authority.--
If the preliminary determination of the administering authority
under subsection (b) is affirmative, the administering
authority--
(1)(A) shall--
(i) determine an estimated weighted average
dumping margin for each exporter and producer
individually investigated, and
(ii) determine, in accordance with section
735(c)(5), an estimated all-others rate for all
exporters and producers not individually
investigated, and
(B) shall order the posting of a cash deposit, bond,
or other security, as the administering authority deems
appropriate, for each entry of the subject merchandise
in an amount based on the estimated weighted average
dumping margin or the estimated all-others rate,
whichever is applicable,
(2) shall order the suspension of liquidation of all
entries of merchandise subject to the determination
which are entered, or withdrawn from warehouse, for
consumption on or after the later of--
(A) the date on which notice of the
determination is published in the Federal
Register, or
(B) the date that is 60 days after the date
on which notice of the determination to
initiate the investigation is published in the
Federal Register, and
(3) shall make available to the Commission all
information upon which such determination was based and
which the Commission considers relevant to its injury
determination, under such procedures as the
administering authority and the Commission may
establish to prevent disclosure, other than with the
consent of the party providing it or under protective
order, of any information to which confidential
treatment has been given by the administering
authority.
The instructions of the administering authority under
paragraphs (1) and (2) may not remain in effect for more than 4
months, except that the administering authority may, at the
request of exporters representing a significant proportion of
exports of the subject merchandise, extend that 4-month period
to not more than 6 months.
(e) Critical Circumstances Determinations.--
(1) In general.--If a petitioner alleges critical
circumstances in its original petition, or by amendment
at any time more than 20 days before the date of a
final determination by the administering authority,
then the administering authority shall promptly (at any
time after the initiation of the investigation under
this subtitle) determine, on the basis of the
information available to it at that time, whether there
is a reasonable basis to believe or suspect that--
(A)(i) there is a history of dumping and
material injury by reason of dumped imports in
the United States or elsewhere of the subject
merchandise, or
(ii) the person by whom, or for whose
account, the merchandise was imported knew or
should have known that the exporter was selling
the subject merchandise at less than its fair
value and that there was likely to be material
injury by reason of such sales, and
(B) there have been massive imports of the
subject merchandise over a relatively short
period.
The administering authority shall be treated as having
made an affirmative determination under subparagraph
(A) in any investigation to which subsection (b)(1)(B)
is applied.
(2) Suspension of liquidation.--If the determination
of the administering authority under paragraph (1) is
affirmative, then any suspension of liquidation ordered
under subsection (d)(2) shall apply, or, if notice of
such suspension of liquidation is already published, be
amended to apply, to unliquidated entries of
merchandise entered, or withdrawn from warehouse, for
consumption on or after the later of--
(A) the date which is 90 days before the date
on which the suspension of liquidation was
first ordered, or
(B) the date on which notice of the
determination to initiate the investigation is
published in the Federal Register.
(f) Notice of Determination.--Whenever the Commission or the
administering authority makes a determination under this
section, the Commission or the administering authority, as the
case may be, shall notify the petitioner, and other parties to
the investigation, and the Commission or the administering
authority (whichever is appropriate) of its determination. The
administering authority shall include with such notification
the facts and conclusions on which its determination is based.
Not later than 5 days after the date on which the determination
is required to be made under subsection (a)(2), the Commission
shall transmit to the administering authority the facts and
conclusions on which its determination is based.
SEC. 734. TERMINATION OR SUSPENSION OF INVESTIGATION.
(a) Termination of Investigation Upon Withdrawal of
Petition.--
(1) In general.--
(A) Withdrawal of petition.--Except as
provided in paragraphs (2) and (3), an
investigation under this subtitle may be
terminated by either the administering
authority or the Commission, after notice to
all parties to the investigation, upon
withdrawal of the petition by the petitioner or
by the administering authority if the
investigation was initiated under section
732(a).
(B) Refiling of petition.--If, within 3
months after the withdrawal of a petition under
subparagraph (A), a new petition is filed
seeking the imposition of duties on both the
subject merchandise of the withdrawn petition
and the subject merchandise from another
country, the administering authority and the
Commission may use in the investigation
initiated pursuant to the new petition any
records compiled in an investigation conducted
pursuant to the withdrawn petition. This
subparagraph applies only with respect to the
first withdrawal of a petition.
(2) Special rules for quantitative restriction
agreements.--
(A) In general.--Subject to subparagraphs (B)
and (C), the administering authority may not
terminate an investigation under paragraph (1)
by accepting an understanding or other kind of
agreement to limit the volume of imports into
the United States of the subject merchandise
unless the administering authority is satisfied
that termination on the basis of that agreement
is in the public interest.
(B) Public interest factors.--In making a
decision under subparagraph (A) regarding the
public interest the administering authority
shall take into account--
(i) whether, based upon the relative
impact on consumer prices and the
availability of supplies of the
merchandise, the agreement would have a
greater adverse impact on United States
consumers than the imposition of
antidumping duties;
(ii) the relative impact on the
international eco- nomic interests of
the United States; and
(iii) the relative impact on the
competitiveness of the domestic
industry producing the like
merchandise, including any such impact
on employment and investment in that
industry.
(C) Prior consultations.--Before making a
decision under subparagraph (A) regarding the
public interest, the administering authority
shall, to the extent practicable, consult
with--
(i) potentially affected consuming
industries; and
(ii) potentially affected producers
and workers in the domestic industry
producing the like merchandise,
including producers and workers not
party to the investigation.
(3) Limitation on termination by commission.--The
Commission may not terminate an investigation under
paragraph (1) before a preliminary determination is
made by the administering authority under section
733(b).
(b) Agreements To Eliminate Completely Sales at Less Than
Fair Value or To Cease Exports of Merchandise.--The
administering authority may suspend an investigation if the
exporters of the subject merchandise who account for
substantially all of the imports of that merchandise agree--
(1) to cease exports of the merchandise to the United
States within 6 months after the date on which the
investigation is suspended, or
(2) to revise their prices to eliminate completely
any amount by which the normal value of the merchandise
which is the subject of the agreement exceeds the
export price (or the constructed export price) of that
merchandise.
(c) Agreements Eliminating Injurious Effect.--
(1) General rule.--If the administering authority
determines that extraordinary circumstances are present
in a case, it may suspend an investigation upon the
acceptance of an agreement to revise prices from
exporters of the subject merchandise who account for
substantially all of the imports of that merchandise
into the United States, if the agreement will eliminate
completely the injurious effect of exports to the
United States of that merchandise and if--
(A) the suppression or undercutting of price
levels of domestic products by imports of that
merchandise will be prevented, and
(B) for each entry of each exporter the
amount by which the estimated normal value
exceeds the export price (or the constructed
export price) will not exceed 15 percent of the
weighted average amount by which the estimated
normal value exceeded the export price (or the
constructed export price) for all less-than-
fair-value entries of the exporter examined
during the course of the investigation.
(2) Definition of extraordinary circumstances.--
(A) Extraordinary circumstances.--For
purposes of this subsection, the term
``extraordinary circumstances'' means
circumstances in which--
(i) suspension of an investigation
will be more beneficial to the domestic
industry than continuation of the
investigation, and
(ii) the investigation is complex.
(B) Complex.--For purposes of this paragraph,
the term ``complex'' means--
(i) there are a large number of
transactions to be investigated or
adjustments to be considered,
(ii) the issues raised are novel, or
(iii) the number of firms involved is
large.
(d) Additional Rules and Conditions.--The administering
authority may not accept an agreement under subsection (b) or
(c) unless--
(1) it is satisfied that suspension of the
investigation is in the public interest, and
(2) effective monitoring of the agreement by the
United States is practicable.
Where practicable, the administering authority shall provide to
the exporters who would have been subject to the agreement the
reasons for not accepting the agreement and, to the extent
possible, an opportunity to submit comments thereon.
(e) Suspension of Investigation Procedure.--Before an
investigation may be suspended under subsection (b) or (c) the
administering authority shall--
(1) notify the petitioner of, and consult with the
petitioner concerning, its intention to suspend the
investigation, and notify other parties to the
investigation and the Commission not less than 30 days
before the date on which it suspends the investigation,
(2) provide a copy of the proposed agreement to the
petitioner at the time of the notification, together
with an explanation of how the agreement will be
carried out and enforced, and of how the agreement will
meet the requirements of subsections (b) and (d) or (c)
and (d), and
(3) permit all interested parties described in
section 771(9) to submit comments and information for
the record before the date on which notice of
suspension of the investigation is published under
subsection (f)(1)(A).
(f) Effects of Suspension of Investigation.--
(1) In general.--If the administering authority
determines to suspend an investigation upon acceptance
of an agreement described in subsection (b) or (c),
then--
(A) it shall suspend the investigation,
publish notice of suspension of the
investigation, and issue an affirmative
preliminary determination under section 733(b)
with respect to the subject merchandise, unless
it has previously issued such a determination
in the same investigation,
(B) the Commission shall suspend any
investigation it is conducting with respect to
that merchandise, and
(C) the suspension of investigation shall
take effect on the day on which such notice is
published.
(2) Liquidation of entries.--
(A) Cessation of exports; complete
elimination of dumping margin.--If the
agreement accepted by the administering
authority is an agreement described in
subsection (b), then--
(i) notwithstanding the affirmative
preliminary determination required
under paragraph (1)(A), the liquidation
of entries of subject merchandise shall
not be suspended under section
733(d)(2),
(ii) if the liquidation of entries of
such merchandise was suspended pursuant
to a previous affirmative preliminary
determination in the same case with
respect to such merchandise, that
suspension of liquidation shall
terminate, and
(iii) the administering authority
shall refund any cash deposit and
release any bond or other security
deposited under section 733(d)(1)(B).
(B) Other agreements.--If the agreement
accepted by the administering authority is an
agreement described in subsection (c), the
liquidation of entries of the subject
merchandise shall be suspended under section
733(d)(2), or, if the liquidation of entries of
such merchandise was suspended pursuant to a
previous affirmative preliminary determination
in the same case, that suspension of
liquidation shall continue in effect, subject
to subsection (h)(3), but the security required
under section 733(d)(1)(B) may be adjusted to
reflect the effect of the agreement.
(3) Where investigation is continued.--If, pursuant
to subsection (g), the administering authority and the
Commission continue an investigation in which an
agreement has been accepted under subsection (b) or
(c), then--
(A) if the final determination by the
administering authority or the Commission under
section 735 is negative, the agreement shall
have no force or effect and the investigation
shall be terminated, or
(B) if the final determinations by the
administering authority and the Commission
under such section are affirmative, the
agreement shall remain in force, but the
administering authority shall not issue an
antidumping duty order in the case so long as--
(i) the agreement remains in force,
(ii) the agreement continues to meet
the requirements of subsections (b) and
(d), or (c) and (d), and
(iii) the parties to the agreement
carry out their obligations under the
agreement in accordance with its terms.
(g) Investigation To Be Continued Upon Request.--If the
administering authority, within 20 days after the date of
publication of the notice of suspension of an investigation,
receives a request for the continuation of the investigation
from--
(1) an exporter or exporters accounting for a
significant proportion of exports to the United States
of the subject merchandise, or
(2) an interested party described in subparagraph
(C), (D), (E), (F), or (G) of section 771(9) which is a
party to the investigation,
then the administering authority and the Commission shall
continue the investigation.
(h) Review of Suspension.--
(1) In general.--Within 20 days after the suspension
of an investigation under subsection (c), an interested
party which is a party to the investigation and which
is described in subparagraph (C), (D), (E), (F), or (G)
of section 771(9) may, by petition filed with the
Commission and with notice to the administering
authority, ask for a review of the suspension.
(2) Commission investigation.--Upon receipt of a
review petition under paragraph (1), the Commission
shall, within 75 days after the date on which the
petition is filed with it, determine whether the
injurious effect of imports of the subject merchandise
is eliminated completely by the agreement. If the
Commission's determination under this subsection is
negative, the investigation shall be resumed on the
date of publication of notice of such determination as
if the affirmative preliminary determination under
section 733(b) had been made on that date.
(3) Suspension of liquidation to continue during
review period.--The suspension of liquidation of
entries of the subject merchandise shall terminate at
the close of the 20-day period beginning on the day
after the date on which notice of suspension of the
investigation is published in the Federal Register, or,
if a review petition is filed under paragraph (1) with
respect to the suspension of the investigation, in the
case of an affirmative determination by the Commission
under paragraph (2), the date on which notice of an
affirmative determination by the Commission is
published. If the determination of the Commission under
paragraph (2) is affirmative, then the administering
authority shall--
(A) terminate the suspension of liquidation
under section 733(d)(2), and
(B) release any bond or other security, and
refund any cash deposit, required under section
733(d)(1)(B).
(i) Violation of Agreement.--
(1) In general.--If the administering authority
determines that an agreement accepted under subsection
(b) or (c) is being, or has been, violated, or no
longer meets the requirements of such subsection (other
than the requirement, under subsection (c)(1), of
elimination of injury) and subsection (d), then, on the
date of publication of its determination it shall--
(A) suspend liquidation under section
733(d)(2) of unliquidated entries of the
merchandise made on the later of--
(i) the date which is 90 days before
the date of publication of the notice
of suspension of liquidation, or
(ii) the date on which the
merchandise, the sale or export to the
United States of which was in violation
of the agreement, or under an agreement
which no longer meets the requirements
of subsections (b) and (d) or (c) and
(d), was first entered, or withdrawn
from warehouse, for consumption,
(B) if the investigation was not completed,
resume the investigation as if its affirmative
preliminary determination were made on the date
of its determination under this paragraph,
(C) if the investigation was completed under
subsection (g), issue an antidumping duty order
under section 736(a) effective with respect to
entries of merchandise liquidation of which was
suspended,
(D) if it considers the violation to be
intentional, notify the Commissioner of Customs
who shall take appropriate action under
paragraph (2), and
(E) notify the petitioner, interested parties
who are or were parties to the investigation,
and the Commission of its action under this
paragraph.
(2) Intentional violation to be punished by civil
penalty.--Any person who intentionally violates an
agreement accepted by the administering authority under
subsection (b) or (c) shall be subject to a civil
penalty assessed in the same amount, in the same
manner, and under the same procedures, as the penalty
imposed for a fraudulent violation of section 592(a) of
this Act.
(j) Determination Not To Take Agreement Into Account.--In
making a final determination under section 735, or in
conducting a review under section 751, in a case in which the
administering authority has terminated a suspension of
investigation under subsection (i)(1), or continued an
investigation under subsection (g), the Commission and the
administering authority shall consider all of the subject
merchandise, without regard to the effect of any agreement
under subsection (b) or (c).
(k) Termination of Investigation Initiated by Administering
Authority.--The administering authority may terminate any
investigation initiated by the administering authority under
section 732(a) after providing notice of such termination to
all parties to the investigation.
(l) Special Rule for Nonmarket Economy Countries.--
(1) In general.--The administering authority may
suspend an investigation under this subtitle upon
acceptance of an agreement with a nonmarket economy
country to restrict the volume of imports into the
United States of the merchandise under investigation
only if the administering authority determines that--
(A) such agreement satisfies the requirements
of subsection (d), and
(B) will prevent the suppression or
undercutting of price levels of domestic
products by imports of the merchandise under
investigation.
(2) Failure of Agreements.--If the administering
authority determines that an agreement accepted under
this subsection no longer prevents the suppression or
undercutting of domestic prices of merchandise
manufactured in the United States, the provisions of
subsection (i) shall apply.
(m) Special Rule for Regional Industry Investigations.--
(1) Suspension agreements.--If the Commission makes a
regional industry determination under section
771(4)(C), the administering authority shall offer
exporters of the subject merchandise who account for
substantially all exports of that merchandise for sale
in the region concerned the opportunity to enter into
an agreement described in subsection (b), (c), or (l).
(2) Requirements for suspension agreements.--Any
agreement described in paragraph (1) shall be subject
to all the requirements imposed under this section for
other agreements under subsection (b), (c), or (l),
except that if the Commission makes a regional industry
determination described in paragraph (1) in the final
affirmative determination under section 735(b) but not
in the preliminary affirmative determination under
section 733(a), any agreement described in paragraph
(1) may be accepted within 60 days after the
antidumping order is published under section 736.
(3) Effect of suspension agreement on antidumping
duty order.--If an agreement described in paragraph (1)
is accepted after the antidumping duty order is
published, the administering authority shall rescind
the order, refund any cash deposit and release any bond
or other security deposited under section 733(d)(1)(B),
and instruct the Customs Service that entries of the
subject merchandise that were made during the period
that the order was in effect shall be liquidated
without regard to antidumping duties.
SEC. 735. FINAL DETERMINATIONS.
(a) Final Determinations by Administering Authority.--
(1) General rule.--Within 75 days after the date of
its preliminary determination under section 733(b), the
administering authority shall make a final
determination of whether the subject merchandise is
being, or is likely to be, sold in the United States at
less than its fair value.
(2) Extension of period for determination.--The
administering authority may postpone making the final
determination under paragraph (1) until not later than
the 135th day after the date on which it published
notice of its preliminary determination under section
733(b) if a request in writing for such a postponement
is made by--
(A) exporters who account for a significant
proportion of exports of the merchandise which
is the subject of the investigation, in a
proceeding in which the preliminary
determination by the administering authority
under section 733(b) was affirmative, or
(B) the petitioner, in a proceeding in which
the preliminary determination by the
administering authority under section 733(b)
was negative.
(3) Critical circumstances determinations.--If the
final determination of the administering authority is
affirmative, then that determination, in any
investigation in which the presence of critical
circumstances has been alleged under section 733(e),
shall also contain a finding of whether--
(A)(i) there is a history of dumping and
material in jury by reason of dumped imports in
the United States or elsewhere of the subject
merchandise, or
(ii) the person by whom, or for whose
account, the merchandise was imported, knew or
should have known that the exporter was selling
the subject merchandise at less than its fair
value and that there would be material injury
by reason of such sales, and
(B) there have been massive imports of the
subject merchandise over a relatively short
period.
Such findings may be affirmative even though the
preliminary determination under section 733(e)(1) was
negative.
(4) De minimis dumping margin.--In making a
determination under this subsection, the administering
authority shall disregard any weighted average dumping
margin that is de minimis as defined in section
733(b)(3).
(b) Final Determination by Commission.--
(1) In general.--The Commission shall make a final
determination of whether--
(A) an industry in the United States--
(i) is materially injured, or
(ii) is threatened with material
injury, or
(B) the establishment of an industry in the
United States is materially retarded,
by reason of imports, or sales (or the likelihood of
sales) for importation, of the merchandise with respect
to which the administering authority has made an
affirmative determination under subsection (a)(1). If
the Commission determines that imports of the subject
merchandise are negligible, the investigation shall be
terminated.
(2) Period for injury determination following
affirmative preliminary determination by administering
authority.--If the preliminary determination by the
administering authority under section 733(b) is
affirmative, then the Commission shall make the
determination required by paragraph (1) before the
later of--
(A) the 120th day after the day on which the
administering authority makes its affirmative
preliminary determination under section 733(b),
or
(B) the 45th day after the day on which the
administering authority makes its affirmative
final determination under subsection (a).
(3) Period for injury determination following
negative preliminary determination by administering
authority.--If the preliminary determination by the
administering authority under section 733(b) is
negative, and its final determination under subsection
(a) is affirmative, then the final determination by the
Commission under this subsection shall be made within
75 days after the date of that affirmative final
determination.
(4) Certain additional findings.--
(A) Commission standard for retroactive
application.--
(i) In general.--If the finding of
the administering authority under
subsection (a)(3) is affirmative, then
the final determination of the
Commission shall include a finding as
to whether the imports subject to the
affirmative determination under
subsection (a)(3) are likely to
undermine seriously the remedial effect
of the antidumping duty order to be
issued under section 736.
(ii) Factors to consider.--In making
the evaluation under clause (i), the
Commission shall consider, among other
factors it considers relevant--
(I) the timing and the volume
of the imports,
(II) a rapid increase in
inventories of the imports, and
(III) any other circumstances
indicating that the remedial
effect of the antidumping order
will be seriously undermined.
(B) If the final determination of the
Commission is that there is no material injury
but that there is threat of material injury,
then its determination shall also include a
finding as to whether material injury by reason
of the imports of the merchandise with respect
to which the administering authority has made
an affirmative determination under subsection
(a) would have been found but for any
suspension of liquidation of entries of the
merchandise.
(c) Effect of Final Determinations.--
(1) Effect of affirmative determination by the
administering authority.--If the determination of the
administering authority under subsection (a) is
affirmative, then--
(A) the administering authority shall make
available to the Commission all information
upon which such determination was based and
which the Commission considers relevant to its
determination, under such procedures as the
administering authority and the Commission may
establish to prevent disclosure, other than
with the consent of the party providing it or
under protective order, of any information as
to which confidential treatment has been given
by the administering authority,
(B)(i) the administering authority shall--
(I) determine the estimated weighted
average dumping margin for each
exporter and producer individually
investigated, and
(II) determine, in accordance with
paragraph (5), the estimated all-others
rate for all exporters and producers
not individually investigated, and
(ii) the administering authority shall order
the posting of a cash deposit, bond, or other
security, as the administering authority deems
appropriate, for each entry of the subject
merchandise in an amount based on the estimated
weighted average dumping margin or the
estimated all-others rate, whichever is
applicable, and
(C) in cases where the preliminary
determination by the administering authority
under section 733(b) was negative, the
administering authority shall order the
suspension of liquidation under section
733(d)(2).
(2) Issuance of order; effect of negative
determination.--If the determinations of the
administering authority and the Commission under
subsections (a)(1) and (b)(1) are affirmative, then the
administering authority shall issue an antidumping duty
order under section 736(a). If either of such
determinations is negative, the investigation shall be
terminated upon the publication of notice of that
negative determination and the administering authority
shall--
(A) terminate the suspension of liquidation
under section 703(d)(2), and
(B) release any bond or other security and
refund any cash deposit, required under section
733(d)(1)(B).
(3) Effect of negative determinations under
subsections (a)(3) and (b)(4)(a).--If the determination
of the administering authority or the Commission under
subsection (a)(3) or (b)(4)(A), respectively, is
negative, then the administering authority shall--
(A) terminate any retroactive suspension of
liquidation required under paragraph (4) or
section 733(e)(2), and
(B) release any bond or other security, and
refund any cash deposit required, under section
733(d)(1)(B) with respect to entries of the
merchandise the liquidation of which was
suspended retroactively under section
733(e)(2).
(4) Effect of affirmative determination under
subsection (a)(3).--If the determination of the
administering authority under subsection (a)(3) is
affirmative, then the administering authority shall--
(A) in cases where the preliminary
determinations by the administering authority
under sections 733(b) and 733(e)(1) were both
affirmative, continue the retroactive
suspension of liquidation and the posting of a
cash deposit, bond, or other security
previously ordered under section 733(e)(2);
(B) in cases where the preliminary
determination by the administering authority
under section 733(b) was affirmative, but the
preliminary determination under section
733(e)(1) was negative, shall modify any
suspension of liquidation and security
requirement previously ordered under section
733(d) to apply to unliquidated entries of
merchandise entered, or withdrawn from
warehouse, for consumption on or after the date
which is 90 days before the date on which
suspension of liquidation was first ordered; or
(C) in cases where the preliminary
determination by the administering authority
under section 733(b) was negative, shall apply
any suspension of liquidation and security
requirement ordered under subsection
735(c)(1)(B) to unliquidated entries of
merchandise entered, or withdrawn from
warehouse, for consumption on or after the date
which is 90 days before the date on which
suspension of liquidation is first ordered.
(5) Method for determining estimated all-others
rate.--
(A) General rule.--For purposes of this
subsection and section 733(d), the estimated
all-others rate shall be an amount equal to the
weighted average of the estimated weighted
average dumping margins established for
exporters and producers individually
investigated, excluding any zero and de minimis
margins, and any margins determined entirely
under section 776.
(B) Exception.--If the estimated weighted
average dumping margins established for all
exporters and producers individually
investigated are zero or de minimis margins, or
are determined entirely under section 776, the
administering authority may use any reasonable
method to establish the estimated all-others
rate for exporters and producers not
individually investigated, including averaging
the estimated weighted average dumping margins
determined for the exporters and producers
individually investigated.
(d) Publication of Notice of Determinations.--Whenever the
administering authority or the Commission makes a determination
under this section, it shall notify the petitioner, other
parties to the investigation, and the other agency of its
determination and of the facts and conclusions of law upon
which the determination is based, and it shall publish notice
of its determination in the Federal Register.
(e) Correction of Ministerial Errors.--The administering
authority shall establish procedures for the correction of
ministerial errors in final determinations within a reasonable
time after the determinations are issued under this section.
Such procedures shall ensure opportunity for interested parties
to present their views regarding any such errors. As used in
this subsection, the term ``ministerial error'' includes errors
in addition, subtraction, or other arithmetic function,
clerical errors resulting from inaccurate copying, duplication,
or the like, and any other type of unintentional error which
the administering authority considers ministerial.
SEC. 736. ASSESSMENT OF DUTY.
(a) Publication of Antidumping Duty Order.--Within 7 days
after being notified by the Commission of an affirmative
determination under section 735(b), the administering authority
shall publish an antidumping duty order which--
(1) directs customs officers to assess an antidumping
duty equal to the amount by which the normal value of
the merchandise exceeds the export price (or the
constructed export price) of the merchandise, within 6
months after the date on which the administering
authority receives satisfactory information upon which
the assessment may be based, but in no event later
than--
(A) 12 months after the end of the annual
accounting period of the manufacturer or
exporter within which the merchandise is
entered, or withdrawn from warehouse, for
consumption, or
(B) in the case of merchandise not sold prior
to its importation into the United States, 12
months after the end of the annual accounting
period of the manufacturer or exporter within
which it is sold in the United States to a
person who is not the exporter of that
merchandise,
(2) includes a description of the subject
merchandise, in such detail as the administering
authority deems necessary, and
(3) requires the deposit of estimated antidumping
duties pending liquidation of entries of merchandise at
the same time as estimated normal customs duties on
that merchandise are deposited.
(b) Imposition of Duty.--
(1) General rule.--If the Commission, in its final
determination under section 735(b), finds material
injury or threat of material injury which, but for the
suspension of liquidation under section 733(d)(2) would
have led to a finding of material injury, then entries
of the subject merchandise, the liquidation of which
has been suspended under section 733(d)(2), shall be
subject to the imposition of antidumping duties under
section 731.
(2) Special rule.--If the Commission, in its final
determination under section 735(b), finds threat of
material injury, other than threat of material injury
described in paragraph (1), or material retardation of
the establishment of an industry in the United States,
then subject merchandise which is entered, or withdrawn
from warehouse, for consumption on or after the date of
publication of notice of an affirmative determination
of the Commission under section 735(b) shall be subject
to the assessment of antidumping duties under section
731, and the administering authority shall release any
bond or other security, and refund any cash deposit
made, to secure the payment of antidumping duties with
respect to entries of the merchandise entered, or
withdrawn from warehouse, for consumption before that
date.
(c) Security in Lieu of Estimated Duty Pending Early
Determination of Duty.--
(1) Conditions for waiver of deposit of estimated
duties.--The administering authority may permit, for
not more than 90 days after the date of publication of
an order under subsection (a), the posting of a bond or
other security in lieu of the deposit of estimated
antidumping duties required under subsection (a)(3)
if--
(A) the investigation has not been designated
as extraordinarily complicated by reason of--
(i) the number and complexity of the
transactions to be investigated or
adjustments to be considered,
(ii) the novelty of the issues
presented, or
(iii) the number of firms whose
activities must be investigated,
(B) the final determination in the
investigation has not been postponed under
section 735(a)(2)(A);
(C) on the basis of information presented to
the administering authority by any
manufacturer, producer, or exporter in such
form and within such time as the administering
authority may require, the administering
authority is satisfied that a determination
will be made, within 90 days after the date of
publication of an order under subsection (a),
of the normal value and the export price (or
the constructed export price) for all
merchandise of such manufacturer, producer, or
exporter described in that order which was
entered, or withdrawn from warehouse, for
consumption on or after the date of publication
of--
(i) an affirmative preliminary
determination by the administering
authority under section 733(b), or
(ii) if its determination under
section 733(b) was negative, an
affirmative final determination by the
administering authority under section
735(a),
and before the date of publication of the
affirmative final determination by the
Commission under section 735(b);
(D) the party described in subparagraph (C)
provides credible evidence that the amount by
which the normal value of the merchandise
exceeds the export price (or the constructed
export price) of the merchandise is
significantly less than the amount of such
excess specified in the antidumping duty order
published under subsection (a); and
(E) the data concerning the normal value and
the export price (or the constructed export
price) apply to sales in the usual commercial
quantities and in the ordinary course of trade
and the number of such sales are sufficient to
form an adequate basis for comparison.
(2) Notice; hearing.--If the administering authority
permits the posting of a bond or other security in lieu
of the deposit of estimated antidumping duties under
paragraph (1), it shall--
(A) publish notice of its action in the
Federal Register, and
(B) upon the request of any interested party,
hold a hearing in accordance with section 774
before determining the normal value and the
export price (or the constructed export price)
of the merchandise.
(3) Determinations to be basis of antidumping duty.--
The administering authority shall publish notice in the
Federal Register of the results of its determination of
normal value and export price (or the constructed
export price), and that determination shall be the
basis for the assessment of antidumping duties on
entries of merchandise to which the notice under this
subsection applies and also shall be the basis for the
deposit of estimated antidumping duties on future
entries of merchandise of manufacturers, producers, or
exporters described in paragraph (1) to which the order
issued under subsection (a) applies.
(4) Provision of business proprietary information;
written comments.--Before determining whether to permit
the posting of bond or other security under paragraph
(1) in lieu of the deposit of estimated antidumping
duties, the administering authority shall--
(A) make all business proprietary information
supplied to the administering authority under
paragraph (1) available under a protective
order in accordance with section 777(c) to all
interested parties described in subparagraph
(C), (D), (E), (F), or (G) of section 771(9),
and
(B) afford all interested parties an
opportunity to file written comments on whether
the posting of bond or other security under
paragraph (1) in lieu of the deposit of
estimated antidumping duties should be
permitted.
(d) Special Rule for Regional Industries.--
(1) In general.--In an investigation in which the
Commission makes a regional industry determination
under section 771(4)(C), the administering authority
shall, to the maximum extent possible, direct that
duties be assessed only on the subject merchandise of
the specific exporters or producers that exported the
subject merchandise for sale in the region concerned
during the period of investigation.
(2) Exception for new exporters and producers.--After
publication of the antidumping duty order, if the
administering authority finds that a new exporter or
producer is exporting the subject merchandise for sale
in the region concerned, the administering authority
shall direct that duties be assessed on the subject
merchandise of the new exporter or producer consistent
with the provisions of section 751(a)(2)(B).
SEC. 737. TREATMENT OF DIFFERENCE BETWEEN DEPOSIT OF ESTIMATED
ANTIDUMPING DUTY AND FINAL ASSESSED DUTY UNDER
ANTIDUMPING DUTY ORDER.
(a) Deposit of Estimated Antidumping Duty Under Section
733(d)(1)(B).--If the amount of a cash deposit, or the amount
of any bond or other security, required as security for an
estimated antidumping duty under section 733(d)(1)(B) is
different from the amount of the antidumping duty determined
under an antidumping duty order published under section 736,
then the difference for entries of merchandise entered, or
withdrawn from warehouse, for consumption before notice of the
affirmative determination of the Commission under section
735(b) is published shall be--
(1) disregarded, to the extent that the cash deposit,
bond, or other security collected is lower than the
duty under the order, or
(2) refunded or released, to the extent that the cash
deposit, bond, or other security is higher than the
duty under the order.
(b) Deposit of Estimated Antidumping Duty Under Section
736(a)(3).--If the amount of an estimated antidumping duty
deposited under section 736(a)(3) is different from the amount
of the antidumping duty determined under an antidumping duty
order published under section 736, then the difference for
entries of merchandise entered, or withdrawn from warehouse,
for consumption after notice of the affirmative determination
of the Commission under section 735(b) is published shall be--
(1) collected, to the extent that the deposit under
section 736(a)(3) is lower than the duty determined
under the order, or
(2) refunded, to the extent that the deposit under
section 736(a)(3) is higher than the duty determined
under the order, together with interest as provided by
section 778.
SEC. 738. CONDITIONAL PAYMENT OF ANTIDUMPING DUTY.
(a) General Rule.--For all entries, or withdrawals from
warehouse, for consumption of merchandise subject to an
antidumping duty order on or after the date of publication of
such order, no customs officer may deliver merchandise of that
class or kind to the person by whom or for whose account it was
imported unless that person complies with the requirements of
subsection (b) and deposits with the appropriate customs
officer an estimated antidumping duty in an amount determined
by the administering authority.
(b) Importer Requirements.--In order to meet the requirements
of this subsection, a person shall--
(1) furnish, or arrange to have furnished, to the
appropriate customs officer such information as the
administering authority deems necessary for determining
the export price (or the constructed export price) of
the merchandise imported by or for the account of that
person, and such other information as the administering
authority deems necessary for ascertaining any
antidumping duty to be imposed under this title;
(2) maintain and furnish to the customs officer such
records concerning the sale of the merchandise as the
administering authority, by regulation, requires;
(3) state under oath before the customs officer that
he is not an exporter, or if he is an exporter, declare
under oath at the time of entry the constructed export
price of the merchandise to the customs officer if it
is then known, or, if not, so declare within 30 days
after the merchandise has been sold, or has been made
the subject of an agreement to be sold, in the United
States; and
(4) pay, or agree to pay on demand, to the customs
officer the amount of antidumping duty imposed under
section 731 on that merchandise.
SEC. 739. ESTABLISHMENT OF PRODUCT CATEGORIES FOR SHORT LIFE CYCLE
MERCHANDISE.
(a) Establishment of Product Categories.--
(1) Petitions.--
(A) In general.--An eligible domestic entity
may file a petition with the Commission
requesting that a product category be
established with respect to short life cycle
merchandise at any time after the merchandise
becomes the subject of 2 or more affirmative
dumping determinations.
(B) Contents.--A petition filed under
subparagraph (A) shall--
(i) identify the short life cycle
merchandise that is the subject of the
affirmative dumping determinations,
(ii) specify the short life cycle
merchandise that the petitioner seeks
to have included in the same product
category as the merchandise that is
subject to the affirmative dumping
determinations,
(iii) specify any short life cycle
merchandise the petitioner particularly
seeks to have excluded from the product
category,
(iv) provide reasons for the
inclusions and exclusions specified
under clauses (ii) and (iii), and
(v) identify such merchandise in
terms of the designations used in the
Harmonized Tariff Schedule of the
United States.
(2) Determinations on sufficiency of petition.--Upon
receiving a petition under paragraph (1), the
Commission shall--
(A) request the administering authority to
confirm promptly the affirmative determinations
on which the petition is based, and
(B) upon receipt of such confirmation,
determine whether the merchandise covered by
the confirmed affirmative determinations is
short life cycle merchandise and whether the
petitioner is an eligible domestic entity.
(3) Notice; hearings.--If the determinations under
paragraph (2)(B) are affirmative, the Commission
shall--
(A) publish notice in the Federal Register
that the petition has been received, and
(B) provide opportunity for the presentation
of views regarding the establishment of the
requested product category, including a public
hearing if requested by any interested person.
(4) Determinations.--
(A) In general.--By no later than the date
that is 90 days after the date on which a
petition is filed under paragraph (1), the
Commission shall determine the scope of the
product category into which the short life
cycle merchandise that is the subject of the
affirmative dumping determinations identified
in such petition shall be classified for
purposes of this section.
(B) Modifications not requested by
petition.--
(i) In general.--The Commission may,
on its own initiative, make a
determination modifying the scope of
any product category established under
subparagraph (A) at any time.
(ii) Notice and hearing.--
Determinations may be made under clause
(i) only after the Commission has--
(I) published in the Federal
Register notice of the proposed
modification, and
(II) provided interested
parties an opportunity for a
hearing, and a period for the
submission of written comments,
on the classification of
merchandise into the product
categories to be affected by
such determination.
(C) Basis of determinations.--In making
determinations under subparagraph (A) or (B),
the Commission shall ensure that each product
category consists of similar short life cycle
merchandise which is produced by similar
processes under similar circumstances and has
similar uses.
(b) Definitions.--For purposes of this section--
(1) Eligible domestic entity.--The term ``eligible
domestic entity'' means a manufacturer or producer in
the United States, or a certified union or recognized
union or group of workers which is representative of an
industry in the United States, that manufactures or
produces short life cycle merchandise that is--
(A) like or directly competitive with other
merchandise that is the subject of 2 or more
affirmative dumping determinations, or
(B) is similar enough to such other
merchandise as to be considered for inclusion
with such merchandise in a product monitoring
category established under this section.
(2) Affirmative dumping determination.--The term
``affirmative dumping determination'' means--
(A) any affirmative final determination made
by the administering authority under section
735(a) during the 8-year period preceding the
filing of the petition under this section that
results in the issuance of an antidumping duty
order under section 736 which requires the
deposit of estimated antidumping duties at a
rate of not less than 15 percent ad valorem, or
(B) any affirmative preliminary determination
that--
(i) is made by the administering
authority under section 733(b) during
the 8-year period preceding the filing
of the petition under this section in
the course of an investigation for
which no final determination is made
under section 735 by reason of a
suspension of the investigation under
section 734, and
(ii) includes a determination that
the estimated average amount by which
the normal value of the merchandise
exceeds the export price (or the
constructed export price) of the
merchandise is not less than 15 percent
ad valorem.
(3) Subject of affirmative dumping determination.--
(A) In general.--Short life cycle merchandise
of a manufacturer shall be treated as being the
subject of an affirmative dumping determination
only if the administering authority--
(i) makes a separate determination of
the amount by which the normal value of
such merchandise of the manufacturer
exceeds the export price (or the
constructed export price) of such
merchandise of the manufacturer, and
(ii) specifically identifies the
manufacturer by name with such amount
in the affirmative dumping
determination or in an antidumping duty
order issued as a result of the
affirmative dumping determination.
(B) Exclusion.--Short life cycle merchandise
of a manufacturer shall not be treated as being
the subject of an affirmative dumping
determination if--
(i) such merchandise of the
manufacturer is part of a group of
merchandise to which the administering
authority assigns (in lieu of making
separate determinations described in
subparagraph (A)(i)(I)) an amount
determined to be the amount by which
the normal value of the merchandise in
such group exceeds the export price (or
the constructed export price) of the
merchandise in such group, and
(ii) the merchandise and the
manufacturer are not specified by name
in the affirmative dumping
determination or in any antidumping
duty order issued as a result of such
affirmative dumping determination.
(4) Short life cycle merchandise.--That term ``short
life cycle merchandise'' means any product that the
Commission determines is likely to become outmoded
within 4 years, by reason of technological advances,
after the product is commercially available. For
purposes of this paragraph, the term ``outmoded''
refers to a kind of style that is no longer state-of-
the-art.
(c) Transitional Rules.--
(1) For purposes of this section and section
733(b)(1) (B) and (C), all affirmative dumping
determinations described in subsection (b)(2)(A) that
were made after December 31, 1980, and before the date
of enactment of the Omnibus Trade and Competitiveness
Act of 1988, and all affirmative dumping determinations
described in subsection (b)(2)(B) that were made after
December 31, 1984, and before the date of enactment of
such Act, with respect to each category of short life
cycle merchandise of the same manufacturer shall be
treated as one affirmative dumping determination with
respect to that category for that manufacturer which
was made on the date on which the latest of such
determinations was made.
(2) No affirmative dumping determination that--
(A) is described in subsection (b)(2)(A) and
was made before January 1, 1981, or
(B) is described in subsection (b)(2)(B) and
was made before January 1, 1985,
may be taken into account under this section or section
733(b)(1) (B) and (C).
3. Administrative Review of Antidumping and Countervailing Duties
Subtitle C of Title VII (Sections 751, 752, 761, and 762) of the Tariff
Act of 1930, as amended
[19 U.S.C. 1675, 1675a, 1676, 1676a; P.L. 71-361, as amended, by P.L.
96-39, P.L. 98-573, P.L. 100-418, P.L. 103-465, and P.O. 106-36]
Chapter 1--Review of Amount of Duty and Agreements Other Than
Quantitative Restriction Agreements
SEC. 751. ADMINISTRATIVE REVIEW OF DETERMINATIONS.
(a) Periodic Review of Amount of Duty.--
(1) In general.--At least once during each 12-month
period beginning on the anniversary of the date of
publication of a countervailing duty order under this
title or under section 303 of this Act, an antidumping
duty order under this title or a finding under the
Antidumping Act, 1921, or a notice of the suspension of
an investigation, the administering authority, if a
request for such a review has been received and after
publication of notice of such review in the Federal
Register, shall--
(A) review and determine the amount of any
net countervailable subsidy,
(B) review, and determine (in accordance with
paragraph (2)), the amount of any antidumping
duty, and
(C) review the current status of, and
compliance with, any agreement by reason of
which an investigation was suspended, and
review the amount of any net countervailable
subsidy or dumping margin involved in the
agreement,
and shall publish in the Federal Register the results
of such review, together with notice of any duty to be
assessed, estimated duty to be deposited, or
investigation to be resumed.
(2) Determination of antidumping duties.--
(A) In general.--For the purpose of paragraph
(1)(B), the administering authority shall
determine--
(i) the normal value and export price
(or constructed export price) of each
entry of the subject merchandise, and
(ii) the dumping margin for each such
entry.
(B) Determination of antidumping or
countervailing duties for new exporters and
producers.--
(i) In general.--If the administering
authority receives a request from an
exporter or producer of the subject
merchandise establishing that--
(I) such exporter or producer
did not export the merchandise
that was the subject of an
antidumping duty or
countervailing duty order to
the United States (or, in the
case of a regional industry,
did not export the subject
merchandise for sale in the
region concerned) during the
period of investigation, and
(II) such exporter or
producer is not affiliated
(within the meaning of section
771(33)) with any exporter or
producer who exported the
subject merchandise to the
United States (or in the case
of a regional industry, who
exported the subject
merchandise for sale in the
region concerned) during that
period,
the administering authority shall
conduct a review under this subsection
to establish an individual weighted
average dumping margin or an individual
countervailing duty rate (as the case
may be) for such exporter or producer.
(ii) Time for review under clause
(i).--The administering authority shall
commence a review under clause (i) in
the calendar month beginning after--
(I) the end of the 6-month
period beginning on the date of
the countervailing duty or
antidumping duty order under
review, or
(II) the end of any 6-month
period occurring thereafter,
if the request for the review is made
during that 6-month period.
(iii) Posting bond or security.--The
administering authority shall, at the
time a review under this subparagraph
is initiated, direct the Customs
Service to allow, at the option of the
importer, the posting, until the
completion of the review, of a bond or
security in lieu of a cash deposit for
each entry of the subject merchandise.
(iv) Time limits.--The administering
authority shall make a preliminary
determination in a review conducted
under this subparagraph within 180 days
after the date on which the review is
initiated, and a final determination
within 90 days after the date the
preliminary determination is issued,
except that if the administering
authority concludes that the case is
extraordinarily complicated, it may
extend the 180-day period to 300 days
and may extend the 90-day period to 150
days.
(C) Results of determinations.--The
determination under this paragraph shall be the
basis for the assessment of countervailing or
antidumping duties on entries of merchandise
covered by the determination and for deposits
of estimated duties.
(3) Time limits.--
(A) Preliminary and final determinations.--
The administering authority shall make a
preliminary determination under subparagraph
(A), (B), or (C) of paragraph (1) within 245
days after the last day of the month in which
occurs the anniversary of the date of
publication of the order, finding, or
suspension agreement for which the review under
paragraph (1) is requested, and a final
determination under paragraph (1) within 120
days after the date on which the preliminary
determination is published. If it is not
practicable to complete the review within the
foregoing time, the administering authority may
extend that 245-day period to 365 days and may
extend that 120-day period to 180 days. The
administering authority may extend the time for
making a final determination without extending
the time for making a preliminary
determination, if such final determination is
made not later than 300 days after the date on
which the preliminary determination is
published.
(B) Liquidation of entries.--If the
administering authority orders any liquidation
of entries pursuant to a review under paragraph
(1), such liquidation shall be made promptly
and, to the greatest extent practicable, within
90 days after the instructions to Customs are
issued. In any case in which liquidation has
not occurred within that 90-day period, the
Secretary of the Treasury shall, upon the
request of the affected party, provide an
explanation thereof.
(C) Effect of pending review under section
516a.--In a case in which a final determination
under paragraph (1) is under review under
section 516A and a liquidation of entries
covered by the determination is enjoined under
section 516A(c)(2) or suspended under section
516A(g)(5)(C), the administering authority
shall, within 10 days after the final
disposition of the review under section 516A,
transmit to the Federal Register for
publication the final disposition and issue
instructions to the Customs Service with
respect to the liquidation of entries pursuant
to the review. In such a case, the 90-day
period referred to in subparagraph (B) shall
begin on the day on which the administering
authority issues such instructions.
(4) Absorption of antidumping duties.--During any
review under this subsection initiated 2 years or 4
years after the publication of an antidumping duty
order under section 736(a), the administering
authority, if requested, shall determine whether
antidumping duties have been absorbed by a foreign
producer or exporter subject to the order if the
subject merchandise is sold in the United States
through an importer who is affiliated with such foreign
producer or exporter. The administering authority shall
notify the Commission of its findings regarding such
duty absorption for the Commission to consider in
conducting a review under subsection (c).
(b) Reviews Based on Changed Circumstances.--
(1) In general.--Whenever the administering authority
or the Commission receives information concerning, or a
request from an interested party for a review of--
(A) a final affirmative determination that
resulted in an antidumping duty order under
this title or a finding under the Antidumping
Act, 1921, or in a countervailing duty order
under this title or section 303,
(B) a suspension agreement accepted under
section 704 or 734, or
(C) a final affirmative determination
resulting from an investigation continued
pursuant to section 704(g) or 734(g),
which shows changed circumstances sufficient to warrant
a review of such determination or agreement, the
administering authority or the Commission (as the case
may be) shall conduct a review of the determination or
agreement after publishing notice of the review in the
Federal Register.
(2) Commission review.--In conducting a review under
this subsection, the Commission shall--
(A) in the case of a countervailing duty
order or antidumping duty order or finding,
determine whether revocation of the order or
finding is likely to lead to continuation or
recurrence of material injury,
(B) in the case of a determination made
pursuant to section 704(h)(2) or 734(h)(2),
determine whether the suspension agreement
continues to eliminate completely the injurious
effects of imports of the subject merchandise,
and
(C) in the case of an affirmative
determination resulting from an investigation
continued under section 704(g) or 734(g),
determine whether termination of the suspended
investigation is likely to lead to continuation
or recurrence of material injury.
(3) Burden of persuasion.--During a review conducted
by the Commission under this subsection--
(A) the party seeking revocation of an order
or finding described in paragraph (1)(A) shall
have the burden of persuasion with respect to
whether there are changed circumstances
sufficient to warrant such revocation, and
(B) the party seeking termination of a
suspended investigation or a suspension
agreement shall have the burden of persuasion
with respect to whether there are changed
circumstances sufficient to warrant such
termination.
(4) Limitation on period for review.--In the absence
of good cause shown--
(A) the Commission may not review a
determination made under section 705(b) or
735(b), or an investigation suspended under
section 704 or 734, and
(B) the administering authority may not
review a determination made under section
705(a) or 735(a), or an investigation suspended
under section 704 or 734,
less than 24 months after the date of publication of
notice of that determination or suspension.
(c) Five-Year Review.--
(1) In general.--Notwithstanding subsection (b) and
except in the case of a transition order defined in
paragraph (6), 5 years after the date of publication
of--
(A) a countervailing duty order (other than a
countervailing duty order to which subparagraph
(B) applies or which was issued without an
affirmative determination of injury by the
Commission under section 303), an antidumping
duty order, or a notice of suspension of an
investigation, described in subsection (a)(1),
(B) a notice of injury determination under
section 753 with respect to a countervailing
duty order, or
(C) a determination under this section to
continue an order or suspension agreement,
the administering authority and the Commission shall
conduct a review to determine, in accordance with
section 752, whether revocation of the countervailing
or antidumping duty order or termination of the
investigation suspended under section 704 or 734 would
be likely to lead to continuation or recurrence of
dumping or a countervailable subsidy (as the case may
be) and of material injury.
(2) Notice of initiation of review.--Not later than
30 days before the fifth anniversary of the date
described in paragraph (1), the administering authority
shall publish in the Federal Register a notice of
initiation of a review under this subsection and
request that interested parties submit--
(A) a statement expressing their willingness
to participate in the review by providing
information requested by the administering
authority and the Commission,
(B) a statement regarding the likely effects
of revocation of the order or termination of
the suspended investigation, and
(C) such other information or industry data
as the administering authority or the
Commission may specify.
(3) Responses to notice of initiation.--
(A) No response.--If no interested party
responds to the notice of initiation under this
subsection, the administering authority shall
issue a final determination, within 90 days
after the initiation of a review, revoking the
order or terminating the suspended
investigation to which such notice relates. For
purposes of this paragraph, an interested party
means a party described in section 771(9) (C),
(D), (E), (F), or (G).
(B) Inadequate response.--If interested
parties provide inadequate responses to a
notice of initiation, the administering
authority, within 120 days after the initiation
of the review, or the Commission, within 150
days after such initiation, may issue, without
further investigation, a final determination
based on the facts available, in accordance
with section 776.
(4) Waiver of participation by certain interested
parties.--
(A) In general.--An interested party
described in section 771(9) (A) or (B) may
elect not to participate in a review conducted
by the administering authority under this
subsection and to participate only in the
review conducted by the Commission under this
subsection.
(B) Effect of waiver.--In a review in which
an interested party waives its participation
pursuant to this paragraph, the administering
authority shall conclude that revocation of the
order or termination of the investigation would
be likely to lead to continuation or recurrence
of dumping or a countervailable subsidy (as the
case may be) with respect to that interested
party.
(5) Conduct of review.--
(A) Time limits for completion of review.--
Unless the review has been completed pursuant
to paragraph (3) or paragraph (4) applies, the
administering authority shall make its final
determination pursuant to section 752 (b) or
(c) within 240 days after the date on which a
review is initiated under this subsection. If
the administering authority makes a final
affirmative determination, the Commission shall
make its final determination pursuant to
section 752(a) within 360 days after the date
on which a review is initiated under this
subsection.
(B) Extension of time limit.--The
administering authority or the Commission (as
the case may be) may extend the period of time
for making their respective determinations
under this subsection by not more than 90 days,
if the administering authority or the
Commission (as the case may be) determines that
the review is extraordinarily complicated. In a
review in which the administering authority
extends the time for making a final
determination, but the Commission does not
extend the time for making a determination, the
Commission's determination shall be made not
later than 120 days after the date on which the
final determination of the administering
authority is published.
(C) Extraordinarily complicated.--For
purposes of this subsection, the administering
authority or the Commission (as the case may
be) may treat a review as extraordinarily
complicated if--
(i) there is a large number of
issues,
(ii) the issues to be considered are
complex,
(iii) there is a large number of
firms involved,
(iv) the orders or suspended
investigations have been grouped as
described in subparagraph (D), or
(v) it is a review of a transition
order.
(D) Grouped reviews.--The Commission, in
consultation with the administering authority,
may group orders or suspended investigations
for review if it considers that such grouping
is appropriate and will promote administrative
efficiency. Where orders or suspended
investigations have been grouped, the
Commission shall, subject to subparagraph (B),
make its final determination under this
subsection not later than 120 days after the
date that the administering authority publishes
notice of its final determination with respect
to the last order or agreement in the group.
(6) Special transition rules.--
(A) Schedule for reviews of transition
orders.--
(i) Initiation.--The administering
authority shall begin its review of
transition orders in the 42d calendar
month after the date such orders are
issued. A review of all transition
orders shall be initiated not later
than the 5th anniversary after the date
such orders are issued.
(ii) Completion.--A review of a
transition order shall be completed not
later than 18 months after the date
such review is initiated. Reviews of
all transition orders shall be
completed not later than 18 months
after the 5th anniversary of the date
such orders are issued.
(iii) Subsequent reviews.--The time
limits set forth in clauses (i) and
(ii) shall be applied to all subsequent
5-year reviews of transition orders by
substituting ``date of the
determination to continue such orders''
for ``date such orders are issued''.
(iv) Revocation and termination.--No
transition order may be revoked under
this subsection before the date that is
5 years after the date the WTO
Agreement enters into force with
respect to the United States.
(B) Sequence of transition reviews.--The
administering authority, in consultation with
the Commission, shall determine such sequence
of review of transition orders as it deems
appropriate to promote administrative
efficiency. To the extent practicable, older
orders shall be reviewed first.
(C) Definition of transition order.--For
purposes of this section, the term ``transition
order'' means--
(i) a countervailing duty order under
this title or under section 303,
(ii) an antidumping duty order under
this title or a finding under the
Antidumping Act, 1921, or
(iii) a suspension of an
investigation under section 704 or 734,
which is in effect on the date the WTO
Agreement enters into force with respect to the
United States.
(D) Issue date for transition orders.--For
purposes of this subsection, a transition order
shall be treated as issued on the date the WTO
Agreement enters into force with respect to the
United States, if such order is based on an
investigation conducted by both the
administering authority and the Commission.
(7) Exclusions from computations.--
(A) In general.--Subject to subparagraph (B),
there shall be excluded from the computation of
the 5-year period described in paragraph (1)
and the periods described in paragraph (6) and
period during which the importation of the
subject merchandise is prohibited on account of
the imposition, under the International
Emergency Economic Powers Act or other
provision of law, of sanctions by the United
States against the country in which the subject
merchandise originates.
(b) Application of exclusion.--Subparagraph
(A) shall apply only with respect to subject
merchandise which originates in a country that
is not a WTO member.
(d) Revocation of Order or Finding; Termination of Suspended
Investigation.--
(1) In general.--The administering authority may
revoke, in whole or in part, a countervailing duty
order or an antidumping duty order or finding, or
terminate a suspended investigation, after review under
subsection (a) or (b). The administering authority
shall not revoke, in whole or in part, a countervailing
duty order or terminate a suspended investigation on
the basis of any export taxes, duties, or other charges
levied on the export of the subject merchandise to the
United States which are specifically intended to offset
the countervailable subsidy received.
(2) Five-year reviews.--In the case of a review
conducted under subsection (c), the administering
authority shall revoke a countervailing duty order or
an antidumping duty order or finding, or terminate a
suspended investigation, unless--
(A) the administering authority makes a
determination that dumping or a countervailable
subsidy, as the case may be, would be likely to
continue or recur, and
(B) the Commission makes a determination that
material injury would be likely to continue or
recur as described in section 752(a).
(3) Application of revocation or termination.--A
determination under this section to revoke an order or
finding or terminate a suspended investigation shall
apply with respect to unliquidated entries of the
subject merchandise which are entered, or withdrawn
from warehouse, for consumption on or after the date
determined by the administering authority.
(e) Hearings.--Whenever the administering authority or the
Commission conducts a review under this section, it shall, upon
the request of an interested party, hold a hearing in
accordance with section 774(b) in connection with that review.
(f) Determination That Basis for Suspension No Longer
Exists.--If the determination of the Commission under
subsection (b)(2)(B) is negative, the suspension agreement
shall be treated as not accepted, beginning on the date of
publication of the Commission's determination, and the
administering authority and the Commission shall proceed, under
section 704(i) or 734(i), as if the suspension agreement had
been violated on that date, except that no duty under any order
subsequently issued shall be assessed on merchandise entered,
or withdrawn from warehouse, for consumption before that date.
(g) Reviews To Implement Results of Subsidies Enforcement
Proceeding.--
(1) Violations of article 8 of the subsidies
agreement.--If--
(A) the administering authority receives
notice from the Trade Representative of a
violation of Article 8 of the Subsidies
Agreement,
(B) the administering authority has reason to
believe that merchandise subject to an existing
countervailing duty order or suspended
investigation is benefiting from the subsidy or
subsidy program found to have been in violation
of Article 8 of the Subsidies Agreement, and
(C) no review pursuant to subsection (a)(1)
is in progress,
the administering authority shall conduct a review of
the order or suspended investigation to determine
whether the subject merchandise benefits from the
subsidy or subsidy program found to have been in
violation of Article 8 of the Subsidies Agreement. If
the administering authority determines that the subject
merchandise is benefiting from the subsidy or subsidy
program, it shall make appropriate adjustments in the
estimated duty to be deposited or appropriate revisions
to the terms of the suspension agreement.\5\
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\5\ Article 8 of the Uruguary Round Subsidies Agreement lapsed
January 1, 2000.
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(2) Withdrawal of subsidy or imposition of
countermeasures.--If the Trade Representative notifies
the administering authority that, pursuant to Article 4
or Article 7 of the Subsidies Agreement--
(A)(i) the United States has imposed
countermeasures, and
(ii) such countermeasures are based on the
effects in the United States of imports of
merchandise that is the subject of a
countervailing duty order, or
(B) a WTO member country has withdrawn a
countervailable subsidy provided with respect
to merchandise subject to a countervailing duty
order,
the administering authority shall conduct a review to
determine if the amount of the estimated duty to be
deposited should be adjusted or the order should be
revoked.
(3) Expedited review.--The administering authority
shall conduct reviews under this subsection on an
expedited basis, and shall publish the results of such
reviews in the Federal Register.
(h) Correction of Ministerial Errors.--The administering
authority shall establish procedures for the correction of
ministerial errors in final determinations within a reasonable
time after the determinations are issued under this section.
Such procedures shall ensure opportunity for interested parties
to present their views regarding any such errors. As used in
this subsection, the term ``ministerial error'' includes errors
in addition, subtraction, or other arithmetic function,
clerical errors resulting from inaccurate copying, duplication,
or the like, and any other type of unintentional error which
the administering authority considers ministerial.
SEC. 752. SPECIAL RULES FOR SECTION 751(B) AND 751(C) REVIEWS.
(a) Determination of Likelihood of Continuation or Recurrence
of Material Injury.--
(1) In general.--In a review conducted under section
751 (b) or (c), the Commission shall determine whether
revocation of an order, or termination of a suspended
investigation, would be likely to lead to continuation
or recurrence of material injury within a reasonably
foreseeable time. The Commission shall consider the
likely volume, price effect, and impact of imports of
the subject merchandise on the industry if the order is
revoked or the suspended investigation is terminated.
The Commission shall take into account--
(A) its prior injury determinations,
including the volume, price effect, and impact
of imports of the subject merchandise on the
industry before the order was issued or the
suspension agreement was accepted,
(B) whether any improvement in the state of
the industry is related to the order or the
suspension agreement,
(C) whether the industry is vulnerable to
material injury if the order is revoked or the
suspension agreement is terminated, and
(D) in an antidumping proceeding under
section 751(c), the findings of the
administering authority regarding duty
absorption under section 751(a)(4).
(2) Volume.--In evaluating the likely volume of
imports of the subject merchandise if the order is
revoked or the suspended investigation is terminated,
the Commission shall consider whether the likely volume
of imports of the subject merchandise would be
significant if the order is revoked or the suspended
investigation is terminated, either in absolute terms
or relative to production or consumption in the United
States. In so doing, the Commission shall consider all
relevant economic factors, including--
(A) any likely increase in production
capacity or existing unused production capacity
in the exporting country,
(B) existing inventories of the subject
merchandise, or likely increases in
inventories,
(C) the existence of barriers to the
importation of such merchandise into countries
other than the United States, and
(D) the potential for product-shifting if
production facilities in the foreign country,
which can be used to produce the subject
merchandise, are currently being used to
produce other products.
(3) Price.--In evaluating the likely price effects of
imports of the subject merchandise if the order is
revoked or the suspended investigation is terminated,
the Commission shall consider whether--
(A) there is likely to be significant price
underselling by imports of the subject
merchandise as compared to domestic like
products, and
(B) imports of the subject merchandise are
likely to enter the United States at prices
that otherwise would have a significant
depressing or suppressing effect on the price
of domestic like products.
(4) Impact on the industry.--In evaluating the likely
impact of imports of the subject merchandise on the
industry if the order is revoked or the suspended
investigation is terminated, the Commission shall
consider all relevant economic factors which are likely
to have a bearing on the state of the industry in the
United States, including, but not limited to--
(A) likely declines in output, sales, market
share, profits, productivity, return on
investments, and utilization of capacity,
(B) likely negative effects on cash flow,
inventories, employment, wages, growth, ability
to raise capital, and investment, and
(C) likely negative effects on the existing
development and production efforts of the
industry, including efforts to develop a
derivative or more advanced version of the
domestic like product.
The Commission shall evaluate all relevant economic
factors described in this paragraph within the context
of the business cycle and the conditions of competition
that are distinctive to the affected industry.
(5) Basis for determination.--The presence or absence
of any factor which the Commission is required to
consider under this subsection shall not necessarily
give decisive guidance with respect to the Commission's
determination of whether material injury is likely to
continue or recur within a reasonably foreseeable time
if the order is revoked or the suspended investigation
is terminated. In making that determination, the
Commission shall consider that the effects of
revocation or termination may not be imminent, but may
manifest themselves only over a longer period of time.
(6) Magnitude of margin of dumping and net
countervailable subsidy; nature of countervailable
subsidy.--In making a determination under section 751
(b) or (c), the Commission may consider the magnitude
of the margin of dumping or the magnitude of the net
countervailable subsidy. If a countervailable subsidy
is involved the Commission shall consider information
regarding the nature of the countervailable subsidy and
whether the subsidy is a subsidy described in Article 3
or 6.1 of the Subsidies Agreement.\6\
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\6\ Article 6.1 of the Uruguary Round Subsidies Agreement lapsed
January 1, 2000.
---------------------------------------------------------------------------
(7) Cumulation.--For purposes of this subsection, the
Commission may cumulatively assess the volume and
effect of imports of the subject merchandise from all
countries with respect to which reviews under section
751 (b) or (c) were initiated on the same day, if such
imports would be likely to compete with each other and
with domestic like products in the United States
market. The Commission shall not cumulatively assess
the volume and effects of imports of the subject
merchandise in a case in which it determines that such
imports are likely to have no discernible adverse
impact on the domestic industry.
(8) Special rule for regional industries.--In a
review under section 751 (b) or (c) involving a
regional industry, the Commission may base its
determination on the regional industry defined in the
original investigation under this title, another region
that satisfies the criteria established in section
771(4)(C), or the United States as a whole. In
determining if a regional industry analysis is
appropriate for the determination in the review, the
Commission shall consider whether the criteria
established in section 771(4)(C) are likely to be
satisfied if the order is revoked or the suspended
investigation is terminated.
(b) Determination of Likelihood of Continuation or Recurrence
of a Countervailable Subsidy.--
(1) In general.--In a review conducted under section
751(c), the administering authority shall determine
whether revocation of a countervailing duty order or
termination of a suspended investigation under section
704 would be likely to lead to continuation or
recurrence of a countervailable subsidy. The
administering authority shall consider--
(A) the net countervailable subsidy
determined in the investigation and subsequent
reviews, and
(B) whether any change in the program which
gave rise to the net countervailable subsidy
described in subparagraph (A) has occurred that
is likely to affect that net countervailable
subsidy.
(2) Consideration of other factors.--If good cause is
shown, the administering authority shall also
consider--
(A) programs determined to provide
countervailable subsidies in other
investigations or reviews under this title, but
only to the extent that such programs--
(i) can potentially be used by the
exporters or producers subject to the
review under section 751(c), and
(ii) did not exist at the time that
the countervailing duty order was
issued or the suspension agreement was
accepted, and
(B) programs newly alleged to provide
countervailable subsidies but only to the
extent that the administering authority makes
an affirmative countervailing duty
determination with respect to such programs and
with respect to the exporters or producers
subject to the review.
(3) Net countervailable subsidy.--The administering
authority shall provide to the Commission the net
countervailable subsidy that is likely to prevail if
the order is revoked or the suspended investigation is
terminated. The administering authority shall normally
choose a net countervailable subsidy that was
determined under section 705 or subsection (a) or
(b)(1) of section 751.
(4) Special rule.--
(A) Treatment of zero and de minimis rates.--
A net countervailable subsidy described in
paragraph (1)(A) that is zero or de minimis
shall not by itself require the administering
authority to determine that revocation of a
countervailing duty order or termination of a
suspended investigation would not be likely to
lead to continuation or recurrence of a
countervailable subsidy.
(B) Application of de minimis standards.--For
purposes of this paragraph, the administering
authority shall apply the de minimis standards
applicable to reviews conducted under
subsections (a) and (b)(1) of section 751.
(c) Determination of Likelihood of Continuation or Recurrence
of Dumping.--
(1) In general.--In a review conducted under section
751(c), the administering authority shall determine
whether revocation of an antidumping duty order or
termination of a suspended investigation under section
734 would be likely to lead to continuation or
recurrence of sales of the subject merchandise at less
than fair value. The administering authority shall
consider--
(A) the weighted average dumping margins
determined in the investigation and subsequent
reviews, and
(B) the volume of imports of the subject
merchandise for the period before and the
period after the issuance of the antidumping
duty order or acceptance of the suspension
agreement.
(2) Consideration of other factors.--If good cause is
shown, the administering authority shall also consider
such other price, cost, market, or economic factors as
it deems relevant.
(3) Magnitude of the margin of dumping.--The
administering authority shall provide to the Commission
the magnitude of the margin of dumping that is likely
to prevail if the order is revoked or the suspended
investigation is terminated. The administering
authority shall normally choose a margin that was
determined under section 735 or under subsection (a) or
(b)(1) of section 751.
(4) Special rule.--
(A) Treatment of zero or de minimis
margins.--A dumping margin described in
paragraph (1)(A) that is zero or de minimis
shall not by itself require the administering
authority to determine that revocation of an
antidumping duty order or termination of a
suspended investigation would not be likely to
lead to continuation or recurrence of sales at
less than fair value.
(B) Application of de minimis standards.--For
purposes of this paragraph, the administering
authority shall apply the de minimis standards
applicable to reviews conducted under
subsections (a) and (b) of section 751.
Chapter 2--Consultations and Determinations Regarding Quantitative
Restriction Agreements
SEC. 761. REQUIRED CONSULTATIONS.
(a) Agreements in Response to Countervailable Subsidies.--
Within 90 days after the administering authority accepts a
quantitative restriction agreement under section 704(a)(2) or
(c)(3), the President shall enter into consultations with the
government that is party to the agreement for purposes of--
(1) eliminating the countervailable subsidy
completely, or
(2) reducing the net countervailable subsidy to a
level that eliminates completely the injurious effect
of exports to the United States of the merchandise.
(b) Modification of Agreements on Basis of Consultations.--At
the direction of the President, the administering authority
shall modify a quantitative restriction agreement as a result
of consultations entered into under subsection (a).
(c) Special Rule Regarding Agreements Under Section
704(c)(3).--This chapter shall cease to apply to a quantitative
restriction agreement described in section 704(c)(3) at such
time as that agreement ceases to have force and effect under
section 704(f) or violation is found under section 704(i).
SEC. 762. REQUIRED DETERMINATIONS.
(a) In General.--Before the expiration date, if any, of a
quantitative restriction agreement accepted under section
704(a)(2) or 704(c)(3) (if suspension of the related
investigation is still in effect)--
(1) the administering authority shall, at the
direction of the President, initiate a proceeding to
determine whether any countervailable subsidy is being
provided with respect to the subject merchandise and,
if being so provided, the net countervailable subsidy;
and
(2) if the administering authority initiates a
proceeding under paragraph (1), the Commission shall
determine whether imports of the merchandise of the
kind subject to the agreement will, upon termination of
the agreement, materially injure, or threaten with
material injury, an industry in the United States or
materially retard the establishment of such an
industry.
(b) Determinations.--The determinations required to be made
by the administering authority and the Commission under
subsection (a) shall be made under such procedures as the
administering authority and the Commission, respectively, shall
by regulation prescribe, and shall be treated as final
determinations made under section 705 for purposes of judicial
review under section 516A. If the determinations by each are
affirmative, the administering authority shall--
(1) issue a countervailing duty order under section
706 effective with respect to merchandise entered on
and after the date on which the agreement terminates;
and
(2) order the suspension of liquidation of all
entries of subject merchandise which are entered, or
withdrawn from warehouse for consumption, on or after
the date of publication of the order in the Federal
Register.
(c) Hearings.--The determination proceedings required to be
prescribed under subsection (b) shall provide that the
administering authority and the Commission must, upon the
request of any interested party, hold a hearing in accordance
with section 774 on the issues involved.
4. General Provisions Relating to Antidumping and Countervailing Duties
Subtitle D of Title VII (Sections 771-782) of the Tariff Act of 1930,
as amended
[19 U.S.C. 1677, 1677-1, 1677-2, 1677a-1677n; P.L. 71-361, as amended
by P.L. 96-39, P.L. 98-573, P.L. 100-418, P.L. 103-465, and P.L. 104-
295]
SEC. 771. DEFINITIONS; SPECIAL RULES.
For purposes of this title--
(1) Administering authority.--The term
``administering authority'' means the Secretary of
Commerce, or any other officer of the United States to
whom the responsibility for carrying out the duties of
the administering authority under this title are
transferred by law.
(2) Commission.--The term ``Commission'' means the
United States International Trade Commission.
(3) Country.--The term ``country'' means a foreign
country, a political subdivision, dependent territory,
or possession of a foreign country, and, except for the
purpose of antidumping proceedings, may include an
association of 2 or more foreign countries, political
subdivisions, dependent territories, or possessions of
countries into a customs union outside the United
States.
(4) Industry.--
(A) In general.--The term ``industry'' means
the producers as a whole of a domestic like
product, or those producers whose collective
output of a domestic like product constitutes a
major proportion of the total domestic
production of the product.
(B) Related parties.--
(i) If a producer of a domestic like
product and an exporter or importer of
the subject merchandise are related
parties, or if a producer of the
domestic like product is also an
importer of the subject merchandise,
the producer may, in appropriate
circumstances, be excluded from the
industry.
(ii) For purposes of clause (i), a
producer and an exporter or importer
shall be considered to be related
parties, if--
(I) the producer directly or
indirectly controls the
exporter or importer,
(II) the exporter or importer
directly or indirectly controls
the producer,
(III) a third party directly
or indirectly controls the
producer and the exporter or
importer, or
(IV) the producer and the
exporter or importer directly
or indirectly control a third
party and there is reason to
believe that the relationship
causes the producer to act
differently than a nonrelated
producer.
For purposes of this subparagraph, a
party shall be considered to directly
or indirectly control another party if
the party is legally or operationally
in a position to exercise restraint or
direction over the other party.
(C) Regional industries.--In appropriate
circumstances, the United States, for a
particular product market, may be divided into
2 or more markets and the producers within each
market may be treated as if they were a
separate industry if--
(i) the producers within such market
sell all or almost all of their
production of the domestic like product
in question in that market, and
(ii) the demand in that market is not
supplied, to any substantial degree, by
producers of the product in question
located elsewhere in the United States.
In such appropriate circumstances, material
injury, the threat of material injury, or
material retardation of the establishment of an
industry may be found to exist with respect to
an industry even if the domestic industry as a
whole, or those producers whose collective
output of a domestic like product constitutes a
major proportion of the total domestic
production of that product, is not injured, if
there is a concentration of dumped imports or
imports of merchandise benefiting from a
countervailable subsidy into such an isolated
market and if the producers of all, or almost
all, of the production within that market are
being materially injured or threatened by
material injury, or if the establishment of an
industry is being materially retarded, by
reason of the dumped imports or imports of
merchandise benefiting from a countervailable
subsidy. The term ``regional industry'' means
the domestic producers within a region who are
treated as a separate industry under this
subparagraph.
(D) Product lines.--The effect of dumped
imports or imports of merchandise benefiting
from a countervailable subsidy shall be
assessed in relation to the United States
production of a domestic like product if
available data permit the separate
identification of production in terms of such
criteria as the production process or the
producer's profits. If the domestic production
of the domestic like product has no separate
identity in terms of such criteria, then the
effect of the dumped imports or imports of
merchandise benefiting from a countervailable
subsidy shall be assessed by the examination of
the production of the narrowest group or range
of products, which includes a domestic like
product, for which the necessary information
can be provided.
(E) Industry producing processed agricultural
products.--
(i) In general.--Subject to clause
(v), in an investigation involving a
processed agricultural product produced
from any raw agricultural product, the
producers or growers of the raw
agricultural product may be considered
part of the industry producing the
processed product if--
(I) the processed
agricultural product is
produced from the raw
agricultural product through a
single continuous line of
production; and
(II) there is a substantial
coincidence of economic
interest between the producers
or growers of the raw
agricultural product and the
processors of the processed
agricultural product based upon
relevant economic factors,
which may, in the discretion of
the Commission, include price,
added market value, or other
economic interrelationships
(regardless of whether such
coincidence of economic
interest is based upon any
legal relationship).
(ii) Processing.--For purposes of
this subparagraph, the processed
agricultural product shall be
considered to be processed from a raw
agricultural product through a single
continuous line of production if--
(I) the raw agricultural
product is substantially or
completely devoted to the
production of the processed
agricultural product; and
(II) the processed
agricultural product is
produced substantially or
completely from the raw
product.
(iii) Relevant economic factors.--For
purposes of clause (i)(II), in addition
to such other factors it considers
relevant to the question of coincidence
of economic interest, the Commission
shall--
(I) if price is taken into
account, consider the degree of
correlation between the price
of the raw agricultural product
and the price of the processed
agricultural product; and
(II) if added market value is
taken into account, consider
whether the value of the raw
agricultural product
constitutes a significant
percentage of the value of the
processed agricultural product.
(iv) Raw agricultural product.--For
purposes of this subparagraph, the term
``raw agricultural product'' means any
farm or fishery product.
(v) Termination of this
subparagraph.--This subparagraph shall
cease to have effect if the United
States Trade Representative notifies
the administering authority and the
Commission that the application of this
subparagraph is inconsistent with the
international obligations of the United
States.
(5) Countervailable subsidy.--
(A) In general.--Except as provided in
paragraph (5B), a countervailable subsidy is a
subsidy described in this paragraph which is
specific as described in paragraph (5A).
(B) Subsidy described.--A subsidy is
described in this paragraph in the case in
which an authority--
(i) provides a financial
contribution,
(ii) provides any form of income or
price support within the meaning of
Article XVI of the GATT 1994, or
(iii) makes a payment to a funding
mechanism to provide a financial
contribution, or entrusts or directs a
private entity to make a financial
contribution, if providing the
contribution would normally be vested
in the government and the practice does
not differ in substance from practices
normally followed by governments,
to a person and a benefit is thereby conferred.
For purposes of this paragraph and paragraphs
(5A) and (5B), the term ``authority'' means a
government of a country or any public entity
within the territory of the country.\7\
---------------------------------------------------------------------------
\7\ Article 8 of the Uruguary Round Subsidies Agreement lapsed
January 1, 2000.
---------------------------------------------------------------------------
(C) Other factors.--The determination of
whether a subsidy exists shall be made without
regard to whether the recipient of the subsidy
is publicly or privately owned and without
regard to whether the subsidy is provided
directly or indirectly on the manufacture,
production, or export of merchandise. The
administering authority is not required to
consider the effect of the subsidy in
determining whether a subsidy exists under this
paragraph.
(D) Financial contribution.--The term
``financial contribution'' means--
(i) the direct transfer of funds,
such as grants, loans, and equity
infusions, or the potential direct
transfer of funds or liabilities, such
as loan guarantees,
(ii) foregoing or not collecting
revenue that is otherwise due, such as
granting tax credits or deductions from
taxable income,
(iii) providing goods or services,
other than general infrastructure, or
(iv) purchasing goods.
(E) Benefit conferred.--A benefit shall
normally be treated as conferred where there is
a benefit to the recipient, including--
(i) in the case of an equity
infusion, if the investment decision is
inconsistent with the usual investment
practice of private investors,
including the practice regarding the
provision of risk capital, in the
country in which the equity infusion is
made,
(ii) in the case of a loan, if there
is a difference between the amount the
recipient of the loan pays on the loan
and the amount the recipient would pay
on a comparable commercial loan that
the recipient could actually obtain on
the market,
(iii) in the case of a loan
guarantee, if there is a difference,
after adjusting for any difference in
guarantee fees, between the amount the
recipient of the guarantee pays on the
guaranteed loan and the amount the
recipient would pay for a comparable
commercial loan if there were no
guarantee by the authority, and
(iv) in the case where goods or
services are provided, if such goods or
services are provided for less than
adequate remuneration, and in the case
where goods are purchased, if such
goods are purchased for more than
adequate remuneration.
For purposes of clause (iv), the adequacy of
remuneration shall be determined in relation to
prevailing market conditions for the good or
service being provided or the goods being
purchased in the country which is subject to
the investigation or review. Prevailing market
conditions include price, quality,
availability, marketability, transportation,
and other conditions of purchase or sale.
(F) Change in ownership.--A change in
ownership of all or part of a foreign
enterprise or the productive assets of a
foreign enterprise does not by itself require a
determination by the administering authority
that a past countervailable subsidy received by
the enterprise no longer continues to be
countervailable, even if the change in
ownership is accomplished through an arm's
length transaction.
(5A) Specificity.--
(A) In general.--A subsidy is specific if it
is an export subsidy described in subparagraph
(B) or an import substitution subsidy described
in subparagraph (C), or if it is determined to
be specific pursuant to subparagraph (D).
(B) Export subsidy.--An export subsidy is a
subsidy that is, in law or in fact, contingent
upon export performance, alone or as 1 of 2 or
more conditions.
(C) Import substitution subsidy.--An import
substitution subsidy is a subsidy that is
contingent upon the use of domestic goods over
imported goods, alone or as 1 of 2 or more
conditions.
(D) Domestic subsidy.--In determining whether
a subsidy (other than a subsidy described in
subparagraph (B) or (C)) is a specific subsidy,
in law or in fact, to an enterprise or industry
within the jurisdiction of the authority
providing the subsidy, the following guidelines
shall apply:
(i) Where the authority providing the
subsidy, or the legislation pursuant to
which the authority operates, expressly
limits access to the subsidy to an
enterprise or industry, the subsidy is
specific as a matter of law.
(ii) Where the authority providing
the subsidy, or the legislation
pursuant to which the authority
operates, establishes objective
criteria or conditions governing the
eligibility for, and the amount of, a
subsidy, the subsidy is not specific as
a matter of law, if--
(I) eligibility is automatic,
(II) the criteria or
conditions for eligibility are
strictly followed, and
(III) the criteria or
conditions are clearly set
forth in the relevant statute,
regulation, or other official
document so as to be capable of
verification.
For purposes of this clause, the term
``objective criteria or conditions''
means criteria or conditions that are
neutral and that do not favor one
enterprise or industry over another.
(iii) Where there are reasons to
believe that a subsidy may be specific
as a matter of fact, the subsidy is
specific if one or more of the
following factors exist:
(I) The actual recipients of
the subsidy, whether considered
on an enterprise or industry
basis, are limited in number.
(II) An enterprise or
industry is a predominant user
of the subsidy.
(III) An enterprise or
industry receives a
disproportionately large amount
of the subsidy.
(IV) The manner in which the
authority providing the subsidy
has exercised discretion in the
decision to grant the subsidy
indicates that an enterprise or
industry is favored over
others.
In evaluating the factors set forth in
subclauses (I), (II), (III), and (IV),
the administering authority shall take
into account the extent of
diversification of economic activities
within the jurisdiction of the
authority providing the subsidy, and
the length of time during which the
subsidy program has been in operation.
(iv) Where a subsidy is limited to an
enterprise or industry located within a
designated geographical region within
the jurisdiction of the authority
providing the subsidy, the subsidy is
specific.
For purposes of this paragraph and paragraph (5B), any
reference to an enterprise or industry is a reference
to a foreign enterprise or foreign industry and
includes a group of such enterprises or industries.
(5B) Categories of noncountervailable subsidies.--
(A) In general.--Notwithstanding the
provisions of paragraphs (5) and (5A), in the
case of merchandise imported from a Subsidies
Agreement country, a subsidy shall be treated
as noncountervailable if the administering
authority determines in an investigation under
subtitle A or a review under subtitle C that
the subsidy meets all of the criteria described
in subparagraph (B), (C), or (D), as the case
may be, or the provisions of subparagraph
(E)(i) apply.
[(B) Research subsidy.--\8\
---------------------------------------------------------------------------
\8\ Pursuant to section 282(c)(1) of the Uruguary Round Agreement
Act, subparagraph (B) of section 771(5B) of the Tariff Act of 1930
ceased to appply as of July 1, 2000.
---------------------------------------------------------------------------
(i) In general.--Except for a subsidy
provided on the manufacture,
production, or export of civil
aircraft, a subsidy for research
activities conducted by a person, or by
a higher education or research
establishment on a contract basis with
a person, shall be treated as
noncountervailable, if the subsidy
covers not more than 75 percent of the
costs of industrial research or not
more than 50 percent of the costs of
precompetitive development activity,
and such subsidy is limited exclusively
to--
(I) the costs of researchers,
technicians, and other
supporting staff employed
exclusively in the research
activity,
(II) the costs of
instruments, equipment, land,
or buildings that are used
exclusively and permanently
(except when disposed of on a
commercial basis) for the
research activity,
(III) the costs of
consultancy and equivalent
services used exclusively for
the research activity,
including costs for bought-in
research, technical knowledge,
and patents,
(IV) additional overhead
costs incurred directly as a
result of the research
activity, and
(V) other operating costs
(such as materials and
supplies) incurred directly as
a result of the research
activity.
(ii) Definitions.--For purposes of
this subparagraph--
(I) Industrial research.--The
term ``industrial research''
means planned search or
critical investigation aimed at
the discovery of new knowledge,
with the objective that such
knowledge may be useful in
developing new products,
processes, or services, or in
bringing about a significant
improvement to existing
products, processes, or
services.
(II) Precompetitive
development activity.--The term
``precompetitive development
activity'' means the
translation of industrial
research findings into a plan,
blueprint, or design for new,
modified, or improved products,
processes, or services, whether
intended for sale or use,
including the creation of a
first prototype that would not
be capable of commercial use.
The term also may include the
conceptual formulation and
design of products, processes,
or services alternatives and
initial demonstration or pilot
projects, if these same
projects cannot be converted or
used for industrial application
or commercial exploitation. The
term does not include routine
or periodic alterations to
existing products, production
lines, manufacturing processes,
services, or other ongoing
operations even if those
alterations may represent
improvements.
(iii) Calculation rules.--
(I) In general.--In the case
of a research activity that
spans both industrial research
and precompetitive development
activity, the allowable level
of the noncountervailable
subsidy shall not exceed 62.5
percent of the costs set forth
in subclauses (I), (II), (III),
(IV), and (V) of clause (i).
(II) Total eligible costs.--
The allowable level of a
noncountervailable subsidy
described in clause (i) shall
be based on the total eligible
costs incurred over the
duration of a particular
project.]
[(C) Subsidy to disadvantaged regions.--\9\
---------------------------------------------------------------------------
\9\ Pursuant to section 282(c)(1) of the Uruguay Round Agreements
Act subparagraph (C) of section 771(5B) of the Tariff Act of 1930
ceased to apply as of July 1, 2000.
---------------------------------------------------------------------------
(i) In general.--A subsidy provided,
pursuant to a general framework of
regional development, to a person
located in a disadvantaged region
within a country shall be treated as
noncountervailable, if it is not
specific (within the meaning of
paragraph (5A)) within eligible regions
and if the following conditions are
met:
(I) Each region identified as
disadvantaged within the
territory of a country is a
clearly designated, contiguous
geographical area with a
definable economic and
administrative identity.
(II) Each region is
considered a disadvantaged
region on the basis of neutral
and objective criteria
indicating that the region is
disadvantaged because of more
than temporary circumstances,
and such criteria are clearly
stated in the relevant statute,
regulation, or other official
document so as to be capable of
verification.
(III) The criteria described
in subclause (II) include a
measurement of economic
development.
(IV) Programs provided within
a general framework of regional
development include ceilings on
the amount of assistance that
can be granted to a subsidized
project. Such ceilings are
differentiated according to the
different levels of development
of assisted regions, and are
expressed in terms of
investment costs or costs of
job creation. Within such
ceilings, the distribution of
assistance is sufficiently
broad and even to avoid the
predominant use of a subsidy
by, or the provision of
disproportionately large
amounts of a subsidy to, an
enterprise or industry as
described in paragraph (5A)(D).
(ii) Measurement of economic
development.--For purposes of clause
(i), the measurement of economic
development shall be based on one or
more of the following factors:
(I) Per capita income,
household per capita income, or
per capita gross domestic
product that does not exceed 85
percent of the average for the
country subject to
investigation or review.
(II) An unemployment rate
that is at least 110 percent of
the average unemployment rate
for the country subject to
investigation or review.
The measurement of economic development
shall cover a 3-year period, but may be
a composite measurement and may include
factors other than those set forth in
this clause.
(iii) Definitions.--For purposes of
this subparagraph--
(I) General framework of
regional development.--The term
``general framework of regional
development'' means that the
regional subsidy programs are
part of an internally
consistent and generally
applicable regional development
policy, and that regional
development subsidies are not
granted in isolated
geographical points having no,
or virtually no, influence on
the development of a region.
(II) Neutral and objective
criteria.--The term ``neutral
and objective criteria'' means
criteria that do not favor
certain regions beyond what is
appropriate for the elimination
or reduction of regional
disparities within the
framework of the regional
development policy.]
[(D) Subsidy for adaptation of existing
facilities to new environmental requirements.--
\10\
---------------------------------------------------------------------------
\10\ Pursuant to sectin 282(c)(1) of the Uruguary Round Agreements
Act, subparagraph (D) of section 771(5B) of the Tariff Act of 1930
ceased to apply as of July 1, 2000.
---------------------------------------------------------------------------
(i) In general.--A subsidy that is
provided to promote the adaptation of
existing facilities to new
environmental requirements that are
imposed by statute or by regulation,
and that result in greater constraints
and financial burdens on the recipient
of the subsidy, shall be treated as
noncountervailable, if the subsidy--
(I) is a one-time
nonrecurring measure,
(II) is limited to 20 percent
of the cost of adaptation,
(III) does not cover the cost
of replacing and operating the
subsidized investment, a cost
that must be fully borne by the
recipient,
(IV) is directly linked and
proportionate to the
recipient's planned reduction
of nuisances and pollution, and
does not cover any
manufacturing cost savings that
may be achieved, and
(V) is available to all
persons that can adopt the new
equipment or production
processes.
(ii) Existing facilities.--For
purposes of this subparagraph, the term
``existing facilities'' means
facilities that have been in operation
for at least 2 years before the date on
which the new environmental
requirements are imposed.]
[(E) Notified subsidy program.--\11\
---------------------------------------------------------------------------
\11\ Pursuant to section 282(c)(1) of the Uruguay Round Agreements
Act, subparagraph (E) of section 771(5B) of the Tariff Act of 1930
ceased to apply as of July 1, 2000.
---------------------------------------------------------------------------
(i) General rule.--If a subsidy is
provided pursuant to a program that has
been notified in accordance with
Article 8.3 of the Subsidies Agreement,
the subsidy shall be treated as
noncountervailable and shall not be
subject to investigation or review
under this title.
(ii) Exception.--Notwithstanding
clause (i), a subsidy shall be treated
as countervailable if--
(I) the Trade Representative
notifies the administering
authority that a determination
has been made pursuant to
Article 8.4 or 8.5 of the
Subsidies Agreement that the
subsidy, or the program
pursuant to which the subsidy
was provided, does not satisfy
the conditions and criteria of
Article 8.2 of the Subsidies
Agreement; and
(II) the subsidy is specific
within the meaning of paragraph
(5A).]
(F) Certain subsidies on agricultural
products.--Domestic support measures that are
provided with respect to products listed in
Annex 1 to the Agreement on Agriculture, and
that the administering authority determines
conform fully to the provisions of Annex 2 to
that Agreement, shall be treated as
noncountervailable. Upon request by the
administering authority, the Trade
Representative shall provide advice regarding
the interpretation and application of Annex 2.
(G) Provisional application.--
(i) Subparagraphs (B), (C), (D), and
(E) shall not apply on or after the
first day of the month that is 66
months after the WTO Agreement enters
into force, unless the provisions of
such subparagraphs are extended
pursuant to section 282(c) of the
Uruguay Round Agreements Act.
(ii) Subparagraph (F) shall not apply
to imports from a WTO member country at
the end of the 9-year period beginning
on January 1, 1995. The Trade
Representative shall determine the
precise termination date for each WTO
member country in accordance with
paragraph (i) of Article 1 of the
Agreement on Agriculture and such date
shall be notified to the administering
authority.
(6) Net countervailable subsidy.--For the purpose of
determining the net countervailable subsidy, the
administering authority may subtract from the gross
countervailable subsidy the amount of--
(A) any application fee, deposit, or similar
payment paid in order to qualify for, or to
receive, the benefit of the countervailable
subsidy,
(B) any loss in the value of the
countervailable subsidy resulting from its
deferred receipt, if the deferral is mandated
by Government order, and
(C) export taxes, duties, or other charges
levied on the export of merchandise to the
United States specifically intended to offset
the countervailable subsidy received.
(7) Material injury.--
(A) In general.--The term ``material injury''
means harm which is not inconsequential,
immaterial, or unimportant.
(B) Volume and consequent impact.--In making
determinations under sections 703(a), 705(b),
733(a), and 735(b), the Commission in each
case--
(i) shall consider--
(I) the volume of imports of
the subject merchandise,
(II) the effect of imports of
that merchandise on prices in
the United States for like
products \1\, and
(III) the impact of imports
of such merchandise on domestic
producers of like products \1\,
but only in the context of
production operations within
the United States; and
(ii) may consider such other economic
factors as are relevant to the
determination regarding whether there
is material injury by reason of
imports.
In the notification required under section
705(d) or 735(d), as the case may be, the
Commission shall explain its analysis of each
factor considered under clause (i), and
identify each factor considered under clause
(ii) and explain in full its relevance to the
determination.
(C) Evaluation of relevant factors.--For
purposes of subparagraph (B)--
(i) Volume.--In evaluating the volume
of imports of merchandise, the
Commission shall consider whether the
volume of imports of the merchandise,
or any increase in that volume, either
in absolute terms or relative to
production or consumption in the United
States, is significant.
(ii) Price.--In evaluating the effect
of imports of such merchandise on
prices, the Commission shall consider
whether--
(I) there has been
significant price underselling
by the imported merchandise as
compared with the price of like
products \12\ of the United
States, and
---------------------------------------------------------------------------
\12\ Section 233(a)(3)(B) of P.L. 103-465 amends this subclause by
striking ``like product'' and inserting ``domestic like product.'' The
phrase ``like product'' does not appear.
---------------------------------------------------------------------------
(II) the effect of imports of
such merchandise otherwise
depresses prices to a
significant degree or prevents
price increases, which
otherwise would have occurred,
to a significant degree.
(iii) Impact on affected domestic
industry.--In examining the impact
required to be considered under
subparagraph (B)(i)(III), the
Commission shall evaluate all relevant
economic factors which have a bearing
on the state of the industry in the
United States, including, but not
limited to--
(I) actual and potential
decline in output, sales,
market share, profits,
productivity, return on
investments, and utilization of
capacity,
(II) factors affecting
domestic prices,
(III) actual and potential
negative effects on cash flow,
inventories, employment, wages,
growth, ability to raise
capital, and investment,
(IV) actual and potential
negative effects on the
existing development and
production efforts of the
domestic industry, including
efforts to develop a derivative
or more advanced version of the
domestic like product, and
(V) in a proceeding under
subtitle B, the magnitude of
the margin of dumping.
The Commission shall evaluate all
relevant economic factors described in
this clause within the context of the
business cycle and conditions of
competition that are distinctive to the
affected industry.
(iv) Captive production.--If domestic
producers internally transfer
significant production of the domestic
like product for the production of a
downstream article and sell significant
production of the domestic like product
in the merchant market, and the
Commission finds that--
(I) the domestic like product
produced that is internally
transferred for processing into
that downstream article does
not enter the merchant market
for the domestic like product,
(II) the domestic like
product is the predominant
material input in the
production of that downstream
article, and
(III) the production of the
domestic like product sold in
the merchant market is not
generally used in the
production of that downstream
article,
then the Commission, in determining
market share and the factors affecting
financial performance set forth in
clause (iii), shall focus primarily on
the merchant market for the domestic
like product.
(D) Special rules for agricultural
products.--
(i) The Commission shall not
determine that there is no material
injury or threat of material injury to
the United States producers of an
agricultural commodity merely because
the prevailing market price is at or
above the minimum support price.
(ii) In the case of agricultural
products, the Commission shall consider
any increased burden on government
income or price support programs.
(E) Special rules.--For purposes of this
paragraph--
(i) Nature of countervailable
subsidy.--In determining whether there
is a threat of material injury, the
Commission shall consider information
provided to it by the administering
authority regarding the nature of the
countervailable subsidy granted by a
foreign country (particularly whether
the countervailable subsidy is a
subsidy described in Article 3 or 6.1
of the Subsidies Agreement) and the
effects likely to be caused by the
countervailable subsidy.\13\
---------------------------------------------------------------------------
\13\ Article 6.1 of the Uruguray Round Subsidies Agreement lapsed
January 1, 2000.
---------------------------------------------------------------------------
(ii) Standard for determination.--The
presence or absence of any factor which
the Commission is required to evaluate
under subparagraph (C) or (D) shall not
necessarily give decisive guidance with
respect to the determination by the
Commission of material injury.
(F) Threat of material injury.--
(i) In general.--In determining
whether an industry in the United
States is threatened with material
injury by reason of imports (or sales
for importation) of the subject
merchandise, the Commission shall
consider, among other relevant economic
factors--
(I) if a countervailable
subsidy is involved, such
information as may be presented
to it by the administering
authority as to the nature of
the subsidy (particularly as to
whether the countervailable
subsidy is a subsidy described
in Article 3 or 6.1 of the
Subsidies Agreement), and
whether imports of the subject
merchandise are likely to
increase,\14\
---------------------------------------------------------------------------
\14\ Article 6.1 of the Uruguray Round Subsidies Agreement lapsed
January 1, 2000.
---------------------------------------------------------------------------
(II) any existing unused
production capacity or
imminent, substantial increase
in production capacity in the
exporting country indicating
the likelihood of substantially
increased imports of the
subject merchandise into the
United States, taking into
account the availability of
other export markets to absorb
any additional exports,
(III) a significant rate of
increase of the volume or
market penetration of imports
of the subject merchandise
indicating the likelihood of
substantially increased
imports,
(IV) whether imports of the
subject merchandise are
entering at prices that are
likely to have a significant
depressing or suppressing
effect on domestic prices, and
are likely to increase demand
for further imports,
(V) inventories of the
subject merchandise,
(VI) the potential for
product-shifting if production
facilities in the foreign
country, which can be used to
produce the subject
merchandise, are currently
being used to produce other
products,
(VII) in any investigation
under this title which involves
imports of both a raw
agricultural product (within
the meaning of paragraph
(4)(E)(iv)) and any product
processed from such raw
agricultural product, the
likelihood that there will be
increased imports, by reason of
product shifting, if there is
an affirmative determination by
the Commission under section
705(b)(1) or 735(b)(1) with
respect to either the raw
agricultural product or the
processed agricultural product
(but not both),
(VIII) the actual and
potential negative effects on
the existing development and
production efforts of the
domestic industry, including
efforts to develop a derivative
or more advanced version of the
domestic like product, and
(IX) any other demonstrable
adverse trends that indicate
the probability that there is
likely to be material injury by
reason of imports (or sale for
importation) of the subject
merchandise (whether or not it
is actually being imported at
the time).
(ii) Basis for determination.--The
Commission shall consider the factors
set forth in clause (i) as a whole in
making a determination of whether
further dumped or subsidized imports
are imminent and whether material
injury by reason of imports would occur
unless an order is issued or a
suspension agreement is accepted under
this title. The presence or absence of
any factor which the Commission is
required to consider under clause (i)
shall not necessarily give decisive
guidance with respect to the
determination. Such a determination may
not be made on the basis of mere
conjecture or supposition.
(iii) Effect of dumping in third-
country markets.--
(I) In general.--In
investigations under subtitle
B, the Commission shall
consider whether dumping in the
markets of foreign countries
(as evidenced by dumping
findings or antidumping
remedies in other WTO member
markets against the same class
or kind of merchandise
manufactured or exported by the
same party as under
investigation) suggests a
threat of material injury to
the domestic industry. In the
course of its investigation,
the Commission shall request
information from the foreign
manufacturer, exporter, or
United States importer
concerning this issue.
(II) WTO member market.--For
purposes of this clause, the
term ``WTO member market''
means the market of any country
which is a WTO member.
(III) European communities.--
For purposes of this clause,
the European Communities shall
be treated as a foreign
country.
(G) Cumulation for determining material
injury.--
(i) In general.--For purposes of
clauses (i) and (ii) of subparagraph
(C), and subject to clause (ii), the
Commission shall cumulatively assess
the volume and effect of imports of the
subject merchandise from all countries
with respect to which--
(I) petitions were filed
under section 702(b) or 732(b)
on the same day,
(II) investigations were
initiated under section 702(a)
or 732(a) on the same day, or
(III) petitions were filed
under section 702(b) or 732(b)
and investigations were
initiated under section 702(a)
or 732(a) on the same day,
if such imports compete with each other
and with domestic like products in the
United States market.
(ii) Exceptions.--The Commission
shall not cumulatively assess the
volume and effect of imports under
clause (i)--
(I) with respect to which the
administering authority has
made a preliminary negative
determination, unless the
administering authority
subsequently made a final
affirmative determination with
respect to those imports before
the Commission's final
determination is made;
(II) from any country with
respect to which the
investigation has been
terminated;
(III) from any country
designated as a beneficiary
country under the Caribbean
Basin Economic Recovery Act (19
U.S.C. 2701 et seq.) for
purposes of making a
determination with respect to
that country, except that the
volume and effect of imports of
the subject merchandise from
such country may be
cumulatively assessed with
imports of the subject
merchandise from any other
country designated as such a
beneficiary country to the
extent permitted by clause (i);
or
(IV) from any country that is
a party to an agreement with
the United States establishing
a free trade area, which
entered into force and effect
before January 1, 1987, unless
the Commission determines that
a domestic industry is
materially injured or
threatened with material injury
by reason of imports from that
country.
(iii) Records in final
investigations.--In each final
determination in which it cumulatively
assesses the volume and effect of
imports under clause (i), the
Commission shall make its
determinations based on the record
compiled in the first investigation in
which it makes a final determination,
except that when the administering
authority issues its final
determination in a subsequently
completed investigation, the Commission
shall permit the parties in the
subsequent investigation to submit
comments concerning the significance of
the administering authority's final
determination, and shall include such
comments and the administering
authority's final determination in the
record for the subsequent
investigation.
(iv) Regional industry
determinations.--In an investigation
which involves a regional industry, and
in which the Commission decides that
the volume and effect of imports should
be cumulatively assessed under this
subparagraph, such assessment shall be
based upon the volume and effect of
imports into the region or regions
determined by the Commission. The
provisions of clause (iii) shall apply
to such investigations.
(H) Cumulation for determining threat of
material injury.--To the extent practicable and
subject to subparagraph (G)(ii), for purposes
of clause (i)(III) and (IV) of subparagraph
(F), the Commission may cumulatively assess the
volume and price effects of imports of the
subject merchandise from all countries with
respect to which--
(i) petitions were filed under
section 702(b) or 732(b) on the same
day,
(ii) investigations were initiated
under section 702(a) or 732(a) on the
same day, or
(iii) petitions were filed under
section 702(b) or 732(b) and
investigations were initiated under
section 702(a) or 732(a) on the same
day,
if such imports compete with each other and
with domestic like products in the United
States market.
(I) Consideration of post-petition
information.--The Commission shall consider
whether any change in the volume, price
effects, or impact of imports of the subject
merchandise since the filing of the petition in
an investigation under subtitle A or B is
related to the pendency of the investigation
and, if so, the Commission may reduce the
weight accorded to the data for the period
after the filing of the petition in making its
determination of material injury, threat of
material injury, or material retardation of the
establishment of an industry in the United
States.
(8) Subsidies agreement; agreement on agriculture.--
(A) Subsidies agreement.--The term
``Subsidies Agreement'' means the Agreement on
Subsidies and Countervailing Measures referred
to in section 101(d)(12) of the Uruguay Round
Agreements Act.
(B) Agreement on agriculture.--The term
``Agreement on Agriculture'' means the
Agreement on Agriculture referred to in section
101(d)(2) of the Uruguay Round Agreements Act.
(9) Interested party.--The term ``interested party''
means--
(A) a foreign manufacturer, producer, or
exporter, or the United States importer, of
subject merchandise or a trade or business
association a majority of the members of which
are producers, exporters, or importers of such
merchandise,
(B) the government of a country in which such
merchandise is produced or manufactured or from
which such merchandise is exported,
(C) a manufacturer, producer, or wholesaler
in the United States of a domestic like
product,
(D) a certified union or recognized union or
group of workers which is representative of an
industry engaged in the manufacture,
production, or wholesale in the United States
of a domestic like product,
(E) a trade or business association a
majority of whose members manufacture, produce,
or wholesale a domestic like product in the
United States,
(F) an association, a majority of whose
members is composed of interested parties
described in subparagraph (C), (D), or (E) with
respect to a domestic like product, and
(G) in any investigation under this title
involving an industry engaged in producing a
processed agricultural product, as defined in
paragraph (4)(E), a coalition or trade
association which is representative of either--
(i) processors,
(ii) processors and producers, or
(iii) processors and growers,
but this subparagraph shall cease to have
effect if the United States Trade
Representative notifies the administering
authority and the Commission that the
application of this subparagraph is
inconsistent with the international obligations
of the United States.
(10) Domestic like product.--The term ``domestic like
product'' means a product which is like, or in the
absence of like, most similar in characteristics and
uses with, the article subject to an investigation
under this title.
(11) Affirmative determinations by divided
commission.--If the Commissioners voting on a
determination by the Commission, including a
determination under section 751, are evenly divided as
to whether the determination should be affirmative or
negative, the Commission shall be deemed to have made
an affirmative determination. For the purpose of
applying this paragraph when the issue before the
Commission is to determine whether there is--
(A) material injury to an industry in the
United States,
(B) threat of material injury to such an
industry, or
(C) material retardation of the establishment
of an industry in the United States,
by reason of imports of the merchandise, an affirmative
vote on any of the issues shall be treated as a vote
that the determination should be affirmative.
(12) Attribution of merchandise to country of
manufacture or production.--For purposes of subtitle A,
merchandise shall be treated as the product of the
country in which it was manufactured or produced
without regard to whether it is imported directly from
that country and without regard to whether it is
imported in the same condition as when exported from
that country or in a changed condition by reason of
remanufacture or otherwise.
(13) [Repealed.]
(14) Sold or, in the absence of sales, offered for
sale.--The term ``sold or, in the absence of sales,
offered for sale'' means sold or, in the absence of
sales, offered--
(A) to all purchasers in commercial
quantities, or
(B) in the ordinary course of trade to one or
more selected purchasers in commercial
quantities at a price which fairly reflects the
market value of the merchandise,
without regard to restrictions as to the disposition or
use of the merchandise by the purchaser except that,
where such restrictions are found to affect the market
value of the merchandise, adjustment shall be made
therefor in calculating the price at which the
merchandise is sold or offered for sale.
(15) Ordinary course of trade.--The term ``ordinary
course of trade'' means the conditions and practices
which, for a reasonable time prior to the exportation
of the subject merchandise, have been normal in the
trade under consideration with respect to merchandise
of the same class or kind. The administering authority
shall consider the following sales and transactions,
among others, to be outside the ordinary course of
trade:
(A) Sales disregarded under section
773(b)(1).
(B) Transactions disregarded under section
773(f)(2).
(16) Foreign like product.--The term ``foreign like
product'' means merchandise in the first of the
following categories in respect of which a
determination for the purposes of subtitle B of this
title can be satisfactorily made:
(A) The subject merchandise and other
merchandise which is identical in physical
characteristics with, and was produced in the
same country by the same person as, that
merchandise.
(B) Merchandise--
(i) produced in the same country and
by the same person as the subject
merchandise,
(ii) like that merchandise in
component material or materials and in
the purposes for which used, and
(iii) approximately equal in
commercial value to that merchandise.
(C) Merchandise--
(i) produced in the same country and
by the same person and of the same
general class or kind as the
merchandise which is the subject of the
investigation,
(ii) like that merchandise in the
purposes for which used, and
(iii) which the administering
authority determines may reasonably be
compared with that merchandise.
(17) Usual commercial quantities.--The term ``usual
commercial quantities'', in any case in which the
subject merchandise is sold in the market under
consideration at different prices for different
quantities, means the quantities in which such
merchandise is there sold at the price or prices for
one quantity in an aggregate volume which is greater
than the aggregate volume sold at the price or prices
for any other quantity.
(18) Nonmarket economy country.--
(A) In general.--The term ``nonmarket economy
country'' means any foreign country that the
administering authority determines does not
operate on market principles of cost or pricing
structures, so that sales of merchandise in
such country do not reflect the fair value of
the merchandise.
(B) Factors to be considered.--In making
determinations under subparagraph (A) the
administering authority shall take into
account--
(i) the extent to which the currency
of the foreign country is convertible
into the currency of other countries;
(ii) the extent to which wage rates
in the foreign country are determined
by free bargaining between labor and
management,
(iii) the extent to which joint
ventures or other investments by firms
of other foreign countries are
permitted in the foreign country,
(iv) the extent of government
ownership or control of the means of
production,
(v) the extent of government control
over the allocation of resources and
over the price and output decisions of
enterprises, and
(vi) such other factors as the
administering authority considers
appropriate.
(C) Determination in effect.--
(i) Any determination that a foreign
country is a nonmarket economy country
shall remain in effect until revoked by
the administering authority.
(ii) The administering authority may
make a determination under subparagraph
(A) with respect to any foreign country
at any time.
(D) Determinations not in issue.--
Notwithstanding any other provision of law, any
determination made by the administering
authority under subparagraph (A) shall not be
subject to judicial review in any investigation
conducted under subtitle B.
(E) Collection of information.--Upon request
by the administering authority, the
Commissioner of Customs shall provide the
administering authority a copy of all public
and proprietary information submitted to, or
obtained by, the Commissioner of Customs that
the administering authority considers relevant
to proceedings involving merchandise from
nonmarket economy countries. The administering
authority shall protect proprietary information
obtained under this section from public
disclosure in accordance with section 777.
(19) Equivalency of leases to sales.--In determining
whether a lease is equivalent to a sale for purposes of
this title, the administering authority shall
consider--
(A) the terms of the lease,
(B) commercial practice within the industry,
(C) the circumstances of the transaction,
(D) whether the product subject to the lease
is integrated into the operations of the lessee
or importer,
(E) whether in practice there is a likelihood
that the lease will be continued or renewed for
a significant period of time, and
(F) other relevant factors, including whether
the lease transaction would permit avoidance of
antidumping or countervailing duties.
(20) Application to governmental importations.--
(A) In general.--Except as otherwise provided
by this paragraph, merchandise imported by, or
for the use of, a department or agency of the
United States Government (including merchandise
provided for under chapter 98 of the Harmonized
Tariff Schedule of the United States) is
subject to the imposition of countervailing
duties or antidumping duties under this title
or section 303.
(B) Exceptions.--Merchandise imported by, or
for the use of, the Department of Defense shall
not be subject to the imposition of
countervailing or antidumping duties under this
title if--
(i) the merchandise is acquired by,
or for use of, such Department--
(I) from a country with which
such Department had a
Memorandum of Understanding
which was in effect on January
1, 1988, and has continued to
have a comparable agreement
(including renewals) or
superseding agreements, and
(II) in accordance with terms
of the Memorandum of
Understanding in effect at the
time of importation, or
(ii) the merchandise has no
substantial nonmilitary use.
(21) United states-canada agreement.--The term
``United States-Canada Agreement'' means the United
States-Canada Free-Trade Agreement.
(22) NAFTA.--The term ``NAFTA'' means the North
American Free Trade Agreement.
(23) Entry.--The term ``entry'' includes, in
appropriate circumstances as determined by the
administering authority, a reconciliation entry created
under a reconciliation process, defined in section
401(s), that is initiated by an importer. The liability
of an importer under an antidumping or countervailing
duty proceeding for entries of merchandise subject to
the proceeding will attach to the corresponding
reconciliation entry or entries. Suspension of
liquidation of the reconciliation entry or entries, for
the purpose of enforcing this title, is equivalent to
the suspension of liquidation of the corresponding
individual entries; but the suspension of liquidation
of the reconciliation entry or entries for such purpose
does not preclude liquidation for any other purpose.
(24) Negligible imports.--
(A) In general.--
(i) Less than 3 percent.--Except as
provided in clauses (ii) and (iv),
imports from a country of merchandise
corresponding to a domestic like
product identified by the Commission
are ``negligible'' if such imports
account for less than 3 percent of the
volume of all such merchandise imported
into the United States in the most
recent 12-month period for which data
are available that precedes--
(I) the filing of the
petition under section 702(b)
or 732(b), or
(II) the initiation of the
investigation, if the
investigation was initiated
under section 702(a) or 732(a).
(ii) Exception.--Imports that would
otherwise be negligible under clause
(i) shall not be negligible if the
aggregate volume of imports of the
merchandise from all countries
described in clause (i) with respect to
which investigations were initiated on
the same day exceeds 7 percent of the
volume of all such merchandise imported
into the United States during the
applicable 12-month period.
(iii) Determination of aggregate
volume.--In determining aggregate
volume under clause (ii) or (iv), the
Commission shall not consider imports
from any country specified in paragraph
(7)(G)(ii).
(iv) Negligibility in threat
analysis.--Notwithstanding clauses (i)
and (ii), the Commission shall not
treat imports as negligible if it
determines that there is a potential
that imports from a country described
in clause (i) will imminently account
for more than 3 percent of the volume
of all such merchandise imported into
the United States, or that the
aggregate volumes of imports from all
countries described in clause (ii) will
imminently exceed 7 percent of the
volume of all such merchandise imported
into the United States. The Commission
shall consider such imports only for
purposes of determining threat of
material injury.
(B) Negligibility for certain countries in
countervailing duty investigations.--In the
case of an investigation under section 701,
subparagraph (A) shall be applied to imports of
subject merchandise from developing countries
by substituting ``4 percent'' for ``3 percent''
in subparagraph (A)(i) and by substituting ``9
percent'' for ``7 percent'' in subparagraph
(A)(ii).
(C) Computation of import volumes.--In
computing import volumes for purposes of
subparagraphs (A) and (B), the Commission may
make reasonable estimates on the basis of
available statistics.
(D) Regional industries.--In an investigation
in which the Commission makes a regional
industry determination under paragraph (4)(C),
the Commission's examination under
subparagraphs (A) and (B) shall be based upon
the volume of subject merchandise exported for
sale in the regional market in lieu of the
volume of all subject merchandise imported into
the United States.
(25) Subject merchandise.--The term ``subject
merchandise'' means the class or kind of merchandise
that is within the scope of an investigation, a review,
a suspension agreement, an order under this title or
section 303, or a finding under the Antidumping Act,
1921.
(26) Section 303.--The terms ``section 303'' and
``303'' mean section 303 of this Act as in effect on
the day before the effective date of title II of the
Uruguay Round Agreements Act.
(27) Suspension agreement.--The term ``suspension
agreement'' means an agreement described in section
704(b), 704(c), 734(b), 734(c), or 734(l).
(28) Exporter or producer.--The term ``exporter or
producer'' means the exporter of the subject
merchandise, the producer of the subject merchandise,
or both where appropriate. For purposes of section 773,
the term ``exporter or producer'' includes both the
exporter of the subject merchandise and the producer of
the same subject merchandise to the extent necessary to
accurately calculate the total amount incurred and
realized for costs, expenses, and profits in connection
with production and sale of that merchandise.
(29) WTO agreement.--The term ``WTO Agreement'' means
the Agreement defined in section 2(9) of the Uruguay
Round Agreements Act.
(30) WTO member and wto member country.--The terms
``WTO member'' and ``WTO member country'' mean a state,
or separate customs territory (within the meaning of
Article XII of the WTO Agreement), with respect to
which the United States applies the WTO Agreement.
(31) GATT 1994.--The term ``GATT 1994'' means the
General Agreement on Tariffs and Trade annexed to the
WTO Agreement.
(32) Trade representative.--The term ``Trade
Representative'' means the United States Trade
Representative.
(33) Affiliated persons.--The following persons shall
be considered to be ``affiliated'' or ``affiliated
persons'':
(A) Members of a family, including brothers
and sisters (whether by the whole or half
blood), spouse, ancestors, and lineal
descendants.
(B) Any officer or director of an
organization and such organization.
(C) Partners.
(D) Employer and employee.
(E) Any person directly or indirectly owning,
controlling, or holding with power to vote, 5
percent or more of the outstanding voting stock
or shares of any organization and such
organization.
(F) Two or more persons directly or
indirectly controlling, controlled by, or under
common control with, any person.
(G) Any person who controls any other person
and such other person.
For purposes of this paragraph, a person shall be
considered to control another person if the person is
legally or operationally in a position to exercise
restraint or direction over the other person.
(34) Dumped; dumping.--The terms ``dumped'' and
``dumping'' refer to the sale or likely sale of goods
at less than fair value.
(35) Dumping margin; weighted average dumping
margin.--
(A) Dumping margin.--The term ``dumping
margin'' means the amount by which the normal
value exceeds the export price or constructed
export price of the subject merchandise.
(B) Weighted average dumping margin.--The
term ``weighted average dumping margin'' is the
percentage determined by dividing the aggregate
dumping margins determined for a specific
exporter or producer by the aggregate export
prices and constructed export prices of such
exporter or producer.
(C) Magnitude of the margin of dumping.--The
magnitude of the margin of dumping used by the
Commission shall be--
(i) in making a preliminary
determination under section 733(a) in
an investigation (including any
investigation in which the Commission
cumulatively assesses the volume and
effect of imports under paragraph
(7)(G)(i)), the dumping margin or
margins published by the administering
authority in its notice of initiation
of the investigation;
(ii) in making a final determination
under section 735(b), the dumping
margin or margins most recently
published by the administering
authority prior to the closing of the
Commission's administrative record;
(iii) in a review under section
751(b)(2), the most recent dumping
margin or margins determined by the
administering authority under section
752(c)(3), if any, or under section
733(b) or 735(a); and
(iv) in a review under section
751(c), the dumping margin or margins
determined by the administering
authority under section 752(c)(3).
(36) Developing and least developed country.--
(A) Developing country.--The term
``developing country'' means a country
designated as a developing country by the Trade
Representative.
(B) Least developed country.--The term
``least developed country'' means a country
which the Trade Representative determines is--
(i) a country referred to as a least
developed country within the meaning of
paragraph (a) of Annex VII to the
Subsidies Agreement, or
(ii) any other country listed in
Annex VII to the Subsidies Agreement,
but only if the country has a per
capita gross national product of less
than $1,000 per annum as measured by
the most recent data available from the
World Bank.
(C) Publication of list.--The Trade
Representative shall publish in the Federal
Register, and update as necessary, a list of--
(i) developing countries that have
eliminated their export subsidies on an
expedited basis within the meaning of
Article 27.11 of the Subsidies
Agreement, and
(ii) countries determined by the
Trade Representative to be least
developed or developing countries.
(D) Factors to consider.--In determining
whether a country is a developing country under
subparagraph (A), the Trade Representative
shall consider such economic, trade, and other
factors which the Trade Representative
considers appropriate, including the level of
economic development of such country (the
assessment of which shall include a review of
the country's per capita gross national
product) and the country's share of world
trade.
(E) Limitation on designation.--A
determination that a country is a developing or
least developed country pursuant to this
paragraph shall be for purposes of this title
only and shall not affect the determination of
a country's status as a developing or least
developed country with respect to any other
law.
SEC. 771A. UPSTREAM SUBSIDIES.
(a) Definition.--The term ``upstream subsidy'' means any
countervailable subsidy, other than an export subsidy, that--
(1) is paid or bestowed by an authority (as defined
in section 771(5)) with respect to a product (hereafter
in this section referred to as an ``input product'')
that is used in the same country as the authority in
the manufacture or production of merchandise which is
the subject of a countervailing duty proceeding;
(2) in the judgment of the administering authority
bestows a competitive benefit on the merchandise; and
(3) has a significant effect on the cost of
manufacturing or producing the merchandise.
In applying this subsection, an association of two or more
foreign countries, political subdivisions, dependent
territories, or possessions of foreign countries organized into
a customs union outside the United States shall be treated as
being one country if the countervailable subsidy is provided by
the customs union.
(b) Determination of Competitive Benefit.--
(1) In general.--Except as provided in paragraph (2),
the administering authority shall decide that a
competitive benefit has been bestowed when the price
for the input product referred to in subsection (a)(1)
for such use is lower than the price that the
manufacturer or producer of merchandise which is the
subject of a countervailing duty proceeding would
otherwise pay for the product in obtaining it from
another seller in an arms-length transaction.
(2) Adjustments.--If the administering authority has
determined in a previous proceeding that a
countervailable subsidy is paid or bestowed on the
input product that is used for comparison under
paragraph (1), the administering authority may (A)
where appropriate, adjust the price that the
manufacturer or producer of merchandise which is the
subject of such proceeding would otherwise pay for the
product to reflect the effects of the countervailable
subsidy, or (B) select in lieu of that price a price
from another source.
(c) Inclusion of Amount of Subsidy \15\.--If the
administering authority decides, during the course of a
countervailing duty proceeding that an upstream countervailable
subsidy is being or has been paid or bestowed regarding the
subject merchandise, the administering authority shall include
in the amount of any countervailing duty imposed on the
merchandise an amount equal to the amount of the competitive
benefit referred to in subparagraph (1)(B), except that in no
event shall the amount be greater than the amount of the
countervailable subsidy determined with respect to the upstream
product.
---------------------------------------------------------------------------
\15\ Section 270(a)(2)(B) of P.L. 103-465 amended ``section
771(A)(c)'' in the heading by striking ``Subsidy'' and inserting
``Countervailable Subsidy.''
SEC. 771B. CALCULATION OF COUNTERVAILABLE SUBSIDIES ON CERTAIN
PROCESSED AGRICULTURAL PRODUCTS.
In the case of an agricultural product processed from a raw
agricultural product in which--
(1) the demand for the prior stage product is
substantially dependent on the demand for the latter
stage product, and
(2) the processing operation adds only limited value
to the raw commodity,
countervailable subsidies found to be provided to either
producers or processors of the product shall be deemed to be
provided with respect to the manufacture, production, or
exportation of the processed product.
SEC. 772. EXPORT PRICE AND CONSTRUCTED EXPORT PRICE.
(a) Export Price.--The term ``export price'' means the price
at which the subject merchandise is first sold (or agreed to be
sold) before the date of importation by the producer or
exporter of the subject merchandise outside of the United
States to an unaffiliated purchaser in the United States or to
an unaffiliated purchaser for exportation to the United States,
as adjusted under subsection (c).
(b) Constructed Export Price.--The term ``constructed export
price'' means the price at which the subject merchandise is
first sold (or agreed to be sold) in the United States before
or after the date of importation by or for the account of the
producer or exporter of such merchandise or by a seller
affiliated with the producer or exporter, to a purchaser not
affiliated with the producer or exporter, as adjusted under
subsections (c) and (d).
(c) Adjustments for Export Price and Constructed Export
Price.--The price used to establish export price and
constructed export price shall be--
(1) increased by--
(A) when not included in such price, the cost
of all containers and coverings and all other
costs, charges, and expenses incident to
placing the subject merchandise in condition
packed ready for shipment to the United States,
(B) the amount of any import duties imposed
by the country of exportation which have been
rebated, or which have not been collected, by
reason of the exportation of the subject
merchandise to the United States, and
(C) the amount of any countervailing duty
imposed on the subject merchandise under
subtitle A to offset an export subsidy, and
(2) reduced by--
(A) except as provided in paragraph (1)(C),
the amount, if any, included in such price,
attributable to any additional costs, charges,
or expenses, and United States import duties,
which are incident to bringing the subject
merchandise from the original place of shipment
in the exporting country to the place of
delivery in the United States, and
(B) the amount, if included in such price, of
any export tax, duty, or other charge imposed
by the exporting country on the exportation of
the subject merchandise to the United States,
other than an export tax, duty, or other charge
described in section 771(6)(C).
(d) Additional Adjustments to Constructed Export Price.--For
purposes of this section, the price used to establish
constructed export price shall also be reduced by--
(1) the amount of any of the following expenses
generally incurred by or for the account of the
producer or exporter, or the affiliated seller in the
United States, in selling the subject merchandise (or
subject merchandise to which value has been added)--
(A) commissions for selling the subject
merchandise in the United States;
(B) expenses that result from, and bear a
direct relationship to, the sale, such as
credit expenses, guarantees and warranties;
(C) any selling expenses that the seller pays
on behalf of the purchaser; and
(D) any selling expenses not deducted under
subparagraph (A), (B), or (C);
(2) the cost of any further manufacture or assembly
(including additional material and labor), except in
circumstances described in subsection (e); and
(3) the profit allocated to the expenses described in
paragraphs (1) and (2).
(e) Special Rule for Merchandise With Value Added After
Importation.--Where the subject merchandise is imported by a
person affiliated with the exporter or producer, and the value
added in the United States by the affiliated person is likely
to exceed substantially the value of the subject merchandise,
the administering authority shall determine the constructed
export price for such merchandise by using one of the following
prices if there is a sufficient quantity of sales to provide a
reasonable basis for comparison and the administering authority
determines that the use of such sales is appropriate:
(1) The price of identical subject merchandise sold
by the exporter or producer to an unaffiliated person.
(2) The price of other subject merchandise sold by
the exporter or producer to an unaffiliated person.
If there is not a sufficient quantity of sales to provide a
reasonable basis for comparison under paragraph (1) or (2), or
the administering authority determines that neither of the
prices described in such paragraphs is appropriate, then the
constructed export price may be determined on any other
reasonable basis.
(f) Special Rule for Determining Profit.--
(1) In general.--For purposes of subsection (d)(3),
profit shall be an amount determined by multiplying the
total actual profit by the applicable percentage.
(2) Definitions.--For purposes of this subsection:
(A) Applicable percentage.--The term
``applicable percentage'' means the percentage
determined by dividing the total United States
expenses by the total expenses.
(B) Total united states expenses.--The term
``total United States expenses'' means the
total expenses described in subsection (d) (1)
and (2).
(C) Total expenses.--The term ``total
expenses'' means all expenses in the first of
the following categories which applies and
which are incurred by or on behalf of the
foreign producer and foreign exporter of the
subject merchandise and by or on behalf of the
United States seller affiliated with the
producer or exporter with respect to the
production and sale of such merchandise:
(i) The expenses incurred with
respect to the subject merchandise sold
in the United States and the foreign
like product sold in the exporting
country if such expenses were requested
by the administering authority for the
purpose of establishing normal value
and constructed export price.
(ii) The expenses incurred with
respect to the narrowest category of
merchandise sold in the United States
and the exporting country which
includes the subject merchandise.
(iii) The expenses incurred with
respect to the narrowest category of
merchandise sold in all countries which
includes the subject merchandise.
(D) Total actual profit.--The term ``total
actual profit'' means the total profit earned
by the foreign producer, exporter, and
affiliated parties described in subparagraph
(C) with respect to the sale of the same
merchandise for which total expenses are
determined under such subparagraph.
SEC. 773. NORMAL VALUE.
(a) Determination.--In determining under this title whether
subject merchandise is being, or is likely to be, sold at less
than fair value, a fair comparison shall be made between the
export price or constructed export price and normal value. In
order to achieve a fair comparison with the export price or
constructed export price, normal value shall be determined as
follows:
(1) Determination of normal value.--
(A) In general.--The normal value of the
subject merchandise shall be the price
described in subparagraph (B), at a time
reasonably corresponding to the time of the
sale used to determine the export price or
constructed export price under section 772(a)
or (b).
(B) Price.--The price referred to in
subparagraph (A) is--
(i) the price at which the foreign
like product is first sold (or, in the
absence of a sale, offered for sale)
for consumption in the exporting
country, in the usual commercial
quantities and in the ordinary course
of trade and, to the extent
practicable, at the same level of trade
as the export price or constructed
export price, or
(ii) in a case to which subparagraph
(C) applies, the price at which the
foreign like product is so sold (or
offered for sale) for consumption in a
country other than the exporting
country or the United States, if--
(I) such price is
representative,
(II) the aggregate quantity
(or, if quantity is not
appropriate, value) of the
foreign like product sold by
the exporter or producer in
such other country is 5 percent
or more of the aggregate
quantity (or value) of the
subject merchandise sold in the
United States or for export to
the United States, and
(III) the administering
authority does not determine
that the particular market
situation in such other country
prevents a proper comparison
with the export price or
constructed export price.
(C) Third country sales.--This subparagraph
applies when--
(i) the foreign like product is not
sold (or offered for sale) for
consumption in the exporting country as
described in subparagraph (B)(i),
(ii) the administering authority
determines that the aggregate quantity
(or, if quantity is not appropriate,
value) of the foreign like product sold
in the exporting country is
insufficient to permit a proper
comparison with the sales of the
subject merchandise to the United
States, or
(iii) the particular market situation
in the exporting country does not
permit a proper comparison with the
export price or constructed export
price.
For purposes of clause (ii), the aggregate
quantity (or value) of the foreign like product
sold in the exporting country shall normally be
considered to be insufficient if such quantity
(or value) is less than 5 percent of the
aggregate quantity (or value) of sales of the
subject merchandise to the United States.
(2) Fictitious markets.--No pretended sale or offer
for sale, and no sale or offer for sale intended to
establish a fictitious market, shall be taken into
account in determining normal value. The occurrence of
different movements in the prices at which different
forms of the foreign like product are sold (or, in the
absence of sales, offered for sale) in the exporting
country after the issuance of an antidumping duty order
may be considered by the administering authority as
evidence of the establishment of a fictitious market
for the foreign like product if the movement in such
prices appears to reduce the amount by which the normal
value exceeds the export price (or the constructed
export price) of the subject merchandise.
(3) Exportation from an intermediate country.--Where
the subject merchandise is exported to the United
States from an intermediate country, normal value shall
be determined in the intermediate country, except that
normal value may be determined in the country of origin
of the subject merchandise if--
(A) the producer knew at the time of the sale
that the subject merchandise was destined for
exportation;
(B) the subject merchandise is merely
transshipped through the intermediate country;
(C) sales of the foreign like product in the
intermediate country do not satisfy the
conditions of paragraph (1)(C); or
(D) the foreign like product is not produced
in the intermediate country.
(4) Use of constructed value.--If the administering
authority determines that the normal value of the
subject merchandise cannot be determined under
paragraph (1)(B)(i), then, notwithstanding paragraph
(1)(B)(ii), the normal value of the subject merchandise
may be the constructed value of that merchandise, as
determined under subsection (e).
(5) Indirect sales or offers for sale.--If the
foreign like product is sold or, in the absence of
sales, offered for sale through an affiliated party,
the prices at which the foreign like product is sold
(or offered for sale) by such affiliated party may be
used in determining normal value.
(6) Adjustments.--The price described in paragraph
(1)(B) shall be--
(A) increased by the cost of all containers
and coverings and all other costs, charges, and
expenses incident to placing the subject
merchandise in condition packed ready for
shipment to the United States;
(B) reduced by--
(i) when included in the price
described in paragraph (1)(B), the cost
of all containers and coverings and all
other costs, charges, and expenses
incident to placing the foreign like
product in condition packed ready for
shipment to the place of delivery to
the purchaser,
(ii) the amount, if any, included in
the price described in paragraph
(1)(B), attributable to any additional
costs, charges, and expenses incident
to bringing the foreign like product
from the original place of shipment to
the place of delivery to the purchaser,
and
(iii) the amount of any taxes imposed
directly upon the foreign like product
or components thereof which have been
rebated, or which have not been
collected, on the subject merchandise,
but only to the extent that such taxes
are added to or included in the price
of the foreign like product, and
(C) increased or decreased by the amount of
any difference (or lack thereof) between the
export price or constructed export price and
the price described in paragraph (1)(B) (other
than a difference for which allowance is
otherwise provided under this section) that is
established to the satisfaction of the
administering authority to be wholly or partly
due to--
(i) the fact that the quantities in
which the subject merchandise is sold
or agreed to be sold to the United
States are greater than or less than
the quantities in which the foreign
like product is sold, agreed to be
sold, or offered for sale,
(ii) the fact that merchandise
described in subparagraph (B) or (C) of
section 771(16) is used in determining
normal value, or
(iii) other differences in the
circumstances of sale.
(7) Additional adjustments.--
(A) Level of trade.--The price described in
paragraph (1)(B) shall also be increased or
decreased to make due allowance for any
difference (or lack thereof) between the export
price or constructed export price and the price
described in paragraph (1)(B) (other than a
difference for which allowance is otherwise
made under this section) that is shown to be
wholly or partly due to a difference in level
of trade between the export price or
constructed export price and normal value, if
the difference in level of trade--
(i) involves the performance of
different selling activities; and
(ii) is demonstrated to affect price
comparability, based on a pattern of
consistent price differences between
sales at different levels of trade in
the country in which normal value is
determined.
In a case described in the preceding sentence,
the amount of the adjustment shall be based on
the price differences between the two levels of
trade in the country in which normal value is
determined.
(B) Constructed export price offset.--When
normal value is established at a level of trade
which constitutes a more advanced stage of
distribution than the level of trade of the
constructed export price, but the data
available do not provide an appropriate basis
to determine under subparagraph (A)(ii) a level
of trade adjustment, normal value shall be
reduced by the amount of indirect selling
expenses incurred in the country in which
normal value is determined on sales of the
foreign like product but not more than the
amount of such expenses for which a deduction
is made under section 772(d)(1)(D).
(8) Adjustments to constructed value.--Constructed
value as determined under subsection (e), may be
adjusted, as appropriate, pursuant to this subsection.
(b) Sales at Less Than Cost of Production.--
(1) Determination; sales disregarded.--Whenever the
administering authority has reasonable grounds to
believe or suspect that sales of the foreign like
product under consideration for the determination of
normal value have been made at prices which represent
less than the cost of production of that product, the
administering authority shall determine whether, in
fact, such sales were made at less than the cost of
production. If the administering authority determines
that sales made at less than the cost of production--
(A) have been made within an extended period
of time in substantial quantities, and
(B) were not at prices which permit recovery
of all costs within a reasonable period of
time,
such sales may be disregarded in the determination of
normal value. Whenever such sales are disregarded,
normal value shall be based on the remaining sales of
the foreign like product in the ordinary course of
trade. If no sales made in the ordinary course of trade
remain, the normal value shall be based on the
constructed value of the merchandise.
(2) Definitions and special rules.--For purposes of
this subsection--
(A) Reasonable grounds to believe or
suspect.--There are reasonable grounds to
believe or suspect that sales of the foreign
like product were made at prices that are less
than the cost of production of the product,
if--
(i) in an investigation initiated
under section 732 or a review conducted
under section 751, an interested party
described in subparagraph (C), (D),
(E), (F), or (G) of section 771(9)
provides information, based upon
observed prices or constructed prices
or costs, that sales of the foreign
like product under consideration for
the determination of normal value have
been made at prices which represent
less than the cost of production of the
product; or
(ii) in a review conducted under
section 751 involving a specific
exporter, the administering authority
disregarded some or all of the
exporter's sales pursuant to paragraph
(1) in the investigation or if a review
has been completed, in the most
recently completed review.
(B) Extended period of time.--The term
``extended period of time'' means a period that
is normally 1 year, but not less than 6 months.
(C) Substantial quantities.--Sales made at
prices below the cost of production have been
made in substantial quantities if--
(i) the volume of such sales
represents 20 percent or more of the
volume of sales under consideration for
the determination of normal value, or
(ii) the weighted average per unit
price of the sales under consideration
for the determination of normal value
is less than the weighted average per
unit cost of production for such sales.
(D) Recovery of costs.--If prices which are
below the per unit cost of production at the
time of sale are above the weighted average per
unit cost of production for the period of
investigation or review, such prices shall be
considered to provide for recovery of costs
within a reasonable period of time.
(3) Calculation of cost of production.--For purposes
of this subtitle, the cost of production shall be an
amount equal to the sum of--
(A) the cost of materials and of fabrication
or other processing of any kind employed in
producing the foreign like product, during a
period which would ordinarily permit the
production of that foreign like product in the
ordinary course of business;
(B) an amount for selling, general, and
administrative expenses based on actual data
pertaining to production and sales of the
foreign like product by the exporter in
question; and
(C) the cost of all containers and coverings
of whatever nature, and all other expenses
incidental to placing the foreign like product
in condition packed ready for shipment.
For purposes of subparagraph (A), if the normal value
is based on the price of the foreign like product sold
for consumption in a country other than the exporting
country, the cost of materials shall be determined
without regard to any internal tax in the exporting
country imposed on such materials or their disposition
which are remitted or refunded upon exportation.
(c) Nonmarket Economy Countries.--
(1) In general.--If--
(A) the subject merchandise is exported from
a nonmarket economy country, and
(B) the administering authority finds that
available information does not permit the
normal value of the subject merchandise to be
determined under subsection (a),
the administering authority shall determine the normal
value of the subject merchandise on the basis of the
value of the factors of production utilized in
producing the merchandise and to which shall be added
an amount for general expenses and profit plus the cost
of containers, coverings, and other expenses. Except as
provided in paragraph (2), the valuation of the factors
of production shall be based on the best available
information regarding the values of such factors in a
market economy country or countries considered to be
appropriate by the administering authority.
(2) Exception.--If the administering authority finds
that the available information is inadequate for
purposes of determining the normal value of subject
merchandise under paragraph (1), the administering
authority shall determine the normal value on the basis
of the price at which merchandise that is--
(A) comparable to the subject merchandise,
and
(B) produced in one or more market economy
countries that are at a level of economic
development comparable to that of the nonmarket
economy country,
is sold in other countries, including the United
States.
(3) Factors of production.--For purposes of paragraph
(1), the factors of production utilized in producing
merchandise include, but are not limited to--
(A) hours of labor required,
(B) quantities of raw materials employed,
(C) amounts of energy and other utilities
consumed, and
(D) representative capital cost, including
depreciation.
(4) Valuation of factors of production.--The
administering authority, in valuing factors of
production under paragraph (1), shall utilize, to the
extent possible, the prices or costs of factors of
production in one or more market economy countries that
are--
(A) at a level of economic development
comparable to that of the nonmarket economy
country, and
(B) significant producers of comparable
merchandise.
(d) Special Rule for Certain Multinational Corporations.--
Whenever, in the course of an investigation under this title,
the administering authority determines that--
(1) subject merchandise exported to the United States
is being produced in facilities which are owned or
controlled, directly or indirectly, by a person, firm,
or corporation which also owns or controls, directly or
indirectly, other facilities for the production of the
foreign like product which are located in another
country or countries,
(2) subsection (a)(1)(C) applies, and
(3) the normal value of the foreign like product
produced in one or more of the facilities outside the
exporting country is higher than the normal value of
the foreign like product produced in the facilities
located in the exporting country,
it shall determine the normal value of the subject merchandise
by reference to the normal value at which the foreign like
product is sold in substantial quantities from one or more
facilities outside the exporting country. The administering
authority, in making any determination under this paragraph,
shall make adjustments for the difference between the cost of
production (including taxes, labor, materials, and overhead) of
the foreign like product produced in facilities outside the
exporting country and costs of production of the foreign like
product produced in facilities in the exporting country, if
such differences are demonstrated to its satisfaction. For
purposes of this subsection, in determining the normal value of
the foreign like product produced in a country outside of the
exporting country, the administering authority shall determine
its price at the time of exportation from the exporting country
and shall make any adjustments required by subsection (a) for
the cost of all containers and coverings and all other costs,
charges, and expenses incident to placing the merchandise in
condition packed ready for shipment to the United States by
reference to such costs in the exporting country.
(e) Constructed Value.--For purposes of this title, the
constructed value of imported merchandise shall be an amount
equal to the sum of--
(1) the cost of materials and fabrication or other
processing of any kind employed in producing the
merchandise, during a period which would ordinarily
permit the production of the merchandise in the
ordinary course of business;
(2)(A) the actual amounts incurred and realized by
the specific exporter or producer being examined in the
investigation or review for selling, general, and
administrative expenses, and for profits, in connection
with the production and sale of a foreign like product,
in the ordinary course of trade, for consumption in the
foreign country, or
(B) if actual data are not available with respect to
the amounts described in subparagraph (A), then--
(i) the actual amounts incurred and realized
by the specific exporter or producer being
examined in the investigation or review for
selling, general, and administrative expenses,
and for profits, in connection with the
production and sale, for consumption in the
foreign country, of merchandise that is in the
same general category of products as the
subject merchandise,
(ii) the weighted average of the actual
amounts incurred and realized by exporters or
producers that are subject to the investigation
or review (other than the exporter or producer
described in clause (i)) for selling, general,
and administrative expenses, and for profits,
in connection with the production and sale of a
foreign like product, in the ordinary course of
trade, for consumption in the foreign country,
or
(iii) the amounts incurred and realized for
selling, general, and administrative expenses,
and for profits, based on any other reasonable
method, except that the amount allowed for
profit may not exceed the amount normally
realized by exporters or producers (other than
the exporter or producer described in clause
(i)) in connection with the sale, for
consumption in the foreign country, of
merchandise that is in the same general
category of products as the subject
merchandise; and
(3) the cost of all containers and coverings of
whatever nature, and all other expenses incidental to
placing the subject merchandise in condition packed
ready for shipment to the United States.
For purposes of paragraph (1), the cost of materials shall be
determined without regard to any internal tax in the exporting
country imposed on such materials or their disposition which
are remitted or refunded upon exportation of the subject
merchandise produced from such materials.
(f) Special Rules for Calculation of Cost of Production and
for Calculation of Constructed Value.--For purposes of
subsections (b) and (e).--
(1) Costs.--
(A) In general.--Costs shall normally be
calculated based on the records of the exporter
or producer of the merchandise, if such records
are kept in accordance with the generally
accepted accounting principles of the exporting
country (or the producing country, where
appropriate) and reasonably reflect the costs
associated with the production and sale of the
merchandise. The administering authority shall
consider all available evidence on the proper
allocation of costs, including that which is
made available by the exporter or producer on a
timely basis, if such allocations have been
historically used by the exporter or producer,
in particular for establishing appropriate
amortization and depreciation periods, and
allowances for capital expenditures and other
development costs.
(B) Nonrecurring costs.--Costs shall be
adjusted appropriately for those nonrecurring
costs that benefit current or future
production, or both.
(C) Startup costs.--
(i) In general.--Costs shall be
adjusted appropriately for
circumstances in which costs incurred
during the time period covered by the
investigation or review are affected by
startup operations.
(ii) Startup operations.--Adjustments
shall be made for startup operations
only where--
(I) a producer is using new
production facilities or
producing a new product that
requires substantial additional
investment, and
(II) production levels are
limited by technical factors
associated with the initial
phase of commercial production.
For purposes of subclause (II), the
initial phase of commercial production
ends at the end of the startup period.
In determining whether commercial
production levels have been achieved,
the administering authority shall
consider factors unrelated to startup
operations that might affect the volume
of production processed, such as
demand, seasonality, or business
cycles.
(iii) Adjustment for startup
operations.--The adjustment for startup
operations shall be made by
substituting the unit production costs
incurred with respect to the
merchandise at the end of the startup
period for the unit production costs
incurred during the startup period. If
the startup period extends beyond the
period of the investigation or review
under this title, the administering
authority shall use the most recent
cost of production data that it
reasonably can obtain, analyze, and
verify without delaying the timely
completion of the investigation or
review. For purposes of this
subparagraph, the startup period ends
at the point at which the level of
commercial production that is
characteristic of the merchandise,
producer, or industry concerned is
achieved.
(2) Transactions disregarded.--A transaction directly
or indirectly between affiliated persons may be
disregarded if, in the case of any element of value
required to be considered, the amount representing that
element does not fairly reflect the amount usually
reflected in sales of merchandise under consideration
in the market under consideration. If a transaction is
disregarded under the preceding sentence and no other
transactions are available for consideration, the
determination of the amount shall be based on the
information available as to what the amount would have
been if the transaction had occurred between persons
who are not affiliated.
(3) Major input rule.--If, in the case of a
transaction between affiliated persons involving the
production by one of such persons of a major input to
the merchandise, the administering authority has
reasonable grounds to believe or suspect that an amount
represented as the value of such input is less than the
cost of production of such input, then the
administering authority may determine the value of the
major input on the basis of the information available
regarding such cost of production, if such cost is
greater than the amount that would be determined for
such input under paragraph (2).
SEC. 773A. CURRENCY CONVERSION.
(a) In General.--In an antidumping proceeding under this
title, the administering authority shall convert foreign
currencies into United States dollars using the exchange rate
in effect on the date of sale of the subject merchandise,
except that, if it is established that a currency transaction
on forward markets is directly linked to an export sale under
consideration, the exchange rate specified with respect to such
currency in the forward sale agreement shall be used to convert
the foreign currency. Fluctuations in exchange rates shall be
ignored.
(b) Sustained Movement in Foreign Currency Value.--In an
investigation under subtitle B, if there is a sustained
movement in the value of the foreign currency relative to the
United States dollar, the administering authority shall allow
exporters at least 60 days to adjust their export prices to
reflect such sustained movement.
SEC. 774. HEARINGS.
(a) Investigation Hearings.--
(1) In general.--Except as provided in paragraph (2),
the administering authority and the Commission shall
each hold a hearing in the course of an investigation
upon the request of any party to the investigation
before making a final determination under section 705
or 735.
(2) Exception.--If investigations are initiated under
subtitle A and subtitle B regarding the same
merchandise from the same country within 6 months of
each other (but before a final determination is made in
either investigation), the holding of a hearing by the
Commission in the course of one of the investigations
shall be treated as compliance with paragraph (1) for
both investigations, unless the Commission considers
that special circumstances require that a hearing be
held in the course of each of the investigations.
During any investigation regarding which the holding of
a hearing is waived under this paragraph, the
Commission shall allow any party to submit such
additional written comment as it considers relevant.
(b) Procedures.--Any hearing required or permitted under this
title shall be conducted after notice published in the Federal
Register, and a transcript of the hearing shall be prepared and
made available to the public. The hearing shall not be subject
to the provisions of subchapter II of chapter 5 of title 5,
United States Code, or to section 702 of such title.
SEC. 775. COUNTERVAILABLE SUBSIDY PRACTICES DISCOVERED DURING A
PROCEEDING.
If, in the course of a proceeding under this title, the
administering authority discovers a practice which appears to
be a countervailable subsidy, but was not included in the
matters alleged in a countervailing duty petition, or if the
administering authority receives notice from the Trade
Representative that a subsidy or subsidy program is in
violation of Article 8 of the Subsidies Agreement, then the
administering authority--
(1) shall include the practice, subsidy, or subsidy
program in the proceeding if the practice, subsidy, or
subsidy program appears to be a countervailable subsidy
with respect to the merchandise which is the subject of
the proceeding, or
(2) shall transfer the information (other than
confidential information) concerning the practice,
subsidy, or subsidy program to the library maintained
under section 777(a)(1), if the practice, subsidy, or
subsidy program appears to be a countervailable subsidy
with respect to any other merchandise.\16\
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\16\ Article 8 of the Uruguray Round Subsidies Agreement lapsed
January 1, 2000.
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SEC. 776. DETERMINATIONS ON THE BASIS OF THE FACTS AVAILABLE.
(a) In General.--If--
(1) necessary information is not available on the
record, or
(2) an interested party or any other person--
(A) withholds information that has been
requested by the administering authority or the
Commission under this title,
(B) fails to provide such information by the
deadlines for submission of the information or
in the form and manner requested, subject to
subsections (c)(1) and (e) of section 782,
(C) significantly impedes a proceeding under
this title, or
(D) provides such information but the
information cannot be verified as provided in
section 782(i),
the administering authority and the Commission shall, subject
to section 782(d), use the facts otherwise available in
reaching the applicable determination under this title.
(b) Adverse Inferences.--If the administering authority or
the Commission (as the case may be) finds that an interested
party has failed to cooperate by not acting to the best of its
ability to comply with a request for information from the
administering authority or the Commission, the administering
authority or the Commission (as the case may be), in reaching
the applicable determination under this title, may use an
inference that is adverse to the interests of that party in
selecting from among the facts otherwise available. Such
adverse inference may include reliance on information derived
from--
(1) the petition,
(2) a final determination in the investigation under
this title,
(3) any previous review under section 751 or
determination under section 753, or
(4) any other information placed on the record.
(c) Corroboration of Secondary Information.--When the
administering authority or the Commission relies on secondary
information rather than on information obtained in the course
of an investigation or review, the administering authority or
the Commission, as the case may be, shall, to the extent
practicable, corroborate that information from independent
sources that are reasonably at their disposal.
SEC. 777. ACCESS TO INFORMATION.
(a) Information Generally Made Available.--
(1) Public information function.--There shall be
established a library of information relating to
foreign subsidy practices and countervailing measures.
Copies of material in the library shall be made
available to the public upon payment of the costs of
preparing such copies.
(2) Progress of investigation reports.--The
administering authority and the Commission shall, from
time to time upon request, inform the parties to an
investigation of the progress of that investigation.
(3) Ex parte meetings.--The administering authority
and the Commission shall maintain a record of any ex
parte meeting between--
(A) interested parties or other persons
providing factual information in connection
with a proceeding, and
(B) the person charged with making the
determination, or any person charged with
making a final recommendation to that person,
in connection with that proceeding,
if information relating to that proceeding was
presented or discussed at such meeting. The record of
such an ex parte meeting shall include the identity of
the persons present at the meeting, the date, time, and
place of the meeting, and a summary of the matters
discussed or submitted. The record of the ex parte
meeting shall be included in the record of the
proceeding.
(4) Summaries; non-proprietary submissions.--The
administering authority and the Commission shall
disclose--
(A) any proprietary information received in
the course of a proceeding if it is disclosed
in a form which cannot be associated with, or
otherwise be used to identify, operations of a
particular person, and
(B) any information submitted in connection
with a proceeding which is not designated as
proprietary by the person submitting it.
(b) Proprietary Information.--
(1) Proprietary status maintained.--
(A) In general.--Except as provided in
subsection (a)(4)(A) and subsection (c),
information submitted to the administering
authority or the Commission which is designated
as proprietary by the person submitting the
information shall not be disclosed to any
person without the consent of the person
submitting the information, other than--
(i) to an officer or employee of the
administering authority or the
Commission who is directly concerned
with carrying out the investigation in
connection with which the information
is submitted or any review under this
title covering the same subject
merchandise, or
(ii) to an officer or employee of the
United States Customs Service who is
directly involved in conducting an
investigation regarding fraud under
this title.
(B) Additional requirements.--The
administering authority and the Commission
shall require that information for which
proprietary treatment is requested be
accompanied by--
(i) either--
(I) a non-proprietary summary
in sufficient detail to permit
a reasonable understanding of
the substance of the
information submitted in
confidence, or
(II) a statement that the
information is not susceptible
to summary accompanied by a
statement of the reasons in
support of the contention, and
(ii) either--
(I) a statement which permits
the administering authority or
the Commission to release under
administrative protective
order, in accordance with
subsection (c), the information
submitted in confidence, or
(II) a statement to the
administering authority or the
Commission that the business
proprietary information is of a
type that should not be
released under administrative
protective order.
(2) Unwarranted designation.--If the administering
authority or the Commission determines, on the basis of
the nature and extent of the information or its
availability from public sources, that designation of
any information as proprietary is unwarranted, then it
shall notify the person who submitted it and ask for an
explanation of the reasons for the designation. Unless
that person persuades the administering authority or
the Commission that the designation is warranted, or
withdraws the designation, the administering authority
or the Commission, as the case may be, shall return it
to the party submitting it. In a case in which the
administering authority or the Commission returns the
information to the person submitting it, the person may
thereafter submit other material concerning the subject
matter of the returned information if the submission is
made within the time otherwise provided for submitting
such material.
(3) Section 751 reviews.--Notwithstanding the
provisions of paragraph (1), information submitted to
the administering authority or the Commission in
connection with a review under section 751(b) or 751(c)
which is designated as proprietary by the person
submitting the information may, if the review results
in the revocation of an order or finding (or
termination of a suspended investigation) under section
751(d), be used by the agency to which the information
was originally submitted in any investigation initiated
within 2 years after the date of the revocation or
termination pursuant to a petition covering the same
subject merchandise.
(c) Limited Disclosure of Certain Proprietary Information
Under Protective Order.--
(1) Disclosure by administering authority or
commission.--
(A) In general.--Upon receipt of an
application (before or after receipt of the
information requested) which describes in
general terms the information requested and
sets forth the reasons for the request, the
administering authority or the Commission shall
make all business proprietary information
presented to, or obtained by it, during a
proceeding (except privileged information,
classified information, and specific
information of a type for which there is a
clear and compelling need to withhold from
disclosure) available to interested parties who
are parties to the proceeding under a
protective order described in subparagraph (B),
regardless of when the information is submitted
during a proceeding. Customer names obtained
during any investigation which requires a
determination under section 705(b) or 735(b)
may not be disclosed by the administering
authority under protective order until either
an order is published under section 706(a) or
736(a) as a result of the investigation or the
investigation is suspended or terminated. The
Commission may delay disclosure of customer
names under protective order during any such
investigation until a reasonable time prior to
any hearing provided under section 774.
(B) Protective order.--The protective order
under which information is made available shall
contain such requirements as the administering
authority or the Commission may determine by
regulation to be appropriate. The administering
authority and the Commission shall provide by
regulation for such sanctions as the
administering authority and the Commission
determine to be appropriate, including
disbarment from practice before the agency.
(C) Time limitation on determinations.--The
administering authority or the Commission, as
the case may be, shall determine whether to
make information available under this
paragraph--
(i) not later than 14 days (7 days if
the submission pertains to a proceeding
under section 703(a) or 733(a)) after
the date on which the information is
submitted, or
(ii) if--
(I) the person that submitted
the information raises
objection to its release, or
(II) the information is
unusually voluminous or
complex,
not later than 30 days (10 days if the
submission pertains to a proceeding
under section 703(a) or 733(a)) after
the date on which the information is
submitted.
(D) Availability after determination.--If the
determination under subparagraph (C) is
affirmative, then--
(i) the business proprietary
information submitted to the
administering authority or the
Commission on or before the date of the
determination shall be made available,
subject to the terms and conditions of
the protective order, on such date; and
(ii) the business proprietary
information submitted to the
administering authority or the
Commission after the date of the
determination shall be served as
required by subsection (d).
(E) Failure to disclose.--If a person
submitting information to the administering
authority refuses to disclose business
proprietary information which the administering
authority determines should be released under a
protective order described in subparagraph (B),
the administering authority shall return the
information, and any nonconfidential summary
thereof, to the person submitting the
information and summary and shall not consider
either.
(2) Disclosure under court order.--If the
administering authority denies a request for
information under paragraph (1), then application may
be made to the United States Customs Court for an order
directing the administering authority or the Commission
to make the information available. After notification
of all parties to the investigation and after an
opportunity for a hearing on the record, the court may
issue an order, under such conditions as the court
deems appropriate, which shall not have the effect of
stopping or suspending the investigation, directing the
administering authority or the Commission to make all
or a portion of the requested information described in
the preceding sentence available under a protective
order and setting forth sanctions for violation of such
order if the court finds that, under the standards
applicable in proceedings of the court, such an order
is warranted, and that--
(A) the administering authority or the
Commission has denied access to the information
under subsection (b)(1),
(B) the person on whose behalf the
information is requested is an interested party
who is a party to the investigation in
connection with which the information was
obtained or developed, and
(C) the party which submitted the information
to which the request relates has been notified,
in advance of the hearing, of the request made
under this section and of its right to appear
and be heard.
(d) Service.--Any party submitting written information,
including business proprietary information, to the
administering authority or the Commission during a proceeding
shall, at the same time, serve the information upon all
interested parties who are parties to the proceeding, if the
information is covered by a protective order. The administering
authority or the Commission shall not accept any such
information that is not accompanied by a certificate of service
and a copy of the protective order version of the document
containing the information. Business proprietary information
shall only be served upon interested parties who are parties to
the proceeding that are subject to protective order; however, a
nonconfidential summary thereof shall be served upon all other
interested parties who are parties to the proceeding.
(e) [Repealed.]
(f) Disclosure of Proprietary Information Under Protective
Orders Issued Pursuant to the North American Free Trade
Agreement or the United States-Canada Agreement.--
(1) Issuance of protective orders.--
(A) In general.--If binational panel review
of a determination under this title is
requested pursuant to article 1904 of the NAFTA
or the United States-Canada Agreement, or an
extraordinary challenge committee is convened
under Annex 1904.13 of the NAFTA or the United
States-Canada Agreement, the administering
authority or the Commission, as appropriate,
may make available to authorized persons, under
a protective order described in paragraph (2),
a copy of all proprietary material in the
administrative record made during the
proceeding in question. If the administrating
authority or the Commission claims a privilege
as to a document or portion of a document in
the administrative record of the proceeding in
question and a binational panel or
extraordinary challenge committee finds that in
camera inspection or limited disclosure of that
document or portion thereof is required by
United States law, the administering authority
or the Commission, as appropriate, may restrict
access to such document or portion thereof to
the authorized persons identified by the panel
or committee as requiring access and may
require such persons to obtain access under a
protective order described in paragraph (2).
(B) Authorized persons.--For purposes of this
subsection, the term ``authorized persons''
means--
(i) the members of, and the
appropriate staff of, the binational
panel or the extraordinary challenge
committee, as the case may be, and the
Secretariat,
(ii) counsel for parties to such
panel or committee proceeding, and
employees, and persons under the
direction and control, of such counsel,
(iii) any officer or employee of the
United States Government designated by
the administering authority or the
Commission, as appropriate, to whom
disclosure is necessary in order to
make recommendations to the Trade
Representative regarding the convening
of extraordinary challenge committees
under chapter 19 of the NAFTA or the
Agreement, and
(iv) any officer or employee of the
Government of a free trade area country
(as defined in section 516A(f)(10))
designated by an authorized agency of
such country to whom disclosure is
necessary in order to make decisions
regarding the convening of
extraordinary challenge committees
under chapter 19 of the NAFTA or the
Agreement.
(C) Review.--A decision concerning the
disclosure or nondisclosure of material under
protective order by the administering authority
or the Commission shall not be subject to
judicial review, and no court of the United
States shall have power or jurisdiction to
review such decision on any question of law or
fact by an action in the nature of mandamus or
otherwise.
(2) Contents of protective order.--Each protective
order issued under this subsection shall be in such
form and contain such requirements as the administering
authority or the Commission may determine by regulation
to be appropriate. The administering authority and the
Commission shall ensure that regulations issued
pursuant to this paragraph shall be designed to provide
an opportunity for participation in the binational
panel proceeding, including any extraordinary
challenge, equivalent to that available for judicial
review of determinations by the administering authority
or the Commission that are not subject to review by a
binational panel.
(3) Prohibited acts.--It is unlawful for any person
to violate, to induce the violation of, or knowingly to
receive information the receipt of which constitutes a
violation of, any provision of a protective order
issued under this subsection or to violate, to induce
the violation of, or knowingly to receive information
the receipt of which constitutes a violation of, any
provision of an undertaking entered into with an
authorized agency of a free trade area country (as
defined in section 516A(f)(10)) to protect proprietary
material during binational panel or extraordinary
challenge committee review pursuant to article 1904 of
the NAFTA or the United States-Canada Agreement.
(4) Sanctions for violation of protective orders.--
Any person, except a judge appointed to a binational
panel or an extraordinary challenge committee under
section 402(b) of the North American Free Trade
Agreement Implementation Act, who is found by the
administering authority or the Commission, as
appropriate, after notice and an opportunity for a
hearing in accordance with section 554 of title 5,
United States Code, to have committed an act prohibited
by paragraph (3) shall be liable to the United States
for a civil penalty and shall be subject to such other
administrative sanctions, including, but not limited
to, debarment from practice before the administering
authority or the Commission, as the administering
authority or the Commission determines to be
appropriate. The amount of the civil penalty shall not
exceed $100,000 for each violation. Each day of a
continuing violation shall constitute a separate
violation. The amount of such civil penalty and other
sanctions shall be assessed by the administering
authority or the Commission by written notice, except
that assessment shall be made by the administering
authority for violation, or inducement of a violation
or receipt of information with reason to know that such
information was disclosed in violation, of an
undertaking entered into by any person with an
authorized agency of a free trade area country (as
defined in section 516A(f)(10)).
(5) Review of sanctions.--Any person against whom
sanctions are imposed under paragraph (4) may obtain
review of such sanctions by filing a notice of appeal
in the United States Court of International Trade
within 30 days from the date of the order imposing the
sanction and by simultaneously sending a copy of such
notice by certified mail to the administering authority
or the Commission, as appropriate. The administering
authority or the Commission shall promptly file in such
court a certified copy of the record upon which such
violation was found or such sanction imposed, as
provided in section 2112 of title 28, United States
Code. The findings and order of the administering
authority or the Commission shall be set aside by the
court only if the court finds that such findings and
order are not supported by substantial evidence, as
provided in section 706(2) of title 5, United States
Code.
(6) Enforcement of sanctions.--If any person fails to
pay an assessment of a civil penalty or to comply with
other administrative sanctions after the order imposing
such sanctions becomes a final and unappealable order,
or after the United States Court of International Trade
has entered final judgment in favor of the
administering authority or the Commission, an action
may be filed in such court to enforce the sanctions. In
such action, the validity and appropriateness of the
final order imposing the sanctions shall not be subject
to review.
(7) Testimony and production of papers.--
(A) Authority to obtain information.--For the
purpose of conducting any hearing and carrying
out other functions and duties under this
subsection, the administering authority and the
Commission, or their duly authorized agents--
(i) shall have access to and the
right to copy any pertinent document,
paper, or record in the possession of
any individual, partnership,
corporation, association, organization,
or other entity,
(ii) may summon witnesses, take
testimony, and administer oaths,
(iii) and may require any individual
or entity to produce pertinent
documents, books, or records.
Any member of the Commission, and any person so
designated by the administering authority, may
sign subpoenas, and members and agents of the
administering authority and the Commission,
when authorized by the administering authority
or the Commission, as appropriate, may
administer oaths and affirmations, examine
witnesses, take testimony, and receive
evidence.
(B) Witnesses and evidence.--The attendance
of witnesses who are authorized to be summoned,
and the production of documentary evidence
authorized to be ordered, under subparagraph
(A) may be required from any place in the
United States at any designated place of
hearing. In the case of disobedience to a
subpoena issued under subparagraph (A), an
action may be filed in any district or
territorial court of the United States to
require the attendance and testimony of
witnesses and the production of documentary
evidence. Such court, within the jurisdiction
of which such inquiry is carried on, may, in
case of contumacy or refusal to obey a subpoena
issued to any individual, partnership,
corporation, association, organization or other
entity, issue any order requiring such
individual or entity to appear before the
administering authority or the Commission, or
to produce documentary evidence if so ordered
or to give evidence concerning the matter in
question. Any failure to obey such order of the
court may be punished by the court as a
contempt thereof.
(C) Mandamus.--Any court referred to in
subparagraph (B) shall have jurisdiction to
issue writs of mandamus commanding compliance
with the provisions of this subsection or any
order of the administering authority or the
Commission made in pursuance thereof.
(D) Depositions.--For purposes of carrying
out any functions or duties under this
subsection, the administering authority or the
Commission may order testimony to be taken by
deposition. Such deposition may be taken before
any person designated by the administering
authority or Commission and having power to
administer oaths. Such testimony shall be
reduced to writing by the person taking the
deposition, or under the direction of such
person, and shall then be subscribed by the
deponent. Any individual, partnership,
corporation, association, organization or other
entity may be compelled to appear and depose
and to produce documentary evidence in the same
manner as witnesses may be compelled to appear
and testify and produce documentary evidence
before the administering authority or
Commission, as provided in this paragraph.
(E) Fees and mileage of witnesses.--Witnesses
summoned before the administering authority or
the Commission shall be paid the same fees and
mileage that are paid witnesses in the courts
of the United States.
(g) Information Relating to Violations of Protective Orders
and Sanctions.--The administering authority and the Commission
may withhold from disclosure any correspondence, private
letters of reprimand, settlement agreements, and documents and
files compiled in relation to investigations and actions
involving a violation or possible violation of a protective
order issued under subsection (c) or (d), and such information
shall be treated as information described in section 552(b)(3)
of title 5, United States Code.
(h) Opportunity for Comment by Consumers and Industrial
Users.--The administering authority and the Commission shall
provide an opportunity for industrial users of the subject
merchandise and, if the merchandise is sold at the retail
level, for representative consumer organizations, to submit
relevant information to the administering authority concerning
dumping or a countervailable subsidy, and to the Commission
concerning material injury by reason of dumped or subsidized
imports.
(i) Publication of Determinations; Requirements for Final
Determinations.--
(1) In general.--Whenever the administering authority
makes a determination under section 702 or 732 whether
to initiate an investigation, or the administering
authority or the Commission makes a preliminary
determination under section 703 or 733, a final
determination under section 705 or section 735, a
preliminary or final determination in a review under
section 751, a determination to suspend an
investigation under this title, or a determination
under section 753, the administering authority or the
Commission, as the case may be, shall publish the facts
and conclusions supporting that determination, and
shall publish notice of that determination in the
Federal Register.
(2) Contents of notice or determination.--The notice
or determination published under paragraph (1) shall
include, to the extent applicable--
(A) in the case of a determination of the
administering authority--
(i) the names of the exporters or
producers of the subject merchandise
or, when providing such names is
impracticable, the countries exporting
the subject merchandise to the United
States,
(ii) a description of the subject
merchandise that is sufficient to
identify the subject merchandise for
customs purposes,
(iii)(I) with respect to a
determination in an investigation under
subtitle A or section 753 or in a
review of a countervailing duty order,
the amount of the countervailable
subsidy established and a full
explanation of the methodology used in
establishing the amount, and
(II) with respect to a determination
in an investigation under subtitle B or
in a review of an antidumping duty
order, the weighted average dumping
margins established and a full
explanation of the methodology used in
establishing such margins, and
(iv) the primary reasons for the
determination; and
(B) in the case of a determination of the
Commission--
(i) considerations relevant to the
determination of injury, and
(ii) the primary reasons for the
determination.
(3) Additional requirements for final
determinations.--In addition to the requirements set
forth in paragraph (2)--
(A) the administering authority shall include
in a final determination described in paragraph
(1) an explanation of the basis for its
determination that addresses relevant
arguments, made by interested parties who are
parties to the investigation or review (as the
case may be), concerning the establishment of
dumping or a countervailable subsidy, or the
suspension of the investigation, with respect
to which the determination is made; and
(B) the Commission shall include in a final
determination of injury an explanation of the
basis for its determination that addresses
relevant arguments that are made by interested
parties who are parties to the investigation or
review (as the case may be) concerning volume,
price effects, and impact on the industry of
imports of the subject merchandise.
SEC. 777A. SAMPLING AND AVERAGING; DETERMINATION OF WEIGHTED AVERAGE
DUMPING MARGIN AND COUNTERVAILABLE SUBSIDY RATE.
(a) In General.--For purposes of determining the export price
(or constructed export price) under section 772 or the normal
value under section 773, and in carrying out reviews under
section 751, the administering authority may--
(1) use averaging and statistically valid samples, if
there is a significant volume of sales of the subject
merchandise or a significant number or types of
products, and
(2) decline to take into account adjustments which
are insignificant in relation to the price or value of
the merchandise.
(b) Selection of Averages and Samples.--The authority to
select averages and statistically valid samples shall rest
exclusively with the administering authority. The administering
authority shall, to the greatest extent possible, consult with
the exporters and producers regarding the method to be used to
select exporters, producers, or types of products under this
section.
(c) Determination of Dumping Margin.--
(1) General rule.--In determining weighted average
dumping margins under section 733(d), 735(c), or
751(a), the administering authority shall determine the
individual weighted average dumping margin for each
known exporter and producer of the subject merchandise.
(2) Exception.--If it is not practicable to make
individual weighted average dumping margin
determinations under paragraph (1) because of the large
number of exporters or producers involved in the
investigation or review, the administering authority
may determine the weighted average dumping margins for
a reasonable number of exporters or producers by
limiting its examination to--
(A) a sample of exporters, producers, or
types of products that is statistically valid
based on the information available to the
administering authority at the time of
selection, or
(B) exporters and producers accounting for
the largest volume of the subject merchandise
from the exporting country that can be
reasonably examined.
(d) Determination of Less Than Fair Value.--
(1) Investigations.--
(A) In general.--In an investigation under
subtitle B, the administering authority shall
determine whether the subject merchandise is
being sold in the United States at less than
fair value--
(i) by comparing the weighted average
of the normal values to the weighted
average of the export prices (and
constructed export prices) for
comparable merchandise, or
(ii) by comparing the normal values
of individual transactions to the
export prices (or constructed export
prices) of individual transactions for
comparable merchandise.
(B) Exception.--The administering authority
may determine whether the subject merchandise
is being sold in the United States at less than
fair value by comparing the weighted average of
the normal values to the export prices (or
constructed export prices) of individual
transactions for comparable merchandise, if--
(i) there is a pattern of export
prices (or constructed export prices)
for comparable merchandise that differ
significantly among purchasers,
regions, or periods of time, and
(ii) the administering authority
explains why such differences cannot be
taken into account using a method
described in paragraph (1)(A)(i) or
(ii).
(2) Reviews.--In a review under section 751, when
comparing export prices (or constructed export prices)
of individual transactions to the weighted average
price of sales of the foreign like product, the
administering authority shall limit its averaging of
prices to a period not exceeding the calendar month
that corresponds most closely to the calendar month of
the individual export sale.
(e) Determination of Countervailable Subsidy Rate.--
(1) General rule.--In determining countervailable
subsidy rates under section 703(d), 705(c), or 751(a),
the administering authority shall determine an
individual countervailable subsidy rate for each known
exporter or producer of the subject merchandise.
(2) Exception.--If the administering authority
determines that it is not practicable to determine
individual countervailable subsidy rates under
paragraph (1) because of the large number of exporters
or producers involved in the investigation or review,
the administering authority may--
(A) determine individual countervailable
subsidy rates for a reasonable number of
exporters or producers by limiting its
examination to--
(i) a sample of exporters or
producers that the administering
authority determines is statistically
valid based on the information
available to the administering
authority at the time of selection, or
(ii) exporters and producers
accounting for the largest volume of
the subject merchandise from the
exporting country that the
administering authority determines can
be reasonably examined; or
(B) determine a single country-wide subsidy
rate to be applied to all exporters and
producers.
The individual countervailable subsidy rates determined
under subparagraph (A) shall be used to determine the
all-others rate under section 705(c)(5).
SEC. 778. INTEREST ON CERTAIN OVERPAYMENTS AND UNDERPAYMENTS.
(a) General Rule.--Interest shall be payable on overpayments
and underpayments of amounts deposited on merchandise entered,
or withdrawn from warehouse, for consumption on and after--
(1) the date of publication of a countervailing or
antidumping duty order under this title or section 303,
or
(2) the date of a finding under the Antidumping Act,
1921.
(b) Rate.--The rate of interest payable under subsection (a)
for any period of time is the rate of interest established
under section 6621 of the Internal Revenue Code of 1954 for
such period.
SEC. 779. DRAWBACK TREATMENT.
For purposes of any law relating to the drawback of customs
duties, countervailing duties and antidumping duties imposed by
this title shall not be treated as being regular customs
duties.
SEC. 780. DOWNSTREAM PRODUCT MONITORING.
(a) Petition Requesting Monitoring.--
(1) In general.--A domestic producer of an article
that is like a component part or a downstream product
may petition the administering authority to designate a
downstream product for monitoring under subsection (b).
The petition shall specify--
(A) the downstream product,
(B) the component product incorporated into
such downstream product, and
(C) the reasons for suspecting that the
imposition of antidumping or countervailing
duties has resulted in a diversion of exports
of the component part into increased production
and exportation to the United States of such
downstream product.
(2) Determination regarding petition.--Within 14 days
after receiving a petition submitted under paragraph
(1), the administering authority shall determine--
(A) whether there is a reasonable likelihood
that imports into the United States of the
downstream product will increase as an indirect
result of any diversion with respect to the
component part, and
(B) whether--
(i) the component part is already
subject to monitoring to aid in the
enforcement of a bilateral arrangement
(within the meaning of section 804 of
the Trade and Tariff Act of 1984),
(ii) merchandise related to the
component part and manufactured in the
same foreign country in which the
component part is manufactured has been
the subject of a significant number of
investigations suspended under section
704 or 734 or countervailing or
antidumping duty orders issued under
this title or section 303, or
(iii) merchandise manufactured or
exported by the manufacturer or
exporter of the component part that is
similar in description and use to the
component part has been the subject of
at least 2 investigations suspended
under section 704 or 734 or
countervailing or antidumping duty
orders issued under this title or
section 303.
(3) Factors to take into account.--In making a
determination under paragraph (2)(A), the administering
authority may, if appropriate, take into account such
factors as--
(A) the value of the component part in
relation to the value of the downstream
product,
(B) the extent to which the component part
has been substantially transformed as a result
of its incorporation into the downstream
product, and
(C) the relationship between the producers of
component parts and producers of downstream
products.
(4) Publication of determination.--The administering
authority shall publish in the Federal Register notice
of each determination made under paragraph (2) and, if
the determination made under paragraph (2)(A) and a
determination made under any subparagraph of paragraph
(2)(B) are affirmative, shall transmit a copy of such
determinations and the petition to the Commission.
(5) Determinations not subject to judicial review.--
Notwithstanding any other provision of law, any
determination made by the administering authority under
paragraph (2) shall not be subject to judicial review.
(b) Monitoring by the Commission.--
(1) In general.--If the determination made under
subsection (a)(2)(A) and a determination made under any
clause of subsection (a)(2)(B) with respect to a
petition are affirmative, the Commission shall
immediately commence monitoring of trade in the
downstream product that is the subject of the
determination made under subsection (a)(2)(A). If the
Commission finds that imports of a downstream product
being monitored increased during any calendar quarter
by 5 percent or more over the preceding quarter, the
Commission shall analyze that increase in the context
of overall economic conditions in the product sector.
(2) Reports.--The Commission shall make quarterly
reports to the administering authority regarding the
monitoring and analyses conducted under paragraph (1).
The Commission shall make the reports available to the
public.
(c) Action on Basis of Monitoring Reports.--The administering
authority shall review the information in the reports submitted
by the Commission under subsection (b)(2) and shall--
(1) consider the information in determining whether
to initiate an investigation under section 702(a) or
732(a) regarding any downstream product, and
(2) request the Commission to cease monitoring any
downstream product if the information indicates that
imports into the United States are not increasing and
there is no reasonable likelihood of diversion with
respect to component parts.
(d) Definitions.--For purposes of this section--
(1) The term ``component part'' means any imported
article that--
(A) during the 5-year period ending on the
date on which the petition is filed under
subsection (a), has been subject to--
(i) a countervailing or antidumping
duty order issued under this title or
section 303 that requires the deposit
of estimated countervailing or
antidumping duties imposed at a rate of
at least 15 percent ad valorem, or
(ii) an agreement entered into under
section 704, 734, or 303 after a
preliminary affirmative determination
under section 703(b), 733(b)(1), or 303
was made by the administering authority
which included a determination that the
estimated net countervailable subsidy
was at least 15 percent ad valorem or
that the estimated average amount by
which the normal value exceeded the
export price (or the constructed export
price) was at least 15 percent ad
valorem, and
(B) because of its inherent characteristics,
is routinely used as a major part, component,
assembly, subassembly, or material in a
downstream product.
(2) The term ``downstream product'' means any
manufactured article--
(A) which is imported into the United States,
and
(B) into which is incorporated any component
part.
SEC. 781. PREVENTION OF CIRCUMVENTION OF ANTIDUMPING AND COUNTERVAILING
DUTY ORDERS.
(a) Merchandise Completed or Assembled in the United
States.--
(1) In general.--If--
(A) merchandise sold in the United States is
of the same class or kind as any other
merchandise that is the subject of--
(i) an antidumping duty order issued
under section 736,
(ii) a finding issued under the
Antidumping Act, 1921, or
(iii) a countervailing duty order
issued under section 706 or section
303,
(B) such merchandise sold in the United
States is completed or assembled in the United
States from parts or components produced in the
foreign country with respect to which such
order or finding applies,
(C) the process of assembly or completion in
the United States is minor or insignificant,
and
(D) the value of the parts or components
referred to in subparagraph (B) is a
significant portion of the total value of the
merchandise,
the administering authority, after taking into account
any advice provided by the Commission under subsection
(e), may include within the scope of such order or
finding the imported parts or components referred to in
subparagraph (B) that are used in the completion or
assembly of the merchandise in the United States at any
time such order or finding is in effect.
(2) Determination of whether process is minor or
insignificant.--In determining whether the process of
assembly or completion is minor or insignificant under
paragraph (1)(C), the administering authority shall
take into account--
(A) the level of investment in the United
States,
(B) the level of research and development in
the United States,
(C) the nature of the production process in
the United States,
(D) the extent of production facilities in
the United States, and
(E) whether the value of the processing
performed in the United States represents a
small proportion of the value of the
merchandise sold in the United States.
(3) Factors to consider.--In determining whether to
include parts or components in a countervailing or
antidumping duty order or finding under paragraph (1),
the administering authority shall take into account
such factors as--
(A) the pattern of trade, including sourcing
patterns,
(B) whether the manufacturer or exporter of
the parts or components is affiliated with the
person who assembles or completes the
merchandise sold in the United States from the
parts or components produced in the foreign
country with respect to which the order or
finding described in paragraph (1) applies, and
(C) whether imports into the United States of
the parts or components produced in such
foreign country have increased after the
initiation of the investigation which resulted
in the issuance of such order or finding.
(b) Merchandise Completed or Assembled in Other Foreign
Countries.--
(1) In general.--If--
(A) merchandise imported into the United
States is of the same class or kind as any
merchandise produced in a foreign country that
is the subject of--
(i) an antidumping duty order issued
under section 736,
(ii) a finding issued under the
Antidumping Act, 1921, or
(iii) a countervailing duty order
issued under section 706 or section
303,
(B) before importation into the United
States, such imported merchandise is completed
or assembled in another foreign country from
merchandise which--
(i) is subject to such order or
finding, or
(ii) is produced in the foreign
country with respect to which such
order or finding applies,
(C) the process of assembly or completion in
the foreign country referred to in subparagraph
(B) is minor or insignificant,
(D) the value of the merchandise produced in
the foreign country to which the antidumping
duty order applies is a significant portion of
the total value of the merchandise exported to
the United States, and
(E) the administering authority determines
that action is appropriate under this paragraph
to prevent evasion of such order or finding,
the administering authority, after taking into account
any advice provided by the Commission under subsection
(e), may include such imported merchandise within the
scope of such order or finding at any time such order
or finding is in effect.
(2) Determination of whether process is minor or
insignificant.--In determining whether the process of
assembly or completion is minor or insignificant under
paragraph (1)(C), the administering authority shall
take into account--
(A) the level of investment in the foreign
country,
(B) the level of research and development in
the foreign country,
(C) the nature of the production process in
the foreign country,
(D) the extent of production facilities in
the foreign country, and
(E) whether the value of the processing
performed in the foreign country represents a
small proportion of the value of the
merchandise imported into the United States.
(3) Factors to consider.--In determining whether to
include merchandise assembled or completed in a foreign
country in a countervailing duty order or an
antidumping duty order or finding under paragraph (1),
the administering authority shall take into account
such factors as--
(A) the pattern of trade, including sourcing
patterns,
(B) whether the manufacturer or exporter of
the merchandise described in paragraph (1)(B)
is affiliated with the person who uses the
merchandise described in paragraph (1)(B) to
assemble or complete in the foreign country the
merchandise that is subsequently imported into
the United States, and
(C) whether imports into the foreign country
of the merchandise described in paragraph
(1)(B) have increased after the initiation of
the investigation which resulted in the
issuance of such order or finding.
(c) Minor Alterations of Merchandise.--
(1) In general.--The class or kind of merchandise
subject to--
(A) an investigation under this title,
(B) an antidumping duty order issued under
section 736,
(C) a finding issued under the Antidumping
Act, 1921, or
(D) a countervailing duty order issued under
section 706 or section 303,
shall include articles altered in form or appearance in
minor respects (including raw agricultural products
that have undergone minor processing), whether or not
included in the same tariff classification.
(2) Exception.--Paragraph (1) shall not apply with
respect to altered merchandise if the administering
authority determines that it would be unnecessary to
consider the altered merchandise within the scope of
the investigation, order, or finding.
(d) Later-Developed Merchandise.--
(1) In general.--For purposes of determining whether
merchandise developed after an investigation is
initiated under this title or section 303 (hereafter in
this paragraph referred to as the ``later-developed
merchandise'') is within the scope of an outstanding
antidumping or countervailing duty order issued under
this title or section 303 as a result of such
investigation, the administering authority shall
consider whether--
(A) the later-developed merchandise has the
same general physical characteristics as the
merchandise with respect to which the order was
originally issued (hereafter in this paragraph
referred to as the ``earlier product''),
(B) the expectations of the ultimate
purchasers of the later-developed merchandise
are the same as for the earlier product,
(C) the ultimate use of the earlier product
and the later-developed merchandise are the
same,
(D) the later-developed merchandise is sold
through the same channels of trade as the
earlier product, and
(E) the later-developed merchandise is
advertised and displayed in a manner similar to
the earlier product.
The administering authority shall take into account any
advice provided by the Commission under subsection (e)
before making a determination under this subparagraph.
(2) Exclusion from orders.--The administering
authority may not exclude a later-developed merchandise
from a countervailing or antidumping duty order merely
because the merchandise--
(A) is classified under a tariff
classification other than that identified in
the petition or the administering authority's
prior notices during the proceeding, or
(B) permits the purchaser to perform
additional functions, unless such additional
functions constitute the primary use of the
merchandise and the cost of the additional
functions constitute more than a significant
proportion of the total cost of production of
the merchandise.
(e) Commission Advice.--
(1) Notification to commission of proposed action.--
Before making a determination--
(A) under subsection (a) with respect to
merchandise completed or assembled in the
United States (other than minor completion or
assembly),
(B) under subsection (b) with respect to
merchandise completed or assembled in other
foreign countries, or
(C) under subsection (d) with respect to any
later-developed merchandise which incorporates
a significant technological advance or
significant alteration of an earlier product,
with respect to an antidumping or countervailing duty
order or finding as to which the Commission has made an
affirmative injury determination, the administering
authority shall notify the Commission of the proposed
inclusion of such merchandise in such countervailing or
antidumping order or finding. Notwithstanding any other
provision of law, a decision by the administering
authority regarding whether any merchandise is within a
category for which notice is required under this
paragraph is not subject to judicial review.
(2) Request for consultation.--After receiving notice
under paragraph (1), the Commission may request
consultations with the administering authority
regarding the inclusion. Upon the request of the
Commission, the administering authority shall consult
with the Commission and any such consultation shall be
completed within 15 days after the date of the request.
(3) Commission advice.--If the Commission believes,
after consultation under paragraph (2), that a
significant injury issue is presented by the proposed
inclusion, the Commission may provide written advice to
the administering authority as to whether the inclusion
would be inconsistent with the affirmative
determination of the Commission on which the order or
finding is based. If the Commission decides to provide
such written advice, it shall promptly notify the
administering authority of its intention to do so, and
must provide such advice within 60 days after the date
of notification under paragraph (1). For purposes of
formulating its advice with respect to merchandise
completed or assembled in the United States from parts
or components produced in a foreign country, the
Commission shall consider whether the inclusion of such
parts or components taken as a whole would be
inconsistent with its prior affirmative determination.
(f) Time Limits for Administering Authority Determinations.--
The administering authority shall, to the maximum extent
practicable, make the determinations under this section within
300 days from the date of the initiation of a countervailing
duty or antidumping circumvention inquiry under this section.
SEC. 782. CONDUCT OF INVESTIGATIONS AND ADMINISTRATIVE REVIEWS.
(a) Treatment of Voluntary Responses in Countervailing or
Antidumping Duty Investigations and Reviews.--In any
investigation under subtitle A or B or a review under section
751(a) in which the administering authority has, under section
777A(c)(2) or section 777A(e)(2)(A) (whichever is applicable),
limited the number of exporters or producers examined, or
determined a single country-wide rate, the administering
authority shall establish an individual countervailable subsidy
rate or an individual weighted average dumping margin for any
exporter or producer not initially selected for individual
examination under such sections who submits to the
administering authority the information requested from
exporters or producers selected for examination, if--
(1) such information is so submitted by the date
specified--
(A) for exporters and producers that were
initially selected for examination, or
(B) for the foreign government, in a
countervailing duty case where the
administering authority has determined a single
country-wide rate; and
(2) the number of exporters or producers who have
submitted such information is not so large that
individual examination of such exporters or producers
would be unduly burdensome and inhibit the timely
completion of the investigation.
(b) Certification of Submissions.--Any person providing
factual information to the administering authority or the
Commission in connection with a proceeding under this title on
behalf of the petitioner or any other interested party shall
certify that such information is accurate and complete to the
best of that person's knowledge.
(c) Difficulties in Meeting Requirements.--
(1) Notification by interested party.--If an
interested party, promptly after receiving a request
from the administering authority or the Commission for
information, notifies the administering authority or
the Commission (as the case may be) that such party is
unable to submit the information requested in the
requested form and manner, together with a full
explanation and suggested alternative forms in which
such party is able to submit the information, the
administering authority or the Commission (as the case
may be) shall consider the ability of the interested
party to submit the information in the requested form
and manner and may modify such requirements to the
extent necessary to avoid imposing an unreasonable
burden on that party.
(2) Assistance to interested parties.--The
administering authority and the Commission shall take
into account any difficulties experienced by interested
parties, particularly small companies, in supplying
information requested by the administering authority or
the Commission in connection with investigations and
reviews under this title, and shall provide to such
interested parties any assistance that is practicable
in supplying such information.
(d) Deficient Submissions.--If the administering authority or
the Commission determines that a response to a request for
information under this title does not comply with the request,
the administering authority or the Commission (as the case may
be) shall promptly inform the person submitting the response of
the nature of the deficiency and shall, to the extent
practicable, provide that person with an opportunity to remedy
or explain the deficiency in light of the time limits
established for the completion of investigations or reviews
under this title. If that person submits further information in
response to such deficiency and either--
(1) the administering authority or the Commission (as
the case may be) finds that such response is not
satisfactory, or
(2) such response is not submitted within the
applicable time limits,
then the administering authority or the Commission (as the case
may be) may, subject to subsection (e), disregard all or part
of the original and subsequent responses.
(e) Use of Certain Information.--In reaching a determination
under section 703, 705, 733, 735, 751, or 753 the administering
authority and the Commission shall not decline to consider
information that is submitted by an interested party and is
necessary to the determination but does not meet all the
applicable requirements established by the administering
authority or the Commission, if--
(1) the information is submitted by the deadline
established for its submission,
(2) the information can be verified,
(3) the information is not so incomplete that it
cannot serve as a reliable basis for reaching the
applicable determination,
(4) the interested party has demonstrated that it
acted to the best of its ability in providing the
information and meeting the requirements established by
the administering authority or the Commission with
respect to the information, and
(5) the information can be used without undue
difficulties.
(f) Nonacceptance of Submissions.--If the administering
authority or the Commission declines to accept into the record
any information submitted in an investigation or review under
this title, it shall, to the extent practicable, provide to the
person submitting the information a written explanation of the
reasons for not accepting the information.
(g) Public Comment on Information.--Information that is
submitted on a timely basis to the administering authority or
the Commission during the course of a proceeding under this
title shall be subject to comment by other parties to the
proceeding within such reasonable time as the administering
authority or the Commission shall provide. The administering
authority and the Commission, before making a final
determination under section 705, 735, 751, or 753 shall cease
collecting information and shall provide the parties with a
final opportunity to comment on the information obtained by the
administering authority or the Commission (as the case may be)
upon which the parties have not previously had an opportunity
to comment. Comments containing new factual information shall
be disregarded.
(h) Termination of Investigation or Revocation of Order for
Lack of Interest.--The administering authority may--
(1) terminate an investigation under subtitle A or B
with respect to a domestic like product if, prior to
publication of an order under section 706 or 736, the
administering authority determines that producers
accounting for substantially all of the production of
that domestic like product have expressed a lack of
interest in issuance of an order; and
(2) revoke an order issued under section 706 or 736
with respect to a domestic like product, or terminate
an investigation suspended under section 704 or 734
with respect to a domestic like product, if the
administering authority determines that producers
accounting for substantially all of the production of
that domestic like product, have expressed a lack of
interest in the order or suspended investigation.
(i) Verification.--The administering authority shall verify
all information relied upon in making--
(1) a final determination in an investigation,
(2) a revocation under section 751(d), and
(3) a final determination in a review under section
751(a), if--
(A) verification is timely requested by an
interested party as defined in section
771(9)(C), (D), (E), (F), or (G), and
(B) no verification was made under this
subparagraph during the 2 immediately preceding
reviews and determinations under section 751(a)
of the same order, finding, or notice, except
that this clause shall not apply if good cause
for verification is shown.
5. Continued Dumping and Subsidy Offset
Section 754 of the Tariff Act of 1930, as amended
[19 U.S.C. 1675c; P.L. 71-361, as amended by P.L. 106-387]
SEC. 754. CONTINUED DUMPING AND SUBSIDY OFFSET.
(a) In General.--Duties assessed pursuant to a
countervailing duty order, an antidumping duty order, or a
finding under the Antidumping Act of 1921 shall be distributed
on an annual basis under this section to the affected domestic
producers for qualifying expenditures. Such distribution shall
be known as the `continued dumping and subsidy offset'.
(b) Definitions.--As used in this section:
(1) Affected domestic producer.--The term ``affected
domestic producer'' means any manufacturer, producer,
farmer, rancher, or worker representative (including
associations of such persons) that--
(A) was a petitioner or interested party in
support of the petition with respect with
respect to which an antidumping duty order, a
finding under the Antidumping Act of 1921, or a
countervailing duty order has been entered, and
(B) remains in operation.
Companies, businesses, or persons that have ceased the
production of the product covered by the order or finding or
who have been acquired by a company or business that is related
to a company that opposed the investigation shall not be an
affected domestic producer.
(2) Commissioner.--The term ``Commissioner'' means
the Commissioner of Customs.
(3) Commission.--The term ``Commission'' means the
United States International Trade Commission.
(4) Qualifying expenditure.--The term ``qualifying
expenditure'' means an expenditure incurred after the
issuance of the antidumping duty finding or order or
countervailing duty order in any of the following
categories:
(A) Manufacturing facilities.
(B) Equipment.
(C) Research and development.
(E) Acquisition of technology.
(F) Health care benefits to employees paid
for by the employer.
(G) Pension benefits to employees paid for by
the employer.
(H) Environmental equipment, training, or
technology.
(I) Acquisition of raw materials and other
inputs.
(J) Working capital or other funds needed to
maintain production.
(5) Related to.--A company, business, or person shall
be considered to be ``related to'' another company,
business, or person if--
(A)the company, business, or person, directly
or indirectly controls or is controlled by the
other company, business, or person,
(B) a third party directly or indirectly
controls both companies, businesses, or
persons,
(C) both companies, businesses, or persons
directly or indirectly control a third party
and there is reason to believe that the
relationship causes the first company,
business, or persons to act differently than a
nonrelated party.
For purposes of this paragraph, a party shall be
considered to directly or indirectly control another party if
the party is legally or operationally in a position to exercise
restraint or direction over the other party.
(c) Distribution Procedures.--The Commissioner shall
prescribe procedures for distribution of the continued dumping
or subsidies offset required by this section. Such distribution
shall be made not later than 60 days after the first day of the
fiscal year from duties assessed during the preceding fiscal
year.
(d) Parties Eligible for Distribution of Antidumping and
Countervailing Duties Assessed.--
(1) List of affected domestic producers.--The
Commission shall forward to the Commissioner within 60
days after the effective date of this section in the
case of orders or findings in effect on January 1,
1999, or thereafter, or in any other case, within 60
days after the date an antidumping or countervailing
duty order or finding is issued, a list of petitioners
and persons with respect to each order and finding and
a list of persons that indicate support of the petition
by letter or through questionnaire response. In those
cases in which a determination of injury was not
required or the Commission's records do not permit an
identification of those in support of a petition, the
Commission shall consult with the administering
authority to determine the identity of the petitioner
and those domestic parties who have entered appearances
during administrative reviews conducted by the
administering authority under section 751.
(2) Publication of list; certification.--The
Commissioner shall publish in the Federal Register at
least 30 days before the distribution of a continued
dumping and subsidy offset, a notice of intention to
distribute the offset and the list of affected domestic
producers potentially eligible for the distribution
based on the list obtained from the Commission under
paragraph (1). The Commissioner shall request a
certification from each potentially eligible affected
domestic producer--
(A) that the producer desires to receive a
distribution;
(B) that the producer is eligible to receive
the distribution as an affected domestic
producer; and
(C) the qualifying expenditures incurred by
the producer since the issuance of the order or
finding for which distribution under this
section has not previously been made.
(3) Distribution of funds.--The Commissioner shall
distribute all funds (including all interest earned on
the funds) from assessed duties received in the
preceding fiscal year to affected domestic producers
based on the certifications described in paragraph (2).
The distributions shall be made on a pro rata basis
based on new and remaining qualifying expenditures.
(e) Special Accounts.--
(1) Establishments.--Within 14 days after the
effective date of this section, with respect to
antidumping duty orders and findings and countervailing
duty orders notified under subsection (d)(1), and
within 14 days after the date an antidumping duty order
or finding or countervailing duty order issued after
the effective date takes effect, the Commissioner shall
establish in the Treasury of the United States a
special account with respect to each such order or
finding.
(2) Deposits into accounts.--The Commissioner shall
deposit into the special accounts, all antidumping or
countervailing duties (including interest earned on
such duties) that are assessed after the effective date
of this section under the antidumping order or finding
or the countervailing duty order with respect to which
the account was established.
(3) Time and Manner of Distributions.--Consistent
with the requirements of subsections (c)(d), the
Commissioner shall be regulation prescribe the time and
manner in which distribution of the funds in a special
account shall be made.
(4) Termination.--A special account shall terminate
after--
(A) the order or finding with respect to
which the account was established has
terminated;
(B) all entries relating to the order or
finding are liquidated and duties assessed
collected;
(C) the Commissioner has provided notice and
a final opportunity to obtain distribution
pursuant to subsection (c); and
(D) 90 days has elapsed from the date of the
notice descried in subparagraph (C).
Amounts not claimed within 90 days of the date of the
notice described in subparagraph (C), shall be deposited into
the general fund of the Treasury.
6. Judicial and Panel Review of Antidumping and Countervailing Duty
Actions
Section 516A of the Tariff Act of 1930, as amended
[19 U.S.C. 1516A; P.L. 71-361, as amended by P.L. 96-39, P.L. 96-417,
P.L. 96-542, P.L. 97-164, P.L. 98-573, P.L. 99-514, P.L. 100-449, P.L.
101-382, P.L. 103-465, and P.L. 104-295]
SEC. 516A. JUDICIAL REVIEW IN COUNTERVAILING DUTY AND ANTIDUMPING DUTY
PROCEEDINGS.
(a) Review of Determination.--
(1) Review of certain determinations.--Within 30 days
after the date of publication in the Federal Register
of--
(A) a determination by the administering
authority, under section 702(c) or 732(c) of
this Act, not to initiate an investigation,
(B) a determination by the Commission, under
section 751(b) of this Act, not to review a
determination based upon changed circumstances,
(C) a negative determination by the
Commission, under section 703(a) or 733(a) of
this Act, as to whether there is reasonable
indication of material injury, threat of
material injury, or material retardation, or
(D) a final determination by the
administering authority or the Commission under
section 751(c)(3),
an interested party who is a party to the proceeding in
connection with which the matter arises may commence an
action in the United States Court of International
Trade by filing concurrently a summons and complaint,
each with the content and in the form, manner, and
style prescribed by the rules of that court, contesting
any factual findings or legal conclusions upon which
the determination is based.
(2) Review of determinations on record.--
(A) In general.--Within thirty days after--
(i) the date of publication in the
Federal Register of--
(I) notice of any
determination described in
clause (ii), (iii), (iv), (v),
or (viii) of subparagraph (B),
or
(II) an antidumping or
countervailing duty order based
upon any determination
described in clause (i) of
subparagraph (B), or
(III) notice of the
implementation of any
determination described in
clause (vii) of subparagraph
(B), or
(ii) the date of mailing of a
determination described in clause (vi)
of subparagraph (B),
an interested party who is a party to the
proceeding in connection with which the matter
arises may commence an action in the United
States Court of International Trade by filing a
summons, and within thirty days thereafter a
complaint, each with the content and in the
form, manner, and style prescribed by the rules
of that court, contesting any factual findings
or legal conclusions upon which the
determination is based.
(B) Reviewable determinations.--The
determinations which may be contested under
subparagraph (A) are as follows:
(i) Final affirmative determinations
by the administering authority and by
the Commission under section 705 or 735
of this Act, including any negative
part of such a determination (other
than a part referred to in clause
(ii)).
(ii) A final negative determination
by the administering authority or the
Commission under section 705 or 735 of
this Act, including, at the option of
the appellant, any part of a final
affirmative determination which
specifically excludes any company or
product.
(iii) A final determination, other
than a determination reviewable under
paragraph (1), by the administering
authority or the Commission under
section 751 of this Act.
(iv) A determination by the
administering authority, under section
704 or 734 of this Act, to suspend an
antidumping duty or a countervailing
duty investigation, including any final
determination resulting from a
continued investigation which changes
the size of the dumping margin or net
subsidy calculated, or the reasoning
underlying such calculations, at the
time the suspension agreement was
concluded.
(v) An injurious effect determination
by the Commission under section 704(h)
or 734(h) of this Act.
(vi) A determination by the
administering authority as to whether a
particular type of merchandise is
within the class or kind of merchandise
described in an existing finding of
dumping or antidumping or
countervailing duty order.
(vii) A determination by the
administering authority or the
Commission under section 129 of the
Uruguay Round Agreements Act concerning
a determination under title VII of the
Tariff Act of 1930.
(viii) A determination by the
Commission under section 753(a)(1).
(3) Exception.--Notwithstanding the limitation
imposed by paragraph (2)(A)(i)(II) of this subsection,
a final affirmative determination by the administering
authority under section 705 or 735 of this Act may be
contested by commencing an action, in accordance with
the provisions of paragraph (2)(A), within thirty days
after the date of publication in the Federal Register
of a final negative determination by the Commission
under section 705 or 735 of this Act.
(4) Procedures and fees.--The procedures and fees set
forth in chapter 169 of Title 28 apply to an action
under this section.
(5) Time limits in cases involving merchandise from
free trade area countries.--Notwithstanding any other
provision of this subsection, in the case of a
determination to which the provisions of subsection (g)
apply, an action under this subsection may not be
commenced, and the time limits for commencing an action
under this subsection shall not begin to run, until the
day specified in whichever of the following
subparagraphs applies:
(A) For a determination described in
paragraph (1)(B) or clause (i), (ii) or (iii)
of paragraph (2)(B), the 31st day after the
date on which notice of the determination is
published in the Federal Register.
(B) For a determination described in clause
(vi) of paragraph (2)(B), the 31st day after
the date on which the government of the
relevant FTA country receives notice of the
determination.
(C) For a determination with respect to which
binational panel review has commenced in
accordance with subsection (g)(8) of this
section, the day after the date as of which--
(i) the binational panel has
dismissed binational panel review of
the determination for lack of
jurisdiction, and
(ii) any interested party seeking
review of the determination under
paragraph (1), (2), or (3) of this
subsection has provided timely notice
under subsection (g)(3)(B) of this
section.
If such an interested party files a summons and
complaint under this subsection after dismissal
by the binational panel, and if a request for
an extraordinary challenge committee is made
with respect to the decision by the binational
panel to dismiss--
(I) judicial review under this
subsection shall be stayed during
consideration by the committee of the
request, and
(II) the United States Court of
International Trade shall dismiss the
action if the committee vacates or
remands the binational panel decision
to dismiss.
(D) For a determination for which review by
the United States Court of International Trade
is provided for--
(i) under subsection (g)(12)(B) of
this section, the day after the date of
publication in the Federal Register of
notice that article 1904 of the NAFTA
has been suspended, or
(ii) under subsection (g)(12)(D) of
this section, the day after the date
that notice of settlement is published
in the Federal Register.
(E) For a determination described in clause
(vii) of paragraph (2)(B), the 31st day after
the date on which notice of the implementation
of the determination is published in the
Federal Register.
(b) Standards of Review.--
(1) Remedy.--The court shall hold unlawful any
determination, finding, or conclusion found--
(A) in an action brought under subparagraph
(A), (B), or (C) of subsection (a)(1) of this
section, to be arbitrary, capricious, an abuse
of discretion, or otherwise not in accordance
with law, or
(B)(i) in an action brought under paragraph
(2) of subsection (a) of this section, to be
unsupported by substantial evidence on the
record, or otherwise not in accordance with
law, or,
(ii) in an action brought under paragraph
(1)(D) of subsection (a), to be arbitrary,
capricious, an abuse of discretion, or
otherwise not in accordance with law.
(2) Record for review.--
(A) In general.--For the purposes of this
subsection, the record, unless otherwise
stipulated by the parties, shall consist of--
(i) a copy of all information
presented to or obtained by the
Secretary, the administering authority,
or the Commission during the course of
the administrative proceeding,
including all governmental memoranda
pertaining to the case and the record
of ex parte meetings required to be
kept by section 777(a)(3) of this
title; and
(ii) a copy of the determination, all
transcripts or records of conferences
or hearings, and all notices published
in the Federal Register.
(B) Confidential or privileged material.--The
confidential or privileged status accorded to
any documents, comments, or information shall
be preserved in any action under this section.
Notwithstanding the preceding sentence, the
court may examine, in camera, the confidential
or privileged material, and may disclose such
material under such terms and conditions as it
may order.
(3) Effect of decisions by nafta or united states-
canada binational panels.--In making a decision in any
action brought under subsection (a) of this section, a
court of the United States is not bound by, but may
take into consideration, a final decision of a
binational panel or extraordinary challenge committee
convened pursuant to article 1904 of the NAFTA or of
the Agreement.
(c) Liquidation of Entries.--
(1) Liquidation in accordance with determination.--
Unless such liquidation is enjoined by the court under
paragraph (2) of this subsection, entries of
merchandise of the character covered by a determination
of the Secretary, the administering authority, or the
Commission contested under subsection (a) of this
section shall be liquidated in accordance with the
determination of the Secretary, the administering
authority, or the Commission, if they are entered, or
withdrawn from warehouse, for consumption on or before
the date of publication in the Federal Register by the
Secretary or the administering authority of a decision
of the United States Court of International Trade, or
of the United States Court of Appeals for the Federal
Circuit, not in harmony with that determination. Such
notice of a decision shall be published within ten days
from the date of the issuance of the court decision.
(2) Injunctive relief.--In the case of a
determination described in paragraph (2) of subsection
(a) of this section by the Secretary, the administering
authority, or the Commission, the United States Court
of International Trade may enjoin the liquidation of
some or all entries of merchandise covered by a
determination of the Secretary, the administering
authority, or the Commission, upon a request by an
interested party for such relief and a proper showing
that the requested relief should be granted under the
circumstances.
(3) Remand for final disposition.--If the final
decision of an action brought under this section is not
in harmony with the published determination of the
Secretary, the administering authority, or the
Commission, the matter shall be remanded to the
Secretary, the administering authority, or the
Commission, as appropriate, for disposition consistent
with the final disposition of the court.
(d) Standing.--Any interested party who was a party to the
proceeding under section 303 of this Act or title VII of this
Act shall have the right to appear and be heard as a party in
interest before the United States Court of International Trade.
The party filing the action shall notify all such interested
parties of the filing of an action under this section, in the
form, manner, and within the time prescribed by rules of the
court.
(e) Liquidation in Accordance With Final Decision.--If the
cause of action is sustained in whole or in part by a decision
of the United States Court of International Trade or of the
United States Court of Appeals for the Federal Circuit--
(1) entries of merchandise of the character covered
by the published determination of the Secretary, the
administering authority, or the Commission, which is
entered, or withdrawn from warehouse, for consumption
after the date of publication in the Federal Register
by the Secretary or the administering authority of a
notice of the court decision, and
(2) entries the liquidation of which was enjoined
under subsection (c)(2) of this section,
shall be liquidated in accordance with the final court decision
in the action. Such notice of the court decision shall be
published within ten days from the date of the issuance of the
court decision.
(f) Definitions.--For the purpose of this section--
(1) Administering authority.--The term
``administering authority'' means the administering
authority described in section 771(1) of this Act.
(2) Commission.--The term ``Commission'' means the
United States International Trade Commission.
(3) Interested party.--The term ``interested party''
means any person described in section 771(9) of this
Act.
(4) Secretary.--The term ``Secretary'' means the
Secretary of the Treasury.
(5) Agreement.--The term ``Agreement'' means the
United States-Canada Free-Trade Agreement.
(6) United states secretary.--The term ``United
States Secretary'' means--
(A) the secretary for the United States
Section referred to in article 1908 of the
NAFTA, and
(B) the secretary of the United States
Section provided for in article 1909 of the
Agreement.
(7) Relevant fta secretary.--The term ``relevant FTA
Secretary'' means the Secretary--
(A) referred to in article 1908 of the NAFTA,
or
(B) provided for in paragraph 5 of article
1909 of the Agreement, of the relevant FTA
country.
(8) NAFTA.--The term ``NAFTA'' means the North
American Free Trade Agreement.
(9) Relevant fta country.--The term ``relevant FTA
country'' means the free trade area country to which an
antidumping or countervailing duty proceeding pertains.
(10) Free trade area country.--The term ``free trade
area country'' means the following:
(A) Canada for such time as the NAFTA is in
force with respect to, and the United States
applies the NAFTA to, Canada.
(B) Mexico for such time as the NAFTA is in
force with respect to, and the United States
applies the NAFTA to, Mexico.
(C) Canada for such time as--
(i) it is not a free trade area
country under subparagraph (A); and
(ii) the Agreement is in force with
respect to, and the United States
applies the Agreement to, Canada.
(g) Review of Countervailing Duty and Antidumping Duty
Determinations Involving Free Trade Area Country Merchandise.--
(1) Definition of determination.--For purposes of
this subsection, the term ``determination'' means a
determination described in--
(A) paragraph (1)(B) of subsection (a), or
(B) clause (i), (ii), (iii), or (vi) of
paragraph (2)(B) of subsection (a) of this
section,
if made in connection with a proceeding regarding a
class or kind of free trade area country merchandise,
as determined by the administering authority.
(2) Exclusive review of determination by binational
panels.--If binational panel review of a determination
is requested pursuant to Article 1904 of the NAFTA or
of the Agreement, then, except as provided in paragraph
(3) and (4)--
(A) the determination is not reviewable under
subsection (a), and
(B) no court of the United States has power
or jurisdiction to review the determination on
any question of law or fact by an action in the
nature of mandamus or otherwise.
(3) Exception to exclusive binational panel review.--
(A) In general.--A determination is
reviewable under subsection (a) of this section
if the determination sought to be reviewed is--
(i) a determination as to which
neither the United States nor the
relevant FTA country requested review
by a binational panel pursuant to
article 1904 of the NAFTA or of the
Agreement,
(ii) a revised determination issued
as a direct result of judicial review,
commenced pursuant to subsection (a),
if neither the United States nor the
relevant FTA country requested review
of the original determination,
(iii) a determination issued as a
direct result of judicial review that
was commenced pursuant to subsection
(a) of this section prior to the entry
into force of the NAFTA or of the
Agreement,
(iv) a determination which a
binational panel has determined is not
reviewable by the binational panel,
(v) a determination as to which
binational panel review has terminated
pursuant to paragraph 12 of article
1905 of the NAFTA, or
(vi) a determination as to which
extraordinary challenge committee
review has terminated pursuant to
paragraph 12 of article 1905 of the
NAFTA.
(B) Special rule.--A determination described
in subparagraph (A)(i) or (iv) is reviewable
under subsection (a) of this section only if
the party seeking to commence review has
provided timely notice of its intent to
commence such review to--
(i) the United States Secretary, the
relevant FTA Secretary;
(ii) all interested parties who were
parties to the proceeding in connection
with which the matter arises; and
(iii) the administering authority or
the Commission, as appropriate.
Such notice is provided timely if the notice is
delivered by no later than the date that is 20
days after the date described in subparagraph
(A) or (B) of subsection (a)(5) of this section
that is applicable to such determination,
except that, if the time for requesting
binational panel review is suspended under
paragraph (8)(A)(ii) of this subsection, any
unexpired time for providing notice of intent
to commence judicial review shall, during the
pendency of any such suspension, also be
suspended. Such notice shall contain such
information, and be in such form, manner, and
style, as the administering authority, in
consultation with the Commission, shall
prescribe by regulations.
(4) Exception to exclusive binational panel review
for constitutional issues.--
(A) Constitutionality of binational panel
review system.--An action for declaratory
judgment or injunctive relief, or both,
regarding a determination on the grounds that
any provision of, or amendment made by, the
North American Free Trade Agreement
Implementation Act implementing the binational
dispute settlement system under chapter 19 of
the NAFTA, the United States-Canada Free-Trade
Agreement Implementation Act of 1988
implementing the binational panel dispute
settlement system under Chapter 19 of the
Agreement, violates the Constitution may be
brought only in the United States Court of
Appeals for the District of Columbia Circuit,
which shall have jurisdiction of such action.
(B) Other constitutional review.--Review is
available under subsection (a) with respect to
a determination solely concerning a
constitutional issue (other than an issue to
which subparagraph (A) applies) arising under
any law of the United States as enacted or
applied. An action for review under this
subparagraph shall be assigned to a 3-judge
panel of the United States Court of
International Trade.
(C) Commencement of review.--Notwithstanding
the time limits in subsection (a), within 30
days after the date of publication in the
Federal Register of notice that binational
panel review has been completed, an interested
party who is a party to the proceeding in
connection with which the matter arises may
commence an action under subparagraph (A) or
(B) by filing an action in accordance with the
rules of the court.
(D) Transfer of actions to appropriate
court.--Whenever an action is filed in a court
under subparagraph (A) or (B) and that court
finds that the action should have been filed in
the other court, the court in which the action
was filed shall transfer the action to the
other court and the action shall proceed as if
it had been filed in the court to which it is
transferred on the date upon which it was
actually filed in the court from which it is
transferred.
(E) Frivolous claims.--Frivolous claims
brought under subparagraph (A) or (B) are
subject to dismissal and sanctions as provided
under section 1927 of title 28, United States
Code, and the Federal Rules of Civil Procedure.
(F) Security.--
(i) Subparagraph (a) actions.--The
security requirements of Rule 65(c) of
the Federal Rules of Civil Procedure
apply with respect to actions commenced
under subparagraph (A).
(ii) Subparagraph (b) actions.--No
claim shall be heard, and no temporary
restraining order or temporary or
permanent injunction shall be issued,
under an action commenced under
subparagraph (B), unless the party
seeking review first files an
undertaking with adequate security in
an amount to be fixed by the court
sufficient to recompense parties
affected for any loss, expense, or
damage caused by the improvident or
erroneous issuance of such order or
injunction. If a court upholds the
constitutionality of the determination
in question in such action, the court
shall award to a prevailing party fees
and expenses, in addition to any costs
incurred by that party, unless the
court finds that the position of the
other party was substantially justified
or that special circumstances make an
award unjust.
(G) Panel record.--The record of proceedings
before the binational panel shall not be
considered part of the record for review
pursuant to subparagraph (A) or (B).
(H) Appeal to supreme court of court orders
issued in subparagraph (a) actions.--
Notwithstanding any other provision of law, any
final judgment of the United States Court of
Appeals for the District of Columbia Circuit
which is issued pursuant to an action brought
under subparagraph (A) shall be reviewable by
appeal directly to the Supreme Court of the
United States. Any such appeal shall be taken
by a notice of appeal filed within 10 days
after such order is entered; and the
jurisdictional statement shall be filed within
30 days after such order is entered. No stay of
an order issued pursuant to an action brought
under subparagraph (A) may be issued by a
single Justice of the Supreme Court.
(5) Liquidation of entries.--
(A) Application.--In the case of a
determination for which binational panel review
is requested pursuant to article 1904 of the
NAFTA or of the Agreement, the rules provided
in this paragraph shall apply, notwithstanding
the provisions of subsection (c).
(B) General rule.--In the case of a
determination for which binational panel review
is requested pursuant to article 1904 of the
NAFTA or of the Agreement, entries of
merchandise covered by such determination shall
be liquidated in accordance with the
determination of the administering authority or
the Commission, if they are entered, or
withdrawn from warehouse, for consumption on or
before the date of publication in the Federal
Register by the administering authority of
notice of a final decision of a binational
panel, or of an extraordinary challenge
committee, not in harmony with that
determination. Such notice of a decision shall
be published within 10 days of the date of the
issuance of the panel or committee decision.
(C) Suspension of liquidation.--
(i) In general.--Notwithstanding the
provisions of subparagraph (B), in the
case of a determination described in
clause (iii) or (vi) of subsection
(a)(2)(B) for which binational panel
review is requested pursuant to article
1904 of the NAFTA or of the Agreement,
the administering authority, upon
request of an interested party who was
a party to the proceeding in connection
with which the matter arises and who is
a participant in the binational panel
review, shall order the continued
suspension of liquidation of those
entries of merchandise covered by the
determination that are involved in the
review pending the final disposition of
the review.
(ii) Notice.--At the same time as the
interested party makes its request to
the administering authority under
clause (i), that party shall serve a
copy of its request on the United
States Secretary, the relevant FTA
Secretary, and all interested parties
who were parties to the proceeding in
connection with which the matter
arises.
(iii) Application of suspension.--If
the interested party requesting
continued suspension of liquidation
under clause (i) is a foreign
manufacturer, producer, or exporter, or
a United States importer, the continued
suspension of liquidation shall apply
only to entries of merchandise
manufactured, produced, exported, or
imported by that particular
manufacturer, producer, exporter, or
importer. If the interested party
requesting the continued suspension of
liquidation under clause (i) is an
interested party described in
subparagraph (C), (D), (E), or (F) of
section 771(9), the continued
suspension of liquidation shall apply
only to entries which could be affected
by a decision of the binational panel
convened under chapter 19 of the NAFTA
or of the Agreement.
(iv) Judicial review.--Any action
taken by the administering authority or
the United States Customs Service under
this subparagraph shall not be subject
to judicial review, and no court of the
United States shall have power or
jurisdiction to review such action on
any question of law or fact by an
action in the nature of mandamus or
otherwise.
(6) Injunctive relief.--Except for cases under
paragraph (4)(B), in the case of a determination for
which binational level review is requested pursuant to
article 1904 of the NAFTA or of the Agreement, the
provisions of subsection (c)(2) shall not apply.
(7) Implementation of international obligations under
article 1904 of the nafta or the agreement.--
(A) In general.--If a determination is
referred to a binational panel or extraordinary
challenge committee under the NAFTA or the
Agreement and the panel or committee makes a
decision remanding the determination to the
administering authority or the Commission, the
administering authority or the Commission
shall, within the period specified by the panel
or committee, take action not inconsistent with
the decision of the panel or committee. Any
action taken by the administering authority or
the Commission under this paragraph shall not
be subject to judicial review, and no court of
the United States shall have power or
jurisdiction to review such action on any
question of law or fact by an action in the
nature of mandamus or otherwise.
(B) Application if subparagraph (a) held
unconstitutional.--In the event that the
provisions of subparagraph (A) are held
unconstitutional under the provisions of
subparagraphs (A) and (H) of paragraph (4), the
provisions of this subparagraph shall take
effect. In such event, the President is
authorized on behalf of the United States to
accept, as a whole, the decision of a
binational panel or extraordinary challenge
committee remanding the determination to the
administering authority or the Commission
within the period specified by the panel or
committee. Upon acceptance by the President of
such a decision, the administering authority or
the Commission shall, within the period
specified by the panel or committee, take
action not inconsistent with such decision. Any
action taken by the President, the
administering authority, or the Commission
under this subparagraph shall not be subject to
judical review, and no court of the United
States shall have power or jurisdiction to
review such action on any question of law or
fact by an action in the nature of mandamus or
otherwise.
(8) Requests for binational panel review.--
(A) Interested party requests for binational
panel review.--
(i) General rule.--An interested
party who was a party to the proceeding
in which a determination is made may
request binational panel review of such
determination by filing a request with
the United States Secretary by no later
than the date that is 30 days after the
date described in subparagraph (A),
(B), or (E) of subsection (a)(5) of
this section that is applicable to such
determination. Receipt of such request
by the United States Secretary shall be
deemed to be a request for binational
panel review within the meaning of
article 1904(4) of the NAFTA or of the
Agreement. Such request shall contain
such information and be in such form,
manner, and style as the administering
authority, in consultation with the
Commission, shall prescribe by
regulations.
(ii) Suspension of time to request
binational panel review under the
nafta.--Notwithstanding clause (i), the
time for requesting binational panel
review shall be suspended during the
pendency of any stay of binational
panel review that is issued pursuant to
paragraph 11(a) of article 1905 of the
NAFTA.
(B) Service of request for binational panel
review.--
(i) Service by interested party.--If
a request for binational panel review
of a determination is filed under
subparagraph (A), the party making the
request shall serve a copy, by mail or
personal service, on any other
interested party who was a party to the
proceeding in connection with which the
matter arises, and on the administering
authority or the Commission, as
appropriate.
(ii) Service by united states
secretary.--If an interested party to
the proceeding requests binational
panel review of a determination by
filing a request with the relevant FTA
Secretary, the United States Secretary
shall serve a copy of the request by
mail on any other interested party who
was a party to the proceeding in
connection with which the matter
arises, and on the administering
authority or the Commission, as
appropriate.
(C) Limitation on request for binational
panel review.--Absent a request by an
interested party under subparagraph (A), the
United States may not request binational panel
review under article 1904 of the NAFTA or the
Agreement of a determination.
(9) Representation in panel proceedings.--In the case
of binational panel proceedings convened under chapter
19 of the NAFTA or of the Agreement, the administering
authority and the Commission shall be represented by
attorneys who are employees of the administering
authority or the Commission respectively. Interested
parties who were parties to the proceeding in
connection with which the matter arises shall have the
right to appear and be represented by counsel before
the binational panel.
(10) Notification of class or kind rulings.--In the
case of a determination which is described in paragraph
(2)(B)(vi) of subsection (a) and which is subject to
the provisions of paragraph (2), the administering
authority, upon request, shall inform any interested
person of the date on which the Government of the
relevant FTA country received notice of the
determination under article 1904(4) of the NAFTA or the
Agreement.
(11) Suspension and termination of suspension of
article 1904 of the nafta.--
(A) Suspension of article 1904.--If a special
committee established under article 1905 of the
NAFTA issues an affirmative finding, the Trade
Representative may, in accordance with
paragraph 8(a) or 9, as appropriate, of article
1905 of the NAFTA, suspend the operation of
article 1904 of the NAFTA.
(B) Termination of suspension of article
1904.--If a special committee is reconvened and
makes an affirmative determination described in
paragraph 10(b) of article 1905 of the NAFTA,
any suspension of the operation of article 1904
of the NAFTA shall terminate.
(12) Judicial review upon termination of binational
panel or committee review under the nafta.--
(A) Notice of suspension or termination of
suspension of article 1904.--
(i) Upon notification by the Trade
Representative or the Government of a
country described in subsection
(f)(10)(A) or (B) of this section that
the operation of article 1904 of the
NAFTA has been suspended in accordance
with paragraph 8(a) or 9 of article
1905 of the NAFTA, the United States
Secretary shall publish in the Federal
Register a notice of suspension of
article 1904 of the NAFTA.
(ii) Upon notification by the Trade
Representative or the Government of a
country described in subsection
(f)(10)(A) or (B) of this section that
the suspension of the operation of
article 1904 of the NAFTA is terminated
in accordance with paragraph 10 of
article 1905 of the NAFTA, the United
States Secretary shall publish in the
Federal Register a notice of
termination of suspension of article
1904 of the NAFTA.
(B) Transfer of final determinations for
judicial review upon suspension of article
1904.--If the operation of article 1904 of the
NAFTA is suspended in accordance with paragraph
8(a) or 9 of article 1905 of the NAFTA--
(i) upon the request of an authorized
person described in subparagraph (C),
any final determination that is the
subject of a binational panel review or
an extraordinary challenge committee
review shall be transferred to the
United States Court of International
Trade (in accordance with rules issued
by the Court) for review under
subsection (a) of this section; or
(ii) in a case in which--
(I) a binational panel review
was completed fewer than 30
days before the suspension, and
(II) extraordinary challenge
committee review has not been
requested,
upon the request of an authorized
person described in subparagraph (C)
which is made within 60 days after the
completion of the binational panel
review, the final determination that
was the subject of the binational panel
review shall be transferred to the
United States Court of International
Trade (in accordance with rules issued
by the Court) for review under
subsection (a) of this section.
(C) Persons authorized to request transfer of
final determinations for judicial review.--A
request that a final determination be
transferred to the Court of International Trade
under subparagraph (B) may be made by--
(i) if the United States made an
allegation under paragraph 1 of article
1905 of the NAFTA and the operation of
article 1904 of the NAFTA was suspended
pursuant to paragraph 8(a) of article
1905 of the NAFTA--
(I) the government of the
relevant country described in
subsection (f)(10)(A) or (B) of
this section,
(II) an interested party that
was a party to the panel or
committee review, or
(III) an interested party
that was a party to the
proceeding in connection with
which panel review was
requested, but only if the time
period for filing notices of
appearance in the panel review
has not expired, or
(ii) if a country described in
subsection (f)(10)(A) or (B) of this
section made an allegation under
paragraph 1 of article 1905 of the
NAFTA and the operation of article 1904
of the NAFTA was suspended pursuant to
paragraph 9 of article 1905 of the
NAFTA--
(I) the government of that
country,
(II) an interested party that
is a person of that country and
that was a party to the panel
or committee review, or
(III) an interested party
that is a person of that
country and that was a party to
the proceeding in connection
with which panel review was
requested, but only if the time
period for filing notices of
appearance in the panel review
has not expired.
(D) Transfer for judicial review upon
settlement.--(i) If the Trade Representative
achieves a settlement with the government of a
country described in subsection (f)(10)(A) or
(B) of this section pursuant to paragraph 7 of
article 1905 of the NAFTA, and referral for
judicial review is among the terms of such
settlement, any final determination that is the
subject of a binational panel review or an
extraordinary challenge committee review shall,
upon a request described in clause (ii), be
transferred to the United States Court of
International Trade (in accordance with rules
issued by the Court) for review under
subsection (a) of this section.
(ii) A request referred to in clause (i) is a
request made by--
(I) the country referred to in clause
(i),
(II) an interested party that was a
party to the panel or committee review,
or
(III) an interested party that was a
party to the proceeding in connection
with which panel review was requested,
but only if the time for filing notices
of appearance in the panel review has
not expired.
Section 129 of the Uruguay Round Agreements Act
[19 U.S.C. 3538; P.L. 103-465]
SEC. 129. ADMINISTRATIVE ACTION FOLLOWING WTO PANEL REPORTS.
(a) Action by United States International Trade
Commission.--
(1) Advisory report.--If a dispute settlement panel
finds in an interim report under Article 15 of the
Dispute Settlement Understanding, or the Appellate Body
finds in a report under Article 17 of that
Understanding, that an action by the International
Trade Commission in connection with a particular
proceeding is not in conformity with the obligations of
the United States under the Antidumping Agreement, the
Safeguards Agreement, or the Agreement on Subsidies and
Countervailing Measures, the Trade Representative may
request the Commission to issue an advisory report on
whether title VII of the Tariff Act of 1930 or title II
of the Trade Act of 1974, as the case may be, permits
the Commission to take steps in connection with the
particular proceeding that would render its action not
inconsistent with the findings of the panel or the
Appellate Body concerning those obligations. The Trade
Representative shall notify the congressional
committees of such request.
(2) Time limits for report.--The Commission shall
transmit its report under paragraph (1) to the Trade
Representative--
(A) in the case of an interim report
described in paragraph (1), within 30 calendar
days after the Trade Representative requests
the report; and
(B) in the case of a report of the Appellate
Body, within 21 calendar days after the Trade
Representative requests the report.
(3) Consultations on request for commission
determination.--If a majority of the Commissioners
issues an affirmative report under paragraph (1), the
Trade Representative shall consult with the
congressional committees concerning the matter.
(4) Commission determination.--Notwithstanding any
provision of the Tariff Act of 1930 or title II of the
Trade Act of 1974, if a majority of the Commissioners
issues an affirmative report under paragraph (1), the
Commission, upon the written request of the Trade
Representative, shall issue a determination in
connection with the particular proceeding that would
render the Commission's action described in paragraph
(1) not inconsistent with the findings of the panel or
Appellate Body. The Commission shall issue its
determination not later than 120 days after the request
from the Trade Representative is made.
(5) Consultations on implementation of commission
determination.--The Trade Representative shall consult
with the congressional committees before the
Commission's determination under paragraph (4) is
implemented.
(6) Revocation of order.--If, by virtue of the
Commission's determination under paragraph (4), an
antidumping or countervailing duty order with respect
to some or all of the imports that are subject to the
action of the Commission described in paragraph (1) is
no longer supported by an affirmative Commission
determination under title VII of the Tariff Act of 1930
or this subsection, the Trade Representative may, after
consulting with the congressional committees under
paragraph (5), direct the administering authority to
revoke the antidumping or countervailing duty order in
whole or in part.
(7) Modification of action under title ii of trade
act of 1974.--Section 204(b) of the Trade Act of 1974
(19 U.S.C. 2254(b)) is amended by adding at the end the
following new paragraph:
``(3) Notwithstanding paragraph (1), the President
may, after receipt of a Commission determination under
section 129(a)(4) of the Uruguay Round Agreements Act
and consulting with the Committee on Ways and Means of
the House of Representatives and the Committee on
Finance of the Senate, reduce, modify, or terminate
action taken under section 203.''.
(b) Action by Administering Authority.--
(1) Consultations with administering authority and
congressional committees.--Promptly after a report by a
dispute settlement panel or the Appellate body is
issued that contains findings that an action by the
administering authority in a proceeding under title VII
of the Tariff Act of 1930 is not in conformity with the
obligations of the United States under the Antidumping
Agreement or the Agreement on Subsidies and
Countervailing Measures, the Trade Representative shall
consult with the administering authority and the
congressional committees on the matter.
(2) Determination by administering authority.--
Notwithstanding any provision of the Tariff Act of
1930, the administering authority shall, within 180
days after receipt of a written request from the Trade
Representative, issue a determination in connection
with the particular proceeding that would render the
administering authority's action described in paragraph
(1) not inconsistent with the findings of the panel or
the Appellate Body.
(3) Consultations before implementation.--Before the
administering authority implements any determination
under paragraph (2), the Trade Representative shall
consult with the administering authority and the
congressional committees with respect to such
determination.
(4) Implementation of determination.--The Trade
Representative may, after consulting with the
administering authority and the congressional
committees under paragraph (3), direct the
administering authority to implement, in whole or in
part, the determination made under paragraph (2).
(c) Effects of Determinations; Notice of Implementation.--
(1) Effects of determinations.--Determinations
concerning title VII of the Tariff Act of 1930 that are
implemented under this section shall apply with respect
to unliquidated entries of the subject merchandise (as
defined in section 771 of that Act) that are entered,
or withdrawn from warehouse, for consumption on or
after--
(A) in the case of a determination by the
Commission under subsection (a)(4), the date on
which the Trade Representative directs the
administering authority under subsection (a)(6)
to revoke an order pursuant to that
determination, and
(B) in the case of a determination by the
administering authority under subsection
(b)(2), the date on which the Trade
Representative directs the administering
authority under subsection (b)(4) to implement
that determination.
(2) Notice of implementation.--
(A) The administering authority shall publish
in the Federal Register notice of the
implementation of any determination made under
this section with respect to title VII of the
Tariff Act of 1930.
(B) The Trade Representative shall publish in
the Federal Register notice of the
implementation of any determination made under
this section with respect to title II of the
Trade Act of 1974.
(d) Opportunity for Comment by Interested Parties.--Prior
to issuing a determination under this section, the
administering authority or the Commission, as the case may be,
shall provide interested parties with an opportunity to submit
written comments and, in appropriate cases, may hold a hearing,
with respect to the determination.
7. Third-Country Dumping
Section 1317 of the Omnibus Trade and Competitiveness Act of 1988
[19 U.S.C. 1677k; P.L. 100-418 and P.L. 103-465]
SEC. 1317. THIRD-COUNTRY DUMPING.
(a) Definitions.--For purposes of this section:
(1)(A) The term ``Agreement'' means the agreement on
Implementation of Article VI of the GATT 1994 (relating
to antidumping measures).
(B) The term ``GATT 1994'' has the meaning given that
term in section 2(1)(B) of the Uruguay Round Agreements
Act.
(2) The term ``Agreement country'' means a foreign
country that has accepted the Agreement.
(3) The term ``Trade Representative'' means the
United States Trade Representative.
(b) Petition by Domestic Industry.--
(1) A domestic industry that produces a product that
is like or directly competitive with merchandise
produced by a foreign country (whether or not an
Agreement country) may, if it has reason to believe
that--
(A) such merchandise is being dumped in an
Agreement country; and
(B) such domestic industry is being
materially injured, or threatened with material
injury, by reason of such dumping;
submit a petition to the Trade Representative that
alleges the elements referred to in subparagraphs (A)
and (B) and requests the Trade Representative to take
action under subsection (c) on behalf of the domestic
industry.
(2) A petition submitted under paragraph (1) shall
contain such detailed information as the Trade
Representative may require in support of the
allegations in the petition.
(c) Application for Antidumping Action on Behalf of the
Domestic Industry.--
(1) If the Trade representative, on the basis of the
information contained in a petition submitted under
paragraph (1), determines that there is a reasonable
basis for the allegations in the petition, the Trade
Representative shall submit to the appropriate
authority of the Agreement country where the alleged
dumping is occurring an application pursuant to article
12 of the Agreement which requests that appropriate
antidumping action under the law of that country be
taken, on behalf of the United States, with respect to
imports into that country of the merchandise concerned.
(2) At the request of the Trade Representative, the
appropriate officers of the Department of Commerce and
the United States International Trade Commission shall
assist the Trade Representative in preparing the
application under paragraph (1).
(d) Consultation After Submission of Application.--After
submitting an application under subsection (c)(1), the Trade
Representative shall seek consultations with the appropriate
authority of the Agreement country regarding the request for
antidumping action.
(e) Action Upon Refusal of Agreement Country to Act.--if
the appropriate authority of an Agreement country refuses to
undertake antidumping measures in response to a request made
therefore by the Trade Representative under subsection (c), the
Trade Representative shall promptly consult with the domestic
industry on whether action under any other law of the United
States is appropriate.
8. Antidumping Petitions by Third Countries
Section 783 of the Tariff Act of 1930, as amended
[19 U.S.C. 1677n; P.L. 103-465, as amended by P.L. 104-295]
SEC. 783. ANTIDUMPING PETITIONS BY THIRD COUNTRIES.
(a) Filing of Petition.--The government of a WTO member may
file with the Trade Representative a petition requesting that
an investigation be conducted to determine if--
(1) imports from another country are being sold in
the United States at less than fair value, and
(2) an industry in the petitioning country is
materially injured by reason of those imports.
(b) Initiation.--The Trade Representative, after consultation
with the administering authority and the Commission and
obtaining the approval of the WTO Council for Trade in Goods,
shall determine whether to initiate an investigation described
in subsection (a).
(c) Determinations.--Upon initiation of an investigation
under this section, the Trade Representative shall request the
following determinations be made according to substantive and
pro
cedural requirements specified by the Trade Representative,
notwithstanding any other provision of this title:
(1) The administering authority shall determine
whether imports into the United States of the subject
merchandise are being sold at less than fair value.
(2) The Commission shall determine whether an
industry in the petitioning country is materially
injured by reason of imports of the subject merchandise
into the United States.
(d) Public Comment.--An opportunity for public comment shall
be provided, as appropriate--
(1) by the Trade Representative, in making the
determination required by subsection (b), and
(2) by the administering authority and the
Commission, in making the determination required by
subsection (c).
(e) Issuance of Order.--If the administering authority makes
an affirmative determination under paragraph (1) of subsection
(c), and the Commission makes an affirmative determination
under paragraph (2) of subsection (c), the administering
authority shall issue an antidumping duty order in accordance
with section 736 and take such other actions as are required by
section 736.
(f) Reviews of Determinations.--For purposes of review under
section 516A or review under section 751, if an order is issued
under subsection (c), the final determinations of the
administering authority and the Commission under this section
shall be treated as final determinations made under section
735.
(g) Access to Information.--Section 777 shall apply to
investigations under this section, to the extent specified by
the Trade Representative, after consultation with the
administering authority and the Commission.
9. Antidumping Act of 1916
[15 U.S.C. 71 et seq.; Act of Sept. 8, 1916, sections 800-806]
SEC. 800. DEFINITION.
When used in this subchapter, the term ``person'' includes
partnerships, corporations, and associations.
SEC. 801. IMPORTATION OR SALE OF ARTICLES AT LESS THAN MARKET VALUE OR
WHOLESALE PRICE.
It shall be unlawful for any person importing or assisting
in importing any articles from any foreign country into the
United States, commonly and systematically to import, sell or
cause to be imported or sold such articles within the United
States at a price substantially less than the actual market
value or wholesale price of such articles, at the time of
exportation to the United States, in the principal markets of
the country of their production, or of other foreign countries
to which they are commonly exported after adding to such market
value or wholesale price, freight, duty, and other charges and
expenses necessarily incident to the importation and sale
thereof in the United States: Provided, That such act or acts
be done with the intent of destroying or injuring an industry
in the United States, or of preventing the establishment of an
industry in the United States, or of restraining or
monopolizing any part of trade and commerce in such articles in
the United States.
Any person who violates or combines or conspires with any
other person to violate this section is guilty of a
misdemeanor, and, on conviction thereof, shall be punished by a
fine not exceeding $5,000, or imprisonment not exceeding one
year, or both, in the discretion of the court.
Any person injured in his business or property by reason of
any violation of, or combination or conspiracy to violate, this
section, may sue therefor in the district court of the United
States for the district in which the defendant resides or is
found or has an agent, without respect to the amount in
controversy, and shall recover threefold the damages sustained,
and the cost of the suit, including a reasonable attorney's
fee.
The foregoing provisions shall not be construed to deprive
the proper State courts of jurisdiction in actions for damages
thereunder.
SEC. 802. AGREEMENTS INVOLVING RESTRICTIONS IN FAVOR OF IMPORTED GOODS.
If any article produced in foreign country is imported into
the United States under any agreement, understanding, or
condition that the importer thereof or any other person in the
United States shall not use, purchase, or deal in, or shall be
restricted in his using, purchasing, or dealing in, the
articles of any other person, there shall be levied, collected,
and paid thereon, in addition to the duty otherwise imposed by
law, a special duty paid thereon, in addition to the duty
otherwise imposed by law, a special duty equal to double the
amount of such duty: Provided, That the above shall not be
interpreted to prevent the establishing in this country on the
part of a foreign producer of an exclusive agency for the sale
in the United States of the products of said foreign producer
or merchant, nor to prevent such exclusive agent from agreeing
not to use, purchase, or deal in the article of any other
person, but this proviso shall not be construed to exempt from
the provision of this section any article imported by such
exclusive agent if such agent is required by the foreign
producer or if it is agreed between such agent and such foreign
producer that any agreement, understanding or condition set out
in this section shall be imposed by such agent upon the sale or
other disposition of such article to any person in the United
States.
SEC. 803. RULES AND REGULATIONS.
The Secretary of the Treasury shall make such rules and
regulations as are necessary for the carrying out of the
provisions of section 73 of this title.
SEC. 804. RETALIATION AGAINST COUNTRY PROHIBITING IMPORTATIONS.
Whenever any country, dependency, or colony shall prohibit
the importation of any article the product of the soil or
industry of the United States and not injurious to health or
morals, the President shall have power to prohibit, during the
period such prohibition is in force, the importation into the
United States of similar articles, or in case the United States
does not import similar articles from that country, then other
articles, the products of such country, dependency, or colony.
And the Secretary of the Treasury, with the approval of the
President, shall make such rules and regulations as are
necessary for the execution of the provisions of this section.
SEC. 805. RETALIATION AGAINST RESTRICTION OF IMPORTATIONS IN TIME OF
WAR.
Whenever, during the existence of a war in which the United
States is not engaged, the President shall be satisfied that
there is reasonable ground to believe that under the laws,
regulations, or practices of any country, colony, or dependency
contrary to the law and practice of nations, the importation
into their own or any other country, dependency, or colony of
any article the product of the soil or industry of the United
States and not injurious to health or morals is prevented or
restricted the President is authorized and empowered to
prohibit or restrict during the period such prohibition or
restriction is in force, the importation into the United States
of similar or other articles, products of such country,
dependency, or colony as in his opinion the public interest may
require; and in such case he shall make proclamation stating
the article or articles which are prohibited from importation
into the United States; and any person or persons who shall
import, or attempt or conspire to import, or be concerned in
importing, such articles, into the United States contrary to
the prohibition in such proclamation, shall be liable to a fine
of not less than $2,000 nor more than $50,000, or to
imprisonment not to exceed two years, or both, in the
discretion of the court. The President may change, modify,
revoke, or renew such proclamation in his discretion.
SEC. 806. DISCRIMINATION AGAINST NEUTRAL AMERICANS IN TIME OF WAR.
Whenever, during the existence of a war in which the United
States is not engaged, the President shall be satisfied that
there is reasonable ground to believe that any vessel, American
or foreign, is, on account of the laws, regulations, or
practices of a belligerent Government, making or giving any
undue or unreasonable preference or advantage in any respect
whatsoever to any particular person, company, firm, or
corporation, or any particular description of traffic in the
United States or its possessions or to any citizens of the
United States residing in neutral countries abroad, or is
subjecting any particular person, company, firm, or corporation
or any particular description of traffic in the United States
or its possessions, or any citizens of the United States
residing in neutral countries abroad to any undue or
unreasonable prejudice, disadvantage, injury, or discrimination
in regard to accepting, receiving, transporting, or delivering,
or refusing to accept, receive, transfer, or deliver any cargo,
freight, or passengers, or in any other respect whatsoever, he
is authorized and empowered to direct the detention of such
vessels by withholding clearance or by formal notice forbidding
departure, and to revoke, modify, or renew any such direction.
Whenever, during the existence of a war in which the United
States is not engaged, the President shall be satisfied that
there is reasonable ground to believe that under the laws,
regulations, or practices of any belligerent country or
Government, American ships or American citizens are not
accorded any of the facilities of commerce which the vessels or
citizens of that belligerent country enjoy in the United States
or its possessions, or are not accorded by such belligerent
equal privileges or facilities of trade with vessels or
citizens of any nationality other than that of such
belligerent, the President is authorized and empowered to
withhold clearance from one or more vessels of such belligerent
country until such belligerent shall restore to such American
vessels and American citizens reciprocal liberty of commerce
and equal facilities of trade; or the President may direct that
similar privileges and facilities, if any, enjoyed by vessels
or citizens of such belligerent in the United States or its
possessions be refused to vessels or citizens of such
belligerent; and in such case he shall make proclamation of his
direction stating the facilities and privileges which shall be
refused, and the belligerent to whose vessels or citizens they
are to be refused, and thereafter the furnishing of such
prohibited privileges and facilities to any vessel or citizen
of the belligerent named in such proclamation shall be
unlawful; and he may change, modify, revoke, or renew such
proclamation; and any person or persons who shall furnish or
attempt or conspire to furnish or be concerned in furnishing or
in the concealment of furnishing facilities or privileges to
ships or persons contrary to the prohibition in such
proclamation shall be liable to a fine of not less than $2,000
nor more than $50,000 or to imprisonment not to exceed two
years, or both, in the discretion of the court.
In case any vessel which is detained by virtue of this
subchapter shall depart or attempt to depart from the
jurisdiction of the United States without clearance or other
lawful authority, the owner or master or person or persons
having charge or command of such vessel shall be severally
liable to a fine of not less than $2,000 nor more than $10,000,
or to imprisonment not to exceed two years, or both, and in
addition such vessel shall be forfeited to the United States.
The President of the United States is authorized and
empowered to employ such part of the land or naval forces of
the United States as shall be necessary to carry out the
purposes of this subchapter.
B. ENFORCEMENT OF UNITED STATES RIGHTS UNDER TRADE AGREEMENTS AND
RESPONSE TO CERTAIN FOREIGN TRADE PRACTICES
Title III, Chapter 1 (Sections 301-310) of the Trade Act of 1974, as
amended
[19 U.S.C. 2411-2420; P.L. 93-618, as amended by P.L. 96-39, P.L. 98-
573, P.L. 100-418, P.L. 103-465, P.L. 104-295, P.L. 106-113, and P.L.
106-200]
SEC. 301. ACTIONS BY UNITED STATES TRADE REPRESENTATIVE.
(a) Mandatory Action.--
(1) If the United States Trade Representative
determines under section 304(a)(1) that--
(A) the rights of the United States under any
trade agreement are being denied; or
(B) an act, policy, or practice of a foreign
country--
(i) violates, or is inconsistent
with, the provisions of, or otherwise
denies benefits to the United States
under, any trade agreement, or
(ii) is unjustifiable and burdens or
restricts United States commerce;
the Trade Representative shall take action authorized
in subsection (c), subject to the specific direction,
if any, of the President regarding any such action, and
shall take all other appropriate and feasible action
within the power of the President that the President
may direct the Trade Representative to take under this
subsection, to enforce such rights or to obtain the
elimination of such act, policy, or practice.
Actions may be taken that are within the power of the President
with respect to trade in any goods or services, or with respect
to any other area of pertinent relations with the foreign
country.
(2) The Trade Representative is not required to take
action under paragraph (1) in any case in which--
(A) The Dispute Settlement Body (as defined
in section 121(5) of the Uruguay Round
Agreements Act) has adopted a report, or a
ruling issued under the formal dispute
settlement proceeding provided under any other
trade agreement finds, that--
(i) the rights of the United States
under a trade agreement are not being
denied, or
(ii) the act, policy, or practice--
(I) is not a violation of, or
inconsistent with, the rights
of the United States, or
(II) does not deny, nullify,
or impair benefits to the
United States under any trade
agreement; or
(B) the Trade Representative finds that--
(i) the foreign country is taking
satisfactory measures to grant the
rights of the United States under a
trade agreement,
(ii) the foreign country has--
(I) agreed to eliminate or
phase out the act, policy, or
practice, or
(II) agreed to an imminent
solution to the burden or
restriction on United States
commerce that is satisfactory
to the Trade Representative,
(iii) it is impossible for the
foreign country to achieve the results
described in clause (i) or (ii), as
appropriate, but the foreign country
agrees to provide to the United States
compensatory trade benefits that are
satisfactory to the Trade
Representative,
(iv) in extraordinary cases, where
the taking of action under this
subsection would have an adverse impact
on the United States economy
substantially out of proportion to the
benefits of such action, taking into
account the impact of not taking such
action on the credibility of the
provisions of this chapter, or
(v) the taking of action under this
subsection would cause serious harm to
the national security of the United
States.
(3) Any action taken under paragraph (1) to eliminate
an act, policy, or practice shall be devised so as to
affect goods or services of the foreign country in an
amount that is equivalent in value to the burden or
restriction being imposed by that country on United
States commerce.
(b) Discretionary Action.--If the Trade Representative
determines under section 304(a)(1) that--
(1) an act, policy, or practice of a foreign country
is unreasonable or discriminatory and burdens or
restricts United States commerce, and
(2) action by the United States is appropriate, the
Trade Representative shall take all appropriate and
feasible action authorized under subsection (c),
subject to the specific direction, if any, of the
President regarding any such action, and all other
appropriate and feasible action within the power of the
President that the President may direct the Trade
Representative to take under this subsection, to obtain
the elimination of that act, policy, or practice.
Actions may be taken that are within the power of the President
with respect to trade in any goods or services, or with respect
to any other area of pertinent relations with the foreign
country.
(c) Scope of Authority.--
(1) For purposes of carrying out the provisions of
subsection (a) or (b), the Trade Representative is
authorized to--
(A) suspend, withdraw, or prevent the
application of, benefits of trade agreement
concessions to carry out a trade agreement with
the foreign country referred to in such
subsection;
(B) impose duties or other import
restrictions on the goods of, and,
notwithstanding any other provision of law,
fees or restrictions on the services of, such
foreign country for such time as the Trade
Representative determines appropriate;
(C) in a case in which the act, policy, or
practice also fails to meet the eligibility
criteria for receiving duty-free treatment
under subsections (b) and (c) of section 502 of
this Act, subsections (b) and (c) of section
212 of the Caribbean Basin Economic Recovery
Act (19 U.S.C. 2702 (b) and (c)), or
subsections (c) and (d) of section 203 of the
Andean Trade Preference Act (19 U.S.C. 3202 (c)
and (d)), withdraw, limit, or suspend such
treatment under such provisions,
notwithstanding the provisions of subsection
(a)(3) of this section; or
(D) enter into binding agreements with such
foreign country that commit such foreign
country to--
(i) eliminate, or phase out, the act,
policy, or practice that is the subject
of the action to be taken under
subsection (a) or (b),
(ii) eliminate any burden or
restriction on United States commerce
resulting from such act, policy, or
practice, or
(iii) provide the United States with
compensatory trade benefits that--
(I) are satisfactory to the
Trade Representative, and
(II) meet the requirements of
paragraph (4).
(2)(A) Notwithstanding any other provision of law
governing any service sector access authorization, and
in addition to the authority conferred in paragraph
(1), the Trade Representative may, for purposes of
carrying out the provisions of subsection (a) or (b)--
(i) restrict, in the manner and to the extent
the Trade Representative determines
appropriate, the terms and conditions of any
such authorization, or
(ii) deny the issuance of any such
authorization.
(B) Actions described in subparagraph (A) may only be
taken under this section with respect to service sector
access authorizations granted, or applications therefor
pending, on or after the date on which--
(i) a petition is filed under section 302(a),
or
(ii) a determination to initiate an
investigation is made by the Trade
Representative under section 302(b).
(C) Before the Trade Representative takes any action
under this section involving the imposition of fees or
other restrictions on the services of a foreign
country, the Trade Representative shall, if the
services involved are subject to regulation by any
agency of the Federal Government or of any State,
consult, as appropriate, with the head of the agency
concerned.
(3) The actions the Trade Representative is
authorized to take under subsection (a) or (b) may be
taken against any goods or economic sector--
(A) on a nondiscriminatory basis or solely
against the foreign country described in such
subsection, and
(B) without regard to whether or not such
goods or economic sector were involved in the
act, policy, or practice that is the subject of
such action.
(4) Any trade agreement described in paragraph
(1)(D)(iii) shall provide compensatory trade benefits
that benefit the economic sector which includes the
domestic industry that would benefit from the
elimination of the act, policy, or practice that is the
subject of the action to be taken under subsection (a)
or (b), or benefit the economic sector as closely
related as possible to such economic sector, unless--
(A) the provision of such trade benefits is
not feasible, or
(B) trade benefits that benefit any other
economic sector would be more satisfactory than
such trade benefits.
(5) If the Trade Representative determines that
actions to be taken under subsection (a) or (b) are to
be in the form of import restrictions, the Trade
Representative shall--
(A) give preference to the imposition of
duties over the imposition of other import
restrictions, and
(B) if an import restriction other than a
duty is imposed, consider substituting, on an
incremental basis, an equivalent duty for such
other import restriction.
(6) Any action taken by the Trade Representative
under this section with respect to export targeting
shall, to the extent possible, reflect the full benefit
level of the export targeting to the beneficiary over
the period during which the action taken has an effect.
(d) Definitions and Special Rules.--For purposes of this
chapter--
(1) The term ``commerce'' includes, but is not
limited to--
(A) services (including transfers of
information) associated with international
trade, whether or not such services are related
to specific goods, and
(B) foreign direct investment by United
States persons with implications for trade in
goods or services.
(2) An act, policy, or practice of a foreign country
that burdens or restricts United States commerce may
include the provision, directly or indirectly, by that
foreign country of subsidies for the construction of
vessels used in the commercial transportation by water
of goods between foreign countries and the United
States.
(3)(A) An act, policy, or practice is unreasonable if
the act, policy, or practice, while not necessarily in
violation of, or inconsistent with, the international
legal rights of the United States, is otherwise unfair
and inequitable.
(B) Acts, policies, and practices that are
unreasonable include, but are not limited to, any act,
policy, or practice, or any combination of acts,
policies, or practices, which--
(i) denies fair and equitable--
(I) opportunities for the
establishment of an enterprise,
(II) provision of adequate and
effective protection of intellectual
property rights notwithstanding the
fact that the foreign country may be in
compliance with the specific
obligations of the Agreement on Trade-
Related Aspects of Intellectual
Property Rights referred to in section
101(d)(15) of the Uruguay Round
Agreements Act,
(III) nondiscriminatory market access
opportunities for United States persons
that rely upon intellectual property
protection, or
(IV) market opportunities, including
the toleration by a foreign government
of systematic anticompetitive
activities by enterprises or among
enterprises in the foreign country that
have the effect of restricting, on a
basis that is inconsistent with
commercial considerations, access of
United States goods or services to a
foreign market,
(ii) constitutes export targeting, or
(iii) constitutes a persistent pattern of
conduct that--
(I) denies workers the right of
association,
(II) denies workers the right to
organize and bargain collectively,
(III) permits any form of forced or
compulsory labor,
(IV) fails to provide a minimum age
for the employment of children, or
(V) fails to provide standards for
minimum wages, hours of work, and
occupational safety and health of
workers.
(C)(i) Acts, policies, and practices of a foreign
country described in subparagraph (B)(iii) shall not be
treated as being unreasonable if the Trade
Representative determines that--
(I) the foreign country has taken, or is
taking, actions that demonstrate a significant
and tangible overall advancement in providing
throughout the foreign country (including any
designated zone within the foreign country) the
rights and other standards described in the
subclauses of subparagraph (B)(iii), or
(II) such acts, policies, and practices are
not inconsistent with the level of economic
development of the foreign country.
(ii) The Trade Representative shall publish in the
Federal Register any determination made under clause
(i), together with a description of the facts on which
such determination is based.
(D) For purposes of determining whether any act,
policy, or practice is unreasonable, reciprocal
opportunities in the United States for foreign
nationals and firms shall be taken into account, to the
extent appropriate.
(E) The term ``export targeting'' means any
government plan or scheme consisting of a combination
of coordinated actions (whether carried out severally
or jointly) that are bestowed on a specific enterprise,
industry, or group thereof, the effect of which is to
assist the enterprise, industry, or group to become
more competitive in the export of a class or kind of
merchandise.
(F)(i) For the purposes of subparagraph (B)(i)(II),
adequate and effective protection of intellectual
property rights includes adequate and effective means
under the laws of the foreign country for persons who
are not citizens or nationals of such country to
secure, exercise, and enforce rights and enjoy
commercial benefits relating to patents, trademarks,
copyrights and related rights, mask works, trade
secrets, and plant breeder's rights.
(ii) For purposes of subparagraph (B)(i)(IV),
the denial of fair and equitable
nondiscriminatory market access opportunities
includes restrictions on market access related
to the use, exploitation, or enjoyment of
commercial benefits derived from exercising
intellectual property rights in protected works
or fixations or products embodying protected
works.
(4)(A) An act, policy, or practice is unjustifiable
if the act, policy, or practice is in violation of, or
inconsistent with, the international legal rights of
the United States.
(B) Acts, policies, and practices that are
unjustifiable include, but are not limited to, any act,
policy, or practice described in subparagraph (A) which
denies national or most-favored-nation treatment or the
right of establishment or protection of intellectual
property rights.
(5) Acts, policies, and practices that are
discriminatory include, when appropriate, any act,
policy, and practice which denies national or most-
favored-nation treatment to United States goods,
services, or investment.
(6) The term ``service sector access authorization''
means any license, permit, order, or other
authorization, issued under the authority of Federal
law, that permits a foreign supplier of services access
to the United States market in a service sector
concerned.
(7) The term ``foreign country'' includes any foreign
instrumentality. Any possession or territory of a
foreign country that is administered separately for
customs purposes shall be treated as a separate foreign
country.
(8) The term ``Trade Representative'' means the
United States Trade Representative.
(9) The term ``interested persons'', only for
purposes of sections 302(a)(4)(B), 304(b)(1)(A),
306(c)(2), and 307(a)(2), includes, but is not limited
to, domestic firms and workers, representatives of
consumer interests, United States product exporters,
and any industrial user of any goods or services that
may be affected by actions taken under subsection (a)
or (b).
SEC. 302. INITIATION OF INVESTIGATIONS.
(a) Petitions.--
(1) Any interested person may file a petition with
the Trade Representative requesting that action be
taken under section 301 and setting forth the
allegations in support of the request.
(2) The Trade Representative shall review the
allegations in any petition filed under paragraph (1)
and, not later than 45 days after the date on which the
Trade Representative received the petition, shall
determine whether to initiate an investigation.
(3) If the Trade Representative determines not to
initiate an investigation with respect to a petition,
the Trade Representative shall inform the petitioner of
the reasons therefor and shall publish notice of the
determination, together with a summary of such reasons,
in the Federal Register.
(4) If the Trade Representative makes an affirmative
determination under paragraph (2) with respect to a
petition, the Trade Representative shall initiate an
investigation regarding the issues raised in the
petition. The Trade Representative shall publish a
summary of the petition in the Federal Register and
shall, as soon as possible, provide opportunity for the
presentation of views concerning the issues, including
a public hearing--
(A) within the 30-day period beginning on the
date of affirmative determination (or on a date
after such period if agreed to by the
petitioner) if a public hearing within such
period is requested in the petition, or
(B) at such other time if a timely request
therefor is made by the petitioner or by any
interested person.
(b) Initiation of Investigation by Means Other Than
Petition.--
(1)(A) If the Trade Representative determines that an
investigation should be initiated under this chapter
with respect to any matter in order to determine
whether the matter is actionable under section 301, the
Trade Representative shall publish such determination
in the Federal Register and shall initiate such
investigation.
(B) The Trade Representative shall, before making any
determination under subparagraph (A), consult with
appropriate committees established pursuant to section
135.
(2)(A) By no later than the date that is 30 days
after the date on which a country is identified under
section 182(a)(2), the Trade Representative shall
initiate an investigation under this chapter with
respect to any act, policy, or practice of that country
that--
(i) was the basis for such identification,
and
(ii) is not at that time the subject of any
other investigation or action under this
chapter.
(B) The Trade Representative is not required under
subparagraph (A) to initiate an investigation under
this chapter with respect to any act, policy, or
practice of a foreign country if the Trade
Representative determines that the initiation of the
investigation would be detrimental to United States
economic interests.
(C) If the Trade Representative makes a determination
under subparagraph (B) not to initiate an
investigation, the Trade Representative shall submit to
the Congress a written report setting forth, in
detail--
(i) the reasons for the determination, and
(ii) the United States economic interests
that would be adversely affected by the
investigation.
(D) The Trade Representative shall, from time to
time, consult with the Register of Copyrights, the
Under Secretary of Commerce for Intellectual Property
and Director of the United States Patent and Trademark
Office, and other appropriate officers of the Federal
Government, during any investigation initiated under
this chapter by reason of subparagraph (A).
(c) Discretion.--In determining whether to initiate an
investigation under subsection (a) or (b) of any act, policy,
or practice that is enumerated in any provision of section
301(d), the Trade Representative shall have discretion to
determine whether action under section 301 would be effective
in addressing such act, policy, or practice.
SEC. 303. CONSULTATION UPON INITIATION OF INVESTIGATION.
(a) In General.--
(1) On the date on which an investigation is
initiated under section 302, the Trade Representative,
on behalf of the United States, shall request
consultations with the foreign country concerned
regarding the issues involved in such investigation.
(2) If the investigation initiated under section 302
involves a trade agreement and a mutually acceptable
resolution is not reached before the earlier of--
(A) the close of the consultation period, if
any, specified in the trade agreement, or
(B) the 150th day after the day on which
consultation was commenced,
the Trade Representative shall promptly request
proceedings on the matter under the formal dispute
settlement procedures provided under such agreement.
(3) The Trade Representative shall seek information
and advice from the petitioner (if any) and the
appropriate committees established pursuant to section
135 in preparing United States presentations for
consultations and dispute settlement proceedings.
(b) Delay of Request for Consultations.--
(1) Notwithstanding the provisions of subsection
(a)--
(A) the United States Trade Representative
may, after consulting with the petitioner (if
any), delay for up to 90 days any request for
consultations under subsection (a) for the
purpose of verifying or improving the petition
to ensure an adequate basis for consultation,
and
(B) if such consultations are delayed by
reason of subparagraph (A), each time
limitation under section 304 shall be extended
for the period of such delay.
(2) The Trade Representative shall--
(A) publish notice of any delay under
paragraph (1) in the Federal Register, and
(B) report to Congress on the reasons for
such delay in the report required under section
309(a)(3).
SEC. 304. DETERMINATIONS BY THE TRADE REPRESENTATIVE.
(a) In General.--
(1) On the basis of the investigation initiated under
section 302 and the consultations (and the proceedings,
if applicable) under section 303, the Trade
Representative shall--
(A) determine whether--
(i) the rights to which the United
States is entitled under any trade
agreement are being denied, or
(ii) any act, policy, or practice
described in subsection (a)(1)(B) or
(b)(1) of section 301 exists, and
(B) if the determination made under
subparagraph (A) is affirmative, determine what
action, if any, the Trade Representative should
take under subsection (a) or (b) of section
301.
(2) The Trade Representative shall make the
determinations required under paragraph (1) on or
before--
(A) in the case of an investigation involving
a trade agreement, the earlier of--
(i) the date that is 30 days after
the date on which the dispute
settlement procedure is concluded, or
(ii) the date that is 18 months after
the date on which the investigation is
initiated, or
(B) in all cases not described in
subparagraph (A) or paragraph (3), the date
that is 12 months after the date on which the
investigation is initiated.
(3)(A) If an investigation is initiated under this
chapter by reason of section 302(b)(2) and the Trade
Representative does not consider that a trade
agreement, including the Agreement on Trade-Related
Aspects of Intellectual Property Rights (referred to in
section 101(d)(15) of the Uruguay Round Agreements
Act), is involved or does not make a determination
described in subparagraph (B) with respect to such
investigation, the Trade Representative shall make the
determinations required under paragraph (1) with
respect to such investigation by no later than the date
that is 6 months after the date on which such
investigation is initiated.
(B) If the Trade Representative determines with
respect to an investigation initiated by reason of
section 302(b)(2) (other than an investigation
involving a trade agreement) that--
(i) complex or complicated issues are
involved in the investigation that require
additional time,
(ii) the foreign country involved in the
investigation is making substantial progress in
drafting or implementing legislative or
administrative measures that will provide
adequate and effective protection of
intellectual property rights, or
(iii) such foreign country is undertaking
enforcement measures to provide adequate and
effective protection of intellectual property
rights,
the Trade Representative shall publish in the Federal
Register notice of such determination and shall make
the determinations required under paragraph (1) with
respect to such investigation by no later than the date
that is 9 months after the date on which such
investigation is initiated.
(4) In any case in which a dispute is not resolved
before the close of the minimum dispute settlement
period provided for in a trade agreement, the Trade
Representative, within 15 days after the close of such
dispute settlement period, shall submit a report to
Congress setting forth the reasons why the dispute was
not resolved within the minimum dispute settlement
period, the status of the case at the close of the
period, and the prospects for resolution. For purposes
of this paragraph, the minimum dispute settlement
period provided for under any such trade agreement is
the total period of time that results if all stages of
the formal dispute settlement procedures are carried
out within the time limitations specified in the
agreement, but computed without regard to any extension
authorized under the agreement at any stage.
(b) Consultation Before Determinations.--
(1) Before making the determinations required under
subsection (a)(1), the Trade Representative, unless
expeditious action is required--
(A) shall provide an opportunity (after
giving not less than 30 days notice thereof)
for the presentation of views by interested
persons, including a public hearing if
requested by any interested person,
(B) shall obtain advice from the appropriate
committees established pursuant to section 135,
and
(C) may request the views of the United
States International Trade Commission regarding
the probable impact on the economy of the
United States of the taking of action with
respect to any goods or service.
(2) If the Trade Representative does not comply with
the requirements of subparagraphs (A) and (B) of
paragraph (1) because expeditious action is required,
the Trade Representative shall, after making the
determinations under subsection (a)(1), comply with
such subparagraphs.
(c) Publication.--The Trade Representative shall publish in
the Federal Register any determination made under subsection
(a)(1), together with a description of the facts on which such
determination is based.
SEC. 305. IMPLEMENTATION OF ACTIONS.
(a) Actions To Be Taken Under Section 301.--
(1) Except as provided in paragraph (2), the Trade
Representative shall implement the action the Trade
Representative determines under section 304(a)(1)(B) to
take under section 301, subject to the specific
direction, if any, of the President regarding any such
action, by no later than the date that is 30 days after
the date on which such determination is made.
(2)(A) Except as otherwise provided in this
paragraph, the Trade Representative may delay, by not
more than 180 days, the implementation of any action
that is to be taken under section 301--
(i) if--
(I) in the case of an investigation
initiated under section 302(a), the
petitioner requests a delay, or
(II) in the case of an investigation
initiated under section 302(b)(1) or to
which section 304(a)(3)(B) applies, a
delay is requested by a majority of the
representatives of the domestic
industry that would benefit from the
action, or
(ii) if the Trade Representative determines
that substantial progress is being made, or
that a delay is necessary or desirable to
obtain United States rights or satisfactory
solution with respect to the acts, policies, or
practices that are the subject of the action.
(B) The Trade Representative may not delay under
subparagraph (A) the implementation of any action that
is to be taken under section 301 with respect to any
investigation to which section 304(a)(3)(A) applies.
(C) The Trade Representative may not delay under
subparagraph (A) the implementation of any action that
is to be taken under section 301 with respect to any
investigation to which section 304(a)(3)(B) applies by
more than 90 days.
(b) Alternative Actions in Certain Cases of Export
Targeting.--
(1) If the Trade Representative makes an affirmative
determination under section 304(a)(1)(A) involving
export targeting by a foreign country and determines to
take no action under section 301 with respect to such
affirmation determination, the Trade Representative--
(A) shall establish an advisory panel to
recommend measures which will promote the
competitiveness of the domestic industry
affected by the export targeting,
(B) on the basis of the report of such panel
submitted under paragraph (2)(B) and subject to
the specific direction, if any, of the
President, may take any administrative actions
authorized under any other provision of law,
and, if necessary, propose legislation to
implement any other actions, that would restore
or improve the international competitiveness of
the domestic industry affected by the export
targeting, and
(C) shall, by no later than the date that is
30 days after the date on which the report of
such panel is submitted under paragraph (2)(B),
submit a report to the Congress on the
administrative actions taken, and legislative
proposals made, under subparagraph (B) with
respect to the domestic industry affected by
the export targeting.
(2)(A) The advisory panels established under
paragraph (1)(A) shall consist of individuals appointed
by the Trade Representative who--
(i) earn their livelihood in the private
sector of the economy, including individuals
who represent management and labor in the
domestic industry affected by the export
targeting that is the subject of the
affirmative determination made under section
304(a)(1)(A), and
(ii) by education or experience, are
qualified to serve on the advisory panel.
(B) By no later than the date that is 6 months after
the date on which an advisory panel is established
under paragraph (1)(A), the advisory panel shall submit
to the Trade Representative and to the Congress a
report on measures that the advisory panel recommends
be taken by the United States to promote the
competitiveness of the domestic industry affected by
the export targeting that is the subject of the
affirmative determination made under section
304(a)(1)(A).
SEC. 306. MONITORING OF FOREIGN COMPLIANCE.
(a) In General.--The Trade Representative shall monitor the
implementation of each measure undertaken, or agreement that is
entered into to by a foreign country provide a satisfactory
resolution of a matter subject to investigation under this
chapter or subject to dispute settlement proceedings to enforce
the rights of the United States under a trade agreement
providing for such proceedings.
(b) Further Action.--
(1) In general.--If, on the basis of the monitoring
carried out under subsection (a), the Trade
Representative considers that a foreign country is not
satisfactorily implementing a measure or agreement
referred to in subsection (a), the Trade Representative
shall determine what further action the Trade
Representative shall take under section 301(a). For
purposes of section 301, any such determination shall
be treated as a determination made under section
304(a)(1).
(2) WTO dispute settlement recommendations.--
(A) Failure to implement Recommendation.--If
the measure or agreement referred to in
subsection (a) concerns the implementation of a
recommendation made pursuant to dispute
settlement proceedings under the World Trade
Organization, and the Trade Representative
considers that the foreign country has failed
to implement it, the Trade Representative shall
make the determination in paragraph (1) no
later than 30 days after the expiration of the
reasonable period of time provided for such
implementation under paragraph 21 of the
Understanding on Rules and Procedures Governing
the Settlement of Disputes that is referred to
in section 101(d)(16) of the Uruguay Round
Agreements Act.
(B) Revision of retaliation list and
action.--
``(i) In general.--Except as provided
in clause (ii), in the event that the
United States initiates a retaliation
list or takes any other action
described in section 301(c)(1) (A) or
(B) against the goods of a foreign
country or countries because of the
failure of such country or countries to
implement the recommendation made
pursuant to a dispute settlement
proceeding under the World Trade
Organization, the Trade Representative
shall periodically revise the list or
action to affect other goods of the
country or countries that have failed
to implement the recommendation.
(ii) Exception.--The Trade
Representative is not required to
revise the retaliation list or the
action described in clause (i) with
respect to a country, if--
(I) the Trade Representative
determines that implementation
of a recommendation made
pursuant to a dispute
settlement proceeding described
in clause (i) by the country is
imminent; or
(II) the Trade Representative
together with the petitioner
involved in the initial
investigation under this
chapter (or if no petition was
filed, the affected United
States industry) agree that it
is unnecessary to revise the
retaliation list.
``(C) Schedule for revising list or action.--
The Trade Representative shall, 120 days after
the date the retaliation list or other section
301(a) action is first taken, and every 180
days thereafter, review the list or action
taken and revise, in whole or in part, the list
or action to affect other goods of the subject
country or countries.
(D) Standards for revising list or action.--
In revising any list or action against a
country or countries under this subsection, the
Trade Representative shall act in a manner that
is most likely to result in the country or
countries implementing the recommendations
adopted in the dispute settlement proceeding or
in achieving a mutually satisfactory solution
to the issue that gave rise to the dispute
settlement proceeding. The Trade Representative
shall consult with the petitioner, if any,
involved in the initial investigation under
this chapter.
(E) Retaliation list.--The term ``retaliation
list'' means the list of products of a foreign
country or countries that have failed to comply
with the report of the panel or appellate Body
of the WTO and with respect to which the Trade
Representative is imposing duties above the
level that would otherwise be imposed under the
Harmonized Tariff Schedule of the United
States.
(F) Requirement to include reciprocal goods
on retaliation list.--The Trade Representative
shall include on the retaliation list, and on
any revised lists, reciprocal goods of the
industries affected by the failure of the
foreign country or countries to implement the
recommendation made pursuant to a dispute
settlement proceeding under the World Trade
Organization, except in cases where existing
retaliation and its corresponding preliminary
retaliation list do not already meet the
requirement.
(c) Consultations.--Before making any determination under
subsection (b), the Trade Representative shall--
(1) consult with the petitioner, if any, involved in
the initial investigation under this chapter and with
representatives of the domestic industry concerned; and
(2) provide an opportunity for the presentation of
views by interested persons.
SEC. 307. MODIFICATION AND TERMINATION OF ACTIONS.
(a) In General.--
(1) The Trade Representative may modify or terminate
any action, subject to the specific direction, if any,
of the President with respect to such action, that is
being taken under section 301 if--
(A) any of the conditions described in
section 301(a)(2) exist,
(B) the burden or restriction on United
States commerce of the denial rights, or of the
acts, policies, and practices, that are the
subject of such action has increased or
decreased, or
(C) such action is being taken under section
301(b) and is no longer appropriate.
(2) Before taking any action under paragraph (1) to
modify or terminate any action taken under section 301,
the Trade Representative shall consult with the
petitioner, if any, and with representatives of the
domestic industry concerned, and shall provide
opportunity for the presentation of views by other
interested persons affected by the proposed
modification or termination concerning the effects of
the modification or termination and whether any
modification or termination of the action is
appropriate.
(b) Notice; Report to Congress.--The Trade Representative
shall promptly publish in the Federal Register notice of, and
report in writing to the Congress with respect to, any
modification or termination of any action taken under section
301 and the reasons therefor.
(c) Review of Necessity.--
(1) If--
(A) a particular action has been taken under
section 301 during any 4-year period, and
(B) neither the petitioner nor any
representative of the domestic industry which
benefits from such action has submitted to the
Trade Representative during the last 60 days of
such 4-year period a written request for the
continuation of such action,
such action shall terminate at the close of such 4-year
period.
(2) The Trade Representative shall notify by mail the
petitioner and representatives of the domestic industry
described in paragraph (1)(B) of any termination of
action by reason of paragraph (1) at least 60 days
before the date of such termination.
(3) If a request is submitted to the Trade
Representative under paragraph (1)(B) to continue
taking a particular action under section 301, the Trade
Representative shall conduct a review of--
(A) the effectiveness in achieving the
objectives of section 301 of--
(i) such action, and
(ii) other actions that could be
taken (including actions against other
products or services), and
(B) the effects of such actions on the United
States economy, including consumers.
SEC. 308. REQUEST FOR INFORMATION.
(a) In General.--Upon receipt of written request therefor
from any person, the Trade Representative shall make available
to that person information (other than that to which
confidentiality applies) concerning--
(1) the nature and extent of a specific trade policy
or practice of a foreign country with respect to
particular goods, services, investment, or intellectual
property rights, to the extent that such information is
available to the Trade Representative, or other Federal
agencies;
(2) United States rights under any trade agreement
and the remedies which may be available under that
agreement and under the laws of the United States; and
(3) past and present domestic and international
proceedings or actions with respect to the policy or
practice concerned.
(b) If Information Not Available.--If information that is
requested by a person under subsection (a) is not available to
the Trade Representative or other Federal agencies, the Trade
Representative shall, within 30 days after receipt of the
request--
(1) request the information from the foreign
government; or
(2) decline to request the information and inform the
person in writing of the reasons for refusal.
(c) Certain Business Information Not Made Available.--
(1) Except as provided in paragraph (2), and
notwithstanding any other provision of law (including
section 552 of title 5, United States Code), no
information requested and received by the Trade
Representative in aid of any investigation under this
chapter shall be made available to any person if--
(A) the person providing such information
certifies that--
(i) such information is business
confidential,
(ii) the disclosure of such
information would endanger trade
secrets or profitability, and
(iii) such information is not
generally available;
(B) the Trade Representative determines that
such certification is well-founded; and
(C) to the extent required in regulations
prescribed by the Trade Representative, the
person providing such information provides an
adequate nonconfidential summary of such
information.
(2) The Trade Representative may--
(A) use such information, or make such
information available (in his own discretion)
to any employee of the Federal Government for
use, in any investigation under this chapter,
or
(B) may make such information available to
any other person in a form which cannot be
associated with, or otherwise identify, the
person providing the information.
SEC. 309. ADMINISTRATION.
The Trade Representative shall--
(1) issue regulations concerning the filing of
petitions and the conduct of investigations and
hearings under this subchapter,
(2) keep the petitioner regularly informed of all
determinations and developments regarding the
investigation conducted with respect to the petition
under this chapter, including the reasons for any undue
delays, and
(3) submit a report to the House of Representatives
and the Senate semiannually describing--
(A) the petitions filed and the
determinations made (and reasons therefor)
under section 302,
(B) developments in, and the current status
of, each investigation or proceeding under this
chapter,
(C) the actions taken, or the reasons for no
action, by the Trade Representative under
section 301 with respect to investigations
conducted under this chapter, and
(D) the commercial effects of actions taken
under section 301.
SEC. 310. IDENTIFICATION OF TRADE EXPANSION PRIORITIES.
(a) Identification.--
(1) Within 180 days after the submission in calendar
year 1995 of the report required by section 181(b), the
Trade Representative shall--
(A) review United States trade expansion
priorities,
(B) identify priority foreign country
practices, the elimination of which is likely
to have the most significant potential to
increase United States exports, either directly
or through the establishment of a beneficial
precedent, and
(C) submit to the Committee on Finance of the
Senate and the Committee on Ways and Means of
the House of Representatives and publish in the
Federal Register a report on the priority
foreign country practices identified.
(2) In identifying priority foreign country practices
under paragraph (1) of this section, the Trade
Representative shall take into account all relevant
factors, including--
(A) the major barriers and trade distorting
practices described in the National Trade
Estimate Report required under section 181(b);
(B) the trade agreements to which a foreign
country is a party and its compliance with
those agreements;
(C) the medium- and long-term implications of
foreign government procurement plans; and
(D) the international competitive position
and export potential of United States products
and services.
(3) The Trade Representative may include in the
report, if appropriate--
(A) a description of foreign country
practices that may in the future warrant
identification as priority foreign country
practices; and
(B) a statement about other foreign country
practices that were not identified because they
are already being addressed by provisions of
United States trade law, by existing bilateral
trade agreements, or as part of trade
negotiations with other countries and progress
is being made toward the elimination of such
practices.
(b) Initiation of Investigations.--By no later than the
date which is 21 days after the date on which a report is
submitted to the appropriate congressional committees under
subsection (a)(1), the Trade Representative shall initiate
under section 302(b)(1) investigations under this chapter with
respect to all of the priority foreign country practices
identified.
(c) Agreements for the Elimination of Barriers.--In the
consultations with a foreign country that the Trade
Representative is required to request under section 303(a) with
respect to an investigation initiated by reason of subsection
(b), the Trade Representative shall seek to negotiate an
agreement that provides for the elimination of the practices
that are the subject of the investigation as quickly as
possible or, if elimination of the practices is not feasible,
an agreement that provides for compensatory trade benefits.
(d) Reports.--The Trade Representative shall include in the
semiannual report required by section 309 a report on the
status of any investigations initiated pursuant to subsection
(b) and, where appropriate, the extent to which such
investigations have led to increased opportunities for the
export of products and services of the United States.
Sections 281 and 282 of the Uruguay Round Agreements Act, as amended
[19 U.S.C. 3571, 3572; P.L. 103-465, as amended by P.L. 104-295]
SEC. 281. SUBSIDIES ENFORCEMENT.
(a) Assistance Regarding Multilateral Subsidy Remedies.--The
administering authority shall provide information to the public
upon request, and, to the extent feasible, assistance and
advice to interested parties concerning--
(1) remedies and benefits available under relevant
provisions of the Subsidies Agreement, and
(2) the procedures relating to such remedies and
benefits.
(b) Prohibited Subsidies.--
(1) Notification of trade representative.--If the
administering authority determines pursuant to title
VII of the Tariff Act of 1930 that a class or kind of
merchandise is benefiting from a subsidy which is
prohibited under Article 3 of the Subsidies Agreement,
the administering authority shall notify the Trade
Representative and shall provide the Trade
Representative with the information upon which the
administering authority based its determination.
(2) Request by interested party regarding prohibited
subsidy.--An interested party may request that the
administering authority determine if there is reason to
believe that merchandise produced in a WTO member
country is benefiting from a subsidy which is
prohibited under Article 3 of the Subsidies Agreement.
The request shall contain such information as the
administering authority may require to support the
allegations contained in the request. If the
administering authority, after analyzing the request
and other information reasonably available to the
administering authority, determines that there is
reason to believe that such merchandise is benefiting
from a subsidy which is prohibited under Article 3 of
the Subsidies Agreement, the administering authority
shall so notify the Trade Representative, and shall
include supporting information with the notification.
(c) Subsidies Actionable Under the Agreement.--
(1) In general.--If the administering authority
determines pursuant to title VII of the Tariff Act of
1930 that a class or kind of merchandise is benefiting
from a subsidy described in Article 6.1 of the
Subsidies Agreement,\19\ the administering authority
shall notify the Trade Representative, and shall
provide the Trade Representative with the information
upon which the administering authority based its
determination.
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\19\ Article 6.1 of the Uruguay Round Subsides Agreement lapsed on
January 1, 2000.
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(2) Request by interested party regarding adverse
effects.--An interested party may request the
administering authority to determine if there is reason
to believe that a subsidy which is actionable under the
Subsidies Agreement is causing adverse effects. The
request shall contain such information as the
administering authority may require to support the
allegations contained in the request. At the request of
the administering authority, the Commission shall
assist the administering authority in analyzing the
information pertaining to the existence of such adverse
effects. If the administering authority, after
analyzing the request and other information reasonably
available to the administering authority, determines
that there is reason to believe that a subsidy which is
actionable under the Subsidies Agreement is causing
adverse effects, the administering authority shall so
notify the Trade Representative, and shall include
supporting information with the notification.
(d) Initiation of Section 301 Investigation.--On the basis
of the notification and information provided by the
administering authority pursuant to subsection (b) or (c), such
other information as the Trade Representative may have or
obtain, and where applicable, after consultation with an
interested party referred to in subsection (b)(2) or (c)(2),
the Trade Representative shall, unless such interested party
objects, determine as expeditiously as possible, in accordance
with the procedures in section 302(b)(1) of the Trade Act of
1974 (19 U.S.C. 2412(b)(1)), whether to initiate an
investigation pursuant to title III of that Act (19 U.S.C. 2411
et seq.). At the request of the Trade Representative, the
administering authority and the Commission shall assist the
Trade Representative in an investigation initiated pursuant to
this subsection.
(e) Nonactionable Subsidies.--
(1) Compliance with article 8 of the subsidies
agreement.--\20\
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\20\ Article 8 of the Uruguay Round Subsidies Agreement lapsed on
January 1, 2000.
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(A) Monitoring.--In order to monitor whether
a subsidy meets the conditions and criteria
described in Article 8.2 of the Subsidies
Agreement and is nonactionable, the Trade
Representative shall provide the administering
authority on a timely basis with any
information submitted or report made pursuant
to Article 8.3 or 8.4 of the Subsidies
Agreement regarding a notified subsidy program.
The administering authority shall review such
information and reports, and where appropriate,
shall recommend to the Trade Representative
that the Trade Representative seek pursuant to
Article 8.3 or 8.4 of the Subsidies Agreement
additional information regarding the notified
subsidy program or a subsidy granted pursuant
to the notified subsidy program. If the
administering authority has reason to believe
that a violation of Article 8 of the Subsidies
Agreement exists, the administering authority
shall so notify the Trade Representative, and
shall include supporting information with the
notification.
(B) Request by interested party regarding
violation of article 8.--An interested party
may request the administering authority to
determine if there is reason to believe that a
violation of Article 8 of the Subsidies
Agreement exists. The request shall contain
such information as the administering authority
may require to support the allegations
contained in the request. If the administering
authority, after analyzing the request and
other information reasonably available to the
administering authority, determines that
additional information is needed, the
administering authority shall recommend to the
Trade Representative that the Trade
Representative seek, pursuant to Article 8.3 or
8.4 of the Subsidies Agreement, additional
information regarding the particular notified
subsidy program or a subsidy granted pursuant
to the notified subsidy program. If the
administering authority determines that there
is reason to believe that a violation of
Article 8 of the Subsidies Agreement exists,
the administering authority shall so notify the
Trade Representative, and shall include
supporting information with the notification.
(C) Action by trade representative.--
(i) If the Trade Representative, on
the basis of the notification and
information provided by the
administering authority pursuant to
subparagraph (A) or (B), and such other
information as the Trade Representative
may have or obtain, and after
consulting with the interested party
referred to in subparagraph (B) and
appropriate domestic industries,
determines that there is reason to
believe that a violation of Article 8
of the Subsidies Agreement exists, the
Trade Representative shall invoke the
procedures of Article 8.4 or 8.5 of the
Subsidies Agreement.
(ii) For purposes of clause (i), the
Trade Representative shall determine
that there is reason to believe that a
violation of Article 8 exists in any
case in which the Trade Representative
determines that a notified subsidy
program or a subsidy granted pursuant
to a notified subsidy program does not
satisfy the conditions and criteria
required for a nonactionable subsidy
program under this Act, the Subsidies
Agreement, and the statement of
administrative action approved under
section 101(a).
(D) Notification of administering
authority.--The Trade Representative shall
notify the administering authority whenever a
violation of Article 8 of the Subsidies
Agreement has been found to exist pursuant to
Article 8.4 or 8.5 of that Agreement.
(2) Serious adverse effects.--
(A) Request by interested party.--An
interested party may request the administering
authority to determine if there is reason to
believe that serious adverse effects resulting
from a program referred to in Article 8.2 of
the Subsidies Agreement exist. The request
shall contain such information as the
administering authority may require to support
the allegations contained in the request.
(B) Action by administering authority.--
Within 90 days after receipt of the request
described in subparagraph (A), the
administering authority, after analyzing the
request and other information reasonably
available to the administering authority, shall
determine if there is reason to believe that
serious adverse effects resulting from a
program referred to in Article 8.2 of the
Subsidies Agreement exist. If the determination
of the administering authority is affirmative,
it shall so notify the Trade Representative and
shall include supporting information with the
notification. The Commission shall assist the
administering authority in analyzing the
information pertaining to the existence of such
serious adverse effects if the administering
authority requests the Commission's assistance.
If the subsidy program that is alleged to
result in serious adverse effects has been the
subject of a countervailing duty investigation
or review under subtitle A or C of title VII of
the Tariff Act of 1930, the administering
authority shall take into account the
determinations made by the administering
authority and the Commission in such
investigation or review and the administering
authority shall complete its analysis as
expeditiously as possible.
(C) Action by trade representative.--The
Trade Representative, on the basis of the
notification and information provided by the
administering authority pursuant to
subparagraph (B), and such other information as
the Trade Representative may have or obtain,
shall determine as expeditiously as possible,
but not later than 30 days after receipt of the
notification provided by the administering
authority, if there is reason to believe that
serious adverse effects exist resulting from
the subsidy program which is the subject of the
administering authority's notification. The
Trade Representative shall make an affirmative
determination regarding the existence of such
serious adverse effects unless the Trade
Representative finds that the notification of
the administering authority is not supported by
the facts.
(D) Consultations.--If the Trade
Representative determines that there is reason
to believe that serious adverse effects
resulting from the subsidy program exist, the
Trade Representative, unless the interested
party referred to in subparagraph (A) objects,
shall invoke the procedures of Article 9 of the
Subsidies Agreement, and shall request
consultations pursuant to Article 9.2 of the
Subsidies Agreement with respect to such
serious adverse effects. If such consultations
have not resulted in a mutually acceptable
solution within 60 days after the request is
made for such consultations, the Trade
Representative shall refer the matter to the
Subsidies Committee pursuant to Article 9.3 of
the Subsidies Agreement.
(E) Determination by subsidies committee.--If
the Trade Representative determines that--
(i) the Subsidies Committee has been
prevented from making an affirmative
determination regarding the existence
of serious adverse effects under
Article 9 of the Subsidies Agreement by
reason of the refusal of the WTO member
country with respect to which the
consultations have been invoked to join
in an affirmative consensus--
(I) that such serious adverse
effects exist, or
(II) regarding a
recommendation to such WTO
member country to modify the
subsidy program in such a way
as to remove the serious
adverse effects, or
(ii) the Subsidies Committee has not
presented its conclusions regarding the
existence of such serious adverse
effects within 120 days after the date
the matter was referred to it, as
required by Article 9.4 of the
Subsidies Agreement,
the Trade Representative shall, within 30 days after
such determination, make a determination under section
304(a)(1) of the Trade Act of 1974 (19 U.S.C.
2414(a)(1)) regarding what action to take under section
301(a)(1)(A) of that Act.
(F) Noncompliance with committee
recommendation.--In the event that the
Subsidies Committee makes a recommendation
under Article 9.4 of the Subsidies Agreement
and the WTO member country with respect to
which such recommendation is made does not
comply with such recommendation within 6 months
after the date of the recommendation, the Trade
Representative shall make a determination under
section 304(a)(1) of the Trade Act of 1974 (19
U.S.C. 2414(a)(1)) regarding what action to
take under section 301(a) of that Act.
(f) Notification, Consultation, and Publication.--\21\
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\21\ Paragraphs (1), (2), and (3) of subsection (f) refer to
Article 8 of the Uruguary Round Subsidies Agreement, which lapsed on
January 1, 2000.
---------------------------------------------------------------------------
(1) Notification of congress.--The Trade
Representative shall submit promptly to the Committee
on Ways and Means of the House of Representatives, the
Committee on Finance of the Senate, and other
appropriate committees of the Congress any information
submitted or report made pursuant to Article 8.3 or 8.4
of the Subsidies Agreement regarding a notified subsidy
program.
(2) Publication in the federal register.--The
administering authority shall publish regularly in the
Federal Register a summary notice of any information
submitted or report made pursuant to Article 8.3 or 8.4
of the Subsidies Agreement regarding notified subsidy
programs.
(3) Consultations with congress and private sector.--
The Trade Representative and the administering
authority promptly shall consult with the committees
referred to in paragraph (1), and with interested
representatives of the private sector, regarding all
information submitted or reports made pursuant to
Article 8.3 or 8.4 of the Subsidies Agreement regarding
a notified subsidy program.
(4) Annual report.--Not later than February 1 of each
year beginning in 1996, the Trade Representative and
the administering authority shall issue a joint report
to the Congress detailing--
(A) the subsidies practices of major trading
partners of the United States, including
subsidies that are prohibited, are causing
serious prejudice, or are nonactionable, under
the Subsidies Agreement, and
(B) the monitoring and enforcement activities
of the Trade Representative and the
administering authority during the preceding
calendar year which relate to subsidies
practices.
(g) Cooperation of Other Agencies.--All agencies,
departments, and independent agencies of the Federal Government
shall cooperate fully with one another in carrying out the
provisions of this section, and, upon the request of the
administering authority, shall furnish to the administering
authority all records, papers, and information in their
possession which relate to the requirements of this section.
(h) Definitions.--For purposes of this section--\22\
---------------------------------------------------------------------------
\22\ Paragraphs (5), (6), (7), and (12) refer to Article 8 of the
Uruguary Round Subsidies Agreement, which lapsed an January 1, 2000.
---------------------------------------------------------------------------
(1) Adverse effects.--The term ``adverse effects''
has the meaning given that term in Articles 5(a) and
5(c) of the Subsidies Agreement.
(2) Administering authority.--The term
``administering authority'' has the meaning given that
term in section 771(1) of the Tariff Act of 1930 (19
U.S.C. 1677(1)).
(3) Commission.--The term ``Commission'' means the
United States International Trade Commission.
(4) Interested party.--The term ``interested party''
means a party described in subparagraph (C), (D), (E),
(F), or (G) of section 771(9) of the Tariff Act of 1930
(19 U.S.C. 1677(9) (C), (D), (E), (F), or (G)).
(5) Nonactionable subsidy.--The term ``nonactionable
subsidy'' means a subsidy described in Article 8.1(b)
of the Subsidies Agreement.
(6) Notified subsidy program.--The term ``notified
subsidy program'' means a subsidy program which has
been notified pursuant to Article 8.3 of the Subsidies
Agreement.
(7) Serious adverse effects.--The term ``serious
adverse effects'' has the meaning given that term in
Article 9.1 of the Subsidies Agreement.
(8) Subsidies agreement.--The term ``Subsidies
Agreement'' means the Agreement on Subsidies and
Countervailing Measures described in section 771(8) of
the Tariff Act of 1930 (19 U.S.C. 1677(8)).
(9) Subsidies committee.--The term ``Subsidies
Committee'' means the committee established pursuant to
Article 24 of the Subsidies Agreement.
(10) Subsidy.--The term ``subsidy'' has the meaning
given that term in Article 1 of the Subsidies
Agreement.
(11) Trade representative.--The term ``Trade
Representative'' means the United States Trade
Representative.
(12) Violation of article 8.--The term ``violation of
Article 8'' means the failure of a notified subsidy
program or an individual subsidy granted pursuant to a
notified subsidy program to meet the applicable
conditions and criteria described in Article 8.2 of the
Subsidies Agreement.
(i) Treatment of Proprietary Information.--Notwithstanding
any other provision of law, the administering authority may
provide the Trade Representative with a copy of proprietary
information submitted to, or obtained by, the administering
authority that the Trade Representative considers relevant in
carrying out its responsibilities under this part. The Trade
Representative shall protect from public disclosure proprietary
information obtained from the administering authority under
this part.
SEC. 282. REVIEW OF SUBSIDIES AGREEMENT.
(a) General Objectives.--The general objectives of the United
States under this part are--
(1) to ensure that parts II and III of the Agreement
on Subsidies and Countervailing Measures referred to in
section 101(d)(12) (hereafter in this section referred
to as the ``Subsidies Agreement'') are effective in
disciplining the use of subsidies and in remedying the
adverse effects of subsidies, and
(2) to ensure that part IV of the Subsidies Agreement
does not undermine the benefits derived from any other
part of that Agreement.
(b) Specific Objective.--The specific objective of the United
States under this part shall be to create a mechanism which
will provide for an ongoing review of the operation of part IV
of the Subsidies Agreement.
(c) Sunset of Noncountervailable Subsidies Provisions.--
(1) In general.--Subparagraphs (B), (C), (D), and (E)
of section 771(5B) of the Tariff Act of 1930 shall
cease to apply as provided in subparagraph (G)(i) of
such section, unless, before the date referred to in
such subparagraph (G)(i)--
(A) the Subsidies Committee determines to
extend Articles 6.1, 8, and 9 of the Subsidies
Agreement as in effect on the date on which the
Subsidies Agreement enters into force or in a
modified form, in accordance with Article 31 of
such Agreement,
(B) the President consults with the Congress
in accordance with paragraph (2), and
(C) an implementing bill is submitted and
enacted into law in accordance with paragraphs
(3) and (4).
(2) Consultation with congress before subsidies
committee agrees to extend.--Before a determination is
made by the Subsidies Committee to extend Articles 6.1,
8, and 9 of the Subsidies Agreement, the President
shall consult with the Committee on Ways and Means of
the House of Representatives and the Committee on
Finance of the Senate regarding such extension.
(3) Implementation of extension.--
(A) Notification and submission.--Any
extension of subparagraphs (B), (C), (D), and
(E) of section 771(5B) of the Tariff Act of
1930 shall take effect if (and only if)--
(i) after the Subsidies Committee
determines to extend Articles 6.1, 8,
and 9 of the Subsidies Agreement, the
President submits to the committees
referred to in paragraph (2) a copy of
the document describing the terms of
such extension, together with--
(I) a draft of an
implementing bill,
(II) a statement of any
administrative action proposed
to implement the extension, and
(III) the supporting
information described in
subparagraph (C); and
(ii) the implementing bill is enacted
into law.
(B) Implementing bill.--The implementing bill
referred to in subparagraph (A) shall contain
only those provisions that are necessary or
appropriate to implement an extension of the
provisions of section 771(5B) (B), (C), (D),
and (E) of the Tariff Act of 1930 as in effect
on the day before the date of the enactment of
the implementing bill or as modified to reflect
the determination of the Subsidies Committee to
extend Articles 6.1, 8, and 9 of the Subsidies
Agreement.
(C) Supporting information.--The supporting
information required under subparagraph
(A)(i)(III) consists of--
(i) an explanation as to how the
implementing bill and proposed
administrative action will change or
affect existing law; and
(ii) a statement regarding--
(I) how the extension serves
the interests of United States
commerce, and
(II) why the implementing
bill and proposed
administrative action is
required or appropriate to
carry out the extension.
[(4) Application of congressional ``fast track''
procedures to implementing bill.--Amendments to section
151 of the Trade Act of 1974.]
(5) Report by the trade representative.--Not later
than the date referred to in section 771(5B)(G)(i) of
the Tariff Act of 1930, the Trade Representative shall
submit to the Congress a report setting forth the
provisions of law which were enacted to implement
Articles 6.1, 8, and 9 of the Subsidies Agreement and
should be repealed or modified if such provisions are
not extended.
(d) Review of the Operation of the Subsidies Agreement.--The
Secretary of Commerce, in consultation with other appropriate
departments and agencies of the Federal Government, shall
undertake an ongoing review of the operation of the Subsidies
Agreement. The review shall address--
(1) the effectiveness of part II of the Subsidies
Agreement in disciplining the use of subsidies which
are prohibited under Article 3 of the Agreement,
(2) the effectiveness of part III and, in particular,
Article 6.1 of the Subsidies Agreement, in remedying
the adverse effects of subsidies which are actionable
under the Agreement, and
(3) the extent to which the provisions of part IV of
the Subsidies Agreement may have undermined the
benefits derived from other parts of the Agreement,
and, in particular--
(A) the extent to which WTO member countries
have cooperated in reviewing and improving the
operation of part IV of the Subsidies
Agreement,
(B) the extent to which the provisions of
Articles 8.4 and 8.5 of the Subsidies Agreement
have been effective in identifying and
remedying violations of the conditions and
criteria described in Article 8.2 of the
Agreement, and
(C) the extent to which the provisions of
Article 9 of the Subsidies Agreement have been
effective in remedying the serious adverse
effects of subsidy programs described in
Article 8.2 of the Agreement.
Not later than 4 years and 6 months after the date of the
enactment of this Act, the Secretary of Commerce shall submit
to the Congress a report on the review required under this
subsection.
Section 307(b) of the Trade and Tariff Act of 1984
[19 U.S.C. 2114d; P.L. 98-573, and P.L. 99-514]
SEC. 307. NEGOTIATING AUTHORITY WITH RESPECT TO FOREIGN DIRECT
INVESTMENT.
* * * * * * *
(b)(1) If the United States Trade Representative, with the
advice of the committee established by section 242 of the Trade
Expansion [Act] of 1962 (19 U.S.C. 1872), determines that
action by the United States is appropriate to respond to any
export performance requirements of any foreign country or
instrumentality that adversely affect the economic interests of
the United States, then the United States Trade Representative
shall seek to obtain the reduction and elimination of such
export performance requirements through consultations and
negotiations with the foreign country or instrumentality
concerned.
(2) In addition to the action referred to in paragraph (1),
the United States Trade Representative may impose duties or
other import restrictions on the products or services of such
foreign country or instrumentality for such time as he
determines appropriate, including the exclusion from entry into
the United States of products subject to such requirements.
(3) Nothing in paragraph (2) shall apply to any products or
services with respect to which--
(A) any foreign direct investment (including a
purchase of land or facilities) has been made directly
or indirectly by any United States person before the
date of enactment of this Act, or
(B) any written commitment relating to a foreign
direct investment that is binding on the date of
enactment of this Act has been made directly or
indirectly by any United States person.
(4) Whenever the international obligations of the United
States and actions taken under paragraph (2) make compensation
necessary or appropriate, compensation may be provided by the
United States Trade Representative subject to the limitations
and conditions contained in section 123 of the Trade Act of
1974 (19 U.S.C. 2133) for providing compensation for actions
taken under section 203 of that Act.
Foreign Air Transportation: Section 2 of the International Air
Transportation Fair Competitiveness Act of 1974, as amended, and the
Federal Aviation Act of 1958, as amended
[49 U.S.C. 41310 (previously codified as 49 App. U.S.C. 1159b); P.L.
85-726, P.L. 103-272, P.L. 104-287, and P.L. 106-181]
SEC. 41310. DISCRIMINATORY PRACTICES.
(a) Prohibition.--An air carrier or foreign air carrier may
not subject a person, place, port, or type of traffic in
foreign air transportation to unreasonable discrimination.
(b) Review and Negotiation of Discriminatory Foreign
Charges.--(1) The Secretary of Transportation shall survey
charges imposed on an air carrier by the government of a
foreign country or another foreign entity for the use of
airport property or airway property in foreign air
transportation. If the Secretary of Transportation decides that
a charge is discriminatory, the Secretary promptly shall report
the decision to the Secretary of State. The Secretaries of
State and Transportation promptly shall begin negotiations with
the appropriate government to end the discrimination. If the
discrimination is not ended in a reasonable time through
negotiation, the Secretary of Transportation shall establish a
compensating charge equal to the discriminatory charge. With
the approval of the Secretary of State, the Secretary of the
Treasury shall impose the compensating charge on a foreign air
carrier of that country as a condition to accepting the general
declaration of the aircraft of the foreign air carrier when it
lands or takes off.
(2) The Secretary of the Treasury shall maintain an account
to credit money collected under paragraph (1) of this
subsection. An air carrier shall be paid from the account an
amount certified by the Secretary of Transportation to
compensate the air carrier for the discriminatory charge paid
to the government.
(c) Actions Against Discriminatory Activity.--(1) The
Secretary of Transportation may take actions the Secretary
considers are in the public interest to eliminate an activity
of a government of a foreign country or another foreign entity,
including a foreign air carrier, when the Secretary, on the
initiative of the Secretary or on complaint, decides that the
activity--
(A) is an unjustifiable or unreasonable
discriminatory, predatory, or anticompetitive practice
against an air carrier; or
(B) imposes an unjustifiable or unreasonable
restriction on access of an air carrier to a foreign
market.
(2) The Secretary of Transportation may deny, amend,
modify, suspend, revoke, or transfer under paragraph (1) of
this subsection a foreign air carrier permit or tariff under
section 41302, 41303, 41304(a), 41504(c), 41507, or 41509 of
this title [Sections 402, 403, 801, and 1002 of the Federal
Aviation Act of 1958, as amended].
(d) Filing of, and Acting on, Complaints.--(1) An air
carrier computer reservations system firm, or a department,
agency, or instrumentality of the United States Government may
file a complaint under subsection (c) or (g) of this section
with the Secretary of Transportation. The Secretary shall
approve, deny, or dismiss the complaint, set the complaint for
a hearing or investigation, or begin another proceeding
proposing remedial action not later than 60 days after
receiving the complaint. The Secretary may extend the period
for acting for additional periods totaling not more than 30
days if the Secretary decides that with additional time it is
likely that a complaint can be resolved satisfactorily through
negotiations with the government of the foreign country or
foreign entity. The Secretary must act not later than 90 days
after receiving the complaint. However, the Secretary may
extend this 90-day period for not more than an additional 90
days if, on the last day of the initial 90-day period, the
Secretary finds that--
(A) negotiations with the government have progressed
to a point that a satisfactory resolution of the
complaint appears imminent;
(B) an air carrier has not been subjected to economic
injury by the government or entity as a result of
filing the complaint; and
(C) the public interest requires additional time
before the Secretary acts on the complaint.
(2) In carrying out paragraph (1) of this subsection and
subsection (c) of this section, the Secretary of Transportation
shall--
(A) solicit the views of the Secretaries of Commerce
and State and the United States Trade Representative;
(B) give an affected air carrier or foreign air
carrier reasonable notice and an opportunity to submit
written evidence and arguments within the time limits
of this subsection; and
(C) submit to the President under section 41307 or
41509(f) of this title [Section 801 of the Federal
Aviation Act of 1958, as amended] actions proposed by
the Secretary of Transportation.
(e) Review.--(1) the Secretaries of State, the Treasury,
and Transportation and the heads of other departments,
agencies, and instrumentalities of the Government shall keep
under review, to the extent of each of their jurisdictions,
each form of discrimination or unfair competitive practice to
which an air carrier is subject when providing foreign air
transportation or a computer reservations system firm is
subject when providing service with respect to airline service.
Each Secretary and head shall--
(A) take appropriate action to eliminate any
discrimination or unfair competitive practice found to
exist; and
(B) request Congress to enact legislation when the
authority to eliminate the discrimination or unfair
practice is inadequate.
(2) The Secretary of Transportation shall report to
Congress annually on each action taken under paragraph (1) of
this subsection and on the continuing program to eliminate
discrimination and unfair competitive practices. The
Secretaries of State and the Treasury each shall give the
Secretary of Transportation information necessary to prepare
the report.
(f) Reports.--Not later than 30 days after acting on a
complaint under this section, the Secretary of Transportation
shall report to the Committee on Transportation and
Infrastructure of the House of Representatives and the
Committee on Commerce, Science, and Transportation of the
Senate on action taken under this section on the complaint.
(g) Actions against discriminatory activity by foreign CRS
systems.--The Secretary of Transportation may take such actions
as the Secretary considers are in the public interest to
eliminate an activity of a foreign air carrier that owns or
markets a computer reservations system, or of a computer
reservations system firm whose principal offices are located
outside the United States, when the Secretary, on the
initiative of the Secretary or on complaint, decides that the
activity, with respect to airline service--
(1) is an unjustifiable or unreasonable discriminatory,
predatory, or anticompetitive practice against a computer
reservations system firm whose principal offices are located
outside the United States, when the Secretary, on the
initiative of the Secretary or on complaint, decides that the
activity, with respect to airline service--
(2) imposes an unjustifiable or unreasonable restriction
on access of such a computer reservations system to a foreign
market.
Section 19 of the Merchant Marine Act of 1920, as amended
[46 App. U.S.C. 876; Act June 5, 1920, as amended by Act June 29, 1936,
Reorganization Plan No. 21 of 1950, Reorganization Plan No. 7 of 1961;
P.L. 97-31; P.L. 101-595, P.L. 102-587, and P.L. 105-258]
Sec. 19. (a) The Secretary of Transportation is authorized
and directed in aid of the accomplishment of the purposes of
this Act--
(1) To make all necessary rules and regulations to
carry out the provisions of this Act;
And the Federal Maritime Commission is authorized and
directed in aid of the accomplishment of the purposes
of this Act:
(2) To make rules and regulations affecting shipping
in the foreign trade not in conflict with law in order
to adjust or meet general or special conditions
unfavorable to shipping in the foreign trade, whether
in any particular trade or upon any particular route or
in commerce generally, including intermodal movements,
terminal operations, cargo solicitation, agency
services, ocean transportation intermediary services
and operations, and other activities and services
integral to transportation systems, and which arise out
of or result from foreign laws, rules, or regulations
or from competitive methods, pricing practices, or
other practices employed by owners, operators, agents,
or masters of vessels of a foreign country; and
(3) To request the head of any department, board,
bureau, or agency of the Government to suspend, modify,
or annul rules or regulations which have been
established by such department, board, bureau, or
agency, or to make new rules or regulations affecting
shipping in the foreign trade other than such rules or
regulations relating to the Public Health Service, the
Consular Service, and the Steamboat Inspection Service.
(b) No rule or regulation shall be established by any
department, board, bureau, or agency of the Government which
affects shipping in the foreign trade, except rules or
regulations affecting the Public Health Service, the Consular
Service, and the Steamboat Inspection Service, until such rule
or regulation has been submitted to the board [Federal Maritime
Commission] for its approval and final action has been taken
thereon by the board or the President.
(c) Whenever the head of any department, board, bureau, or
agency of the Government refuses to suspend, modify, or annul
any rule or regulation, or make a new rule or regulation upon
request of the board [Federal Maritime Commission], as provided
in subsection (a)(3) of this section, or objects to the
decision of the board in respect to the approval of any rule or
regulation, as provided in subsection (b) of this section,
either the board or the head of the department, board, bureau,
or agency which has established or is attempting to establish
the rule or regulation in question may submit the facts to the
President, who is hereby authorized to establish or suspend,
modify, or annul such rule or regulation.
(d) No rule or regulation shall be established which in any
manner gives vessels owned by the United States any preference
or favor over those vessels documented under the laws of the
United States and owned by persons who are citizens of the
United States.
(e) The Commission may initiate a rule or regulation under
subsection (a)(2) of this section either on its own motion or
pursuant to a petition. Any person, including a common carrier,
tramp operator, bulk operator, shipper, shippers' association,
ocean transportation intermediary, marine terminal operator, or
any component of the Government of the United States, may file
a petition for relief under subsection (a)(2) of this section.
(f) In furtherance of the purposes of subsection (a)(2) of
this section--
(1) the Commission may, by order, require any person
(including any common carrier, tramp operator, bulk
operator, shipper, shippers' association, ocean
transportation intermediary or marine terminal
operator, or an officer, receiver, trustee, lessee,
agent, or employee thereof) to file with the Commission
a report, answers to questions, documentary material,
or other information which the Commission considers
necessary or appropriate;
(2) the Commission may require a report or answers to
questions to be made under oath;
(3) the Commission may prescribe the form and the
time for response to a report and answers to questions;
and
(4) a person who fails to file a report, answer,
documentary material, or other information required
under this paragraph shall be liable to the United
States Government for a civil penalty of not more than
$5,000 for each day that the information is not
provided.
(g) In proceedings under subsection (a)(2) of this
section--
(1) the Commission may authorize a party to use
depositions, written interrogatories, and discovery
procedures that, to the extent practicable, are in
conformity with the rules applicable in civil
proceedings in the district courts of the United
States;
(2) the Commission may by subpoena compel the
attendance of witnesses and the production of books,
papers, documents, and other evidence;
(3) subject to funds being provided by appropriations
Acts, witnesses are, unless otherwise prohibited by
law, entitled to the same fees and mileage as in the
courts of the United States;
(4) for failure to supply information ordered to be
produced or compelled by subpoena under paragraph (2)
of this section, the Commission may--
(A) after notice and an opportunity for
hearing, suspend tariffs and service contracts
of a common carrier or that common carrier's
right to use tariffs of conferences and service
contracts of agreements of which it is a
member, or
(B) assess a civil penalty of not more than
$5,000 for each day that the information is not
provided; and
(5) when a person violates an order of the Commission
or fails to comply with a subpoena, the Commission may
seek enforcement by a United States district court
having jurisdiction over the parties, and if, after
hearing, the court determines that the order was
regularly made and duly issued, it shall enforce the
order by an appropriate injunction or other process,
mandatory or otherwise.
(h) Notwithstanding any other law, the Commission may
refuse to disclose to the public a response or other
information provided under the terms of this section.
(i) If the Commission finds that conditions that are
unfavorable to shipping under subsection (a)(2) of this section
exist, the Commission may--
(1) limit sailings to and from United States ports or
the amount or type of cargo carried;
(2) suspend, in whole or in part, tariffs and service
contracts for carriage to or from United States ports,
including a common carrier's right to use tariffs of
conferences and service contracts of agreements in
United States trades of which it is a member for any
period the Commission specifies;
(3) suspend, in whole or in part, an ocean common
carrier's right to operate under an agreement filed
with the Commission, including any agreement
authorizing preferential treatment at terminals,
preferential terminal leases, space chartering, or
pooling of cargoes or revenue with other ocean common
carriers;
(4) impose a fee, not to exceed $1,000,000 per
voyage; or
(5) take any other action the Commission finds
necessary and appropriate to adjust or meet any
condition unfavorable to shipping in the foreign trade
of the United States.
(j) Upon request by the Commission--
(1) the collector of customs at the port or place of
destination in the United States shall refuse the
clearance required by section 4197 of the Revised
Statutes (46 App. U.S.C. 91) to a vessel of a country
that is named in a rule or regulation issued by the
Commission under subsection (a)(2) of this section, and
shall collect any fees imposed by the Commission under
subsection (i)(4) of this section; and
(2) the Secretary of the department in which the
Coast Guard is operating shall deny entry for purpose
of oceanborne trade, of a vessel of a country that is
named in a rule or regulation issued by the Commission
under subsection (a)(2) of this section, to any port or
place in the United States or the navigable waters of
the United States, or shall detain that vessel at the
port or place in the United States from which it is
about to depart for another port or place in the United
States.
(k) A common carrier that accepts or handles cargo for
carriage under a tariff or service contract that has been
suspended under subsection (g)(4) or (i)(2) of this section, or
after its right to use another tariff or service contract has
been suspended under those paragraphs, is subject to a civil
penalty of not more than $50,000 for each day that it is found
to be operating under a suspended tariff or service contract.
(l) The Commission may consult with, seek the cooperation
of, or make recommendations to other appropriate Government
agencies prior to taking any action under this section.
Section 10002 of the Foreign Shipping Practices Act of 1988
[46 App. U.S.C. 1710a; P.L. 100-418, and P.L. 105-258]
SEC. 10002. FOREIGN LAWS AND PRACTICES.
(a) Definitions.--For purposes of this section--
(1) ``common carrier'', ``marine terminal operator'',
``ocean transportation intermediary'', ``ocean common
carrier'', ``person'', ``shipper'', ``shippers'
association'', and ``United States'' have the meanings
given each such term, respectively, in section 3 of the
Shipping Act of 1984 (46 App. U.S.C. 1702);
(2) ``foreign carrier'' means an ocean common carrier
a majority of whose vessels are documented under the
laws of a country other than the United States;
(3) ``maritime services'' means port-to-port carriage
of cargo by the vessels operated by ocean common
carriers;
(4) ``maritime-related services'' means intermodal
operations, terminal operations, cargo solicitation,
agency services, ocean transportation intermediary
services and operations, and all other activities and
services integral to total transportation systems of
ocean common carriers and their foreign domiciled
affiliates on their own and others' behalf;
(5) ``United States carrier'' means an ocean common
carrier which operates vessels documented under the
laws of the United States; and
(6) ``United States oceanborne trade'' means the
carriage of cargo between the United States and a
foreign country, whether direct or indirect, by an
ocean common carrier.
(b) Authority To Conduct Investigations.--The Federal
Maritime Commission shall investigate whether any laws, rules,
regulations, policies, or practices of foreign governments, or
any practices of foreign carriers or other persons providing
maritime or maritime-related services in a foreign country
result in the existence of conditions that--
(1) adversely affect the operations of United States
carriers in United States oceanborne trade; and
(2) do not exist for foreign carriers of that country
in the United States under the laws of the United
States or as a result of acts of United States carriers
or other persons providing maritime or maritime-related
services in the United States.
(c) Investigations.--(1) Investigations under subsection
(b) of this section may be initiated by the Commission on its
own motion or on the petition of any person, including any
common carrier, shipper, shippers' association, ocean
transportation intermediary, or marine terminal operator, or
any branch, department, agency, or other component of the
Government of the United States.
(2) The Commission shall complete any such investigation
and render a decision within 120 days after it is initiated,
except that the Commission may extend such 120-day period for
an additional 90 days if the Commission is unable to obtain
sufficient information to determine whether a condition
specified in subsection (b) of this section exists. Any notice
providing such an extension shall clearly state the reasons for
such extension.
(d) Information Requests.--(1) In order to further the
purposes of subsection (b) of this section, the Commission may,
by order, require any person (including any common carrier,
shipper, shippers' association, ocean transportation
intermediary, or marine terminal operator, or any officer,
receiver, trustee, lessee, agent or employee thereof) to file
with the Commission any periodic or special report, answers to
questions, documentary material, or other information which the
Commission considers necessary or appropriate. The Commission
may require that the response to any such order shall be made
under oath. Such response shall be furnished in the form and
within the time prescribed by the Commission.
(2) In an investigation under subsection (b) of this
section, the Commission may issue subpoenas to compel the
attendance and testimony of witnesses and the production of
records or other evidence.
(3) Notwithstanding any other provision of law, the
Commission may, in its discretion, determine that any
information submitted to it in response to a request under this
subsection, or otherwise, shall not be disclosed to the public.
(e) Action Against Foreign Carriers.--(1) Whenever, after
notice and opportunity for comment or hearing, the Commission
determines that the conditions specified in subsection (b) of
this section exist, the Commission shall take such action as it
considers necessary and appropriate against any foreign carrier
that is a contributing cause to, or whose government is a
contributing cause to, such conditions, in order to offset such
conditions. Such action may include--
(A) limitations on sailings to and from United States
ports or on the amount or type of cargo carried;
(B) suspension, in whole or in part, of any or all
tariffs and service contracts, including the right of
an ocean common carrier to use any or all tariffs of
conferences in United States trades of which it is a
member for such period as the Commission specifies;
(C) suspension, in whole or in part, of the right of
an ocean common carrier to operate under any agreement
filed with the Commission, including agreements
authorizing preferential treatment at terminals,
preferential terminal leases, space chartering, or
pooling of cargo or revenues with other ocean common
carriers; and
(D) a fee, not to exceed $1,000,000 per voyage.
(2) The Commission may consult with, seek the cooperation
of, or make recommendations to other appropriate Government
agencies prior to taking any action under this subsection.
(3) Before a determination under this subsection becomes
effective or a request is made under subsection (f) of this
section, the determination shall be submitted immediately to
the President who may, within 10 days after receiving such
determination, disapprove the determination in writing, setting
forth the reasons for the disapproval, if the President finds
that disapproval is required for reasons of the national
defense or the foreign policy of the United States.
(f) Actions Upon Request of the Commission.--Whenever the
conditions specified in subsection (b) of this section are
found by the Commission to exist, upon the request of the
Commission--
(1) the collector of customs at any port or place of
destination in the United States shall refuse the
clearance required by section 4197 of the Revised
Statutes (46 App. U.S.C. 91) to any vessel of a foreign
carrier that is identified by the Commission under
subsection (e) of this section; and
(2) the Secretary of the department in which the
Coast Guard is operating shall deny entry, for purposes
of oceanborne trade, of any vessel of a foreign carrier
that is identified by the Commission under subsection
(e) of this section to any port or place in the United
States or the navigable waters of the United States, or
shall detain any such vessel at the port or place in
the United States from which it is about to depart for
any other port or place in the United States.
(g) Report.--The Commission shall include in its annual
report to Congress--
(1) a list of the twenty foreign countries which
generated the largest volume of oceanborne liner cargo
for the most recent calendar year in bilateral trade
with the United States;
(2) an analysis of conditions described in subsection
(b) of this section being investigated or found to
exist in foreign countries;
(3) any actions being taken by the Commission to
offset such conditions;
(4) any recommendations for additional legislation to
offset such conditions; and
(5) a list of petitions filed under subsection (c) of
this section that the Commission rejected, and the
reasons for each such rejection.
(h) The actions against foreign carriers authorized in
subsections (e) and (f) of this section may be used in the
administration and enforcement of section 13(b)(6) of the
Shipping Act of 1984 (46 App. U.S.C. 1712(b)(6)) or section
19(1)(b) of the Merchant Marine Act, 1920 (46 App. U.S.C. 876).
(i) Any rule, regulation or final order of the Commission
issued under this section shall be reviewable exclusively in
the same forum and in the same manner as provided in section
2342(3)(B) of title 28, United States Code.
C. UNFAIR PRACTICES IN IMPORT TRADE
Section 337 of the Tariff Act of 1930, as amended
[19 U.S.C. 1337; P.L. 71-361, as amended by P.L. 85-686, P.L. 93-618,
P.L. 96-39, P.L. 96-417, P.L. 97-164, P.L. 98-620, P.L. 100-418, P.L.
100-647, P.L. 102-563, P.L. 102-572, P.L. 103-465, P.L. 104-295, P.L.
106-113]
SEC. 337. UNFAIR PRACTICES IN IMPORT TRADE.
(a) Unfair Methods of Competition Declared Unlawful.--
(1) Subject to paragraph (2), the following are
unlawful, and when found by the Commission to exist
shall be dealt with, in addition to any other provision
of law, as provided in this section:
(A) unfair methods of competition and unfair
acts in the importation of articles (other than
articles provided for in subparagraphs (B),
(C), (D), and (E) into the United States, or in
the sale of such articles by the owner,
importer, or consignee, the threat or effect or
which is--
(i) to destroy or substantially
injure an industry in the United
States;
(ii) to prevent the establishment of
such an industry; or
(iii) to restrain or monopolize trade
and commerce in the United States.
(B) the importation into the United States,
the sale for importation, or the sale within
the United States after importation by the
owner, importer, or consignee of articles
that--
(i) infringe a valid and enforceable
United States patent or a valid and
enforceable United States copy-right
registered under title 17, United
States Code; or
(ii) are made, produced, processed,
or mined under, or by means of, a
process covered by the claims of a
valid and enforceable United States
patent.
(C) the importation into the United States,
the sale for importation, or the sale within
the United States after importation by the
owner, importer, or consignee, of articles that
infringe a valid and enforceable United States
trademark registered under the Trademark Act of
1946.
(D) the importation into the United States,
the sale for importation or the sale within the
United States after importation by the owner,
importer, or consignee, of a semiconductor chip
product in a manner that constitutes
infringement of a mask work registered under
chapter 9 of title 17, United States Code.
(E) the importation into the United States,
the sale for importation, or the sale within
the United States after importation by the
owner, importer, or consigner, of an article
that constitutes infringement of the exclusive
rights in a design protected under chapter 13
of title 17, United States Code.
(2) Subparagraphs (B), (C), and (D) of paragraph (1)
apply only if an industry in the United States,
relating to the articles protected by the patent,
copyright, trademark, mask work, or design concerned,
exists or is in the process of being established.
(3) For purposes of paragraph (2), an industry in the
United States shall be considered to exist if there is
in the United States, with respect to the articles
protected by the patent, copyright, trademark, mask
work, or design concerned--
(A) significant investment in plant and
equipment;
(B) significant employment of labor or
capital; or
(C) substantial investment in its
exploitation, including engineering, research
and development, or licensing.
(4) For the purposes of this section, the phrase
``owner, importer, or consignee'' includes any agent of
the owner, importer, or consignee.
(b) Investigations of Violations by Commission.--(1) The
Commission shall investigate any alleged violation of this
section on complaint under oath or upon its initiative. Upon
commencing any such investigation, the Commissioner shall
publish notice thereof in the Federal Register. The Commission
shall conclude any such investigation and make its
determination under this section at the earliest practicable
time after the date of publication of notice of such
investigation. To promote expeditious adjudication, the
Commission shall, within 45 days after an investigation is
initiated, establish a target date for its final determination.
(2) During the course of each investigation under this
section, the Commission shall consult with, and seek advice and
information from, the Department of Health and Human Services,
the Department of Justice, the Federal Trade Commission, and
such other departments and agencies as it considers
appropriate.
(3) Whenever, in the course of an investigation under this
section, the Commission has reason to believe, based on
information before it, that a matter, in whole or in part, may
come within the purview of subtitle B of title VII of this Act,
it shall promptly notify the Secretary of Commerce so that such
action may be taken as is otherwise authorized by such
subtitle. If the Commission has reason to believe that the
matter before it (A) is based solely on alleged acts and
effects which are within the purview of section 701 or 731, or
(B) relates to an alleged copyright infringement with respect
to which action is prohibited by section 1008 of title 17,
United States Code, the Commission shall terminate, or not
institute, any investigation into the matter. If the Commission
has reason to believe the matter before it is based in part on
alleged acts and effects which are within the purview of
section 701 or 731 of this Act, and in part on alleged acts and
effects which may, independently from or in conjunction with
those within the purview of such section, establish a basis for
relief under this section, then it may institute or continue an
investigation into the matter. If the Commission notifies the
Secretary or the administering authority (as defined in section
771(1) of this Act) with respect to a matter under this
paragraph, the Commission may suspend its investigation during
the time the matter is before the Secretary or administering
authority for final decision. Any final decision by the
administering authority under section 701 or 731 of this Act
with respect to the matter within such section 701 or 731 of
which the Commission has notified the Secretary or
administering authority shall be conclusive upon the Commission
with respect to the issue of less-than-fair-value sales or
subsidization and the matters necessary for such decision.
(c) Determinations; Review.--The Commission shall
determine, with respect to each investigation conducted by it
under this section, whether or not there is a violation of this
section, except that the Commission may, by issuing a consent
order or on the basis of an agreement between the private
parties to the investigation, including an agreement to present
the matter for arbitration, terminate any such investigation,
in whole or in part, without making such a determination. Each
determination under subsection (d) or (e) shall be made on the
record after notice and opportunity for a hearing in conformity
with the provisions of subchapter II of chapter 5 of title 5,
United States Code. All legal and equitable defenses may be
presented in all cases. A respondent may raise any counterclaim
in a manner prescribed by the Commission. Immediately after a
counterclaim is received by the Commission, the respondent
raising such counterclaim shall file a notice of removal with a
United States district court in which venue for any of the
counterclaims raised by the party would exist under section
1391 of title 28, United States Code. Any counterclaim raised
pursuant to this section shall relate back to the date of the
original complaint in the proceeding before the Commission.
Action on such counterclaim shall not delay or affect the
proceeding under this section, including the legal and
equitable defenses that may be raised under this subsection.
Any person adversely affected by a final determination of the
Commission under subsection (d), (e), (f), or (g) may appeal
such determination, within 60 days after the determination
becomes final, to the United States Court of Appeals for the
Federal Circuit for review in accordance with chapter 7 of
title 5, United States Code. Notwithstanding the foregoing
provisions of this subsection, Commission determinations under
subsections (d), (e), (f), and (g) with respect to its findings
on the public health and welfare, competitive conditions in the
United States economy, the production of like or directly
competitive articles in the United States, and United States
consumers, the amount and nature of bond, or the appropriate
remedy shall be reviewable in accordance with section 706 of
title 5, United States Code. Determinations by the Commission
under subsections (e), (f), and (j) with respect to forfeiture
of bonds and under subsection (h) with respect to the
imposition of sanctions for abuse of discovery or abuse of
process shall also be reviewable in accordance with section 706
of title 5, United States Code.
(d) Exclusion of Articles From Entry.--(1) If the
Commission determines, as a result of an investigation under
this section, that there is a violation of this section, it
shall direct that the articles concerned, imported by any
person violating the provision of this section, be excluded
from entry into the United States, unless, after considering
the effect of such exclusion upon the public health and
welfare, competitive conditions in the United States economy,
the production of like or directly competitive articles in the
United States, and United States consumers, it finds that such
articles should not be excluded from entry. The Commission
shall notify the Secretary of the Treasury of its action under
this subsection directing such exclusion from entry, and upon
receipt of such notice, the Secretary shall, through the proper
officers, refuse such entry.
(2) The authority of the Commission to order an exclusion
from entry of articles shall be limited to persons determined
by the Commission to be violating this section unless the
Commission determines that--
(A) a general exclusion from entry of articles is
necessary to prevent circumvention of an exclusion
order limited to products of named persons; or
(B) there is a pattern of violation of this section
and it is difficult to identify the source of
infringing products.
(e) Exclusion of Articles From Entry During Investigation
Except Under Bond.--(1) If, during the course of an
investigation under this section, the Commission determines
that there is reason to believe that there is a violation of
this section, it may direct that the articles concerned,
imported by any person with respect to whom there is reason to
believe that such person is violating this section, be excluded
from entry into the United States, unless, after considering
the effect of such exclusion upon the public health and
welfare, competitive conditions in the United States economy,
the production of like or directly competitive articles in the
United States, and United States consumers, it finds that such
articles should not be excluded from entry. The Commission
shall notify the Secretary of the Treasury of its action under
this subsection directing such exclusion from entry, and upon
receipt of such notice, the Secretary shall, through the proper
officers, refuse such entry, except that such articles shall be
entitled to entry under bond prescribed by the Secretary in an
amount determined by the Commission to be sufficient to protect
the complainant from any injury. If the Commission later
determines that the respondent has violated the provisions of
this section, the bond may be forfeited to the complainant.
(2) A complainant may petition the Commission for the
issuance of an order under this subsection. The Commission
shall make a determination with regard to such petition by no
later than the 90th day after the date on which the
Commission's notice of investigation is published in the
Federal Register. The Commission may extend the 90-day period
for an additional 60 days in a case it designates as a more
complicated case. The Commission shall publish in the Federal
Register its reasons why it designated the case as being more
complicated. The Commission may require the complainant to post
a bond as a prerequisite to the issuance of an order under this
subsection. If the Commission later determines that the
respondent has not violated the provisions of this section, the
bond may be forfeited to the respondent.
(3) The Commission may grant preliminary relief under this
subsection or subsection (f) to the same extent as preliminary
injunctions and temporary restraining orders may be granted
under the Federal Rules of Civil Procedure.
(4) The Commission shall prescribe the terms and conditions
under which bonds may be forfeited under paragraphs (1) and
(2).
(f) Cease and Desist Orders.--(1) In addition to, or in
lieu of, taking action under subsection (d) or (e), the
Commission may issue and cause to be served on any person
violating this section, or believed to be violating this
section, as the case may be, an order directing such person to
cease and desist from engaging in the unfair methods or acts
involved, unless after considering the effect of such order
upon the public health and welfare, competitive conditions in
the United States economy, the production of like or directly
competitive articles in the United States, and United States
consumers, it finds that such order should not be issued. The
Commission may at any time, upon such notice and in such manner
as it deems proper, modify or revoke any such order, and, in
the case of a revocation, may take action under subsection (d)
or (e), as the case may be. If a temporary cease and desist
order is issued in addition to, or in lieu of, an exclusion
order under subsection (e), the Commission may require the
complainant to post a bond, in an amount determined by the
Commission to be sufficient to protect the respondent from any
injury, as a prerequisite to the issuance of an order under
this subsection. If the Commission later determines that the
respondent has not violated the provisions of this section, the
bond may be forfeited to the respondent. The Commission shall
prescribe the terms and conditions under which the bonds may be
forfeited under this paragraph.
(2) Any person who violates an order issued by the
Commission under paragraph (1) after it has become final shall
forfeit and pay to the United States a civil penalty for each
day on which an importation of articles, or their sale, occurs
in violation of the order of not more than the greater of
$100,000, twice the domestic value of the articles entered or
sold on such day in violation of the order. Such penalty shall
accrue to the United States and may be recovered for the United
States in a civil action brought by the Commission in the
Federal District Court for the District of Columbia or for the
district in which the violation occurs. In such actions, the
United States district courts may issue mandatory injunctions
incorporating the relief sought by the Commission as they deem
appropriate in the enforcement of such final orders of the
Commission.
(g)(1) If--
(A) a complaint is filed against a person under this
section;
(B) the complaint and a notice of investigation are
served on the person;
(C) the person fails to respond to the complaint and
notice or otherwise fails to appear to answer the
complaint and notice;
(D) the person fails to show good cause why the
person should not be found in default; and
(E) the complainant seeks relief limited solely to
that person;
the Commission shall presume the facts alleged in the complaint
to be true and shall, upon request, issue an exclusion from
entry or a cease and desist order, or both, limited to that
person unless, after considering the effect of such exclusion
or order upon the public health and welfare, competitive
conditions in the United States economy, the production of like
or directly competitive articles in the United States, and
United States consumers, the Commission finds that such
exclusion or order should not be issued.
(2) In addition to the authority of the Commission to issue
a general exclusion from entry of articles when a respondent
appears to contest an investigation concerning a violation of
the provisions of this section, a general exclusion from entry
of articles, regardless of the source or importer of the
articles, may be issued if--
(A) no person appears to contest an investigation
concerning a violation of the provisions of this
section,
(B) such a violation is established by substantial,
reliable, and probative evidence, and
(C) the requirements of subsection (d)(2) are met.
(h) The Commission may by rule prescribe sanctions for abuse
of discovery and abuse of process to the extent authorized by
Rule 11 and Rule 37 of the Federal Rules of Civil Procedure.
(i) Forfeiture.--
(1) In addition to taking action under subsection
(d), the Commission may issue an order providing that
any article imported in violation of the provisions of
this section be seized and forfeited to the United
States if--
(A) the owner, importer, or consignee of the
article previously attempted to import the
article into the United States;
(B) the article was previously denied entry
into the United States by reason of an order
issued under subsection (d); and
(C) upon such previous denial of entry, the
Secretary of the Treasury provided the owner,
importer, or consignee of the article written
notice of--
(i) such order, and
(ii) the seizure and forfeiture that
would result from any further attempt
to import the article into the United
States.
(2) The Commission shall notify the Secretary of the
Treasury of any order issued under this subsection and,
upon receipt of such notice, the Secretary of the
Treasury shall enforce such order in accordance with
the provisions of this section.
(3) Upon the attempted entry of articles subject to
an order issued under this subsection, the Secretary of
the Treasury shall immediately notify all ports of
entry of the attempted importation and shall identify
the persons notified under paragraph (1)(C).
(4) The Secretary of the Treasury shall provide--
(A) the written notice described in paragraph
(1)(C) to the owner, importer, or consignee of
any article that is denied entry into the
United States by reason of an order issued
under subsection (d); and
(B) a copy of such written notice to the
Commission.
(j) Referral to the President.--(1) If the Commission
determines that there is a violation of this section, or that,
for purposes of subsection (e), there is reason to believe that
there is such a violation, it shall--
(A) publish such determination in the Federal
Register, and
(B) transmit to the President a copy of such
determination and the action taken under subsection
(d), (e), (f), (g), or (i), with respect thereto,
together with the record upon which such determination
is based.
(2) If, before the close of the 60-day period beginning on
the day after the day on which he receives a copy of such
determination, the President, for policy reasons, disapproves
such determination and notifies the Commission of his
disapproval, then, effective on the date of such notice, such
determination and the action taken under subsection (d), (e),
(f), (g), or (i) with respect thereto shall have no force or
effect.
(3) Subject to the provisions of paragraph (2), such
determination shall, except for purposes of subsection (c), be
effective upon publication thereof in the Federal Register, and
the action taken under subsection (d), (e), (f), (g), or (i)
with respect thereto shall be effective as provided in such
subsections, except that articles directed to be excluded from
entry under subsection (d) or subject to a cease and desist
order under subsection (f) shall, until such determination
becomes final, be entitled to entry under bond prescribed by
the Secretary in an amount determined by the Commission to be
sufficient to protect the complainant from any injury. If the
determination becomes final, the bond may be forfeited to the
complainant. The Commission shall prescribe the terms and
conditions under which bonds may be forfeited under this
paragraph.
(4) If the President does not disapprove such determination
within such 60-day period, or if he notifies the Commission
before the close of such period that he approves such
determination, then, for purposes of paragraph (3) and
subsection (c) such determination shall become final on the day
after the close of such period or the day on which the
President notifies the Commission of his approval, as the case
may be.
(k) Period of Effectiveness.--(1) Except as provided in
subsections (f) and (j), any exclusion from entry or order
under this section shall continue in effect until the
Commission finds, and in the case of exclusion from entry
notifies the Secretary of the Treasury, that the conditions
which led to such exclusion from entry or order no longer
exist.
(2) If any person who has previously been found by the
Commission to be in violation of this section petitions the
Commission for a determination that the petitioner is no longer
in violation of this section or for a modification or
rescission of an exclusion from entry or order under subsection
(d), (e), (f), (g), or (i)--
(A) the burden of proof in any proceeding before the
Commission regarding such petition shall be on the
petitioner; and
(B) relief may be granted by the Commission with
respect to such petition--
(i) on the basis of new evidence or evidence
that could not have been presented at the prior
proceeding, or
(ii) on grounds which would permit relief
from a judgment or order under the Federal
Rules of Civil Procedure.
(l) Importations by or for the United States.--Any
exclusion from entry or order under subsection (d), (e), (f),
(g), or (i), in cases based on a preceding involving a patent,
copyright, mask work, or design under subsection (a)(1), shall
not apply to any articles imported by and for the use of the
United States, or imported for, and to be used for, the United
States with the authorization or consent of the Government.
Whenever any article would have been excluded from entry or
would not have been entered pursuant to the provisions of such
subsections but for the operation of this subsection, an owner
of the patent, copyright, or mask work adversely affected shall
be entitled to reasonable and entire compensation in an action
before the United States Court of Federal Claims pursuant to
the procedures of section 1498 of title 28, United States Code.
(m) Definition of United States.--For purposes of this
section and sections 338 and 340, the term ``United States''
means the customs territory of the United States as defined in
general note 2 of the Harmonized Tariff Schedule of the United
States.
(n)(1) Information submitted to the Commission or exchanged
among the parties in connection with proceedings under this
section which is properly designated as confidential pursuant
to Commission rules may not be disclosed (except under a
protective order issued under regulations of the Commission
which authorizes limited disclosure of such information) to any
person (other than a person described in paragraph (2)) without
the consent of the person submitting it.
(2) Notwithstanding the prohibition contained in paragraph
(1), information referred to in that paragraph may be disclosed
to--
(A) an officer or employee of the Commission who is
directly concerned with--
(i) carrying out the investigation or related
proceeding in connection with which the
information is submitted,
(ii) the administration of a bond posted
pursuant to subsection (e), (f), or (j),
(iii) the administration or enforcement of an
exclusion order issued pursuant to subsection
(d), (e), or (g), a cease and desist order
issued pursuant to subsection (f), or a consent
order issued pursuant to subsection (c),
(iv) proceedings for the modification or
rescission of a temporary or permanent order
issued under subsection (d), (e), (f), (g), or
(i), or a consent order issued under this
section, or
(v) maintaining the administrative record of
the investigation or related proceeding,
(B) an officer or employee of the United States
Government who is directly involved in the review under
subsection (j), or
(C) an officer or employee of the United States
Customs Service who is directly involved in
administering an exclusion from entry under subsection
(d), (e), or (g) resulting from the investigation or
related proceeding in connection with which the
information is submitted.
D. SAFEGUARD ACTIONS
Chapter 1 of Title II (Sections 201-204) of the Trade Act of 1974, as
amended
[19 U.S.C. 2251 et seq.; P.L. 93-618, as amended by P.L. 96-39,
Reorganization Plan No. 3 of 1979, P.L. 98-573, P.L. 100-418, P.L. 100-
647, P.L. 103-182, P.L. 103-465, and P.L. 104-295]
Chapter 1--Positive Adjustment by Industries Injured by Imports
SEC. 201. ACTION TO FACILITATE POSITIVE ADJUSTMENT TO IMPORT
COMPETITION.
(a) Presidential Action.--If the United States
International Trade Commission (hereinafter referred to in this
chapter as the ``Commission'') determines under section 202(b)
that an article is being imported into the United States in
such increased quantities as to be a substantial cause of
serious injury, or the threat thereof, to the domestic industry
producing an article like or directly competitive with the
imported article, the President, in accordance with this
chapter, shall take all appropriate and feasible action within
his power which the President determines will facilitate
efforts by the domestic industry to make a positive adjustment
to import competition and provide greater economic and social
benefits than costs.
(b) Positive Adjustment to Import Competition.--
(1) For purposes of this chapter, a positive
adjustment to import competition occurs when--
(A) the domestic industry--
(i) is able to compete successfully
with imports after actions taken under
section 204 terminate, or
(ii) the domestic industry
experiences an orderly transfer of
resources to other productive pursuits;
and
(B) dislocated workers in the industry
experience an orderly transition to productive
pursuits.
(2) The domestic industry may be considered to have
made a positive adjustment to import competition even
though the industry is not of the same size and
composition as the industry at the time the
investigation was initiated under section 202(b).
SEC. 202. INVESTIGATIONS, DETERMINATIONS, AND RECOMMENDATIONS BY
COMMISSION.
(a) Petitions and Adjustment Plans.--
(1) A petition requesting action under this chapter
for the purpose of facilitating positive adjustment to
import competition may be filed with the Commission by
an entity, including a trade association, firm,
certified or recognized union, or group of workers,
which is representative of an industry.
(2) A petition under paragraph (1)--
(A) shall include a statement describing the
specific purposes for which action is being
sought, which may include facilitating the
orderly transfer of resources to more
productive pursuits, enhancing competitiveness,
or other means of adjustment to new conditions
of competition; and
(B) may--
(i) subject to subsection
(d)(1)(C)(i), request provisional
relief under subsection (d)(1); or
(ii) request provisional relief under
subsection (d)(2).
(3) Whenever a petition is filed under paragraph (1),
the Commission shall promptly transmit copies of the
petition to the Office of the United States Trade
Representative and other Federal agencies directly
concerned.
(4) A petitioner under paragraph (1) may submit to
the Commission and the United States Trade
Representative (hereafter in this chapter referred to
as the ``Trade Representative''), either with the
petition, or at any time within 120 days after the date
of filing of the petition, a plan to facilitate
positive adjustment to import competition.
(5)(A) Before submitting an adjustment plan under
paragraph (4), the petitioner and other entities
referred to in paragraph (1) that wish to participate
may consult with the Trade Representative and the
officers and employees of any Federal agency that is
considered appropriate by the Trade Representative, for
purposes of evaluating the adequacy of the proposals
being considered for inclusion in the plan in relation
to specific actions that may be taken under this
chapter.
(B) A request for any consultation under subparagraph
(A) must be made to the Trade Representative. Upon
receiving such a request, the Trade Representative
shall confer with the petitioner and provide such
assistance, including publication of appropriate notice
in the Federal Register, as may be practicable in
obtaining other participants in the consultation. No
consultation may occur under subparagraph (A) unless
the Trade Representative, or his delegate, is in
attendance.
(6)(A) In the course of any investigation under
subsection (b), the Commission shall seek information
(on a confidential basis, to the extent appropriate) on
actions being taken, or planned to be taken, or both,
by firms and workers in the industry to make a positive
adjustment to import competition.
(B) Regardless whether an adjustment plan is
submitted under paragraph (4) by the petitioner, if the
Commission makes an affirmative determination under
subsection (b), any--
(i) firm in the domestic industry;
(ii) certified or recognized union or group
of workers in the domestic industry;
(iii) State or local community;
(iv) trade association representing the
domestic industry; or
(v) any other person or group of persons,
may, individually, submit to the Commission commitments
regarding actions such persons and entities intend to
take to facilitate positive adjustment to import
competition.
(7) Nothing in paragraphs (5) and (6) may be
construed to provide immunity under the antitrust laws.
(8) The procedures concerning the release of
confidential business information set forth in section
332(g) of the Tariff Act of 1930 shall apply with
respect to information received by the Commission in
the course of investigations conducted under this
chapter and part 1 of title III of the North American
Free Trade Agreement Implementation Act. The Commission
may request that parties providing confidential
business information furnish nonconfidential summaries
thereof or, if such parties indiciate that the
information in the submission cannot be summarized, the
reasons why a summary cannot be provided. If the
Commission finds that a request for confidentiality is
not warranted and if the party concerned is either
unwilling to make the information public or to
authorize its disclosure in generalized or summarized
form, the Commission may disregard the submission.
(b) Investigations and Determinations by Commission.--
(1)(A) Upon the filing of a petition under subsection
(a), the request of the President or the Trade
Representative, the resolution of either the Committee
on Ways and Means of the House of Representatives or
the Committee on Finance of the Senate, or on its own
motion, the Commission shall promptly make an
investigation to determine whether an article is being
imported into the United States in such increased
quantities as to be a substantial cause of serious
injury, or the threat thereof, to the domestic industry
producing an article like or directly competitive with
the imported article.
(B) For purposes of this section, the term
``substantial cause'' means a cause which is important
and not less than any other cause.
(2)(A) Except as provided in subparagraph (B), the
Commission shall make the determination under paragraph
(1) within 120 days (180 days if the petition alleges
that critical circumstances exist) after the date on
which the petition is filed, the request or resolution
is received, or the motion is adopted, as the case may
be.
(B) If before the 100th day after a petition is filed
under subsection (a)(1) the Commission determines that
the investigation is extraordinarily complicated, the
Commission shall make the determination under paragraph
(1) within 150 days (210 days if the petition alleges
that critical circumstances exist) after the date
referred to in subparagraph (A).
(3) The Commission shall publish notice of the
commencement of any proceeding under this subsection in
the Federal Register and shall, within a reasonable
time thereafter, hold public hearings at which the
Commission shall afford interested parties and
consumers an opportunity to be present, to present
evidence, to comment on the adjustment plan, if any,
submitted under subsection (a), to respond to the
presentations of other parties and consumers, and
otherwise to be heard.
(c) Factors Applied in Making Determinations.--
(1) In making determinations under subsection (b),
the Commission shall take into account all economic
factors which it considers relevant, including (but not
limited to)--
(A) with respect to serious injury--
(i) the significant idling of
productive facilities in the domestic
industry,
(ii) the inability of a significant
number of firms to carry out domestic
production operations at a reasonable
level of profit, and
(iii) significant unemployment or
underemployment within the domestic
industry;
(B) with respect to threat of serious
injury--
(i) a decline in sales or market
share, a higher and growing inventory
(whether maintained by domestic
producers, importers, wholesalers, or
retailers), and a downward trend in
production, profits, wages,
productivity, or employment (or
increasing underemployment) in the
domestic industry,
(ii) the extent to which firms in the
domestic industry are unable to
generate adequate capital to finance
the modernization of their domestic
plants and equipment, or are unable to
maintain existing levels of
expenditures for research and
development,
(iii) the extent to which the United
States market is the focal point for
the diversion of exports of the article
concerned by reason of restraints on
exports of such article to, or on
imports of such article into, third
country markets; and
(C) with respect to substantial cause, an
increase in imports (either actual or relative
to domestic production) and a decline in the
proportion of the domestic market supplied by
domestic producers.
(2) In making determinations under subsection (b),
the Commission shall--
(A) consider the condition of the domestic
industry over the course of the relevant
business cycle, but may not aggregate the
causes of declining demand associated with a
recession or economic downturn in the United
States economy into a single cause of serious
injury or threat of injury; and
(B) examine factors other than imports which
may be a cause of serious injury, or threat of
serious injury, to the domestic industry.
The Commission shall include the results of its
examination under subparagraph (B) in the report
submitted by the Commission to the President under
subsection (e).
(3) The presence or absence of any factor which the
Commission is required to evaluate in subparagraphs (A)
and (B) of paragraph (1) is not necessarily dispositive
of whether an article is being imported into the United
States in such increased quantities as to be a
substantial cause of serious injury, or the threat
thereof, to the domestic industry.
(4) For purposes of subsection (b), in determining
the domestic industry producing an article like or
directly competitive with an imported article, the
Commission--
(A) to the extent information is available,
shall, in the case of a domestic producer which
also imports, treat as part of such domestic
industry only its domestic production;
(B) may, in the case of a domestic producer
which produces more than one article, treat as
part of such domestic industry only that
portion or subdivision of the producer which
produces the like or directly competitive
article; and
(C) may, in the case of one or more domestic
producers which produce a like or directly
competitive article in a major geographic area
of the United States and whose production
facilities in such area for such article
constitute a substantial portion of the
domestic industry in the United States and
primarily serve the market in such area, and
where the imports are concentrated in such
area, treat as such domestic industry only that
segment of the production located in such area.
(5) In the course of any proceeding under this
subsection, the Commission shall investigate any factor
which in its judgment may be contributing to increased
imports of the article under investigation. Whenever in
the course of its investigation the Commission has
reason to believe that the increased imports are
attributable in part to circumstances which come within
the purview of subtitles A and B of title VII or
section 337 of the Tariff Act of 1930, or other
remedial provisions of law, the Commission shall
promptly notify the appropriate agency so that such
action may be taken as is otherwise authorized by such
provisions of law.
(6) For purposes of this section:
(A)(i) The term ``domestic industry'' means,
with respect to an article, the producers as a
whole of the like or directly competitive
article or those producers whose collective
production of the like or directly competitive
article constitutes a major proportion of the
total domestic production of such article.
(ii) The term ``domestic industry'' includes
producers located in the United States insular
possessions.
(B) The term ``significant idling of
productive facilities'' includes the closing of
plants or the underutilization of production
capacity.
(C) The term ``serious injury'' means a
significant overall impairment in the position
of a domestic industry.
(D) The term ``threat of serious injury''
means serious injury that is clearly imminent.
(d) Provisional Relief.--
(1)(A) An entity representing a domestic industry
that produces a perishable agricultural product or
citrus product that is like or directly competitive
with an imported perishable agricultural product or
citrus product may file a request with the Trade
Representative for the monitoring of imports of that
product under subparagraph (B). Within 21 days after
receiving the request, the Trade Representative shall
determine if--
(i) the imported product is a perishable
agricultural product or citrus product; and
(ii) there is a reasonable indication that
such product is being imported into the United
States in such increased quantities as to be,
or likely to be, a substantial cause of serious
injury, or the threat thereof, to such domestic
industry.
(B) If the determinations under subparagraph (A) (i)
and (ii) are affirmative, the Trade Representative
shall request, under section 332(g) of the Tariff Act
of 1930, the Commission to monitor and investigate the
imports concerned for a period not to exceed 2 years.
The monitoring and investigation may include the
collection and analysis of information that would
expedite an investigation under subsection (b).
(C) If a petition filed under subsection (a)--
(i) alleges injury from imports of a
perishable agricultural product or citrus
product that has been, on the date the
allegation is included in the petition, subject
to monitoring by the Commission under
subparagraph (B) for not less than 90 days; and
(ii) requests that provisional relief be
provided under this subsection with respect to
such imports;
the Commission shall, not later than the 21st day after
the day on which the request was filed, make a
determination, on the basis of available information,
whether increased imports (either actual or relative to
domestic production) of the perishable agricultural
product or citrus product are a substantial cause of
serious injury, or the threat thereof, to the domestic
industry producing a like or directly competitive
perishable product or citrus product, and whether
either--
(I) the serious injury is likely to be
difficult to repair by reason of perishability
of the like or directly competitive
agricultural product; or
(II) the serious injury cannot be timely
prevented through investigation under
subsection (b) and action under section 203.
(D) At the request of the Commission, the Secretary
of Agriculture shall promptly provide to the Commission
any relevant information that the Department of
Agriculture may have for purposes of making
determinations and findings under this subsection.
(E) Whenever the Commission makes an affirmative
preliminary determination under subparagraph (C), the
Commission shall find the amount or extent of
provisional relief that is necessary to prevent or
remedy the serious injury. In carrying out this
subparagraph, the Commission shall give preference to
increasing or imposing a duty on imports, if such form
of relief is feasible and would prevent or remedy the
serious injury.
(F) The Commission shall immediately report to the
President its determination under subparagraph (C) and,
if the determination is affirmative, the finding under
subparagraph (E).
(G) Within 7 days after receiving a report from the
Commission under subparagraph (F) containing an
affirmative determination, the President, if he
considers provisional relief to be warranted and after
taking into account the finding of the Commission under
subparagraph (E), shall proclaim such provisional
relief that the President considers necessary to
prevent or remedy the serious injury.
(2)(A) When a petition filed under subsection (a)
alleges that critical circumstances exist and requests
that provisional relief be provided under this
subsection with respect to imports of the article
identified in the petition, the Commission shall, not
later than 60 days after the petition containing the
request was filed, determine, on the basis of available
information, whether--
(i) there is clear evidence that increased
imports (either actual or relative to domestic
production) of the article are a substantial
cause of serious injury, or the threat thereof,
to the domestic industry producing an article
like or directly competitive with the imported
article; and
(ii) delay in taking action under this
chapter would cause damage to that industry
that would be difficult to repair.
(B) If the determinations under subparagraph (A)(i)
and (ii) are affirmative, the Commission shall find the
amount or extent of provisional relief that is
necessary to prevent or remedy the serious injury. In
carrying out this subparagraph, the Commission shall
give preference to increasing or imposing a duty on
imports, if such form of relief is feasible and would
prevent or remedy the serious injury.
(C) The Commission shall immediately report to the
President its determinations under subparagraph (A)(i)
and (ii) and, if the determinations are affirmative,
the finding under subparagraph (B).
(D) Within 30 days after receiving a report from the
Commission under subparagraph (C) containing an
affirmative determination under subparagraph (A)(i) and
(ii), the President, if he considers provisional relief
to be warranted and after taking into account the
finding of the Commission under subparagraph (B), shall
proclaim, for a period not to exceed 200 days, such
provisional relief that the President considers
necessary to prevent or remedy the serious injury. Such
relief shall take the form of an increase in, or the
imposition of, a duty on imports, if such form of
relief is feasible and would prevent or remedy the
serious injury.
(3) If provisional relief is proclaimed under
paragraph (1)(G) or (2)(D) in the form of an increase,
or the imposition of, a duty, the President shall order
the suspension of liquidation of all imported articles
subject to the affirmative determination under
paragraph (1)(C) or paragraph (2)(A), as the case may
be, that are entered, or withdrawn from warehouse for
consumption, on or after the date of the determination.
(4)(A) Any provisional relief implemented under this
subsection with respect to an imported article shall
terminate on the day on which--
(i) if such relief was proclaimed under
paragraph (1)(G) or (2)(D), the Commission
makes a negative determination under subsection
(b) regarding injury or the threat thereof by
imports of such article;
(ii) action described in section 203(a)(3)
(A) or (C) takes effect under section 203 with
respect to such article;
(iii) a decision by the President not to take
any action under section 203(a) with respect to
such article becomes final; or
(iv) whenever the President determines that,
because of changed circumstances, such relief
is no longer warranted.
(B) Any suspension of liquidation ordered under
paragraph (3) with respect to an imported article shall
terminate on the day on which provisional relief is
terminated under subparagraph (A) with respect to the
article.
(C) If an increase in, or the imposition of, a duty
that is proclaimed under section 203 on an imported
article is different from a duty increase or imposition
that was proclaimed for such an article under this
section, then the entry of any such article for which
liquidation was suspended under paragraph (3) shall be
liquidated at whichever of such rates of duty is lower.
(D) If provisional relief in the form of an increase
in, or the imposition of, a duty is proclaimed under
this section with respect to an imported article and
neither a duty increase nor a duty imposition is
proclaimed under section 203 regarding such article,
the entry of any such article for which liquidation was
suspended under paragraph (3) may be liquidated at the
rate of duty that applied before provisional relief was
provided.
(5) For purposes of this subsection:
(A) The term ``citrus product'' means any
processed oranges or grapefruit or any orange
or grapefruit juice, including concentrate.
(B) A perishable agricultural product is any
agricultural article, including livestock,
regarding which the Trade Representative
considers action under this section to be
appropriate after taking into account--
(i) whether the article has--
(I) a short shelf life,
(II) a short growing season,
or
(III) a short marketing
period,
(ii) whether the article is treated
as a perishable product under any other
Federal law or regulation; and
(iii) any other factor considered
appropriate by the Trade
Representative.
The presence or absence of any factor which the
Trade Representative is required to take into
account under clause (i), (ii), or (iii) is not
necessarily dispositive of whether an article
is a perishable agricultural product.
(C) The term ``provisional relief'' means--
(i) any increase in, or imposition
of, any duty;
(ii) any modification or imposition
of any quantitative restriction on the
importation of an article into the
United States; or
(iii) any combination of actions
under clauses (i) and (ii).
(e) Commission Recommendations.--
(1) If the Commission makes an affirmative
determination under subsection (b)(1), the Commission
shall also recommend the action that would address the
serious injury, or threat thereof, to the domestic
industry and be most effective in facilitating the
efforts of the domestic industry to make a positive
adjustment to import competition.
(2) The Commission is authorized to recommend under
paragraph (1)--
(A) an increase in, or the imposition of, any
duty on the imported article;
(B) a tariff-rate quota on the article;
(C) a modification or imposition of any
quantitative restriction on the importation of
the article into the United States;
(D) one or more appropriate adjustment
measures, including the provision of trade
adjustment assistance under chapter 2; or
(E) any combination of the actions described
in subparagraphs (A) through (D).
(3) The Commission shall specify the type, amount,
and duration of the action recommended by it under
paragraph (1). The limitations set forth in section
203(e) are applicable to the action recommended by the
Commission.
(4) In addition to the recommendation made under
paragraph (1), the Commission may also recommend that
the President--
(A) initiate international negotiations to
address the underlying cause of the increase in
imports of the article or otherwise to
alleviate the injury or threat; or
(B) implement any other action authorized
under law that is likely to facilitate positive
adjustment to import competition.
(5) For purposes of making its recommendation under
this subsection, the Commission shall--
(A) after reasonable notice, hold a public
hearing at which all interested parties shall
be provided an opportunity to present testimony
and evidence; and
(B) take into account--
(i) the form and amount of action
described in paragraph (2) (A), (B),
and (C) that would prevent or remedy
the injury or threat thereof,
(ii) the objectives and actions
specified in the adjustment plan, if
any, submitted under subsection (a)(4),
(iii) any individual commitment that
was submitted to the Commission under
subsection (a)(6),
(iv) any information available to the
Commission concerning the conditions of
competition in domestic and world
markets, and likely developments
affecting such conditions during the
period for which action is being
requested, and
(v) whether international
negotiations may be constructive to
address the injury or threat thereof or
to facilitate adjustment.
(6) Only those members of the Commission who agreed
to the affirmative determination under subsection (b)
are eligible to vote on the recommendation required to
be made under paragraph (1) or that may be made under
paragraph (3). Members of the Commission who did not
agree to the affirmative determination may submit, in
the report required under subsection (f), separate
views regarding what action, if any, should be taken
under section 203.
(f) Report by Commission.--
(1) The Commission shall submit to the President a
report on each investigation undertaken under
subsection (b). The report shall be submitted at the
earliest practicable time, but not later than 180 days
(240 days if the petition alleges that crucial
circumstances exist) after the date on which the
petition is filed, the request or resolution is
received, or the motion is adopted, as the case may be.
(2) The Commission shall include in the report
required under paragraph (1) the following:
(A) The determination made under subsection
(b) and an explanation of the basis for the
determination.
(B) If the determination under subsection (b)
is affirmative, the recommendations for action
made under subsection (e) and an explanation of
the basis for each recommendation.
(C) Any dissenting or separate views by
members of the Commission regarding the
determination and any recommendation referred
to in subparagraphs (A) and (B).
(D) The findings required to be included in
the report under subsection (c)(2).
(E) A copy of the adjustment plan, if any,
submitted under section 201(b)(4).
(F) Commitments submitted, and information
obtained, by the Commission regarding steps
that firms and workers in the domestic industry
are taking, or plan to take, to facilitate
positive adjustment to import competition.
(G) A description of--
(i) the short- and long-term effects
that implementation of the action
recommended under subsection (e) is
likely to have on the petitioning
domestic industry, on other domestic
industries, and on consumers, and
(ii) the short- and long-term effects
of not taking the recommended action on
the petitioning domestic industry, its
workers and the communities where
production facilities of such industry
are located, and on other domestic
industries.
(3) The Commission, after submitting a report to the
President under paragraph (1), shall promptly make it
available to the public (with the exception of the
confidential information obtained under section
202(a)(6)(B) and any other information which the
Commission determines to be confidential) and cause a
summary thereof to be published in the Federal
Register.
(g) Expedited Consideration of Adjustment Assistance
Petitions.--If the Commission makes an affirmative
determination under subsection (b)(1), the Commission shall
promptly notify the Secretary of Labor and the Secretary of
Commerce of the determination. After receiving such
notification--
(1) the Secretary of Labor shall give expedited
consideration to petitions by workers in the domestic
industry for certification for eligibility to apply for
adjustment assistance under chapter 2; and
(2) the Secretary of Commerce shall give expedited
consideration to petitions by firms in the domestic
industry for certification of eligibility to apply for
adjustment assistance under chapter 3.
(h) Limitations on Investigations.--
(1) Except for good cause determined by the
Commission to exist, no investigation for the purposes
of this section shall be made with respect to the same
subject matter as a previous investigation under this
chapter, unless 1 year has elapsed since the Commission
made its report to the President of the results of such
previous investigation.
(2) No new investigation shall be conducted with
respect to an article that is or has been the subject
of an action under section 203(a)(3)(A), (B), (C), or
(E) if the last day on which the President could take
action under section 203 in the new investigation is a
date earlier than that permitted under section
203(e)(7).
(3)(A) Not later than the date on which the Textiles
Agreement enters into force with respect to the United
States, the Secretary of Commerce shall publish in the
Federal Register a list of all articles that are
subject to the Textiles Agreement. An investigation may
be conducted under this section concerning imports of
any article that is subject to the Textiles Agreement
only if the United States has integrated that article
into GATT 1994 pursuant to the Textiles Agreement, as
set forth in notices published in the Federal Register
by the Secretary of Commerce, including the notice
published under section 331 of the Uruguay Round
Agreements Act.
(B) For purposes of this paragraph:
(i) The term `Textiles Agreement' means the
Agreement on Textiles and Clothing referred to
in section 101(d)(4) of the Uruguay Round
Agreements Act.
(ii) The term `GATT 1994' has the meaning
given that term in section 2(1)(B) of the
Uruguay Round Agreements Act.
(i) Limited Disclosure of Confidential Business Information
Under Protective Order.--The Commission shall promulgate
regulations to provide access to confidential business
information under protective order to authorized
representatives of interested parties who are parties to an
investigation under this section.
SEC. 203. ACTION BY PRESIDENT AFTER DETERMINATION OF IMPORT INJURY.
(a) In General.--
(1)(A) After receiving a report under section 202(f)
containing an affirmative finding regarding serious
injury, or the threat thereof, to a domestic industry,
the President shall take all appropriate and feasible
action within his power which the President determines
will facilitate efforts by the domestic industry to
make a positive adjustment to import competition and
provide greater economic and social benefits than
costs.
(B) The action taken by the President under
subparagraph (A) shall be to such extent, and for such
duration, subject to subsection (e)(1), that the
President determines to be appropriate and feasible
under such subparagraph.
(C) The interagency trade organization established
under section 242(a) of the Trade Expansion Act of 1962
shall, with respect to each affirmative determination
reported under section 202(f), make a recommendation to
the President as to what action the President should
take under subparagraph (A).
(2) In determining what action to take under
paragraph (1), the President shall take into account--
(A) the recommendation and report of the
Commission;
(B) the extent to which workers and firms in
the domestic industry are--
(i) benefiting from adjustment
assistance and other manpower programs,
and
(ii) engaged in worker retraining
efforts;
(C) the efforts being made, or to be
implemented, by the domestic industry
(including the efforts included in any
adjustment plan or commitment submitted to the
Commission under section 202(a)) to make a
positive adjustment to import competition;
(D) the probable effectiveness of the actions
authorized under paragraph (3) to facilitate
positive adjustment to import competition;
(E) the short- and long-term economic and
social costs of the actions authorized under
paragraph (3) relative to their short- and
long-term economic and social benefits and
other considerations relative to the position
of the domestic industry in the United States
economy;
(F) other factors related to the national
economic interest of the United States,
including, but not limited to--
(i) the economic and social costs
which would be incurred by taxpayers,
communities, and workers if import
relief were not provided under this
chapter,
(ii) the effect of the implementation
of actions under this section on
consumers and on competition in
domestic markets for articles, and
(iii) the impact on United States
industries and firms as a result of
international obligations regarding
compensation;
(G) the extent to which there is diversion of
foreign exports to the United States market by
reason of foreign restraints;
(H) the potential for circumvention of any
action taken under this section;
(I) the national security interests of the
United States; and
(J) the factors required to be considered by
the Commission under section 202(e)(5).
(3) The President may, for purposes of taking action
under paragraph (1)--
(A) proclaim an increase in, or the
imposition of, any duty on the imported
article;
(B) proclaim a tariff-rate quota on the
article;
(C) proclaim a modification or imposition of
any quantitative restriction on the importation
of the article into the United States;
(D) implement one or more appropriate
adjustment measures, including the provision of
trade adjustment assistance under chapter 2;
(E) negotiate, conclude, and carry out
agreements with foreign countries limiting the
export from foreign countries and the import
into the United States of such article;
(F) proclaim procedures necessary to allocate
among importers by the auction of import
licenses quantities of the article that are
permitted to be imported into the United
States;
(G) initiate international negotiations to
address the underlying cause of the increase in
imports of the article or otherwise to
alleviate the injury or threat thereof;
(H) submit to Congress legislative proposals
to facilitate the efforts of the domestic
industry to make a positive adjustment to
import competition;
(I) take any other action which may be taken
by the President under the authority of law and
which the President considers appropriate and
feasible for purposes of paragraph (1); and
(J) take any combination of actions listed in
subparagraphs (A) through (I).
(4)(A) Subject to subparagraph (B), the President
shall take action under paragraph (1) within 60 days
(50 days if the President has proclaimed provisional
relief under section 202(d)(2)(D) with respect to the
article concerned) after receiving a report from the
Commission containing an affirmative determination
under section 202(b)(1) (or a determination under such
section which he considers to be an affirmative
determination by reason of section 330(d) of the Tariff
Act of 1930).
(B) If a supplemental report is requested under
paragraph (5), the President shall take action under
paragraph (1) within 30 days after the supplemental
report is received, except that, in a case in which the
President has proclaimed provisional relief under
section 202(d)(2)(D) with respect to the article
concerned, action by the President under paragraph (1)
may not be taken later than the 200th day after the
provisional relief was proclaimed.
(5) The President may, within 15 days after the date
on which he receives a report from the Commission
containing an affirmative determination under section
202(b)(1), request additional information from the
Commission. The Commission shall, as soon as
practicable but in no event more than 30 days after the
date on which it receives the President's request,
furnish additional information with respect to the
industry in a supplemental report.
(b) Reports to Congress.--
(1) On the day the President takes action under
subsection (a)(1), the President shall transmit to
Congress a document describing the action and the
reasons for taking the action. If the action taken by
the President differs from the action required to be
recommended by the Commission under section 202(e)(1),
the President shall state in detail the reasons for the
difference.
(2) On the day on which the President decides that
there is no appropriate and feasible action to take
under subsection (a)(1) with respect to a domestic
industry, the President shall transmit to Congress a
document that sets forth in detail the reasons for the
decision.
(3) On the day on which the President takes any
action under subsection (a)(1) that is not reported
under paragraph (1), the President shall transmit to
Congress a document setting forth the action being
taken and the reasons therefor.
(c) Implementation of Action Recommended by Commission.--If
the President reports under subsection (b)(1) or (2) that--
(1) the action taken under subsection (a)(1) differs
from the action recommended by the Commission under
section 202(e)(1); or
(2) no action will be taken under subsection (a)(1)
with respect to the domestic industry;
the action recommended by the Commission shall take effect (as
provided in subsection (d)(2)) upon the enactment of a joint
resolution described in section 152(a)(1)(A) within the 90-day
period beginning on the date on which the document referred to
in subsection (b)(1) or (2) is transmitted to the Congress.
(d) Time for Taking Effect of Certain Relief.--
(1) Except as provided in paragraph (2), any action
described in subsection (a)(3) (A), (B), or (C), that
is taken under subsection (a)(1) shall take effect
within 15 days after the day on which the President
proclaims the action, unless the President announces,
on the date he decides to take such action, his
intention to negotiate one or more agreements described
in subsection (a)(3)(E) in which case the action under
subsection (a)(3) (A), (B), or (C) shall be proclaimed
and take effect within 90 days after the date of such
decision.
(2) If the contingency set forth in subsection (c)
occurs, the President shall, within 30 days after the
date of the enactment of the joint resolution referred
to in such subsection, proclaim the action recommended
by the Commission under section 202(e)(1).
(e) Limitations on Actions.--
(1)(A) Subject to subparagraph (B), the duration of
the period in which an action taken under this section
may be in effect shall not exceed 4 years. Such period
shall include the period, if any, in which provisional
relief under section 202(d) was in effect.
(B)(i) Subject to clause (ii), the President, after
receiving an affirmative determination from the
Commission under section 204(c) (or, if the Commission
is equally divided in its determination, a
determination which the President considers to be an
affirmative determination of the Commission), may
extend the effective period of any action under this
section if the President determines that--
(I) the action continues to be necessary to
prevent or remedy the serious injury; and
(II) there is evidence that the domestic
industry is making a positive adjustment to
import competition.
(ii) The effective period of any action under this
section, including any extensions thereof, may not, in
the aggregate, exceed 8 years.
(2) Action of a type described in subsection (a)(3)
(A), (B), or (C) may be taken under subsection (a)(1),
under section 202(d)(1)(G), or under section
202(d)(2)(D) only to the extent the cumulative impact
of such action does not exceed the amount necessary to
prevent or remedy the serious injury.
(3) No action may be taken under this section which
would increase a rate of duty to (or impose a rate)
which is more than 50 percent ad valorem above the rate
(if any) existing at the time the action is taken.
(4) Any action taken under this section proclaiming a
quantitative restriction shall permit the importation
of a quantity or value of the article which is not less
than the average quantity or value of such article
entered into the United States in the most recent 3
years that are representative of imports of such
article and for which data are available, unless the
President finds that the importation of a different
quantity or value is clearly justified in order to
prevent or remedy the serious injury.
(5) An action described in subsection (a)(3) (A),
(B), or (C) that has an effective period of more than 1
year shall be phased down at regular intervals during
the period in which the action is in effect.
(6)(A) The suspension, pursuant to any action taken
under this section, of--
(i) subheadings 9802.00.60 or 9802.00.80 of
the Harmonized Tariff Schedule of the United
States with respect to an article; and
(ii) the designation of any article as an
eligible article for purposes of title V;
shall be treated as an increase in duty.
(B) No proclamation providing for a suspension
referred to in subparagraph (A) with respect to any
article may be made by the President, nor may any such
suspension be recommended by the Commission under
section 202(e), unless the Commission, in addition to
making an affirmative determination under section
202(b)(1), determines in the course of its
investigation under section 202(b) that the serious
injury, or threat thereof, substantially caused by
imports to the domestic industry producing a like or
directly competitive article results from, as the case
may be--
(i) the application of subheadings 9802.00.60
or 9802.00.80 of the Harmonized Tariff Schedule
of the United States; or
(ii) the designation of the article as an
eligible article for the purposes of title V.
(7)(A) If an article was the subject of an action
under subparagraph (A), (B), (C), or (E) of subsection
(a)(3), no new action may be taken under any of those
subparagraphs with respect to such article for--
(i) a period beginning on the date on which
the previous action terminates that is equal to
the period in which the previous action was in
effect, or
(ii) a period of 2 years beginning on the
date on which the previous action terminates,
whichever is greater.
(B) Notwithstanding subparagraph (A), if the previous
action under subparagraph (A), (B), (C), or (E) of
subsection (a)(3) with respect to an article was in
effect for a period of 180 days or less, the President
may take a new action under any of those subparagraphs
with respect to such article if--
(i) at least 1 year has elapsed since the
previous action went into effect; and
(ii) an action described in any of those
subparagraphs has not been taken with respect
to such article more than twice in the 5-year
period immediately preceding the date on which
the new action with respect to such article
first becomes effective.
(f) Certain Agreements.--
(1) If the President takes action under this section
other than the implementation of agreements of the type
described in subsection (a)(3)(E), the President may,
after such action takes effect, negotiate agreements of
the type described in subsection (a)(3)(E), and may,
after such agreements take effect, suspend or
terminate, in whole or in part, any action previously
taken.
(2) If an agreement implemented under subsection
(a)(3)(E) is not effective, the President may,
consistent with the limitations contained in subsection
(e), take additional action under subsection (a).
(g) Regulations.--
(1) The President shall by regulation provide for the
efficient and fair administration of all actions taken
for the purpose of providing import relief under this
chapter.
(2) In order to carry out an international agreement
concluded under this chapter, the President may
prescribe regulations governing the entry or withdrawal
from warehouse of articles covered by such agreement.
In addition, in order to carry out any agreement of the
type described in subsection (a)(3)(E) that is
concluded under this chapter with one or more countries
accounting for a major part of United States imports of
the article covered by such agreement, including
imports into a major geographic area of the United
States, the President may issue regulations governing
the entry or withdrawal from warehouse of like articles
which are the product of countries not parties to such
agreement.
(3) Regulations prescribed under this subsection
shall, to the extent practicable and consistent with
efficient and fair administration, insure against
inequitable sharing of imports by a relatively small
number of the larger importers.
SEC. 204. MONITORING, MODIFICATION, AND TERMINATION OF ACTION.
(a) Monitoring.--
(1) So long as any action taken under section 203
remains in effect, the Commission shall monitor
developments with respect to the domestic industry,
including the progress and specific efforts made by
workers and firms in the domestic industry to make a
positive adjustment to import competition.
(2) If the initial period during which the action
taken under section 203 is in effect exceeds 3 years,
or if an extension of such action exceeds 3 years, the
Commission shall submit a report on the results of the
monitoring under paragraph (1) to the President and to
the Congress not later than the date that is the mid-
point of the initial period, and of each such
extension, during which the action is in effect.
(3) In the course of preparing each report under
paragraph (2), the Commission shall hold a hearing at
which interested persons shall be given a reasonable
opportunity to be present, to produce evidence, and to
be heard.
(4) Upon request of the President, the Commission
shall advise the President of its judgment as to the
probable economic effect on the industry concerned of
any reduction, modification, or termination of the
action taken under section 203 which is under
consideration.
(b) Reduction, Modification, and Termination of Action.--
(1) Action taken under section 203 may be reduced,
modified, or terminated by the President (but not
before the President receives the report required under
subsection (a)(2)(A)) if the President--
(A) after taking into account any report or
advice submitted by the Commission under
subsection (a) and after seeking the advice of
the Secretary of Commerce and the Secretary of
Labor, determines, on the basis that either--
(i) the domestic industry has not
made adequate efforts to make a
positive adjustment to import
competition, or
(ii) the effectiveness of the action
taken under section 203 has been
impaired by changed economic
circumstances,
that changed circumstances warrant such
reduction, or termination; or
(B) determines, after a majority of the
representatives of the domestic industry
submits to the President a petition requesting
such reduction, modification, or termination on
such basis, that the domestic industry has made
a positive adjustment to import competition.
(2) Notwithstanding paragraph (1), the President is
authorized to take such additional action under section
203 as may be necessary to eliminate any circumvention
of any action previously taken under such section.
(3) Notwithstanding paragraph (1), the President may,
after receipt of a Commission determination under
section 129(a)(4) of the Uruguay Round Agreements Act
and consulting with the Committee on Ways and Means of
the House of Representatives and the Committee on
Finance of the Senate, reduce, modify, or terminate
action taken under section 203.
(c) Extension of Action.--
(1) Upon request of the President, or upon petition
on behalf of the industry concerned filed with the
Commission not earlier than the date which is 9 months,
and not later than the date which is 6 months, before
the date any action taken under section 203 is to
terminate, the Commission shall investigate to
determine whether action under section 203 continues to
be necessary to prevent or remedy serious injury and
whether there is evidence that the industry is making a
positive adjustment to import competition.
(2) The Commission shall publish notice of the
commencement of any proceeding under this subsection in
the Federal Register and shall, within a reasonable
time thereafter, hold a public hearing at which the
Commission shall afford interested parties and
consumers an opportunity to be present, to present
evidence, and to respond to the presentations of other
parties and consumers, and otherwise to be heard.
(3) The Commission shall transmit to the President a
report on its investigation and determination under
this subsection not later than 60 days before the
action under section 203 is to terminate, unless the
President specifies a different date.
(d) Evaluation of Effectiveness of Action.--
(1) After any action taken under section 203 has
terminated, the Commission shall evaluate the
effectiveness of the actions in facilitating positive
adjustment by the domestic industry to import
competition, consistent with the reasons set out by the
President in the report submitted to the Congress under
section 203(b).
(2) During the course of the evaluation conducted
under paragraph (1), the Commission shall, after
reasonable public notice, hold a hearing on the
effectiveness of the action. All interested persons
shall have the opportunity to attend such hearing and
to present evidence or testimony at such hearing.
(3) A report on the evaluation made under paragraph
(1) and the hearings held under paragraph (2) shall be
submitted by the Commission to the President and to the
Congress by no later than the 180th day after the day
on which the actions taken under section 203
terminated.
(e) Other Provisions.--
(1) Action by the President under this chapter may be
taken without regard to the provisions of section
126(a) of this Act but only after consideration of the
relation of such actions to the international
obligations of the United States.
(2) If the Commission treats as the domestic industry
production located in a major geographic area of the
United States under section 202(c)(4)(C), then the
President shall take into account the geographic
concentration of domestic production and of imports in
that area in taking any action authorized under
paragraph (1).
E. RELIEF FROM MARKET DISRUPTION BY IMPORTS FROM COMMUNIST COUNTRIES
Section 406 of the Trade Act of 1974, as amended
[19 U.S.C. 2436; P.L. 93-618, as amended by Reorganization Plan No. 3
of 1979 P.L. 100-418 and P.L. 106-36]
SEC. 406. MARKET DISRUPTION.
(a)(1) Upon the filing of a petition by an entity described
in section 202(a), upon request of the President or the United
States Trade Representative, upon resolution of either the
Committee on Ways and Means of the House of Representatives or
the Committee on Finance of the Senate, or on its own motion,
the International Trade Commission (hereafter in this section
referred to as the ``Commission'') shall promptly make an
investigation to determine, with respect to imports of an
article which is the product of a Communist country, whether
market disruption exists with respect to an article produced by
a domestic industry.
(2) The provisions of subsections (a)(3), (b)(4), and
(c)(4) of section 202 shall apply with respect to
investigations by the Commission under paragraph (1).
(3) The Commission shall report to the President its
determination with respect to each investigation under
paragraph (1) and the basis therefor and shall include in each
report any dissenting or separate views. If the Commission
finds, as a result of its investigation, that market disruption
exists with respect to an article produced by a domestic
industry, it shall find the amount of the increase in, or
imposition of, any duty or other import restriction on such
article which is necessary to prevent or remedy such market
disruption and shall include such finding in its report to the
President. The Commission shall furnish to the President a
transcript of the hearings and any briefs which may have been
submitted in connection with each investigation.
(4) The report of the Commission of its determination with
respect to an investigation under paragraph (1) shall be made
at the earliest practicable time, but not later than 3 months
after the date on which the petition is filed (or the date on
which the request or resolution is received or the motion is
adopted, as the case may be). Upon making such report to the
President, the Commission shall also promptly make public such
report (with the exception of information which the Commission
determines to be confidential) and shall cause a summary
thereof to be published in the Federal Register.
(b) With respect to any affirmative determination of the
Commission under subsection (a)--
(1) such determination shall be treated as an
affirmative determination made under section 201(b) of
this Act (as in effect on the day before the date of
the enactment of the Omnibus Trade and Competitiveness
Act of 1988); and
(2) sections 202 and 203 of this Act (as in effect on
the day before the date of the enactment of such Act of
1988), rather than the provisions of chapter 1 of title
II of this Act as amended by section 1401 of such Act
of 1988, shall apply with respect to the taking of
subsequent action, if any, by the President in response
to such affirmative determination;
except that--
(A) the President may take action under such sections
202 and 203 only with respect to imports from the
country or countries involved of the article with
respect to which the affirmative determination was
made; and
(B) if such action consists of, or includes, an
orderly marketing agreement, such agreement shall be
entered into within 60 days after the import relief
determination date.
(c) If, at any time, the President finds that there are
reasonable grounds to believe, with respect to imports of an
article which is the product of a Communist country, that
market disruption exists with respect to an article produced by
a domestic industry, he shall request the Commission to
initiate an investigation under subsection (a). If the
President further finds that emergency action is necessary, he
may take action under sections 202 and 203 referred to in
subsection (b) as if an affirmative determination of the
Commission had been made under subsection (a). Any action taken
by the President under the preceding sentence shall cease to
apply (1) if a negative determination is made by the Commission
under subsection (a) with respect to imports of such article,
on the day on which the Commission's report of such
determination is submitted to the President, or (2) if an
affirmative determination is made by the Commission under
subsection (a) with respect to imports of such article, on the
day on which the action was taken by the President pursuant to
such determination becomes effective.
(d)(1) A petition may be filed with the President by an
entity described in section 202(a) requesting the President to
initiate consultations provided for by the safeguard
arrangements of any agreement entered into under section 405
with respect to imports of an article which is the product of
the country which is the other party to such agreement.
(2) If the President determines that there are reasonable
grounds to believe, with respect to imports of such article,
that market disruption exists with respect to an article
produced by a domestic industry, he shall initiate
consultations with such country with respect to such imports.
(e) For purposes of this section--
(1) The term ``Communist country'' means any country
dominated or controlled by communism.
(2)(A) Market disruption exists within a domestic
industry whenever imports of an article, like or
directly competitive with an article produced by such
domestic industry, are increasing rapidly, either
absolutely or relatively, so as to be a significant
cause of material injury, or threat thereof, to such
domestic industry.
(B) For purposes of subparagraph (A):
(i) Imports of an article shall be considered
to be increasing rapidly if there has been a
significant increase in such imports (either
actual or relative to domestic production)
during a recent period of time.
(ii) The term ``significant cause'' refers to
a cause which contributes significantly to the
material injury of the domestic industry, but
need not be equal to or greater than any other
cause.
(C) The Commission, in determining whether market
disruption exists, shall consider, among other
factors--
(i) the volume of imports of the merchandise
which is the subject of the investigation;
(ii) the effect of imports of the merchandise
on prices in the United States for like or
directly competitive articles;
(iii) the impact of imports of such
merchandise on domestic producers of like or
directly competitive articles; and
(iv) evidence of disruptive pricing
practices, or other efforts to unfairly manage
trade patterns.
F. RELIEF FROM MARKET DISRUPTION BY IMPORTS FROM THE PEOPLE'S REPUBLIC
OF CHINA
Section 421-423 of the Trade Agreements Act of 1974, as amended
[19 U.S.C. 2451, 2451a, 2451b; P.L. 93-618, as amended by P.L. 106-286]
CHAPTER 2--RELIEF FROM MARKET DISRUPTION TO INDUSTRIES AND DIVERSION OF
TRADE TO THE UNITED STATES MARKET
SEC. 421. ACTION TO ADDRESS MARKET DISRUPTION.
(a) Presidential Action.--If a product of the People's
Republic of China is being imported into the United States in
such increased quantities or under such conditions as to cause
or threaten to cause market disruption to the domestic
producers of a like or directly competitive product, the
President shall, in accordance with the provisions of this
section, proclaim increased duties or other import restrictions
with respect to such product, to the extent and for such period
as the President considers necessary to prevent or remedy the
market disruption.
(b) Intiation of an Investigation.--(1) Upon the filing of
a petition by an entity described in section 202(a) of the
Trade Act of 1974 (19 U.S.C. 2252(a)), upon the request of the
President or the United States Trade Representative (in this
subtitle referred to as the ``Trade Representative''), upon
resolution of either the Committee on Ways and Means of the
House of Representatives, or the Committee on Finance of the
Senate (in this subtitle referred to as the ``Committees'') or
on its own motion, the United States International Trade
Commission (in this subtitle referred to as the ``Commission'')
shall promptly make an investigation to determine whether
products of the People's Republic of China are being imported
into the United States in such increased quantities or under
such conditions as to cause or threaten to cause market
disruption to the domestic producers of like or directly
competitive products.
(2) The limitations on investigations set forth in section
202(h)(1) of the Trade Act of 1974 (19 U.S.C. 2252(h)(1)) shall
apply to investigations conducted under this section.
(3) The provisions of subsections (a)(8) and (i) of section
202 of the Trade Act of 1974 (19 U.S.C. 2252(a)(8) and (i)),
relating to treatment of confidential business information,
shall apply to investigations conducted under this section.
(4) Whenever a petition is filed, or a request or
resolution is received, under this subsection, the Commission
shall transmit a copy thereof to the President, the Trade
Representative, the Committee on Ways and Means of the House of
Representatives, and the Committee on Finance of the Senate,
except that in the case of confidential business information,
the copy may include only nonconfidential summaries of such
information.
(5) The Commission shall publish notice of the commencement
of any proceeding under this subsection in the Federal Register
and shall, within a reasonable time thereafter, hold public
hearings at which the Commission shall afford interested
parties an opportunity to be present, to present evidence, to
respond to the presentations of other parties, and otherwise to
be heard.
(c) Market Disruption.--(1) For purposes of this section,
market disruption exists whenever imports of an article like or
directly competitive with an article produced by a domestic
industry are increasing rapidly, either absolutely or
relatively, so as to be a significant cause of material injury,
or threat of material injury, to the domestic industry.
(2) For purposes of paragraph (1), the term ``significant
cause'' refers to a cause which contributes significantly to
the material injury of the domestic industry, but need not be
equal to or greater than any other cause.
(d) Factors in Determination.--In determining whether
market disruption exists, the Commission shall consider
objective factors, including--
(1) the volume of imports of the product which is the
subject of the investigation;
(2) the effect of imports of such product on prices
in the United States for like or directly competitive
articles.
(3) the effect of imports of such product on the
domestic industry producing like or directly
competitive articles.
The presence or absence of any factor under paragraph (1), (2),
or (3) is not necessarily dispositive of whether market
disruption exists.
(e) Time for Commission Determinations.--The Commission
shall make and transmit to the President and the Trade
Representative its determination under subsection (b)(1) at the
earliest practicable time, but in no case later than 60 days
(or 90 days in the case of a petition requesting relief under
subsection (i)) after the date on which the petition is filed,
the request or resolution is received, or the motion is
adopted, under subsection (b). If the Commissioners voting are
equally divided with respect to its determination, then the
determination agreed upon by either group of Commissioners may
be considered by the President and the Trade Representative as
the determination of the Commission.
(f) Recommendations of Commission on Proposed Remedies.--If
the Commission makes an affirmative determination under
subsection (b), or a determination which the President or the
Trade Representative may consider as affirmative under
subsection (e), the Commission shall propose the amount of
increase in, or imposition of, any duty or other import
restrictions necessary to prevent or remedy the market
disruption. Only those members of the Commission who agreed to
the affirmative determination under subsection (b) are eligible
to vote on the proposed action to prevent or remedy market
disruption. Members of the Commission who did not agree to the
affirmative determination may submit, in the report required
under subsection (g), separate views regarding what action, if
any, should be taken to prevent or remedy market disruption.
(g) Report by Commission.--(1) Not later than 20 days after
a determination under subsection (b) is made, the Commission
shall submit a report to the president and the Trade
Representative.
(2) The Commission shall include in the report required
under paragraph (1) the following:
(A) The determination made under subsection (b) and
an explanation of the basis for the determination.
(B) If the determination under subsection (b) is
affirmative, or may be considered by the President of
the Trade Representative as affirmative under
subsection (e), the recommendations of the Commission
on proposed remedies under subsection (f) and an
explanation of the basis for each recommendation.
(C) Any dissenting or separate views by members of
the Commission regarding the determination and any
recommendation referred to in subparagraphs (A) and
(B).
(D) A description of--
(i) the short- and long-term effects that
implementation of the action recommended under
subsection (f) is likely to have on the
petitioning domestic industry, on other
domestic industries, and on consumers; and
(ii) the short- and long-term effects of not
taking the recommended action on the
petitioning domestic industry, its workers, and
the communities where production facilities of
such industry are located, and on other
domestic industries.
(3) The Commission, after submitting a report to the
President under paragraph (1), shall promptly make it available
to the public (but shall not include confidential business
information) and cause a summary thereof to be published in the
Federal Register.
(h) Opportunity To Present Views and Evidence on Proposed
Measure and Recommendation to the President.--(1) Within 20
days after receipt of the Commission's report under subsection
(g) (or 15 days in the case of an affirmative preliminary
determination under subsection (i)(1)(B)), the Trade
Representative shall publish in the Federal Register notice of
any measure proposed by the Trade Representative to be taken
pursuant to subsection (a) and of the opportunity, including a
public hearing, if requested, for importers, exporters, and
other interested parties to submit their views and evidence on
the appropriateness of the proposed measure and whether it
would be in the public interest.
(2) Within 55 days after receipt of the report under
subsection (g) (or 35 days in the case of an affirmative
preliminary determination under subsection (i)(1)(B)), The
Trade Representative, taking into account the views and
evidence received under paragraph (1) on the measure proposed
by the Trade Representative, shall make a recommendation to the
President concerning what action, if any, to take to prevent or
remedy the market disruption.
(i) Critical Circumstances.--(1) When a petition filed
under subsection (b) alleges that critical circumstances exist
and requests that provisional relief be provided under this
subsection with respect to the product identified in the
petition, the Commission shall, not later than 45 days after
the petition containing the request is filed--
(A) determine whether delay in taking action under
this section would cause damage to the relevant
domestic industry which would be difficult to repair;
and
(B) if the determination under subparagraph (A) is
affirmative, make a preliminary determination of
whether imports of the product which is the subject of
the investigation have caused or threatened to cause
market disruption.
If the Commissioners voting are equally divided with respect to
either of its determinations, then the determination agreed
upon by either group of Commissioners may be Considered by the
President and the Trade Representative as the determination of
the Commission.
(2) On the date on which the Commission completes its
determinations under paragraph (1), the Commission shall
transmit a report on the determinations to the President and
the Trade Representative, including the reasons for its
determinations. If the determinations under paragraph (1) are
affirmative, or may be considered by the President or the Trade
Representative as affirmative under paragraph (1), the
Commission shall include in its report its recommendations on
proposed provisional measures to be taken to prevent or remedy
the market disruption. Only those members of the Commission who
agreed to the affirmative determinations under paragraph (1)
are eligible to vote on the proposed provisional measures to
prevent or remedy market disruption. Members of the Commission
who did not agree to the affirmative determinations may submit,
in the report, dissenting or separate views regarding the
determination and any recommendation of provisional measures
referred to in this paragraph.
(3) If the determinations under paragraph (1) are
affirmative, or may be considered by the President or the Trade
Representative as affirmative under paragraph (1), the Trade
Representative shall, within 10 days after receipt of the
Commission's report, determine the amount or extent of
provisional relief that is necessary to prevent or remedy the
market disruption and shall provide a recommendation to the
President on what provisional measures, if any, to take.
(4)(A) The President shall determine whether to provide
provisional relief and proclaim such relief, if any, within 10
days after receipt of the recommendation from the Trade
Representative.
(B) Such relief may take the form of--
(i) the imposition of or increase in any duty;
(ii) any modification, or imposition of any
quantitative restriction on the importation of any
article into the United States; or
(iii) any combination of actions under clauses (i)
and (ii).
(C) Any provisional action proclaimed by the President
pursuant to a determination of critical circumstances shall
remain in effect not more than 200 days.
(D) Provisional relief shall cease to apply upon the
effective date of relief proclaimed under subsection (a), upon
a decision by the President not to provide such relief, or upon
a negative determination by the Commission under subsection
(b).
(j) Agreements With the People's Republic of China.--(1)
The Trade Representative is authorized to enter into agreements
for the People's Republic of China to take such action as
necessary to prevent or remedy market disruption, and should
seek to conclude such agreement before the expiration of the
60-days consultation period provided for under the product-
specific safeguard provision of the Protocol of Accession of
the People's Republic of China to the WTO, which shall commence
not later than 5 days after the Trade Representative receives
an affirmative determination provided for in subsection (e) or
a determination which the Trade Representative considers to be
an affirmative determination pursuant to subsection (e).
(2) If no agreement is reached with the People's Republic
of china pursuant to consultations under paragraph (1), or if
the President determines than an agreement reached pursuant to
such consultations is not preventing or remedying them market
disruption at issue, the President shall provide import relief
in accordance with subsection (a).
(k) Standard for Presidential Action.--(1) Within 15 days
after receipt of a recommendation from the Trade Representative
under subsection (h) on the appropriate action, if any, to take
to prevent or remedy the market disruption, the President shall
provide import relief for such industry pursuant to subsection
(a), unless the President determines that provision of such
relief is not in the national economic interest of the United
States or, in extraordinary cases, that the taking of action
pursuant to subsection (a) would cause serious harm to the
national security of the United States.
(2) The President may determine under paragraph (1) that
providing import relief is not in the national economic
interest of the United States only if the President finds that
the taking of such action would have an adverse impact on the
United States economy clearly greater than the benefits of such
action
(l) Publication of Decision and Reports.--The President's
decision, including the reasons therefor and the scope and
duration of any action taken, shall be published in the Federal
Register.
(2) The Commission shall promptly make public any report
transmitted under this section, but shall not make public any
information which the Commission determines to be confidential,
and shall publish notice of such report in the Federal
Register.
(m) Effective Date of Relief.--Import relief under this
section shall take effect not later than 15 days after the
President's determination to provide such relief.
(n) Modifications of Relief.--(1) At any time after the end
of the 6-month period beginning on the date on which relief
under subsection (m) first takes effect, the President may
request that the Commission provide a report on the Probable
effect of the modification, reduction, or termination of the
relief provided on the relevant industry. The Commission shall
transmit such report to the President within 60 days of the
request.
(2) The President may, after receiving a report from the
Commission under paragraph (1), take such action to modify,
reduce, or terminate relief that the President determines is
necessary to continue to prevent or remedy the market
disruption at issue.
(3) Upon the granting of relief under subsection (k),
the Commission shall collect such data as is necessary
to allow it to respond rapidly to a request by the
President under paragraph (1).
(o) Extension of Action.--(1) Upon request of the
President or upon petition on behalf of the industry
concerned filed with the Commission not earlier than
the date which is 9 months, and not later than the date
which is 6 months, before the date any relief provided
under subsection (k) is to terminate, the Commission
shall investigate to determine whether action under
this section continues to be necessary to prevent or
remedy market disruption.
(2) The Commission shall publish notice of the
commencement of any proceeding under this subsection in
the Federal register and shall, within a reasonable
time thereafter, hold a public hearing at which the
Commission shall afford interested parties and
consumers an opportunity to be present, to present
evidence, and to respond to the presentations of other
parties and consumers, and otherwise to be heard.
(3) The Commission shall transmit to the President a
report on its investigation and determination under
this subsection not later than 60 days before the
action under subsection (m) is to terminate.
(4) The President, after receiving an affirmative
determination from the Commission under paragraph (3),
may extend the effective period of any action under
this section if the President determines that the
action continues to be necessary to prevent or remedy
the market disruption.
SEC. 422. ACTION TO RESPONSE TO TRADE DIVERSION.
(a) Monitoring by Customs Service.--In any case in which a
WTO member other than the United States requests consultations
with the People's Republic of China under the product-specific
safeguard provision of the Protocol of Accession of the
People's Republic of China to the World Trade Organization, the
Trade Representative shall inform the United States Customs
Service, which shall monitor imports into the United States of
those products of Chinese origin that are the subject of the
consultation request. Data from such monitoring shall promptly
be made available to the Commission upon request by the
Commission.
(b) Initiation of Investigation.--Upon the filing of a
petition by an entity described in section 202(a) of the Trade
Act of 1974, upon the request of the President or the Trade
Representative, upon resolution of either of the Committees, or
on its own motion, the Commission shall promptly make an
investigation to determine whether an action described in
subsection (c) has caused, or threatens to cause, a significant
diversion of trade into the domestic market of the United
States.
(2) The Commission shall publish notice of the commencement
of any proceeding under this subsection in the Federal Register
and shall, within a reasonable time thereafter, hold public
hearings at which the Commission shall afford interested
parties an opportunity to be present, to present evidence, to
respond to the presentations of other parties, and otherwise to
be hear.
(3) The provisions of subsection (a)(8) and (i) of section
202 of the Trade Act of 1974 (19 U.S.C. 2252(a)(8) and (i)),
relating to treatment of confidential business information,
shall apply to investigations conducted under this section.
(c) Actions Described.--An action is described in this
subsection if it is an action--
(1) by the People's Republic of China to prevent or
remedy market disruption in a WTO member other than the
United States;
(2) by a WTO member other than the United States to
withdraw concessions under the WTO Agreement or
otherwise to limit imports to prevent or remedy market
disruption;
(3) by a WTO member other than the United States to
apply a provisional safeguard within the meaning of the
product-specific safeguard provison of the Protocol of
Accession of the People's Republic of China to the WTO;
or
(4) any combination of actions described in
paragraphs (1) through (3).
(d) Basic for Determination of Significant Diversion.--(1)
In determining whether significant diversion or the treat
thereof exists for purposes of this section, the Commission
shall take into account, to the extent such evidence is
reasonably available--
(A) the monitoring conducted under subsection (A);
(B) the actual or imminent increase in United States
market share held by such imports from the People's
Republic of China;
(C) the actual or imminent increase in volume of such
imports into the United States;
(D) the nature and extent of the action taken or
proposed by the WTO member concerned;
(E) the extent of exports from the People's Republic
of China to that WTO member and to the United States;
(F) the actual or imminent changes in exports to that
WTO member due to the action taken or proposed
(G) the actual or imminent diversion of exports from
the People's Republic of China to countries other than
the Unites States;
(H) cyclical or seasonal trend in import volumes into
the United States of the products at issue; and
(I) conditions of demand and supply in the United
States market for the products at issue.
The presence or absence of any factor under any of
subparagraphs (A) through (I) is not necessarily dispositive of
whether a significant diversion of trade or the treat thereof
exists.
(2) For purposes of making its determination, the
Commission shall examine changes in imports into the United
States from the People's Republic of China since the time that
the WTO member commenced the investigation that led to a
request for consultations described in subsection (a).
(3) If more than one action by a WTO member or WTO
members against a particular product is identified in the
petition, request, or resolution under subsection (b) or during
the investigation, the Commission may cumulatively assess the
actual or likely effects of such actions jointly in determining
whether a significant diversion of trade or threat thereof
exists.
(e) Commission Determination; Agreement Authority.--(1)
The Commission shall make and transmit to the President and the
trade Representative its determination under subsection (b) at
the earliest practicable time, but in no case later than 45
days after the date on which the petition is filed, the request
or resolution is received, or the motion is adopted, under
subsection (b). If the Commissioners voting are equally divided
with respect to its determination, then the determination
agreed upon by either group of Commissioners may be considered
by the President and the Trade Representative as the
determination of the Commission.
(2) The Trade Representative is authorized to enter into
agreements with the People's Republic of China or the other WTO
members concerned to take such action as necessary to prevent
or remedy significant trade diversion or treat thereof into the
domestic market of the United States, and should seek to
conclude such agreements before the expiration of the 60-day
consultation period provided for under the product-specific
safeguard provision of the Protocol of Accession of the
People's Republic of China to the WTO, which shall commence not
later than 5 days after the Trade Representative receives an
affirmative determination provided for in paragraph (1) or a
determination which the Trade Representative considers to be an
affirmative determination pursuant to paragraph (1).
(3) Report by Commission.--
(A) Not later than 10 days after a determination
under subsection (b), is made, the Commission shall
transmit a report to the President and the Trade
Representative.
(B) The Commission shall include in the report
required under subparagraph (A) the following:
(i) The determination made under subsection
(b) and an explanation of the basis for the
determination.
(ii) If the determination under subsection
(b) is affirmative, or may be considered by the
President or the Trade Representative as
affirmative under subsection (e)(1), the
recommendations of the Commission on increased
tariffs or other import restrictions to be
imposed to prevent or remedy the trade
diversion or threat thereof, and explanations
of the bases for such recommendations. Only
those members of the Commission who agreed to
the affirmative determination under subsection
(b) are eligible to vote on the proposed action
to prevent or remedy the trade diversion or
threat thereof.
(iii) Any dissenting or separate views by
members of the Commission regarding the
determination and any recommendation referred
to in clauses (i) and (ii).
(iv) A description of--
(I) The short- and long-term effects
that implementation of the action
recommended under clause (ii) is likely
to have on the petitioning domestic
industry, on other domestic industries,
and on consumers; and
(II) the short- and long-term effects
of not taking the recommended action on
the petitioning domestic industry, its
workers and the communities where
production facilities of such industry
are located, and on other domestic
industries.
(C) The Commission, after submitting a report to the
President under subparagraph (A), shall promptly make
it available to the public (with the exception of
confidential business information) and cause a summary
thereof to be published in the Federal Register.
(f) Public Comment.--If consultations fail to lead to an
agreement with the People's Republic of China or the WTO member
concerned within 60 days, the Trade Representative shall
promptly publish notice in the Federal Register of any proposed
action to prevent or remedy the trade diversion, and provide an
opportunity for interested persons to present views and
evidence on whether the proposed action is in the public
interest.
(g) Recommendation to the President.--Within 20 days
after the end of consultations pursuant to subsection (e), the
Trade Representative shall make a recommendation to the
President on what action, if any, should be taken to prevent or
remedy the trade diversion or threat thereof.
(h) Presidential Action.--Within 20 days after receipt of
the recommendation from the Trade Representative, the President
shall determine what action to take to prevent or remedy the
trade diversion or threat thereof.
(i) Duration of Action.--Action taken under subsection
(h) shall be terminated not later than 30 days after expiration
of the action taken by the WTO member or members involved
against imports from the People's Republic of China.
(j) Review of Circumstances.--The Commission shall review
the continued need for action taken under subsection (h) if the
WTO member of members involved notify the Committee of
Safeguards of the WTO of any modification in the action taken
by them against the People's Republic of China pursuant to
consultation referred to in subsection (a). The Commission
shall, not later than 60 days after such notification,
determine whether a significant diversion of trade continues to
exist and report its determination to the President. The
President shall determine, within 15 days after receiving the
Commission's report, whether to modify, withdraw, or keep in
place the action taken under subsection (h).
SEC. 423. REGULATIONS; TERMINATION OF PROVISION.
(a) To Carry Out Restrictions and Monitoring.--The
President shall by regulation provide for the efficient and
fair administration of any restriction proclaimed pursuant to
the subtitle and to provide for effective monitoring of imports
under section 422(a).
(b) To Carry Out Agreements.--To carry out an agreement
concluded pursuant to consultations under section 421(j) or
422(e)(2), the President is authorized to prescribe regulations
governing the entry or withdrawal from warehouse of articles
covered by such agreement.
(c) Termination Date.--This subtitle and any regulations
issued under this subtitle shall cease to be effective 12 years
after the date of entry into force of the Protocol of Accession
of the People's Republic of China to the WTO.
G. AUTHORITY TO AUCTION IMPORT LICENSES
Section 1102 of the Trade Agreements Act of 1979
[19 U.S.C. 2581, P.L. 96-39, as amended by P.L. 100-418, P.L. 105-220,
P.L. 105-277, P.L. 106-36, and P.L. 106-113]
SEC. 1102. AUCTION OF IMPORT LICENSES.
(a) In General.--Notwithstanding any other provision of
law, the President may sell import licenses at public auction
under such terms and conditions as he deems appropriate.
Regulations prescribed under this subsection shall, to the
extent practicable and consistent with efficient and fair
administration, insure against inequitable sharing of imports
by a relatively small number of the larger importers.
(b) Definition of Import License.--For purposes of this
section, the term ``import license'' means any documentation
used to administer a quantitative restriction imposed or
modified after the date of enactment of this Act under--
(1) section 125, 203, 301, or 406 of the Trade Act of
1974 (19 U.S.C. 2135, 2253, 2411, or 2436),
(2) the International Emergency Economic Powers Act
(50 U.S.C. App. 1701-1706),
(3) authority under the notes of the Harmonized
Tariff Schedule of the United States, but not including
any quantitative restriction imposed under section 22
of the Agriculture Adjustment Act of 1934 (7 U.S.C.
624),
(4) the Trading With the Enemy Act (50 U.S.C. App. 1-
44),
(5) section 204 of the Agricultural Act of 1956 (7
U.S.C. 1854) other than for meat or meat products, or
(6) any Act enacted explicitly for the purpose of
implementing any international agreement to which the
United States is a party, including such agreements
relating to commodities, but not including any
agreement relating to cheese or dairy products.
H. TRADE ADJUSTMENT ASSISTANCE
Chapters 2, 3, 4, and 5 of Title II of the Trade Act of 1974, as
amended
[19 U.S.C. 2271 et seq.; P.L. 93-618, as amended by P.L. 96-417, P.L.
97-35, P.L. 98-120, P.L. 98-369, P.L. 99-107, P.L. 99-155, P.L. 99-181,
P.L. 99-189, P.L. 99-272, P.L. 100-418, P.L. 100-647, P.L. 101-382,
P.L. 102-318, P.L. 103-66, and P.L. 103-182, P.L. 105-220, P.L. 105-
277, P.L. 106-36, and P.L. 106-113]
Chapter 2--Adjustment Assistance for Workers
Subchapter A--Petitions and Determinations
SEC. 221. PETITIONS.
(a) A petition for certification of eligibility to apply
for adjustment assistance under this subchapter may be filed
with the Secretary of Labor (hereinafter in this chapter
referred to as the ``Secretary'') by a group of workers
(including workers in any agricultural firm or subdivision of
an agricultural firm) or by their certified or recognized union
or other duly authorized representative. Upon receipt of the
petition, the Secretary shall promptly publish notice in the
Federal Register that he has received the petition and
initiated an investigation.
(b) If the petitioner, or any other person found by the
Secretary to have a substantial interest in the proceedings,
submits not later than 10 days after the date of the
Secretary's publication under subsection (a) a request for a
hearing, the Secretary shall provide for a public hearing and
afford such interested persons an opportunity to be present, to
produce evidence, and to be heard.
SEC. 222. GROUP ELIGIBILITY REQUIREMENTS.
(a) The Secretary shall certify a group of workers
(including workers in any agricultural firm or subdivision of
an agricultural firm) as eligible to apply for adjustment
assistance under this subchapter if he determines--
(1) that a significant number or proportion of the
workers in such workers' firm or an appropriate
subdivision of the firm have become totally or
partially separated, or are threatened to become
totally or partially separated,
(2) that sales or production, or both, of such firm
or subdivision have decreased absolutely, and
(3) that increases of imports of articles like or
directly competitive with articles produced by such
workers' firm or an appropriate subdivision thereof
contributed importantly to such total or partial
separation, or threat thereof, and to such decline in
sales or production.
(b) For purposes of subsection (a)(3)--
(1) The term ``contributed importantly'' means a
cause which is important but not necessarily more
important than any other cause.
(2)(A) Any firm, or appropriate subdivision of a
firm, that engages in exploration or drilling for oil
or natural gas shall be considered to be a firm
producing oil or natural gas.
(B) Any firm, or appropriate subdivision of a firm,
that engages in exploration or drilling for oil or
natural gas, or otherwise produces oil or natural gas,
shall be considered to be producing articles directly
competitive with imports of oil and with imports of
natural gas.
SEC. 223. DETERMINATIONS BY SECRETARY OF LABOR.
(a) As soon as possible after the date on which a petition
is filed under section 221, but in any event not later than 60
days after that date, the Secretary shall determine whether the
petitioning group meets the requirements of section 222 and
shall issue a certification of eligibility to apply for
assistance under this subchapter covering workers in any group
which meets such requirements. Each certification shall specify
the date on which the total or partial separation began or
threatened to begin.
(b) A certification under this section shall not apply to
any worker whose last total or partial separation from the firm
or appropriate subdivision of the firm before his application
under section 231 occurred--
(1) more than one year before the date of the
petition on which such certification was granted, or
(2) more than 6 months before the effective date of
this chapter.
(c) Upon reaching his determination on a petition, the
Secretary shall promptly publish a summary of the determination
in the Federal Register together with his reasons for making
such determination.
(d) Whenever the Secretary determines, with respect to any
certification of eligibility of the workers of a firm or
subdivision of the firm, that total or partial separations from
such firm or subdivision are no longer attributable to the
conditions specified in section 222, he shall terminate such
certification and promptly have notice of such termination
published in the Federal Register together with his reasons for
making such determination. Such termination shall apply only
with respect to total or partial separations occurring after
the termination date specified by the Secretary.
SEC. 224. STUDY BY SECRETARY OF LABOR WHEN INTERNATIONAL TRADE
COMMISSION BEGINS INVESTIGATION.
(a) Whenever the International Trade Commission (hereafter
referred to in this chapter as the ``Commission'') begins an
investigation under section 202 with respect to an industry,
the Commission shall immediately notify the Secretary of such
investigation, and the Secretary shall immediately begin a
study of--
(1) the number of workers in the domestic industry
producing the like or directly competitive article who
have been or are likely to be certified as eligible for
adjustment assistance, and
(2) the extent to which the adjustment of such
workers to the import competition may be facilitated
through the use of existing programs.
(b) The report of the Secretary of the study under
subsection (a) shall be made to the President not later than 15
days after the day on which the Commission makes its report
under section 202(f). Upon making his report to the President,
the Secretary shall also promptly make it public (with the
exception of information which the Secretary determines to be
confidential) and shall have a summary of it published in the
Federal Register.
SEC. 225. BENEFIT INFORMATION TO WORKERS.
(a) The Secretary shall provide full information to workers
about the benefit allowances, training, and other employment
services available under this chapter and about the petition
and application procedures, and the appropriate filing dates,
for such allowances, training and services. The Secretary shall
provide whatever assistance is necessary to enable groups of
workers to prepare petitions or applications for program
benefits. The Secretary shall make every effort to insure that
cooperating State agencies fully comply with the agreements
entered into under section 239(a) and shall periodically review
such compliance. The Secretary shall inform the State Board for
Vocational Education or equivalent agency and other public or
private agencies, institutions, and employers, as appropriate,
of each certification issued under section 223 and of
projections, if available, of the needs for training under
section 236 as a result of such certification.
(b)(1) The Secretary shall provide written notice through
the mail of the benefits available under this chapter to each
worker whom the Secretary has reason to believe is covered by a
certification made under subchapter A or subchapter D of this
chapter--
(A) at the time such certification is made, if the
worker was partially or totally separated from the
adversely affected employment before such
certification, or
(B) at the time of the total or partial separation of
the worker from the adversely affected employment, if
subparagraph (A) does not apply.
(2) The Secretary shall publish notice of the benefits
available under this chapter to workers covered by each
certification made under subchapter A or subchapter D in
newspapers of general circulation in the areas in which such
workers reside.
Subchapter B--Program Benefits
Part I--Trade Readjustment Allowances
SEC. 231. QUALIFYING REQUIREMENTS FOR WORKERS.
(a) Payment of a trade readjustment allowance shall be made
to an adversely affected worker covered by a certification
under subchapter A who files an application for such allowance
for any week of unemployment which begins more than 60 days
after the date on which the petition that resulted in such
certification was filed under section 221, if the following
conditions are met:
(1) Such worker's total or partial separation before
his application under this chapter occurred--
(A) on or after the date, as specified in the
certification under which he is covered, on
which total or partial separation began or
threatened to begin in the adversely affected
employment,
(B) before the expiration of the 2-year
period beginning on the date on which the
determination under section 223 was made, and
(C) before the termination date (if any)
determined pursuant to section 223(d).
(2) Such worker had, in the 52-week period ending
with the week in which such total or partial separation
occurred, at least 26 weeks of employment at wages of
$30 or more a week in adversely affected employment
with a single firm or subdivision of a firm, or, if
data with respect to weeks of employment with a firm
are not available, equivalent amounts of employment
computed under regulations prescribed by the Secretary.
For the purpose of this paragraph, any week in which
such worker--
(A) is on the employer-authorized leave for
purposes of vacation, sickness, injury,
maternity, or inactive duty or active duty
military service for training,
(B) does not work because of a disability
that is compensable under a workmen's
compensation law or plan of a State or the
United States,
(C) had his employment interrupted in order
to serve as a full-time representative of a
labor organization in such firm or subdivision,
or
(D) is on call-up for purposes of active duty
in a reserve status in the Armed Forces of the
United States, provided such active duty is
``Federal service'' as defined in 5 U.S.C.
8521(a)(1),\18\
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\18\ Effective with respect to weeks beginning after August 1,
1990.
---------------------------------------------------------------------------
shall be treated as a week of employment at wages of
$30 or more, but not more than 7 weeks, in case of
weeks described in subparagraph (A) or (C), or both
(and not more than 26 weeks, in the case of weeks
described in subparagraph (B) or (D)), may be treated
as weeks of employment under this sentence.
(3) Such worker--
(A) was entitled to (or would be entitled to
if he applied therefor) unemployment insurance
for a week within the benefit period (i) in
which such total or partial separation took
place, or (ii) which began (or would have
begun) by reason of the filing of a claim for
unemployment insurance by such worker after
such total or partial separation;
(B) has exhausted all rights to any
unemployment insurance to which he was entitled
(or would be entitled if he applied therefor);
and
(C) does not have an unexpired waiting period
applicable to him for any such unemployment
insurance.
(4) Such worker, with respect to such week of
unemployment, would not be disqualified for extended
compensation payable under the Federal-State Extended
Unemployment Compensation Act of 1970 by reason of the
work acceptance and job search requirements in section
202(a)(3) of such Act.
(5) Such worker--
(A) is enrolled in a training program
approved by the Secretary under section 236(a),
or
(B) has, after the date on which the worker
became totally separated, or partially
separated, from the adversely affected
employment, completed a training program
approved by the Secretary under section 236(a),
or
(C) has received a written statement
certified under subsection (c)(1) after the
date described in subparagraph (B).
(b)(1) If--
(A) the Secretary determines that--
(i) the adversely affected worker--
(I) has failed to begin participation
in the training program the enrollment
in which meets the requirement of
subsection (a)(5), or
(II) has ceased to participate in
such training program before completing
such training program, and
(ii) there is no justifiable cause for such
failure or cessation, or
(B) the certification made with respect to such
worker under subsection (c)(1) is revoked under
subsection (c)(2),
no trade readjustment allowance may be paid to the adversely
affected worker under this part for the week in which such
failure, cessation, or revocation occurred, or any succeeding
week, until the adversely affected worker begins or resumes
participation in a training program approved under section
236(a).
(2) The provisions of subsection (a)(5) and paragraph (1)
shall not apply with respect to any week of unemployment which
begins--
(A) after the date that is 60 days after the date on
which the petition that results in the certification
that covers the worker is filed under section 221, and
(B) before the first week following the week in which
such certification is made under subchapter (A).
(c)(1)(A) If the Secretary finds that it is not feasible or
appropriate to approve a training program for a worker under
section 236(a), the Secretary shall submit to such worker a
written statement certifying such finding.
(B) If a State or State agency has an agreement with the
Secretary under section 239 and the State or State agency finds
that it is not feasible or appropriate to approve a training
program for a worker pursuant to the requirements of section
236(a), the State or State agency shall--
(i) submit to such worker a written statement
certifying such finding, and
(ii) submit to the Secretary a written statement
certifying such finding and the reasons for such
finding.
(2)(A) If, after submitting to a worker a written statement
certified under paragraph (1)(A), the Secretary finds that it
is feasible or appropriate to approve a training program for
such worker under section 236(a), the Secretary shall submit to
such worker a written statement that revokes the certification
made under paragraph (1)(A) with respect to such worker.
(B) If, after submitting to a worker a written statement
certified under paragraph (1)(B), a State or State agency finds
that it is feasible or appropriate to approve a training
program for such worker pursuant to the requirements of section
236(a), the State or State agency shall submit to such worker,
and to the Secretary, a written statement that revokes the
certification made under paragraph (1)(B) with respect to such
worker.
(3) The Secretary shall submit to the Finance Committee of
the Senate and to the Ways and Means Committee of the House of
Representatives an annual report on the number of workers who
received certifications under paragraph (1) during the
preceding year and the number of certifications made under
paragraph (1) that were revoked during the preceding year.
SEC. 232. WEEKLY AMOUNTS.
(a) Subject to subsections (b) and (c), the trade
readjustment allowance payable to an adversely affected worker
for a week of total unemployment shall be an amount equal to
the most recent weekly benefit amount of the unemployment
insurance payable to the worker for a week of total
unemployment preceding the worker's first exhaustion of
unemployment insurance (as determined for purposes of section
231(a)(3)(B)) reduced (but not below zero) by--
(1) any training allowance deductible under
subsection (c); and
(2) income that is deductible from unemployment
insurance under the disqualifying income provisions of
the applicable State law or Federal unemployment
insurance law.
(b) Any adversely affected worker who is entitled to trade
readjustment allowances and who is undergoing training approved
by the Secretary shall receive for each week in which he is
undergoing any such training, a trade readjustment allowance in
an amount (computed for such week) equal to the amount computed
under subsection (a) or (if greater) the amount of any weekly
allowance for such training to which he would be entitled under
any other Federal law for the training of workers, if he
applied for such allowance. Such trade readjustment allowance
shall be paid in lieu of any training allowance to which the
worker would be entitled under such other Federal law.
(c) If a training allowance under any Federal law other
than this Act, is paid to an adversely affected worker for any
week of unemployment with respect to which he would be entitled
(determined without regard to any disqualification under
section 231(b)) to a trade readjustment allowance if he applied
for such allowance, each such week shall be deducted from the
total number of weeks of trade readjustment allowance otherwise
payable to him under section 233(a) when he applies for a trade
readjustment allowance and is determined to be entitled to such
allowance. If such training allowance paid to such worker for
any week of unemployment is less than the amount of the trade
readjustment allowance to which he would be entitled if he
applied for such allowance, he shall receive, when he applies
for a trade readjustment allowance and is determined to be
entitled to such allowance, a trade readjustment allowance for
such week equal to such difference.
SEC. 233. LIMITATIONS ON TRADE READJUSTMENT ALLOWANCES.
(a)(1) The maximum amount of trade readjustment allowances
payable with respect to the period covered by any certification
to an adversely affected worker shall be the amount which is
the product of 52 multiplied by the trade readjustment
allowance payable to the worker for a week of total
unemployment (as determined under section 232(a)), but such
product shall be reduced by the total sum of the unemployment
insurance to which the worker was entitled (or would have been
entitled if he had applied therefor) in the worker's first
benefit period described in section 231(a)(3)(A).
(2) A trade readjustment allowance shall not be paid for
any week occurring after the close of the 104-week period that
begins with the first week following the week in which the
adversely affected worker was most recently totally separated
from adversely affected employment--
(A) within the period which is described in section
231(a)(1), and
(B) with respect to which the worker meets the
requirements of section 231(a)(2).
(3) Notwithstanding paragraph (1), in order to assist the
adversely affected worker to complete training approved for him
under section 236, and in accordance with regulations
prescribed by the Secretary, payments may be made as trade
readjustment allowances for up to 26 additional weeks in the
26-week period that--
(A) follows the last week of entitlement to trade
readjustment allowances otherwise payable under this
chapter; or
(B) begins with the first week of such training, if
such training begins after the last week described in
subparagraph (A).
Payments for such additional weeks may be made only for weeks
in such 26-week period during which the individual is
participating in such training.
(b) A trade readjustment allowance may not be paid for an
additional week specified in subsection (a)(3) if the adversely
affected worker who would receive such allowance did not make a
bona fide application to a training program approved by the
Secretary under section 236 within 210 days after the date of
the worker's first certification of eligibility to apply for
adjustment assistance issued by the Secretary, or, if later,
within 210 days after the date of the worker's total or partial
separation referred to in section 231(a)(1).
(c) Amounts payable to an adversely affected worker under
this part shall be subject to such adjustment on a week-to-week
basis as may be required by section 232(b).
(d) Notwithstanding any other provision of this Act or
other Federal law, if the benefit year of a worker ends within
an extended benefit period, the number of weeks of extended
benefits that such worker would, but for this subsection, be
entitled to in that extended benefit period shall be reduced
(but not below zero) by the number of weeks for which the
worker was entitled, during such benefit year, to trade
readjustment allowances under this part. For purposes of this
paragraph, the terms ``benefit year'' and ``extended benefit
period'' shall have the same respective meanings given to them
in the Federal-State Extended Unemployment Compensation Act of
1970.
(e) No trade readjustment allowance shall be paid to a
worker under this part for any week during which the worker is
receiving on-the-job training.
(f) For purposes of this chapter, a worker shall be treated
as participating in training during any week which is part of a
break in training that does not exceed 14 days if--
(1) the worker was participating in a training
program approved under section 236(a) before the
beginning of such break in training, and
(2) the break is provided under such training
program.
SEC. 234. APPLICATION OF STATE LAWS.
Except where inconsistent with the provisions of this
chapter and subject to such regulations as the Secretary may
prescribe, the availability and disqualification provisions of
the State law--
(1) under which an adversely affected worker is
entitled to unemployment insurance (whether or not he
has filed a claim for such insurance), or
(2) if he is not so entitled to unemployment
insurance, of the State in which he was totally or
partially separated,
shall apply to any such worker who files a claim for trade
readjustment allowances. The State law so determined with
respect to a separation of a worker shall remain applicable,
for purposes of the preceding sentence, with respect to such
separation until such worker becomes entitled to unemployment
insurance under another State law (whether or not he has filed
a claim for such insurance).
Part II--Training, Other Employment Services, and Allowances
SEC. 235. EMPLOYMENT SERVICES.
The Secretary shall make every reasonable effort to secure
for adversely affected workers covered by a certification under
subchapter A of this chapter counseling, testing, and placement
services, and supportive and other services, provided for under
any other Federal law. The Secretary shall, whenever
appropriate, procure such services through agreements with the
States.
SEC. 236. TRAINING.
(a)(1) If the Secretary determines that--
(A) there is no suitable employment (which may
include technical and professional employment)
available for an adversely affected worker,
(B) the worker would benefit from appropriate
training,
(C) there is a reasonable expectation of employment
following completion of such training,
(D) training approved by the Secretary is reasonably
available to the worker from either governmental
agencies or private sources (which may include area
vocational education schools, as defined in section
195(2) of the Vocational Education Act of 1963, and
employers),
(E) the worker is qualified to undertake and complete
such training, and
(F) such training is suitable for the worker and
available at a reasonable cost,
the Secretary shall approve such training for the worker. Upon
such approval, the worker shall be entitled to have payment of
the costs of such training (subject to the limitations imposed
by this section) paid on his behalf by the Secretary directly
or through a voucher system. Insofar as possible, the Secretary
shall provide or assure the provision of such training on the
job, which shall include related education necessary for the
acquisition of skills needed for a position within a particular
occupation.
(2)(A) The total amount of payments that may be made under
paragraph (1) for any fiscal year shall not exceed $80,000,000,
except that for fiscal year 1997, the total amount of payments
made under paragraph (1) shall not exceed $70,000,000.
(B) If, during any fiscal year, the Secretary estimates
that the amount of funds necessary to pay the costs of training
approved under this section will exceed the amount of the
limitation proposed under subparagraph (A), the Secretary shall
decide how the portion of such limitation that has not been
expended at the time of such estimate is to be apportioned
among the States for the remainder of such fiscal year.
(3) For purposes of applying paragraph (1)(C), a reasonable
expectation of employment does not require that employment
opportunities for a worker be available, or offered,
immediately upon the completion of training approved under this
paragraph (1).
(4)(A) If the costs of training an adversely affected
worker are paid by the Secretary under paragraph (1), no other
payment for such costs may be made under any other provision of
Federal law.
(B) No payment may be made under paragraph (1) of the costs
of training an adversely affected worker if such costs--
(i) have already been paid under any other provision
of Federal law, or
(ii) are reimbursable under any other provision of
Federal law and a portion of such costs have already
been paid under such other provision of Federal law.
(C) The provisions of this paragraph shall not apply to, or
take into account, any funds provided under any other provision
of Federal law which are used for any purpose other than the
direct payment of the costs incurred in training a particular
adversely affected worker, even if such use has the effect of
indirectly paying or reducing any portion of the costs involved
in training the adversely affected worker.
(5) The training programs that may be approved under
paragraph (1) include, but are not limited to--
(A) on-the-job training,
(B) any training program provided by a State pursuant
to title I of the Workforce Investment Act of 1998,
(C) any training program approved by a private
industry council established under section 102 of such
Act,
(D) any program of remedial education,
(E) any training program (other than a training
program described in paragraph (7)) for which all, or
any portion, of the costs of training the worker are
paid--
(i) under any Federal or State program other
than this chapter, or
(ii) from any source other than this section,
and
(F) any other training program approved by the
Secretary.
(6)(A) The Secretary is not required under paragraph (1) to
pay the costs of any training approved under paragraph (1) to
the extent that such costs are paid--
(i) under any Federal or State program other than
this chapter, or
(ii) from any source other than this section.
(B) Before approving any training to which subparagraph (A)
may apply, the Secretary may require that the adversely
affected worker enter into an agreement with the Secretary
under which the Secretary will not be required to pay under
this section the portion of the costs of such training that the
worker has reason to believe will be paid under the program, or
by the source, described in clause (i) or (ii) of subparagraph
(A).
(7) The Secretary shall not approve a training program if--
(A) all or a portion of the costs of such training
program are paid under any nongovernmental plan or
program,
(B) the adversely affected worker has a right to
obtain training or funds for training under such plan
or program, and
(C) such plan or program requires the worker to
reimburse the plan or program from funds provided under
this chapter, or from wages paid under such training
program, for any portion of the costs of such training
program paid under the plan or program.
(8) The Secretary may approve training for any adversely
affected worker who is a member of a group certified under
subchapter A at any time after the date on which the group is
certified under subchapter A, without regard to whether such
worker has exhausted all rights to any unemployment insurance
to which the worker is entitled.
(9) The Secretary shall prescribe regulations which set
forth the criteria under each of the subparagraphs of paragraph
(1) that will be used as the basis for making determinations
under paragraph (1).
(b) The Secretary may, where appropriate, authorize
supplemental assistance necessary to defray reasonable
transportation and subsistence expenses for separate
maintenance when training is provided in facilities which are
not within commuting distance of a worker's regular place of
residence. The Secretary may not authorize--
(1) payments for subsistence that exceed whichever is
the lesser of (A) the actual per diem expenses for
subsistence, or (B) payments at 50 percent of the
prevailing per diem allowance rate authorized under the
Federal travel regulations, or
(2) payments for travel expenses exceeding the
prevailing mileage rate authorized under the Federal
travel regulations, and
(c) The Secretary shall pay the costs of any on-the-job
training of an adversely affected worker that is approved under
subsection (a)(1) in equal monthly installments, but the
Secretary may pay such costs, notwithstanding any other
provision of this section, only if--
(1) no currently employed worker is displaced by such
adversely affected worker (including partial
displacement such as a reduction in the hours of
nonovertime work, wages, or employment benefits),
(2) such training does not impair existing contracts
for services or collective bargaining agreements,
(3) in the case of training which would be
inconsistent with the terms of a collective bargaining
agreement, the written concurrence of the labor
organization concerned has been obtained,
(4) no other individual is on layoff from the same,
or any substantially equivalent, job for which such
adversely affected worker is being trained,
(5) the employer has not terminated the employment of
any regular employee or otherwise reduced the work
force of the employer with the intention of filling the
vacancy so created by hiring such adversely affected
worker,
(6) the job for which such adversely affected worker
is being trained is not being created in a promotional
line that will infringe in any way upon the promotional
opportunities of currently employed individuals,
(7) such training is not for the same occupation from
which the worker was separated and with respect to
which such worker's group was certified pursuant to
section 222,
(8) the employer certifies to the Secretary that the
employer will continue to employ such worker for at
least 26 weeks after completion of such training if the
worker desires to continue such employment and the
employer does not have due cause to terminate such
employment,
(9) the employer has not received payment under
subsection (a)(1) with respect to any other on-the-job
training provided by such employer which failed to meet
the requirements of paragraphs (1), (2), (3), (4), (5),
and (6), and
(10) the employer has not taken, at any time, any
action which violated the terms of any certification
described in paragraph (8) made by such employer with
respect to any other on-the-job training provided by
such employer for which the Secretary has made a
payment under subsection (a)(1).
(d) A worker may not be determined to be ineligible or
disqualified for unemployment insurance or program benefits
under this subchapter because the individual is in training
approved under subsection (a), because of leaving work which is
not suitable employment to enter such training, or because of
the application to any such week in training of provisions of
State law or Federal unemployment insurance law relating to
availability for work, active search for work, or refusal to
accept work. The Secretary shall submit to the Congress a
quarterly report regarding the amount of funds expended during
the quarter concerned to provide training under paragraph (1)
and the anticipated demand for such funds for any remaining
quarters in the fiscal year concerned.
(e) For purposes of this section the term ``suitable
employment'' means, with respect to a worker, work of a
substantially equal or higher skill level than the worker's
past adversely affected employment, and wages for such work at
not less than 80 percent of the worker's average weekly wage.
SEC. 237. JOB SEARCH ALLOWANCES.
(a) Any adversely affected worker covered by a
certification under subchapter A of this chapter may file an
application with the Secretary for a job search allowance. Such
allowance, if granted, shall provide reimbursement to the
worker of 90 percent of the cost of necessary job search
expenses as prescribed by regulations of the Secretary; except
that--
(1) such reimbursement may not exceed $800 for any
worker, and
(2) reimbursement may not be made for subsistence and
transportation expenses at levels exceeding those
allowable under section 236(b) (1) and (2).
(b) A job search allowance may be granted only--
(1) to assist an adversely affected worker who has
been totally separated in securing a job within the
United States;
(2) where the Secretary determines that such worker
cannot reasonably be expected to secure suitable
employment in the commuting area in which he resides;
and
(3) where the worker has filed an application for
such allowance with the Secretary before--
(A) the later of--
(i) the 365th day after the date of
the certification under which the
worker is eligible, or
(ii) the 365th day after the date of
the worker's last total separation; or
(B) the 182d day after the concluding date of
any training received by the worker, if the
worker was referred to such training by the
Secretary.
(c) The Secretary shall reimburse any adversely affected
worker for necessary expenses incurred by such worker in
participating in a job search program approved by the
Secretary.
SEC. 238. RELOCATION ALLOWANCES.
(a) Any adversely affected worker covered by a
certification under subchapter A of this chapter may file an
application with the Secretary for a relocation allowance,
subject to the terms and conditions of this section, if such
worker files such application before--
(1) the later of--
(A) the 425th day after the date of the
certification, or
(B) the 425th day after the date of the
worker's last total separation; or
(2) the 182d day after the concluding date of any
training received by such worker, if the worker was
referred to such training by the Secretary.
(b) A relocation allowance may be granted only to assist an
adversely affected worker in relocating within the United
States and only if the Secretary determines that such worker
cannot reasonably be expected to secure suitable employment in
the commuting area in which he resides and that such worker--
(1) has obtained suitable employment affording a
reasonable expectation of long-term duration in the
area in which he wishes to relocate, or
(2) has obtained a bona fide offer of such
employment, and
(3) is totally separated from employment at the time
relocation commences.
(c) A relocation allowance shall not be granted to such
worker unless his relocation occurs within 182 days after the
filing of the application therefor or (in the case of a worker
who has been referred to training by the Secretary) within 182
days after the conclusion of such training.
(d) For the purposes of this section, the term ``relocation
allowance'' means--
(1) 90 percent of the reasonable and necessary
expenses (including, but not limited to, subsistence
and transportation expenses at levels not exceeding
those allowable under section 236(b) (1) and (2))
specified in regulations prescribed by the Secretary,
incurred in transporting a worker and his family if
any, and household effects, and
(2) a lump sum equivalent to three times the worker's
average weekly wage, up to a maximum payment of $800.
Subchapter C--General Provisions
SEC. 239. AGREEMENTS WITH STATES.
(a) The Secretary is authorized on behalf of the United
States to enter into an agreement with any State, or with any
State agency (referred to in this subchapter as ``cooperating
States'' and ``cooperating States agencies'' respectively).
Under such an agreement, the cooperating State agency (1) as
agent of the United States, will receive applications for, and
will provide, payments on the basis provided in this chapter,
(2) where appropriate, but in accordance with subsection (f),
will afford adversely affected workers testing, counseling,
referral to training and job search programs, and placement
services, (3) will make any certifications required under
section 231(c)(2), and (4) will otherwise cooperate with the
Secretary and with other State and Federal agencies in
providing payments and services under this chapter.
(b) Each agreement under this subchapter shall provide the
terms and conditions upon which the agreement may be amended,
suspended, or terminated.
(c) Each agreement under this subchapter shall provide that
unemployment insurance otherwise payable to any adversely
affected worker will not be denied or reduced for any week by
reason of any right to payments under this chapter.
(d) A determination by a cooperating State agency with
respect to entitlement to program benefits under an agreement
is subject to review in the same manner and to the same extent
as determinations under the applicable State law and only in
that manner and to that extent.
(e) Any agreement entered into under this section shall
provide for the coordination of the administration of the
provisions for employment services, training, and supplemental
assistance under sections 235 and 236 of this Act and under
title I of the Workforce Investment Act of 1998 upon such terms
and conditions as are established by the Secretary in
consultation with the States and set forth in such agreement.
Any agency of the State jointly administering such provisions
under such agreement shall be considered to be a cooperating
State agency for purposes of this chapter.
(f) Each cooperating State agency shall, in carrying out
subsection (a)(2)--
(1) advise each worker who applies for unemployment
insurance of the benefits under this chapter and the
procedures and deadlines for applying for such
benefits,
(2) facilitate the early filing of petitions under
section 221 for any workers that the agency considers
are likely to be eligible for benefits under this
chapter,
(3) advise each adversely affected worker to apply
for training under section 236(a) before, or at the
same time, the worker applies for trade readjustment
allowances under part I of subchapter B, and
(4) as soon as practicable, interview the adversely
affected worker regarding suitable training
opportunities available to the worker under section 236
and review such opportunities with the worker.
(g) In order to promote the coordination of workforce
investment activities in each State with activities carried out
under this chapter, any agreement entered into under this
section shall provide that the State shall submit to the
Secretary, in such form as the Secretary may require, the
description and information described in paragraphs (8) and
(14) of section 112(b) of the Workforce Investment Act of 1998.
[Section 3302(c)(3) of the Internal Revenue Code of 1986
(relating to credits against Federal unemployment tax) was
originally enacted as part of section 239 of the Trade Act of
1974:
[``(3) If the Secretary of Labor determines that a
State, or State agency, has not--
[``(A) entered into the agreement described
in section 239 of the Trade Act of 1974, with
the Secretary of Labor before July 15, 1975, or
[``(B) fulfilled its commitments under an
agreement with the Secretary of Labor as
described in section 239 of the Trade Act of
1974,
then, in the case of a taxpayer subject to the
unemployment compensation law of such State, the total
credits (after applying subsections (a) and (b) and
paragraphs (1) and (2) of this section) otherwise
allowable under this section for a year during which
such State or agency does not enter into or fulfill
such an agreement shall be reduced by 7\1/2\ percent of
the tax imposed with respect to wages paid by such
taxpayer during such year which are attributable to
such State.''.]
SEC. 240. ADMINISTRATION ABSENT STATE AGREEMENT.
(a) In any State where there is no agreement in force
between a State or its agency under section 239, the Secretary
shall arrange under regulations prescribed by him for
performance of all necessary functions under subchapter B of
this chapter, including provision for a fair hearing for any
worker whose application for payments is denied.
(b) A final determination under subsection (a) with respect
to entitlement to program benefits under subchapter B of this
chapter is subject to review by the courts in the same manner
and to the same extent as is provided by section 205(g) of the
Social Security Act (42 U.S.C. 405(g)).
SEC. 241. PAYMENTS TO STATES.
(a) The Secretary shall from time to time certify to the
Secretary of the Treasury for payment to each cooperating State
the sums necessary to enable such State as agent of the United
States to make payments provided for by this chapter.
(b) All money paid a State under this section shall be used
solely for the purposes for which it is paid; and money so paid
which is not used for such purposes shall be returned, at the
time specified in the agreement under this subchapter, to the
Secretary of the Treasury.
(c) Any agreement under this subchapter may require any
officer or employee of the State certifying payments or
disbursing funds under the agreement or otherwise participating
in the performance of the agreement, to give a surety bond to
the United States in such amount as the Secretary may deem
necessary, and may provide for the payment of the cost of such
bond from funds for carrying out the purposes of this chapter.
SEC. 242. LIABILITIES OF CERTIFYING AND DISBURSING OFFICERS.
(a) No person designated by the Secretary, or designated
pursuant to an agreement under this subchapter, as a certifying
officer, shall, in the absence of gross negligence or intent to
defraud the United States, be liable with respect to any
payment certified by him under this chapter.
(b) No disbursing officer shall, in the absence of gross
negligence or intent to defraud the United States, be liable
with respect to any payment by him under this chapter if it was
based upon a voucher signed by a certifying officer designated
as provided in subsection (a).
SEC. 243. FRAUD AND RECOVERY OF OVERPAYMENTS.
(a)(1) If a cooperating State agency, the Secretary, or a
court of competent jurisdiction determines that any person has
received any payment under this chapter to which the person was
not entitled, including a payment referred to in subsection
(b), such person shall be liable to repay such amount to the
State agency or the Secretary, as the case may be, except that
the State agency or the Secretary may waive such repayment if
such agency or the Secretary determines, in accordance with
guidelines prescribed by the Secretary, that--
(A) the payment was made without fault on the part of
such individual, and
(B) requiring such repayment would be contrary to
equity and good conscience.
(2) Unless an overpayment is otherwise recovered, or waived
under paragraph (1), the State agency or the Secretary shall
recover the overpayment by deductions from any sums payable to
such person under this chapter, under any Federal unemployment
compensation law administered by the State agency or the
Secretary, or under any other Federal law administered by the
State agency or the Secretary which provides for the payment of
assistance or an allowance with respect to unemployment, and,
notwithstanding any other provision of State law or Federal law
to the contrary, the Secretary may require the State agency to
recover any overpayment under this chapter by deduction from
any unemployment insurance payable to such person under the
State law, except that no single deduction under this paragraph
shall exceed 50 percent of the amount otherwise payable.
(b) If a cooperating State agency, the Secretary, or a
court of competent jurisdiction determines that an individual--
(1) knowingly has made, or caused another to make, a
false statement or representation of a material fact,
or
(2) knowingly has failed, or caused another to fail,
to disclose a material fact,
and as a result of such false statement or representation, or
of such nondisclosure, such individual has received any payment
under this chapter to which the individual was not entitled,
such individual shall, in addition to any other penalty
provided by law, be ineligible for any further payments under
this chapter.
(c) Except for overpayments determined by a court of
competent jurisdiction, no repayment may be required, and no
deduction may be made, under this section until a determination
under subsection (a)(1) by the State agency or the Secretary,
as the case may be, has been made, notice of the determination
and an opportunity for a fair hearing thereon has been given to
the individual concerned, and the determination has become
final.
(d) Any amount recovered under this section shall be
returned to the Treasury of the United States.
SEC. 244. PENALTIES.
Whoever makes a false statement of a material fact knowing
it to be false, or knowingly fails to disclose a material fact,
for the purpose of obtaining or increasing for himself or for
any other person any payment authorized to be furnished under
this chapter or pursuant to an agreement under section 239
shall be fined not more than $1,000 or imprisoned for not more
than one year, or both.
SEC. 245. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There are authorized to be appropriated to
the Department of Labor, for the period beginning October 1,
1998, and ending September 30, 2001, such sums as may be
necessary to carry out the purposes of this chapter, other than
subchapter D.
(b) Subchapter D.--There are authorized to be appropriated
to the Department of Labor, for the period beginning October 1,
1998, and ending September 30, 2001, such sums as may be
necessary to carry out the purposes of subchapter D of this
chapter.
SEC. 246. SUPPLEMENTAL WAGE ALLOWANCE DEMONSTRATION PROJECTS.
(a) The Secretary shall establish one or more demonstration
projects during fiscal years 1989 and 1990 for the purpose of--
(1) determining the attractiveness of a supplemental
wage allowance to various categories of workers
eligible for assistance under this chapter, based on
the amount and duration of the supplement;
(2) determining the effectiveness of a supplemental
wage allowance as an option under this chapter in
facilitating the readjustment of adversely affected
workers; and
(3) determining whether a supplemental wage allowance
should be made an option under the Trade Adjustment
Assistance program for all fiscal years.
(b)(1) For purposes of this section, the term
``supplemental wage allowance'' means a payment that is made to
an adversely affected worker who--
(A) accepts full-time employment at an average weekly
wage that is less than the average weekly wage of the
worker in the adversely affected employment,
(B) prior to such acceptance, is eligible for trade
readjustment allowances under part I of subchapter B,
and
(C) voluntarily elects to receive such payment in
lieu of any trade readjustment allowances that the
worker would otherwise be eligible to receive with
respect to the period covered by the certification made
under subchapter A that applies to such worker.
(2) A supplemental wage allowance shall be provided under
any demonstration project established under subsection (a) to a
worker described in paragraph (1) for each week during which
the worker performs services in the full-time employment
referred to in paragraph (1)(A) in an amount that does not
exceed the lesser of--
(A) the amount of the trade readjustment allowance
that the worker would have been eligible to receive for
any week under part 1 of subchapter B if the worker had
not accepted the full-time employment and had not made
the election described in paragraph (1)(C), or
(B) the excess of--
(i) an amount equal to 80 percent of the
average weekly wage of the worker in the
adversely affected employment, over
(ii) the average weekly wage in the full-time
employment.
(3)(A) Supplemental wage allowances shall not be provided
under any demonstration project established under subsection
(a) for more than 52 weeks.
(B) The total amount of supplemental wage allowances that
may be paid to any worker under any demonstration project
established under subsection (a) with respect to the period
covered by the certification applicable to such worker shall
not exceed an amount that is equal to the excess of--
(i) the amount of the limitation imposed under
section 233(a)(1) with respect to such worker for such
period, over
(ii) the amount of the trade readjustment allowances
paid under part I of subchapter B to such worker for
such period.
(c) The Secretary shall provide for an evaluation of
demonstration projects conducted under this section to
determine at least the following:
(1) the extent to which different age groups of
eligible recipients utilize the supplemental wage
allowance;
(2) the effect of the amount and duration of the
supplemental wage allowance on the utilization of the
allowance;
(3) the extent to which the supplemental wage
allowance affects the demand for training and the
appropriateness thereof;
(4) the extent to which the supplemental wage
allowance facilitates the readjustment of workers who
would not otherwise utilize benefits provided under
this chapter;
(5) the extent to which the allowance affects the
cost of carrying out the provisions of this chapter;
and
(6) the effectiveness of the supplemental wage
allowance as an option under this chapter in
facilitating the readjustment of adversely affected
workers.
(d) By no later than the date that is 6 years after the
date of enactment of the Omnibus Trade and Competitiveness Act
of 1988, the Secretary shall transmit to the Congress a report
that includes--
(1) an evaluation of the projects authorized under
this section that is conducted in accordance with
subsection (c), and
(2) a recommendation as to whether the supplemental
wage allowance should be available on a permanent basis
as an option for some or all workers eligible for
assistance under this chapter.
[Paragraph 2 of section 1423(d) of the Omnibus Trade and
Competitiveness Act of 1988 provides:
[``For purposes of funding the demonstration projects
established under section 246(a) of the Trade Act of
1974, as added by paragraph (1) of this subsection--
[``(A) the supplemental wage allowances
payable under such projects shall be considered
to be trade readjustment allowances payable
under part I of subchapter B of chapter 2 of
title II of the Trade Act of 1974, and
[``(B) the costs of administering such
projects by the States shall be considered to
be costs of administering such part I.''.]
SEC. 247. DEFINITIONS.
For purposes of this chapter--
(1) The term ``adversely affected employment'' means
employment in a firm or appropriate subdivision of a
firm, if workers of such firm or subdivision are
eligible to apply for adjustment assistance under this
chapter.
(2) The term ``adversely affected worker'' means an
individual who, because of lack of work in adversely
affected employment--
(A) has been totally or partially separated
from such employment, or
(B) has been totally separated from
employment with the firm in a subdivision of
which such adversely affected employment
exists.
[(3) Repealed.]
(4) The term ``average weekly wage'' means one-
thirteenth of the total wages paid to an individual in
the high quarter. For purposes of this computation, the
high quarter shall be that quarter in which the
individual's total wages were highest among the first 4
of the last 5 completed calendar quarters immediately
before the quarter in which occurs the week with
respect to which the computation is made. Such week
shall be the week in which total separation occurred,
or, in cases where partial separation is claimed, an
appropriate week, as defined in regulations prescribed
by the Secretary.
(5) The term ``average weekly hours'' means the
average hours worked by the individual (excluding
overtime) in the employment from which he has been or
claims to have been separated in the 52 weeks
(excluding weeks during which the individual was sick
or on vacation) preceding the week specified in the
last sentence of paragraph (4).
(6) The term ``partial separation'' means, with
respect to an individual who has not been totally
separated, that he has had--
(A) his hours of work reduced to 80 percent
or less of his average weekly hours in
adversely affected employment, and
(B) his wages reduced to 80 percent or less
of his average weekly wage in such adversely
affected employment.
[(7) Repealed.]
(8) The term ``State'' includes the District of
Columbia and the Commonwealth of Puerto Rico; and the
term ``United States'' when used in the geographical
sense includes such Commonwealth.
(9) The term ``State agency'' means the agency of the
State which administers the State law.
(10) The term ``State law'' means the unemployment
insurance law of the State approved by the Secretary of
Labor under section 3304 of the Internal Revenue Code
of 1954.
(11) The term ``total separation'' means the layoff
or severance of an individual from employment with a
firm in which, or in a subdivision of which, adversely
affected employment exists.
(12) The term ``unemployment insurance'' means the
unemployment compensation payable to an individual
under any State law or Federal unemployment
compensation law, including chapter 85 of title 5,
United States Code, and the Railroad Unemployment
Insurance Act. The terms ``regular compensation'',
``additional compensation'', and ``extended
compensation'' have the same respective meanings that
are given them in section 205(2), (3), and (4) of the
Federal-State Extended Unemployment Compensation Act of
1970 (26 U.S.C. 3304 note.)
(13) The term ``week'' means a week as defined in the
applicable State law.
(14) The term ``week of unemployment'' means a week
of total, part-total, or partial unemployment as
determined under the applicable State law or Federal
unemployment insurance law.
(15) The term ``benefit period'' means, with respect
to an individual--
(A) the benefit year and any ensuing period,
as determined under applicable State law,
during which the individual is eligible for
regular compensation, additional compensation,
or extended compensation, or
(B) the equivalent to such a benefit year or
ensuing period provided for under the
applicable Federal unemployment insurance law.
(16) The term ``on-the-job training'' means training
provided by an employer to an individual who is
employed by the employer.
(17)(A) The term ``job search program'' means a job
search workshop or job finding club.
(B) The term ``job search workshop'' means a short (1
to 3 days) seminar designed to provide participants
with knowledge that will enable the participants to
find jobs. Subjects are not limited to, but should
include, labor market information, resume writing,
interviewing techniques, and techniques for finding job
openings.
(C) The term ``job finding club'' means a job search
workshop which includes a period (1 and 2 weeks) of
structured, supervised activity in which participants
attempt to obtain jobs.
SEC. 248. REGULATIONS.
The Secretary shall prescribe such regulations as may be
necessary to carry out the provisions of this chapter.
SEC. 249. SUBPENA POWER.
(a) The Secretary may require by subpena the attendance of
witnesses and the production of evidence necessary for him to
make a determination under the provisions of this chapter.
(b) If a person refuses to obey a subpena issued under
subsection (a), a United States district court within the
jurisdiction of which the relevant proceeding under this
chapter is conducted may, upon petition by the Secretary, issue
an order requiring compliance with such subpena.
SEC. 249A. NONDUPLICATION OF ASSISTANCE.
No worker may receive assistance relating to a separation
pursuant to certifications under both subchapters A and D of
this chapter.
Subchapter D--NAFTA Transitional Adjustment Assistance Program
SEC. 250. ESTABLISHMENT OF TRANSITIONAL PROGRAM.
(a) Group Eligibility Requirements.--
(1) Criteria.--A group of workers (including workers
in any agricultural firm or subdivision of an
agricultural firm) shall be certified as eligible to
apply for adjustment assistance under this subchapter
pursuant to a petition filed under subsection (b) if
the Secretary determines that a significant number or
proportion of the workers in such worker's firm or an
appropriate subdivision of the firm have become totally
or partially separated, or are threatened to become
totally or partially separated, and either--
(A) that--
(i) the sales or production, or both,
of such firm or subdivision have
decreased absolutely,
(ii) imports from Mexico or Canada of
articles like or directly competitive
with articles produced by such firm or
subdivision have increased, and
(iii) the increase in imports under
clause (ii) contributed importantly to
such workers' separation or threat of
separation and to the decline in the
sales or production of such firm or
subdivision; or
(B) that there has been a shift in production
by such workers' firm or subdivision to Mexico
or Canada of articles like or directly
competitive with articles which are produced by
the firm or subdivision.
(2) Definition of contributed importantly.--The term
``contributed importantly'', as used in paragraph
(1)(A)(iii), means a cause which is important but not
necessarily more important than any other cause.
(3) Regulations.--The Secretary shall issue
regulations relating to the application of the criteria
described in paragraph (1) in making preliminary
findings under subsection (b) and determinations under
subsection (c).
(b) Preliminary Findings and Basic Assistance.--
(1) Filing of petitions.--A petition for
certification of eligibility to apply for adjustment
assistance under this subchapter may be filed by a
group of workers (including workers in any agricultural
firm or subdivision of an agricultural firm) or by
their certified or recognized union or other duly
authorized representative with the Governor of the
State in which such workers' firm or subdivision
thereof is located.
(2) Findings and assistance.--Upon receipt of a
petition under paragraph (1), the Governor shall--
(A) notify the Secretary that the Governor
has received the petition;
(B) within 10 days after receiving the
petition--
(i) make a preliminary finding as to
whether the petition meets the criteria
described in subsection (a)(1) (and for
purposes of this clause the criteria
described under subparagraph (A)(iii)
of such subsection shall be
disregarded), and
(ii) transmit the petition, together
with a statement of the finding under
clause (i) and reasons therefor, to the
Secretary for action under subsection
(c); and
(C) if the preliminary finding under
subparagraph (B)(i) is affirmative, ensure that
rapid response and basic readjustment services
authorized under other Federal law are made
available to the workers.
(c) Review of Petitions by Secretary; Certifications.--
(1) In general.--The Secretary, within 30 days after
receiving a petition under subsection (b), shall
determine whether the petition meets the criteria
described in subsection (a)(1). Upon a determination
that the petition meets such criteria, the Secretary
shall issue to workers covered by the petition a
certification of eligibility to apply for assistance
described in subsection (d).
(2) Denial of certification.--Upon denial of
certification with respect to a petition under
paragraph (1), the Secretary shall review the petition
in accordance with the requirements of subchapter A to
determine if the workers may be certified under such
subchapter.
(d) Comprehensive Assistance.--Workers covered by
certification issued by the Secretary under subsection (c)
shall be provided, in the same manner and to the same extent as
workers covered under a certification under subchapter A, the
following:
(1) Employment services described in section 235.
(2) Training described in section 236, except that
notwithstanding the provisions of section 236(a)(2)(A),
the total amount of payments for training under this
subchapter for the period beginning October 1, 1998,
and ending september 30, 2001, shall not exceed
$30,000,000 for any fiscal year.
(3) Trade readjustment allowances described in
sections 231 through 234, except that--
(A) the provisions of sections 231(a)(5)(c)
and 231(c), authorizing the payment of trade
readjustment allowances upon a finding that it
is not feasible or appropriate to approve a
training program for a worker, shall not be
applicable to payment of such allowances under
this subchapter; and
(B) notwithstanding the provisions of section
233(b), in order for a worker to qualify for
trade readjustment allowances under this
subchapter, the worker shall be enrolled in a
training program approved by the Secretary
under section 236(a) by the later of--
(i) the last day of the 16th week of
such worker's initial unemployment
compensation benefit period, or
(ii) the last day of the 6th week
after the week in which the Secretary
issues a certification covering such
worker.
In cases of extenuating circumstances relating to
enrollment in a training program, the Secretary may
extend the time for enrollment for a period not to
exceed 30 days.
(4) Job search allowances described in section 237.
(5) Relocation allowances described in section 238.
(e) Administration.--The provisions of subchapter C shall
apply to the administration of the program under this
subchapter in the same manner and to the same extent as such
provisions apply to the administration of the program under
subchapters A and B, except that the agreement between the
Secretary and the States described in section 239 shall specify
the procedures that will be used to carry out the certification
process under subsection (c) and the procedures for providing
relevant data by the Secretary to assist the States in making
prliminary findings under subsection (b).
[Section 506(b) of the NAFTA Implementation Act provides:
[``(b) Covered Workers.--
[``(1) General rule.--Except as provided in paragraph
(2), no worker shall be certified as eligible to
receive assistance under subchapter D of chapter 2 of
title II of the Trade Act of 1974 (as added by this
subtitle) whose last total or partial separation from a
firm (or appropriate subdivision of a firm) occurred
before such date of entry into force.
[``(2) Reachback.--Notwithstanding paragraph (1), any
worker--
[``(A) whose last total or partial separation
from a firm (or appropriate subdivision of a
firm) occurs--
[``(i) after the date of the
enactment of this Act, and
[``(ii) before such date of entry
into force, and
[``(B) who would otherwise be eligible to
receive assistance under subchapter D of
chapter 2 of title II of the Trade Act of 1974,
[``shall be eligible to receive such assistance in the same
manner as if such separation occurred on or after such date of
entry into force.''.]
Chapter 3--Adjustment Assistance for Firms
SEC. 251. PETITIONS AND DETERMINATIONS.
(a) A petition for a certification of eligibility to apply
for adjustment assistance under this chapter may be filed with
the Secretary of Commerce (hereinafter in this chapter referred
to as the ``Secretary'') by a firm (including any agricultural
firm) or its representative. Upon receipt of the petition, the
Secretary shall promptly publish notice in the Federal Register
that he has received the petition and initiated an
investigation.
(b) If the petitioner, or any other person, organization,
or group found by the Secretary to have a substantial interest
in the proceedings, submits not later than 10 days after the
date of the Secretary's publication under subsection (a) a
request for a hearing, the Secretary shall provide for a public
hearing and afford such interested persons an opportunity to be
present, to produce evidence, and to be heard.
(c)(1) The Secretary shall certify a firm (including any
agricultural firm) as eligible to apply for adjustment
assistance under this chapter if the Secretary determines--
(A) that a significant number or proportion of the
workers in such firm have become totally or partially
separated, or are threatened to become totally or
partially separated,
(B) that--
(i) sales or production, or both, of the firm
have decreased absolutely, or
(ii) sales or production, or both, of an
article that accounted for not less than 25
percent of the total production or sales of the
firm during the 12-month period preceding the
most recent 12-month period for which data are
available have decreased absolutely, and
(C) increases of imports of articles like or directly
competitive with articles which are produced by such
firm contributed importantly to such total or partial
separation, or threat thereof, and to such decline in
sales or production.
(2) For purposes of paragraph (1)(C)--
(A) The term ``contributed importantly'' means a
cause which is important but not necessarily more
important than any other cause.
(B)(i) Any firm which engages in exploration or
drilling for oil or natural gas shall be considered to
be a firm producing oil or natural gas.
(ii) Any firm that engages in exploration or drilling
for oil or natural gas, or otherwise producing articles
directly competitive with imports of oil and with
imports of natural gas.
(d) A determination shall be made by the Secretary as soon
as possible after the date on which the petition is filed under
this section, but in any event not later than 60 days after
that date.
SEC. 252. APPROVAL OF ADJUSTMENT PROPOSALS.
(a) A firm certified under section 251 as eligible to apply
for adjustment assistance may, at any time within 2 years after
the date of such certification, file an application with the
Secretary for adjustment assistance under this chapter. Such
application shall include a proposal for the economic
adjustment of such firm.
(b)(1) Adjustment assistance under this chapter consists of
technical assistance. The Secretary shall approve a firm's
application for adjustment assistance only if the Secretary
determines that the firm's adjustment proposal--
(A) is reasonably calculated to materially contribute
to the economic adjustment of the firm,
(B) gives adequate consideration to the interests of
the workers of such firm, and
(C) demonstrates that the firm will make all
reasonable efforts to use its own resources for
economic development.
(2) The Secretary shall make a determination as soon as
possible after the date on which an application is filed under
this section, but in no event later than 60 days after such
date.
(c) Whenever the Secretary determines that any firm no
longer requires assistance under this chapter, he shall
terminate the certification of eligibility of such firm and
promptly have notice of such termination published in the
Federal Register. Such termination shall take effect on the
termination date specified by the Secretary.
SEC. 253. TECHNICAL ASSISTANCE.
(a) The Secretary may provide a firm, on terms and
conditions as the Secretary determines to be appropriate, with
such technical assistance as in his judgment will carry out the
purposes of this chapter with respect to the firm. The
technical assistance furnished under this chapter may consist
of one or more of the following:
(1) Assistance to a firm in preparing its petition
for certification of eligibility under section 251 of
this chapter.
(2) Assistance to a certified firm in developing a
proposal for its economic adjustment.
(3) Assistance of a certified firm in the
implementation of such a proposal.
(b)(1) The Secretary shall furnish technical assistance
under this chapter through existing agencies and through
private individuals, firms, or institutions (including private
consulting services), or by grants to intermediary
organizations (including Trade Adjustment Assistance Centers).
(2) In the case of assistance furnished through private
individuals, firms, or institutions (including private
consulting services), the Secretary may share the cost thereof
(but not more than 75 percent of such cost for assistance
described in paragraph (2) or (3) of subsection (a) may be
borne by the United States).
(3) The Secretary may make grants to intermediary
organizations in order to defray up to 100 percent of
administrative expenses incurred in providing such technical
assistance to a firm.
SEC. 254. FINANCIAL ASSISTANCE.
(a) The Secretary may provide to a firm, on such terms and
conditions as he determines to be appropriate, such financial
assistance in the form of direct loans or guarantees of loans
as in his judgment will materially contribute to the economic
adjustment of the firm. The assumption of an outstanding
indebtedness of the firm, with or without recourse, shall be
considered to be the making of a loan for purposes of this
section.
(b) Loans or guarantee of loans shall be made under this
chapter only for the purpose of making funds available to the
firm--
(1) for acquisition, construction, installation,
modernization, development, conversion, or expansion of
land, plant, buildings, equipment, facilities, or
machinery, or
(2) to supply such working capital as may be
necessary to enable the firm to implement its
adjustment proposal.
(c) No direct loan may be provided to a firm under this
chapter if the firm can obtain loan funds from private sources
(with or without a guarantee) at a rate no higher than the
maximum interest per annum that a participating financial
institution may establish on guaranteed loans made pursuant to
section 7(a) of the Small Business Act.
(d) Notwithstanding any other provision of this chapter, no
direct loans or guarantees of loans may be made under this
chapter after the date of enactment of the Trade Adjustment
Assistance Reform and Extension Act of 1986.
SEC. 255. CONDITIONS FOR FINANCIAL ASSISTANCE.
(a) No financial assistance shall be provided under this
chapter unless the Secretary determines--
(1) that the funds required are not available from
the firm's own resources; and
(2) that there is reasonable assurance of repayment
of the loan.
(b)(1) The rate of interest on direct loans made under this
chapter shall be--
(A) a rate determined by the Secretary of the
Treasury taking into consideration the current average
market yield on outstanding marketable obligations of
the United States with remaining periods of maturity
that are comparable to the average maturities of such
loans, adjusted to the nearest one-eighth of 1 percent,
plus
(B) an amount adequate in the judgment of the
Secretary of Commerce to cover administrative costs and
probable losses under the program.
(2) The Secretary may not guarantee any loan under this
chapter if--
(A) the rate of interest on either the portion to be
guaranteed, or the portion not to be guaranteed, is
determined by the Secretary to be excessive when
compared with other loans bearing Federal guarantees
and subject to similar terms and conditions; and
(B) the interest on the loan is exempt from Federal
income taxation under section 103 of the Internal
Revenue Code of 1954.
(c) The Secretary shall make no loan or guarantee of a loan
under section 254(b)(1) having a maturity in excess of 25 years
or the useful life of the fixed assets (whichever period is
shorter), including renewals and extensions; and shall make no
loan or guarantee of a loan under section 254(b)(2) having a
maturity in excess of 10 years, including extensions and
renewals. Such limitations on maturities shall not, however,
apply--
(1) to securities or obligations received by the
Secretary as claimant in bankruptcy or equitable
reorganization, or as creditor in other proceedings
attendant upon insolvency of the obligor, or
(2) to an extension or renewal for an additional
period not exceeding 10 years, if the Secretary
determines that such extension or renewal is reasonably
necessary for the orderly liquidation or servicing of
the loan.
(d)(1) In making guarantees of loans, and in making direct
loans, the Secretary shall give priority to firms which are
small within the meaning of the Small Business Act (and
regulations promulgated thereunder).
(2) For any direct loan made, or any loan guaranteed, under
the authority of this chapter, the Secretary may enter into
arrangements for the servicing, including foreclosure, of such
loans or evidences of indebtedness on terms which are
reasonable and which protect the financial interests of the
United States.
(e) The following conditions apply with respect to any loan
guaranteed under this chapter:
(1) No guarantee may be made for an amount which
exceeds 90 percent of the outstanding balance of the
unpaid principal and interest on the loan.
(2) The loan may be evidenced by multiple obligations
for the guaranteed and nonguaranteed portions of the
loan.
(3) The guarantee agreement shall be conclusive
evidence of the eligibility of any obligation
guaranteed thereunder for such guarantee, and the
validity of any guarantee agreement shall be
incontestable, except for fraud or misrepresentation by
the holder.
(f) The Secretary shall maintain operating reserve with
respect to anticipated claims under guarantees made under this
chapter. Such reserves shall be considered to constitute
obligations for purposes of section 1311 of the Supplemental
Appropriation Act, 1955 (31 U.S.C. 200).
(g) The Secretary may charge a fee to a lender which makes
a loan guaranteed under this chapter in such amount as is
necessary to cover the cost of administration of such
guarantee.
(h)(1) The aggregate amount of loans made to any firm which
are guaranteed under this chapter and which are outstanding at
any time shall not exceed $3,000,000.
(2) The aggregate amount of direct loans made to any firm
under this chapter which are outstanding at any time shall not
exceed $1,000,000.
(i)(1) When considering whether to grant a direct loan or
to guarantee a loan to a corporation which is otherwise
certified under section 251, the Secretary shall give
preference to a corporation which agrees with respect to such
loan to fulfill the following requirements--
(A) 25 percent of the principal amount of the loan is
paid by the lender to a qualified trust established
under an employee stock ownership plan established and
maintained by the recipient corporation, by a parent or
subsidiary of such corporation, or by several
corporations including the recipient corporation,
(B) the employee stock ownership plan meets the
requirements of this subsection, and
(C) the agreement among the recipient corporation,
the lender, and the qualified trust relating to the
loan meets the requirements of this section.
(2) An employee stock ownership plan does not meet the
requirements of this subsection unless the governing instrument
of the plan provides that--
(A) the amount of the loan paid under paragraph
(1)(A) to the qualified trust will be used to purchase
qualified employer securities,
(B) the qualified trust will repay to the lender the
amount of such loan, together with the interest
thereon, out of amounts contributed to the trust by the
recipient corporation, and
(C) from time to time, as the qualified trust repays
such amount, the trust will allocate qualified employer
securities among the individual accounts of
participants and their beneficiaries in accordance with
the provisions of paragraph (4).
(3) The agreement among the recipient corporation, the
lender, and the qualified trust does not meet the requirements
of this subsection unless--
(A) it is unconditionally enforceable by any party
against the others, jointly and severally,
(B) it provides that the liability of the qualified
trust to repay loan amounts paid to the qualified trust
may not, at any time, exceed an amount equal to the
amount of contributions required under paragraph (2)(B)
which are actually received by such trust,
(C) it provides that amounts received by the
recipient corporation from the qualified trust for
qualified employer securities purchased for the purpose
of this subsection will be used exclusively by the
recipient corporation for those purposes for which it
may use that portion of the loan paid directly to it by
the lender,
(D) it provides that the recipient corporation may
not reduce the amount of its equity capital during the
one year period beginning on the date on which the
qualified trust purchases qualified employer securities
for purposes of this subsection, and
(E) it provides that the recipient corporation will
make contributions to the qualified trust of not less
than such amounts as are necessary for such trust to
meet its obligations to make repayments of principal
and interest on the amount of the loan received by the
trust without regard to whether such contributions are
deductible by the corporation under section 404 of the
Internal Revenue Code of 1954 and without regard to any
other amounts the recipient corporation is obligated
under law to contribute to or under the employee stock
ownership plan.
(4) At the close of each plan year, an employee stock
ownership plan shall allocate to the accounts of participating
employees that portion of the qualified employer securities the
cost of which bears substantially the same ratio to the cost of
all the qualified employer securities purchased under paragraph
(2)(A) of this subsection as the amount of the loan principal
and interest repaid by the qualified trust during that year
bears to the total amount of the loan principal and interest
payable by such trust during the term of such loan. Qualified
employer securities allocated to the individual account of a
participant during one plan year must bear substantially the
same proportion to the amount of all such securities allocated
to all participants in the plan as the amount of compensation
paid to such participant bears to the total amount of
compensation paid to all such participants during that year.
(5) For purposes of this subsection, the term--
(A) ``employee stock ownership plan'' means a plan
described in section 4975(e)(7) of the Internal Revenue
Code of 1954,
(B) ``qualified trust'' means a trust established
under an employee stock ownership plan and meeting the
requirements of title I of the Employee Retirement
Income Security Act of 1974 and section 401 of the
Internal Revenue Code of 1954,
(C) ``qualified employer securities'' means common
stock issued by the recipient corporation or by a
parent or subsidiary of such corporation with voting
power and dividend rights no less favorable than the
voting power and dividend rights on other common stock
issued by the issuing corporation and with voting power
being exercised by the participants in the employee
stock ownership plan after it is allocated to their
plan accounts, and
(D) ``equity capital'' means, with respect to the
recipient corporation, the sum of its money and other
property (in an amount equal to the adusted basis of
such property but disregarding adjustments made on
account of depreciation or amortization made during the
period described in paragraph (3)(D)), less the amount
of its indebtedness.
SEC. 256. DELEGATION OF FUNCTIONS TO SMALL BUSINESS ADMINISTRATION;
AUTHORIZATION OF APPROPRIATIONS.
(a) In the case of any firm which is small (within the
meaning of the Small Business Act and regulations promulgated
thereunder), the Secretary may delegate all of his functions
under this chapter (other than the functions under sections 251
and 252(d) with respect to the certification of eligibility and
section 264) to the Administrator of the Small Business
Administration.
(b) There are hereby authorized to be appropriated to the
Secretary for the period beginning October 1, 1998, and ending
September 30, 2001, such sums as may be necessary to carry out
his functions under this chapter in connection with furnishing
adjustment assistance to firms (including, but not limited to,
the payment of principal, interest, and reasonable costs
incident to default on loans guaranteed by the Secretary under
the authority of this chapter), which sums are authorized to be
appropriated to remain available until expended.
(c) The unexpended balances of appropriations authorized by
section 312(d) of the Trade Expansion Act of 1962 are
transferred to the Secretary to carry out his functions under
this chapter.
SEC. 257. ADMINISTRATION OF FINANCIAL ASSISTANCE.
(a) In making and administering guarantees and loans under
section 254, the Secretary may--
(1) require security for any such guarantee or loan,
and enforce, waive, or subordinate such security;
(2) assign or sell at public or private sale, or
otherwise dispose of, upon such terms and conditions
and for such consideration as he shall determine to be
reasonable, any evidence of debt, contract, claim,
personal property, or security assigned to or held by
him in connection with such guarantees or loans, and
collect, compromise, and obtain deficiency judgments
with respect to all obligations assigned to or held by
him in connection with such guarantees or loans until
such time as such obligations may be referred to the
Attorney General for suit or collection;
(3) renovate, improve, modernize, complete, insure,
rent, sell, or otherwise deal with, upon such terms and
conditions and for such consideration as he shall
determine to be reasonable, any real or personal
property conveyed to or otherwise acquired by him in
connection with such guarantees or loans;
(4) acquire, hold, transfer, release, or convey any
real or personal property or any interest therein
whenever deemed necessary or appropriate, and execute
all legal documents for such purposes; and
(5) exercise all such other powers and take all such
other acts as may be necessary or incidental to the
carrying out of functions pursuant to section 254.
(b) Any mortgage acquired as security under subsection (a)
shall be recorded under applicable State law.
(c) All repayments of loans, payments of interest, and
other receipts arising out of transactions entered into by the
Secretary pursuant to this chapter, shall be available for
financing functions performed under this chapter, including
administrative expenses in connection with such functions.
(d) To the extent the Secretary deems it appropriate, and
consistent with the provisions of section 552(b)(4) and section
552b(c)(4) of title 5, United States Code, that portion of any
record, material or data received by the Secretary in
connection with any application for financial assistance under
this chapter which contains trade secrets or commercial or
financial information regarding the operation or competitive
position of any business shall be deemed to be privileged or
confidential within the meaning of those provisions.
(e) Direct loans made, or loans guaranteed, under this
chapter for the acquisition or development of real property or
other capital assets shall ordinarily be secured by a first
lien on the assets to be financed and shall be fully amortized.
To the extent that the Secretary finds that exceptions to these
standards are necessary to achieve the objectives of this
chapter, he shall develop appropriate criteria for the
protection of the interests of the United States.
SEC. 258. PROTECTIVE PROVISIONS.
(a) Each recipient of adjustment assistance under this
chapter shall keep records which fully disclose the amount and
disposition by such recipient of the proceeds, if any, of such
adjustment assistance, and which will facilitate an effective
audit. The recipient shall also keep such other records as the
Secretary may prescribe.
(b) The Secretary and the Comptroller General of the United
States shall have access for the purposes of audit and
examination to any books, documents, papers, and records of the
recipient petaining to adjustment assistance under this
chapter.
(c) No adjustment assistance under this chapter shall be
extended to any firm unless the owners, partners, or officers
certify to the Secretary--
(1) the names of any attorneys, agents, and other
persons engaged by or on behalf of the firm for the
purpose of expediting applications for such adjustment
assistance; and
(2) the fees paid or to be paid to any such person.
(d) No financial assistance shall be provided to any firm
under this chapter unless the owners, partners, or officers
shall execute an agreement binding them and the firm for a
period of 2 years after such financial assistance is provided,
to refrain from employing, tendering any office or employment
to, or retaining for professional services any person who, on
the date such assistance or any part thereof was provided, or
within 1 year prior thereto, shall have served as an officer,
attorney, agent, or employee occupying a position or engaging
in activities which the Secretary shall have determined involve
discretion with respect to the provision of such financial
assistance.
SEC. 259. PENALTIES.
Whoever makes a false statement of a material fact knowing
it to be false, or knowingly fails to disclose a material fact,
or whoever willfully overvalues any security, for the purpose
of influencing in any way a determination under this chapter,
or for the purpose of obtaining money, property, or anything of
value under this chapter, shall be fined not more than $5,000
or imprisoned for not more than 2 years, or both.
SEC. 260. CIVIL ACTIONS.
In providing technical and financial assistance under this
chapter the Secretary may sue and be sued in any court of
record of a State having general jurisidiction or in any United
States district court, and jurisdiction is conferred upon such
district court to determine such controversies without regard
to the amount in controversy; but no attachment, injunction,
garnishment, or other similar process, mesne or final, shall be
issued against him or his property. Nothing in this section
shall be construed to except the activities pursuant to
sections 253 and 254 from the application of sections 516, 547,
and 2679 of title 28 of the United States Code.
SEC. 261. DEFINITIONS.
For purposes of this chapter, the term ``firm'' includes an
individual proprietorship, partnership, joint venture,
association, corporation (including a development corporation),
business trust, cooperative, trustee in bankruptcy, and
receiver under decree of any court. A firm, together with any
predecessor or successor firm, or any affiliated firm
controlled or substantially beneficially owned by substantially
the same persons, may be considered a single firm where
necessary to prevent unjustifiable benefits.
SEC. 262. REGULATIONS.
The Secretary shall prescribe such regulations as may be
necessary to carry out the provisions of this chapter.
[SEC. 263. REPEALED.]
SEC. 264. STUDY BY SECRETARY OF COMMERCE WHEN INTERNATIONAL TRADE
COMMISSION BEGINS INVESTIGATION; ACTION WHERE THERE
IS AFFIRMATIVE FINDING.
(a) Whenever the Commission begins an investigation under
section 202 with respect to an industry, the Commission shall
immediately notify the Secretary of such investigation, and the
Secretary shall immediately begin a study of--
(1) the number of firms in the domestic industry
producing the like or directly competitive article
which have been or are likely to be certified as
eligible for adjustment assistance, and
(2) the extent to which the orderly adjustment of
such firms to the import competition may be facilitated
through the use of existing programs.
(b) The report of the Secretary of the study under
subsection (a) shall be made to the President not later than 15
days after the day on which the Commission makes its report
under section 202(f). Upon making its report to the President,
the Secretary shall also promptly make it public (with the
exception of information which the Secretary determines to be
confidential) and shall have a summary of it published in the
Federal Register.
(c) Whenever the Commission makes an affirmative finding
under section 202(b) that increased imports are a substantial
cause of serious injury or threat thereof with respect to an
industry, the Secretary shall make available, to the extent
feasible, full information to the firms in such industry about
programs which may facilitate the orderly adjustment to import
competition of such firms, and he shall provide assistance in
the preparation and processing of petitions and applications of
such firms for program benefits.
SEC. 265. ASSISTANCE TO INDUSTRIES.
(a) The Secretary may provide technical assistance, on such
terms and conditions as the Secretary deems appropriate, for
the establishment of industrywide programs for new product
development, new process development, export development, or
other uses consistent with the purposes of this chapter. Such
technical assistance may be provided through existing agencies,
private individuals, firms, universities and institutions, and
by grants, contracts, or cooperative agreements to
associations, unions, or other nonprofit industry organizations
in which a substantial number of firms or workers have been
certified as eligible to apply for adjustment assistance under
section 223 or 251.
(b) Expenditures for technical assistance under this
section may be up to $10,000,000 annually per industry and
shall be made under such terms and conditions as the Secretary
deems appropriate.
[Chapter 4--Adjustment Assistance for Communities.--The program
terminated on September 30, 1982.]
Chapter 5--Miscellaneous Provisions
SEC. 280. GENERAL ACCOUNTING OFFICE REPORT.
(a) The Comptroller General of the United States shall
conduct a study of the adjustment assistance programs
established under chapters 2, 3, and 4 of this title and shall
report the results of such study to the Congress no later than
January 31, 1980. Such report shall include an evaluation of--
(1) the effectiveness of such programs in aiding
workers, firms, and communities to adjust to changed
economic conditions resulting from changes in the
patterns of international trade; and
(2) the coordination of the administration of such
programs and other Government programs which provide
unemployment compensation and relief to depressed
areas.
(b) In carrying out his responsibilities under this
section, the Comptroller General shall, to the extent
practical, avail himself of the assistance of the Departments
of Labor and Commerce. The Secretaries of Labor and Commerce
shall make available to the Comptroller General any assistance
necessary for an effective evaluation of the adjustment
assistance programs established under this title.
SEC. 281. COORDINATION.
There is established the Adjustment Assistance Coordinating
Committee to consist of a Deputy United States Trade
Representative as Chairman, and the officials charged with
adjustment assistance responsibilities of the Departments of
Labor and Commerce and the Small Business Administration. It
shall be the function of the Committee to coordinate the
adjustment assistance policies, studies, and programs of the
various agencies involved and to promote the efficient and
effective delivery of adjustment assistance benefits.
SEC. 282. TRADE MONITORING SYSTEM.
The Secretary of Commerce and the Secretary of Labor shall
establish and maintain a program to monitor imports of articles
into the United States which will reflect changes in the volume
of such imports, the relation of such imports to changes in
domestic production, changes in employment within domestic
industries producing articles like or directly competitive with
such imports, and the extent to which such changes in
production and employment are concentrated in specific
geographic regions of the United States. A summary of the
information gathered under this section shall be published
regularly and provided to the Adjustment Assistance
Coordinating Committee, the International Trade Commission, and
to the Congress.
SEC. 283. FIRMS RELOCATING IN FOREIGN COUNTRIES.
Before moving productive facilities from the United States
to a foreign country, every firm should--
(1) provide notice of the move to its employees who
are likely to be totally or partially separated as a
result of the move at least 60 days before the date of
such move, and
(2) provide notice of the move to the Secretary of
Labor and the Secretary of Commerce on the same day it
notifies employees under paragraph (1).
(b) It is the sense of the Congress that every such firm
should--
(1) apply for and use all adjustment assistance for
which it is eligible under this title,
(2) offer employment opportunities in the United
States, if any exist, to its employees who are totally
or partially separated workers as a result of the move,
and
(3) assist in relocating employees to other locations
in the United States where employment opportunities
exist.
SEC. 284. JUDICIAL REVIEW.
(a) A worker, group of workers, certified or recognized
union, or authorized representative of such worker or group
aggrieved by a final determination of the Secretary of Labor
under section 223 or section 250(c) of this title, a firm or
its representative or any other interested domestic party
aggrieved by a final determination of the Secretary of Commerce
under section 251 of this title, or a community or any other
interested domestic party aggrieved by a final determination of
the Secretary of Commerce under section 271 of this title may,
within sixty days after notice of such determination, commence
a civil action in the United States Court of International
Trade for review of such determination. The clerk of such court
shall send a copy of the summons and the complaint in such
action to the Secretary of Labor or the Secretary of Commerce,
as the case may be. Upon receiving a copy of such summons and
complaint, such Secretary shall promptly certify and file in
such court the record on which he based such determination.
(b) The findings of fact by the Secretary of Labor or the
Secretary of Commerce, as the case may be, if supported by
substantial evidence, shall be conclusive; but the court, for
good cause shown, may remand the case to such Secretary to take
further evidence, and such Secretary may thereupon make new or
modified findings of fact and may modify his previous action,
and shall certify to the court the record of the further
proceedings. Such new or modified findings of fact shall
likewise be conclusive if supported by substantial evidence.
(c) The Court of International Trade shall have
jurisdiction to affirm the action of the Secretary of Labor or
the Secretary of Commerce, as the case may be, or to set such
action aside, in whole or in part. The judgment of the Court of
International Trade shall be subject to review by the United
States Court of Appeals for the Federal Circuit as prescribed
by the rules of such court. The judgment of the Court of
Appeals for the Federal Circuit shall be subject to review by
the Supreme Court of the United States upon certiorari as
provided in section 1256 of title 28.
SEC. 285. TERMINATION.
(a) Chapter 4 shall terminate on September 30, 1982.
(b) No duty shall be imposed under section 287, after
September 30, 1993.
(c)(1) Except as provided in paragraph (2), no assistance,
vouchers, allowances, or other payments may be provided under
chapter 2, and no technical assistance may be provided under
chapter 3, after September 30, 2001.
(2)(A) Except as provided in subparagraph (B), no
assistance, vouchers, allowances, or other payments may be
provided under subchapter D of chapter 2 after September 30,
2001.
(B) Nothwithstanding subparagraph (A), if, on or before the
day described in subparagraph (A), a worker--
(i) is certified as eligible to apply for assistance,
under subchapter D of chapter 2; and
(ii) is otherwise eligible to receive assistance in
accordance with section 250,
such worker shall continue to be eligible to receive such
assistance for any week for which the worker meets the
eligibility requirements of such section.
Section 401 and 408 of the Trade and Development Act of 2000
[P.L. 106-200]
SEC. 401. REPORT ON EMPLOYMENT AND TRADE ADJUSTMENT ASSISTANCE.
(a) In General.--Not later than 9 months after the date of
the enactment of this section, the Comptroller General of the
United States shall submit to Congress a report regarding the
efficiency and effectiveness of Federal and State coordination
of employment and retraining activities associated with the
following programs and legislation:
(1) Trade adjustment assistance (including NAFTA
trade adjustment assistance) provided for under title
II of the Trade Act of 1974.
(2) The Job Training Partnership Act.
(3) The Workforce Investment Act of 1998.
(4) Unemployment insurance.
(b) Period Covered.--The report shall cover the
activities involved in the programs and legislation listed in
subsection (a) from January 1, 1994, to December 31, 1999.
(c) Data and Recommendations.--The report shall at a
minimum include specific data and recommendations regarding--
(1) the compatibility of program requirements related
to the employment and retraining of dislocated workers
in the United States, with particular emphasis on the
trade adjustment assistance programs provided for under
title II of the Trade Act of 1974;
(2) the compatibility of application procedures
related to the employment and retraining of dislocated
workers in the United States;
(3) the capacity of the programs in addressing
foreign trade and the transfer of production to other
countries on workers in the United States measured in
terms of loss of employment and wages;
(4) the capacity of the programs in addressing
foreign trade and the transfer of production to other
countries on secondary workers in the United States
measured in terms of loss of employment and wages;
(5) how the impact of foreign trade and the transfer
of production to other countries would have changed the
number of beneficiaries covered under the trade
adjustment assistance program if the trade adjustment
assistance program covered secondary workers in the
United States; and
(6) the effectiveness of the programs described in
subsection (a) in achieving reemployment of the United
States workers and maintaining wage levels of United
States workers who have been dislocated as a result of
foreign trade and the transfer of production to other
countries.
SEC. 408. REPORT ON TRADE ADJUSTMENT ASSISTANCE FOR AGRICULTURAL
COMMODITY PRODUCERS.
(a) In General.--Not later than 4 months after the date of
the enactment of this Act, the Secretary of Labor, in
consultation with the Secretary of Agriculture and the
Secretary of Commerce, shall submit to the Committee on Ways
and Means of the House of Representatives and the Committee on
Finance of the Senate a report that--
(1) examines the applicability to agricultural
commodity producers of trade adjustment assistance
programs established under title II of the Trade Act of
1974; and
(2) sets forth recommendations to improve the operation
of these programs as the programs apply to agricultural
commodity producers or to establish a new trade
adjustment assistance program for agricultural
commodity producers.
(b) Contents.--In preparing the report required by
subsection (a), the Secretary of Labor shall--
(1) assess the degree to which the existing trade
adjustment assistance programs address the adverse
effects on agricultural commodity producers due to
price suppression caused by increased imports of like
or directly competitive agricultural commodities; and
(2) examine the effectiveness of the program benefits
authorized under subchapter B of chapter 2 and chapter
3 of title II of the Trade Act of 1974 in remedying the
adverse effects, including price suppression, caused by
increased imports of like or directly competitive
agricultural commodities.
(c) Definitions.--In this section:
(1) Agricultural commodity.--The term ``agricultural
commodity'' means any agricultural commodity, including
livestock, fish or harvested seafood in its raw or
natural state.
(2) Agricultural commodity producer.--The term
``agricultural commodity producer'' means any person
who is engaged in the production and sale of an
agricultural commodity in the United States and who
owns or shares the ownership and risk of loss of the
agricultural commodity.
* * * * * * *
Chapter 10: OTHER LAWS REGULATING IMPORTS
A. AUTHORITIES TO RESTRICT IMPORTS OF AGRICULTURAL AND TEXTILE PRODUCTS
Section 204 of the Agricultural Act of 1956, as amended
[7 U.S.C. 1854; P.L. 84-540, as amended by P.L. 87-488, P.L. 103-465,
and P.L. 104-295]
Sec. 204. The President may, whenever he determines such
action appropriate, negotiate with representatives of foreign
governments in an effort to obtain agreements limiting the
export from such countries and the importation into the United
States of any agricultural commodity or product manufactured
therefrom or textiles or textile products, and the President is
authorized to issue regulations governing the entry or
withdrawal from warehouse of any such commodity, product,
textiles, or textile products to carry out any such agreement.
In addition, if a multilateral agreement, including but not
limited to the agreement on textiles and clothing referred to
in section 101(d)(4) of the Uruguay Round Agreements Act, has
been or is concluded under the authority of this section among
countries accounting for a significant part of world trade in
the articles with respect to which the agreement was concluded,
the President may also issue, in order to carry out such
agreement, regulations governing the entry or withdrawal from
warehouse of the same articles which are the products of
countries not parties to the agreement, or countries to which
the United States does not apply the agreement. Nothing herein
shall affect the authority provided under section 22 of the
Agricultural Adjustment Act (of 1933) as amended.
Section 22 of the Agricultural Adjustment Act of 1933, as amended
[7 U.S.C. 624; Act of May 12, 1933, as added by P.L. 74-320, and
amended by Act of Feb. 29, 1936, Act of June 3, 1937, Act of Jan. 25,
1940, Act of July 3, 1948, Act of June 28, 1950, Act of June 16, 1951,
Act of Aug. 7, 1953, P.L. 100-449, and P.L. 103-465]
Sec. 22. (a) Whenever the Secretary of Agriculture has
reason to believe that any article or articles are being or are
practically certain to be imported into the United States under
such conditions and in such quantities as to render or tend to
render ineffective, or materially interfere with, any program
or operation undertaken under this title or the Soil
Conservation and Domestic Allotment Act, as amended, or section
32, Public Law Numbered 320, Seventy-Fourth Congress, approved
August 24, 1935, as amended, or any loan, purchase, or other
program or operation undertaken by the Department of
Agriculture, or any agency operating under its direction, with
respect to any agricultural commodity or product thereof, or to
reduce substantially the amount of any product processed in the
United States from any agricultural commodity or product
thereof with respect to which any such program or operation is
being undertaken, he shall so advise the President, and, if the
President agrees that there is reason for such belief, the
President shall cause an immediate investigation to be made by
the United States International Trade Commission, which shall
give precedence to investigations under this section to
determine such facts. Such investigation shall be made after
due notice and opportunity for hearing to interested parties,
and shall be conducted subject to such regulations as the
President shall specify.
(b) If, on the basis of such investigation and report to
him of findings and recommendations made in connection
therewith, the President finds the existence of such facts, he
shall by proclamation impose such fees not in excess of 50 per
centum ad valorem or such quantitative limitations on any
article or articles which may be entered, or withdrawn from
warehouse, for consumption as he finds and declares shown by
such investigation to be necessary in order that the entry of
such article or articles will not render or tend to render
ineffective, or materially interfere with, any program or
operation referred to in subsection (a) of this section, or
reduce substantially the amount of any product processed in the
United States from any such agricultural commodity or product
thereof with respect to which any such program or operation is
being undertaken: Provided, That no proclamation under this
section shall impose any limitation on the total quantity of
any article or articles which may be entered, or withdrawn from
warehouse, for consumption which reduces such permissible total
quantity to proportionately less than 50 per centum of the
total quantity of such article or articles which was entered,
or withdrawn from warehouse, for consumption during a
representative period as determined by the President. And
provided further, That in designating any article or articles,
the President may describe them by physical qualities, value,
use, or upon such other bases as he shall determine.
In any case where the Secretary of Agriculture determines
and reports to the President with regard to any article or
articles that a condition exists requiring emergency treatment,
the President may take immediate action under this section
without awaiting the recommendations of the International Trade
Commission, such action to continue in effect pending the
report and recommendations of the Trade Commission and action
thereon by the President.
(c) The fees and limitations imposed by the President by
proclamation under this section and any revocation, suspension,
or modification thereof, shall become effective on such date as
shall be therein specified, and such fees shall be treated for
administrative purposes and for the purposes of section 32,
Public Law Numbered 320, Seventy-Fourth Congress, approved
August 24, 1935, as amended, as duties imposed by the Tariff
Act of 1930, but such fees shall not be considered as duties
for the purpose of granting any preferential concession under
any international obligation of the United States.
(d) After investigation, report, finding, and declaration
in the manner provided in the case of a proclamation issued
pursuant to subsection (b) of this section, any proclamation or
provision of such proclamation may be suspended or terminated
by the President whenever he finds and proclaims that the
circumstances requiring the proclamation or provision thereof
no longer exist or may be modified by the President whenever he
finds and proclaims that changed circumstances require such
modification to carry out the purposes of this section.
(e) Any decision of the President as to facts under this
section shall be final.
(f) No quantitative limitation or fee shall be imposed under
this section with respect to any article that is the product of
a WTO member (as defined in section 2(10) of the Uruguay Round
Agreements Act).
[Paragraph (2) of section 401 (a) of the Uruguay Round
Agreements Act provides that subsection (f) as amended shall
take effect on the date of entry into force of the WTO
Agreement with respect to the United States, except that with
respect to wheat, that amendment shall take effect on the later
of such date or September 12, 1995.]
Tariff-Rate Quotas and Safeguards
(Sections 404 and 405 of the Uruguay Round Agreements Act)
[19 U.S.C. 3601, 3602; P.L. 103-465, as amended by P.L. 104-295]
SEC. 404. ADMINISTRATION OF TARIFF-RATE QUOTAS.
(a) Orderly Marketing.--In implementing the tariff-rate
quotas set out in Schedule XX for the entry, or withdrawal from
warehouse, for consumption of goods in the United States, the
President shall take such action as may be necessary to ensure
that imports of agricultural products do not disrupt the
orderly marketing of commodities in the United States.
(b) Inadequate Supply.--Where imports of an agricultural
product are subject to a tariff-rate quota, and where the
President determines and proclaims that the supply of the same
or directly competitive or substitutable agricultural product
will be inadequate, because of a natural disaster, disease, or
major national market disruption, to meet domestic demand at
reasonable prices, the President may temporarily increase the
quantity of imports of the agricultural product that is subject
to the in-quota rate of duty established under the tariff-rate
quota.
(c) Monitoring.--The Secretary of Agriculture shall monitor
the domestic supply of agricultural products subject to a
tariff-rate quota as the Secretary considers appropriate and
shall advise the President when the domestic supply of the
products and substitutable products combined with the estimated
imports of the products under the tariff-rate quota may be
inadequate to meet domestic demand at reasonable prices.
(d) Coverage of Tariff-Rate Quotas.--
(1) Exclusions.--The President may, subject to terms
and conditions determined appropriate by the President,
provide that the entry, or withdrawal from warehouse,
for consumption in the United States of an agricultural
product shall not be subject to the over-quota rate of
duty established under a tariff-rate quota if the
agricultural product--
(A) is imported by, or for the account of,
any agency of the United States or of any
foreign embassy;
(B) is imported as a sample for taking
orders, for the personal use of the importer,
or for the testing of equipment;
(C) is a commercial sample or is entered for
exhibition, display, or sampling at a trade
fair or for research; or
(D) is a blended syrup provided for in
subheadings 1702.20.28, 1702.30.28, 1702.40.28,
1702.60.28, 1702.90.58, 1806.20.92, 1806.20.93,
1806.90.38, 1806.90.40, 2101.10.38, 2101.20.38,
2106.90.38, or 2106.90.67 of Schedule XX, if
entered from a foreign trade zone by a foreign
trade zone user whose facilities were in
operation on June 1, 1990, to the extent that
the annual quantity entered into the customs
territory from such zone does not contain a
quantity of sugar of nondomestic origin greater
than the quantity authorized by the Foreign
Trade Zones Board for processing in that zone
during calendar year 1985.
(2) Reclassification.--Subject to the consultation
and layover requirements of section 115, the President
may proclaim a modification to the coverage of a
tariff-rate quota for any agricultural product if the
President determines the modification is necessary or
appropriate to conform the tariff-rate quota to
Schedule XX as a result of a reclassification of any
item by the Secretary of the Treasury.
(3) Allocation.--The President may allocate the in-
quota quantity of a tariff-rate quota for any
agricultural product among supplying countries or
customs areas and may modify any allocation as
determined appropriate by the President.
(4) Bilateral agreement.--The President may proclaim
an increase in the tariff-rate quota for beef if the
President determines that an increase is necessary to
implement--
(A) the March 24, 1994, agreement between the
United States and Argentina; or
(B) the March 9, 1994, agreement between the
United States and Uruguay.
(5) Continuation of sugar headnote.--The President is
authorized to proclaim additional United States note 3
to chapter 17 of the HTS, and to proclaim the
modifications to the note, as determined appropriate by
the President to reflect Schedule XX.
[(e) Conforming Amendments.--Amendments to section 213(d) of
the Caribbean Basin Economic Recovery Act, section 204 of the
Andean Trade Preference Act, section 503 of the Trade Act of
1974, General Note 3(a)(iv) of the HTS, section 313 of the
Tariff Act of 1930, and Section 358e(f)(6) of the Agricultural
Adjustment Act of 1938 (reprinted elsewhere).]
SEC. 405. SPECIAL AGRICULTURAL SAFEGUARD AUTHORITY.
(a) Determination of Trigger Levels.--Consistent with Article
5 as determined by the President, the President shall cause to
be published in the Federal Register--
(1) the list of special safeguard agricultural goods
not later than the date of entry into force of the WTO
Agreement with respect to the United States; and
(2) for each special safeguard agricultural good--
(A) the trigger level specified in
subparagraph 1(a) of Article 5, on an annual
basis;
(B) the trigger price specified in
subparagraph 1(b) of Article 5; and
(C) the relevant period.
(b) Determination of Safeguard.--If the President determines
with respect to a special safeguard agricultural good that it
is appropriate to impose--
(1) the price-based safeguard in accordance with
subparagraph 1(b) of Article 5; or
(2) the volume-based safeguard in accordance with
subparagraph 1(a) of Article 5,
the President shall, consistent with Article 5 as determined by
the President, determine the amount of the duty to be imposed,
the period such duty shall be in effect, and any other terms
and conditions applicable to the duty.
(c) Imposition of Safeguard.--The President shall direct the
Secretary of the Treasury to impose a duty on a special
safeguard agricultural good entered, or withdrawn from
warehouse, for consumption in the United States in accordance
with a determination made under subsection (b).
(d) No Simultaneous Safeguard.--A duty may not be in effect
for a special safeguard agricultural good pursuant to this
section during any period in which such good is the subject of
any action proclaimed pursuant to section 202 or 203 of the
Trade Act of 1974 (19 U.S.C. 2252 or 2253).
(e) Exclusion of NAFTA Countries.--The President may exempt
from any duty imposed under this section any good originating
in a NAFTA country (as determined in accordance with section
202 of the North American Free Trade Agreement Implementation
Act (19 U.S.C. 3332)).
(f) Advice of Secretary of Agriculture.--The Secretary of
Agriculture shall advise the President on the implementation of
this section.
(g) Termination Date.--This section shall cease to be
effective on the date, as determined by the President, that the
special safeguard provisions of Article 5 are no longer in
force with respect to the United States.
(h) Definitions.--For purposes of this section--
(1) the term ``Article 5'' means Article 5 of the
Agreement on Agriculture described in section
101(d)(2);
(2) the term ``relevant period'' means the period
determined by the President to be applicable to a
special safeguard agricultural good for purposes of
applying this section; and
(3) the term ``special safeguard agricultural good''
means an agricultural good on which an additional duty
may be imposed pursuant to the special safeguard
provisions of Article 5.
Reciprocal Meat Inspection Requirement
(Section 20(h) of the Federal Meat Inspection Act)
[21 U.S.C. 620; P.L. 90-201 as added by P.L. 100-418, section 4604]
SEC. 20.
* * * * * * *
(h)(1) As used in this subsection:
(A) The term ``meat articles'' means carcasses, meat
and meat food products of cattle, sheep, swine, goats,
horses, mules, or other equines, that are capable of
use as human food.
(B) The term ``standards'' means inspection, building
construction, sanitary, quality, species verification,
residue, and other standards that are applicable to
meat articles.
(2) On request of the Committee on Agriculture or the
Committee on Ways and Means of the House of Representatives or
the Committee on Agriculture, Nutrition, and Forestry or the
Committee on Finance of the Senate, or at the initiative of the
Secretary, the Secretary shall, as soon as practicable,
determine whether a particular foreign country applies
standards for the importation of meat articles from the United
States that are not related to public health concerns about
end-product quality that can be substantiated by reliable
analytical methods.
(3) If the Secretary determines that a foreign country
applies standards described in paragraph (2)--
(A) the Secretary shall consult with the United
States Trade Representative; and
(B) within 30 days after the determination of the
Secretary under paragraph (2), the Secretary and the
United States Trade Representative shall recommend to
the President whether action should be taken under
paragraph (4).
(4) Within 30 days after receiving a recommendation for
action under paragraph (3), the President shall, if and for
such time as the President considers appropriate, prohibit
imports into the United States of any meat articles produced in
such foreign country unless it is determined that the meat
articles produced in that country meet the standards applicable
to meat articles in commerce within the United States.
(5) The action authorized under paragraph (4) may be used
instead of, or in addition to, any other action taken under any
other law.
Sugar Tariff-Rate Quotas Under Headnote Authority
[Additional U.S. Notes of Chapter 17 of the Harmonized Tariff Schedule
of the United States]
Chapter 17.--Sugars and Sugar Confectionery
Additional U.S. Notes
1. The term ``degree'' as used in the ``Rates of Duty''
columns of this chapter means International Sugar Degree as
determined by polarimetric test performed in accordance with
procedures recognized by the International Commission for
Uniform Methods of Sugar Analysis (ICUMSA).
2. For the purposes of this schedule, the term ``articles
containing over 65 percent by dry weight of sugar described in
additional U.S. note 2 to chapter 17'' means articles
containing over 65 percent by dry weight of sugars derived from
sugar cane or sugar beets, whether or not mixed with other
ingredients, capable of being further processed or mixed with
similar or other ingredients, and not prepared for marketing to
the ultimate consumer in the identical form and package in
which imported.
3. For the purposes of this schedule, the term ``articles
containing over 10 percent by dry weight of sugar described in
additional U.S. note 3 to chapter 17'' means articles
containing over 10 percent by dry weight of sugars derived from
sugar cane or sugar beets, whether or not mixed with other
ingredients, except (a) articles not principally of crystalline
structure or not in dry amorphous form, the foregoing that are
prepared for marketing to the ultimate consumer in the
identical form and package in which imported; (b) blended
syrups containing sugars derived from sugar cane or sugar
beets, capable of being further processed or mixed with similar
or other ingredients, and not prepared for marketing to the
ultimate consumer in the identical form and package in which
imported; (c) articles containing over 65 percent by dry weight
of sugars derived from sugar cane or sugar beets, whether or
not mixed with other ingredients, capable of being further
processed or mixed with similar or other ingredients, and not
prepared for marketing to the ultimate consumer in the
identical form and package in which imported; or (d) cake
decorations and similar products to be used in the same
condition as imported without any further processing other than
the direct application to individual pastries or confections,
finely ground or masticated coconut meat or juice thereof mixed
with those sugars, and sauces and preparations therefor.
4. For the purposes of this schedule, the term ``blended
syrups described in additional U.S. note 4 to chapter 17''
means blended syrups containing sugars derived from sugar cane
or sugar beets, capable of being further processed or mixed
with similar or other ingredients, and not prepared for
marketing to the ultimate consumer in the identical form and
package in which imported.
5. (a)(i) The aggregate quantity of raw cane sugar entered,
or withdrawn from warehouse for consumption, under subheading
1701.11.10, during any fiscal year, shall not exceed in the
aggregate an amount (expressed in terms of raw value), not less
than 1,117,195 metric tons, as shall be established by the
Secretary of Agriculture (hereinafter referred to as ``the
Secretary''), and the aggregate quantity of sugars, syrups and
molasses entered, or withdrawn from warehouse for consumption,
under subheadings 1701.12.10, 1701.91.10, 1701.99.10,
1702.90.10 and 2106.90.44, during any fiscal year, shall not
exceed in the aggregate an amount (expressed in terms of raw
value), not less than 22,000 metric tons, as shall be
established by the Secretary. With either the aggregate
quantity for raw cane sugar or the aggregate quantity for
sugars, syrups and molasses other than raw cane sugar, the
Secretary may reserve a quota quantity for the importation of
specialty sugars as defined by the United States Trade
Representative.
(ii) Whenever the Secretary believes that domestic supplies
of sugars may be inadequate to meet domestic demand at
reasonable prices, the Secretary may modify any quantitative
limitations which have previously been established under this
note but may not reduce the total amounts below the amounts
provided for in subdivision (i) hereof.
(iii) The Secretary shall inform the Secretary of the
Treasury of any determination made under this note. Notice of
such determinations shall be published in the Federal Register.
(iv) Sugar entering the United States during a quota period
established under this note may be charged to the previous or
subsequent quota period with the written approval of the
Secretary.
(b)(i) The quota amounts established under subdivision (a)
may be allocated among supplying countries and areas by the
United States Trade Representative.
(ii) The United States Trade Representative, after
consultation with the Secretaries of State and Agriculture, may
modify, suspend (for all or part of the quota amount), or
reinstate the allocations provided for in this subdivision
(including the addition or deletion of any country or area) if
he finds that such action is appropriate to carry out the
rights or obligations of the United States under any
international agreement to which the United States is a party
or is appropriate to promote the economic interests of the
United States.
(iii) The United States Trade Representative shall inform
the Secretary of the Treasury of any such action and shall
publish notice thereof in the Federal Register. Such action
shall not become effective until the day following the date of
publication of such notice in the Federal Register or such
later date as may be specified by the United States Trade
Representative.
(iv) The United States Trade Representative may promulgate
regulations appropriate to provide for the allocations
authorized pursuant to this note. Such regulations may, among
other things, provide for the issuance of certificates of
eligibility to accompany any sugars, syrups or molasses
(including any speciality sugars) imported from any country or
area for which an allocation has been provided and for such
minimum quota amounts as may be appropriate to provide
reasonable access to the U.S. market for articles the product
of those countries or areas having small allocations.
(c) For purposes of this note, the term raw value means the
equivalent of such articles in terms of ordinary commercial raw
sugar testing 96 degrees by the polariscope as determined in
accordance with regulations or instructions issued by the
Secretary of the Treasury. Such regulations or instructions
may, among other things, provide: (i) for the entry of such
articles pending a final determination of polarity; and (ii)
that positive or negative adjustments for differences in
preliminary and final raw values be made in the same or
succeeding quota periods. The principal grades and types of
sugar shall be translated into terms of raw value in the
following manner--
(A) For articles described in subheadings 1701.11.05,
1701.11.10, 1701.11.20, 1701.11.50, 1701.12.05,
1701.12.10, 1701.12.50, 1701.91.05, 1701.91.10,
1701.91.30, 1701.99.05, 1701.99.10, 1701.99.50,
2106.90.42, 2106.90.44 and 2106.90.46 by multiplying
the number of kilograms thereof by the greater of 0.93,
or 1.07 less 0.0175 for each degree of polarization
under 100 degrees (and fractions of a degree in
proportion).
(B) For articles described in subheadings 1702.90.05,
1702.90.10 and 1702.90.20, by multiplying the number of
kilograms of the total sugars thereof (the sum of the
sucrose and reducing or invert sugars) by 1.07.
(C) The Secretary of the Treasury shall establish
methods for translating sugar into terms of raw value
for any special grade or type of sugar, syrup, or
molasses for which he/she determines that the raw value
cannot be measured adequately under the above
provisions.
6. Raw cane sugar classifiable in subheading 1701.11.20
shall be entered only to be used for the production (other than
by distillation) of polyhydric alcohols, except polyhydric
alcohols for use as a substitute for sugar in human food
consumption, or to be refined and reexported in refined form or
in sugar-containing products, or to be substituted for
domestically produced raw cane sugar that has been or will be
exported. The Secretary of Agriculture may issue licenses for
such entries and may promulgate such regulations (including any
terms, conditions, certifications, bonds, civil penalties, or
other limitations) as are appropriate to ensure that sugar
entered under subheading 1701.11.20 is used only for such
purposes.
7. The aggregate quantity of articles containing over 65
percent by dry weight of sugars described in additional U.S.
note 2 to chapter 17, entered under subheadings 1701.91.44,
1702.90.64, 1704.90.64, 1806.10.24, 1806.10.45, 1806.20.71,
1806.90.45, 1901.20.20, 1901.20.55, 1901.90.52, 2101.12.44,
2101.20.44, 2106.90.74 and 2106.90.92 during the 12-month
period from October 1 in any year to the following September
30, inclusive, shall be none and no such articles shall be
classifiable therein.
8. The aggregate quantity of articles containing over 10
percent by dry weight of sugars described in additional U.S.
note 3 to chapter 17, entered under subheadings 1701.91.54,
1704.90.74, 1806.20.75, 1806.20.95, 1806.90.56, 1901.90.56,
2101.12.54, 2101.20.54, 2106.90.78 and 2106.90.95 during the
12-month period from October 1, in any year to the following
September 30, inclusive, shall be exceed 64,709 metric tons
(articles the product of Mexico shall not be permitted or
included under this quantitative limitation and no such
articles shall be classifiable therein).
9. The aggregate quantity of blended syrups described in
additional U.S. note 4 to chapter 17, the foregoing goods
entered under subheadings 1704.20.24, 1702.30.24, 1702.40.24,
1702.60.24, 1702.90.54, 1806.20.91, 1806.90.35, 2101.12.34,
2101.20.34, 2106.90.68 and 2106.90.89 during the 12-month
period from October 1, in any year to the following September
30, inclusive, shall be none and no such articles shall be none
and no such articles shall be classifiable therein.
10. Heading 1703 does not include products derived from
sugar cane or sugar beet and containing soluble non-sugar
solids (excluding any foreign substance that may have been
added or developed in the product) equal to percent or less by
weight of the total soluble solids.
11. For the purposes of subheading 1704.90.25, ``cough
drops'' must contain a minimum of 5 mg per dose of menthol, of
eucalyptol, or of a combination of menthol, and of eucalptol,
or of a combination of menthol and eucalyptol.
Import Prohibitions on Certain Agricultural Commodities Under Marketing
Orders
(Section 8e of the Agricultural Adjustment Act, as amended)
[7 U.S.C. 608e-1; Act of Mar. 12, 1933, as amended by Act of Aug. 31,
1954, P.L. 87-128, P.L. 91-670, P.L. 95-133, P.L. 97-312, P.L. 100-418,
and P.L. 101-624]
SEC. 8E. IMPORT PROHIBITIONS ON TOMATOES, AVOCADOS, LIMES, ETC; RULES
AND REGULATIONS.
(a) Subject to the provisions of subsections (c) and (d)
and notwithstanding any other provision of law, whenever a
marketing order issued by the Secretary of Agriculture pursuant
to section 608c of this title contains any terms or conditions
regulating the grade, size, quality or maturity of tomatoes,
raisins, olives (other than Spanish-style green olives),
prunes, avocados, mangoes, limes, grapefruit, green peppers,
Irish potatoes, cucumbers, oranges, onions, walnuts, dates,
filberts, table grapes, eggplants, kiwifruit, nectarines,
plums, pistachios, or apples produced in the United States the
importation into the United States of any such commodity, other
than dates for processing, during the period of time such order
is in effect shall be prohibited unless it complies with the
grade, size, quality, and maturity provisions of such order or
comparable restrictions promulgated hereunder: Provided, That
this prohibition shall not apply to such commodities when
shipped into the continental United States from the
Commonwealth of Puerto Rico or any Territory or possession of
the United States where this chapter has force and effect;
Provided further, That whenever two or more such marketing
orders regulating the same agricultural commodity produced in
different areas of the United States are concurrently in
effect, the importation into the United States of any such
commodity, other than dates for processing, shall be prohibited
unless it complies with the grade, size, quality, and maturity
provisions of the order which, as determined by the Secretary
of Agriculture, regulates the commodity produced in the area
with which the imported commodity is in most direct
competition. Such prohibition shall not become effective until
after the giving of such notice as the Secretary of Agriculture
determines reasonable, which shall not be less than three days.
In determining the amount of notice that is reasonable in the
case of tomatoes the Secretary of Agriculture shall give due
consideration to the time required for their transportation and
entry into the United States after picking. Whenever the
Secretary of Agriculture finds that the application of the
restrictions under a marketing order to an imported commodity
is not practicable because of variations in characteristics
between the domestic and imported commodity he shall establish
with respect to the imported commodity, other than dates for
processing, such grade, size, quality, and maturity
restrictions by varieties, types, or other classifications as
he finds will be equivalent or comparable to those imposed upon
the domestic commodity under such order. The Secretary of
Agriculture may promulgate such rules and regulations as he
deems necessary, to carry out the provisions of this section.
Any person who violates any provision of this section or of any
rule, regulation, or order promulgated hereunder shall be
subject to a forfeiture in the amount prescribed in section
608a(5) of this title or, upon conviction, a penalty in the
amount prescribed in section 608c(14) of this title, or to both
such forfeiture and penalty.
(b)(1) The Secretary may provide for a period of time (not
to exceed 35 days) in addition to the period of time covered by
a marketing order during which the marketing order requirements
would be in effect for a particular commodity during any year
if the Secretary determines that such additional period of time
is necessary--
(A) to effectuate the purpose of this Act; and
(B) to prevent the circumvention of the grade, size,
quality, or maturity standards of a seasonal marketing
order applicable to a commodity produced in the United
States by imports of such commodity.
(2) In making the determination required by paragraph (1),
the Secretary, through notice and comment procedures, shall
consider--
(A) to what extent, during the previous year, imports
of a commodity that did not meet the requirements of a
marketing order applicable to such commodity were
marketed in the United States during the period that
such marketing order requirements were in effect for
available domestic commodities (or would have been
marketed during such time if not for any additional
period established by the Secretary);
(B) if the importation into the United States of such
commodity did, or was likely to, circumvent the grade,
size, quality or maturity standards of a seasonal
marketing order applicable to such commodity produced
in the United States; and
(C) the availability and price of commodities of the
variety covered by the marketing order during any
additional period the marketing order requirements are
to be in effect.
(3) An additional period established by the Secretary in
accordance with this subsection shall be--
(A) announced not later than 30 days before the date
such additional period is to be in effect; and
(B) reviewed by the Secretary on request, through
notice and comment procedures, at least every 3 years
in order to determine if the additional period is still
needed to prevent circumvention of the seasonal
marketing order by imported commodities.
(4) For the purposes of carrying out this subsection, the
Secretary is authorized to make such reasonable inspections as
may be necessary.
(c) Prior to any import prohibition or regulation under
this section being made effective with respect to any
commodity--
(1) the Secretary of Agriculture shall notify the
United States Trade Representative of such import
prohibition or regulation; and
(2) the United States Trade Representative shall
advise the Secretary of Agriculture, within 60 days of
the notification under paragraph (1), to ensure that
the application of the grade, size, quality, and
maturity provisions of the relevant marketing order, or
comparable restrictions, to imports is not inconsistent
with United States international obligations under any
trade agreement, including the General Agreement on
Tariffs and Trade.
(d) The Secretary may proceed with the proposed prohibition
or regulation if the Secretary receives the advice and
concurrence of the United States Trade Representative within 60
days of the notification under subsection (c)(1).
B. AUTHORITIES TO RESTRICT IMPORTS UNDER CERTAIN ENVIRONMENTAL LAWS
Marine Mammal Protection Act of 1972, as amended
[Excerpts]
[16 U.S.C. 1371, 1411-1412, and 1415-1417; P.L. 92-522, as amended by
P.L. 93-205, P.L. 94-265, P.L. 95-136, P.L. 96-470, P.L. 97-58, P.L.
97-389, P.L. 98-364, P.L. 102-523, P.L. 102-582, P.L. 102-587, P.L.
103-238, P.L. 105-18, and P.L. 105-42]
TITLE I--CONSERVATION AND PROTECTION OF MARINE MAMMALS
moratorium and exceptions
Sec. 101. (a) There shall be a moratorium on the taking and
importation of marine mammals and marine mammal products,
commencing on the effective date of this Act, during which time
no permit may be issued for the taking of any marine mammal and
no marine mammal or marine mammal product may be imported into
the United States except in the following cases:
(1) Consistent with the provisions of section 104,
permits may be issued by the Secretary for taking, and
importation for purposes of scientific research, public
display, photography for educational or commercial
purposes, or enhancing the survival or recovery of a
species or stock, or for importation of polar bear
parts (other than internal organs) taken in sport hunts
in Canada. Such permits, except permits issued under
section 104(c)(5), may be issued if the taking or
importation proposed to be made is first reviewed by
the Marine Mammal Commission and the Committee of
Scientific Advisors on Marine Mammals established under
title II. The Commission and Committee shall recommend
any proposed taking or importation, other than
importation under section 104(c)(5), which is
consistent with the purposes and policies of section 2
of this Act. If the Secretary issues such a permit for
importation, the Secretary shall issue to the importer
concerned a certificate to that effect in such form as
the Secretary of the Treasury prescribes, and such
importation may be made upon presentation of the
certificate to the customs officer concerned.
(2) Marine mammals may be taken incidentally in the
course of commercial fishing operations and permits may
be issued thereof pursuant to section 104 of this
title, subject to regulations prescribed by the
Secretary in accordance with section 103 hereof, or in
lieu of such permits, authorizations may be granted
therefor under section 118, subject to regulations
prescribed under that section by the Secretary without
regard to section 103. Such authorizations may be
granted under title III with respect to purse seine
fishing for yellowfin tuna in the eastern tropical
Pacific Ocean, subject to regulations prescribed under
that title by the Secretary without regard to section
103. In any event it shall be the immediate goal that
the incidental kill or incidental serious injury of
marine mammals permitted in the course of commercial
fishing operations be reduced to insignificant levels
approaching a zero mortality and serious injury rate.
The Secretary of the Treasury shall ban the importation
of commercial fish or products from fish which have
been caught with commercial fishing technology which
results in the incidental kill or incidental serious
injury of ocean mammals in excess of United States
standards. For purposes of applying the preceding
sentence, the Secretary--
(A) shall insist on reasonable proof from the
government of any nation from which fish or
fish products will be exported to the United
States of the effects on ocean mammals of the
commercial fishing technology in use for such
fish or fish products exported from such nation
to the United States;
(B) in the case of yellowfin tuna harvested
with purse seines nets in the eastern tropical
Pacific Ocean, and products therefrom, to be
exported to the United States, shall require
that the government of the exporting nation
provide documentary evidence that--
(i)(I) the tuna or products therefrom
were not banned from importation under
this paragraph before the effective
date of section 4 of the International
Dolphin Conservation Program Act; or
(II) the tuna or products therefrom
were harvested after the effective date
of section 4 of the International
Dolphin Conservation Program Act by
vessels of a nation which participates
in the International Dolphin
Conservation Program, and such
harvesting nation is either a member of
the Inter-American Tropical Tuna
Commission or has initiated (and within
6 months thereafter completed) all
steps required of applicant nations, in
accordance with article V, paragraph 3
of the Convention establishing the
Inter-American Tropical Tuna
Commission, to become a member of that
organization;
(ii) such nation is meeting the
obligations of the International
Dolphin Conservation Program and the
obligations of membership in the Inter-
American Tropical Tuna Commission,
including all financial obligations;
and
(iii) the total dolphin mortality
limits, and per-stock per-year dolphin
mortality limits permitted for that
nation's vessels under the
International Dolphin Conservation
Program do not exceed the limits
determined for 1997, or for any year
thereafter, consistent with the
objective of progressively reducing
dolphin mortality to a level
approaching zero through the setting of
annual limits and the goal of
eliminating dolphin mortality, and
requirements of the International
Dolphin Conservation Program;
(C) shall not accept such documentary
evidence if--
(i) the government of the harvesting
nation does not provide directly or
authorize the Inter-American Tropical
Tuna Commission to release complete and
accurate information to the Secretary
in a timely manner--
(I) to allow determination of
compliance with the
International Dolphin
Conservation Program; and
(II) for the purposes of
tracking and verifying
compliance with the minimum
requirements established by the
Secretary in regulations
promulgated under subsection
(f) of the Dolphin Protection
Consumer Information Act (16
U.S.C. 1385(f)); or
(ii) after taking into consideration
such information, findings of the
Inter-American Tropical Tuna
Commission, and any other relevant
information, including information that
a nation is consistently failing to
take enforcement actions on violations
which diminish the effectiveness of the
International Dolphin Conservation
Program, the Secretary, in consultation
with the Secretary of State, finds that
the harvesting nation is not in
compliance with the International
Dolphin Conservation Program.
(D) shall require the government of any
intermediary nation to certify and provide
reasonable proof to the Secretary that it has
not imported, within the preceding six months,
any yellowfin tuna or yellowfin tuna products
that are subject to a direct ban on importation
to the United States under subparagraph (B);
(E) shall, six months after importation of
yellowfin tuna or tuna products has been banned
under this section, certify such fact to the
President, which certification shall be deemed
to be a certification for the purposes of
section 8(a) of the Fishermen's Protective Act
of 1967 (22 U.S.C. 1978(a)) for as long as such
ban is in effect; and
(F)(i) except as provided in clause (ii), in
the case of fish or products containing fish
harvested by a nation whose fishing vessels
engage in high seas driftnet fishing, shall
require that the government of the exporting
nation provide documentary evidence that the
fish or fish product was not harvested with a
large-scale driftnet in the South Pacific Ocean
after July 1, 1991, or in any other water of
the high seas after January 1, 1993, and
(ii) in the case of tuna or a product
containing tuna harvested by a nation whose
fishing vessels engage in high seas driftnet
fishing, shall require that the government of
the exporting nation provide documentary
evidence that the tuna or tuna product was not
harvested with a large-scale driftnet anywhere
on the high seas after July 1, 1991.
For purposes of subparagraph (F), the term ``driftnet''
has the meaning given such term in section 4003 of the
Driftnet Impact Monitoring, Assessment, and Control Act
of 1987 (16 U.S.C. 1822 note), except that, until
January 1, 1994, the term ``driftnet'' does not include
the use in the northeast Atlantic Ocean of gillnets
with a total length not to exceed 5 kilometers if the
use is in accordance with regulations adopted by the
European Community pursuant to the October 28, 1991,
decision by the Council of Fisheries Ministers of the
Community.
(3)(A) The Secretary, on the basis of the best
scientific evidence available and in consultation with
the Marine Mammal Commission, is authorized and
directed, from time to time, having due regard to the
distribution, abundance, breeding habits, and times and
lines of migratory movements of such marine mammals, to
determine when, to what extent, if at all, and by what
means, it is compatible with this Act to waive the
requirements of this section so as to allow taking, or
importing of any marine mammal, or any marine mammal
product, and to adopt suitable regulations, issue
permits, and make determinations in accordance with
sections 102, 103, 104, and 111 of this title
permitting and governing such taking and importing, in
accordance with such determinations: Provided, however,
That the Secretary, in making such determinations, must
be assured that the taking of such marine mammal is in
accord with sound principles of resource protection and
conservation as provided in the purposes and policies
of this Act: Provided further, however, That no marine
mammal or no marine mammal product may be imported into
the United States unless the Secretary certifies that
the program for taking marine mammals in the country of
origin is consistent with the provisions and policies
of this Act. Products of nations not so certified may
not be imported into the United States for any purpose,
including processing for exportation.
(B) Except for scientific research purposes,
photography for educational or commercial purposes, or
enhancing the survival or recovery of a species or
stock as provided for in paragraph (1) of this
subsection, or as provided for under paragraph (5) of
this subsection, during the moratorium no permit may be
issued for the taking of any marine mammal which has
been designated by the Secretary as depleted, and no
importation may be made of any such mammal.
(4)(A) Except as provided in subparagraphs (B) and
(C), the provisions of this Act shall not apply to the
use of measures--
(i) by the owner of fishing gear or catch, or
an employee or agent of such owner, to deter a
marine mammal from damaging the gear or catch;
(ii) by the owner of other private property,
or an agent, bailee, or employee of such owner,
to deter a marine mammal from damaging private
property;
(iii) by any person, to deter a marine mammal
from endangering personal safety; or
(iv) by a government employee, to deter a
marine mammal from damaging public property,
so long as such measures do not result in the death or
serious injury of a marine mammal.
(B) The Secretary shall, through consultation with
appropriate experts, and after notice and opportunity
for public comment, publish in the Federal Register a
list of guidelines for use in safely deterring marine
mammals. In the case of marine mammals listed as
endangered species or threatened species under the
Endangered Species Act of 1973, the Secretary shall
recommend specific measures which may be used to
nonlethally deter marine mammals. Actions to deter
marine mammals consistent with such guidelines or
specific measures shall not be a violation of this Act.
(C) If the Secretary determines, using the best
scientific information available, that certain forms of
deterrence have a significant adverse effect on marine
mammals, the Secretary may prohibit such deterrent
methods, after notice and opportunity for public
comment, through regulation under this Act.
(D) The authority to deter marine mammals pursuant to
subparagraph (A) applies to all marine mammals,
including all stocks designated as depleted under this
Act.
(5)(A) Upon request therefor by citizens of the
United States who engage in a specified activity (other
than commercial fishing) within a specified
geographical region, the Secretary shall allow, during
periods of not more than five consecutive years each,
the incidental, but not intentional, taking by citizens
while engaging in that activity within that region of
small numbers of marine mammals of a species or
population stock if the Secretary, after notice (in the
Federal Register and in newspapers of general
circulation, and through appropriate electronic media,
in the coastal areas that may be affected by such
activity) and opportunity for public comment--
(i) finds that the total of such taking
during each five-year (or less) period
concerned will have a negligible impact on such
species or stock and will not have an
unmitigable adverse impact on the availability
of such species or stock for taking for
subsistence uses pursuant to subsection (b) of
this section or section 109(f) of this title
or, in the case of a cooperative agreement
under both this Act and the Whaling Convention
Act of 1949 [16 U.S.C.A. Sec. 916 et seq.],
pursuant to section 112(c) of this title; and
(ii) prescribes regulations setting forth--
(I) permissible methods of taking
pursuant to such activity, and other
means of effecting the least
practicable adverse impact on such
species or stock and its habitat,
paying particular attention to
rookeries, mating grounds, and areas of
similar significance, and on the
availability of such species or stock
for subsistence uses; and
(II) requirements pertaining to the
monitoring and reporting of such
taking.
(B) The Secretary shall withdraw, or suspend for a
time certain (either on an individual or class basis,
as appropriate) the permission to take marine mammals
under subparagraph (A) pursuant to a specified activity
within a specified geographical region if the Secretary
finds, after notice and opportunity for public comment
(as required under subparagraph (A) unless subparagraph
(C)(i) applies), that--
(i) the regulations prescribed under
subparagraph (A) regarding methods of taking,
monitoring, or reporting are not being
substantially complied with by a person
engaging in such activity; or
(ii) the taking allowed under subparagraph
(A) pursuant to one or more activities within
one or more regions is having, or may have,
more than a negligible impact on the species or
stock concerned.
(C)(i) The requirement for notice and opportunity for
public comment in subparagraph (B) shall not apply in
the case of a suspension of permission to take if the
Secretary determines that an emergency exists which
poses a significant risk to the well-being of the
species or stock concerned.
(ii) Sections 103 and 104 of this title shall not
apply to the taking of marine mammals under the
authority of this paragraph.
(D)(i) Upon request therefor by citizens of the
United States who engage in a specified activity (other
than commercial fishing) within a specific geographic
region, the Secretary shall authorize, for periods of
not more than 1 year, subject to such conditions as the
Secretary may specify, the incidental, but not
intentional, taking by harassment of small numbers of
marine mammals of a species or population stock by such
citizens while engaging in that activity within that
region if the Secretary finds that such harassment
during each period concerned--
(I) will have a negligible impact on such
species or stock, and
(II) will not have an unmitigable adverse
impact on the availability of such species or
stock for taking for subsistence uses pursuant
to subsection (b), or section 109(f) or
pursuant to a cooperative agreement under
section 119.
(ii) The authorization for such activity shall
prescribe, where applicable--
(I) permissible methods of taking by
harassment pursuant to such activity, and other
means of effecting the least practicable impact
on such species or stock and its habitat,
paying particular attention to rookeries,
mating grounds, and areas of similar
significance, and on the availability of such
species or stock for taking for subsistence
uses pursuant to subsection (b) or section
109(f) or pursuant to a cooperative agreement
under section 119,
(II) the measures that the Secretary
determines are necessary to ensure no
unmitigable adverse impact on the availability
of the species or stock for taking for
subsistence uses pursuant to subsection (b) or
section 109(f) or pursuant to a cooperative
agreement under section 119, and
(III) requirements pertaining to the
monitoring and reporting of such taking by
harassment, including requirements for the
independent peer review of proposed monitoring
plans or other research proposals where the
proposed activity may affect the availability
of a species or stock for taking for
subsistence uses pursuant to subsection (b) or
section 109(f) or pursuant to a cooperative
agreement under section 119.
(iii) The Secretary shall publish a proposed
authorization not later than 45 days after receiving an
application under this subparagraph and request public
comment through notice in the Federal Register,
newspapers of general circulation, and appropriate
electronic media and to all locally affected
communities for a period of 30 days after publication.
Not later than 45 days after the close of the public
comment period, if the Secretary makes the findings set
forth in clause (i), the Secretary shall issue an
authorization with appropriate conditions to meet the
requirements of clause (ii).
(iv) The Secretary shall modify, suspend, or revoke
an authorization if the Secretary finds that the
provisions of clauses (i) or (ii) are not being met.
(v) A person conducting an activity for which an
authorization has been granted under this subparagraph
shall not be subject to the penalties of this Act for
taking by harassment that occurs in compliance with
such authorization.
(E)(i) During any period of up to 3 consecutive
years, the Secretary shall allow the incidental, but
not the intentional, taking by persons using vessels of
the United States or vessels which have valid fishing
permits issued by the Secretary in accordance with
section 204(b) of the Magnuson Fishery Conservation and
Management Act (16 U.S.C. 1824(b)), while engaging in
commercial fishing operations, of marine mammals from a
species or stock designated as depleted because of its
listing as an endangered species or threatened species
under the Endangered Species Act of 1973 (16 U.S.C.
1531 et seq.) if the Secretary, after notice and
opportunity for public comment, determines that--
(I) the incidental mortality and serious
injury from commercial fisheries will have a
negligible impact on such species or stock;
(II) a recovery plan has been developed or is
being developed for such species or stock
pursuant to the Endangered Species Act of 1973;
and
(III) where required under section 118, a
monitoring program is established under
subsection (d) of such section, vessels engaged
in such fisheries are registered in accordance
with such section, and a take reduction plan
has been developed or is being developed for
such species or stock.
(ii) Upon a determination by the Secretary that the
requirements of clause (i) have been met, the Secretary
shall publish in the Federal Register a list of those
fisheries for which such determination was made, and,
for vessels required to register under section 118,
shall issue an appropriate permit for each
authorization granted under such section to vessels to
which this paragraph applies. Vessels engaged in a
fishery included in the notice published by the
Secretary under this clause which are not required to
register under section 118 shall not be subject to the
penalties of this Act for the incidental taking of
marine mammals to which this paragraph applies, so long
as the owner or master of such vessel reports any
incidental mortality or injury of such marine mammals
to the Secretary in accordance with section 118.
(iii) If, during the course of the commercial fishing
season, the Secretary determines that the level of
incidental mortality or serious injury from commercial
fisheries for which a determination was made under
clause (i) has resulted or is likely to result in an
impact that is more than negligible on the endangered
or threatened species or stock, the Secretary shall use
the emergency authority granted under section 118 to
protect such species or stock, and may modify any
permit granted under this paragraph as necessary.
(iv) The Secretary may suspend for a time certain or
revoke a permit granted under this subparagraph only if
the Secretary determines that the conditions or
limitations set forth in such permit are not being
complied with. The Secretary may amend or modify, after
notice and opportunity for public comment, the list of
fisheries published under clause (ii) whenever the
Secretary determines there has been a significant
change in the information or conditions used to
determine such list.
(v) Sections 103 and 104 shall not apply to the
taking of marine mammals under the authority of this
subparagraph.
(vi) This subparagraph shall not govern the
incidental taking of California sea otters and shall
not be deemed to amend or repeal the Act of November 7,
1986 (Public Law 99-625; 100 Stat. 3500).
(6)(A) A marine mammal product may be imported into
the United States if the product--
(i) was legally possessed and exported by any
citizen of the United States in conjunction
with travel outside the United States, provided
that the product is imported into the United
States by the same person upon the termination
of travel;
(ii) was acquired outside of the United
States as part of a cultural exchange by an
Indian, Aleut, or Eskimo residing in Alaska; or
(iii) is owned by a Native inhabitant of
Russia, Canada, or Greenland and is imported
for noncommercial purposes in conjunction with
travel within the United States or as part of a
cultural exchange with an Indian, Aleut, or
Eskimo residing in Alaska.
(B) For the purposes of this paragraph, the term--
(i) ``Native inhabitant of Russia, Canada, or
Greenland'' means a person residing in Russia,
Canada, or Greenland who is related by blood,
is a member of the same clan or ethnological
grouping, or shares a common heritage with an
Indian Aleut or Eskimo residing in Alaska; and
(ii) ``cultural exchange'' means the sharing
or exchange of ideas, information, gifts,
clothing, or handicrafts between an Indian,
Aleut, or Eskimo residing in Alaska and a
native inhabitant of Russia, Canada, or
Greenland, including rendering of raw marine
mammal parts as part of such exchange into
clothing or handicrafts through carving,
painting, sewing, or decorating.
(b) Except as provided in section 109 of this title the
provisions of this Act shall not apply with respect to the
taking of any marine mammal by any Indian, Aleut, or Eskimo who
resides in Alaska and who dwells on the coast of the North
Pacific Ocean or the Arctic Ocean if such taking--
(1) is for subsistence purposes; or
(2) is done for purposes of creating and selling
authentic native articles of handicrafts and clothing:
Provided, That only authentic native articles of
handicrafts and clothing may be sold in interstate
commerce: And provided further, That any edible portion
of marine mammals may be sold in native villages and
towns in Alaska or for native consumption. For the
purposes of this subsection, the term ``authentic
native articles of handicrafts and clothing'' means
items composed wholly or in some significant respect of
natural materials, and which are produced, decorated,
or fashioned in the exercise of traditional native
handicrafts without the use of pantographs, multiple
carvers, or other mass copying devices. Traditional
native handicrafts include, but are not limited to
weaving, carving, stitching, sewing, lacing, beading,
drawing, and painting; and
(3) in each case, is not accomplished in a wasteful
manner.
Notwithstanding the preceding provisions of this subsection,
when, under this Act, the Secretary determines any species or
stock of marine mammal subject to taking by Indians, Aleuts, or
Eskimos to be depleted, he may prescribe regulations upon the
taking of such marine mammals by any Indian, Aleut, or Eskimo
described in this subsection. Such regulations may be
established with reference to species or stocks, geographical
description of the area included, the season for taking, or any
other factors related to the reason for establishing such
regulations and consistent with the purposes of this Act. Such
regulations shall be prescribed after notice and hearing
required by section 103 of this title and shall be removed as
soon as the Secretary determines that the need for their
imposition has disappeared. In promulgating any regulation or
making any assessment pursuant to a hearing or proceeding under
this subsection or section 117(b)(2), or in making any
determination of depletion under this subsection or finding
regarding unmitigable adverse impacts under subsection (a)(5)
that affects stocks or persons to which this subsection
applies, the Secretary shall be responsible for demonstrating
that such regulation, assessment, determination, or finding is
supported by substantial evidence on the basis of the record as
a whole. The preceding sentence shall only be applicable in an
action brought by one or more Alaska Native organizations
representing persons to which this subsection applies.
(c) It shall not be a violation of this Act to take a
marine mammal if such taking is imminently necessary in self-
defense or to save the life of a person in immediate danger,
and such taking is reported to the Secretary within 48 hours.
The Secretary may seize and dispose of any carcass.
(d) Good Samaritan Exemption.--Is shall not be a violation
of this Act to take a marine mammal if--
(1) such taking is imminently necessary to avoid
serious injury, additional injury, or death to a marine
mammal entangled in fishing gear or debris;
(2)reasonable care is taken to ensure the safe
release of the marine mammal, taking into consideration
the equipment, expertise, and conditions at hand;
(3) reasonable care is exercised to prevent any
further injury to the marine mammal; and
(4) such taking is reported to the Secretary within
48 hours.
(e) Act Not to Apply to Incidental Takings by United States
Citizens Employed on Foreign Vessels Outside the United States
EEZ.--The provisions of this Act shall not apply to a citizen
of the United States who incidentally takes any marine mammal
during fishing operations outside the United States exclusive
economic zone (as defined in section 3 of the Magnuson-Stevens
Fishery Conservation and Management Act (16 U.S.C. 1802)) when
employed on a foreign fishing vessel of a harvesting nation
which is in compliance with the International Dolphin
Conservation Program.
* * * * * * *
TITLE III--INTERNATIONAL DOLPHIN CONSERVATION PROGRAM
SEC. 301. FINDINGS AND POLICY.
(a) Findings.--The Congress finds the following:
(1) The yellowfin tuna fishery of the eastern
tropical Pacific Ocean has resulted in the deaths of
millions of dolphins.
(2) Significant awareness and increased concern for
the health and safety of dolphin populations has
encouraged a change in fishing methods worldwide.
(3) United States tuna fishing vessels have led the
world in the development of fishing methods to reduce
dolphin mortalities in the eastern tropical Pacific
Ocean and United States tuna processing companies have
voluntarily promoted the marketing of tuna that is
dolphin safe.
(4) Nations harvesting yellowfin tuna in the eastern
tropical Pacific Ocean have demonstrated their
willingness to participate in appropriate multilateral
agreements to reduce dolphin mortality progressively to
a level approaching zero through the setting of annual
limits, with the goal of eliminating dolphin mortality
in that fishery. Recognition of the International
Dolphin Conservation Program will assure that the
existing trend of reduced dolphin mortality continues;
that individual stocks of dolphins are adequately
protected; and that the goal of eliminating all dolphin
mortality continues to be a priority.
(b) Policy.--It is the policy of the United States to--
(1) eliminate the marine mammal mortality resulting
from the intentional encirclement of dolphins and other
marine mammals in tuna purse seine fisheries;
(2) support the International Dolphin Conservation
Program and efforts within the Program to reduce, with
the goal of eliminating, the mortality referred to in
paragraph (1);
(3) ensure that the market of the United States does
not act as an incentive to the harvest of tuna caught
with driftnets or caught by purse seine vessels in the
eastern tropical Pacific Ocean not operating in
compliance with the International Dolphin Conservation
Program;
(4) secure appropriate multilateral agreements to
ensure that United States tuna fishing vessels shall
have continued access to productive tuna fishing
grounds in the South Pacific Ocean and elsewhere; and
(5) encourage observer coverage on purse seine
vessels fishing for tuna outside of the eastern
tropical Pacific Ocean in a fishery in which the
Secretary has determined that a regular and significant
association occurs between marine mammals and tuna, and
in which tuna is harvested through the use of purse
seine nets deployed on or to encircle marine mammals.
SEC. 302. INTERNATIONAL DOLPHIN CONSERVATION PROGRAM.
The Secretary of State, in consultation with the Secretary,
shall seek to secure a binding international agreement to
establish an International Dolphin Conservation Program that
requires--
(1) that the total annual dolphin mortality in the purse
seine fishery for yellowfin tuna in the eastern tropical
Pacific Ocean shall not exceed 5,000 animals with a commitment
and objective to progressively reduce dolphin mortality to a
level approaching zero through the setting of annual limits;
(2) the establishment of a per-sock per-year dolphin
mortality limit, to be in effect through calendar year 2000, at
a level between 0.2 percent and 0.1 percent of the minimum
population estimate, as calculated, revised, or approved by the
Secretary;
(3) the establishment of a per-stock per-year dolphin
mortality limit, beginning with the calendar year 2001, at a
level less than or equal to 0.1 percent of the minimum
population estimate as calculated, revised, or approved by the
Secretary;
(4) that if a dolphin mortality limit is exceeded under--
(A) paragraph (1), all sets on dolphins shall cease
for the applicable fishing year; and
(B) paragraph (2) or (3), all sets on the stocks
covered under paragraph (2) or (3) and any mixed
schools that contain any of those stocks shall cease
for the applicable fishing year;
(5) a scientific review and assessment to be conducted in
calendar year 1998 to--
(A) assess progress in meeting the objectives set for
calendar year 2000 under paragraph (2); and
(B) as apppropriate, consider recommendations for
meeting these objectives;
(6) a scientific review and assessment to be conducted in
calendar year 2000--
(A) to review the stocks covered under paragraph (3);
and
(B) as appropriate to consider recommendations to
further the objectives set under that paragraph;
(7) the establishment of a per vessel maximum annual
dolphin mortality limit consistent with the established per-
year mortality limits, as determined under paragraph (1)
through (3); and
(8) the provision of a system of incentives to vessel
captains to continue to reduce dolphin mortality, with the goal
of eliminating dolphin mortality.
SEC. 303. REGULATORY AUTHORITY OF THE SECRETARY.
(a) Regulations.--
(1) The Secretary shall issue regulations, and revise
those regulations as may be appropriate, to implement
the International Dolphin Conservation Program.
(2)(A) The Secretary shall issue regulations to
authorize and govern the taking of marine mammals in
the eastern tropical Pacific Ocean, including any
species of marine mammal designated as depleted under
this Act but not listed as endangered or threatened
under the Endangered Species Act (16 U.S.C. 1531 et
seq.), by vessels of the United States participating in
the International Dolphin Conservation Program.
(B) Regulations issued under this section shall
include provisions--
(i) requiring observers on each vessel;
(ii) requiring use of the backdown procedure
or other procedures equally or more effective
in avoiding mortality of, or serious injury to,
marine mammals in fishing operations;
(iii) prohibiting intentional sets on stocks
and schools in accordance with the
International Dolphin Conservation Program;
(iv) requiring the use of special equipment,
including dolphin safety panels in nets,
monitoring devices as identified by the
International Dolphin Conservation Program to
detect unsafe fishing conditions that may cause
high incidental dolphin mortality before nets
are deployed by a tuna vessel, operable rafts,
speedboats with towing bridles, floodlights in
operable condition, and diving masks and
snorkels;
(v) ensuring that the backdown procedure
during sets of purse seine net on marine
mammals is completed and rolling of the net to
sack up has begun no later than 30 minutes
before sundown;
(vii) establishing per vessel maximum annual
dolphin mortality limits, total dolphin
mortality limits and per-stock per-year
mortality limits in accordance with the
International Dolphin Conservation Program;
(viii) preventing the making of intentional
sets on dolphins after reaching either the
vessel maximum annual dolphin mortality limits,
total dolphin mortality limits, or per-stock
per-year mortality limits;
(ix) preventing the fishing on dolphins by a
vessel without an assigned vessel dolphin
mortality limit;
(x) allowing for the authorization and
conduct of experimental fishing operations,
under such terms and conditions as the
Secretary may prescribe, for the purpose of
testing proposed improvements in fishing
techniques and equipment that may reduce or
eliminate dolphin mortality or serious injury
do not require the encirclement of dolphins in
the course of commercial yellowfin tuna
fishing;
(xi) authorizing fishing within the area
covered by the International Dolphin
Conservation Program by vessels of the United
States without the use of special equipment or
nets if the vessel takes an observer and does
not intentionally deploy nets on, or encircle,
dolphins, under such terms and conditions as
the Secretary may prescribe; and
(xii) containing such other restrictions and
requirements as the Secretary determines are
necessary to implement the International
Dolphin Conservation Program with respect to
vessels of the United States.
(C) Adjustments to requirements.--The Secretary may
make such adjustments as may be appropriate to
requirements of subparagraph (B) that pertain to
fishing gear, vessel equipment, and fishing practices
to the extent the adjustments are consistent with the
International Dolphin Conservation Program.
(b) Consultation.--In developing any regulation under this
section, the Secretary shall consult with the Secretary of
State, the Marine Mammal Commission, and the United States
Commissioners to the Inter-American Tropical Tuna Commission
appointed under section 3 of the Tuna Conventions Act of 1950
(16 U.S.C. 952).
(c) Emergency Regulations.--
(1) If the Secretary determines, on the basis of the
best scientific information available (including
research conducted under section 304 and information
obtained under the International Dolphin Conservation
Program) that the incidental mortality and serious
injury of marine mammals authorized under this title is
having, or is likely to have, a significant adverse
impact on a marine mammal stock or species, the
Secretary shall--
(A) notify the Inter-American Tropical Tuna
Commission of his or her determination, along
with recommendations to the Commission as to
actions necessary to reduce incidental
mortality and serious injury and mitigate such
adverse impact; and
(B) prescribe emergency regulations to reduce
incidental mortality and serious injury and
mitigate such adverse impact.
(2) Before taking action under subparagraph (A) or
(B) of paragraph (1), the Secretary shall consult with
the Secretary of State, the marine Mammal Commission,
and the United States Commissioners to the Inter-
American Tropical Tuna Commission.
(3) Emergency regulations prescribed under this
subsection--
(A) shall be published in the Federal
Register, together with an explanation thereof;
(B) shall remain in effect for the duration
of the applicable fishing year; and
(C) may be terminated by the Secretary at an
earlier date by publication in the Federal
Register of a notice of termination if the
Secretary determines that the reasons for the
emergency action no longer exist.
(4) If the Secretary finds that the incidental
mortality and serious injury of marine mammals in the
yellowfin tuna fishery in the eastern tropical Pacific
Ocean is continuing to have a significant adverse
impact on a stock or species, the Secretary may extend
the emergency regulations for such additional periods
as may be necessary.
(5) Within 120 days after the Secretary notifies the
United States Commissioners to the Inter-American
Tropical Tuna Commission of the Secretary's
determination under paragraph (1)(A), the United States
Commissioners shall call for a special meeting of the
Commission to address the actions necessary to reduce
incidental mortality and serious injury and mitigate
the adverse impact which resulted in the determination.
The Commissioners shall report the results of the
special meeting in writing to the Secretary and to the
Secretary of State. In their report, the Commissioners
shall--
(A) include a description of the actions
taken by the harvesting nations or under the
International Dolphin Conservation Program to
reduce the incidental mortality and serious
injury and measures to mitigate the adverse
impact on the marine mammal species or stock;
(B) indicate whether, in their judgment, the
actions taken address the problem adequately;
and
(C) if they indicate that the actions taken
do not address the problem adequately, include
recommendations of such additional action to be
taken as may be necessary.
* * * * * * *
SEC. 306. PERMITS.
(a) In General.--
(1) Consistent with the regulations issued pursuant
to section 303, the Secretary shall issue a permit to a
vessel of the United States authorizing participation
in the International Dolphin Conservation Program and
may require a permit for the person actually in charge
of and controlling the fishing operation of the vessel.
The Secretary shall prescribe such procedures as are
necessary to carry out this subsection, including
requiring the submission of--
(A) the name and official number or other
identification of each fishing vessel for which
a permit is sought, together with the name and
address of the owner thereof; and
(B) the tonnage, hold capacity, speed,
processing equipment, and type and quantity of
gear, including an inventory of special
equipment required under section 303, with
respect to each to each vessel.
(2) The Secretary is authorized to charge a fee for
granting an authorization and issuing a permit under
this section. The level of fees charged under this
paragraph may not exceed the administrative cost
incurred in granting an authorization and issuing a
permit. Fees collected under this paragraph shall be
available to the Under Secretary of Commerce for Oceans
and Atmosphere for expenses incurred in granting
authorizations and issuing permits under this section.
(3) After the effective date of the International
Dolphin Conservation Program Act, no vessel of the
United States shall operate in the yellowfin tuna
fishery in the eastern tropical Pacific Ocean without a
valid permit issued under this section.
(b) Permit Sanctions.--
(A) a vessel for which a permit has been
issued under this section has been used in the
commission of an act prohibited under section
307;
(B) the owner or operator of any such vessel
or any other person who has applied for or been
issued a permit under this section has acted in
violation of section 307; or
(C) any civil penalty or criminal fine
imposed on a vessel, owner or operator of a
vessel, or other person who has applied for or
been issued a permit under this section has not
been paid or is overdue, the Secretary may--
(i) revoke any permit with respect to
such vessel, with or without prejudice
to the issuance of subsequent permits;
(ii) suspend such permit for a period
of time considered by the Secretary to
be appropriate;
(iii) deny such permit; or
(iv) impose additional conditions or
restrictions on any permit issued to,
or applied for by any such vessel or
person under this section.
(2) In imposing a sanction under this subsection, the
Secretary shall take into account--
(A) the nature, circumstances, extent, and
gravity of the prohibited acts for which the
sanction is imposed; and
(B) with respect to the violator, the degree
of culpability, and history of prior offenses,
an other such matters as justice requires.
(3) Transfer of ownership of a vessel, by sale or
otherwise, shall not extinguish any permit sanction
that is in effect or is pending at the time of transfer
of ownership. Before executing the transfer of
ownership of a vessel, by sale or otherwise, the owner
shall disclose in writing to the prospective transferee
the existence of any permit sanction that will be in
effect or pending with respect to the vessel at the
time of transfer.
(4) In the case of any permit that is suspended for
the failure to pay a civil penalty or criminal fine,
the Secretary shall reinstate the permit upon payment
of the penalty or fine and interest thereon at the
prevailing rate.
(5) No sanctions shall be imposed under this section
unless there has been a prior opportunity for a hearing
on the facts underlying the violation for which the
sanction is imposed, either in conjunction with a civil
penalty proceeding under this title or otherwise.
SEC. 307. PROHIBITIONS.
(a) In General.--It is unlawful--
(1) for any person to sell, purchase, offer for sale
transport, or ship, in the United States, any tuna or
tuna product unless the tuna or tuna product is either
dolphin safe or has been harvested in compliance with
the International Dolphin Conservation Program by a
country that is a member of the Inter-American Tropical
Tuna Commission or has initiated and within 6 months
thereafter completed all steps required of applicant
nations in accordance with Article V, paragraph 3 of
the Convention establishing the Inter-American Tropical
Tuna Commission, to become a member of that
organization;
(2) except as provided for in subsection 101(d), for
any person or vessel subject to the jurisdiction of the
United States intentionally to set a purse seine net on
or to encircle any marine mammal in the course of tuna
fishing operations in the eastern tropical Pacific
Ocean except in accordance with this title and
regulations issued pursuant to this title; and
(3) for any person to import any yellowfin tuna or
yellowfin tuna product or any other fish or fish
product in violation of a ban on importation imposed
under section 101(a)(2);
(4) for any person to violate any regulation
promulgated under this title;
(5) for any person to refuse to permit any duly
authorized officer to board a vessel subject to that
person's control for purposes of conducting any search
or inspection in connection with the enforcement of
this title; and
(6) for any person to assault, resist, oppose,
impede, intimidate, or interfere with any such
authorized officer in the conduct of any search or
inspection described in paragraph (5).
(b) Penalties.--
(1) Civil penalty.--A person that knowingly and
willfully violates subsection (a) (1), (2), (3), (4),
or (5) shall be subject to a civil penalty under
section 105(a).
(2) Criminal penalty.--A person that knowingly and
willfully violates subsection (a)(5) or (a)(6) shall be
subject to a criminal penalty under section 105(b).
(c) Civil Forfeitures.--Any vessel (including its fishing
gear, appurtenances, stores, and cargo) used, and any fish (or
its fair market value) taken or retained, in any manner, in
connection with or as a result of the commission of any act
prohibited by this section shall be subject to forfeiture to
the United States in the manner provided in section 310 of the
Magnuson Fishery Conservation and Management Act.
Section 9 of the Endangered Species Act of 1973, as amended
[16 U.S.C. 1538; P.L. 93-205, as amended by P.L. 94-359, P.L. 95-212,
P.L. 95-632, P.L. 96-159, P.L. 96-246, P.L. 97-304, P.L. 99-659, P.L.
100-478, P.L. 100-653, P.L. 100-707, and P.L. 102-582]
PROHIBITED ACTS
Sec. 9. (a) General.--(1) Except as provided in sections
6(g)(2) and 10 of this Act, with respect to any endangered
species of fish or wildlife listed pursuant to section 4 of
this Act it is unlawful for any person subject to the
jurisdiction of the United States to--
(A) import any such species into, or export any such
species from the United States;
(B) take any such species within the United States or
the territorial sea of the United States;
(C) take any such species upon the high seas;
(D) possess, sell, deliver, carry, transport, or
ship, by any means whatsoever, any such species taken
in violation of subparagraphs (B) and (C);
(E) deliver, receive, carry, transport, or ship in
interstate or foreign commerce, by any means whatsoever
and in the course of a commercial activity, any such
species;
(F) sell or offer for sale in interstate or foreign
commerce any such species; or
(G) violate any regulation pertaining to such species
or to any threatened species of fish or wildlife listed
pursuant to section 4 of this Act and promulgated by
the Secretary pursuant to authority provided by this
Act.
(2) Except as provided in sections 6(g)(2) and 10 of this
Act, with respect to any endangered species of plants listed
pursuant to section 4 of this Act, it is unlawful for any
person subject to the jurisdiction of the United States to--
(A) import any such species into, or export any such
species from, the United States;
(B) remove and reduce to possession any such species
from areas under Federal jurisdiction; maliciously
damage or destroy any such species on any such area; or
remove, cut, dig up, or damage or destroy any such
species on any other area in knowing violation of any
law or regulation of any State or in the course of any
violation of a State criminal trespass law;
(C) deliver, receive, carry, transport, or ship in
interstate or foreign commerce, by any means whatsover
and in the course of a commercial activity, any such
species;
(D) sell or offer for sale in interstate or foreign
commerce any such species; or
(E) violate any regulation pertaining to such species
or to any threatened species of plants listed pursuant
to section 4 of this Act and promulgated by the
Secretary pursuant to authority provided by this Act.
(b) Species Held in Captivity or Controlled Environment.--
(1) The provisions of subsections (a)(1)(A) and (a)(1)(G) of
this section shall not apply to any fish or wildlife which was
held in captivity or in a controlled environment on (A) the
effective date of this Act or (B) the date of the publication
in the Federal Register of a final regulation adding such fish
or wildlife species to any list published pursuant to
subsection (c) of section 4 of this Act: Provided, That such
holding and any subsequent holding or use of the fish or
wildlife was not in the course of a commercial activity. With
respect to any act prohibited by subsections (a)(1)(A) and
(a)(1)(G) of this section which occurs after a period of 180
days from (i) the effective date of this Act, or (ii) the date
of publication in the Federal Register of a final regulation
adding such fish or wildlife species to any list published
pursuant to subsection (c) of section 4 of this Act, there
shall be a rebuttable presumption that the fish or wildlife
involved in such act is not entitled to the exemption contained
in this subsection.
(2)(A) The provisions of subsection (a)(1) of this section
shall not apply to--
(i) any raptor legally held in captivity or in a
controlled environment on November 10, 1978; or
(ii) any progeny of any raptor described in clause
(i);
until such time as any such raptor or progeny is intentionally
returned to a wild state.
(B) Any person holding any raptor or progeny described in
subparagraph (A) must be able to demonstrate that the raptor or
progeny does, in fact, qualify under the provisions of this
paragraph, and shall maintain and submit to the Secretary, on
request, such inventories, documentation, and records as the
Secretary may by regulation require as being reasonably
appropriate to carry out the purposes of this paragraph. Such
requirements shall not unnecessarily duplicate the requirements
of other rules and regulations promulgated by the Secretary.
(c) Violation of Convention.--(1) It is unlawful for any
person subject to the jurisdiction of the United States to
engage in any trade in any specimens contrary to the provisions
of the Convention, or to possess any specimens traded contrary
to the provisions of the Convention, including the definitions
of terms in article I thereof.
(2) Any importation into the United States of fish or
wildlife shall, if--
(A) such fish or wildlife is not an endangered
species listed pursuant to section 4 of this Act but is
listed in Appendix II to the Convention,
(B) the taking and exportation of such fish or
wildlife is not contrary to the provisions of the
Convention and all other applicable requirements of the
Convention have been satisfied,
(C) the applicable requirements of subsections (d),
(e), and (f) of this section have been satisfied, and
(D) such importation is not made in the course of a
commercial activity,
be presumed to be an importation not in violation of any
provisions of this Act or any regulation issued pursuant to
this Act.
(d) Imports and Exports.--(1) It is unlawful for any
person, without first having obtained permission from the
Secretary, to engage in business--
(A) as an importer or exporter of fish or wildlife
(other than shellfish and fishery products which (i)
are not listed pursuant to section 4 of this Act as
endangered species or threatened species, and (ii) are
imported for purposes of human or animal consumption or
taken in waters under the jurisdiction of the United
States or on the high seas for recreational purposes)
or plants; or
(B) as an importer or exporter of any amount of raw
or worked African elephant ivory.
(2) Any person required to obtain permission under
paragraph (1) of this subsection shall--
(A) keep such records as willfully and correctly
disclose each importation or exportation of fish,
wildlife, plants, or African elephant ivory made by him
and the subsequent disposition made by him with respect
to such fish, wildlife, plants, or ivory;
(B) at all reasonable times upon notice by a duly
authorized representative of the Secretary, afford such
representative access to his place of business, an
opportunity to examine his inventory of imported fish,
wildlife, plants, or African elephant ivory and the
records required to be kept under subparagraph (A) of
this paragraph, and to copy such records; and
(C) file such reports as the Secretary may require.
(3) The Secretary shall prescribe such regulations as are
necessary and appropriate to carry out the purposes of this
subsection.
(4) In granting permission under this subsection for
importation or exportation of African elephant ivory, the
Secretary shall not vary the requirements for obtaining such
permission on the basis of the value or amount of ivory
imported or exported under such permission.
(e) Reports.--It is unlawful for any person importing or
exporting fish or wildlife (other than shellfish and fishery
products which (1) are not listed pursuant to section 4 of this
Act as endangered or threatened species, and (2) are imported
for purposes of human or animal consumption or taken in waters
under the jurisdiction of the United States or on the high seas
for recreational purposes) or plants to fail to file any
declaration or report as the Secretary deems necessary to
facilitate enforcement of this Act or to meet the obligations
of the Convention.
(f) Designation of Ports.--(1) It is unlawful for any
person subject to the jurisdiction of the United States to
import into or export from the United States any fish or
wildlife (other than shellfish and fishery products which (A)
are not listed pursuant to section 4 of this Act as endangered
species or threatened species, and (B) are imported for
purposes of human or animal consumption or taken in waters
under the jurisdiction of the United States or on the high seas
for recreational purposes) or plants, except at a port or ports
designated by the Secretary of the Interior. For the purpose of
facilitating enforcement of this Act and reducing the costs
thereof, the Secretary of the Interior, with approval of the
Secretary of the Treasury and after notice and opportunity for
public hearing, may, by regulation, designate ports and change
such designations. The Secretary of the Interior, under such
terms and conditions as he may prescribe, may permit the
importation or exportation at nondesignated ports in the
interest of the health or safety of the fish or wildlife or
plants, or for other reasons if, in his discretion, he deems it
appropriate and consistent with the purpose of this subsection.
(2) Any port designated by the Secretary of the Interior
under the authority of section 4(d) of the Act of December 5,
1969 (16 U.S.C. 666cc-4(d)), shall, if such designation is in
effect on the day before the date of the enactment of this Act,
be deemed to be a port designated by the Secretary under
paragraph (1) of this subsection until such time as the
Secretary otherwise provides.
(g) Violations.--It is unlawful for any person subject to
the jurisdiction of the United States to attempt to commit,
solicit another to commit, or cause to be committed, any
offense defined in this section.
Section 527 of the Tariff Act of 1930, as amended
[19 U.S.C. 1527; P.L. 71-361]
SEC. 527. IMPORTATION OF WILD MAMMALS AND BIRDS IN VIOLATION OF FOREIGN
LAW.
(a) Importation Prohibited.--If the laws or regulations of
any country, dependency, province, or other subdivision of
government restrict the taking, killing, possession, or
exportation to the United States, of any wild mammal or bird,
alive or dead, or restrict the exportation to the United States
or any part or product of any wild mammal or bird, whether raw
or manufactured, no such mammal or bird, whether raw or
manufactured, no such mammal or bird, or part or product
thereof, shall, after the expiration of ninety days after the
enactment of this Act, be imported into the United States from
such country, dependency, province, or other subdivision of
government, directly or indirectly, unless accompanied by a
certification of the United States consul, for the consular
district in which is located the port or place from which such
mammal or bird, or part or product thereof, was exported from
such country, dependency, province, or other subdivision of
government, that such mammal or bird, or part of product
thereof, has not been acquired or exported in violation of the
laws or regulations of such country, dependency, province, or
other subdivision of government.
(b) Forfeiture.--Any mammal or bird, alive or dead, or any
part or product thereof, whether raw or manufactured, imported
into the United States in violation of the provisions of the
preceding subdivision shall be subject to seizure and
forfeiture under the customs laws. Any such article so
forfeited may, in the discretion of the Secretary of the
Treasury and under such regulations as he may prescribe, be
placed with the departments or bureaus of the Federal or State
Governments, or with societies or museums, for exhibition or
scientific or educational purposes, or destroyed, or (exempt in
the case of heads or horns of wild mammals) sold in the manner
provided by law.
(e) Section Not to Apply in Certain Cases.--The provisions
of this section shall not apply in the cases of--
(A) Prohibited importation.--Articles the importation
of which is prohibited under the provisions of this
Act, or of section 241 of the Criminal Code, or of any
other law;
(2) Scientific or educational pruposes.--Wild mammals
or birds, alive or dead, or parts or products thereof,
whether raw or manufactured, imported for scientific or
educational purposes;
(3) Certain migratory game birds.--Migratory game
birds (for which an open season is provided by the laws
of the United States and any foreign country which is a
part to a treaty with the United States, in effect on
the date of importation, relating to the protection of
such migratory game birds) brought into the United
States by bona fide sportsmen returning from hunting
trips in such country, if at the time of importation
the possession of such birds is not prohibited by the
laws of such country or of the United States.
Section 2201-2204 of the Endangered Species Act Amendment of 1988
African Elephant Conservation Act
[Excerpts]
[16 U.S.C. 4221-4224; P.L. 100-478]
PART 2--MORATORIA AND PROHIBITED ACTS
Sec. 2201. Review of African Elephant Conservation
Programs.
(a) In General.--Within one month after the date of the
enactment of this title, the Secretary shall issue a call for
information on the African elephant conservation program of
each ivory producing country by--
(1) publishing a notice in the Federal Register
requesting submission of such information to the
Secretary by all interested parties; and
(2) submitting a written request for such information
through the Secretary of State to each ivory producing
country.
(b) Review and Determination.--
(1) In general.--The Secretary shall review the
African elephant conservation program of each ivory
producing country and, not later than one year after
the date of the enactment of this title, shall issue
and publish in the Federal Register a determination of
whether or not the country meets the following
criteria;
(A) The country is a party to CITES and
adheres to the CITES Ivory Control System.
(B) The country's elephant conservation
program is based on the best available
information, and the country is making
expeditious progress in compiling information
on the elephant habitat condition and carrying
capacity, total population and population and
population trends, and the annual reproduction
and mortality of the elephant populations
within the country.
(C) The taking of elephants in the country is
effectively controlled and monitored.
(D) The country's ivory quota is determined
on the basis of information referred to in
subparagraph (B) and reflects the amount of
ivory which is confiscated or consumed
domestically by the country.
(E) The country has not authorized or allowed
the export of amounts of raw ivory which exceed
its ivory quota under the CITES Ivory Control
System.
(2) Delay in issuing determination.--If the Secretary
finds within one year after the date of the enactment
of this title that there is insufficient information
upon which to make the determination under paragraph
(1), the Secretary may delay issuing the determination
until no later than December 31, 1989. The Secretary
shall issue and publish in the Federal Register at the
time of the finding a statement explaining the reasons
for any such delay.
Sec. 2202. Moratoria.
(a) Ivory Producing Countries.--
(1) In general.--The Secretary shall establish a
moratorium on the importation of raw and worked ivory
from an ivory producing country immediately upon making
a determination that the country does not meet all the
criteria set forth in section 2201(b)(1).
(2) Later establishment.--With regard to any ivory
producing country for which the Secretary has
insufficient information to make a determination
pursuant to section 2201(b), the Secretary shall
establish a moratorium the importation of raw and
worked ivory from such country not later than January
1, 1990, unless, based on new information, the
Secretary concludes before that date that the country
meets all of the criteria set forth in section
2201(b)(1).
(b) Intermediary Countries.--The Secretary shall establish
a moratorium on the importation of raw and worked ivory from an
intermediary country immediately upon making a determination
that the country--
(1) is not a party to CITES;
(2) does not adhere to the CITES Ivory Control
System;
(3) imports raw ivory from a country that is not an
ivory producing country;
(4) imports raw or worked ivory from a country that
is not a party to CITES;
(5) imports raw or worked ivory that originates in an
ivory producing country in violation of the laws of
that ivory producing country;
(6) substantially increases its imports of raw or
worked ivory from a country that is subject to a
moratorium under this title during the first three
months of that moratorium; or
(7) imports raw or worked ivory from a country that
is subject to a moratorium under this title after the
first three months of that moratorium, unless the ivory
is imported by vessel during the first six months of
that moratorium and is accompanied by shipping
documents which show that it was exported before the
establishment of the moratorium.
(c) Suspension of Moratorium.--The Secretary shall suspend
a moratorium established under this section if, after notice
and public comment, the Secretary determines that the reasons
for establishing the moratorium no longer exist.
(d) Petition.--
(1) In general.--Any person may at any time submit a
petition in writing requesting that the Secretary
establish or suspend a moratorium under this section.
Such a petition shall include such substantial
information as may be necessary to demonstrate the need
for the action requested by the petition.
(2) Consideration and ruling.--The Secretary shall
publish a notice of receipt of a petition under this
subsection in the Federal Register and shall provide an
opportunity for the public to comment on the petition.
The Secretary shall rule on such petition not later
than 90 days after the close of the public comment
period.
(e) Sport-Hunted Trophies.--Individuals may import sport-
hunted elephant trophies that they have legally taken in an
ivory producing country that has submitted an ivory quota. The
Secretary shall not establish any moratorium under this
section, pursuant to a petition or otherwise, which prohibits
the importation into the United States of sport-hunted trophies
from elephants that are legally taken by the importer or the
importer's principal in an ivory producing country that has
submitted an ivory quota.
(f) Confiscated Ivory.--Trade in raw or worked ivory that
is confiscated by an ivory producing country or an intermediary
country and is disposed of pursuant to the CITES Ivory Control
System shall not be the sole cause for the establishment of a
moratorium under this part if all proceeds from the disposal of
the confiscated ivory are used solely to enhance wildlife
conservation programs or conservation purposes of CITES. With
respect to any country that was not a party to CITES at the
time of such confiscation, this subsection shall not apply
until such country develops appropriate measures to assure that
persons with a history of illegal dealings in ivory shall not
benefit from the disposal of confiscated ivory.
Sec. 2203. Prohibited Acts.
Except as provided in section 2202(e), it is unlawful for
any person--
(1) to import raw ivory from any country other than
an ivory producing country;
(2) to export raw ivory from the United States;
(3) to import raw or worked ivory that was exported
from an ivory producing country in violation of that
country's laws or of the CITES Ivory Control System;
(4) to import worked ivory, other than personal
effects, from any country unless that country has
certified that such ivory was derived from legal
sources; or
(5) to import raw or worked ivory from a country for
which a moratorium is in effect under section 2202.
Sec. 2204. Penalties and Enforcement.
(a) Criminal Violations.--Whoever knowingly violates
section 2203 shall, upon conviction, be fined under title 18,
United States Code, or imprisoned for not more than one year,
or both.
(b) Civil Violations.--Whoever violates section 2203 may be
assessed a civil penalty by the Secretary of not more than
$5,000 for each such violation.
(c) Procedures for Assessment of Civil Penalty.--
Proceedings for the assessment of a civil penalty under this
section shall be conducted in accordance with the procedures
provided for in section 11(a) of the Endangered Species Act of
1973 (16 U.S.C. 1540(a)).
(D) Use of Penalties.--Subject to appropriations,
penalties collected under this section may be used by
the Secretary of the Treasury to pay rewards under
section 2205 and, to the extent not used to pay such
rewards, shall be deposited by the Secretary of the
Treasury into the Fund.
(e) Enforcement.--The Secretary, the Secretary of the
Treasury, and the Secretary of the department in which
the Coast Guard is operating shall enforce this part in
the same manner such Secretaries carry out enforcement
activities under section 11(e) of the Endangered
Species Act of 1973 (16 U.S.C. 1540(e)). Section 11(c)
of the Endangered Species Act of 1973 (16 U.S.C.
1540(c)) shall apply to actions arising under this
part.
Section 7 of the Rhinoceros and Tiger Conservation Act of 1994, as
amended
[16 U.S.C. 5305a; P.L. 103-391, as amended by P.L. 105-312]
sec. 7--prohibition on sale, importation or exportation of
products labeled or advertised as rhinoceros or tiger products.
(a) Prohibition.--A person shall not sell, import, or
export, or attempt to sell, import, or export, any product,
item or substance intended for human consumption or application
containing, or labeled or advertised as containing, any
substance derived from any species of rhinoceros or tiger.
(b) Penalties.--
(1) Criminal Penalty.--A person engaged in business
as an importer, exporter, or distributor that knowingly
violates subsection (a) shall be fined under title 18,
United States Code, imprisoned not more than 6 months,
or both.
(2) Civil Penalties.--
(A) In General.--A person that knowingly
violates subsection (a), and a person engaged
in business as an importer, exporter, or
distributor that violates subsection (a), may
be assessed a civil penalty by the Secretary of
not more than $12,000 for each violation.
(B) Manner of Assessment and Collection.--A
civil penalty under this paragraph shall be
assessed, and may be collected, in the manner
in which a civil penalty under the Endangered
Species Act of 1973 may be assessed and
collected under section 11(a) of that Act (16
U.S.C. 1540(a)).
(c) Products, Items, and Substances.--Any product, item, or
substance sold, imported, or exported, or attempted to be sold,
imported, or exported, in violation of this section or any
regulation issued under this section shall be subject to
seizure and forfeiture to the United States.
(d) Regulations.--After consultation with the Secretary of
the Treasury, the Secretary of Health and Human Services, and
the United States Trade Representative, the Secretary shall
issue such regulations as are appropriate to carry out this
section.
(e) Enforcement.--The Secretary, the Secretary of the
Treasury, and the Secretary of the department in which the
Coast Guard is operating shall enforce this section in the
manner in which the Secretaries carry out enforcement
activities under section 11(e) of the Endangered Species Act of
1973 (16 U.S.C. 1540(e)).
(f) Use of Penalty Amounts.--Amounts received as penalties,
fines, or forfeiture of property under this section shall be
used in accordance with section 6(d) of the Lacey Act
Amendments of 1981 (16 U.S.C. 3375(d)).
Section 8 of the Fishermen's Protective Act of 1967, as amended
[22 U.S.C. 1978; P.L. 90-578, as added by P.L. 92-219 and amended by
P.L. 95-376, P.L. 96-61, P.L. 96-88, P.L. 100-711, P.L. 102-582, and
P.L. 106-36]
Sec. 8. (a)(1) When the Secretary of Commerce determines
that nationals of a foreign country, directly or indirectly,
are conducting fishing operations in a manner or under
circumstances which diminish the effectiveness of an
international fishery conservation program, the Secretary of
Commerce shall certify such fact to the President.
(2) When the Secretary of Commerce or the Secretary of the
Interior finds that nationals of a foreign country, directly or
indirectly, are engaging in trade or taking which diminishes
the effectiveness of any international program for endangered
or threatened species, the Secretary making such finding shall
certify such fact to the President.
(3) In administering this subsection, the Secretary of
Commerce or the Secretary of the Interior, as appropriate,
shall--
(A) periodically monitor the activities of foreign
nationals that may affect the international programs
referred to in paragraphs (1) and (2);
(B) promptly investigate any activity by foreign
nationals that, in the opinion of the Secretary, may be
cause for certification under paragraph (1) or (2); and
(C) promptly conclude; and reach a decision with
respect to; any investigation commenced under
subparagraph (B).
(4) Upon receipt of any certification made under paragraph
(1) or (2), the President may direct the Secretary of the
Treasury to prohibit the bringing or the importation into the
United States of any products from the offending country for
any duration as the President determines appropriate and to the
extent that such prohibition is sanctioned by the World Trade
Organization (as defined in section 2(8) of the Uruguay Round
Agreements Act) or the multilateral trade agreements (as
defined in section 2(4) of that Act).
(b) Within sixty days following certification by the
Secretary of Commerce or the Secretary of the Interior, the
President shall notify the Congress of any action taken by him
pursuant to such certification. In the event the President
fails to direct the Secretary of the Treasury to prohibit the
importation of fish products or wildlife products of the
offending country, or if such prohibition does not cover all
fish products or wildlife products of the offending country,
the President shall inform the Congress of the reasons
therefor.
(c) It shall be unlawful for any person subject to the
jurisdiction of the United States knowingly to bring or import
into, or cause to be imported into, the United States any
products prohibited by the Secretary of the Treasury pursuant
to this section.
(d) After making a certification to the President under
subsection (a) of this section, the Secretary of Commerce or
the Secretary of the Interior, as the case may be, shall
periodically review the activities of the nationals of the
offending country to determine if the reasons for which the
certification was made no longer prevail. Upon determining that
such reasons no longer prevail, the Secretary concerned shall
terminate the certification and publish notice thereof,
together with a statement of the facts on which such
determination is based, in the Federal Register.
(e)(1) Any person violating the provisions of this section
shall be fined not more than $10,000 for the first violation,
and not more than $25,000 for each subsequent violation.
(2) All products brought or imported into the United States
in violation of this section, or the monetary value thereof,
may be forfeited.
(3) All provisions of law relating to the seizure, judicial
forfeiture, and condemnation of a cargo for violation of the
customs laws, the disposition of such cargo or the proceeds
from the sale thereof, and the remission or mitigation of such
forfeitures shall apply to seizures and forfeitures incurred,
or alleged to have incurred, under the provisions of this
section, insofar as such provisions of law are applicable and
not inconsistent with this section.
(f)(1) Enforcement of the provisions of this section
prohibiting the bringing or importation of products into the
United States shall be the responsibility of the Secretary of
the Treasury.
(2) The judges of the United States district courts, and
United States magistrates may, within their respective
jurisdictions, upon proper oath or affirmation showing probable
cause, issue such warrants or other process as may be required
for enforcement of this Act and regulations issued thereunder.
(3) Any person authorized to carry out enforcement
activities hereunder shall have the power to execute any
warrant or process issued by any officer or court of competent
jurisdiction for the enforcement of this section.
(4) Such person so authorized shall have the power--
(A) with or without a warrant or other process, to
arrest any persons subject to the jurisdiction of the
United States committing in his presence or view a
violation of this section or the regulations issued
thereunder;
(B) with or without a warrant or other process, to
search any vessel or other conveyance subject to the
jurisdiction of the United States, and, if as a result
of such search he has reasonable cause to believe that
such vessel or other conveyance or any person on board
is engaging in operations in violation of this section
or the regulations issued thereunder, then to arrest
such person.
(5) Such person so authorized, may seize, whenever and
wherever lawfully found, all products brought or imported into
the United States in violation of this section or the
regulations issued thereunder. Products so seized may be
disposed of pursuant to the order of a court of competent
jurisdiction, or, if perishable, in a manner prescribed by
regulations promulgated by the Secretary of the Treasury after
consultation with the Secretary of Health and Human Services.
(g) The Secretary of the Treasury, the Secretary of
Commerce, and the Secretary of the Interior are each authorized
to prescribe such regulations as he determines necessary to
carry out the provisions of this section.
(h) As used in this section--
(1) The term ``person'' means any individual,
partnership, corporation, or association.
(2) The term ``United States'' means the several
States, the District of Columbia, Puerto Rico, the
Northern Mariana Islands, American Samoa, Guam, the
Virgin Islands, and every other territory and
possession of the United States.
(3) The term ``international fishery conservation
program'' means any ban, restriction, regulation, or
other measure in effect pursuant to a bilateral or
multilateral agreement which is in force with respect
to the United States, the purpose of which is to
conserve or protect the living resources of the sea,
including marine mammals.
(4) The term ``international program for endangered
or threatened species'' means any ban, restriction,
regulation, or other measure in effect pursuant to a
multilateral agreement which is in force with respect
to the United States, the purpose of which is to
protect endangered or threatened species of animals.
(5) The term ``taking'', as used with respect to
animals to which an international program for
endangered or threatened species applies, means to--
(A) harass, harm, pursue, hunt, shoot, wound,
kill, trap, capture, or collect; or
(B) attempt to harass, harm, pursue, hunt,
shoot, wound, kill, trap, capture, or collect.
High Seas Driftnet Fisheries Enforcement Act
[Excerpts]
[16 U.S.C. 1826a-1826c, 1826a note, and 1861 note; P.L. 102-582]
SECTION 1. SHORT TITLE.
This Act may be cited as the ``High Seas Driftnet Fisheries
Enforcement Act''.
SEC. 2. FINDINGS AND POLICY.
(a) Findings.--Congress makes the following findings:
(1) Large-scale driftnet fishing on the high seas is
highly destructive to the living marine resources and
ocean ecosystems of the world's oceans, including
anadromous fish and other living marine resources of
the United States.
(2) The cumulative effects of large-scale driftnet
fishing pose a significant threat to the marine
ecosystem, and slow-reproducing species like marine
mammals, sharks, and seabirds may require many years to
recover.
(3) Members of the international community have
reviewed the best available scientific data on the
impacts of large-scale pelagic driftnet fishing, and
have failed to conclude that this practice has no
significant adverse impacts which threaten the
conservation and sustainable management of living
marine resources.
(4) The United Nations, via General Assembly
Resolutions numbered 44-225, 45-197, and most recently
46-215 (adopted on December 20, 1991), has called for a
worldwide moratorium on all high seas driftnet fishing
by December 31, 1992, in all the world's oceans,
including enclosed seas and semi-enclosed seas.
(5) The United Nations has commended the unilateral,
regional, and international efforts undertaken by
members of the international community and
international organizations to implement and support
the objectives of the General Assembly resolutions.
(6) Operative paragraph (4) of United Nations General
Assembly Resolution numbered 46-215 specifically
``encourages all members of the international community
to take measures individually and collectively to
prevent large-scale pelagic driftnet fishing operations
on the high seas of the world's oceans and seas''.
(7) The United States, in section 307(1)(M) of the
Magnuson Fishery Conservation and Management Act (16
U.S.C. 1857(1)(M)), has specifically prohibited the
practice of large-scale driftnet fishing by United
States nationals and vessels both within the exclusive
economic zone of the United States and beyond the
exclusive economic zone of any nation.
(8) The Senate, through Senate Resolution 396 of the
100th Congress, approved on March 18, 1988), has called
for a moratorium on fishing in the Central Bering Sea,
and the United States has taken concrete steps to
implement such moratorium through international
negotiations.
(9) Despite the continued evidence of a decline in
the fishery resources of the Bering Sea and the
multiyear cooperative negotiations undertaken by the
United States, the Russian Federation, Japan, and other
concerned fishing nations, some nations refuse to agree
to measures to reduce or eliminate unregulated fishing
practices in the waters of the Bering Sea beyond the
exclusive economic zones of the United States and the
Russian Federation.
(10) In order to ensure that the global moratorium on
large-scale driftnet fishing called for in United
Nations General Assembly Resolution numbered 46-215
takes effect by December 31, 1992, and that unregulated
fishing practices in the waters of the Central Bering
Sea are reduced or eliminated, the United States should
take the actions described in this Act and encourage
other nations to take similar action.
(b) Policy.--It is the stated policy of the United States
to--
(1) implement United Nations General Assembly
Resolution numbered 46-215, approved unanimously on
December 20, 1991, which calls for an immediate
cessation to further expansion of large-scale driftnet
fishing, a 50 percent reduction in existing large-scale
driftnet fishing effort by June 30, 1992, and a global
moratorium on the use of large-scale driftnets beyond
the exclusive economic zone of any nation by December
31, 1992;
(2) bring about a moratorium on fishing in the
Central Bering Sea, or an international conservation
and management agreement to which the United States and
the Russian Federation are parties that regulates
fishing in the Central Bering Sea; and
(3) secure a permanent ban on the use of destructive
fishing practices, and in particular large-scale
driftnets, by persons or vessels fishing beyond the
exclusive economic zone of any nation.
SEC. 101. DENIAL OF PORT PRIVILEGES AND SANCTIONS FOR HIGH SEAS LARGE-
SCALE DRIFTNET FISHING.
(a) Denial of Port Privileges.--
(1) Publication of list.--Not later than 30 days
after the date of enactment of this Act and
periodically thereafter, the Secretary of Commerce, in
consultation with the Secretary of State, shall publish
a list of nations whose nationals or vessels conduct
large-scale driftnet fishing beyond the exclusive
economic zone of any nation.
(2) Denial of port privileges.--The Secretary of the
Treasury shall, in accordance with recognized
principles of international law--
(A) withhold or revoke the clearance required
by section 4197 of the Revised Statutes of the
United States (46 App. U.S.C. 91) for any
large-scale driftnet fishing vessel that is
documented under the laws of the United States
or of a nation included on a list published
under paragraph (1); and
(B) deny entry of that vessel to any place in
the United States and to the navigable waters
of the United States.
(3) Notification of nation.--Before the publication
of a list of nations under paragraph (1), the Secretary
of State shall notify each nation included on that list
regarding--
(A) the effect of that publication on port
privileges of vessels of that nation under
paragraph (1); and
(B) any sanctions or requirements, under this
Act or any other law, that may be imposed on
that nation if nationals or vessels of that
nation continue to conduct large-scale driftnet
fishing beyond the exclusive economic zone of
any nation after December 31, 1992.
(b) Sanctions.--
(1) Identifications.--
(A) Initial identifications.--Not later than
January 10, 1993, the Secretary of Commerce
shall--
(i) identify each nation whose
nationals or vessels are conducting
large-scale driftnet fishing beyond the
exclusive economic zone of any nation;
and
(ii) notify the President and that
nation of the identification under
clause (i).
(B) Additional identifications.--At any time
after January 10, 1993, whenever the Secretary
of Commerce has reason to believe that the
nationals or vessels of any nation are
conducting large-scale driftnet fishing beyond
the exclusive economic zone of any nation, the
Secretary of Commerce shall--
(i) identify that nation; and
(ii) notify the President and that
nation of the identification under
clause (i).
(2) Consultations.--Not later than 30 days after a
nation is identified under paragraph (1)(B), the
President shall enter into consultations with the
government of that nation for the purpose of obtaining
an agreement that will effect the immediate termination
of large-scale driftnet fishing by the nationals or
vessels of that nation beyond the exclusive economic
zone of any nation.
(3) Prohibition on imports of fish and fish products
and sport fishing equipment.--
(A) Prohibition.--The President--
(i) upon receipt of notification of
the identification of a nation under
paragraph (1)(A); or
(ii) if the consultations with the
government of a nation under paragraph
(2) are not satisfactorily concluded
within 90 days,
shall direct the Secretary of the Treasury to
prohibit the importation into the United States
of fish and fish products and sport fishing
equipment (as that term is defined in section
4162 of the Internal Revenue Code of 1986 (26
U.S.C. 4162)) from that nation.
(B) Implementation of prohibition.--With
respect to an import prohibition directed under
subparagraph (A), the Secretary of the Treasury
shall implement such prohibition not later than
the date that is 45 days after the date on
which the Secretary has received the direction
from the President.
(C) Public notice of prohibition.--Before the
effective date of any import prohibition under
this paragraph, the Secretary of the Treasury
shall provide public notice of the impending
prohibition.
(4) Additional economic sanctions.--
(A) Determination of effectiveness of
sanctions.--Not later than 6 months after the
date the Secretary of Commerce identifies a
nation under paragraph (1), the Secretary shall
determine whether--
(i) any prohibition established under
paragraph (3) is insufficient to cause
that nation to terminate large-scale
driftnet fishing conducted by its
nationals and vessels beyond the
exclusive economic zone of any nation;
or
(ii) That nation has retaliated
against the United States as a result
of that prohibition.
(B) Certification.--The Secretary of Commerce
shall certify to the President each affirmative
determination under subparagraph (A) with
respect to a nation.
(C) Effect of certification.--Certification
by the Secretary of Commerce under subparagraph
(B) is deemed to be a certification under
section 8(a) of the Fishermen's Protective Act
of 1967 (22 U.S.C. 1978(a)), as amended by this
Act.
SEC. 102. DURATION OF DENIAL OF PORT PRIVILEGES AND SANCTIONS.
Any denial of port privileges or sanction under section 101
with respect to a nation shall remain in effect until such time
as the Secretary of Commerce certifies to the President and the
Congress that such nation has terminated large-scale driftnet
fishing by its nationals and vessels beyond the exclusive
economic zone of any nation.
* * * * * * *
SEC. 104. DEFINITIONS.
In this title, the following definitions apply:
(1) Fish and fish products.--The term ``fish and fish
products'' means any aquatic species (including marine mammals
and plants) and all products thereof exported from a nation,
whether or not taken by fishing vessels of that nation or
packed, processed, or otherwise prepared for export in that
nation or within the jurisdiction thereof.
(2) Large-scale driftnet fishing.--
(A) In general.--Except as provided in subparagraph
(B), the term ``large-scale driftnet fishing'' means a
method of fishing in which a gillnet composed of a
panel or panels of webbing, or a series of such
gillnets, with a total length of two and one-half
kilometers or more is placed in the water and allowed
to drift with the currents and winds for the purpose of
entangling fish in the webbing.
(B) Exception.--Until January 1, 1994, the term
``large-scale driftnet fishing'' does not include the
use in the northeast Atlantic Ocean of gillnets with a
total length not to exceed 5 kilometers if the use is
in accordance with regulations adopted by the European
Community pursuant to the October 28, 1991, decision by
the Council of Fisheries Ministers of the Community.
(3) Large-scale driftnet fishing vessel.--The term ``large-
scale driftnet fishing vessel'' means any vessel which is--
(A) used for, equipped to be used for, or of a type
which is normally used for large-scale driftnet
fishing; or
(B) used for aiding or assisting one or more vessels
at sea in the performance of large-scale driftnet
fishing, including preparation, supply, storage,
refrigeration, transportation, or processing.
* * * * * * *
SEC. 202. ENFORCEMENT.
(a) In General.--Not later than 6 months after the date of
the enactment of this Act, the Secretary of the department in
which the Coast Guard is operating, the Secretary of Commerce,
and the Secretary of Defense shall enter into an agreement
under section 311(a) of the Magnuson Fishery Conservation and
Management Act (16 U.S.C. 1861(a)) in order to make more
effective the enforcement of domestic laws and international
agreements that conserve and manage the living marine resources
of the United States.
(b) Terms.--The agreement entered into under subsection (a)
shall include--
(1) procedures for identifying and providing the
location of vessels that are in violation of domestic
laws or international agreements to conserve and manage
the living marine resources of the United States;
(2) requirements for the use of the surveillance
capabilities of the Department of Defense; and
(3) procedures for communicating vessel locations to
the Secretary of Commerce and the Coast Guard.
SEC. 203. TRADE NEGOTIATIONS AND THE ENVIRONMENT.
It is the sense of the Congress that the President, in
carrying out multilateral, bilateral, and regional trade
negotiations, should seek to--
(1) address environmental issues related to the
negotiations;
(2) modify articles of the General Agreement on
Tariffs and Trade (referred to in this section as
``GATT'') to take into consideration the national
environmental laws of the GATT Contracting Parties and
international environmental treaties;
(3) secure a working party on trade and the
environment within GATT as soon as possible;
(4) take an active role in developing trade policies
that make GATT more responsive to national and
international environmental concerns;
(5) include Federal agencies with environmental
expertise during the negotiations to determine the
impact of the proposed trade agreements on national
environmental law; and
(6) periodically consult with interested parties
concerning the progress of the negotiations.
Sections 105 and 108 of the Wild Bird Conservation Act of 1992
[16 U.S.C. 4904, 4907; P.L. 102-440]
SEC. 105. MORATORIA ON IMPORTS OF EXOTIC BIRDS COVERED BY CONVENTION.
(a) Immediate Moratorium.--
(1) Establishment of moratorium.--The importation of
any exotic bird of a species identified as a category B
species in the report entitled ``Report of the Animals
Committee'', adopted by the 8th meeting of the
Conference of the Parties to the Convention, is
prohibited.
(2) Termination of moratorium.--A species of exotic
birds shall be subject to the prohibition on
importation established by paragraph (1) until the
Secretary, after notice and an opportunity for public
comment--
(A) determines that appropriate remedial
measures have been taken in the countries of
origin for that species, so as to eliminate the
threat of trade to the conservation of the
species; and
(B) makes the findings described in section
106(c) for the species and includes the species
in the list published under section 106(a).
(b) Emergency Authority To Suspend Imports of Listed
Species.--
(1) Authority to suspend imports.--The Secretary is
authorized to suspend the importation of exotic birds
of any species that is listed in any Appendix to the
Convention, and if applicable remove the species from
the list under section 106(a), if the Secretary
determines that--
(A)(i) trade in that species is detrimental
to the species,
(ii) there is not sufficient information
available on which to base a judgment that the
species is not detrimentally affected by trade
in that species, or
(iii) remedial measures have been recommended
by the Standing Committee of the Convention
that have not been implemented; and
(B) the suspension might be necessary for the
conservation of the species.
(2) Termination of suspension.--A species of exotic
birds shall be subject to a suspension of importation
under paragraph (1) until the Secretary, after notice
and an opportunity for public comment, makes the
findings described in section 106(c) and includes the
species in the list published under section 106(a).
(c) Moratorium After One Year for Other Species Listed in
Appendices.--Effective on the date that is one year after the
date of the enactment of this Act, the importation of any
exotic bird of a species that is listed in any Appendix to the
Convention is prohibited unless the Secretary makes the
findings described in section 106(c) and includes the species
in the list published under section 106(a).
(d) Limitation on Number Imported During First Year.--
Notwithstanding any other provision of this Act, the Secretary
shall prohibit the importation, during the 1-year period
beginning on the date of the enactment of this Act, of exotic
birds of each species that is listed under any Appendix to the
Convention in excess of the number of that species that were
imported during the most recent year for which the Secretary
has complete import data.
SEC. 108. MORATORIA FOR SPECIES NOT COVERED BY CONVENTION.
(a) In General.--The Secretary shall--
(1) review periodically the trade in species of
exotic birds that are not listed in any Appendix to the
Convention; and
(2) after notice and an opportunity for public
comment, establish a moratorium or quota on--
(A) importation of any species of exotic
birds from one or more countries of origin for
the species, if the Secretary determines that--
(i) the findings described in section
106(c) (2), (3), and (4) cannot be made
with respect to the species;
(ii) the moratorium or quota is
necessary for the conservation of the
species or is otherwise consistent with
the purpose of this title; or
(B) the importation of all species of exotic
birds from a particular country, if--
(i) the country has not developed and
implemented a management program for
exotic birds in trade generally, that
ensures both the conservation and the
humane treatment of exotic birds during
capture, transport, and maintenance;
and
(ii) the Secretary finds that the
moratorium or quota is necessary for
the conservation of the species or is
otherwise consistent with the purpose
of this title.
(b) Termination of Quota or Moratorium.--The Secretary
shall terminate a quota or moratorium established under
subsection (a) if the Secretary finds that the reasons for
establishing the quota or moratorium no longer exist.
Atlantic Tunas Convention Act of 1975, as amended
[Excerpts]
[16 U.S.C. 971 and 971d; P.L. 94-70, as amended by P.L. 94-265, P.L.
95-33, P.L. 104-43, and P.L. 105-384]
SEC. 2. DEFINITIONS.
For the purpose of this chapter--
(1) The term ``Convention'' means the International
Convention for the Conservation of Atlantic Tunas,
signed at Rio de Janeiro May 14, 1966, including any
amendments or protocols which are or become effective
for the United States.
(2) The term ``Commission'' means the International
Commission for the Conservation of Atlantic Tunas
provided for in article III of the Convention.
(3) The term ``conservation recommendation'' means
any recommendation of the Commission made pursuant to
Article VIII of the Convention and acted upon favorably
by the Secretary of State under section 5(a) of this
Act.
(4) The term ``Council'' means the Council
established within the International Commission for the
Conservation of Atlantic Tunas pursuant to article V of
the Convention.
(5) The term ``exclusive economic zone'' means an
exclusive economic zone as defined in section 3 of the
Magnuson Fishery Conservation and Management Act.
(6) The term ``fishing'' means the catching, taking,
or fishing for or the attempted catching, taking, or
fishing for any species of fish covered by the
Convention, or any activities in support thereof.
(7) The term ``fishing vessel'' means any vessel
engaged in catching fish or processing or transporting
fish loaded on the high seas, or any vessel outfitted
for such activities.
(8) The term ``Panel'' means any panel established by
the Commission pursuant to article VI of the
Convention.
(9) The term ``person'' means every individual,
partnership, corporation, and association subject to
the jurisdiction of the United States.
(10) The term ``Secretary'' means the Secretary of
Commerce.
(11) The term ``State'' includes each of the States
of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, and the territories and
possessions of the United States.
* * * * * * *
SEC. 6(C). REGULATIONS TO CARRY OUT COMMISSION RECOMMENDATIONS AND
OTHER MEASURES.
* * * * * * *
(4) Upon the promulgation of regulations provided for
in paragraph (3) of this subsection, the Secretary
shall promulgate, with the concurrence of the Secretary
of State and pursuant to the procedures prescribed in
paragraph (2) of this subsection, additional
regulations which shall become effective simultaneously
with the appplication of the regulations provided for
in paragraph (3) of this subsection, which prohibit--
(A) the entry into the United States of fish
in any form of those species which are subject
to regulation pursuant to a recommendation of
the Commission and which were taken from the
Convention area in such manner or in such
circumstances as would tend to diminish the
effectiveness of the conservation
recommendations of the Commission; and
(B) the entry into the United States, from
any country when the vessels of such country
are being used in the conduct of fishing
operations in the Convention area in such
manner or in such circumstances as would tend
to diminish the effectiveness of the
conservation recommendations of the Commission,
of fish in any form of those species which are
subject to regulation pursuant to a
recommendation of the Commission and which were
taken from the Convention area.
(5) In the case of repeated and flagrant fishing
operations in the Convention area by the vessels of any
country which seriously threaten the achievement of the
objectives of the Commission's recommendations, the
Secretary with the concurrence of the Secretary of
State, may by regulations promulgated pursuant to
paragraph (2) of this subsection prohibit the entry in
any form from such country of other species covered by
the Convention as may be under investigation by the
Commission and which were taken in the Convention area.
Any such prohibition shall continue until the Secreary
is satisfied that the condition warranting the
prohibition no longer exists, except that all fish in
any form of the species under regulation which were
previously prohibited from entry shall continue to be
prohibited from entry.
(6) Identification and notification.--
(A) Not later than July 1, 1996, and annually
thereafter, the Secretary, in consultation with
the Secretary of State, the Commissioners, and
the advisory committee, shall--
(i) identify those nations whose
fishing vessels are fishing, or have
fished during the preceding calendar
year, within the convention area in a
manner or under circumstances that
diminish the effectiveness of a
conservation recommendation;
(ii) notify the President and the
nation so identified, including an
explanation of the reasons therefor;
and
(iii) publish a list of those Nations
identified under clause (i).
(B) In identifying those Nations, the Secretary
shall consider, based on the best available
information, whether those Nations have
measures in place for reporting, monitoring,
and enforcement, and whether those measures
diminish the effectiveness of any conservation
recommendation.
(7) Consultation.--Not later than 30 days after a
Nation is notified under paragraph (6), the President
may enter into consultations with the Government of
that Nation for the purpose of obtaining an agreement
that will--
(A) effect the immediate termination and
prevent the resumption of any fishing operation
by vessels of that Nation within the Convention
area which is conducted in a manner or under
circumstances that diminish the effectiveness
of the conservation recommendation;
(B) when practicable, require actions by that
Nation, or vessels of that Nation, to mitigate
the negative impacts of fishing operations on
the effectiveness of the conservation
recommendation involved, including but not
limited to, the imposition of subsequent-year
deductions for quota overages; and
(C) result in the establishment, if
necessary, by such Nation of reporting,
monitoring, and enforcement measures that are
adequate to ensure the effectiveness of
conservation recommendations.
* * * * * * *
Section 609 of Public Law 101-162; Conservation of Sea Turtles
[16 U.S.C. 1537 note; P.L. 101-162]
Sec. 609.--(a) The Secretary of State, in consultation with
the Secretary of Commerce, shall, with respect to those species
of sea turtles the conservation of which is the subject of
regulations promulgated by the Secretary of Commerce on June
29, 1987--
(1) initiate negotiations as soon as possible for the
development of bilateral or multilateral agreements
with other nations for the protection and conservation
of such species of sea turtles;
(2) initiate negotiations as soon as possible with
all foreign governments which are engaged in, or which
have persons or companies engaged in, commercial
fishing operations which, as determined by the
Secretary of Commerce, may affect adversely such
species of sea turtles, for the purposes of entering
into bilateral and multilateral treaties with such
countries to protect such species of sea turtles;
(3) encourage such other agreements to promote the
purposes of this section with other nations for the
protection of specific ocean and land regions which are
of special significance to the health and stability of
such species of sea turtles;
(4) initiate the amendment of any existing
international treaty for the protection and
conservation of such species of sea turtles to which
the United States is a party in order to make such
treaty consistent with the purposes and policies of
this section; and
(5) provide to the Congress by not later than one
year after the date of enactment of this section--
(A) a list of each nation which conducts
commercial shrimp fishing operations within the
geographic range of distribution of such sea
turtles;
(B) a list of each nation which conducts
commercial shrimp fishing operations which may
affect adversely such species of sea turtles;
and
(C) a full report on--
(i) the results of his efforts under
this section; and
(ii) the status of measures taken by
each nation listed pursuant to
paragraph (A) or (B) to protect and
conserve such sea turtles.
(b)(1) In General.--The importation of shrimp or products
from shrimp which have been harvested with commercial fishing
technology which may affect adversely such species of sea
turtles shall be prohibited not later than May 1, 1991, except
as provided in paragraph (2).
(2) Certification Procedure.--The ban on importation
of shrimp or products from shrimp pursuant to paragraph
(1) shall not apply if the President shall determine
and certify to the Congress not later than May 1, 1991,
a annually thereafter that--
(A) the government of the harvesting nation
has provided documentary evidence of the
adoption of a regulatory program governing the
incidental taking of such sea turtles in the
course of such harvesting that is comparable to
that of the United States; and
(B) The average rate of that incidental
taking by the vessels of the harvesting nation
is comparable to the average rate of incidental
taking of sea turtles by United States vessels
in the course of such harvesting; or
(C) the particular fishing environment of the
harvesting nation does not pose a threat of the
incidental taking of such sea turtles in the
course of such harvesting.
C. NATIONAL SECURITY IMPORT RESTRICTIONS
Sections 232 and 233 of the Trade Expansion Act of 1962, as amended
[19 U.S.C. 1862, 1864; P.L. 87-794, as amended by P.L. 93-618,
Reorganization Plan No. 3 of 1979, P.L. 96-223, and P.L. 100-418; P.L.
87-794, as added by P.L. 99-64 and amended by P.L. 100-418]
SEC. 232. SAFEGUARDING NATIONAL SECURITY.
(a) No action shall be taken pursuant to section 201(a) or
pursuant to section 350 of the Tariff Act of 1930 to decrease
or eliminate the duty or other import restriction on any
article if the President determines that such reduction or
elimination would threaten to impair the national security.
(b)(1)(A) Upon request of the head of any department or
agency, upon application of an interested party, or upon his
own motion, the Secretary of Commerce (hereafter in the section
referred to as the ``Secretary'') shall immediately initiate an
appropriate investigation to determine the effects of the
national security of imports of the article which is the
subject of such request, application, or motion.
(B) The Secretary shall immediately provide notice to the
Secretary of Defense of any investigation initiated under this
section.
(2)(A) In the course of any investigation conducted under
this subsection, the Secretary shall--
(i) consult with the Secretary of Defense regarding
the methodological and policy questions raised in any
investigation initiated under paragraph (1),
(ii) seek information and advice from, and consult
with, appropriate officers of the United States, and
(iii) if it is appropriate and after reasonable
notice, hold public hearings or otherwise afford
interested parties an opportunity to present
information and advice relevant to such investigation.
(B) Upon the request of the Secretary, the Secretary of
Defense shall provide the Secretary an assessment of the
defense requirements of any article that is the subject of an
investigation conducted under this section.
(3)(A) By no later than the date that is 270 days after the
date on which an investigation is initiated under paragraph (1)
with respect to any article, the Secretary shall submit to the
President a report on the findings of such investigation with
respect to the effect of the importation of such article in
such quantities or under such circumstances upon the national
security and, based on such findings, the recommendations of
the Secretary for action or inaction under this section. If the
Secretary finds that such article is being imported into the
United States in such quantities or under such circumstances as
to threaten to impair the national security, the Secretary
shall so advise the President in such report.
(B) Any portion of the report submitted by the Secretary
under subparagraph (A) which does not contain classified
information or proprietary information shall be published in
the Federal Register.
(4) The Secretary shall prescribe such procedural
regulations as may be necessary to carry out the provisions of
this subsection.
(c)(1)(A) Within 90 days after receiving a report submitted
under subsection (b)(3)(A) in which the Secretary finds that an
article is being imported into the United States in such
quantities or under such circumstances as to threaten to impair
the national security, the President shall--
(i) determine whether the President concurs with the
finding of the Secretary, and
(ii) if the President concurs, determine the nature
and duration of the action that, in the judgment of the
President, must be taken to adjust the imports of the
article and its derivatives so that such imports will
not threaten to impair the national security.
(B) If the President determines under subparagraph (A) to
take action to adjust imports of an article and its
derivatives, the President shall implement that action by no
later than the date that is 15 days after the day on which the
President determines to take action under subparagraph (A).
(2) By no later than the date that is 30 days after the
date on which the President makes any determinations under
paragraph (1), the President shall submit to the Congress a
written statement of the reasons why the President has decided
to take action, or refused to take action, under paragraph (1).
Such statement shall be included in the report published under
subsection (e).
(3)(A) If--
(i) the action taken by the President under paragraph
(1) is the negotiation of an agreement which limits or
restricts the importation into, or the exportation to,
the United States of the article that threatens to
impair national security, and
(ii) either--
(I) no such agreement is entered into before
the date that is 180 days after the date on
which the President makes the determination
under paragraph (1)(A) to take such action, or
(II) such an agreement that has been entered
into is not being carried out or is ineffective
in eliminating the threat to the national
security posed by imports of such article,
the President shall take such other actions as the President
deems necessary to adjust the imports of such article so that
such imports will not threaten to impair the national security.
The President shall publish in the Federal Register notice of
any additional actions being taken under this section by reason
of this subparagraph.
(B) If--
(i) clauses (i) and (ii) of subparagraph (A) apply,
and
(ii) the President determines not to take any
additional actions under this subsection,
the President shall publish in the Federal Register such
determination and the reasons on which such determination is
based.
(d) For the purposes of this section, the Secretary and the
President shall, in the light of the requirements of national
security and without excluding other relevant factors, give
consideration to domestic production needed for projected
national defense requirements, the capacity of domestic
industries to meet such requirements, existing and anticipated
availabilities of the human resources, products, raw materials,
and other supplies and services essential to the national
defense, the requirements of growth of such industries and such
supplies and services including the investment, exploration,
and development necessary to assure such growth, and the
importation of goods in terms of their quantities,
availabilities, character, and use as those affect such
industries and the capacity of the United States to meet
national security requirements. In the administration of this
section, the Secretary and the President shall further
recognize the close relation of the economic welfare of the
Nation to our national security, and shall take into
consideration the impact of foreign competition on the economic
welfare of individual domestic industries; and any substantial
unemployment, decrease in revenues of government, loss of
skills or investment, or other serious effects resulting from
the displacement of any domestic products by excessive imports
shall be considered, without excluding other factors, in
determining whether such weakening of our internal economy may
impair the national security.
(e)(1) Upon the disposition of each request, application,
or motion under subsection (b), the Secretary shall submit to
the Congress, and publish in the Federal Register, a report on
such disposition.
(2) The President shall submit to the Congress an annual
report on the operation of the provisions of this section.
(f)(1) An action taken by the President under subsection
(c) to adjust imports of petroleum, or petroleum products shall
cease to have force and effect upon the enactment of a
disapproval resolution, provided for in paragraph (2), relating
to that action.
(2)(A) This paragraph is enacted by the Congress--
(i) as an exercise of the rulemaking power of the
House of Representatives and the Senate, respectively,
and as such is deemed a part of the rules of each
House, respectively, but applicable only with respect
to the procedures to be followed in that House in the
case of disapproval resolutions and such procedures
supersede other rules only to the extent that they are
inconsistent therewith; and
(ii) with the full recognition of the constitutional
right of either House to change the rules (so far as
relating to the procedure of that House) at any time,
in the same manner, and to the same extent as any other
rule of that House.
(B) For purposes of this subsection, the term ``disapproval
resolution'' means only a joint resolution of either House of
Congress the matter after the resolving clause of which is as
follows: ``That the Congress disapproves the action taken under
section 232 of the Trade Expansion Act of 1962 with respect to
petroleum imports under ------------ dated ------------.'', the
first blank space being filled with the number of the
proclamation, Executive order, or other Executive act issued
under the authority of subsection (c) of such section 232 for
purposes of adjusting imports of petroleum or petroleum
products and the second blank being filled with the appropriate
date.
(C)(i) All disapproval resolutions introduced in the House
of Representatives shall be referred to the Committee on Ways
and Means and all disapproval resolutions introduced in the
Senate shall be referred to the Committee on Finance.
(ii) No amendment to a disapproval resolution shall be in
order in either the House of Representatives or the Senate, and
no motion to suspend the application of this clause shall be in
order in either House nor shall it be in order in either House
for the Presiding Officer to entertain a request to suspend the
application of this clause by unanimous consent.
SEC. 233. IMPORT SANCTIONS FOR EXPORT VIOLATIONS.
Any person who violates any national security export
control imposed under section 5 of the Export Administration
Act of 1979 (50 U.S.C. App. 2404), or any regulation, order, or
license issued under that section, may be subject to such
controls on the importing of goods or technology into the
United States as the President may prescribe.
D. BALANCE OF PAYMENTS AUTHORITY
Section 122 of the Trade Act of 1974
[19 U.S.C. 2132; P.L. 93-618]
SEC. 122. BALANCE-OF-PAYMENTS AUTHORITY.
(a) Whenever fundamental international payments problems
require special import measures to restrict imports--
(1) to deal with large and serious United States
balance-of-payments deficits,
(2) to prevent an imminent and significant
depreciation of the dollar in foreign exchange markets,
or
(3) to cooperate with other countries in correcting
an international balance-of-payments disequilibrium,
the President shall proclaim, for a period not exceeding 150
days (unless such period is extended by Act of Congress)--
(A) a temporary import surcharge, not to
exceed 15 percent ad valorem, in the form of
duties (in addition to those already imposed,
if any) on articles imported into the United
States;
(B) temporary limitations through the use of
quotas on the importation of articles into the
United States; or
(C) both a temporary import surcharge
described in subparagraph (A) and temporary
limitations described in subparagraph (B).
The authority delegated under subparagraph (B) (and so much of
subparagraph (C) as relates to subparagraph (B)) may be
exercised (i) only if international trade or monetary
agreements to which the United States is a party permit the
imposition of quotas and a balance-of-payments measure, and
(ii) only to the extent that the fundamental imbalance cannot
be dealt with effectively by a surcharge proclaimed pursuant to
subparagraph (A) and (C). Any temporary import surcharge
proclaimed pursuant to subparagraph (A) or (C) shall be treated
as a regular customs duty.
(b) If the President determines that the imposition of
import restrictions under subsection (a) will be contrary to
the national interest of the United States, then he may refrain
from proclaiming such restrictions and he shall--
(1) immediately inform Congress of his determination,
and
(2) immediately convene the group of congressional
official advisers designated under section 161(a) and
consult with them as to the reasons for such
determination.
(c) Whenever the President determines that fundamental
international payments problems require special import measures
to increase imports--
(1) to deal with large and persistent United States
balance-of-trade surpluses, as determined on the basis
of the cost-insurance-freight value of imports, as
reported by the Bureau of the Census, or
(2) to prevent significant appreciation of the dollar
in foreign exchange markets,
the President is authorized to proclaim, for a period of 150
days (unless such period is extended by Act of Congress)--
(A) a temporary reduction (of not more than 5
percent ad valorem) in the rate of duty on any
article; and
(B) a temporary increase in the value or
quantity of articles which may be imported
under any import restriction, or a temporary
suspension of any import restriction.
Import liberalizing actions proclaimed pursuant to this
subsection shall be of broad and uniform application with
respect to product coverage except that the President shall not
proclaim measures under this subsection with respect to those
articles where in his judgment such action will cause or
contribute to material injury to firms or workers in any
domestic industry, including agriculture, mining, fishing, or
commerce, or to impairment of the national security, or will
otherwise be contrary to the national interest.
(d)(1) Import restricting actions proclaimed pursuant to
subsection (a) shall be applied consistently with the principle
of nondiscriminatory treatment. In addition, any quota
proclaimed pursuant to subparagraph (B) of subsection (a) shall
be applied on a basis which aims at a distribution of trade
with the United States approaching as closely as possible that
which various foreign countries might have expected to obtain
in the absence of such restrictions.
(2) Notwithstanding paragraph (1), if the President
determines that the purposes of this section will best be
served by action against one or more countries having large or
persistent balance-of-payments surpluses, he may exempt all
other countries from such action.
(3) After such time when there enters into force for the
United States new rules regarding the application of surcharges
as part of a reform of internationally agreed balance-of-
payments adjustment procedures, the exemption authority
contained in paragraph (2) shall be applied consistently with
such new international rules.
(4) It is the sense of Congress that the President seek
modifications in international agreements aimed at allowing the
use of surcharges in place of quantitative restrictions (and
providing rules to govern the use of such surcharges) as a
balance-of-payments adjustment measure within the context of
arrangements for an equitable sharing of balance-of-payments
adjustment responsibility among deficit and surplus countries.
(e) Import restricting actions proclaimed pursuant to
subsection (a) shall be of broad and uniform application with
respect to product coverage except where the President
determines, consistently with the purposes of this section,
that certain articles should not be subject to import
restricting actions because of the needs of the United States
economy. Such exceptions shall be limited to the un-
availability of domestic supply at reasonable prices, the
necessary importation of raw materials, avoiding serious
dislocations in the supply of imported goods, and other similar
factors. In addition, uniform exceptions may be made where
import restricting actions will be unnecessary or ineffective
in carrying out the purposes of this section, such as with
respect to articles already subject to import restrictions,
goods in transit, or goods under binding contract. Neither the
authorization of import restricting actions nor the
determination of exceptions with respect to product coverage
shall be made for the purpose of protecting individual domestic
industries from import competition.
(f) Any quantitative limitation proclaimed pursuant to
subparagraph (B) or (C) of subsection (a) on the quantity or
value, or both, of an article--
(1) shall permit the importation of a quantity or
value which is not less than the quantity or value of
such article imported into the United States from the
foreign countries to which such limitation applies
during the most recent period which the President
determines is representative of imports of such
article, and
(2) shall take into account any increase since the
end of such representative period in domestic
consumption of such article and like or similar
articles of domestic manufacture or production.
(g) The President may at any time, consistent with the
provisions of this section, suspend, modify, or terminate, in
whole or in part, any proclamation under this section either
during the initial 150-day period of effectiveness or as
extended by subsequent Act of Congress.
(h) No provision of law authorizing the termination of
tariff concessions shall be used to impose a surcharge on
imports into the United States.
E. IMPLEMENTATION OF THE GATT AGREEMENT ON TECHNICAL BARRIERS TO TRADE
(PRODUCT STANDARDS)
Excerpts from Title IV of the Trade Agreements Act of 1979
[19 U.S.C. 2531; P.L. 96-39, as amended by Reorganization Plan No. 3 of
1979, P.L. 103-182, P.L. 103-465, and P.L. 104-295]
Subtitle A--Obligations of the United States
SEC. 401. CERTAIN STANDARDS-RELATED ACTIVITIES.
(a) No Bar To Engaging in Standards Activity.--Nothing in
this title may be construed--
(1) to prohibit a Federal agency from engaging in
activity related to standards-related measures,
including any such measure relating to safety, the
protection of human, animal, or plant life or health,
the environment, or consumers; or
(2) to limit the authority of a Federal agency to
determine the level it considers appropriate of safety
or of protection of human, animal, or plant life or
health, the environment, or consumers.
(b) Unnecessary Obstacles.--Nothing in this title may be
construed as prohibiting any private person, Federal agency, or
State agency from engaging in standards-related activities that
do not create unnecessary obstacles to the foreign commerce of
the United States. No standards-related activity of any private
person, Federal agency, or State agency shall be deemed to
constitute an unnecessary obstacle to the foreign commerce of
the United States if the demonstrable purpose of the standards-
related activity is to achieve a legitimate domestic objective
including, but not limited to, the protection of legitimate
health or safety, essential security, environmental, or
consumer interests and if such activity does not operate to
exclude imported products which fully meet the objectives of
such activity.
SEC. 402. FEDERAL STANDARDS-RELATED ACTIVITIES.
No Federal agency may engage in any standards-related
activity that creates unnecessary obstacles to the foreign
commerce of the United States, including, but not limited to,
standards-related activities that violate any of the following
requirements:
(1) Nondiscriminatory treatment.--Each Federal agency
shall ensure, in applying standards-related activities
with respect to any imported product, that such product
is treated no less favorably than are like domestic or
imported products, including, but not limited to, when
applying tests or test methods, no less favorable
treatment with respect to--
(A) the acceptance of the product for testing
in comparable situations;
(B) the administration of the tests in
comparable situations;
(C) the fees charged for tests;
(D) the release of test results to the
exporter, importer, or agents;
(E) the siting of testing facilities and the
selection of samples for testing; and
(F) the treatment of confidential information
pertaining to the product.
(2) Use of international standards.--
(A) In general.--Except as provided in
subparagraph (B)(ii), each Federal agency, in
developing standards, shall take into
consideration international standards and
shall, if appropriate, base the standards on
international standards.
(B) Application of requirement.--For purposes
of this paragraph, the following apply:
(i) International standards not
appropriate.--The reasons for which the
basing of a standard on an
international standard may not be
appropriate include, but are not
limited to, the following:
(I) National security
requirements.
(II) The prevention of
deceptive practices.
(III) The protection of human
health or safety, animal or
plant life or health, or the
environment.
(IV) Fundamental climatic or
other geographical factors.
(V) Fundamental technological
problems.
(ii) Regional standards.--In
developing standards, a Federal agency
may, but is not required to, take into
consideration any international
standard promulgated by an
international standards organization
the membership of which is described in
section 451(6)(A)(ii).
(3) Performance criteria.--Each Federal agency shall,
if appropriate, develop standards based on performance
criteria, such as those relating to the intended use of
a product and the level of performance that the product
must achieve under defined conditions, rather than on
design criteria, such as those relating to the physical
form of the product or the types of material of which
the product is made.
(4) Access for foreign suppliers.--Each Federal
agency shall, with respect to any conformity assessment
procedure used by it, permit access for obtaining an
assessment of conformity and the mark of the system, if
any, to foreign suppliers of a product on the same
basis as access is permitted to suppliers of like
products, whether of domestic or other foreign origin.
SEC. 403. STATE AND PRIVATE STANDARDS-RELATED ACTIVITIES.
(a) In General.--It is the sense of the Congress that no
State agency and no private person should engage in any
standards-related activity that creates unnecessary obstacles
to the foreign commerce of the United States.
(b) Presidential Action.--The President shall take such
reasonable measures as may be available to promote the
observance by State agencies and private persons, in carrying
out standards-related activities, of requirements equivalent to
those imposed on Federal agencies under section 402, and of
procedures that provide for notification, participation, and
publication with respect to such activities.
Subtitle B--Functions of Federal Agencies
SEC. 411. FUNCTIONS OF TRADE REPRESENTATIVE.
(a) In General.--The Trade Representative shall coordinate
the consideration of international trade policy issues that
arise as a result of, and shall develop international trade
policy as it relates to, the implementation of this title.
(b) Negotiating Functions.--The Trade Representative has
responsibility for coordinating United States discussions and
negotiations with foreign countries for the purpose of
establishing mutual arrangements with respect to standards-
related activities. In carrying out this responsibility, the
Trade Representative shall inform and consult with any Federal
agency having expertise in the matters under discussion and
negotiation.
(c) Cross Reference.--For provisions of law regarding
general authority of the Trade Representative with respect to
trade agreements, see section 141 of the Trade Act of 1974 (19
U.S.C. 2171).
* * * * * * *
Subtitle C--Administrative and Judicial Proceedings Regarding
Standards-Related Activities
Chapter 1--Representations Alleging United States Violations of
Obligations
SEC. 421. RIGHT OF ACTION UNDER THIS CHAPTER.
Except as provided under this chapter, the provisions of
this subtitle do not create any right of action under the laws
of the United States with respect to allegations that any
standards-related activity engaged in within the United States
violates the obligations of the United States under the
Agreement.
SEC. 422. REPRESENTATIONS.
Any--
(1) Party to the Agreement; or
(2) foreign country that is not a Party to the
Agreement but is found by the Trade Representative to
extend rights and privileges to the United States that
are substantially the same as those that would be so
extended if that foreign country were a Party to the
Agreement;
may make a representation to the Trade Representative alleging
that a standards-related activity engaged in within the United
States violates the obligations of the United States under the
Agreement. Any such representation must be made in accordance
with procedures that the Trade Representative shall by
regulation prescribe and must provide a reasonable indication
that the standards-related activity concerned is having a
significant trade effect. No person other than a Party to the
Agreement or a foreign country described in paragraph (2) may
make such a representation.
SEC. 423. ACTION AFTER RECEIPT OF REPRESENTATIONS.
(a) Review.--Upon receipt of any representation made under
section 422, the Trade Representative shall review the issues
concerned in consultation with--
(1) the agency or person alleged to be engaging in
violations under the Agreement;
(2) the member agencies of the interagency trade
organization established under section 242(a) of the
Trade Expansion Act of 1962 (19 U.S.C. 1872(a));
(3) other appropriate Federal agencies; and
(4) appropriate representatives referred to in
section 417.
(b) Resolution.--The Trade Representative shall undertake
to resolve, on a mutually satisfactory basis, the issues set
forth in the representation through consultation with the
parties concerned.
SEC. 424. PROCEDURE AFTER FINDING BY INTERNATIONAL FORUM.
(a) In General.--If an appropriate international forum
finds that a standards-related activity being engaged in within
the United States conflicts with the obligations of the United
States under the Agreement, the interagency trade organization
established under section 242(a) of the Trade Expansion Act of
1962 (19 U.S.C. 1872(a)) shall review the finding and the
matters related thereto with a view to recommending appropriate
action.
(b) Cross Reference.--For provisions of law regarding
remedies available to domestic persons alleging that standards
activities engaged in by Parties to the Agreement (other than
the United States) violate the obligations of the Agreement,
see section 301 of the Trade Act of 1974 (19 U.S.C. 2411).
Chapter 2--Other Proceedings Regarding Certain Standards-Related
Activities
SEC. 441. FINDINGS OF RECIPROCITY REQUIRED IN ADMINISTRATIVE
PROCEEDINGS.
(a) In General.--Except as provided under chapter 1, no
Federal agency may consider a complaint or petition against any
standards-related activity regarding an imported product, if
that activity is engaged in within the United States and is
covered by the Agreement, unless the Trade Representative
finds, and informs the agency concerned in writing, that--
(1) the country of origin of the imported product is
a Party to the Agreement or a foreign country described
in section 422(2); and
(2) the dispute settlement procedures provided under
the Agreement are not appropriate.
(b) Exemptions.--This section does not apply with respect
to causes of action arising under--
(1) the antitrust laws as defined in subsection (a)
of the first section of the Clayton Act (15 U.S.C.
12(a)); or
(2) statutes administered by the Secretary of
Agriculture.
This section does not apply with respect to petitions and
proceedings that are provided for under the practices of any
Federal agency for the purpose of ensuring, in accordance with
section 553 of title 5, United States Code, that interested
persons are given an opportunity to participate in agency
rulemaking or to seek the issuance, amendment, or appeal of a
rule.
SEC. 442. NOT CAUSE FOR STAY IN CERTAIN CIRCUMSTANCES.
No standards-related activity being engaged in within the
United States may be stayed in any judicial or administrative
proceeding on the basis that such activity is currently being
considered, pursuant to the Agreement, by an international
forum.
Subtitle D--Definitions and Miscellaneous Provisions
SEC. 451. DEFINITIONS.
As used in this title--
(1) Agreement.--The term ``Agreement'' means the
Agreement on Technical Barriers to Trade referred to in
section 101(d)(5) of the Uruguay Round Agreements Act.
(2) Conformity assessment procedure.--The term
``conformity assessment procedure'' means any procedure
used, directly or indirectly, to determine that
relevant requirements in technical regulations or
standards are fulfilled.
(3) Federal agency.--The term ``Federal agency''
means any of the following within the meaning of
chapter 2 of part I of title 5, United States Code:
(A) Any executive department.
(B) Any military department.
(C) Any Government corporation.
(D) Any Government-controlled corporation.
(E) Any independent establishment.
(4) International conformity assessment procedure.--
The term ``international conformity assessment
procedure'' means a conformity assessment procedure
that is adopted by an international standards
organization.
(5) International standard.--The term ``international
standard'' means any standard that is promulgated by an
international standards organization.
(6) International standards organization.--The term
``international standards organization'' means any
organization--
(A) the membership of which is open to
representatives, whether public or private, of
the United States and at least all Members; and
(B) that is engaged in international
standards-related activities.
(7) International standards-related activity.--The
term ``international standards-related activity'' means
the negotiation, development, or promulgation of, or
any amendment or change to, an international standard,
or an international conformity assessment procedure, or
both.
(8) Member.--The term ``Member'' means a WTO member
as defined in section 2(10) of the Uruguay Round
Agreements Act.
(9) Private person.--The term ``private person''
means--
(A) any individual who is a citizen or
national of the United States; and
(B) any corporation, partnership,
association, or other legal entity organized or
existing under the law of any State, whether
for profit or not for profit.
(10) Product.--The term ``product'' means any natural
or manufactured item.
(11) Secretary concerned.--The term ``Secretary
concerned'' means the Secretary of Commerce with
respect to functions under this title relating to
nonagricultural products, and the Secretary of
Agriculture with respect to functions under this title
relating to agricultural products.
(12) Trade representative.--The term ``Trade
Representative'' means the United States Trade
Representative.
(13) Standard.--The term ``standard'' means a
document approved by a recognized body, that provides,
for common and repeated use, rules, guidelines, or
characteristics for products or related processes and
production methods, with which compliance is not
mandatory. Such term may also include or deal
exclusively with terminology, symbols, packaging,
marking, or labeling requirements as they apply to a
product, process, or production method.
(14) Standards-related activity.--The term
``standards-related activity'' means the development,
adoption, or application of any standard, technical
regulation, or conformity assessment procedure.
(15) State.--The term ``State'' means any of the
several States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands,
American Samoa, Guam and any other Commonwealth,
territory, or possession of the United States.
(16) State agency.--The term ``State agency'' means
any department, agency, or other instrumentality of the
government of any State or of any political subdivision
of any State.
(17) Technical regulation.--The term ``technical
regulation'' means a document which lays down product
characteristics or their related processes and
production methods, including the applicable
administrative provisions, with which compliance is
mandatory. Such term may also include or deal
exclusively with terminology, symbols, packaging,
marking, or labeling requirements as they apply to a
product, process, or production method.
(18) United states.--The term ``United States'', when
used in a geographical context, means all States.
SEC. 452. EXEMPTIONS UNDER TITLE.
This title does not apply to--
(1) any standards activity engaged in by any Federal
agency or State agency for the use (including, but not
limited to, use with respect to research and
development, production, or consumption) of that agency
or the use of another such agency; or
(2) any standards activity engaged in by any private
person solely for use in the production or consumption
of products by that person.
SEC. 453. REPORTS TO CONGRESS ON OPERATION OF AGREEMENT.
As soon as practicable after the close of the 3-year period
beginning on the date on which this title takes effect, and as
soon as practicable after the close of each succeeding 3-year
period through 2001, the Trade Representative shall prepare and
submit to Congress a report containing an evaluation of the
operation of the Agreement, both domestically and
internationally, during the period.
Subtitle E--Standards and Measures Under the North American Free Trade
Agreement
Chapter 1--Sanitary and Phytosanitary Measures
SEC. 461. GENERAL.
Nothing in this chapter may be construed--
(1) to prohibit a Federal agency or State agency from
engaging in activity related to sanitary or
phytosanitary measures to protect human, animal, or
plant life or health; or
(2) to limit the authority of a Federal agency or
State agency to determine the level of protection of
human, animal, or plant life or health the agency
considers appropriate.
SEC. 462. INQUIRY POINT.
The standards information center maintained under section
414 shall, in addition to the functions specified therein, make
available to the public relevant documents, at such reasonable
fees as the Secretary of Commerce may prescribe, and
information regarding--
(1) any sanitary or phytosanitary measure of general
application, including any control or inspection
procedure or approval procedure proposed, adopted, or
maintained by a Federal or State agency;
(2) the procedures of a Federal or State agency for
risk assessment, and factors the agency considers in
conducting the assessment and in establishing the
levels of protection that the agency considers
appropriate;
(3) the membership and participation of the Federal
Government and State governments in international and
regional sanitary and phytosanitary organizations and
systems, and in bilateral and multilateral arrangements
regarding sanitary and phytosanitary measures, and the
provisions of those systems and arrangements; and
(4) the location of notices of the type required
under article 719 of the NAFTA, or where the
information contained in such notices can be obtained.
SEC. 463. CHAPTER DEFINITIONS.
Notwithstanding section 451, for purposes of this chapter--
(1) Animal.--The term ``animal'' includes fish, bees,
and wild fauna.
(2) Approval procedure.--The term ``approval
procedure'' means any registration, notification, or
other mandatory administrative procedure for--
(A) approving the use of an additive for a
stated purpose or under stated conditions, or
(B) establishing a tolerance for a stated
purpose or under stated conditions for a
contaminant,
in a food, beverage, or feedstuff prior to permitting
the use of the additive or the marketing of a food,
beverage, or feedstuff containing the additive or
contaminant.
(3) Contaminant.--The term ``contaminant'' includes
pesticide and veterinary drug residues and extraneous
matter.
(4) Control or inspection procedure.--The term
``control or inspection procedure'' means any procedure
used, directly or indirectly, to determine that a
sanitary or phytosanitary measure is fulfilled,
including sampling, testing, inspection, evaluation,
verification, monitoring, auditing, assurance of
conformity, accreditation, registration, certification,
or other procedure involving the physical examination
of a good, of the packaging of a good, or of the
equipment or facilities directly related to production,
marketing, or use of a good, but does not mean an
approval procedure.
(5) Plant.--The term ``plant'' includes wild flora.
(6) Risk assessment.--The term ``risk assessment''
means an evaluation of--
(A) the potential for the introduction,
establishment or spread of a pest or disease
and associated biological and economic
consequences; or
(B) the potential for adverse effects on
human or animal life or health arising from the
presence of an additive, contaminant, toxin or
disease-causing organism in a food, beverage,
or feedstuff.
(7) Sanitary or phytosanitary measure.--
(A) In general.--The term ``sanitary or
phytosanitary measure'' means a measure to--
(i) protect animal or plant life or
health in the United States from risks
arising from the introduction,
establishment, or spread of a pest or
disease;
(ii) protect human or animal life or
health in the United States from risks
arising from the presence of an
additive, contaminant, toxin, or
disease-causing organism in a food,
beverage, or feedstuff;
(iii) protect human life or health in
the United States from risks arising
from a disease-causing organism or pest
carried by an animal or plant, or a
product thereof; or
(iv) prevent or limit other damage in
the United States arising from the
introduction, establishment, or spread
of a pest.
(B) Form.--The form of a sanitary or
phytosanitary measure includes--
(i) end product criteria;
(ii) a product-related processing or
production method;
(iii) a testing, inspection,
certification, or approval procedure;
(iv) a relevant statistical method;
(v) a sampling procedure;
(vi) a method of risk assessment;
(vii) a packaging and labeling
requirement directly related to food
safety; and
(viii) a quarantine treatment, such
as a relevant requirement associated
with the transportation of animals or
plants or with material necessary for
their survival during transportation.
* * * * * * *
Chapter 2--Standards-Related Measures
Subtitle F--International Standard-Setting Activities
SEC. 491. NOTICE OF UNITED STATES PARTICIPATION IN INTERNATIONAL
STANDARD-SETTING ACTIVITIES.
(a) In General.--The President shall designate an agency to
be responsible for informing the public of the sanitary and
phytosanitary standard-setting activities of each international
standard-setting organization.
(b) Notification.--Not later than June 1 of each year, the
agency designated under subsection (a) with respect to each
international standard-setting organization shall publish
notice in the Federal Register of the information specified in
subsection (c) with respect to that organization. The notice
shall cover the period ending on June 1 of the year in which
the notice is published, and beginning on the date of the
preceding notice under this subsection, except that the first
such notice shall cover the 1-year period ending on the date of
the notice.
(c) Required Information.--The information to be provided
in the notice under subsection (b) is--
(1) the sanitary or phytosanitary standards under
consideration or planned for consideration by that
organization;
(2) for each sanitary or phytosanitary standard
specified in paragraph (1)--
(A) a description of the consideration or
planned consideration of the standard;
(B) whether the United States is
participating or plans to participate in the
consideration of the standard;
(C) the agenda for the United States
participation, if any; and
(D) the agency responsible for representing
the United States with respect to the standard.
(d) Public Comment.--The agency specified in subsection
(c)(2)(D) shall provide an opportunity for public comment with
respect to the standards for which the agency is responsible
and shall take the comments into account in participating in
the consideration of the standards and in proposing matters to
be considered by the organization.
SEC. 492. EQUIVALENCE DETERMINATIONS.
(a) In General.--An agency may not determine that a
sanitary or phytosanitary measure of a foreign country is
equivalent to a sanitary or phytosanitary measure established
under the authority of Federal law unless the agency determines
that the sanitary or phytosanitary measure of the foreign
country provides at least the same level of sanitary or
phytosanitary protection as the comparable sanitary or
phytosanitary measure established under the authority of
Federal law.
(b) FDA Determination.--If the Commissioner proposes to
issue a determination of the equivalency of a sanitary or
phytosanitary measure of a foreign country to a measure that is
required to be promulgated as a rule under the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) or other statute
administered by the Food and Drug Administration, the
Commissioner shall issue a proposed regulation to incorporate
such determination and shall include in the notice of proposed
rulemaking the basis for the determination that the sanitary or
phytosanitary measure of a foreign country provides at least
the same level of sanitary or phytosanitary protection as the
comparable Federal sanitary or phytosanitary measure. The
Commissioner shall provide opportunity for interested persons
to comment on the proposed regulation. The Commissioner shall
not issue a final regulation based on the proposal without
taking into account the comments received.
(c) Notice.--If the Commissioner proposes to issue a
determination of the equivalency of a sanitary or phytosanitary
measure of a foreign country to a sanitary or phytosanitary
measure of the Food and Drug Administration that is not
required to be promulgated as a rule under the Federal Food,
Drug, and Cosmetic Act or other statute administered by the
Food and Drug Administration, the Commissioner shall publish a
notice in the Federal Register that identifies the basis for
the determination that the measure provides at least the same
level of sanitary or phytosanitary protection as the comparable
Federal sanitary or phytosanitary measure. The Commissioner
shall provide opportunity for interested persons to comment on
the notice. The Commissioner shall not issue a final
determination on the issue of equivalency without taking into
account the comments received.
SEC. 493. DEFINITIONS.
(a) In General.--As used in this subtitle:
(1) Agency.--The term ``agency'' means a Federal
department or agency (or combination of Federal
departments or agencies).
(2) Commissioner.--The term ``Commissioner'' means
the Commissioner of Food and Drugs.
(3) International standard-setting organization.--The
term ``international standard-setting organization''
means an organization consisting of representatives of
2 or more countries, the purpose of which is to
negotiate, develop, promulgate, or amend an
international standard.
(4) Sanitary or phytosanitary standard.--The term
``sanitary or phytosanitary standard'' means a standard
intended to form a basis for a sanitary or
phytosanitary measure.
(5) International standard.--The term ``international
standard'' means a standard, guideline, or
recommendation--
(A) regarding food safety, adopted by the
Codex Alimentarius Commission, including a
standard, guideline, or recommendation
regarding decomposition elaborated by the Codex
Committee on Fish and Fishery Products, food
additives, contaminants, hygienic practice, and
methods of analysis and sampling;
(B) regarding animal health and zoonoses,
developed under the auspices of the
International Office of Epizootics;
(C) regarding plant health, developed under
the auspices of the Secretariat of the
International Plant Protection Convention in
cooperation with the North American Plant
Protection Organization; or
(D) established by or developed under any
other international organization agreed to by
the NAFTA countries (as defined in section 2(4)
of the North American Free Trade Agreement
Implementation Act) or by the WTO members (as
defined in section 2(10) of the Uruguay Round
Agreements Act).
(b) Other Definitions.--The definitions set forth in
section 463 apply for purposes of this subtitle except that in
applying paragraph (7) of section 463 with respect to a
sanitary or phytosanitary measure of a foreign country, any
reference in such paragraph to the United States shall be
deemed to be a reference to that foreign country.
F. GOVERNMENT PROCUREMENT
1. Buy American Requirements
Buy American Act
(Title III of the Act of March 3, 1933, as amended)
[41 U.S.C. 10a, 10b, 10b-1, and 10c; P.L. 72-428, as amended by P.L.
100-418]
SECTION 1. [41 U.S.C. 10C. DEFINITION OF TERMS USED IN SECTIONS 10A TO
10C.]
That when used in this title--
(a) The term ``United States'', when used in a
geographical sense, includes the United States and any
place subject to the jurisdiction thereof;
(b) The terms ``public use'', ``public building'',
and ``public work'' shall mean use by, public building
of, and public work of, the United States, the District
of Columbia, Puerto Rico, American Samoa, the Canal
Zone, and the Virgin Islands;
(c) The term ``Federal agency'' has the meaning given
such term by section 3 of the Federal Property and
Administrative Services Act of 1949 (40 U.S.C. 472),
which includes the Departments of the Army, Navy, and
Air Force.
SEC. 2. [41 U.S.C. 10A. AMERICAN MATERIALS REQUIRED FOR PUBLIC USE.]
Notwithstanding any other provision of law, and unless the
head of the Federal agency concerned shall determine it to be
inconsistent with the public interest, or the cost to be
unreasonable, only such unmanufactured articles, materials, and
supplies as have been mined or produced in the United States,
and only such manufactured articles, materials, or supplies as
have been manufactured in the United States substantially all
from articles, materials, or supplies mined, produced, or
manufactured, as the case may be, in the United States, shall
be acquired for public use. This section shall not apply with
respect to articles, materials, or supplies for use outside the
United States, or if articles, materials, or supplies [of the
class or kind to be used or the articles, materials, or
supplies] from which they are manufactured are not mined,
produced, or manufactured, as the case may be, in the United
States in sufficient and reasonably available commercial
quantities and of a satisfactory quality.
SEC. 3. [41 U.S.C. 10B. CONTRACTS FOR PUBLIC WORKS; SPECIFICATION FOR
USE OF AMERICAN MATERIALS; BLACKLISTING CONTRACTORS
VIOLATING REQUIREMENTS.]
(a) Every contract for the construction, alteration, or
repair of any public building or public work in the United
States growing out of an appropriation heretofore made or
hereafter to be made shall contain a provision that in the
performance of the work the contractor, subcontractors,
material men, or suppliers, shall use only such unmanufactured
articles, materials, and supplies as have been mined or
produced in the United States, and only such manufactured
articles, materials, and supplies as have been manufactured in
the United States substantially all from articles, materials,
or supplies mined, produced, or manufactured, as the case may
be, in the United States except as provided in section 2:
Provided, however, That if the head of the Federal agency
making the contract shall find that in respect to some
particular articles, materials, or supplies it is impracticable
to make such requirement or that it would unreasonably increase
the cost, an exception shall be noted in the specifications as
to that particular article, material, or supply, and a public
record made of the findings which justified the exception.
(b) If the head of a Federal agency which has made any
contract containing the provision required by subsection (a) of
this section finds that in the performance of such contract
there has been a failure to comply with such provisions, he
shall make public his findings, including therein the name of
the contractor obligated under such contract, and no other
contract for the construction, alteration, or repair of any
public building or public work in the United States or
elsewhere shall be awarded to such contractor, subcontractors,
material men, or suppliers with which such contractor is
associated or affiliated, within a period of three years after
such finding is made public.
SEC. 4. [41 U.S.C. 10B-1. PROHIBITION ON PROCUREMENT CONTRACTS;
EXCEPTIONS.]
(a) A Federal agency shall not award any contract--
(1) for the procurement of an article, material, or
supply mined, produced, or manufactured--
(A) in a signatory country that is considered
to be a signatory not in good standing of the
Agreement pursuant to section 305(f)(3)(A) of
the Trade Agreements Act of 1979; or
(B) in a foreign country whose government
maintains, in government procurement, a
significant and persistent pattern or practice
of discrimination against United States
products or services which results in
identifiable harm to United States businesses,
as identified by the President pursuant to
section 305(g)(1)(A) of such Act; or
(2) for the procurement of a service of any
contractor or subcontractor that is a citizen or
national of a foreign country identified by the
President pursuant to section 305(f)(3)(A) or
305(g)(1)(A) of such Act, or is owned or controlled
directly or indirectly by citizens or nationals of such
a foreign country.
(b) The prohibition on procurement in subsection (a) is
subject to sections 305(h) and 305(j) of such Act and shall not
apply--
(1) with respect to services, articles, materials, or
supplies procured and used outside the United States
and its territories;
(2) notwithstanding section 305(g) of such Act, to an
eligible product of a country which is a signatory
country unless that country is considered to be a
signatory not in good standing pursuant to section
305(f)(3)(A) of such Act; or
(3) notwithstanding section 305(g) of such Act, to a
country that is a least developed country (as that term
is defined in section 308(6) of that Act).
(c) Notwithstanding subsection (a) of this section, the
President or the head of a Federal agency may authorize the
award of a contract or class of contracts if the President or
the head of the Federal agency--
(1) determines that such action is necessary--
(A) in the public interest;
(B) to avoid the restriction of competition
in a manner which would limit the procurement
in question to, or would establish a preference
for, the services, articles, materials, or
supplies of a single manufacturer or supplier;
or
(C) because there would be or are an
insufficient number of potential or actual
bidders to assure procurement of services,
articles, materials, or supplies or requisite
quality at competitive prices; and
(2) notifies the Committee on Governmental Affairs of
the Senate, as well as other appropriate Senate
committees, and the appropriate committees of the House
of Representatives, of such determination--
(A) not less than 30 days prior to the date
of the award of the contract or the date of
authorization of the award of a class of
contracts; or
(B) if the agency's need for the service,
article, material, or supply is of such urgency
that the United States would be seriously
injured by delaying the award or authorization,
not more than 90 days after the date of such
award or authorization.
(d) The authority of the head of a Federal agency under
subsection (c) shall not apply to contracts subject to
memorandums of understanding entered into by the Department of
Defense (or any military department) and a representative of a
foreign country (or agency or instrumentality thereof). In the
case of any such contracts, any determinations and notice
required by subsection (c) shall be made by--
(1) the President, or
(2) if delegated, by the Secretary of Defense or the
Secretary of the Army, Navy, or Air Force, subject to
review and policy guidance by the organization
established under section 242(a) of the Trade Expansion
Act of 1962 (19 U.S.C. 1872(a)).
(e) The authority of the head of a Federal agency under
subsection (c) or (d) of this section may not be delegated.
(f) Nothing in this section shall restrict the application
of the prohibition under section 302(a)(1) of the Trade
Agreements Act of 1979.
(g)(1) For purposes of this section with respect to
construction services, a contractor or subcontractor is owned
or controlled directly or indirectly by citizens or nationals
of a foreign country if--
(A) 50 percent or more of the voting stock of the
contractor or subcontractor is owned by one or more
citizens or nationals of the foreign country;
(B) the title to 50 percent or more of the stock of
the contractor or subcontractor is held subject to
trust or fiduciary obligations in favor of one or more
citizens or nationals of the foreign country;
(C) 50 percent or more of the voting stock of the
contractor or subcontractor is vested in or exercisable
on behalf of one or more citizens or nationals of the
foreign country;
(D) in the case of a corporation--
(i) the number of its directors necessary to
constitute a quorum are citizens or nationals
of the foreign country; or
(ii) the corporation is organized under the
laws of the foreign country or any subdivision,
territory, or possession thereof; or
(E) in the case of a contractor or subcontractor who
is a participant in a joint venture or a member of a
partnership, any participant of the joint venture or
partner meets any of the criteria in subparagraphs (A)
through (D) of this paragraph.
(2)(A) For purposes of this section, except as provided in
paragraph (1), a determination of whether a contractor or
subcontractor is a citizen or national of a foreign country or
is owned or controlled directly or indirectly by citizens or
nationals of a foreign country shall be made in accordance with
policy guidance prescribed by the Administrator for Federal
Procurement Policy after conducting one or more public hearings
at which interested parties may present comments. Sections 556
and 557 of title 5, United States Code, shall not apply to the
conduct of any such hearing.
(B) The Administrator shall include in the policy guidance
prescribed under subparagraph (A) definitions, procedures,
standards, and rules that, to the extent the Administrator
considers appropriate and consistent with the applicability of
such policy guidance to all services (other than construction
services), is the same as or similar to the definitions,
procedures, standards, and rules that the Administrator has
developed and issued for the administration of section 109 of
the Treasury, Postal Service, and General Government
Appropriations Act, 1988 (101 Stat. 1329-434).
(C) The policy guidance required by subparagraph (A) shall
be prescribed not later than 180 days after the date of
enactment of this subsection.
(3)(A) The Administrator for Federal Procurement Policy
shall conduct an assessment of the current rules under this Act
for making determinations of country of origin and alternatives
to such rules. Such assessment shall identify and evaluate (i)
reasonable alternatives to such rules of origin, including one
or more alternative rules that require a determination on the
basis of total cost, and (ii) the specific cost factors that
should be included in determining total cost.
(B) In conducting the analysis, the Administrator shall
consult and seek comment from representatives of United States
labor and business, other interested United States persons, and
other Federal agencies. The Administrator shall hold public
hearings for the purpose of obtaining such comment, and a
transcript of such hearings shall be appended to the report
required by subparagraph (C).
(C) A report on the results of the analysis shall be
submitted to the appropriate committees of the House of
Representatives and to the Committee on Governmental Affairs
and other appropriate committees of the Senate not later than
18 months after the date of enactment of this subsection. Such
report shall include proposed policy guidance or any
recommended legislative changes on the factors to be used in
making determinations of country of origin.
(h) As used in this section--
(1) the term ``Agreement'' means the Agreement on
Government Procurement as defined in section 308(1) of
the Trade Agreements Act of 1979;
(2) the term ``signatory'' means a party to the
Agreement; and
(3) the term ``eligible product'' has the meaning
given such term by section 308(4) of the Trade
Agreements Act of 1979 (19 U.S.C. 2518(4)).
SEC. 5.
This title shall take effect on the date of its enactment,
but shall not apply to any contract entered into prior to such
effective date.
SEC. 6.
If any provision of this Act, or the application thereof to
any person or circumstances, is held invalid, the remainder of
the Act, and the application thereof to other persons or
circumstances, shall not be affected thereby.
[Section 7004 of the Omnibus Trade and Competitiveness Act
of 1988 establishes a sunset on new section 4 and the
conforming amendments made to the Buy American Act and Act of
October 29, 1949 by title VII of the 1988 Act:
[SEC. 7004. SUNSET PROVISION.
[The amendments made by this title shall cease to be
effective on April 30, 1996, unless the Congress, after
reviewing the report required by section 305(k) of the Trade
Agreements Act of 1979, and other relevant information, extends
such date. After such date, the President may modify or
terminate any or all actions taken pursuant to such
amendments.]
Section 833 of the Defense Production Act of 1950, as amended
[41 U.S.C. 10b-2; P.L. 102-190, P.L. 103-335, and P.L. 104-61]
SEC. 833. BUY AMERICAN ACT WAIVER RESCISSIONS.
(a) Determinations by the Secretary of Defense.--(1) If the
Secretary of Defense, after consultation with the United States
Trade Representative, determines that a foreign country which
is party to an agreement described in paragraph (2) has
violated the terms of the agreement by discriminating against
certain types of products produced in the United States that
are covered by the agreement, the Secretary of Defense shall
rescind the Secretary's blanket waiver of the Buy American Act
with respect to such types of products produced in that foreign
country.
(2) An agreement referred to in paragraph (1) is any
reciprocal defense procurement memorandum of understanding
between the United States and a foreign country pursuant to
which the Secretary of Defense has prospectively waived the Buy
American Act for certain products in that country.
(b) Report to Congress.--The Secretary of Defense shall
submit to Congress a report on the amount of Department of
Defense purchases from foreign entities in fiscal year 1996.
Such report shall separately indicate the dollar value of items
for which the Buy American Act was waived pursuant to any
agreement described in subsection (a)(2), the Trade Agreement
Act of 1979 (19 U.S.C. 2501 et seq.), or any international
agreement to which the United States is a party.
(c) Buy American Act Defined.--For purposes of this
section, the term ``Buy American Act'' means title III of the
Act entitled ``An Act making appropriations for the Treasury
and Post Office Departments for the fiscal year ending June 30,
1934, and for other purposes'', approved March 3, 1933 (41
U.S.C. 10a et seq.).
Act of October 29, 1949
[41 U.S.C 10d; P.L. 81-434, as amended by P.L. 100-418]
SEC. 633. [41 U.S.C. 10D. CLARIFICATION OF CONGRESSIONAL INTENT
REGARDING SECTIONS 10A AND 10B(A).]
In order to clarify the original intent of Congress,
hereafter, section 2 and that part of section 3 (a) preceding
the words ``Provided, however,'' of title III of the Act of
March 3, 1933 (47 Stat. 1520), shall be regarded as requiring
the purchase, for public use within the United States, of
articles, materials, or supplies manufactured in the United
States in sufficient and reasonably available commercial
quantities and of a satisfactory quality, unless the head of
the Federal agency concerned shall determine their purchase to
be inconsistent with the public interest or their cost to be
unreasonable.
2. Implementation of the GATT Agreement on Government Procurement
Title III of the Trade Agreements Act of 1979, as amended
[19 U.S.C. 2511-2518; P.L. 96-39, as amended by Reorganization Plan No.
3 of 1979, P.L. 99-47, P.L. 100-418, P.L. 100-449, P.L. 103-182, P.L.
103-465, and P.L. 104-295]
SEC. 301. GENERAL AUTHORITY TO MODIFY DISCRIMINATORY PURCHASING
REQUIREMENTS.
(a) Presidental Waiver of Discriminatory Purchasing
Requirements.--Subject to subsection (f) of this section, the
President may waive, in whole or in part, with respect to
eligible products of any foreign country or instrumentality
designated under subsection (b), and suppliers of such
products, the application of any law, regulation, procedure, or
practice regarding Government procurement that would, if
applied to such products and suppliers, result in treatment
less favorable than that accorded--
(1) to United States products and suppliers of such
products; or
(2) to eligible products of another foreign country
or instrumentality which is a party to the Agreement
and suppliers of such products.
(b) Designation of Eligible Countries and
Instrumentalities.--The President may designate a foreign
country or instrumentality for purposes of subsection (a) only
if he determines that such country or instrumentality--
(1) is a country or instrumentality which (A) has
become a party to the Agreement or the North American
Free Trade Agreement, and (B) will provide appropriate
reciprocal competitive government procurement
opportunities to United States products and suppliers
of such products;
(2) is a country or instrumentality, other than a
major industrial country, which (A) will otherwise
assume the obligations of the Agreement, and (B) will
provide such opportunities to such products and
suppliers;
(3) is a country or instrumentality, other than a
major industrial country, which will provide such
opportunities to such products and suppliers; or
(4) is a least developed country.
(c) Modification or Withdrawal of Waivers and
Designations.--The President may modify or withdraw any waiver
granted pursuant to subsection (a) or designation made pursuant
to subsection (b).
(d) Limitations on Waiver Authority Not Effective Unless
Provision Amended.--The authority of the President under
subsection (a) to waive any laws, regulations, procedure, or
practice shall be effective notwithstanding any other provision
of law hereafter enacted (excluding the provisions of and
amendments made by the Buy American Act of 1988) unless such
other provision specifically refers to and amends this section.
(e) Procurement Procedures by Certain Federal Agencies.--
Notwithstanding any other provision of law, the President may
direct any agency of the United States listed in Annex 1001.1a-
2 of the North American Free Trade Agreement to procure
eligible products in compliance with the procedural provisions
of chapter 10 of such Agreement.
(f) Small Business and Minority Preferences.--The authority
of the President under subsection (a) of this section to waive
any law, regulation, procedure, or practice regarding
Government procurement does not authorize the waiver of any
small business or minority preference.
SEC. 302. AUTHORITY TO ENCOURAGE RECIPROCAL COMPETITIVE PROCUREMENT
PRACTICES.
(a) Authority To Bar Procurement From Nondesignated
Countries.--
(1) In general.--Subject to paragraph (2), the
President, in order to encourage additional countries
to become parties to the Agreement and to provide
appropriate reciprocal competitive government
procurement opportunities to United States products and
suppliers of such products--
(A) shall, with respect to procurement
covered by the Agreement, prohibit the
procurement, after the date on which any waiver
under section 301(a) first takes effect, of
products--
(i) which are products of a foreign
country or instrumentality which is not
designated pursuant to section 301(b),
and
(ii) which would otherwise be
eligible products; and
(B) may, with respect to procurement covered
by the Agreement, take such other actions
within the President's authority as the
President deems necessary.
(2) Exception.--Paragraph (1) shall not apply in the
case of procurements for which--
(A) there are no offers of products or
services of the United States or of eligible
products; or
(B) the offers of products or services of the
United States or of eligible products are
insufficient to fulfill the requirements of the
United States Government.
(b) Deferrals and Waivers.--Notwithstanding subsection (a),
but in furtherance of the objective of encouraging countries to
become parties to the Agreement and provide appropriate
reciprocal competitive government procurement opportunities to
United States products and suppliers of such products, the
President may--
(1) waive the prohibition required by subsection
(a)(1) on procurement of products of a foreign country
or instrumentality which has not yet become a party to
the Agreement but--
(A) has agreed to apply transparent and
competitive procedures to its government
procurement equivalent to those in the
Agreement, and
(B) maintains and enforces effective
prohibitions on bribery and other corrupt
practices in connection with its government
procurement;
(2) authorize agency heads to waive, subject to
interagency review and general policy guidance by the
organization established under section 242(a) of the
Trade Expansion Act of 1962 (19 U.S.C. 1872(a)), such
prohibition on a case-by-case basis when in the
national interest; and
(3) authorize the Secretary of Defense to waive,
subject to interagency review and policy guidance by
the organization established under section 242(a) of
the Trade Expansion Act of 1962 (19 U.S.C. 1872(a)),
such prohibition for products of any country or
instrumentality which enters into a reciprocal
procurement agreement with the Department of Defense.
Before exercising the waiver authority under paragraph
(1), the President shall consult with the appropriate
private sector advisory committees established under
section 135 of the Trade Act of 1974 and with the
appropriate committees of the Congress.
(c) Report on Impact of Restrictions.--
(1) Impact of the economy.--On or before July 1,
1981, the President shall report to the Committee on
Ways and Means and the Committee on Government
Operations of the House of Representatives and to the
Committee on Finance and the Committee on Governmental
Affairs of the Senate on the effects on the United
States economy (including effects on employment,
production, competition, costs and prices,
technological development, export trade, balance of
payments, inflation, and the Federal budget) of the
refusal of developed countries to allow the Agreement
to cover the entities of the governments of such
countries which are the principal purchasers of goods
and equipment in appropriate product sectors.
(2) Recommendations for attaining reciprocity.--The
report required by paragraph (1) shall include an
evaluation of alternative means to obtain equity and
reciprocity in such product sectors, including (A)
prohibiting the procurement of products of such
countries by United States entities not covered by the
Agreement, and (B) modifying the application of title
III of the Act of March 3, 1933 (41 U.S.C. 10a et
seq.), commonly referred to as the Buy American Act.
The report shall include an analysis of the effect of
such alternative means on the United States economy
(including effects on employment, production,
competition, costs and prices, technological
development, export trade, balance of payments,
inflation, and the Federal budget), and on successful
negotiations on the expansion of the coverage of the
Agreement pursuant to section 304 (a) and (b), other
trade negotiating objectives, the relationship of the
Federal Government to State and local governments, and
such other factors as the President deems appropriate.
(3) Consultation.--In the preparation of the report
required by paragraph (1) and the evaluation and
analysis required by paragraph (2), the President shall
consult with representatives of the public, industry,
and labor, and make available pertinent,
nonconfidential information obtained in the course of
such preparation to the advisory committees established
pursuant to section 135 of the Trade Act of 1974.
(d) Proposed Action.--
(1) Presidential report.--On or before October 1,
1981, the President shall prepare and transmit to the
congressional committees referred to in subsection
(c)(1) a report which describes the actions he deems
appropriate to establish reciprocity with major
industrialized countries in the area of Government
procurement.
(2) Procedure.--
(A) Presidential determination.--If the
President determines that any changes in
existing law or new statutory authority are
required to authorize or to implement any
action proposed in the report submitted under
paragraph (1), he shall, on or after January 1,
1982, submit to the Congress a bill to
accomplish such changes or provide such new
statutory authority. Prior to submitting such a
bill, the President shall consult with the
appropriate committees of the Congress having
jurisdiction over legislation involving subject
matters which would be affected by such action,
and shall submit to such committees a proposed
draft of such bill.
(B) Congressional consideration.--The
appropriate committee of each House of the
Congress shall give a bill submitted pursuant
to subparagraph (A) prompt consideration and
shall make its best efforts to take final
committee action on such bill in an expeditious
manner.
SEC. 303. WAIVER OF DISCRIMINATORY PURCHASING REQUIREMENTS WITH RESPECT
TO PURCHASES OF CIVIL AIRCRAFT.
The President may waive the application of the provisions
of title III of the Act of March 3, 1933 (41 U.S.C. 10a et
seq.), popularly referred to as the Buy American Act, in the
case of any procurement of civil aircraft and related articles
of a country or instrumentality which is a party to the
Agreement on Trade in Civil Aircraft referred to in section
2(c) and approved under section 2(a). The President may modify
or withdraw any waiver granted pursuant to this section.
SEC. 304. EXPANSION OF THE COVERAGE OF THE AGREEMENT.
(a) Overall Negotiating Objective.--The President shall
seek in the renegotiations provided for in article XXIV(7) of
the Agreement more open and equitable market access abroad, and
the harmonization, reduction, or elimination of devices which
distort trade or commerce related to Government procurement,
with the overall goal of maximizing the economic benefit to the
United States through maintaining and enlarging foreign markets
for products of United States agriculture, industry, mining,
and commerce, the development of fair and equitable market
opportunities, and open and nondiscriminatory world trade. In
carrying out the provisions of this subsection, the President
shall consider the assessment made in the report required under
section 306(a).
(b) Sector Negotiating Objectives.--The President shall
seek, consistent with the overall objective set forth in
subsection (a) and to the maximum extent feasible, with respect
to appropriate product sectors, competitive opportunities for
the export of United States products to the developed countries
of the world equivalent to the competitive opportunities
afforded by the United States, taking into account all barriers
to, and other distortions of, international trade affecting
that sector.
(c) Independent Verification Objective.--The President
shall seek to establish in the renegotiation provided for in
article XXIV(7) of the Agreement a system for independent
verification of information provided by parties to the
Agreement to the Committee on Government Procurement pursuant
to article XIX(5) of the Agreement.
(d) Reports on Negotiations.--
(1) Report in the event of inadequate progress.--If,
during the renegotiations of the Agreement, the
President at any time determines that the
renegotiations are not progressing satisfactorily and
are not likely to result, within twelve months of the
commencement thereof, in an expansion of the Agreement
to cover purchases by the entities of the governments
of developed countries which are the principal
purchasers of goods and equipment in appropriate
product sectors, he shall so report to the
congressional committees referred to in section
302(c)(1). Taking into account the objectives set forth
in subsections (a) and (b) of this section and the
factors required to be analyzed under section 302(c),
the President shall further report to such committees
appropriate actions to seek reciprocity in such product
sectors with such countries in the area of government
procurement.
(2) Legislative recommendations.--Taking into account
the factors required to be analyzed under section
302(c), the President may recommend to the Congress
legislation (with respect to entities of the Government
which are not covered by the Agreement) which may
prohibit such entities from purchasing products of such
countries.
(3) Annual reports.--Each annual report of the
President under section 163(a) of the Trade Act of 1974
made after the date of enactment of this Act shall
report the actions, if any, the President deemed
appropriate to establish reciprocity in appropriate
product sectors with major industrial countries in the
area of government procurement.
(e) Extension of Nondiscrimination and National
Treatment.--Before exercising the waiver authority in section
301 for procurement not covered by the Agreement on the date it
enters into force with respect to the United States, the
President shall follow the consultation provisions of section
135 and chapter 6 of title I of the Trade Act of 1974 for
private sector and congressional consultations.
SEC. 305. MONITORING AND ENFORCEMENT.
(a) Monitoring and Enforcement Structure Recommendations.--
In the preparation of the recommendations for the
reorganization of trade functions, the President shall ensure
that careful consideration is given to monitoring and enforcing
the requirements of the Agreement and this title, with
particular regard to the tendering procedures required by the
Agreement or otherwise agreed to by a country or
instrumentality likely to be designated pursuant to section
301(b).
(b) Rules of Origin.--
(1) Advisory rulings and final determinations.--For
the purposes of this title, and Secretary of the
Treasury shall provide for the prompt issuance of
advisory rulings and final determinations on whether,
under section 308(4)(B), and article is or would be a
product of a foreign country or instrumentality
designated pursuant to section 301(b).
(2) Penalties for fraudulent conduct.--In addition to
any other provisions of law which may be applicable,
section 1001 of title 18, United States Code, shall
apply to fraudulent conduct with respect to the origin
of products for purposes of qualifying for a waiver
under section 301 or avoiding a prohibition under
section 302.
(c) Report to Congress on Rules of Origin.--
(1) Domestic administrative practices.--As soon as
practicable after the close of the two-year period
beginning on the date on which any waiver under section
301(a) first takes effect, the President shall prepare
and transmit to Congress a report containing an
evaluation of administrative practices under any
provision of law which requires determinations to be
made of the country of origin of goods, products,
commodities, or other articles of commerce. Such
evaluation shall be accompanied by the President's
recommendations for legislative and executive measures
required to improve and simplify and to make more
uniform and consistent such practices. Such evaluation
and recommendations shall take into account the special
problems affecting insular possessions of the United
States with respect to such practices.
(2) Foreign administrative practices.--The report
required under paragraph (1) shall contain an
evaluation of the administrative practices under the
laws of each major industrial country which require
determinations to be made of the country of origin of
goods, products, commodities, or other articles of
commerce, including an assessment of such practices on
the exports of the United States.
(d) Annual Report on Foreign Discrimination.--
(1) Annual report required.--The President shall, no
later than April 30 of each year, submit to the
appropriate committees of the House of Representatives
and the Committee on Governmental Affairs of the
Senate, as well as other appropriate Senate committees,
a report on the extent to which foreign countries
discriminate against United States products or services
in making government procurements.
(2) Identifications required.--In the annual report,
the President shall identify (and continue to identify
subject to subsections (f)(5) and (g)(3)) any
countries, other than least developed countries, that--
(A) are signatories to the Agreement and not
in compliance with the requirements of the
Agreement;
(B)(i) are signatories to the Agreement; (ii)
are in compliance with the Agreement but, in
the government procurement of products or
services not covered by the Agreement, maintain
a significant and persistent pattern or
practice of discrimination against United
States products or services which results in
identifiable harm to United States businesses;
and (iii) whose products or services are
acquired in significant amounts by the United
States Government;
(C)(i) are not signatories to the Agreement;
(ii) maintain, in government procurement, a
significant and persistent pattern or practice
of discrimination against United States
products or services which results in
identifiable harm to United States businesses;
and (iii) whose products or services are
acquired in significant amounts by the United
States Government;
(D)(i) are not signatories to the Agreement;
(ii) fail to apply transparent and
competitive procedures to its government
procurement equivalent to those in the
Agreement; and
(iii) whose products or services are acquired
in significant amounts by the United States
Government; or
(E)(i) are not signatories to the Agreement;
(ii) fail to maintain and enforce effective
prohibitions on bribery and other corrupt
practices in connection with government
procurement; and
(iii) whose products or services are acquired
in significant amounts by the United States
Government.
(3) Considerations in making identifications.--In
making the identifications required by paragraph (1),
the President shall--
(A) use the requirements of the Agreement,
government procurement practices, and the
effects of such practices on United States
businesses as a basis for evaluating whether
the procurement practices of foreign
governments do not provide fair market
opportunities for United States products or
services;
(B) take into account, among other factors,
whether and to what extent countries that are
signatories to the Agreement, and other
countries described in paragraph (1) of this
subsection--
(i) use sole-sourcing or otherwise
noncompetitive procedures for
procurements that could have been
conducted using competitive procedures;
(ii) conduct what normally would have
been one procurement as two or more
procurements, to decrease the
anticipated contract values below the
Agreement's value threshold or to make
the procurements less attractive to
United States businesses;
(iii) announce procurement
opportunities with inadequate time
intervals for United States businesses
to submit bids; and
(iv) use specifications in such a way
as to limit the ability of United
States suppliers to participate in
procurements; and
(C) use any other additional criteria deemed
appropriate, including the failure to maintain
and enforce effective prohibitions on bribery
and other corrupt practices in connection with
government procurement.
(4) Contents of reports.--The reports required by
this subsection shall include, with respect to each
country identified under subparagraph (A), (B), or (C)
of paragraph (1), the following:
(A) a description of the specific nature of
the discrimination, including (for signatory
countries) any provision of the Agreement with
which the country is not in compliance;
(B) an identification of the United States
products or services that are affected by the
noncompliance or discrimination;
(C) an analysis of the impact of the
noncompliance or discrimination on the commerce
of the United States and the ability of United
States companies to compete in foreign
government procurement markets; and
(D) a description of the status, action
taken, and disposition of cases of
noncompliance or discrimination identified in
the preceding annual report with respect to
such country.
(5) Information and advice from government agencies
and united states businesses.--In developing the annual
reports required by this subsection, the President
shall seek information and advice from executive
agencies through the interagency trade organization
established under section 242(a) of the Trade Expansion
Act of 1962, and from United States businesses in the
United States and in countries that are signatories to
the Agreement and in other foreign countries whose
products or services are acquired in significant
amounts by the United States Government.
(6) Impact of noncompliance.--The President shall
take into account, in identifying countries in the
annual report and in any action required by this
section, the relative impact of any noncompliance with
the Agreement or of other discrimination on United
States commerce and the extent to which such
noncompliance or discrimination has impeded the ability
of United States suppliers to participate in
procurements on terms comparable to those available to
suppliers of the country in question when seeking to
sell goods or services to the United States Government.
(7) Impact on procurement costs.--Such report shall
also include an analysis of the impact on United States
Government procurement costs that may occur as a
consequence of any sanctions that may be required by
subsection (f) or (g) of this section.
(e) Consultation.--No later than the date the annual report
is submitted under subsection (d)(1), the United States Trade
Representative, on behalf of the United States, shall request
consultations with any countries identified in the report to
obtain their compliance with the Agreement or the elimination
of their discriminatory procurement practices unless the
country is identified as discriminatory pursuant to section
305(d)(1) in the preceding annual report.
(f) Procedures With Respect to Violations of the
Agreement.--
(1) Initiation of dispute settlement procedures.--If,
within 60 days after the annual report is submitted
under subsection (d)(1), a signatory country identified
pursuant to subsection (d)(1)(A) has not complied with
the Agreement, then the United States Trade
Representative shall promptly request proceedings on
the matter under the formal dispute settlement
procedures provided under the Agreement unless such
proceedings are already underway pursuant to the
identification of the signatory country under section
305(d)(1) as not in compliance in a preceding annual
report.
(2) Settlement of disputes.--If, before the end of
the 18 months following the initiation of dispute
settlement procedures--
(A) the other participant to the dispute
settlement procedures has complied with the
Agreement,
(B) the other participant to the procedures
takes the action recommended as a result of the
procedures to the satisfaction of the
President,
(C) the procedures result in a determination
providing a specific period of time for the
other participant to bring its practices into
compliance with the Agreement, or
(D) the procedures result in a determination
requiring no action by the other participant,
the President shall take no action to limit
Government procurement from that participant.
(3) Sanctions after dispute resolution fails.--
(A) Failures resulting in sanctions.--If--
(i) within 18 months from the date
dispute settlement procedures are
initiated with a signatory country
pursuant to this section--
(I) such procedures are not
concluded, or
(II) the country has not met
the requirements of
subparagraph (A) or (B) of
paragraph (2), or
(ii) the period of time provided for
pursuant to paragraph (2)(C) has
expired and procedures for suspending
concessions under the Agreement have
been completed,
then the sanctions described in subparagraph
(B) shall be imposed.
(B) Sanctions.--
(i) In general.--If subparagraph (A)
applies to any signatory country--
(I) the signatory country
shall be considered as a
signatory not in good standing
of the Agreement and the
prohibition on procurement
contained in section 4 of the
Act of March 3, 1933 (41 U.S.C.
10b-1) shall apply to such
country, and
(II) the President shall
revoke the waiver of
discriminatory purchasing
requirements granted to the
signatory country pursuant to
section 301(a).
(ii) Time sanctions are imposed.--Any
sanction--
(I) described in clause
(i)(I) shall apply from the
date that is the last day of
the 18-month period described
in subparagraph (A)(i) or, in
the case of paragraph (2)(C),
from the date procedures for
suspending concessions under
the Agreement have been
completed, and
(II) described in clause
(i)(II) shall apply beginning
on the day after the date
described in subclause (I).
(4) Withholding and modification of sanctions.--If
the President determines that imposing or continuing
the sanctions required by subclause (I) or (II) of
paragraph (3)(B)(i) would harm the public interest of
the United States, the President may, to the extent
necessary to apply appropriate limitations that are
equivalent, in their effect, to the noncompliance with
Agreement by that signatory country--
(A) withhold the imposition of either (but
not both) of such sanctions;
(B) modify or restrict the application of
either or both such sanctions, subject to such
terms and conditions as the President considers
appropriate; or
(C) take any combination of the actions
permitted by subparagraph (A) or (B) of this
paragraph.
(5) Termination of sanctions and reinstatement of
waivers.--The President may terminate the sanctions
imposed under paragraph (3) or (4), reinstate the
waiver of discriminatory purchasing requirements
granted to that signatory country pursuant to section
301(a) of this Act, and remove that country from the
report under subsection (d)(1) of this section at such
time as the President determines that--
(A) the signatory country has complied with
the Agreement;
(B) the signatory country has taken
corrective action as a result of the dispute
settlement procedures to the satisfaction of
the President; or
(C) the dispute settlement procedures result
in a determination requiring no action by the
other signatory country.
(g) Procedures With Respect to Other Discrimination.--
(1) Imposition of sanctions.--If, within 60 days
after the annual report is submitted under subsection
(d)(1), a country that is identified pursuant to
subparagraph (B), (C), (D), or (E) of subsection (d)(2)
has not eliminated the practices regarding government
procurement identified under subparagraph (B)(ii),
(C)(ii), (D)(ii), or (E)(ii) (as the case may be) of
subsection (d)(2), then, on the day after the end of
such 60-day period--
(A) the President shall identify such country
as a country that maintains, in government
procurement, a significant and persistent
pattern or practice of discrimination against
United States products or services which
results in identifiable harm to United States
businesses; and
(B) the prohibition on procurement contained
in section 4 of the Act of March 3, 1933, shall
apply to such country.
(2) Withholding and modification of sanctions.--If
the President determines that imposing or continuing
the sanction required by paragraph (1) would harm the
public interest of the United States, the President
may, to the extent necessary to impose appropriate
limitations that are equivalent, in their effect, to
the discrimination against United States products or
services in government procurement by that country,
modify or restrict the application of such sanction,
subject to such terms and conditions as the President
considers appropriate.
(3) Termination of sanctions.--The President may
terminate the sanctions imposed under paragraph (1) or
(2) and remove a country from the report under
subsection (d)(1) at such time as the President
determines that the country has eliminated the
practices regarding government procurement identified
under subparagraph (B)(ii), (C)(ii), (D)(ii), or
(E)(ii) (as the case may be) of subsection (d)(2).
(h) Limitations on Imposing Sanctions.--
(1) Avoiding adverse impact on competition.--The
President shall not take any action under subsection
(f) or (g) of this section if the President determines
that such action--
(A) would limit the procurement or class of
procurements to, or would establish a
preference for, the products or services of a
single manufacturer or supplier; or
(B) would, with respect to any procurement or
class of procurements, result in an
insufficient number of potential or actual
bidders to assure procurement of services,
articles, materials, or supplies of requisite
quality at competitive prices.
(2) Advice from u.s. agencies and businesses.--The
President, in taking any action under this subsection
to limit government procurements from foreign
countries, shall seek the advice of executive agencies
through the interagency trade organization established
under section 242(a) of the Trade Expansion Act of 1962
and the advice of United States businesses and other
interested parties.
(i) Renegotiation To Secure Full and Open Competition.--The
President shall instruct the United States Trade
Representative, in conducting renegotiations of the Agreement,
to seek improvements in the Agreement that will secure full and
open competition consistent with the requirements imposed by
the amendments made by the Competition in Contracting Act
(Public Law 98-369; 98 Stat. 1175).
(j) Federal Register Notices of Actions.--
(1) Notices required.--A notice shall be published in
the Federal Register on the date of any action under
this section, describing--
(A) the results of dispute settlement
proceedings under subsection (f)(2);
(B) any sanction imposed under subsection
(f)(3) or (g)(1);
(C) any withholding, modification, or
restriction of any sanction under subsection
(f)(4) or (g)(2); and
(D) the termination of any sanction under
subsection (f)(5) or (g)(3).
(2) Publication of determinations lifting
sanctions.--A notice describing the termination of any
sanction under subsection (f)(5) or (g)(3) shall
include a copy of the President's determination under
such subsection.
(k) General Report on Actions Under This Section.--
(1) Advice to the congress.--The President shall, as
necessary, advise the Congress and, by no later than
April 30, 1994, submit to the appropriate committees of
the House of Representatives, and to the Committee on
Governmental Affairs and other appropriate committees
of the Senate, a general report on actions taken
pursuant to this section.
(2) Contents of report.--The general report required
by this subsection shall include an evaluation of the
adequacy and effectiveness of actions taken pursuant to
subsections (e), (f), and (g) of this section as a
means toward eliminating discriminatory government
procurement practices against United States businesses.
(3) Legislative recommendations.--The general report
may also include, if appropriate, legislative
recommendations for enhancing the usefulness of this
section or for other measures to be used as means for
eliminating or responding to discriminatory foreign
government procurement practices.
[Section 7004 of the Omnibus Trade and Competitiveness Act
of 1988 imposes a sunset on section 305(d) (i.e., the
amendments made by Title VII of that Act):
[The amendments made by this title shall cease to be
effective on April 30, 1996, unless the Congress, after
reviewing the report required by section 305(k) of the
Trade Agreements Act of 1979, as amended, and other
relevant information, extends such date. After such
date, the President may modify or terminate any or all
actions taken pursuant to such amendments.]
[SEC. 306. LABOR SURPLUS AREA STUDIES. REPEALED.]
SEC. 307. AVAILABILITY OF INFORMATION TO CONGRESSIONAL ADVISERS.
The United States Trade Representative shall make available
to the Members of Congress designated as official advisers
pursuant to section 161 of the Trade Act of 1974 information
compiled by the Committee on Government Procurement under
article XIX(5) of the Agreement.
SEC. 308. DEFINITIONS.
As used in this title--
(1) Agreement.--The term ``Agreement'' means the
agreement on Government Procurement referred to in
section 101(d)(17) of the Uruguay Round Agreements Act,
as submitted to the Congress, but including
rectifications, modifications, and amendments which are
accepted by the United States.
(2) Civil aircraft.--The term ``civil aircraft and
related articles'' means--
(A) all aircraft other than aircraft to be
purchased for use by the Department of Defense
or the United States Coast Guard;
(B) the engines (and parts of the components
for incorporation therein) of such aircraft;
(C) any other parts, components, and
subassemblies for incorporation in such
aircraft; and
(D) any ground flight simulators, and parts
and components thereof, for use with respect to
such aircraft,
whether to be purchased for use as original or
replacement equipment in the manufacture, repair,
maintenance, rebuilding, modification, or conversion of
such aircraft, and without regard to whether such
aircraft or articles receive duty-free treatment
pursuant to section 601(a)(2).
(3) Developed countries.--The term ``developed
countries'' means countries so designated by the
President.
(4) Eligible products.--
(A) In general.--The term ``eligible
product'' means, with respect to any foreign
country or instrumentality that is--
(i) a party to the Agreement, a
product or service of that country or
instrumentality which is covered under
the Agreement for procurement by the
United States; or
(ii) a party to the North American
Free Trade Agreement, a product or
service of that country or
instrumentality which is covered under
the North American Free Trade Agreement
for procurement by the United States.
(B) Rule of origin.--An article is a product
of a country or instrumentality only if (i) it
is wholly the growth, product, or manufacture
of that country or instrumentality, or (ii) in
the case of an article which consists in whole
or in part of materials from another country or
instrumentality, it has been substantially
transformed into a new and different article of
commerce with a name, character, or use
distinct from that of the article or articles
from which it was so transformed.
(C) Lowered threshold for certain products as
a consequence of united states-israel free
trade area provisions.--The term ``eligible
product'' includes a product or service of
Israel for which the United States is obligated
to waive Buy National restrictions under--
(i) the Agreement on the
Establishment of a Free Trade Area
between the Government of the United
States of America and the Government of
Israel, regardless of the thresholds
provided for in the Agreement (as
defined in paragraph (1)), or
(ii) any subsequent agreement between
the United States and Israel which
lowers on a reciprocal basis the
applicable threshold for entities
covered by the Agreement.
(D) Lowered threshold for certain products as
a consequence of united states-canada free-
trade agreement.--Except as otherwise agreed by
the United States and Canada under paragraph 3
of article 1304 of the United States-Canada
Free-Trade Agreement, the term ``eligible
product'' includes a product or service of
Canada having a contract value of $25,000 or
more that would be covered for procurement by
the United States under the Agreement (as
defined in paragraph (1)), but for the
thresholds provided for in the Agreement.
(5) Instrumentality.--The term ``instrumentality''
shall not be construed to include an agency or division
of the government of a country, but may be construed to
include such arrangements as the European Economic
Community
(6) Least developed country.--The term ``least
developed country'' means any country on the United
Nations General Assembly list of least developed
countries.
(7) Major industrial country.--The term ``major
industrial country'' means any country as defined in
section 126 of the Trade Act of 1974 and any
instrumentality of such a country.
SEC. 309. EFFECTIVE DATES.
The provisions of this title shall be effective on the date
of enactment of this Act, except that--
(1) the authority of the President to grant waivers
under section 303 shall be effective on January 1,
1980; and
(2) the authority of the President to grant waivers
under section 301 shall be effective on January 1,
1981.
Chapter 11: LAWS REGULATING EXPORT ACTIVITIES
A. EXPORT CONTROLS
Excerpts from Export Administration Act of 1979, as amended
[50 U.S.C. App. 2401 et seq.; P.L. 96-72, as amended by P.L. 96-533,
P.L. 97-145, P.L. 98-108, P.L. 98-207, P.L. 98-222, P.L. 99-64, P.L.
99-399, P.L. 99-633, P.L. 100-180, P.L. 100-418, P.L. 100-449 P.L. 101-
222, P.L. 101-510, P.L. 102-138, and P.L. 102-182]
multilateral export control violations
Sec. 11A. (a) Determination by the President.--The
President, subject to subsection (c), shall apply sanctions
under subsection (b) for a period of not less than 2 years and
not more than 5 years, if the President determines that--
(1) a foreign person has violated any regulation
issued by a country to control exports for national
security purposes pursuant to the agreement of the
group known as the Coordinating Committee, and
(2) such violation has resulted in substantial
enhancement of Soviet and East bloc capabilities in
submarine or antisubmarine warfare, ballistic or
antiballistic missile technology, strategic aircraft,
command, control, communications and intelligence, or
other critical technologies as determined by the
President, on the advice of the National Security
Council, to represent a serious adverse impact on the
strategic balance of forces.
The President shall notify the Congress of each action taken
under this section. This section, except subsections (h) and
(j), applies only to violations that occur after the date of
the enactment of the Export Enhancement Act of 1988.
(b) Sanctions.--The sanctions referred to in subsection (a)
shall apply to the foreign person committing the violation, as
well as to any parent, affiliate, subsidiary, and successor
entity of the foreign person, and except as provided in
subsection (c), are as follows:
(1) a prohibition on contracting with, and
procurement of products and services from, a sanctioned
person, by any department, agency, or instrumentality
of the United States Government, and
(2) a prohibition on importation into the United
States of all products produced by a sanctioned person.
(c) Exceptions.--The President shall not apply sanctions
under this section--
(1) in the case of procurement of defense articles or
defense services--
(A) under existing contracts or subcontracts,
including the exercise of options for
production quantities to satisfy United States
operational military requirements;
(B) if the President determines that the
foreign person or other entity to which the
sanctions would otherwise be applied is a sole
source supplier of essential defense articles
or services and no alternative supplier can be
identified; or
(C) if the President determines that such
articles or services are essential to the
national security under defense coproduction
agreements; or
(2) to--
(A) products or services provided under
contracts or other binding agreements (as such
terms are defined by the President in
regulations) entered into before the date on
which the President notifies the Congress of
the intention to impose the sanctions;
(B) spare parts;
(C) component parts, but not finished
products, essential to United States products
or production;
(D) routine servicing and maintenance of
products; or
(E) information and technology.
(d) Exclusion.--The President shall not apply sanctions
under this section to a parent, affiliate, subsidiary, and
successor entity of a foreign person if the President
determines that--
(1) the parent, affiliate, subsidiary, or successor
entity (as the case may be) has not knowingly violated
the export control regulation violated by the foreign
person, and
(2) the government of the country with jurisdiction
over the parent, affiliate, subsidiary, or successor
entity had in effect, at the time of the violation by
the foreign person, an effective export control system
consistent with principles agreed to in the
Coordinating Committee, including the following:
(A) national laws providing appropriate civil
and criminal penalties and statutes of
limitations sufficient to deter potential
violations;
(B) a program to evaluate export license
applications that includes sufficient technical
expertise to assess the licensing status of
exports and ensure the reliability of end-
users;
(C) an enforcement mechanism that provides
authority for trained enforcement officers to
investigate and prevent illegal exports;
(D) a system of export control documentation
to verify the movement of goods and technology;
and
(E) procedures for the coordination and
exchange of information concerning violations
of the agreement of the Coordinating Committee.
(e) Definitions.--For purposes of this section--
(1) the term ``component part'' means any article
which is not usable for its intended functions without
being imbedded in or integrated into any other product
and which, if used in production of a finished product,
would be substantially transformed in that process;
(2) the term ``finished product'' means any article
which is usable for its intended functions without
being imbedded or integrated into any other product,
but in no case shall such term be deemed to include an
article produced by a person other than a sanctioned
person that contains parts or components of the
sanctioned person if the parts or components have been
substantially transformed during production of the
finished product; and
(3) the term ``sanctioned person'' means a foreign
person, and any parent, affiliate, subsidiary, or
successor entity of the foreign person, upon whom
sanctions have been imposed under this section.
(f) Subsequent Modifications of Sanctions.--The President
may, after consultation with the Congress, limit the scope of
sanctions applied to a parent, affiliate, subsidiary, or
successor entity of the foreign person determined to have
committed the violation on account of which the sanctions were
imposed if the President determines that--
(1) the parent, affiliate, subsidiary, or successor
entity (as the case may be) has not, on the basis of
available evidence, itself violated the export control
regulation involved, either directly or through a
course of conduct;
(2) the government with jurisdiction over the parent,
affiliate, subsidiary, or successor entity has improved
its export control system as measured by the criteria
set forth in subsection (d)(2);
(3) the parent, affiliate, subsidiary, or successor
entity, has instituted improvements in internal
controls sufficient to detect and prevent violations of
the export control regime implemented under paragraph
(2); and
(4) the impact of the sanctions imposed on the
parent, affiliate, subsidiary, or successor entity is
proportionate to the increased defense expenditures
imposed on the United States.
Notwithstanding the preceding sentence, the President may not
limit the scope of the sanction referred to in subsection
(b)(1) with respect to the parent of the foreign person
determined to have committed the violation, until that sanction
has been in effect for at least 2 years.
(g) Reports to Congress.--The President shall include in
the annual report submitted under section 14, a report on the
status of any sanctions imposed under this section, including
any exceptions, exclusions, or modifications of sanctions that
have been applied under subsection (c), (d), or (f).
(h) Discretionary Imposition of Sanctions.--If the
President determines that a foreign person has violated a
regulation issued by a country to control exports for national
security purposes pursuant to the agreement of the group known
as the Coordinating Committee, but in a case in which
subsection (a)(2) may not apply, the President may apply the
sanctions referred to in subsection (b) against that foreign
person for a period of not more than 5 years.
(i) Compensation for Diversion of Militarily Critical
Technologies to Controlled Countries.--(1) In cases in which
sanctions have been applied against a foreign person under
subsection (a), the President shall initiate discussions with
the foreign person and the government with jurisdiction over
that foreign person regarding compensation on the part of the
foreign person in an amount proportionate to the costs of
research and development and procurement of new defensive
systems by the United States and the allies of the United
States to counteract the effort of the technological advance
achieved by the Soviet Union as a result of the violation by
that foreign person.
(2) The President shall, at the time that discussions are
initiated under paragraph (1), report to the Congress that such
discussions are being undertaken, and shall report to the
Congress the outcome of those discussions.
(j) Other Actions by the President.--Upon making a
determination under subsection (a) or (h), the President
shall--
(1) initiate consultations with the foreign
government with jurisdiction over the foreign person
who committed the violation involved, in order to seek
prompt remedial action by that government;
(2) initiate discussions with the governments
participating in the Coordinating Committee regarding
the violation and means to ensure that similar
violations do not occur; and
(3) consult with and report to the Congress on the
nature of the violation and the actions the President
proposes to take, or has taken, to rectify the
situation.
(k) Damages for Certain Violations.--(1) In any case in
which the President makes a determination under subsection (a),
the Secretary of Defense shall determine the costs of restoring
the military preparedness of the United States on account of
the violation involved. The Secretary of Defense shall notify
the Attorney General of his determination, and the Attorney
General may bring an action for damages, in any appropriate
district court of the United States, to recover such costs
against the person who committed the violation, any person that
is owned or controlled by the person who committed the
violation, and any person who owns and controls the person who
committed the violation.
(3) The total amount awarded in any case brought under
paragraph (2) shall be determined by the court in light of the
facts and circumstances, but shall not exceed the amount of the
net loss to the national security of the United States. An
action under this subsection shall be commenced not later than
3 years after the violation occurs, or one year after the
violation is discovered, whichever is later.
(l) Definition.--For purposes of this section, the term
``foreign person'' means any person other than a United States
person.
missile proliferation control violations
Sec. 11B. (a) Violations by United States Persons.--
(1) Sanctions.--(A) If the President determines that
a United States person knowingly--
(i) exports, transfers, or otherwise engages
in the trade of any item on the MTCR Annex, in
violation of the provisions of section 38 (22
U.S.C. 2778) or chapter 7 of the Arms Export
Control Act, section 5 or 6 of this Act, or any
regulations or orders issued under any such
provisions,
(ii) conspires to or attempts to engage in
such export, transfer, or trade, or
(iii) facilitates such export, transfer, or
trade by any other person,
then the President shall impose the applicable
sanctions described in subparagraph (B).
(B) The sanctions which apply to a United States
person under subparagraph (A) are the following:
(i) If the item on the MTCR Annex involved in
the export, transfer, or trade is missile
equipment or technology within category II of
the MTCR Annex, then the President shall deny
to such United States person, for a period of 2
years, licenses for the transfer of missile
equipment or technology controlled under this
Act.
(ii) If the item on the MTCR Annex involved
in the export, transfer, or trade is missile
equipment or technology within category I of
the MTCR Annex, then the President shall deny
to such United States person, for a period of
not less than 2 years, all licenses for items
the export of which is controlled under this
Act.
(2) Discretionary sanctions.--In the case of any
determination referred to in paragraph (1), the
Secretary may pursue any other appropriate penalties
under section 11 of this Act.
(3) Waiver.--The President may waive the imposition
of sanctions under paragraph (1) on a person with
respect to a product or service if the President
certifies to the Congress that--
(A) the product or service is essential to
the national security of the United States; and
(B) such person is a sole source supplier of
the product or service, the product or service
is not available from any alternative reliable
supplier, and the need for the product or
service cannot be met in a timely manner by
improved manufacturing processes or
technological developments.
(b) Transfers of Missile Equipment or Technology by Foreign
Persons.--
(1) Sanctions.--(A) Subject to paragraphs (3) through
(7), if the President determines that a foreign person,
after the date of the enactment of this section,
knowingly--
(i) exports, transfers, or otherwise engages
in the trade of any MTCR equipment or
technology that contributes to the design,
development, or production of missiles in a
country that is not an MTCR adherent and would
be, if it were United States-origin equipment
or technology, subject to the jurisdiction of
the United States under this Act,
(ii) conspires to or attempts to engage in
such export, transfer, or trade, or
(iii) facilitates such export, transfer, or
trade by any other person,
or if the President has made a determination with
respect to a foreign person under section 73(a) of the
Arms Export Control Act, then the President shall
impose on that foreign person the applicable sanctions
under subparagraph (B).
(B) The sanctions which apply to a foreign person
under subparagraph (A) are the following:
(i) If the item involved in the export,
transfer, or trade is within category II of the
MTCR Annex, then the President shall deny, for
a period of 2 years, licenses for the transfer
to such foreign person of missile equipment or
technology the export of which is controlled
under this Act.
(ii) If the item involved in the export,
transfer, or trade is within category I of the
MTCR Annex, then the President shall deny, for
a period of not less than 2 years, licenses for
the transfer to such foreign person of items
the export of which is controlled under this
Act.
(iii) If, in addition to actions taken under
clauses (i) and (ii), the President determines
that the export, transfer, or trade has
substantially contributed to the design,
development, or production of missiles in a
country that is not an MTCR adherent, then the
President shall prohibit, for a period of not
less than 2 years, the importation into the
United States of products produced by that
foreign person.
(2) Inapplicability with respect to mtcr adherents.--
Paragraph (1) does not apply with respect to--
(A) any export, transfer, or trading activity
that is authorized by the laws of an MTCR
adherent, if such authorization is not obtained
by misrepresentation or fraud; or
(B) any export, transfer, or trade of an item
to an end user in a country that is an MTCR
adherent.
(3) Effect of enforcement actions by mtcr
adherents.--Sanctions set forth in paragraph (1) may
not be imposed under this subsection on a person with
respect to acts described in such paragraph or, if such
sanctions are in effect against a person on account of
such acts, such sanctions shall be terminated, if an
MTCR adherent is taking judicial or other enforcement
action against that person with respect to such acts,
or that person has been found by the government of an
MTCR adherent to be innocent of wrongdoing with respect
to such acts.
(4) Advisory opinions.--The Secretary, in
consultation with the Secretary of State and the
Secretary of Defense, may, upon the request of any
person, issue an advisory opinion to that person as to
whether a proposed activity by that person would
subject that person to sanctions under this subsection.
Any person who relies in good faith on such an advisory
opinion which states that the proposed activity would
not subject a person to such sanctions, and any person
who thereafter engages in such activity, may not be
made subject to such sanctions on account of such
activity.
(5) Waiver and report to congress.--(A) In any case
other than one in which an advisory opinion has been
issued under paragraph (4) stating that a proposed
activity would not subject a person to sanctions under
this subsection, the President may waive the
application of paragraph (1) to a foreign person if the
President determines that such waiver is essential to
the national security of the United States.
(B) In the event that the President decides to apply
the waiver described in subparagraph (A), the President
shall so notify the Congress not less than 20 working
days before issuing the waiver. Such notification shall
include a report fully articulating the rationale and
circumstances which led the President to apply the
waiver.
(6) Additional waiver.--The President may waiver the
imposition of sanctions under paragraph (1) on a person
with respect to a product or service if the President
certifies to the Congress that--
(A) the product or service is essential to
the national security of the United States; and
(B) such person is a sole source supplier of
the product or service, the product or service
is not available from any alternative reliable
supplier, and the need for the product or
service cannot be met in a timely manner by
improved manufacturing processes or
technological developments.
(7) Exceptions.--The President shall not apply the
sanction under this subsection prohibiting the
importation of the products of a foreign person--
(A) in the case of procurement of defense
articles or defense services--
(i) under existing contracts or
subcontracts, including the exercise of
options for production quantities to
satisfy requirements essential to the
national security of the United States;
(ii) if the President determines that
the person to which the sanctions would
be applied is a sole source supplier of
the defense articles and services, that
the defense articles or services are
essential to the national security of
the United States, and that alternative
sources are not readily or reasonably
available; or
(iii) if the President determines
that such articles or services are
essential to the national security of
the United States under defense
coproduction agreements or NATO
Programs of Cooperation;
(B) to products or services provided under
contracts entered into before the date on which
the President publishes his intention to impose
the sanctions; or
(C) to--
(i) spare parts,
(ii) component parts, but not
finished products, essential to United
States products or production,
(iii) routine services and
maintenance of products, to the extent
that alternative sources are not
readily or reasonably available, or
(iv) information and technology
essential to United States products or
production.
(c) Definitions.--For purposes of this section and
subsections (k) and (l) of section 6--
(1) the term ``missile'' means a category I system as
defined in the MTCR Annex, and any other unmanned
delivery system of similar capability, as well as the
specially designed production facilities for these
systems;
(2) the term ``Missile Technology Control Regime'' or
``MTCR'' means the policy statement, between the United
States, the United Kingdom, the Federal Republic of
Germany, France, Italy, Canada, and Japan, announced on
April 16, 1987, to restrict sensitive missile-relevant
transfers based on the MTCR Annex, and any amendments
thereto;
(3) the term ``MTCR adherent'' means a country that
participates in the MTCR or that, pursuant to an
international understanding to which the United States
is a party, controls MTCR equipment or technology in
accordance with the criteria and standards set forth in
the MTCR;
(4) the term ``MTCR Annex'' means the Guidelines and
Equipment and Technology Annex of the MTCR, and any
amendments thereto;
(5) the terms ``missile equipment or technology'' and
``MTCR equipment or technology'' means those items
listed in category I or category II of the MTCR Annex;
(6) the term ``foreign person'' means any person
other than a United States person;
(7)(A) the term ``person'' means a natural person as
well as a corporation, business association,
partnership, society, trust, any other nongovernmental
entity, organization, or group, and any governmental
entity operating as a business enterprise, and any
successor of any such entity; and
(B) in the case of countries where it may be
impossible to identify a specific governmental entity
referred to in subparagraph (A), the term ``person''
means--
(i) all activities of that government
relating to the development or production of
any missile equipment or technology; and
(ii) all activities of that government
affecting the development or production of
aircraft, electronics, and space systems or
equipment; and
(8) the term ``otherwise engaged in the trade of''
means, with respect to a particular export or transfer,
to be a freight forwarder or designated exporting
agent, or a consignee or end user of the item to be
exported or transferred.
chemical and biological weapons proliferation sanctions
Sec. 11C. (a) Imposition of Sanction.--
(1) Determination by the president.--Except as
provided in subsection (b)(2), the President shall
impose the sanction described in subsection (c) if the
President determines that a foreign person, on or after
the date of the enactment of this section, has
knowingly and materially contributed--
(A) through the export from the United States
of any goods or technology that are subject to
the jurisdiction of the United States under
this Act, or
(B) through the export from any other country
of any goods or technology that would be, if
they were United States goods or technology,
subject to the jurisdiction of the United
States under this Act,
to the efforts by any foreign country, project, or
entity described in paragraph (2) to use, develop,
produce, stockpile, or otherwise acquire chemical or
biological weapons.
(2) Countries, projects, or entities receiving
assistance.--Paragraph (1) applies in the case of--
(A) any foreign country that the President
determines has, at any time after January 1,
1980--
(i) used chemical or biological
weapons in violation of international
law;
(ii) used lethal chemical or
biological weapons against its own
nationals; or
(iii) made substantial preparations
to engage in the activities described
in clause (i) or (ii);
(B) any foreign country whose government is
determined for purposes of section 6(j) of this
Act to be a government that has repeatedly
provided support for acts of international
terrorism; or
(C) any other foreign country, project, or
entity designated by the President for purposes
of this section.
(3) Persons against whom sanction is to be imposed.--
A sanction shall be imposed pursuant to paragraph (1)
on--
(A) the foreign person with respect to which
the President makes the determination described
in that paragraph;
(B) any successor entity to that foreign
person;
(C) any foreign person that is a parent or
subsidiary of that foreign person if that
parent or subsidiary knowingly assisted in the
activities which were the basis of that
determination; and
(D) any foreign person that is an affiliate
of that foreign person if that affiliate
knowingly assisted in the activities which were
the basis of that determination and if that
affiliate is controlled in fact by that foreign
person.
(b) Consultations With and Actions by Foreign Government of
Jurisdiction.--
(1) Consultations.--If the President makes the
determination described in subsection (a)(1) with
respect to a foreign person, the Congress urges the
President to initiate consultations immediately with
the government with primary jurisdiction over that
foreign person with respect to the imposition of a
sanction pursuant to this section.
(2) Actions by government of jurisdiction.--In order
to pursue such consultations with that government, the
President may delay the imposition of a sanction
pursuant to this section for a period of up to 90 days.
Following these consultations, the President shall
impose the sanction unless the President determines and
certifies to the Congress that that government has
taken specific and effective actions, including
appropriate penalties, to terminate the involvement of
the foreign person in the activities described in
subsection (a)(1). The President may delay the
imposition of the sanction for an additional period of
up to 90 days if the President determines and certifies
to the Congress that that government is in the process
of taking the actions described in the preceding
sentence.
(3) Report to congress.--The President shall report
to the Congress, not later than 90 days after making a
determination under subsection (a)(1), on the status of
consultations with the appropriate government under
this subsection, and the basis for any determination
under paragraph (2) of this subsection that such
government has taken specific corrective actions.
(c) Sanction.--
(1) Description of sanction.--The sanction to be
imposed pursuant to subsection (a)(1) is, except as
provided in paragraph (2) of this subsection, that the
United States Government shall not procure, or enter
into any contract for the procurement of, any goods or
services from any person described in subsection
(a)(3).
(2) Exceptions.--The President shall not be required
to apply or maintain a sanction under this section--
(A) in the case of procurement of defense
articles or defense services--
(i) under existing contracts or
subcontracts, including the exercise of
options for production quantities to
satisfy United States operational
military requirements;
(ii) if the President determines that
the person or other entity to which the
sanction would otherwise be applied is
a sole source supplier of the defense
articles or services, that the defense
articles or services are essential, and
that alternative sources are not
readily or reasonably available; or
(iii) if the President determines
that such articles or services are
essential to the national security
under defense coproduction agreements;
(B) to products or services provided under
contracts entered into before the date on which
the President publishes his intention to impose
the sanction;
(C) to--
(i) spare parts,
(ii) component parts, but not
finished products, essential to United
States products or production, or
(iii) routine servicing and
maintenance of products, to the extent
that alternative sources are not
readily or reasonably available;
(D) to information and technology essential
to United States products or production; or
(E) to medical or other humanitarian items.
(d) Termination of Sanction.--A sanction imposed pursuant
to this section shall apply for a period of at least 12 months
following the imposition of the sanction and shall cease to
apply thereafter only if the President determines and certifies
to the Congress that reliable information indicates that the
foreign person with respect to which the determination was made
under subsection (a)(1) has ceased to aid or abet any foreign
government, project, or entity in its efforts to acquire
chemical or biological weapons capability as described in that
subsection.
(e) Waiver.--
(1) Criterion for waiver.--The President may waive
the application of the sanction imposed on any person
pursuant to this section, after the end of the 12-month
period beginning on the date on which the sanction was
imposed on that person, if the President determines and
certifies to the Congress that such waiver is important
to the national security interests of the United
States.
(2) Notification of and report to congress.--If the
President decides to exercise the waiver authority
provided in paragraph (1), the President shall so
notify the Congress not less than 20 days before the
waiver takes effect. Such notification shall include a
report fully articulating the rationale and
circumstances which led the President to exercise the
waiver authority.
(f) Definition of Foreign Person.--For purposes of this
section, the term ``foreign person'' means--
(1) an individual who is not a citizen of the United
States or an alien admitted for permanent residence to
the United States; or
(2) a corporation, partnership, or other entity which
is created or organized under the laws of a foreign
country or which has its principal place of business
outside the United States.
B. EXPORT FINANCING AND PROMOTION
1. Agriculture Export Sales and Promotion
Agricultural Trade Act of 1978, as amended
[Excerpts]
[7 U.S.C. 5621 et seq.; P.L. 95-501, as amended by P.L. 101-624, P.L.
102-237, P.L. 102-511, P.L. 103-465, and P.L. 104-127]
TITLE I--GENERAL PROVISIONS
* * * * * * *
* * * * * * *
SEC. 106. IMPLEMENTATION OF COMMITMENTS UNDER URUGUAY ROUND AGREEMENTS.
Not later than September 30 of each year, the Secretary shall
evaluate whether the obligations undertaken by foreign
countries under the Uruguay Round Agreement on Agriculture are
being fully implemented. If the Secretary has reason to believe
(based on the evaluation) that any foreign country, by not
implementing the obligations of the country, may be
significantly constraining an opportunity for United States
agricultural exports, the Secretary shall--
(1) submit the evaluation to the United States Trade
Representative; and
(2) transmit a copy of the evaluation to the
Committee on Agriculture, and the Committee on Ways and
Means, of the House of Representatives and the
Committee on Agriculture, Nutrition, and Forestry, and
the Committee on Finance, of the Senate.
* * * * * * *
TITLE III--EXPORT ENHANCEMENT PROGRAM
SEC. 301. EXPORT ENHANCEMENT PROGRAM.
(a) In General.--The Commodity Credit Corporation shall
carry out an export enhancement program in accordance with this
section to encourage the commercial sale of United States
agricultural commodities in world markets at competitive
prices. The program shall be carried out in a market sensitive
manner. Activities under the program shall not be limited to
responses to unfair trade practices.
(b) Export Bonus.--
(1) In general.--In carrying out the program
established under this section, the Commodity Credit
Corporation may--
(A) make agricultural commodities, acquired
by the Commodity Credit Corporation, available
to exporters, users, processors, or foreign
purchasers at no cost either directly or
through the issuance of commodity certificates;
and
(B) make cash payments to exporters, users,
and processors.
(2) Calculation of bonus levels.--The Commodity
Credit Corporation shall--
(A) maintain an established procedure for
evaluating program bonus requests, with
guidelines for determining prevailing market
prices for targeted commodities and
destinations to be used in the calculation of
acceptable bonus levels;
(B) use a clear set of established procedures
for measuring transportation and incidental
costs to be used in the calculation of
acceptable bonus levels and for determining the
amount of such costs actually incurred; and
(C) maintain consistent and effective
controls and procedures for auditing and
reviewing payment of bonuses and for securing
refunds where appropriate.
(3) Disclosure of information.--The Secretary may,
notwithstanding the provisions of section 552 of title
5, United States Code, provide for withholding from the
public the procedures and guidelines established under
paragraphs (2) and (B) if the Secretary determines that
release of such information would adversely affect the
operation of the program. Nothing in this paragraph
shall be construed to authorize the withholding of
information, including such procedures and guidelines,
from the Congress.
(4) Competitive disadvantage.--The Secretary shall
take such action as is necessary to ensure that equal
treatment is provided to domestic and foreign
purchasers and users of agricultural commodities in any
case in which the importation of a manufactured product
made, in whole or in part, from a commodity made
available for export under this section would place
domestic users of the commodity at a competitive
disadvantage.
(5) Different commodities.--The Commodity Credit
Corporation may provide to an exporter, user, or
processor, or foreign purchaser, under the program
established under this section, agricultural
commodities of a kind different than the agricultural
commodity involved in the transaction for which
assistance under this section is being provided.
(6) Other export programs.--The Commodity Credit
Corporation may provide bonuses under this section in
conjunction with other export promotion programs
conducted by the Secretary or the Commodity Credit
Corporation.
(7) Avoidance of preferential application.--When
using the authorities of this section to promote the
exporting of wheat, the Secretary shall make reasonable
efforts to avoid giving a preference to one class of
wheat disproportionately more than another class.
(8) Displacement.--The Secretary shall avoid the
displacement of usual marketings of United States
agricultural commodities in carrying out this section.
(c) Priority in the Case of Livestock.--In the case of
proposals for bonuses for dairy cattle or other appropriate
livestock, the Commodity Credit Corporation shall give priority
to proposals that include, in connection with the purchase of
the livestock, appropriate herd management training, veterinary
services, nutritional training, and other technical assistance
necessary for the adaptation of the livestock to foreign
environments.
(d) Inapplicability of Price Restrictions.--Any price
restrictions that otherwise may be applicable to dispositions
of agricultural commodities owned by the Commodity Credit
Corporation shall not apply to agricultural commodities
provided under this section.
(e) Funding Levels.--
(1) In general.--The Commodity Credit Corporation
shall make available to carry out the program
established under this section not more than--
(A) $350,000,000 for fiscal year 1996;
(B) $250,000,000 for fiscal year 1997;
(C) $500,000,000 for fiscal year 1998;
(D) $550,000,000 for fiscal year 1999;
(E) $579,000,000 for fiscal year 2000;
(F) $478,000,000 for fiscal year 2001; and
(G) $478,000,000 for fiscal year 2002.
(2) Set-asides.--(A) For each fiscal year, the
Corporation shall, to the extent practicable and
subject to subparagraph (B), ensure that no less than
25 percent of the total of--
(i) the funds expended, and
(ii) the value of any commodities made
available, under this section in connection
with sales of agricultural commodities to the
independent states of the former Soviet Union
is used to promote the export of processed and
high-value United States agricultural products
and that the balance of the funds expended and
commodities made available under this section
in connection with such sales is used to
promote the export of bulk or raw United States
agricultural commodities.
(B) The 25 percent requirement of subparagraph (A)
shall apply for a fiscal year only to the extent that
the percentage of the total of--
(i) the funds expended, and
(ii) the value of commodities made available,
for that fiscal year under this section to
promote the export to all countries of
processed and high-value United States
agricultural products is less than 15 percent.
(f) Effect on Third Countries.--It is not the purpose of the
program established under this section to affect adversely the
exports of fairly traded agricultural commodities.
(g) Consistency With International Obligations.--
Notwithstanding any other provision of this section, the
Commodity Credit Corporation shall administer and carry out the
program authorized by this section in a manner consistent, as
determined by the President, with the obligations undertaken by
the United States set forth in the Uruguay Round Agreements.
(h) Priority Funding for Intermediate Products.--
(1) In general.--Effective beginning in fiscal year
1996, and consistent, as determined by the Secretary,
with the obligations and reduction commitments
undertaken by the United States under the Uruguay Round
Agreements, the Secretary may make available not more
than $100,000,000 for each fiscal year under this
section for the sale of intermediate agricultural
products in sufficient quantities to attain the volume
of export sales consistent with the volume of
intermediate agricultural products exported by the
United States during the Uruguay Round base period
years of 1986 through 1990.
(2) Additional assistance.--Notwithstanding paragraph
(1), if the export sale of any intermediate
agricultural product attains the volume of export sales
consistent with the volume of the intermediate
agricultural product exported by the United States
during the Uruguay Round base period years of 1986
through 1990, the Secretary may make available
additional amounts under this section for the
encouragement of export sales of the intermediate
agricultural product.
SEC. 302. RELIEF FROM UNFAIR TRADE PRACTICES.
(a) Use of Programs.--
(1) In general.--The Secretary may, for each article
described in paragraph (2), make available some or all
of the commercial export promotion programs of the
Department of Agriculture and the Commodity Credit
Corporation to help mitigate or offset the effects of
the unfair trade practice serving as the basis for the
proceeding described in paragraph (2).
(2) Commodities specified.--Paragraph (1) shall apply
in the case of articles for which the United States has
instituted, under any international trade agreement,
any dispute settlement proceeding based on an unfair
trade practice if such proceeding has been prevented
from progressing to a decision by the refusal of the
party maintaining the unfair trade practice to permit
the proceeding to progress.
(b) Consultations Required.--For any article described in
subsection (a)(2), the Secretary shall--
(1) promptly consult with representatives of the
industry producing such articles and other allied
groups or individuals regarding specific actions or the
development of an integrated marketing strategy
utilizing some or all of the commercial export programs
of the Department of Agriculture and the Commodity
Credit Corporation to help mitigate or offset the
effects of the unfair trade practice identified in
subsection (a)(2); and
(2) ascertain and take into account the industry
preference for the practical use of available
commercial export promotion programs in implementing
subsection (a)(1).
SEC. 303. EQUITABLE TREATMENT OF HIGH-VALUE AND VALUE-ADDED UNITED
STATES AGRICULTURAL COMMODITIES.
In the case of any program, such as that established under
section 301, operated by the Secretary or the Commodity Credit
Corporation during the fiscal years 1991 through 1995, for the
purpose of discouraging unfair trade practices, the Secretary
shall establish as an objective to expend annually at least 25
percent of the total funds available (or 25 percent of the
value of any commodities employed) for program activities
involving the export sales of high-value agricultural
commodities and value-added products of United States
agricultural commodities.
* * * * * * *
TITLE IV--GENERAL PROVISIONS
* * * * * * *
SEC. 414. TRADE CONSULTATIONS CONCERNING IMPORTS.
(a) Consultation Between Agencies.--The Secretary shall
require consultation between the Administrator of the Service
and the heads of other appropriate agencies and offices of the
Department of Agriculture, including the Administrator of the
Animal and Plant Health Inspection Service, prior to relaxing
or removing any restriction on the importation of any
agricultural commodity into the United States.
(b) Consultation With Trade Representative.--The Secretary
shall consult with the United States Trade Representative prior
to relaxing or removing any restriction on the importation of
any agricultural commodity or a product thereof into the United
States.
(c) Monitoring Compliance With Sanitary and Phytosanitary
Measures.--The Secretary shall monitor the compliance of World
Trade Organization member countries with the sanitary and
phytosanitary measures of the Agreement on Agriculture of the
Uruguay Round of Multilateral Trade Negotiations of the General
Agreement on Tariffs and Trade. If the Secretary has reason to
believe that any country may have failed to meet the commitment
on sanitary and phytosanitary measures under the Agreement in a
manner that adversely impacts the exports of a United States
agricultural commodity, the Secretary shall--
(1) provide such information to the United States
Trade Representative of the circumstances surrounding
the matter arising under this subsection; and
(2) with respect to any such circumstances that the
Secretary considers to have a continuing adverse effect
on United States agricultural exports, report to the
Committee on Agriculture, and the Committee on Ways and
Means, of the House of Representatives and the
Committee on Agriculture, Nutrition, and Forestry, and
the Committee on Finance, of the Senate--
(A) that a country may have failed to meet
the sanitary and phytosanitary commitments; and
(B) any notice given by the Secretary to the
United States Trade Representative.
SEC. 415. TECHNICAL ASSISTANCE IN TRADE NEGOTIATIONS.
The Secretary shall provide technical services to the United
States Trade Representative on matters pertaining to
agricultural trade and with respect to international
negotiations on issues related to agricultural trade.
* * * * * * *
Section 1123 of the Food Security Act of 1985
[7 U.S.C. 1736r; P.L. 99-198, as amended by P.L. 104-127]
SEC. 1123. TRADE NEGOTIATIONS POLICY.
(a) Findings.--Congress finds that--
(1) on a level playing field, United States
producers are the most competitive suppliers of
agricultural products in the world;
(2) exports of United States agricultural
products accounted for $54,000,000,000 in 1995,
contributing a net $24,000,000,000 to the merchandise
trade balance of the United States and supporting
approximately 1,000,000 jobs;
(3) increased agricultural exports are critical to
the future of the farm, rural, and overall United
States economy, but the opportunities for increased
agricultural exports are limited by the unfair
subsidies of the competitors of the United States, and
a variety of tariff and nontariff barriers to highly
competitive United States agricultural products;
(4) international negotiations can play a key role
in breaking down barriers to United States agricultural
exports;
(5) the Uruguay Round Agreement on Agriculture made
significant progress in the attainment of increased
market access opportunities for United States exports
of agricultural products, for the first time--
(A) restraining foreign trade-distorting
domestic support and export subsidy programs;
and
(B) developing common rules for the
application of sanitary and phytosanitary
restrictions;
that should result in increased exports of United
States agricultural products, jobs, and income growth
in the United States;
(6) the Uruguay Round Agreement on Agriculture did
not succeed in completely eliminating trade distorting
domestic support and export subsidies by--
(A) allowing the European Union to continue
unreasonable levels of spending on export
subsidies; and
(B) failing to discipline monopolistic state
trading entities, such as the Canadian Wheat
Board, that use nontransparent and
discriminatory pricing as a hidden de facto
export subsidy;
(7) during the period 1996 through 2002, there will
be several opportunities for the United States to
negotiate fairer trade in agricultural products,
including further negotiations under the World Trade
Organization, and steps toward possible free trade
agreements of the Americas and Asian-Pacific Economic
Cooperation (APEC); and
(8) the United States should aggressively use these
opportunities to achieve more open and fair
opportunities for trade in agricultural products.
(b) Goals of the United States in Agricultural Trade
Negotiations.--The objectives of the United States with respect
to future negotiations on agricultural trade include--
(1) increasing opportunities for United States
exports of agricultural products by eliminating tariff
and nontariff barriers to trade;
(2) leveling the playing field for United States
producers of agricultural products by limiting per unit
domestic production supports to levels that are no
greater than those available in the United States;
(3) ending the practice of export dumping by
eliminating all trade distorting export subsidies and
disciplining state trading entities so that they do not
(except in cases of bona fide food aid) sell in foreign
markets at prices below domestic market prices or
prices below their full costs of acquiring and
delivering agricultural products to the foreign
markets; and
(4) encouraging government policies that avoid
price-depressing surpluses.
2. Export Promotion of Goods and Services
Sections 2303, 2306, and 2312 of the Export Enhancement Act of 1988, as
amended
[15 U.S.C. 4723, 4726, 4732; P.L. 100-418, as amended by P.L. 102-240,
P.L. 102-429, P.L. 102-549, P.L. 103-392, and P.L. 106-158]
SEC. 2303. MARKET DEVELOPMENT COOPERATOR PROGRAM.
(a) Authority of Secretary of Commerce.--In order to
promote further the exportation of goods and services from the
United States, the Secretary of Commerce is authorized to
establish, in the International Trade Administration of the
Department of Commerce, a Market Development Cooperator
Program. The purpose of the program is to develop, maintain,
and expand foreign markets for nonagricultural goods and
services produced in the United States.
(b) Implementation of the Program.--The Secretary of
Commerce shall carry out the Market Development Cooperator
Program by entering into contracts with--
(1) nonprofit industry organizations,
(2) trade associations,
(3) State departments of trade and their regional
associations, including centers for international trade
development, and
(4) private industry firms or groups of firms in
cases where no entity described in paragraph (1), (2),
or (3) represents that industry,
(in this section referred to as ``cooperators'') to engage in
activities in order to carry out the purpose of the Market
Development Cooperator Program set forth in subsection (a). The
costs of activities under such a contract shall be shared
equitably among the Department of Commerce, the cooperator
involved, and, whenever appropriate, foreign businesses. The
Department of Commerce shall undertake to support direct costs
of activities under such a contract, and the cooperator shall
undertake to support indirect costs of such activities.
Activities under such a contract shall be carried out by the
cooperator with the approval and assistance of the Secretary.
(c) Cooperator Partnership Program.--
(1) In general.--(A) As part of the Market
Development Cooperator Program established under
subsection (a), the Secretary of Commerce shall
establish a partnership program with cooperators under
which a cooperator may detail individuals, subject to
the approval of the Secretary, to the United States and
Foreign Commercial Service for a period of not less
than 1 year or more than 2 years to supplement the
Commercial Service.
(B) Any individual detailed to the United States and
Foreign Commercial Service under this subsection shall
be responsible for such duties as the Secretary may
prescribe in order to carry out the purpose of the
Market Development Cooperator Program set forth in
subsection (a).
(C) Individuals detailed to the United States and
Foreign Commercial Service under this subsection shall
not be considered to be employees of the United States
for the purposes of any law administered by the Office
of Personnel Management, except that the Secretary of
State may determine the applicability to such
individuals of section 2(f) of the State Department
Basic Authorities Act of 1956 (22 U.S.C. 2669(f)) and
of any other law administered by the Secretary of State
concerning the detail of such individuals abroad.
(2) Qualifications of participants.--In order to
qualify for the program established under this
subsection, individuals shall have demonstrated
expertise in the international business arena in at
least 2 of the following areas: marketing, market
research, and computer data bases.
(3) Expenses of the program.--(A) The cooperator who
details an individual to the United States and Foreign
Commercial Service under this subsection shall be
responsible for that individual's salary and related
expenses, including health care, life insurance, and
other noncash benefits, if any, normally paid by such
cooperator.
(B) The Secretary of Commerce shall pay
transportation and housing costs for each individual
participating in the program established under this
subsection.
(d) Budget Act.--Contracts may be entered into under this
section in a fiscal year only to such extent or in such amounts
as are provided in appropriations Acts.
SEC. 2306. UNITED STATES AND FOREIGN COMMERCIAL SERVICE PACIFIC RIM
INITIATIVE.
(a) In General.--In order to encourage the export of United
States goods and services to Japan, South Korea, and Taiwan,
the United States and Foreign Commercial Service shall make a
special effort to--
(1) identify United States goods and services which
are not being exported to the markets of Japan, South
Korea, and Taiwan but which could be exported to these
markets under competitive market conditions;
(2) identify and notify United States persons who
sell or provide such goods or services of potential
opportunities identified under paragraph (1);
(3) present, periodically, a list of the goods and
services identified under paragraph (1), together with
a list of any impediments to the export of such goods
and services, to appropriate authorities in Japan,
South Korea, and Taiwan, with a view toward
liberalizing markets to such goods and services;
(4) facilitate the entrance into such markets by
United States persons identified and notified under
paragraph (2); and
(5) monitor and evaluate the results of efforts to
increase the sale of goods and services in such
markets.
(b) Reports to the Congress.--The Secretary of Commerce
shall report periodically to the Congress on activities carried
out under subsection (a).
(c) Definition.--As used in this section, the term ``United
States person'' means--
(1) a United States citizen; or
(2) a corporation, partnership, or other association
created under the laws of the United States or any
State (including the District of Columbia or any
commonwealth, territory, or possession of the United
States).
SEC. 2312. TRADE PROMOTION COORDINATING COMMITTEE.
(a) Establishment and Purpose.--The President shall
establish the Trade Promotion Coordinating Committee (hereafter
in this section referred to as the ``TPCC''). The purpose of
the TPCC shall be--
(1) to provide a unifying framework to coordinate the
export promotion and export financing activities of the
United States Government; and
(2) to develop a governmentwide strategic plan for
carrying out Federal export promotion and export
financing programs.
(b) Duties.--The TPCC shall--
(1) coordinate the development of the trade promotion
policies and programs of the United States Government;
(2) provide a central source of information for the
business community on Federal export promotion and
export financing programs;
(3) coordinate official trade promotion efforts to
ensure better delivery of services to United States
businesses, including--
(A) information and counseling on United
States export promotion and export financing
programs and opportunities in foreign markets;
(B) representation of United States business
interests abroad; and
(C) assistance with foreign business contacts
and projects;
(4) prevent unnecessary duplication in Federal export
promotion and export financing activities;
(5) assess the appropriate levels and allocation of
resources among agencies in support of export promotion
and export financing and provide recommendations to the
President based on its assessment; and
(6) carry out such other duties as are deemed to be
appropriate consistent with the purpose of the TPCC.
(c) Strategic Plan.--To carry out subsection (b), the TPCC
shall develop and implement a governmentwide strategic plan for
Federal trade promotion efforts. Such plan shall--
(1) establish a set of priorities for Federal
activities in support of United States exports and
explain the rationale for the priorities;
(2) review current Federal programs designed to
promote the sale of United States exports in light of
the priorities established under paragraph (1) and
develop a plan to bring such activities into line with
the priorities and to improve coordination of such
activities;
(3) identify areas of overlap and duplication among
Federal export promotion activities and propose means
of eliminating them;
(4) propose to the President an annual unified
Federal trade promotion budget that supports the plan
for priority activities and improved coordination
established under paragraph (2) and eliminates funding
for the areas of overlap and duplication identified
under paragraph (3); and
(5) review efforts by the States (as defined in
section 2301(i)) to promote United States exports and
propose means of developing cooperation between State
and Federal efforts, including co-location, cost-
sharing between Federal and State export promotion
programs, and sharing of market research data.
(d) Membership.--
(1) In general.--Members of the TPCC shall include
representatives from--
(A) the Department of Commerce;
(B) the Department of State;
(C) the Department of the Treasury;
(D) the Department of Agriculture;
(E) the Department of Energy;
(F) the Department of Transportation;
(G) the Office of the United States Trade
Representative;
(H) the Small Business Administration;
(I) the Agency for International Development;
(J) the Trade and Development Program;
(K) the Overseas Private Investment
Corporation;
(L) the Export-Import Bank of the United
States; and
(M) at the discretion of the President, such
other departments or agencies as may be
necessary.
(2) Chairperson.--The Secretary of Commerce shall
serve as the chairperson of the TPCC.
(e) Member Qualifications.--Members of the TPCC shall be
appointed by the heads of their respective departments or
agencies. Such members, as well as alternates designated by any
members unable to attend a meeting of the TPCC, shall be
individuals who exercise significant decisionmaking authority
in their respective departments or agencies.
(f) Report to the Congress.--The chairperson of the TPCC
shall prepare and submit to the Committee on Banking, Housing,
and Urban Affairs of the Senate, and the Committee on Foreign
Affairs of the House of Representatives, not later than March
30 of each year, a report describing the strategic plan
developed by the TPCC pursuant to subsection (c), the
implementation of such plan, and any revisions thereto.
Chapter 12: AUTHORITIES RELATING TO POLITICAL OR ECONOMIC SECURITY
A. ECONOMIC AUTHORITIES IN NATIONAL EMERGENCIES
International Emergency Economic Powers Act, as amended
[50 U.S.C. 1701, 50 App. 5 note; P.L. 95-223, title I and title II, as
amended by P.L. 100-418 and P.L. 103-236]
TITLE I--AMENDMENTS TO THE TRADING WITH THE ENEMY ACT
removal of national emergency powers under the trading with the enemy
act
* * * * * * *
Sec. 101. (b) Notwithstanding the amendment made by
subsection (a), the authorities conferred upon the President by
section 5(b) of the Trading With the Enemy Act, which were
being exercised with respect to a country on July 1, 1977, as a
result of a national emergency declared by the President before
such date, may continue to be exercised with respect to such
country, except that, unless extended, the exercise of such
authorities shall terminate (subject to the savings provisions
of the second sentence of section 101(a) of the National
Emergencies Act) at the end of the two-year period beginning on
the date of enactment of the National Emergencies Act. The
President may extend the exercise of such authorities for one-
year periods upon a determination of each such extension that
the exercise of such authorities with respect to such country
for another year is in the national interest of the United
States.
(c) The termination and extension provisions of subsection
(b) of this section supersede the provisions of section 101(a)
and of title II of the National Emergencies Act to the extent
that the provisions of subsection (b) of this section are
inconsistent with those provisions.
* * * * * * *
TITLE II--INTERNATIONAL EMERGENCY ECONOMIC POWERS
short title
Sec. 201. This title may be cited as the ``International
Emergency Economic Powers Act''.
situations in which authorities may be exercised
Sec. 202. (a) Any authority granted to the President by
section 203 may be exercised to deal with any unusual and
extraordinary threat, which has its source in whole or
substantial part outside the United States, to the national
security, foreign policy, or economy of the United States, if
the President declares a national emergency with respect to
such threat.
(b) The authorities granted to the President by section 203
may only be exercised to deal with an unusual and extraordinary
threat with respect to which a national emergency has been
declared for purposes of this title and may not be exercised
for any other purpose. Any exercise of such authorities to deal
with any new threat shall be based on a new declaration of
national emergency which must be with respect to such threat.
grant of authorities
Sec. 203. (a)(1) At the times and to the extent specified
in section 202, the President may, under such regulations as he
may prescribe, by means of instructions, licenses, or
otherwise--
(A) investigate, regulate, or prohibit--
(i) any transactions in foreign exchange,
(ii) transfers of credit or payments between,
by, through, or to any banking institution, to
the extent that such transfers or payments
involve any interest of any foreign country or
a national thereof,
(iii) the importing or exporting of currency
or securities; and
(B) investigate, regulate, direct and compel,
nullify, void, prevent or prohibit, any acquisition,
holding, withholding, use, transfer, withdrawal,
transportation, importation or exportation of, or
dealing in, or exercising any right, power, or
privilege with respect to, or transactions involving,
any property in which any foreign country or a national
thereof has any interest;
by any person, or with respect to any property, subject to the
jurisdiction of the United States.
(2) In exercising the authorities granted by paragraph (1),
the President may require any person to keep a full record of,
and to furnish under oath, in the form of reports or otherwise,
complete information relative to any act or transaction
referred to in paragraph (1) either before, during, or after
the completion thereof, or relative to any interest in foreign
property, or relative to any property in which any foreign
country or any national thereof has or has had any interest, or
as may be otherwise necessary to enforce the provisions of such
paragraph. In any case in which a report by a person could be
required under this paragraph, the President may require the
production of any books of account, records, contracts,
letters, memoranda, or other papers, in the custody or control
of such person.
(3) Compliance with any regulation, instruction, or
direction issued under this title shall to the extent thereof
be a full acquittance and discharge for all purposes of the
obligation of the person making the same. No person shall be
held liable in any court for or with respect to anything done
or omitted in good faith in connection with the administration
of, or pursuant to and in reliance on, this title, or any
regulation, instruction, or direction issued under this title.
(b) The authority granted to the President by this section
does not include the authority to regulate or prohibit,
directly or indirectly--
(1) any postal, telegraphic, telephonic, or other
personal communication, which does not involve a
transfer of anything of value;
(2) donations, by persons subject to the jurisdiction
of the United States, of articles, such as food,
clothing, and medicine, intended to be used to relieve
human suffering, except to the extent that the
President determines that such donations (A) would
seriously impair his ability to deal with any national
emergency declared under section 202 of this title, (B)
are in response to coercion against the proposed
recipient or donor, or (C) would endanger Armed Forces
of the United States which are engaged in hostilities
or are in a situation where imminent involvement in
hostilities is clearly indicated by the circumstances;
or
(3) the importation from any country, or the
exportation to any country, whether commercial or
otherwise, regardless of format or medium of
transmission, of any information or informational
materials, including but not limited to, publications,
films, posters, phonograph records, photographs,
microfilms, microfiche, tapes, compact disks, CD ROMs,
artworks, and news wire feeds. The exports exempted
from regulation or prohibition by this paragraph do not
include those which are otherwise controlled for export
under section 5 of the Export Administration Act of
1979, or under section 6 of such Act to the extent that
such controls promote the nonproliferation or
antiterrorism policies of the United States, or with
respect to which acts are prohibited by chapter 37 of
title 18, United States Code; or
(4) any transactions ordinarily incident to travel to
or from any country, including importation of
accompanied baggage for personal use, maintenance
within any country including payment of living expenses
and acquisition of goods or services for personal use,
and arrangement or facilitation of such travel
including nonscheduled air, sea, or land voyages.
[Section 525(c) of P.L. 103-236 provides that paragraph (3)
as amended applies to actions taken by the President under
section 203 of such Act before the date of enactment of this
Act which are in effect on such date, and to actions taken
under such section on or after such date and that paragraph (4)
shall not apply to restrictions on the transactions and
activities described in section 203(b)(4) in force on the date
of enactment of this Act, with respect to countries embargoed
under the International Emergency Economic Powers Act on the
date of enactment of this Act.]
consultation and reports
Sec. 204. (a) The President, in every possible instance,
shall consult with the Congress before exercising any of the
authorities granted by this title and shall consult regularly
with the Congress so long as such authorities are exercised.
(b) Whenever the President exercises any of the authorities
granted by this title, he shall immediately transmit to the
Congress a report specifying--
(1) the circumstances which necessitate such exercise
of authority;
(2) why the President believes those circumstances
constitute an unusual and extraordinary threat, which
has its source in whole or substantial part outside the
United States, to the national security, foreign
policy, or economy of the United States;
(3) the authorities to be exercised and the actions
to be taken in the exercise of those authorities to
deal with those circumstances;
(4) why the President believes such actions are
necessary to deal with those circumstances; and
(5) any foreign countries with respect to which such
actions are to be taken and why such actions are to be
be taken with respect to those countries.
(c) At least once during each succeeding six-month period
after transmitting a report pursuant to subsection (b) with
respect to an exercise of authorities under this title, the
President shall report to the Congress with respect to the
actions taken, since the last such report, in the exercise of
such authorities, and with respect to any changes which have
occurred concerning any information previously furnished
pursuant to paragraphs (1) through (5) of subsection (b).
(d) The requirements of this section are supplemental to
those contained in title IV of the National Emergencies Act.
authority to issue regulations
Sec. 205. The President may issue such regulations,
including regulations prescribing definitions, as may be
necessary for the exercise of the authorities granted by this
title.
penalties
Sec. 206. (a) A civil penalty of not to exceed $10,000 may
be imposed on any person who violates any license, order, or
regulation issued under this title.
(b) Whoever willfully violates any license, order, or
regulation issued under this title shall, upon conviction, be
fined not more than $50,000, or, if a natural person, may be
imprisoned for not more than ten years, or both; and any
officer, director, or agent of any corporation who knowingly
participates in such violation may be punished by a like fine,
imprisonment, or both.
savings provision
Sec. 207. (a)(1) Except as provided in subsection (b),
notwithstanding the termination pursuant to the National
Emergencies Act of a national emergency declared for purposes
of this title, any authorities granted by this title, which are
exercised on the date of such termination on the basis of such
national emergency to prohibit transactions involving property
in which a foreign country or national thereof has any
interest, may continue to be so exercised to prohibit
transactions involving that property if the President
determines that the continuation of such prohibition with
respect to that property is necessary on account of claims
involving such country or its nationals.
(2) Notwithstanding the termination of the authorities
described in section 101(b) of this Act, any such authorities,
which are exercised with respect to a country on the date of
such termination to prohibit transactions involving any
property in which such country or any national thereof has any
interest, may continue to be exercised to prohibit transactions
involving that property if the President determines that the
continuation of such prohibition with respect to that property
is necessary on account of claims involving such country or its
nationals.
(b) The authorities described in subsection (a)(1) may not
continue to be exercised under this section if the national
emergency is terminated by the Congress by concurrent
resolution pursuant to section 202 of the National Emergencies
Act and if the Congress specifies in such concurrent resolution
that such authorities may not continue to be exercised under
this section.
(c)(1) The provisions of this section are supplemental to
the savings provisions of paragraphs (1), (2), and (3) of
section 101(a) and of paragraphs (A), (B), and (C) of section
202(a) of the National Emergencies Act.
(2) The provisions of this section superseded the
termination provisions of section 101(a) and of title II of the
National Emergencies Act to the extent that the provisions of
this section are inconsistent with these provisions.
(d) If the President uses the authority of this section to
continue prohibitions on transactions involving foreign
property interests, he shall report to the Congress every six
months on the use of such authority.
Sec. 208. If any provision of this Act is held invalid, the
remainder of the Act shall not be affected thereby.
Section 5(b) of the Trading With the Enemy Act, as amended
[50 U.S.C. App. 5(b); P.L. 65-91, as amended by P.L. 65-217, P.L. 73-
1, P.L. 76-69, P.L. 77-354, P.L. 95-223, P.L. 99-93, P.L. 100-418, and
P.L. 103-236]
Sec. 5. (b)(1) During the time of war the President may,
through any agency that he may designate, and under such rules
and regulations as he may prescribe, by means of instructions,
licenses, or otherwise--
(A) investigate, regulate, or prohibit, any
transactions in foreign exchange, transfers of credit
or payments between, by, through, or to any banking
institution, and the importing, exporting, hoarding,
melting, or earmarking of gold or silver coin or
bullion, currency or securities, and
(B) investigate, regulate, direct and compel,
nullify, void, prevent or prohibit, any acquisition
holding, withholding, use, transfer, withdrawal,
transportation, importation or exportation of, or
dealing in, or exercising any right, power, or
privilege with respect to, or transactions involving,
any property in which any foreign country or a national
thereof has any interest,
by any person, or with respect to any property, subject to the
jurisdiction of the United States; and any property or interest
of any foreign country or national thereof shall vest, when,
as, and upon the terms, directed by the President, in such
agency or person as may be designated from time to time by the
President, and upon such terms and conditions as the President
may prescribe such interest or property shall be held, used,
administered, liquidated, sold, or otherwise dealt with in the
interest of and for the benefit of the United States, and such
designated agency or person may perform any and all acts
incident to the accomplishment or furtherance of these
purposes; and the President shall, in the manner hereinabove
provided, require any person to keep a full record of, and to
furnish under oath, in the form of reports or otherwise,
complete information relative to any act or transaction
referred to in this subdivision either before, during, or after
the completion thereof, or relative to any interest in foreign
property, or relative to any property in which any foreign
country or any national thereof has or has had any interest, or
as may be otherwise necessary to enforce the provisions of this
subsection, and in any case in which a report could be
required, the President may, in the manner hereinabove
provided, require the production, or if necessary to the
national security or defense, the seizure, of any books of
account, records, contracts, letters, memoranda, or other
papers, in the custody or control of such person.
(2) Any payment, conveyance, transfer, assignment, or
delivery of property or interest therein, made to or for the
account of the United States, or as otherwise directed,
pursuant to this subdivision or any rule, regulation,
instruction, or direction issued hereunder shall to the extent
thereof be a full acquittance and discharge for all purposes of
the obligation of the person making the same; and no person
shall be held liable in any court for or in respect to anything
done or omitted in good faith in connection with the
administration of, or in pursuance of and in reliance on, this
subdivision, or any rule, regulation, instruction, or direction
issued hereunder.
(3) As used in this subdivision the term ``United States''
means the United States and any place subject to the
jurisdiction thereof: Provided, however, That the foregoing
shall not be construed as a limitation upon the power of the
President, which is hereby conferred, to prescribe from time to
time, definitions, not inconsistent with the purposes of this
subdivision, for any or all of the terms used in this
subdivision. As used in this subdivision the term ``person''
means an individual, partnership, association, or corporation.
(4) The authority granted to the President in this section
does not include the authority to regulate or prohibit,
directly or indirectly, the importation from any country, or
the exportation to any country, whether commercial or
otherwise, regardless of format or medium of transmission, of
any information or informational materials, including but not
limited to, publications, films, posters, phonograph records,
photographs, microfilms, microfiche, tapes, compact disks, CD
ROMs, artworks, and news wire feeds. The exports exempted from
regulation or prohibition by this paragraph do not include
those which are otherwise controlled for export under section 5
of the Export Administration Act of 1979, or under section 6 of
that Act to the extent that such controls promote the
nonproliferation or antiterrorism policies of the United
States, or with respect to which acts are prohibited by chapter
37 of title 18, United States Code.
[Section 2502(a)(2) of the Omnibus Trade and
Competitiveness Act of 1988 and Section 525 (b)(2) of the
Foreign Relations Authorization Act of 1994 provide with
respect to paragraph (4) of section 5(b):
[The authorities conferred upon the President by section
5(b) of the Trading With the Enemy Act, which were being
exercised with respect to a country on July 1, 1977, as a
result of a national emergency declared by the President before
such date, and are being exercised on the date of the enactment
of this Act, do not include the authority to regulate or
prohibit, directly or indirectly, any activity which, under
section 5(b)(4) of the Trading With the Enemy Act, as added by
paragraph (1) of this subsection, may not be regulated or
prohibited.]
B. TRADE SANCTIONS AGAINST UNCOOPERATIVE MAJOR DRUG PRODUCING OR DRUG-
TRANSIT COUNTRIES
Narcotics Control Trade Act
(Title VIII of the Trade Act of 1974, as amended)
[19 U.S.C. 2491 et seq.; P.L. 93-618 as added by P.L. 99-570, title IX,
and amended by P.L. 100-204, P.L. 100-690, P.L. 101-231, P.L. 102-583,
and P.L. 106-36]
SEC. 801. SHORT TITLE.
This title may be cited as the ``Narcotics Control Trade
Act''.
SEC. 802. TARIFF TREATMENT OF PRODUCTS OF UNCOOPERATIVE MAJOR DRUG
PRODUCING OR DRUG-TRANSIT COUNTRIES.
(a) Required Action by President.--Subject to subsection
(b), for every major drug producing country and every major
drug-transit country, the President shall, on or after March 1,
1987, and March 1 of each succeeding year, to the extent
considered necessary by the President to achieve the purposes
of this title--
(1) deny to any or all of the products of that
country tariff treatment under the Generalized System
of Preferences, the Caribbean Basin Economic Recovery
Act, or any other law providing preferential tariff
treatment;
(2) apply to any or all of the dutiable products of
that country an additional duty at a rate not to exceed
50 percent ad valorem or the specific rate equivalent;
(3) apply to one or more duty-free products of that
country a duty at a rate not to exceed 50 percent ad
valorem;
(4) take the steps described in subsection (d)(1) or
(d)(2), or both, to curtail air transportation between
the United States and that country;
(5) withdraw the personnel and resources of the
United States from participation in any arrangement
with that country for the pre-clearance of customs by
visitors between the United States and that country; or
(6) take any combination of the actions described in
paragraphs (1) through (5).
(b)(1)(A) Subject to paragraph (3), subsection (a) shall
not apply with respect to a country if the President determines
and certifies to the Congress, at the time of the submission of
the report required by section 489 of the Foreign Assistance
Act of 1961 (22 U.S.C. 2291h), that--
(i) during the previous year the country has
cooperated fully with the United States, or has taken
adequate steps on its own--
(I) in satisfying the goals agreed to in an
applicable bilateral narcotics agreement with
the United States (as described in paragraph
(B)) or a multilateral agreement which achieves
the objectives of paragraph (B),
(II) in preventing narcotic and psychotropic
drugs and other controlled substances produced
or processed, in whole or in part, in such
country or transported through such country,
from being sold illegally within the
jurisdiction of such country to United States
Government personnel or their dependents or
from being transported, directly or indirectly,
into the United States,
(III) in preventing and punishing the
laundering in that country of drug-related
profits or drug-related moneys, and
(IV) in preventing and punishing bribery and
other forms of public corruption which
facilitate the illicit production, processing,
or shipment of narcotic and psychotropic drugs
and other controlled substances, or which
discourage the investigation and prosecution of
such acts; or
(ii) for a country that would not otherwise qualify
for certification under clause (i), the vital national
interests of the United States require that subsection
(a) not be applied with respect to that country.
(B) A bilateral narcotics agreement referred to in
subparagraph (A)(i)(I) is an agreement between the United
States and a foreign country in which the foreign country
agrees to take specific activities, including, where
applicable, efforts to--
(i) reduce drug production, drug consumption, and
drug trafficking within its territory, including
activities to address illicit crop eradication and crop
substitution;
(ii) increase drug interdiction and enforcement;
(iii) increase drug education and treatment programs;
(iv) increase the identification of and elimination
of illicit drug laboratories;
(v) increase the identification and elimination of
the trafficking of essential precursor chemicals for
the use in production of illegal drugs;
(vi) increase cooperation with United States drug
enforcement officials; and
(vii) where applicable, increase participation in
extradition treaties, mutual legal assistance
provisions directed at money laundering, sharing of
evidence, and other initiatives for cooperative drug
enforcement.
(C) A country which in the previous year was designated as
a major drug producing country or a major drug-transit country
may not be determined to be cooperating fully under
subparagraph (A)(i) unless it has in place a bilateral
narcotics agreement with the United States or a multilateral
agreement which achieves the objectives of subparagraph (B).
(D) If the President makes a certification with respect to
a country pursuant to subparagaph (A)(ii), he shall include in
such certification--
(i) a full and complete description of the vital
national interests placed at risk if action is taken
pursuant to subsection (a) with respect to that
country; and
(ii) a statement weighing the risk described in
clause (i) against the risks posed to the vital
national interests of the United States by the failure
of such country to cooperate fully with the United
States in combating narcotics or to take adequate steps
to combat narcotics on its own.
(E) The President may make a certification under
subparagraph (A)(i) with respect to a major drug producing
country or drug-transit country which is also a producer of
licit opium only if the President determines that such country
has taken steps to prevent significant diversion of its licit
cultivation and production into the illicit market, maintains
production and stockpiles at levels no higher than those
consistent with licit market demand, and prevents illicit
cultivation and production.
(2) In determining whether to make the certification
required by paragraph (1) with respect to a country, the
President shall consider the following:
(A) Have the actions of the government of that
country resulted in the maximum reductions in illicit
drug production which were determined to be achievable
pursuant to section 481(e)(4) of the Foreign Assistance
Act of 1961.\1\ In the case of a major drug producing
country, the President shall give foremost
consideration, in determining whether to make the
certification required by paragraph (1), to whether the
government of that country has taken actions which have
resulted in such reductions.
---------------------------------------------------------------------------
\1\ For successor provisions to section 481(e) of the Foreign
Assistance Act of 1961 see sections 489 and 490 of the Foreign
Assistance Act of 1961; 22 U.S.C. 22918, 22 U.S.C. 2291j.
---------------------------------------------------------------------------
(B) Has that government taken the legal and law
enforcement measures to enforce in its territory, to
the maximum extent possible, the elimination of illicit
cultivation and the suppression of illicit
manufacturing of and trafficking in narcotic and
psychotropic drugs and other controlled substances, as
evidenced by seizures of such drugs and substances and
of illicit laboratories and the arrest and prosecution
of violators involved in the traffic in such drugs and
substances significantly affecting the United States?
(C) Has that government taken the legal and law
enforcement steps necessary to eliminate, to the
maximum extent possible, the laundering in that country
of drug-related profits or drug-related moneys, as
evidenced by--
(i) the enactment and enforcement by that
government of laws prohibiting such conduct,
(ii) that government entering into, and
cooperating under the terms of, mutual legal
assistance agreements with the United States
governing (but not limited to) money
laundering, and
(iii) the degree to which that government
otherwise cooperates with United States law
enforcement authorities on anti-money
laundering efforts?
(D) Has that government taken the legal and law
enforcement steps necessary to eliminate, to the
maximum extent possible, bribery and other forms of
public corruption which facilitate the illicit
production, processing, or shipment of narcotic and
psychotropic drugs and other controlled substances, or
which discourage the investigation and prosecution of
such acts, as evidenced by the enactment and
enforcement of laws prohibiting such conduct?
(E) Has that government, as a matter of government
policy, encouraged or facilitated the production or
distribution of illicit narcotic and psychotropic drugs
and other controlled substances?
(F) Does any senior official of that government
engage in, encourage, or facilitate the production or
distribution of illicit narcotic and psychotropic drugs
and other controlled substances?
(G) Has that government investigated aggressively all
cases in which any member of an agency of the United
States Government engaged in drug enforcement
activities since January 1, 1985, has been the victim
of acts or threats of violence, inflicted by or with
the complicity of any law enforcement or other officer
of such country or any political subdivision thereof,
and has energetically sought to bring the perpetrators
of such offense or offenses to justice?
(H) Having been requested to do so by the United
States Government, does that government fail to provide
reasonable cooperation to lawful activities of United
States drug enforcement agents, including the refusal
of permission to such agents engaged in interdiction of
aerial smuggling into the United States to pursue
suspected aerial smugglers a reasonable distance into
the airspace of the requested country?
(I) Has that government made necessary changes in
legal codes in order to enable law enforcement
officials to move more effectively against narcotics
traffickers, such as new conspiracy laws and new asset
seizure laws?
(J) Has that government expeditiously processed
United States extradition requests relating to
narcotics trafficking?
(K) Has that government refused to protect or give
haven to any known drug traffickers, and has it
expeditiously processed extradition requests relating
to narcotics trafficking made by other countries?
(3) Subsection (a) shall apply to a country without regard
to paragraph (1) of this subsection if the Congress enacts,
with 45 days of continuous session after receipt of a
certification under paragraph (1), a joint resolution
disapproving the determination of the President contained in
that certification.
(4) If the President takes action under subsection (a),
that action shall remain in effect until--
(A) the President makes the certification under
paragraph (a), a period of 45 days of continuous
session of Congress elapses, and during that period the
Congress does not enact a joint resolution of
disapproval; or
(B) the President submits at any other time a
certification of the matters described in paragraph (1)
with respect to that country, a period of 45 days of
continuous session of Congress elapses, and during that
period the Congress does not enact a joint resolution
of disapproving determination contained in that
certification.
(5) For the purpose of expediting the consideration and
enactment of joint resolutions under paragraphs (3) and (4)--
(A) a motion to proceed to the consideration of any
such joint resolution after it has been reported by the
Committee on Ways and Means shall be treated as highly
privileged in the House of Representatives; and
(B) a motion to proceed to the consideration of any
such joint resolution after it has been reported by the
Committee on Finance shall be treated as privileged in
the Senate.
(c) Duration of Action.--The action taken by the President
under paragraph (1), (2), or (3) of subsection (a) shall apply
to the products of a foreign country that are entered, or
withdrawn from warehouse for consumption, during the period
that such action is in effect.
(d) Presidential Action Regarding Aviation.--
(1)(A) The President is authorized to notify the
government of a country against which is imposed the
sanction described in subsection (a)(4) of his
intention to suspend the authority of foreign air
carriers owned or controlled by the government or
nationals of that country to engage in foreign air
transportation to or from the United States.
(B) Within 10 days after the date of notification of
a government under subparagraph (a), the Secretary of
Transportation shall take all steps necessary to
suspend at the earliest possible date the authority of
any foreign air carrier owned or controlled, directly
or indirectly, by the government or nationals of that
country to engage in foreign air transportation to or
from the United States, notwithstanding any agreement
relating to air services.
(C) The President may also direct the Secretary of
Transportation to take such steps as may be necessary
to suspend the authority of any air carrier to engage
in foreign air transportation between the United States
and that country.
(2)(A) The President may direct the Secretary of
State to terminate any air service agreement between
the United States and a country against which the
sanction described in subsection (a)(4) is imposed in
accordance with the provisions of that agreement.
(B) Upon termination of an agreement under this
paragraph, the Secretary of Transportation shall take
such steps as may be necessary to revoke at the
earliest possible date the right of any foreign air
carrier owned, or controlled, directly or indirectly,
by the government or nationals of that country to
engage in foreign air transportation to or from the
United States.
(C) Upon termination of an agreement under this
paragraph, the Secretary of Transportation may also
revoke the authority of any air carrier to engage in
foreign air transportation between the United States
and that country.
(3) The Secretary of Transportation may provide for
such exceptions from paragraphs (1) and (2) as the
Secretary considers necessary to provide for
emergencies in which the safety of an aircraft or its
crew or passengers is threatened.
(4) For purposes of this subsection, the term ``air
transportation'', ``air carrier'', ``foreign air
carrier'' and ``foreign air transportation'' have the
meanings such terms have under section 101 of the
Federal Aviation Act of 1958 (49 U.S.C. App. 1301).
(e) For each calendar year, the Secretary of State, after
consultation with the appropriate committees of the Congress,
shall establish numerical standards and other guidelines for
determining which countries will be considered to be major
drug-transit countries under section 805(3) (A) and (B).
SEC. 803. SUGAR QUOTA.
Notwithstanding any other provision of law, the President
may not allocate any limitation imposed on the quantity of
sugar to any country which has a Government involved in the
trade of illicit narcotics or is failing to cooperate with the
United States in narcotics enforcement activities as defined in
section 802(b) as determined by the President.
SEC. 804. PROGRESS REPORTS.
The President shall include as a part of the annual report
required under section 489 of the Foreign Assistance Act of
1961 (22 U.S.C. 2291(h)) an evaluation of progress that each
major drug producing country and each major drug-transit
country has made during the reporting period in achieving the
objectives set forth in section 802(b).
SEC. 805. DEFINITIONS.
For purposes of this title--
(1) continuity of a session of Congress is broken
only by an adjournment of the Congress sine die, and
the days on which either House is not in session
because of an adjournment of more than three days to a
day certain are excluded in the computation of the
period indicated;
(2) the term ``major drug producing country'' means a
country that illicitly produces during a fiscal year
five metric tons or more of opium or opium derivative,
five hundred metric tons or more of coca, or five
hundred metric tons or more of marijuana;
(3) the term ``major drug-transit country'' means a
country--
(A) that is a significant direct source of
illicit narcotic or psychotropic drugs or other
controlled substances significantly affecting
the United States;
(B) through which are transported such drugs
or substances; or
(C) through which significant sums of drug-
related profits or monies are laundered with
the knowledge or complicity of the government;
and
(4) the term ``narcotic and psychotropic drugs and
other controlled substances'' has the same meaning as
is given by any applicable international narcotics
control agreement or domestic law of the country or
countries concerned.
C. ECONOMIC SANCTIONS AGAINST TERRORISM OR MISSILE PROLIFERATION
Sections 504 and 505 of the International Security and Development
Cooperation Act of 1985
[22 U.S.C. 2349 aa-8, aa-9; P.L. 99-83]
SEC. 504. PROHIBITION ON IMPORTS FROM AND EXPORTS TO LIBYA.
(a) Prohibition on Imports.--Notwithstanding any other
provision of law, the President may prohibit any article grown,
produced, extracted, or manufactured in Libya from being
imported into the United States.
(b) Prohibition on Exports.--Notwithstanding any other
provision of law, the President may prohibit any goods or
technology, including technical data or other information,
subject to the jurisdiction of the United States or exported by
any person subject to the jurisdiction of the United States,
from being exported to Libya.
(c) Definition.--For purposes of this section, the term
``United States'', when used in a geographical sense, includes
territories and possessions of the United States.
SEC. 505. BAN ON IMPORTING GOODS AND SERVICES FROM COUNTRIES SUPPORTING
TERRORISM.
(a) Authority.--The President may ban the importation into
the United States of any good or service from any country which
supports terrorism or terrorist organizations or harbors
terrorists or terrorist organizations.
(b) Consultation.--The President, in every possible
instance, shall consult with the Congress before exercising the
authority granted by this section and shall consult regularly
with the Congress so long as that authority is being exercised.
(c) Reports.--Whenever the President exercises the
authority granted by this section, he shall immediately
transmit to the Congress a report specifying--
(1) the country with respect to which the authority
is to be exercised and the imports to be prohibited;
(2) the circumstances which necessitate the exercise
of such authority;
(3) why the President believes those circumstances
justify the exercise of such authority; and
(4) why the President believes the prohibitions are
necessary to deal with those circumstances.
At least once during each succeeding 6-month period after
transmitting a report pursuant to this subsection, the
President shall report to the Congress with respect to the
actions taken, since the last such report, pursuant to this
section and with respect to any changes which have occurred
concerning any information previously furnished pursuant to
this subsection.
(d) Definition.--For purposes of this section, the term
``United States'' includes territories and possessions of the
United States.
Section 73 of the Arms Export Control Act
[22 U.S.C. 2797b; P.L. 90-629, added by P.L. 101-510, and amended by
P.L. 102-138, P.L. 103-236, P.L. 104-106, P.L. 105-277, and P.L. 106-
113]
SEC. 73. TRANSFERS OF MISSILE EQUIPMENT OR TECHNOLOGY BY FOREIGN
PERSONS.
(a) Sanctions.--(1) Subject to subsections (c) through (g),
if the President determines that a foreign person, after the
date of the enactment of this chapter, (enacted November 5,
1990) knowingly--
(A) exports, transfers, or otherwise engages in the
trade of any MTCR equipment or technology that
contributes to the acquisition, design, development, or
production of missiles in a country that is not an MTCR
adherent and would be, if it were United States-origin
equipment or technology, subject to the jurisdiction of
the United States under this Act,
(B) conspires to or attempts to engage in such
export, transfer, or trade, or
(C) facilitates such export, transfer, or trade by
any other person,
or if the President has made a determination with respect to a
foreign person under section 11B(b)(1) of the Export
Administration Act of 1979, then the President shall impose on
that foreign person the applicable sanctions under paragraph
(2).
(2) The sanctions which apply to a foreign person under
paragraph (1) are the following:
(A) If the item involved in the export, transfer, or
trade is within category II of the MTCR Annex, then the
President shall deny, for a period of 2 years--
(i) United States Government contracts
relating to missile equipment or technology;
and
(ii) licenses for the transfer to such
foreign person of missile equipment or
technology controlled under this Act.
(B) If the item involved in the export, transfer, or
trade is within category I of the MTCR Annex, then the
President shall deny, for a period of not less than 2
years--
(i) all United States Government contracts
with such foreign person; and
(ii) licenses for the transfer to such
foreign person of all items on the United
States Munitions List.
(C) If, in addition to actions taken under
subparagraphs (A) and (B), the President determines
that the export, transfer, or trade has substantially
contributed to the design, development, or production
of missiles in a country that is not an MTCR adherent,
then the President shall prohibit, for a period of not
less than 2 years, the importation into the United
States of products produced by that foreign person.
(b) Inapplicability With Respect to MTCR Adherents.--
(1) In General.--Except as provided in paragraph (2),
Subsection (a) does not apply to--
(A) any export, transfer, or trading activity that is
authorized by the laws of an MTCR adherent, if such
authorization is not obtained by misrepresentation or
fraud; or
(B) any export, transfer, or trade of an item to an
end user in a country that is an MTCR adherent.
(2) Limitation.--Notwithstanding paragraph (1), Subsection
(a) shall apply to an entity subordinate to a government that
engages in exports or transfers described in section
498(b)(3)(A) of the Foreign Assistance Act of 1961.
(c) Effect of Enforcement Actions by MTCR Adherents.--
Sanctions set forth in subsection (a) may not be imposed under
this section on a person with respect to acts described in such
subsection or, if such sanctions are in effect against a person
on account of such acts, such sanctions shall be terminated, if
an MTCR adherent is taking judicial or other enforcement action
against that person with respect to such acts, or that person
has been found by the government of an MTCR adherent to be
innocent of wrongdoing with respect to such acts, and if the
President certifies to the Committee on Foreign Relations of
the Senate and the Committee on International Relations of the
House of Representatives that--
(1) for any judicial or other enforcement action taken by
the MTCR adherent, such action has--
(A) been comprehensive; and
(B) been performed to the satisfaction of the United
States; and
(2) with respect to any finding of innocence of wrongdoing,
the United States is satisfied with the basis for such finding.
(d) Advisory Opinions.--The Secretary of State, in
consultation with the Secretary of Defense, the Secretary of
Commerce, may, upon the request of any person, issue an
advisory opinion to that person as to whether a proposed
activity by that person would subject that person to sanctions
under this section. Any person who relies in good faith on such
an advisory opinion which states that the proposed activity
would not subject a person to such sanctions, and any person
who thereafter engages in such activity, may not be made
subject to such sanctions on account of such activity.
(e) Waiver and Report to Congress.--(1) In any case other
than one in which an advisory opinion has been issued under
subsection (d) stating that a proposed activity would not
subject a person to sanctions under this section, the President
may waive the application of subsection (a) to a foreign person
if the President determines that such waiver is essential to
the national security of the United States.
(2) In the event that the President decides to apply the
waiver described in paragraph (1), the President shall so
notify the Committee on Armed Services and the Committee on
Foreign Relations of the Senate and the Committee on National
Security (Committee on Armed Services) and the Committee on
International Relations of the House of Representatives not
less than 45 working days before issuing the waiver. Such
notification shall include a report fully articulating the
rationale and circumstances which led the President to apply
the waiver.
(f) Presumption.--In determining whether to apply sanctions
under subsection (a) to a foreign person involved in the
export, transfer, or trade of an item on the MTCR Annex, it
should be a rebuttable presumption that such item is designed
for use in a missile listed in the MTCR Annex if the President
determines that the final destination of the item is a country
the government of which the Secretary of State has determined,
for purposes of 6(j)(1)(A) of the Export Administration Act of
1979, has repeatedly provided support for acts of international
terrorism.
(g) Additional Waiver.--The President may waive the
imposition of sanctions under paragraph (1) on a person with
respect to a product or service if the President certifies to
the Congress that--
(1) the product or service is essential to the
national security of the United States; and
(2) such person is a sole source supplier of the
product or service, the product or service is not
available from any alternative reliable supplier, and
the need for the product or service cannot be met in a
timely manner by improved manufacturing processes or
technological developments.
(h) Exceptions.--The President shall not apply the sanction
under this section prohibiting the importation of the products
of a foreign person--
(1) in the case of procurement of defense articles or
defense services--
(A) under existing contracts or subcontracts,
including the exercise of options for
production quantities to satisfy requirements
essential to the national security of the
United States;
(B) if the President determines that the
person to which the sanctions would be applied
is a sole source supplier of the defense
articles and services, that the defense
articles or services are essential to the
national security of the United States, and
that alternative sources are not readily or
reasonably available; or
(C) if the President determines that such
articles or services are essential to the
national security of the United States under
defense coproduction agreements or NATO
Programs of Cooperation;
(2) to products or services provided under contracts
entered into before the date on which the President
publishes his intention to impose the sanctions; or
(3) to--
(A) spare parts,
(B) component parts, but not finished
products, essential to United States products
or production,
(C) routine services and maintenance of
products, to the extent that alternative
sources are not readily or reasonably
available, or
(D) information and technology essential to
United States products or production.
D. ECONOMIC SANCTIONS AGAINST CHEMICAL AND BIOLOGICAL WEAPONS
Chemical and Biological Weapons Control and Warfare Elimination Act of
1991
[22 U.S.C. 5601; P.L. 102-182, title III]
SEC. 301. SHORT TITLE.
This title may be cited as the ``Chemical and Biological
Weapons Control and Warfare Elimination Act of 1991''.
SEC. 302. PURPOSES.
The purposes of this title are--
(1) to mandate United States sanctions, and to
encourage international sanctions, against countries
that use chemical or biological weapons in violation of
international law or use lethal chemical or biological
weapons against their own nationals, and to impose
sanctions against companies that aid in the
proliferation of chemical and biological weapons;
(2) to support multilaterally coordinated efforts to
control the proliferation of chemical and biological
weapons;
(3) to urge continued close cooperation with the
Australia Group and cooperation with other supplier
nations to devise ever more effective controls on the
transfer of materials, equipment, and technology
applicable to chemical or biological weapons
production; and
(4) to require Presidential reports on efforts that
threaten United States interests or regional stability
by Iran, Iraq, Syria, Libya, and others to acquire the
materials and technology to develop, produce,
stockpile, deliver, transfer, or use chemical or
biological weapons.
SEC. 303. MULTILATERAL EFFORTS.
(a) Multilateral Controls on Proliferation.--It is the
policy of the United States to seek multilaterally coordinated
efforts with other countries to control the proliferation of
chemical and biological weapons. In furtherance of this policy,
the United States shall--
(1) promote agreements banning the transfer of
missiles suitable for armament with chemical or
biological warheads;
(2) set as a top priority the early conclusion of a
comprehensive global agreement banning the use,
development, production, and stockpiling of chemical
weapons;
(3) seek and support effective international means of
monitoring and reporting regularly on commerce in
equipment, materials, and technology applicable to the
attainment of a chemical or biological weapons
capability; and
(4) pursue and give full support to multilateral
sanctions pursuant to United Nations Security Council
Resolution 620, which declared the intention of the
Security Council to give immediate consideration to
imposing ``appropriate and effective'' sanctions
against any country which uses chemical weapons in
violation of international law.
(b) Multilateral Controls on Chemical Agents, Precursors,
and Equipment.--It is also the policy of the United States to
strengthen efforts to control chemical agents, precursors, and
equipment by taking all appropriate multilateral diplomatic
measures--
(1) to continue to seek a verifiable global ban on
chemical weapons at the 40 nation Conference on
Disarmament in Geneva;
(2) to support the Australia Group's objective to
support the norms and restraints against the spread and
the use of chemical warfare, to advance the negotiation
of a comprehensive ban on chemical warfare by taking
appropriate measures, and to protect the Australia
Group's domestic industries against inadvertent
association with supply of feedstock chemical equipment
that could be misused to produce chemical weapons;
(3) to implement paragraph (2) by proposing steps
complementary to, and not mutually exclusive of,
existing multilateral efforts seeking a verifiable ban
on chemical weapons, such as the establishment of--
(A) a harmonized list of export control rules
and regulations to prevent relative commercial
advantage and disadvantages accruing to
Australia Group members,
(B) liaison officers to the Australia Group's
coordinating entity from within the diplomatic
missions,
(C) a close working relationship between the
Australia Group and industry,
(D) a public unclassified warning list of
controlled chemical agents, precursors, and
equipment,
(E) information-exchange channels of
suspected proliferants,
(F) a ``denial'' list of firms and
individuals who violate the Australia Group's
export control provisions, and
(G) broader cooperation between the Australia
Group and other countries whose political
commitment to stem the proliferation of
chemical weapons is similar to that of the
Australia Group; and
(4) to adopt the imposition of stricter controls on
the export of chemical agents, precursors, and
equipment and to adopt tougher multilateral sanctions
against firms and individuals who violate these
controls or against countries that use chemical
weapons.
SEC. 304. UNITED STATES EXPORT CONTROLS.
(a) In General.--The President shall--
(1) use the authorities of the Arms Export Control
Act to control the export of those defense articles and
defense services, and
(2) use the authorities of the Export Administration
Act of 1979 to control the export of those goods and
technology,
that the President determines would assist the government of
any foreign country in acquiring the capability to develop,
produce, stockpile, deliver, or use chemical or biological
weapons.
[(b) Amendments to section 6 of the Export Administration
Act of 1979.]
[SEC. 305. SANCTIONS AGAINST CERTAIN FOREIGN PERSONS.
Section 11C added to the Export Administration Act of 1979;
chapter 8 added to the Arms Export Control Act.]
SEC. 306. DETERMINATIONS REGARDING USE OF CHEMICAL OR BIOLOGICAL
WEAPONS.
(a) Determination by the President.--
(1) When determination required; nature of
determination.--Whenever persuasive information becomes
available to the executive branch indicating the
substantial possibility that, on or after the date of
the enactment of this title, the government of a
foreign country has made substantial preparation to use
or has used chemical or biological weapons, the
President shall, within 60 days after the receipt of
such information by the executive branch, determine
whether that government, on or after such date of
enactment, has used chemical or biological weapons in
violation of international law or has used lethal
chemical or biological weapons against its own
nationals. Section 307 applies if the President
determines that that government has so used chemical or
biological weapons.
(2) Matters to be considered.--In making the
determination under paragraph (1), the President shall
consider the following:
(A) All physical and circumstantial evidence
available bearing on the possible use of such
weapons.
(B) All information provided by alleged
victims, witnesses, and independent observers.
(C) The extent of the availability of the
weapons in question to the purported user.
(D) All official and unofficial statements
bearing on the possible use of such weapons.
(E) Whether, and to what extent, the
government in question is willing to honor a
request from the Secretary General of the
United Nations to grant timely access to a
United Nations fact-finding team to investigate
the possibility of chemical or biological
weapons use or to grant such access to other
legitimate outside parties.
(3) Determination to be reported to congress.--Upon
making a determination under paragraph (1), the
President shall promptly report that determination to
the Congress. If the determination is that a foreign
government had used chemical or biological weapons as
described in that paragraph, the report shall specify
the sanctions to be imposed pursuant to section 307.
(b) Congressional Requests; Report.--
(1) Request.--The Chairman of the Committee on
Foreign Relations of the Senate (upon consultation with
the ranking minority member of such committee) or the
Chairman of the Committee on Foreign Affairs of the
House of Representatives (upon consultation with the
ranking minority member of such committee) may at any
time request the President to consider whether a
particular foreign government, on or after the date of
the enactment of this title, has used chemical or
biological weapons in violation of international law or
has used lethal chemical or biological weapons against
its own nationals.
(2) Report to congress.--Not later than 60 days after
receiving such a request, the President shall provide
to the Chairman of the Committee on Foreign Relations
of the Senate and the Chairman of the Committee on
Foreign Affairs of the House of Representatives a
written report on the information held by the executive
branch which is pertinent to the issue of whether the
specified government, on or after the date of the
enactment of this title, has used lethal chemical or
biological weapons in violation of international law or
has used lethal chemical or biological weapons against
its own nationals. This report shall contain an
analysis of each of the items enumerated in subsection
(a)(2).
SEC. 307. SANCTIONS AGAINST USE OF CHEMICAL OR BIOLOGICAL WEAPONS.
(a) Initial Sanctions.--If, at any time, the President
makes a determination pursuant to section 306(a)(1) with
respect to the government of a foreign country, the President
shall forthwith impose the following sanctions:
(1) Foreign assistance.--The United States Government
shall terminate assistance to that country under the
Foreign Assistance Act of 1961, except for urgent
humanitarian assistance and food or other agricultural
commodities or products.
(2) Arms sales.--The United States Government shall
terminate--
(A) sales to that country under the Arms
Export Control Act of any defense articles,
defense services, or design and construction
services, and
(B) licenses for the export to that country
of any item on the United States Munitions
List.
(3) Arms sales financing.--The United States
Government shall terminate all foreign military
financing for that country under the Arms Export
Control Act.
(4) Denial of united states government credit or
other financial assistance.--The United States
Government shall deny to that country any credit,
credit guarantees, or other financial assistance by any
department, agency, or instrumentality of the United
States Government, including the Export-Import Bank of
the United States.
(5) Exports of national security-sensitive goods and
technology.--The authorities of section 6 of the Export
Administration Act of 1979 (50 U.S.C. 2405) shall be
used to prohibit the export to that country of any
goods or technology on that part of the control list
established under section 5(c)(1) of that Act (22
U.S.C. 2404(c)(1)).
(b) Additional Sanctions if Certain Conditions Not Met.--
(1) Presidential determination.--Unless, within 3
months after making a determination pursuant to section
306(a)(1) with respect to a foreign government, the
President determines and certifies in writing to the
Congress that--
(A) that government is no longer using
chemical or biological weapons in violation of
international law or using lethal chemical or
biological weapons against its own nationals,
(B) that government has provided reliable
assurances that it will not in the future
engage in any such activities, and
(C) that government is willing to allow on-
site inspections by United Nations observers or
other internationally recognized, impartial
observers, or other reliable means exist, to
ensure that that government is not using
chemical or biological weapons in violation of
international law and is not using lethal
chemical or biological weapons against its own
nationals,
then the President, after consultation with the
Congress, shall impose on that country the sanctions
set forth in at least 3 of subparagraphs (A) through
(F) of paragraph (2).
(2) Sanctions.--The sanctions referred to in
paragraph (1) are the following:
(A) Multilateral development bank
assistance.--The United States Government shall
oppose, in accordance with section 701 of the
International Financial Institutions Act (22
U.S.C. 262d), the extension of any loan or
financial or technical assistance to that
country by international financial
institutions.
(B) Bank loans.--The United States Government
shall prohibit any United States bank from
making any loan or providing any credit to the
government of that country, except for loans or
credits for the purpose of purchasing food or
other agricultural commodities or products.
(C) Further export restrictions.--The
authorities of section 6 of the Export
Administration Act of 1979 shall be used to
prohibit exports to that country of all other
goods and technology (excluding food and other
agricultural commodities and products).
(D) Import restrictions.--Restrictions shall
be imposed on the importation into the United
States of articles (which may include petroleum
or any petroleum product) that are the growth,
product, or manufacture of that country.
(E) Diplomatic relations.--The President
shall use his constitutional authorities to
downgrade or suspend diplomatic relations
between the United States and the government of
that country.
(F) Presidential action regarding aviation.--
(i)(I) The President is authorized to notify
the government of a country with respect to
which the President has made a determination
pursuant to section 306(a)(1) of his intention
to suspend the authority of foreign air
carriers owned or controlled by the government
of that country to engage in foreign air
transportation to or from the United States.
(II) Within 10 days after the date of
notification of a government under subclause
(I), the Secretary of Transportation shall take
all steps necessary to suspend at the earliest
possible date the authority of any foreign air
carrier owned or controlled, directly or
indirectly, by that government to engage in
foreign air transportation to or from the
United States, notwithstanding any agreement
relating to air services.
(ii)(I) The President may direct the
Secretary of State to terminate any air service
agreement between the United States and a
country with respect to which the President has
made a determination pursuant to section
306(a)(1), in accordance with the provisions of
that agreement.
(II) Upon termination of an agreement under
this clause, the Secretary of Transportation
shall take such steps as may be necessary to
revoke at the earliest possible date the right
of any foreign air carrier owned, or
controlled, directly or indirectly, by the
government of that country to engage in foreign
air transportation to or from the United
States.
(iii) The Secretary of Transportation may
provide for such exceptions from clauses (i)
and (ii) as the Secretary considers necessary
to provide for emergencies in which the safety
of an aircraft or its crew or passengers is
threatened.
(iv) For purposes of this subparagraph, the
terms ``air transportation'', ``air carrier'',
``foreign air carrier'', and ``foreign air
transportation'' have the meanings such terms
have under section 101 of the Federal Aviation
Act of 1958 (49 U.S.C. App. 1301).
(c) Removal of Sanctions.--The President shall remove the
sanctions imposed with respect to a country pursuant to this
section if the President determines and so certifies to the
Congress after the end of the 12-month period beginning on the
date on which sanctions were initially imposed on that country
pursuant to subsection (a), that--
(1) the government of that country has provided
reliable assurances that it will not use chemical or
biological weapons in violation of international law
and will not use lethal chemical or biological weapons
against its own nationals;
(2) that government is not making preparations to use
chemical or biological weapons in violation of
international law or to use lethal chemical or
biological weapons against its own nationals;
(3) that government is willing to allow on-site
inspections by United Nations observers or other
internationally recognized, impartial observers to
verify that it is not making preparations to use
chemical or biological weapons in violation of
international law or to use lethal chemical or
biological weapons against its own nationals, or other
reliable means exist to verify that it is not making
such preparations; and
(4) that government is making restitution to those
affected by any use of chemical or biological weapons
in violation of international law or by any use of
lethal chemical or biological weapons against its own
nationals.
(d) Waiver.--
(1) Criteria for waiver.--The President may waive the
application of any sanction imposed with respect to a
country pursuant to this section--
(A) if--
(i) in the case of any sanction other
than a sanction specified in subsection
(b)(2)(D) (relating to import
restrictions) or (b)(2)(E) (relating to
the downgrading or suspension of
diplomatic relations), the President
determines and certifies to the
Congress that such waiver is essential
to the national security interests of
the United States, and if the President
notifies the Committee on Foreign
Relations of the Senate and the
Committee on Foreign Affairs of the
House of Representatives of his
determination and certification at
least 15 days before the waiver takes
effect, in accordance with the
procedures applicable to reprogramming
notifications under section 634A of the
Foreign Assistance Act of 1961, or
(ii) in the case of any sanction
specified in subsection (b)(2)(D)
(relating to import restrictions), the
President determines and certifies to
the Congress that such waiver is
essential to the national security
interest of the United States, and if
the President notifies the Committee on
Finance of the Senate and the Committee
on Ways and Means of the House of
Representatives of his determination
and certification at least 15 days
before the waiver takes effect; or
(B) if the President determines and certifies
to the Congress that there has been a
fundamental change in the leadership and
policies of the government of that country, and
if the President notifies the Congress at least
20 days before the waiver takes effect.
(2) Report.--In the event that the President decides
to exercise the waiver authority provided in paragraph
(1) with respect to a country, the President's
notification to the Congress under such paragraph shall
include a report fully articulating the rationale and
circumstances which led the President to exercise that
waiver authority, including a description of the steps
which the government of that country has taken to
satisfy the conditions set forth in paragraphs (1)
through (4) of subsection (c).
(e) Contract Sanctity.--
(1) Sanctions not applied to existing contracts.--(A)
A sanction described in paragraph (4) or (5) of
subsection (a) or in any of subparagraphs (A) through
(D) of subsection (b)(2) shall not apply to any
activity pursuant to any contract or international
agreement entered into before the date of the
presidential determination under section 306(a)(1)
unless the President determines, on a case-by-case
basis, that to apply such sanction to that activity
would prevent the performance of a contract or
agreement that would have the effect of assisting a
country in using chemical or biological weapons in
violation of international law or in using lethal
chemical or biological weapons against its own
nationals.
(B) The same restrictions of subsection (p) of
section 6 of the Export Administration Act of 1979 (50
U.S.C. App. 2405), as that subsection is so
redesignated by section 304(b) of this title, which are
applicable to exports prohibited under section 6 of
that Act shall apply to exports prohibited under
subsection (a)(5) or (b)(2)(C) of this section. For
purposes of this subparagraph, any contract or
agreement the performance of which (as determined by
the President) would have the effect of assisting a
foreign government in using chemical or biological
weapons in violation of international law or in using
lethal chemical or biological weapons against its own
nationals shall be treated as constituting a breach of
the peace that poses a serious and direct threat to the
strategic interest of the United States, within the
meaning of subparagraph (A) of section 6(p) of that
Act.
(2) Sanctions applied to existing contracts.--The
sanctions described in paragraphs (1), (2), and (3) of
subsection (a) shall apply to contracts, agreements,
and licenses without regard to the date the contract or
agreement was entered into or the license was issued
(as the case may be), except that such sanctions shall
not apply to any contract or agreement entered into or
license issued before the date of the presidential
determination under section 306(a)(1) if the President
determines that the application of such sanction would
be detrimental to the national security interests of
the United States.
SEC. 308. PRESIDENTIAL REPORTING REQUIREMENTS.
(a) Reports to Congress.--Not later than 90 days after the
date of the enactment of this title, and every 12 months
thereafter, the President shall transmit to the Congress a
report which shall include--
(1) a description of the actions taken to carry out
this title, including the amendments made by this
title;
(2) a description of the current efforts of foreign
countries and subnational groups to acquire equipment,
materials, or technology to develop, produce, or use
chemical or biological weapons, together with an
assessment of the current and likely future
capabilities of such countries and groups to develop,
produce, stockpile, deliver, transfer, or use such
weapons;
(3) a description of--
(A) the use of chemical weapons by foreign
countries in violation of international law,
(B) the use of chemical weapons by
subnational groups,
(C) substantial preparations by foreign
countries and subnational groups to do so, and
(D) the development, production, stockpiling,
or use of biological weapons by foreign
countries and subnational groups; and
(4) a description of the extent to which foreign
persons or governments have knowingly and materially
assisted third countries or subnational groups to
acquire equipment, material, or technology intended to
develop, produce, or use chemical or biological
weapons.
(b) Protection of Classified Information.--To the extent
practicable, reports submitted under subsection (a) or any
other provision of this title should be based on unclassified
information. Portions of such reports may be classified.
[SEC. 309. REPEAL OF DUPLICATIVE PROVISIONS.]
Section 81 of the Arms Export Control Act
[22 U.S.C. 2798; P.L. 90-629, added by P.L. 102-182, sec. 305(b)]
SEC. 81. SANCTIONS AGAINST CERTAIN FOREIGN PERSONS.
(a) Imposition of Sanctions.--
(1) Determination by the president.--Except as
provided in subsection (b)(2), the President shall
impose both of the sanctions described in subsection
(c) if the President determines that a foreign person,
on or after the date of the enactment of this section,
has knowingly and materially contributed--
(A) through the export from the United States
of any goods or technology that are subject to
the jurisdiction of the United States,
(B) through the export from any other country
of any goods or technology that would be, if
they were United States goods or technology,
subject to the jurisdiction of the United
States, or
(C) through any other transaction not subject
to sanctions pursuant to the Export
Administration Act of 1979,
to the efforts by any foreign country, project, or
entity described in paragraph (2) to use, develop,
produce, stockpile, or otherwise acquire chemical or
biological weapons.
(2) Countries, projects, or entities receiving
assistance.--Paragraph (1) applies in the case of--
(A) any foreign country that the President
determines has, at any time after January 1,
1980--
(i) used chemical or biological
weapons in violation of international
law;
(ii) used lethal chemical or
biological weapons against its own
nationals; or
(iii) made substantial preparations
to engage in the activities described
in clause (i) or (ii);
(B) any foreign country whose government is
determined for purposes of section 6(j) of the
Export Administration Act of 1979 (50 U.S.C.
2405(j)) to be a government that has repeatedly
provided support for acts of international
terrorism; or
(C) any other foreign country, project, or
entity designated by the President for purposes
of this section.
(3) Persons against whom sanctions are to be
imposed.--Sanctions shall be imposed pursuant to
paragraph (1) on--
(A) the foreign person with respect to which
the President makes the determination described
in that paragraph;
(B) any successor entity to that foreign
person;
(C) any foreign person that is a parent or
subsidiary of that foreign person if that
parent or subsidiary knowingly assisted in the
activities which were the basis of that
determination; and
(D) any foreign person that is an affiliate
of that foreign person if that affiliate
knowingly assisted in the activities which were
the basis of that determination and if that
affiliate is controlled in fact by that foreign
person.
(b) Consultations With and Actions by Foreign Government of
Jurisdiction.--
(1) Consultations.--If the President makes the
determinations described in subsection (a)(1) with
respect to a foreign person, the Congress urges the
President to initiate consultations immediately with
the government with primary jurisdiction over that
foreign person with respect to the imposition of
sanctions pursuant to this section.
(2) Actions by government of jurisdiction.--In order
to pursue such consultations with that government, the
President may delay imposition of sanctions pursuant to
this section for a period of up to 90 days. Following
these consultations, the President shall impose
sanctions unless the President determines and certifies
to the Congress that that government has taken specific
and effective actions, including appropriate penalties,
to terminate the involvement of the foreign person in
the activities described in subsection (a)(1). The
President may delay imposition of sanctions for an
additional period of up to 90 days if the President
determines and certifies to the Congress that that
government is in the process of taking the actions
described in the preceding sentence.
(3) Report to congress.--The President shall report
to the Congress, not later than 90 days after making a
determination under subsection (a)(1), on the status of
consultations with the appropriate government under
this subsection, and the basis for any determination
under paragraph (2) of this subsection that such
government has taken specific corrective actions.
(c) Sanctions.--
(1) Description of sanctions.--The sanctions to be
imposed pursuant to subsection (a)(1) are, except as
provided in paragraph (2) of this subsection, the
following:
(A) Procurement sanction.--The United States
Government shall not procure, or enter into any
contract for the procurement of, any goods or
services from any person described in
subsection (a)(3).
(B) Import sanctions.--The importation into
the United States of products produced by any
person described in subsection (a)(3) shall be
prohibited.
(2) Exceptions.--The President shall not be required
to apply or maintain sanctions under this section--
(A) in the case of procurement of defense
articles or defense services--
(i) under existing contracts or
subcontracts, including the exercise of
options for production quantities to
satisfy United States operational
military requirements;
(ii) if the President determines that
the person or other entity to which the
sanctions would otherwise be applied is
a sole source supplier of the defense
articles or services, that the defense
articles or services are essential, and
that alternative sources are not
readily or reasonably available; or
(iii) if the President determines
that such articles or services are
essential to the national security
under defense coproduction agreements;
(B) to products or services provided under
contracts entered into before the date on which
the President publishes his intention to impose
sanctions;
(C) to--
(i) spare parts,
(ii) component parts, but not
finished products, essential to United
States products or production, or
(iii) routine servicing and
maintenance of products, to the extent
that alternative sources are not
readily or reasonably available;
(D) to information and technology essential
to United States products or production; or
(E) to medical or other humanitarian items.
(d) Termination of Sanctions.--The sanctions imposed pursuant
to this section shall apply for a period of at least 12 months
following the imposition of sanctions and shall cease to apply
thereafter only if the President determines and certifies to
the Congress that reliable information indicates that the
foreign person with respect to which the determination was made
under subsection (a)(1) has ceased to aid or abet any foreign
government, project, or entity in its efforts to acquire
chemical or biological weapons capability as described in that
subsection.
(e) Waiver.--
(1) Criterion for waiver.--The President may waive
the application of any sanction imposed on any person
pursuant to this section, after the end of the 12-month
period beginning on the date on which that sanction was
imposed on that person, if the President determines and
certifies to the Congress that such waiver is important
to the national security interests of the United
States.
(2) Notification of and report to congress.--If the
President decides to exercise the waiver authority
provided in paragraph (1), the President shall so
notify the Congress not less than 20 days before the
waiver takes effect. Such notification shall include a
report fully articulating the rationale and
circumstances which led the President to exercise the
waiver authority.
(f) Definition of Foreign Person.--For the purposes of this
section, the term ``foreign person'' means--
(1) an individual who is not a citizen of the United
States or an alien admitted for permanent residence to
the United States; or
(2) a corporation, partnership, or other entity which
is created or organized under the laws of a foreign
country or which has its principal place of business
outside the United States.
E. EMBARGO ON TRADE WITH CUBA
Section 620(a) of the Foreign Assistance Act of 1961, as amended
[22 U.S.C. 2370; P.L. 87-195, as amended by Foreign Assistance Acts
of 1963, 1965, and P.L. 95-88]
Sec. 620. Prohibitions Against Furnishing Assistance.--
(a)(1) No assistance shall be furnished under this Act to the
present government of Cuba. As an additional means of
implementing and carrying into effect the policy of the
preceding sentence, the President is authorized to establish
and maintain a total embargo upon all trade between the United
States and Cuba.
(2) Except as may be deemed necessary by the President in
the interest of the United States, no assistance shall be
furnished under this Act of any government of Cuba, nor shall
Cuba be entitled to receive any quota authorizing the
importation of Cuban sugar into the United States or to receive
any other benefit under any law of the United States, until the
President determines that such government has taken appropriate
steps according to international law standards to return to
United States citizens, and to entities not less than 50 per
centum beneficially owned by United States citizens, or to
provide equitable compensation to such citizens and entities
for property taken from such citizens and entities on or after
January 1, 1959, by the Government of Cuba.
Cuban Democracy Act of 1992
(Title XVII of the National Defense Authorization Act for Fiscal Year
1993)
[22 U.S.C. 6001 et seq.; P.L. 102-484, title XVII, as amended by P.L.
104-114]
SEC. 1701. SHORT TITLE.
This Act may be cited as the ``Cuban Democracy Act of
1992''.
SEC. 1702. FINDINGS.
The Congress makes the following findings:
(1) The government of Fidel Castro has demonstrated
consistent disregard for internationally accepted
standards of human rights and for democratic values. It
restricts the Cuban people's exercise of freedom of
speech, press, assembly, and other rights recognized by
the Universal Declaration of Human Rights adopted by
the General Assembly of the United Nations on December
10, 1948. It has refused to admit into Cuba the
representative of the United Nations Human Rights
Commission appointed to investigate human rights
violations on the island.
(2) The Cuban people have demonstrated their yearning
for freedom and their increasing opposition to the
Castro government by risking their lives in organizing
independent, democratic activities on the island and by
undertaking hazardous flights for freedom to the United
States and other countries.
(3) The Castro government maintains a military-
dominated economy that has decreased the well-being of
the Cuban people in order to enable the government to
engage in military interventions and subversive
activities throughout the world and, especially, in the
Western Hemisphere. These have included involvement in
narcotics trafficking and support for the FMLN
guerrillas in El Salvador.
(4) There is no sign that the Castro regime is
prepared to make any significant concessions to
democracy or to undertake any form of democratic
opening. Efforts to suppress dissent through
intimidation, imprisonment, and exile have accelerated
since the political changes that have occurred in the
former Soviet Union and Eastern Europe.
(5) Events in the former Soviet Union and Eastern
Europe have dramatically reduced Cuba's external
support and threaten Cuba's food and oil supplies.
(6) The fall of communism in the former Soviet Union
and Eastern Europe, the now universal recognition in
Latin America and the Caribbean that Cuba provides a
failed model of government and development, and the
evident inability of Cuba's economy to survive current
trends, provide the United States and the international
democratic community with an unprecedented opportunity
to promote a peaceful transition to democracy in Cuba.
(7) However, Castro's intransigence increases the
likelihood that there could be a collapse of the Cuban
economy, social upheaval, or widespread suffering. The
recently concluded Cuban Communist Party Congress has
underscored Castro's unwillingness to respond
positively to increasing pressures for reform either
from within the party or without.
(8) The United States cooperated with its European
and other allies to assist the difficult transitions
from Communist regimes in Eastern Europe. Therefore, it
is appropriate for those allies to cooperate with
United States policy to promote a peaceful transition
in Cuba.
SEC. 1703. STATEMENT OF POLICY.
It should be the policy of the United States--
(1) to seek a peaceful transition to democracy and a
resumption of economic growth in Cuba through the
careful application of sanctions directed at the Castro
government and support for the Cuban people;
(2) to seek the cooperation of other democratic
countries in this policy;
(3) to make clear to other countries that, in
determining its relations with them, the United States
will take into account their willingness to cooperate
in such a policy;
(4) to seek the speedy termination of any remaining
military or technical assistance, subsidies, or other
forms of assistance to the Government of Cuba from any
of the independent states of the former Soviet Union;
(5) to continue vigorously to oppose the human rights
violations of the Castro regime;
(6) to maintain sanctions on the Castro regime so
long as it continues to refuse to move toward
democratization and greater respect for human rights;
(7) to be prepared to reduce the sanctions in
carefully calibrated ways in response to positive
developments in Cuba;
(8) to encourage free and fair elections to determine
Cuba's political future;
(9) to request the speedy termination of any military
or technical assistance, subsidies, or other forms of
assistance to the Government of Cuba from the
government of any other country; and
(10) to initiate immediately the development of a
comprehensive United States policy toward Cuba in a
post-Castro era.
SEC. 1704. INTERNATIONAL COOPERATION.
(a) Cuban Trading Partners.--The President should encourage
the governments of countries that conduct trade with Cuba to
restrict their trade and credit relations with Cuba in a manner
consistent with the purposes of this Act.
(b) Sanctions Against Countries Assisting Cuba.--
(1) Sanctions.--The President may apply the following
sanctions to any country that provides assistance to
Cuba:
(A) The government of such country shall not
be eligible for assistance under the Foreign
Assistance Act of 1961 or assistance or sales
under the Arms Export Control Act.
(B) Such country shall not be eligible, under
any program, for forgiveness or reduction of
debt owed to the United States Government.
(2) Definition of assistance.--For purposes of
paragraph (1), the term ``assistance to Cuba''--
(A) means assistance to or for the benefit of
the Government of Cuba that is provided by
grant, concessional sale, guaranty, or
insurance, or by any other means on terms more
favorable than that generally available in the
applicable market, whether in the form of a
loan, lease, credit, or otherwise, and such
term includes subsidies for exports to Cuba and
favorable tariff treatment of articles that are
the growth, product, or manufacture of Cuba;
(B) includes an exchange, reduction, or
forgiveness of Cuban debt owed to a foreign
country in return for a grant of an equity
interest in a property, investment, or
operation of the Government of Cuba (including
the government of any political subdivision of
Cuba, and any agency or instrumentality of the
Government of Cuba) or of a Cuban national; and
(C) does not include--
(i) donations of food to non-
governmental organizations or
individuals in Cuba, or
(ii) exports of medicines or medical
supplies, instruments, or equipment
that would be permitted under section
5(c) of this Act.
As used in this paragraph, the term ``agency or
instrumentality of the Government of Cuba''
means an agency or instrumentality of a foreign
state as defined in section 1603(b) of title
28, United States Code, with each reference in
such section to ``a foreign state'' deemed to
be a reference to ``Cuba''.
(3) Applicability of section.--This section, and any
sanctions imposed pursuant to this section shall cease
to apply at such time as the President makes and
reports to the Congress a determination under section
8(a).
SEC. 1705. SUPPORT FOR THE CUBAN PEOPLE.
(a) Provisions of Law Affected.--The provisions of this
section apply notwithstanding any other provision of law,
including section 620(a) of the Foreign Assistance Act of 1961,
and notwithstanding the exercise of authorities, before the
enactment of this Act, under section 5(b) of the Trading With
the Enemy Act, the International Emergency Economic Powers Act,
or the Export Administration Act of 1979.
(b) Donations of Food.--Nothing in this or any other Act
shall prohibit donations of food to non-governmental
organizations or individuals in Cuba.
(c) Exports of Medicines and Medical Supplies.--Exports of
medicines or medical supplies, instruments, or equipment to
Cuba shall not be restricted--
(1) except to the extent such restrictions would be
permitted under section 5(m) of the Export
Administration Act of 1979 or section 203(b)(2) of the
International Emergency Economic Powers Act;
(2) except in a case in which there is a reasonable
likelihood that the item to be exported will be used
for purposes of torture or other human rights abuses;
(3) except in a case in which there is a reasonable
likelihood that the item to be exported will be
reexported; and
(4) except in a case in which the item to be exported
could be used in the production of any biotechnological
product.
(d) Requirements for Certain Exports.--
(1) Onsite verifications.--(A) Subject to
subparagraph (B), an export may be made under
subsection (c) only if the President determines that
the United States Government is able to verify, by
onsite inspections and other appropriate means, that
the exported item is to be used for the purposes for
which it was intended and only for the use and benefit
of the Cuban people.
(B) Exception.--Subparagraph (A) does not apply to
donations to nongovernmental organizations in Cuba of
medicines for humanitarian purposes.
(2) Licenses.--Exports permitted under subsection (c)
shall be made pursuant to specific licenses issued by
the United States Government.
(e) Telecommunications Services and Facilities.--
(1) Telecommunications services.--Telecommunications
services between the United States and Cuba shall be
permitted.
(2) Telecommunications facilities.--
Telecommunications facilities are authorized in such
quantity and of such quality as may be necessary to
provide efficient and adequate telecommunications
services between the United States and Cuba.
(3) Licensing of payments to cuba.--(A) The President
may provide for the issuance of licenses for the full
or partial payment to Cuba of amounts due Cuba as a
result of the provision of telecommunications services
authorized by this subsection, in a manner that is
consistent with the public interest and the purposes of
this Act, except that this paragraph shall not require
any withdrawal from any account blocked pursuant to
regulations issued under section 5(b) of the Trading
With the Enemy Act.
(B) If only partial payments are made to Cuba under
subparagraph (A), the amounts withheld from Cuba shall
be deposited in an account in a banking institution in
the United States. Such account shall be blocked in the
same manner as any other account containing funds in
which Cuba has any interest, pursuant to regulations
issued under section 5(b) of the Trading With the Enemy
Act.
(4) Authority of federal communications commission.--
Nothing in this subsection shall be construed to
supersede the authority of the Federal Communications
Commission.
(5) Prohibition on investment in domestic
telecommunications services.--Nothing in this
subsection shall be construed to authorize the
investment by any United states person in the domestic
telecommunications network within Cuba. For purposes of
this paragraph, an ``investment'' in the domestic
telecommunications network within Cuba includes the
contribution (including by donation) of funds or
anything of value to or for, and the making of loans to
or for, such network.
(6) Reports to congress.--The President shall submit
to the Congress on a semiannual basis a report
detailing payments made to Cuba by any United States
person as a result of the provision of
telecommunications services authorized by this
subsection.
(f) Direct Mail Delivery to Cuba.--The United States Postal
Service shall take such actions as are necessary to provide
direct mail service to and from Cuba, including, in the absence
of common carrier service between the 2 countries, the use of
charter service providers.
(g) Assistance To Support Democracy in Cuba.--The United
States Government may provide assistance, through appropriate
nongovernmental organizations, for the support of individuals
and organizations to promote nonviolent democratic change in
Cuba.
SEC. 1706. SANCTIONS.
(a) Prohibition on Certain Transactions Between Certain
United States Firms and Cuba.--
(1) Prohibition.--Notwithstanding any other provision
of law, no license may be issued for any transaction
described in section 515.559 of title 31, Code of
Federal Regulations, as in effect on July 1, 1989.
(2) Applicability to existing contracts.--Paragraph
(1) shall not affect any contract entered into before
the date of the enactment of this Act.
(b) Prohibitions on Vessels.--
(1) Vessels engaging in trade.--Beginning on the 61st
day after the date of the enactment of this Act, a
vessel which enters a port or place in Cuba to engage
in the trade of goods or services may not, within 180
days after departure from such port or place in Cuba,
load or unload any freight at any place in the United
States, except pursuant to a license issued by the
Secretary of the Treasury.
(2) Vessels carrying goods or passengers to or from
cuba.--Except as specifically authorized by the
Secretary of the Treasury, a vessel carrying goods or
passengers to or from Cuba or carrying goods in which
Cuba or a Cuban national has any interest may not enter
a United States port. For purposes of this paragraph,
the term ``Cuban national'' means a national of Cuba,
as the term ``national'' is defined in section 515.302
of title 31, Code of Federal Regulations, as of August
1, 1992.
(3) Inapplicability of ship stores general license.--
No commodities which may be exported under a general
license described in section 771.9 of title 15, Code of
Federal Regulations, as in effect on May 1, 1992, may
be exported under a general license to any vessel
carrying goods or passengers to or from Cuba or
carrying goods in which Cuba or a Cuban national has an
interest.
(4) Definitions.--As used in this subsection--
(A) the term ``vessel'' includes every
description of water craft or other contrivance
used, or capable of being used, as a means of
transportation in water, but does not include
aircraft; and
(B) the term ``United States'' includes the
territories and possessions of the United
States and the customs waters of the United
States (as defined in section 401 of the Tariff
Act of 1930 (19 U.S.C. 1401)).
(c) Restrictions on Remittances to Cuba.--The President
shall establish strict limits on remittances to Cuba by United
States persons for the purpose of financing the travel of
Cubans to the United States, in order to ensure that such
remittances reflect only the reasonable costs associated with
such travel, and are not used by the Government of Cuba as a
means of gaining access to United States currency.
(d) Clarification of Applicability of Sanctions.--The
prohibitions contained in subsections (a), (b), and (c) shall
not apply with respect to any activity otherwise permitted by
section 5 or section 7 of this Act or any activity which may
not be regulated or prohibited under section 5(b)(4) of the
Trading With the Enemy Act (50 U.S.C. App. 5(b)(4)).
SEC. 1707. POLICY TOWARD A TRANSITIONAL CUBAN GOVERNMENT.
Food, medicine, and medical supplies for humanitarian
purposes should be made available for Cuba under the Foreign
Assistance Act of 1961 and the Agricultural Trade Development
and Assistance Act of 1954 if the President determines and
certifies to the Committee on Foreign Affairs of the House of
Representatives and the Committee on Foreign Relations of the
Senate that the government in power in Cuba--
(1) has made a public commitment to hold free and
fair elections for a new government within 6 months and
is proceeding to implement that decision;
(2) has made a public commitment to respect, and is
respecting, internationally recognized human rights and
basic democratic freedoms; and
(3) is not providing weapons or funds to any group,
in any other country, that seeks the violent overthrow
of the government of that country.
SEC. 1708. POLICY TOWARD A DEMOCRATIC CUBAN GOVERNMENT.
(a) Waiver of Restrictions.--The President may waive the
requirements of section 6 if the President determines and
reports to the Congress that the Government of Cuba--
(1) has held free and fair elections conducted under
internationally recognized observers;
(2) has permitted opposition parties ample time to
organize and campaign for such elections, and has
permitted full access to the media to all candidates in
the elections;
(3) is showing respect for the basic civil liberties
and human rights of the citizens of Cuba;
(4) is moving toward establishing a free market
economic system; and
(5) has committed itself to constitutional change
that would ensure regular free and fair elections that
meet the requirements of paragraph (2).
(b) Policies.--If the President makes a determination under
subsection (a), the President shall take the following actions
with respect to a Cuban Government elected pursuant to
elections described in subsection (a):
(1) To encourage the admission or reentry of such
government to international organizations and
international financial institutions.
(2) To provide emergency relief during Cuba's
transition to a viable economic system.
(3) To take steps to end the United States trade
embargo of Cuba.
SEC. 1709. EXISTING CLAIMS NOT AFFECTED.
Except as provided in section 5(a), nothing in this Act
affects the provisions of section 620(a)(2) of the Foreign
Assistance Act of 1961.
SEC. 1710. ENFORCEMENT.
(a) Enforcement Authority.--The authority to enforce this
Act shall be carried out by the Secretary of the Treasury. The
Secretary of the Treasury shall exercise the authorities of the
Trading With the Enemy Act in enforcing this Act. In carrying
out this subsection, the Secretary of the Treasury shall take
the necessary steps to ensure that activities permitted under
section 5 are carried out for the purposes set forth in this
Act and not for purposes of the accumulation by the Cuban
Government of excessive amounts of United States currency or
the accumulation of excessive profits by any person or entity.
(b) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of the Treasury such sums
as may be necessary to carry out this Act.
(c) Penalties Under the Trading With the Enemy Act.--
[Amends section 16 of the Trading With the Enemy Act (50 U.S.C.
App. 16):
[(1) by inserting ``(a)'' before ``That whoever'';
and
(2) by adding at the end the following:
``(b)(1) The Secretary of the Treasury may impose a civil
penalty of not more than $50,000 on any person who violates any
license, order, rule, or regulation issued under this Act.
``(2) Any property, funds, securities, papers, or other
articles or documents, or any vessel, together with its tackle,
apparel, furniture, and equipment, that is the subject of a
violation under paragraph (1) shall, at the discretion of the
Secretary of the Treasury, be forfeited to the United States
Government.
``(3) The penalties provided under this subsection may not
be imposed for--
``(A) news gathering, research, or the export or
import of, or transmission of, information or
informational materials; or
``(B) clearly defined educational or religious
activities, or activities of recognized human rights
organizations, that are reasonably limited in
frequency, duration, and number of participants.
``(4) The penalties provided under this subsection may be
imposed only on the record after opportunity for an agency
hearing in accordance with sections 554 through 557 of title 5,
United States Code, with the right to prehearing discovery.
``(5) Judicial review of any penalty imposed under this
subsection may be had to the extent provided in section 702 of
title 5, United States Code.''.]
(d) Applicability of Penalties.--The penalties set forth in
section 16 of the Trading With the Enemy Act shall apply to
violations of this Act to the same extent as such penalties
apply to violations under that Act.
(e) Office of Foreign Assets Control.--The Department of
the Treasury shall establish and maintain a branch of the
Office of Foreign Assets Control in Miami, Florida, in order to
strengthen the enforcement of this Act.
SEC. 1711. DEFINITION.
As used in this Act, the term ``United States person''
means any United States citizen or alien admitted for permanent
residence in the United States, and any corporation,
partnership, or other organization organized under the laws of
the United States.
SEC. 1712. EFFECTIVE DATE.
This Act shall take effect on the date of the enactment of
this Act.
Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996
[Excerpts]
[22 U.S.C. 6032, 6040, and 6062-6064; P.L. 104-114]
TITLE I--STRENGTHENING INTERNATIONAL SANCTIONS AGAINST THE CASTRO
GOVERNMENT
* * * * * * *
SEC. 102. ENFORCEMENT OF THE ECONOMIC EMBARGO OF CUBA.
(a) Policy.--
(1) Restrictions by other countries.--The Congress
hereby reaffirms section 1704(a) of the Cuban Democracy
Act of 1992, which states that the President should
encourage foreign countries to restrict trade and
credit relations with Cuba in a manner consistent with
the purposes of that Act.
(2) Sanctions on other countries.--The Congress
further urges the President to take immediate steps to
apply the sanctions described in section 1704(b)(1) of
that Act against countries assisting Cuba.
(b) Diplomatic Efforts.--The Secretary of State should
ensure that United States diplomatic personnel abroad
understand and, in their contacts with foreign officials, are
communicating the reasons for the United States economic
embargo of Cuba, and are urging foreign governments to
cooperate more effectively with the embargo.
(c) Existing Regulations.--The President shall instruct the
Secretary of the Treasury and the Attorney General to enforce
fully the Cuban Assets Control Regulations set forth in part
515 of title 31, Code of Federal Regulations.
(d) Trading With the Enemy Act.--
[(1) amends section 16(b) of the Trading With the
Enemy Act (50 U.S.C. App. 16(b)), as added by Public
Law 102-484, to read as follows:
[``(b)(1) A civil penalty of not to exceed
$50,000 may be imposed by the Secretary of the
Treasury on any person who violates any
license, order, rule, or regulation issued in
compliance with the provisions of this Act.
[``(2) Any property, funds, securities,
papers, or other articles or documents, or any
vessel, together with its tackle, apparel,
furniture, and equipment, that is the subject
of a violation under paragraph (1) shall, at
the direction of the Secretary of the Treasury,
be forfeited to the United States Government.
[``(3) The penalties provided under this
subsection may be imposed only on the record
after opportunity for an agency hearing in
accordance with sections 554 through 557 of
title 5, United States Code, with the right to
prehearing discovery.
[``(4) Judicial review of any penalty imposed
under this subsection may be had to the extent
provided in section 702 of title 5, United
States Code.''.
[(2) Further amends section 16 of the Trading With
the Enemy Act by striking subsection (b), as added by
Public Law 102-393, concerning criminal forfeiture.]
(e) Denial of Visas to Certain Cuban Nationals.--It is the
sense of the Congress that the President should instruct the
Secretary of State and the Attorney General to enforce fully
existing regulations to deny visas to Cuban nationals
considered by the Secretary of State to be officers or
employees of the Cuban Government or of the Communist Party of
Cuba.
[(f) Amends section 1704(b)(2) of the Cuban Democracy Act of
1992 (22 U.S.C. 6003(b)(2)) concerning coverage of debt-for-
equity swaps by the economic embargo of Cuba.
[(g) Amends section 1705(e) of the Cuban Democracy Act of
1992 (22 U.S.C. 6004(e)) concerning telecommunications
services.]
(h) Codification of Economic Embargo.--The economic embargo
of Cuba, as in effect on March 1, 1996, including all
restrictions under part 515 of title 31, Code of Federal
Regulations, shall be in effect upon the enactment of this Act,
and shall remain in effect, subject to section 204 of this Act.
the term ``agency'' in section 551(1) of title 5, United States
Code.
* * * * * * *
SEC. 110. IMPORTATION SAFEGUARD AGAINST CERTAIN CUBAN PRODUCTS.
(a) Prohibition on Import of and Dealings in Cuban
Products.--The Congress notes that section 515.204 of title 31,
Code of Federal Regulations, prohibits the entry of, and
dealings outside the United States in, merchandise that--
(1) is of Cuban origin;
(2) is or has been located in or transported from or
through Cuba; or
(3) is made or derived in whole or in part of any
article which is the growth, produce, or manufacture of
Cuba.
(b) Effect of NAFTA.--The Congress notes that United States
accession to the North American Free Trade Agreement does not
modify or alter the United States sanctions against Cuba. The
statement of administrative action accompanying that trade
agreement specifically states the following:
(1) ``The NAFTA rules of origin will not in any way
diminish the Cuban sanctions program. . . . Nothing in
the NAFTA would operate to override this
prohibition.''.
(2) ``Article 309(3) [of the NAFTA] permits the
United States to ensure that Cuban products or goods
made from Cuban materials are not imported into the
United States from Mexico or Canada and that United
States products are not exported to Cuba through those
countries.''.
(c) Restriction of Sugar Imports.--The Congress notes that
section 902(c) of the Food Security Act of 1985 (Public Law 99-
198) requires the President not to allocate any of the sugar
import quota to a country that is a net importer of sugar
unless appropriate officials of that country verify to the
President that the country does not import for reexport to the
United States any sugar produced in Cuba.
(d) Assurances Regarding Sugar Products.--Protection of
essential security interests of the United States requires
assurances that sugar products that are entered, or withdrawn
from warehouse for consumption, into the customs territory of
the United States are not products of Cuba.
TITLE II--ASSISTANCE TO A FREE AND INDEPENDENT CUBA
* * * * * * *
SEC. 202. ASSISTANCE FOR THE CUBAN PEOPLE.
(a) Authorization.--
(1) In general.--The President shall develop a plan
for providing economic assistance to Cuba at such time
as the President determines that a transition
government or a democratically elected government in
Cuba (as determined under section 203(c)) is in power.
(2) Effect on other laws.--Assistance may be
provided under this section subject to an authorization
of appropriations and subject to the availability of
appropriations.
(b) Plan for Assistance.--
(1) Development of plan.--The President shall
develop a plan for providing assistance under this
section--
(A) to Cuba when a transition government in
Cuba is in power; and
(B) to Cuba when a democratically elected
government in Cuba is in power.
(2) Types of assistance.--Assistance under the plan
developed under paragraph (1) may, subject to an
authorization of appropriations and subject to the
availability of appropriations, include the following:
(A) Transition government.--(i) Except as
provided in clause (ii), assistance to Cuba
under a transition government shall, subject to
an authorization of appropriations and subject
to the availability of appropriations, be
limited to--
(I) such food, medicine, medical
supplies and equipment, and assistance
to meet emergency energy needs, as is
necessary to meet the basic human needs
of the Cuban people; and
(II) assistance described in
subparagraph (C).
(ii) Assistance in addition to assistance
under clause (i) may be provided, but only
after the President certifies to the
appropriate congressional committees, in
accordance with procedures applicable to
reprogramming notifications under section 634A
of the Foreign Assistance Act of 1961, that
such assistance is essential to the successful
completion of the transition to democracy.
(iii) Only after a transition government in
Cuba is in power, freedom of individuals to
travel to visit their relatives without any
restrictions shall be permitted.
(B) Democratically elected government.--
Assistance to a democratically elected
government in Cuba may, subject to an
authorization of appropriations and subject to
the availability of appropriations, consist of
economic assistance in addition to assistance
available under subparagraph (A), together with
assistance described in subparagraph (C). Such
economic assistance may include--
(i) assistance under chapter 1 of
part I (relating to development
assistance), and chapter 4 of part II
(relating to the economic support
fund), of the Foreign Assistance Act of
1961;
(ii) assistance under the
Agricultural Trade Development and
Assistance Act of 1954;
(iii) financing, guarantees, and
other forms of assistance provided by
the Export-Import Bank of the United
States;
(iv) financial support provided by
the Overseas Private Investment
Corporation for investment projects in
Cuba;
(v) assistance provided by the Trade
and Development Agency;
(vi) Peace Corps programs; and
(vii) other appropriate assistance
to carry out the policy of section 201.
(C) Military adjustment assistance.--
Assistance to a transition government in Cuba
and to a democratically elected government in
Cuba shall also include assistance in preparing
the Cuban military forces to adjust to an
appropriate role in a democracy.
(c) Strategy for Distribution.--The plan developed under
subsection (b) shall include a strategy for distributing
assistance under the plan.
(d) Distribution.--Assistance under the plan developed under
subsection (b) shall be provided through United States
Government organizations and nongovernmental organizations and
private and voluntary organizations, whether within or outside
the United States, including humanitarian, educational, labor,
and private sector organizations.
(e) International Efforts.--The President shall take the
necessary steps--
(1) to seek to obtain the agreement of other
countries and of international financial institutions
and multilateral organizations to provide to a
transition government in Cuba, and to a democratically
elected government in Cuba, assistance comparable to
that provided by the United States under this Act; and
(2) to work with such countries, institutions, and
organizations to coordinate all such assistance
programs.
(f) Communication with the Cuban People.--The President
shall take the necessary steps to communicate to the Cuban
people the plan for assistance developed under this section.
(g) Report to Congress.--Not later than 180 days after the
date of the enactment of this Act, the President shall transmit
to the appropriate congressional committees a report describing
in detail the plan developed under this section.
(h) Report on Trade and Investment Relations.--
(1) Report to congress.--The President, following
the transmittal to the Congress of a determination
under section 203(c)(3) that a democratically elected
government in Cuba is in power, shall submit to the
Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the
Senate and the appropriate congressional committees a
report that describes--
(A) acts, policies, and practices which
constitute significant barriers to, or
distortions of, United States trade in goods or
services or foreign direct investment with
respect to Cuba;
(B) policy objectives of the United States
regarding trade relations with a democratically
elected government in Cuba, and the reasons
therefor, including possible--
(i) reciprocal extension of
nondiscriminatory trade treatment
(most-favored-nation treatment);
(ii) designation of Cuba as a
beneficiary developing country under
title V of the Trade Act of 1974
(relating to the Generalized System of
Preferences) or as a beneficiary
country under the Caribbean Basin
Economic Recovery Act, and the
implications of such designation with
respect to trade with any other country
that is such a beneficiary developing
country or beneficiary country or is a
party to the North American Free Trade
Agreement; and
(iii) negotiations regarding free
trade, including the accession of Cuba
to the North American Free Trade
Agreement;
(C) specific trade negotiating objectives of
the United States with respect to Cuba,
including the objectives described in section
108(b)(5) of the North American Free Trade
Agreement Implementation Act (19 U.S.C.
3317(b)(5)); and
(D) actions proposed or anticipated to be
undertaken, and any proposed legislation
necessary or appropriate, to achieve any of
such policy and negotiating objectives.
(2) Consultation.--The President shall consult with
the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the
Senate and the appropriate congressional committees and
shall seek advice from the appropriate advisory
committees established under section 135 of the Trade
Act of 1974 regarding the policy and negotiating
objectives and the legislative proposals described in
paragraph (1).
SEC. 203. COORDINATION OF ASSISTANCE PROGRAM; IMPLEMENTATION AND
REPORTS TO CONGRESS; REPROGRAMMING.
(a) Coordinating Official.--The President shall designate a
coordinating official who shall be responsible for--
(1) implementing the strategy for distributing
assistance described in section 202(b);
(2) ensuring the speedy and efficient distribution of
such assistance; and
(3) ensuring coordination among, and appropriate
oversight by, the agencies of the United States that
provide assistance described in section 202(b),
including resolving any disputes among such agencies.
(b) United States-Cuba Council.--Upon making a determination
under subsection (c)(3) that a democratically elected
government in Cuba is in power, the President, after
consultation with the coordinating official, is authorized to
designate a United States-Cuba council--
(1) to ensure coordination between the United States
Government and the private sector in responding to
change in Cuba, and in promoting market-based
development in Cuba; and
(2) to establish periodic meetings between
representatives of the United States and Cuban private
sectors for the purpose of facilitating bilateral
trade.
(c) Implementation of Plan; Reports to Congress.--
(1) Implementation with respect to transition
government.--Upon making a determination that a
transition government in Cuba is in power, the
President shall transmit that determination to the
appropriate congressional committees and shall, subject
to an authorization of appropriations and subject to
the availability of appropriations, commence the
delivery and distribution of assistance to such
transition government under the plan developed under
section 202(b).
(2) Reports to congress.--(A) The President shall
transmit to the appropriate congressional committees a
report setting forth the strategy for providing
assistance described in section 202(b)(2) (A) and (C)
to the transition government in Cuba under the plan of
assistance developed under section 202(b), the types of
such assistance, and the extent to which such
assistance has been distributed in accordance with the
plan.
(B) The President shall transmit the report not later
than 90 days after making the determination referred to
in paragraph (1), except that the President shall
transmit the report in preliminary form not later than
15 days after making that determination.
(3) Implementation with respect to democratically
elected government.--The President shall, upon
determining that a democratically elected government in
Cuba is in power, submit that determination to the
appropriate congressional committees and shall, subject
to an authorization of appropriations and subject to
the availability of appropriations, commence the
delivery and distribution of assistance to such
democratically elected government under the plan
developed under section 202(b).
(4) Annual reports to congress.--Not later than 60
days after the end of each fiscal year, the President
shall transmit to the appropriate congressional
committees a report on the assistance provided under
the plan developed under section 202(b), including a
description of each type of assistance, the amounts
expended for such assistance, and a description of the
assistance to be provided under the plan in the current
fiscal year.
(d) Reprogramming.--Any changes in the assistance to be
provided under the plan developed under section 202(b) may not
be made unless the President notifies the appropriate
congressional committees at least 15 days in advance in
accordance with the procedures applicable to reprogramming
notifications under section 634A of the Foreign Assistance Act
of 1961 (22 U.S.C. 2394-1).
SEC. 204. TERMINATION OF THE ECONOMIC EMBARGO OF CUBA.
(a) Presidential Actions.--Upon submitting a determination to
the appropriate congressional committees under section
203(c)(1) that a transition government in Cuba is in power, the
President, after consultation with the Congress, is authorized
to take steps to suspend the economic embargo of Cuba and to
suspend the right of action created in section 302 with respect
to actions thereafter filed against the Cuban Government, to
the extent that such steps contribute to a stable foundation
for a democratically elected government in Cuba.
(b) Suspension of Certain Provisions of Law.--In carrying out
subsection (a), the President may suspend the enforcement of--
(1) section 620(a) of the Foreign Assistance Act of
1961 (22 U.S.C. 2370(a));
(2) section 620(f) of the Foreign Assistance Act of
1961 (22 U.S.C. 2370(f)) with respect to the ``Republic
of Cuba'';
(3) sections 1704, 1705(d), and 1706 of the Cuban
Democracy Act of 1992 (22 U.S.C. 6003, 6004(d), and
6005);
(4) section 902(c) of the Food Security Act of 1985;
and
(5) the prohibitions on transactions described in
part 515 of title 31, Code of Federal Regulations.
(c) Additional Presidential Actions.--Upon submitting a
determination to the appropriate congressional committees under
section 203(c)(3) that a democratically elected government in
Cuba is in power, the President shall take steps to terminate
the economic embargo of Cuba, including the restrictions under
part 515 of title 31, Code of Federal Regulations.
(d) Conforming Amendments.--On the date on which the
President submits a determination under section 203(c)(3)--
(1) section 620(a) of the Foreign Assistance Act of
1961 (22 U.S.C. 2370(a)) is repealed;
(2) section 620(f) of the Foreign Assistance Act of
1961 (22 U.S.C. 2370(f)) is amended by striking
``Republic of Cuba'';
(3) sections 1704, 1705(d), and 1706 of the Cuban
Democracy Act of 1992 (22 U.S.C. 6003, 6004(d), and
6005) are repealed; and
(4) section 902(c) of the Food Security Act of 1985
is repealed.
(e) Review of Suspension of Economic Embargo.--
(1) Review.--If the President takes action under
subsection (a) to suspend the economic embargo of Cuba,
the President shall immediately so notify the Congress.
The President shall report to the Congress no less
frequently than every 6 months thereafter, until he
submits a determination under section 203(c)(3) that a
democratically elected government in Cuba is in power,
on the progress being made by Cuba toward the
establishment of such a democratically elected
government. The action of the President under
subsection (a) shall cease to be effective upon the
enactment of a joint resolution described in paragraph
(2).
(2) Joint resolutions.--For purposes of this
subsection, the term ``joint resolution'' means only a
joint resolution of the 2 Houses of Congress, the
matter after the resolving clause of which is as
follows: ``That the Congress disapproves the action of
the President under section 204(a) of the Cuban Liberty
and Democratic Solidarity (LIBERTAD) Act of 1996 to
suspend the economic embargo of Cuba, notice of which
was submitted to the Congress on ----.'', with the
blank space being filled with the appropriate date.
(3) Referral to committees.--Joint resolutions
introduced in the House of Representatives shall be
referred to the Committee on International Relations
and joint resolutions introduced in the Senate shall be
referred to the Committee on Foreign Relations.
(4) Procedures.--(A) Any joint resolution shall be
considered in the Senate in accordance with the
provisions of section 601(b) of the International
Security Assistance and Arms Export Control Act of
1976.
(B) For the purpose of expediting the consideration
and enactment of joint resolutions, a motion to proceed
to the consideration of any joint resolution after it
has been reported by the appropriate committee shall be
treated as highly privileged in the House of
Representatives.
(C) Not more than 1 joint resolution may be
considered in the House of Representatives and the
Senate in the 6-month period beginning on the date on
which the President notifies the Congress under
paragraph (1) of the action taken under subsection (a),
and in each 6-month period thereafter.
F. ECONOMIC SANCTIONS AGAINST IRAQ, IRAN, AND LIBYA
Iraq Sanctions Act of 1990
(Sections 586-586I of the Foreign Assistance and Related Programs
Appropriation Act, 1991)
[Excerpts]
[50 U.S.C. 1701 note; P.L. 101-513]
SEC. 586. SHORT TITLE.
Sections 586 through 586J of this Act may be cited as the
``Iraq Sanctions Act of 1990''.
* * * * * * *
SEC. 586C. TRADE EMBARGO AGAINST IRAQ.
(a) Continuation of Embargo.--Except as otherwise provided
in this section, the President shall continue to impose the
trade embargo and other economic sanctions with respect to Iraq
and Kuwait that the United States is imposing, in response to
Iraq's invasion of Kuwait, pursuant to Executive Orders
Numbered 12724 and 12725 (August 9, 1990) and, to the extent
they are still in effect, Executive Orders Numbered 12722 and
12723 (August 2, 1990). Notwithstanding any other provision of
law, no funds, credits, guarantees, or insurance appropriated
or otherwise made available by this or any other Act for fiscal
year 1991 or any fiscal year thereafter shall be used to
support or administer any financial or commercial operation of
any United States Government department, agency, or other
entity, or of any person subject to the jurisdiction of the
United States, for the benefit of the Government of Iraq, its
agencies or instrumentalities, or any person working on behalf
of the Government of Iraq, contrary to the trade embargo and
other economic sanctions imposed in accordance with this
section.
(b) Humanitarian Assistance.--To the extent that
transactions involving foodstuffs or payments for foodstuffs
are exempted ``in humanitarian circumstances'' from the
prohibitions established by the United States pursuant to
United Nations Security Council Resolution 661 (1990), those
exemptions shall be limited to foodstuffs that are to be
provided consistent with United Nations Security Council
Resolution 666 (1990) and other relevant Security Council
resolutions.
(c) Notice to Congress of Exceptions to and Termination of
Sanctions.--
(1) Notice of regulations.--Any regulations issued
after the date of enactment of this Act with respect to
the economic sanctions imposed with respect to Iraq and
Kuwait by the United States under Executive Orders
Numbered 12722 and 12723 (August 2, 1990) and Executive
Orders Numbered 12724 and 12725 (August 9, 1990) shall
be submitted to the Congress before these regulations
take effect.
(2) Notice of termination of sanctions.--The
President shall notify the Congress at least 15 days
before the termination, in whole or in part, of any
sanction imposed with respect to Iraq or Kuwait
pursuant to those Executive orders.
(d) Relation to Other Laws.--
(1) Sanctions legislation.--The sanctions that are
described in subsection (a) are in addition to, and not
in lieu of the sanctions provided for in section 586G
of this Act or any other provision of law.
(2) National emergencies and united nations
legislation.--Nothing in this section supersedes any
provision of the National Emergencies Act or any
authority of the President under the International
Emergency Economic Powers Act or section 5(a) of the
United Nations Participation Act of 1945.
SEC. 586D. COMPLIANCE WITH UNITED NATIONS SANCTIONS AGAINST IRAQ.
(a) Denial of Assistance.--None of the funds appropriated
or otherwise made available pursuant to this Act to carry out
the Foreign Assistance Act of 1961 (including title IV of
chapter 2 of part I, relating to the Overseas Private
Investment Corporation) or the Arms Export Control Act may be
used to provide assistance to any country that is not in
compliance with the United Nations Security Council sanctions
against Iraq unless the President determines and so certifies
to the Congress that--
(1) such assistance is in the national interest of
the United States;
(2) such assistance will directly benefit the needy
people in that country; or
(3) the assistance to be provided will be
humanitarian assistance for foreign nationals who have
fled Iraq and Kuwait.
(b) Import Sanctions.--If the President considers that the
taking of such action would promote the effectiveness of the
economic sanctions of the United Nations and the United States
imposed with respect to Iraq, and is consistent with the
national interest, the President may prohibit, for such a
period of time as he considers appropriate, the importation
into the United States of any or all products of any foreign
country that has not prohibited--
(1) the importation of products of Iraq into its
customs territory, and
(2) the export of its products to Iraq.
SEC. 586E. PENALTIES FOR VIOLATIONS OF EMBARGO.
Notwithstanding section 206 of the International Emergency
Economic Powers Act (50 U.S.C. 1705) and section 5(b) of the
United Nations Participation Act of 1945 (22 U.S.C. 287c(b))--
(1) a civil penalty of not to exceed $250,000 may be
imposed on any person who, after the date of enactment
of this Act, violates or evades or attempts to violate
or evade Executive Order Numbered 12722, 12723, 12724,
or 12725 or any license, order, or regulation issued
under any such Executive order; and
(2) whoever, after the date of enactment of this Act,
willfully violates or evades or attempts to violate or
evade Executive Order Numbered 12722, 12723, 12724, or
12725 or any license, order, or regulation issued under
any such Executive order--
(A) shall, upon conviction, be fined not more
than $1,000,000, if a person other than a
natural person; or
(B) if a natural person, shall, upon
conviction, be fined not more than $1,000,000,
be imprisoned for not more than 12 years, or
both.
Any officer, director, or agent of any corporation who
knowingly participates in a violation, evasion, or attempt
described in paragraph (2) may be punished by imposition of the
fine or imprisonment (or both) specified in subparagraph (B) of
that paragraph.
* * * * * * *
SEC. 586G. SANCTIONS AGAINST IRAQ.
(a) Imposition.--Except as provided in section 586H, the
following sanctions shall apply with respect to Iraq:
(1) FMS sales.--The United States Government shall
not enter into any sale with Iraq under the Arms Export
Control Act.
(2) Commercial arms sales.--Licenses shall not be
issued for the export to Iraq of any item on the United
States Munitions List.
(3) Exports of certain goods and technology.--The
authorities of section 6 of the Export Administration
Act of 1979 (50 U.S.C. App. 2405) shall be used to
prohibit the export to Iraq of any goods or technology
listed pursuant to that section or section 5(c)(1) of
that Act (50 U.S.C. App. 2404(c)(1)) on the control
list provided for in section 4(b) of that Act (50
U.S.C. App. 2403(b)).
(4) Nuclear equipment, materials, and technology.--
(A) NRC licenses.--The Nuclear Regulatory
Commission shall not issue any license or other
authorization under the Atomic Energy Act of
1954 (42 U.S.C. 2011 and following) for the
export to Iraq of any source or special nuclear
material, any production or utilization
facility, any sensitive nuclear technology, any
component, item, or substance determined to
have significance for nuclear explosive
purposes pursuant to section 109b of the Atomic
Energy Act of 1954 (42 U.S.C. 2139(b)), or any
other material or technology requiring such a
license or authorization.
(B) Distribution of nuclear materials.--The
authority of the Atomic Energy Act of 1954
shall not be used to distribute any special
nuclear material, source material, or byproduct
material to Iraq.
(C) DOE authorizations.--The Secretary of
Energy shall not provide a specific
authorization under section 57b. (2) of the
Atomic Energy Act of 1954 (42 U.S.C.
2077(b)(2)) for any activity that would
constitute directly or indirectly engaging in
Iraq in activities that require a specific
authorization under that section.
(5) Assistance from international financial
institutions.--The United States shall oppose any loan
or financial or technical assistance to Iraq by
international financial institutions in accordance with
section 701 of the International Financial Institutions
Act (22 U.S.C. 262d).
(6) Assistance through the export-import bank.--
Credits and credit guarantees through the Export-Import
Bank of the United States shall be denied to Iraq.
(7) Assistance through the commodity credit
corporation.--Credit, credit guarantees, and other
assistance through the Commodity Credit Corporation
shall be denied to Iraq.
(8) Foreign assistance.--All forms of assistance
under the Foreign Assistance Act of 1961 (22 U.S.C.
2151 and following) other than emergency assistance for
medical supplies and other forms of emergency
humanitarian assistance, and under the Arms Exports
Control Act (22 U.S.C. 2751 and following) shall be
denied to Iraq.
(b) Contract Sanctity.--For purposes of the export controls
imposed pursuant to subsection (a)(3), the date described in
subsection (m)(1) of section 6 of the Export Administration Act
of 1979 (50 U.S.C. App. 2405) shall be deemed to be August 1,
1990.
SEC. 586H. WAIVER AUTHORITY.
(a) In General.--The President may waive the requirements
of any paragraph of section 586G(a) if the President makes a
certification under subsection (b) or subsection (c).
(b) Certification of Fundamental Changes in Iraqi Policies
and Actions.--The authority of subsection (a) may be exercised
60 days after the President certifies to the Congress that--
(1) the Government of Iraq--
(A) has demonstrated, through a pattern of
conduct, substantial improvement in its respect
for internationally recognized human rights;
(B) is not acquiring, developing, or
manufacturing (i) ballistic missiles, (ii)
chemical, biological, or nuclear weapons, or
(iii) components for such weapons; has forsworn
the first use of such weapons; and is taking
substantial and verifiable steps to destroy or
otherwise dispose of any such missiles and
weapons it possesses; and
(C) does not provide support for
international terrorism;
(2) the Government of Iraq is in substantial
compliance with its obligations under international
law, including--
(A) the Charter of the United Nations;
(B) the International Covenant on Civil and
Political Rights (done at New York, December
16, 1966) and the International Covenant on
Economic, Social, and Cultural Rights (done at
New York, December 16, 1966);
(C) the Convention on the Prevention and
Punishment of the Crime of Genocide (done at
Paris, December 9, 1948);
(D) the Protocol for the Prohibition of the
Use in War of Asphyxiating, Poisonous or Other
Gases, and of Bacteriological Methods of
Warfare (done at Geneva, June 17, 1925);
(E) the Treaty on the Non-Proliferation of
Nuclear Weapons (done at Washington, London,
and Moscow, July 1, 1968); and
(F) the Convention on the Prohibition of the
Development, Production and Stockpiling of
Bacteriological (Biological) and Toxin Weapons
and on Their Destruction (done at Washington,
London, and Moscow, April 10, 1972); and
(3) the President has determined that it is essential
to the national interests of the United States to
exercise the authority of subsection (a).
(c) Certification of Fundamental Changes in Iraqi
Leadership and Policies.--The authority of subsection (a) may
be exercised 30 days after the President certifies to the
Congress that--
(1) there has been a fundamental change in the
leadership of the Government of Iraq; and
(2) the new Government of Iraq has provided reliable
and credible assurance that--
(A) it respects internationally recognized
human rights and it will demonstrate such
respect through its conduct;
(B) it is not acquiring, developing, or
manufacturing and it will not acquire, develop,
or manufacture (i) ballistic missiles, (ii)
chemical, biological, or nuclear weapons, or
(iii) components for such weapons; has forsworn
the first use of such weapons; and is taking
substantial and verifiable steps to destroy or
otherwise dispose of any such missiles and
weapons it possesses;
(C) it is not and will not provide support
for international terrorism; and
(D) it is and will continue to be in
substantial compliance with its obligations
under international law, including all the
treaties specified in subparagraphs (A) through
(F) of subsection (b)(2).
(d) Information To Be Included in Certifications.--Any
certification under subsection (b) or (c) shall include the
justification for each determination required by that
subsection. The certification shall also specify which
paragraphs of section 586G(a) the President will waive pursuant
to that certification.
SEC. 586I. DENIAL OF LICENSES FOR CERTAIN EXPORTS TO COUNTRIES
ASSISTING IRAQ'S ROCKET OR CHEMICAL, BIOLOGICAL, OR
NUCLEAR WEAPONS CAPABILITY.
(a) Restriction on Export Licenses.--None of the funds
appropriated by this or any other Act may be used to approve
the licensing for export of any supercomputer to any country
whose government the President determines is assisting, or
whose government officials the President determines are
assisting, Iraq to improve its rocket technology or chemical,
biological, or nuclear weapons capability.
(b) Negotiations.--The President is directed to begin
immediate negotiations with those governments with which the
United States has bilateral supercomputer agreements, including
the Government of the United Kingdom and the Government of
Japan, on conditions restricting the transfer to Iraq of
supercomputer or associated technology.
* * * * * * *
Iran-Iraq Arms Non-Proliferation Act of 1992
(Title XVI of the National Defense Authorization Act for Fiscal Year
1993)
[50 U.S.C. 1701 note; P.L. 102-484, title XVI, and P.L. 104-106,
section 1408(a)-(c)]
SEC. 1601. SHORT TITLE.
This title may be cited as the ``Iran-Iraq Arms Non-
Proliferation Act of 1992''.
SEC. 1602. UNITED STATES POLICY.
(a) In General.--It shall be the policy of the United
States to oppose, and urgently to seek the agreement of other
nations also to oppose, any transfer to Iran or Iraq of any
goods or technology, including dual-use goods or technology,
wherever that transfer could materially contribute to either
country's acquiring chemical, biological, nuclear, or
destabilizing numbers and types of advanced conventional
weapons.
(b) Sanctions.--(1) In the furtherance of this policy, the
President shall apply sanctions and controls with respect to
Iran, Iraq, and those nations and persons who assist them in
acquiring weapons of mass destruction in accordance with the
Foreign Assistance Act of 1961, the Nuclear Non-Proliferation
Act of 1978, the Chemical and Biological Weapons Control and
Warfare Elimination Act of 1991, chapter 7 of the Arms Export
Control Act, and other relevant statutes, regarding the non-
proliferation of weapons of mass destruction and the means of
their delivery.
(2) The President should also urgently seek the agreement
of other nations to adopt and institute, at the earliest
practicable date, sanctions and controls comparable to those
the United States is obligated to apply under this subsection.
(c) Public Identification.--The Congress calls on the
President to identify publicly (in the report required by
section 1607) any country or person that transfers goods or
technology to Iran or Iraq contrary to the policy set forth in
subsection (a).
SEC. 1603. APPLICATION TO IRAN OF CERTAIN IRAQ SANCTIONS.
The sanctions against Iraq specified in paragraphs (1)
through (4) of section 586G(a) of the Iraq Sanctions Act of
1990 (as contained in Public Law 101-513), including denial of
export licenses for United States persons and prohibitions on
United States Government sales, shall be applied to the same
extent and in the same manner with respect to Iran.
SEC. 1604. SANCTIONS AGAINST CERTAIN PERSONS.
(a) Prohibition.--If any person transfers or retransfers
goods or technology so as to contribute knowingly and
materially to the efforts by Iran or Iraq (or any agency or
instrumentality of either such country) to acquire chemical,
biological or nuclear weapons or to acquire destabilizing
numbers and types of advanced conventional weapons, then the
sanctions described in subsection (b) shall be imposed.
(b) Mandatory Sanctions.--The sanctions to be imposed
pursuant to subsection (a) are as follows.
(1) Procurement sanction.--For a period of two years,
the United States Government shall not procure, or
enter into any contract for the procurement of, any
goods or services from the sanctioned person.
(2) Export sanction.--For a period of two years, the
United States Government shall not issue any license
for any export by or to the sanctioned person.
SEC. 1605. SANCTIONS AGAINST CERTAIN FOREIGN COUNTRIES.
(a) Prohibition.--If the President determines that the
government of any foreign country transfers or retransfers
goods or technology so as to contribute knowingly and
materially to the efforts by Iran or Iraq (or any agency or
instrumentality of either such country), to acquire chemical,
biological or nuclear weapons or to acquire destabilizing
numbers and types of advanced conventional weapons, then--
(1) the sanctions described in subsection (b) shall
be imposed on such country; and
(2) in addition, the President may apply, in the
discretion of the President, the sanction described in
subsection (c).
(b) Mandatory Sanctions.--Except as provided in paragraph
(2), the sanctions to be imposed pursuant to subsection (a)(1)
are as follows:
(1) Suspension of united states assistance.--The
United States Government shall suspend, for a period of
one year, United States assistance to the sanctioned
country.
(2) Multilateral development bank assistance.--The
Secretary of the Treasury shall instruct the United
States Executive Director to each appropriate
international financial institution to oppose, and vote
against, for a period of one year, the extension by
such institution of any loan or financial or technical
assistance to the sanctioned country.
(3) Suspension of codevelopment or coproduction
agreements.--The United States shall suspend, for a
period of one year, compliance with its obligations
under any memorandum of understanding with the
sanctioned country for the codevelopment or
coproduction of any item on the United States Munitions
List (established under section 38 of the arms Export
Control Act), including any obligation for
implementation of the memorandum of understanding
through the sale to the sanctioned country of technical
data or assistance or the licensing for export to the
sanctioned country of any component part.
(4) Suspension of military and dual-use technical
exchange agreements.--The United States shall suspend,
for a period of one year, compliance with its
obligations under any technical exchange agreement
involving military and dual-use technology between the
United States and the sanctioned country that does not
directly contribute to the security of the United
States, and no military or dual-use technology may be
exported from the United States to the sanctioned
country pursuant to that agreement during that period.
(5) United states munitions list.--No item on the
United States Munitions List (established pursuant to
section 38 of the Arms Export Control Act) may be
exported to the sanctioned country for a period of one
year.
(c) Discretionary Sanction.--The sanction referred to in
subsection (a)(2) is as follows:
(1) Use of authorities of international emergency
economic powers act.--Except as provided in paragraph
(2), the President may exercise, in accordance with the
provisions of that Act, the authorities of the
International Emergency Economic Powers Act with
respect to the sanctioned country.
(2) Exception.--Paragraph (1) does not apply with
respect to urgent humanitarian assistance.
SEC. 1606. WAIVER.
The President may waive the requirement to impose a
sanction described in section 1603, in the case of Iran, or a
sanction described in section 1604(b) or 1605(b), in the case
of Iraq and Iran, 15 days after the President determines and so
reports to the Committees on Armed Services and Foreign
Relations of the Senate and the Committees on Armed Services
and Foreign Affairs of the House of Representatives that it is
essential to the national interest of the United States to
exercise such waiver authority. Any such report shall provide a
specific and detailed rationale for such determination.
SEC. 1607. REPORTING REQUIREMENT.
(a) Annual Report.--Beginning one year after the date of
the enactment of this Act, and every 12 months thereafter, the
President shall submit to the Committees on Armed Services and
Foreign Relations of the Senate and the Committees on Armed
Services and Foreign Affairs of the House of Representatives a
report detailing--
(1) all transfers or retransfers made by any person
or foreign government during the preceding 12-month
period which are subject to any sanction under this
title; and
(2) the actions the President intends to under take
or has undertaken pursuant to this title with respect
to each such transfer.
(b) Report on Individual Transfers.--Whenever the President
determines that a person or foreign government has made a
transfer which is subject to any sanction under this title, the
President shall, within 30 days after such transfer, submit to
the Committees on Armed Services and Foreign Relations of the
Senate and the Committees on Armed Service and Foreign Affairs
of the House of Representatives a report--
(1) identifying the person or government and
providing the details of the transfer; and
(2) describing the actions the President intends to
undertake or has undertaken under the provisions of
this title with respect to each such transfer.
(c) Form of Transmittal.--Reports required by this section
may be submitted in classified as well as in unclassified form.
SEC. 1608. DEFINITIONS.
For purposes of this title:
(1) The term ``advanced conventional weapons''
includes--
(A) such long-range precision-guided
munitions, fuel air explosives, cruise
missiles, low observability aircraft, other
radar evading aircraft, advanced military
aircraft, military satellites, electromagnetic
weapons, and laser weapons as the President
determines destabilize the military balance or
enhance offensive capabilities in destabilizing
ways;
(B) such advanced command, control, and
communications systems, electronic warfare
systems, or intelligence collection systems as
the President determines destabilize the
military balance or enhance offensive
capabilities in destabilizing ways; and
(C) such other items or systems as the
President may, by regulation, determine
necessary for purposes of this title.
(2) The term ``cruise missile'' means guided missiles
that use aerodynamic lift to offset gravity and
propulsion to counteract drag.
(3) The term ``goods or technology'' means--
(A) any article, natural or manmade
substance, material, supply, or manufactured
product, including inspection and test
equipment; and
(B) any information and know-how (whether in
tangible form, such as models, prototypes,
drawings, sketches, diagrams, blueprints, or
manuals, or in intangible form, such as
training or technical services) that can be
used to design, produce, manufacture, utilize,
or reconstruct goods, including computer
software and technical data.
(4) The term ``person'' means any United States or
foreign individual, partnership, corporation, or other
form of association, or any of their successor
entities, parents, or subsidiaries.
(5) The term ``sanctioned country'' means a country
against which sanctions are required to be imposed
pursuant to section 1605.
(6) The term ``sanctioned person'' means a person
that makes a transfer described in section 1604(a).
(7) The term ``United States assistance'' means--
(A) any assistance under the Foreign
Assistance Act of 1961 (22 U.S.C. 2151 et
seq.), other than urgent humanitarian
assistance or medicine;
(B) sales and assistance under the Arms
Export Control Act;
(C) financing by the Commodity Credit
Corporation for export sales of agricultural
commodities; and
(D) financing under the Export-Import Bank
Act.
Compliance With United Nations Sanctions Against Iraq
[50 U.S.C. 1701 note; P.L. 104-107, sec. 534]
Sec. 534. (a) Denial of Assistance.--None of the funds
appropriated or otherwise made available pursuant to this Act
to carry out the Foreign Assistance Act of 1961 (including
title IV of chapter 2 of part I, relating to the Overseas
Private Investment Corporation) or the Arms Export Control Act
may be used to provide assistance to any country that is not in
compliance with the United Nations Security Council sanctions
against Iraq, Serbia or Montenegro unless the President
determines and so certifies to the Congress that--
(1) such assistance is in the national interest of
the United States;
(2) such assistance will directly benefit the needy
people in that country; or
(3) the assistance to be provided will be
humanitarian assistance for foreign nationals who have
fled Iraq and Kuwait.
(b) Import Sanctions.--If the President considers that the
taking of such action would promote the effectiveness of the
economic sanctions of the United Nations and the United States
imposed with respect to Iraq, Serbia, or Montenegro, as the
case may be, and is consistent with the national interest, the
President may prohibit, for such a period of time as he
considers appropriate, the importation into the United States
of any or all products of any foreign country that has not
prohibited--
(1) the importation of products of Iraq, Serbia, or
Montenegro into its customs territory, and
(2) the export of its products to Iraq, Serbia, or
Montenegro, as the case may be.
Iran and Libya Sanctions Act of 1996
[50 U.S.C. 1701 note; P.L. 104-172]
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Iran and Libya Sanctions Act
of 1996''.
SEC. 2. FINDINGS.
The Congress makes the following findings:
(1) The efforts of the Government of Iran to acquire
weapons of mass destruction and the means to deliver
them and its support of acts of international terrorism
endanger the national security and foreign policy
interests of the United States and those countries with
which the United States shares common strategic and
foreign policy objectives.
(2) The objective of preventing the proliferation of
weapons of mass destruction and acts of international
terrorism through existing multilateral and bilateral
initiatives requires additional efforts to deny Iran
the financial means to sustain its nuclear, chemical,
biological, and missile weapons programs.
(3) The Government of Iran uses its diplomatic
facilities and quasi-governmental institutions outside
of Iran to promote acts of international terrorism and
assist its nuclear, chemical, biological, and missile
weapons programs.
(4) The failure of the Government of Libya to comply
with Resolutions 731, 748, and 883 of the Security
Council of the United Nations, its support of
international terrorism, and its efforts to acquire
weapons of mass destruction constitute a threat to
international peace and security that endangers the
national security and foreign policy interests of the
United States and those countries with which it shares
common strategic and foreign policy objectives.
SEC. 3. DECLARATION OF POLICY.
(a) Policy with Respect to Iran.--The Congress declares that
it is the policy of the United States to deny Iran the ability
to support acts of international terrorism and to fund the
development and acquisition of weapons of mass destruction and
the means to deliver them by limiting the development of Iran's
ability to explore for, extract, refine, or transport by
pipeline petroleum resources of Iran.
(b) Policy with Respect to Libya.--The Congress further
declares that it is the policy of the United States to seek
full compliance by Libya with its obligations under Resolutions
731, 748, and 883 of the Security Council of the United
Nations, including ending all support for acts of international
terrorism and efforts to develop or acquire weapons of mass
destruction.
SEC. 4. MULTILATERAL REGIME.
(a) Multilateral Negotiations.--In order to further the
objectives of section 3, the Congress urges the President to
commence immediately diplomatic efforts, both in appropriate
international fora such as the United Nations, and bilaterally
with allies of the United States, to establish a multilateral
sanctions regime against Iran, including provisions limiting
the development of petroleum resources, that will inhibit
Iran's efforts to carry out activities described in section 2.
(b) Reports to Congress.--The President shall report to the
appropriate congressional committees, not later than 1 year
after the date of the enactment of this Act, and periodically
thereafter, on the extent that diplomatic efforts described in
subsection (a) have been successful. Each report shall
include--
(1) the countries that have agreed to undertake
measures to further the objectives of section 3 with
respect to Iran, and a description of those measures;
and
(2) the countries that have not agreed to measures
described in paragraph (1), and, with respect to those
countries, other measures (in addition to that provided
in subsection (d)) the President recommends that the
United States take to further the objectives of section
3 with respect to Iran.
(c) Waiver.--The President may waive the application of
section 5(a) with respect to nationals of a country if--
(1) that country has agreed to undertake substantial
measures, including economic sanctions, that will
inhibit Iran's efforts to carry out activities
described in section 2 and information required by
subsection (b)(1) has been included in a report
submitted under subsection (b); and
(2) the President, at least 30 days before the
waiver takes effect, notifies the appropriate
congressional committees of his intention to exercise
the waiver.
(d) Enhanced Sanction.--
(1) Sanction.--With respect to nationals of
countries except those with respect to which the
President has exercised the waiver authority of
subsection (c), at any time after the first report is
required to be submitted under subsection (b), section
5(a) shall be applied by substituting ``$20,000,000''
for ``$40,000,000'' each place it appears, and by
substituting ``$5,000,000'' for ``$10,000,000''.
(2) Report to congress.--The President shall report
to the appropriate congressional committees any country
with respect to which paragraph (1) applies.
(e) Interim Report on Multilateral Sanctions; Monitoring.--
The President, not later than 90 days after the date of the
enactment of this Act, shall report to the appropriate
congressional committees on--
(1) whether the member states of the European Union,
the Republic of Korea, Australia, Israel, or Japan have
legislative or administrative standards providing for
the imposition of trade sanctions on persons or their
affiliates doing business or having investments in Iran
or Libya;
(2) the extent and duration of each instance of the
application of such sanctions; and
(3) the disposition of any decision with respect to
such sanctions by the World Trade Organization or its
predecessor organization.
SEC. 5. IMPOSITION OF SANCTIONS.
(a) Sanctions with Respect to Iran.--Except as provided in
subsection (f), the President shall impose 2 or more of the
sanctions described in paragraphs (1) through (6) of section 6
if the President determines that a person has, with actual
knowledge, on or after the date of the enactment of this Act,
made an investment of $40,000,000 or more (or any combination
of investments of at least $10,000,000 each, which in the
aggregate equals or exceeds $40,000,000 in any 12-month
period), that directly and significantly contributed to the
enhancement of Iran's ability to develop petroleum resources of
Iran.
(b) Mandatory Sanctions with Respect to Libya.--
(1) Violations of prohibited transactions.--Except as
provided in subsection (f), the President shall impose
2 or more of the sanctions described in paragraphs (1)
through (6) of section 6 if the President determines
that a person has, with actual knowledge, on or after
the date of the enactment of this Act, exported,
transferred, or otherwise provided to Libya any goods,
services, technology, or other items the provision of
which is prohibited under paragraph 4(b) or 5 of
Resolution 748 of the Security Council of the United
Nations, adopted March 31, 1992, or under paragraph 5
or 6 of Resolution 883 of the Security Council of the
United Nations, adopted November 11, 1993, if the
provision of such items significantly and materially--
(A) contributed to Libya's ability to
acquire chemical, biological, or nuclear
weapons or destabilizing numbers and types of
advanced conventional weapons or enhanced
Libya's military or paramilitary capabilities;
(B) contributed to Libya's ability to
develop its petroleum resources; or
(C) contributed to Libya's ability to
maintain its aviation capabilities.
(2) Investments that contribute to the development of
petroleum resources.--Except as provided in subsection
(f), the President shall impose 2 or more of the
sanctions described in paragraphs (1) through (6) of
section 6 if the President determines that a person
has, with actual knowledge, on or after the date of the
enactment of this Act, made an investment of
$40,000,000 or more (or any combination of investments
of at least $10,000,000 each, which in the aggregate
equals or exceeds $40,000,000 in any 12-month period),
that directly and significantly contributed to the
enhancement of Libya's ability to develop its petroleum
resources.
(c) Persons Against Which the Sanctions Are To Be Imposed.--
The sanctions described in subsections (a) and (b) shall be
imposed on--
(1) any person the President determines has carried
out the activities described in subsection (a) or (b);
and
(2) any person the President determines--
(A) is a successor entity to the person
referred to in paragraph (1);
(B) is a parent or subsidiary of the person
referred to in paragraph (1) if that parent or
subsidiary, with actual knowledge, engaged in
the activities referred to in paragraph (1); or
(C) is an affiliate of the person referred
to in paragraph (1) if that affiliate, with
actual knowledge, engaged in the activities
referred to in paragraph (1) and if that
affiliate is controlled in fact by the person
referred to in paragraph (1).
For purposes of this Act, any person or entity
described in this subsection shall be referred to as a
``sanctioned person''.
(d) Publication in Federal Register.--The President shall
cause to be published in the Federal Register a current list of
persons and entities on whom sanctions have been imposed under
this Act. The removal of persons or entities from, and the
addition of persons and entities to, the list, shall also be so
published.
(e) Publication of Projects.--The President shall cause to
be published in the Federal Register a list of all significant
projects which have been publicly tendered in the oil and gas
sector in Iran.
(f) Exceptions.--The President shall not be required to apply
or maintain the sanctions under subsection (a) or (b)--
(1) in the case of procurement of defense articles
or defense services--
(A) under existing contracts or
subcontracts, including the exercise of options
for production quantities to satisfy
requirements essential to the national security
of the United States;
(B) if the President determines in writing
that the person to which the sanctions would
otherwise be applied is a sole source supplier
of the defense articles or services, that the
defense articles or services are essential, and
that alternative sources are not readily or
reasonably available; or
(C) if the President determines in writing
that such articles or services are essential to
the national security under defense
coproduction agreements;
(2) in the case of procurement, to eligible products,
as defined in section 308(4) of the Trade Agreements
Act of 1979 (19 U.S.C. 2518(4)), of any foreign country
or instrumentality designated under section 301(b)(1)
of that Act (19 U.S.C. 2511(b)(1));
(3) to products, technology, or services provided
under contracts entered into before the date on which
the President publishes in the Federal Register the
name of the person on whom the sanctions are to be
imposed;
(4) to--
(A) spare parts which are essential to United
States products or production;
(B) component parts, but not finished
products, essential to United States products
or production; or
(C) routine servicing and maintenance of
products, to the extent that alternative
sources are not readily or reasonably
available;
(6) \2\ to information and technology essential to
United States products or production; or
---------------------------------------------------------------------------
\2\ There is no subsection (5) in original.
---------------------------------------------------------------------------
(7) to medicines, medical supplies, or other
humanitarian items.
SEC. 6. DESCRIPTION OF SANCTIONS.
The sanctions to be imposed on a sanctioned person under
section 5 are as follows:
(1) Export-import bank assistance for exports to
sanctioned persons.--The President may direct the
Export-Import Bank of the United States not to give
approval to the issuance of any guarantee, insurance,
extension of credit, or participation in the extension
of credit in connection with the export of any goods or
services to any sanctioned person.
(2) Export sanction.--The President may order the
United States Government not to issue any specific
license and not to grant any other specific permission
or authority to export any goods or technology to a
sanctioned person under--
(i) the Export Administration Act of 1979;
(ii) the Arms Export Control Act;
(iii) the Atomic Energy Act of 1954; or
(iv) any other statute that requires the
prior review and approval of the United States
Government as a condition for the export or
reexport of goods or services.
(3) Loans from united states financial
institutions.--The United States Government may
prohibit any United States financial institution from
making loans or providing credits to any sanctioned
person totaling more than $10,000,000 in any 12-month
period unless such person is engaged in activities to
relieve human suffering and the loans or credits are
provided for such activities.
(4) Prohibitions on financial institutions.--The
following prohibitions may be imposed against a
sanctioned person that is a financial institution:
(A) Prohibition on designation as primary
dealer.--Neither the Board of Governors of the
Federal Reserve System nor the Federal Reserve
Bank of New York may designate, or permit the
continuation of any prior designation of, such
financial institution as a primary dealer in
United States Government debt instruments.
(B) Prohibition on service as a repository
of government funds.--Such financial
institution may not serve as agent of the
United States Government or serve as repository
for United States Government funds. The
imposition of either sanction under
subparagraph (A) or (B) shall be treated as 1
sanction for purposes of section 5, and the
imposition of both such sanctions shall be
treated as 2 sanctions for purposes of section
5.
(5) Procurement sanction.--The United States
Government may not procure, or enter into any contract
for the procurement of, any goods or services from a
sanctioned person.
(6) Additional sanctions.--The President may impose
sanctions, as appropriate, to restrict imports with
respect to a sanctioned person, in accordance with the
International Emergency Economic Powers Act (50 U.S.C.
1701 and following).
SEC. 7. ADVISORY OPINIONS.
The Secretary of State may, upon the request of any person,
issue an advisory opinion to that person as to whether a
proposed activity by that person would subject that person to
sanctions under this Act. Any person who relies in good faith
on such an advisory opinion which states that the proposed
activity would not subject a person to such sanctions, and any
person who thereafter engages in such activity, will not be
made subject to such sanctions on account of such activity.
SEC. 8. TERMINATION OF SANCTIONS.
(a) Iran.--The requirement under section 5(a) to impose
sanctions shall no longer have force or effect with respect to
Iran if the President determines and certifies to the
appropriate congressional committees that Iran--
(1) has ceased its efforts to design, develop,
manufacture, or acquire--
(A) a nuclear explosive device or related
materials and technology;
(B) chemical and biological weapons; and
(C) ballistic missiles and ballistic missile
launch technology; and
(2) has been removed from the list of countries the
governments of which have been determined, for purposes
of section 6(j) of the Export Administration Act of
1979, to have repeatedly provided support for acts of
international terrorism.
(b) Libya.--The requirement under section 5(b) to impose
sanctions shall no longer have force or effect with respect to
Libya if the President determines and certifies to the
appropriate congressional committees that Libya has fulfilled
the requirements of United Nations Security Council Resolution
731, adopted January 21, 1992, United Nations Security Council
Resolution 748, adopted March 31, 1992, and United Nations
Security Council Resolution 883, adopted November 11, 1993.
SEC. 9. DURATION OF SANCTIONS; PRESIDENTIAL WAIVER.
(a) Delay of Sanctions.--
(1) Consultations.--If the President makes a
determination described in section 5(a) or 5(b) with
respect to a foreign person, the Congress urges the
President to initiate consultations immediately with
the government with primary jurisdiction over that
foreign person with respect to the imposition of
sanctions under this Act.
(2) Actions by government of jurisdiction.--In order
to pursue consultations under paragraph (1) with the
government concerned, the President may delay
imposition of sanctions under this Act for up to 90
days. Following such consultations, the President shall
immediately impose sanctions unless the President
determines and certifies to the Congress that the
government has taken specific and effective actions,
including, as appropriate, the imposition of
appropriate penalties, to terminate the involvement of
the foreign person in the activities that resulted in
the determination by the President under section 5(a)
or 5(b) concerning such person.
(3) Additional delay in imposition of sanctions.--
The President may delay the imposition of sanctions for
up to an additional 90 days if the President determines
and certifies to the Congress that the government with
primary jurisdiction over the person concerned is in
the process of taking the actions described in
paragraph (2).
(4) Report to congress.--Not later than 90 days
after making a determination under section 5(a) or
5(b), the President shall submit to the appropriate
congressional committees a report on the status of
consultations with the appropriate foreign government
under this subsection, and the basis for any
determination under paragraph (3).
(b) Duration of Sanctions.--A sanction imposed under section
5 shall remain in effect--
(1) for a period of not less than 2 years from the
date on which it is imposed; or
(2) until such time as the President determines and
certifies to the Congress that the person whose
activities were the basis for imposing the sanction is
no longer engaging in such activities and that the
President has received reliable assurances that such
person will not knowingly engage in such activities in
the future, except that such sanction shall remain in
effect for a period of at least 1 year.
(c) Presidential Waiver.--
(1) Authority.--The President may waive the
requirement in section 5 to impose a sanction or
sanctions on a person described in section 5(c), and
may waive the continued imposition of a sanction or
sanctions under subsection (b) of this section, 30 days
or more after the President determines and so reports
to the appropriate congressional committees that it is
important to the national interest of the United States
to exercise such waiver authority.
(2) Contents of report.--Any report under paragraph
(1) shall provide a specific and detailed rationale for
the determination under paragraph (1), including--
(A) a description of the conduct that
resulted in the determination under section
5(a) or (b), as the case may be;
(B) in the case of a foreign person, an
explanation of the efforts to secure the
cooperation of the government with primary
jurisdiction over the sanctioned person to
terminate or, as appropriate, penalize the
activities that resulted in the determination
under section 5(a) or (b), as the case may be;
(C) an estimate as to the significance--
(i) of the provision of the items
described in section 5(a) to Iran's
ability to develop its petroleum
resources, or
(ii) of the provision of the items
described in section 5(b)(1) to the
abilities of Libya described in
subparagraph (A), (B), or (C) of
section 5(b)(1), or of the investment
described in section 5(b)(2) on Libya's
ability to develop its petroleum
resources, as the case may be; and
(D) a statement as to the response of the
United States in the event that the person
concerned engages in other activities that
would be subject to section 5(a) or (b).
(3) Effect of report on waiver.--If the President
makes a report under paragraph (1) with respect to a
waiver of sanctions on a person described in section
5(c), sanctions need not be imposed under section 5(a)
or (b) on that person during the 30-day period referred
to in paragraph (1).
SEC. 10. REPORTS REQUIRED.
(a) Report on Certain International Initiatives.--Not later
than 6 months after the date of the enactment of this Act, and
every 6 months thereafter, the President shall transmit a
report to the appropriate congressional committees describing--
(1) the efforts of the President to mount a
multilateral campaign to persuade all countries to
pressure Iran to cease its nuclear, chemical,
biological, and missile weapons programs and its
support of acts of international terrorism;
(2) the efforts of the President to persuade other
governments to ask Iran to reduce the presence of
Iranian diplomats and representatives of other
government and military or quasi-governmental
institutions of Iran and to withdraw any such diplomats
or representatives who participated in the takeover of
the United States embassy in Tehran on November 4,
1979, or the subsequent holding of United States
hostages for 444 days;
(3) the extent to which the International Atomic
Energy Agency has established regular inspections of
all nuclear facilities in Iran, including those
presently under construction; and
(4) Iran's use of Iranian diplomats and
representatives of other government and military or
quasi-governmental institutions of Iran to promote acts
of international terrorism or to develop or sustain
Iran's nuclear, chemical, biological, and missile
weapons programs.
(b) Other Reports.--The President shall ensure the continued
transmittal to the Congress of reports describing--
(1) the nuclear and other military capabilities of
Iran, as required by section 601(a) of the Nuclear Non-
Proliferation Act of 1978 and section 1607 of the
National Defense Authorization Act for Fiscal Year
1993; and
(2) the support provided by Iran for acts of
international terrorism, as part of the Department of
State's annual report on international terrorism.
SEC. 11. DETERMINATIONS NOT REVIEWABLE.
A determination to impose sanctions under this Act shall not
be reviewable in any court.
SEC. 12. EXCLUSION OF CERTAIN ACTIVITIES.
Nothing in this Act shall apply to any activities subject to
the reporting requirements of title V of the National Security
Act of 1947.
SEC. 13. EFFECTIVE DATE; SUNSET.
(a) Effective Date.--This Act shall take effect on the date
of the enactment of this Act.
(b) Sunset.--This Act shall cease to be effective on the
date that is 5 years after the date of the enactment of this
Act.
SEC. 14. DEFINITIONS.
As used in this Act:
(1) Act of international terrorism.--The term ``act
of international terrorism'' means an act--
(A) which is violent or dangerous to human
life and that is a violation of the criminal
laws of the United States or of any State or
that would be a criminal violation if committed
within the jurisdiction of the United States or
any State; and
(B) which appears to be intended--
(i) to intimidate or coerce a
civilian population;
(ii) to influence the policy of a
government by intimidation or coercion;
or
(iii) to affect the conduct of a
government by assassination or
kidnapping.
(2) Appropriate congressional committees.--The term
``appropriate congressional committees'' means the
Committee on Finance, the Committee on Banking,
Housing, and Urban Affairs, and the Committee on
Foreign Relations of the Senate and the Committee on
Ways and Means, the Committee on Banking and Financial
Services, and the Committee on International Relations
of the House of Representatives.
(3) Component part.--The term ``component part'' has
the meaning given that term in section 11A(e)(1) of the
Export Administration Act of 1979 (50 U.S.C. App.
2410a(e)(1)).
(4) Develop and development.--To ``develop'', or the
``development'' of, petroleum resources means the
exploration for, or the extraction, refining, or
transportation by pipeline of, petroleum resources.
(5) Financial institution.--The term ``financial
institution'' includes--
(A) a depository institution (as defined in
section 3(c)(1) of the Federal Deposit
Insurance Act), including a branch or agency of
a foreign bank (as defined in section 1(b)(7)
of the International Banking Act of 1978);
(B) a credit union;
(C) a securities firm, including a broker or
dealer;
(D) an insurance company, including an agency
or underwriter; and
(E) any other company that provides financial
services.
(6) Finished product.--The term ``finished product''
has the meaning given that term in section 11A(e)(2) of
the Export Administration Act of 1979 (50 U.S.C. App.
2410a(e)(2)).
(7) Foreign person.--The term ``foreign person''
means--
(A) an individual who is not a United States
person or an alien lawfully admitted for
permanent residence into the United States; or
(B) a corporation, partnership, or other
nongovernmental entity which is not a United
States person.
(8) Goods and technology.--The terms ``goods'' and
``technology'' have the meanings given those terms in
section 16 of the Export Administration Act of 1979 (50
U.S.C. App. 2415).
(9) Investment.--The term ``investment'' means any
of the following activities if such activity is
undertaken pursuant to an agreement, or pursuant to the
exercise of rights under such an agreement, that is
entered into with the Government of Iran or a
nongovenmental entity in Iran, or with the Government
of Libya or a nongovernmental entity in Libya, on or
after the date of the enactment of this Act:
(A) The entry into a contract that includes
responsibility for the development of petroleum
resources located in Iran or Libya (as the case
may be), or the entry into a contract providing
for the general supervision and guarantee of
another person's performance of such a
contract.
(B) The purchase of a share of ownership,
including an equity interest, in that
development.
(C) The entry into a contract providing for
the participation in royalties, earnings, or
profits in that development, without regard to
the form of the participation. The term
``investment'' does not include the entry into,
performance, or financing of a contract to sell
or purchase goods, services, or technology.
(10) Iran.--The term ``Iran'' includes any agency or
instrumentality of Iran.
(11) Iranian diplomats and representatives of other
government and military or quasi-governmental
institutions of iran.--The term ``Iranian diplomats and
representatives of other government and military or
quasi-governmental institutions of Iran'' includes
employees, representatives, or affiliates of Iran's--
(A) Foreign Ministry;
(B) Ministry of Intelligence and Security;
(C) Revolutionary Guard Corps;
(D) Crusade for Reconstruction;
(E) Qods (Jerusalem) Forces;
(F) Interior Ministry;
(G) Foundation for the Oppressed and
Disabled;
(H) Prophet's Foundation;
(I) June 5th Foundation;
(J) Martyr's Foundation;
(K) Islamic Propagation Organization; and
(L) Ministry of Islamic Guidance.
(12) Libya.--The term ``Libya'' includes any agency
or instrumentality of Libya.
(13) Nuclear explosive device.--The term ``nuclear
explosive device'' means any device, whether assembled
or disassembled, that is designed to produce an
instantaneous release of an amount of nuclear energy
from special nuclear material (as defined in section
11(aa) of the Atomic Energy Act of 1954) that is
greater than the amount of energy that would be
released from the detonation of one pound of
trinitrotoluene (TNT).
(14) Person.--The term ``person'' means--
(A) a natural person;
(B) a corporation, business association,
partnership, society, trust, any other
nongovernmental entity, organization, or group,
and any governmental entity operating as a
business enterprise; and
(C) any successor to any entity described in
subparagraph (B).
(15) Petroleum resources.--The term ``petroleum
resources'' includes petroleum and natural gas
resources.
(16) United states or state.--The term ``United
States'' or ``State'' means the several States, the
District of Columbia, the Commonwealth of Puerto Rico,
the Commonwealth of the Northern Mariana Islands,
American Samoa, Guam, the United States Virgin Islands,
and any other territory or possession of the United
States.
(17) United states person.--The term ``United States
person'' means--
(A) a natural person who is a citizen of the
United States or who owes permanent allegiance
to the United States; and
(B) a corporation or other legal entity
which is organized under the laws of the United
States, any State or territory thereof, or the
District of Columbia, if natural persons
described in subparagraph (A) own, directly or
indirectly, more than 50 percent of the
outstanding capital stock or other beneficial
interest in such legal entity. Speaker of the
House of Representatives. Vice President of the
United States and President of the Senate.
Trade Sanctions Reform and Export Enhancement Act of 2000
[22 U.S.C. 7201-7209; P.L. 106-387]
SEC. 901. SHORT TITLE.
This Act may be cited as the ``Trade Sanctions Reform and
Export Enhancement Act of 2000''.
SEC. 902. DEFINITIONS.
In this title:
(1) Agricultural commodity.--The term ``agricultural
commodity'' has the meaning given the term in section 102 of
the Agricultural Trade Act of 1978 (7 U.S.C. 5602).
(1) Agricultural program.--The term ``agricultural
program'' means--
(A) any program administered under the Agricultural
Trade Development and Assistance Act of 1954 (7 U.S.C.
1691 et seq.);
(B) any program administered under section 416 of the
Agricultural Act of 1949 (7 U.S.C. 1431);
(C) any program administered under the Agricultural
Trade Act of 1978 (7 U.S.C. 5601 et seq.);
(D) the dairy export incentive program administered
under section 153 of the Food Security Act of 1985 (15
U.S.C. 713a 14);
(E) any commercial export sale of agricultural
commodities; or
(F) any export financing (including credits or credit
guarantees) provided by the United States Government
for agricultural commodities.
(3) Joint resolution.--The term ``joint resolution''
means--
(A) in the case of section 903(a)(1), only a joint
resolution introduced within 10 session days of
Congress after the date on which the report of the
President under section 903(a)(1) is received by
Congress, the matter after the resolving clause of
which is as follows: ``That Congress approves the
report of the President pursuant to section 903(a)(1)
of the Trade Sanctions Reform and Export Enhancement
Act of 2000, transmitted on ______________.'', with the
blank completed with the appropriate date; and
(B) in the case of section 906(1), only a joint
resolution introduced within 10 session days of
Congress after the date on which the report of the
President under section 906(2) is received by Congress,
the matter after the resolving clause of which is as
follows: ``906(1) of the Trade Sanctions Reform and
Export Enhancement Act of 2000, transmitted on
______________.'', with the blank completed with the
appropriate date.
(4) Medical device.--The term ``medical device'' has the
meaning given the term ``device'' in section 201 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 321).
(5) Medicine.--The term ``medicine'' has the meaning given
the term ``drug'' in section 201 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321).
(6) Unilateral agricultural sanction.--The term
``unilateral agricultural sanction'' means any prohibition,
restriction, or condition on carrying out an agricultural
program with respect to a foreign country or foreign entity
that is imposed by the United States for reasons of foreign
policy or national security, except in a case in which the
United States imposes the measure pursuant to--
(A) a multilateral regime and the other member
countries of that regime have agreed to impose
substantially equivalent measures; or
(B) a mandatory decision of the United Nations
Security Council.
(7) Unilateral medical sanction.--The term ``unilateral
medical sanction'' means any prohibition, restriction, or
condition on exports of, or the provision of assistance
consisting of, medicine or a medical device with respect to a
foreign country or foreign entity that is imposed by the United
States for reasons of foreign policy or national security,
except in a case in which the United States imposes the measure
pursuant to--
(A) a multilateral regime and the other member
countries of that regime have agreed to impose
substantially equivalent measures; or
(B) a mandatory decision of the United Nations
Security Council.
SEC. 903. EXCEPTIONS.
(a) New Sanctions.--Except as provided in sections 904 and
905 and notwithstanding any other provision of law, the
President may not impose a unilateral agricultural sanction or
unilateral medical sanction against a foreign country or
foreign entity, unless--
(1) not later than 60 days before the sanction is
proposed to be imposed, the President submits a report
to Congress that--
(A) describes the activity proposed to be
prohibited, restricted, or conditioned; and
(B) describes the actions by the foreign
country or foreign entity that justify the
sanction; and
(2) there is enacted into law a joint resolution
stating the approval of Congress for the report
submitted under paragraph (1).
(b) Existing Sanctions.--The President shall terminate any
unilateral agricultural sanction or unilateral medical sanction
that is in effect as of the date of enactment of this Act.
SEC. 904. EXEMPTIONS.
Section 903 shall not affect any authority or requirement to
impose (or continue to impose) a sanction referred to in
section 903--
(1) against a foreign country or foreign entity--
(A) pursuant to a declaration of war against the
country or entity;
(B) pursuant to specific statutory authorization for
the use of the Armed Forces of the United States
against the country or entity;
(C) against which the Armed Forces of the United
States are involved in hostilities; or
(D) where imminent involvement by the Armed Forces of
the United States in hostilities against the country or
entity is clearly indicated by the circumstances; or
(2) to the extent that the sanction would prohibit,
restrict, or condition the provision or use of any agricultural
commodity, medicine, or medical device that is--
(A) controlled on the United States Munitions List
established under section 38 of the Arms Export Control
Act (22 U.S.C. 2778);
(B) controlled on any control list established under
the Export Administration Act of 1979 or any successor
statute (50 U.S.C. App. 2401 et seq.); or
(C) used to facilitate the development or production
of a chemical or biological weapon or weapon of mass
destruction.
SEC. 905. TERMINATION OF SANCTIONS.
Any unilateral agricultural sanction or unilateral medical
sanction that is imposed pursuant to the procedures described
in section 903(a) shall terminate not later than 2 years after
the date on which the sanction became effective unless--
(1) not later than 60 days before the date of termination
of the sanction, the President submits to Congress a report
containing--
(A) the recommendation of the President for the
continuation of the sanction for an additional period
of not to exceed 2 years; and
(B) the request of the President for approval by
Congress of the recommendation; and
(2) there is enacted into law a joint resolution stating
the approval of Congress for the report submitted under
paragraph (1).
SEC. 906. STATE SPONSORS OF INTERNATIONAL TERRORISM.
(a) Requirement.--
(1) In General.--Notwithstanding any other provision
of this title (other than section 904), the
export of agricultural commodities, medicine,
or medical devices to Cuba or to the government
of a country that has been determined by the
Secretary of State to have repeatedly provided
support for acts of international terrorism
under section 620A of the Foreign Assistance
Act of 1961 (22 U.S.C. 2371), section 6(j)(1)
of the Export Administration Act of 1979 (50
U.S.C. app. 2405(j)(1)), or section 40(d) of
the Arms Export Control Act (22 U.S.C.
2780(d)), or to any other entity in such a
country, shall only be made pursuant to one-
year licenses issued by the United States
Government for contracts entered into during
the one-year period of the license and shipped
within the 12-month period beginning on the
date of the signing of the contract, except
that the requirements of such one-year licenses
shall be no more restrictive than license
exceptions administered by the Department of
Commerce or general license exceptions
administered by the Department of the Treasury,
except that procedures shall be in place to
deny licenses for exports to any entity within
such country promoting international terrorism.
(2) Exception.--Paragraph (1) shall not apply with
respect to the export of agricultural commodities,
medicine, or medicine, or medical devices to the
Government of Syria or to the Government of North
Korea.
(b) Quarterly Reports.--The applicable department or
agency of the Federal Government shall submit to the
appropriate congressional committees on a quarterly basis a
report on any activities undertaken under subsection (a)(1)
during the preceding calendar quarter.
(c) Biennial Reports.--Not later than two years after the
date of enactment of this Act, and every two years thereafter,
the applicable department or agency of the Federal Government
shall submit a report to the appropriate congressional
committees on the operation of the licensing system under this
section for the preceding two-year period, including--
(1) the number and types of licenses applied for;
(2) the number and types of licenses approved;
(3) the average amount of time elapsed from the date
of filing of a license application until the date of
its approval;
(4) the extent to which the licensing procedures were
effectively implemented; and
(5) a description of comments received from
interested parties about the extent to which the
licensing procedures were effective, after the
applicable department or agency holds a public 30-day
comment period.
SEC. 907. CONGRESSIONAL PROCEDURES.
(a) Referral of Report.--A report described in section
903(a)(1) or 905(1) shall be referred to the appropriate
committee or committees of the House of Representatives and to
the appropriate committee or committees of the Senate.
(b) Referral of Joint Resolution.--
(1) In general.--A joint resolution introduced in the
senate shall be referred to the Committee on Foreign
Relations, and a joint resolution introduced in the
House of Representatives shall be referred to the
Committee on International Relations.
(2) Reporting date.--A joint resolution referred to
in paragraph (1) may not be reported before the eighth
session day of Congress after the introduction of the
joint resolution.
SEC. 908. PROHIBITION ON UNITED STATES ASSISTANCE AND FINANCING.
(a) Prohibition on United States Assistance.--
(1) In general.--Notwithstanding any other provision
of law, no United States Government assistance,
including United States foreign assistance,
United States export assistance, and any
United States credit or guarantees shall be
available for exports to Cuba or for commercial
exports to Iran, Libya, North Korea, or Sudan.
(2) Rule of construction.--Nothing in paragraph (1)
shall be construed to alter, modify, or otherwise
affect the provisions of section 109 of the Cuban
Liberty and Democratic Solidarity (LIBERTAD) Act of
1996 (22 U.S.C. 6039) or any other provision of law
relating to Cuba in effect on the day before the date
of the enactment of this Act.
(3) Waiver.--The President may waive the application
of paragraph (1) with respect to Iran, Libya, North
Korea, and Sudan to the degree the President determines
that it is in the national security interest of the
United States to do so, or for humanitarian reasons.
(b) Prohibition on Financing of Agricultural Sales to
Cuba.--
(1) In General.--No United States person may provide
payment or financing terms for sales of agricultural
commodities or products to Cuba or any person in Cuba,
except in accordance with the following terms
(notwithstanding part 515 of title 31, Code of Federal
Regulations, or any other provision of law):
(A) Payment of cash in advance.
(B) Financing by third country financial
institutions (excluding United States persons
or Government of Cuba entities), except that
such financing may be confirmed or advised by a
United States financial institution.
Nothing in this paragraph authorizes payment
terms or trade financing involving a debit or
credit to an account of a person located in
Cuba or of the Government of Cuba maintained on
the books of a United States depository
institution.
(2) Penalties.--Any private person or entity that
violates paragraph (1) shall be subject to the
penalties provided in the Trading with the Enemy Act
for violations under that Act.
(3) Administration and Enforcement.--The President
shall issue such regulations as are necessary to carry
out this section, except that the President, in lieu of
issuing new regulations, may apply any regulations in
effect on the date of the enactment of this Act,
pursuant to the Trading with the Enemy Act, with
respect to the conduct prohibited in paragraph (1).
(4) Definitions.--In this subsection--
(A) the term ``financing'' includes any loan
or extension of credit;
(B) the term ``United States depository
institution'' means any entity (including its
foreign branches or subsidiaries) organized
under the laws of any jurisdiction within the
United States, or any agency, office or branch
located in the United States of a foreign
entity, that is engaged primarily in the
business of banking (including a bank, savings
bank, savings association, credit union, trust
company, or United States bank holding
company); and
(C) the term ``United States person'' means
the Federal Government, any State or local
government, or any private person or entity of
the United States.
SEC. 909. PROHIBITION ON ADDITIONAL IMPORTS FROM CUBA.
Nothing in this title shall be construed to alter, modify, or
otherwise affect the provisions of section 515.204 of title 31,
Code of Federal Regulations, relating to the prohibition on the
entry into the United States of merchandise that (1) is of
Cuban origin, (2) is or has been located in or transported from
or through Cuba, or (3) is made or derived in whole or in part
of any article which is the growth, produce, or manufacture of
Cuba.
SEC. 910. REQUIREMENTS RELATING TO CERTAIN TRAVEL-RELATED TRANSACTIONS
WITH CUBA.
(a) Authorization of Travel Relating to Commercial Sale
of Agricultural Commodities.--The Secretary of the Treasury
shall promulgate regulations under which the travel-related
transactions listed in paragraph (c) of section 515.560 of
title 31, Code of Federal Regulations, may be authorized on a
case-by-case basis by a specific license for travel to, from,
or within Cuba for the commercial export sale of agricultural
commodities pursuant to the provisions of this title.
(b) Prohibition on Travel Relating to Tourist
Avtivities.--
(1) In General.--Notwithstanding any other provision
of law of regulation, the Secretary of the Treasury, or
any other Federal official, may not authorize the
travel-related transactions listed in paragraph (c) of
section 515.560 of title 31, Code of Federal
Regulations, either by a general license or on a case-
by-case basis by a specific license for travel to, from
or within Cuba for tourist activities.
(2) Definition.--In this subsection, the term
``tourist activities'' means any activity with respect
to travel to, from, or within Cuba that is not
expressly authorized in subsection (a) of this section,
in any of paragraphs (1) through (12) of section
515.560 of title 31, Code of Federal Regulations, or in
any section referred to in any of such paragraphs (1)
through (2) (as such sections were in effect on June 1,
2000).
SEC. 911. EFFECTIVE DATE.
(a) In General.--Except as provided in subsection (b), this
title shall take effect on the date of enactment of this Act,
and shall apply thereafter in any fiscal year.
(b) Existing Sanctions.--In the case of any unilateral
agricultural sanction or unilateral medical sanction that is in
effect as of the date of enactment of this Act, this title
shall take effect 120 days after the date of enactment of this
Act, and shall apply thereafter in any fiscal year.
G. UNITED STATES-HONG KONG POLICY ACT OF 1992
[22 U.S.C. 5721 et seq., P.L. 102-383 as amended by P.L. 104-107, P.L.
105-206, and P.L. 106-36]
SECTION 1. SHORT TITLE.
This Act may be cited as the ``United States-Hong Kong
Policy Act of 1992''.
SEC. 2. FINDINGS AND DECLARATIONS.
The Congress makes the following findings and declarations:
(1) The Congress recognizes that under the 1984 Sino-
British Joint Declaration:
(A) The People's Republic of China and the
United Kingdom of Great Britain and Northern
Ireland have agreed that the People's Republic
of China will resume the exercise of
sovereignty over Hong Kong on July 1, 1997.
Until that time, the United Kingdom will be
responsible for the administration of Hong
Kong.
(B) The Hong Kong Special Administrative
Region of the People's Republic of China,
beginning on July 1, 1997, will continue to
enjoy a high degree of autonomy on all matters
other than defense and foreign affairs.
(C) There is provision for implementation of
a ``one country, two systems'' policy, under
which Hong Kong will retain its current
lifestyle and legal, social, and economic
systems until at least the year 2047.
(D) The legislature of the Hong Kong Special
Administrative Region will be constituted by
elections, and the provisions of the
International Covenant on Civil and Political
Rights and the International Covenant on
Economic, Social and Cultural Rights, as
applied to Hong Kong, shall remain in force.
(E) Provision is made for the continuation in
force of agreements implemented as of June 30,
1997, and for the ability of the Hong Kong
Special Administrative Region to conclude new
agreements either on its own or with the
assistance of the Government of the People's
Republic of China.
(2) The Congress declares its wish to see full
implementation of the provisions of the Joint
Declaration.
(3) The President has announced his support for the
policies and decisions reflected in the Joint
Declaration.
(4) Hong Kong plays an important role in today's
regional and world economy. This role is reflected in
strong economic, cultural, and other ties with the
United States that give the United States a strong
interest in the continued vitality, prosperity, and
stability of Hong Kong.
(5) Support for democratization is a fundamental
principle of United States foreign policy. As such, it
naturally applies to United States policy toward Hong
Kong. This will remain equally true after June 30,
1997.
(6) The human rights of the people of Hong Kong are
of great importance to the United States and are
directly relevant to United States interests in Hong
Kong. A fully successful transition in the exercise of
sovereignty over Hong Kong must safeguard human rights
in and of themselves. Human rights also serve as a
basis for Hong Kong's continued economic prosperity.
SEC. 3. DEFINITIONS.
For purposes of this Act--
(1) the term ``Hong Kong'' means, prior to July 1,
1997, the British Dependent Territory of Hong Kong, and
on and after July 1, 1997, the Hong Kong Special
Administrative Region of the People's Republic of
China;
(2) the term ``Joint Declaration'' means the Joint
Declaration of the Government of the United Kingdom of
Great Britain and Northern Ireland and the Government
of the People's Republic of China on the Question of
Hong Kong, done at Beijing on December 19, 1984; and
(3) the term ``laws of the United States'' means
provisions of law enacted by the Congress.
TITLE I--POLICY
SEC. 101. BILATERAL TIES BETWEEN THE UNITED STATES AND HONG KONG.
It is the sense of the Congress that the following, which
are based in part on the relevant provisions of the Joint
Declaration, should be the policy of the United States with
respect to its bilateral relationship with Hong Kong:
(1) The United States should play an active role,
before, on, and after July 1, 1997, in maintaining Hong
Kong's confidence and prosperity, Hong Kong's role as
an international financial center, and the mutually
beneficial ties between the people of the United States
and the people of Hong Kong.
(2) The United States should actively seek to
establish and expand direct bilateral ties and
agreements with Hong Kong in economic, trade,
financial, monetary, aviation, shipping,
communications, tourism, cultural, sport, and other
appropriate areas.
(3) The United States should seek to maintain, after
June 30, 1997, the United States consulate-general in
Hong Kong, together with other official and semi-
official organizations, such as the United States
Information Agency American Library.
(4) The United States should invite Hong Kong to
maintain, after June 30, 1997, its official and semi-
official missions in the United States, such as the
Hong Kong Economic & Trade Office, the Office of the
Hong Kong Trade Development Council, and the Hong Kong
Tourist Association. The United States should invite
Hong Kong to open and maintain other official or semi-
official missions to represent Hong Kong in those areas
in which Hong Kong is entitled to maintain relations on
its own, including economic, trade, financial,
monetary, aviation, shipping, communications, tourism,
cultural, and sport areas.
(5) The United States should recognize passports and
travel documents issued after June 30, 1997, by the
Hong Kong Special Administrative Region.
(6) The resumption by the People's Republic of China
of the exercise of sovereignty over Hong Kong after
June 30, 1997, should not affect treatment of Hong Kong
residents who apply for visas to visit or reside
permanently in the United States, so long as such
treatment is consistent with the Immigration and
Nationality Act.
SEC. 102. PARTICIPATION IN MULTILATERAL ORGANIZATIONS, RIGHTS UNDER
INTERNATIONAL AGREEMENTS, AND TRADE STATUS.
It is the sense of the Congress that the following, which
are based in part on the relevant provisions of the Joint
Declaration, should be the policy of the United States with
respect to Hong Kong after June 30, 1997:
(1) The United States should support Hong Kong's
participation in all appropriate multilateral
conferences, agreements, and organizations in which
Hong Kong is eligible to participate.
(2) The United States should continue to fulfill its
obligations to Hong Kong under international
agreements, so long as Hong Kong reciprocates,
regardless of whether the People's Republic of China is
a party to the particular international agreement,
unless and until such obligations are modified or
terminated in accordance with law.
(3) The United States should respect Hong Kong's
status as a separate customs territory, and as a WTO
member country (as defined in section 2(10) of the
Uruguay Round Agreements Act) whether or not the
People's Republic of China participates in the World
Trade Organization (as defined in section 2(8) of that
Act).
SEC. 103. COMMERCE BETWEEN THE UNITED STATES AND HONG KONG.
It is the sense of the Congress that the following, which
are based in part on the relevant provisions of the Joint
Declaration, are and should continue after June 30, 1997, to be
the policy of the United States with respect to commerce
between the United States and Hong Kong:
(1) The United States should seek to maintain and
expand economic and trade relations with Hong Kong and
should continue to treat Hong Kong as a separate
territory in economic and trade matters, such as import
quotas and certificates of origin.
(2) The United States should continue to negotiate
directly with Hong Kong to conclude bilateral economic
agreements.
(3) The United States should continue to treat Hong
Kong as a territory which is fully autonomous from the
United Kingdom and, after June 30, 1997, should treat
Hong Kong as a territory which is fully autonomous from
the People's Republic of China with respect to economic
and trade matters.
(4) The United States should continue to grant the
products of Hong Kong nondiscriminatory trade treatment
by virtue of Hong Kong's membership in the General
Agreement on Tariffs and Trade.
(5) The United States should recognize certificates
of origin for manufactured goods issued by the Hong
Kong Special Administrative Region.
(6) The United States should continue to allow the
United States dollar to be freely exchanged with the
Hong Kong dollar.
(7) United States businesses should be encouraged to
continue to operate in Hong Kong, in accordance with
applicable United States and Hong Kong law.
(8) The United States should continue to support
access by Hong Kong to sensitive technologies
controlled under the agreement of the Coordinating
Committee for Multilateral Export Controls (commonly
referred to as ``COCOM'') for so long as the United
States is satisfied that such technologies are
protected from improper use or export.
(9) The United States should encourage Hong Kong to
continue its efforts to develop a framework which
provides adequate protection for intellectual property
rights.
(10) The United States should negotiate a bilateral
investment treaty directly with Hong Kong, in
consultation with the Government of the People's
Republic of China.
(11) The change in the exercise of sovereignty over
Hong Kong should not affect ownership in any property,
tangible or intangible, held in the United States by
any Hong Kong person.
SEC. 104. TRANSPORTATION.
It is the sense of the Congress that the following, which
are based in part on the relevant provisions of the Joint
Declaration, should be the policy of the United States after
June 30, 1997, with respect to transportation from Hong Kong:
(1) Recognizing Hong Kong's position as an
international transport center, the United States
should continue to recognize ships and airplanes
registered in Hong Kong and should negotiate air
service agreements directly with Hong Kong.
(2) The United States should continue to recognize
ships registered by Hong Kong.
(3) United States commercial ships, in accordance
with applicable United States and Hong Kong law, should
remain free to port in Hong Kong.
(4) The United States should continue to recognize
airplanes registered by Hong Kong in accordance with
applicable laws of the People's Republic of China.
(5) The United States should recognize licenses
issued by the Hong Kong to Hong Kong airlines.
(6) The United States should recognize certificates
issued by the Hong Kong to United States air carriers
for air service involving travel to, from, or through
Hong Kong which does not involve travel to, from, or
through other parts of the People's Republic of China.
(7) The United States should negotiate at the
appropriate time directly with the Hong Kong Special
Administrative Region, acting under authorization from
the Government of the People's Republic of China, to
renew or amend all air service agreements existing on
June 30, 1997, and to conclude new air service
agreements affecting all flights to, from, or through
the Hong Kong Special Administrative Region which do
not involve travel to, from, or through other parts of
the People's Republic of China.
(8) The United States should make every effort to
ensure that thenegotiations described in paragraph (7)
lead to procompetitive air service agreements.
SEC. 105. CULTURAL AND EDUCATIONAL EXCHANGES.
It is the sense of the Congress that the following, which
are based in part on the relevant provisions of the Joint
Declaration, are and should continue after June 30, 1997, to be
the policy of the United States with respect to cultural and
educational exchanges with Hong Kong:
(1) The United States should seek to maintain and
expand United States-Hong Kong relations and exchanges
in culture, education, science, and academic research.
The United States should encourage American
participation in bilateral exchanges with Hong Kong,
both official and unofficial.
(2) The United States should actively seek to further
United States-Hong Kong cultural relations and promote
bilateral exchanges, including the negotiating and
concluding of appropriate agreements in these matters.
(3) Hong Kong should be accorded separate status as a
full partner under the Fulbright Academic Exchange
Program (apart from the United Kingdom before July 1,
1997, and apart from the People's Republic of China
thereafter), with the continuation or establishment of
a Fulbright Commission or functionally equivalent
mechanism.
(4) The United States should actively encourage Hong
Kong residents to visit the United States on
nonimmigrant visas for such purposes as business,
tourism, education, and scientific and academic
research, in accordance with applicable United States
and Hong Kong laws.
(5) Upon the request of the Legislative Council of
Hong Kong, the Librarian of Congress, acting through
the Congressional Research Service, should seek to
expand educational and informational ties with the
Council.
TITLE II--THE STATUS OF HONG KONG IN UNITED STATES LAW
SEC. 201. CONTINUED APPLICATION OF UNITED STATES LAW.
(a) In General.--Notwithstanding any change in the exercise
of sovereignty over Hong Kong, the laws of the United States
shall continue to apply with respect to Hong Kong, on and after
July 1, 1997, in the same manner as the laws of the United
States were applied with respect to Hong Kong before such date
unless otherwise expressly provided by law or by Executive
order under section 202.
(b) International Agreements.--For all purposes, including
actions in any court in the United States, the Congress
approves the continuation in force on and after July 1, 1997,
of all treaties and other international agreements, including
multilateral conventions, entered into before such date between
the United States and Hong Kong, or entered into before such
date between the United States and the United Kingdom and
applied to Hong Kong, unless or until terminated in accordance
with law. If in carrying out this title, the President
determines that Hong Kong is not legally competent to carry out
its obligations under any such treaty or other international
agreement, or that the continuation of Hong Kong's obligations
or rights under any such treaty or other international
agreement is not appropriate under the circumstances, such
determination shall be reported to the Congress in accordance
with section 301.
SEC. 202. PRESIDENTIAL ORDER.
(a) Presidential Determination.--On or after July 1, 1997,
whenever the President determines that Hong Kong is not
sufficiently autonomous to justify treatment under a particular
law of the United States, or any provision thereof, different
from that accorded the People's Republic of China, the
President may issue an Executive order suspending the
application of section 201(a) to such law or provision of law.
(b) Factor for Consideration.--In making a determination
under subsection (a) with respect to the application of a law
of the United States, or any provision thereof, to Hong Kong,
the President should consider the terms, obligations, and
expectations expressed in the Joint Declaration with respect to
Hong Kong.
(c) Publication in Federal Register.--Any Executive order
issued under subsection (a) shall be published in the Federal
Register and shall specify the law or provision of law affected
by the order.
(d) Termination of Suspension.--An Executive order issued
under subsection (a) may be terminated by the President with
respect to a particular law or provision of law whenever the
President determines that Hong Kong has regained sufficient
autonomy to justify different treatment under the law or
provision of law in question. Notice of any such termination
shall be published in the Federal Register.
SEC. 203. RULES AND REGULATIONS.
The President is authorized to prescribe such rules and
regulations as thePresident may deem appropriate to carry out
this Act.
SEC. 204. CONSULTATION WITH CONGRESS.
In carrying out this title, the President shall consult
appropriately with the Congress.
TITLE III--REPORTING PROVISIONS
SEC. 301. REPORTING REQUIREMENT.
Not later than March 31, 1993, March 31, 1995, March 31,
1996, March 31, 1997, March 31, 1998, March 31, 1999, and March
31, 2000, the Secretary of State shall transmit to the Speaker
of the House of Representatives and the chairman of the
Committee on Foreign Relations of the Senate a report on
conditions in Hong Kong of interest to the United States. This
report shall cover (in the case of the initial report) the
period since the date of enactment of this Act or (in the case
of subsequent reports) the period since the most recent report
pursuant to this section and shall describe--
(1) significant developments in United States
relations with Hong Kong, including a description of
agreements that have entered into force between the
United States and Hong Kong;
(2) other matters, including developments related to
the change in the exercise of sovereignty over Hong
Kong, affecting United States interests in Hong Kong or
United States relations with Hong Kong;
(3) the nature and extent of United States-Hong Kong
cultural, education, scientific, and academic
exchanges, both official and unofficial;
(4) the laws of the United States with respect to
which the application of section 201(a) has been
suspended pursuant to section 202(a) or with respect to
which such a suspension has been terminated pursuant to
section 202(d), and the reasons for the suspension or
termination, as the case may be;
(5) treaties and other international agreements with
respect to which the President has made a determination
described in the last sentence of section 201(b), and
the reasons for each such determination;
(6) significant problems in cooperation between Hong
Kong and the United States in the area of export
controls;
(7) the development of democratic institutions in
Hong Kong; and
(8) the nature and extent of Hong Kong's
participation in multilateral forums.
SEC. 302. SEPARATE PART OF COUNTRY REPORTS.
Whenever a report is transmitted to the Congress on a
country-by-country basis there shall be included in such
report, where applicable, a separate subreport on Hong Kong
under the heading of the state that exercises sovereignty over
Hong Kong. The reports to which this section applies include
the reports transmitted under--
(1) sections 116(d) and 502B(b) of the Foreign
Assistance Act of 1961 (relating to human rights);
(2) section 181 of the Trade Act of 1974 (relating to
trade barriers); and
(3) section 2202 of the Export Enhancement Act of
1988 (relating to economic policy and trade practices).
H. RESTRICTIONS ON TRANSPORT OF MERCHANDISE BY FOREIGN VESSELS
Section 27 of the Merchant Marine Act, 1920, as amended
[46 App. U.S.C. 883; P.L. 95-410, section 213, as amended by P.L. 96-
112, P.L. 97-31, P.L. 97-389, P.L. 100-239, P.L. 100-329, and P.L. 104-
324]
SEC. 27. TRANSPORTATION OF MERCHANDISE BETWEEN POINTS IN UNITED STATES
IN OTHER THAN DOMESTIC-BUILT OR REBUILT AND
DOCUMENTED VESSELS.
No merchandise shall be transported by water, or by land
and water, on penalty of forfeiture of the merchandise (or a
monetary amount up to the value thereof as determined by the
Secretary of the Treasury, or the actual cost of the
transportation, whichever is greater, to be recovered from any
consignor, seller, owner, importer, consignee, agent, or other
person or persons so transporting or causing said merchandise
to be transported), between points in the United States,
including Districts, Territories, and possessions thereof
embraced within the coastwise laws, either directly or via a
foreign port, or for any part of the transportation, in any
other vessel than a vessel built in and documented under the
laws of the United States and owned by persons who are citizens
of the United States, or vessels to which the privilege of
engaging in the coastwise trade is extended by section 13 or
808 of this title: Provided, That no vessel ``of more than 200
gross tons (as measured under chapter 143 of title 46, United
States Code) having at any time acquired the lawful right to
engage in the coastwise trade, either by virtue of having been
built in, or documented under the laws of the United States,
and later sold foreign in whole or in part, or placed under
foreign registry, shall hereafter acquire the right to engage
in the coastwise trade: Provided further, That no vessel which
has acquired the lawful right to engage in the coastwise trade,
by virtue of having been built in or documented under the laws
of the United States, and which has later been rebuilt, shall
have the right thereafter to engage in the coastwise trade,
unless the entire rebuilding, including the construction of any
major components of the hull or superstructure of the vessel,
is effected within the United States, its Territories (not
including trust territories), or its possessions: Provided
further, That this section shall not apply to merchandise
transported between points within the continental United
States, including Alaska, over through routes heretofore or
hereafter recognized by the Surface Transportation Board for
which routes rate tariffs have been or shall hereafter be filed
with the Board when such routes are in part over Canadian rail
lines and their own or other connecting water facilities:
Provided further, That this section shall not become effective
upon the Yukon River until the Alaska Railroad shall be
completed and the Secretary of Transportation shall find that
proper facilities will be furnished for transportation by
persons citizens of the United States for properly handling the
traffic: Provided further, That this section shall not apply to
the transportation of merchandise loaded on railroad cars or to
motor vehicles with or without trailers, and with their
passengers or contents when accompanied by the operator
thereof, when such railroad cars or motor vehicles are
transported in any railroad car ferry operated between fixed
termini on the Great Lakes as a part of a rail route, if such
car ferry is owned by a common carrier by water and operated as
part of a rail route with the approval of the Surface
Transportation Board, and if the stock of such common carrier
by water, or its predecessor, was owned or controlled by a
common carrier by rail prior to June 5, 1920, and if the stock
of the common carrier owning such car ferry is, with the
approval of the Board, now owned or controlled by any common
carrier by rail and if such car ferry is built in and
documented under the laws of the United States: Provided
further, That upon such terms and conditions as the Secretary
of the Treasury by regulation may prescribe, and, if the
transporting vessel is of foreign registry, upon a finding by
the Secretary of the Treasury, pursuant to information obtained
and furnished by the Secretary of State, that the government of
the nation of registry extends reciprocal privileges to vessels
of the United States, this section shall not apply to the
transportation by vessels of the United States not qualified to
engage in the coastwise trade, or by vessels of foreign
registry, of (a) empty cargo vans, empty lift vans, and empty
shipping tanks, (b) equipment for use with cargo vans, lift
vans, or shipping tanks, (c) empty barges specifically designed
for carriage aboard a vessel and equipment, excluding
propulsion equipment, for use with such barges, and (d) any
empty instrument for international traffic exempted from
application of the customs laws by the Secretary of the
Treasury pursuant to the provisions of section 1322(a) of Title
19, if the articles described in clauses (a) through (d) are
owned or leased by the owner or operator of the transporting
vessel and are transported for his use in handling his cargo in
foreign trade; and (e) stevedoring equipment and material, if
such equipment and material is owned or leased by the owner or
operator of the transporting vessel, or is owned or leased by
the stevedoring company contracting for the lading or unlading
of that vessel, and is transported without charge for use in
the handling of cargo in foreign trade: Provided further, That
upon such terms and conditions as the Secretary of the Treasury
by regulation may prescribe, and, if the transporting vessel is
of foreign registry, upon his finding, pursuant to information
furnished by the Secretary of State, that the government of the
nation of registry extends reciprocal privileges to vessels of
the United States, the Secretary of the Treasury may suspend
the application of this section to the transportation of
merchandise between points in the United States (excluding
transportation between the continental United States and
noncontiguous states, districts, territories, and possessions
embraced within the coastwise laws) which, while moving in the
foreign trade of the United States, is transferred from a non-
self-propelled barge certified by the owner or operator to be
specifically designed for carriage aboard a vessel and
regularly carried aboard a vessel in foreign trade to another
such barge owned or leased by the same owner or operator,
without regard to whether any such barge is under foreign
registry or qualified to engage in the coastwise trade:
Provided further, That until April 1, 1984, and notwithstanding
any other provisions of this section, any vessel documented
under the laws of the United States and owned by persons who
are citizens of the United States may, when operated upon a
voyage in foreign trade, transport merchandise in cargo vans,
lift vans, and shipping-tanks between points embraced within
the coastwise laws for transfer to or when transferred from
another vessel or vessels, so documented and owned, of the same
operator when the merchandise movement has either a foreign
origin or a foreign destination; but this proviso (1) shall
apply only to vessels which that same operator owned, chartered
or contracted for the construction of prior to November 16,
1979, and (2) shall not apply to movements between points in
the contiguous United States and points in Hawaii, Alaska, the
Commonwealth of Puerto Rico and United States territories and
possessions. For the purposes of this section, after December
31, 1983, or after such time as an appropriate vessel has been
constructed and documented as a vessel of the United States,
the transportation of hazardous waste, as defined in section
6903(5) of Title 42, from a point in the United States for the
purpose of the incineration at sea of that waste shall be
deemed to be transportation by water of merchandise between
points in the United States: Provided, however, That the
provisions of this sentence shall not apply to this
transportation when performed by a foreign-flag ocean
incineration vessel, owned by or under construction on May 1,
1982, for a corporation wholly owned by a citizen of the United
States; the term ``citizen of the United States'', as used in
this proviso, means a corporation as defined in section 802(a)
and (b) of this title. The incineration equipment on these
vessels shall meet all current United States Coast Guard and
Environmental Protection Agency standards. These vessels shall,
in addition to any other inspections by the flag state, be
inspected by the United States Coast Guard, including drydock
inspections and internal examinations of tanks and void spaces,
as would be required of a vessel of the United States.
Satisfactory inspection shall be certified in writing by the
Secretary of Transportation. Such inspections may occur
concurrently with any inspections required by the flag state or
subsequent to but no more than one year after the initial
issuance or the next scheduled issuance of the Safety of Life
at Sea Safety Construction Certificate. In making such
inspections, the Coast Guard shall refer to the conditions
established by the initial flag state certification as the
basis for evaluating the current condition of the hull and
superstructure. The Coast Guard shall allow the substitution of
an equivalent fitting, material, appliance, apparatus, or
equipment other than that required for vessels of the United
States if the Coast Guard has been satisfied that fitting,
material, appliance, apparatus, or equipment is at least as
effective as that required for vessels of the United States:
Provided further, That for the purposes of this section,
supplies aboard United States documented fish processing
vessels, which are necessary and used for the processing or
assembling of fishery products aboard such vessels, shall be
considered ship's equipment and not merchandise: Provided
further, That for purposes of this section, the term
``merchandise'' includes valueless material: Provided further,
That this section applies to the transportation of valueless
material or any dredged material regardless of whether it has
commercial value, from a point or place in the United States or
a point or place on the high seas within the Exclusive Economic
Zone as defined in the Presidential Proclamation of March 10,
1983, to another point or place in the United States or a point
or place on the high seas within that Exclusive Economic Zone:
Provided further, That the transportation of any platform
jacket in or on a launch barge between two points in the United
States, at one of which there is an installation or other
device within the meaning of section 1333(a) of Title 43, shall
not be deemed transportation subject to this section if the
launch barge has a launch capacity of 12,000 long tons or more,
was built as of June 7, 1988, and is documented under the laws
of the United States, and the platform jacket cannot be
transported on and launched from a launch barge of lesser
launch capacity that is identified by the Secretary of
Transportation and is available for such transportation.
I. AUTHORITY TO REVIEW CERTAIN MERGERS, ACQUISITIONS, AND TAKEOVERS
Section 721 of the Defense Production Act of 1950, as amended
[50 U.S.C. App. 2170; P.L. 81-774, as added by P.L. 100-418, sec. 5021,
and amended by P.L. 102-558, sec. 163, and P.L. 103-359, sec.
721(k)(1)(B)]
Sec. 721. (a) Investigations.--The President or the
President's designee may make an investigation to determine the
effects on national security of mergers, acquisitions, and
takeovers proposed or pending on or after the date of enactment
of this section by or with foreign persons which could result
in foreign control of persons engaged in interstate commerce in
the United States. If it is determined that an investigation
should be undertaken, it shall commence no later than 30 days
after receipt by the President or the President's designee of
written notification of the proposed or pending merger,
acquisition, or takeover as prescribed by regulations
promulgated pursuant to this section. Such investigation shall
be completed no later than 45 days after such determination.
(b) Confidentiality of Information.--Any information or
documentary material filed with the President or the
President's designee pursuant to this section shall be exempt
from disclosure under section 552 of title 5, United States
Code, and no such information or documentary material may be
made public, except as may be relevant to any administrative or
judicial action or proceeding. Nothing in this subsection shall
be construed to prevent disclosure to either House of Congress
or to any duly authorized committee or subcommittee of the
Congress.
(c) Action by the President.--Subject to subsection (d),
the President may take such action for such time as the
President considers appropriate to suspend or prohibit any
acquisition, merger, or takeover, of a person engaged in
interstate commerce in the United States proposed or pending on
or after the date of enactment of this section by or with
foreign persons so that such control will not threaten to
impair the national security. The President shall announce the
decision to take action pursuant to this subsection not later
than 15 days after the investigation described in subsection
(a) is completed. The President may direct the Attorney General
to seek appropriate relief, including divestment relief, in the
district courts of the United States in order to implement and
enforce this section.
(d) Findings of the President.--The President may exercise
the authority conferred by subsection (c) only if the President
finds that--
(1) there is credible evidence that leads the
President to believe that the foreign interest
exercising control might take action that threatens to
impair the national security, and
(2) provisions of law, other than this section and
the International Emergency Economic Powers Act (50
U.S.C. 1701-1706), do not in the President's judgment
provide adequate and appropriate authority for the
President to protect the national security in the
matter before the President.
The provisions of subsection (d) of this section shall not be
subject to judicial review.
(e) Factors To Be Considered.--For purposes of this
section, the President or the President's designee may, taking
into account the requirements of national security, consider
among other factors--
(1) domestic production needed for projected national
defense requirements,
(2) the capability and capacity of domestic
industries to meet national defense requirements,
including the availability of human resources,
products, technology, materials, and other supplies and
services, and
(3) the control of domestic industries and commercial
activity by foreign citizens as it affects the
capability and capacity of the United States to meet
the requirements of national security.
(f) Report to the Congress.--If the President determines to
take action under subsection (c), the President shall
immediately transmit to the Secretary of the Senate and the
Clerk of the House of Representatives a written report of the
action which the President intends to take, including a
detailed explanation of the findings made under subsection (d).
(g) Regulations.--The President shall direct the issuance
of regulations to carry out this section. Such regulations
shall, to the extent possible, minimize paperwork burdens and
shall to the extent possible coordinate reporting requirements
under this section with reporting requirements under any other
provision of Federal law.
(h) Effect on Other Law.--Nothing in this section shall be
construed to alter or affect any existing power, process,
regulation, investigation, enforcement measure, or review
provided by any other provision of law.
(k) Quadrennial Report.--
(1) In general.--In order to assist the Congress in
its oversight responsibilities with respect to this
section, the President and such agencies as the
President shall designate shall complete and furnish to
the Congress, not later than 1 year after the date of
enactment of this section and upon the expiration of
every 4 years thereafter, a report which--
(A) evaluates whether there is credible
evidence of a coordinated strategy by 1 or more
countries or companies to acquire United States
companies involved in research, development, or
production of critical technologies for which
the United States is a leading producer; and
(B) evaluates whether there are industrial
espionage activities directed or directly
assisted by foreign governments against private
United States companies aimed at obtaining
commercial secrets related to critical
technologies.
(2) Definition.--For the purposes of this subsection,
the term ``critical technologies'' means technologies
identified under title VI of the National Science and
Technology Policy, Organization, and Priorities Act of
1976 or other critical technology, critical components,
or critical technology items essential to national
defense identified pursuant to this section.
(3) Release of unclassified study.--The report
required by this subsection may be classified. An
unclassified version of the report shall be made
available to the public.
Chapter 13: RECIPROCAL TRADE AGREEMENTS
A. U.S. NEGOTIATING OBJECTIVES
Section 1101 of the Omnibus Trade and Competitiveness Act of 1988
[19 U.S.C. 2901; P.L. 100-418]
SEC. 1101. OVERALL AND PRINCIPAL TRADE NEGOTIATING OBJECTIVES OF THE
UNITED STATES.
(a) Overall Trade Negotiating Objectives.--The overall trade
negotiating objectives of the United States are to obtain--
(1) more open, equitable, and reciprocal market
access;
(2) the reduction or elimination of barriers and
other trade-distorting policies and practices; and
(3) a more effective system of international trading
disciplines and procedures.
(b) Principal Trade Negotiating Objectives.--
(1) Dispute settlement.--The principal negotiating
objectives of the United States with respect to dispute
settlement are--
(A) to provide for more effective and
expeditious dispute settlement mechanisms and
procedures; and
(B) to ensure that such mechanisms within the
GATT and GATT agreements provide for more
effective and expeditious resolution of
disputes and enable better enforcement of
United States rights.
(2) Improvement of the gatt and multilateral trade
negotiation agreements.--The principal negotiating
objectives of the United States regarding the
improvement of GATT and multilateral trade negotiation
agreements are--
(A) to enhance the status of the GATT;
(B) to improve the operation and extend the
coverage of the GATT and such agreements and
arrangements to products, sectors, and
conditions of trade not adequately covered; and
(C) to expand country participation in
particular agreements or arrangements, where
appropriate.
(3) Transparency.--The principal negotiating
objective of the United States regarding transparency
is to obtain broader application of the principle of
transparency and clarification of the costs and
benefits of trade policy actions through the observance
of open and equitable procedures in trade matters by
Contracting Parties to the GATT.
(4) Developing countries.--The principal negotiating
objectives of the United States regarding developing
countries are--
(A) to ensure that developing countries
promote economic development by assuming the
fullest possible measure of responsibility for
achieving and maintaining an open international
trading system by providing reciprocal benefits
and assuming equivalent obligations with
respect to their import and export practices;
and
(B) to establish procedures for reducing
nonreciprocal trade benefits for the more
advanced developing countries.
(5) Current account surpluses.--The principal
negotiating objective of the United States regarding
current account surpluses is to develop rules to
address large and persistent global current account
imbalances of countries, including imbalances which
threaten the stability of the international trading
system, by imposing greater responsibility on such
countries to undertake policy changes aimed at
restoring current account equilibrium, including
expedited implementation of trade agreements where
feasible and appropriate.
(6) Trade and monetary coordination.--The principal
negotiating objective of the United States regarding
trade and monetary coordination is to develop
mechanisms to assure greater coordination, consistency,
and cooperation between international trade and
monetary systems and institutions.
(7) Agriculture.--The principal negotiating
objectives of the United States with respect to
agriculture are to achieve, on an expedited basis to
the maximum extent feasible, more open and fair
conditions of trade in agricultural commodities by--
(A) developing, strengthening, and clarifying
rules for agricultural trade, including
disciplines on restrictive or trade-distorting
import and export practices;
(B) increasing United States agricultural
exports by eliminating barriers to trade
(including transparent and nontransparent
barriers) and reducing or eliminating the
subsidization of agricultural production
consistent with the United States policy of
agricultural stabilization in cyclical and
unpredictable markets;
(C) creating a free and more open world
agricultural trading system by resolving
questions pertaining to export and other trade-
distorting subsidies, market pricing and market
access and eliminating and reducing
substantially other specific constraints to
fair trade and more open market access, such as
tariffs, quotas, and other nontariff practices,
including unjustified phytosanitary and
sanitary restrictions; and
(D) seeking agreements by which the major
agricultural exporting nations agree to pursue
policies to reduce excessive production of
agricultural commodities during periods of
oversupply, with due regard for the fact that
the United States already undertakes such
policies, and without recourse to arbitrary
schemes to divide market shares among major
exporting countries.
(8) Unfair trade practices.--The principal
negotiating objectives of the United States with
respect to unfair trade practices are--
(A) to improve the provisions of the GATT and
nontariff measure agreements in order to
define, deter, discourage the persistent use
of, and otherwise discipline unfair trade
practices having adverse trade effects,
including forms of subsidy and dumping and
other practices not adequately covered such as
resource input subsidies, diversionary dumping,
dumped or subsidized inputs, and export
targeting practices;
(B) to obtain the application of similar
rules to the treatment of primary and
nonprimary products in the Agreement on
Interpretation and Application of Articles VI,
XVI, and XXIII of the GATT (relating to
subsidies and countervailing measures); and
(C) to obtain the enforcement of GATT rules
against--
(i) state trading enterprises, and
(ii) the acts, practices, or policies
of any foreign government which, as a
practical matter, unreasonably require
that--
(I) substantial direct
investment in the foreign
country be made,
(II) intellectual property be
licensed to the foreign country
or to any firm of the foreign
country, or
(III) other collateral
concessions be made,
as a condition for the importation of
any product or service of the United
States into the foreign country or as a
condition for carrying on business in
the foreign country.
(9) Trade in services.--
(A) The principal negotiating objectives of
the United States regarding trade in services
are--
(i) to reduce or to eliminate
barriers to, or other distortions of,
international trade in services,
including barriers that deny national
treatment and restrictions on
establishment and operation in such
markets; and
(ii) to develop internationally
agreed rules, including dispute
settlement procedures, which--
(I) are consistent with the
commercial policies of the
United States, and
(II) will reduce or eliminate
such barriers or distortions,
and help ensure fair, equitable
opportunities for foreign
markets.
(B) In pursuing the negotiating objectives
described in subparagraph (A), United States
negotiators shall take into account legitimate
United States domestic objectives including,
but not limited to, the protection of
legitimate health or safety, essential
security, environmental, consumer or employment
opportunity interests and the law and
regulations related thereto.
(10) Intellectual property.--The principal
negotiating objectives of the United States regarding
intellectual property are--
(A) to seek the enactment and effective
enforcement by foreign countries of laws
which--
(i) recognize and adequately protect
intellectual property, including
copyrights, patents, trademarks,
semiconductor chip layout designs, and
trade secrets, and
(ii) provide protection against
unfair competition,
(B) to establish in the GATT obligations--
(i) to implement adequate substantive
standards based on--
(I) the standards in existing
international agreements that
provide adequate protection,
and
(II) the standards in
national laws if international
agreement standards are
inadequate or do not exist,
(ii) to establish effective
procedures to enforce, both internally
and at the border, the standards
implemented under clause (i), and
(iii) to implement effective dispute
settlement procedures that improve on
existing GATT procedures;
(C) to recognize that the inclusion in the
GATT of--
(i) adequate and effective
substantive norms and standards for the
protection and enforcement of
intellectual property rights, and
(ii) dispute settlement provisions
and enforcement procedures,
is without prejudice to other complementary
initiatives undertaken in other international
organizations; and
(D) to supplement and strengthen standards
for protection and enforcement in existing
international intellectual property conventions
administered by other international
organizations, including their expansion to
cover new and emerging technologies and
elimination of discrimination or unreasonable
exceptions or preconditions to protection.
(11) Foreign direct investment.--
(A) The principal negotiating objectives of
the United States regarding foreign direct
investment are--
(i) to reduce or to eliminate
artificial or trade-distorting barriers
to foreign direct investment, to expand
the principle of national treatment,
and to reduce unreasonable barriers to
establishment; and
(ii) to develop internationally
agreed rules, including dispute
settlement procedures, which--
(I) will help ensure a free
flow of foreign direct
investment, and
(II) will reduce or eliminate
the trade distortive effects of
certain trade-related
investment measures.
(B) In pursuing the negotiating objectives
described in subparagraph (A), United States
negotiators shall take into account legitimate
United States domestic objectives including,
but not limited to, the protection of
legitimate health or safety, essential
security, environmental, consumer or employment
opportunity interests and the law and
regulations related thereto.
(12) Safeguards.--The principal negotiating
objectives of the United States regarding safeguards
are--
(A) to improve and expand rules and
procedures covering safeguard measures;
(B) to ensure that safeguard measures are--
(i) transparent,
(ii) temporary,
(iii) degressive, and
(iv) subject to review and
termination when no longer necessary to
remedy injury and to facilitate
adjustment; and
(C) to require notification of, and to
monitor the use by, GATT Contracting Parties of
import relief actions for their domestic
industries.
(13) Specific barriers.--The principal negotiating
objective of the United States regarding specific
barriers is to obtain competitive opportunities for
United States exports in foreign markets substantially
equivalent to the competitive opportunities afforded
foreign exports to United States markets, including the
reduction or elimination of specific tariff and
nontariff trade barriers, particularly--
(A) measures identified in the annual report
prepared under section 181 of the Trade Act of
1974 (19 U.S.C. 2241); and
(B) foreign tariffs and nontariff barriers on
competitive United States exports when like or
similar products enter the United States at low
rates of duty or are duty-free, and other
tariff disparities that impede access to
particular export markets.
(14) Worker rights.--The principal negotiating
objectives of the United States regarding worker rights
are--
(A) to promote respect for worker rights;
(B) to secure a review of the relationship of
worker rights to GATT articles, objectives, and
related instruments with a view to ensuring
that the benefits of the trading system are
available to all workers; and
(C) to adopt, as a principle of the GATT,
that the denial of worker rights should not be
a means for a country or its industries to gain
competitive advantage in international trade.
(15) Access to high technology.--
(A) The principal negotiating objective of
the United States regarding access to high
technology is to obtain the elimination or
reduction of foreign barriers to, and acts,
policies, or practices by foreign governments
which limit, equitable access by United States
persons to foreign-developed technology,
including barriers, acts, policies, or
practices which have the effect of--
(i) restricting the participation of
United States persons in government-
supported research and development
projects;
(ii) denying equitable access by
United States persons to government-
held patents;
(iii) requiring the approval or
agreement of government entities, or
imposing other forms of government
interventions, as a condition for the
granting of licenses to United States
persons by foreign persons (except for
approval or agreement which may be
necessary for national security
purposes to control the export of
critical military technology); and
(iv) otherwise denying equitable
access by United States persons to
foreign-developed technology or
contributing to the inequitable flow of
technology between the United States
and its trading partners.
(B) In pursuing the negotiating objective
described in subparagraph (A), the United
States negotiators shall take into account
United States Government policies in licensing
or otherwise making available to foreign
persons technology and other information
developed by United States laboratories.
(16) Border taxes.--The principal negotiating
objective of the United States regarding border taxes
is to obtain a revision of the GATT with respect to the
treatment of border adjustments for internal taxes to
redress the disadvantage to countries relying primarily
for revenue on direct taxes rather than indirect taxes.
Sections 1124 and 3004 of the Omnibus Trade and Competitiveness Act of
1988
[22 U.S.C. 5304 and 5304 note; P.L. 100-418]
SEC. 1124. NEGOTIATIONS ON CURRENCY EXCHANGE RATES.
(a) Findings.--The Congress finds that--
(1) the benefit of trade concessions can be adversely
affected by misalignments in currency, and
(2) misalignments in currency caused by government
policies intended to maintain an unfair trade advantage
tend to nullify and impair trade concessions.
(b) Negotiations.--Whenever, in the course of negotiating a
trade agreement under this subtitle, the President is advised
by the Secretary of the Treasury that a foreign country that is
a party to the negotiations satisfies the criteria for
initiating bilateral currency negotiations listed in section
3004(b) of this Act, the Secretary of the Treasury shall take
action to initiate bilateral currency negotiations on an
expedited basis with such foreign country.
SEC. 3004. INTERNATIONAL NEGOTIATIONS ON EXCHANGE RATE AND ECONOMIC
POLICIES.
(a) Multilateral Negotiations.--The President shall seek to
confer and negotiate with other countries--
(1) to achieve--
(A) better coordination of macroeconomic
policies of the major industrialized nations;
and
(B) more appropriate and sustainable levels
of trade and current account balances, and
exchange rates of the dollar and other
currencies consistent with such balances; and
(2) to develop a program for improving existing
mechanisms for coordination and improving the
functioning of the exchange rate system to provide for
long-term exchange rate stability consistent with more
appropriate and sustainable current account balances.
(b) Bilateral Negotiations.--The Secretary of the Treasury
shall analyze on an annual basis the exchange rate policies of
foreign countries, in consultation with the International
Monetary Fund, and consider whether countries manipulate the
rate of exchange between their currency and the United States
dollar for purposes of preventing effective balance of payments
adjustments or gaining unfair competitive advantage in
international trade. If the Secretary considers that such
manipulation is occurring with respect to countries that (1)
have material global current account surpluses; and (2) have
significant bilateral trade surpluses with the United States,
the Secretary of the Treasury shall take action to initiate
negotiations with such foreign countries on an expedited basis,
in the International Monetary Fund or bilaterally, for the
purpose of ensuring that such countries regularly and promptly
adjust the rate of exchange between their currencies and the
United States dollar to permit effective balance of payments
adjustments and to eliminate the unfair advantage. The
Secretary shall not be required to initiate negotiations in
cases where such negotiations would have a serious detrimental
impact on vital national economic and security interests; in
such cases, the Secretary shall inform the chairman and the
ranking minority member of the Committee on Banking, Housing,
and Urban Affairs of the Senate and of the Committee on
Banking, Finance and Urban Affairs of the House of
Representatives of his determination.
Sections 131, 132, 135, and 315 of the Uruguay Round Agreements Act, as
amended
[19 U.S.C. 3551, 3552, 3555, and 3581; P.L. 103-465, as amended by P.L.
104-188, P.L. 104-295, and P.L. 105-206]
SEC. 131. WORKING PARTY ON WORKER RIGHTS.
(a) In General.--The President shall seek the establishment
in the GATT 1947, and, upon entry into force of the WTO
Agreement with respect to the United States, in the WTO, of a
working party to examine the relationship of internationally
recognized worker rights, as defined in section 507(4) of the
Trade Act of 1974, to the articles, objectives, and related
instruments of the GATT 1947 and of the WTO, respectively.
(b) Objectives of Working Party.--The objectives of the
United States for the working party described in subsection (a)
are to--
(1) explore the linkage between international trade
and internationally recognized worker rights, as
defined in section 507(4) of the Trade Act of 1974,
taking into account differences in the level of
development among countries;
(2) examine the effects on international trade of the
systematic denial of such rights;
(3) consider ways to address such effects; and
(4) develop methods to coordinate the work program of
the working party with the International Labor
Organization.
(c) Report to Congress.--The President shall report to the
Congress, not later than 1 year after the date of the enactment
of this Act, on the progress made in establishing the working
party under this section, and on United States objectives with
respect to the working party's work program.
SEC. 132. IMPLEMENTATION OF RULES OF ORIGIN WORK PROGRAM.
If the President enters into an agreement developed under
the work program described in Article 9 of the Agreement on
Rules of Origin referred to in section 101(d)(10), the
President may implement United States obligations under such an
agreement under United States law only pursuant to authority
granted to the President for that purpose by law enacted after
the effective date of this section.
* * * * * * *
SEC. 135. OBJECTIVES FOR EXTENDED NEGOTIATIONS.
(a) Trade in Financial Services.--The principal negotiating
objective of the United States in the extended negotiations on
financial services to be conducted under the auspices of the
WTO is to seek to secure commitments, from a wide range of
commercially important developed and developing countries, to
reduce or eliminate barriers to the supply of financial
services, including barriers that deny national treatment or
market access by restricting the establishment or operation of
financial services providers, as the condition for the United
States--
(1) offering commitments to provide national
treatment and market access in each of the financial
service subsectors, and
(2) making such commitments on a normal trade
relations basis.
(b) Trade in Basic Telecommunications Services.--The
principal negotiating objective of the United States in the
extended negotiations on basic telecommunications services to
be conducted under the auspices of the WTO is to obtain the
opening on nondiscriminatory terms and conditions of foreign
markets for basic telecommunications services through
facilities-based competition or through the resale of services
on existing networks.
(c) Trade in Civil Aircraft.--
(1) Negotiations.--The principal negotiating
objectives of the United States in the extended
negotiations on trade in civil aircraft to be conducted
under the auspices of the WTO are--
(A) to obtain competitive opportunities for
United States exports in foreign markets
substantially equivalent to those afforded to
foreign products in the United States,
(B) to obtain the reduction or elimination of
specific tariff and nontariff barriers,
including through expanded membership in the
Agreement on Trade in Civil Aircraft and in the
US-EC bilateral agreement for large civil
aircraft,
(C) to maintain vigorous and effective
disciplines on subsidies practices with respect
to civil aircraft products under the Agreement
on Subsidies and Countervailing Measures
referred to in section 101(d)(12),
(D) to maintain the scope and coverage on
indirect support as specified in the US-EC
bilateral agreement on large civil aircraft,
and
(E) to obtain increased transparency with
respect to foreign subsidy programs in the
civil aircraft sector, both through greater
government disclosure with respect to the use
of taxpayer moneys and higher financial
disclosure standards for companies receiving
government supports (including disclosure
comparable to that required under United States
securities laws).
(2) Definitions.--For purposes of paragraph (1)--
(A) the term ``civil aircraft'' means those
products to which the Agreement on Trade in
Civil Aircraft applies,
(B) the term ``large civil aircraft'' has the
meaning given that term in Annex II to the US-
EC bilateral agreement,
(C) the term ``indirect support'' means
indirect government support as defined in Annex
II to the US-EC bilateral agreement,
(D) the term ``Agreement on Trade in Civil
Aircraft'' means the Agreement on Trade in
Civil Aircraft approved by the Congress under
section 2 of the Trade Agreements Act of 1979,
and
(E) the term ``US-EC bilateral agreement''
means the Agreement Concerning the Application
of the GATT Agreement on Trade in Civil
Aircraft Between the European Economic
Community and the Government of the United
States of America on trade in large civil
aircraft, entered into on July 17, 1992.
* * * * * * *
SEC. 315. OBJECTIVES IN THE INTELLECTUAL PROPERTY.
It is the objective of the United States--
(1) to accelerate the implementation of the Agreement
on Trade-Related Aspects of Intellectual Property
Rights referred to in section 101(d)(15),
(2) to seek enactment and effective implementation by
foreign countries of laws to protect and enforce
intellectual property rights that supplement and
strengthen the standards of the Agreement on Trade-
Related Aspects of Intellectual Property Rights
referred to in section 101(d)(15) and the North
American Free Trade Agreement and, in particular--
(A) to conclude bilateral and multilateral
agreements that create obligations to protect
and enforce intellectual property rights that
cover new and emerging technologies and new
methods of transmission and distribution, and
(B) to prevent or eliminate discrimination
with respect to matters affecting the
availability, acquisition, scope, maintenance,
use, and enforcement of intellectual property
rights,
(3) to secure fair, equitable, and nondiscriminatory
market access opportunities for United States persons
that rely upon intellectual property protection,
(4) to take an active role in the development of the
intellectual property regime under the World Trade
Organization to ensure that it is consistent with other
United States objectives, and
(5) to take an active role in the World Intellectual
Property Organization (WIPO) to develop a cooperative
and mutually supportive relationship between the World
Trade Organization and WIPO.
Section 409 of the Trade and Development Act of 2000
[7 U.S.C. 1736r note; P.L. 106-200]
SEC. 409. AGRICULTURAL TRADE NEGOTIATING OBJECTIVES AND CONSULTATIONS
WITH CONGRESS.
(a) Findings.--Congress finds that--
(1) United States agriculture contributes positively
to the United States balance of trade and United States
agricultural exports support in excess of 1,000,000
United States jobs;
(2) United States agriculture competes successfully
worldwide despite the fact that United States producers
are at a competitive disadvantage because of the trade
distorting support and subsidy practices of other
countries and despite the fact that significant tariff
and nontariff barriers exist to United States exports;
and
(3) a successful conclusion of the current World
Trade Organization agricultural negotiations is
critically important to the United States agricultural
sector.
(b) Objectives.--The agricultural negotiating objectives of
the United States with respect to the current World Trade
Organization agricultural negotiations include as matters of
the highest priority--
(1) The expeditious elimination of all export
subsidies worldwide while maintaining bona fide food
aid and preserving United States market development and
export credit programs that allow the United States to
compete with other foreign export promotion efforts;
(2) leveling the playing field for United States
producers of agricultural products by eliminating blue
box subsidies and disciplining domestic supports in a
way that forces producers to face world prices on all
production in excess of domestic food security needs
allowing the preservation of nontrade distorting
programs to support family farms and rural communities;
(3) the elimination of state trading enterprises or
the adoption of rigorous disciplines that ensure
operational transparency, competition, and the end of
discriminatory pricing practices, including policies
supporting cross-subsidization and price undercutting
in export markets;
(4) affirming that the World Trade Organization
Agreement on the Application of Sanitary and
Phytosanitary Measures applies to new technologies,
including biotechnology, and that labeling requirements
to allow consumers to make choices regarding
biotechnology products or other regulatory requirements
may not be used as disguised barriers to trade:
(5) increasing opportunities for United States
exports of agricultural products by reducing tariffs to
the same levels that exist in the United States or to
lower levels and by eliminating all nontariff barriers,
including--
(A) restrictive or trade distorting
practices, including those that adversely
impact perishable or cyclical products;
(B) restrictive rules in the administration
of tariff rate quotas; and
(C) other barriers to agriculture trade,
including unjustified restrictions or
commercial requirements affecting new
technologies, including biotechnology;
(6) eliminating government policies that create
price-depressing surpluses; and
(7) strengthening dispute settlement procedures to
ensure prompt compliance by foreign governments with
their World Trade Organization obligations including
commitments not to maintain unjustified restrictions on
United States exports.
(c) Consultation With Congressional Committees.--
(1) Consultation before offer made.--In developing
and before submitting an initial or revised negotiating
proposal that would reduce United States tariffs on
agricultural products or require a change in United
States agricultural law, the United States Trade
Representative shall consult with the Committee on
Agriculture, Nutrition, and Forestry and the Committee
on Finance of the Senate and the Committee on
Agriculture and the Committee on Ways and Means of the
House of Representatives.
(2) Consultation with congressional trade advisers.--
Prior to and during the course of current negotiations
on agricultural trade, the United States Trade
Representative shall consult closely with the
congressional trade advisers.
(3) Consultation before agreement initialed.--Not
less than 48 hours before initialing an agreement
reached as part of current World Trade Organization
agricultural negotiations, the United States Trade
Representative shall consult closely with the
committees referred to in paragraph (1) regarding--
(A) the details of the agreement;
(B) the potential impact of the agreement on
United States agricultural producers; and
(C) any changes in United States law
necessary to implement the agreement.
(4) Disclosure of commitments.--Any agreement or
other understanding addressing agricultural trade with
a foreign government or governments (whether oral or in
writing) that relates to a trade agreement with respect
to which Congress must enact implementing legislation
and that is not disclosed to Congress before
legislation implementing that agreement is introduced
in either House of Congress shall not be considered to
be part of the agreement approved by Congress and shall
have no force and effect under United States law or in
any dispute settlement body.
(d) Sense of the Congress.--It is the sense of the
Congress that--
(1) granting the President trade negotiating
authority is essential to the successful conclusion of
the new round of World Trade Organization agricultural
negotiations;
(2) reaching a successful agreement on agriculture
should be the top priority of United States
negotiators; and
(3) if by the conclusion of the negotiations, the
primary agricultural competitors of the United States
do not agree to reduce their trade distorting domestic
supports and eliminate export subsidies in accordance
with the negotiating objectives expressed in this
section, the United States should take steps to
increase the leverage of United States negotiators and
level the playing field for United States producers.
Section 108 of the North American Free Trade Agreement Implementation
Act
[19 U.S.C. 3317; P.L. 103-182]
SEC. 108. CONGRESSIONAL INTENT REGARDING FUTURE ACCESSIONS.
(a) In General.--Section 101(a) may not be construed as
conferring Congressional approval of the entry into force of
the Agreement for the United States with respect to countries
other than Canada and Mexico.
(b) Future Free Trade Area Negotiations.--
(1) Findings.--The Congress makes the following
findings:
(A) Efforts by the United States to obtain
greater market opening through multilateral
negotiations have not produced agreements that
fully satisfy the trade negotiating objectives
of the United States.
(B) United States trade policy should provide
for additional mechanisms with which to pursue
greater market access for United States exports
of goods and services and opportunities for
export-related investment by United States
persons.
(C) Among the additional mechanisms should be
a system of bilateral and multilateral trade
agreements that provide greater market access
for United States exports and opportunities for
export-related investment by United States
persons.
(D) The system of trade agreements can and
should be structured to be consistent with, and
complementary to, existing international
obligations of the United States and ongoing
multilateral efforts to open markets.
(2) Report on significant market opening.--No later
than May 1, 1994, and May 1, 1997, the Trade
Representative shall submit to the President, and to
the Committee on Finance of the Senate and the
Committee on Ways and Means of the House of
Representatives (hereafter in this section referred to
as the ``appropriate Congressional Committees''), a
report which lists those foreign countries--
(A) that--
(i) currently provide fair and
equitable market access for United
States exports of goods and services
and opportunities for export-related
investment by United States persons,
beyond what is required by existing
multilateral trade agreements or
obligations; or
(ii) have made significant progress
in opening their markets to United
States exports of goods and services
and export-related investment by United
States persons; and
(B) the further opening of whose markets has
the greatest potential to increase United
States exports of goods and services and
export-related investment by United States
persons, either directly or through the
establishment of a beneficial precedent.
(3) Presidential determination.--The President, on
the basis of the report submitted by the Trade
Representative under paragraph (2), shall determine
with which foreign country or countries, if any, the
United States should seek to negotiate a free trade
area agreement or agreements.
(4) Recommendations on future free trade area
negotiations.--No later than July 1, 1994, and July 1,
1997, the President shall submit to the appropriate
Congressional committees a written report that
contains--
(A) recommendations for free trade area
negotiations with each foreign country selected
under paragraph (3);
(B) with respect to each country selected,
the specific negotiating objectives that are
necessary to meet the objectives of the United
States under this section; and
(C) legislative proposals to ensure adequate
consultation with the Congress and the private
sector during the negotiations, advance
Congressional approval of the negotiations
recommended by the President, and Congressional
approval of any trade agreement entered into by
the President as a result of the negotiations.
(5) General negotiating objectives.--The general
negotiating objectives of the United States under this
section are to obtain--
(A) preferential treatment for United States
goods;
(B) national treatment and, where
appropriate, equivalent competitive opportunity
for United States services and foreign direct
investment by United States persons;
(C) the elimination of barriers to trade in
goods and services by United States persons
through standards, testing, labeling, and
certification requirements;
(D) nondiscriminatory government procurement
policies and practices with respect to United
States goods and services;
(E) the elimination of other barriers to
market access for United States goods and
services, and the elimination of barriers to
foreign direct investment by United States
persons;
(F) the elimination of acts, policies, and
practices which deny fair and equitable market
opportunities, including foreign government
toleration of anticompetitive business
practices by private firms or among private
firms that have the effect of restricting, on a
basis that is inconsistent with commercial
considerations, purchasing by such firms of
United States goods and services;
(G) adequate and effective protection of
intellectual property rights of United States
persons, and fair and equitable market access
for United States persons that rely upon
intellectual property protection;
(H) the elimination of foreign export and
domestic subsidies that distort international
trade in United States goods and services or
cause material injury to United States
industries;
(I) the elimination of all export taxes;
(J) the elimination of acts, policies, and
practices which constitute export targeting;
and
(K) monitoring and effective dispute
settlement mechanisms to facilitate compliance
with the matters described in subparagraphs (A)
through (J).
B. GENERAL TRADE AGREEMENT AND IMPLEMENTATION AUTHORITIES
1. ``Fast Track'' Authority (expired)
Sections 1102, 1103, 1105, and 1107 of the Omnibus Trade and
Competitiveness Act of 1988, as amended
[19 U.S.C. 2902, 2903, 2904, and 2906; P.L. 100-418, as amended by P.L.
101-382, P.L. 103-49, and P.L. 103-465]
SEC. 1102. TRADE AGREEMENT NEGOTIATING AUTHORITY.
(a) Agreements Regarding Tariff Barriers.--
(1) Whenever the President determines that one or
more existing duties or other import restrictions of
any foreign country or the United States are unduly
burdening and restricting the foreign trade of the
United States and that the purposes, policies, and
objectives of this title will be promoted thereby, the
President--
(A) before June 1, 1993, may enter into trade
agreements with foreign countries; and
(B) may, subject to paragraphs (2) through
(5), proclaim--
(i) such modification or continuance
of any existing duty,
(ii) such continuance of existing
duty-free or excise treatment, or
(iii) such additional duties;
as he determines to be required or appropriate
to carry out any such trade agreement.
(2) No proclamation may be made under subsection (a)
that--
(A) reduces any rate of duty (other than a
rate of duty that does not exceed 5 percent ad
valorem on the date of enactment of this Act)
to a rate which is less than 50 percent of the
rate of such duty that applies on such date of
enactment; or
(B) increases any rate of duty above the rate
that applies on such date of enactment.
(3)(A) Except as provided in subparagraph (B), the
aggregate reduction in the rate of duty on any article
which is in effect on any day pursuant to a trade
agreement entered into under paragraph (1) shall not
exceed the aggregate reduction which would have been in
effect on such day if a reduction of 3 percent ad
valorem or a reduction of one-tenth of the total
reduction, whichever is greater, had taken effect on
the effective date of the first reduction proclaimed in
paragraph (1) to carry out such agreement with respect
to such article.
(B) No staging under subparagraph (A) is required
with respect to a rate reduction that is proclaimed
under paragraph (1) for an article of a kind that is
not produced in the United States. The United States
International Trade Commission shall advise the
President of the identity of articles that may be
exempted from staging under this subparagraph.
(4) If the President determines that such action will
simplify the computation of reductions under paragraph
(3), the President may round an annual reduction by the
lesser of--
(A) the difference between the reduction
without regard to this paragraph and the next
lower whole number; or
(B) one-half of 1 percent ad valorem.
(5) No reduction in a rate of duty under a trade
agreement entered into under subsection (a) on any
article may take effect more than 10 years after the
effective date of the first reduction under paragraph
(1) that is proclaimed to carry out the trade agreement
with respect to such article.
(6) A rate of duty reduction or increase that may not
be proclaimed by reason of paragraph (2) may take
effect only if a provision authorizing such reduction
or increase is included within an implementing bill
provided for under section 1103 and that bill is
enacted into law.
(b) Agreements Regarding Nontariff Barriers.--
(1) Whenever the President determines that any
barrier to, or other distortion of, international
trade--
(A) unduly burdens or restricts the foreign
trade of the United States or adversely affects
the United States economy; or
(B) the imposition of any such barrier or
distortion is likely to result in such a
burden, restriction, or effect;
and that the purposes, policies, and objectives of this
title will be promoted thereby, the President may,
before June 1, 1993, enter into a trade agreement with
foreign countries providing for--
(i) the reduction or elimination of such
barrier or other distortion; or
(ii) the prohibition of, or limitations on
the imposition of, such barrier or other
distortion.
(2) A trade agreement may be entered into under this
subsection only if such agreement makes progress in
meeting the applicable objectives described in section
1101.
(c) Bilateral Agreements Regarding Tariff and Nontariff
Barriers.--
(1) Before June 1, 1993, the President may enter into
bilateral trade agreements with foreign countries that
provide for the elimination or reduction of any duty
imposed by the United States. A trade agreement entered
into under this paragraph may also provide for the
reduction or elimination of barriers to, or other
distortions of, the international trade of the foreign
country or the United States.
(2) Notwithstanding any other provision of law, no
trade benefit shall be extended to any country by
reason of the extension of any trade benefit to another
country under a trade agreement entered into under
paragraph (1) with such other country.
(3) A trade agreement may be entered into under
paragraph (1) with any foreign country only if--
(A) the agreement makes progress in meeting
the applicable objectives described in section
1101;
(B) such foreign country requests the
negotiation of such an agreement; and
(C) the President, at least 60 days before
the date notice is provided under section
1103(a)(1)(A)--
(i) provides written notice of such
negotiations to the Committee on
Finance of the Senate and the Committee
on Ways and Means of the House of
Representatives, and
(ii) consults with such committees
regarding the negotiation of such
agreement.
(4) The 60-day period of time described in paragraph
(3)(C) shall be computed in accordance with section
1103(e).
(5) In any case in which there is an inconsistency
between any provision of this Act and any bilateral
free trade area agreement that entered into force and
effect with respect to the United States before January
1, 1987, the provision shall not apply with respect to
the foreign country that is party to that agreement.
(d) Consultation With Congress Before Agreements Entered
Into.--
(1) Before the President enters into any trade
agreement under subsection (b) or (c), the President
shall consult with--
(A) the Committee on Ways and Means of the
House of Representatives and the Committee on
Finance of the Senate; and
(B) each other committee of the House and the
Senate, and each joint committee of the
Congress, which has jurisdiction over
legislation involving subject matters which
would be affected by the trade agreement.
(2) The consultation under paragraph (1) shall
include--
(A) the nature of the agreement;
(B) how and to what extent the agreement will
achieve the applicable purposes, policies, and
objectives of this title; and
(C) all matters relating to the
implementation of the agreement under section
1103.
(3) If it is proposed to implement two or more trade
agreements in a single implementing bill under section
1103, the consultation under paragraph (1) shall
include the desirability and feasibility of such
proposed implementation.
(e) Special Provisions Regarding Uruguay Round Trade
Negotiations.--
(1) In general.--Notwithstanding the time limitations
in subsections (a) and (b), if the Uruguay Round of
multilateral trade negotiations under the auspices of
the General Agreement on Tariffs and Trade has not
resulted in trade agreements by May 31, 1993, the
President may, during the period after May 31, 1993,
and before April 16, 1994, enter into, under
subsections (a) and (b), trade agreements resulting
from such negotiations.
(2) Application of tariff proclamation authority.--No
proclamation under subsection (a) to carry out the
provisions regarding tariff barriers of a trade
agreement that is entered into pursuant to paragraph
(1) may take effect before the effective date of a bill
that implements the provisions regarding nontariff
barriers of a trade agreement that is entered into
under such paragraph.
(3) Application of implementing and ``fast track''
procedures.--Section 1103 applies to any trade
agreement negotiated under subsection (b) pursuant to
paragraph (1), except that--
(A) in applying subsection (a)(1)(A) of
section 1103 to any such agreement, the phrase
``at least 120 calendar days before the day on
which he enters into the trade agreement (but
not later than December 15, 1993),'' shall be
substituted for the phrase ``at least 90
calendar days before the day on which he enters
into the trade agreement,''; and
(B) no provision of subsection (b) of section
1103 other than paragraph (1)(A) applies to any
such agreement and in applying such paragraph,
``April 16, 1994;'' shall be substituted for
``June 1, 1991;''.
(4) Advisory committee reports.--The report required
under section 135(e)(1) of the Trade Act of 1974
regarding any trade agreement provided for under
paragraph (1) shall be provided to the President, the
Congress, and the United States Trade Representative
not later than 30 days after the date on which the
President notifies the Congress under section
1103(a)(1)(A) of his intention to enter into the
agreement (but before January 15, 1994).
SEC. 1103. IMPLEMENTATION OF TRADE AGREEMENTS.
(a) In General.--
(1) Any agreement entered into under section 1102 (b)
or (c) shall enter into force with respect to the
United States if (and only if)--
(A) the President, at least 90 calendar days
before the day on which he enters into the
trade agreement, notifies the House of
Representatives and the Senate of his intention
to enter into the agreement, and promptly
thereafter publishes notice of such intention
in the Federal Register;
(B) after entering into the agreement, the
President submits a document to the House of
Representatives and to the Senate containing a
copy of the final legal text of the agreement,
together with--
(i) a draft of an implementing bill,
(ii) a statement of any
administrative action proposed to
implement the trade agreement, and
(iii) the supporting information
described in paragraph (2); and
(C) the implementing bill is enacted into
law.
(2) The supporting information required under
paragraph (1)(B)(iii) consists of--
(A) an explanation as to how the implementing
bill and proposed administrative action will
change or affect existing law; and
(B) a statement--
(i) asserting that the agreement
makes progress in achieving the
applicable purposes, policies, and
objectives of this title,
(ii) setting forth the reasons of the
President regarding--
(I) how and to what extent
the agreement makes progress in
achieving the applicable
purposes, policies, and
objectives referred to in
clause (i), and why and to what
extent the agreement does not
achieve other applicable
purposes, policies, and
objectives,
(II) how the agreement serves
the interests of United States
commerce, and
(III) why the implementing
bill and proposed
administrative action is
required or appropriate to
carry out the agreement;
(iii) describing the efforts made by
the President to obtain international
exchange rate equilibrium and any
effect the agreement may have regarding
increased international monetary
stability; and
(iv) describing the extent, if any,
to which--
(I) each foreign country that
is a party to the agreement
maintains non-commercial state
trading enterprises that may
adversely affect, nullify, or
impair the benefits to the
United States under the
agreement, and
(II) the agreement applies to
or affects purchases and sales
by such enterprises.
(3) To ensure that a foreign country which receives
benefits under a trade agreement entered into under
section 1102 (b) or (c) is subject to the obligations
imposed by such agreement, the President shall
recommend to Congress in the implementing bill and
statement of administrative action submitted with
respect to such agreement that the benefits and
obligations of such agreement apply solely to the
parties to such agreement, if such application is
consistent with the terms of such agreement. The
President may also recommend with respect to any such
agreement that the benefits and obligations of such
agreement not apply uniformly to all parties to such
agreement, if such application is consistent with the
terms of such agreement.
(b) Application of Congressional ``Fast Track'' Procedures to
Implementing Bills.--
(1) Except as provided in subsection (c)--
(A) the provisions of section 151 of the
Trade Act of 1974 (19 U.S.C. 2191) (hereinafter
in this section referred to as ``fast track
procedures'') apply to implementing bills
submitted with respect to trade agreements
entered into under section 1102 (b) or (c)
before June 1, 1991; and
(B) such fast track procedures shall be
extended to implementing bills submitted with
respect to trade agreements entered into under
section 1102 (b) or (c) after May 31, 1991, and
before June 1, 1993, if (and only if)--
(i) the President requests such
extension under paragraph (2); and
(ii) neither House of the Congress
adopts an extension disapproval
resolution under paragraph (5) before
June 1, 1991.
(2) If the President is of the opinion that the fast
track procedures should be extended to implementing
bills described in paragraph (1)(B), the President must
submit to the Congress, no later than March 1, 1991, a
written report that contains a request for such
extension, together with--
(A) a description of all trade agreements
that have been negotiated under section 1102
(b) or (c) and the anticipated schedule for
submitting such agreements to the Congress for
approval;
(B) a description of the progress that has
been made in multilateral and bilateral
negotiations to achieve the purposes, policies,
and objectives of this title, and a statement
that such progress justifies the continuation
of negotiations; and
(C) a statement of the reasons why the
extension is needed to complete the
negotiations.
(3) The President shall promptly inform the Advisory
Committee for Trade Policy and Negotiations established
under section 135 of the Trade Act of 1974 (19 U.S.C.
2155) of his decision to submit a report to Congress
under paragraph (2). The Advisory Committee shall
submit to the Congress as soon as practicable, but no
later than March 1, 1991, a written report that
contains--
(A) its views regarding the progress that has
been made in multilateral and bilateral
negotiations to achieve the purposes, policies,
and objectives of this title; and
(B) a statement of its views, and the reasons
therefor, regarding whether the extension
requested under paragraph (2) should be
approved or disapproved.
(4) The reports submitted to the Congress under
paragraphs (2) and (3), or any portion of the reports,
may be classified to the extent the President
determines appropriate.
(5)(A) For purposes of this subsection, the term
``extension disapproval resolution'' means a resolution
of either House of the Congress, the sole matter after
the resolving clause of which is as follows: ``That the
disapproves the request of the President
for the extension, under section 1103(b)(1)(B)(i) of
the Omnibus Trade and Competitiveness Act of 1988, of
the provisions of section 151 of the Trade Act of 1974
to any implementing bill submitted with respect to any
trade agreement entered into under section 1102 (b) or
(c) of such Act after May 31, 1991, because sufficient
tangible progress has not been made in trade
negotiations.'', with the blank space being filled with
the name of the resolving House of the Congress.
(B) Extension disapproval resolutions--
(i) may be introduced in either House of the
Congress by any member of such House; and
(ii) shall be jointly referred, in the House
of Representatives, to the Committee on Ways
and Means and the Committee on Rules.
(C) The provisions of section 152 (d) and (e) of the
Trade Act of 1974 (19 U.S.C. 2192 (d) and (e))
(relating to the floor consideration of certain
resolutions in the House and Senate) apply to extension
disapproval resolutions.
(D) It is not in order for--
(i) the Senate to consider any extension
disapproval resolution not reported by the
Committee on Finance;
(ii) the House of Representatives to consider
any extension disapproval resolution not
reported by the Committee on Ways and Means and
the Committee on Rules; or
(iii) either House of the Congress to
consider an extension disapproval resolution
that is reported to such House after May 15,
1991.
(c) Limitations on Use of ``Fast Track'' Procedures.--
(1)(A) The fast track procedures shall not apply to
any implementing bill submitted with respect to a trade
agreement entered into under section 1102 (b) or (c) if
both Houses of the Congress separately agree to
procedural disapproval resolutions within any 60-day
period.
(B) Procedural disapproval resolutions--
(i) in the House of Representatives--
(I) shall be introduced by the
chairman or ranking minority member of
the Committee on Ways and Means or the
chairman or ranking minority member of
the Committee on Rules,
(II) shall be jointly referred to the
Committee on Ways and Means and the
Committee on Rules, and
(III) may not be amended by either
Committee; and
(ii) in the Senate shall be original
resolutions of the Committee on Finance.
(C) The provisions of section 152 (d) and (e) of the
Trade Act of 1974 (19 U.S.C. 2192 (d) and (e))
(relating to the floor consideration of certain
resolutions in the House and Senate) apply to
procedural disapproval resolutions.
(D) It is not in order for the House of
Representatives to consider any procedural disapproval
resolution not reported by the Committee on Ways and
Means and the Committee on Rules.
(E) For purposes of this subsection, the term
``procedural disapproval resolution'' means a
resolution of either House of the Congress, the sole
matter after the resolving clause of which is as
follows: ``That the President has failed or refused to
consult with Congress on trade negotiations and trade
agreements in accordance with the provisions of the
Omnibus Trade and Competitiveness Act of 1988, and,
therefore, the provisions of section 151 of the Trade
Act of 1974 shall not apply to any implementing bill
submitted with respect to any trade agreement entered
into under section 1102 (b) or (c) of such Act of 1988,
if, during the 60-day period beginning on the date on
which this resolution is agreed to by the , the
agrees to a procedural disapproval resolution
(within the meaning of section 1103(c)(1)(E) of such
Act of 1988).'', with the first blank space being
filled with the name of the resolving House of the
Congress and the second blank space being filled with
the name of the other House of the Congress.
(2) The fast track procedures shall not apply to any
implementing bill that contains a provision approving
of any trade agreement which is entered into under
section 1102(c) with any foreign country if either--
(A) the requirements of section 1102(c)(3)
are not met with respect to the negotiation of
such agreement; or
(B) the Committee on Finance of the Senate or
the Committee on Ways and Means of the House of
Representatives disapproves of the negotiation
of such agreement before the close of the 60-
day period which begins on the date notice is
provided under section 1102(c)(3)(C)(i) with
respect to the negotiation of such agreement.
(d) Rules of House of Representatives and Senate.--
Subsections (b) and (c) are enacted by the Congress--
(1) as an exercise of the rulemaking power of the
House of Representatives and the Senate, respectively,
and as such is deemed a part of the rules of each
House, respectively, and such procedures supersede
other rules only to the extent that they are
inconsistent with such other rules; and
(2) with the full recognition of the constitutional
right of either House to change the rules (so far as
relating to the procedures of that House) at any time,
in the same manner, and to the same extent as any other
rule of that House.
(e) Computation of Certain Periods of Time.--Each period of
time described in subsection (c)(1) (A) and (E) and (2) of this
section shall be computed without regard to--
(1) the days on which either House of Congress is not
in session because of an adjournment of more than 3
days to a day certain or an adjournment of the Congress
sine die; and
(2) any Saturday and Sunday, not excluded under
paragraph (1), when either House of the Congress is not
in session.
SEC. 1105. TERMINATION AND RESERVATION AUTHORITY; RECIPROCAL
NONDISCRIMINATORY TREATMENT.
(a) In General.--For purposes of applying sections 125,
126(a), and 127 of the Trade Act of 1974 (19 U.S.C. 2135,
2136(a), and 2137)--
(1) any trade agreement entered into under section
1102 shall be treated as an agreement entered into
under section 101 or 102, as appropriate, of the Trade
Act of 1974 (19 U.S.C. 2111 or 2112); and
(2) any proclamation or Executive order issued
pursuant to a trade agreement entered into under
section 1102 shall be treated as a proclamation or
Executive order issued pursuant to a trade agreement
entered into under section 102 of the Trade Act of
1974.
(b) Reciprocal Nondiscriminatory Treatment.--
(1) The President shall determine, before June 1,
1993, whether any major industrial country has failed
to make concessions under trade agreements entered into
under section 1102 (a) and (b) which provide
competitive opportunities for the commerce of the
United States in such country substantially equivalent
to the competitive opportunities, provided by
concessions made by the United States under trade
agreements entered into under section 1102 (a) and (b),
for the commerce of such country in the United States.
(2) If the President determines under paragraph (1)
that a major industrial country has not made
concessions under trade agreements entered into under
section 1102 (a) and (b) which provide substantially
equivalent competitive opportunities for the commerce
of the United States, the President shall, either
generally with respect to such country or by article
produced by such country, in order to restore
equivalence of competitive opportunities, recommend to
the Congress--
(A) legislation providing for the termination
or denial of the benefits of concessions of
trade agreements entered into under section
1102 (a) and (b) that have been made with
respect to rates of duty or other import
restrictions imposed by the United States, and
(B) legislation providing that any law
necessary to carry out any trade agreement
under section 1102 (a) or (b) not apply to such
country.
(3) For purposes of this subsection, the term ``major
industrial country'' means Canada, the European
Communities, the individual member countries of the
European Communities, Japan, and any other foreign
country designated by the President for purposes of
this subsection.
SEC. 1107. DEFINITIONS AND CONFORMING AMENDMENTS.
(a) Definitions.--For purposes of this part [trade agreement
and implementation authorities under sections 1101-1106 of the
Omnibus Trade and Competitiveness Act of 1988]:
(1) The term ``distortion'' includes, but is not
limited to, a subsidy.
(2) The term ``foreign country'' includes any foreign
instrumentality. Any territory or possession of a
foreign country that is administered separately for
customs purposes, shall be treated as a separate
foreign country.
(3) The term ``GATT'' means the GATT 1947 (as defined
in section 2(1)(A) of the Uruguay Round Agreements
Act).
(4) The term ``implementing bill'' has the meaning
given such term in section 151(b)(1) of the Trade Act
of 1974 (19 U.S.C. 2191(b)(1)).
(5) The term ``international trade'' includes, but is
not limited to--
(A) trade in both goods and services, and
(B) foreign direct investment by United
States persons, especially if such investment
has implications for trade in goods and
services.
(6) The term ``state trading enterprise'' means--
(A) any agency, instrumentality, or
administrative unit of a foreign country
which--
(i) purchases goods or services in
international trade for any purpose
other than the use of such goods or
services by such agency,
instrumentality, administrative unit,
or foreign country, or
(ii) sells goods or services in
international trade; or
(B) any business firm which--
(i) is substantially owned or
controlled by a foreign country or any
agency, instrumentality, or
administrative unit thereof,
(ii) is granted (formally or
informally) any special or exclusive
privilege by such foreign country,
agency, instrumentality, or
administrative unit, and
(iii) purchases goods or services in
international trade for any purpose
other than the use of such goods or
services by such foreign country,
agency, instrumentality, or
administrative unit, or which sells
goods or services in international
trade.
2. Uruguay Round/WTO Implementation, Tariff Modifications, and Dispute
Settlement
Sections 101(a and b), 102, 111(a, b, c, and e), and 121-129 of the
Uruguay Round Agreements Act
[19 U.S.C. 3511, 3512, 3521, 3531-3538; P.L. 103-465]
SEC. 101. APPROVAL AND ENTRY INTO FORCE OF THE URUGUAY ROUND
AGREEMENTS.
(a) Approval of Agreements and Statement of Administrative
Action.--Pursuant to section 1103 of the Omnibus Trade and
Competitiveness Act of 1988 (19 U.S.C. 2903) and section 151 of
the Trade Act of 1974 (19 U.S.C. 2191), the Congress approves--
(1) the trade agreements described in subsection (d)
resulting from the Uruguay Round of multilateral trade
negotiations under the auspices of the General
Agreement on Tariffs and Trade, entered into on April
15, 1994, and submitted to the Congress on September
27, 1994; and
(2) the statement of administrative action proposed
to implement the agreements that was submitted to the
Congress on September 27, 1994.
(b) Entry Into Force.--At such time as the President
determines that a sufficient number of foreign countries are
accepting the obligations of the Uruguay Round Agreements, in
accordance with article XIV of the WTO Agreement, to ensure the
effective operation of, and adequate benefits for the United
States under, those Agreements, the President may accept the
Uruguay Round Agreements and implement article VIII of the WTO
Agreement.
SEC. 102. RELATIONSHIP OF THE AGREEMENTS TO UNITED STATES LAW AND STATE
LAW.
(a) Relationship of Agreements to United States Law.--
(1) United states law to prevail in conflict.--No
provision of any of the Uruguay Round Agreements, nor
the application of any such provision to any person or
circumstance, that is inconsistent with any law of the
United States shall have effect.
(2) Construction.--Nothing in this Act shall be
construed--
(A) to amend or modify any law of the United
States, including any law relating to--
(i) the protection of human, animal,
or plant life or health,
(ii) the protection of the
environment, or
(iii) worker safety, or
(B) to limit any authority conferred under
any law of the United States, including section
301 of the Trade Act of 1974,
unless specifically provided for in this Act.
(b) Relationship of Agreements to State Law.--
(1) Federal-state consultation.--
(A) In general.--Upon the enactment of this
Act, the President shall, through the
intergovernmental policy advisory committees on
trade established under section 306(c)(2)(A) of
the Trade and Tariff Act of 1984 (19 U.S.C.
2114c(2)(A)), consult with the States for the
purpose of achieving conformity of State laws
and practices with the Uruguay Round
Agreements.
(B) Federal-state consultation process.--The
Trade Representative shall establish within the
Office of the United States Trade
Representative a Federal-State consultation
process for addressing issues relating to the
Uruguay Round Agreements that directly relate
to, or will potentially have a direct effect
on, the States. The Federal-State consultation
process shall include procedures under which--
(i) the States will be informed on a
continuing basis of matters under the
Uruguay Round Agreements that directly
relate to, or will potentially have a
direct impact on, the States;
(ii) the States will be provided an
opportunity to submit, on a continuing
basis, to the Trade Representative
information and advice with respect to
matters referred to in clause (i); and
(iii) the Trade Representative will
take into account the information and
advice received from the States under
clause (ii) when formulating United
States positions regarding matters
referred to in clause (i).
The Federal Advisory Committee Act (5 U.S.C.
App.) shall not apply to the Federal-State
consultation process established by this
paragraph.
(C) Federal-state cooperation in wto dispute
settlement.--
(i) When a WTO member requests
consultations with the United States
under Article 4 of the Understanding on
Rules and Procedures Governing the
Settlement of Disputes referred to in
section 101(d)(16) (hereafter in this
subsection referred to as the ``Dispute
Settlement Understanding'') concerning
whether the law of a State is
inconsistent with the obligations
undertaken by the United States in any
of the Uruguay Round Agreements, the
Trade Representative shall notify the
Governor of the State or the Governor's
designee, and the chief legal officer
of the jurisdiction whose law is the
subject of the consultations, as soon
as possible after the request is
received, but in no event later than 7
days thereafter.
(ii) Not later than 30 days after
receiving such a request for
consultations, the Trade Representative
shall consult with representatives of
the State concerned regarding the
matter. If the consultations involve
the laws of a large number of States,
the Trade Representative may consult
with an appropriate group of
representatives of the States
concerned, as determined by those
States.
(iii) The Trade Representative shall
make every effort to ensure that the
State concerned is involved in the
development of the position of the
United States at each stage of the
consultations and each subsequent stage
of dispute settlement proceedings
regarding the matter. In particular,
the Trade Representative shall--
(I) notify the State
concerned not later than 7 days
after a WTO member requests the
establishment of a dispute
settlement panel or gives
notice of the WTO member's
decision to appeal a report by
a dispute settlement panel
regarding the matter; and
(II) provide the State
concerned with the opportunity
to advise and assist the Trade
Representative in the
preparation of factual
information and argumentation
for any written or oral
presentations by the United
States in consultations or in
proceedings of a panel or the
Appellate Body regarding the
matter.
(iv) If a dispute settlement panel or
the Appellate Body finds that the law
of a State is inconsistent with any of
the Uruguay Round Agreements, the Trade
Representative shall consult with the
State concerned in an effort to develop
a mutually agreeable response to the
report of the panel or the Appellate
Body and shall make every effort to
ensure that the State concerned is
involved in the development of the
United States position regarding the
response.
(D) Notice to states regarding consultations
on foreign subcentral government laws.--
(i) Subject to clause (ii), the Trade
Representative shall, at least 30 days
before making a request for
consultations under Article 4 of the
Dispute Settlement Understanding
regarding a subcentral government
measure of another WTO member, notify,
and solicit the views of, appropriate
representatives of each State regarding
the matter.
(ii) In exigent circumstances clause
(i) shall not apply, in which case the
Trade Representative shall notify the
appropriate representatives of each
State not later than 3 days after
making the request for consultations
referred to in clause (i).
(2) Legal challenge.--
(A) In general.--No State law, or the
application of such a State law, may be
declared invalid as to any person or
circumstance on the ground that the provision
or application is inconsistent with any of the
Uruguay Round Agreements, except in an action
brought by the United States for the purpose of
declaring such law or application invalid.
(B) Procedures governing action.--In any
action described in subparagraph (A) that is
brought by the United States against a State or
any subdivision thereof--
(i) a report of a dispute settlement
panel or the Appellate Body convened
under the Dispute Settlement
Understanding regarding the State law,
or the law of any political subdivision
thereof, shall not be considered as
binding or otherwise accorded
deference;
(ii) the United States shall have the
burden of proving that the law that is
the subject of the action, or the
application of that law, is
inconsistent with the agreement in
question;
(iii) any State whose interests may
be impaired or impeded in the action
shall have the unconditional right to
intervene in the action as a party, and
the United States shall be entitled to
amend its complaint to include a claim
or cross-claim concerning the law of a
State that so intervenes; and
(iv) any State law that is declared
invalid shall not be deemed to have
been invalid in its application during
any period before the court's judgment
becomes final and all timely appeals,
including discretionary review, of such
judgment are exhausted.
(C) Reports to congressional committees.--At
least 30 days before the United States brings
an action described in subparagraph (A), the
Trade Representative shall provide a report to
the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of
the Senate--
(i) describing the proposed action;
(ii) describing efforts by the Trade
Representative to resolve the matter
with the State concerned by other
means; and
(iii) if the State law was the
subject of consultations under the
Dispute Settlement Understanding,
certifying that the Trade
Representative has substantially
complied with the requirement of
paragraph (1)(C) in connection with the
matter.
Following the submission of the report, and
before the action is brought, the Trade
Representative shall consult with the
committees referred to in the preceding
sentence concerning the matter.
(3) Definition of state law.--For purposes of this
subsection--
(A) the term ``State law'' includes--
(i) any law of a political
subdivision of a State; and
(ii) any State law regulating or
taxing the business of insurance; and
(B) the terms ``dispute settlement panel''
and ``Appellate Body'' have the meanings given
those terms in section 121.
(c) Effect of Agreement With Respect to Private Remedies.--
(1) Limitations.--No person other than the United
States--
(A) shall have any cause of action or defense
under any of the Uruguay Round Agreements or by
virtue of congressional approval of such an
agreement, or
(B) may challenge, in any action brought
under any provision of law, any action or
inaction by any department, agency, or other
instrumentality of the United States, any
State, or any political subdivision of a State
on the ground that such action or inaction is
inconsistent with such agreement.
(2) Intent of congress.--It is the intention of the
Congress through paragraph (1) to occupy the field with
respect to any cause of action or defense under or in
connection with any of the Uruguay Round Agreements,
including by precluding any person other than the
United States from bringing any action against any
State or political subdivision thereof or raising any
defense to the application of State law under or in
connection with any of the Uruguay Round Agreements--
(A) on the basis of a judgment obtained by
the United States in an action brought under
any such agreement; or
(B) on any other basis.
(d) Statement of Administrative Action.--The statement of
administrative action approved by the Congress under section
101(a) shall be regarded as an authoritative expression by the
United States concerning the interpretation and application of
the Uruguay Round Agreements and this Act in any judicial
proceeding in which a question arises concerning such
interpretation or application.
* * * * * * *
SEC. 111. TARIFF MODIFICATIONS.
(a) In General.--In addition to the authority provided by
section 1102 of the Omnibus Trade and Competitiveness Act of
1988 (19 U.S.C. 2902), the President shall have the authority
to proclaim--
(1) such other modification of any duty,
(2) such other staged rate reduction, or
(3) such additional duties,
as the President determines to be necessary or appropriate to
carry out Schedule XX.
(b) Other Tariff Modifications.--Subject to the consultation
and layover requirements of section 115, the President may
proclaim--
(1) the modification of any duty or staged rate
reduction of any duty set forth in Schedule XX if--
(A) the United States agrees to such
modification or staged rate reduction in a
multilateral negotiation under the auspices of
the WTO, and
(B) such modification or staged rate
reduction applies to the rate of duty on an
article contained in a tariff category that was
the subject of reciprocal duty elimination or
harmonization negotiations during the Uruguay
Round of multilateral trade negotiations, and
(2) such modifications as are necessary to correct
technical errors in Schedule XX or to make other
rectifications to the Schedule.
(c) Authority To Increase Duties on Articles From Certain
Countries.--
(1) In general.--
(A) Determination with respect to certain
countries.--Notwithstanding section 251 of the
Trade Expansion Act of 1962 (19 U.S.C. 1881),
after the entry into force of the WTO Agreement
with respect to the United States, if the
President--
(i) determines that a foreign country
(other than a foreign country that is a
WTO member country) is not according
adequate trade benefits to the United
States, including substantially equal
competitive opportunities for the
commerce of the United States, and
(ii) consults with the Committee on
Ways and Means of the House of
Representatives and the Committee on
Finance of the Senate,
the President may proclaim an increase in the
rate of duty with respect to any article of
such country in accordance with subparagraph
(B).
(B) Rate of duty described.--The President
may proclaim a rate of duty on any article of a
country identified under subparagraph (A) that
is equal to the greater of--
(i) the rate of duty set forth for
such article in the base rate of duty
column of Schedule XX, or
(ii) the rate of duty set forth for
such article in the bound rate of duty
column of Schedule XX.
(2) Termination of increased duties.--The President
shall terminate any increase in the rate of duty
proclaimed under this subsection by a proclamation
which shall be effective on the earlier of--
(A) the date set out in such proclamation of
termination,
(B) the date the WTO Agreement enters into
force with respect to the foreign country with
respect to which the determination under
paragraph (1) was made.
(3) Publication of determination and termination.--
The President shall publish in the Federal Register
notice of a determination made under paragraph (1) and
a termination occurring by reason of paragraph (2).
* * * * * * *
(e) Authority To Consolidate Subheadings and Modify Column
2 Rates of Duty for Tariff Simplification Purposes.--
(1) In general.--Whenever the HTS column 1 general
rates of duty for 2 or more 8-digit subheadings are at
the same level and such subheadings are subordinate to
a provision required by the International Convention on
the Harmonized Commodity Description and Coding System,
the President may proclaim, subject to the consultation
and layover requirements of section 115, that the goods
described in such subheadings be provided for in a
single 8-digit subheading of the HTS, and that--
(A) the HTS column 1 general rate of duty for
such single subheading be the column 1 general
rate of duty common to all such subheadings,
and
(B) the HTS column 2 rate of duty for such
single subheading be the highest column 2 rate
of duty for such subheadings that is in effect
on the day before the effective date of such
proclamation.
(2) Same level of duty.--The provisions of this
subsection apply to subheadings described in paragraph
(1) that have the same column 1 general rate of duty--
(A) on the date of the enactment of this Act,
or
(B) after such date of enactment as a result
of a staged reduction in such column 1 rates of
duty.
* * * * * * *
SEC. 121. DEFINITIONS.
For purposes of this subtitle:
(1) Administering authority.--The term
``administering authority'' has the meaning given that
term in section 771(1) of the Tariff Act of 1930.
(2) Appellate body.--The term ``Appellate Body''
means the Appellate Body established under Article 17.1
of the Dispute Settlement Understanding.
(3) Appropriate congressional committees;
congressional committees.--
(A) Appropriate congressional committees.--
The term ``appropriate congressional
committees'' means the committees referred to
in subparagraph (B) and any other committees of
the Congress that have jurisdiction involving
the matter with respect to which consultations
are to be held.
(B) Congressional committees.--The term
``congressional committees'' means the
Committee on Ways and Means of the House of
Representatives and the Committee on Finance of
the Senate.
(4) Dispute settlement panel; panel.--The terms
``dispute settlement panel'' and ``panel'' mean a panel
established pursuant to Article 6 of the Dispute
Settlement Understanding.
(5) Dispute settlement body.--The term ``Dispute
Settlement Body'' means the Dispute Settlement Body
administering the rules and procedures as set forth in
the Dispute Settlement Understanding.
(6) Dispute settlement understanding.--The term
``Dispute Settlement Understanding'' means the
Understanding on Rules and Procedures Governing the
Settlement of Disputes referred to in section
101(d)(16).
(7) General council.--The term ``General Council''
means the General Council established under paragraph 2
of Article IV of the WTO Agreement.
(8) Ministerial conference.--The term ``Ministerial
Conference'' means the Ministerial Conference
established under paragraph 1 of Article IV of the WTO
Agreement.
(9) Other terms.--The terms ``Antidumping
Agreement'', ``Agreement on Subsidies and
Countervailing Measures'', and ``Safeguards Agreement''
mean the agreements referred to in section 101(d)(7),
(12), and (13), respectively.
SEC. 122. IMPLEMENTATION OF URUGUAY ROUND AGREEMENTS.
(a) Decisionmaking.--In the implementation of the Uruguay
Round Agreements and the functioning of the World Trade
Organization, it is the objective of the United States to
ensure that the Ministerial Conference and the General Council
continue the practice of decisionmaking by consensus followed
under the GATT 1947, as required by paragraph 1 of article IX
of the WTO Agreement.
(b) Consultations With Congressional Committees.--In
furtherance of the objective set forth in subsection (a), the
Trade Representative shall consult with the appropriate
congressional committees before any vote is taken by the
Ministerial Conference or the General Council relating to--
(1) the adoption of an interpretation of the WTO
Agreement or another multilateral trade agreement,
(2) the amendment of any such agreement,
(3) the granting of a waiver of any obligation under
any such agreement,
(4) the adoption of any amendment to the rules or
procedures of the Ministerial Conference or the General
Council,
(5) the accession of a state or separate customs
territory to the WTO Agreement, or
(6) the adoption of any other decision,
if the action described in paragraph (1), (2), (3), (4), (5),
or (6) would substantially affect the rights or obligations of
the United States under the WTO Agreement or another
multilateral trade agreement or potentially entails a change in
Federal or State law.
(c) Report on Decisions.--
(1) In general.--Not later than 30 days after the end
of any calendar year in which the Ministerial
Conference or the General Council adopts by vote any
decision to take any action described in paragraph (1),
(2), (4), or (6) of subsection (b), the Trade
Representative shall submit a report to the appropriate
congressional committees describing--
(A) the nature of the decision;
(B) the efforts made by the United States to
have the matter decided by consensus pursuant
to paragraph 1 of article IX of the WTO
Agreement and the results of those efforts;
(C) which countries voted for, and which
countries voted against, the decision;
(D) the rights or obligations of the United
States affected by the decision and any Federal
or State law that would be amended or repealed,
if the President after consultation with the
Congress determined that such amendment or
repeal was an appropriate response; and
(E) the action the President intends to take
in response to the decision or, if the
President does not intend to take any action,
the reasons therefor.
(2) Additional reporting requirements.--
(A) Grant of waiver.--In the case of a
decision to grant a waiver described in
subsection (b)(3), the report under paragraph
(1) shall describe the terms and conditions of
the waiver and the rights and obligations of
the United States that are affected by the
waiver.
(B) Accession.--In the case of a decision on
accession described in subsection (b)(5), the
report under paragraph (1) shall state whether
the United States intends to invoke Article
XIII of the WTO Agreement.
(d) Consultation on Report.--Promptly after the submission
of a report under subsection (c), the Trade Representative
shall consult with the appropriate congressional committees
with respect to the report.
SEC. 123. DISPUTE SETTLEMENT PANELS AND PROCEDURES.
(a) Review by President.--The President shall review
annually the WTO panel roster and shall include the panel
roster and the list of persons serving on the Appellate Body in
the annual report submitted by the President under section
163(a) of the Trade Act of 1974.
(b) Qualifications of Appointees to Panels.--The Trade
Representative shall--
(1) seek to ensure that persons appointed to the WTO
panel roster are well-qualified, and that the roster
includes persons with expertise in the subject areas
covered by the Uruguay Round Agreements; and
(2) inform the President of persons nominated to the
roster by other WTO member countries.
(c) Rules Governing Conflicts of Interest.--The Trade
Representative shall seek the establishment by the General
Council and the Dispute Settlement Body of rules governing
conflicts of interest by persons serving on panels and members
of the Appellate Body and shall describe, in the annual report
submitted under section 124, any progress made in establishing
such rules.
(d) Notification of Disputes.--Promptly after a dispute
settlement panel is established to consider the consistency of
Federal or State law with any of the Uruguay Round Agreements,
the Trade Representative shall notify the appropriate
congressional committees of--
(1) the nature of the dispute, including the matters
set forth in the request for the establishment of the
panel, the legal basis of the complaint, and the
specific measures, in particular any State or Federal
law cited in the request for establishment of the
panel;
(2) the identity of the persons serving on the panel;
and
(3) whether there was any departure from the rule of
consensus with respect to the selection of persons to
serve on the panel.
(e) Notice of Appeals of Panel Reports.--If an appeal is
taken of a report of a panel in a proceeding described in
subsection (d), the Trade Representative shall, promptly after
the notice of appeal is filed, notify the appropriate
congressional committees of--
(1) the issues under appeal; and
(2) the identity of the persons serving on the
Appellate Body who are reviewing the report of the
panel.
(f) Actions Upon Circulation of Reports.--Promptly after
the circulation of a report of a panel or of the Appellate Body
to WTO members in a proceeding described in subsection (d), the
Trade Representative shall--
(1) notify the appropriate congressional committees
of the report;
(2) in the case of a report of a panel, consult with
the appropriate congressional committees concerning the
nature of any appeal that may be taken of the report;
and
(3) if the report is adverse to the United States,
consult with the appropriate congressional committees
concerning whether to implement the report's
recommendation and, if so, the manner of such
implementation and the period of time needed for such
implementation.
(g) Requirements for Agency Action.--
(1) Changes in agency regulations or practice.--In
any case in which a dispute settlement panel or the
Appellate Body finds in its report that a regulation or
practice of a department or agency of the United States
is inconsistent with any of the Uruguay Round
Agreements, that regulation or practice may not be
amended, rescinded, or otherwise modified in the
implementation of such report unless and until--
(A) the appropriate congressional committees
have been consulted under subsection (f);
(B) the Trade Representative has sought
advice regarding the modification from relevant
private sector advisory committees established
under section 135 of the Trade Act of 1974 (19
U.S.C. 2155);
(C) the head of the relevant department or
agency has provided an opportunity for public
comment by publishing in the Federal Register
the proposed modification and the explanation
for the modification;
(D) the Trade Representative has submitted to
the appropriate congressional committees a
report describing the proposed modification,
the reasons for the modification, and a summary
of the advice obtained under subparagraph (B)
with respect to the modification;
(E) the Trade Representative and the head of
the relevant department or agency have
consulted with the appropriate congressional
committees on the proposed contents of the
final rule or other modification; and
(F) the final rule or other modification has
been published in the Federal Register.
(2) Effective date of modification.--A final rule or
other modification to which paragraph (1) applies may
not go into effect before the end of the 60-day period
beginning on the date on which consultations under
paragraph (1)(E) begin, unless the President determines
that an earlier effective date is in the national
interest.
(3) Vote by congressional committees.--During the 60-
day period described in paragraph (2), the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate may vote to indicate
the agreement or disagreement of the committee with the
proposed contents of the final rule or other
modification. Any such vote shall not be binding on the
department or agency which is implementing the rule or
other modification.
(4) Inapplicability to itc.--This subsection does not
apply to any regulation or practice of the
International Trade Commission.
(h) Consultations Regarding Review of WTO Rules and
Procedures.--Before the review is conducted of the dispute
settlement rules and procedures of the WTO that is provided for
in the Decision on the Application of the Understanding on
Rules and Procedures Governing the Settlement of Disputes, as
such decision is set forth in the Ministerial Declarations and
Decisions adopted on April 15, 1994, together with the Uruguay
Round Agreements, the Trade Representative shall consult with
congressional committees regarding the policy of the United
States concerning the review.
SEC. 124. ANNUAL REPORT ON THE WTO.
Not later than March 1 of each year beginning in 1996, the
Trade Representative shall submit to the Congress a report
describing, for the preceding fiscal year of the WTO--
(1) the major activities and work programs of the
WTO, including the functions and activities of the
committees established under article IV of the WTO
Agreement, and the expenditures made by the WTO in
connection with those activities and programs;
(2) the percentage of budgetary assessments by the
WTO that were accounted for by each WTO member country,
including the United States;
(3) the total number of personnel employed or
retained by the Secretariat of the WTO, and the number
of professional, administrative, and support staff of
the WTO;
(4) for each personnel category described in
paragraph (3), the number of citizens of each country,
and the average salary of the personnel, in that
category;
(5) each report issued by a panel or the Appellate
Body in a dispute settlement proceeding regarding
Federal or State law, and any efforts by the Trade
Representative to provide for implementation of the
recommendations contained in a report that is adverse
to the United States;
(6) each proceeding before a panel or the Appellate
Body that was initiated during that fiscal year
regarding Federal or State law, the status of the
proceeding, and the matter at issue;
(7) the status of consultations with any State whose
law was the subject of a report adverse to the United
States that was issued by a panel or the Appellate
Body; and
(8) any progress achieved in increasing the
transparency of proceedings of the Ministerial
Conference and the General Council, and of dispute
settlement proceedings conducted pursuant to the
Dispute Settlement Understanding.
SEC. 125. REVIEW OF PARTICIPATION IN THE WTO.
(a) Report on the Operation of the WTO.--The first annual
report submitted to the Congress under section 124--
(1) after the end of the 5-year period beginning on
the date on which the WTO Agreement enters into force
with respect to the United States, and
(2) after the end of every 5-year period thereafter,
shall include an analysis of the effects of the WTO Agreement
on the interests of the United States, the costs and benefits
to the United States of its participation in the WTO, and the
value of the continued participation of the United States in
the WTO.
(b) Congressional Disapproval of U.S. Participation in the
WTO.--
(1) General rule.--The approval of the Congress,
provided under section 101(a), of the WTO Agreement
shall cease to be effective if, and only if, a joint
resolution described in subsection (c) is enacted into
law pursuant to the provisions of paragraph (2).
(2) Procedural provisions.--(A) The requirements of
this paragraph are met if the joint resolution is
enacted under subsection (c), and
(i) the Congress adopts and transmits the
joint resolution to the President before the
end of the 90-day period (excluding any day
described in section 154(b) of the Trade Act of
1974), beginning on the date on which the
Congress receives a report referred to in
subsection (a), and
(ii) if the President vetoes the joint
resolution, each House of Congress votes to
override that veto on or before the later of
the last day of the 90-day period referred to
in clause (i) or the last day of the 15-day
period (excluding any day described in section
154(b) of the Trade Act of 1974) beginning on
the date on which the Congress receives the
veto message from the President.
(B) A joint resolution to which this section applies
may be introduced at any time on or after the date on
which the President transmits to the Congress a report
described in subsection (a), and before the end of the
90-day period referred to in subparagraph (A).
(c) Joint Resolutions.--
(1) Joint resolutions.--For purposes of this section,
the term ``joint resolution'' means only a joint
resolution of the 2 Houses of Congress, the matter
after the resolving clause of which is as follows:
``That the Congress withdraws its approval, provided
under section 101(a) of the Uruguay Round Agreements
Act, of the WTO Agreement as defined in section 2(9) of
that Act.''.
(2) Procedures.--(A) Joint resolutions may be
introduced in either House of the Congress by any
member of such House.
(B) Subject to the provisions of this subsection, the
provisions of subsections (b), (d), (e), and (f) of
section 152 of the Trade Act of 1974 (19 U.S.C.
2192(b), (d), (e), and (f)) apply to joint resolutions
to the same extent as such provisions apply to
resolutions under such section.
(C) If the committee of either House to which a joint
resolution has been referred has not reported it by the
close of the 45th day after its introduction (excluding
any day described in section 154(b) of the Trade Act of
1974), such committee shall be automatically discharged
from further consideration of the joint resolution and
it shall be placed on the appropriate calendar.
(D) It is not in order for--
(i) the Senate to consider any joint
resolution unless it has been reported by the
Committee on Finance or the committee has been
discharged under subparagraph (C); or
(ii) the House of Representatives to consider
any joint resolution unless it has been
reported by the Committee on Ways and Means or
the committee has been discharged under
subparagraph (C).
(E) A motion in the House of Representatives to
proceed to the consideration of a joint resolution may
only be made on the second legislative day after the
calendar day on which the Member making the motion
announces to the House his or her intention to do so.
(3) Consideration of second resolution not in
order.--It shall not be in order in either the House of
Representatives or the Senate to consider a joint
resolution (other than a joint resolution received from
the other House), if that House has previously adopted
a joint resolution under this section.
(d) Rules of House of Representatives and Senate.--This
section is enacted by the Congress--
(1) as an exercise of the rulemaking power of the
House of Representatives and the Senate, respectively,
and as such is deemed a part of the rules of each
House, respectively, and such procedures supersede
other rules only to the extent that they are
inconsistent with such other rules; and
(2) with the full recognition of the constitutional
right of either House to change the rules (so far as
relating to the procedures of that House) at any time,
in the same manner, and to the same extent as any other
rule of that House.
SEC. 126. INCREASED TRANSPARENCY.
The Trade Representative shall seek the adoption by the
Ministerial Conference and General Council of procedures that
will ensure broader application of the principle of
transparency and clarification of the costs and benefits of
trade policy actions, through the observance of open and
equitable procedures in trade matters by the Ministerial
Conference and the General Council, and by the dispute
settlement panels and the Appellate Body under the Dispute
Settlement Understanding.
SEC. 127. ACCESS TO THE WTO DISPUTE SETTLEMENT PROCESS.
(a) In General.--Whenever the United States is a party
before a dispute settlement panel established pursuant to
Article 6 of the Dispute Settlement Understanding, the Trade
Representative shall, at each stage of the proceeding before
the panel or the Appellate Body, consult with the appropriate
congressional committees, the petitioner (if any) under section
302(a) of the Trade Act of 1974 (19 U.S.C. 2412) with respect
to the matter that is the subject of the proceeding, and
relevant private sector advisory committees established under
section 135 of the Trade Act of 1974 (19 U.S.C. 2155), and
shall consider the views of representatives of appropriate
interested private sector and nongovernmental organizations
concerning the matter.
(b) Notice and Public Comment.--In any proceeding described
in subsection (a), the Trade Representative shall--
(1) promptly after requesting the establishment of a
panel, or receiving a request from another WTO member
country for the establishment of a panel, publish a
notice in the Federal Register--
(A) identifying the initial parties to the
dispute,
(B) setting forth the major issues raised by
the country requesting the establishment of a
panel and the legal basis of the complaint,
(C) identifying the specific measures,
including any State or Federal law cited in the
request for establishment of the panel, and
(D) seeking written comments from the public
concerning the issues raised in the dispute;
and
(2) take into account any advice received from
appropriate congressional committees and relevant
private sector advisory committees referred to in
subsection (a), and written comments received pursuant
to paragraph (1)(D), in preparing United States
submissions to the panel or the Appellate Body.
(c) Access to Documents.--In each proceeding described in
subsection (a), the Trade Representative shall--
(1) make written submissions by the United States
referred to in subsection (b) available to the public
promptly after they are submitted to the panel or
Appellate Body, except that the Trade Representative is
authorized to withhold from disclosure any information
contained in such submissions identified by the
provider of the information as proprietary information
or information treated as confidential by a foreign
government;
(2) request each other party to the dispute to permit
the Trade Representative to make that party's written
submissions to the panel or the Appellate Body
available to the public; and
(3) make each report of the panel or the Appellate
Body available to the public promptly after it is
circulated to WTO members, and inform the public of
such availability.
(d) Requests for Nonconfidential Summaries.--In any dispute
settlement proceeding conducted pursuant to the Dispute
Settlement Understanding, the Trade Representative shall
request each party to the dispute to provide nonconfidential
summaries of its written submissions, if that party has not
made its written submissions public, and shall make those
summaries available to the public promptly after receiving
them.
(e) Public File.--The Trade Representative shall maintain a
file accessible to the public on each dispute settlement
proceeding to which the United States is a party that is
conducted pursuant to the Dispute Settlement Understanding. The
file shall include all United States submissions in the
proceeding and a listing of any submissions to the Trade
Representative from the public with respect to the proceeding,
as well as the report of the dispute settlement panel and the
report of the Appellate Body.
[(f) Conforming Amendment.--Amends section 135(a)(1)(B) of
the Trade Act of 1974, reprinted elsewhere.]
[SEC. 128. ADVISORY COMMITTEE PARTICIPATION.
[Amends section 135(b)(1) of the Trade Act of 1974,
reprinted elsewhere.]
SEC. 129. ADMINISTRATIVE ACTION FOLLOWING WTO PANEL REPORTS.
(a) Action by United States International Trade
Commission.--
(1) Advisory report.--If a dispute settlement panel
finds in an interim report under Article 15 of the
Dispute Settlement Understanding, or the Appellate Body
finds in a report under Article 17 of that
Understanding, that an action by the International
Trade Commission in connection with a particular
proceeding is not in conformity with the obligations of
the United States under the Antidumping Agreement, the
Safeguards Agreement, or the Agreement on Subsidies and
Countervailing Measures, the Trade Representative may
request the Commission to issue an advisory report on
whether title VII of the Tariff Act of 1930 or title II
of the Trade Act of 1974, as the case may be, permits
the Commission to take steps in connection with the
particular proceeding that would render its action not
inconsistent with the findings of the panel or the
Appellate Body concerning those obligations. The Trade
Representative shall notify the congressional
committees of such request.
(2) Time limits for report.--The Commission shall
transmit its report under paragraph (1) to the Trade
Representative--
(A) in the case of an interim report
described in paragraph (1), within 30 calendar
days after the Trade Representative requests
the report; and
(B) in the case of a report of the Appellate
Body, within 21 calendar days after the Trade
Representative requests the report.
(3) Consultations on request for commission
determination.--If a majority of the Commissioners
issues an affirmative report under paragraph (1), the
Trade Representative shall consult with the
congressional committees concerning the matter.
(4) Commission determination.--Notwithstanding any
provision of the Tariff Act of 1930 or title II of the
Trade Act of 1974, if a majority of the Commissioners
issues an affirmative report under paragraph (1), the
Commission, upon the written request of the Trade
Representative, shall issue a determination in
connection with the particular proceeding that would
render the Commission's action described in paragraph
(1) not inconsistent with the findings of the panel or
Appellate Body. The Commission shall issue its
determination not later than 120 days after the request
from the Trade Representative is made.
(5) Consultations on implementation of commission
determination.--The Trade Representative shall consult
with the congressional committees before the
Commission's determination under paragraph (4) is
implemented.
(6) Revocation of order.--If, by virtue of the
Commission's determination under paragraph (4), an
antidumping or countervailing duty order with respect
to some or all of the imports that are subject to the
action of the Commission described in paragraph (1) is
no longer supported by an affirmative Commission
determination under title VII of the Tariff Act of 1930
or this subsection, the Trade Representative may, after
consulting with the congressional committees under
paragraph (5), direct the administering authority to
revoke the antidumping or countervailing duty order in
whole or in part.
(7) Modification of action under title ii of trade
act of 1974.--Section 204(b) of the Trade Act of 1974
(19 U.S.C. 2254(b)) is amended by adding at the end the
following new paragraph:
``(3) Notwithstanding paragraph (1), the President
may, after receipt of a Commission determination under
section 129(a)(4) of the Uruguay Round Agreements Act
and consulting with the Committee on Ways and Means of
the House of Representatives and the Committee on
Finance of the Senate, reduce, modify, or terminate
action taken under section 203.''.
(b) Action by Administering Authority.--
(1) Consultations with administering authority and
congressional committees.--Promptly after a report by a
dispute settlement panel or the Appellate Body is
issued that contains findings that an action by the
administering authority in a proceeding under title VII
of the Tariff Act of 1930 is not in conformity with the
obligations of the United States under the Antidumping
Agreement or the Agreement on Subsidies and
Countervailing Measures, the Trade Representative shall
consult with the administering authority and the
congressional committees on the matter.
(2) Determination by administering authority.--
Notwithstanding any provision of the Tariff Act of
1930, the administering authority shall, within 180
days after receipt of a written request from the Trade
Representative, issue a determination in connection
with the particular proceeding that would render the
administering authority's action described in paragraph
(1) not inconsistent with the findings of the panel or
the Appellate Body.
(3) Consultations before implementation.--Before the
administering authority implements any determination
under paragraph (2), the Trade Representative shall
consult with the administering authority and the
congressional committees with respect to such
determination.
(4) Implementation of determination.--The Trade
Representative may, after consulting with the
administering authority and the congressional
committees under paragraph (3), direct the
administering authority to implement, in whole or in
part, the determination made under paragraph (2).
(c) Effects of Determinations; Notice of
Implementation.--
(1) Effects of determinations.--Determinations
concerning title VII of the Tariff Act of 1930 that are
implemented under this section shall apply with respect
to unliquidated entries of the subject merchandise (as
defined in section 771 of that Act) that are entered,
or withdrawn from warehouse, for consumption on or
after--
(A) in the case of a determination by the
Commission under subsection (a)(4), the date on
which the Trade Representative directs the
administering authority under subsection (a)(6)
to revoke an order pursuant to that
determination, and
(B) in the case of a determination by the
administering authority under subsection
(b)(2), the date on which the Trade
Representative directs the administering
authority under subsection (b)(4) to implement
that determination.
(2) Notice of implementation.--
(A) The administering authority shall publish
in the Federal Register notice of the
implementation of any determination made under
this section with respect to title VII of the
Tariff Act of 1930.
(B) The Trade Representative shall publish in
the Federal Register notice of the
implementation of any determination made under
this section with respect to title II of the
Trade Act of 1974.
(d) Opportunity for Comment by Interested Parties.--Prior
to issuing a determination under this section, the
administering authority or the Commission, as the case may be,
shall provide interested parties with an opportunity to submit
written comments and, in appropriate cases, may hold a hearing,
with respect to the determination.
C. SPECIFIC TRADE AGREEMENT AUTHORITIES
1. Compensation Authority
Section 123 of the Trade Act of 1974, as amended
[19 U.S.C. 2133; P.L. 93-618, as amended by P.L. 100-418]
SEC. 123. COMPENSATION AUTHORITY.
(a) Whenever--
(1) any action taken under chapter 1 of title II or
chapter 1 of title III; or
(2) any judicial or administrative tariff
reclassification that becomes final after the date of
the enactment of the Omnibus Trade and Competitiveness
Act of 1988;
increases or imposes any duty or other import restriction, the
President--
(A) may enter into trade agreements with foreign
countries or instrumentalities for the purpose of
granting new concessions as compensation in order to
maintain the general level of reciprocal and mutually
advantageous concessions; and
(B) may proclaim such modification or continuance of
any existing duty, or such continuance of existing
duty-free or excise treatment, as he determines to be
required or appropriate to carry out any such
agreement.
(b)(1) No proclamation shall be made pursuant to subsection
(a) decreasing any rate of duty to a rate which is less than 70
percent of the existing rate of duty.
(2) Where the rate of duty in effect at any time is an
intermediate stage under section 1102(a) of the Omnibus Trade
and Competitiveness Act of 1988, the proclamation made pursuant
to subsection (a) may provide for the reduction of each rate of
duty at each such stage proclaimed under section 1102(a) by not
more than 30 percent of such rate of duty, and may provide for
a final rate of duty which is not less than 70 percent of the
rate of duty proclaimed as the final stage under section
1102(a).
(3) If the President determines that such action will
simplify the computation of the amount of duty imposed with
respect to an article, he may exceed the limitations provided
by paragraphs (1) and (2) of this subsection by not more than
the lesser of--
(A) the difference between such limitation and the
next lower whole number, or
(B) one-half of 1 percent ad valorem.
(4) Any concessions granted under subsection (a)(1) shall
be reduced and terminated according to substantially the same
time schedule for reduction applicable to the relevant action
under sections 203(e) and 204.
(c) Before entering into any trade agreement under this
section with any foreign country or instrumentality, the
President shall consider whether such country or
instrumentality has violated trade concessions of benefit to
the United States and such violation has not been adequately
offset by the action of the United States or by such country or
instrumentality.
(d) Notwithstanding the provisions of subsection (a), the
authority delegated under section 1102 of the Omnibus Trade and
Competitiveness Act of 1988 shall be used for the purpose of
granting new concessions as compensation within the meaning of
this section until such authority terminates.
(e) The provisions of this section shall apply by reason of
action taken under chapter 1 of title III only if the President
determines that action authorized under this section is
necessary or appropriate to meet the international obligations
of the United States.
2. Termination and Withdrawal Authority
Section 125 of the Trade Act of 1974
[19 U.S.C. 2135; P.L. 93-618]
SEC. 125. TERMINATION AND WITHDRAWAL AUTHORITY.
(a) Grant of Authority for Termination or Withdrawal at end
of Period Specified in Agreement.--Every trade agreement
entered into under this Act shall be subject to termination, in
whole or in part, or withdrawal, upon due notice, at the end of
a period specified in the agreement. Such period shall be not
more than 3 years from the date on which the agreement becomes
effective. If the agreement is not terminated or withdrawn from
at the end of the period so specified, it shall be subject to
termination or withdrawal thereafter upon not more than 6
months' notice.
(b) Authority To Terminate Proclamations at Any Time.--The
President may at any time terminate, in whole or in part, any
proclamation made under this Act.
(c) Increased Duties or Other Import Restrictions Following
Withdrawal, Suspension, or Modification of Obligations with
Respect to Trade of Foreign Countries or Instrumentalities.--
Whenever the United States, acting in pursuance of any of its
rights or obligations under any trade agreement entered into
pursuant to this Act, section 201 of the Trade Expansion Act of
1962, or section 350 of the Tariff Act of 1930, withdraws,
suspends, or modifies any obligation with respect to the trade
of any foreign country or instrumentality thereof, the
President is authorized to proclaim increased duties or other
import restrictions, to the extent, at such times, and for such
periods as he deems necessary or appropriate, in order to
exercise the rights or fulfill the obligations of the United
States. No proclamation shall be made under this subsection
increasing any existing duty to a rate more than 50 percent
above the rate set forth in rate column numbered 2 of the
Tariff Schedules of the United States, as in effect on January
1, 1975, or 20 percent ad valorem above the rate existing on
January 1, 1975, whichever is higher.
[Section 421 of the Uruguay Round Agreements Act provides
that in the application of section 125(c) of the Trade Act of
1974 (19 U.S.C. 2135) with respect to any item provided for in
subheadings 2401.10.60, 2401.20.30, 2401.20.80, 2401.30.30,
2401.30.60, 2401.30.90, 2403.10.00, 2403.91.40, or 2403.99.00
of the HTS, ``350'' shall be substituted for ``20'' where it
appears in such section.]
(d) Retaliatory Authority.--Whenever any foreign country or
instrumentality withdraws, suspends, or modifies the
application of trade agreement obligations of benefit to the
United States without granting adequate compensation therefor,
the President, in pursuance of rights granted to the United
States under any trade agreement and to the extent necessary to
protect United States economic interests (including United
States balance of payments), may--
(1) withdraw, suspend, or modify the application of
substantially equivalent trade agreement obligations of
benefit to such foreign country or instrumentality; and
(2) proclaim under subsection (c) such increased
duties or other import restrictions as are appropriate
to effect adequate compensation from such foreign
country or instrumentality.
(e) Continuation of Duties or Other Import Restrictions
After Termination of or Withdrawal from Agreements.--Duties or
other import restrictions required or appropriate to carry out
any trade agreement entered into pursuant to this Act, section
201 of the Trade Expansion Act of 1962, or section 350 of the
Tariff Act of 1930 shall not be affected by any termination, in
whole or in part, of such agreement or by the withdrawal of the
United States from such agreement and shall remain in effect
after the date of such termination or withdrawal for 1 year,
unless the President by proclamation provides that such rates
shall be restored to the level at which they would be but for
the agreement. Within 60 days after the date of any such
termination or withdrawal, the President shall transmit to the
Congress his recommendations as to the appropriate rates of
duty for all articles which were affected by the termination or
withdrawal or would have been so affected but for the preceding
sentence.
(f) Public Hearings.--Before taking any action pursuant to
subsection (b), (c), or (d), the President shall provide for a
public hearing during the course of which interested persons
shall be given a reasonable opportunity to be present, to
produce evidence, and to be heard, unless he determines that
such prior hearings will be contrary to the national interest
because of the need for expeditious action, in which case he
shall provide for a public hearing promptly after such action.
[Section 1105(a) of the Omnibus Trade and Competitiveness
Act of 1988 applies section 125 to trade agreements entered
into under section 1102 of that Act.]
3. Accession of State Trading Regimes to the GATT or the WTO
Section 1106 of the Omnibus Trade and Competitiveness Act of 1988, as
amended
[19 U.S.C. 2905; P.L. 100-418, as amended by P.L. 103-465 and P.L. 104-
295]
SEC. 1106. ACCESSION OF STATE TRADING REGIMES TO THE GENERAL AGREEMENT
ON TARIFFS AND TRADE OR THE WTO.
(a) In General.--Before any major foreign country accedes,
after the date of enactment of this Act, to the GATT 1947, or
the WTO Agreement, the President shall determine--
(1) whether state trading enterprises account for a
significant share of--
(A) the exports of such major foreign
country, or
(B) the goods of such major foreign country
that are subject to competition from goods
imported into such foreign country; and
(2) whether such state trading enterprises--
(A) unduly burden and restrict, or adversely
affect, the foreign trade of the United States
or the United States economy, or
(B) are likely to result in such a burden,
restriction, or effect.
(b) Effects of Affirmative Determination.--If both of the
determinations made under paragraphs (1) and (2) of subsection
(a) with respect to a major foreign country are affirmative--
(1) the President shall reserve the right of the
United States to withhold extension of the application
of the GATT 1947 or the WTO Agreement, between the
United States and such major foreign country, and
(2) the GATT 1947 or the WTO Agreement shall not
apply between the United States and such major foreign
country until--
(A) such foreign country enters into an
agreement with the United States providing that
the state trading enterprises of such foreign
country--
(i) will--
(I) make purchases which are
not for the use of such foreign
country, and
(II) make sales in
international trade,
in accordance with commercial
considerations (including price,
quality, availability, marketability,
and transportation), and
(ii) will afford United States
business firms adequate opportunity, in
accordance with customary practice, to
compete for participation in such
purchases or sales; or
(B) a bill submitted under subsection (c)
which approves of the extension of the
application of the GATT 1947 or the WTO
Agreement between the United States and such
major foreign country is enacted into law.
(c) Expedited Consideration of Bill To Approve Extension.--
(1) The President may submit to the Congress any
draft of a bill which approves of the extension of the
application of the GATT 1947 or the WTO Agreement
between the United States and a major foreign country.
(2) Any draft of a bill described in paragraph (1)
that is submitted by the President to the Congress
shall--
(A) be introduced by the majority leader of
each House of the Congress (by request) on the
first day on which such House is in session
after the date such draft is submitted to the
Congress; and
(B) shall be treated as an implementing bill
for purposes of subsections (d), (e), (f), and
(g) of section 151 of the Trade Act of 1974.
(d) Publication.--The President shall publish in the Federal
Register each determination made under subsection (a).
(e) Definitions.--For purposes of this section:
(1) The term ``GATT 1947'' has the meaning given that
term in section 2(1)(A) of the Uruguay Round Agreements
Act.
(2) The term ``WTO Agreement'' means the Agreement
Establishing the World Trade Organization entered into
on April 15, 1994 and the multilateral trade agreements
(as such term is defined in section 2(4) of the Uruguay
Round Agreements Act).
4. GATT and WTO Authorizations
Section 121 of the Trade Act of 1974, as amended
[19 U.S.C. 2131; P.L. 93-618, as amended by P.L. 100-418 and P.L. 100-
647]
SEC. 121. AUTHORIZATION OF APPROPRIATION FOR GATT REVERSION.
There are authorized to be appropriated annually such sums
as may be necessary for the payment by the United States of its
share of the expenses of the Contracting Parties to the General
Agreement on Tariffs and Trade. This authorization does not
imply approval or disapproval by the Congress of all articles
of the General Agreement on Tariffs and Trade.
Section 101(c) of the Uruguay Round Agreements Act
[19 U.S.C. 3511; P.L. 103-465]
SEC. 101. APPROVAL AND ENTRY INTO FORCE OF THE URUGUAY ROUND
AGREEMENTS.
(c) Authorization of Appropriations.--There are authorized
to be appropriated annually such sums as may be necessary for
the payment by the United States of its share of the expenses
of the WTO.
D. TRADE NEGOTIATION PROCEDURAL REQUIREMENTS
Sections 131-134 of the Trade Act of 1974, as amended
[19 U.S.C. 2151-2154; P.L. 93-618, as amended by P.L. 100-418]
SEC. 131. ADVICE FROM INTERNATIONAL TRADE COMMISSION.
(a) Lists of Articles Which May Be Considered for Action.--
(1) In connection with any proposed trade agreement
under section 123 of this Act or section 1102 (a) or
(c) of the Omnibus Trade and Competitiveness Act of
1988, the President shall from time to time publish and
furnish the International Trade Commission (hereafter
in this section referred to as the ``Commission'') with
lists of articles which may be considered for
modification or continuance of United States duties,
continuance of United States duty-free or excise
treatment, or additional duties. In the case of any
article with respect to which consideration may be
given to reducing or increasing the rate of duty, the
list shall specify the provision of this subchapter
under which such consideration may be given.
(2) In connection with any proposed trade agreement
under section 1102 (b) or (c) of the Omnibus Trade and
Competitiveness Act of 1988, the President may from
time to time publish and furnish the Commission with
lists of nontariff matters which may be considered for
modification.
(b) Advice to President by Commission.--Within 6 months after
receipt of a list under subsection (a) or, in the case of a
list submitted in connection with a trade agreement, within 90
days after receipt of such list, the Commission shall advise
the President, with respect to each article or nontariff
matter, of its judgment as to the probable economic effect of
modification of the tariff or nontariff measure on industries
producing like or directly competitive articles and on
consumers, so as to assist the President in making an informed
judgment as to the impact which might be caused by such
modifications on United States interests, such as sectors
involved in manufacturing, agriculture, mining, fishing,
services, intellectual property, investment, labor, and
consumers. Such advice may include in the case of any article
the advice of the Commission as to whether any reduction in the
rate of duty should take place over a longer period of time
than the minimum period provided for in section 1102(a)(3)(A).
(c) Additional Investigations and Reports Requested by the
President or the Trade Representative.--In addition, in order
to assist the President in his determination whether to enter
into any agreement under section 123 of this Act or section
1102 of the Omnibus Trade and Competitiveness Act of 1988, or
how to develop trade policy, priorities or other matters (such
as priorities for actions to improve opportunities in foreign
markets), the Commission shall make such investigations and
reports as may be requested by the President or the United
States Trade Representative on matters such as effects of
modification of any barrier to (or other distortion of)
international trade on domestic workers, industries or sectors,
purchasers, prices and quantities of articles in the United
States.
(d) Commission Steps in Preparing Its Advice to the
President.--In preparing its advice to the President under this
section, the Commission shall to the extent practicable--
(1) investigate conditions, causes, and effects
relating to competition between the foreign industries
producing the articles or services in question and the
domestic industries producing the like or directly
competitive articles or services;
(2) analyze the production, trade, and consumption of
each like or directly competitive article or service,
taking into consideration employment, profit levels,
and use of productive facilities with respect to the
domestic industries concerned, and such other economic
factors in such industries as it considers relevant,
including prices, wages, sales, inventories, patterns
of demand, capital investment, obsolescence of
equipment, and diversification of production;
(3) describe the probable nature and extent of any
significant change in employment, profit levels, and
use of productive facilities; the overall impact of
such or other possible changes on the competitiveness
of relevant domestic industries or sectors; and such
other conditions as it deems relevant in the domestic
industries or sectors concerned which it believes such
modifications would cause; and
(4) make special studies (including studies of real
wages paid in foreign supplying countries), whenever
deemed to be warranted, of particular proposed
modifications affecting United States manufacturing,
agriculture, mining, fishing, labor, consumers,
services, intellectual property and investment, using
to the fullest extent practicable United States
Government facilities abroad and appropriate personnel
of the United States.
(e) Public Hearing.--In preparing its advice to the President
under this section, the Commission shall, after reasonable
notice, hold public hearings.
SEC. 132. ADVICE FROM EXECUTIVE DEPARTMENTS AND OTHER SOURCES.
Before any trade agreement is entered into under section 123
of this Act or section 1102 of the Omnibus Trade and
Competitiveness Act of 1988, the President shall seek
information and advice with respect to such agreement from the
Departments of Agriculture, Commerce, Defense, Interior, Labor,
State and the Treasury, from the United States Trade
Representative, and from such other sources as he may deem
appropriate. Such advice shall be prepared and presented
consistent with the provisions of Reorganization Plan Number 3
of 1979, Executive Order Number 12188 and section 141(c).
SEC. 133. PUBLIC HEARINGS.
(a) Opportunity for Presentation of Views.--In connection
with any proposed trade agreement under section 123 of this Act
or section 1102 of the Omnibus Trade and Competitiveness Act of
1988, the President shall afford an opportunity for any
interested person to present his views concerning any article
on a list published under section 131, any matter or article
which should be so listed, any concession which should be
sought by the United States, or any other matter relevant to
such proposed trade agreement. For this purpose, the President
shall designate an agency or an interagency committee which
shall, after reasonable notice, hold public hearings and
prescribe regulations governing the conduct of such hearings.
When appropriate, such procedures shall apply to the
development of trade policy and priorities.
(b) Summary of Hearings.--The organization holding such
hearing shall furnish the President with a summary thereof.
SEC. 134. PREREQUISITES FOR OFFERS.
(a) In any negotiation seeking an agreement under section 123
of this Act or section 1102 of the Omnibus Trade and
Competitiveness Act of 1988, the President may make a formal
offer for the modification or continuance of any United States
duty, import restrictions, or barriers to (or other distortions
of) international trade, the continuance of United States duty-
free or excise treatment, or the imposition of additional
duties, import restrictions, or other barrier to (or other
distortion of) international trade including trade in services,
foreign direct investment and intellectual property as covered
by this title, with respect to any article or matter only after
he has received a summary of the hearings at which an
opportunity to be heard with respect to such article has been
afforded under section 133. In addition, the President may make
an offer for the modification or continuance of any United
States duty, the continuance of United States duty-free or
excise treatment, or the imposition of additional duties, with
respect to any article included in a list published and
furnished under section 131(a), only after he has received
advice concerning such article from the Commission under
section 131(b), or after the expiration of the 6-month or 90-
day period provided for in that section, as appropriate,
whichever first occurs.
(b) In determining whether to make offers described in
subsection (a) in the course of negotiating any trade agreement
under section 1102 of the Omnibus Trade and Competitiveness Act
of 1988, and in determining the nature and scope of such
offers, the President shall take into account any advice or
information provided, or reports submitted, by--
(1) the Commission;
(2) any advisory committee established under section
135; or
(3) any organization that holds public hearings under
section 133;
with respect to any article, or domestic industry, that is
sensitive, or potentially sensitive, to imports.
Sections 127(a) and (b) of the Trade Act of 1974
[19 U.S.C. 2137; P.L. 93-618]
SEC. 127. RESERVATION OF ARTICLES FOR NATIONAL SECURITY OR OTHER
REASONS.
(a) National Security Considerations.--No proclamation
shall be made pursuant to the provisions of this Act reducing
or eliminating the duty or other import restrictions on any
article if the President determines that such reduction or
elimination would threaten to impair the national security.
(b) Action Taken Under Other Laws.--Where there is in
effect with respect to any article any action taken under
section 203 of this Act, or section 232 or 351 of the Trade
Expansion Act of 1962 (19 U.S.C. 1862 or 1981), the President
shall reserve such article from negotiations under this title
(and from any action under section 122(c)) contemplating
reduction or elimination of--
(A) any duty on such article,
(B) any import restriction imposed under such
section, or
(C) any other import restriction, the removal of
which will be likely to undermine the effect of the
import restrictions referred to in subparagraph (B).
In addition, the President shall also so reserve any other
article which he determines to be appropriate, taking into
consideration information and advice available pursuant to and
with respect to the matters covered by sections 131, 132, and
133, where applicable.
[Section 1105(a) of the Omnibus Trade and Competitiveness
Act of 1988 applies section 127 to trade agreements entered
into under section 1102 of that Act.]
E. IDENTIFICATION OF, AND ACTION ON, SPECIFIC FOREIGN TRADE BARRIERS
1. National Trade Estimates Report
Section 181 of the Trade Act of 1974, as amended
[19 U.S.C. 2241; P.L. 93-618, as added by P.L. 98-573, section 303(a)
and amended by P.L. 100-418 and P.L. 103-465]
SEC. 181. ESTIMATES OF BARRIERS TO MARKET ACCESS.
(a) National Trade Estimates.--
(1) In general.--For calendar year 1988, and for each
succeeding calendar year, the United States Trade
Representative, through the interagency trade
organization established pursuant to section 242(a) of
the Trade Expansion Act of 1962 and with the assistance
of the interagency advisory committee established under
section 141(d)(2), shall--
(A) identify and analyze acts, policies, or
practices of each foreign country which
constitute significant barriers to, or
distortions of--
(i) United States exports of goods or
services (including agricultural
commodities; and property protected by
trademarks, patents, and copyrights
exported or licensed by United States
persons), and
(ii) foreign direct investment by
United States persons, especially if
such investment has implications for
trade in goods or services;
(B) make an estimate of the trade-distorting
impact on United States commerce of any act,
policy, or practice identified under
subparagraph (A); and
(C) make an estimate, if feasible, of--
(i) the value of additional goods and
services of the United States, and
(ii) the value of additional foreign
direct investment by United States
persons,
that would have been exported to, or invested
in, each foreign country during such calendar
year if each of such acts, policies, and
practices of such country did not exist.
(2) Certain factors taken into account in making
analysis and estimate.--In making any analysis or
estimate under paragraph (1), the Trade Representative
shall take into account--
(A) the relative impact of the act, policy,
or practice on United States commerce;
(B) the availability of information to
document prices, market shares, and other
matters necessary to demonstrate the effects of
the act, policy, or practice;
(C) the extent to which such act, policy, or
practice is subject to international agreements
to which the United States is a party;
(D) any advice given through appropriate
committees established pursuant to section 135;
and
(E) the actual increase in--
(i) the value of goods and services
of the United States exported to, and
(ii) the value of foreign direct
investment made in,
the foreign country during the calendar year
for which the estimate under paragraph (1)(C)
is made.
(3) Annual revisions and updates.--The Trade
Representative shall annually revise and update the
analysis and estimate under paragraph (1).
(b) Report to Congress.--
(1) On or before April 30, 1989, and on or before
March 31 of each succeeding calendar year, the Trade
Representative shall submit a report on the analysis
and estimates made under subsection (a) for the
calendar year preceding such calendar year (which shall
be known as the ``National Trade Estimate'') to the
President, the Committee on Finance of the Senate, and
appropriate committees of the House of Representatives.
(2) Reports to include information with respect to
action being taken.--The Trade Representative shall
include in each report submitted under paragraph (1)
information with respect to any action taken (or the
reasons for no action taken) to eliminate any act,
policy, or practice identified under subsection (a),
including, but not limited to--
(A) any action under section 301,
(B) negotiations or consultations with
foreign governments, or
(C) a section on foreign anticompetitive
practices, the toleration of which by foreign
governments is adversely affecting exports of
United States goods or services.
(3) Consultation with congress on trade policy
priorities.--The Trade Representative shall keep the
committees described in paragraph (1) currently
informed with respect to trade policy priorities for
the purposes of expanding market opportunities. After
the submission of the report required by paragraph (1),
the Trade Representative shall also consult
periodically with, and take into account the views of,
the committees described in that paragraph regarding
means to address the foreign trade barriers identified
in the report, including the possible initiation of
investigations under section 302 or other trade
actions.
(c) Assistance of Other Agencies.--
(1) Furnishing of information.--The head of each
department or agency of the executive branch of the
Government, including any independent agency, is
authorized and directed to furnish to the Trade
Representative or to the appropriate agency, upon
request, such data, reports, and other information as
is necessary for the Trade Representative to carry out
his functions under this section. In preparing the
section of the report required by subsection (b)(2)(C),
the Trade Representative shall consult in particular
with the Attorney General.
(2) Restrictions on release or use of information.--
Nothing in this subsection shall authorize the release
of information to, or the use of information by, the
Trade Representative in a manner inconsistent with law
or any procedure established pursuant thereto.
(3) Personnel and services.--The head of any
department, agency, or instrumentality of the United
States may detail such personnel and may furnish such
services, with or without reimbursement, as the Trade
Representative may request to assist in carrying out
his functions.
2. Intellectual Property Rights
Section 182 of the Trade Act of 1974, as amended
[19 U.S.C. 2242; P.L. 93-618, as added by P.L. 100-418, section
1303(b), and amended by P.L. 103-182, P.L. 103-465, and P.L. 106-113]
SEC. 182. IDENTIFICATION OF COUNTRIES THAT DENY ADEQUATE PROTECTION, OR
MARKET ACCESS, FOR INTELLECTUAL PROPERTY RIGHTS.
(a) In General.--By no later than the date that is 30 days
after the date on which the annual report is submitted to
Congressional committees under section 181(b), the United
States Trade Representative (hereafter in this section referred
to as the ``Trade Representative'') shall identify--
(1) those foreign countries that--
(A) deny adequate and effective protection of
intellectual property rights, or
(B) deny fair and equitable market access to
United States persons that rely upon
intellectual property protection, and
(2) those foreign countries identified under
paragraph (1) that are determined by the Trade
Representative to be priority foreign countries.
(b) Special Rules for Identifications.--
(1) In identifying priority foreign countries under
subsection (a)(2), the Trade Representative shall only
identify those foreign countries--
(A) that have the most onerous or egregious
acts, policies, or practices that--
(i) deny adequate and effective
intellectual property rights, or
(ii) deny fair and equitable market
access to United States persons that
rely upon intellectual property
protection,
(B) whose acts, policies, or practices
described in subparagraph (A) have the greatest
adverse impact (actual or potential) on the
relevant United States products, and
(C) that are not--
(i) entering into good faith
negotiations, or
(ii) making significant progress in
bilateral or multilateral negotiations,
to provide adequate and effective protection of
intellectual property rights.
(2) In identifying priority foreign countries under
subsection (a)(2), the Trade Representative shall--
(A) consult with the Register of Copyrights,
the Under Secretary of Commence for
Intellectual Property and Director of the
United States Patent and Trademark Office,
other appropriate officers of the Federal
Government, and
(B) take into account information from such
sources as may be available to the Trade
Representative and such information as may be
submitted to the Trade Representative by
interested persons, including information
contained in reports submitted under section
181(b) and petitions submitted under section
302.
(3) The Trade Representative may identify a foreign
country under subsection (a)(1)(B) only if the Trade
Representative finds that there is a factual basis for
the denial of fair and equitable market access as a
result of the violation of international law or
agreement, or the existence of barriers, referred to in
subsection (d)(3).
(4) In identifying foreign countries under paragraphs
(1) and (2) of subsection (a), the Trade Representative
shall take into account--
(A) the history of intellectual property laws
and practices of the foreign country, including
any previous identification under subsection
(a)(2), and
(B) the history of efforts of the United
States, and the response of the foreign
country, to achieve adequate and effective
protection and enforcement of intellectual
property rights.
(c) Revocations and Additional Identifications.--
(1) The Trade Representative may at any time--
(A) revoke the identification of any foreign
country as a priority foreign country under
this section, or
(B) identify any foreign country as a
priority foreign country under this section,
if information available to the Trade Representative
indicates that such action is appropriate.
(2) The Trade Representative shall include in the
semi-annual report submitted to the Congress under
section 309(3) a detailed explanation of the reasons
for the revocation under paragraph (1) of the
identification of any foreign country as a priority
foreign country under this section.
(d) Definitions.--For purposes of this section--
(1) The term ``persons that rely upon intellectual
property protection'' means persons involved in--
(A) the creation, production or licensing of
works of authorship (within the meaning of
sections 102 and 103 of title 17, United States
Code) that are copyrighted, or
(B) the manufacture of products that are
patented or for which there are process
patents.
(2) A foreign country denies adequate and effective
protection of intellectual property rights if the
foreign country denies adequate and effective means
under the laws of the foreign country for persons who
are not citizens or nationals of such foreign country
to secure, exercise, and enforce rights relating to
patents, process patents, registered trademarks,
copyrights and mask works.
(3) A foreign country denies fair and equitable
market access if the foreign country effectively denies
access to a market for a product protected by a
copyright or related right, patent, trademark, mask
work, trade secret, or plant breeder's right, through
the use of laws, procedures, practices, or regulations
which--
(A) violate provisions of international law
or international agreements to which both the
United States and the foreign country are
parties, or
(B) constitute discriminatory nontariff trade
barriers.
(4) A foreign country may be determined to deny
adequate and effective protection of intellectual
property rights, notwithstanding the fact that the
foreign country may be in compliance with the specific
obligations of the Agreement on Trade-Related Aspects
of Intellectual Property Rights referred to in section
101(d)(15) of the Uruguay Round Agreements Act.
(e) Publication.--The Trade Representative shall publish in
the Federal Register a list of foreign countries identified
under subsection (a) and shall make such revisions to the list
as may be required by reason of action under subsection (c).
(f) Special Rule for Actions Affecting United States
Cultural Industries.--
(1) In general.--By no later than the date that is 30
days after the date on which the annual report is
submitted to Congressional committees under section
181(b), the Trade Representative shall identify any
act, policy, or practice of Canada which--
(A) affects cultural industries,
(B) is adopted or expanded after December 17,
1992, and
(C) is actionable under article 2106 of the
North American Free Trade Agreement.
(2) Special rules for identifications.--For purposes
of section 302(b)(2)(A), an act, policy, or practice
identified under this subsection shall be treated as an
act, policy, or practice that is the basis for
identification of a country under subsection (a)(2),
unless the United States has already taken action
pursuant to article 2106 of the North American Free
Trade Agreement in response to such act, policy, or
practice. In deciding whether to identify an act,
policy, or practice under paragraph (1), the Trade
Representative shall--
(A) consult with and take in to account the
views of representatives of the relevant
domestic industries, appropriate committees
established pursuant to section 135, and
appropriate officers of the Federal Government,
and
(B) take into account the information from
such sources as may be available to the Trade
Representative and such information as may be
submitted to the Trade Representative by
interested persons, including information
contained in reports submitted under section
181(b).
(3) Cultural industries.--For purposes of this
subsection, the term `cultural industries' means
persons engaged in any of the following activities:
(A) The publication, distribution, or sale of
books, magazines, periodicals, or newpapers in
print or machine readable form but not
including the sole activity of printing or
typesetting any of the foregoing.
(B) The production, distribution, sale, or
exhibition of film or video recordings.
(C) The production, distribution, sale, or
exhibition of audio or video music recordings.
(D) The publication, distribution, or sale of
music in print or machine readable form.
(E) Radio communications in which the
transmissions are intended for direct reception
by the general public, and all radio,
television, and cable broadcasting undertakings
and all satellite programming and broadcasting
network services.
(g) Annual Report.--The Trade Representative shall, by not
later than the date by which countries are identified under
subsection (a), transmit to the Committee on Ways and Means of
the House of Representatives and the Committee on Finance of
the Senate, a report on actions taken under this section during
the 12 months preceding such report, and the reasons for such
actions, including a description of progress made in achieving
improved intellectual property protection and market access for
persons relying on intellectual property rights.
3. Telecommunications Trade
Telecommunications Trade Act of 1988
(Title I, Subtitle C, Part 4 (Sections 1371-1382) of the Omnibus Trade
and Competitiveness Act of 1988)
[19 U.S.C. 3101 et seq.; P.L. 100-418, as amended by P.L. 103-465]
SEC. 1371. SHORT TITLE.
This part may be cited as the ``Telecommunications Trade
Act of 1988''.
SEC. 1372. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) rapid growth in the world market for
telecommunications products and services is likely to
continue for several decades;
(2) the United States can improve prospects for--
(A) the growth of--
(i) United States exports of
telecommunications products and
services, and
(ii) export-related employment and
consumer services in the United States,
and
(B) the continuance of the technological
leadership of the United States,
by undertaking a program to achieve an open world
market for trade in telecommunications products,
services, and investment;
(3) most foreign markets for telecommunications
products, services, and investment are characterized by
extensive government intervention (including
restrictive import practices and discriminatory
procurement practices) which adversely affect United
States exports of telecommunications products and
services and United States investment in
telecommunications;
(4) the open nature of the United States
telecommunications market, accruing from the
liberalization and restructuring of such market, has
contributed, and will continue to contribute, to an
increase in imports of telecommunications products and
a growing imbalance in competitive opportunities for
trade in telecommunications;
(5) unless this imbalance is corrected through the
achievement of mutually advantageous market
opportunities for trade in telecommunications products
and services between the United States and foreign
countries, the United States should avoid granting
continued open access to the telecommunications
products and services of such foreign countries in the
United States market; and
(6) the unique business conditions in the worldwide
market for telecommunications products and services
caused by the combination of deregulation and
divestiture in the United States, which represents a
unilateral liberalization of United States trade with
the rest of the world, and continuing government
intervention in the domestic industries of many other
countries create a need to make an exception in the
case of telecommunications products and services that
should not necessarily be a precedent for legislating
specific sectoral priorities in combating the closed
markets or unfair foreign trade practices of other
countries.
(b) Purposes.--The purposes of this part are--
(1) to foster the economic and technological growth
of, and employment in, the United States
telecommunications industry;
(2) to secure a high quality telecommunications
network for the benefit of the people of the United
States;
(3) to develop an international consensus in favor of
open trade and competition in telecommunications
products and services;
(4) to ensure that countries which have made
commitments to open telecommunications trade fully
abide by those commitments; and
(5) to achieve a more open world trading system for
telecommunications products and services through
negotiation and provision of mutually advantageous
market opportunities for United States
telecommunications exporters and their subsidiaries in
those markets in which barriers exist to free
international trade.
SEC. 1373. DEFINITIONS.
For purposes of this part--
(1) The term ``Trade Representative'' means the
United States Trade Representative.
(2) The term ``telecommunications product'' means--
(A) any paging devices provided for under
item 685.65 of such Schedules, and
(B) any article classified under any of the
following item numbers of such Schedules:
684.57 685.16 685.34
684.58 685.24 685.39
684.59 685.25 685.48
684.65 685.28 688.17
684.66 685.30 688.41
684.67 685.31 707.90.
684.80 685.33
SEC. 1374. INVESTIGATION OF FOREIGN TELECOMMUNICATIONS TRADE BARRIERS.
(a) In General.--The Trade Representative shall conduct an
investigation to identify priority foreign countries. Such
investigation shall be concluded by no later than the date that
is 5 months after the date of enactment of this Act.
(b) Factors To Be Taken Into Account.--In identifying
priority foreign countries under subsection (a), the Trade
Representative shall take into account, among other relevant
factors--
(1) the nature and significance of the acts,
policies, and practices that deny mutually advantageous
market opportunities to telecommunications products and
services of United States firms;
(2) the economic benefits (actual and potential)
accruing to foreign firms from open access to the
United States market;
(3) the potential size of the market of a foreign
country for telecommunications products and services of
United States firms;
(4) the potential to increase United States exports
of telecommunications products and services, either
directly or through the establishment of a beneficial
precedent; and
(5) measurable progress being made to eliminate the
objectionable acts, policies, or practices.
(c) Revocations and Additional Identifications.--
(1) The Trade Representative may at any time, after
taking into account the factors described in subsection
(b)--
(A) revoke the identification of any priority
foreign country that was made under this
section, or
(B) identify any foreign country as a
priority foreign country under this section,
if information available to the Trade Representative
indicates that such action is appropriate.
(2) The Trade Representative shall include in the
semiannual report submitted to the Congress under
section 309(3) of the Trade Act of 1974 a detailed
explanation of the reasons for the revocation under
paragraph (1) of this subsection of any identification
of any foreign country as a priority foreign country.
(d) Report to Congress.--By no later than the date that is
30 days after the date on which the investigation conducted
under subsection (a) is completed, the United States Trade
Representative shall submit a report on the investigation to
the President and to appropriate committees of the Congress.
SEC. 1375. NEGOTIATIONS IN RESPONSE TO INVESTIGATION.
(a) In General.--Upon--
(1) the date that is 30 days after the date on which
any foreign country is identified in the investigation
conducted under section 1374(a) as a priority foreign
country, and
(2) the date on which any foreign country is
identified under section 1374(c)(1)(B) as a priority
foreign country,
the President shall enter into negotiations with such priority
foreign country for the purpose of entering into a bilateral or
multilateral trade agreement under part 1 of subtitle A which
meets the specific negotiating objectives established by the
President under subsection (b) for such priority foreign
country.
(b) Establishment of Specific Negotiating Objectives for
Each Foreign Priority Country.--
(1) The President shall establish such relevant
specific negotiating objectives on a country-by-country
basis as are necessary to meet the general negotiating
objectives of the United States under this section.
(2)(A) The President may refine or modify specific
negotiating objectives for particular negotiations in
order to respond to circumstances arising during the
negotiating period, including--
(i) changed practices by the priority foreign
country,
(ii) tangible substantive developments in
multilateral negotiations,
(iii) changes in competitive positions,
technological developments, or
(iv) other relevant factors.
(B) By no later than the date that is 30 days after
the date on which the President makes any modifications
or refinements to specific negotiating objectives under
subparagraph (A), the President shall submit to
appropriate committees of the Congress a statement
describing such modifications or refinements and the
reasons for such modifications or refinements.
(c) General Negotiating Objectives.--The general negotiating
objectives of the United States under this section are--
(1) to obtain multilateral or bilateral agreements
(or the modification of existing agreements) that
provide mutually advantageous market opportunities for
trade in telecommunications products and services
between the United States and foreign countries;
(2) to correct the imbalances in market opportunities
accruing from reductions in barriers to the access of
telecommunications products and services of foreign
firms to the United States market; and
(3) to facilitate the increase in United States
exports of telecommunications products and services to
a level of exports that reflects the competitiveness of
the United States telecommunications industry.
(d) Specific Negotiating Objectives.--The specific
negotiating objectives of the United States under this section
regarding telecommunications products and services are to
obtain--
(1) national treatment for telecommunications
products and services that are provided by United
States firms;
(2) most-favored-nation treatment for such products
and services;
(3) nondiscriminatory procurement policies with
respect to such products and services and the inclusion
under the Agreement on Government Procurement of the
procurement (by sale or lease by government-owned or
controlled entities) of all telecommunications products
and services;
(4) the reduction or elimination of customs duties on
telecommunications products;
(5) the elimination of subsidies, violations of
intellectual property rights, and other unfair trade
practices that distort international trade in
telecommunications products and services;
(6) the elimination of investment barriers that
restrict the establishment of foreign-owned business
entities which market such products and services;
(7) assurances that any requirement for the
registration of telecommunications products, which are
to be located on customer premises, for the purposes
of--
(A) attachment to a telecommunications
network in a foreign country, and
(B) the marketing of the products in a
foreign country,
be limited to the certification by the manufacturer
that the products meet the standards established by the
foreign country for preventing harm to the network or
network personnel;
(8) transparency of, and open participation in, the
standards-setting processes used in foreign countries
with respect to telecommunications products;
(9) the ability to have telecommunications products,
which are to be located on customer premises, approved
and registered by type, and, if appropriate, the
establishment of procedures between the United States
and foreign countries for the mutual recognition of
type approvals;
(10) access to the basic telecommunications network
in foreign countries on reasonable and
nondiscriminatory terms and conditions (including
nondiscriminatory prices) for the provision of value-
added services by United States suppliers;
(11) the nondiscriminatory procurement of
telecommunications products and services by foreign
entities that provide local exchange telecommunications
services which are owned, controlled, or, if
appropriate, regulated by foreign governments; and
(12) monitoring and effective dispute settlement
mechanisms to facilitate compliance with matters
referred to in the preceding paragraphs of this
subsection.
SEC. 1376. ACTIONS TO BE TAKEN IF NO AGREEMENT OBTAINED.
(a) In General.--
(1) If the President is unable, before the close of
the negotiating period, to enter into an agreement
under subtitle A with any priority foreign country
identified under section 1374 which achieves the
general negotiating objectives described in section
1375(b) as defined by the specific objectives
established by the President for that country, the
President shall take whatever actions authorized under
subsection (b) that are appropriate and most likely to
achieve such general negotiating objectives.
(2) In taking actions under paragraph (1), the
President shall first take those actions which most
directly affect trade in telecommunications products
and services with the priority foreign country referred
to in paragraph (1), unless the President determines
that actions against other economic sectors would be
more effective in achieving the general negotiating
objectives referred to in paragraph (1).
(b) Actions Authorized.--
(1) The President is authorized to take any of the
following actions under subsection (a) with respect to
any priority foreign country:
(A) termination, withdrawal, or suspension of
any portion of any trade agreement entered into
with such country under--
(i) the Trade Act of 1974,
(ii) section 201 of the Trade
Expansion Act of 1962, or
(iii) section 350 of the Tariff Act
of 1930,
with respect to any duty or import restriction
imposed by the United States on any
telecommunications product;
(B) actions described in section 301 of the
Trade Act of 1974;
(C) prohibition of purchases by the Federal
Government of telecommunications products of
such country;
(D) increases in domestic preferences under
title III of the Act of March 3, 1933 (41
U.S.C. 10a, et seq.) for purchases by the
Federal Government of telecommunications
products of such country;
(E) suspension of any waiver of domestic
preferences under title III of the Act of March
3, 1933 (41 U.S.C. 10a, et seq.) which may have
been extended to such country pursuant to the
Trade Agreements Act of 1979 with respect to
telecommunications products or any other
products;
(F) issuance of orders to appropriate
officers and employees of the Federal
Government to deny Federal funds or Federal
credits for purchases of the telecommunications
products of such country; and
(G) suspension, in whole or in part, of
benefits accorded articles of such country
under title V of the Trade Act of 1974 (19
U.S.C. 2461, et seq.).
(2) Notwithstanding section 125 of the Trade Act of
1974 and any other provision of law, if any portion of
a trade agreement described in paragraph (1)(A) is
terminated, withdrawn, or suspended under paragraph (1)
with respect to any duty imposed by the United States
on the products of a foreign country, the rate of such
duty that shall apply to such products entered, or
withdrawn from warehouse for consumption, after the
date on which such termination, withdrawal, or
suspension takes effect shall be a rate determined by
the President.
(c) Negotiating Period.--
(1) For purposes of this section, the term
``negotiating period'' means--
(A) with respect to a priority foreign
country identified in the investigation
conducted under section 1374(a), the 18-month
period beginning on the date of the enactment
of this Act, and
(B) with respect to any foreign country
identified as a priority foreign country after
the conclusion of such investigation, the 1-
year period beginning on the date on which such
identification is made.
(2)(A) The negotiating period with respect to a
priority foreign country may be extended for not more
than two 1-year periods.
(B) By no later than the date that is 15 days after
the date on which the President extends the negotiating
period with respect to any priority foreign country,
the President shall submit to appropriate committees of
the Congress a report on the status of negotiations
with such country that includes--
(i) a finding by the President that
substantial progress is being made in
negotiations with such country, and
(ii) a statement detailing the reasons why an
extension of such negotiating period is
necessary.
(d) Modification and Termination Authority.--The President
may modify or terminate any action taken under subsection (a)
if, after taking into consideration the factors described in
section 1374(b), the President determines that changed
circumstances warrant such modification or termination.
(e) Report.--The President shall promptly inform the
appropriate committees of the Congress of any action taken
under subsection (a) or of the modification or termination of
any such action under subsection (d).
SEC. 1377. REVIEW OF TRADE AGREEMENT IMPLEMENTATION BY TRADE
REPRESENTATIVE.
(a) In General.--
(1) In conducting the annual analysis under section
181(a) of the Trade Act of 1974 (19 U.S.C. 2241), the
Trade Representative shall review the operation and
effectiveness of--
(A) each trade agreement negotiated by reason
of this part that is in force with respect to
the United States; and
(B) every other trade agreement regarding
telecommunications products or services that is
in force with respect to the United States.
(2) In each review conducted under paragraph (1), the
Trade Representative shall determine whether any act,
policy, or practice of the foreign country that has
entered into the agreement described in paragraph (1)--
(A) is not in compliance with the terms of
such agreement, or
(B) otherwise denies, within the context of
the terms of such agreement, to
telecommunications products and services of
United States firms mutually advantageous
market opportunities in that foreign country.
(b) Review Factors.--
(1) In conducting reviews under subsection (a), the
Trade Representative shall consider any evidence of
actual patterns of trade (including United States
exports to a foreign country of telecommunications
products and services, including sales and services
related to those products) that do not reflect patterns
of trade which would reasonably be anticipated to flow
from the concessions or commitments of such country
based on the international competitive position and
export potential of such products and services.
(2) The Trade Representative shall consult with the
United States International Trade Commission with
regard to the actual patterns of trade described in
paragraph (1).
(c) Action in Response to Affirmative Determination.--
(1) Any affirmative determination made by the Trade
Representative under subsection (a)(2) with respect to
any act, policy, or practice of a foreign country
shall, for purposes of chapter 1 of title III of the
Trade Act of 1974, be treated as an affirmative
determination under section 304(a)(1)(A) of such Act
that such act, policy, or practice violates a trade
agreement.
(2) In taking actions under section 301 by reason of
paragraph (1), the Trade Representative shall first
take those actions which most directly affect trade in
telecommunications products and services with the
priority foreign country referred to in paragraph (1),
unless the Trade Representative determines that actions
against other economic sectors would be more effective
in achieving compliance by the foreign country with the
trade agreement that is the subject of the affirmative
determination made under subsection (a)(2).
SEC. 1378. COMPENSATION AUTHORITY.
If--
(1) the President has taken action under section
1376(a) with respect to any foreign country, and
(2) such action is found to be inconsistent with the
international obligations of the United States,
including the WTO Agreement and the multilateral trade
agreements (as such terms are defined in paragraphs (8)
and (4), respectively, of section 2 of the Uruguay
Round Agreements Act),
the President may enter into trade agreements with such foreign
country for the purpose of granting new concessions as
compensation for such action in order to maintain the general
level of reciprocal and mutually advantageous concessions.
SEC. 1379. CONSULTATIONS.
(a) Advice From Departments and Agencies.--Prior to taking
any action under this part, the President shall seek
information and advice from the interagency trade organization
established under section 242(a) of the Trade Expansion Act of
1962 (19 U.S.C. 1872).
(b) Advice From the Private Sector.--Before--
(1) the Trade Representative concludes the
investigation conducted under section 1374(a) or takes
action under section 1374(c),
(2) the President establishes specific negotiating
objectives under section 1375(b) with respect to any
foreign country, or
(3) the President takes action under section 1376,
the Trade Representative shall provide an opportunity for the
presentation of views by any interested party with respect to
such investigation, objectives, or action, including
appropriate committees established pursuant to section 135 of
the Trade Act of 1974 (19 U.S.C. 2155).
(c) Consultations With Congress and Official Advisors.--For
purposes of conducting negotiations under section 1375(a), the
Trade Representative shall keep appropriate committees of the
Congress, as well as appropriate committees established
pursuant to section 135 of the Trade Act of 1974, currently
informed with respect to--
(1) the negotiating priorities and objectives for
each priority foreign country;
(2) the assessment of negotiating prospects, both
bilateral and multilateral; and
(3) any United States concessions which might be
included in negotiations to achieve the objectives
described in subsections (c) and (d) of section 1375.
(d) Modification of Specific Negotiating Objectives.--
Before the President takes any action under section
1375(b)(2)(A) to refine or modify specific negotiating
objectives, the President shall consult with the Congress and
with members of the industry, and representatives of labor,
affected by the proposed refinement or modification.
SEC. 1380. SUBMISSION OF DATA; ACTION TO ENSURE COMPLIANCE.
(a) Submission of Data.--The Federal Communications
Commission (hereafter in this section referred to as the
``Commission'') shall periodically submit to appropriate
committees of the House of Representatives and of the Senate
any data collected and otherwise made public under Report No.
DC-1105, ``Information Reporting Requirements Established for
Common Carriers'', adopted February 25, 1988, relating to FCC
Docket No. 86-494, adopted December 23, 1987.
(b) Action To Ensure Compliance.--
(1)(A) Any product of a foreign country that is
subject to registration or approval by the Commission
may be entered only if--
(i) such product conforms with all applicable
rules and regulations of the Commission, and
(ii) the information which is required on
Federal Communications Commission Form 740 on
the date of enactment of this Act is provided
to the appropriate customs officer at the time
of such entry in such form and manner as the
Secretary of the Treasury may prescribe.
(B) For purposes of this paragraph, the term
``entered'' means entered, or withdrawn from warehouse
for consumption, in the customs territory of the United
States.
(2) The Commission, the Secretary of Commerce, and
the Trade Representative shall provide such assistance
in the enforcement of paragraph (1) as the Secretary of
the Treasury may request.
(3) The Secretary of the Treasury shall compile the
information collected under paragraph (1)(A)(ii) into a
summary and shall annually submit such summary to the
Congress until the authority to negotiate trade
agreements under part 1 of subtitle A expires. Such
information shall also be made available to the public.
SEC. 1381. STUDY ON TELECOMMUNICATIONS COMPETITIVENESS IN THE UNITED
STATES.
(a) In General.--The Secretary of Commerce, in consultation
with the Federal Communications Commission and the United
States Trade Representative, shall conduct a study of the
competitiveness of the United States telecommunications
industry and the effects of foreign telecommunications policies
and practices on such industry in order to assist the Congress
and the President in determining what actions might be
necessary to preserve the competitiveness of the United States
telecommunications industry.
(b) Public Comment.--The Secretary of Commerce may, as
appropriate, provide notice and reasonable opportunity for
public comment as part of the study conducted under subsection
(a).
(c) Report.--The Secretary of Commerce shall, by no later
than the date that is 1 year after the date of enactment of
this Act, submit to the Congress and the President a report on
the findings and recommendations reached by the Secretary of
Commerce as a result of the study conducted under subsection
(a). Such report shall be referred to the appropriate
committees of the House of Representatives and of the Senate.
SEC. 1382. INTERNATIONAL OBLIGATIONS.
Nothing in this part may be construed to require actions
inconsistent with the international obligations of the United
States, including the WTO Agreement and the multilateral trade
agreements (as such terms are defined in paragraphs (9) and
(4), respectively, of section 2 of the Uruguay Round Agreements
Act).
F. NORMAL TRADE RELATIONS (NONDISCRIMINATORY) TREATMENT
1. NTR Principle
Section 5003 of P.L. 105-206: Clarification of Designation of Normal
Trade Relation
[19 U.S.C. 2434 note]
SEC. 5003. CLARIFICATION OF DESIGNATION OF NORMAL TRADE RELATIONS.
(a) Findings and Policy.--
(1) Findings.--The Congress makes the following
findings:
(A) Since the 18th century, the principle of
nondiscrimination among countries with which
the United States has trade relations, commonly
referred to as ``most-favored-nation''
treatment, has been a cornerstone of United
States trade policy.
(B) Although the principle remains firmly in
place as a fundamental concept in United States
trade relations, the term ``most-favored-
nation'' is a misnomer which has led to public
misunderstanding.
(C) It is neither the purpose nor the effect
of the most-favored-nation principle to treat
any country as ``most favored''. To the
contrary, the principle reflects the intention
to confer on a country the same trade benefits
that are conferred on any other country, that
is, the intention not to discriminate among
trading partners.
(D) The term ``normal trade relations'' is a
more accurate description of the principle of
nondiscrimination as it applies to the tariffs
applicable generally to imports from United
States trading partners, that is, the general
rates of duty set forth in column 1 of the
Harmonized Tariff Schedule of the United
States.
(2) Policy.--It is the sense of the Congress that--
(A) the language used in United States laws,
treaties, agreements, executive orders,
directives, and regulations should more clearly
and accurately reflect the underlying
principles of United States trade policy; and
(B) accordingly, the term ``normal trade
relations'' should, where appropriate, be
substituted for the term ``most-favored-
nation''.
(b)Change in Terminology.--
[Amends several trade statutes to reflect change in
terminology, several reprinted elsewhere.]
(c) Savings Provisions.--Nothing in this section shall
affect the meaning of any provision of law, Executive Order,
Presidential proclamation, rule, regulation, delegation of
authority, other document, or treaty or other international
agreement of the United States relating to the principle of
``most-favored-nation'' (or ``most favored nation'') treatment.
Any Executive Order, Presidential proclamation, rule,
regulation, delegation of authority, other document, or treaty
or other international agreement of the United States that has
been issued, made, granted, or allowed to become effective and
that is in effect on the effective date of this Act, or was to
become effective on or after the effective date of this Act,
shall continue in effect according to its terms until modified,
terminated, superseded, set aside, or revoked in accordance
with law.
Section 251 of the Trade Expansion Act of 1962
[19 U.S.C. 1881; P.L. 87-794; P.L. 105-206]
SEC. 251. NORMAL TRADE RELATIONS.
Except as otherwise provided in this title, in section
350(b) of the Tariff Act of 1930, or in section 401(a) of the
Tariff Classification Act of 1962, any duty or other import
restriction or duty-free treatment proclaimed in carrying out
any trade agreement under this title or section 350 of the
Tariff Act of 1930 shall apply to products of all foreign
countries, whether imported directly or indirectly.
Section 126(a) of the Trade Act of 1974
[19 U.S.C. 2136; P.L. 93-618]
SEC. 126. RECIPROCAL NONDISCRIMINATORY TREATMENT.
(a) Except as otherwise provided in this Act or in any
other provision of law, any duty or other import restriction or
duty-free treatment proclaimed in carrying out any trade
agreement under this title shall apply to products of all
foreign countries, whether imported directly or indirectly.
[Section 1105(a) of the Omnibus Trade and Competitiveness
Act of 1988 applies section 126(a) to trade agreements entered
into under section 1102 of that Act.]
Section 1103(a)(3) of the Omnibus Trade and Competitiveness Act of 1988
[19 U.S.C. 2903; P.L. 100-418]
SEC. 1103. IMPLEMENTATION OF TRADE AGREEMENTS.
* * * * * * *
(a)(3) To ensure that a foreign country which receives
benefits under a trade agreement entered into under section
1102(b) or (c) is subject to the obligations imposed by such
agreement, the President shall recommend to Congress in the
implementing bill and statement of administrative action
submitted with respect to such agreement that the benefits and
obligations of such agreement apply solely to the parties to
such agreement, if such application is consistent with the
terms of such agreement. The President may also recommend with
respect to any such agreement that the benefits and obligations
of such agreement not apply uniformly to all parties to such
agreement, if such application is consistent with the terms of
such agreement.
2. Trade Relations with Nonmarket Economy Countries
General Note 3(b) of the Harmonized Tariff Schedule \1\
Rate of Duty Column 2.
Notwithstanding any of the foregoing provisions of this
note, the rates of duty shown in column 2 shall apply to
products, whether imported directly or indirectly, of the
following countries and areas pursuant to section 401 of the
Tariff Classification Act of 1962, to section 231 or 257(e)(2)
of the Trade Expansion Act of 1962, to section 404(a) of the
Trade Act of 1974 or to any other applicable section of law, or
to action taken by the President thereunder:
---------------------------------------------------------------------------
\1\ List as printed in the 1997 edition.
Afghanistan
Cuba
Laos
North Korea
Vietnam
Title IV of the Trade Act of 1974, as amended
[19 U.S.C. 2431 et seq., P.L. 93-618, as amended by P.L. 96-39,
Reorganization Plan No. 3 of 1979, P.L. 100-418, P.L. 101-382, P.L.
104-295 and P.L. 105-206]
SEC. 401. EXCEPTION OF THE PRODUCTS OF CERTAIN COUNTRIES OR AREAS.
Except as otherwise provided in this title, the President
shall continue to deny nondiscriminatory treatment to the
products of any country, the products of which were not
eligible for the rates set forth in rate column numbered 1 of
the Tariff Schedules of the United States on the date of the
enactment of this Act.
SEC. 402. FREEDOM OF EMIGRATION IN EAST-WEST TRADE.
(a) To assure the continued dedication of the United States
to fundamental human rights, and notwithstanding any other
provision of law, on or after the date of the enactment of this
Act products from any nonmarket economy country shall not be
eligible to receive nondiscriminatory treatment (normal trade
relations), such country shall not participate in any program
of the Government of the United States which extends credits or
credit guarantees or investment guarantees, directly or
indirectly, and the President of the United States shall not
conclude any commercial agreement with any such country, during
the period beginning with the date on which the President
determines that such country--
(1) denies its citizens the right or opportunity to
emigrate;
(2) imposes more than a nominal tax on emigration or
on the visas or other documents required for
emigration, for any purpose or cause whatsoever; or
(3) imposes more than a nominal tax, levy, fine, fee,
or other charge on any citizen as a consequence of the
desire of such citizen to emigrate to the country of
his choice,
and ending on the date on which the President determines that
such country is no longer in violation of paragraph (1), (2),
or (3).
(b) After the date of the enactment of this Act, (A)
products of a nonmarket economy country may be eligible to
receive nondiscriminatory treatment (normal trade relations),
(B) such country may participate in any program of the
Government of the United States which extends credits or credit
guarantees or investment guarantees, and (C) the President may
conclude a commercial agreement with such country, only after
the President has submitted to the Congress a report indicating
that such country is not in violation of paragraph (1), (2), or
(3) of subsection (a). Such report with respect to such country
shall include information as to the nature and implementation
of emigration laws and policies and restrictions or
discrimination applied to or against persons wishing to
emigrate. The report required by this subsection shall be
submitted initially as provided herein and, with current
information, on or before each June 30 and December 31
thereafter so long as such treatment is received, such credits
or guarantees are extended, or such agreement is in effect.
(c)(1) During the 18-month period beginning on the date of
the enactment of this Act, the President is authorized to waive
by Executive Order the application of subsections (a) and (b)
with respect to any country, if he reports to the Congress
that--
(A) he has determined that such waiver will
substantially promote the objectives of this section;
and
(B) he has received assurances that the emigration
practices of that country will henceforth lead
substantially to the achievement of the objectives of
this section.
(2) During any period subsequent to the 18-month period
referred to in paragraph (1), the President is authorized to
waive by Executive Order the application of subsections (a) and
(b) with respect to any country, if the waiver authority
granted by this subsection continues to apply to such country
pursuant to subsection (d), and if he reports to the Congress
that--
(A) he has determined that such waiver will
substantially promote the objectives of this section;
and
(B) he has received assurances that the emigration
practices of that country will henceforth lead
substantially to the achievement of the objectives of
this section.
(3) A waiver with respect to any country shall terminate on
the day after the waiver authority granted by this subsection
ceases to be effective with respect to such country pursuant to
subsection (d). The President may, at any time, terminate by
Executive Order any waiver granted under this subsection.
(d)(1) If the President determines that the further
extension of the waiver authority granted under subsection (c)
will substantially promote the objectives of this section, he
may recommend further extensions of such authority for
successive 12-month periods. Any such recommendations shall--
(A) be made not later than 30 days before the
expiration of such authority;
(B) be made in a document transmitted to the House of
Representatives and the Senate setting forth his
reasons for recommending the extension of such
authority; and
(C) include, for each country with respect to which a
waiver granted under subsection (c) is in effect, a
determination that continuation of the waiver
applicable to that country will substantially promote
the objectives of this section, and a statement setting
forth his reasons for such determination.
If the President recommends the further extension of such
authority, such authority shall continue in effect until the
end of the 12-month period following the end of the previous
12-month extension with respect to any country (except for any
country with respect to which such authority has not been
extended under this subsection), unless a joint resolution
described in section 153(a) is enacted into law pursuant to the
provisions of paragraph (2).
(2)(A) The requirements of this paragraph are met if the
joint resolution is enacted under the procedures set forth in
section 153, and--
(i) the Congress adopts and transmits the joint
resolution to the President before the end of the 60-
day period beginning on the date the waiver authority
would expire but for an extension under paragraph (1),
and
(ii) if the President vetoes the joint resolution,
each House of Congress votes to override such veto on
or before the later of the last day of the 60-day
period referred to in clause (i) or the last day of the
15-day period (excluding any day described in section
154(b)) beginning on the date the Congress receives the
veto message from the President.
(B) If a joint resolution is enacted into law under the
provisions of this paragraph, the waiver authority applicable
to any country with respect to which the joint resolution
disapproves of the extension of such authority shall cease to
be effective as of the day after the 60-day period beginning on
the date of the enactment of the joint resolution.
(C) A joint resolution to which this subsection and section
153 apply may be introduced at any time on or after the date
the President transmits to the Congress the document described
in paragraph (1)(B).
(e) This section shall not apply to any country the
products of which are eligible for the rates set forth in rate
column numbered 1 of the Tariff Schedules of the United States
on the date of the enactment of this Act.
SEC. 403. UNITED STATES PERSONNEL MISSING IN ACTION IN SOUTHEAST ASIA.
(a) Notwithstanding any other provision of law, if the
President determines that a nonmarket economy country is not
cooperating with the United States--
(1) to achieve a complete accounting of all United
States military and civilian personnel who are missing
in action in Southeast Asia,
(2) to repatriate such personnel who are alive, and
(3) to return the remains of such personnel who are
dead to the United States,
then, during the period beginning with the date of such
determination and ending on the date on which the President
determines such country is cooperating with the United States,
he may provide that--
(A) the products of such country may not receive
nondiscriminatory treatment,
(B) such country may not participate, directly or
indirectly, in any program under which the United
States extends credit, credit guarantees, or investment
guarantees, and
(C) no commercial agreement entered into under this
title between such country and the United States will
take effect.
(b) This section shall not apply to any country the
products of which are eligible for the rates set forth in rate
column numbered 1 of the Tariff Schedules of the United States
on the date of enactment of this Act.
SEC. 404. EXTENSION OF NONDISCRIMINATORY TREATMENT.
(a) Subject to the provisions of section 405(c), the
President may by proclamation extend nondiscriminatory
treatment to the products of a foreign country which has
entered into a bilateral commercial agreement referred to in
section 405.
(b) The application of nondiscriminatory treatment shall be
limited to the period of effectiveness of the obligations of
the United States to such country under such bilateral
commercial agreement. In addition, in the case of any foreign
country receiving nondiscriminatory treatment pursuant to this
title which has entered into an agreement with the United
States regarding the settlement of lend-lease reciprocal aid
and claims, the application of such nondiscriminatory treatment
shall be limited to period during which such country is not in
arrears on its obligations under such agreement.
(c) The President may at any time suspend or withdraw any
extension of nondiscriminatory treatment to any country
pursuant to subsection (a) and thereby cause all products of
such country to be dutiable at the rates set forth in rate
column numbered 2 of the Harmonized Tariff Schedule of the
United States.
SEC. 405. AUTHORITY TO ENTER INTO COMMERCIAL AGREEMENTS.
(a) Subject to the provisions of subsections (b) and (c) of
this section, the President may authorize the entry into force
of bilateral commercial agreements providing nondiscriminatory
treatment to the products of countries heretofore denied such
treatment whenever he determines that such agreements with such
countries will promote the purposes of this Act and are in the
national interest.
(b) Any such bilateral commercial agreement shall--
(1) be limited to an initial period specified in the
agreement which shall be no more than 3 years from the
date the agreement enters into force; except that it
may be renewable for additional periods, each not to
exceed 3 years; if--
(A) a satisfactory balance of concessions in
trade and services has been maintained during
the life of such agreement, and
(B) the President determines that actual or
foreseeable reductions in United States tariffs
and nontariff barriers to trade resulting from
multilateral negotiations are satisfactorily
reciprocated by the other party to the
bilateral agreement;
(2) provide that it is subject to suspension or
termination at any time for national security reasons,
or that the other provisions of such agreement shall
not limit the rights of any party to take any action
for the protection of its security interests;
(3) include safeguard arrangements (A) providing for
prompt consultations whenever either actual or
prospective imports cause or threaten to cause, or
significantly contribute to, market disruption and (B)
authorizing the imposition of such import restrictions
as may be appropriate to prevent such market
disruption;
(4) if the other party to the bilateral agreement is
not a party to the Paris Convention for the Protection
of Industrial Property, provide rights for United
States nationals with respect to patents and trademarks
in such country not less than the rights specified in
such convention;
(5) if the other party to the bilateral agreement is
not a party to the Universal Copyright Convention,
provide rights for United States nationals with respect
to copyrights in such country not less than the rights
specified in such convention;
(6) in the case of an agreement entered into or
renewed after the date of the enactment of the Act,
provide arrangements for the protection of industrial
rights and processes;
(7) provide arrangements for the settlement of
commercial differences and disputes;
(8) in the case of an agreement entered into or
renewed after the date of the enactment of this Act,
provide arrangements for the promotion of trade, which
may include arrangements for the establishment or
expansion of trade and tourist promotion offices, for
facilitation of activities of governmental commercial
officers, participation in trade fairs and exhibits,
and the sending of trade missions, and for facilitation
of entry, establishment, and travel of commercial
representatives;
(9) provide for consultations for the purpose of
reviewing the operation of the agreement and relevant
aspects of relations between the United States and the
other party; and
(10) provide such other arrangements of a commercial
nature as will promote the purpose of this Act.
(c) An agreement referred to in subsection (a), and a
proclamation referred to in section 404(a) implementing such
agreement, shall take effect only if a joint resolution
described in section 151(b)(3) that approves of the agreement
referred to in subsection (a) is enacted into law.
[SEC. 406. MARKET DISRUPTION.
See separate section under Chapter 9.]
SEC. 407. PROCEDURE FOR CONGRESSIONAL APPROVAL OR DISAPPROVAL OF
EXTENSION OF NONDISCRIMINATORY TREATMENT AND
PRESIDENTIAL REPORTS.
(a) Whenever the President issues a proclamation under
section 404 extending nondiscriminatory treatment to the
products of any foreign country, he shall promptly transmit to
the House of Representatives and to the Senate a document
setting forth the proclamation and the agreement the
proclamation proposes to implement, together with his reasons
therefor.
(b) The President shall transmit to the House of
Representatives and the Senate a document containing the
initial report submitted by him under section 402(b) or 409(b)
with respect to a nonmarket economy country. On or before
December 31 of each year, the President shall transmit to the
House of Representatives and the Senate, a document containing
the report required by section 402(b) or 409(b) as the case may
be, to be submitted on or before such December 31.
(c)(1) In the case of a document referred to in subsection
(a), the proclamation set forth in the document may become
effective and the agreement set forth in the document may enter
into force and effect only if a joint resolution described in
section 151(b)(3) that approves of the extension of
nondiscriminatory treatment to the products of the country
concerned is enacted into law.
(2) In the case of a document referred to in subsection (b)
which contains a report submitted by the President under
section 402(b) or 409(b) with respect to a nonmarket economy
country, if, before the close of the 90-day period beginning on
the day on which such document is delivered to the House of
Representatives and to the Senate, a joint resolution described
in section 152(a)(1)(B) is enacted into law that disapproves of
the report submitted by the President with respect to such
country, then, beginning with the day after the end of the 60-
day period beginning with the date of the enactment of such
resolution of disapproval, (A) nondiscriminatory treatment
shall not be in force with respect to the products of such
country, and the products of such country shall be dutiable at
the rates set forth in rate column numbered 2 of the Harmonized
Tariff Schedule of the United States, (B) such country may not
participate in any program of the Government of the United
States which extends credit or credit guarantees or investment
guarantees, and (C) no commercial agreement may thereafter be
concluded with such country under this title. If the President
vetoes the joint resolution, the joint resolution shall be
treated as enacted into law before the end of the 90-day period
under this paragraph if both Houses of Congress vote to
override such veto on or before the later of the last day of
such 90-day period or the last day of the 15-day period
(excluding any day described in section 154(b)) beginning on
the date the Congress receives the veto message from the
President.
SEC. 408. PAYMENT BY CZECHOSLOVAKIA OF AMOUNTS OWED UNITED STATES
CITIZENS AND NATIONALS.
(a) The arrangement initialed on July 5, 1974, with respect
to the settlement of the claims of citizens and nationals of
the United States against the Government of Czechoslovakia
shall be renegotiated and shall be submitted to the Congress as
part of any agreement entered into under this title with
Czechoslovakia.
(b) The United States shall not release any gold belonging
to Czechoslovakia and controlled directly or indirectly by the
United States pursuant to the provisions of the Paris
Reparations Agreement of January 24, 1946, or otherwise, until
such agreement has been approved by the Congress.
SEC. 409. FREEDOM TO EMIGRATE TO JOIN A VERY CLOSE RELATIVE IN THE
UNITED STATES.
(a) To assure the continued dedication of the United States
to the fundamental human rights and welfare of its own
citizens, and notwithstanding any other provision of law, on or
after the date of the enactment of this Act, no nonmarket
economy country shall participate in any program of the
Government of the United States which extends credits or credit
guarantees or investment guarantees, directly or indirectly,
and the President of the United States shall not conclude any
commercial agreement with any such country, during the period
beginning with the date on which the President determines that
such country--
(1) denies its citizens the right or opportunity to
join permanently through emigration, a very close
relative in the United States, such as a spouse,
parent, child, brother, or sister;
(2) imposes more than a nominal tax on the visas or
other documents required for emigration described in
paragraph (1); or
(3) imposes more than a nominal tax, levy, fine, fee,
or other charge on any citizen as a consequence of the
desire of such citizen to emigrate as described in
paragraph (1),
and ending on the date on which the President determines that
such country is no longer in violation of paragraph (1), (2),
or (3).
(b) After the date of the enactment of this Act, (A) a
nonmarket economy country may participate in any program of the
Government of the United States which extends credits or credit
guarantees or investment guarantees, and (B) the President may
conclude a commercial agreement with such country, only after
the President has submitted to the Congress a report indicating
that such country is not in violation of paragraph (1), (2), or
(3) of subsection (a). Such report with respect to such country
shall include information as to the nature and implementation
of its laws and policies and restrictions or discrimination
applied to or against persons wishing to emigrate to the United
States to join close relatives. The report required by this
subsection shall be submitted initially as provided herein and,
with current information, on or before each June 30 and
December 31 thereafter, so long as such credits or guarantees
are extended or such agreement is in effect.
(c) This section shall not apply to any country the
products of which are eligible for the rates set forth in rate
column numbered 1 of the Tariff Schedules of the United States
on the date of enactment of this Act.
(d) During any period that a waiver is in effect with
respect to any nonmarket economy country under section 402(c),
the provisions of subsections (a) and (b) shall not apply with
respect to such country.
[SEC. 410. EAST-WEST TRADE STATISTICS MONITORING SYSTEM.
Repealed by Public Law 104-295, section 17.]
[SEC. 411. EAST-WEST FOREIGN TRADE BOARDS.
Abolished by section 6 and functions transferred to the
President and interagency trade organization by section 5 (c)
and (e) of Reorganization Plan No. 3 of 1979.]
Sections 1 and 2 of Public Law 102-182
NTR Treatment for Hungary and the Czech and Slovak Republics
[19 U.S.C. 2434 note]
SECTION 1. CONGRESSIONAL FINDINGS AND PREPARATORY PRESIDENTIAL ACTION.
(a) Congressional Findings.--The Congress finds that the
Czech and Slovak Federal Republic and the Republic of Hungary
both have--
(1) dedicated themselves to respect for fundamental
human rights;
(2) accorded to their citizens the right to emigrate
and to travel freely;
(3) reversed over 40 years of communist dictatorship
and embraced the establishment of political pluralism,
free and fair elections, and multi-party political
systems;
(4) introduced far-reaching economic reforms based on
market-oriented principles and have decentralized
economic decisionmaking; and
(5) demonstrated a strong desire to build friendly
relationships with the United States.
(b) Preparatory Presidential Action.--The Congress notes
that the President in anticipation of the enactment of section
2, has directed the United States Trade Representative to
negotiate with the Czech and Slovak Federal Republic and the
Republic of Hungary, respectively, in order to--
(1) preserve the commitments of that country under
the bilateral commercial agreement in effect between
that country and the United States that are consistent
with the General Agreement on Tariffs and Trade; and
(2) obtain other appropriate commitments.
SEC. 2. TERMINATION OF APPLICATION OF TITLE IV OF THE TRADE ACT OF 1974
TO CZECHOSLOVAKIA AND HUNGARY.
(a) Presidential Determinations and Extension of
Nondiscriminatory Treatment.--Notwithstanding any provision of
title IV of the Trade Act of 1974 (19 U.S.C. 2431 et seq.), the
President may--
(1) determine that such title should no longer apply
to the Czech and Slovak Federal Republic or to the
Republic of Hungary, or to both; and
(2) after making a determination under paragraph (1)
with respect to a country, proclaim the extension of
nondiscriminatory treatment (most-favored-nation
treatment) to the products of that country.
(b) Termination of Application of Title IV.--On and after
the effective date of the extension under subsection (a)(2) of
nondiscriminatory treatment to the products of a country, title
IV of the Trade Act of 1974 shall cease to apply to that
country.
Title I of Public Law 102-182
NTR Treatment for Estonia, Latvia, and Lithuania
[19 U.S.C. 2434 note]
SEC. 101. CONGRESSIONAL FINDINGS.
The Congress finds the following:
(1) The Government of the United States extended full
diplomatic recognition to Estonia, Latvia, and
Lithuania in 1922.
(2) The Government of the United States entered into
agreements extending most-favored-nation treatment with
the Government of Estonia on August 1, 1925, the
Government of Latvia on April 30, 1926, and the
Government of Lithuania on July 10, 1926.
(3) The Union of Soviet Socialist Republics
incorporated Estonia, Latvia, and Lithuania
involuntarily into the Union as a result of a secret
protocol to a German-Soviet agreement in 1939 which
assigned those three states to the Soviet sphere of
influence; and the Government of the United States has
at no time recognized the forcible incorporation of
those states into the Union of Soviet Socialist
Republics.
(4) The Trade Agreements Extension Act of 1951
required the President to suspend, withdraw, or prevent
the application of trade benefits, including most-
favored-nation treatment, to countries under the
domination or control of the world Communist movement.
(5) In 1951, responsible representatives of Estonia,
Latvia, and Lithuania stated that they did not object
to the imposition of ``such controls as the Government
of the United States may consider to be appropriate''
to the products of those countries, for such time as
those countries remained under Soviet domination or
control.
(6) In 1990, the democratically elected governments
of Estonia, Latvia, and Lithuania declared the
restoration of their independence from the Union of
Soviet Socialist Republics.
(7) The Government of the United States established
diplomatic relations with Estonia, Latvia, and
Lithuania on September 2, 1991, and on September 6,
1991, the State Council of the transitional government
of the Union of Soviet Socialist Republics recognized
the independence of Estonia, Latvia, and Lithuania,
thereby ending the involuntary incorporation of those
countries into, and the domination of those countries
by, the Soviet Union.
(8) Immediate action should be taken to remove the
impediments, imposed in response to the circumstances
referred to in paragraph (5), in United States trade
laws to the extension of nondiscriminatory treatment
(most-favored-nation treatment) to the products of
those countries.
(9) As a consequence of establishment of United
States diplomatic relations with Estonia, Latvia, and
Lithuania, these independent countries are eligible to
receive the benefits of the Generalized System of
Preferences provided for in title V of the Trade Act of
1974.
SEC. 102. EXTENSION OF NONDISCRIMINATORY TREATMENT TO THE PRODUCTS OF
ESTONIA, LATVIA, AND LITHUANIA.
(a) In General.--Notwithstanding any provision of title IV
of the Trade Act of 1974 (19 U.S.C. 2431 et seq.) or any other
provision of law, nondiscriminatory treatment (most-favored-
nation treatment) applies to the products of Estonia, Latvia,
and Lithuania.
[(b) Conforming Tariff Schedule Amendments.--Amendments to
General Note 3(b) of the Harmonized Tariff Schedule of the
United States relating to the application of column 2 rates of
duty.]
(c) Effective Date.--Subsection (a) and the amendments made
by subsection (b) apply with respect to goods entered, or
withdrawn from warehouse for consumption, on or after the 15th
day after the date of the enactment of this Act.
SEC. 103. TERMINATION OF APPLICATION OF TITLE IV OF THE TRADE ACT OF
1974 TO THE BALTICS.
Title IV of the Trade Act of 1974 (19 U.S.C. 2431 et seq.)
shall cease to apply to Estonia, Latvia, and Lithuania
effective as of the 15th day after the date of the enactment of
this Act.
SEC. 104. SENSE OF THE CONGRESS REGARDING PROMPT PROVISION OF GSP
TREATMENT TO THE PRODUCTS OF ESTONIA, LATVIA, AND
LITHUANIA.
It is the sense of the Congress that the President should
take prompt action under title V of the Trade Act of 1974 to
provide preferential tariff treatment to the products of
Estonia, Latvia, and Lithuania pursuant to the Generalized
System of Preferences.
Section 1 of Public Law 102-420
NTR Withdrawal from Serbia and Montenegro
[19 U.S.C. 2434 note]
SECTION 1. WITHDRAWAL OF MOST FAVORED NATION STATUS FROM SERBIA AND
MONTENEGRO.
(a) Findings.--The Congress finds that Serbia or Montenegro
are not complying with the provisions of the Final Act of the
Conference on Security and Cooperation in Europe (also known as
the ``Helsinki Final Act''), particularly the provisions
regarding human rights and humanitarian affairs and are not
respecting minority rights in Kosovo and Vojvodina.
(b) Withdrawal of MFN Status.--Except as provided in
subsection (c), nondiscriminatory treatment shall not apply
with respect to any goods that--
(1) are the product of Serbia or Montenegro; and
(2) are entered into the customs territory of the
United States on or after the 15th day after the date
of the enactment of this Act.
(c) Restoration of Nondiscriminatory Treatment.--
Notwithstanding subsection (b), the President may restore
nondiscriminatory treatment to goods that are the product of
Serbia or Montenegro, as the case may be, 30 days after he
certifies to the Congress that Serbia or Montenegro, as the
case may be--
(1) has ceased its armed conflict with the other
ethnic peoples of the region formerly comprising the
Socialist Federal Republic of Yugoslavia;
(2) has agreed to respect the borders of the 6
republics that comprised the Socialist Federal Republic
of Yugoslavia under the 1974 Yugoslav Constitution; and
(3) has ceased all support of Serbian forces inside
Bosnia-Hercegovina.
Public Law 104-162
[19 U.S.C. 2434 note]
SECTION 1. CONGRESSIONAL FINDINGS AND SUPPLEMENTAL ACTION.
(a) Congressional Findings.--The Congress finds that
Bulgaria--
(1) has received most-favored-nation treatment since
1991 and has been found to be in full compliance with
the freedom of emigration requirements under title IV
of the Trade Act of 1974 since 1993;
(2) has reversed many years of Communist
dictatorship and instituted a constitutional republic
ruled by a democratically elected government as well as
basic market-oriented reforms, including privatization;
(3) is in the process of acceding to the General
Agreement on Tariffs and Trade (GATT) and the World
Trade Organization (WTO), and extension of
unconditional most-favored-nation treatment would
enable the United States to avail itself of all rights
under the GATT and the WTO with respect to Bulgaria;
and
(4) has demonstrated a strong desire to build
friendly relationships and to cooperate fully with the
United States on trade matters.
(b) Supplemental Action.--The Congress notes that the United
States Trade Representative intends to negotiate with Bulgaria
in order to preserve the commitments of that country under the
bilateral commercial agreement in effect between that country
and the United States that are consistent with the GATT and the
WTO.
SEC. 2. TERMINATION OF APPLICATION OF TITLE IV OF THE TRADE ACT OF 1974
TO BULGARIA.
(a) Presidential Determinations and Extension of
Nondiscriminatory Treatment.--Notwithstanding any provision of
title IV of the Trade Act of 1974 (19 U.S.C. 2431 et seq.), the
President may--
(1) determine that such title should no longer apply
to Bulgaria; and
(2) after making a determination under paragraph (1)
with respect to Bulgaria, proclaim the extension of
nondiscriminatory treatment (most-favored-nation
treatment) to the products of that country.
(b) Termination of Application of Title IV.--On and after
the effective date of the extension under subsection (a)(2) of
nondiscriminatory treatment to the products of Bulgaria, title
IV of the Trade Act of 1974 shall cease to apply to that
country.
Public Law 104-171
[19 U.S.C. 2434 note]
SECTION 1. FINDINGS.
The Congress finds that--
(1) Romania emerged from years of brutal Communist
dictatorship in 1989 and approved a new Constitution
and elected a Parliament by 1991, laying the foundation
for a modern parliamentary democracy charged with
guaranteeing fundamental human rights, freedom of
expression, and respect for private property;
(2) local elections, parliamentary elections, and
presidential elections have been held in Romania, and
1996 will mark the second nationwide presidential
elections under the new Constitution;
(3) Romania has undertaken significant economic
reforms, including the establishment of a two-tier
banking system, the introduction of a modern tax
system, the freeing of most prices and elimination of
most subsidies, the adoption of a tariff-based trade
regime, and the rapid privatization of industry and
nearly all agriculture;
(4) Romania concluded a bilateral investment treaty
with the United States in 1993, and both United States
investment in Romania and bilateral trade are
increasing rapidly;
(5) Romania has received most-favored-nation
treatment since 1993, and has been found by the
President to be in full compliance with the freedom of
emigration requirements under title IV of the Trade Act
of 1974;
(6) Romania is a member of the World Trade
Organization and extension of unconditional most-
favored-nation treatment to the products of Romania
would enable the United States to avail itself of all
rights under the World Trade Organization with respect
to Romania; and
(7) Romania has demonstrated a strong desire to
build friendly relationships and to cooperate fully
with the United States on trade matters.
SEC. 2. TERMINATION OF APPLICATION OF TITLE IV OF THE TRADE ACT OF 1974
TO ROMANIA.
(a) Presidential Determinations and Extension of
Nondiscriminatory Treatment.--Notwithstanding any provision of
title IV of the Trade Act of 1974 (19 U.S.C. 2431 et seq.), the
President may--
(1) determine that such title should no longer apply
to Romania; and
(2) after making a determination under paragraph
(1), proclaim the extension of nondiscriminatory
treatment (most-favored-nation treatment) to the
products of that country.
(b) Termination of Application of Title IV.--On and after
the effective date of the extension under subsection (a)(2) of
nondiscriminatory treatment to the products of Romania, title
IV of the Trade Act of 1974 shall cease to apply to that
country.
Public Law 104-203
SECTION 1. CONGRESSIONAL FINDINGS.
The Congress finds that--
(1) despite recent increases in acts of repression
by the Cambodian Government and growing government
corruption that has contributed to substantial
environmental degradation, Cambodia has made some
progress towards democratic rule after 20 years of
undemocratic regimes and civil war, and is striving to
rebuild its market economy;
(2) extension of unconditional most-favored-nation
treatment would assist Cambodia in developing its
economy based on free market principles and becoming
competitive in the global marketplace;
(3) establishing normal commercial relations on a
reciprocal basis with Cambodia will promote United
States exports to the rapidly growing Southeast Asian
region and expand opportunities for United States
business and investment in the Cambodian economy; and
(4) expanding bilateral trade relations that
includes a commercial agreement may promote further
progress by Cambodia on human rights and democratic
rule and assist Cambodia in adopting regional and world
trading rules and principles.
SEC. 2. EXTENSION OF NONDISCRIMINATORY TREATMENT TO THE PRODUCTS OF
CAMBODIA.
(a) Harmonized Tariff Schedule Amendment.--General note 3(b)
of the Harmonized Tariff Schedule of the United States is
amended by striking ``Kampuchea''.
(b) Effective Date.--The amendment made by subsection (a)
applies with respect to goods entered, or withdrawn from
warehouse for consumption, on or after the effective date of a
notice published in the Federal Register by the United States
Trade Representative that a trade agreement obligating
reciprocal most-favored-nation treatment between Cambodia and
the United States has entered into force.
SEC. 3. REPORT TO CONGRESS.
The President shall submit to the Congress, not later than 18
months after the date of the enactment of this Act, a report on
the trade relations between the United States and Cambodia
pursuant to the trade agreement described in section 2(b).
Section 2424 of P.L. 106-36.
[19 U.S.C. 2434 note]
SEC. 2424. EXTENSION OF NONDISCRIMINATORY TREATMENT (NORMAL TRADE
RELATIONS TREATMENT) TO THE PRODUCTS OF MONGOLIA.
(a) Findings.--The Congress finds that Mongolia--
(1) has received normal trade relations treatment
since 1991 and has been found to be in full compliance
with the freedom of emigration requirements under title
IV of the Trade Act of 1974;
(2) has emerged from nearly 70 years of communism and
dependence on the former Soviet Union, approving a new
constitution in 1992 which has established a modern
parliamentary democracy charged with guaranteeing
fundamental human rights, freedom of expression, and an
independent judiciary;
(3) has held four national elections under the new
constitution, two presidential and two parliamentary,
thereby solidifying the nation's transition to
democracy;
(4) has undertaken significant market-based economic
reforms, including privatization, the reduction of
government subsidies, the elimination of most price
controls and virtually all import tariffs, and the
closing of insolvent banks;
(5) has concluded a bilateral trade treaty with the
United States in 1991, and a bilateral investment
treaty in 1994;
(6) has acceded to the Agreement Establishing the
World Trade Organization, and extension of
unconditional normal trade relations treatment to the
products of Mongolia would enable the United States to
avail itself of all rights under the World Trade
Organization with respect to Mongolia; and
(7) has demonstrated a strong desire to build
friendly relationships and to cooperate fully with the
United States on trade matters.
(b) Termination of Application of Title IV of the Trade Act of
1974 to Mongolia.--
(1) Presidental determinations and extensions of
nondiscriminatory treatment.--Notwithstanding any
provision of title IV of the Trade Act of 1974 (19
U.S.C. 2431 et seq.), the President may--
(A) determine that such title should no
longer apply to Mongolia; and
(B) after making a determination under
subparagraph (A) with respect to Mongolia,
proclaim the extension of nondiscriminatory
treatment (normal trade relations treatment) to
the products of that country.
(2) Termination of application of title iv.--On or
after the effective date of the extension under
paragraph (1)(B) of nondiscriminatory treatment to the
products of Mongolia, title IV of the Trade Act of 1974
shall cease to apply to that country.
Section 301-302 of P.L. 106-200.
[19 U.S.C. 2434 note]
SEC. 301. NORMAL TRADE RELATIONS FOR ALBANIA.
(a) Findings.--Congress makes the following findings:
(1) Albania has been found to be in full compliance
with the freedom of emigration requirements under title
IV of the Trade Act of 1974.
(2) Since its emergence from communism, Albania has
made progress toward democratic rule and the creation
of a free-market economy.
(3) Albania has concluded a bilateral investment
treaty with the United States.
(4) Albania has demonstrated a strong desire to build
a friendly relationship with the United States and has
been very cooperative with NATO and the international
community during and after the Kosova crisis.
(5) The extension of unconditional normal trade
relations treatment to the products of Albania will
enable the United States to avail itself of all rights
under the World Trade Organization with respect to
Albania when that country becomes a member of the World
Trade Organization.
(b) Termination of Application of Title IV of the Trade Act
of 1974 to Albania.--
(1) Presidential determinations and extensions of
nondiscriminatory treatment.--Notwithstanding any
provision of title IV of the Trade Act of 1974 (19
U.S.C. 2431 et seq.), the President may--
(A) determine that such title should no
longer apply to Albania; and
(B) after making a determination under
subparagraph (1) with respect to Albania,
proclaim the extension of nondiscriminatory
treatment (normal trade relations treatment) to
the products of that country.
(2) Termination of application of title iv.--On or
after the effective date of the extension under
paragraph (1)(B) of nondiscriminatory treatment to the
products of Albania, title IV of the Trade Act of 1974
shall cease to apply to that country.
SEC. 302. NORMAL TRADE RELATIONS FOR KYRGYZSTAN.
(a) Findings.--Congress makes the following findings:
(1) Kyrgyzstan has been found to be in full
compliance with the freedom of emigration requirements
under title IV of the Trade Act of 1974.
(2) Since its independence from the Soviet Union in
1991, Kyrgystan has made great progress toward
democratic rule and toward creating a free-market
economic system.
(3) Kyrgyzstan concluded a bilateral investment
treaty with the United States in 1994.
(4) Kyrgyzstan has demonstrated a strong desire to
build a friendly and cooperative relationship with the
United States.
(5) The extension of unconditional normal trade
relations treatment to the products of Kyrgyzstan will
enable the United States to avail itself of all rights
under the World Trade Organization with respect to
Kyrgyzstan.
(b) Termination of Application of Title IV of the Trade Act
of 1974 to Kyrgyzstan.--
(1) Presidential determinations and extension of
nondiscriminatory treatment.--Notwithstanding any
provision of title IV of the Trade Act of 1974 (19
U.S.C. 2431 et seq.), the President may--
(A) determine that such title should no
longer apply to Kyrgyzstan; and
(B) after making a determination under
subparagraph (A) with respect to Kyrgyzstan,
proclaim the extension of nondiscriminatory
treatment (normal trade relations treatment) to
the products of that country.
(B) Termination of application of title iv.--On or
after the effective date of the extension under
paragraph (1)(B) of nondiscriminatory treatment to the
products of Kyrgyzstan, title IV of the Trade Act of
1974 shall cease to apply to that country.
P.L. 106-286.
NTR for the People's Republic of China
[19 U.S.C. 2431 note, 22 U.S.C. 6901-6903, 6911-6919, 6931, 6941-6943,
6951, 6961-6965, 6981-6984, 6991, 7001.]
SEC. 101. TERMINATION OF APPLICATION OF CHAPTER 1 OF TITLE IV OF THE
TRADE ACT OF 1974 TO THE PEOPLE'S REPUBLIC OF
CHINA.
(a) Presidental Determinations and Extension of
Nondiscriminatory Treatment.--Notwithstanding any provision of
chapter 1 of title IV of the Trade Act of 1974 (19 U.S.C. 2431
et seq.), as designated by section 3(a)(2) of this Act, the
President may--
(1) determine that such chapter should no longer
apply to the People's Republic of China; and
(2) after making a determination under paragraph (1)
with respect to the People's Republic of China,
proclaim the extension of nondiscriminatory treatment
(normal trade relations treatment) to the products of
that country.
(b) Accession of the People's Republic of China to the
World Trade Organization.--Prior to making the determination
provided for in subsection (a)(1) and pursuant to the
provisions of section 122 of the Uruguay Round Agreements Act
(19 U.S.C. 3532), the President shall transmit a report to
Congress certifying that the terms and conditions for the
accession of the People's Republic of China to the World Trade
Organization are at least equivalent to those agreed between
the United States and the People's Republic of China on
November 15, 1999.
SEC. 102. EFFECTIVE DATE.
(a) Effective Date of Nondiscriminatory Treatment.--The
extension of nondiscriminatory treatment pursuant to section
101(a) shall be effective no earlier than the effective date of
the accession of the People's Republic of China to the World
Trade Organization.
(b) Termination of Applicability of Title IV.--On and after
the effective date under subsection (a) of the extension of
nondiscriminatory treatment to the products of the People's
Republic of China, chapter 1 of title IV of the Trade Act of
1974 (as designated by section 103(a)(2) of this Act) shall
cease to apply to that country.
SEC. 103. RELIEF FROM MARKET DISRUPTION.
[Adds new Sections 921-423 to Title IV of Trade Act of 1974, reprinted
elsewhere.]
SEC. 104. AMENDMENT TO SECTION 123 OF THE TRADE ACT OF 1974--
COMPENSATION AUTHORITY.
[Amends Section 123(a)(1) of the Trade Act of 1974 (19 U.S.C.
2133(a)(1)), reprinted elsewhere.]
* * * * * * *
SEC. 202. FINDINGS.
The Congress finds the following:
(1) In 1980, the United States opened trade relations
with the People's Republic of China by entering into a
bilateral trade agreement, which was approved by joint
resolution enacted pursuant to section 405(c) of the
Trade Act of 1974.
(2) Since 1980, the President has consistently
extended nondiscriminatory treatment to products of the
People's Republic of China, pursuant to his authority
under section 404 of the Trade Act of 1974.
(3) Since 1980, the United States has entered into
several additional trade-related agreements with the
People's Republic of China, including a memorandum of
understanding on market access in 1992, two agreements
on intellectual property rights protection in 1992 and
1995, and an agreement on agricultural cooperation in
1999.
(4) Trade in goods between the People's Republic of
China and the United States totaled almost
$95,000,000,000 in 1999, compared with approximately
$18,000,000,000 in 1989, representing growth of
approximately 428 percent over 10 years.
(5) The United States merchandise trade deficit with
the People's Republic of China has grown from
approximately $6,000,000,000 in 1989 to over
$68,000,000,000 in 1999, a growth of over 1,000
percent.
(6) The People's Republic of China currently
restricts imports through relatively high tariffs and
nontariff barriers, including import licensing,
technology transfer, and local content requirements.
(7) United States businesses attempting to sell goods
to markets in the People's Republic of China have
complained of uneven application of tariffs, customs
procedures, and other laws, rules, and administrative
measures affecting their ability to sell their products
in the Chinese market.
(8) On November 15, 1999, the United States and the
People's Republic of China concluded a bilateral
agreement concerning terms of the People's Republic of
China's eventual accession to the World Trade
Organization.
(9) The commitments that the People's Republic of
China made in its November 15, 1999, agreement with the
United States promise to eliminate or greatly reduce
the principal barriers to trade with and investment in
the People's Republic of China, if those commitments
are effectively complied with and enforced.
(10) The record of the People's Republic of China in
implementing trade-related commitments has been mixed.
While the People's Republic of China has generally met
the requirements of the 1992 market access memorandum
of understanding and the 1992 and 1995 agreements on
intellectual property rights protection, other measures
remain in place or have been put into place which tend
to diminish the benefit to United States businesses,
farmers, and workers from the People's Republic of
China's implementation of those earlier commitments.
Notably, administration of tariff-rate quotas and other
trade-related laws remains opaque, new local content
requirements have proliferated, restrictions on
importation of animal and plant products are not always
supported by sound science, and licensing requirements
for importation and distribution of goods remain
common. Finally, the Government of the People's
Republic of China has failed to cooperate with the
United States Customs Service in implementing a 1992
memorandum of understanding prohibiting trade in
products made by prison labor.
(11) The human rights record of the People's Republic
of China is a matter of very serious concern to the
Congress. The Congress notes that the Department of
State's 1999 Country Reports on Human Rights Practices
for the People's Republic of China finds that ``[t]he
Government's poor human rights record deteriorated
markedly throughout the year, as the Government
intensified efforts to suppress dissent, particularly
organized dissent.''.
(12) The Congress deplores violations by the
Government of the People's Republic of China of human
rights, religious freedoms, and worker rights that are
referred to in the Department of State's 1999 Country
Reports on Human Rights Practices for the People's
Republic of China, including the banning of the Falun
Gong spiritual movement, denial in many cases,
particularly politically sensitive ones, of effective
representation by counsel and public trials,
extrajudical killings and torture, forced abortion and
sterilization, restriction of access to Tibet and
Xinijiang, perpetuation of ``reeducation through
labor'', denial of the right of workers to organize
labor unions or bargain collectively with their
employers, and failure to implement a 1992 memorandum
of understanding prohibiting trade in products made by
prison labor.
SEC. 203. POLICY.
It is the policy of the United States--
(1) to develop trade relations that broaden the
benefits of trade, and lead to a leveling up, rather
than a leveling down, of labor, environmental,
commercial rule of law, market access, anticorruption,
and other standards across national borders;
(2) to pursue effective enforcement of trade-related
and other international commitments by foreign
governments through enforcement mechanisms of
international organizations and through the application
of United States law as appropriate;
(3) to encourage foreign governments to conduct both
commercial and noncommercial affairs according to the
rule of law developed through democratic processes;
(4) to encourage the Government of the People's
Republic of China to afford its workers internationally
recognized worker rights;
(5) to encourage the Government of the People's
Republic of China to protect the human rights of people
within the territory of the People's Republic of China,
and to take steps toward protecting such rights,
including, but not limited to--
(A) ratifying the International Covenant on
Civil and Political Rights;
(B) protecting the right to liberty of
movement and freedom to choose a residence
within the People's Republic of China and the
right to leave from and return to the People's
Republic of China; and
(C) affording a criminal defendant--
(i) the right to be tried in his or
her presence, and to defend himself or
herself in person or through legal
assistance of his or her own choosing;
(ii) the right to be informed, if he
or she does not have legal assistance,
of the right set forth in clause (i);
(iii) the right to have legal
assistance assigned to him or her in
any case in which the interests of
justice so require and without payment
by him or her in any such case if he or
she does not have sufficient means to
pay for it;
(iv) the right to a fair and public
hearing by a competent, independent,
and impartial tribunal established by
the law;
(v) the right to be presumed innocent
until proved guilty according to law;
and
(vi) the right to be tried without
undue delay; and
(6) to highlight in the United Nations Human Rights
Commission and in other appropriate fora violations of
human rights by foreign governments and to seek the
support of other governments in urging improvements in
human rights practices.
SEC. 204. DEFINITIONS.
In this division:
(1) Dispute settlement understanding.--The term
``Dispute Settlement Understanding'' means the
Understanding on Rules and Procedures Governing the
Settlement of Disputes referred to in section
101(d)(16) of the Uruguay Round Agreements Act (19
U.S.C. 3511(16)).
(2) Government of the people's republic of china.--
The term ``Government of the People's Republic of
China'' means the central Government of the People's
Republic of China and any other governmental entity,
including any provincial, prefectural, or local entity
and any enterprise that is controlled by the central
Government or any such governmental entity or as to
which the central Government or any such governmental
entity is entitled to received a majority of the
profits.
(3) Internationally recognized worker rights.--The
term ``internationally recognized worker rights'' has
the meaning given that term in section 507(4) of the
Trade Act of 1974 (19 U.S.C. 2467(4)) and includes the
right to the elimination of the ``worst forms of child
labor'', as defined in section 507(6) of the Trade Act
of 1974 (19 U.S.C. 2467(6)).
(4) Trade representative.--The term ``Trade
Representative'' means the Unites States Trade
Representative.
(5) WTO; world trade organization.--The terms ``WTO''
and ``World Trade Organization'' mean the organization
established pursuant to the WTO Agreement.
(6) WTO agreement.--The term ``WTO Agreement'' means
the Agreement Establishing the World Trade Organization
entered into on April 15, 1994.
(7) WTO member.--The term ``WTO member'' has the
meaning given that term in section 2(10) of the Uruguay
Round Agreements Act (19 U.S.C. 3501(10)).
SEC. 301. ESTABLISHMENT OF CONGRESSIONAL-EXECUTIVE COMMISSION ON THE
PEOPLE'S REPUBLIC OF CHINA.
There is established a Congressional-Executive Commission
on the People's Republic of China (in this title referred to as
the ``Commission'').
SEC. 302. FUNCTIONS OF THE COMMISSION.
(a) Monitoring Compliance With Human Rights.--The
Commission shall monitor the acts of the People's Republic of
China which reflect compliance with or violation of human
rights, in particular, those contained in the International
Covenant on Civil and Political Rights and in the Universal
Declaration of Human Rights, including, but not limited to,
effectively affording--
(1) the right to engage in free expression without
fear of any prior restraints;
(2) the right to peaceful assembly without
restrictions, in accordance with international law;
(3) religious freedom, including the right to worship
free of involvement of and interference by the
government;
(4) the right to liberty of movement and freedom to
choose a residence within the People's Republic of
China and the right to leave from and return to the
People's Republic of China;
(5) the right of a criminal defendant--
(A) to be tried in his or her presence, and
to defend himself or herself in person or
through legal assistance of his or her own
choosing;
(B) to be informed, if he or she does not
have legal assistance, of the right set forth
in subparagraph (A);
(C) to have legal assistance assigned to him
or her in any case in which the interests of
justice so require and without payment by him
or her in any such case if he or she does not
have sufficient means to pay for it;
(D) to a fair and public hearing by a
competent, independent, and impartial tribunal
established by the law;
(E) to be presumed innocent until proved
guilty according to law; and
(F) to be tried without undue delay;
(6) the right to be free from torture and other forms
of cruel or unusual punishment;
(7) protection of internationally recognized worker
rights;
(8) freedom from incarceration as punishment for
political opposition to the government;
(9) freedom from incarceration as punishment for
exercising or advocating human rights (including those
described in this section);
(10) freedom from arbitrary arrest, detention, or
exile;
(11) the right to fair and public hearings by an
independent tribunal for the determination of a
citizen's rights and obligations; and
(12) free choice of employment.
(b) Victims Lists.--The Commission shall compile and
maintain lists of persons believed to be imprisoned, detained,
or placed under house arrest, tortured, or otherwise persecuted
by the Government of the People's Republic of China due to
their pursuit of the rights described in subsection (a). In
compiling such lists, the Commission shall exercise appropriate
discretion, including concerns regarding the safety and
security of, and benefit to, the persons who may be included on
the lists and their families.
(c) Monitoring Development of Rule of Law.--The Commission
shall monitor the development of the rule of law in the
People's Republic of China, including, but not limited to--
(1) progress toward the development of institutions
of democratic governance;
(2) processes by which statutes, regulations, rules,
and other legal acts of the Government of the People's
Republic of China are developed and become binding
within the People's Republic of China;
(3) the extent to which statutes, regulations, rules,
administrative and judicial decisions, and other legal
acts of the Government of the People's Republic of
China are published and are made accessible to the
public;
(4) the extent to which administrative and judicial
decisions are supported by statements of reasons that
are based upon written statutes, regulations, rules,
and other legal acts of the Government of the People's
Republic of China;
(5) the extent to which individuals are treated
equally under the laws of the People's Republic of
China without regard to citizenship;
(6) the extent to which administrative and judicial
decisions are independent of political pressure or
governmental interference and are reviewed by entities
of appellate jurisdiction; and
(7) the extent to which laws in the People's Republic
of China are written and administered in ways that are
consistent with international human rights standards,
including the requirements of the International
Covenant on Civil and Political Rights.
(d) Bilateral Cooperation.--The Commission shall monitor
and encourage the development of programs and activities of the
United States Government and private organizations with a view
toward increasing the interchange of people and ideas between
the United States and the People's Republic of China and
expanding cooperation in areas that include, but are not
limited to--
(1) increasing enforcement of human rights described
in subsection (a); and
(2) developing the rule of law in the People's
Republic of China.
(e) Contacts With Nongovernmental.--In performing the
functions described in subsections (a) through (d), the
Commission shall, as appropriate, seek out and maintain
contacts with nongovernmental organizations, including
receiving reports and updates from such organizations and
evaluating such reports.
(f) Cooperation With Special Coordinator.--In performing
the functions described in subsections (a) through (d), the
Commission shall cooperate with the Special Coordinator for
Tibetan Issues in the Department of State.
(g) Annual Reports.--The Commission shall issue a report to
the President and the Congress not later than 12 months after
the date of the enactment of this Act, and not later than the
end of each 12-month period thereafter, setting forth the
findings of the Commission during the preceding 12-month
period, in carrying out subsections (a) through (c). The
Commission's report may contain recommendations for legislative
or executive action.
(h) Specific Information in Annual Reports.--The
Commission's report under subsection (g) shall include specific
information as to the nature and implementation of laws or
policies concerning the rights set forth in paragraphs (1)
through (12) of subsection (a), and as to restrictions applied
to or discrimination against persons exercising any of the
rights set forth in such paragraphs.
(i) Congressional Hearings on Annual Reports.--The
Committee on International Relations of the House of
Representatives shall, not later than 30 days after the receipt
by the Congress of the report referred to in subsection (g),
hold hearings on the contents of the report, including any
recommendations contained therein, for the purpose of receiving
testimony from Members of Congress, and such appropriate
representatives of Federal departments and agencies, and
interested persons and groups, as the committee deems
advisable, with a view to reporting to the House of
Representatives any appropriate legislation in furtherance of
such recommendations. If any such legislation is considered by
the Committee on International Relations within 45 days after
receipt by the Congress of the Report referred to in subsection
(g), it shall be reported by the committee not later than 60
days after receipt by the Congress of such report.
(2) The provisions of paragraph (1) are enacted by
the Congress--
(A) as an exercise of the rulemaking power of
the House of Representatives, and as such are
deemed a part of the rules of the House, and
they supersede other rules only to the extent
that they are inconsistent therewith; and
(B) with full recognition of the
constitutional right of the House to change the
rules (so far as relating to the procedure of
the House) at any time, in the same manner and
to the same extent as in the case of any other
rule of the House.
(j) Supplemental Reports.--The Commission may submit to the
President and the Congress reports that supplement the reports
described in subsection (g), as appropriate, in carrying out
subsections (a) through (c).
SEC. 303. MEMBERSHIP OF THE COMMISSION.
(a) Selection and Appointment of Members.--The Commission
shall be composed of 23 members as follows:
(1) Nine Members of the House of Representatives
appointed by the Speaker of the House of
Representatives. Five members shall be selected from
the majority party and four members shall be selected,
after consultation with the minority leader of the
House, from the minority party.
(2) Nine Members of the Senate appointed by the
President of the Senate. Five members shall be
selected, after consultation with the majority leader
of the Senate, from the majority party, and four
members shall be selected, after consultation with the
minority leader of the Senate, from the minority party.
(3) One representative of the Department of State,
appointed by the President of the United States from
among officer and employees of that Department.
(4) One representative of the Department of Commerce,
appointed by the President of the United States from
among officers and employees of that Department.
(5) One representative of the Department of Labor,
appointed by the President of the United States from
among officers and employees of that Department.
(6) Two at-large representatives, appointed by the
President of the United States, from among the officers
and employees of the executive branch.
(b) Chairman and Cochairman.--
(1) Designation of chairman.--At the beginning of
each odd-numbered Congress, the President of the
Senate, on the recommendation of the majority leader,
shall designate one of the members of the Commission
from the Senate as Chairman of the Commission. At the
beginning of each even-numbered Congress, the Speaker
of the House of Representatives shall designate one of
the members of the Commission from the House as
Chairman of the Commission.
(2) Designation of cochairman.--At the beginning of
each odd-numbered Congress, the Speaker of the House of
Representatives shall designate one of the members of
the Commission from the House as Cochairman of the
Commission. At the beginning of each even-numbered
Congress, the President of the Senate, on the
recommendation of the majority leader, shall designate
one of the members of the Commission from the Senate as
Cochairman of the Commission.
SEC. 304. VOTES OF THE COMMISSION.
Decisions of the Commission, including adoption of reports
and recommendations to the executive branch or to the Congress,
shall be made by a majority vote of the members of the
Commission present and voting. Two-thirds of the Members of the
Commission shall constitute a quorum for purposes of conducting
business.
SEC. 305. EXPENDITURE OF APPROPRIATIONS.
For each fiscal year for which an appropriation is made to
the Commission, the Commission shall issue a report to the
Congress on its expenditures under that appropriation.
SEC. 306. TESTIMONY OF WITNESSES, PRODUCTION OF EVIDENCE; ISSUANCE OF
SUBPOENAS; ADMINISTRATION OF OATHS.
In carrying out this title, the Commission may require, by
subpoena or otherwise, the attendance and testimony of such
witnesses and the production of such books, records,
correspondence, memoranda, papers, documents, and
electronically recorded data as its considers necessary.
Subpoenas may be issued only pursuant to a two-thirds vote of
members of the Commission present and voting. Subpoenas may be
issued over the signature of the Chairman of the Commission or
any person designated by the Chairman, and may be served by any
person designated by the Chairman or such member. The Chairman
of the Commission, or any member designated by the Chairman,
may administer oaths to any witness.
SEC. 307. APPROPRIATIONS FOR THE COMMISSION.
(a) Authorization; Disbursements.--
(1) Authorization.--There are authorized to be
appropriated to the Commission for fiscal year 2001,
and each fiscal year thereafter, such sums as may be
necessary to enable it to carry out its functions.
Appropriations to the Commission are authorized to
remain available until expended.
(2) Disbursements.--Appropriations to the Commission
shall be disbursed on vouchers approved--
(A) jointly by the Chairman and the
Cochairman; or
(B) by a majority of the members of the
personnel and administration committee
established pursuant to section 308.
(b) Foreign Travel for Official Purposes.--Foreign travel
for official purposes by members and staff of the Commission
may be authorized by either the Chairman or the Cochairman.
SEC. 308. STAFF OF THE COMMISSION.
(a) Personnel and Administration Committee.--The Commission
shall have a personnel and administration committee composed of
the Chairman, the Cochairman, the senior member of the
Commission from the minority party of the House of
Representatives, and the senior member of the Commission from
the minority party of the Senate.
(b) Committee Functions.--All decisions pertaining to the
hiring, firing, and fixing of pay of personnel of the
Commission shall be by a majority vote of the personnel and
administration committee, except that--
(1) the Chairman shall be entitled to appoint and fix
the pay of the staff director, and the Cochairman shall
be entitled to appoint and fix the pay of the
Cochairman's senior staff member; and
(2) The Chairman and Cochairman shall each have the
authority to appoint, with the approval of the
personnel and administration committee, at least four
professional staff members who shall be responsible to
the Chairman or the Cochairman (as the case may be) who
appointed them.
Subject to subsection (d), the personnel and administration
committee may appoint and fix the pay of such other personnel
as it considers desirable.
(c) Staff Appointments.--All staff appointments shall be
made without regard to the provisions of title 5, United States
Code, government appointments in the competitive service, and
without regard to the provisions of chapter 51 and subchapter
III of chapter 53 of such title relating to classification and
general schedule pay rates.
(d) Qualifications of Professional Staff.--The personnel
and administration committee shall ensure that the professional
staff of the Commission consists of persons with expertise in
areas including human rights, internationally recognized worker
rights, international economics, law (including international
law), rule of law and other foreign assistance programming,
Chinese politics, economy and culture, and the Chinese
language.
(e) Commission Employees as Congressional Employees.--
(1) In general.--For purposes of pay and other
employment benefits, rights, and privileges, and for
all other purposes, any employee of the Commission
shall be considered to the a congressional employee as
defined in section 2107 of title 5, United States Code.
(2) Competitive status.--For purposes of section
3304(c)(1) of title 5, United States Code, employees of
the Commission shall be considered as if they are in
positions in which they are paid by the Secretary of
the Senate or the Clerk of the House of
Representatives.
SEC. 309. PRINTING AND BINDING COSTS.
For purposes of costs relating to printing and binding,
including the costs of personnel detailed from the Government
Printing Office, the Commission shall be deemed to be a
committee of the Congress.
SEC. 401. REVIEW WITHIN THE WTO.
It shall be the objective of the United States to obtain as
part of the Protocol of Accession of the People's Republic of
China to the WTO, an annual review within the WTO of the
Compliance by the People's Republic of China with its terms of
accession to the WTO.
SEC. 411. FINDINGS.
The Congress finds as follows:
(1) The opening of world markets through the elimination of
tariff and nontariff barriers has contributed to a 56-percent
increase in exports of United States goods and services since
1992.
(2) Such export expansion, along with an increase in trade
generally, has helped fuel the longest economic expansion in
United States history.
(3) The United States Government must continue to be
vigilant in monitoring and enforcing the compliance by our
trading partners with trade agreements in order for United
States businesses, workers, and farmers to continue to benefit
from the opportunities created by market-opening trade
agreements.
(4) The People's Republic of China, as part of its
accession to the World Trade Organization, has committed to
eliminating significant trade barriers in the agricultural,
services, and manufacturing sectors that, if realized, would
provide considerable opportunities for United States farmers,
businesses, and workers.
(5) For these opportunities to be fully realized, the
United States Government must effectively monitor and enforce
its rights under the agreements on the accession of the
People's Republic of China to the WTO.
SEC. 412. PURPOSE.
The purpose of this subtitle is to authorize additional
resources for the agencies and departments engaged in
monitoring and enforcement of United States trade agreements
and trade laws with respect to the People's Republic of China.
SEC. 413. AUTHORIZATION OF APPROPRIATIONS.
(a) Department of Commerce.--There is authorized to be
appropriated to the Department of Commerce, in addition to
amounts otherwise available for such purposes, such sums as
many be necessary for fiscal year 2001, and each fiscal year
thereafter, for additional staff for--
(1) monitoring compliance by the People's Republic of
China with its commitments under the WTO, assisting
United States negotiators with ongoing negotiations in
the WTO, and defending United States antidumping and
countervailing duty measures with respect to products
of the People's Republic of China;
(2) enforcement of United States trade laws with
respect to products of the People's Republic of China;
and
(3) a Trade Law Technical Assistance Center to assist
small- and medium-sized businesses, workers, and unions
in evaluating potential remedies available under the
trade laws of the United States with respect to trade
involving the People's Republic of China.
(b) Overseas Compliance Program.--
(1) Authorization of appropriation.--There are
authorized to be appropriated to the Department of
Commerce and the Department of State, in addition to
amounts otherwise available, such sums as may be
necessary for fiscal year 2001, and each fiscal year
thereafter, to provide staff for monitoring in the
People's Republic of China that country's compliance
with its international trade obligations and to support
the enforcement of the trade laws of the United States,
as part of an Overseas Compliance Program which
monitors abroad compliance with international trade
obligations and supports the enforcement of United
States trade laws.
(2) Reporting.--The annual report on compliance by
the People's Republic of China submitted to the
Congress under section 421 of this Act shall include
the findings of the Overseas Compliance Program with
respect to the People's Republic of China.
(c) United States Trade Representative.--There are
authorized to be appropriated to the Office of the United
States Trade Representative, in addition to amounts otherwise
available for such purposes, such sums as may be necessary for
fiscal year 2001, and each fiscal year thereafter, for
additional staff in--
(1) the Office of the General Counsel, the Monitoring
and Enforcement Unit, and the Office of the Deputy
United States Trade Representative in Geneva,
Switzerland, to investigate, prosecute, and defend
cases before the WTO, and to administer United States
trade laws, including title III of the Trade Act of
1974 (19 U.S.C. 2411 et seq.) and other trade laws
relating to intellectual property, government
procurement, and telecommunications, with respect to
the People's Republic of China;
(2) the Office of Economic Affairs, to analyze the
impact on the economy of the United States, including
United States exports, of acts of the Government of the
People's Republic of China affecting access to markets
in the People's Republic of China and to support the
Office of the General Counsel in presenting cases to
the WTO involving the People's Republic of China;
(3) the geographic office for the People's Republic
of China; and
(4) offices relating to the WTO and to different
sectors of the economy, including agriculture,
industry, services, and intellectual property rights
protection, to monitor and enforce the trade agreement
obligations of the People's Republic of China in those
sectors.
(d) Department of Agriculture.--There are authorized to be
appropriated to the Department of Agriculture, in addition to
amounts otherwise available for such purposes, such sums as may
be necessary for fiscal year 2001, and each fiscal year
thereafter, for additional staff to increase legal and
technical expertise in areas covered by trade agreements and
United States trade law, including food safety and
biotechnology, for purposes of monitoring compliance by the
People's Republic of China with its trade agreement
obligations.
SEC. 421. REPORT ON COMPLIANCE.
(A) In General.--Not later than 1 year after the entry into
force of the Protocol of Accession of the People's Republic of
China to the WTO, and annually thereafter, the Trade
Representative shall submit a report to Congress on compliance
by the People's Republic of China with commitments made in
connection with its accession to the World Trade Organization,
including both multilateral commitments and any bilateral
commitments made to the United States.
(b) Public Participation.--In preparing the report
described in subsection (a), the Trade Representative shall
seek public participation by publishing a notice in the Federal
Register and holding a public hearing.
SEC. 501. ESTABLISHMENT OF TASK FORCE.
There is hereby established a task force on prohibition of
importation of products of forced or prison labor from the
People's Republic of China (hereafter in this subtitle referred
to as the ``Task Force'').
SEC. 502. FUNCTIONS OF TASK FORCE.
The Task Force shall monitor and promote effective
enforcement of and compliance with section 307 of the Tariff
Act of 1930 (19 U.S.C. 1307) by performing the following
functions:
(1) Coordinate closely with the United States Customs
Service to promote maximum effectiveness in the
enforcement by the Customs Service of section 307 of
the Tariff Act of 1930 with respect to the products of
the People's Republic of China. In order to assure such
coordination, the Customs Service shall keep the Task
Force informed, on a regular basis, of the progress of
its investigations of allegations that goods are being
entered into the United States, or that such entry is
being attempted, in violation of the prohibition in
section 307 of the Tarriff Act of 1930 on entry into
the United States of goods mined, produced, or
manufactured wholly or in part in the People's Republic
of China by convict labor, forced labor, or indentured
labor under penal sanctions. Such investigations may
include visits to foreign sites where goods allegedly
are being mined, produced, or manufactured in a manner
that would lead to prohibition of their importation
into the United States under section 307 of the Tarriff
Act of 1930.
(2) Make recommendations to the Customs Service on
seeking new agreement with the People's Republic of
China to allow Customs Service officials to visit sites
where goods may be mined, produced, or manufactured by
convict labor, forced labor, or indentured labor under
penal sanctions.
(3) Work with the Customs Service to assist the
People's Republic of China and other foreign
governments in monitoring the sale of goods mined,
produced, or manufactured by convict labor, forced
labor, or indentured labor under penal sanctions to
ensure that such goods are not exported to the United
States.
(4) Coordinate closely with the Customs Service to
promote maximum effectiveness in the enforcement by the
Customs Service of section 307 of the Tariff Act of
1930 with respect to the products of the People's
Republic of China. In order to assure such
coordination, the Customs Service shall keep the Task
Force informed, on a regular basis, of the progress of
its monitoring of ports of the United States to ensure
that goods mined, produced, or manufactured wholly or
in part in the People's Republic of China by convict
labor, forced labor, or indentured labor under penal
sanctions are not imported into the United States.
(5) Advise the Customs Service in performing such
other functions, consistent with existing authority, to
ensure the effective enforcement of section 307 of the
Tariff Act of 1930.
(6) Provide to the Customs Service all information
obtained by the departments represented on the Task
Force relating to the use of convict labor, forced
labor, or/and indentured labor under penal sanctions in
the mining, production, or manufacture of goods which
may be imported into the United States.
SEC. 503. COMPOSITION OF TASK FORCE.
The Secretary of the Treasury, the Secretary of Commerce,
the Secretary of Labor, the Secretary of State, the
Commissioner of Customs, and the heads of other executive
branch agencies, as appropriate, acting through their
respective designees at or above the level of Deputy Assistant
Secretary, or in the case of the Customs Service, at or above
the level of Assistant Commissioner, shall compose the Task
Force. The designee of the Secretary of the Treasury shall
chair the Task Force.
SEC. 504. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated for fiscal year
2001, and each fiscal year thereafter, such sums as may be
necessary for the Task Force to carry out the functions
described in section 502.
SEC. 505. REPORTS TO CONGRESS.
(a) Frequency of Reports.--Not later than the date that is
1-year after the date of the enactment of this Act, and not
later than the end of each 1-year period thereafter, the Task
Force shall submit to the Congress a report on the work of the
Task Force during the preceding 1-year period.
(b) Contents of Reports.--Each report under subsection (a)
shall set forth, at a minimum--
(1) the number of allegations of violations of
section 307, of the Tariff Act of 1930 with respect to
products of the Peoples' Republic of China that were
investigated during the preceding 1-year period.
(2) the number of actual violations of section 307 of
the Tariff Act of 1930 with respect to the products of
the People's Republic of China that were discovered
during the preceding 1-year period;
(3) in the case of each attempted entry of products
of the People's Republic of China in violation of such
section 307 discovered during the preceding 1-year
period--
(A) the identity of the exporter of the
goods;
(B) the identity of the person or persons who
attempted to sell the goods for export; and
(C) the identity of all parties involved in
transshipment of the goods; and
(4) such other information as the Task Force
considers useful in monitoring and enforcing compliance
with section 307 of the Tariff Act of 1930.
SEC. 511. ESTABLISHMENT OF TECHNICAL ASSISTANCE AND RULE OF LAW
PROGRAMS.
(a) Commerce Rule of Law Program.--The Secretary of
Commerce, in consultation with the Secretary of State, is
authorized to establish a program to conduct rule of law
training and technical assistance related to commercial
activities in the People's Republic of China.
(b) Labor Rule of Law Program.--
(1) In general.--The Secretary of Labor, in
consultation with the Secretary of State, is authorized
to establish a program to conduct rule of law training
and technical assistance related to the protection of
internationally recognized worker rights in the
People's Republic of China.
(2) Use of amounts.--In carrying out paragraph (1),
the Secretary of Labor shall focus on activities
including, but not limited to--
(A) developing, laws, regulations, and other
measures to implement internationally
recognized worker rights;
(B) establishing national mechanisms for the
enforcement of national labor laws and
regulations;
(C) training government officials concerned
with implementation and enforcement of national
labor laws and regulations; and
(D) developing an educational infrastructure
to educate workers about their legal rights and
protections under national labor laws and
regulations.
(3) Limitation.--The Secretary of Labor may not
provide assistant under the program established under
this subsection to the All-China Federation of Trade
Unions.
(c) Legal System and Civil Society Rule of Law Program.--
The Secretary of State is authorized to establish a program to
conduct rule of law training and technical assistance related
to development of the legal system and civil society generally
in the People's Republic of China.
(d) Conduct of Programs.--The programs authorized by this
section may be used to conduct activities such as seminars and
workshops, drafting of commercial and labor codes, legal
training, publications, financing the operating costs for
nongovernmental organizations working in this area, and funding
the travel of individuals to the United States and to the
People's Republic of China to provide and receive training.
SEC. 512. ADMINISTRATIVE AUTHORITIES.
In carrying out the programs authorized by section 511, the
Secretary of Commerce and the Secretary of Labor (in
consultation with the Secretary of State) may utilize any of
the authorities contained in the Foreign Assistance Act of 1961
and the Foreign Service Act of 1980.
SEC. 513. PROHIBITION RELATING TO HUMAN RIGHTS ABUSES.
Amounts made available to carry out this subtitle may not
be provided to a component of a ministry or other
administrative unit of the national, provincial, or other local
governments of the People's Republic of China, to a
nongovernmental organization, or to an official of such
governments or organizations, if the President has credible
evidence that such component, administrative unit, organization
or official has been materially responsible for the commission
of human rights violations.
SEC. 514. AUTHORIZATION OF APPROPRIATIONS.
(a) Commercial Law Program.--There are authorized to be
appropriated to the Secretary of Commerce to carry out the
program described in section 511(a) such sums as may be
necessary for fiscal year 2001, and each fiscal year
thereafter.
(b) Labor Law Program.--There are authorized to be
appropriated to the Secretary of Labor to carry out the program
described in section 511(b) such sums as may be necessary for
fiscal year 2001, and each fiscal year thereafter.
(c) Legal System and Civil Society Rule of Law Program.--
There are authorized to be appropriated to the Secretary of
State to carry out the program described in section 511(c) such
sums as may be necessary for fiscal year 2001, and each fiscal
year thereafter.
(d) Construction With Other Laws.--Except as provided in
this division, funds may be made available to carry out the
purposes of this subtitle notwithstanding any other provision
of law.
SEC. 601. ACCESSION OF TAIWAN TO THE WTO.
It is the sense of the Congress that--
(1) immediately upon approval by the General Council
of the WTO of the terms and conditions of the accession
of the People's Republic of China to the WTO, the
United States representative to the WTO should request
that the General Council of the WTO consider Taiwan's
accession to the WTO as the next order of business of
the Council during the same session; and
(2) the United States should be prepared to
aggressively counter any WTO member, upon the approval
of the General Council of the WTO of the terms and
conditions of the accession of the People's Republic of
China to the WTO, to block the accession of Taiwan to
the WTO.
SEC. 701. AUTHORIZATIONS OF APPROPRIATIONS FOR BROADCASTING CAPITAL
IMPROVEMENTS AND INTERNATIONAL BROADCASTING
OPERATIONS.
(a) Broadcasting Capital Imporvements.--In addition to such
sums as may otherwise be authorized to be appropriated, there
are authorized to be appropriated for ``Department of State and
Related Agency, Related Agency, Broadcasting Board of
Governors, Broadcasting Capital Improvements'' $65,000,000 for
the fiscal year 2001.
(b) International Broadcasting Operations.--
(1) Authorization of approriations.--In addition to
such sums as are otherwise authorized to be
appropriated, there are authorized to be appropriated
$34,000,000 for each of the fiscal years 2001 and 2002
for ``Department of State and Related Agency, Related
Agency, Broadcasting Board of Governors, International
Broadcasting Operations'' for the purposes under
paragraph (2).
(2) Uses of funds.--In addition to other authorized
purposes, funds appropriated pursuant to paragraph (1)
shall be used for the following:
(A) To increase personnel for the program
development office to enhance marketing
programming in the People's Republic of China
and neighboring countries.
(B) To enable Radio Free Asia's expansion of
news research, production, call-in show
capability, and web site/Internet enhancement
for the People's Republic of China and
neighboring countries.
(C) VOA enhancements including the opening of
new news bureaus in Taipei and Shanghai,
enhancement of TV Mandarin, and an increase of
stringer presence abroad.
Sections 3001-3002 of P.L. 106-476: Extension of Nondiscriminatory
Treatment to Georgia.
[19 U.S.C. 2434 note]
SEC. 3001. FINDINGS.
Congress finds that Georgia has--
(1) made considerable progress toward respecting
fundamental human rights consistent with the objectives
of title IV of the Trade Act of 1974;
(2) adopted administrative procedures that accord its
citizens the right to emigrate, travel freely, and to
return to their country without restriction;
(3) been found to be in full compliance with the
freedom of emigration provisions in title IV of the
Trade Act of 1974;
(4) made progress toward democratic rule and creating
a free market economic system since its independence
from the Soviet Union;
(5) demonstrated strong and effective enforcement of
internationally recognized core labor standards and a
commitment to continue to improve effective enforcement
of its laws reflecting such standards;
(6) committed to developing a system of governance in
accordance with the provisions of the Final Act of the
Conference on Security and Cooperation in Europe (also
known as the ``Helsinki Final Act'') regarding human
rights and humanitarian affairs;
(7) endeavored to address issues related to its
national and religious minorities and, as a member
state of the Organization for Security and Cooperation
in Europe (OSCE), committed to adopting special
measures for ensuring that persons belonging to
national minorities have full equality individually as
well as in community with other members of their group;
(8) also committed to enacting legislation to provide
protection against incitement to violence against
persons or groups based on national, racial, ethnic, or
religious discrimination, hostility, or hatred,
including anti-Semitism;
(9) continued to return communal properties
confiscated from national and religious minorities
during the Soviet period, facilitating the reemergence
of those communities in the national life of Georgia
and establishing the legal framework for completion of
this process in the future;
(10) concluded a bilateral trade agreement with the
United States in 1993 and a bilateral investment treaty
in 1994;
(11) demonstrated a strong desire to build a friendly
and cooperative relationship with the United States;
and
(12) acceded to the World Trade Organization on June
14, 2000, and the extension of unconditional normal
trade relations treatment to the products of Georgia
will enable the United States to avail itself of all
rights under the World Trade Organization with respect
to Georgia.
SEC. 3002. TERMINATION OF APPLICATION OF TITLE IV OF THE TRADE ACT OF
1974 TO GEORGIA.
(A) Presidential Determinations and Extensions of
Nondiscriminatory Treatment.--Notwithstanding any provision of
title IV of the Trade Act of 1974 (19 U.S.C. 2431 et seq.), the
President may--
(1) determine that such title should no longer apply
to Georgia; and
(2) after making a determination under paragraph (1)
with respect to Georgia, proclaim the extension of
nondiscriminatory treatment (normal trade relations
treatment) to the products of that country.
(B) Termination of Application of Title IV.--On and after
the effective date of the extension under subsection (a)(2) of
nondiscriminatory treatment to the products of Georgia, title
IV of the Trade Act of 1974 shall cease to apply to that
country.
G. TRADE RELATIONS WITH NORTH AMERICA
North American Free Trade Agreement Implementation Act, as amended
[19 U.S.C. 58c note, 3301, 3311-3317, 3331-3335, 3351-3358, 3371-3372,
3381-3382, 3391, 3421, 3431-3438, 3431 note, 3451, 3461-3463, 3471-
3473; P.L. 103-182, as amended by P.L. 104-295 and P.L. 105-206]
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``North
American Free Trade Agreement Implementation Act''.
[(b) Table of Contents.]
SEC. 2. DEFINITIONS.
For purposes of this Act:
(1) Agreement.--The term ``Agreement'' means the
North American Free Trade Agreement approved by the
Congress under section 101(a).
(2) HTS.--The term ``HTS'' means the Harmonized
Tariff Schedule of the United States.
(3) Mexico.--Any reference to Mexico shall be
considered to be a reference to the United Mexican
States.
(4) NAFTA country.--Except as provided in section
202, the term ``NAFTA country'' means--
(A) Canada for such time as the Agreement is
in force with respect to, and the United States
applies the Agreement to, Canada; and
(B) Mexico for such time as the Agreement is
in force with respect to, and the United States
applies the Agreement to, Mexico.
(5) International trade commission.--The term
``International Trade Commission means the United
States International Trade Commission.
(6) Trade representative.--The term ``Trade
Representative'' means the United States Trade
Representative.
TITLE I--APPROVAL OF, AND GENERAL PROVISIONS RELATING TO, THE NORTH
AMERICAN FREE TRADE AGREEMENT
SEC. 101. APPROVAL AND ENTRY INTO FORCE OF THE NORTH AMERICAN FREE
TRADE AGREEMENT.
(a) Approval of Agreement and Statement of Administrative
Action.--Pursuant to section 1103 of the Omnibus Trade and
Competitiveness Act of 1988 (19 U.S.C. 2903) and section 151 of
the Trade Act of 1974 (19 U.S.C. 2191), the Congress approves--
(1) the North American Free Trade Agreement entered
into on December 17, 1992, with the Governments of
Canada and Mexico and submitted to the Congress on
November 4, 1993; and
(2) the statement of administrative action proposed
to implement the Agreement that was submitted to the
Congress on November 4, 1993.
(b) Conditions for Entry Into Force of the Agreement.--The
President is authorized to exchange notes with the Government
of Canada or Mexico providing for the entry into force, on or
after January 1, 1994, of the Agreement for the United States
with respect to such country at such time as--
(1) the President--
(A) determines that such country has
implemented the statutory changes necessary to
bring that country into compliance with its
obligations under the Agreement and has made
provision to implement the Uniform Regulations
provided for under article 511 of the Agreement
regarding the interpretation, application, and
administration of the rules of origin, and
(B) transmits a report to the House of
Representatives and the Senate setting forth
the determination under subparagraph (A) and
including, in the case of Mexico, a description
of the specific measures taken by that country
to--
(i) bring its laws into conformity
with the requirements of the Schedule
of Mexico in Annex 1904.15 of the
Agreement, and
(ii) otherwise ensure the effective
implementation of the binational panel
review process under chapter 19 of the
Agreement regarding final antidumping
and countervailing duty determinations;
and
(2) the Government of such country exchanges notes
with the United States providing for the entry into
force of the North American Agreement on Environmental
Cooperation and the North American Agreement on Labor
Cooperation for that country and the United States.
SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED STATES AND STATE LAW.
(a) Relationship of Agreement to United States Law.--
(1) United states law to prevail in conflict.--No
provision of the Agreement, nor the application of any
such provision to any person or circumstance, which is
inconsistent with any law of the United States shall
have effect.
(2) Construction.--Nothing in this Act shall be
construed--
(A) to amend or modify any law of the United
States, including any law regarding--
(i) the protection of human, animal,
or plant life or health,
(ii) the protection of the
environment, or
(iii) motor carrier or worker safety;
or
(B) to limit any authority conferred under
any law of the United States, including section
301 of the Trade Act of 1974;
unless specifically provided for in this Act.
(b) Relationship of Agreement to State Law.--
(1) Federal-state consultation.--
(A) In general.--Upon the enactment of this
Act, the President shall, through the
intergovernmental policy advisory committees on
trade established under section 306(c)(2)(A) of
the Trade and Tariff Act of 1984, consult with
the States for the purpose of achieving
conformity of State laws and practices with the
Agreement.
(B) Federal-state consultation process.--The
Trade Representative shall establish within the
Office of the United States Trade
Representative a Federal-State consultation
process for addressing issues relating to the
Agreement that directly relate to, or will
potentially have a direct impact on, the
States. The Federal-State consultation process
shall include procedures under which--
(i) the Trade Representative will
assist the States in identifying those
State laws that may not conform with
the Agreement but may be maintained
under the Agreement by reason of being
in effect before the Agreement entered
into force;
(ii) the States will be informed on a
continuing basis of matters under the
Agreement that directly relate to, or
will potentially have a direct impact
on, the States;
(iii) the States will be provided
opportunity to submit, on a continuing
basis, to the Trade Representative
information and advice with respect to
matters referred to in clause (ii);
(iv) the Trade Representative will
take into account the information and
advice received from the States under
clause (iii) when formulating United
States positions regarding matters
referred to clause (ii); and
(v) the States will be involved
(including involvement through the
inclusion of appropriate
representatives of the States) to the
greatest extent practicable at each
stage of the development of United
States positions regarding matters
referred to in clause (ii) that will be
addressed by committees, subcommittees,
or working groups established under the
Agreement or through dispute settlement
processes provided for under the
Agreement.
The Federal Advisory Committee Act (5 U.S.C. App.)
shall not apply to the Federal-State consultation
process established by this paragraph.
(2) Legal challenge.--No State law, or the
application thereof, may be declared invalid as to any
person or circumstance on the ground that the provision
or application is inconsistent with the Agreement,
except in an action brought by the United States for
the purpose of declaring such law or application
invalid.
(3) Definition of state law.--For purposes of this
subsection, the term ``State law'' includes--
(A) any law of a political subdivision of a
State; and
(B) any State law regulating or taxing the
business of insurance.
(c) Effect of Agreement With Respect to Private Remedies.--
No person other than the United States--
(1) shall have any cause of action or defense under--
(A) the agreement or by virtue of
Congressional approval thereof, or
(B) the North American Agreement on
Environmental Cooperation or the North American
Agreement on Labor Cooperation; or
(2) may challenge, in any action brought under any
provision of law, any action or inaction by any
department, agency, or other instrumentality of the
United States, any State, or any political subdivision
of a State on the ground that such action or inaction
is inconsistent with the Agreement, the North American
Agreement on Environmental Cooperation, or the North
American Agreement on Labor Cooperation.
SEC. 103. CONSULTATION AND LAYOVER REQUIREMENTS FOR, AND EFFECTIVE DATE
OF, PROCLAIMED ACTIONS.
(a) Consultation and Layover Requirements.--If a provision
of this Act provides that the implementation of an action by
the President by proclamation is subject to the consultation
and layover requirements of this section, such action may be
proclaimed only if--
(1) the President has obtained advice regarding the
proposed action from--
(A) the appropriate advisory committees
established under section 135 of Trade Act of
1974, and
(B) the International Trade Commission;
(2) the President has submitted a report to the
Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the
Senate that sets forth--
(A) the action proposed to be proclaimed and
the reasons therefor, and
(B) the advice obtained under paragraph (1);
(3) a period of 60 calendar days, beginning with the
first day on which the President has met the
requirements of paragraphs (1) and (2) with respect to
such action, has expired; and
(4) the President has consulted with such Committees
regarding the proposed action during the period
referred to in paragraph (3).
(b) Effective Date of Certain Proclaimed Actions.--Any
action proclaimed by the President under the authority of this
Act that is not subject to the consultation and layover
requirements under subsection(a) may not take effect before the
15th day after the date on which the text of the proclamation
is published in the Federal Register.
SEC. 104. IMPLEMENTING ACTIONS IN ANTICIPATION OF ENTRY INTO FORCE AND
INITIAL REGULATIONS.
(a) Implementing Actions.--After the date of the enactment
of this Act--
(1) the President may proclaim such actions; and
(2) other appropriate officers of the United States
Government may issue such regulations;
as may be necessary to ensure that any provision of this Act,
or amendment made by this Act, that takes effect on the date
the Agreement enters into force is appropriately implemented on
such date, but no such proclamation or regulation may have an
effective date earlier than the date of entry into force. The
15-day restriction in section 103(b) on the taking effect of
proclaimed actions is waived to the extent that the application
of such restriction would prevent the taking effect on the date
the Agreement enters into force of any action proclaimed under
this section.
(b) Initial Regulations.--Initial regulations necessary or
appropriate to carry out the actions proposed in the statement
of administrative action submitted under section 101(a)(2) to
implement the Agreement shall, to the maximum extent feasible,
be issued within 1 year after the date of entry into force of
the Agreement; except that interim or initial regulations to
implement those Uniform Regulations regarding rules of origin
provided for under article 511 of the Agreement shall be issued
no later than the date of entry into force of the Agreement. In
the case of any implementing action that takes effect on a date
after the date of entry into force of the Agreement, initial
regulations to carry out that action shall, to the maximum
extent feasible, be issued within 1 year after such effective
date.
SEC. 105. UNITED STATES SECTION OF THE NAFTA SECRETARIAT.
(a) Establishment of the United States Section.--The
President is authorized to establish within any department or
agency of the United States Government a United States Section
of the Secretariat established under chapter 20 of the
Agreement. The United States Section, subject to the oversight
of the inter-agency group established under section 402, shall
carry out its functions within the Secretariat to facilitate
the operation of the Agreement, including the operation of
chapters 19 and 20 of the Agreement and the work of the panels,
extraordinary challenge committees, special committees, and
scientific review boards convened under those chapters. The
United States Section may not be considered to be an agency for
purposes of section 552 of title 5, United States Code.
(b) Authorization of Appropriations.--There are authorized
to be appropriated for each fiscal year after fiscal year 1993
to the department or agency within which the United States
Section is established the lesser of--
(1) such sums as may be necessary; or
(2) $2,000,000;
for the establishment and operations of the United States
Section and for the payment of the United States share of the
expenses of binational panels and extraordinary challenge
committees convened under chapter 19, and of the expenses
incurred in dispute settlement proceedings under chapter 20, of
the Agreement.
(c) Reimbursement of Certain Expenses.--If, in accordance
with Annex 2002.2 of the Agreement, the Canadian Section or the
Mexican Section of the Secretariat provides funds to the United
States Section during any fiscal year, as reimbursement for
expenses by the Canadian Section or the Mexican Section in
connection with settlement proceedings under chapter 19 or 20
of the Agreement, the United States Section may retain and use
such funds to carry out the functions described in subsection
(a).
SEC. 106. APPOINTMENTS TO CHAPTER 20 PANEL PROCEEDINGS.
(a) Consultation.--The Trade Representative shall consult
with the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate
regarding the selection and appointment of candidates for the
rosters described in article 2009 of the Agreement.
(b) Selection of Individuals With Environmental
Expertise.--The United States shall, to the maximum extent
practicable, encourage the selection of individuals who have
expertise and experience in environmental issues for service in
panel proceedings under chapter 20 of the Agreement to hear any
challenge to a United States or State environmental law.
[SEC. 107. TERMINATION OR SUSPENSION OF UNITED STATES-CANADA FREE-TRADE
AGREEMENT.
[Amendment to section 501(c) of the United States-Canada
Free-Trade Implementation Act of 1988 (reprinted elsewhere).]
[SEC. 108. CONGRESSIONAL INTENT REGARDING FUTURE ACCESSIONS.
[See U.S. negotiating objectives.]
SEC. 109. EFFECTIVE DATES; EFFECT OF TERMINATION OF NAFTA STATUS.
(a) Effective Dates.--
(1) In general.--This title (other than the amendment
made by section 107) takes effect on the date of the
enactment of this Act.
(2) Section 107 amendment.--The amendment made by
section 107 takes effect on the date the Agreement
enters into force between the United States and Canada.
(b) Termination of NAFTA Status.--During any period in
which a country ceases to be a NAFTA country, sections 101
through 106 shall cease to have effect with respect to such
country.
TITLE II--CUSTOMS PROVISIONS
SEC. 201. TARIFF MODIFICATIONS.
(a) Tariff Modifications Provided for in the Agreement.--
(1) Proclamation authority.--The President may
proclaim--
(A) such modifications or continuation of any
duty,
(B) such continuation of duty-free or excise
treatment, or
(C) such additional duties,
as the President determines to be necessary or appropriate to
carry out or apply articles 302, 305, 307, 308, and 703 and
Annexes 302.2, 307.1, 308.1, 308.2, 300-B, 703.2, and 703.3 of
the Agreement.
(2) Effect on mexican gsp status.--Notwithstanding
502(a)(2) of the Trade Act of 1974 (19 U.S.C.
2462(a)(2)), the President shall terminate the
designation of Mexico as a beneficiary developing
country for purposes of title V of the Trade Act of
1974 on the date of entry into force of the Agreement
between the United States and Mexico.
(b) Other Tariff Modifications.--
(1) In general.--Subject to paragraph (2) and the
consultation and layover requirements of section
103(a), the President may proclaim--
(A) such modifications or continuation of any
duty,
(B) such modifications as the United States
may agree to with Mexico or Canada regarding
the staging of any duty treatment set forth in
Annex 302.2 of the Agreement,
(C) such continuation of duty-free or excise
treatment, or
(D) such additional duties,
as the President determines to be necessary or appropriate to
maintain the general level of reciprocal and mutually
advantageous concessions with respect to Canada or Mexico
provided for by the Agreement.
(2) Special rule for articles with tariff phaseout
periods of more than 10 years.--The President may not
consider a request to accelerate the staging of duty
reductions for an article for which the United States
tariff phaseout period is more than 10 years if a
request for acceleration with respect to such article
has been denied in the preceding 3 calendar years.
(c) Conversion to Ad Valorem Rates for Certain Textiles.--
For purposes of subsections (a) and (b), with respect to an
article covered by Annex 300-B of the Agreement imported from
Mexico for which the base rate in the Schedule of the United
States in Annex 300-B is a specific or compound rate of duty,
the President may substitute for the base rate an ad valorem
rate that the President determines to be equivalent to the base
rate.
SEC. 202. RULES OF ORIGIN.
(a) Originating Goods.--
(1) In general.--For purposes of implementing the
tariff treatment and quantitative restrictions provided
for under the Agreement, except as otherwise provided
in this section, a good originates in the territory or
a NAFTA country if--
(A) the good is wholly obtained or produced
entirely in the territory of one or more of the
NAFTA countries;
(B)(i) each nonoriginating material used in
the production of the good--
(I) undergoes an applicable change in
tariff classification set out in Annex
401 of the Agreement as a result of
production occurring entirely in the
territory of one or more of the NAFTA
countries; or
(II) where no change in tariff
classification is required, the good
otherwise satisfies the applicable
requirements of such Annex; and
(ii) the good satisfies all other applicable
requirements of this section;
(C) the good is produced entirely in the
territory of one or more of the NAFTA countries
exclusively from originating materials; or
(D) except for a good provided for in
chapters 61 through 63 of the HTS, the good is
produced entirely in the territory of one or
more of the NAFTA countries, but one or more of
the nonoriginating materials, that are provided
for as parts under the HTS and are used in the
production of the good, does not undergo a
change in tariff classification because--
(i) the good was imported into the
territory of a NAFTA country in an
unassembled or a disassembled form but
was classified as an assembled good
pursuant to General Rule of
Interpretation 2(a) of the HTS; or
(ii)(I) the heading for the good
provides for and specifically describes
both the good itself and its parts and
is not further subdivided into
subheadings; or
(II) the subheading for the good
provides for and specifically describes
both the good itself and its parts.
(2) Special rules.--
(A) Foreign-trade zones.--Subparagraph (B) of
paragraph (1) shall not apply to a good
produced in a foreign-trade zone or subzone
(established pursuant to the Act of June 18,
1934, commonly known as the Foreign Trade Zones
Act) that is entered for consumption in the
customs territory of the United States.
(B) Regional value-content requirement.--For
purposes of subparagraph (D) of paragraph (1),
a good shall be treated as originating in a
NAFTA country if the regional value-content of
the good, determined in accordance with
subsection (b), is not less than 60 percent
where the transaction value method is used, or
not less than 50 percent where the net cost
method is used, and the good satisfies all
other applicable requirements of this section.
(b) Regional Value-Content.--
(1) In general.--Except as provided in paragraph (5),
the regional value-content of a good shall be
calculated, at the choice of the exporter or producer
of the good, on the basis of--
(A) the transaction value method described in
paragraph (2); or
(B) the net cost method described in
paragraph (3).
(2) Transaction value method.--
(A) In general.--An exporter or producer may
calculate the regional value-content of a good
on the basis of the following transaction value
method:
TV-VNM
RVC = ------------------- 100
TV
------------------------------------------------------------------------
(B) Definitions.--For purposes of
subparagraph (A):
(i) The term ``RVC'' means the
regional value-content, expressed as a
percentage.
(ii) The term ``TV'' means the
transaction value of the good adjusted
to a F.O.B. basis.
(iii) The term ``VNM'' means the
value of nonoriginating materials used
by the producer in the production of
the good.
(3) Net cost method.--
(A) In general.--An exporter or producer may
calculate the regional value-content of a good
on the basis of the following net cost method:
NC-VNM
RVC = -------------------- 100
NC
------------------------------------------------------------------------
(B) Definitions.--For purposes of
subparagraph (A):
(i) The term ``RVC'' means the
regional value-content, expressed as a
percentage.
(ii) The term ``NC'' means the net
cost of the good.
(iii) The term ``VNM'' means the
value of nonoriginating materials used
by the producer in the production of
the good.
(4) Value of nonoriginating materials used in
originating materials.--Except as provided in
subsection (c)(1), and for a motor vehicle identified
in subsection (c)(2) or a component identified in Annex
403.2 of the Agreement, the value of nonoriginating
materials used by the producer in the production of a
good shall not, for purposes of calculating the
regional value-content of the good under paragraph (2)
or (3), include the value of nonoriginating materials
used to produce originating materials that are
subsequently used in the production of the good.
(5) Net cost method must be used in certain cases.--
An exporter or producer shall calculate the regional
value-content of a good solely on the basis of the net
cost method described in paragraph (3), if--
(A) there is no transaction value for the
good;
(B) the transaction value of the good is
unacceptable under Article 1 of the Customs
Valuation Code;
(C) the good is sold by the producer to a
related person and the volume, by units of
quantity, of sales of identical or similar
goods to related persons during the six-month
period immediately preceding the month in which
the good is sold exceeds 85 percent of the
producer's total sales of such goods during
that period;
(D) the good is--
(i) a motor vehicle provided for in
heading 8701 or 8702, subheadings
8703.21 through 8703.90, or heading
8704, 8705, or 8706;
(ii) identified in Annex 403.1 or
403.2 of the Agreement and is for use
in a motor vehicle provided for in
heading 8701 or 8702, subheadings
8703.21 through 8703.90, or heading
8704, 8705, or 8706;
(iii) provided for in subheadings
6401.10 through 6406.10; or
(iv) a word processing machine
provided for in subheading 8469.10.00;
(E) the exporter or producer chooses to
accumulate the regional value-content of the
good in accordance with subsection (d); or
(F) the good is designated as an intermediate
material under paragraph (10) and is subject to
a regional value-content requirement.
(6) Net cost method allowed for adjustments.--If an
exporter or producer of a good calculates the regional
value-content of the good on the basis of the
transaction value method and a NAFTA country
subsequently notifies the exporter or producer, during
the course of a verification conducted in accordance
with chapter 5 of the Agreement, that the transaction
value of the good or the value of any material used in
the production of the good must be adjusted or is
unacceptable under Article 1 of the Customs Valuation
Code, the exporter or producer may calculate the
regional value-content of the good on the basis of the
net cost method.
(7) Review of adjustment.--Nothing in paragraph (6)
shall be construed to prevent any review or appeal
available in accordance with article 510 of the
Agreement with respect to an adjustment to or a
rejection of--
(A) the transaction value of a good; or
(B) the value of any material used in the
production of a good.
(8) Calculating net cost.--The producer may,
consistent with regulations implementing this section,
calculate the net cost of a good under paragraph (3),
by--
(A) calculating the total cost incurred with
respect to all goods produced by that producer,
subtracting any sales promotion, marketing and
after-sales service costs, royalties, shipping
and packing costs, and nonallowable interest
costs that are included in the total cost of
all such goods, and reasonably allocating the
resulting net cost of those goods to the good;
(B) calculating the total cost incurred with
respect to all goods produced by that producer,
reasonably allocating the total cost to the
good, and subtracting any sales promotion,
marketing and after-sales service costs,
royalties, shipping and packing costs, and
nonallowable interest costs that are included
in the portion of the total cost allocated to
the good; or
(C) reasonably allocating each cost that is
part of the total cost incurred with respect to
the good so that the aggregate of these costs
does not include any sales promotion, marketing
and after-sales service costs, royalties,
shipping and packing costs, or nonallowable
interest costs.
(9) Value of material used in production.--Except as
provided in paragraph (11), the value of a material
used in the production of a good--
(A) shall--
(i) be the transaction value of the
material determined in accordance with
Article 1 of the Customs Valuation
Code; or
(ii) in the event that there is no
transaction value or the transaction
value of the material is unacceptable
under Article 1 of the Customs
Valuation Code, be determined in
accordance with Articles 2 through 7 of
the Customs Valuation Code; and
(B) if not included under clause (i) or (ii)
of subparagraph (A), shall include--
(i) freight, insurance, packing, and
all other costs incurred in
transporting the material to the
location of the producer;
(ii) duties, taxes, and customs
brokerage fees paid on the material in
the territory of one or more of the
NAFTA countries; and
(iii) the cost of waste and spoilage
resulting from the use of the material
in the production of the good, less the
value of renewable scrap or by-product.
(10) Intermediate material.--Except for goods
described in subsection (c)(1), any self-produced
material, other than a component identified in Annex
403.2 of the Agreement, that is used in the production
of a good may be designated by the producer of the good
as an intermediate material for the purpose of
calculating the regional value-content of the good
under paragraph (2) or (3); provided that if the
intermediate material is subject to a regional value-
content requirement, no other self-produced material
that is subject to a regional value-content requirement
and is used in the production of the intermediate
material may be designated by the producer as an
intermediate material.
(11) Value of intermediate material.--The value of an
intermediate material shall be--
(A) the total cost incurred with respect to
all goods produced by the producer of the good
that can be reasonably allocated to the
intermediate material; or
(B) the aggregate of each cost that is part
of the total cost incurred with respect to the
intermediate material that can be reasonably
allocated to that intermediate material.
(12) Indirect material.--The value of an indirect
material shall be based on the Generally Accepted
Accounting Principles applicable in the territory of
the NAFTA country in which the good is produced.
(c) Automotive Goods.--
(1) Passenger vehicles and light trucks, and their
automotive parts.--For purposes of calculating the
regional value-content under the net cost method for--
(A) a good that is a motor vehicle for the
transport of 15 or fewer persons provided for
in subheading 8702.10.00 or 8702.90.00, or a
motor vehicle provided for in subheadings
8703.21 through 8703.90, or subheading 8704.21
or 8704.31, or
(B) a good provided for in the tariff
provisions listed in Annex 403.1 of the
Agreement, that is subject to a regional value-
content requirement and is for use as original
equipment in the production of a motor vehicle
for the transport of 15 or fewer persons
provided for in subheading 8702.10.00 or
8702.90.00, or a motor vehicle provided for in
subheadings 8703.21 through 8703.90, or
subheading 8704.21 or 8704.31,
the value of nonoriginating materials used by the
producer in the production of the good shall be the sum
of the values of all nonoriginating materials,
determined in accordance with subsection (b)(9) at the
time the nonoriginating materials are received by the
first person in the territory of a NAFTA country who
takes title to them, that are imported from outside the
territories of the NAFTA countries under the tariff
provisions listed in Annex 403.1 of the Agreement and
are used in the production of the good or that are used
in the production of any material used in the
production of the good.
(2) Other vehicles and their automotive parts.--For
purposes of calculating the regional value-content
under the net cost method for a good that is a motor
vehicle provided for in heading 8701, subheading
8704.10, 8704.22, 8704.23, 8704.32, or 8704.90, or
heading 8705 or 8706, a motor vehicle for the transport
of 16 or more persons provided for in subheading
8702.10.00 or 8702.90.00, or a component identified in
Annex 403.2 of the Agreement for use as original
equipment in the production of the motor vehicle, the
value of nonoriginating materials used by the producer
in the production of the good shall be the sum of--
(A) for each material used by the producer
listed in Annex 403.2 of the Agreement, whether
or not produced by the producer, at the choice
of the producer and determined in accordance
with subsection (b), either--
(i) the value of such material that
is nonoriginating, or
(ii) the value of nonoriginating
materials used in the production of
such material; and
(B) the value of any other nonoriginating
material used by the producer that is not
listed in Annex 403.2 of the Agreement
determined in accordance with subsection (b).
(3) Averaging permitted.--
(A) In general.--For purposes of calculating
the regional value-content of a motor vehicle
described in paragraph (1) or (2), the producer
may average its calculation over its fiscal
year, using any of the categories described in
subparagraph (B), on the basis of either all
motor vehicles in the category or on the basis
of only the motor vehicles in the category that
are exported to the territory of one or more of
the other NAFTA countries.
(B) Category described.--A category is
described in this subparagraph if it is--
(i) the same model line of motor
vehicles in the same class of vehicles
produced in the same plant in the
territory of a NAFTA country;
(ii) the same class of motor vehicles
produced in the same plant in the
territory of a NAFTA country;
(iii) the same model line of motor
vehicles produced in the territory of a
NAFTA country; or
(iv) if applicable, the basis set out
in Annex 403.3 of the Agreement.
(4) Annex 403.1 and annex 403.2.--For purposes of
calculating the regional value-content for any or all
goods provided for in a tariff provision listed in
Annex 403.1 of the Agreement, or a component or
material identified in Annex 403.2 of the Agreement,
produced in the same plant, the producer of the good
may--
(A) average its calculation--
(i) over the fiscal year of the motor
vehicle producer to whom the good is
sold;
(ii) over any quarter or month; or
(iii) over its fiscal year, if the
good is sold as an aftermarket part;
(B) calculate the average referred to in
subparagraph (A) separately for any or all
goods sold to one or more motor vehicle
producers; or
(C) with respect to any calculation under
this paragraph, make a separate calculation for
goods that are exported to the territory of one
or more NAFTA countries.
(5) Phase-in of regional value-content requirement.--
Notwithstanding Annex 401 of the Agreement, and except
as provided in paragraph (6), the regional value-
content requirement shall be--
(A) for a producer's fiscal year beginning on
the day closest to January 1, 1998, and
thereafter, 56 percent calculated under the net
cost method, and for a producer's fiscal year
beginning on the day closest to January 1,
2002, and thereafter, 62.5 percent calculated
under the net cost method, for--
(i) a good that is a motor vehicle
for the transport of 15 or fewer
persons provided for in subheading
8702.10.00 or 8702.90.00, or a motor
vehicle provided for in subheadings
8703.21 through 8703.90, or subheading
8704.21 or 8704.31; and
(ii) a good provided for in heading
8407 or 8408, or subheading 8708.40,
that is for use in a motor vehicle
identified in clause (i); and
(B) for a producer's fiscal year beginning on
the day closest to January 1, 1998, and
thereafter, 55 percent calculated under the net
cost method, and for a producer's fiscal year
beginning on the day closest to January 1,
2002, and thereafter, 60 percent calculated
under the net cost method, for--
(i) a good that is a motor vehicle
provided for in heading 8701,
subheading 8704.10, 8704.22, 8704.23,
8704.32, or 8704.90, or heading 8705 or
8706, or a motor vehicle for the
transport of 16 or more persons
provided for in subheading 8702.10.00
or 8702.90.00;
(ii) a good provided for in heading
8407 or 8408, or subheading 8708.40
that is for use in a motor vehicle
identified in clause (i); and
(iii) except for a good identified in
subparagraph (A)(ii) or a good provided
for in subheadings 8482.10 through
8482.80, or subheading 8483.20 or
8483.30, a good identified in Annex
403.1 of the Agreement that is subject
to a regional value-content requirement
and is for use in a motor vehicle
identified in subparagraph (A)(i) or
(B)(i).
(6) New and refitted plants.--The regional value-
content requirement for a motor vehicle identified in
paragraph (1) or (2) shall be--
(A) 50 percent for 5 years after the date on
which the first motor vehicle prototype is
produced in a plant by a motor vehicle
assembler, if--
(i) it is a motor vehicle of a class,
or marque, or, except for a motor
vehicle identified in paragraph (2),
size category and underbody, not
previously produced by the motor
vehicle assembler in the territory of
any of the NAFTA countries;
(ii) the plant consists of a new
building in which the motor vehicle is
assembled; and
(iii) the plant contains
substantially all new machinery that is
used in the assembly of the motor
vehicle; or
(B) 50 percent for 2 years after the date on
which the first motor vehicle prototype is
produced at a plant following a refit, if it is
a motor vehicle of a class, or marque, or,
except for a motor vehicle identified in
paragraph (2), size category and underbody,
different from that assembled by the motor
vehicle assembler in the plant before the
refit.
(7) Election for certain vehicles from canada.--In
the case of goods provided for in subheadings 8703.21
through 8703.90, or subheading 8704.21 or 8704.31,
exported from Canada directly to the United States, and
entered on or after January 1, 1989, and before the
date of entry into force of the Agreement between the
United States and Canada, an importer may elect to use
the rules of origin set out in this section in lieu of
the rules of origin contained in section 202 of the
United States-Canada Free-Trade Agreement
Implementation Act of 1988 (19 U.S.C. 2112 note) and
may elect to use the method for calculating the value
of nonoriginating materials established in article
403(2) of the Agreement in lieu of the method
established in article 403(1) of the Agreement for
purposes of determining eligibility for preferential
duty treatment under the United States-Canada Free-
Trade Agreement. Any election under this paragraph
shall be made in writing to the Customs Service not
later than the date that is 180 days after the date of
entry into force of the Agreement between the United
States and Canada. Any such election may be made only
if the liquidation of such entry has not become final.
For purposes of averaging the calculation of regional
value-content for the goods covered by such entry,
where the producer's 1989-1990 fiscal year began after
January 1, 1989, the producer may include the period
between January 1, 1989, and the beginning of its first
fiscal year after January 1, 1989, as part of fiscal
year 1989-1990.
(d) Accumulation.--
(1) Determination of originating good.--For purposes
of determining whether a good is an originating good,
the production of the good in the territory of one or
more of the NAFTA countries by one or more producers
shall, at the choice of the exporter or producer of the
good, be considered to have been performed in the
territory of any of the NAFTA countries by that
exporter or producer, if--
(A) all nonoriginating materials used in the
production of the good undergo an applicable
tariff classification change set out in Annex
401 of the Agreement;
(B) the good satisfies any applicable
regional value-content requirement; and
(C) the good satisfies all other applicable
requirements of this section.
The requirements of subparagraphs (A) and (B) must be
satisfied entirely in the territory of one or more of
the NAFTA countries.
(2) Treatment as single producer.--For purposes of
subsection (b)(10), the production of a producer that
chooses to accumulate its production with that of other
producers under paragraph (1) shall be treated as the
production of a single producer.
(e) De Minimis Amounts of Nonoriginating Materials.--
(1) In general.--Except as provided in paragraphs
(3), (4), (5), and (6), a good shall be considered to
be an originating good if--
(A) the value of all nonoriginating materials
used in the production of the good that do not
undergo an applicable change in tariff
classification (set out in Annex 401 of the
Agreement) is not more than 7 percent of the
transaction value of the good, adjusted to a
F.O.B. basis, or
(B) where the transaction value of the good
is unacceptable under Article 1 of the Customs
Valuation Code, the value of all such
nonoriginating materials is not more than 7
percent of the total cost of the good,
provided that the good satisfies all other applicable
requirements of this section and, if the good is
subject to a regional value-content requirement, the
value of such nonoriginating materials is taken into
account in calculating the regional value-content of
the good.
(2) Goods not subject to regional value-content
requirement.--A good that is otherwise subject to a
regional value-content requirement shall not be
required to satisfy such requirement if--
(A)(i) the value of all nonoriginating
materials used in the production of the good is
not more than 7 percent of the transaction
value of the good, adjusted to a F.O.B. basis;
or
(ii) where the transaction value of the good
is unacceptable under Article 1 of the Customs
Valuation Code, the value of all nonoriginating
materials is not more than 7 percent of the
total cost of the good; and
(B) the good satisfies all other applicable
requirements of this section.
(3) Dairy products, etc.--Paragraph (1) does not
apply to--
(A) a nonoriginating material provided for in
chapter 4 of the HTS or a dairy preparation
containing over 10 percent by weight of milk
solids provided for in subheading 1901.90.30,
1901.90.40, or 1901.90.80 that is used in the
production of a good provided for in chapter 4
of the HTS;
(B) a nonoriginating material provided for in
chapter 4 of the HTS or a dairy preparation
containing over 10 percent by weight of milk
solids provided for in subheading 1901.90.30,
1901.90.40, or 1901.90.80 that is used in the
production of--
(i) preparations for infants
containing over 10 percent by weight of
milk solids provided for in subheading
1901.10.00;
(ii) mixes and doughs, containing
over 25 percent by weight of butterfat,
not put up for retail sale, provided
for in subheading 1901.20.00;
(iii) a dairy preparation containing
over 10 percent by weight of milk
solids provided for in subheading
1901.90.30, 1901.90.40, or 1901.90.80;
(iv) a good provided for in heading
2105 or subheading 2106.90.05, or
preparations containing over 10 percent
by weight of milk solids provided for
in subheading 2106.90.15, 2106.90.40,
2106.90.50, or 2106.90.65;
(v) a good provided for in subheading
2202.90.10 or 2202.90.20; or
(vi) animal feeds containing over 10
percent by weight of milk solids
provided for in subheading 2309.90.30;
(C) a nonoriginating material provided for in
heading 0805 or subheadings 2009.11 through
2009.30 that is used in the production of--
(i) a good provided for in
subheadings 2009.11 through 2009.30, or
subheading 2106.90.16, or concentrated
fruit or vegetable juice of any single
fruit or vegetable, fortified with
minerals or vitamins, provided for in
subheading 2106.90.19; or
(ii) a good provided for in
subheading 2202.90.30 or 2202.90.35, or
fruit or vegetable juice of any single
fruit or vegetable, fortified with
minerals or vitamins, provided for in
subheading 2202.90.36;
(D) a nonoriginating material provided for in
chapter 9 of the HTS that is used in the
production of instant coffee, not flavored,
provided for in subheading 2101.10.20;
(E) a nonoriginating material provided for in
chapter 15 of the HTS that is used in the
production of a good provided for in headings
1501 through 1508, or heading 1512, 1514, or
1515;
(F) a nonoriginating material provided for in
heading 1701 that is used in the production of
a good provided for in headings 1701 through
1703;
(G) a nonoriginating material provided for in
chapter 17 of the HTS or heading 1805 that is
used in the production of a good provided for
in subheading 1806.10;
(H) a nonoriginating material provided for in
headings 2203 through 2208 that is used in the
production of a good provided for in headings
2207 through 2208;
(I) a nonoriginating material used in the
production of--
(i) a good provided for in subheading
7321.11.30;
(ii) a good provided for in
subheading 8415.10, subheadings 8415.81
through 8415.83, subheadings 8418.10
through 8418.21, subheadings 8418.29
through 8418.40, subheading 8421.12 or
8422.11, subheadings 8450.11 through
8450.20, or subheadings 8451.21 through
8451.29;
(iii) trash compactors provided for
in subheading 8479.89.60; or
(iv) a good provided for in
subheading 8516.60.40; and
(J) a printed circuit assembly that is a
nonoriginating material used in the production
of a good where the applicable change in tariff
classification for the good, as set out in
Annex 401 of the Agreement, places restrictions
on the use of such nonoriginating material.
(4) Certain fruit juices.--Paragraph (1) does not
apply to a nonoriginating single juice ingredient
provided for in heading 2009 that is used in the
production of--
(A) a good provided for in subheading
2009.90, or concentrated mixtures of fruit or
vegetable juice, fortified with minerals or
vitamins, provided for in subheading
2106.90.19; or
(B) mixtures of fruit or vegetable juices,
fortified with minerals or vitamins, provided
for in subheading 2202.90.39.
(5) Goods provided for in chapters 1 through 27 of
the hts.--Paragraph (1) does not apply to a
nonoriginating material used in the production of a
good provided for in chapters 1 through 27 of the HTS
unless the nonoriginating material is provided for in a
different subheading than the good for which origin is
being determined under this section.
(6) Goods provided for in chapters 50 through 63 of
the hts.--A good provided for in chapters 50 through 63
of the HTS, that does not originate because certain
fibers or yarns used in the production of the component
of the good that determines the tariff classification
of the good do not undergo an applicable change in
tariff classification set out in Annex 401 of the
Agreement, shall be considered to be a good that
originates if the total weight of all such fibers or
yarns in that component is not more than 7 percent of
the total weight of that component.
(f) Fungible Goods and Materials.--For purposes of
determining whether a good is an originating good--
(1) if originating and nonoriginating fungible
materials are used in the production of the good, the
determination of whether the materials are originating
need not be made through the identification of any
specific fungible material, but may be determined on
the basis of any of the inventory management methods
set out in regulations implementing this section; and
(2) if originating and nonoriginating fungible goods
are commingled and exported in the same form, the
determination may be made on the basis of any of the
inventory management methods set out in regulations
implementing this section.
(g) Accessories, Spare Parts, or Tools.--
(1) In general.--Except as provided in paragraph (2),
accessories, spare parts, or tools delivered with the
good that form part of the good's standards
accessories, spare parts, or tools shall--
(A) be considered as originating goods if the
good is an originating good, and
(B) be disregarded in determining whether all
the nonoriginating materials used in the
production of the good undergo an applicable
change in tariff classification set out in
Annex 401 of the Agreement.
(2) Conditions.--Paragraph (1) shall apply only if--
(A) the accessories, spare parts, or tools
are not invoiced separately from the good;
(B) the quantities and value of the
accessories, spare parts, or tools are
customary for the good; and
(C) in any case in which the good is subject
to a regional value-content requirement, the
value of the accessories, spare parts, or tools
are taken into account as originating or
nonoriginating materials, as the case may be,
in calculating the regional value-content of
the good.
(h) Indirect Materials.--An indirect material shall be
considered to be an originating material without regard to
where it is produced.
(i) Packaging Materials and Containers for Retail Sale.--
Packaging materials and containers in which a good is packaged
for retail sale, if classified with the good, shall be
disregarded in determining whether all the nonoriginating
materials used in the production of the good undergo an
applicable change in tariff classification set out in Annex 401
of the Agreement. If the good is subject to a regional value-
content requirement, the value of such packaging materials and
containers shall be taken into account as originating or
nonoriginating materials, as the case may be, in calculating
the regional value-content of the good.
(j) Packing Materials and Containers for Shipment.--Packing
materials and containers in which a good is packed for shipment
shall be disregarded--
(1) in determining whether the nonoriginating
materials used in the production of the good undergo an
applicable change in tariff classification set out in
Annex 401 of the Agreement; and
(2) in determining whether the good satisfies a
regional value-content requirement.
(k) Transshipment.--A good shall not be considered to be an
originating good by reason of having undergone production that
satisfies the requirements of subsection (a) if, subsequent to
that production, the good undergoes further production or any
other operation outside the territories of the NAFTA countries,
other than unloading, reloading, or any other operation
necessary to preserve it in good condition or to transport the
good to the territory of a NAFTA country.
(l) Nonqualifying Operations.--A good shall not be
considered to be an originating good merely by reason of--
(1) mere dilution with water or another substance
that does not materially alter the characteristics of
the good; or
(2) any production or pricing practice with respect
to which it may be demonstrated, by a preponderance of
evidence, that the object was to circumvent this
section.
(m) Interpretation and Application.--For purposes of this
section:
(1) The basis for any tariff classification is the
HTS.
(2) Except as otherwise expressly provided, whenever
in this section there is a reference to a heading or
subheading such reference shall be a reference to a
heading or subheading of the HTS.
(3) In applying subsection (a)(4), the determination
of whether a heading or subheading under the HTS
provides for and specifically describes both a good and
its parts shall be made on the basis of the
nomenclature of the heading or subheading, the rules of
interpretation, or notes of the HTS.
(4) In applying the Customs Valuation Code--
(A) the principles of the Customs Valuation
Code shall apply to domestic transactions, with
such modifications as may be required by the
circumstances, as would apply to international
transactions;
(B) the provisions of this section shall take
precedence over the Customs Valuation Code to
the extent of any difference; and
(C) the definitions in subsection (p) shall
take precedence over the definitions in the
Customs Valuation Code to the extent of any
difference.
(5) All costs referred to in this section shall be
recorded and maintained in accordance with the
Generally Accepted Accounting Principles applicable in
the territory of the NAFTA country in which the good is
produced.
(n) Origin of Automatic Data Processing Goods.--
Notwithstanding any other provision of this section, when the
NAFTA countries apply the rate of duty described in paragraph 1
of section A of Annex 308.1 of the Agreement to a good provided
for under the tariff provisions set out in Table 308.1.1 of
such Annex, the good shall, upon importation from a NAFTA
country, be deemed to originate in the territory of a NAFTA
country for purposes of this section.
(o) Special Rule for Certain Agricultural Products.--
Notwithstanding any other provision of this section, for
purposes of applying a rate of duty to a good provided for in--
(1) heading 1202 that is exported from the territory
of Mexico, if the good is not wholly obtained in the
territory of Mexico,
(2) subheading 2008.11 that is exported from the
territory of Mexico, if any material provided for in
heading 1202 used in the production of that good is not
wholly obtained in the territory of Mexico, or
(3) subheading 1806.10.42 or 2106.90.12 that is
exported from the territory of Mexico, if any material
provided for in subheading 1701.99 used in the
production of that good is not a qualifying good,
such good shall be treated as a nonoriginating good and, for
purposes of this subsection, the terms ``qualifying good'' and
``wholly obtained in the territory of'' have the meaning given
such terms in paragraph 26 of section A of Annex 703.2 of the
Agreement.
(p) Definitions.--For purposes of this section--
(1) Class of motor vehicles.--The term ``class of
motor vehicles'' means any one of the following
categories of motor vehicles:
(A) Motor vehicles provided for in subheading
8701.20, subheading 8704.10, 8704.22, 8704.23,
8704.32, or 8704.90, or heading 8705 or 8706,
or motor vehicles designed for the transport of
16 or more persons provided for in subheading
8702.10.00 or 8702.90.00.
(B) Motor vehicles provided for in subheading
8701.10, or subheading 8701.30 through 8701.90.
(C) Motor vehicles for the transport of 15 or
fewer persons provided for in subheading
8702.10.00 or 8702.90.00, or motor vehicles
provided for in subheading 8704.21 or 8704.31.
(D) Motor vehicles provided for in
subheadings 8703.21 through 8703.90.
(2) Customs valuation code.--The term ``Customs
Valuation Code'' means the Agreement on Implementation
of Article VII of the General Agreement on Tariffs and
Trade, including its interpretative notes.
(3) F.O.B.--The term ``F.O.B.'' means free on board,
regardless of the mode of transportation, at the point
of direct shipment by the seller to the buyer.
(4) Fungible goods and fungible materials.--The terms
``fungible goods'' and fungible materials'' means goods
or materials that are interchangeable for commercial
purposes and whose properties are essentially
identical.
(5) Generally accepted accounting principles.--The
term ``Generally Accepted Accounting Principles'' means
the recognized consensus or substantial authoritative
support in the territory of a NAFTA country with
respect to the recording of revenues, expenses, costs,
assets and liabilities, disclosure of information, and
preparation of financial statements. These standards
may be broad guidelines of general application as well
as detailed standards, practices, or procedures.
(6) Goods wholly obtained or produced entirely in the
territory of one or more of the nafta countries.--The
term ``goods wholly obtained or produced entirely in
the territory of one or more of the NAFTA countries''
means--
(A) mineral goods extracted in the territory
of one or more of the NAFTA countries;
(B) vegetable goods harvested in the
territory of one or more of the NAFTA
countries;
(C) live animals born and raised in the
territory of one or more of the NAFTA
countries;
(D) goods obtained from hunting, trapping, or
fishing in the territory of one or more of the
NAFTA countries;
(E) goods (such as fish, shellfish, and other
marine life) taken from the sea by vessels
registered or recorded with a NAFTA country and
flying its flag;
(F) goods produced on board factory ships
from the goods referred to in subparagraph (E),
if such factory ships are registered or
recorded with the NAFTA country and fly its
flag;
(G) goods taken by a NAFTA country or a
person of a NAFTA country from the seabed or
beneath the seabed outside territorial waters,
provided that a NAFTA country has rights to
exploit such seabed;
(H) goods taken from outer space, if the
goods are obtained by a NAFTA country or a
person of a NAFTA country and not processed in
a country other than a NAFTA country;
(I) waste and scrap derived from--
(i) production in the territory of
one or more of the NAFTA countries; or
(ii) used goods collected in the
territory of one or more of the NAFTA
countries, if such goods are fit only
for the recovery of raw materials; and
(J) goods produced in the territory of one or
more of the NAFTA countries exclusively from
goods referred to in subparagraphs (A) through
(I), or from their derivatives, at any stage of
production.
(7) Identical or similar goods.--The term ``identical
or similar goods'' means ``identical goods'' and
``similar goods'', respectively, as defined in the
Customs Valuation Code.
(8) Indirect material.--
(A) The term ``indirect material'' means a
good--
(i) used in the production, testing,
or inspection of a good but not
physically incorporated into the good,
or
(ii) used in the maintenance of
buildings or the operation of equipment
associated with the production of a
good,
in the territory of one or more of the NAFTA
countries.
(B) When used for a purpose described in
subparagraph (A), the following materials are
among those considered to be indirect
materials:
(i) Fuel and energy.
(ii) Tools, dies, and molds.
(iii) Spare parts and materials used
in the maintenance of equipment and
buildings.
(iv) Lubricants, greases, compounding
materials, and other materials used in
production or used to operate equipment
and buildings.
(v) Gloves, glasses, footwear,
clothing, safety equipment, and
supplies.
(vi) Equipment, devices, and supplies
used for testing or inspecting the
goods.
(vii) Catalysts and solvents.
(viii) Any other goods that are not
incorporated into the good, if the use
of such goods in the production of the
good can reasonably be demonstrated to
be a part of that production.
(9) Intermediate material.--The term ``intermediate
material'' means a material that is self-produced, used
in the production of a good, and designated pursuant to
subsection (b)(10).
(10) Marque.--The term ``marque'' means the trade
name used by a separate marketing division of a motor
vehicle assembler.
(11) Material.--The term ``material'' means a good
that is used in the production of another good and
includes a part or an ingredient.
(12) Model line.--The term ``model line'' means a
group of motor vehicles having the same platform or
model name.
(13) Motor vehicle assembler.--The term ``motor
vehicle assembler'' means a producer of motor vehicles
and any related persons or joint ventures in which the
producer participates.
(14) NAFTA country.--The term ``NAFTA country'' means
the United States, Canada or Mexico for such time as
the Agreement is in force with respect to Canada or
Mexico, and the United States applies the Agreement to
Canada or Mexico.
(15) New building.--The term ``new building'' means a
new construction, including at least the pouring or
construction of new foundation and floor, the erection
of a new structure and roof, and installation of new
plumbing, electrical, and other utilities to house a
complete vehicle assembly process.
(16) Net cost.--The term ``net cost'' means total
cost less sales promotion, marketing and after-sales
service costs, royalties, shipping and packing costs,
and nonallowable interest costs that are included in
the total cost.
(17) Net cost of a good.--The term ``net cost of a
good'' means the net cost that can be reasonably
allocated to a good using one of the methods set out in
subsection (b)(8).
(18) Nonallowable interest costs.--The term
``nonallowable interest costs'' means interest costs
incurred by a producer as a result of an interest rate
that exceeds the applicable Federal Government interest
rate for comparable maturities by more than 700 basis
points, determined pursuant to regulations implementing
this section.
(19) Nonoriginating good; nonoriginating material.--
The term ``nonoriginating good'' or ``nonoriginating
material'' means a good or material that does not
qualify as an originating good or material under the
rules of origin set out in this section.
(20) Originating.--The term ``originating'' means
qualifying under the rules of origin set out in this
section.
(21) Producer.--The term ``producer'' means a person
who grows, mines, harvests, fishes, traps, hunts,
manufacturers, processes, or assembles a good.
(22) Production.--The term ``production'' means
growing, mining, harvesting, fishing, trapping,
hunting, manufacturing, processing, or assembling a
good.
(23) Reasonably allocate.--The term ``reasonably
allocate'' means to apportion in a manner appropriate
to the circumstances.
(24) Refit.--The term ``refit'' means a plant
closure, for purposes of plant conversion or retooling,
that lasts at least 3 months.
(25) Related persons.--The term ``related persons''
means persons specified in any of the following
subparagraphs:
(A) Persons who are officers or directors of
one another's businesses.
(B) Persons who are legally recognized
partners in business.
(C) Persons who are employer and employee.
(D) Persons one of whom owns, controls, or
holds 25 percent or more of the outstanding
voting stock or shares of the other.
(E) Persons if 25 percent or more of the
outstanding voting stock or shares of each of
them is directly or indirectly owned,
controlled, or held by a third person.
(F) Persons one of whom is directly or
indirectly controlled by the other.
(G) Persons who are directly or indirectly
controlled by a third person.
(H) Persons who are members of the same
family.
For purposes of this paragraph, the term ``members of
the same family'' means natural or adoptive children,
brothers, sisters, parents, grandparents, or spouses.
(26) Royalties.--The term ``royalties'' means
payments of any kind, including payments under
technical assistance or similar agreements, made as
consideration for the use or right to use any
copyright, literary, artistic, or scientific work,
patent, trademark, design, model, plan, secret formula,
or process. It does not include payments under
technical assistance or similar agreements that can be
related to specific services such as--
(A) personnel training, without regard to
where performed; and
(B) if performed in the territory of one or
more of the NAFTA countries, engineering,
tooling, die-setting, software design and
similar computer services, or other services.
(27) Sales promotion, marketing, and after-sales
service costs.--The term ``sales promotion, marketing,
and after-sales service costs'' means the costs related
to sales promotion, marketing, and after-sales service
for the following:
(A) Sales and marketing promotion, media
advertising, advertising and market research,
promotional and demonstration materials,
exhibits, sales conferences, trade shows,
conventions, banners, marketing displays, free
samples, sales, marketing and after-sales
service literature (product brochures,
catalogs, technical literature, price lists,
service manuals, sales aid information),
establishment and protection of logos and
trademarks, sponsorships, wholesale and retail
restocking charges, and entertainment.
(B) Sales and marketing incentives, consumer,
retailer, or wholesaler rebates, and
merchandise incentives.
(C) Salaries and wages, sales commissions,
bonuses, benefits (such as medical, insurance,
and pension), traveling and living expenses,
and membership and professional fees for sales
promotion, marketing, and after-sales service
personnel.
(D) Recruiting and training of sales
promotion, marketing, and after-sales service
personnel, and after-sales training of
customers' employees, where such costs are
identified separately for sales promotion,
marketing, and after-sales service of goods on
the financial statements or cost accounts of
the producer.
(E) Product liability insurance.
(F) Office supplies for sales promotion,
marketing, and after-sales service of goods,
where such costs are identified separately for
sales promotion, marketing, and after-sales
service of goods on the financial statements or
cost accounts of the producer.
(G) Telephone, mail, and other
communications, where such costs are identified
separately for sales promotion, marketing, and
after-sales service of goods on the financial
statements or cost accounts of the producer.
(H) Rent and depreciation of sales promotion,
marketing, and after-sales service offices and
distribution centers.
(I) Property insurance, taxes, utilities, and
repair and maintenance of sales promotion,
marketing, and after-sales service offices and
distribution centers, where such costs are
identified separately for sales promotion,
marketing, and after-sales service of goods on
the financial statements or cost accounts of
the producer.
(J) Payments by the producer to other persons
for warranty repairs.
(28) Self-produced material.--The term ``self-
produced material'' means a material that is produced
by the producer of a good and used in the production of
that good.
(29) Shipping and packing costs.--The term ``shipping
and packing costs'' means the costs incurred in packing
a good for shipment and shipping the good from the
point of direct shipment to the buyer, but does not
include the costs of preparing and packaging the good
for retail sale.
(30) Size category.--The term ``size category'' means
with respect to a motor vehicle identified in
subsection (c)(1)(A)--
(A) 85 cubic feet or less of passenger and
luggage interior volume;
(B) more than 85 cubic feet, but less than
100 cubic feet, of passenger and luggage
interior volume;
(C) at least 100 cubic feet, but not more
than 110 cubic feet, of passenger and luggage
interior volume;
(D) more than 110 cubic feet, but less than
120 cubic feet, of passenger and luggage
interior volume; and
(E) 120 cubic feet or more of passenger and
luggage interior volume.
(31) Territory.--The term ``territory'' means a
territory described in Annex 201.1 of the Agreement.
(32) Total cost.--The term ``total cost'' means all
product costs, period costs, and other costs incurred
in the territory of one or more of the NAFTA countries.
(33) Transaction value.--Except as provided in
subsection (c)(1) or (c)(2)(A), the term ``transaction
value'' means the price actually paid or payable for a
good or material with respect to a transaction of the
producer of the good, adjusted in accordance with the
principles of paragraphs 1, 3, and 4 of Article 8 of
the Customs Valuation Code and determined without
regard to whether the good or material is sold for
export.
(34) Underbody.--The term ``underbody'' means the
floor pan of a motor vehicle.
(35) Used.--The term ``used'' means used or consumed
in the production of goods.
(q) Presidential Proclamation Authority.--
(1) In general.--The President is authorized to
proclaim, as a part of the HTS--
(A) the provisions set out in Appendix 6.A of
Annex 300-B, Annex 401, Annex 403.1 Annex
403.2, and Annex 403.3, of the Agreement, and
(B) any additional subordinate category
necessary to carry out this title consistent
with the Agreement.
(2) Modifications.--Subject to the consultation and
layover requirements of section 103, the President may
proclaim--
(A) modifications to the provisions
proclaimed under the authority of paragraph
(1)(A), other than the provisions of paragraph
A of Appendix 6 of Annex 300-B and section XI
of part B of Annex 401 of the Agreement; and
(B) a modified version of the definition of
any term set out in subsection (p) (and such
modified version of the definition shall
supersede the version in subsection (p)), but
only if the modified version reflects solely
those modifications to the same term in article
415 of the Agreement that are agreed to by the
NAFTA countries before the 1st anniversary of
the date of the enactment of this Act.
(3) Special rules for textiles.--Notwithstanding the
provisions of paragraph (2)(A), and subject to the
consultation and layover requirements of section 103,
the President may proclaim--
(A) modifications to the provisions
proclaimed under the authority of paragraph
(1)(A) as are necessary to implement an
agreement with one or more of the NAFTA
countries pursuant to paragraph 2 of section 7
of Annex 300-B of the Agreement, and
(B) before the 1st anniversary of the date of
the enactment of this Act, modifications to
correct any typographical, clerical, or other
nonsubstantive technical error regarding the
provisions of Appendix 6.A of Annex 300-B and
section XI of part B of Annex 401 of the
Agreement.
SEC. 203. DRAWBACK.
(a) Definition of a Good Subject to NAFTA Drawback.--For
purposes of this Act and the amendments made by subsection (b),
the term ``good subject to NAFTA drawback'' means any imported
good other than the following:
(1) A good entered under bond for transportation and
exportation to a NAFTA country.
(2) A good exported to a NAFTA country in the same
condition as when imported into the United States. For
purposes of this paragraph--
(A) processes such as testing, cleaning,
repacking, or inspecting a good, or preserving
it in its same condition, shall not be
considered to change the condition of the good,
and
(B) except for a good referred to in
paragraph 12 of section A of Annex 703.2 of the
Agreement that is exported to Mexico, if a good
described in the first sentence of this
paragraph is commingled with fungible goods and
exported in the same condition, the origin of
the good may be determined on the basis of the
inventory methods provided for in the
regulations implementing this title.
(3) A good--
(A) that is--
(i) deemed to be exported from the
United States,
(ii) used as a material in the
production of another good that is
deemed to be exported to a NAFTA
country, or
(iii) substituted for by a good of
the same kind and quality that is used
as a material in the production of
another good that is deemed to be
exported to a NAFTA country, and
(B) that is delivered--
(i) to a duty-free shop,
(ii) for ship's stores or supplies
for ships or aircraft, or
(iii) for use in a project undertaken
jointly by the United States and a
NAFTA country and destined to become
the property of the United States.
(4) A good exported to a NAFTA country for which a
refund of customs duties is granted by reason of--
(A) the failure of the good to conform to
sample or specification, or
(B) the shipment of the good without the
consent of the consignee.
(5) A good that qualifies under the rules of origin
set out in section 202 that is--
(A) exported to a NAFTA country,
(B) used as a material in the production of
another good that is exported to a NAFTA
country, or
(C) substituted for by a good of the same
kind and quality that is used as a material in
the production of another good that is exported
to a NAFTA country.
(6) A good provided for in subheading 1701.11.02 of
the HTS that is--
(A) used as a material, or
(B) substituted for by a good of the same
kind and quality that is used as a material,
in the production of a good provided for in existing
Canadian tariff item 1701.99.00 or existing Mexican
tariff item 1701.99.01 or 1701.99.99 (relating to
refined sugar).
(7) A citrus product that is exported to Canada.
(8) A good used as a material, or substituted for by
a good of the same kind and quality that is used as a
material, in the production of--
(A) apparel, or
(B) a good provided for in subheading
6307.90.99 (insofar as it relates to furniture
moving pads), 5811.00.20, or 5811.00.30 of the
HTS,
that is exported to Canada and that is subject to
Canada's most-favored-nation rate of duty upon
importation into Canada.
Wherein paragraph (6) a good referred to by an item is
described in parentheses following the item, the description is
provided for purposes of reference only.
[(b) Consequential Amendments With Delayed Effect.--
Amendments to sections 311-313 of the Tariff Act of 1930,
section 562 of the Tariff Act of 1930, and section 3(a) of the
Foreign Trade Zones Act.
[(c) Consequential Amendment With Immediate Effect.--
Amendment to section 313(j) of the Tariff Act of 1930.]
(d) Elimination of Drawback for Section 22 Fees.--
Notwithstanding any other provision of law, the Secretary of
the Treasury may not, on condition of export, refund or reduce
a fee applied pursuant to section 22 of the Agricultural
Adjustment Act (7 U.S.C. 624) with respect to goods included
under subsection (a) that are exported to--
(1) Canada after December 31, 1995, for so long as it
is a NAFTA country; or
(2) Mexico after December 31, 2000, for so long as it
is a NAFTA country.
(e) Inapplicability to Countervailing and Antidumping
Duties.--Nothing in this section or the amendments made by it
shall be considered to authorize the refund, waiver, or
reduction of countervailing duties or antidumping duties
imposed on an imported good.
[SEC. 204. CUSTOMS USER FEES.
Amendment to section 13031(b)(10) of the Consolidated
Budget Reconciliation Act of 1985 (reprinted elsewhere).]
[SEC. 205. ENFORCEMENT.
Amendments to sections 508, 509, and 592 of the Tariff Act
of 1930 (reprinted elsewhere).]
[SEC. 206. RELIQUIDATION OF ENTRIES FOR NAFTA-ORIGIN GOODS.
Amendment to section 520 of the Tariff Act of 1930.]
[SEC. 207. COUNTRY OF ORIGIN MARKING OF NAFTA GOODS.
Amendments to section 304 of the Tariff Act of 1930
(reprinted elsewhere).]
[SEC. 208. PROTESTS AGAINST ADVERSE ORIGIN DETERMINATIONS.
Amendments to section 514 of the Tariff Act of 1930
(reprinted elsewhere).]
[SEC. 209. EXCHANGE OF INFORMATION.
Amendment to section 628 of the Tariff Act of 1930.]
SEC. 210. PROHIBITION ON DRAWBACK FOR TELEVISION PICTURE TUBES.
Notwithstanding any other provision of law, no customs
duties may be refunded, waived, or reduced on color cathode-ray
television picture tubes, including video monitor cathode-ray
tubes (provided for in subheading 8540.11.00 of the HTS), that
are nonoriginating goods under section 202(p)(19) and are--
(A) exported to a NAFTA country;
(B) used as a material in the production of other
goods that are exported to a NAFTA country; or
(C) substituted for by goods of the same kind and
quality used as a material in the production of other
goods that are exported to a NAFTA country.
SEC. 211. MONITORING OF TELEVISION AND PICTURE TUBE IMPORTS.
(a) Monitoring.--Beginning on the date the Agreement enters
into force with respect to the United States, the United States
Customs Service shall, for a period of 5 years, monitor imports
into the United States of articles described in subheading
8528.10 of the HTS from NAFTA countries and shall take action
to exercise all rights of the United States under chapter 5 of
the Agreement with respect to such imports. The United States
Customs Service shall take appropriate action under chapter 5
of the Agreement with respect to such imports, including
verifications to ensure that the rules of origin under the
Agreement are fully complied with and that the duty drawback
obligations contained in article 303 and Annex 303.8 of the
Agreement are fully implemented and duties are correctly
assessed.
(b) Report to Trade Representative.--The United States
Customs Service shall make the results of the monitoring and
verification required by subsection (a) available to the
President and the Trade Representative. If, based on such
information, the President has reason to believe that articles
described in subheading 8540.11 of the HTS, intended for
ultimate consumption in the United States, are entering the
territory of a NAFTA country inconsistent with the provisions
of the Agreement, or have been undervalued in a manner that may
raise concerns under United States trade laws, the President
shall promptly take such action as may be appropriate under all
relevant provisions of the Agreement, including article 317 and
chapter 20, and under applicable United States trade statutes.
SEC. 212. TITLE VI AMENDMENTS.
Any amendment in this title to a law that is also amended
under title VI shall be made after the title VI amendment is
executed.
[SEC. 213. EFFECTIVE DATES.]
TITLE III--APPLICATION OF AGREEMENT TO SECTORS AND SERVICES
Subtitle A--Safeguards
PART 1--RELIEF FROM IMPORTS BENEFITING FROM THE AGREEMENT
SEC. 301. DEFINITIONS.
As used in this part:
(1) Canadian article.--The term ``Canadian article''
means an article that--
(A) is an originating good under chapter 4 of
the Agreement; and
(B) qualifies under the Agreement to be
marked as a good of Canada.
(2) Mexican article.--The term ``Mexican article''
means an article that--
(A) is an originating good under chapter 4 of
the Agreement; and
(B) qualifies under the Agreement to be
marked as a good of Mexico.
SEC. 302. COMMENCING OF ACTION FOR RELIEF.
(a) Filing of Petition.--
(1) In general.--A petition requesting action under
this part for the purpose of adjusting to the
obligations of the United States under the Agreement
may be filed with the International Trade Commission by
an entity, including a trade association, firm,
certified or recognized union, or group of workers,
that is representative of an industry. The
International Trade Commission shall transmit a copy of
any petition filed under this subsection to the Trade
Representative.
(2) Provisional relief.--An entity filing a petition
under this section may request that provisional relief
be provided as if the petition had been filed under
section 202(a) of the Trade Act of 1974.
(3) Critical circumstances.--An allegation that
critical circumstances exist must be included in the
petition or made on or before the 90th day after the
date on which the investigation is initiated under
subsection (b).
(b) Investigation and Determination.--Upon the filing of a
petition under subsection (a), the International Trade
Commission, unless subsection (d) applies, shall promptly
initiate an investigation to determine whether, as a result of
the reduction or elimination of a duty provided for under the
Agreement, a Canadian article or a Mexican article, as the case
may be, is being imported into the United States in such
increased quantities (in absolute terms) and under such
conditions so that imports of the article, alone, constitute a
substantial cause of--
(1) serious injury; or
(2) except in the case of a Canadian article, a
threat of serious injury;
to the domestic industry producing an article that is like, or
directly competitive with, the imported article.
(c) Applicable Provisions.--The provisions of--
(1) paragraphs (1)(B), (3) (except subparagraph (A)),
and (4) of subsection (b);
(2) subsection (c); and
(3) subsection (d),
of section 202 of the Trade Act of 1974 (19 U.S.C. 2252) apply
with respect to any investigation initiated under subsection
(b).
(d) Articles Exempt From Investigation.--No investigation
may be initiated under this section with respect to--
(1) any Canadian article or Mexican article if import
relief has been provided under this part with respect
to that article; or
(2) any textile or apparel article set out in
Appendix 1.1 of Annex 300-B of the Agreement.
SEC. 303. INTERNATIONAL TRADE COMMISSION ACTION ON PETITION.
(a) Determination.--By no later than 120 days after the
date on which an investigation is initiated under section
302(b) with respect to a petition, the International Trade
Commission shall--
(1) make the determination required under that
section; and
(2) if the determination referred to in paragraph (1)
is affirmative and an allegation regarding critical
circumstances was made under section 302(a), make a
determination regarding that allegation.
(b) Additional Finding and Recommendation if Determination
Affirmative.--If the determination made by the International
Trade Commission under subsection (a) with respect to imports
of an article is affirmative, the International Trade
Commission shall find, and recommend to the President in the
report required under subsection (c), the amount of import
relief that is necessary to remedy or, except in the case of
imports of a Canadian article, prevent the injury found by the
International Trade Commission in the determination. The import
relief recommended by the International Trade Commission under
this subsection shall be limited to that described in section
304(c).
(c) Report to President.--No later than the date that is 30
days after the date on which a determination is made under
subsection (a) with respect to an investigation, the
International Trade Commission shall submit to the President a
report that shall include--
(1) a statement of the basis for the determination;
(2) dissenting and separate views; and
(3) any finding made under subsection (b) regarding
import relief.
(d) Public Notice.--Upon submitting a report to the
President under subsection (c), the International Trade
Commission shall promptly make public such report (with the
exception of information which the International Trade
Commission determines to be confidential) and shall cause a
summary thereof to be published in the Federal Register.
(e) Applicable Provisions.--For purposes of this part, the
provisions of paragraphs (1), (2), and (3) of section 330(d) of
the Tariff Act of 1930 (19 U.S.C. 1330(d)) shall be applied
with respect to determinations and findings made under this
section as if such determinations and findings were made under
section 202 of the Trade Act of 1974 (19 U.S.C. 2252).
SEC. 304. PROVISION OF RELIEF.
(a) In General.--No later than the date that is 30 days
after the date on which the President receives the report of
the International Trade Commission containing an affirmative
determination of the International Trade Commission under
section 303(a), the President, subject to subsection (b), shall
provide relief from imports of the article that is the subject
of such determination to the extent that the President
determines necessary to remedy or, except in the case of
imports of a Canadian article, prevent the injury found by the
International Trade Commission.
(b) Exception.--The President is not required to provide
import relief under this section if the President determines
that the provision of the import relief will not provide
greater economic and social benefits than costs.
(c) Nature of Relief.--The import relief (including
provisional relief) that the President is authorized to provide
under this part is as follows:
(1) In the case of imports of a Canadian article--
(A) the suspension of any further reduction
provided for under Annex 401.2 of the United
States-Canada Free Trade Agreement in the duty
imposed on such article;
(B) an increase in the rate of duty imposed
on such article to a level that does not exceed
the lesser of--
(i) the column 1 general rate of duty
imposed under the HTS on like articles
at the time the import relief is
provided, or
(ii) the column 1 general rate of
duty imposed on like articles on
December 31, 1988; or
(C) in the case of a duty applied on a
seasonal basis to such article, an increase in
the rate of duty imposed on the article to a
level that does not exceed the column 1 general
rate of duty imposed on the article for the
corresponding season occurring immediately
before January 1, 1989.
(2) In the case of imports of a Mexican article--
(A) the suspension of any further reduction
provided for under the United States Schedule
to Annex 302.2 of the Agreement in the duty
imposed on such article;
(B) an increase in the rate of duty imposed
on such article to a level that does not exceed
the lesser of--
(i) the column 1 general rate of duty
imposed under the HTS on like articles
at the time the import relief is
provided, or
(ii) the column 1 general rate of
duty imposed under the HTS on like
articles on the day before the date on
which the Agreement enters into force;
or
(C) in the case of a duty applied on a
seasonal basis to such article, an increase in
the rate of duty imposed on the article to a
level that does not exceed the column 1 general
rate of duty imposed under the HTS on the
article for the corresponding season
immediately occurring before the date on which
the Agreement enters into force.
(d) Period of Relief.--The import relief that the President
is authorized to provide under this section may not exceed 3
years, except that, if a Canadian article or Mexican article
which is the subject of the action--
(1) is provided for in an item for which the
transition period of tariff elimination set out in the
United States Schedule to Annex 302.2 of the Agreement
is greater than 10 years; and
(2) the President determines that the affected
industry has undertaken adjustment and requires an
extension of the period of the import relief;
the President, after obtaining the advice of the International
Trade Commission, may extend the period of the import relief
for not more than 1 year, if the duty applied during the
initial period of the relief is substantially reduced at the
beginning of the extension period.
(e) Rate on Mexican Articles After Termination of Import
Relief.--When import relief under this part is terminated with
respect to a Mexican article--
(1) the rate of duty on that article after such
termination and on or before December 31 of the year in
which termination occurs shall be the rate that,
according to the United States Schedule to Annex 302.2
of the Agreement for the staged elimination of the
tariff, would have been in effect 1 year after the
initiation of the import relief action under section
302; and
(2) the tariff treatment for that article after
December 31 of the year in which termination occurs
shall be, at the discretion of the President, either--
(A) the rate of duty conforming to the
applicable rate set out in the United States
Schedule to Annex 302.2; or
(B) the rate of duty resulting from the
elimination of the tariff in equal annual
stages ending on the date set out in the United
States Schedule to Annex 302.2 for the
elimination of the tariff.
SEC. 305. TERMINATION OF RELIEF AUTHORITY.
(a) General Rule.--Except as provided in subsection (b), no
import relief may be provided under this part--
(1) in the case of a Canadian article, after December
31, 1998; or
(2) in the case of a Mexican article, after the date
that is 10 years after the date on which the Agreement
enters into force;
unless the article against which the action is taken is an item
for which the transition period for tariff elimination set out
in the United States Schedule to Annex 302.2 of the Agreement
is greater than 10 years, in which case the period during which
relief may be granted shall be the period of staged tariff
elimination for that article.
(b) Exception.--Import relief may be provided under this
part in the case of a Canadian article or Mexican article after
the date on which such relief would, but for this subsection,
terminate under subsection (a), but only if the Government of
Canada or Mexico, as the case may be, consents to such
provision.
SEC. 306. COMPENSATION AUTHORITY.
For purposes of section 123 of the Trade Act of 1974 (19
U.S.C. 2133), any import relief provided by the President under
section 304 shall be treated as action taken under chapter 1 of
title II of such Act.
SEC. 307. SUBMISSION OF PETITIONS.
A petition for import relief may be submitted to the
International Trade Commission under--
(1) this part;
(2) chapter 1 of title II of the Trade Act of 1974; or
(3) under both this part and such chapter 1 at the same
time, in which case the International Trade Commission shall
consider such petitions jointly.
[SEC. 308. SPECIAL TARIFF PROVISIONS FOR CANADIAN FRESH FRUITS AND
VEGETABLES.
[Amendments to section 301(a) of the United States-Canada
Free-Trade Implementation Act of 1988.]
SEC. 309. PRICE-BASED SNAPBACK FOR FROZEN CONCENTRATED ORANGE JUICE.
(a) Trigger Price Determination.--
(1) In general.--The Secretary shall determine--
(A) each period of 5 consecutive business
days in which the daily price for frozen
concentrated orange juice is less than the
trigger price; and
(B) for each period determined under
subparagraph (A), the first period occurring
thereafter of 5 consecutive business days in
which the daily price for frozen concentrated
orange juice is greater than the trigger price.
(2) Notice of determinations.--The Secretary shall
immediately notify the Commissioner of Customs and
publish notice in the Federal Register of any
determination under paragraph (1), and the date of such
publication shall be the determination date for that
determination.
(b) Imports of Mexican Articles.--Whenever after any
determination date for a determination under subsection
(a)(1)(A), the quantity of Mexican articles of frozen
concentrated orange juice that is entered exceeds--
(1) 264,978,000 liters (single strength equivalent)
in any of calendar years 1994 through 2002; or
(2) 340,560,000 liters (single strength equivalent)
in any of calendar years 2003 through 2007;
the rate of duty on Mexican articles of frozen concentrated
orange juice that are entered after the date on which the
applicable limitation in paragraph (1) or (2) is reached and
before the determination date for the related determination
under subsection (a)(1)(B) shall be the rate of duty specified
in subsection (c).
(c) Rate of Duty.--The rate of duty specified for purposes
of subsection (b) for articles entered on any day is the rate
in the HTS that is the lower of--
(1) the column 1 general rate of duty in effect for
such articles on July 1, 1991; or
(2) the column 1 general rate of duty in effect on
that day.
(d) Definitions.--For purposes of this section--
(1) The term ``daily price'' means the daily closing
price of the New York Cotton Exchange, or any successor
as determined by the Secretary, for the closest month
in which contracts for frozen concentrated orange juice
are being traded on the Exchange.
(2) The term ``business day'' means a day in which
contracts for frozen concentrated orange juice are
being traded on the New York Cotton Exchange, or any
successor as determined by the Secretary.
(3) The term ``entered'' means entered or withdrawn
from warehouse for consumption, in the customs
territory of the United States.
(4) The term ``frozen concentrated orange juice''
means all products classifiable under subheading
2009.11.00 of the HTS.
(5) The term ``Secretary'' means the Secretary of
Agriculture.
(6) The term ``trigger price'' means the average
daily closing price of the New York Cotton Exchange, or
any successor as determined by the Secretary, for the
corresponding month during the previous 5-year period,
excluding the year with the highest average price for
the corresponding month and the year with the lowest
average price for the corresponding month.
PART 2--RELIEF FROM IMPORTS FROM ALL COUNTRIES
SEC. 311. NAFTA ARTICLE IMPACT IN IMPORT RELIEF CASES UNDER THE TRADE
ACT OF 1974.
(a) In General.--If, in any investigation initiated under
chapter 1 of title II of the Trade Act of 1974, the
International Trade Commission makes an affirmative
determination (or a determination which the President may treat
as an affirmative determination under such chapter by reason of
section 330(d) of the Tariff Act of 1930), the International
Trade Commission shall also find (and report to the President
at the time such injury determination is submitted to the
President) whether--
(1) imports of the article from a NAFTA country,
considered individually, account for a substantial
share of total imports; and
(2) imports of the article from a NAFTA country,
considered individually or, in exceptional
circumstances, imports from NAFTA countries considered
collectively, contribute importantly to the serious
injury, or threat thereof, caused by imports.
(b) Factors.--
(1) Substantial import share.--In determining whether
imports from a NAFTA country, considered individually,
account for a substantial share of total imports, such
imports normally shall not be considered to account for
a substantial share of total imports if that country is
not among the top 5 suppliers of the article subject to
the investigation, measured in terms of import share
during the most recent 3-year period.
(2) Application of ``contribute importantly''
standard.--In determining whether imports from a NAFTA
country or countries contribute importantly to the
serious injury, or threat thereof, the International
Trade Commission shall consider such factors as the
change in the import share of the NAFTA country or
countries, and the level and change in the level of
imports of such country or countries. In applying the
preceding sentence, imports from a NAFTA country or
countries normally shall not be considered to
contribute importantly to serious injury, or the threat
thereof, if the growth rate of imports from such
country or countries during the period in which an
injurious increase in imports occurred is appreciably
lower than the growth rate of total imports from all
sources over the same period.
(c) Definition.--For purposes of this section and section
312(a), the term ``contribute importantly'' refers to an
important cause, but not necessarily the most important cause.
SEC. 312. PRESIDENTIAL ACTION REGARDING NAFTA IMPORTS.
(a) In General.--In determining whether to take action
under chapter 1 of title II of the Trade Act of 1974 with
respect to imports from a NAFTA country, the President shall
determine whether--
(1) imports from such country, considered
individually, account for a substantial share of total
imports; or
(2) imports from a NAFTA country, considered
individually, or in exceptional circumstances imports
from NAFTA countries considered collectively,
contribute importantly to the serious injury, or threat
thereof, found by the International Trade Commission.
(b) Exclusion of NAFTA Imports.--In determining the nature
and extent of action to be taken under chapter 1 of title II of
the Trade Act of 1974, the President shall exclude from such
action imports from a NAFTA country if the President makes a
negative determination under subsection (a) (1) or (2) with
respect to imports from such country.
(c) Action After Exclusion of NAFTA Country Imports.--
(1) In general.--If the President, under subsection
(b), excludes imports from a NAFTA country or countries
from action under chapter 1 of title II of the Trade
Act of 1974 but thereafter determines that a surge in
imports from that country or countries is undermining
the effectiveness of the action--
(A) the President may take appropriate action
under such chapter 1 to include those imports
in the action; and
(B) any entity that is representative of an
industry for which such action is being taken
may request the International Trade Commission
to conduct an investigation of the surge in
such imports.
(2) Investigation.--Upon receiving a request under
paragraph (1)(B), the International Trade Commission
shall conduct an investigation to determine whether a
surge in such imports undermines the effectiveness of
the action. The International Trade Commission shall
submit the findings of its investigation to the
President no later than 30 days after the request is
received by the International Trade Commission.
(3) Definition.--For purposes of this subsection, the
term ``surge'' means a significant increase in imports
over the trend for a recent representative base period.
(d) Condition Applicable to Quantitative Restrictions.--Any
action taken under this section proclaiming a quantitative
restriction shall permit the importation of a quantity or value
of the article which is not less than the quantity or value of
such article imported into the United States during the most
recent period that is representative of imports of such
article, with allowance for reasonable growth.
* * * * * * *
PART 3--GENERAL PROVISIONS
[SEC. 315. PROVISIONAL RELIEF.
[Amendments to section 202(d) of the Trade Act of 1974
(reprinted elsewhere).]
SEC. 316. MONITORING.
For purposes of expediting an investigation concerning
provisional relief under this subtitle or section 202 of the
Trade Act of 1974 regarding--
(1) fresh or chilled tomatoes provided for in
subheading 0702.00.00 of the HTS; and
(2) fresh or chilled peppers, other than chili
peppers provided for in subheading 0709.60.00 of the
HTS;
the International Trade Commission, until January 1, 2009,
shall monitor imports of such goods as if proper requests for
such monitoring had been made under subsection (d)(1)(C)(i) of
such section 202. At the request of the International Trade
Commission, the Secretary of Agriculture and the Commissioner
of Customs shall provide to the International Trade Commission
information relevant to the monitoring carried out under this
section.
SEC. 317. PROCEDURES CONCERNING THE CONDUCT OF INTERNATIONAL TRADE
COMMISSION INVESTIGATIONS.
(a) Procedures and Rules.--The International Trade
Commission shall adopt such procedures and rules and
regulations as are necessary to bring its procedures into
conformity with chapter 8 of the Agreement.
[(b) Conforming Amendment.--Amendment to section 202(a) of
the Trade Act of 1974 (reprinted elsewhere).]
[SEC. 318. EFFECTIVE DATE.]
Subtitle B--Agriculture
SEC. 321. AGRICULTURE.
[(a) Meat Import Act of 1979.--Amendments to the Meat
Import Act of 1979 which was repealed by section 403 of the
Uruguay Round Agreements Act.]
(b) Section 22 of the Agricultural Adjustment Act.--
(1) In general.--The President may, pursuant to
article 309 and Annex 703.2 of the Agreement, exempt
from any quantitative limitation or fee imposed
pursuant to section 22 of the Agricultural Adjustment
Act (7 U.S.C. 624), reenacted with amendments by the
Agricultural Marketing Agreement Act of 1937, any
article which originates in Mexico, if Mexico is a
NAFTA country.
(2) Qualification of articles.--The determination of
whether an article originates in Mexico shall be made
in accordance with section 202, except that operations
performed in, or materials obtained from, any country
other than the United States or Mexico shall be treated
as if performed in or obtained from a country other
than a NAFTA country.
(c) Tariff Rate Quotas.--In implementing the tariff rate
quotas set out in the United States Schedule to Annex 302.2 of
the Agreement, the President shall take such action as may be
necessary to ensure that imports of agricultural goods do not
disrupt the orderly marketing of commodities in the United
States.
(d) Peanuts.--
(1) Effect of the agreement.--
(A) In general.--Nothing in the Agreement or
this Act reduces or eliminates--
(i) any penalty required under
section 358e(d) of the Agricultural
Adjustment Act of 1938 (7 U.S.C.
1359a(d)); or
(ii) any requirement under Marketing
Agreement No. 146, Regulating the
Quality of Domestically Produced
Peanuts, on peanuts in the domestic
market, pursuant to section 108B(f) of
the Agricultural Act of 1949 (7 U.S.C.
1445c-3(f)).
(B) Reentry of exported peanuts.--Paragraph
(6) of section 358e(d) of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1359a(d)(6))
is amended to read as follows:
``(6) Reentry of exported peanuts.--
``(A) Penalty.--If any additional peanuts
exported by a handler are reentered into the
United States in commercial quantities as
determined by the Secretary, the importer of
the peanuts shall be subject to a penalty at a
rate equal to 140 percent of the loan level for
quota peanuts on the quantity of peanuts
reentered.
``(B) Records.--Each person, firm, or handler
who imports peanuts into the United States
shall maintain such records and documents as
are required by the Secretary to ensure
compliance with this subsection.''.
(2) Consultations on imports.--It is the sense of
Congress that the United States should request
consultations in the Working Group on Emergency Action,
established in the Understanding Between the Parties to
the North American Free Trade Agreement Concerning
Chapter Eight--Emergency Action, if imports of peanuts
exceed the in-quota quantity under a tariff rate quota
set out in the United States Schedule to Annex 302.2 of
the Agreement concerning whether--
(A) the increased imports of peanuts
constitute a substantial cause of, or
contribute importantly to, serious injury, or
threat of serious injury, to the domestic
peanut industry; and
(B) recourse under Chapter Eight of the
Agreement or Article XIX of the General
Agreement on Tariffs and Trade is appropriate.
(e) Fresh Fruits, Vegetables, and Cut Flowers.--
(1) In general.--The Secretary of Agriculture shall
collect and compile the information specified under
paragraph (3), if reasonably available, from
appropriate Federal departments and agencies and the
relevant counterpart ministries of the Government of
Mexico.
(2) Designation of an office.--The Secretary of
Agriculture shall designate an office within the United
States Department of Agriculture to be responsible for
maintaining and disseminating, in a timely manner, the
data accumulated for verifying citrus, fruit,
vegetable, and cut flower trade between the United
States and Mexico. The information shall be made
available to the public and the NAFTA Agriculture
Committee Working Groups.
(3) Information collected.--The information to be
collected if reasonably available, includes--
(A) monthly fresh fruit, fresh vegetable,
fresh citrus, and processed citrus product
import and export data;
(B) monthly citrus juice production and
export data;
(C) data on inspections of shipments of
citrus, vegetables, and cut flowers entering
the United States from Mexico; and
(D) in the case of fruits, vegetables, and
cut flowers entering the United States from
Mexico, data regarding--
(i) planted and harvested acreage;
and
(ii) wholesale prices, quality, and
grades.
(f) End Use Certificates.--
(1) In general.--The Secretary of Agriculture
(referred to in this subsection as the ``Secretary'')
shall implement, in coordination with the Commissioner
of Customs, a program requiring that end-use
certificates be included in the documentation covering
the entry into, or the withdrawal from a warehouse for
consumption in, the customs territory of the United
States--
(A) of any wheat that is a product of any
foreign country or instrumentality that
requires, as of the effective date of this
subsection, end-use certificates for imports of
wheat that is a product of the United States
(referred to in this subsection as ``United
States-produced wheat''); and
(B) of any barley that is a product of any
foreign country or instrumentality that
requires, as of the effective date of this
subsection, end-use certificates for imports of
barley that is a product of the United States
(referred to in this subsection as ``United
States-produced barley'').
(2) Regulations.--The Secretary shall prescribe by
regulation such requirements regarding the information
to be included in end-use certificates as may be
necessary and appropriate to carry out this subsection.
(3) Producer protection determination.--At any time
after the effective date of the requirements
established under paragraph (1), the Secretary may,
subject to paragraph (5), suspend the requirements when
making a determination, after consultation with
domestic producers, that the program implemented under
this subsection has directly resulted in--
(A) the reduction of income to the United
States producers of agricultural commodities;
or
(B) the reduction of the competitiveness of
United States agricultural commodities in the
world export markets.
(4) Suspension of requirements.--
(A) Wheat.--If a foreign country or
instrumentality that requires end-use
certificates for imports of United States-
produced wheat as of the effective date of the
requirement under paragraph (1)(A) eliminates
the requirement, the Secretary shall suspend
the requirement under paragraph (1)(A)
beginning 30 calendar days after suspension by
the foreign country or instrumentality.
(B) Barley.--If a foreign country or
instrumentality that requires end-use
certificates for imports of United States-
produced barley as of the effective date of the
requirement under paragraph (1)(B) eliminates
the requirement, the Secretary shall suspend
the requirement under paragraph (1)(B)
beginning 30 calendar days after suspension by
the foreign country or instrumentality.
(5) Report to congress.--The Secretary shall not
suspend the requirements established under paragraph
(1) under circumstances identified in paragraph (3)
before the Secretary submits a report to Congress
detailing the determination made under paragraph (3)
and the reasons for making the determination.
(6) Compliance.--It shall be a violation of section
1001 of title 18, United States Code, for a person to
engage in fraud or knowingly violate this subsection or
a regulation implementing this subsection.
(7) Effective date.--This subsection shall become
effective on the date that is 120 days after the date
of enactment of this Act.
(g) Agricultural Fellowship Program.--Section 1542(d) of
the Food, Agriculture, Conservation, and Trade Act of 1990
(Public Law 101-624; 7 U.S.C. 5622 note) is amended by adding
at the end the following new paragraph:
``(3) Agricultural fellowships for nafta countries.--
``(A) In general.--The Secretary shall grant
fellowships to individuals from countries that
are parties to the North American Free Trade
Agreement (referred to in this paragraph as
`NAFTA') to study agriculture in the United
States, and to individuals in the United States
to study agriculture in other NAFTA countries.
``(B) Purpose.--The purpose of fellowships
granted under this paragraph is--
``(i) to allow the recipients to
expand their knowledge and
understanding of agricultural systems
and practices in other NAFTA countries;
``(ii) to facilitate the improvement
of agricultural systems in NAFTA
countries; and
``(iii) to establish and expand
agricultural trade linkages between the
United States and other NAFTA
countries.
``(C) Eligible recipients.--The Secretary may
provide fellowships under this paragraph to
agricultural producers and consultants,
government officials, and other individuals
from the private and public sectors.
``(D) Acceptance of gifts.--The Secretary may
accept money, funds, property, and services of
every kind by gift, devise, bequest, grant, or
otherwise, and may in any manner, dispose of
all of the holdings and use the receipts
generated from the disposition to carry out
this paragraph. Receipts under this paragraph
shall remain available until expended.
``(E) Authorization of appropriation.--There
are authorized to be appropriated such sums as
are necessary to carry out this paragraph.''.
(h) Assistance for Affected Farmworkers.--
(1) In general.--Subject to paragraph (3), if at any
time the Secretary of Agriculture determines that the
implementation of the Agreement has caused low-income
migrant or seasonal farmworkers to lose income, the
Secretary may make available grants, not to exceed
$20,000,000 for any fiscal year, to public agencies or
private organizations with tax-exempt status under
section 501(c)(3) of the Internal Revenue Code of 1986,
that have experience in providing emergency services to
low-income migrant or seasonal farmworkers. Emergency
services to be provided with assistance received under
this subsection may include such types of assistance as
the Secretary determines to be necessary and
appropriate.
(2) Definition.--As used in this subsection, the term
``low-income migrant or seasonal farmworkers'' shall
have the same meaning as provided in section 2281(b) of
the Food, Agriculture, Conservation, and Trade Act of
1990 (42 U.S.C. 5177a(b)).
(3) Authorization of appropriations.--There are
authorized to be appropriated $20,000,000 for each
fiscal year to carry out this subsection.
(i) Biennial Report on Effects of the Agreement on American
Agriculture.--
(1) In general.--The Secretary of Agriculture shall
prepare a biennial report on the effects of the
Agreement on United States producers of agricultural
commodities and on rural communities located in the
United States.
(2) Contents of report.--The report required under
this subsection shall include--
(A) an assessment of the effects of
implementing the Agreement on the various
agricultural commodities affected by the
Agreement, on a commodity-by-commodity basis;
(B) an assessment of the effects of
implementing the Agreement on investments made
in United States agriculture and on rural
communities located in the United States;
(C) an assessment of the effects of
implementing the Agreement on employment in
United States agriculture, including any gains
or losses of jobs in businesses directly or
indirectly related to United States
agriculture; and
(D) such other information and data as the
Secretary determines appropriate.
(3) Submission of report.--The Secretary shall
furnish the report required under this subsection to
the Committee on Agriculture, Nutrition, and Forestry
of the Senate and to the Committee on Agriculture of
the House of Representatives. The report shall be due
every 2 years and shall be submitted by March 1 of the
year in which the report is due. The first report shall
be due by March 1, 1997, and the final report shall be
due by March 1, 2011.
Subtitle C--Intellectual Property
SEC. 331. TREATMENT OF INVENTIVE ACTIVITY.
[Amendment to section 104 of title 35, United States Code:
SECTION 104A. COPYRIGHT IN CERTAIN MOTION PICTURES
(a) Restoration of Copyright.--Subject to subsections (b)
and (c)--
(1) any motion picture that is first fixed or
published in the territory of a NAFTA country as
defined in section 2(4) of the North American Free
Trade Agreement Implementation Act to which Annex
1705.7 of the North American Free Trade Agreement
applies, and
(2) any work included in such motion picture that is
first fixed in or published with such motion picture,
that entered the public domain in the United States because it
was first published on or after January 1, 1978, and before
March 1, 1989, without the notice required by section 401, 402,
or 403 of this title, the absence of which has not been excused
by the operation of section 405 of this title, as such sections
were in effect during that period, shall have copyright
protection under this title for the remainder of the term of
copyright protection to which it would have been entitled in
the United States had it been published with such notice.
(b) Effective Date of Protection.--The protection provided
under subsection (a) shall become effective, with respect to
any motion picture or work included in such motion picture
meeting the criteria of that subsection, 1 year after the date
on which the North American Free Trade Agreement enters into
force with respect to, and the United States applies the
Agreement to, the country in whose territory the motion picture
was first fixed or published if, before the end of that 1-year
period, the copyright owner in the motion picture or work files
with the Copyright Office a statement of intent to have
copyright protection restored under subsection (a). The
Copyright Office shall publish in the Federal Register promptly
after that effective date a list of motion pictures, and works
included in such motion pictures, for which protection is
provided under subsection (a).
(c) Use of Previously Owned Copies.--A national or
domiciliary of the United States who, before the date of the
enactment of the North American Free Trade Agreement
Implementation Act, made or acquired copies of a motion
picture, or other work included in such motion picture, that is
subject to protection under subsection (a), may sell or
distribute such copies or continue to perform publicly such
motion picture and other work without liability for such sale,
distribution, or performance, for a period of 1 year after the
date on which the list of motion pictures, and works included
in such motion pictures, that are subject to protection under
subsection (a) is published in the Federal Register under
subsection (b).]
[SEC. 332. RENTAL RIGHTS IN SOUND RECORDINGS.
[Amendment to section 4 of the Record Rental Amendment of
1984.]
[SEC. 333. NONREGISTRABILITY OF MISLEADING GEOGRAPHIC INDICATIONS.
[Amendments to the Trademark Act of 1946.]
SEC. 334. MOTION PICTURES IN THE PUBLIC DOMAIN.
[Amendments to Chapter 1 of title 17, United States Code:
SECTION 104. INVENTION MADE ABROAD
(a) In General.--In proceedings in the Patent and Trademark
Office, in the courts, and before any other competent
authority, an applicant for a patent, or a patentee, may not
establish a date of invention by reference to knowledge or use
thereof, or other activity with respect thereto, in a foreign
country other than a NAFTA country, except as provided in
sections 119 and 365 of this title. Where an invention was made
by a person, civil or military, while domiciled in the United
States or a NAFTA country and serving in any other country in
connection with operations by or on behalf of the United States
or a NAFTA country, the person shall be entitled to the same
rights of priority in the United States with respect to such
invention as if such invention had been made in the United
States or a NAFTA country. To the extent that any information
in a NAFTA country concerning knowledge, use, or other activity
relevant to proving or disproving a date of invention has not
been made available for use in a proceeding in the Office, a
court, or any other competent authority to the same extent as
such information could be made available in the United States,
the Commissioner, court, or such other authority shall draw
appropriate inferences, or take other action permitted by
statute, rule, or regulation, in favor of the party that
requested the information in the proceeding.
(b) Definition.--As used in this section, the term ``NAFTA
country'' has the meaning given that term in section 2(4) of
the North American Free Trade Agreement Implementation Act.]
[SEC. 335. EFFECTIVE DATES.]
Subtitle D--Temporary Entry of Business Persons
[SEC. 341. TEMPORARY ENTRY.
[Provisions relating to, and amendments of, the Immigration
and Nationality Act.]
[SEC. 342. EFFECTIVE DATE.]
Subtitle E--Standards
PART 1--STANDARDS AND MEASURES
[SEC. 351. STANDARDS AND SANITARY AND PHYTOSANITARY MEASURES.
[Amendment adding Subtitle E to Title IV of the Trade
Agreements Act of 1979.]
SEC. 352. TRANSPORTATION.
No regulation issued by the Secretary of Transportation
implementing a recommendation of the Land Transportation
Standards Subcommittee established under article 913(5)(a)(i)
of the Agreement may take effect before the date 90 days after
the date of issuance.
PART 2--AGRICULTURAL STANDARDS
SEC. 361. AGRICULTURAL TECHNICAL AND CONFORMING AMENDMENTS.
[Subsections (a)-(h) amendments to the Federal Seed Act;
the Act of August 10, 1890; section 306 of the Tariff Act of
1930; Honeybee Act; Poultry Products Inspection Act; Federal
Meat Inspection Act; provisions on peanut butter and paste and
an animal health biocontainment facility.]
(i) Reports on Inspection of Imported Meat, Poultry, Other
Foods, Animals, and Plants.--
(1) Definitions.--As used in this subsection:
(A) Imports.--The term ``imports'' means any
meat, poultry, other food, animal, or plant
that is imported into the United States in
commercially significant quantities.
(B) Secretary.--The term ``Secretary'' means
the Secretary of Agriculture.
(2) In general.--In consultation with representatives
of other appropriate agencies, the Secretary shall
prepare an annual report on the impact of the Agreement
on the inspection of imports.
(3) Contents of reports.--the report required under
this subsection shall, to the maximum extent
practicable, include a description of--
(A) the quantity or, with respect to the
Customs Service, the number of shipments, of
imports from a NAFTA country that are inspected
at the borders of the United States with Canada
and Mexico during the prior year;
(B) any change in the level or types of
inspections of imports in each NAFTA country
during the prior year;
(C) in any case in which the Secretary has
determined that the inspection system of
another NAFTA country is equivalent to the
inspection system of the United States, the
reasons supporting the determination of the
Secretary;
(D) the incidence of violations of inspection
requirements by imports from NAFTA countries
during the prior year--
(i) at the borders of the United
States with Mexico of Canada; or
(ii) at the last point of inspection
in a NAFTA country prior to shipment to
the United States if the agency accepts
inspection in that country;
(E) the incidence of violations of inspection
requirements of imports to the United States
from Mexico or Canada prior to the
implementation of the Agreement;
(F) any additional cost associated with
maintaining an adequate inspection system of
imports as a result of the implementation of
the Agreement;
(G) any incidence of transshipment of
imports--
(i) that originate in a country other
than a NAFTA country;
(ii) that are shipped to the United
States through a NAFTA country during
the prior year; and
(iii) that are incorrectly
represented by the importer to qualify
for preferential treatment under the
Agreement;
(H) the quantity and results of any
monitoring by the United States of equivalent
inspection systems of imports in other NAFTA
countries during the prior year;
(I) the use by other NAFTA countries of
sanitary and phytosanitary measures (as defined
in the Agreement) to limit exports of United
States meat, poultry, other foods, animals, and
plants to the countries during the prior year;
and
(J) any other information the Secretary
determines to be appropriate.
(4) Frequency of reports.--The Secretary shall
submit--
(A) the initial report required under this
subsection not later than January 31, 1995; and
(B) an annual report required under this
subsection not later than 1 year after the date
of the submission of the initial report and the
end of each 1-year period thereafter through
calendar year 2004.
(5) Report to congress.--The Secretary shall prepare
and submit the report required under this subsection to
the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture,
Nutrition, and Forestry of the Senate.
Subtitle F--Corporate Average Fuel Economy
SEC. 371. CORPORATE AVERAGE FUEL ECONOMY.
[Amends Section 503(b)(2) of the Motor Vehicle Information
and Cost Savings Act (15 U.S.C. 2003(b)(2):
(b)(1) In calculating average fuel economy under subsection
(a)(1) of this section, the EPA Administrator shall separate
the total number of passenger automobiles manufactured by a
manufacturer into the following two categories:
(A) Passenger automobiles which are domestically
manufactured by such manufacturer and passenger
automobiles which are included within this category
pursuant to paragraph (3) (plus, in the case of model
year 1978 and model year 1979, passenger automobiles
which are within the includable base import volume of
such manufacturer).
(B) Passenger automobiles which are not domestically
manufactured by such manufacturer and which are not
included in the domestic category pursuant to paragraph
(3) (and which, in the case of model year 1978 and
model year 1979, are not within the includable base
import volume of such manufacturer).
The EPA Administrator shall calculate the average fuel economy
of each such separate category, and each such category shall be
treated as if manufactured by a separate manufacturer for
purposes of this subchapter.
(2) For purposes of this subsection:
(A) The term ``includable base import volume'', with
respect to any manufacturer in model year 1978 or 1979,
as the case may be, is a number of passenger
automobiles which is the lesser of--
(i) the manufacturer's base import volume, or
(ii) the number of passenger automobiles
calculated by multiplying--
(I) the quotient obtained by dividing
such manufacturer's base import volume
by such manufacturer's base production
volume, times
(II) the total number of passenger
automobiles manufactured by such
manufacturer during such model year.
(B) The term ``base import volume'' means one-half
the sum of--
(i) the total number of passenger automobiles
which were not domestically manufactured by
such manufacturer during model year 1974 and
which were imported by such manufacturer during
such model year, plus
(ii) 133 percent of the total number of
passenger automobiles which were not
domestically manufactured by such manufacturer
during the first 9 months of model year 1975
and which were imported by such manufacturer
during such 9-month period.
(C) The term ``base production volume'' means one-
half the sum of--
(i) the total number of passenger automobiles
manufactured by such manufacturer during model
year 1974, plus
(ii) 133 percent of the total number of
passenger automobiles manufactured by such
manufacturer during the first 9 months of model
year 1975.
(D) For purposes of subparagraphs (B) and (C) of this
paragraph any passenger automobile imported during
model year 1976, but prior to July 1, 1975, shall be
deemed to have been manufactured (and imported) during
the first 9 months of model year 1975.
(E) Except as provided in subparagraph (G), an
automobile shall be considered domestically
manufactured in any model year if at least 75 percent
of the cost to the manufacturer of such automobile is
attributable to value added in the United States or
Canada, unless the assembly of such automobile is
completed in Canada and such automobile is not imported
into the United States prior to the expiration of 30
days following the end of such model year. The EPA
Administrator may prescribe rules for purposes of
carrying out this subparagraph and subparagraph (G).
(F) The fuel economy of each passenger automobile
which is imported by a manufacturer in model year 1978
or any subsequent model year, as the case may be, and
which is not domestically manufactured by such
manufacturer, shall be deemed to be equal to the
average fuel economy of all such passenger automobiles.
(G)(i) In accordance with the schedule set out in
clause (ii), an automobile shall be considered
domestically manufactured in a model year if at least
75 percent of the cost to the manufacturer of the
automobile is attributable to value added in the United
States, Canada, or Mexico, unless the assembly of the
automobile is completed in Canada or Mexico and the
automobile is not imported into the United States prior
to the expiration of 30 days following the end of that
model year.
(ii) Clause (i) shall apply to all automobiles
manufactured by a manufacturer and sold in the United
States, wherever assembled, in accordance with the
following schedule:
(I) With respect to a manufacturer that
initiated the assembly of automobiles in Mexico
before model year 1992, the manufacturer may
elect, at any time between January 1, 1997, and
January 1, 2004, to have clause (i) apply to
all automobiles it manufacturers, beginning
with the model year commencing after the date
of such election.
(II) With respect to a manufacturer
initiating the assembly of automobiles in
Mexico after model year 1991, clause (i) shall
apply to all automobiles it manufactures,
beginning with the model year commencing after
January 1, 1994, or the model year commencing
after the date that the manufacturer initiates
the assembly of automobiles in Mexico,
whichever is later.
(III) With respect to a manufacturer not
described by subclause (I) or (II) assembling
automobiles in the United States or Canada but
not in Mexico, the manufacturer may elect, at
any time between January 1, 1997, and January
1, 2004, to have clause (i) apply to all
automobiles it manufactures, beginning with the
model year commencing after the date of such
election, except that if such manufacturer
initiates the assembly of automobiles in Mexico
before making such election, this subclause
shall not apply and the manufacturer shall be
subject to clause (II).
(IV) With respect to a manufacturer not
assembling automobiles in the United States,
Canada, or Mexico, clause (i) shall apply to
all automobiles it manufactures, beginning with
the model year commencing after January 1,
1994.
(V) With respect to a manufacturer authorized
to make an election under subclause (I) or
(III) which has not made that election within
the specified period, clause (i) shall apply to
all automobiles it manufactures, beginning with
the model year commencing after January 1,
2004.
(iii) The Secretary shall prescribe reasonable
procedures for elections under this subparagraph, and
the EPA Administrator may prescribe rules for purposes
of carrying out this subparagraph.]
Subtitle G--Government Procurement
[SEC. 381. GOVERNMENT PROCUREMENT.
[Amendments to Title III of the Trade Agreements Act of
1979 (reprinted elsewhere) and to section 401 of the Rural
Electrification Act of 1938.]
TITLE IV--DISPUTE SETTLEMENT IN ANTIDUMPING AND COUNTERVAILING DUTY
CASES
Subtitle A--Organizational, Administrative, and Procedural Provisions
Regarding the Implementation of Chapter 19 of the Agreement
SEC. 401. REFERENCES IN SUBTITLE.
Any reference in this subtitle to an Annex, chapter, or
article shall be considered to be a reference to the respective
Annex, chapter, or article of the Agreement.
SEC. 402. ORGANIZATIONAL AND ADMINISTRATIVE PROVISIONS.
(a) Criteria for Selection of Individuals To Serve on
Panels and Committees.--
(1) In general.--The selection of individuals under
this section for--
(A) placement on lists prepared by the
interagency group under subsection (c)(2)(B)
(i) and (ii);
(B) placement on preliminary candidate lists
under subsection (c)(3)(A);
(C) placement on final candidate lists under
subsection (c)(4)(A);
(D) placement by the Trade Representative on
the rosters described in paragraph 1 of Annex
1901.2 and paragraph 1 of Annex 1904.13; and
(E) appointment by the Trade Representative
for service on the panels and committees
convened under chapter 19;
shall be made on the basis of the criteria provided in
paragraph 1 of Annex 1901.2 and paragraph 1 of Annex
1904.13 and shall be made without regard to political
affiliation.
(2) Additional criteria for roster placements and
appointments under paragraph 1 of annex 1901.2.--
Rosters described in paragraph 1 of Annex 1901.2 shall
include, to the fullest extent practicable, judges and
former judges who meet the criteria referred to in
paragraph (1). The Trade Representative shall, subject
to subsection (b), appoint judges to binational panels
convened under chapter 19, extraordinary challenge
committees convened under chapter 19, and special
committees established under article 1905, where such
judges offer and are available to serve and such
service is authorized by the chief judge of the court
on which they sit.
(b) Selection of Certain Judges To Serve on Panels and
Committees.--
(1) Applicability.--This subsection applies only with
respect to the selection of individuals for binational
panels convened under chapter 19, extraordinary
challenge committees convened under chapter 19, and
special committees established under article 1905, who
are judges of courts created under article III of the
Constitution of the United States.
(2) Consultation with chief judges.--The Trade
Representative shall consult, from time to time, with
the chief judges of the Federal judicial circuits
regarding the interest in, and availability for,
participation in binational panels, extraordinary
challenge committees, and special committees, of judges
within their respective circuits. If the chief judge of
a Federal judicial circuit determines that it is
appropriate for one or more judges within that circuit
to be included on a roster described in subsection
(a)(1)(D), the chief judge shall identify all such
judges for the Chief Justice of the United States who
may, upon his or her approval, submit the names of such
judges to the Trade Representative. The Trade
Representative shall include the names of such judges
on the roster.
(3) Submission of lists to congress.--The Trade
Representative shall submit to the Committee on the
Judiciary and the Committee on Ways and Means of the
House of Representatives and to the Committee on
Finance and the Committee on the Judiciary of the
Senate a list of all judges included on a roster under
paragraph (2). Such list shall be submitted at the same
time as the final candidate lists are submitted under
subsection (c)(4)(A) and the final forms of amendments
are submitted under subsection (c)(4)(C)(iv).
(4) Appointment of judges to panels or committees.--
At such time as the Trade Representative proposes to
appoint a judge described in paragraph (1) to a
binational panel, an extraordinary challenge committee,
or a special committee, the Trade Representative shall
consult with that judge in order to ascertain whether
the judge is available for such appointment.
(c) Selection of Other Candidates.--
(1) Applicability.--This subsection applies only with
respect to the selection of individuals for binational
panels convened under chapter 19, extraordinary
challenge committees convened under chapter 19, and
special committees established under article 1905,
other than those individuals to whom subsection (b)
applies.
(2) Interagency group.--
(A) Establishment.--There is established
within the interagency organization established
under section 242 of the Trade Expansion Act of
1962 (19 U.S.C. 1872) an interagency group
which shall--
(i) be chaired by the Trade
Representative; and
(ii) consist of such officers (or the
designees thereof) of the United States
Government as the Trade Representative
considers appropriate.
(B) Functions.--The interagency group
established under subparagraph (A) shall, in a
manner consistent with chapter 19--
(i) prepare by January 3 of each
calendar year--
(I) a list of individuals who
are qualified to serve as
members of binational panels
convened under chapter 19; and
(II) a list of individuals
who are qualified to serve on
extraordinary challenge
committees convened under
chapter 19 and special
committees established under
article 1905;
(ii) if the Trade Representative
makes a request under paragraph
(4)(C)(i) with respect to a final
candidate list during any calendar
year, prepare by July 1 of such
calendar year a list of those
individuals who are qualified to be
added to that final candidate list;
(iii) exercise oversight of the
administration of the United States
Section that is authorized to be
established under section 105; and
(iv) make recommendations to the
Trade Representative regarding the
convening of extraordinary challenge
committees and special committees under
chapter 19.
(3) Preliminary candidate lists.--
(A) In general.--The Trade Representative
shall select individuals from the respective
lists prepared by the interagency group under
paragraph (2)(B)(i) for placement on--
(i) a preliminary candidate list of
individuals eligible to serve as
members of binational panels under
Annex 1901.2; and
(ii) a preliminary candidate list of
individuals eligible for selection as
members of extraordinary challenge
committees under Annex 1904.13 and
special committees under article 1905.
(B) Submission of lists to congressional
committees.--
(i) In general.--No later than
January 3 of each calendar year, the
Trade Representative shall submit to
the Committee on Finance of the Senate
and the Committee on Ways and Means of
the House of Representatives (hereafter
in this section referred to as the
``appropriate Congressional
Committees'') the preliminary candidate
lists of those individuals selected by
the Trade Representative under
subparagraph (A) to be candidates
eligible to serve on panels or
committees convened pursuant to chapter
19 during the 1-year period beginning
on April 1 of such calendar year.
(ii) Additional information.--At the
time the candidate lists are submitted
under clause (i), the Trade
Representative shall submit for each
individual on the list a statement of
professional qualifications.
(C) Consultation.--Upon submission of the
preliminary candidate lists under subparagraph
(B) to the appropriate Congressional
Committees, the Trade Representative shall
consult with such Committees with regard to the
individuals included on the preliminary
candidate lists.
(D) Revision of lists.--The Trade
Representative may add and delete individuals
from the preliminary candidate lists submitted
under subparagraph (B) after consultation with
the appropriate Congressional Committees
regarding the additions and deletions. The
Trade Representative shall provide to the
appropriate Congressional Committees written
notice of any addition or deletion of an
individual from the preliminary candidate
lists, along with the information described in
subparagraph (B)(ii) with respect to any
proposed addition.
(4) Final candidate lists.--
(A) Submission of lists to congressional
committees.--No later than March 31 of each
calendar year, the Trade Representative shall
submit to the appropriate Congressional
Committees the final candidate lists of those
individuals selected by the Trade
Representative to be candidates eligible to
serve on panels and committees convened under
chapter 19 during the 1-year period beginning
on April 1 of such calendar year. An individual
may be included on a final candidate list only
if such individual was included in the
preliminary candidate list or if written notice
of the addition of such individual to the
preliminary candidate list was submitted to the
appropriate Congressional Committees at least
15 days before the date on which that final
candidate list is submitted to such Committees
under this subparagraph.
(B) Finality of lists.--Except as provided in
subparagraph (C), no additions may be made to
the final candidate lists after the final
candidate lists are submitted to the
appropriate Congressional Committees under
subparagraph (A).
(C) Amendment of lists.--
(i) In general.--If, after the Trade
Representative has submitted the final
candidate lists to the appropriate
Congressional Committees under
subparagraph (A) for a calendar year
and before July 1 of such calendar
year, the Trade Representative
determines that additional individuals
need to be added to a final candidate
list, the Trade Representative shall--
(I) request the interagency
group established under
paragraph (2)(A) to prepare a
list of individuals who are
qualified to be added to such
candidate list;
(II) select individuals from
the list prepared by the
interagency group under
paragraph (2)(B)(ii) to be
included in a proposed
amendment to such final
candidate list; and
(III) by no later than July 1
of such calendar year, submit
to the appropriate
Congressional Committees the
proposed amendments to such
final candidate list developed
by the Trade Representative
under subclause (II), along
with the information described
in paragraph (3)(B)(ii).
(ii) Consultation with congressional
committees.--Upon submission of a
proposed amendment under clause
(i)(III) to the appropriate
Congressional Committees, the Trade
Representative shall consult with the
appropriate Congressional Committees
with regard to the individuals included
in the proposed amendment.
(iii) Adjustment of proposed
amendment.--The Trade Representatives
may add and delete individuals from any
proposed amendment submitted under
clause (i)(III) after consulting with
the appropriate Congressional
Committees with regard to the additions
and deletions. The Trade Representative
shall provide to the appropriate
Congressional Committees written notice
of any addition or deletion of an
individual from the proposed amendment.
(iv) Final amendment.--
(I) In general.--If the Trade
Representative submits under
clause (i)(III) in any calendar
year a proposed amendment to a
final candidate list, the Trade
Representative shall, no later
than September 30 of such
calendar year, submit to the
appropriate Congressional
Committees the final form of
such amendment. On October 1 of
such calendar year, such
amendment shall take effect
and, subject to subclause (II),
the individuals included in the
final form of such amendment
shall be added to the final
candidate list.
(II) Inclusion of
individuals.--An individual may
be included in the final form
of an amendment submitted under
subclause (I) only if such
individual was included in the
proposed form of such amendment
or if written notice of the
addition of such individual to
the proposed form of such
amendment was submitted to the
appropriate Congressional
Committees at least 15 days
before the date on which the
final form of such amendment is
submitted to such Committees
under subclause (I).
(III) Eligibility for
service.--Individuals added to
a final candidate list under
subclause (I) shall be eligible
to serve on panels or
committees convened under
chapter 19 during the 6-month
period beginning on October 1
of the calendar year in which
such addition occurs.
(IV) Finality of amendment.--
No additions may be made to the
final form of an amendment
described in subclause (I)
after the final form of such
amendment is submitted to the
appropriate Congressional
Committees under subclause (I).
(5) Treatment of responses.--For purposes of applying
section 1001 of title 18, United States Code, the
written or oral responses of individuals to inquiries
of the interagency group established under paragraph
(2)(A) or of the Trade Representative regarding their
personal and professional qualifications, and financial
and other relevant interests, that bear on their
suitability for the placements and appointments
described in subsection (a)(1), shall be treated as
matters within the jurisdiction of an agency of the
United States.
(d) Selection and Appointment.--
(1) Authority of trade representative.--The Trade
Representative is the only officer of the United States
Government authorized to act on behalf of the United
States Government in making any selection or
appointment of an individual to--
(A) the rosters described in paragraph 1 of
Annex 1901.2 and paragraph 1 of Annex 1904.13;
or
(B) the panels or committees convened under
chapter 19;
That is to be made solely or jointly by the United
States Government under the terms of the Agreement.
(2) Restrictions on selection and appointment.--
Except as provided in paragraph (3)--
(A) the Trade Representative may--
(i) select an individual for
placement on the rosters described in
paragraph 1 of Annex 1901.2 and
paragraph 1 of Annex 1904.13 during the
1-year period beginning on April 1 of
any calendar year;
(ii) appoint an individual to serve
as one of those members of any panel or
committee convened under chapter 19
during such 1-year period who, under
the terms of the Agreement, are to be
appointed solely by the United States
Government; or
(iii) act to make a joint appointment
with the Government of a NAFTA country,
under the terms of the Agreement, of
any individual who is a citizen or
national of the United States to serve
as any other member of such a panel or
committee;
only if such individual is on the appropriate
final candidate list that was submitted to the
appropriate Congressional Committees under
subsection (c)(4)(A) during such calendar year
or on such list as it may be amended under
subsection (c)(4)(C)(iv)(I), or on the list
submitted under subsection (b)(3) to the
Congressional Committees referred to in such
subsection; and
(B) no individual may--
(i) be selected by the United States
Government for placement on the rosters
described in paragraph 1 of Annex
1901.2 and paragraph 1 of Annex
1904.13; or
(ii) be appointed solely or jointly
by the United States Government to
serve as a member as a member of a
panel or committee convened under
chapter 19;
during the 1-year period beginning on April 1
of any calendar year for which the Trade
Representative has not met the requirements of
subsection (a), and subsection (b) or (c) (as
the case may be).
(3) Exceptions.--Notwithstanding subsection (c)(3)
(other than subparagraph (B)), subsection (c)(4), or
paragraph (2)(A) of this subsection, individuals
included on the preliminary candidate lists submitted
to the appropriate Congressional Committees under
subsection (c)(3)(B) may--
(A) be selected by the Trade Representative
for placement on the rosters described in
paragraph 1 of Annex 1901.2 and paragraph 1 of
Annex 1904.13 during the 3-month period
beginning on the date on which the Agreement
enters into force with respect to the United
States; and
(B) be appointed solely or jointly by the
Trade Representative under the terms of the
Agreement to serve as members of panels or
committees that are convened under chapter 19
during such 3-month period.
(e) Transition.--If the Agreement enters into force between
the United States and NAFTA country after January 3, 1994, the
provisions of subsection (c) shall be applied with respect to
the calendar year in which such entering into force occurs--
(1) by substituting ``the date that is 30 days after
the date on which the Agreement enters into force with
respect to the United States'' for ``January 3 of each
calendar year'' in subsections (c)(2)(B(i) and
(c)(3)(B)(i); and
(2) by substituting ``the date that is 3 months after
the date on which the Agreement enters into force with
respect to the United States'' for ``March 31 of each
calendar year'' in subsection (c)(4)(A).
(f) Immunity.--With the exception of acts described in
section 777(f)(3) of the Tariff Act of 1930 (19 U.S.C.
1677f(f)(3)), individuals serving on panels or committees
convened pursuant to chapter 19, and individuals designated to
assist the individuals serving on such panels or committees,
shall be immune from suit and legal process relating to acts
performed by such individuals in their official capacity and
within the scope of their functions as such panelists or
committee members or assistants to such panelists or committee
members.
(g) Regulations.--The administering authority under title
VII of the Tariff Act of 1930, the International Trade
Commission, and the Trade Representative may promulgate such
regulations as are necessary or appropriate to carry out
actions in order to implement their respective responsibilities
under chapter 19. Initial regulations to carry out such
functions shall be issued before the date on which the
Agreement enters into force with respect to the United States.
(h) Report to Congress.--At such time as the final
candidate lists are submitted under subsection (c)(4)(A) and
the final forms of amendments are submitted under subsection
(c)(4)(C)(iv), the Trade Representative shall submit to the
Committee on the Judiciary and the Committee on Ways and Means
of the House of Representatives, and to the Committee on
Finance and the Committee on the Judiciary of the Senate, a
report regarding the efforts made to secure the participation
of judges and former judges on binational panels, extraordinary
challenge committees, and special committees established under
chapter 19.
SEC. 403. TESTIMONY AND PRODUCTION OF PAPERS IN EXTRAORDINARY
CHALLENGES.
(a) Authority of Extraordinary Challenge Committee To
Obtain Information.--If an extraordinary challenge committee
(hereafter in this section referred to as the ``committee'') is
convened under paragraph 13 of article 1904, and the
allegations before the committee include a matter referred to
in paragraph 13(a)(i) of article 1904, for the purposes of
carrying out its functions and duties under Annex 1904.13, the
committee--
(1) shall have access to, and the right to copy, any
document, paper, or record pertinent to the subject
matter under consideration, in the possession of any
individual, partnership, corporation, association,
organization, or other entity;
(2) may summon witnesses, take testimony, and
administer oaths;
(3) may require any individual, partnership,
corporation, association, organization, or other entity
to produce documents, books, or records relating to the
matter in question; and
(4) may require any individual, partnership,
corporation, association, organization, or other entity
to furnish in writing, in such detail and in such form
as the committee may prescribe, information in its
possession pertaining to the matter.
Any member of the committee may sign subpoenas, and members of
the committee, when authorized by the committee, may administer
oaths and affirmation, examine witnesses, take testimony, and
receive evidence.
(b) Witnesses and Evidence.--The attendance of witnesses
who are authorized to be summoned, and the production of
documentary evidence authorized to be ordered, under subsection
(a) may be required from any place in the United States at any
designated place of hearing. In the case of disobedience to a
subpoena authorized under subsection (a), the committee may
request the Attorney General of the United States to invoke the
aid of any district or territorial court of the United States
in requiring the attendance and testimony of witnesses and the
production of documentary evidence. Such court, within the
jurisdiction of which such inquiry is carried on, may, in case
of contumacy or refusal to obey a subpoena issued to any
individual, partnership, corporation, association,
organization, or other entity, issue an order requiring such
individual or entity to appear before the committee, or to
produce documentary evidence if so ordered or to give evidence
concerning the matter in question. Any failure to obey such
order of the court may be punished by such court as a contempt
thereof.
(c) Mandamus.--Any court referred to in subsection (b)
shall have jurisdiction to issue writs of mandamus commanding
compliance with the provisions of this section or any order of
the committee made in pursuance thereof.
(d) Depositions.--The committee may order testimony to be
taken by deposition at any stage of the committee review. Such
deposition may be taken before any person designated by the
committee and having power to administer oaths. Such testimony
shall be reduced to writing by the person taking the
deposition, or under the direction of such person, and shall
then be subscribed by the deponent. Any individual,
partnership, corporation, association, organization, or other
entity may be compelled to appear and be deposed and to produce
documentary evidence in the same manner as witnesses may be
compelled to appear and testify and produce documentary
evidence before the committee, as provided in this section.
SEC. 404. REQUESTS FOR REVIEW OF DETERMINATION BY COMPETENT
INVESTIGATING AUTHORITIES OF NAFTA COUNTRIES.
(a) Definitions.--As used in this section:
(1) Competent investigating authority.--The term
``competent investigating authority'' means the
competent investigating authority; as defined in
article 1911, of a NAFTA country.
(2) United states secretary.--The term ``United
States Secretary'' means that officer of the United
States referred to in article 1908.
(b) Requests for Review by the United States.--In the case
of a final determination of a competent investigating
authority, requests by the United States for binational panel
review of such determination under article 1904 shall be made
by the United States Secretary.
(c) Requests for Review by a Person.--In the case of a
final determination of a competent investigating authority, a
person, within the meaning of paragraph 5 of article 1904, may
request a binational panel review of such determination by
filing such a request with the United States Secretary within
the time limit provided for in paragraph 4 of article 1904. The
receipt of such request by the United States Secretary shall be
deemed to be a request for binational panel review within the
meaning of article 1904. The request for such panel review
shall be without prejudice to any challenge before a binational
panel of the basis for a particular request for review.
(d) Service of Request for Review.--Whenever binational
panel review of a final determination made by a competent
investigating authority is requested under this section, the
United States Secretary shall serve a copy of the request on
all persons who would otherwise be entitled under the law of
the importing country to commence proceedings for judicial
review of the determination.
SEC. 405. RULES OF PROCEDURE FOR PANELS AND COMMITTEES.
(a) Rules of Procedure and Binational Panels.--The
administering authority shall prescribe rules, negotiated in
accordance with paragraph 14 of article 1904, governing, with
respect to binational panel reviews--
(1) requests for such review, complaints, other
pleadings, and other papers;
(2) the amendment, filing, and service of such
pleadings and papers;
(3) the joinder, suspension, and termination of such
reviews; and
(4) other appropriate procedural matters.
(b) Rules of Procedure for Extraordinary Challenge
Committees.--The administering authority shall prescribe rules,
negotiated in accordance with paragraph 2 of Annex 1904.13,
governing the procedures for reviews by extraordinary challenge
committees.
(c) Rules of Procedure for Safeguarding the Panel Review
System.--The administering authority shall prescribe rules,
negotiated in accordance with Annex 1905.6, governing the
procedures for special committees described in such Annex.
(d) Publication of Rules.--The rules prescribed under
subsections (a), (b), and (c) shall be published in the Federal
Register.
(e) Administering Authority.--As used in this section, the
term ``administering authority'' has the meaning given such
term in section 771(1) of the Tariff Act of 1930 (19 U.S.C.
1677(1)).
SEC. 406. SUBSIDY NEGOTIATIONS.
In the case of any trade agreement which may be entered
into by the President with a NAFTA country, the negotiating
objectives of the United States with respect to subsidies shall
include--
(1) achievement of increased discipline on domestic
subsidies provided by a foreign government, including--
(A) the provision of capital, loans, or loan
guarantees on terms inconsistent with
commercial considerations;
(B) the provision of goods or services at
preferential rates;
(C) the granting of funds or forgiveness of
debt to cover operating losses sustained by a
specific industry; and
(D) the assumption of any costs or expenses
of manufacture, production, or distribution;
(2) achievement of increased discipline on export
subsidies provided by a foreign government,
particularly with respect to agricultural products; and
(3) maintenance of effective remedies against
subsidized imports, including, where appropriate,
countervailing duties.
SEC. 407. IDENTIFICATION OF INDUSTRIES FACING SUBSIDIZED IMPORTS.
(a) Petitions.--Any entity, including a trade association,
firm, certified or recognized union, or group of workers, that
is representative of a United States industry and has reason to
believe--
(1) that--
(A) as a result of implementation of
provisions of the Agreement, the industry is
likely to face increased competition from
subsidized imports, from a NAFTA country, with
which it directly competes; or
(B) the industry is likely to face increased
competition from subsidized imports with which
it directly competes from any other country
designated by the President, following
consultations with the Congress, as benefiting
from a reduction of tariffs or other trade
barriers under a trade agreement that enters
into force with respect to the United States
after January 1, 1994; and
(2) that the industry is likely to experience a
deterioration of its competitive position before more
effective rules and disciplines relating to the use of
government subsidies have been developed with respect
to the country concerned;
may file with the Trade Representative a petition that such
industry be identified under this section.
(b) Identification of Industry.--Within 90 days after
receipt of a petition under subsection (a), the Trade
Representative, in consultation with the Secretary of Commerce,
shall decide whether to identify the industry on the basis that
there is a reasonable likelihood that the industry may face
both the subsidization described in subsection (a)(1) and the
deterioration described in subsection (a)(2).
(c) Action After Identification.--At the request of an
entity that is representative of an industry identified under
subsection (b), the Trade Representative shall--
(1) compile and make available to the industry
information under section 308 of the Trade Act of 1974;
(2) recommend to the President that an investigation
by the International Trade Commission be requested
under section 332 of the Tariff Act of 1930; or
(3) take actions described in both paragraphs (1) and
(2). The industry may request the Trade Representative
to take appropriate action to update (as often as
annually) any information obtained under paragraph (1)
or (2), or both, as the case may be, until an agreement
on more effective rules and disciplines relating to
government subsidies is reached between the United
States and the NAFTA countries.
(d) Initiation of Action Under Other Law.--
(1) In general.--The Trade Representative and the
Secretary of Commerce shall review information obtained
under subsection (c) and consult with the industry
identified under subsection (b) with a view to deciding
whether any action is appropriate--
(A) under section 301 of the Trade Act of
1974, including the initiation of an
investigation under section 302(c) of that Act
(in the case of the Trade Representative); or
(B) under subtitle A of title VII of the
Tariff Act of 1930, including the initiation of
an investigation under section 702(a) of that
Act (in the case of the Secretary of Commerce).
(2) Criteria for initiation.--In determining whether
to initiate any investigation under section 301 of the
Trade Act of 1974 or any other trade law, other than
title VII of the Tariff Act of 1930, the Trade
Representative, after consultation with the Secretary
of Commerce--
(A) shall seek the advice of the advisory
committees established under section 135 of the
Trade Act of 1974;
(B) shall consult with the Committee on
Finance of the Senate and the Committee on Ways
and Means of the House of Representatives;
(C) shall coordinate with the interagency
organization established under section 242 of
the Trade Expansion Act of 1962; and
(D) may ask the President to request advice
from the International Trade Commission.
(3) Title iii actions.--In the event an investigation
is initiated under section 302(c) of the Trade Act of
1974 as a result of a review under this subsection and
the Trade Representative, following such investigation
(including any applicable dispute settlement
proceedings under the Agreement or any other trade
agreement), determines to take action under section
301(a) of such Act, the Trade Representative shall give
preference to actions that most directly affect the
products that benefit from governmental subsidies and
were the subject of the investigation, unless there are
no significant imports of such products or the Trade
Representative otherwise determines that application of
the action to other products would be more effective.
(e) Effect of Decisions.--Any decision, whether positive or
negative, or any action by the Trade Representative or the
Secretary of Commerce under this section shall not in any way--
(1) prejudice the right of any industry to file a
petition under any trade law;
(2) prejudice, affect, or substitute for, any
proceeding, investigation, determination, or action by
the Secretary of Commerce, the International Trade
Commission, or the Trade Representative pursuant to
such a petition; or
(3) prejudice, affect, substitute for, or obviate any
proceeding, investigation, or determination under
section 301 of the Trade Act of 1974, title VII of the
Tariff Act of 1930, or any other trade law.
(f) Standing.--Nothing in this section may be construed to
alter in any manner the requirements in effect before the date
of the enactment of this Act for standing under any law of the
United States or to add any additional requirements for
standing under any law of the United States.
SEC. 408. TREATMENT OF AMENDMENTS TO ANTIDUMPING AND COUNTERVAILING
DUTY LAW.
Any amendment enacted after the Agreement enters into force
with respect to the United States that is made to--
(1) section 303 or title VII of the Tariff Act of
1930, or any successor statute, or
(2) any other statute which--
(A) provides for judicial review of final
determinations under such section, title, or
successor statute, or
(B) indicates the standard of review to be
applied,
shall apply to goods from a NAFTA country only to the extent
specified in the amendment.
Subtitle B--Conforming Amendments and Provisions
[SEC. 411. JUDICIAL REVIEW IN ANTIDUMPING DUTY AND COUNTERVAILING DUTY
CASES.
[Amendments to section 516A of the Tariff Act of 1930
(reprinted elsewhere).]
[SEC. 412. CONFORMING AMENDMENTS TO OTHER PROVISIONS OF THE TARIFF ACT
OF 1930.
[Amendments to sections 502b, 514(b), 771, and 777(f) of
the Tariff Act of 1930 (reprinted elsewhere).]
[SEC. 413. CONSEQUENTIAL AMENDMENT TO FREE-TRADE AGREEMENT ACT OF 1988.
[Amendment to section 410 of the United States-Canada Free-
Trade Agreement Implementation Act of 1988 (reprinted
elsewhere).]
[SEC. 414. CONFORMING AMENDMENTS TO TITLE 28, UNITED STATES CODE.]
SEC. 415. EFFECT OF TERMINATION OF NAFTA COUNTRY STATUS.
(a) In General.--Except as provided in subsection (b), on
the date on which a country ceases to be a NAFTA country, the
provisions of this title (other then this section) and the
amendments made by this title shall cease to have effect with
respect to that country.
(b) Transition Provisions.--
(1) Proceedings regarding protective orders and
undertakings.--If on the date on which a country ceases
to be a NAFTA country an investigation or enforcement
proceeding concerning the violation of a protective
order issued under section 777(f) of the Tariff Act of
1930 (as amended by this subtitle) or an undertaking of
the Government of that country is pending, the
investigation or proceeding shall continue, and
sanctions may continue to be imposed, in accordance
with the provisions of such section 777(f).
(2) Binational panel and extraordinary challenge
committee reviews.--If on the date on which a country
ceases to be a NAFTA country--
(A) a binational panel review under article
1904 of the Agreement is pending, or has been
requested; or
(B) an extraordinary challenge committee
review under article 1904 of the Agreement is
pending, or has been requested;
with respect to a determination which involves a class
or kind of merchandise and to which section 516A(g)(2)
of the Tariff Act of 1930 applies, such determination
shall be reviewable under section 516A(a) of the Tariff
Act of 1930. In the case of a determination to which
the provisions of this paragraph apply, the time limits
for commencing an action under section 516A(a) of the
Tariff Act of 1930 shall not begin to run until the
date on which the Agreement ceases to be in force with
respect to that country.
SEC. 416. EFFECTIVE DATE.
The provisions of this title and the amendments made by
this title take effect on the date the Agreement enters into
force with respect to the United States, but shall not apply--
(1) to any final determination described in paragraph
(1)(B), or (2)(B) (i), (ii), or (iii), of section
516A(a) of the Tariff Act of 1930 notice of which is
published in the Federal Register before such date, or
to a determination described in paragraph (2)(B)(vi) of
section 516A(a) of such Act notice of which is received
by the Government of Canada or Mexico before such date;
or
(2) to any binational panel review under the United
States- Canada Free-Trade Agreement, or any
extraordinary challenge arising out of any such review,
that was commenced before such date.
TITLE V--NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE AND OTHER PROVISIONS
[Subtitle A--NAFTA Transitional Adjustment Assistance Program
[Amendments adding subchapter D and making conforming
amendments to chapter 2 of title II of the Trade Act of 1974
(reprinted elsewhere); amendment to section 3306 of the
Internal Revenue Code of 1986 on Self-employment Assistance
Program and related provisions.]
Subtitle B--Provisions Relating to Performance Under the Agreement
SEC. 511. DISCRIMINATORY TAXES.
It is the sense of the Congress that when a State,
province, or other governmental entity of a NAFTA country
discriminatorily enforces sales or other taxes so as to afford
protection to domestic production or domestic service
providers, such enforcement is in violation of the terms of the
Agreement. When such discriminatory enforcement adversely
affects United States producers of goods or United States
service providers, the Trade Representative should pursue all
appropriate remedies to obtain removal of such discriminatory
enforcement, including invocation of the provisions of the
Agreement.
SEC. 512. REVIEW OF THE OPERATION AND EFFECTS OF THE AGREEMENT.
(a) Study.--By not later than July 1, 1997, the President
shall provide to the Congress a comprehensive study on the
operation and effects of the Agreement. The study shall include
an assessment of the following factors:
(1) The net effect of the Agreement on the economy of
the United States, including with respect to the United
States gross national product, employment, balance of
trade, and current account balance.
(2) The industries (including agricultural
industries) in the United States that have
significantly increased exports to Mexico or Canada as
a result of the Agreement, or in which imports into the
United States from Mexico or Canada have increased
significantly as a result of the Agreement, and the
extent of any change in the wages, employment, or
productivity in each such industry as a result of the
Agreement.
(3) The extent to which investment in new or existing
production or other operations in the United States has
been redirected to Mexico as a result of the Agreement,
and the effect on United States employment of such
redirection.
(4) The extent of any increase in investment,
including foreign direct investment and increased
investment by United States investors, in new or
existing production or other operations in the United
States as a result of the Agreement, and the effect on
United States employment of such investment.
(5) The extent to which the Agreement has contributed
to--
(A) improvement in real wages and working
conditions in Mexico,
(B) effective enforcement of labor and
environmental laws in Mexico, and
(C) the reduction or abatement of pollution
in the region of the United States-Mexico
border.
(b) Scope.--In assessing the factors listed in subsection
(a), to the extent possible, the study shall distinguish
between the consequences of the Agreement and events that
likely would have occurred without the Agreement. In addition,
the study shall evaluate the effects of the Agreement relative
to aggregate economic changes and, to the extent possible,
relative to the effects of other factors, including--
(1) international competition,
(2) reductions in defense spending,
(3) the shift from traditional manufacturing to
knowledge and information based economic activity, and
(4) the Federal debt burden.
(c) Recommendations of the President.--The study shall
include any appropriate recommendations by the President with
respect to the operation and effects of the Agreement,
including recommendations with respect to the specific factors
listed in subsection (a).
(d) Recommendations of Certain Committees.--The President
shall provide the study to the Committee on Ways and Means of
the House of Representatives and the Committee on Finance of
the Senate and any other committee that has jurisdiction over
any provision of United States law that was either enacted or
amended by the North American Free Trade Agreement
Implementation Act. Each such committee may hold hearings and
make recommendations to the President with respect to the
operation and effects of the Agreement.
[SEC. 513. ACTIONS AFFECTING UNITED STATES CULTURAL INDUSTRIES.
[Amendment to section 182 of the Trade Act of 1974
(reprinted elsewhere).]
SEC. 514. REPORT ON IMPACT OF NAFTA ON MOTOR VEHICLE EXPORTS TO MEXICO.
(a) Findings.--The Congress makes the following findings:
(1) Trade in motor vehicles and motor vehicle parts
is one of the most restricted areas of trade between
the United States and Mexico.
(2) The elimination of Mexico's restrictive barriers
to trade in motor vehicles and motor vehicle parts over
a 10-year period under the Agreement should increase
substantially United States exports of such products to
Mexico.
(3) The Department of Commerce estimates that the
Agreement provides the opportunity to increase United
States exports of motor vehicles and motor vehicle
parts by $1,000,000,000 during the first year of the
Agreement's implementation with the potential for
additional increases over the 10-year transition
period.
(4) The United States automotive industry has
estimated that United States exports of motor vehicles
to Mexico should increase to more than 60,000 units
during the first year of the Agreement's
implementation, which is substantially above the
current level of 4,000 units.
(b) Trade Representative Report.--No later than July 1, 1995,
and annually thereafter through 1999, the Trade Representative
shall submit a report to the Committee on Finance of the Senate
and the Committee on Ways and Means of the House of
Representatives on how effective the provisions of the
Agreement are with respect to increasing United States exports
of motor vehicles and motor vehicle parts to Mexico. Each
report shall identify and determine the following:
(1) The patterns of trade in motor vehicles and motor
vehicle parts between the United States and Mexico
during the preceding 12-month period.
(2) The level of tariff and nontariff barriers that
were in force during the preceding 12-month period.
(3) The amount by which United States exports of
motor vehicles and motor vehicle parts to Mexico have
increased from the preceding 12-month period as a
result of the elimination of Mexican tariff and
nontariff barriers under the Agreement.
(4) Whether any such increase in United States
exports meets the levels of new export opportunities
anticipated under the Agreement.
(5) If the anticipated levels of new United States
export opportunities are not reached, what actions the
Trade Representative is prepared to take to realize the
benefits anticipated under the Agreement, including
possible initiation of additional negotiations with
Mexico for the purpose of seeking modifications of the
Agreement.
[SEC. 515. CENTER FOR THE STUDY OF WESTERN HEMISPHERIC TRADE.
[Amendment adding section 219 to the Caribbean Basin
Economic Recovery Act (reprinted elsewhere).]
[SEC. 516. EFFECTIVE DATE.]
Subtitle C--Funding
PART 1--CUSTOMS USER FEES
[SEC. 521. FEES FOR CERTAIN CUSTOMS SERVICES.
[Amendments to section 13031 by the Consolidated Omnibus
Budget Reconciliation Act of 1985 (reprinted elsewhere).]
PART 2--INTERNAL REVENUE CODE AMENDMENTS
[SEC. 522. AUTHORITY TO DISCLOSE CERTAIN TAX INFORMATION TO THE UNITED
STATES CUSTOMS SERVICE.
[Amendments to section 6103 of the Internal Revenue Code by
1986.]
[SEC. 523. USE OF ELECTRONIC FUND TRANSFER SYSTEM FOR COLLECTION OF
CERTAIN TAXES.
[Amendments to section 6302 of the Internal Revenue Code of
1986.]
Subtitle D--Implementation of NAFTA Supplemental Agreements
PART 1--AGREEMENTS RELATING TO LABOR AND ENVIRONMENT
SEC. 531. AGREEMENT ON LABOR COOPERATION.
(a) Commission for Labor Cooperation.--
(1) Membership.--The United States is authorized to
participate in the Commission for Labor Cooperation in
accordance with the North American Agreement on Labor
Cooperation.
(2) Contributions to budget.--There are authorized to
be appropriated to the President (or such agency as the
President may designate) $2,000,000 for each of fiscal
years 1994 and 1995 for United States contributions to
the annual budget of the Commission for Labor
Cooperation pursuant to Article 47 of the North
American Agreement on Labor Cooperation. Funds
authorized to be appropriated for such contributions by
this paragraph are in addition to any funds otherwise
available for such contributions. Funds authorized to
be appropriated by this paragraph are authorized to be
made available until expended.
(b) Definitions.--As used in this section--
(1) the term ``Commission for Labor Cooperation''
means the commission established by Part Three of the
North American Agreement on Labor Cooperation; and
(2) the term ``North American Agreement on Labor
Cooperation'' means the North American Agreement on
Labor Cooperation Between the Government of the United
States of America, the Government of Canada, and the
Government of the United Mexican States (signed at
Mexico City, Washington, and Ottawa on September 8, 9,
12, and 14, 1993).
SEC. 532. AGREEMENT ON ENVIRONMENTAL COOPERATION.
(a) Commission for Environmental Cooperation.--
(1) Membership.--The United States is authorized to
participate in the Commission for Environmental
Cooperation in accordance with the North American
Agreement on Environmental Cooperation.
(2) Contributions to budget.--There are authorized to
be appropriated to the President (or such agency as the
President may designate) $5,000,000 for each of fiscal
years 1994 and 1995 for United States contributions to
the annual budget of the Commission for Environmental
Cooperation pursuant to Article 43 of the North
American Agreement on Environmental Cooperation. Funds
authorized to be appropriated for such contributions by
this paragraph are in addition to any funds otherwise
available for such contributions. Funds authorized to
be appropriated by this contributions. Funds authorized
to be appropriated by this paragraph are authorized to
be made available until expended.
(b) Definitions.--As used in this section--
(1) the term ``Commission for Environmental
Cooperation'' means the commission established by Part
Three of the North American Agreement on Environmental
Cooperation; and
(2) the term ``North American Agreement on
Environmental Cooperation'' means the North American
Agreement on Environmental Cooperation Between the
Government of the United States of America, the
Government of Canada, and the Government of the United
Mexican States (signed at Mexico City, Washington, and
Ottawa on September 8, 9, 12, and 14, 1993).
SEC. 533. AGREEMENT ON BORDER ENVIRONMENT COOPERATION COMMISSION.
(a) Border Environment Cooperation Commission.--
(1) Membership.--The United States is authorized to
participate in the Border Environment Cooperation
Commission in accordance with the Border Environment
Cooperation Agreement.
(2) Contributions to the commission budget.--There
are authorized to be appropriated to the President (or
such agency as the President may designate) $5,000,000
for fiscal year 1994 and each fiscal year thereafter
for United States contributions to the budget of the
Border Environment Cooperation Commission pursuant to
section 7 of Article III of Chapter I of the Border
Environment Cooperation Agreement. Funds authorized to
be appropriated for such contributions by this
paragraph are in addition to any funds otherwise
available for such contributions. Funds authorized to
be appropriated by this paragraph are authorized to be
made available until expended.
(b) Civil Actions Involving the Commission.--For the purpose
of any civil action which may be brought within the United
States by or against the Border Environment Cooperation
Agreement (including an action brought to enforce an arbitral
award against the Commission), the Commission shall be deemed
to be an inhabitant of the Federal judicial district in which
its principal office within the United States, or its agent
appointed for the purpose of accepted service or notice of
service, is located. Any such action to which the Commission is
a party shall be deemed to arise under the laws of the United
States, and the district courts of the United States (including
the courts enumerated in section 460 of title 28, United States
Code) shall have original jurisdiction of any such action. When
the Commission is a defendant in any action in a State court,
it may at any time before trial remove the action into the
appropriate district court of the United States by following
the procedure for removal provided in section 1446 of title 28,
United States Code.
(c) Definitions.--As used in this section--
(1) the term ``Border Environment Cooperation
Agreement'' means the November 1993 Agreement Between
the Government of the United States of America and the
Government of the United Mexican States Concerning the
Establishment of a Border Environment Cooperation
Commission and a North American Development Bank;
(2) the terms ``Border Environment Cooperation
Commission'' and ``Commission'' mean the commission
established pursuant to Chapter I of the Border
Environment Cooperation Agreement; and
(3) the term ``United States'' means the United
States, its territories and possessions, and the
Commonwealth of Puerto Rico.
[PART 2--NORTH AMERICAN DEVELOPMENT BANK AND RELATED PROVISIONS
[TITLE VI--CUSTOMS MODERNIZATION
[Amendments to various sections of the Tariff Act of 1930
and other trade laws; National Customs Automation Program.]
H. BILATERAL TRADE RELATIONS WITH ISRAEL
Section 102(b)(1) of the Trade Act of 1974, as amended
[19 U.S.C. 2112; P.L. 93-618, as amended by P.L. 99-47]
SEC. 102. BARRIERS TO AND OTHER DISTORTIONS OF TRADE.
(b)(1) Whenever the President determines that any barriers
to (or other distortions of) international trade of any foreign
country or the United States unduly burden and restrict the
foreign trade of the United States or adversely affect the
United States economy, or that the imposition of such barriers
is likely to result in such a burden, restriction, or effect,
and that the purposes of this chapter will be promoted thereby,
the President, during the 13-year period beginning on January
3, 1975, may enter into trade agreements with foreign countries
or instrumentalities providing for the harmonization,
reduction, or elimination of such barriers (or other
distortions) or providing for the prohibition of or limitations
on the imposition of such barriers (or other distortions).
Title IV of the Trade and Tariff Act of 1984, as amended
[19 U.S.C. 2112 note; P.L. 98-573, as amended by P.L. 99-47, P.L. 99-
514, and P.L. 100-418]
SEC. 401. NEGOTIATION OF TRADE AGREEMENTS TO REDUCE TRADE BARRIERS.
* * * * * * *
(2)(A) Trade agreements that provide for the elimination or
reduction of any duty imposed by the United States may be
entered into under paragraph (1) only with Israel.
(B) The negotiation of any trade agreement entered into
under paragraph (1) with Israel that provides for the
elimination or reduction of any duty imposed by the United
States shall take fully into account any product that benefits
from a discriminatory preferential tariff arrangement between
Israel and a third country if the tariff preference on such
product has been the subject of a challenge by the United
States Government under the authority of section 301 of the
Trade Act of 1974 and the General Agreement on Tariffs and
Trade.
(C) Notwithstanding any other provision of this section,
the requirements of subsections (c) and (e)(1) shall not apply
to any trade agreement entered into under paragraph (1) with
Israel that provides for the elimination or reduction of any
duty imposed by the United States.
(3) Notwithstanding any other provision of law, no trade
benefit shall be extended to any country by reason of the
extension of any trade benefit to another country under a trade
agreement entered into under paragraph (1) with such other
country.
[Paragraph (4) was superseded by sections 1102 and 1103 of
the Omnibus Trade and Competitiveness Act of 1988 with respect
to bilateral trade agreements with countries other than
Israel.]
SEC. 402. CRITERIA FOR DUTY-FREE TREATMENT OF ARTICLES.
(a)(1) The reduction or elimination of any duty imposed on
any article by the United States provided for in a trade
agreement entered into with Israel under section 102(b)(1) of
the Trade Act of 1974 shall apply only if--
(A) that article is the growth, product, or
manufacture of Israel or is a new or different article
of commerce that has been grown, produced, or
manufactured in Israel;
(B) that article is imported directly from Israel
into the customs territory of the United States; and
(C) the sum of--
(i) the cost of value of the materials
produced in Israel, plus
(ii) the direct costs of processing
operations performed in Israel,
is not less than 35 percent of the appraised value of
such article at the time it is entered.
If the cost or value of materials produced in the customs
territory of the United States is included with respect to an
article to which this subsection applies, an amount not to
exceed 15 percent of the appraised value of the article at the
time it is entered that is attributable to such United States
cost or value may be applied toward determining the percentage
referred to in subparagraph (C).
(2) No article may be considered to meet the requirements
of paragraph (1)(A) by virtue of having merely undergone--
(A) simple combining or packaging operations; or
(B) mere dilution with water or mere dilution with
another substance that does not materially alter the
characteristics of the article.
(b) As used in this section, the phrase ``direct costs of
processing operations'' includes, but is not limited to--
(1) all actual labor costs involved in the growth,
production, manufacture, or assembly of the specific
merchandise, including fringe benefits, on-the-job
training and the cost of engineering, supervisory,
quality control, and similar personnel; and
(2) dies, molds, tooling, and depreciation on
machinery and equipment which are allocable to the
specific merchandise.
Such phrase does not include costs which are not directly
attributable to the merchandise concerned, or are not costs of
manufacturing the product, such as (A) profit, and (B) general
expenses of doing business which are either not allocable to
the specific merchandise or are not related to the growth,
production, manufacture, or assembly of the merchandise, such
as administrative salaries, casualty and liability insurance,
advertising, and salesmen's salaries, commissions or expenses.
(c) Regulations.--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.
SEC. 403. APPLICATION OF CERTAIN OTHER TRADE LAW PROVISIONS.
(a) Suspension of Duty-Free Treatment.--The President may
by proclamation suspend the reduction or elimination of any
duty provided under any trade agreement provision entered into
with Israel under the authority of section 102(b)(1) of the
Trade Act of 1974 with respect to any article and may proclaim
a duty rate for such article if such action is proclaimed under
section 203 of the Trade Act of 1974 or section 232 of the
Trade Expansion Act of 1962.
(b) ITC Reports.--In any report by the United States
International Trade Commission (hereinafter referred to in this
title as the ``Commission'') to the President under section
202(f) of the Trade Act of 1974 regarding any article for which
a reduction or elimination of any duty is provided under a
trade agreement entered into with Israel under section
102(b)(1) of the Trade Act of 1974, the Commission shall state
whether and to what extent its findings and recommendations
apply to such an article when imported from Israel.
(c) For purposes of section 203 of the Trade Act of 1974,
the suspension of the reduction or elimination of a duty under
subsection (a) shall be treated as an increase in duty.
(d) No proclamation which provides solely for a suspension
referred to in subsection (a) with respect to any article shall
be made under section 203 of the Trade Act of 1974 unless the
Commission, in addition to making an affirmative determination
with respect to such article under section 202(b) of the Trade
Act of 1974, determines in the course of its investigation
under that section that the serious injury (or threat thereof)
substantially caused by imports to the domestic industry
producing a like or directly competitive article results from
the reduction or elimination of any duty provided under any
trade agreement provision entered into with Israel under under
section 102(b)(1) of the Trade Act of 1974.
(e)(1) Any proclamation issued under section 203 of the
Trade Act of 1974 that is in effect when an agreement with
Israel is entered into under section 102(b)(1) of the Trade Act
of 1974 shall remain in effect until modified or terminated.
(2) If any article is subject to import relief at the time
an agreement is entered into with Israel under section
102(b)(1) of the Trade Act of 1974, the President may reduce or
terminate the application of such import relief to the
importation of such article before the otherwise scheduled date
on which such reduction or termination would occur pursuant to
the criteria and procedures of sections 203 and 204 of the
Trade Act of 1974.
SEC. 404. FAST TRACK PROCEDURES FOR PERISHABLE ARTICLES.
(a) If a petition is filed with the Commission under the
provisions of section 202(a) of the Trade Act of 1974 regarding
a perishable product which is subject to any reduction or
elimination of a duty imposed by the United States under a
trade agreement entered into with Israel under section
102(b)(1) of the Trade Act of 1974 and alleges injury from
imports of that product, then the petition may also be filed
with the Secretary of Agriculture with a request that emergency
relief be granted under subsection (c) with respect to such
article.
(b) Within 14 days after the filing of a petition under
subsection (a)--
(1) if the Secretary of Agriculture has reason to
believe that a perishable product from Israel is being
imported into the United States in such increased
quantities as to be a substantial cause of serious
injury, or the threat thereof, to the domestic industry
producing a perishable product like or directly
competitive with the imported product and that
emergency action is warranted, he shall advise the
President and recommend that the President take
emergency action; or
(2) the Secretary of Agriculture shall publish a
notice of his determination not to recommend the
imposition of emergency action and so advise the
petitioner.
(c) Within 7 days after the President receives a
recommendation from the Secretary of Agriculture to take
emergency action under subsection (b), he shall issue a
proclamation withdrawing the reduction or elimination of duty
provided to the perishable product under any trade agreement
provision entered into under section 102(b)(1) of the Trade Act
of 1974 or publish a notice of his determination not to take
emergency action.
(d) The emergency action provided under subsection (c)
shall cease to apply--
(1) upon the taking of action under section 203 of
the Trade Act of 1974;
(2) on the day a determination of the President under
section 203 of such Act not to take action becomes
final;
(3) in the event of a report of the Commission
containing a negative finding, on the day the
Commission's report is submitted to the President; or
(4) whenever the President determines that because of
changed circumstances such relief is no longer
warranted.
(e) For purposes of this section, the term ``perishable
product'' means any--
(1) live plants and fresh cut flowers provided for in
chapter 6 of the Harmonized Tariff Schedule of the
United States (19 U.S.C. 1202, hereinafter referred to
as the ``HTS'');
(2) vegetables, edible nuts or fruit provided for in
chapters 7 and 8, heading 1105, subheadings 1106.10.00
and 1106.30, heading 1202, subheadings 1214.90.00 and
1704.90.60, headings 2001 through 2008 (excluding
subheadings 2001.90.20 and 2004.90.10) and subheading
2103.20.40 of the HTS;
(3) concentrated citrus fruit juice provided for in
subheadings 2009.11.00, 2009.19.40, 2009.20.40,
2009.30.20, and 2009.30.60 of the HTS.
(f) No trade agreement entered into with Israel under
section 102(b)(1) of the Trade Act of 1974 shall affect fees
imposed under section 22 of the Agricultural Adjustment Act (7
U.S.C. 624).
SEC. 405. CONSTRUCTION OF TITLE.
Neither the taking effect of any trade agreement provision
entered into with Israel under section 102(b)(1), nor any
proclamation issued to implement any such provision, may affect
in any manner, or to any extent, the application to any Israeli
articles of section 232 of the Trade Expansion Act of 1962,
section 337 of title VII of the Tariff Act of 1930, chapter 1
of title II and chapter 1 of title III of the Trade Act of
1974, or any other provision of law under which relief from
injury caused by import competition or by unfair import trade
practices may be sought.
United States-Israel Free Trade Area Implementation Act of 1985, as
amended
[19 U.S.C. 2112 note; P.L. 99-47, as amended by P.L. 104-234]
SECTION 1. SHORT TITLE.
This Act may be cited as the ``United States-Israel Free
Trade Area Implementation Act of 1985''.
SEC. 2. PURPOSES.
The purposes of this Act are--
(1) to approve and implement the agreement on the
establishment of a free trade area between the United
States and Israel negotiated under the authority of
section 102 of the Trade Act of 1974;
(2) to strengthen and develop the economic relations
between the United States and Israel for their mutual
benefit; and
(3) to establish free trade between the two nations
through the removal of trade barriers.
SEC. 3. APPROVAL OF A FREE TRADE AREA AGREEMENT.
Pursuant to section 102 and 151 of the Trade Act of 1974
(19 U.S.C. 2112; 2191), the Congress approves--
(1) the Agreement on the Establishment of a Free
Trade Area between the Government of the United States
of America and the Government of Israel (hereinafter in
this Act referred to as ``the Agreement'') entered into
on April 22, 1985, and submitted to the Congress on
April 29, 1985, and
(2) the statement of administrative action proposed
to implement the Agreement that was submitted to the
Congress on April 29, 1985.
SEC. 4. PROCLAMATION AUTHORITY.
(a) Tariff Modifications.--Except as provided in subsection
(c), the President may proclaim--
(1) such modifications or continuance of any existing
duty,
(2) such continuance of existing duty-free or excise
treatment, or
(3) such additional duties,
as the President determines to be required or appropriate to
carry out the schedule of duty reductions with respect to
Israel set forth in annex 1 of the Agreement.
(b) Additional Tariff Modification Authority.--Except as
provided in subsection (c), whenever the President determines
that it is necessary to maintain the general level of
reciprocal and mutually advantageous concessions with respect
to Israel provided for by the Agreement, the President may
proclaim--
(1) such withdrawal, suspension, modification, or
continuance of any duty,
(2) such continuance of existing duty-free or excise
treatment, or
(3) such additional duties,
as the President determines to be required or appropriate to
carry out the Agreement.
(c) Exception to Authority.--No modification of any duty
imposed on any article provided for in paragraph (4) of annex 1
of the Agreement that may be proclaimed under subsection (a) or
(b) shall take effect prior to January 1, 1995.
SEC. 5. RELATIONSHIP OF THE AGREEMENT TO UNITED STATES LAW.
(a) United States Statutes To Prevail in Conflict.--No
provision of the Agreement, nor the application of any such
provision to any person or circumstance, which is in conflict
with--
(1) title IV of the Trade and Tariff Act of 1984, or
(2) any other statute of the United States,
shall be given effect under the laws of the United States.
(b) Implementing Regulations.--Regulations that are
necessary or appropriate to carry out actions proposed in any
statement of proposed administrative action submitted to the
Congress under section 102 of the Trade Act of 1974 (19 U.S.C.
2112) in order to implement the Agreement shall be prescribed.
Initial regulations to carry out such action shall be issued
within one year after the date of the entry into force of the
Agreement.
(c) Changes in Statutes To Implement a Requirement,
Amendment, or Recommendation.--
(1) Except as otherwise provided in paragraph (2),
the provisions of section 3(c) of the Trade Agreements
Act of 1979 (19 U.S.C. 2504(c)) shall apply with
respect to the Agreement and--
(A) no requirement of, amendment to, or
recommendation under the Agreement shall be
implemented under United States law, and
(B) no amendment, repeal, or enactment of a
statute of the United States to implement any
such requirement, amendment, or recommendation
shall enter into force with respect to the
United States,
unless there has been compliance with the provisions of
section 3(c) of the Trade Agreements Act of 1979.
(2) The provisions of section 3(c)(4) of the Trade
Agreements Act of 1979 (19 U.S.C. 2504(c)(4)) shall
apply to any bill implementing any requirement of,
amendment to, or recommendation made under, the
Agreement that reduces or eliminates any duty imposed
on any article provided for in paragraph (4) of Annex 1
of the Agreement only if--
(A) any reduction of such duty provided in
such bill--
(i) takes effect after December 31,
1989, and
(ii) takes effect gradually over the
period that begins on January 1, 1990,
and ends on December 31, 1994,
(B) any elimination of such duty provided in
such bill does not take effect prior to January
1, 1995, and
(C) the consultations required under section
3(c)(1) of such Act occur at least ninety days
prior to the date on which such bill is
submitted to the Congress under section 3(c) of
such Act.
(d) Private Remedies Not Created.--Neither the entry into
force of the Agreement with respect to the United States, nor
the enactment of this Act, shall be construed as creating any
private right of action or remedy for which provision is not
explicitly made under this Act or under the laws of the United
States.
SEC. 6. TERMINATION.
The provisions of section 125(a) of the Trade Act of 1974
(19 U.S.C. 2135(a)) shall not apply to the Agreement.
[SEC. 7. LOWERED THRESHOLD FOR GOVERNMENT PROCUREMENT UNDER TRADE
AGREEMENTS ACT OF 1979 IN THE CASE OF CERTAIN
ISRAELI PRODUCTS.
[Amendment to section 308(4) of the Trade Agreements Act of
1979 (reprinted elsewhere).]
[SEC. 8. TECHNICAL AMENDMENTS.
[Technical amendments to sections 402(a), 404(e), and 406
of the Trade and Tariff Act of 1984 and section 102(b) and
Title V of the Trade Act of 1974.]
SEC. 9. ADDITIONAL PROCLAMATION AUTHORITY.
(a) Elimination or Modifications of Duties.--The President is
authorized to proclaim elimination or modification of any
existing duty as the President determines is necessary to
exempt any article from duty if--
(1) that article is wholly the growth, product, or
manufacture of the West Bank, the Gaza Strip, or a
qualifying industrial zone or is a new or different
article of commerce that has been grown, produced, or
manufactured in the West Bank, the Gaza Strip, or a
qualifying industrial zone;
(2) that article is imported directly from the West
Bank, the Gaza Strip, Israel, or a qualifying
industrial zone; and
(3) the sum of--
(A) the cost or value of the materials
produced in the West Bank, the Gaza Strip,
Israel, or a qualifying industrial zone, plus
(B) the direct costs of processing operations
performed in the West Bank, the Gaza Strip,
Israel, or a qualifying industrial zone,
is not less than 35 percent of the appraised value of
the product at the time it is entered into the United
States.
For purposes of determining the 35 percent content requirement
contained in paragraph (3), the cost or value of materials
which are used in the production of an article in the West
Bank, the Gaza Strip, or a qualifying industrial zone, and are
the products of the United States, may be counted in an amount
up to 15 percent of the appraised value of the article.
(b) Applicability of Certain Provisions of the Agreement.--
(1) Nonqualifying operations.--No article shall be
considered a new or different article of commerce under
this section, and no material shall be included for
purposes of determining the 35 percent requirement of
subsection (a)(3), by virtue of having merely
undergone--
(A) simple combining or packaging operations,
or
(B) mere dilution with water or with another
substance that does not materially alter the
characteristics of the article or material.
(2) Requirements for new or different article of
commerce.--For purposes of subsection (a)(1), an
article is a ``new or different article of commerce''
if it is substantially transformed into an article
having a new name, character, or use.
(3) Cost or value of materials.--(A) For purposes of
this section, the cost or value of materials produced
in the West Bank, the Gaza Strip, or a qualifying
industrial zone includes--
(i) the manufacturer's actual cost for the
materials;
(ii) when not included in the manufacturer's
actual cost for the materials, the freight,
insurance, packing, and all other costs
incurred in transporting the materials to the
manufacturer's plant;
(iii) the actual cost of waste or spoilage,
less the value of recoverable scrap; and
(iv) taxes or duties imposed on the materials
by the West Bank, the Gaza Strip, or a
qualifying industrial zone, if such taxes or
duties are not remitted on exportation.
(B) If a material is provided to the manufacturer
without charge, or at less than fair market value, its
cost or value shall be determined by computing the sum
of--
(i) all expenses incurred in the growth,
production, or manufacture of the material,
including general expenses;
(ii) an amount for profit; and
(iii) freight, insurance, packing, and all
other costs incurred in transporting the
material to the manufacturer's plant.
If the information necessary to compute the cost or
value of a material is not available, the Customs
Service may ascertain or estimate the value thereof
using all reasonable methods.
(4) Direct costs of processing operations.--(A) For
purposes of this section, the ``direct costs of
processing operations performed in the West Bank, Gaza
Strip, or a qualifying industrial zone'' with respect
to an article are those costs either directly incurred
in, or which can be reasonably allocated to, the
growth, production, manufacture, or assembly, of that
article. Such costs include, but are not limited to,
the following to the extent that they are includible in
the appraised value of articles imported into the
United States:
(i) All actual labor costs involved in the
growth, production, manufacture, or assembly of
the article, including fringe benefits, on-the-
job training, and costs of engineering,
supervisory, quality control, and similar
personnel.
(ii) Dies, molds, tooling, and depreciation
on machinery and equipment which are allocable
to the article.
(iii) Research, development, design,
engineering, and blueprint costs insofar as
they are allocable to the article.
(iv) Costs of inspecting and testing the
article.
(B) Those items that are not included as direct costs
of processing operations with respect to an article are
those which are not directly attributable to the
article or are not costs of manufacturing the article.
Such items include, but are not limited to--
(i) profit; and
(ii) 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.
(5) Imported directly.--For purposes of this
section--
(A) articles are ``imported directly'' if--
(i) the articles are shipped directly
from the West Bank, the Gaza Strip, a
qualifying industrial zone, or Israel
into the United States without passing
through the territory of any
intermediate country; or
(ii) if shipment is through the
territory of an intermediate country,
the articles in the shipment do not
enter into the commerce of any
intermediate country and the invoices,
bills of lading, and other shipping
documents specify the United States as
the final destination; or
(B) if articles are shipped through an
intermediate country and the invoices and other
documents do not specify the United States as
the final destination, then the articles in the
shipment, upon arrival in the United States,
are imported directly only if they--
(i) remain under the control of the
customs authority in an intermediate
country;
(ii) do not enter into the commerce
of an intermediate country except for
the purpose of a sale other than at
retail, but only if the articles are
imported as a result of the original
commercial transactions between the
importer and the producer or the
producer's sales agent; and
(iii) have not been subjected to
operations other than loading,
unloading, or other activities
necessary to preserve the article in
good condition.
(6) Documentation required.--An article is eligible
for the duty exemption under this section only if--
(A) the importer certifies that the article
meets the conditions for the duty exemption;
and
(B) when requested by the Customs Service,
the importer, manufacturer, or exporter submits
a declaration setting forth all pertinent
information with respect to the article,
including the following:
(i) A description of the article,
quantity, numbers, and marks of
packages, invoice numbers, and bills of
lading.
(ii) A description of the operations
performed in the production of the
article in the West Bank, the Gaza
Strip, a qualifying industrial zone, or
Israel and identification of the direct
costs of processing operations.
(iii) A description of any materials
used in production of the article which
are wholly the growth, product, or
manufacture of the West Bank, the Gaza
Strip, a qualifying industrial zone,
Israel or United States, and a
statement as to the cost or value of
such materials.
(iv) A description of the operations
performed on, and a statement as to the
origin and cost or value of, any
foreign materials used in the article
which are claimed to have been
sufficiently processed in the West
Bank, the Gaza Strip, a qualifying
industrial zone, or Israel so as to be
materials produced in the West Bank,
the Gaza Strip, a qualifying industrial
zone, or Israel.
(v) A description of the origin and
cost or value of any foreign materials
used in the article which have not been
substantially transformed in the West
Bank, the Gaza Strip, or a qualifying
industrial zone.
(c) Shipment of Articles of Israel Through West Bank or Gaza
Strip.--The President is authorized to proclaim that articles
of Israel may be treated as though they were articles directly
shipped from Israel for the purposes of the Agreement even if
shipped to the United States from the West Bank, the Gaza
Strip, or a qualifying industrial zone, if the articles
otherwise meet the requirements of the Agreement.
(d) Treatment of Cost or Value of Materials.--The President
is authorized to proclaim that the cost or value of materials
produced in the West Bank, the Gaza Strip, or a qualifying
industrial zone may be included in the cost or value of
materials produced in Israel under section 1(c)(i) of Annex 3
of the Agreement, and the direct costs of processing operations
performed in the West Bank, the Gaza Strip, or a qualifying
industrial zone may be included in the direct costs of
processing operations performed in Israel under section
1(c)(ii) of Annex 3 of the Agreement.
(e) Qualifying Industrial Zone Defined.--For puposes of this
section, a ``qualifying industrial zone'' means any area that--
(1) encompasses portions of the territory of Israel
and Jordan or Israel and Egypt;
(2) has been designated by local authorities as an
enclave where merchandise may enter without payment of
duty or excise taxes; and
(3) has been specified by the President as a
qualifying industrial zone.
I. BILATERAL TRADE RELATIONS WITH CANADA
United States-Canada Free-Trade Agreement Implementation Act of 1988,
as amended
[19 U.S.C. 2112 note; P.L. 100-449, as amended by P.L. 101-207, P.L.
101-382 and P.L. 103-182]
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``United
States-Canada Free-Trade Agreement Implementation Act of
1988''.
[(b) Table of Contents.]
SEC. 2. PURPOSES.
The purposes of this Act are--
(1) to approve and implement the Free-Trade Agreement
between the United States and Canada negotiated under
the authority of section 102 of the Trade Act of 1974;
(2) to strengthen and develop economic relations
between the United States and Canada for their mutual
benefit;
(3) to establish a free-trade area between the two
nations through the reduction and elimination of
barriers to trade in goods and services and to
investment; and
(4) to lay the foundation for further cooperation to
expand and enhance the benefits of such Agreement.
TITLE I--APPROVAL OF UNITED STATES-CANADA FREE-TRADE AGREEMENT AND
RELATIONSHIP OF AGREEMENT TO UNITED STATES LAW
SEC. 101. APPROVAL OF UNITED STATES-CANADA FREE-TRADE AGREEMENT.
(a) Approval of Agreement and Statement of Administrative
Action.--Pursuant to sections 102 and 151 of the Trade Act of
1974 (19 U.S.C. 2112 and 2191), the Congress approves--
(1) the United States-Canada Free-Trade Agreement
(hereinafter in this Act referred to as the
``Agreement'') entered into on January 2, 1988, and
submitted to the Congress on July 25, 1988;
(2) the letters exchanged between the Governments of
the United States and Canada--
(A) dated January 2, 1988, relating to
negotiations regarding articles 301 (Rules of
Origin) and 401 (Tariff Elimination) of the
Agreement, and
(B) dated January 2, 1988, relating to
negotiations regarding article 2008 (Plywood
Standards) of the Agreement; and
(3) the statement of administrative action proposed
to implement the Agreement that was submitted to the
Congress on July 25, 1988.
(b) Conditions for Entry Into Force of the Agreement.--At
such time as the President determines that Canada has taken
measures necessary to comply with the obligations of the
Agreement, the President is authorized to exchange notes with
the Government of Canada providing for the entry into force, on
or after January 1, 1989, of the Agreement with respect to the
United States.
(c) Report on Canadian Practices.--Within 60 days after the
date of the enactment of this Act (but not later than December
15, 1988), the United States Trade Representative shall submit
to the Congress a report identifying, to the maximum extent
practicable, major current Canadian practices (and the legal
authority for such practices) that, in the opinion of the
United States Trade Representative--
(1) are not in conformity with the Agreement; and
(2) require a change of Canadian law, regulation,
policy, or practice to enable Canada to conform with
its international obligations under the Agreement.
SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED STATES LAW.
(a) United States Laws To Prevail in Conflict.--No provision
of the Agreement, nor the application of any such provision to
any person or circumstance, which is in conflict with any law
of the United States shall have effect.
(b) Relationship of Agreement to State and Local Law.--
(1) The provisions of the Agreement prevail over--
(A) any conflicting State law; and
(B) any conflicting application of any State
law to any person or circumstance;
to the extent of the conflict.
(2) Upon the enactment of this Act, the President
shall, in accordance with section 306(c)(2)(A) of the
Trade and Tariff Act of 1984 (19 U.S.C. 2114c),
initiate consultations with the State governments on
the implementation of the obligations of the United
States under the Agreement. Such consultations shall be
held--
(A) through the intergovernmental policy
advisory committees on trade established under
such section for the purpose of achieving
conformity of State laws and practices with the
Agreement; and
(B) with the individual States as necessary
to deal with particular questions that may
arise.
(3) The United States may bring an action challenging
any provision of State law, or the application thereof
to any person or circumstance, on the ground that the
provision or application is inconsistent with the
Agreement.
(4) For purposes of this subsection, the term ``State
law'' includes--
(A) any law of a political subdivision of a
State; and
(B) any State law regulating or taxing the
business of insurance.
(c) Effect of Agreement With Respect to Private Remedies.--No
person other than the United States shall--
(1) have any cause of action or defense under the
Agreement or by virtue of congressional approval
thereof, or
(2) challenge, in any action brought under any
provision of law, any action or inaction by any
department, agency, or other instrumentality of the
United States, any State, or any political subdivision
of a State on the ground that such action or inaction
is inconsistent with the Agreement.
(d) Initial Implementing Regulations.--Initial regulations
necessary or appropriate to carry out the actions proposed in
the statement of administrative action submitted under section
101(a)(3) to implement the Agreement shall, to the maximum
extent feasible, be issued within 1 year after the date of
entry into force of the Agreement. In the case of any
implementing action that takes effect after the date of entry
into force of the Agreement, initial regulations to carry out
that action shall, to the maximum extent feasible, be issued
within 1 year after such effective date.
(e) Changes in Statutes To Implement a Requirement,
Amendment, or Recommendation.--The provisions of section 3(c)
of the Trade Agreements Act of 1979 (19 U.S.C. 2504(c)) shall
apply as if the Agreement were an agreement approved under
section 2(a) of that Act whenever the President determines that
it is necessary or appropriate to amend, repeal, or enact a
statute of the United States in order to implement any
requirement of, amendment to, or recommendation, finding or
opinion under, the Agreement; but such provisions shall not
apply to any bill to implement any such requirement, amendment,
recommendation, finding, or opinion that is submitted to the
Congress after the close of the 30th month after the month in
which the Agreement enters into force.
SEC. 103. CONSULTATION AND LAY-OVER REQUIREMENTS FOR, AND EFFECTIVE
DATE OF, PROCLAIMED ACTIONS.
(a) Consultation and Lay-Over Requirements.--If a provision
of this Act provides that the implementation of an action by
the President by proclamation is subject to the consultation
and lay-over requirements of this section, such action may be
proclaimed only if--
(1) the President has obtained advice regarding the
proposed action from--
(A) the appropriate advisory committees
established under section 135 of the Trade Act
of 1974, and
(B) the United States International Trade
Commission;
(2) the President has submitted a report to the
Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the
Senate that sets forth--
(A) the action proposed to be proclaimed and
the reasons therefor, and
(B) the advice obtained under paragraph (1);
(3) a period of at least 60 calendar days that begins
on the first day on which the President has met the
requirements of paragraphs (1) and (2) with respect to
such action has expired; and
(4) the President has consulted with such Committees
regarding the proposed action during the period
referred to in paragraph (3).
(b) Effective Date of Certain Proclaimed Actions.--No action
proclaimed by the President under the authority of this Act, if
such action is not subject to the consultation and lay-over
requirements under subsection (a), may take effect before the
15th day after the date on which the text of the proclamation
is published in the Federal Register.
SEC. 104. HARMONIZED SYSTEM.
(a) Definition.--As used in this Act, the term ``Harmonized
System'' means the nomenclature system established under the
International Convention on the Harmonized Commodity
Description and Coding System (done at Brussels on June 14,
1983, and the protocol thereto, done at Brussels on June 24,
1986) as implemented under United States law.
(b) Interim Application of TSUS.--The following apply if the
International Convention, and the protocol thereto, referred to
in subsection (a) are not implemented under United States law
before the Agreement enters into force:
(1) The President, subject to subsection (c), shall
proclaim such modifications to the Tariff Schedules of
the United States (19 U.S.C. 1202) as may be necessary
to give effect, until such time as such Convention and
protocol are so implemented, to the rules of origin,
schedule of rate reductions, and other provisions that
would, but for the absence of such implementation, be
proclaimed under the authority of this Act to, or in
terms of, the Harmonized System to implement the
obligations of the United States under the Agreement.
(2) Until such time as such Convention and protocol
are so implemented, any reference in this Act to the
nomenclature of such Convention and protocol shall be
treated as a reference to the corresponding
nomenclature of the Tariff Schedules of the United
States as modified under paragraph (1).
(c) Restrictions.--
(1) No modification described in subsection (b)(1)
that is to take effect concurrently with the entry into
force of the Agreement may be proclaimed unless the
text of the modification is published in the Federal
Register at least 30 days before the date of entry into
force.
(2) All modifications proclaimed under the authority
of subsection (b)(1) after the Agreement enters into
force with respect to the United States are subject to
the consultation and lay-over requirements of section
103(a).
SEC. 105. IMPLEMENTING ACTIONS IN ANTICIPATION OF ENTRY INTO FORCE.
Subject to section 103 or 104(c), as appropriate, and any
other applicable restriction or limitation in this Act on the
proclaiming of actions or the issuing of regulations to carry
out this Act or any amendment made by this Act, after the date
of the enactment of this Act--
(1) the President may proclaim such actions; and
(2) other appropriate officers of the United States
Government may issue such regulations;
as may be necessary to ensure that any provision of this Act,
or amendment made by this Act, that takes effect on the date
the Agreement enters into force is appropriately implemented on
such date, but no such proclamation or regulation may have an
effective date earlier than the date of entry into force.
TITLE II--TARIFF MODIFICATIONS, RULES OF ORIGIN, USER FEES, DRAWBACK,
ENFORCEMENT, AND OTHER CUSTOMS PROVISIONS
SEC. 201. TARIFF MODIFICATIONS.
(a) Tariff Modifications Specified in the Agreement.--The
President may proclaim--
(1) such modifications or continuance of any existing
duty;
(2) such continuance of existing duty-free or excise
treatment; or
(3) such additional duties;
as the President determines to be necessary or appropriate to
carry out article 401 of the Agreement and the schedule of duty
reductions with respect to Canada set forth in Annexes 401.2
and 401.7 to the Agreement, as approved under section
101(a)(1). For purposes of proclaiming necessary modifications
under such Annex 401.2, any article covered under subheading
9813.00.05 (contained in the United States Schedule in such
Annex) shall, unless such article is a drawback eligible good
under section 204(a), be treated as being subject to any
otherwise applicable customs duty if the article, or
merchandise incorporating such article, is exported to Canada.
(b) Other Tariff Modifications.--Subject to the
consultation and lay-over requirements of section 103(a), the
President may proclaim--
(1) such modifications as the United States and
Canada may agree to regarding the staging of any duty
treatment set forth in Annexes 401.2 and 401.7 of the
Agreement;
(2) such modifications or continuance of any existing
duty;
(3) such continuance of existing duty-free or excise
treatment; or
(4) such additional duties;
as the President determines to be necessary or appropriate to
maintain the general level of reciprocal and mutually
advantageous concessions with respect to Canada provided for by
the Agreement.
(c) Modifications Affecting Plywood.--
(1) The Congress encourages the President to
facilitate the preparation, and the implementation with
Canada, of common performance standards for the use of
softwood, plywood, and other structural panels in
construction applications in the United States and
Canada.
(2) The President shall report to the Congress on the
incorporation of common plywood performance standards
into building codes in the United States and Canada and
may implement the provisions of article 2008 of the
Agreement when he determines that the necessary
conditions have been met.
(3) Any tariff reduction undertaken pursuant to
paragraph (2) shall be in equal annual increments
ending January 1, 1998, unless those reductions
commence after January 1, 1991.
SEC. 202. RULES OF ORIGIN.
(a) In General.--
(1) For purposes of implementing the tariff treatment
contemplated under the Agreement, goods originate in
the territory of a Party if--
(A) they are wholly obtained or produced in
the territory of either Party or both Parties;
or
(B) they--
(i) have been transformed in the
territory of either Party or both
Parties so as to be subject to a change
in tariff classification as described
in the Annex rules or to such other
requirements as the Annex rules may
provide when no change in tariff
classifications occurs, and
(ii) meet the other conditions set
out in the Annex.
(2) A good shall not be considered to originate in
the territory of a party under paragraph (1)(B) merely
by virtue of having undergone--
(A) simple packaging or, except as expressly
provided by the Annex rules, combining
operations;
(B) mere dilution with water or another
substance that does not materially alter the
characteristics of the good; or
(C) any process or work in respect of which
it is established, or in respect of which the
facts as ascertained clearly justify the
presumption, that the sole object was to
circumvent the provisions of chapter 3 of the
Agreement.
(3) Accessories, spare parts, or tools delivered with
any piece of equipment, machinery, apparatus, or
vehicle that form part of its standard equipment shall
be treated as having the same origin as that equipment,
machinery, apparatus, or vehicle if the quantities and
values of such accessories, spare parts, or tools are
customary for the equipment, machinery, apparatus, or
vehicle.
(b) Transshipment.--Goods exported from the territory of
one Party originate in the territory of that Party only if--
(1) the goods meet the applicable requirements of
subsection (a) and are shipped to the territory of the
other Party without having entered the commerce of any
third country;
(2) the goods, if shipped through the territory of a
third country, do not undergo any operation other than
unloading, reloading, or any operation necessary to
transport them to the territory of the other Party or
to preserve them in good condition; and
(3) the documents related to the exportation and
shipment of the goods from the territory of a Party
show the territory of the other Party as their final
destination.
(c) Interpretation.--In interpreting this section, the
following apply:
(1) Whenever the processing or assembly of goods in
the territory of either Party or both Parties results
in one of the changes in tariff classification
described in the Annex rules, such goods shall be
considered to have been transformed in the territory of
that Party and shall be treated as goods originating in
the territory of that Party if--
(A) such processing or assembly occurs
entirely within the territory of either Party
or both Parties; and
(B) such goods have not subsequently
undergone any processing or assembly outside
the territories of the Parties that improves
the goods in condition or advances them in
value.
(2) Whenever the assembly of goods in the territory
of a Party fails to result in a change of tariff
classification because either--
(A) the goods were imported into the
territory of the Party in an unassembled or a
disassembled form and were classified as
unassembled or disassembled goods pursuant to
General Rule of Interpretation 2(a) of the
Harmonized System; or
(B) the tariff subheading for the goods
provides for both the goods themselves and
their parts;
such goods shall not be treated as goods originating in
the territory of a Party.
(3) Notwithstanding paragraph (2), goods described in
that paragraph shall be considered to have been
transformed in the territory of a Party and be treated
as goods originating in the territory of the Party if--
(A) the value of materials originating in the
territory of either Party or both Parties used
or consumed in the production of the goods plus
the direct cost of assembling the goods in the
territory of either Party or both Parties
constitute not less than 50 percent of the
value of the goods when exported to the
territory of the other Party; and
(B) the goods have not subsequent to assembly
undergone processing or further assembly in a
third country and they meet the requirements of
subsection (b).
(4) The provisions of paragraph (3) shall not apply
to goods of chapters 61-63 of the Harmonized System.
(5) In making the determination required by paragraph
(3)(A) and in making the same or a similar
determination when required by the Annex rules, where
materials originating in the territory of either Party
or both Parties and materials obtained or produced in a
third country are used or consumed together in the
production of goods in the territory of a Party, the
value of materials originating in the territory of
either Party or both Parties may be treated as such
only to the extent that it is directly attributable to
the goods under consideration.
(6) In applying the Annex rules, a specific rule
shall take precedence over a more general rule.
(d) Annex Rules.--
(1) The President is authorized to proclaim, as a
part of the Harmonized System, the rules set forth
under the heading ``Rules'' in Annex 301.2 of the
Agreement. For purposes of carrying out this
paragraph--
(A) the phrase ``headings 2207-2209'' in
paragraph 7 of section IV of such Annex 301.2
shall be treated as a reference to headings
2203-2209; and
(B) the phrase ``any other heading'' in
paragraph 11 of section XV in such Annex 301.2
shall be treated as a reference to any other
heading of chapter 74 of the Harmonized System.
(2) Subject to the consultation and lay-over
requirements of section 103, the President is
authorized to proclaim such modifications to the rules
as may from time-to-time be agreed to by the United
States and Canada.
(e) Automotive Products.--
(1) The President is authorized to proclaim such
modifications to the definition of Canadian articles
(relating to the administration of the Automotive
Products Trade Act of 1965) in the general notes of the
Harmonized System as may be necessary to conform that
definition with chapter 3 of the Agreement.
(2) For purposes of administering the value
requirement (as defined in section 304(c)(3)) with
respect to vehicles, the Secretary of the Treasury
shall prescribe regulations governing the averaging of
the value content of vehicles of the same class, or of
sister vehicles, assembled in the same plant as an
alternative to the calculation of the value content of
each vehicle.
(f) Definitions.--For purposes of this section:
(1) The term ``Annex'' means--
(A) the interpretative guidelines set forth
in subsection (c); and
(B) the Annex rules.
(2) The term ``Annex rules'' means the rules
proclaimed under subsection (d).
(3) The term ``direct cost of processing or direct
cost of assembling'' means the costs directly incurred
in, or that can reasonably be allocated to, the
production of goods, including--
(A) the cost of all labor, including benefits
and on-the-job training, labor provided in
connection with supervision, quality control,
shipping, receiving, storage, packaging,
management at the location of the process or
assembly, and other like labor, whether
provided by employees or independent
contractors;
(B) the cost of inspecting and testing the
goods;
(C) the cost of energy, fuel, dies, molds,
tooling, and the depreciation and maintenance
of machinery and equipment, without regard to
whether they originate within the territory of
a Party;
(D) development, design, and engineering
costs;
(E) rent, mortgage interest, depreciation on
buildings, property insurance premiums,
maintenance, taxes and the cost of utilities
for real property used in the production of
goods; and
(F) royalty, licensing, or other like
payments for the right to the goods;
but not including--
(i) costs relating to the general
expense of doing business, such as the
cost of providing executive, financial,
sales, advertising, marketing,
accounting and legal services, and
insurance;
(ii) brokerage charges relating to
the importation and exportation of
goods;
(iii) the costs for telephone, mail,
and other means of communication;
(iv) packing costs for exporting the
goods;
(v) royalty payments related to a
licensing agreement to distribute or
sell the goods;
(vi) rent, mortgage interest,
depreciation on buildings, property
insurance premiums, maintenance, taxes,
and the cost of utilities for real
property used by personnel charged with
administrative functions; or
(vii) profit on the goods.
(4) The term ``goods wholly obtained or produced in
the territory of either Party or both Parties'' means--
(A) mineral goods extracted in the territory
of either Party or both Parties;
(B) goods harvested in the territory of
either Party or both Parties;
(C) live animals born and raised in the
territory of either Party or both Parties;
(D) goods (fish, shellfish, and other marine
life) taken from the sea by vessels registered
or recorded with a Party and flying its flag;
(E) goods produced on board factory ships
from the goods referred to in subparagraph (D)
provided such factory ships are registered or
recorded with that Party and fly its flag;
(F) goods taken by a Party or a person of a
Party from the seabed or beneath the seabed
outside territorial waters, provided that Party
has rights to exploit such seabed;
(G) goods taken from space, provided they are
obtained by a Party or a person of a Party and
not processed in a third country;
(H) waste and scrap derived from
manufacturing operations and used goods,
provided they were collected in the territory
of either Party or both Parties and are fit
only for the recovery of raw materials; and
(I) goods produced in the territory of either
Party or both Parties exclusively from goods
referred to in subparagraphs (A) to (H)
inclusive or from their derivatives, at any
stage of production.
(5) The term ``materials'' means goods, other than
those included as part of the direct cost of processing
or assembling, used or consumed in the production of
other goods.
(6) The term ``Party'' means Canada or the United
States.
(7) The term ``territory'' means--
(A) with respect to Canada, the territory to
which its customs laws apply, including any
areas beyond the territorial seas of Canada
within which, in accordance with international
law and its domestic laws, Canada may exercise
rights with respect to the seabed and subsoil
and their natural resources; and
(B) with respect to the United States--
(i) the customs territory of the
United States, which includes the fifty
States, the District of Columbia and
the Commonwealth of Puerto Rico,
(ii) the foreign trade zones located
in the United States, and the
Commonwealth of Puerto Rico, and
(iii) any area beyond the territorial
seas of the United States within which,
in accordance with international law
and its domestic laws, the United
States may exercise rights with respect
to the seabed and subsoil and their
natural resources.
(8) The term ``third country'' means any country
other than Canada or the United States or any territory
not a part of the territory of either.
(9) The term ``value of materials originating in the
territory of either Party or both Parties'' means the
aggregate of--
(A) the price paid by the producer of an
exported good for materials originating in the
territory of either Party or both Parties or
for materials imported from a third country
used or consumed in the production of such
originating materials; and
(B) when not included in that price, the
following costs related thereto--
(i) freight, insurance, packing, and
all other costs incurred in
transporting any of the materials
referred to in subparagraph (A) to the
location of the producer;
(ii) duties, taxes, and brokerage
fees on such materials paid in the
territory of either Party or both
Parties;
(iii) the cost of waste or spoilage
resulting from the use or consumption
of such materials, less the value of
renewable scrap or byproduct; and
(iv) the value of goods and services
relating to such materials determined
in accordance with subparagraph 1(b) of
article 8 of the Agreement on
Implementation of article VII of the
General Agreement on Tariffs and Trade.
(10) The term ``value of the goods when exported to
the territory of the other Party'' means the aggregate
of--
(A) the price paid by the producer for all
materials, whether or not the materials
originate in either Party or both Parties, and,
when not included in the price paid for the
materials, the costs related to--
(i) freight, insurance, packing, and
all other costs incurred in
transporting all materials to the
location of the producer;
(ii) duties, taxes, and brokerage
fees on all materials paid in the
territory of either Party or both
Parties;
(iii) the cost of waste or spoilage
resulting from the use or consumption
of such materials, less the value of
renewable scrap or byproduct; and
(iv) the value of goods and services
relating to all materials determined in
accordance with subparagraph 1(b) of
article 8 of the Agreement on
Implementation of article VII of the
General Agreement on Tariffs and Trade;
and
(B) the direct cost of processing or the
direct cost of assembling the goods.
(g) Special Provision Regarding Application of Rules of
Origin to Certain Apparel.--The Secretary of Commerce is
authorized to issue regulations governing the exportation to
Canada of apparel products that are cut, or knit to shape, and
sewn, or otherwise assembled, in either Party from fabric
produced or obtained in a third country for the purpose of
establishing which exports of such products shall be permitted
to claim preferential tariff treatment under the rules of
origin of the Agreement, to the extent that the Agreement
provides for quantitative limits on the availability of
preferential tariff treatment for such products.
[SEC. 203. CUSTOMS USER FEES.
[Amendment to section 13031(b) of the Consolidated Omnibus
Reconciliation Act of 1985.]
[SEC. 204. DRAWBACK.
[(a) Definition.--Suspended, as provided in section 501(c)(3)
(reprinted elsewhere).]
[(b) Implementation of Article 404.--Suspended, as provided
in section 501(c)(3).]
[(c) Consequential Amendments.--Amendments to sections 311,
312 of the Tariff Act of 1930,
amendments adding subsections (n) and (o) to section 313 of the
Tariff Act of 1930 concerning drawback, amendments to section
562 of the Tariff Act of 1930, and amendment to section 3(a) of
the Act of June 18, 1934, the Foreign Trade Zones Act
(reprinted elsewhere).]
SEC. 205. ENFORCEMENT.
[(a) Certifications of Origin.--Suspended, as provided in
section 501(c)(3).]
[(b) Recordkeeping Requirements.--Amendments to section 508
of the Tariff Act of 1930.]
SEC. 206. EXEMPTION FROM LOTTERY TICKET EMBARGO.
Section 305(a) of the Tariff Act of 1930 (19 U.S.C. 1305(a))
is amended by striking out the period at the end of the first
paragraph and inserting the following: ``: Provided further,
That effective January 1, 1993, this section shall not apply to
any lottery ticket, printed paper that may be used as a lottery
ticket, or advertisement of any lottery, that is printed in
Canada for use in connection with a lottery conducted in the
United States.''.
[Section 484H(a) of the Customs and Trade Act of 1990 adds
the following new subsection to section 553 of the Tariff Act
of 1930 (19 U.S.C. 1553):
[(b) Notwithstanding subsection (a), the entry for
transportation in bond through the United States of any lottery
ticket, printed paper that may be used as a lottery ticket, or
any advertisement of any lottery, that is printed in Canada,
shall be permitted without appraisement or the payment of
duties under such regulations as the Secretary of the Treasury
may prescribe, except that such regulations shall not permit
the transportation of lottery materials in the personal baggage
of a traveler.]
SEC. 207. PRODUCTION-BASED DUTY REMISSION PROGRAMS WITH RESPECT TO
AUTOMOTIVE PRODUCTS.
(a) USTR Study.--The United States Trade Representative
shall--
(1) undertake a study to determine whether any of the
production-based duty remission programs of Canada with
respect to automotive products is either--
(A) inconsistent with the provisions of, or
otherwise denies the benefits to the United
States under, the General Agreement on Tariffs
and Trade, or
(B) being implemented inconsistently with the
obligations under article 1002 of the Agreement
not--
(i) to expand the extent or the
application, or
(ii) to extend the duration,
of such programs; and
(2) determine whether to initiate an investigation
under section 302 of the Trade Act of 1974 with respect
to any of such production-based duty remission
programs.
(b) Report and Monitoring.--
(1) The United States Trade Representative shall
submit a report to Congress no later than June 30, 1989
(or no later than September 30, 1989, if the Trade
Representative considers an extension to be necessary)
containing--
(A) the results of the study under subsection
(a)(1), as well as a description of the basis
used for measuring and verifying compliance
with the obligations referred to in subsection
(a)(1)(B); and
(B) any determination made under subsection
(a)(2) and the reasons therefor.
(2) Notwithstanding the submission of the report
under paragraph (1), the Trade Representative shall
continue to monitor the degree of compliance with the
obligations referred to in subsection (a)(1)(B).
TITLE III--APPLICATION OF AGREEMENT TO SECTORS AND SERVICES
SEC. 301. AGRICULTURE.
(a) Special Tariff Provisions for Fresh Fruits and
Vegetables.--
(1) The Secretary of Agriculture (hereafter in this
section referred to as the ``Secretary'') may recommend
to the President the imposition of a temporary duty on
any Canadian fresh fruit or vegetable entered into the
United States if the Secretary determines that both of
the following conditions exist at the time that
imposition of the duty is recommended:
(A) For each of 5 consecutive working days
the import price of the Canadian fresh fruit or
vegetable is below 90 percent of the
corresponding 5-year average monthly import
price for such fruit or vegetable.
(B) The planted acreage in the United States
for the like fresh fruit or vegetable is no
higher than the average planted acreage over
the preceding 5 years, excluding the years with
the highest and lowest acreage. For the
purposes of applying this subparagraph, any
acreage increase attributed directly to a
reduction in the acreage that was planted to
wine grapes as of October 4, 1987, shall be
excluded.
Whenever the Secretary makes a determination that the
conditions referred to in subparagraphs (A) and (B)
regarding any Canadian fresh fruit or vegetable exist,
the Secretary shall immediately submit for publication
in the Federal Register notice of the determination.
(2) No later than 6 days after publication in the
Federal Register of the notice described in paragraph
(1), the Secretary shall decide whether to recommend
the imposition of a temporary duty to the President,
and if the Secretary decides to make such a
recommendation, the recommendation shall be forwarded
immediately to the President.
(3) In determining whether to recommend the
imposition of a temporary duty to the President under
paragraph (1), the Secretary shall consider whether the
conditions in subparagraphs (A) and (B) of such
paragraph have led to a distortion in trade between the
United States and Canada of the fresh fruit or
vegetable and, if so, whether the imposition of the
duty is appropriate, including consideration of whether
it would significantly correct this distortion.
(4) Not later than 7 days after receipt of a
recommendation of the Secretary under paragraph (1),
the President, after taking into account the national
economic interests of the United States, shall
determine whether to impose a temporary duty on the
Canadian fresh fruit or vegetable concerned. If the
determination is affirmative, the President shall
proclaim the imposition and the rate of the temporary
duty, but such duty shall not apply to the entry of
articles that were in transit to the United States on
the first day on which the temporary duty is in effect.
(5) A temporary duty imposed under paragraph (4)
shall cease to apply with respect to articles that are
entered on or after the earlier of--
(A) the day following the last of 5
consecutive working days with respect to which
the Secretary determines that the point of
shipment price in Canada for the Canadian fruit
or vegetable concerned exceeds 90 percent of
the corresponding 5-year average monthly import
price; or
(B) the 180th day after the date on which the
temporary duty first took effect.
(6) No temporary duty may be imposed under this
subsection on a Canadian fresh fruit or vegetable
during such time as import relief is provided with
respect to such fresh fruit or vegetable under chapter
1 of title II of the Trade Act of 1974.
(7) For purposes of this subsection:
(A) The term ``Canadian fresh fruit or
vegetable'' means any article originating in
Canada (as determined in accordance with
section 202) and classified within any of the
following headings of the Harmonized System:
(i) 07.01 (relating to potatoes,
fresh or chilled);
(ii) 07.02 (relating to tomatoes,
fresh or chilled);
(iii) 07.03 (relating to onions,
shallots, garlic, leeks and other
alliaceous vegetables, fresh or
chilled);
(iv) 07.04 (relating to cabbages,
cauliflowers, kohlrabi, kale and
similar edible brassicas, fresh or
chilled);
(v) 07.05 (relating to lettuce
(lactuca sativa) and chicory (cichorium
spp.), fresh or chilled);
(vi) 07.06 (relating to carrots,
salad beets or beetroot, salsify,
celeriac, radishes and similar edible
roots (excluding turnips), fresh or
chilled);
(vii) 07.07 (relating to cucumbers
and gherkins, fresh or chilled);
(viii) 07.08 (relating to leguminous
vegetables, shelled or unshelled, fresh
or chilled);
(ix) 07.09 (relating to other
vegetables (excluding truffles), fresh
or chilled);
(x) 08.06.10 (relating to grapes,
fresh);
(xi) 08.08.20 (relating to pears and
quinces, fresh);
(xii) 08.09 (relating to apricots,
cherries, peaches (including
nectarines), plums and sloes, fresh);
and
(xiii) 08.10 (relating to other fruit
(excluding cranberries and
blueberries), fresh).
(B) The term ``corresponding 5-year average
monthly import price'' for a particular day
means the average import price of a Canadian
fresh fruit or vegetable, for the calendar
month in which that day occurs, for that month
in each of the preceding 5 years, excluding the
years with the highest and lowest monthly
averages.
(C) The term ``import price'' has the meaning
given such term in article 711 of the
Agreement.
(D) The rate of a temporary duty imposed
under this subsection with respect to a
Canadian fresh fruit or vegetable means a rate
that, including the rate of any other duty in
effect for such fruit or vegetable, does not
exceed the lesser of--
(i) the duty that was in effect for
the fresh fruit or vegetable before
January 1, 1989, under column one of
the Tariff Schedules of the United
States for the applicable season in
which the temporary duty is applied; or
(ii) the duty in effect for the fresh
fruit or vegetable under column one of
such Schedules, or column 1 (General)
of the Harmonized System, at the time
the temporary duty is applied.
(8)(A) The Secretary shall, to the extent
practicable, administer the provisions of this
subsection to the 8-digit level of classification under
the Harmonized System.
(B) The Secretary may issue such regulations as may
be necessary to implement the provisions of this
subsection.
(9) For purposes of assisting the Secretary in
carrying out this subsection--
(A) the Commissioner of Customs and the
Director of the Bureau of Census shall
cooperate in providing the Secretary with
timely information and data relating to the
importation of Canadian fresh fruits and
vegetables, and
(B) importers shall report such information
relating to Canadian fresh fruits and
vegetables to the Commissioner of Customs at
such time and in such manner as the
Commissioner requires.
(10) The authority to impose temporary duties under
this subsection expires on the 20th anniversary of the
date on which the Agreement enters into force.
[(b) Meat Import Act of 1979.--Amendments to the Meat Import
Act of 1979, repealed by section 403 of the Uruguay Round
Agreements Act.]
[(c) Agricultural Adjustment Act.--Amendment to section 22(f)
of the Agricultural Adjustment Act, as reenacted with
amendments by the Agricultural Marketing Agreement Act of
1937.]
[(d)-(f) Amendments to the Act of March 4, 1913, the Federal
Seed Act, the Federal Plant Pest Act, the Act of August 20,
1912, the Federal Noxious Weed Act of 1974, and section 306 of
the Tariff Act of 1930.]
[SEC. 302. RELIEF FROM IMPORTS.
[Suspended, as provided in section 501(c)(3).]
SEC. 303. ACTS IDENTIFIED IN NATIONAL TRADE ESTIMATES.
With respect to any act, policy, or practice of Canada that
is identified in the annual report submitted under section 181
of the Trade Act of 1974 (19 U.S.C. 2241), the United States
Trade Representative shall include--
(1) information with respect to the action taken
regarding such act, policy, or practice, including but
not limited to--
(A) any action under section 301 of the Trade
Act of 1974 (including resolution through
appropriate dispute settlement procedures),
(B) any action under section 307 of the Trade
and Tariff Act of 1984, and
(C) negotiations or consultations, whether on
a bilateral or multilateral basis; or
(2) the reasons that no action was taken regarding
such act, policy, or practice.
SEC. 304. NEGOTIATIONS REGARDING CERTAIN SECTORS; BIENNIAL REPORTS.
(a) In General.--
(1) The President is authorized to enter into
negotiations with the Government of Canada for the
purpose of concluding an agreement (including an
agreement amending the Agreement) or agreements to--
(A) liberalize trade in services in
accordance with article 1405 of the Agreement;
(B) liberalize investment rules;
(C) improve the protection of intellectual
property rights;
(D) increase the value requirement applied
for purposes of determining whether an
automotive product is treated as originating in
Canada or the United States; and
(E) liberalize government procurement
practices, particularly with regard to
telecommunications.
(2) As an exercise of the foreign relations powers of
the President under the Constitution, the President
will enter into immediate consultations with the
Government of Canada to obtain the exclusion from the
transport rates established under Canada's Western
Grain Transportation Act of agricultural goods that
originate in Canada and are shipped via east coast
ports for consumption in the United States.
(b) Negotiating Objectives Regarding Services, Investment,
and Intellectual Property Rights.--
(1) The objectives of the United States in
negotiations conducted under subsection (a)(1)(A) to
liberalize trade in services include--
(A) with respect to developing services
sectors not covered in the Agreement, the
elimination of those tariff, nontariff, and
subsidy trade distortions that have potential
to affect significant bilateral trade;
(B) the elimination or reduction of measures
grandfathered by the Agreement that deny or
restrict national treatment in the provision of
services;
(C) the elimination of local presence
requirements; and
(D) the liberalization of government
procurement of services.
In conducting such negotiations, the President shall
consult with the services advisory committees
established under section 135 of the Trade Act of 1974
(19 U.S.C. 2155).
(2) The objectives of the United States in any
negotiations conducted under subsection (a)(1)(B) to
liberalize investment rules include--
(A) the elimination of direct investment
screening;
(B) the extension of the principles of the
Agreement to energy and cultural industries, to
the extent such industries are not currently
covered by the Agreement;
(C) the elimination of technology transfer
requirements and other performance requirements
not currently barred by the Agreement; and
(D) the subjection of all investment disputes
to dispute resolution under chapter 18 of the
Agreement.
In conducting such negotiations, the President shall
consult with persons representing diverse interests in
the United States in investment.
(3) The objectives of the United States in any
negotiations conducted under subsection (a)(1)(C) to
improve the protection of intellectual property rights
include--
(A) the recognition and adequate protection
of intellectual property, including copyrights,
patents, process patents, trademarks, mask
works, and trade secrets; and
(B) the establishment of dispute resolution
procedures and binational enforcement of
intellectual property standards.
In conducting such negotiations, the President shall
consult with persons representing diverse interests in
the United States in intellectual property.
(c) Negotiating Objectives Regarding Automotive Products.--
(1) In conducting negotiations under subsection
(a)(1)(D) regarding the value requirement for
automotive products, the President shall seek to
conclude an agreement by no later than January 1, 1990,
to increase the value requirement from 50 percent to at
least 60 percent.
(2) The President is authorized, through January 1,
1999, to proclaim any agreed increase in the value
requirement.
(3) As used in this section, the term ``value
requirement'' means the minimum percentage of the value
of an automotive product that must be accounted for by
the value of the materials in the product that
originated in the United States or Canada, or both,
plus the direct cost of processing or assembly
performed in the United States or Canada, or both, with
respect to the product.
(d) Negotiation of Limitation on Potato Trade.--
(1) During the 5-year period beginning on the date of
enactment of this Act, the President is authorized to
enter into negotiations with Canada for the purpose of
obtaining an agreement to limit the exportation and
importation of all potatoes between the United States
and Canada, including seed potatoes, fresh, chilled or
frozen potatoes, dried, desiccated or dehydrated
potatoes, and potatoes otherwise prepared or preserved.
Any agreement negotiated under this subsection shall
provide for an annual limitation divided equally into
each half of the year.
(2) For the purpose of conducting negotiations under
paragraph (1), the Secretary of Agriculture and the
United States Trade Representative shall consult with
representatives of the potato producing industry,
including the Ad Hoc Potato Advisory Group and the
United States/Canada Horticultural Industry Advisory
Committee, to solicit their views on negotiations with
Canada for reciprocal quantitative limits on the potato
trade.
(3) The President is authorized to direct the
Secretary of the Treasury to--
(A) carry out such actions as may be
necessary or appropriate to ensure the
attainment of the objectives of any agreement
that is entered into under this section; and
(B) enforce any quantitative limitation,
restriction, and other terms contained in the
agreement.
Such actions may include, but are not limited to,
requirements that valid export licenses or other
documentation issued by a foreign government be
presented as a condition for the entry into the United
States of any article that is subject to the agreement.
(4) The provisions of section 1204 of the Agriculture
and Food Act of 1981 (7 U.S.C. 1736j) and the last
sentence of section 812 of the Agricultural Act of 1970
(7 U.S.C. 612c-3) shall not apply in the case of
actions taken pursuant to this subsection.
(e) Canadian Controls on Fish.--
(1) Within 30 days of the application by Canada of
export controls on unprocessed fish under statutes
exempted from the Agreement under article 1203, or the
application of landing requirements for fish caught in
Canadian waters, the President shall take appropriate
action to enforce United States rights under the
General Agreement on Tariffs and Trade that are
retained in article 1205 of the Agreement.
(2) In enforcing the United States rights referred to
in paragraph (1), the President has discretion to--
(A) bring a challenge to the offending
Canadian practices before the GATT;
(B) retaliate against such offending
practices;
(C) seek resolution directly with Canada;
(D) refer the matter for dispute resolution
to the Canada-United States Trade Commission;
or
(E) take other action that the President
considers appropriate to enforce such United
States rights.
[(f) Biennial Report.--Suspended as provided in section
501(c)(3).]
[SEC. 305. ENERGY.
[(a) Alaskan Oil.--Amendment to section 7(d)(1) of the Export
Administration Act of 1979.]
[(b) Uranium.--Amendment to section 161(v) of the Atomic
Energy Act of 1954.]
[SEC. 306. LOWERED THRESHOLD FOR GOVERNMENT PROCUREMENT UNDER TRADE
AGREEMENTS ACT OF 1979 IN THE CASE OF CERTAIN
CANADIAN PRODUCTS.
[Amendment adding subparagraph (D) to section 308(4) of the
Trade Agreements Act of 1979 (reprinted elsewhere).]
[SEC. 307. TEMPORARY ENTRY FOR BUSINESS PERSONS.
[Provisions relating to, and amendments of, the Immigration and
Nationality Act.]
[SEC. 308. AMENDMENT TO SECTION 5136 OF THE REVISED STATUTES.]
SEC. 309. STEEL PRODUCTS.
Nothing in this Act shall preclude any discussion or
negotiation between the United States and Canada in order to
conclude voluntary restraint agreements or mutually agreed
quantitative restrictions on the volume of steel products
entering the United States from Canada.
TITLE IV--BINATIONAL PANEL DISPUTE SETTLEMENT IN ANTIDUMPING AND
COUNTERVAILING DUTY CASES
[SEC. 401. AMENDMENTS TO SECTION 516A OF THE TARIFF ACT OF 1930.
Amendments to section 516A of the Tariff Act of 1930 to
establish procedures for binational panel review of certain
antidumping and countervailing duty determinations (reprinted
elsewhere).]
[SEC. 402. AMENDMENTS TO TITLE 28, UNITED STATES CODE.]
[SEC. 403. CONFORMING AMENDMENTS TO THE TARIFF ACT OF 1930.
Amendments to sections 502(b), 514(b), 771, and 777 of the
Tariff Act of 1930 (reprinted elsewhere).]
[SEC. 404. AMENDMENTS TO ANTIDUMPING AND COUNTERVAILING DUTY LAW.
Suspended, as provided in section 501(c)(3) (reprinted
elsewhere).]
SEC. 405. ORGANIZATIONAL AND ADMINISTRATIVE PROVISIONS REGARDING THE
IMPLEMENTATION OF CHAPTERS 18 AND 19 OF THE
AGREEMENT.
(a) Appointment of Individuals to Panels and Committees.--
(1)(A) There is established within the interagency
organization established under section 242 of the Trade
Expansion Act of 1962 (19 U.S.C. 1872) an interagency
group which shall--
(i) be chaired by the United States Trade
Representative (hereafter in this section
referred to as the ``Trade Representative''),
and
(ii) consist of such officers (or the
designees thereof) of the Government of the
United States as the Trade Representative
considers appropriate.
(B) The interagency group established under
subparagraph (A) shall, in a manner consistent with
chapter 19 of the Agreement--
(i) prepare by January 3 of each calendar
year--
(I) a list of individuals who are
qualified to serve as members of
binational panels convened under
chapter 19 of the Agreement, and
(II) a list of individuals who are
qualified to serve on extraordinary
challenge committees convened under
such chapter,
(ii) if the Trade Representative makes a
request under paragraph (5)(A)(i) with respect
to a final candidate list during any calendar
year, prepare by July 1 of such calendar year a
list of those individuals who are qualified to
be added to that final candidate list,
(iii) exercise oversight of the
administration of the United States Secretariat
that is authorized to be established under
subsection (e), and
(iv) make recommendations to the Trade
Representative regarding the convening of
extraordinary challenge committees under
chapter 19 of the Agreement.
(2)(A) The Trade Representative shall select
individuals from the respective lists prepared by the
interagency group under paragraph (1)(B)(i) for
placement on a preliminary candidate list of
individuals eligible to serve as members of binational
panels under Annex 1901.2 of the Agreement and a
preliminary candidate list of individuals eligible for
selection as members of extraordinary challenge
committees under Annex 1904.13 of the Agreement.
(B) The selection of individuals for--
(i) placement on lists prepared by the
interagency group under clause (i) or (ii) of
paragraph (1)(B),
(ii) placement on preliminary candidate lists
under subparagraph (A),
(iii) placement on final candidate lists
under paragraph (3),
(iv) placement by the Trade Representative on
the rosters described in Annex 1901.2(1) and
Annex 1904.13(1) of the Agreement, and
(v) appointment by the Trade Representative
for service on binational panels and
extraordinary challenge committees convened
under chapter 19 of the Agreement,
shall be made on the basis of the criteria provided in
Annex 1901.2(1) and Annex 1904.13(1) of the Agreement
and shall be made without regard to political
affiliation.
(C) For purposes of applying section 1001 of title
18, United States Code, the written or oral responses
of individuals to inquiries of the interagency group
established under paragraph (1) or the Trade
Representative regarding their personal and
professional qualifications, and financial and other
relevant interests, that bear on their suitability for
the placements and appointments described in
subparagraph (B), shall be treated as matters within
the jurisdiction of an agency of the United States.
(3)(A) By no later than January 3 of each calendar
year, the Trade Representative shall submit to the
Committee on Finance of the Senate and the Committee on
Ways and Means of the House of Representatives
(hereafter in this section referred to as the
``appropriate Congressional Committees'') the
preliminary candidate lists of those individuals
selected by the Trade Representative under paragraph
(2)(A) to be candidates eligible to serve on binational
panels or extraordinary challenge committees convened
pursuant to chapter 19 of the Agreement during the 1-
year period beginning on April 1 of such calendar year.
(B) Upon submission of the preliminary candidate
lists under subparagraph (A) to the appropriate
Congressional Committees, the Trade Representative
shall consult with the appropriate Congressional
Committees with regard to the individuals listed on the
preliminary candidate lists.
(C) The Trade Representative may add or delete
individuals from the preliminary candidate lists
submitted under subparagraph (A) after consulting the
appropriate Congressional Committees with regard to
such addition or deletion. The Trade Representative
shall provide to the appropriate Congressional
Committees written notice of any addition or deletion
of an individual from the preliminary candidate lists.
(4)(A) By no later than March 31 of each calendar
year, the Trade Representative shall submit to the
appropriate Congressional Committees the final
candidate lists of those individuals selected by the
Trade Representative to be candidates eligible to serve
on binational panels and extraordinary challenge
committees convened pursuant to chapter 19 of the
Agreement during the 1-year period beginning on April 1
of such calendar year. An individual may be included on
a final candidate list only if written notice of the
addition of such individual to the preliminary
candidate list was submitted to the appropriate
Congressional Committees at least 15 days before the
date on which that final candidate list is submitted to
the appropriate Congressional Committees under this
subparagraph.
(B) Except as provided in paragraph (5), no additions
may be made to the final candidate lists after the
final candidate lists are submitted to the appropriate
Congressional Committees under subparagraph (A).
(5)(A) If, after the Trade Representative has
submitted the final candidate lists to the appropriate
Congressional Committees under paragraph (4)(A) for a
calendar year and before July 1 of such calendar year,
the Trade Representative determines that additional
individuals need to be added to a final candidate list,
the Trade Representative shall--
(i) request the interagency group established
under paragraph (1)(A) to prepare a list of
individuals who are qualified to be added to
such candidate list,
(ii) select individuals from the list
prepared by the interagency group under
paragraph (1)(B)(ii) to be included in a
proposed amendment to such final candidate
list, and
(iii) by no later than July 1 of such
calendar year, submit to the appropriate
Congressional Committees the proposed
amendments to such final candidate list
developed by the Trade Representative under
clause (ii).
(B) Upon submission of a proposed amendment under
subparagraph (A)(iii) to the appropriate Congressional
Committees, the Trade Representative shall consult with
the appropriate Congressional Committees with regard to
the individuals included in the proposed amendment.
(C) The Trade Representative may add or delete
individuals from any proposed amendment submitted under
subparagraph (A)(iii) after consulting the appropriate
Congressional Committees with regard to such addition
or deletion. The Trade Representative shall provide to
the appropriate Congressional Committees written notice
of any addition or deletion of an individual from the
proposed amendment.
(D)(i) If the Trade Representative submits under
subparagraph (A)(iii) in any calendar year a proposed
amendment to a final candidate list, the Trade
Representative shall, by no later than September 30 of
such calendar year, submit to the appropriate
Congressional Committees the final form of such
amendment. On October 1 of such calendar year, such
amendment shall take effect and the individuals
included in the final form of such amendment shall be
added to the final candidate list.
(ii) An individual may be included in the final form
of an amendment submitted under clause (i) only if
written notice of the addition of such individual to
the proposed form of such amendment was submitted to
the appropriate Congressional Committees at least 15
days before the date on which the final form of such
amendment is submitted under clause (i).
(iii) Individuals added to a final candidate list
under clause (i) shall be eligible to serve on
binational panels or extraordinary challenge committees
convened pursuant to chapter 19 of the Agreement, as
the case may be, during the 6-month period beginning on
October 1 of the calendar year in which such addition
occurs.
(iv) No additions may be made to the final form of an
amendment described in clause (i) after the final form
of such amendment is submitted to the appropriate
Congressional Committees under clause (i).
(6)(A) The Trade Representative is the only officer
of the Government of the United States authorized to
act on behalf of the Government of the United States in
making any selection or appointment of an individual
to--
(i) the rosters described in Annex 1901.2(1)
and Annex 1904.13(1) of the Agreement, or
(ii) the binational panels or extraordinary
challenge committees convened pursuant to
chapter 19 of the Agreement,
that is to be made solely or jointly by the Government
of the United States under the terms of the Agreement.
(B) Except as otherwise provided in paragraph (7)(B),
the Trade Representative may--
(i) select an individual for placement on the
rosters described in Annex 1901.2(1) and Annex
1904.13(1) of the Agreement during the 1-year
period beginning on April 1 of any calendar
year,
(ii) appoint an individual to serve as one of
those members of any binational panel or
extraordinary challenge committee convened
pursuant to chapter 19 of the Agreement during
such 1-year period who, under the terms of the
Agreement, are to be appointed solely by the
Government of the United States, or
(iii) act to make a joint appointment with
the Government of Canada, under the terms of
the Agreement, of any individual who is a
citizen or national of the United States to
serve as any other member of such a panel or
committee,
only if such individual is on the appropriate final
candidate list that was submitted to the appropriate
Congressional Committees under paragraph (4)(A) during
such calendar year or on such list as it may be amended
under paragraph (5)(D)(i).
(7)(A) Except as otherwise provided in this
paragraph, no individual may--
(i) be selected by the Government of the
United States for placement on the rosters
described in Annex 1901.2(1) and Annex
1904.13(1) of the Agreement, or
(ii) be appointed solely or jointly by the
Government of the United States to serve as a
member of a binational panel or extraordinary
challenge committee convened pursuant to
chapter 19 of the Agreement,
during the 1-year period beginning on April 1 of any
calendar year for which the Trade Representative has
not met the requirements of this subsection.
(B)(i) Notwithstanding paragraphs (3), (4), or (6)(B)
(other than paragraph (3)(A)), individuals listed on
the preliminary candidate lists submitted to the
appropriate Congressional Committees under paragraph
(3)(A) may--
(I) be selected by the Trade Representative
for placement on the rosters described in Annex
1901.2(1) and Annex 1904.13(1) of the Agreement
during the 3-month period beginning on the date
on which the Agreement enters into force, and
(II) be appointed solely or jointly by the
Trade Representative under the terms of the
Agreement to serve as members of binational
panels or extraordinary challenge committees
that are convened pursuant to chapter 19 of the
Agreement during such 3-month period.
(ii) If the Agreement enters into force after January
3, 1989, the provisions of this subsection shall be
applied with respect to the calendar year in which the
Agreement enters into force--
(I) by substituting ``the date that is 30
days after the date on which the Agreement
enters into force'' for ``January 3 of each
calendar year'' in paragraphs (1)(B)(i) and
(3)(A), and
(II) by substituting ``the date that is 3
months after the date on which the Agreement
enters into force'' for ``March 31 of each
calendar year'' in paragraph (4)(A).
(b) Status of Panelists.--Notwithstanding any other provision
of law, individuals appointed by the United States to serve on
panels or committees convened pursuant to chapter 19 of the
Agreement, and individuals designated to assist such appointed
individuals, shall not be considered to be employees or special
employees of, or to be otherwise affiliated with, the
Government of the United States.
(c) Immunity of Panelists.--With the exception of acts
described in section 777f(d)(3) of the Tariff Act of 1930, as
added by this Act, individuals serving on panels or committees
convened pursuant to chapter 19 of the Agreement, and
individuals designated to assist the individuals serving on
such panels or committees, shall be immune from suit and legal
process relating to acts performed by such individuals in their
official capacity and within the scope of their functions as
such panelists or committee members or assistants to such
panelists or committee members.
(d) Regulations.--The administering authority under title VII
of the Tariff Act of 1930, the United States International
Trade Commission, and the United States Trade Representative
may promulgate such regulations as are necessary or appropriate
to carry out actions in order to implement their respective
responsibilities under chapters 18 and 19 of the Agreement.
Initial regulations to carry out such functions shall be issued
prior to the date of entry into force of the Agreement.
(e) Establishment of United States Secretariat.--
(1) The President is authorized to establish within
any department or agency of the Federal Government a
United States Secretariat which, subject to the
oversight of the interagency group established under
subsection (a)(1)(A), shall facilitate--
(A) the operation of chapters 18 and 19 of
the Agreement, and
(B) the work of the binational panels and
extraordinary challenge committees convened
under chapters 18 and 19 of the Agreement.
(2) The United States Secretariat established by the
President under paragraph (1) shall not be considered
to be an agency for purposes of section 552 of title 5,
United States Code.
SEC. 406. AUTHORIZATION OF APPROPRIATIONS FOR THE SECRETARIAT, THE
PANELS, AND THE COMMITTEES.
(a) The Secretariat.--There are authorized to be appropriated
to the department or agency within which the United States
Secretariat described in chapter 19 of the Agreement is
established the lesser of--
(1) such sums as may be necessary, or
(2) $5,000,000,
for each fiscal year succeeding fiscal year 1988 for the
establishment and operations of such United States Secretariat
and for the payment of the United States share of the expenses
of the dispute settlement proceedings under chapter 18 of the
Agreement.
(b) Panels and Committees.--
(1) There are authorized to be appropriated to the
Office of the United States Trade Representative for
fiscal year 1990, $1,492,000 to pay during such fiscal
year the United States share of the expenses of
binational panels and extraordinary challenge
committees convened pursuant to chapter 19 of the
Agreement.
(2) The United States Trade Representative is
authorized to transfer to any department or agency of
the United States, from sums appropriated pursuant to
the authorization provided under paragraph (1) or
section 141(g)(1) of the Trade Act of 1974, such funds
as may be necessary to facilitate the payment of the
expenses described in paragraph (1).
(3) Funds appropriated for the payment of expenses
described in paragraph (1) during any fiscal year may
be expended only to the extent such funds do not exceed
the amount authorized to be appropriated under
paragraph (1) for such fiscal year. This paragraph
shall apply, notwithstanding any law enacted after the
date of enactment of this Act, unless such subsequent
law specifically provides that this paragraph shall not
apply and specifically cites this paragraph.
(4) If the Canadian Secretariat described in chapter
19 of the Agreement provides funds during any fiscal
year for the purpose of paying, in accordance with
Annex 1901.2 of the Agreement, the Canadian share of
the expenses of binational panels, the United States
Secretariat established under section 405(e)(1) may
hereafter retain and use such funds for such purposes.
SEC. 407. TESTIMONY AND PRODUCTION OF PAPERS IN EXTRAORDINARY
CHALLENGES.
(a) Authority of Extraordinary Challenge Committee To Obtain
Information.--If an extraordinary challenge committee
(hereinafter referred to in this section as the ``committee'')
is convened pursuant to article 1904(13) of the Agreement, and
the allegations before the committee include a matter referred
to in article 1904(13)(a)(i) of the Agreement, for the purposes
of carrying out its functions and duties under Annex 1904.13 of
the Agreement, the committee--
(1) shall have access to, and the right to copy, any
document, paper, or record pertinent to the subject
matter under consideration, in the possession of any
individual, partnership, corporation, association,
organization, or other entity,
(2) may summon witnesses, take testimony, and
administer oaths,
(3) may require any individual, partnership,
corporation, association, organization, or other entity
to produce documents, books, or records relating to the
matter in question, and
(4) may require any individual, partnership,
corporation, association, organization, or other entity
to furnish in writing, in such detail and in such form
as the committee may prescribe, information in its
possession pertaining to the matter.
Any member of the committee may sign subpoenas, and members of
the committee, when authorized by the committee, may administer
oaths and affirmations, examine witnesses, take testimony, and
receive evidence.
(b) Witnesses and Evidence.--The attendance of witnesses who
are authorized to be summoned, and the production of
documentary evidence authorized to be ordered, under subsection
(a) may be required from any place in the United States at any
designated place of hearing. In the case of disobedience to a
subpoena authorized under subsection (a), the committee may
request the Attorney General of the United States to invoke the
aid of any district or territorial court of the United States
in requiring the attendance and testimony of witnesses and the
production of documentary evidence. Such court, within the
jurisdiction of which such inquiry is carried on, may, in case
of contumacy or refusal to obey a subpoena issued to any
individual, partnership, corporation, association,
organization, or other entity, issue an order requiring such
individual or entity to appear before the committee, or to
produce documentary evidence if so ordered or to give evidence
concerning the matter in question. Any failure to obey such
order of the court may be punished by such court as a contempt
thereof.
(c) Mandamus.--Any court referred to in subsection (b) shall
have jurisdiction to issue writs of mandamus commanding
compliance with the provisions of this section or any order of
the committee made in pursuance thereof.
(d) Depositions.--The committee may order testimony to be
taken by deposition at any stage of the committee review. Such
deposition may be taken before any person designated by the
committee and having power to administer oaths. Such testimony
shall be reduced to writing by the person taking the
deposition, or under the direction of such person, and shall
then be subscribed by the deponent. Any individual,
partnership, corporation, association, organization or other
entity may be compelled to appear and depose and to produce
documentary evidence in the same manner as witnesses may be
compelled to appear and testify and produce documentary
evidence before the committee, as provided in this section.
SEC. 408. REQUESTS FOR REVIEW OF CANADIAN ANTIDUMPING AND
COUNTERVAILING DUTY DETERMINATIONS.
(a) Requests for Review by the United States.--In the case of
a final antidumping or countervailing duty determination of a
competent investigating authority of Canada, as defined in
article 1911 of the Agreement, requests by the United States
for binational panel review under article 1904 of the Agreement
shall be made by the United States Secretary, described in
article 1909(4) of the Agreement.
(b) Requests for Review by a Person.--In the case of a final
antidumping or countervailing duty determination of a competent
investigating authority of Canada, as defined in article 1911
of the Agreement, a person, within the meaning of article
1904(5) of the Agreement, may request a binational panel review
of such determination by filing with the United States
Secretary, described in article 1909(4) of the Agreement, such
a request within the time limit provided for in article 1904(4)
of the Agreement. The receipt of such request by the United
States Secretary shall be deemed to be a request for binational
panel review within the meaning of article 1904(4) of the
Agreement. Such request shall contain such information and be
in such form, manner, and style as the administering authority
shall prescribe by regulations. The request for such panel
review shall not preclude the United States, Canada, or any
other person from challenging before a binational panel the
basis for a particular request for review.
(c) Service of Request for Review.--Whenever binational panel
review is requested under this section, the United States
Secretary shall serve a copy of the request on all persons who
would otherwise be entitled under Canadian law to commence
procedures for judicial review of a final antidumping or
countervailing duty determination made by a competent
investigating authority of Canada.
[SEC. 409. SUBSIDIES.
Suspended, as provided in section 501(c)(3) (reprinted
elsewhere).]
SEC. 410. TERMINATION OF AGREEMENT.
(a) In General.--If--
(1) no agreement is entered into between the United
States and Canada on a substitute system of rules for
antidumping and countervailing duties before the date
that is 7 years after the date on which the Agreement
enters into force, and
(2) the President decides not to exercise the rights
of the United States under article 1906 of the
Agreement to terminate the Agreement,
the President shall submit to the Congress a report on such
decision which explains why continued adherence to the
Agreement is in the national economic interest of the United
States. In calculating the 7-year period referred to in
paragraph (1), any time during which Canada is a NAFTA country
(as defined in section 2(4) of the North American Free Trade
Agreement Implementation Act) shall be disregarded.
[(b) Transition Provisions.--Suspended as provided in section
501(c)(3).]
TITLE V--EFFECTIVE DATES AND SEVERABILITY
SEC. 501. EFFECTIVE DATES.
(a) In General.--Except as provided in subsection (b), the
provisions of this Act, and the amendments made by this Act,
shall take effect on the date of enactment of this Act.
(b) Exceptions.--Sections 1 and 2, title I, section 304
(except subsection (f)), section 309, this section and section
502 shall take effect on the date of enactment of this Act.
(c) Termination or Suspension of Agreement.--
(1) Termination of agreement.--On the date the
Agreement ceases to be in force, the provision of this
Act (other than this paragraph and section 410(b)), and
the amendments made by this Act, shall cease to have
effect.
(2) Effect of agreement suspension.--An agreement by
the United States and Canada to suspend the operation
of the Agreement shall not be deemed to cause the
Agreement to cease to be in force within the meaning of
paragraph (1).
(3) Suspension resulting from nafta.--On the date the
United States and Canada agree to suspend the operation
of the Agreement by reason of the entry into force
between them of the North American Free Trade
Agreement, the following provisions of this Act are
suspended and shall remain suspended until such time as
the suspension of the Agreement may be terminated:
(A) Sections 204(a) and (b) and 205(a).
(B) Sections 302 and 304(f).
(C) Sections 404, 409, and 410(b).
SEC. 502. SEVERABILITY.
If any provision of this Act, any amendment made by this
Act, or the application of such a provision or amendment to any
person or circumstances is held to be invalid, the remainder of
this Act, the remaining amendments made by this Act, and the
application of such provision or amendment to persons or
circumstances other than those to which it is held invalid,
shall not be affected thereby.
Automotive Products Trade Act of 1965, as amended
[19 U.S.C. 2001 et seq.; P.L. 89-283, as amended by P.L. 96-39 and P.L.
100-418]
TITLE I--SHORT TITLE AND PURPOSES
SEC. 101. SHORT TITLE.
This Act may be cited as the ``Automotive Products Trade Act
of 1965.''
SEC. 102. PURPOSES.
The purposes of this Act are--
(1) to provide for the implementation of the
Agreement Concerning Automotive Products Between the
Government of the United States of America and the
Government of Canada signed on January 16, 1965
(hereinafter referred to as the ``Agreement''), in
order to strengthen the economic relations and expand
trade in automotive products between the United States
and Canada; and
(2) to authorize the implementation of such other
international agreements providing for the mutual
reduction or elimination of duties applicable to
automotive products as the Government of the United
States may hereafter enter into.
TITLE II--BASIC AUTHORITIES
SEC. 201. IMPLEMENTATION OF THE AGREEMENT.
(a) The President is authorized to proclaim the
modifications of the Harmonized Tariff Schedule of the United
States provided for in title IV of this Act.
(b) At any time after the issuance of the proclamation
authorized by subsection (a), the President is authorized to
proclaim further modifications of the Harmonized Tariff
Schedule of the United States to provide for the duty-free
treatment of any Canadian article which is original motor-
vehicle equipment (as defined by such Schedules as modified
pursuant to subsection (a)) if he determines that the
importation of such article, is actually or potentially of
commercial significance and that such duty-free treatment is
required to carry out the Agreement.
SEC. 202. IMPLEMENTATION OF OTHER AGREEMENTS.
(a) Whenever, after determining that such an agreement will
afford mutual trade benefits, the President enters into an
agreement with the government of a country providing for the
mutual elimination of the duties applicable to products of
their respective countries which are motor vehicles and
fabricated components intended for use as original equipment in
the manufacture of such vehicles, the President (in accordance
with subsection (d)) is authorized to proclaim such
modifications of the Tariff Schedules of the United States as
he determines to be required to carry out such agreement.
(b) Whenever, after having entered into an agreement with
the government of a country providing for the mutual
elimination of the duties applicable to products described in
subsection (a), the President, after determining that such
further agreement will afford mutual trade benefits, enters
into a further agreement with such government providing for the
mutual reduction or elimination of the duties applicable to
automotive products other than motor vehicles and fabricated
components intended for use as original equipment in the
manufacture of such vehicles, the President (in accordance with
subsection (d)) is authorized to proclaim such modifications of
the Tariff Schedules of the United States as he determines to
be required to carry out such further agreement.
(c) Before the President enters into the negotiation of an
agreement referred to in subsection (a) or (b), he shall--
(1) seek the advice of the Tariff Commission as to
the probable economic effect of the reduction or
elimination of duties on industries producing articles
like or directly competitive with those which may be
covered by such agreement;
(2) give reasonable public notice of his intention to
negotiate such agreement (which notice shall be
published in the Federal Register) in order that any
interested person may have an opportunity to present
his views to such agency as the President may
prescribe; and
(3) seek information and advice with respect to such
agreement from the Department of Commerce, Labor,
State, and the Treasury, and from such other sources as
he may deem appropriate.
(d)(1) The President shall transmit to each House of the
Congress a copy of each agreement referred to in subsection (a)
or (b). The delivery to both Houses shall be on the same day
and shall be made to each House while it is in session.
(2) The President is authorized to issue any proclamation
to carry out any such agreement--
(A) only after the expiration of the 60-day period
following the date of delivery,
(B) only if, between the date of delivery and the
expiration of such 60-day period, the Congress has not
adopted a concurrent resolution stating in substance
that the Senate and House of Representatives disapprove
of the agreement, and
(C) in the case of any agreement referred to in
subsection (b) with any country only if there is in
effect a proclamation implementing an agreement with
such country applicable to products described in
subsection (a).
(3) For purposes of paragraph (2) in the computation of the
60-day period there shall be excluded the days on which either
House is not in session because of adjournment of more than 3
days to a day certain or an adjournment of the Congress sine
die.
(e) This section shall cause to be in effect on the day
after the date of the enactment of this Act.
SEC. 203. EFFECTIVE DATE OF PROCLAMATIONS.
(a) Subject to subsection (b), the President is authorized,
notwithstanding section 514 of the Tariff Act of 1930 (19
U.S.C., sec. 1514) or any other provision of law, to give
retroactive effect to any proclamation issued pursuant to
section 201 of this Act as of the earliest date after January
17, 1965, which he determines to be practicable.
(b) In the case of liquidated customs entries, the
retroactive effect pursuant to subsection (a) of any
proclamation shall apply only upon request therefor filed with
the customs officer concerned on or before the 90th day after
the date of such proclamation and subject to such other
conditions as the President may specify.
SEC. 204. TERMINATION OF PROCLAMATIONS.
The President is authorized at any time to terminate, in
whole or in part, any proclamation issued pursuant to section
201 or 202 of this Act.
SEC. 205. SPECIAL REPORTS TO CONGRESS.
(a) No later than August 31, 1968, the President shall
submit to the Senate and the House of Representatives a special
report on the comprehensive review called for by Article IV(c)
of the Agreement. In such report he shall advise the Congress
of the progress made toward the achievement of the objectives
of Article I of the Agreement.
(b) Whenever the President finds that any manufacturer has
entered into any undertaking, by reason of governmental action,
to increase the Canadian value added of automobiles, buses,
specified commercial vehicles, or original equipment parts
produced by such manufacturer in Canada after August 31, 1968,
he shall report such finding to the Senate and the House of
Representatives. The President shall also report whether such
undertaking is additional to undertakings agreed to in letters
of undertaking submitted by such manufacturer before the date
of enactment of this Act.
(c) The reports provided for in subsections (a) and (b) of
this section shall include recommendations for such further
steps, including legislative action, if any, as may be
necessary for the achievement of the purposes of the Agreement
and this Act.
TITLE III--TARIFF ADJUSTMENT AND OTHER ADJUSTMENT ASSISTANCE
SEC. 301. GENERAL AUTHORITY.
Subject to section 302 of this Act, a petition may be filed
for tariff adjustment or for a determination of eligibility to
apply for adjustment assistance under title III of the Trade
Expansion Act of 1962 (19 U.S.C., sec. 1901-1991) as though the
reduction or elimination of a duty proclaimed by the President
pursuant to section 201 or 202 of this Act were a concession
granted under a trade agreement referred to in section 301 of
the Trade Expansion Act of 1962.
SEC. 302. SPECIAL AUTHORITY DURING TRANSITIONAL PERIOD UNDER THE
AGREEMENT.
(a) After the 90th day after the date of the enactment of
this Act and before July 1, 1968, a petition under section 301
of this Act for a determination of eligibility to apply for
adjustment assistance may be filed with the President by--
(1) a firm which produces an automotive product, or
its representative; or
(2) a group of workers in a firm which produces an
automotive product, or their certified or recognized
union or other duly authorized representative.
(b) After a petition is filed by a firm or group of workers
under subsection (a), the President shall determine whether--
(1) dislocation of the firm or group of workers has
occurred or threatens to occur;
(2) production in the United States of the automotive
product concerned produced by the firm, or an
appropriate subdivision thereof, and of the automotive
product like or directly competitive therewith, has
decreased appreciably; and
(3)(A) imports into the United States from Canada of
the Canadian automotive product like or directly
competitive with that produced by the firm, or an
appropriate subdivision thereof, have increased
appreciably; or
(B) exports from the United States to Canada of the
United States automotive product concerned produced by
the firm, or an appropriate subdivision thereof, and of
the United States automotive product like or directly
competitive therewith, have decreased appreciably, and
the decrease in such exports is greater than the
decrease, if any, in production in Canada of the
Canadian automotive product like or directly
competitive with the United States automotive product
being exported.
(c) If the President makes an affirmative determination
under paragraphs (1), (2), and (3) of subsection (b), with
respect to a firm or group of workers, he shall promptly
certify that as a result of its dislocation the firm or group
of workers is eligible to apply for adjustment assistance,
unless the President determines that the operation of the
Agreement has not been the primary factor in causing or
threatening to cause dislocation of the firm or group of
workers.
(d) If the President makes an affirmative determination
under paragraph (1) but a negative determination under
paragraph (2) or (3) of subsection (b), with respect to a firm
or group of workers, the President shall determine whether the
operation of the Agreement has nevertheless been the primary
factor in causing or threatening to cause dislocation of the
firm or group of workers. If the President makes such an
affirmative determination, he shall promptly certify that as a
result of its dislocation the firm or group of workers is
eligible to apply for adjustment assistance.
(e)(1) In order to provide the President with a factual
record on the basis of which he may make the determinations
referred to in subsections (b), (c), and (d) with respect to a
firm or a group of workers, the President shall promptly
transmit to the Tariff Commission a copy of each petition filed
under such subsection (a) and, not later than 5 days after the
date on which the petition is filed, shall request the Tariff
Commission to conduct an investigation related to questions of
fact relevant to such determinations and to make a report of
the facts disclosed by such investigation. In his request, the
President may specify the particular kinds of data which he
deems appropriate. Upon receipt of the President's request, the
Tariff Commission shall promptly institute the investigation
and public notice thereof in the Federal Register.
(2) In the course of each investigation conducted under
paragraph (1), the Tariff Commission shall, after reasonable
notice, hold a public hearing, if such hearing is requested
(not later than 10 days after the date of the publication of
its notice under paragraph (1)) by the petitioner or any other
person showing a proper interest in the subject matter of the
investigation, and shall afford interested persons an
opportunity to be present, to produce evidence, and to be heard
at such hearing.
(3) Not later than 50 days after the date on which it
receives the request of the President under paragraph (1), the
Tariff Commission shall transmit to the President a report of
the facts disclosed by its investigation, together with the
transcript of the hearing and any briefs which may have been
submitted in connection with such investigation.
(f)(1) The President shall make each final determination
under subsection (b), (c), or (d) with respect to a firm or
group of workers only after he has sought advice from the
Departments of Commerce, Labor, and the Treasury, the Small
Business Administration, and such other agencies as he may deem
appropriate.
(2) The President shall make each such final determination
not later than 15 days after the date on which he receives the
Tariff Commission's report, unless, within such period, the
President requests additional factual information from the
Tariff Commission. In this event, the Tariff Commission shall,
not later than 25 days after the date on which it receives the
President's request, furnish such additional factual
information in a supplemental report, and the President shall
make his final determination not later than 10 days after the
date on which he receives such supplemental report.
(3) The President shall promptly publish in the Federal
Register a summary of each final determination under this
section.
(g) Any certification with respect to a group of workers
made by the President under this section shall--
(1) specify the date on which the dislocation began
or threatens to begin; and
(2) be terminated by the President whenever he
determines that the operation of the Agreement is no
longer the primary factor in causing separations from
the firm or subdivision thereof, in which case such
termination shall apply only with respect to
separations occurring after the termination date
specified by the President.
(h) Any certification with respect to a firm or a group of
workers or any termination of such certification, including the
specification of a date in such certification or termination,
made by the President under this section shall constitute a
certification or termination, including the specification of a
date therein, under section 302 of the Trade Expansion Act of
1962 (19 U.S.C., sec. 1902) for purposes of chapter 2 or of
title III of that Act.
(i) If a firm which has been certified under this section
applies for tax assistance as provided by section 317 of the
Trade Expansion Act of 1962, the reference in subsection (a)(2)
of such section 317 to a trade or business which was seriously
injured by increased imports which the Tariff Commission has
determined to result from concessions granted under trade
agreements shall be treated as referring to a trade or business
which was seriously injured by the operation of the Agreement.
(j) Notwithstanding any provision of chapter 3 of title III
of the Trade Expansion Act of 1962 or of this title,
applications based on any certification made by the President
under this section for--
(1) trade readjustment allowances for weeks of
unemployment beginning after January 17, 1965, and
before the 90th day after the date of the enactment of
this Act, and
(2) relocation allowances for relocations occurring
after January 17, 1965, and before such 90th day,
shall be determined in accordance with regulations prescribed
by the Secretary of Labor.
(k) The President is authorized to exercise any of his
functions under this section through such agency or other
instrumentality of the United States Government as he may
direct and in conformity with such rules or regulations as he
may prescribe.
(l) For purposes of this section--
(1) The term ``automotive product'' means a motor
vehicle or a fabricated component to be used as
original equipment in the manufacture of motor
vehicles.
(2) The term ``dislocation'' means--
(A) in the case of a firm, injury to the
firm, which may be evidenced by such conditions
as idling of productive facilities, inability
to operate at a level of reasonable profit, or
unemployment or underemployment and which is of
a serious nature; and
(B) in the case of a group of workers,
unemployment or underemployment of a
significant number or proportion of the workers
of a firm or an appropriate subdivision
thereof.
(3) The term ``firm'' includes an individual
proprietorship, partnership, joint venture,
association, corporation (including a development
corporation), business trust, cooperative, trustees in
bankruptcy, and receivers under decree of any court. A
firm, together with any predecessor, successor, or
affiliated firm controlled or substantially
beneficially owned by substantially the same persons,
may be considered a single firm where necessary to
prevent unjustifiable benefits.
(4) The term ``operation of the Agreement'' includes
governmental or private actions in the United States or
Canada directly related to the conclusion or
implementation of the Agreement.
SEC. 303. ADJUSTMENT ASSISTANCE RELATED TO OTHER AGREEMENTS.
At the time the President transmits to the Congress a copy
of any agreement pursuant to section 202(d)(1), he shall
recommend to the Congress such legislative provisions
concerning adjustment assistance to firms and workers as he
determines to be appropriate in light of the anticipated
economic impact of the reduction or elimination of duties
provided for by such agreement.
SEC. 304. AUTHORIZATION OF APPROPRIATIONS.
There are hereby authorized to be appropriated such sums as
may be necessary from time to time to carry out the provisions
of this title, which sums are authorized to be appropriated to
remain available until expended.
TITLE IV--MODIFICATIONS OF TARIFF SCHEDULES OF THE UNITED STATES
SEC. 401. ENTRY INTO FORCE AND STATUS OF MODIFICATIONS.
(a) The modifications of the Tariff Schedules of the United
States provided for in this title shall not enter into force
except as proclaimed by the President pursuant to section
201(a) of this Act.
(b) The rates of duty in column numbered 1 of the Tariff
Schedules of the United States which are modified pursuant to
section 201(a) of this Act shall be treated--
(1) as not having the status of statutory provisions
enacted by the Congress, but
(2) as having been proclaimed by the President as
being required to carry out a foreign trade agreement
to which the United States is a party.
SEC. 402. REFERENCES TO TARIFF SCHEDULES.
Whenever in this title a modification is expressed in terms
of a modification of an item or other provision, the reference
shall be considered to be made to an item or other provision of
the Tariff Schedules of the United States (19 U.S.C., sec.
1202). Each page reference ``(p. )'' in this title refers to
the page on which the item or provision referred to appears
both in part II of the Federal Register for August 7, 1963, and
in volume 77A of the United States Statutes at Large.
SEC. 403. DEFINITION OF CANADIAN ARTICLE.
In general headnote 3 (pp. 11 and 12) redesignate
paragraphs (d), (e), and (f) as paragraphs (e), (f), and (g),
respectively, and insert a new paragraph (d) as follows:
[Text of general headnote 3(c).]
SEC. 404. DEFINITION OF ORIGINAL MOTOR-VEHICLE EQUIPMENT.
In the headnotes for subpart B, part 6, schedule 6, add
after headnote 1 (p. 325) the following new headnote:
[Text of headnote 2, part 6B, schedule 6.]
SEC. 405. IDENTIFICATION OF AUTOMOTIVE PRODUCTS.
(a) Redesignate item 692.25 (p. 326) as 692.27; in headnote
1(b) of subpart B, part 6, schedule 6 (p. 325) substitute
``item 692.27'' in lieu of ``item 692.25''; and insert in
proper numerical sequence new items as follows:
-``692.0If Canadian article, but not--------Free------------------------
including any electric trolley
bus, three-wheeled vehicle, or
trailer accompanying an
automobile truck tractor (see
general headnote 3(d))
692.1If Canadian article, but not Free
including any three-wheeled
vehicle (see general headnote
3(d))
692.21 Chassis, if Canadian article, Free
except chassis for an
electric trolley bus, or a
three-wheeled vehicle; bodies
(including cabs), if Canadian
article and original motor-
vehicle equipment (see
headnote 2 of this subpart)
692.23 Chassis, if Canadian article, Free
except chassis designed
primarily for a vehicle
described in item 692.15 or a
three-wheeled vehicle; bodies
(including cabs), if Canadian
article and original motor-
vehicle equipment (see
headnote 2 of this subpart)
692.25 If Canadian article and Free
original motor-vehicle
equipment (see headnote 2 of
this subpart)
692.28 Automobile truck tractors, if Free''
Canadian article: other
articles, if Canadian article
and original motor-vehicle
equipment (see headnote 2 of
this subpart)
------------------------------------------------------------------------
(b) Insert in proper numerical sequence new items as
follows:
-``361.9Any article described in the--------Free------------------------
foregoing items 360.20 to 360.70,
inclusive, 360.80, 361.80, or
361.85, if Canadian article and
original motor-vehicle equipment
(see headnote 2, part 6B,
schedule 6)
516.9Any article described in the Free
foregoing items 516.71 to 516.76,
inclusive, or 516.94, if Canadian
article and original motor-
vehicle equipment (see headnote
2, part 6B, schedule 6)
646.7Any article described in the Free
foregoing items 646.20 and items
646.78, inclusive (except 646.45
and 646.47), if Canadian article
and original motor-vehicle
equipment (see headnote 2, part
6B, schedule 6)
652.3Any article described in the Free
foregoing items 652.12 to 652.38,
inclusive, if Canadian article
and original motor-vehicle
equipment (see headnote 2, part
6B, schedule 6)
658.1Any article described in the Free
foregoing items 657.09 to 658.00,
inclusive, if Canadian article
and original motor-vehicle
equipment (see headnote 2, part
6B, schedule 6)
682.6Any article described in the Free
foregoing items 682.10 to 682.60,
inclusive (except 682.50), if
Canadian article and original
motor-vehicle equipment (see
headnote 2, part 6B, schedule 6)
685.5Any article described in the Free
foregoing items 685.20 to 685.50,
inclusive, if Canadian article
and original motor-vehicle
equipment (see headnote 2, part
6B, schedule 6)
721.2Any article in the foregoing item Free''
covering clocks, clock movements,
clock cases and dials and parts
thereof, plates (720.67),
assemblies and subassemblies for
clock movements, and other parts
for clock movements, if Canadian
article and original motor-
vehicle equipment (see headnote
2, part 6B, schedule 6)
------------------------------------------------------------------------
(c) Insert in proper numerical sequence new items 355.27,
389.80, 728.30, 745.80, and 774.70, each having an article
description and rate as follows:
------- ``Any article described in the------Free''----------------------
foregoing provisions of this
subpart, if Canadian article and
original motor-vehicle equipment
(see headnote 2, part 6B,
schedule 6)
------------------------------------------------------------------------
(d) Redesignate item 613.16 as 613.18, item 652.85 as
652.84, item 652.87 as 652.88, item 680.34 as 680.33, item
680.58 as 680.60, item 680.59 as 680.70, item 680.60 as 680.90,
and item 711.91 as 711.93; and insert in proper numerical
sequence new items as follows:
207.01 652.89 683.11
220.46 660.43 683.16
357.91 660.45 683.61
357.96 660.47 683.66
358.03 660.51 684.41
517.82 660.53 684.63
535.15 660.55 684.71
540.72 660.86 685.71
544.18 660.93 685.81
544.32 660.95 685.91
544.42 661.11 686.11
544.52 661.13 686.23
544.55 661.16 686.61
545.62 661.21 686.81
545.64 661.36 687.51
547.16 661.93 687.61
610.81 661.96 688.13
613.16 662.36 688.41
613.19 662.51 711.85
618.48 664.51 711.91
620.47 678.51 711.99
642.21 680.21 712.51
642.86 680.23 727.07
642.88 680.28 772.66
646.93 680.31 772.81
647.02 680.34 772.86
647.06 680.36 773.26
652.10 680.58 773.31
652.76 680.91 791.81
652.85 682.71 791.91
652.87 682.91
each such item having the article description ``If Canadian
article and original motor-vehicle equipment (see headnote 2,
part 6B, schedule 6) * * *'' subordinate to the immediately
preceding article description, and having ``Free'' in rate of
duty column numbered 1.
TITLE V--GENERAL PROVISIONS
SEC. 501. AUTHORITIES.
The head of any agency performing functions authorized by
this Act may--
(1) authorize the head of any agency to perform any
of such functions; and
(2) prescribe such rules and regulations as may be
necessary to perform such functions.
SEC. 502. ANNUAL REPORT.
The President shall submit to the Congress an annual report
on the implementation of this Act. Such report shall include
information regarding new negotiations, reductions or
eliminations of duties, reciprocal concessions obtained, and
other information relating to activities under this Act. Such
report shall also include information providing an evaluation
of the Agreement and this Act in relation to the total national
interest, and specifically shall include, to the extent
practicable, information with respect to--
(1) the production of motor vehicles and motor
vehicle parts in the United States and Canada,
(2) the retail prices of motor vehicles and motor
vehicles parts in the United States and Canada,
(3) employment in the United States and Canada, and
(4) United States and Canadian trade in motor
vehicles and motor vehicle parts, particularly trade
between the United States and Canada.
SEC. 503. APPLICABILITY OF ANTIDUMPING AND ANTITRUST LAWS.
Nothing contained in this Act shall be construed to affect
or modify the provisions of subtitle B of title VII of the
Tariff Act of 1930, or of any of the antitrust laws as
designated in section 1 of the Act entitled ``An Act to
supplement existing laws against unlawful restraints and
monopolies, and for other purposes'', approved October 15, 1914
(15 U.S.C. 12).
TITLE VI--MISCELLANEOUS PROVISIONS
SEC. 601. JOINT COMMITTEE ON REDUCTION OF NONESSENTIAL FEDERAL
EXPENDITURES.
Section 601(e) of the Revenue Act of 1941 (55 Stat. 726)
(relating to the Joint Committee on Reduction of Nonessential
Federal Expenditures) is amended to read as follows:
``(e) There are hereby authorized to be appropriated such
sums as may be necessary to carry out the provisions of this
section.''
General Note 5 of the Harmonized Tariff Schedule
Automotive Products and Motor Vehicles Eligible for Special
Tariff Treatment.--Articles entered under the Automotive
Products Trade Act are subject to the following provisions:
(a) Motor vehicles and original motor-vehicle
equipment which are Canadian articles and which fall in
provisions for which the rate of duty ``Free (B)''
appears in the ``Special'' subcolumn may be entered
free of duty. As used in this note--
(1) The term ``Canadian article'' means an
article which originates in Canada, as defined
in general note 12.
(2) The term ``original motor-vehicle
equipment'', as used with reference to a
Canadian article (as defined above), means such
a Canadian article which has been obtained from
a supplier in Canada under or pursuant to a
written order, contract or letter of intent of
a bona fide motor vehicle manufacturer in the
United States, and which is a fabricated
component originating in Canada, as defined in
general note 12, and intended for use as
original equipment in the manufacture in the
United States of a motor vehicle, but the term
does not include trailers or articles to be
used in their manufacture.
(3) The term ``motor vehicle'', as used in
this note, means a motor vehicle of a kind
described in headings 8702, 8703 and 8704 of
chapter 87 (excluding an electric trolley bus
and a three-wheeled vehicle) or an automobile
truck tractor principally designed for the
transport of persons or goods.
(4) The term ``bona fide motor-vehicle
manufacturer'' means a person who, upon
application to the Secretary of Commerce, is
determined by the Secretary to have produced no
fewer than 15 complete motor vehicles in the
United States during the previous 12 months,
and to have installed capacity in the United
States to produce 10 or more complete motor
vehicles per 40-hour week. The Secretary of
Commerce shall maintain, and publish from time
to time in the Federal Register, a list of the
names and addresses of bona fide motor-vehicle
manufacturers.
(b) If any Canadian article accorded the status of
original motor-vehicle equipment is not so used in the
manufacture in the United States of motor vehicles,
such Canadian article or its value (to be recovered
from the importer or other person who diverted the
article from its intended use as original motor-vehicle
equipment) shall be subject to forfeiture, unless at
the time of the diversion of the Canadian article the
United States Customs Service is notified in writing,
and, pursuant to arrangements made with the Service--
(1) the Canadian article is, under customs
supervision, destroyed or exported, or
(2) duty is paid to the United States
Government in an amount equal to the duty which
would have been payable at the time of entry if
the Canadian article had not been entered as
original motor-vehicle equipment.
Chapter 14: ORGANIZATION OF TRADE POLICY FUNCTIONS
A. CONGRESS
1. Congressional Advisers
Section 161 of the Trade Act of 1974, as amended
[19 U.S.C. 2211; P.L. 93-618, as amended by P.L. 96-39 and P.L. 100-
418]
SEC. 161. CONGRESSIONAL ADVISERS FOR TRADE POLICY AND NEGOTIATIONS.
(a) Selection.--
(1) At the beginning of each regular session of
Congress, the Speaker of the House of Representatives,
upon the recommendation of the chairman of the
Committee on Ways and Means, shall select 5 members
(not more than 3 of whom are members of the same
political party) of such committee, and the President
pro tempore of the Senate, upon the recommendation of
the chairman of the Committee on Finance, shall select
5 members (not more than 3 of whom are members of the
same political party) of such committee, who shall be
designated congressional advisers on trade policy and
negotiations. They shall provide advice on the
development of trade policy and priorities for the
implementation thereof. They shall also be accredited
by the United States Trade Representative on behalf of
the President as official advisers to the United States
delegations to international conferences, meetings, and
negotiating sessions relating to trade agreements.
(2)(A) In addition to the advisers designated under
paragraph (1) from the Committee on Ways and Means and
the Committee on Finance--
(i) the Speaker of the House may select
additional members of the House, for
designation as congressional advisers regarding
specific trade policy matters or negotiations,
from any other committee of the House or joint
committee of Congress that has jurisdiction
over legislation likely to be affected by such
matters or negotiations; and
(ii) the President pro tempore of the Senate
may select additional members of the Senate,
for designation as congressional advisers
regarding specific trade policy matters or
negotiations, from any other committee of the
Senate or joint committee of Congress that has
jurisdiction over legislation likely to be
affected by such matters or negotiations.
Members of the House and Senate selected as
congressional advisers under this subparagraph shall be
accredited by the United States Trade Representative.
(B) Before designating any member under subparagraph
(A), the Speaker or the President pro tempore shall
consult with--
(i) the chairman and ranking member of the
Committee on Ways and Means or the Committee on
Finance, as appropriate; and
(ii) the chairman and ranking minority member
of the committee from which the member will be
selected.
(C) Not more than 3 members (not more than 2 of whom
are members of the same political party) may be
selected under this paragraph as advisers from any
committee of Congress.
(b) Briefing.--
(1) The United States Trade Representative shall keep
each official adviser designated under subsection
(a)(1) currently informed on matters affecting the
trade policy of the United States and, with respect to
possible agreements, negotiating objectives, the status
of negotiations in progress, and the nature of any
changes in domestic law or the administration thereof
which may be recommended to Congress to carry out any
trade agreement or any requirement of, amendment to, or
recommendation under, such agreement.
(2) The United States Trade Representative shall keep
each official adviser designated under subsection
(a)(2) currently informed regarding the trade policy
matters and negotiations with respect to which the
adviser is designated.
(3)(A) The chairmen of the Committee on Ways and
Means and the Committee on Finance may designate
members (in addition to the official advisers under
subsection (a)(1)) and staff members of their
respective committees who shall have access to the
information provided to official advisers under
paragraph (1).
(B) The Chairman of any committee of the House or
Senate or any joint committee of Congress from which
official advisers are selected under subsection (a)(2)
may designate other members of such committee, and
staff members of such committee, who shall have access
to the information provided to official advisers under
paragraph (2).
(c) Committee Consultation.--The United States Trade
Representative shall consult on a continuing basis with the
Committee on Ways and Means of the House of Representatives,
the Committee on Finance of the Senate, and the other
appropriate committees of the House and Senate on the
development, implementation, and administration of overall
trade policy of the United States. Such consultations shall
include, but are not limited to, the following elements of such
policy:
(1) The principal multilateral and bilateral
negotiating objectives and the progress being made
toward their achievement.
(2) The implementation, administration, and
effectiveness of recently concluded multilateral and
bilateral trade agreements and resolution of trade
disputes.
(3) The actions taken, and proposed to be taken,
under the trade laws of the United States and the
effectiveness, or anticipated effectiveness, of such
actions in achieving trade policy objectives.
(4) The important developments and issues in other
areas of trade for which there must be developed proper
policy response.
When necessary, meetings shall be held with each Committee in
executive session to review matters under negotiation.
2. Reports to Congress
Sections 162 and 163 of the Trade Act of 1974, as amended
[19 U.S.C. 2212 and 2213; P.L. 93-618, as amended by P.L. 100-418 and
P.L. 100-647]
SEC. 162. TRANSMISSION OF AGREEMENTS TO CONGRESS.
(a) As soon as practicable, after a trade agreement entered
into under section 123 or 124 or under section 1102 of the
Omnibus Trade and Competitiveness Act of 1988 has entered into
force with respect to the United States, the President shall,
if he has not previously done so, transmit a copy of such trade
agreement to each House of the Congress together with a
statement, in the light of the advice of the International
Trade Commission under section 131(b), if any, and of other
relevent considerations, of his reasons for entering into the
agreement.
(b) The President shall transmit to each Member of the
Congress a summary of the information required to be
transmitted to each House under subsection (a). For purposes of
this subsection, the term ``Member'' includes any Delegate or
Resident Commissioner.
SEC. 163. REPORTS.
(a) Annual Report on Trade Agreements Program and National
Trade Policy Agenda.--
(1) The President shall submit to the Congress during
each calendar year (but not later than March 1 of that
year) a report on--
(A) the operation of the trade agreements
program, and the provision of import relief and
adjustment assistance to workers and firms,
under this Act during the preceding calendar
year; and
(B) the national trade policy agenda for the
year in which the report is submitted.
(2) The report shall include, with respect to the
matters referred to in paragraph (1)(A), information
regarding--
(A) new trade negotiations;
(B) changes made in duties and nontariff
barriers and other distortions of trade of the
United States;
(C) reciprocal concessions obtained;
(D) changes in trade agreements (including
the incorporation therein of actions taken for
import relief and compensation provided
therefor);
(E) the extension or withdrawal of
nondiscriminatory treatment by the United
States with respect to the products of foreign
countries;
(F) the extension, modification, withdrawal,
suspension, or limitation of preferential
treatment to exports of developing countries;
(G) the results of actions to obtain the
removal of foreign trade restrictions
(including discriminatory restrictions) against
United States exports and the removal of
foreign practices which discriminate against
United States service industries (including
transportation and tourism) and investment;
(H) the measures being taken to seek the
removal of other significant foreign import
restrictions;
(I) each of the referrals made under section
141(d)(1)(B) and any action taken with respect
to such referral;
(J) other information relating to the trade
agreements program and to the agreements
entered into thereunder; and
(K) the number of applications filed for
adjustment assistance for workers and firms,
the number of such applications which were
approved, and the extent to which adjustment
assistance has been provided under such
approved applications.
(3)(A) The national trade policy agenda required
under paragraph (1)(B) for the year in which a report
is submitted shall be in the form of a statement of--
(i) the trade policy objectives and
priorities of the United States for the year,
and the reasons therefor;
(ii) the actions proposed, or anticipated, to
be undertaken during the year to achieve such
objectives and priorities, including, but not
limited to, actions authorized under the trade
laws and negotiations with foreign countries;
(iii) any proposed legislation necessary or
appropriate to achieve any of such objectives
or priorities; and
(iv) the progress that was made during the
preceding year in achieving the trade policy
objectives and priorities included in the
statement provided for that year under this
paragraph.
(B) The President may separately submit any
information referred to in subparagraph (A) to the
Congress in confidence if the President considers
confidentiality appropriate.
(C) Before submitting the national trade policy
agenda for any year, the President shall seek advice
from the appropriate advisory committees established
under section 135 and shall consult with the
appropriate committees of the Congress.
(D) The United States Trade Representative (hereafter
referred to in this section as the ``Trade
Representative'') and other appropriate officials of
the United States Government shall consult periodically
with the appropriate committees of the Congress
regarding the annual objectives and priorities set
forth in each national trade policy agenda with respect
to--
(i) the status and results of the actions
that have been undertaken to achieve the
objectives and priorities; and
(ii) any development which may require, or
result in, changes to any of such objectives or
priorities.
(b) Annual Trade Projection Report.--
(1) In order for the Congress to be informed of the
impact of foreign trade barriers and macroeconomic
factors on the balance of trade of the United States,
the Trade Representative and the Secretary of the
Treasury shall jointly prepare and submit to the
Committee on Finance of the Senate and the Committee on
Ways and Means of the House of Representatives
(hereafter referred to in this subsection as the
``Committees'') on or before March 1 of each year a
report which consists of--
(A) a review and analysis of--
(i) the merchandise balance of trade,
(ii) the goods and services balance
of trade,
(iii) the balance on the current
account,
(iv) the external debt position,
(v) the exchange rates,
(vi) the economic growth rates,
(vii) the deficit or surplus in the
fiscal budget, and
(viii) the impact on United States
trade of market barriers and other
unfair practices,
of countries that are major trading partners of
the United States, including, as appropriate,
groupings of such countries;
(B) projections for each of the economic
factors described in subparagraph (A) (except
those described in clauses (v) and (viii)) for
each of the countries and groups of countries
referred to in subparagraph (A) for the year in
which the report is submitted and for the
succeeding year; and
(C) conclusions and recommendations, based
upon the projections referred to in
subparagraph (B), for policy changes, including
trade policy, exchange rate policy, fiscal
policy, and other policies that should be
implemented to improve the outlook.
(2) To the extent that subjects referred to in
paragraph (1) (A), (B), or (C) are covered in the
national trade policy agenda required under subsection
(a)(1)(B) or in other reports required by this Act or
other law, the Trade Representative and the Secretary
of the Treasury may, as appropriate, draw on the
information, analysis, and conclusions, if any, in
those reports for the purposes of preparing the report
required by this subsection.
(3) The Trade Representative and the Secretary of the
Treasury shall consult with the Chairman of the Board
of Governors of the Federal Reserve System in the
preparation of each report required under this
subsection.
(4) The Trade Representative and the Secretary of the
Treasury may separately submit any information,
analysis, or conclusion referred to in paragraph (1) to
the Committees in confidence if the Trade
Representative and the Secretary consider
confidentiality appropriate.
(5) After submission of each report required under
paragraph (1), the Trade Representative and the
Secretary of the Treasury shall consult with each of
the Committees with respect to the report.
(c) ITC Reports.--The United States International Trade
Commission shall submit to the Congress, at least once a year,
a factual report on the operation of the trade agreements
program.
Section 2202 of the Omnibus Trade and Competitiveness Act of 1988
[15 U.S.C. 4711; P.L. 100-418]
SEC. 2202. COUNTRY REPORTS ON ECONOMIC POLICY AND TRADE PRACTICES.
The Secretary of State shall, not later than January 31 of
each year, prepare and transmit to the Committee on Foreign
Affairs and the Committee on Ways and Means of the House of
Representatives, to the Committee on Foreign Relations and the
Committee on Finance of the Senate, and to other appropriate
committees of the Congress, a detailed report regarding the
economic policy and trade practices of each country with which
the United States has an economic or trade relationship. The
Secretary may direct the appropriate officers of the Department
of State who are serving overseas, in consultation with
appropriate officers or employees of other departments and
agencies of the United States, including the Department of
Agriculture and the Department of Commerce, to coordinate the
preparation of such information in a country as is necessary to
prepare the report under this section. The report shall
identify and describe, with respect to each country--
(1) the macroeconomic policies of the country and
their impact on the overall growth in demand for United
States exports;
(2) the impact of macroeconomic and other policies on
the exchange rate of the country and the resulting
impact on price competitiveness of United States
exports;
(3) any change in structural policies (including tax
incentives, regulations governing financial
institutions, production standards, and patterns of
industrial ownership) that may affect the country's
growth rate and its demand for United States exports;
(4) the management of the country's external debt and
its implications for trade with the United States;
(5) acts, policies, and practices that constitute
significant barriers to United States exports or
foreign direct investment in that country by United
States persons, as identified under section 181(a)(1)
of the Trade Act of 1974 (19 U.S.C. 2241(a)(1));
(6) acts, policies, and practices that provide direct
or indirect government support for exports from that
country, including exports by small businesses;
(7) the extent to which the country's laws and
enforcement of those laws afford adequate protection to
United States intellectual property, including patents,
trademarks, copyrights, and mask works; and
(8) the country's laws, enforcement of those laws,
and practices with respect to internationally
recognized worker rights (as defined in section
502(a)(4) of the Trade Act of 1974), the conditions of
worker rights in any sector which produces goods in
which United States capital is invested, and the extent
of such investment.
3. Congressional Fast Track Procedures With Respect to Presidential
Actions
Sections 151-154 of the Trade Act of 1974, as amended
[19 U.S.C. 2191-2194; P.L. 93-618, as amended by P.L. 96-39, P.L. 98-
573, P.L. 100-418, P.L. 101-382, P.L. 103-465, and P.L. 104-295]
SEC. 151. BILLS IMPLEMENTING TRADE AGREEMENTS ON NONTARIFF BARRIERS AND
RESOLUTIONS APPROVING COMMERCIAL AGREEMENTS WITH
COMMUNIST COUNTRIES.
(a) Rules of House of Representatives and Senate.--This
section and sections 152 and 153 are enacted by the Congress--
(1) as an exercise of the rulemaking power of the
House of Representatives and the Senate, respectively,
and as such they are deemed a part of the rules of each
House, respectively, but applicable only with respect
to the procedure to be followed in that House in the
case of implementing bills described in subsection
(b)(1), implementing revenues bills described in
subsection (b)(2), approval resolutions described in
subsection (b)(3), and resolutions described in
subsections 152(a) and 153(a); and they supersede other
rules only to the extent that they are inconsistent
therewith; and
(2) with full recognition of the constitutional right
of either House to change the rules (so far as relating
to the procedure of that House) at any time, in the
same manner and to the same extent as in the case of
any other rule of that House.
(b) Definitions.--For purposes of this section--
(1) The term ``implementing bill'' means only a bill
of either House of Congress which is introduced as
provided in subsection (c) with respect to one or more
trade agreements, or with respect to an extension
described in section 282(c)(3) of the Uruguay Round
Agreements Act, submitted to the House of
Representatives and the Senate under section 102 of
this Act, section 1103(a)(1) of the Omnibus Trade and
Competitiveness Act of 1988, or section 282 of the
Uruguay Round Agreements Act and which contains--
(A) a provision approving such trade
agreement or agreements or such extension,
(B) a provision approving the statement of
administrative action (if any) proposed to
implement such trade agreement or agreements,
and
(C) if changes in existing laws or new
statutory authority is required to implement
such trade agreement or agreements or such
extension, provisions, necessary or appropriate
to implement such trade agreement or agreements
or such extension, either repealing or amending
existing laws or providing new statutory
authority.
(2) The term ``implementing revenue bill'' or
resolution means an implementing bill or approval
resolution which contains one or more revenue measures
by reason of which it must originate in the House of
Representatives.
(3) The term ``approval resolution'' means only a
joint resolution of the two Houses of the Congress, the
matter after the resolving clause of which is as
follows: ``That the Congress approves the extension of
nondiscriminatory treatment with respect to the
products of ---------- transmitted by the President to
the Congress on --------.'', the first blank space
being filled with the name of the country involved and
the second blank space being filled with the
appropriate date.
(c) Introduction and Referral.--
(1) On the day on which a trade agreement or
extension is submitted to the House of Representatives
and the Senate under section 102 or section 282 of the
Uruguay Round Agreements Act, the implementing bill
submitted by the President with respect to such trade
agreement or extension shall be introduced (by request)
in the House by the majority leader of the House, for
himself and the minority leader of the House, or by
Members of the House designated by the majority leader
and minority leader of the House; and shall be
introduced (by request) in the Senate by the majority
leader of the Senate, for himself the minority leader
of the Senate, or by Members of the Senate designated
by the majority leader and minority leader of the
Senate. If either House is not in session on the day on
which such a trade agreement or extension is submitted,
the implementing bill shall be introduced in that House
as provided in the preceding sentence, on the first day
thereafter on which the House is in session. Such bills
shall be referred by the Presiding Officers of the
respective Houses to the appropriate committee, or, in
the case of a bill containing provisions within the
jurisdiction of two or more committees, jointly to such
committees for consideration of those provisions within
their respective jurisdictions.
(2) On the day on which a bilateral commerical
agreement, entered into under title IV of this Act
after the date of the enactment of this Act, is
transmitted to the House of Representatives and the
Senate, an approval resolution with respect to such
agreement shall be introduced (by request) in the House
by the majority leader of the House, for himself and
the minority leader of the House, or by Members of the
House designated by the majority leader and minority
leader of the House; and shall be introduced (by
request) in the Senate by the majority leader of the
Senate, for himself and the minority leader of the
Senate, or by Members of the Senate designated by the
majority leader and minority leader of the Senate. If
either House is not in session on the day on which such
an agreement is transmitted, the approval resolution
with respect to such agreement shall be introduced in
that House, as provided in the preceding sentence, on
the first day thereafter on which that House is in
session. The approval resolution introduced in the
House shall be referred to the Committee on Ways and
Means and the approval resolution introduced in the
Senate shall be referred to the Committee on Finance.
(d) Amendments Prohibited.--No amendment to an implementing
bill or approval resolution shall be in order in either the
House of Representatives or the Senate; and no motion to
suspend the application of this subsection shall be in order in
either House, nor shall it be in order in either House for the
Presiding Officer to entertain a request to suspend the
application of this subsection by unanimous consent.
(e) Period for Committee and Floor Consideration.--
(1) Except as provided in paragraph (2), if the
committee or committees of either House to which an
implementing bill or approval resolution has been
referred have not reported it at the close of the 45th
day after its introduction, such committee or
committees shall be automatically discharged from
further consideration of the bill or resolution and it
shall be placed on the appropriate calendar. A vote on
final passage of the bill or resolution shall be taken
in each House on or before the close of the 15th day
after the bill or resolution is reported by the
committee or committees of that House to which it was
referred, or after such committee or committees have
been discharged from further consideration of the bill
or resolution. If prior to the passage by one House of
an implementing bill or approval resolution of that
House, that House receives the same implementing bill
or approval resolution from the other House, then--
(A) the procedure in that House shall be the
same as if no implementing bill or approval
resolution had been received from the other
House; but
(B) the vote on final passage shall be on the
implementing bill or approval resolution of the
other House.
(2) The provisions of paragraph (1) shall not apply
in the Senate to an implementing revenue bill or
resolution. An implementing revenue bill or resolution
received from the House shall be referred to the
appropriate committee or committees of the Senate. If
such committee or committees have not reported such
bill at the close of the 15th day after its receipt by
the Senate (or, if later, before the close of the 45th
day after the corresponding implementing revenue bill
or resolution was introduced in the Senate), such
committee or committees shall be automatically
discharged from further consideration of such bill or
resolution and it shall be placed on the calendar. A
vote on final passage of such bill or resolution shall
be taken in the Senate on or before the close of the
15th day after such bill or resolution is reported by
the committee or committees of the Senate to which it
was referred, or after such committee or committees
have been discharged from further consideration of such
bill or resolution.
(3) For purposes of paragraphs (1) and (2), in
computing a number of days in either House, there shall
be excluded any day on which that House was not in
session.
(f) Floor Consideration in the House.--
(1) A motion in the House of Representatives to
proceed to the consideration of an implementing bill or
approval resolution shall be highly privileged and not
debatable. An amendment to the motion shall not be in
order, nor shall it be in order to move to reconsider
the vote by which the motion is agreed to or disagreed
to.
(2) Debate in the House of Representatives on an
implementing bill or approval resolution shall be
limited to not more than 20 hours, which shall be
divided equally between those favoring and those
opposing the bill or resolution. A motion further to
limit debate shall not be debatable. It shall not be in
order to move to recommit an implementing bill or
approval resolution or to move to reconsider the vote
by which an implementing bill or approval resolution is
agreed to or disagreed to.
(3) Motions to postpone, made in the House of
Representatives with respect to the consideration of an
implementing bill or approval resolution, and motions
to proceed to the consideration of other business,
shall be decided without debate.
(4) All appeals from the decisions of the Chair
relating to the application of the Rules of the House
of Representatives to the procedure relating to an
implementing bill or approval resolution shall be
decided without debate.
(5) Except to the extent specifically provided in the
preceding provisions of this subsection, consideration
of an implementing bill or approval resolution shall be
governed by the Rules of the House of Representatives
applicable to other bills and resolutions in similar
circumstances.
(g) Floor Consideration in the Senate.--
(1) A motion in the Senate to proceed to the
consideration of an implementing bill or approval
resolution shall be privileged and not debatable. An
amendment to the motion shall not be in order, nor
shall it be in order to move to reconsider the vote by
which the motion is agreed to or disagreed to.
(2) Debate in the Senate on an implementing, and all
debatable motions and appeals in connection therewith,
shall be limited to not more than 20 hours. The time
shall be equally divided between, and controlled by,
the majority leader and the minority leader or their
designees.
(3) Debate in the Senate on any debatable motion or
appeal in connection with an implementing bill or
approval resolution shall be limited to not more than 1
hour, to be equally divided between, and controlled by,
the mover and the manager of the bill or resolution,
except that in the event the manager of the bill or
resolution is in favor of any such motion or appeal,
the time in opposition thereto, shall be controlled by
the minority leader or his designee. Such leaders, or
either of them, may, from time under their control on
the passage of an implementing bill or approval
resolution, allot additional time to any Senator during
the consideration of any debatable motion or appeal.
(4) A motion in the Senate to further limit debate is
not debatable. A motion to recommit an implementing
bill or approval resolution is not in order.
SEC. 152. RESOLUTIONS DISAPPROVING CERTAIN ACTIONS.
(a) Contents of Resolution.--
(1) For purposes of this section, the term
``resolution'' means only--
(A) a joint resolution of the two Houses of
the Congress, the matter after the resolving
clause of which is as follows: ``That the
Congress does not approve the action taken by,
or the determination of the President under
section 203 of the Trade Act of 1974
transmitted to the Congress on --------.'', the
blank space being filled with the appropriate
date; and
(B) a joint resolution of the two Houses of
Congress, the matter after the resolving clause
of which is as follows: ``That the Congress
does not approve -------- transmitted to the
Congress on ----------.'', with the first blank
space being filled in accordance with paragraph
(2), and the second blank space being filled
with the appropriate date.
(2) The first blank space referred to in paragraph
(1)(B) shall be filled, in the case of a resolution
referred to in section 407(c)(2), with the phrase ``the
report of the President submitted under section ------
of the Trade Act of 1974 with respect to ------'' (with
the first blank space being filled with ``402(b)'' or
``409(b)'', as appropriate, and the second blank space
being filled with the name of the country involved).
(b) Reference to Committees.--All resolutions introduced in
the House of Representatives shall be referred to the Committee
on Ways and Means and all resolutions introduced in the Senate
shall be referred to the Committee on Finance.
(c) Discharge of Committees.--
(1) If the committee of either House to which a
resolution has been referred has not reported it at the
end of 30 days after its introduction, not counting any
day which is excluded under section 154(b), it is in
order to move either to discharge the committee from
further consideration of the resolution or to discharge
the committee from further consideration of any other
resolution introduced with respect to the same matter,
except that a motion to discharge--
(A) may only be made on the second
legislative day after the calendar day on which
the Member making the motion announces to the
House his intention to do so; and
(B) is not in order after the Committee has
reported a resolution with respect to the same
matter.
(2) A motion to discharge under paragraph (1) may be
made only by an individual favoring the resolution, and
is highly privileged in the House and privileged in the
Senate; and debate thereon shall be limited to not more
than 1 hour, the time to be divided in the House
equally between those favoring and those opposing the
resolution, and to be divided in the Senate equally
between, and controlled by, the majority leader and the
minority leader or their designees. An amendment to the
motion is not in order, and it is not in order to move
to reconsider the vote by which the motion is agreed to
or disagreed to.
(d) Floor Consideration in the House.--
(1) A motion in the House of Representatives to
proceed to the consideration of a resolution shall be
highly privileged and not debatable. An amendment to
the motion shall not be in order, nor shall it be in
order to move to reconsider the vote by which the
motion is agreed to or disagreed to.
(2) Debate in the House of Representatives on a
resolution shall be limited to not more than 20 hours,
which shall be divided equally between those favoring
and those opposing the resolution. A motion further to
limit debate shall not be debatable. No amendment to,
or motion to recommit, the resolution shall be in
order. It shall not be in order to move to reconsider
the vote by which a resolution is agreed to or
disagreed to.
(3) Motions to postpone, made in the House of
Representatives with respect to the consideration of a
resolution, and motions to proceed to the consideration
of other business, shall be decided without debate.
(4) All appeals from the decisions of the Chair
relating to the application of the Rules of the House
of Representatives to the procedure relating to a
resolution shall be decided without debate.
(5) Except to the extent specifically provided in the
preceding provisions of this subsection, consideration
of a resolution in the House of Representatives shall
be governed by the Rules of the House of
Representatives applicable to other resolutions in
similar circumstances.
(e) Floor Consideration in the Senate.--
(1) A motion in the Senate to proceed to the
consideration of a resolution shall be privileged. An
amendment to the motion shall not be in order, nor
shall it be in order to move to reconsider the vote by
which the motion is agreed to or disagreed to.
(2) Debate in the Senate on a resolution, and all
debatable motions and appeals in connection therewith,
shall be limited to not more than 20 hours, to be
equally divided between, and controlled by, the
majority leader and the minority leader or their
designees.
(3) Debate in the Senate on any debatable motion or
appeal in connection with a resolution shall be limited
to not more than 1 hour, to be equally divided between,
and controlled by, the mover and the manager of the
resolution, except that in the event the manager of the
resolution is in favor of any such motion or appeal,
the time in opposition thereto, shall be controlled by
the minority leader or his designee. Such leaders, or
either of them, may, from time under their control on
the passage of a resolution, allot additional time to
any Senator during the consideration of any debatable
motion or appeal.
(4) A motion in the Senate to further limit debate on
a resolution, debatable motion, or appeal is not
debatable. No amendment to, or motion to recommit, a
resolution is in order in the Senate.
(f) Procedures in the Senate.--
(1) Except as otherwise provided in this section, the
following procedures shall apply in the Senate to a
resolution to which this section applies:
(A)(i) Except as provided in clause (ii), a
resolution that has passed the House of
Representatives shall, when received in the
Senate, be referred to the Committee on Finance
for consideration in accordance with this
section.
(ii) If a resolution to which this section
applies was introduced in the Senate before
receipt of a resolution that has passed the
House of Representatives, the resolution from
the House of Representatives shall, when
received in the Senate, be placed on the
calendar. If this clause applies, the
procedures in the Senate with respect to a
resolution introduced in the Senate that
contains the identical matter as the resolution
that passed the House of Representatives shall
be the same as if no resolution had been
received from the House of Representatives,
except that the vote on passage in the Senate
shall be on the resolution that passed the
House of Representatives.
(B) If the Senate passes a resolution before
receiving from the House of Representatives a
joint resolution that contains the identical
matter, the joint resolution shall be held at
the desk pending receipt of the joint
resolution from the House of Representatives.
Upon receipt of the joint resolution from the
House of Representatives, such joint resolution
shall be deemed to be read twice, considered,
read the third time, and passed.
(2) If the texts of joint resolutions described in
section 152 or 153(a), whichever is applicable
concerning any matter are not identical--
(A) the Senate shall vote passage on the
resolution introduced in the Senate, and
(B) the text of the joint resolution passed
by the Senate shall, immediately upon its
passage (or, if later, upon receipt of the
joint resolution passed by the House), be
substituted for the text of the joint
resolution passed by the House of
Representatives, and such resolution, as
amended, shall be returned with a request for a
conference between the two Houses.
(3) Consideration in the Senate of any veto message
with respect to a joint resolution described in
subsection (a)(2)(B) or section 153(a), including
consideration of all debatable motions and appeals in
connection therewith, shall be limited to 10 hours, to
be equally divided between, and controlled by, the
majority leader and the minority leader or their
designees.
SEC. 153. RESOLUTIONS RELATING TO EXTENSION OF WAIVER AUTHORITY UNDER
SECTION 402.
(a) Contents of Resolutions.--For purposes of this section,
the term ``resolution'' means only a joint resolution of the
two Houses of Congress, the matter after the resolving clause
of which is as follows: ``That the Congress does not approve
the extension of the authority contained in section 402(c) of
the Trade Act of 1974 recommended by the President to the
Congress on -------- with respect to --------.'', with the
first blank space being filled with the appropriate date, and
the second blank space being filled with the names of those
countries, if any, with respect to which such extension of
authority is not approved, and with the clause beginning with
``with-respect-to'' being omitted if the extension of the
authority is not approved with respect to any country.
(b) Application of Rules of Section 152; Exceptions.--
(1) Except as provided in this section, the
provisions of section 152 shall apply to resolutions
described in subsection (a).
(2) In applying section 152(c)(1), all calendar days
shall be counted.
(3) That part of section 152(d)(2) which provides
that no amendment is in order shall not apply to any
amendment to a resolution which is limited to striking
out or inserting the names of one or more countries or
to striking out or inserting a with-respect-to clause.
Debate in the House of Representatives on any amendment
to a resolution shall be limited to not more than 1
hour which shall be equally divided between those
favoring and those opposing the amendment. A motion in
the House to further limit debate on an amendment to a
resolution is not debatable.
(4) That part of section 152(e)(4) which provides
that no amendment is in order shall not apply to any
amendment to a resolution which is limited to striking
out or inserting the names of one or more countries or
to striking out or inserting a with-respect-to clause.
The time limit on a debate on a resolution in the
Senate under section 152(e)(2) shall include all
amendments to a resolution. Debate in the Senate on any
amendment to a resolution shall be limited to not more
than 1 hour, to be equally divided between, and
controlled by, the mover and the manager of the
resolution, except that in the event the manager of the
resolution is in favor of any such amendment, the time
in opposition thereto shall be controlled by the
minority leader or his designee. The majority leader
and minority leader may, from time under the control on
the passage of a resolution, allot additional time to
any Senator during the consideration of any amendment.
A motion in the Senate to further limit debate on an
amendment to a resolution is not debatable.
(c) Consideration of Second Resolution Not in Order.--It
shall not be in order in either the House of Representatives or
the Senate to consider a resolution with respect to a
recommendation of the President under section 402(d) (other
than a resolution described in subsection (a) received from the
other House), if that House has adopted a resolution with
respect to the same recommendation.
(d) Procedures Relating to Conference Reports in the
Senate.--
(1) Consideration in the Senate of the conference
report on any joint resolution described in subsection
(a), including consideration of all amendments in
disagreement (and all amendments thereto), and
consideration of all debatable motions and appeals in
connection therewith, shall be limited to 10 hours, to
be equally divided between, and controlled by, the
majority leader and the minority leader or their
designees. Debate on any debatable motion or appeal
related to the conference report shall be limited to 1
hour, to be equally divided between, and controlled by,
the mover and the manager of the conference report.
(2) In any case in which there are amendments in
disagreement, time on each amendment shall be limited
to 30 minutes, to be equally divided between, and
controlled by, the manager of the conference report and
the minority leader or his designee. No amendment to
any amendment in disagreement shall be received unless
it is a germane amendment.
SEC. 154. SPECIAL RULES RELATING TO CONGRESSIONAL PROCEDURES.
(a) Whenever, pursuant to section 102(e), 203(b), 402(d),
or 407 (a) or (b), a document is required to be transmitted to
the Congress, copies of such document shall be delivered to
both Houses of Congress on the same day and shall be delivered
to the Clerk of the House of Representatives if the House is
not in session and to the Secretary of the Senate if the Senate
is not in session.
(b) For purposes of sections 203(c), and 407(c)(2), the 90-
day period referred to in such sections shall be computed by
excluding--
(1) the days on which either House is not in session
because of an adjournment of more than 3 days to a day
certain or an adjournment of the Congress sine die, and
(2) any Saturday and Sunday, not excluded under
paragraph (1), when either House is not in session.
4. Trade Agreement Implementation Authority and Amendment Procedures
Sections 111(b) and 115 of the Uruguay Round Agreements Act
[19 U.S.C. 3521, 3524; P.L. 103-465]
SEC. 111. TARIFF MODIFICATIONS.
* * * * * * *
(b) Other Tariff Modifications.--Subject to the
consultation and layover requirements of section 115, the
President may proclaim--
(1) the modification of any duty or staged rate
reduction of any duty set forth in Schedule XX if--
(A) the United States agrees to such
modification or staged rate reduction in a
multilateral negotiation under the auspices of
the WTO, and
(B) such modification or staged rate
reduction applies to the rate of duty on an
article contained in a tariff category that was
the subject of reciprocal duty elimination or
harmonization negotiations during the Uruguay
Round of multilateral trade negotiations, and
(2) such modifications as are necessary to correct
technical errors in Schedule XX or to make other
rectifications to the Schedule.
* * * * * * *
SEC. 115. CONSULTATION AND LAYOVER REQUIREMENTS FOR, AND EFFECTIVE DATE
OF, PROCLAIMED ACTIONS.
If a provision of this Act provides that the implementation
of an action by the President by proclamation is subject to the
consultation and layover requirements of this section, such
action may be proclaimed only if--
(1) the President has obtained advice regarding the
proposed action from--
(A) the appropriate advisory committees
established under section 135 of the Trade Act
of 1974 (19 U.S.C. 2155), and
(B) the International Trade Commission;
(2) the President has submitted a report to the
Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the
Senate that sets forth--
(A) the action proposed to be proclaimed and
the reasons for such actions, and
(B) the advice obtained under paragraph (1);
(3) a period of 60 calendar days, beginning with the
first day on which the President has met the
requirements of paragraphs (1) and (2) with respect to
such action, has expired; and
(4) the President has consulted with such committees
regarding the proposed action during the period
referred to in paragraph (3).
Sections 103 and 104 of the North American Free Trade Agreement
Implementation Act
[19 U.S.C. 3313 and 3314; P.L. 103-182]
SEC. 103. CONSULTATION AND LAYOVER REQUIREMENTS FOR, AND EFFECTIVE DATE
OF, PROCLAIMED ACTIONS.
(a) Consultation and Layover Requirements.--If a provision of
this Act provides that the implementation of an action by the
President by proclamation is subject to the consultation and
layover requirements of this section, such action may be
proclaimed only if--
(1) the President has obtained advice regarding the
proposed action from--
(A) the appropriate advisory committees
established under section 135 of the Trade Act
of 1974, and
(B) the International Trade Commission;
(2) the President has submitted a report to the
Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the
Senate that sets forth--
(A) the action proposed to be proclaimed and
the reasons therefor, and
(B) the advice obtained under paragraph (1);
(3) a period of 60 calendar days, beginning with the
first day on which the President has met the
requirements of paragraphs (1) and (2) with respect to
such action, has expired; and
(4) the President has consulted with such committees
regarding the proposed action during the period
referred to in paragraph (3).
(b) Effective Date of Certain Proclaimed Actions.--Any
action proclaimed by the President under the authority of this
Act that is not subject to the consultation and layover
requirements under subsection (a) may not take effect before
the 15th day after the date on which the text of the
proclamation is published in the Federal Register.
SEC. 104. IMPLEMENTING ACTIONS IN ANTICIPATION OF ENTRY INTO FORCE AND
INITIAL REGULATIONS.
(a) Implementing Actions.--After the date of the enactment of
this Act--
(1) the President may proclaim such actions; and
(2) other appropriate officers of the United States
Government may issue such regulations;
as may be necessary to ensure that any provision of this Act,
or amendment made by this Act, that takes effect on the date
the Agreement enters into force is appropriately implemented on
such date, but no such proclamation or regulation may have an
effective date earlier than the date of entry into force. The
15-day restriction in section 103(b) on the taking effect of
proclaimed actions is waived to the extent that the application
of such restriction would prevent the taking effect on the date
the Agreement enters into force of any action proclaimed under
this section.
(b) Initial Regulations.--Initial regulations necessary or
appropriate to carry out the actions proposed in the statement
of administrative action submitted under section 101(a)(2) to
implement the Agreement shall, to the maximum extent feasible,
be issued within 1 year after the date of entry into force of
the Agreement; except that interim or initial regulations to
implement those Uniform Regulations regarding rules of origin
provided for under article 511 of the Agreement shall be issued
no later than the date of entry into force of the Agreement. In
the case of any implementing action that takes effect on a date
after the date of entry into force of the Agreement, initial
regulations to carry out that action shall, to the maximum
extent feasible, be issued within 1 year after such effective
date.
Sections 2(a) and 3(c) of the Trade Agreements Act of 1979
[19 U.S.C. 2503, 2504; P.L. 96-39]
SEC. 2. APPROVAL OF TRADE AGREEMENTS.
(a) Approval of Agreements and Statements of Administrative
Action.--In accordance with the provisions of sections 102 and
151 of the Trade Act of 1974 (19 U.S.C. 2112 and 2191), the
Congress approves the trade agreements described in subsection
(c) submitted to the congress on June 19, 1979, and the
statements of administrative action proposed to implement such
trade agreements submitted to the Congress on that date.
SEC. 3. RELATIONSHIP OF TRADE AGREEMENTS TO UNITED STATES LAW.
* * * * * * *
(c) Changes in Statutes To Implement a Requirement,
Amendment, or Recommendation.--
(1) Presidential determination.--Whenever the
President determines that it is necessary or
appropriate to amend, repeal, or enact a statute of the
United States in order to implement any requirement of,
amendment to, or recommendation under such an
agreement, he shall submit to the Congress a draft of a
bill to accomplish the amendment, repeal, or enactment
and a statement of any administrative action proposed
to implement the requirement, amendment, or
recommendation. Not less than 30 days before submitting
such a bill, the President shall consult with the
Committee on Ways and Means of the House of
Representatives, the Committee on Finance of the
Senate, and each committee of the House or Senate which
has jurisdiction over legislation involving subject
matters which would be affected by such amendment,
repeal, or enactment. The consultation shall treat all
matters relating to the implementation of such
requirement, amendment, or recommendation, as provided
in paragraphs (2) and (3).
(2) Conditions for taking effect under united states
law.--No such amendment shall enter into force with
respect to the United States, and no such requirement,
amendment, or recommendation shall be implemented under
United States law, unless--
(A) the President, after consultation with
the Congress under paragraph (1), notifies the
House of Representatives and the Senate of his
determination and publishes notice of that
determination in the Federal Register,
(B) the President transmits a document to the
House of Representatives and to the Senate
containing a copy of the text of such
requirement, amendment, or recommendation,
together with--
(i) a draft of a bill to amend or
repeal provisions of existing statutes
or to create statutory authority and an
explanation as to how the bill and any
proposed administrative action affect
existing law, and
(ii) a statement of how the
requirement, amendment, or
recommendation serves the interests of
United States commerce and why the
legislative and administrative action
is necessary or appropriate to carry
out the requirement, amendment, or
recommendation, and
(C) the bill submitted by the President is
enacted into law.
(3) Recommendations as to application.--The President
may make the same type of recommendations, in the same
manner and subject to the same conditions, to the
Congress with respect to the application of any such
requirement, amendment, or recommendation as he may
make, under section 102(f) of the Trade Act of 1974,
with respect to a trade agreement.
(4) Congressional procedures applicable.--The bill
submitted by the President shall be introduced in
accordance with the provisions of subsection (c)(1) of
section 151 of the Trade Act of 1974, and the
provisions of subsections (d), (e), (f), and (g) of
such section shall apply to the consideration of the
bill. For the purpose of applying section 151 of such
Act to such bill--
(A) the term ``trade agreement'' shall be
treated as a reference to the requirement,
amendment, or recommendation, and
(B) the term ``implementing bill'' or
``implementing revenue bill'', whichever is
appropriate, shall be treated as a reference to
the bill submitted by the President.
B. EXECUTIVE BRANCH
1. Interagency Trade Organization
Section 242 of the Trade Expansion Act of 1962, as amended
[19 U.S.C. 1872; P.L. 87-794, as amended by P.L. 93-618, P.L. 96-39,
Reorganization Plan No. 3 of 1979, and P.L. 100-418]
SEC. 242. INTERAGENCY TRADE ORGANIZATION.
(a)(1) The President shall establish an interagency
organization.
(2) The functions of the organization are--
(A) to assist, and make recommendations to, the
President in carrying out the functions vested in him
by the trade laws and to advise the United States Trade
Representative (hereinafter in this section referred to
as the ``Trade Representative'') in carrying out the
functions set forth in section 141 of the Trade Act of
1974;
(B) to assist the President, and advise the Trade
Representative, with respect to the development and
implementation of the international trade policy
objectives of the United States; and
(C) to advise the President and the Trade
Representative with respect to the relationship between
the international trade policy objectives of the United
States and other major policy areas which may
significantly affect the overall international trade
policy and trade competitiveness of the United States.
(3) The interagency organization shall be composed of the
following:
(A) The Trade Representative, who shall be
chairperson.
(B) The Secretary of Commerce.
(C) The Secretary of State.
(D) The Secretary of the Treasury.
(E) The Secretary of Agriculture.
(F) The Secretary of Labor.
The Trade Representative may invite representatives from other
agencies, as appropriate, to attend particular meetings if
subject matters of specific functional interest to such
agencies are under consideration. It shall meet at such times
and with respect to such matters as the President or the
Chairman shall direct.
(b) In assisting the President, the organization shall--
(1) make recommendations to the President on basic
policy issues arising in the administration of the
trade agreements program,
(2) make recommendations to the President as to what
action, if any, he should take on reports submitted to
him by the United States International Trade Commission
under section 201(d) of the Trade Act of 1974,
(3) advise the President of the results of hearings
held pursuant to section 302(b)(2) of the Trade Act of
1974, and recommend appropriate action with respect
thereto, and
(4) perform such other functions with respect to the
trade agreements program as the President may from time
to time designate.
In carrying out its functions under this subsection, the
organization shall take into account the advice of the
congressional advisers and private sector advisory committees,
as well as that of any committee or other body established to
advise the department, agency, or office which a member of the
organization heads.
(c) The organization shall, to the maximum extent
practicable, draw upon the resources of the agencies
represented in the organization, as well as such other agencies
as it may determine, including the United States International
Trade Commission. In addition, the President may establish by
regulation such procedures and committees as he may determine
to be necessary to enable the organization to provide for the
conduct of hearings pursuant to section 302(b)(2) of the Trade
Act of 1974, and for the carrying out of other functions
assigned to the organization pursuant to this section.
[Section 1621(b) of the Omnibus Trade and Competitiveness
Act of 1988, in referring to section 242(a) as amended by
section 1621(a) of that Act, states:
[It is the sense of Congress that the interagency
organization established under subsection (a) should be
the principal interagency forum within the executive
branch on international trade policy matters.]
Reorganization Plan No. 3 of 1979
[19 U.S.C. 2171 note]
Prepared by the President and transmitted to the Senate and
the House of Representatives in Congress assembled, September
25, 1979, pursuant to the provisions of chapter 9 of title 5 of
the United States Code, as amended by P.L. 97-377.
reorganization of functions relating to international trade
SECTION 1. OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE.
(a) The Office of the Special Representative for Trade
Negotiations is redesignated the Office of the United States
Trade Representative.
(b)(1) The Special Representative for Trade Negotiations is
redesignated the United States Trade Representative
(hereinafter referred to as the ``Trade Representative''). The
Trade Representative shall have primary responsibility, with
the advice of the interagency organization established under
section 242 of the Trade Expansion Act of 1962 (19 U.S.C. 1872)
(hereinafter referred to as the ``Committee''), for developing,
and for coordinating the implementation of, United States
international trade policy, including commodity matters and, to
the extent they are related to international trade policy,
direct investment matters. The Trade Representative shall serve
as the principal advisor to the President on international
trade policy and shall advise the President on the impact of
other policies of the United States Government on international
trade.
(2) The Trade Representative shall have lead responsibility
for the conduct of international trade negotiations including
commodity and direct investment negotiations in which the
United States participates.
(3) To the extent necessary to assure the coordination of
international trade policy, and consistent with any other law,
the Trade Representative, with the advice of the Committee,
shall issue policy guidance to departments and agencies on
basic issues of policy and interpretation arising in the
exercise of the following international trade functions. Such
guidance shall determine the policy of the United States with
respect to international trade issues arising in the exercise
of such functions:
(A) matters concerning the General Agreement on
Tariffs and Trade, including implementation of the
trade agreements set forth in section 2(c) of the Trade
Agreements Act of 1979; United States Government
positions on trade and commodity matters dealt with by
the Organization for Economic Cooperation and
Development, the United Nations Conference on Trade and
Development, and other multilateral organizations; and
the assertion and protection of the rights of the
United States under bilateral and multilateral
international trade and commodity agreements;
(B) expansion of exports from the United States;
(C) policy research on international trade,
commodity, and direct investment matters;
(D) to the extent permitted by law, overall United
States policy with regard to unfair trade practices,
including enforcement of countervailing duties and
antidumping functions under section 303 and title VII
of the Tariff Act of 1930;
(E) bilateral trade and commodity issues, including
East-West trade matters; and
(F) international trade issues involving energy.
(4) All functions of the Trade Representative shall be
conducted under the direction of the President.
(c) The Deputy Special Representatives for Trade
Negotiations are redesignated Deputy United States Trade
Representatives.
SEC. 2. DEPARTMENT OF COMMERCE.
(a) The Secretary of Commerce (hereinafter referred to as
the ``Secretary'') shall have, in addition to any other
functions assigned by law, general operational responsibility
for major nonagricultural international trade functions of the
United States Government, including export development,
commercial representation abroad, the administration of the
antidumping and countervailing duty laws, export controls,
trade adjustment assistance to firms and communities, research
and analysis, and monitoring compliance with international
trade agreements to which the United States is a party.
(b)(1) There shall be in the Department of Commerce
(hereinafter referred to as the ``Department'') a Deputy
Secretary appointed by the President, by and with the advice
and consent of the Senate. The Deputy Secretary shall receive
compensation at the rate payable for Level II of the Executive
Schedule, and shall perform such duties and exercise such
powers as the Secretary may from time to time prescribe.
(2) The position of Under Secretary of Commerce established
under section 1 of the Act of June 5, 1939 (ch. 180, 53 Stat.
808; 15 U.S.C. 1502) is abolished.
(c) There shall be in the Department an Under Secretary for
International Trade appointed by the President, by and with the
advice and consent of the Senate. The Under Secretary for
International Trade shall receive compensation at the rate
payable for Level III of the Executive Schedule, and shall
perform such duties and exercise such powers as the Secretary
may from time to time prescribe.
(d) There shall be in the Department two additional
Assistant Secretaries appointed by the President, by and with
the advice and consent of the Senate. Each such Assistant
Secretary shall perform such duties and exercise such powers as
the Secretary may from time to time prescribe.
(e) There shall be in the Department of Commerce a Director
General of the United States and Foreign Commercial Services
who shall be appointed by the President, by and with the advice
and consent of the Senate, and shall receive compensation at
the rate prescribed by law for level IV of the Executive
Schedule.
SEC. 3. EXPORT-IMPORT BANK OF THE UNITED STATES.
The Trade Representative and the Secretary shall serve, ex
officio and without vote, as additional members of the Board of
Directors of the Export-Import Bank of the United States.
SEC. 4. OVERSEAS PRIVATE INVESTMENT CORPORATION.
(a) The Trade Representative shall serve, ex officio, as an
additional voting member of the Board of Directors of the
Overseas Private Investment Corporation. The Trade
Representative shall be the Vice Chair of such Board.
(b) There shall be an additional member of the Board of
Directors of the Overseas Private Investment Corporation who
shall be appointed by the President of the United States, by
and with the advice and consent of the Senate, and who shall
not be an official or employee of the Government of the United
States. Such Director shall be appointed for a term of no more
than three years.
SEC. 5. TRANSFER OF FUNCTIONS.
(a)(1) There are transferred to the Secretary all functions
of the Secretary of the Treasury, the General Counsel of the
Department of the Treasury, or the Department of the Treasury
pursuant to the following:
(A) section 305(b) of the Trade Agreements Act of
1979 (19 U.S.C. 215(b)), to be exercised in
consultation with the Secretary of the Treasury;
(B) section 232 of the Trade Expansion Act of 1962
(19 U.S.C. 1862);
(C) section 303 and title VII (including section
77(1)) of the Tariff Act of 1930 (19 U.S.C. 1303, 1671
et seq.), except that the Customs Service of the
Department of the Treasury shall accept such deposits,
bonds, or other security as deemed appropriate by the
Secretary, shall assess and collect such duties as may
be directed by the Secretary, and shall furnish such of
its important records or copies thereof as may be
requested by the Secretary incident to the functions
transferred by this subparagraph;
(D) sections 514, 515, and 516 of the Tariff Act of
1930 (19 U.S.C. 1514, 1515, and 1516) insofar as they
relate to any protest, petition, or notice of desire to
contest described in section 1002(b)(1) of the Trade
Agreements Act of 1979;
(E) with respect to the functions transferred by
subparagraph (C) of this paragraph, section 318 of the
Tariff Act of 1930 (19 U.S.C. 1318), to be exercised in
consultation with the Secretary of the Treasury;
(F) with respect to the functions transferred by
subparagraph (C) of this paragraph, section 502(b) of
the Tariff Act of 1930 (19 U.S.C. 1502(b)), and,
insofar as it provides authority to issue regulations
and disseminate information, to be exercised in
consultation with the Secretary of the Treasury to the
extent that the Secretary of the Treasury has
responsibility under subparagraph (C), section 502(a)
of such Act (19 U.S.C. 1502(a));
(G) with respect to the functions transferred by
subparagraph (C) of this paragraph, section 617 of the
Tariff Act of 1930 (19 U.S.C. 1617); and
(H) section 2632(e) of title 28 of the United States
Code, insofar as it relates to actions taken by the
Secretary reviewable under section 516A of the Tariff
Act of 1930 (19 U.S.C. 1516(a)).
(2) The Secretary shall consult with the Trade
Representative regularly in exercising the functions
transferred by subparagraph (C) of paragraph (1) of this
subsection, and shall consult with the Trade Representative
regarding any substantive regulation proposed to be issued to
enforce such functions.
(b)(1) There are transferred to the Secretary all trade
promotion and commercial functions of the Secretary of State or
the Department of State that are--
(A) performed in full-time overseas trade promotion
and commercial positions; or
(B) performed in such countries as the President may
from time to time prescribe.
(2) To carry out the functions transferred by paragraph (1)
of this subsection, the President, to the extent he deems it
necessary, may authorize the Secretary to utilize Foreign
Service personnel authorities and to exercise the functions
vested in the Secretary of State by the Foreign Service Act of
1946 (22 U.S.C. 801 et seq.) and by any other laws with respect
to personnel performing such functions.
(c) There are transferred to the President all functions of
the East-West Foreign Trade Board under section 411(c) of the
Trade Act of 1974 (19 U.S.C. 2441(c)).
(d) Appropriations available to the Department of State for
Fiscal Year 1980 for representation of the United States
concerning matters arising under the General Agreement on
Tariffs and Trade and trade and commodity matters dealt with
under the auspices of the United Nations Conference on Trade
and Development are transferred to the Trade Representative.
(e) There are transferred to the interagency organization
established under section 242 of the Trade Expansion Act of
1962 (19 U.S.C. 1872) all functions of the East-West Foreign
Trade Board under section 411 (a) and (b) of the Trade Act of
1974 (19 U.S.C. 2441(a) and (b)).
SEC. 6. ABOLITION.
The East-West Foreign Trade Board established under section
411 of the Trade Act of 1974 (19 U.S.C. 2441) is abolished.
SEC. 7. RESPONSIBILITY OF THE SECRETARY OF STATE.
Nothing in this reorganization plan is intended to derogate
from the responsibility of the Secretary of State for advising
the President on foreign policy matters, including the foreign
policy aspects of international trade and trade related
matters.
SEC. 8. INCIDENTAL TRANSFERS: INTERIM OFFICERS.
(a) So much of the personnel, property, records, and
unexpended balances of appropriations, allocations, and other
funds employed, used, held available or to be made available in
connection with the functions transferred under this
reorganization plan as the Director of the Office of Management
and Budget shall determine shall be transferred to the
appropriate agency, organization, or component at such time or
times as such Director shall provide, except that no such
unexpended balances transferred shall be used for purposes
other than those for which the appropriation originally was
made. The Director of the Office of Management and Budget shall
provide for terminating the affairs of any agency abolished
herein and for such further measures and dispositions as such
Director deems necessary to effectuate the purposes of the
reorganization plan.
(b) Pending the assumption of office by the initial
officers provided for in section 2 of this reorganization plan,
the functions of each such office may be performed, for up to a
total of 60 days, by such individuals as the President may
designate. Any individual so designated shall be compensated at
the rate provided herein for such position.
SEC. 9. EFFECTIVE DATE.
The provisions of this reorganization plan shall take
effect October 1, 1980, or at such earlier time or times as the
President shall specify, but not sooner than the earliest time
allowable under section 906 of title 5 of the United States
Code.
Section 306 of the Trade and Tariff Act of 1984
[19 U.S.C. 2114b and 2114c; P.L. 98-573]
SEC. 306. PROVISIONS RELATING TO INTERNATIONAL TRADE IN SERVICES.
(a)(1) The Secretary of Commerce shall establish a service
industries development program designed to--
(A) develop, in consultation with other Federal
agencies as appropriate, policies regarding services
that are designed to increase the competitiveness of
United States service industries in foreign commerce;
(B) develop a data base for assessing the adequacy of
Government policies and actions pertaining to services,
including, but not limited to, data on trade, both
aggregate and pertaining to individual service
industries;
(C) collect and analyze, in consultation with
appropriate agencies, information pertaining to the
international operations and competitiveness of United
States service industries, including information with
respect to--
(i) policies of foreign governments toward
foreign and United States service industries;
(ii) Federal, State, and local regulation of
both foreign and United States suppliers of
services, and the effect of such regulation on
trade;
(iii) the adequacy of current United States
policies to strengthen the competitiveness of
United States service industries in foreign
commerce, including export promotion activities
in the service sector;
(iv) tax treatment of services, with
particular emphasis on the effect of United
States taxation on the international
competitiveness of United States firms and
exports;
(v) treatment of services under international
agreements of the United States;
(vi) antitrust policies as such policies
affect the competitiveness of United States
firms; and
(vii) treatment of services in international
agreements of the United States;
(D) conduct a program of research and analysis of
service-related issues and problems, including
forecasts and industrial strategies; and
(E) conduct sectoral studies of domestic service
industries.
(2) For purposes of the collection and analysis required by
paragraph (1), and for the purpose of any reporting the
Department of Commerce makes under paragraph (3), such
collection and reporting shall distinguish between income from
investment and income from noninvestment services.
(3) On not less than a biennial basis beginning in 1986,
the Secretary shall prepare a report which analyzes the
information collected under paragraph (1). Such report shall be
submitted to the Congress and to the President by not later
than the date that is 120 days after the close of the period
covered by the report.
(4) The Secretary of Commerce shall carry out the
provisions of this subsection from funds otherwise made
available to him which may be used for such purposes.
(5) For purposes of this section, the term ``services''
means economic activities whose outputs are other than tangible
goods. Such term includes, but is not limited to, banking,
insurance, transportation, communications and data processing,
retail and wholesale trade, advertising, accounting,
construction, design and engineering, management consulting,
real estate, professional services, entertainment, education,
health care, and tourism.
[(b) Amendments to the International Investment Survey Act
of 1976.]
(c)(1)(A) The United States Trade Representative, through
the interagency trade organization established pursuant to
section 242(a) of the Trade Expansion Act of 1962 or any
subcommittee thereof, shall, in conformance with this Act and
other provisions of law, develop (and coordinate the
implementation of) United States policies concerning trade in
services.
(c)(2)(A) The President shall, as he deems appropriate--
(i) consult with State governments on issues of trade
policy, including negotiating objectives and
implementation of trade agreements, affecting the
regulatory authority of non-Federal governments, or
their procurement of goods and services;
(ii) establish one or more intergovernmental policy
advisory committees on trade which shall serve as a
principal forum in which State and local governments
may consult with the Federal Government with respect to
the matters described in clause (i); and
(iii) provide to State and local governments and to
United States service industries, upon their request,
advice, assistance, and (except as may be otherwise
prohibited by law) data, analyses, and information
concerning United States policies on international
trade in services.
[(13) Amendments to section 135 of the Trade Act of 1974 on
private sector advisors (reprinted elsewhere).]
2. Office of the United States Trade Representative
Section 141 of the Trade Act of 1974, as amended \1\
[19 U.S.C. 2171; P.L. 93-618, as amended by Reorganization Plan No. 3
of 1979, P.L. 97-456, P.L. 98-573, P.L. 99-272, P.L. 99-514, P.L. 100-
203, P.L. 100-418, P.L. 101-207, P.L. 101-382, P.L. 103-465, and P.L.
104-65]
SEC. 141. OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE.
(a) There is established within the Executive Office of the
President the Office of the United States Trade Representative
(hereinafter in this section referred to as the ``Office'').
---------------------------------------------------------------------------
\1\ Section 241, Trade Expansion Act of 1962 (P.L. 87-794), was
repealed by P.L. 93-618.
---------------------------------------------------------------------------
(b)(1) The Office shall be headed by the United States
Trade Representative who shall be appointed by the President,
by and with the advice and consent of the Senate. As an
exercise of the rulemaking power of the Senate, any nomination
of the United States Trade Representative submitted to the
Senate for confirmation, and referred to a committee, shall be
referred to the Committee on Finance. The United States Trade
Representative shall hold office at the pleasure of the
President, shall be entitled to receive the same allowances as
a chief of mission, and shall have the rank of Ambassador
Extraordinary and Plenipotentiary.
(2) There shall be in the Office three Deputy United States
Trade Representatives and one Chief Agricultural Negotiator who
shall be appointed by the President, by and with the advice and
consent of the Senate. As an exercise of the rulemaking power
of the Senate, any nomination of a Deputy United States Trade
Representative or Chief Agrcultural Negotiator submitted to the
Senate for its advice and consent, and referred to a committee,
shall be referred to the Committee on Finance. Each Deputy
United States Trade Representative and the Chief Agricultural
Negotiator shall hold office at the pleasure of the President
and shall have the rank of Ambassador.
(3) A person who has directly represented, aided, or
advised a foreign entity (as defined by section 207(f)(3) of
title 18, United States Code) in any trade negotiation, or
trade dispute, with the United States may not be appointed as
United States Trade Representative or as a Deputy United States
Trade Representative.
[(3) Amendment to title 5, section 5312, United States
Code, added the Trade Representative to the list of positions
at level I of the Executive Schedule.]
(c)(1) The United States Trade Representative shall--
(A) have primary responsibility for developing, and
for coordinating the implementation of, United States
international trade policy, including commodity
matters, and, to the extent they are related to
international trade policy, direct investment matters;
(B) serve as the principal advisor to the President
on international trade policy and shall advise the
President on the impact of other policies of the United
States Government on international trade;
(C) have lead responsibility for the conduct of, and
shall be the chief representative of the United States
for, international trade negotiations, including all
negotiations on any matter considered under the
auspices of the World Trade Organization, commodity and
direct investment negotiations, in which the United
States participates;
(D) issue and coordinate policy guidance to
departments and agencies on basic issues of policy and
interpretation arising in the exercise of international
trade functions including any matter considered under
the auspices of the World Trade Organization, to the
extent necessary to assure the coordination of
international trade policy and consistent with any
other law;
(E) act as the principal spokesman of the President
on international trade;
(F) report directly to the President and the Congress
regarding, and be responsible to the President and the
Congress for the administration of, trade agreements
programs;
(G) advise the President and Congress with respect to
nontariff barriers to international trade,
international commodity agreements, and other matters
which are related to the trade agreements programs;
(H) be responsible for making reports to Congress
with respect to matters referred to in subparagraphs
(C) and (F);
(I) be chairman of the interagency trade organization
established under section 242(a) of the Trade Expansion
Act of 1962, and shall consult with and be advised by
such organization in the performance of his functions;
and
(J) in addition to those functions that are delegated
to the United States Trade Representative as of the
date of the enactment of the Omnibus Trade and
Competitiveness Act of 1988, be responsible for such
other functions as the President may direct.
(2) It is the sense of Congress that the United States Trade
Representative should--
(A) be the senior representative on any body that the
President may establish for the purpose of providing to
the President advice on overall economic policies in
which international trade matters predominate; and
(B) be included as a participant in all economic
summit and other international meetings at which
international trade is a major topic.
(3) The United States Trade Representative may--
(A) delegate any of his functions, powers, and duties
to such officers and employees of the Office as he may
designate; and
(B) authorize such successive redelegations of such
functions, powers, and duties to such officers and
employees of the Office as he may deem appropriate.
(4) Each Deputy United States Trade Representative shall
have as his principal function the conduct of trade
negotiations under this chapter and shall have such other
functions as the United States Trade Representative may direct.
(5) The principal function of the Chief Agricultural
Negotiator shall be to conduct trade negotiations and to
enforce trade agreements relating to United States agricultural
products and services. The Chief Agricultural Negotiator shall
be a vigorous advocate on behalf of United States agricultural
interests. The Chief Agricultural Negotiator shall perform such
other functions as the United States Trade Representative may
direct.
(d)(1) In carrying out subsection (c) with respect to
unfair trade practices, the United States Trade Representative
shall--
(A) coordinate the application of interagency
resources to specific unfair trade practice cases;
(B) identify, and refer to the appropriate Federal
department or agency for consideration with respect to
action, each act, policy, or practice referred to in
the report required under section 181(b), or otherwise
known to the United States Trade Representative on the
basis of other available information, that may be an
unfair trade practice that either--
(i) is considered to be inconsistent with the
provisions of any trade agreement and has a
significant adverse impact on United States
commerce, or
(ii) has a significant adverse impact on
domestic firms or industries that are either
too small or financially weak to initiate
proceedings under the trade laws;
(C) identify practices having a significant adverse
impact on United States commerce that the attainment of
United States negotiating objectives would eliminate;
and
(D) identify, on a biennial basis, those United
States Government policies and practices that, if
engaged in by a foreign government, might constitute
unfair trade practices under United States law.
(2) For purposes of carrying out paragraph (1), the United
States Trade Representative shall be assisted by an interagency
unfair trade practices advisory committee composed of the Trade
Representative, who shall chair the committee, and senior
representatives of the following agencies, appointed by the
respective heads of those agencies:
(A) The Bureau of Economics and Business Affairs of
the Department of State.
(B) The United States and Foreign Commercial Services
of the Department of Commerce.
(C) The International Trade Administration (other
than the United States and Foreign Commercial Service)
of the Department of Commerce.
(D) The Foreign Agricultural Service of the
Department of Agriculture.
The United States Trade Representative may also request the
advice of the United States International Trade Commission
regarding the carrying out of paragraph (1).
(3) For purposes of this subsection, the term ``unfair
trade practice'' means any act, policy, or practice that--
(A) may be a subsidy with respect to which
countervailing duties may be imposed under subtitle A
of title VII;
(B) may result in the sale or likely sale of foreign
merchandise with respect to which antidumping duties
may be imposed under subtitle B of title VII;
(C) may be either an unfair method of competition, or
an unfair act in the importation of articles into the
United States, that is unlawful under section 337; or
(D) may be an act, policy, or practice of a kind with
respect to which action may be taken under title III of
the Trade Act of 1974.
(e) The United States Trade Representative may, for the
purpose of carrying out his functions under this section--
(1) subject to the civil service and classification
laws, select, appoint, employ, and fix the compensation
of such officers and employees as are necessary and
prescribe their authority and duties, except that not
more than 20 individuals may be employed without regard
to any provision of law regulating the employment or
compensation at rates not to exceed the rate of pay for
level IV of the Executive schedule in section 5314 of
title 5, United States Code;
(2) employ experts and consultants in accordance with
section 3109 of Title 5, and compensate individuals so
employed for each day (including traveltime) at rates
not in excess of the maximum rate of pay for grade GS-
18 as provided in section 5332 of Title 5, and while
such experts and consultants are so serving away from
their homes or regular place of business, to pay such
employees travel expenses and per diem in lieu of
subsistence at rates authorized by section 5703 of
Title 5 for persons in Government service employed
intermittently;
(3) promulgate such rules and regulations as may be
necessary to carry out the functions, powers and duties
vested in him;
(4) utilize, with their consent, the services,
personnel, and facilities of other Federal agencies;
(5) enter into and perform such contracts, leases,
cooperative agreements, or other transactions as may be
necessary in the conduct of the work of the Office and
on such terms as the United States Trade Representative
may deem appropriate, with any agency or
instrumentality of the United States, or with any
public or private person, firm, association,
corporation, or institution;
(6) accept voluntary and uncompensated services,
notwithstanding the provisions of 1342 of title 31,
United States Code;
(7) adopt an official seal, which shall be judicially
noticed;
(8) pay for expenses approved by him for official
travel without regard to the Federal Travel Regulations
or to the provisions of subchapter I of chapter 57 of
Title 5 [5 U.S.C. Sec. 5701 et seq.] (relating to rates
of per diem allowances in lieu of subsistence
expenses);
(9) accept, hold, administer, and utilize gifts,
devises, and bequests of property, both real and
personal, for the purpose of aiding or facilitating the
work of the Office;
(10) acquire, by purchase or exchange, not more than
two passenger motor vehicles for use abroad, except
that no vehicle may be acquired at a cost exceeding
$9,500; and
(11) provide, where authorized by law, copies of
documents to persons at cost, except that any funds so
received shall be credited to, and be available for use
from, the account from which expenditures relating
thereto were made.
(f) The United States Trade Representative shall, to the
extent he deems it necessary for the proper administration and
execution of the trade agreements programs of the United
States, draw upon the resources of, and consult with, Federal
agencies in connection with the performance of his functions.
(g)(1)(A) There are authorized to be appropriated to the
Office for the purposes of carrying out its functions not to
exceed the following:
(i) $23,250,000 for fiscal year 1991.
(ii) $21,077,000 for fiscal year 1992.
(B) Of the amounts authorized to be appropriated under
subparagraph (A) for any fiscal year--
(i) not to exceed $98,000 may be used for
entertainment and representation expenses of the
Office;
(ii) not to exceed $2,050,000 may be used to pay the
United States share of the expenses of binational
panels and extraordinary challenge committees convened
pursuant to chapter 19 of the United States-Canada Free
Trade Agreement; and
(iii) not to exceed $1,000,000 shall remain available
until expended.
(2) For the fiscal year beginning October 1, 1982, and for
each fiscal year thereafter, there are authorized to be
appropriated to the Office for the salaries of its officers and
employees such additional sums as may be provided by law to
reflect pay rate changes made in accordance with the Federal
Pay Comparability Act of 1970 [5 U.S.C. Sec. 5301 et seq.].
Section 117 of the Trade and Development Act of 2000
[19 U.S.C. 3724; P.L. 106-200]
SEC. 117. ASSISTANT UNITED STATES TRADE REPRESENTATIVE FOR AFRICAN
AFFAIRS.
It is the sense of the Congress that--
(1) The position of Assistant United States Trade
Representative for African Affairs is integral to the United
States commitment to increasing United States-sub-Saharan
African trade and investment;
(2) the position of Assistant United States Trade
Representative for African Affairs should be maintained within
the Office of the United States Trade Representative to direct
and coordinate interagency activities on United States-Africa
trade policy and investment matters and serve as--
(A) a primary point of contact in the executive
branch for those persons engaged in trade between the
United States and sub-Saharan Africa; and
(B) the chief advisor to the United States Trade
Representative on issues of trade and investment with
Africa; and
(3) the United States Trade Representative should have
adequate funding and staff to carry out the duties of the
Assistant United States Trade Representative for African
Affairs described in paragraph (2), subject to the availability
of appropriations.
C. UNITED STATES INTERNATIONAL TRADE COMMISSION
1. Organization, General Powers, Procedures
Sections 330, 331, 333-335, and 339 of the Tariff Act of 1930, as
amended
[19 U.S.C. 1330, 1331, 1333-1335, and 1339; P.L. 71-361, as amended by
Act of June 25, 1936, Act of June 25, 1948, Act of May 24, 1949, Act of
Aug. 7, 1953, P.L. 85-686, P.L. 91-452, P.L. 93-618, P.L. 94-455, P.L.
95-106, P.L. 95-430, P.L. 97-456, P.L. 98-573, P.L. 99-272, P.L. 99-
514, P.L. 100-203, P.L. 100-418, P.L. 100-647, P.L. 101-207, P.L. 101-
382, and P.L. 102-185]
SEC. 330. ORGANIZATION OF COMMISSION.
(a) Membership.--The United States International Trade
Commission (referred to in this Act as the ``Commission'')
shall be composed of six commissioners who shall be appointed
by the President, by and with the advice and consent of the
Senate. No person shall be eligible for appointment as a
commissioner unless he is a citizen of the United States, and,
in the judgment of the President, is possessed of
qualifications requisite for developing expert knowledge of
international trade problems and efficiency in administering
the duties and functions of the Commission. A person who has
served as a commissioner for more than 5 years (excluding
service as a commissioner before January 3, 1975) shall not be
eligible for reappointment as a commissioner. Not more than
three of the commissioners shall be members of the same
political party, and in making appointments members of
different political parties shall be appointed alternately as
nearly as may be practicable.
(b) Terms of Office.--The terms of office of the
commissioners holding office on January 3, 1975, which (but for
this sentence) would expire on June 16, 1975, June 16, 1976,
June 16, 1977, June 16, 1978, June 16, 1979, and June 16, 1980,
shall expire on December 16, 1976, June 16, 1978, December 16,
1979, June 16, 1981, December 16, 1982, and June 16, 1984,
respectively. The term of office of each commissioner appointed
after such date shall expire 9 years from the date of the
expiration of the term for which his predecessor was appointed,
except that--
(1) any commissioner appointed to fill a vacancy
occurring prior to the expiration of the term for which
his predecessor was appointed shall be appointed for
the remainder of such term, and
(2) any commissioner may continue to serve as a
commissioner after an expiration of his term of office
until his successor is appointed and qualified.
(c) Chairman and Vice Chairman; Quorum.--(1) The chairman
and the vice chairman of the Commission shall be designated by
the President from among the members of the Commission not
ineligible, under paragraph (3), for designation. The President
shall notify the Congress of his designations under this
paragraph. If, as of the date on which a term begins under
paragraph (2), the President has not designated the chairman of
the Commission for such term, the Commissioner who, as of such
date--
(A) is a member of a different political party than
the chairman of the Commission for the immediately
preceding term, and
(B) has the longest period of continuous service as a
commissioner,
shall serve as chairman of the Commission for the portion of
such term preceding the date on which an individual designated
by the President takes office as chairman.
(2) After June 16, 1978, the terms of office for the
chairman and vice chairman of the Commission shall be as
follows:
(A) The first term of office occurring after such
date shall begin on June 17, 1978, and end at the close
of June 16, 1980.
(B) Each term of office thereafter shall begin on the
day after the closing date of the immediately preceding
term of office and end at the close of the 2-year
period beginning on such day.
(3)(A) The President may not designate as the chairman of
the Commission for any term any Commissioner who is a member of
the political party of which the chairman of the Commission for
the immediately preceding term is a member, or who has less
than 1 year of continuous service as a commissioner as of the
date such designation is being made.
(B) The President may not designate as the vice chairman of
the Commission for any term any commissioner who is a member of
the political party of which the chairman for that term is a
member.
(C) If any commissioner does not complete a term as
chairman or vice chairman by reason of death, resignation,
removal from office as a commissioner, or expiration of his
term of office as a commissioner, the President shall designate
as the chairman or vice chairman, as the case may be, for the
remainder of such term a commissioner who is a member of the
same political party. Designation of a chairman under this
subparagraph may be made without regard to the 1-year
continuous service requirement under subparagraph (A).
(4) The vice chairman shall act as chairman in case of the
absence or disability of the chairman. During any period in
which there is no chairman or vice chairman, the commissioner
having the longest period of continuous service as a
commissioner shall act as chairman.
(5) No commissioner shall actively engage in any business,
vocation, or employment other than that of serving as a
commissioner.
(6) A majority of the commissioners in office shall
constitute a quorum, but the Commission may function
notwithstanding vacancies.
(d) Effect of Divided Vote in Certain Cases.--
(1) In a proceeding in which the Commission is
required to determine--
(A) under section 202 of the Trade Act of
1974, whether in-creased imports of an article
are a substantial cause of serious injury, or
the threat thereof, as described in subsection
(b)(1) of that section (hereafter in this
subsection referred to as ``serious injury''),
or
(B) under section 406 of such Act, whether
market disruption exists,
and the commissioners voting are equally divided with
respect to such determination, then the determination
agreed upon by either group of commissioners may be
considered by the President as the determination of the
Commission.
(2) If under section 202(b) or 406 of the Trade Act
of 1974 there is an affirmative determination of the
Commission, or a determination of the Commission which
the President may consider an affirmative determination
under paragraph (1), that serious injury or market
disruption exists, respectively, and a majority of the
commissioners voting are unable to agree on a finding
or recommendation described in section 202(e)(1) of
such Act or the finding described in section 406(a)(3)
of such Act, as the case may be (hereafter in this
subsection referred to as a ``remedy finding''), then--
(A) if a plurality of not less than three
commissioners so voting agree on a remedy
finding, such remedy finding shall, for
purposes of section 203 of such Act, be treated
as the remedy finding of the Commission, or
(B) if two groups, both of which include not
less than 3 commissioners, each agree upon a
remedy finding and the President reports under
section 204(a) of such Act that--
(i) he is taking the action agreed
upon by one such group, then the remedy
finding agreed upon by the other group
shall, for purposes of section 203 of
such Act, be treated as the remedy
finding of the Commission, or
(ii) he is taking action which
differs from the action agreed upon by
both such groups, or that he will not
take any action, then the remedy
finding agreed upon by either such
group may be considered by the Congress
as the remedy finding of the Commission
and shall, for purposes of section 203
of such Act, be treated as the remedy
finding of the Commission.
(3) In any proceeding to which paragraph (1) applies
in which the commissioners voting are equally divided
on a determination that serious injury exists, or that
market disruption exists, the Commission shall report
to the President the determination of each group of
commissioners. In any proceeding to which paragraph (2)
applies, the Commission shall report to the President
the remedy finding of each group of commissioners
voting.
(4) In a case to which paragraph (2)(B)(ii) applies,
for purposes of section 203(a) of the Trade Act of
1974, notwithstanding section 152(a)(1)(A) of such Act,
the second blank space in the concurrent resolution
described in such section 152 shall be filled with the
appropriate date and the following: ``The action which
shall take effect under section 203(c)(1) of the Trade
Act of 1974 is the finding or recommendation agreed
upon by Commissioners ------------, ------------, and
------------.'' The three blank spaces shall be filled
with the names of the appropriate Commissioners.
(5) Whenever, in any case in which the Commission is
authorized to make an investigation upon its own
motion, upon complaint, or upon application of any
interested party, one-half of the number of
commissioners voting agree that the investigation
should be made, such investigation shall thereupon be
carried out in accordance with the statutory authority
covering the matter in question. Whenever the
Commission is authorized to hold hearings in the course
of any investigation and one-half of the number of
commissioners voting agree that hearings should be held
such hearings shall thereupon be held in accordance
with the statutory authority covering the matter in
question.
(e) Authorization of Appropriations.--(1) For the fiscal
year beginning October 1, 1976, and each fiscal year
thereafter, there are authorized to be appropriated to the
Commission only such sums as may hereafter be provided by law.
(2)(A) There are authorized to be appropriated to the
Commission for necessary expenses (including the rental of
conference rooms in the District of Columbia and elsewhere) not
to exceed the following:
(i) $41,170,000 for fiscal year 1991.
(ii) $44,052,000 for fiscal year 1992.
(B) Not to exceed $2,500 of the amount authorized to be
appropriated for any fiscal year under subparagraph (A) may be
used, subject to the approval of the Chairman of the
Commission, for reception and entertainment expenses.
(C) No part of any sum that is appropriated under the
authority of subparagraph (A) may be used by the Commission in
the making of any special study, investigation, or report that
is requested by any agency of the executive branch unless that
agency reimburses the Commission for the cost thereof.
(3) There are authorized to be appropriated to the
Commission for each fiscal year after September 30, 1977, in
addition to any other amount authorized to be appropriated for
such fiscal year, such sums as may be necessary for increases
authorized by law in salary, pay, retirement, and other
employee benefits.
(f) The Commission shall be considered to be an independent
regulatory agency for purposes of chapter 35 of title 44,
United States Code.
SEC. 331. GENERAL POWERS.
(a) Administration.--(1) Except as provided in paragraph
(2), the chairman of the Commission, shall--
(A) appoint and fix the compensation of such
employees of the Commission as he deems necessary
(other than the personal staff of each commissioner),
including the secretary,
(B) procure the services of experts and consultants
in accordance with the provisions of section 3109 of
Title 5, and
(C) exercise and be responsible for all other
administrative functions of the Commission.
Any decision by the chairman under this paragraph shall be
subject to disapproval by a majority vote of all the
commissioners in office.
(2) Subject to approval by a majority vote of all the
commissioners in office, the chairman may--
(A) terminate the employment of any supervisory
employee of the Commission whose duties involve
substantial personal responsibility for Commission
matters and who is compensated at a rate equal to, or
in excess of, the rate for grade GS-15 of the General
Schedule in section 5332 of title 5, and
(B) formulate the annual budget of the Commission.
(3) No member of the Commission, in making public
statements with respect to any policy matter for which the
Commission has responsibility, shall represent himself as
speaking for the Commission, or his views as being the views of
the Commission, with respect to such matters except to the
extent that the Commission has adopted the policy being
expressed.
(b) Application of Civil Service Law.--Except for employees
excepted under civil service rules, all employees of the
Commission shall be appointed from lists of eligibles to be
supplied by the Director of the Office of Personnel Management
and in accordance with the civil service law.
(c) Expenses.--All of the expenses of the Commission,
including all necessary expenses for transportation incurred by
the commissioners or by their employees under their orders in
making any investigation or upon official business in any other
places than at their respective headquarters, shall be allowed
and paid on the presentation of itemized vouchers therefor
approved by the chairman (except that in the case of a
commissioner, or the personal staff of any commissioner, such
vouchers may be approved by that commissioner).
(d) Principal Office at Washington.--The principal office
of the Commission shall be in the city of Washington, but it
may meet and exercise all its powers at any other place. The
Commission may, by one or more of its members, or by such
agents as it may designate, prosecute any inquiry necessary to
its duties in any part of the United States or in any foreign
country.
(e) Office at New York.--The Commission is authorized to
establish and maintain an office at the port of New York for
the purpose of directing or carrying on any investigation,
receiving and compiling statistics, selecting, describing, and
filing samples of articles, and performing any of the duties or
exercising any of the powers imposed upon it by law.
(f) Official Seal.--The Commission is authorized to adopt
an official seal, which shall be judicially noticed.
* * * * * * *
SEC. 333. TESTIMONY AND PRODUCTION OF PAPERS.
(a) Authority To Obtain Information.--For the purposes of
carrying out its functions and duties in connection with any
investigation authorized by law, the Commission or its duly
authorized agent or agents (1) shall have access to and the
right to copy any document, paper, or record, pertinent to the
subject matter under investigation, in the possession of any
person, firm, copartnership, corporation, or association
engaged in the production, importation, or distribution of any
article under investigation, (2) may summon witnesses, take
testimony, and administer oaths, (3) may require any person,
firm, copartnership, corporation, or association to produce
books or papers relating to any matter pertaining to such
investigation, and (4) may require any person, firm,
copartnership, corporation, or association, to furnish in
writing, in such detail and in such form as the Commission may
prescribe, information in their possession pertaining to such
investigation. Any member of the Commission may sign subpoenas,
and members and agents of the Commission, when authorized by
the Commission, may administer oath and affirmations, examine
witnesses, take testimony, and receive evidence.
(b) Witnesses and Evidence.--Such attendance of witnesses
and the production of such documentary evidence may be required
from any place in the United States at any designated place of
hearing. And in case of disobedience to a subpoena the
Commission may invoke the aid of any district or territorial
court of the United States in requiring the attendance and
testimony of witnesses and the production of documentary
evidence, and such court within the jurisdiction of which such
inquiry is carried on may, in case of contumacy or refusal to
obey a subpoena issued to any corporation or other person,
issue an order requiring such corporation or other person to
appear before the Commission, or to produce documentary
evidence if so ordered or to give evidence touching the matter
in question; and any failure to obey such order of the court
may be punished by such court as a contempt thereof.
(c) Mandamus.--At the request of the Commission, any such
court shall have jurisdiction to issue writs of mandamus
commanding compliance with the provisions of this part or any
order of the Commission made in pursuance thereof.
(d) Depositions.--The Commission may order testimony to be
taken by deposition in any proceeding or investigation pending
before the Commission at any stage of such proceeding or
investigation. Such depositions may be taken before any person
designated by the Commission and having power to administer
oaths. Such testimony shall be reduced to writing by the person
taking the deposition, or under his direction, and shall then
be subscribed by the deponent. Any person, firm, copartnership,
corporation, or association, may be compelled to appear and
depose and to produce documentary evidence in the same manner
as witnesses may be compelled to appear and testify and produce
documentary evidence before the Commission, as hereinbefore
provided.
(e) Fees and Mileage of Witnesses.--Witnesses summoned
before the Commission shall be paid the same fees and mileage
that are paid witnesses in the courts of the United States, and
witnesses whose depositions are taken and the person taking the
same, except employees of the Commission, shall severally be
entitled to the same fees and mileage as are paid for like
services in the court of the United States.
(f) Statements Under Oath.--The Commission is authorized,
in order to ascertain any facts required by subdivision (d) of
section 332 to require any importer and any American grower,
producer, manufacturer, or seller to file with the commission a
statement, under oath, giving his selling prices in the United
States of any article imported, grown, produced, fabricated,
manipulated, or manufactured by him.
(g) Representation in Court Proceedings.--The Commission
shall be represented in all judicial proceedings by attorneys
who are employees of the Commission or, at the request of the
Commission, by the Attorney General of the United States.
(h) Administrative Protective Orders.--Any correspondence,
private letters of reprimand, and other documents and files
relating to violations or possible violations of administrative
protective orders issued by the Commission in connection with
investigations or other proceedings under this title shall be
treated as information described in section 552(b)(3) of title
5, United States Code.
SEC. 334. COOPERATION WITH OTHER AGENCIES.
The Commission shall in appropriate matters act in
conjunction and cooperation with the Treasury Department, the
Department of Commerce, the Federal Trade Commission, or any
other departments, or independent establishments of the
Government, and such departments and independent establishments
of the Government shall cooperate fully with the Commission for
the purposes of aiding and assisting in its work, and when
directed by the President, shall furnish to the Commission, on
its request, all records, papers, and information in their
possession relating to any of the subjects of investigation by
the Commission and shall detail, from time to time, such
officials and employees to said Commission as he may direct.
SEC. 335. RULES AND REGULATIONS.
The Commission is authorized to adopt such reasonable
procedures and rules and regulations as it deems necessary to
carry out its functions and duties.
* * * * * * *
SEC. 339. TRADE REMEDY ASSISTANCE OFFICE.
(a) There is established in the Commission a separate
office to be known as the Trade Remedy Assistance Office which
shall provide full information to the public upon request and
shall to the extent feasible, provide assistance and advice to
interested parties concerning--
(1) remedies and benefits available under the trade
laws, and
(2) the petition and application procedures, and the
appropriate filing dates, with respect to such remedies
and benefits.
(b) The Trade Remedy Assistance Office, in coordination
with each agency responsible for administering a trade law,
shall provide technical and legal assistance and advice to
eligible small businesses to enable them--
(1) to prepare and file petitions and applications
(other than those which, in the opinion of the Office,
are frivolous); and
(2) to seek to obtain the remedies and benefits
available under the trade laws, including any
administrative review or administrative appeal
thereunder.
(c) For purposes of this section--
(1) The term ``eligible small business'' means any
business concern which, in the agency's judgment, due
to its small size, has neither adequate internal
resources nor financial ability to obtain qualified
outside assistance in preparing and filing petitions
and applications for remedies and benefits under trade
laws. In determining whether a business concern is an
``eligible small business'', the agency may consult
with the Small Business Administration, and shall
consult with any other agency that has provided
assistance under subsection (b) to that business
concern. Any agency decision regarding whether a
business concern is an eligible small business for
purposes of this section is not reviewable by any other
agency or by any court.
(2) The term ``trade laws'' means--
(A) chapter 1 of title II of the Trade Act of
1974 (19 U.S.C. 2251 et seq., relating to
relief caused by import competition);
(B) chapters 2 and 3 of such title II
(relating to adjustment assistance for workers
and firms);
(C) chapter 1 of title III of the Trade Act
of 1974 (19 U.S.C. 2411 et seq., relating to
relief from foreign import restrictions and
export subsidies);
(D) title VII of the Tariff Act of 1930 (19
U.S.C. 1671 et seq., relating to the imposition
of countervailing duties and antidumping
duties);
(E) section 232 of the Trade Expansion Act of
1962 (19 U.S.C. 1862, relating to the
safeguarding of national security); and
(F) section 337 of the Tariff Act of 1930 (19
U.S.C. 1337, relating to unfair practices in
import trade).
Section 603 of the Trade Act of 1974
[19 U.S.C. 2482; P.L. 93-618]
SEC. 603. INTERNATIONAL TRADE COMMISSION.
(a) In order to expedite the performance of its functions
under this Act, the International Trade Commission may conduct
preliminary investigations, determine the scope and manner of
its proceedings, and consolidate proceedings before it.
(b) In performing its functions under this Act, the
Commission may exercise any authority granted to it under any
other Act.
(c) The Commission shall at all times keep informed
concerning the operation and effect of provisions relating to
duties or other import restrictions of the United States
contained in trade agreements entered into under the trade
agreements program.
Section 175(a)(1) of the Trade Act of 1974
[19 U.S.C. 2232; P.L. 93-618]
SEC. 175. INDEPENDENT BUDGET AND AUTHORIZATION OF APPROPRIATIONS.
(a)(1) Effective with respect to the fiscal year beginning
October 1, 1976, for purposes of the Budget and Accounting Act,
1921 (31 U.S.C. 1 et seq.), estimated expenditures and proposed
appropriations for the United States International Trade
Commission shall be transmitted to the President on or before
October 15 of the year preceding the beginning of each fiscal
year and shall be included by him in the Budget without
revision, and the Commission shall not be considered to be a
department or establishment for purposes of such Act.
2. Investigations
Section 332 of the Tariff Act of 1930, as amended
[19 U.S.C. 1332; P.L. 71-361, as amended by P.L. 93-618, P.L. 96-39,
P.L. 100-418, and P.L. 100-647]
SEC. 332. INVESTIGATIONS.
(a) Investigations and Reports.--It shall be the duty of
the Commission to investigate the administration and fiscal and
industrial effects of the customs laws of this country, the
relations between the rates of duty on raw materials and
finished or partly finished products, the effects of ad valorem
and specific duties and of compound specific and ad valorem
duties, all questions relative to the arrangement of schedules
and classification of articles in the several schedules of the
customs law, and, in general, to investigate the operation of
customs laws, including their relation to the Federal revenues,
their effect upon the industries and labor of the country, and
to submit reports of its investigations as hereafter provided.
(b) Investigations of Tariff Relations.--The Commission
shall have power to investigate the tariff relations between
the United States and foreign countries, commercial treaties,
preferential provisions, economic alliances, the effect of
export bounties and preferential transportation rates, the
volume of importations compared with domestic production and
consumption, and conditions, causes, and effects relating to
competition of foreign industries with those of the United
States, including dumping and cost of production.
(c) Investigation of Paris Economy Pact.--The Commission
shall have power to investigate the Paris Economy Pact and
similar organizations and arrangements in Europe.
(d) Information for President and Congress.--In order that
the President and the Congress may secure information and
assistance, it shall be the duty of the Commission to--
(1) Ascertain conversion costs and costs of
production in the principal growing, producing, or
manufacturing centers of the United States of articles
of the United States, whenever in the opinion of the
Commission it is practicable;
(2) Ascertain conversion costs and costs of
production in the principal growing, producing, or
manufacturing centers of foreign countries of articles
imported into the United States, whenever in the
opinion of the Commission such conversion costs or
costs of production are necessary for comparison with
conversion costs or costs of production in the United
States and can be reasonably ascertained;
(3) Select and describe articles which are
representative of the classes or kinds of articles
imported into the United States and which are similar
to or comparable with articles of the United States;
select and describe articles of the United States
similar to or comparable with such imported articles;
and obtain and file samples of articles so selected,
whenever the Commission deems it advisable;
(4) Ascertain imports costs of such representative
articles so selected;
(5) Ascertain the grower's producer's, or
manufacturer's selling prices in the principal growing,
producing, or manufacturing centers of the United
States of the articles of the United States so
selected; and
(6) Ascertain all other facts which will show the
differences in or which affect competition between
articles of the United States and imported articles in
the principal markets of the United States.
(e) Definitions.--When used in this subdivision and in
subdivision (d)--
(1) The term ``article'' includes any commodity,
whether grown, produced, fabricated, manipulated, or
manufactured;
(2) The term ``import cost'' means the transaction
value of the imported merchandise determined in
accordance with section 402(b) plus, when not included
in the transaction value, all necessary expenses,
exclusive of customs duties, of bringing such
merchandise to the United States.
[(f) Provision directing the Commission to ascertain the
cost of crude petroleum during 3 years preceding 1930.]
(g) Reports to President and Congress.--The Commission
shall put at the disposal of the President of the United
States, the Committee on Ways and Means of the House of
Representatives, and the Committee on Finance of the Senate,
whenever requested, all information at its command, and shall
make such investigations and reports as may be requested by the
President or by either of said committees or by either branch
of the Congress. However, the Commission may not release
information which the Commission considers to be confidential
business information unless the party submitting the
confidential business information had notice, at the time of
submission, that such information would be released by the
Commission, or such party subsequently consents to the release
of the information. The Commission shall report to Congress on
the first Monday of December of each year after June 17, 1930,
a statement of the methods adopted and all expenses incurred, a
summary of all reports made during the year, and a list of all
votes taken by the Commission during the year, showing those
commissioners voting in the affirmative and the negative on
each vote and those commissioners not voting on each vote and
the reasons for not voting. Each such annual report shall
include a list of all complaints filed under section 337 during
the year for which such report is being made, the date on which
each such complaint was filed, and the action taken thereon,
and the status of all investigations conducted by the
Commission under such section during such year and the date on
which each such investigation was commenced.
D. PRIVATE OR PUBLIC SECTOR ADVISORY COMMITTEES
Section 135 of the Trade Act of 1974, as amended
[19 U.S.C. 2155; P.L. 93-618, as amended by P.L. 96-39, P.L. 98-573,
P.L. 99-514, P.L. 100-418, and P.L. 103-465]
SEC. 135. INFORMATION AND ADVICE FROM PRIVATE AND PUBLIC SECTORS.
(a) In General.--
(1) The President shall seek information and advice
from representative elements of the private sector and
the non-Federal governmental sector with respect to--
(A) negotiating objectives and bargaining
positions before entering into a trade
agreement under this title or section 1102 of
the Omnibus Trade and Competitiveness Act of
1988;
(B) the operation of any trade agreement once
entered into, including preparation for dispute
settlement panel proceedings to which the
United States is a party; and
(C) other matters arising in connection with
the development, implementation, and
administration of the trade policy of the
United States, including those matters referred
to in Reorganization Plan Number 3 of 1979 and
Executive Order Numbered 12188, and the
priorities for actions thereunder.
To the maximum extent feasible, such information and
advice on negotiating objectives shall be sought and
considered before the commencement of negotiations.
(2) The President shall consult with representative
elements of the private sector and the non-Federal
governmental sector on the overall current trade policy
of the United States. The consultations shall include,
but are not limited to, the following elements of such
policy:
(A) The principal multilateral and bilateral
trade negotiating objectives and the progress
being made toward their achievement.
(B) The implementation, operation, and
effectiveness of recently concluded
multilateral and bilateral trade agreements and
resolution of trade disputes.
(C) The actions taken under the trade laws of
the United States and the effectiveness of such
actions in achieving trade policy objectives.
(D) Important developments in other areas of
trade for which there must be developed a
proper policy response.
(3) The President shall take the advice received
through consultation under paragraph (2) into account
in determining the importance which should be placed on
each major objective and negotiating position that
should be adopted in order to achieve the overall trade
policy of the United States.
(b) Advisory Committee for Trade Policy and Negotiations.--
(1) The President shall establish an Advisory
Committee for Trade Policy and Negotiations to provide
overall policy advice on matters referred to in
subsection (a). The committee shall be composed of not
more than 45 individuals and shall include
representatives of non-Federal governments, labor,
industry, agriculture, small business, service
industries, retailers, nongovernmental environmental
and conservation organizations, and consumer interests.
The committee shall be broadly representative of the
key sectors and groups of the economy, particularly
with respect to those sectors and groups which are
affected by trade. Members of the committee shall be
recommended by the United States Trade Representative
and appointed by the President for a term of 2 years.
An individual may be reappointed to committee for any
number of terms. Appointments to the Committee shall be
made without regard to political affiliation.
(2) The committee shall meet as needed at the call of
the United States Trade Representative or at the call
of two-thirds of the members of the committee. The
chairman of the committee shall be elected by the
committee from among its members.
(3) The United States Trade Representative shall make
available to the committee such staff, information,
personnel, and administrative services and assistance
as it may reasonably require to carry out its
activities.
(c) General Policy, Sectoral, or Functional Advisory
Committees.--
(1) The President may establish individual general
policy advisory committees for industry, labor,
agriculture, services, investment, defense, and other
interests, as appropriate, to provide general policy
advice on matters referred to in subsection (a). Such
committees shall, insofar as is practicable, be
representative of all industry, labor, agricultural,
service, investment, defense, and other interests,
respectively, including small business interests, and
shall be organized by the United States Trade
Representative and the Secretaries of Commerce,
Defense, Labor, Agriculture, the Treasury, or other
executive departments, as appropriate. The members of
such committees shall be appointed by the United States
Trade Representative in consultation with such
Secretaries.
(2) The President shall establish such sectoral or
functional advisory committees as may be appropriate.
Such committees shall, insofar as is practicable, be
representative of all industry, labor, agricultural, or
service interests (including small business interests)
in the sector or functional areas concerned. In
organizing such committees, the United States Trade
Representative and the Secretaries of Commerce, Labor,
Agriculture, the Treasury, or other executive
departments, as appropriate, shall--
(A) consult with interested private
organizations; and
(B) take into account such factors as--
(i) patterns of actual and potential
competition between United States
industry and agriculture and foreign
enterprise in international trade,
(ii) the character of the nontariff
barriers and other distortions
affecting such competition,
(iii) the necessity for reasonable
limits on the number of such advisory
committees,
(iv) the necessity that each
committee be reasonably limited in
size, and
(v) in the case of each sectoral
committee, that the product lines
covered by each committee be reasonably
related.
(3) The President--
(A) may, if necessary, establish policy
advisory committees representing non-Federal
governmental interests to provide policy
advice--
(i) on matters referred to in
subsection (a), and
(ii) with respect to implementation
of trade agreements, and
(B) shall include as members of committees
established under subparagraph (A)
representatives of non-Federal governmental
interests if he finds such inclusion
appropriate after consultation by the United
States Trade Representative with such
representatives.
(4) Appointments to each committee established under
paragraph (1), (2), or (3) shall be made without regard
to political affiliation.
(d) Policy, Technical, and Other Advice and Information.--
Committees established under subsection (c) shall meet at the
call of the United States Trade Representative and the
Secretaries of Agriculture, Commerce, Labor, Defense, or other
executive departments, as appropriate, to provide policy
advice, technical advice and information, and advice on other
factors relevant to the matters referred to in subsection (a).
(e) Meeting of Advisory Committees at Conclusion of
Negotiations.--
(1) The Advisory Committee for Trade Policy and
Negotiations, each appropriate policy advisory
committee, and each sectoral or functional advisory
committee, if the sector or area which such committee
represents is affected, shall meet at the conclusion of
negotiations for each trade agreement entered into
under section 1102 of the Omnibus Trade and
Competitiveness Act of 1988, to provide to the
President, to Congress, and to the United States Trade
Representative a report on such agreement. Each report
that applies to a trade agreement entered into under
section 1102 of the Omnibus Trade and Competitiveness
Act of 1988 shall be provided under the preceding
sentence not later than the date on which the President
notifies the Congress under section 1103(a)(1)(A) of
such Act of 1988 of his intention to enter into that
agreement.
(2) The report of the Advisory Committee for Trade
Policy and Negotiations and each appropriate policy
advisory committee shall include an advisory opinion as
to whether and to what extent the agreement promotes
the economic interests of the United States and
achieves the applicable overall and principal
negotiating objectives set forth in section 1101 of the
Omnibus Trade and Competitiveness Act of 1988, as
appropriate.
(3) The report of the appropriate sectoral or
functional committee under paragraph (1) shall include
an advisory opinion as to whether the agreement
provides for equity and reciprocity within the sector
or within the functional area.
(f) Application of Federal Advisory Committee Act.--The
provisions of the Federal Advisory Committee Act apply--
(1) to the Advisory Committee for Trade Policy and
Negotiations established under subsection (b); and
(2) to all other advisory committees which may be
established under subsection (c); except that the
meetings of advisory committees established under
subsections (b) and (c) shall be exempt from the
requirements of subsections (a) and (b) of sections 10
and 11 of the Federal Advisory Committee Act (relating
to open meetings, public notice, public participation,
and public availability of documents), whenever and to
the extent it is determined by the President or his
designee that such meetings will be concerned with
matters the disclosure of which would seriously
compromise the development by the United States
Government of trade policy, priorities, negotiating
objectives or bargaining positions with respect to
matters referred to in subsection (a), and that
meetings may be called of such special task forces,
plenary meetings of chairmen, or other such groups made
up of members of the committees established under
subsections (b) and (c).
(g) Trade Secrets and Confidential Information.--
(1) Trade secrets and commercial or financial
information which is privileged or confidential, and
which is submitted in confidence by the private sector
or non-Federal government to officers or employees of
the United States in connection with trade
negotiations, may be disclosed upon request to--
(A) officers and employees of the United
States designated by the United States Trade
Representative;
(B) members of the Committee on Ways and
Means of the House of Representatives and the
Committee on Finance of the Senate who are
designated as official advisers under section
161(a)(1) or are designated by the chairmen of
either such committee under section
161(b)(3)(A) and staff members of either such
committee designated by the chairmen under
section 161(b)(3)(A); and
(C) members of any committee of the House or
Senate or any joint committee of Congress who
are designated as advisers under section
161(a)(2) or designated by the chairman of such
committee under section 161(b)(3)(B) and staff
members of such committee designated under
section 161(b)(3)(B), but disclosure may be
made under this subparagraph only with respect
to trade secrets or commercial or financial
information that is relevant to trade policy
matters or negotiations that are within the
legislative jurisdiction of such committee;
for use in connection with matters referred to in
subsection (a).
(2) Information other than that described in
paragraph (1), and advice submitted in confidence by
the private sector or non-Federal government to
officers or employees of the United States, to the
Advisory Committee for Trade Policy and Negotiations,
or to any advisory committee established under
subsection (c), in connection with matters referred to
in subsection (a), may be disclosed upon request to--
(A) the individuals described in paragraph
(1); and
(B) the appropriate advisory committee
established under this section.
(3) Information submitted in confidence by officers
or employees of the United States to the Advisory
Committee for Trade Policy and Negotiations, or to any
advisory committee established under subsection (c),
may be disclosed in accordance with rules issued by the
United States Trade Representative and the Secretaries
of Commerce, Labor, Defense, Agriculture, or other
executive departments, as appropriate, after
consultation with the relevant advisory committees
established under subsection (c). Such rules shall
define the categories of information which require
restricted or confidential handling by such committee
considering the extent to which public disclosure of
such information can reasonably be expected to
prejudice the development of trade policy, priorities,
or United States negotiating objectives. Such rules
shall, to the maximum extent feasible, permit
meaningful consultations by advisory committee members
with persons affected by matters referred to in
subsection (a).
(h) Advisory Committee Support.--The United States Trade
Representative, and the Secretaries of Commerce, Labor,
Defense, Agriculture, the Treasury, or other executive
departments, as appropriate, shall provide such staff,
information, personnel, and administrative services and
assistance to advisory committees established under subsection
(c) as such committees may reasonably require to carry out
their activities.
(i) Consultation With Advisory Committees; Procedures;
Nonacceptance of Committee Advice or Recommendations.--It shall
be the responsibility of the United States Trade
Representative, in conjunction with the Secretaries of
Commerce, Labor, Agriculture, the Treasury, or other executive
departments, as appropriate, to adopt procedures for
consultation with and obtaining information and advice from the
advisory committees established under subsection (c) on a
continuing and timely basis. Such consultation shall include
the provision of information to each advisory committee as to--
(1) significant issues and developments; and
(2) overall negotiating objectives and positions of
the United States and other parties;
with respect to matters referred to in subsection (a). The
United States Trade Representative shall not be bound by the
advice or recommendations of such advisory committees, but
shall inform the advisory committees of significant departures
from such advice or recommendations made. In addition, in the
course of consultations with the Congress under this title,
information on the advice and information provided by advisory
committees shall be made available to congressional advisers.
(j) Private Organizations or Groups.--In addition to any
advisory committee established under this section, the
President shall provide adequate, timely and continuing
opportunity for the submission on an informal basis (and, if
such information is submitted under the provisions of
subsection (g), on a confidential basis) by private
organizations or groups, representing government, labor,
industry, agriculture, small business, service industries,
consumer interests, and others, of statistics, data and other
trade information, as well as policy recommendations, pertinent
to any matter referred to in subsection (a).
(k) Scope of Participation by Members of Advisory
Committees.--Nothing contained in this section shall be
construed to authorize or permit any individual to participate
directly in any negotiation of any matters referred to in
subsection (a). To the maximum extent practicable, the members
of the committees established under subsections (b) and (c),
and other appropriate parties, shall be informed and consulted
before and during any such negotiations. They may be designated
as advisors to a negotiating delegation, and may be permitted
to participate in international meetings to the extent the head
of the United States delegation deems appropriate. However,
they may not speak or negotiate for the United States.
(l) Advisory Committees Established by Department of
Agriculture.--The provisions of title XVIII of the Food and
Agriculture Act of 1977 (7 U.S.C. 2281 et seq.) shall not apply
to any advisory committee established under subsection (c).
(m) Non-Federal Government Defined.--As used in this
section the term ``non-Federal government'' means--
(1) any State, territory, or possession of the United
States, or the District of Columbia, or any political
subdivision thereof; or
(2) any agency or instrumentality of any entity
described in paragraph (1).
APPENDIX
----------
DESCRIPTIONS OF MAJOR REGIONAL AND MULTILATERAL TRADE ORGANIZATIONS
World Trade Organization (WTO)
The agreement establishing the WTO as of January 1, 1995,
is a multilateral instrument which creates a permanent
organization to oversee the implementation of the Uruguay Round
Agreements, including the GATT 1994, to provide a forum for
multilateral trade negotiations, and to administer dispute
settlements. The WTO operates in a similar manner to the GATT,
which it replaces, and is headquartered in Geneva, Switzerland.
Additional Information on the WTO can be found at www.wto.org.
WTO Membership as of November 30, 2000
Albania
Angola
Antigua and
Barbuda
Argentina
Australia
Austria
Bahrain
Bangladesh
Barbados
Belgium
Belize
Benin
Bolivia
Botswana
Brazil
Brunei
Darussalam
Bulgaria
Burkina Faso
Burundi
Cameroon
Canada
Central African Republic
Chad
Chile
Colombia
Congo
Costa Rica
Cote d'Ivoire
Croatia
Cuba
Cyprus
Czech Republic
Democratic Republic of the Congo
Denmark
Djibouti
Dominica
Dominican Republic
Ecuador
Egypt
El Salvador
Estonia
European Community
Fiji
Finland
France
Gabon
Gambia
Georgia
Germany
Ghana
Greece
Grenada
Guatemala
Guinea Bissau
Guinea, Republic of
Guyana
Haiti
Honduras
Hong Kong
Hungary
Iceland
India
Indonesia
Ireland
Israel
Italy
Jamaica
Jordan
Japan
Kenya
Korea
Kuwait
The Kyrgyz Republic
Latvia
Lesotho
Liechtenstein
Luxembourg
Macau
Madagascar
Malawi
Malaysia
Maldives
Mali
Malta
Mauritania
Mauritius
Mexico
Mongolia
Morocco
Mozambique
Myanmar
Namibia
Netherlands
New Zealand
Nicaragua
Niger
Nigeria
Norway
Oman, Sultanate of
Pakistan
Panama
Papua New Guinea
Paraguay
Peru
Philippines
Poland
Portugal
Qatar
Romania
Rwanda
St. Kitts and Nevis
St. Lucia
St. Vincent and the
Grenadines
Senegal
Sierra Leone
Singapore
Slovak Republic
Slovenia
Solomon Islands
South Africa
Spain
Sri Lanka
Suriname
Swaziland
Sweden
Switzerland
Tanzania
Thailand
Togo
Trinidad and Tobago
Tunisia
Turkey
Uganda
United Arab Emirates
United Kingdom
United States
Uruguay
Venezuela
Zambia
Zimbabwe
Observer Governments as of November 30, 2000
Algeria
Andorra
Armenia
Azerbaijan
Bahamas
Belarus
Bhutan
Bosnia and herzegovina
Cambodia
Cape Verde
People's Republic of China
Ethiopia
Former Yugoslav Republic of Macedonia
Holy See (Vatican)
Lao People's Democratic Republic
Lebanon
Lithuania
Moldova
Nepal
Russian Federation
Samoa
Saudi Arabia
Seychelles
Sudan
Chinese Taipei
Tonga
Ukraine
Uzbekistan
Vanuatu
Vietnam
Yemen
Organization for Economic Cooperation and Development (OECD)
Founded in 1961 and based in Paris, the OECD is the primary
organization for industralized nations to discuss trade and
economic matters. The objectives are to achieve economic growth
and employment and a rising standard of living in member
countries while maintaining financial stability. The 30 member
countries use the OECD and its various committees and working
groups to conduct both studies and negotiations on particular
economic problems and to coordinate their policies for purposes
of international negotiations. Additional information on the
OCECD can be found at www.oced.org.
OECD Membership as of February 1, 2001
Australia
Austria
Belgium
Canada
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Iceland
Ireland
Italy
Japan
Korea
Luxembourg
Mexico
Netherlands
New Zealand
Norway
Poland
Portugal
Slovak Republic
Spain
Sweden
Switzerland
Turkey
United Kingdom
United States
United Nations Conference on Trade and Development (UNCTAD)
Based in Geneva and associated with the United Nations
system, UNCTAD focuses attention on international economic
relations and measures that might be taken by developed
countries to accelerate the pace of economic and industrial
development in the developing countries. The conference has met
quadrennially since 1964 in various locations throughout the
world. UNCTAD committees meet several times each year between
the major conferences and is supported by the permanent UNCTAD
Secretariat in Geneva, Switzerland. Additional information on
UNCTAD can be found at www.unctad.org.
World Customs Organization
Established in 1952 as the Customs Cooperation Council, the
renamed World Customs Organization is a 151-member
international organization with headquarters in Brussels,
Belgium. It deals exclusively with customs matters. Its
objective is to obtain, in the interest of international trade,
the best possible degree of uniformity among the customs
systems of member nations. The United States became a member on
November 5, 1970.
The Customs Service is the lead government agency in
dealing with the various activities of the Council, including
the work of the Harmonized System Committee. The Customs
Service heads the U.S. delegations to the sessions of the
Committee. Generally, the Council studies questions relating to
cooperation in customs matters, examines technical aspects of
customs systems and furnishes information and advice to member
states.
European Union (EU)
The EU is a union of 15 independent nations and was founded
to enhance political, economic and social cooperation. Formerly
known as the European Community (EC) or the European Economic
Community (EEC), the EU was founded in November 1993, upon
ratification of the Maastricht Treaty. The Maastricht Treaty
expanded the scope of the EEC and included provisions for an
economic and monetary union with a single european currency to
begin at the end of the century. Additional information on the
EU can be found at www.eurunion.org.
EU Membership, as of February 1, 2001
Austria
Belgium
Denmark
Finland
France
Germany
Greece
Ireland
Italy
Luxembourg
Netherlands
Portugal
Spain
Sweden
United Kingdom of Great Britain and Northern Ireland
In March 1998 the EU opened talks on full membership with
six countries--Cyprus, the Czech Republic, Estonia, Hungary,
Poland and Slovenia. Other countries interested in joining the
EU are Bulgaria, Latvia, Lithuania, Romania, Slovakia,
Switzerland and Turkey.
Asia-Pacific Economic Cooperation (APEC)
APEC was formed in 1989 in response to the growing
interdependence among Asia-Pacific economies. Initiated as an
informal dialogue group with limited participation, APEC has
since become the primary regional vehicle for promoting open
trade and practical economic cooperation. In 1994, APEC members
agreed to attain free and open trade and investment among APEC
industrialized nations by the year 2010 and among the
developing members by 2020. APEC's 21-member economies possess
a combined gross domestic product of over $18 trillion, nearly
half the world's total annual output. Additional information on
APEC can be found at www.apecsec.org.sg.
APEC Membership, as of February 1, 2001
Australia
Brunei Darussalam
Canada
Chile
People's Republic of China
Hong Kong
Indonesia
Japan
Republic of Korea
Malaysia
Mexico
New Zealand
Papua New Guinea
Peru
Republic of the Philippines
Russia
Singapore
Chinese Taipei
Thailand
United States
Vietnam
MERCOSUR
Mercosur, translated as the Southern Common Market, is
composed of Brazil, Argentina, Paraguay, and Uruguay. Mercosur
began operating a customs union on January 1, 1995, which binds
tariff preferences among the four Mercosur countries and
introduces a common external trade policy with non-member
countries and economic groups.
The purpose of Mercosur is to create a common market in
which goods and services can be freely traded among member
countries and to permit the unrestricted movement of labor and
capital, the coordination of macroeconomic and sector policies,
and the harmonization of national legislation in order to
enhance competitiveness. Chile and Bolivia are associate
members of Mercosur. Under the terms of their membership, they
apply and receive preferential tariffs with respect to
countries within Mercosur but do not apply the common external
tariff. Additional information on MERCOSUR can be found at
www.mercosur.com.
Association of Southeast Asian Nations (ASEAN)
ASEAN was established in August 1967 in Bangkok, Thailand,
with the signing of the Bangkok Declaration by the five
original member countries: Indonesia, Malaysia, Philippines,
Singapore and Thailand. Brunei Darussalam joined the
Association in January 1984, Vietnam in July 1995, Laos and
Myanmar in July 1997, and Cambodia in April 1999.
ASEAN was established with three main objectives: (1) to
promote the economic, social and cultural development of the
region through cooperative programs; (2) to safeguard the
political and economic stability of the region against big
power rivalry; and (3) to serve as a forum for the resolution
of intra-regional differences. Additional information on ASEAN
can be found at www.aseansec.org.
Cairns Group
The Cairns Group is a 18-country group, chaired by
Australia, which was established just before the Uruguay Round
negotiations began. The purpose of the Cairns Group is to
encourage reductions in trade-distorting farm subsidies and
market access for agricultural products. Aside from Australia,
other members are Argentina, Bolivia, Brazil, Canada, Chile,
Colombia, Costa Rica, Fiji, Guatemala, Indonesia, Malaysia, New
Zealand, Paraguay, Philippines, South Africa, Thailand, and
Uruguay. These nations collectively account for one-third of
the worlds' agricultural exports. Additional information on the
Cairns Group can be found at www.cairnsgroup.org.
SUBJECT INDEX
ALPHABETICAL LISTING BY POPULAR REFERENCE
[First page number refers to description in part I; second page number
refers to text of law in part II]
Part I Part II
page page
African Elephant Conservation Act................. 170 758
African Growth and Opportunity Act................ 37 367
Agriculture....................................... 159 727
Agriculture exports............................... 202 821
Agricultural Trade Act of 1978, as amended........ 203 821
American Automobile Labeling Act.................. 66 411
American goods returned........................... 7 289
Andean Initiative................................. 34 358
Antidumping Act of 1916........................... 90 618
Antidumping duties................................ 83 501
Arms Export Control Act........................... 195 846
Atlantic Tunas Convention Act of 1975............. 171 771
Automotive Products Trade Act of 1965, as amended. -- 1107
Balance of payments authority..................... 176 777
Buy American Act.................................. 184 790
Byrd amendment.................................... 104 597
Canada............................................ 265 1081
Caribbean Basin Initiative (CBI).................. 21 321
Caribbean Basin Trade Partnership Act............. 22 321
Carousel retaliation.............................. 110 632
Chemical and Biological Weapons Control and -- 848
Warfare Elimination Act of 1991..................
China............................................. 251 990
China safeguard................................... 140 682
Civil aircraft agreement.......................... 12 468
Compensation authority............................ 230 951
Congressional advisers............................ 279 1119
Continued Dumping and Subsidy Offset Act.......... 104 597
Copyrights and trademark enforcement.............. 71 435
Countervailing Duties............................. 83 473
Country-of-origin marking......................... 63 403
Cuba embargo...................................... 216 859
Cuban Liberty and Democratic Solidarity Act....... 218 867
Customs automation program........................ 76 452
Customs commercial operations..................... 75 456
Customs modernization act......................... 76 1
Customs penalties................................. 72 440
Customs Service................................... 2 279 1
Customs user fees................................. 58 389
Customs valuation................................. 48 381
Department of Commerce............................ 273 --
Dispute settlement................................ 109 935
Drawback.......................................... 67 415
Part I Part II
page page
Endangered Species Act of 1973, as amended........ 169 753
Entry of merchandise.............................. 48 424
Environmental laws................................ 167 738
``Escape clause''................................. 132 662
Executive branch.................................. 270 1137
Exemptions for food and medicine from U.S. 220 862, 875
unilateral trade sanctions.......................
``Exon/Florio''................................... 223 910
Export Administration Act of 1979, as amended..... 196 811
Export Administration Amendments Act of 1985...... 198 811
Export controls................................... 195 811
Export Enhancement Act of 1988, as amended........ 200 827
Export promotion.................................. 200 827
Fair Trade in Auto Parts of 1988.................. 201 --
``Fast Track'' trade agreement implementing 232 no part 2
procedures....................................... reference
Foreign air transportation........................ -- 646
Foreign Sales Corporation......................... 107 --
Foreign Shipping Practices Act of 1988............ -- 651
Foreign trade barriers............................ 241 959
Foreign trade zone................................ 78 459
Foreign vessels................................... 222 907
General Agreement on Tariffs and Trade (GATT)..... passim 1165
Generalized System of Preferences (GSP)........... 14 307
Government procurment............................. 183 790
Harmonized Tariff Schedule of the United States 1 289
(HTS)............................................
``Helms-Burton''.................................. 218 867
High Seas Driftnet Fisheries Enforcement Act...... 170 764
Hong Kong Policy Act.............................. 222 900
Import license auctioning......................... 142 691
Import relief..................................... 132 662
Insular possessions............................... 10 304
Intellectual property rights...................... 116 961
Interagency trade organization.................... 270 1137
International Air Transportation Fair Competitive -- 646
Practices Act of 1974, as amended................
International Dolphin Conservation Program........ 168 747
International Emergency Economic Powers Act 205 833
(IEEPA)..........................................
International Security and Development Cooperation 215 845
Act of 1985......................................
International Trade Commission.................... 275 1149
Iran and Libya Sanctions Act of 1996.............. 215 884
Iraq sanctions.................................... 220 875
Israel............................................ 261 1075
Jackson-Vanik Amendment........................... 249 976
Jones Act......................................... 222 907
Marine Mammal Protection Act of 1972, as amended.. 167 738
Market disruption relief.......................... 139 680
Market order...................................... 166 736
Meat inspection requirement....................... 164 732
Merchant Marine Act of 1920....................... 222 648
Mergers, acquisitions, and takeovers.............. 223 910
Multifiber Arrangement (MFA)...................... 153 --
Narcotics Control Trade Act....................... 214 839
National security import restrictions............. 174 774
National Trade Estimates report................... 241 959
Negotiating authority............................. 225 926
Negotiating objectives............................ 226 913
Nonmarket economy countries....................... 249 976
Normal Trade Relations principle and treatment.... 6, 246 974
North American Free Trade Agreement............... 260 1008
North American Free Trade Agreement Implementation 260 1134
Act..............................................
``Pelly Amendment''............................... 170 762
Public Law 480.................................... 202 822
Private or public sector advisory committees...... 276 1159
Product standards................................. 178 786, 788
Reports to Congress............................... 270 1121
Rhinoceros and Tiger Conservation Act of 1994. as 170 761
amended..........................................
Safeguards........................................ 132 662
Sanctions......................................... 108, 153 3
Section 22 of the Agricultural Adjustment Act of 159 727
1933, as amended.................................
Section 122 of the Trade Act of 1974.............. 176 777
Section 123 of the Trade Act of 1974, as amended.. 230 951
Section 125 of the Trade Act of 1974.............. 230 952
Section 135 of the Trade Act of 1974, as amended.. 276 919
Section 161 of the Trade Act of 1974, as amended.. 269 1119
Section 181 of the Trade Act of 1974, as amended.. 241 959
Section 201-204 of the Trade Act of 1974, as 132 662
amended..........................................
Section 204 of the Trade Act of 1956, as amended.. 153 727
Section 232 and 233 of the Trade Expansion Act of 174, 175 774
1962, as amended.................................
Sections 301-310 of the Trade Act of 1974, as 108 621
amended..........................................
Section 313 of the Tariff Act of 1930, as amended. 67 415
Section 332 of the Tariff Act of 1930, as amended. 276 1157
Section 337 of the Tariff Act of 1930, as amended. 128 654
Section 402 of the Tariff Act of 1930, as amended. 51 381
Section 406 of the Trade Act of 1974, as amended.. 139 680
Section 501 of the United States-Canada Free Trade -- 1107
Implementation Act of 1988.......................
Section 516A of the Tariff Act of 1930, as amended 105 600
Section 527 of the Tariff Act of 1930, as amended. 169 757
Section 592 of the Tariff Act of 1930, as amended. 72 440
Section 721 of the Defense Production Act of 1950, 223 910
as amended.......................................
Sections 1101-1103, 1105(b), and 1107 of the 226 913
Omnibus Trade and Competitiveness Act of 1988....
Section 13031 of the Consolidated Budget 58 389
Reconciliation Act of 1985, as amended...........
Shipping.......................................... -- 651
``Shrimp-Turtle'' law............................. 172 773
``Special 301''................................... 116 621
Standards......................................... 178 780
Subsidies......................................... 83 473
Sugar tariff-rate quota head note authority....... 165 732
``Super 301''..................................... 123 621
Tariff modifications.............................. 227 935
Technical barriers to trade....................... 179 786, 788
Telecommunications Trade Act of 1988.............. 242 965
Termination and withdrawal authority.............. 231 952
Terroism.......................................... 215 845, 897
Textiles.......................................... 153 727
Title II of the Trade Act of 1974, as amended..... 142 691
Title III of the Trade Agreements Act of 1979, as 188 790
amended..........................................
Title IV of the Trade Act of 1974, as amended..... 246 982
Title IV of the Trade Act of 1979, as amended..... 182 780
Title V of the Trade Act of 1974, as amended...... 14 307
Title VII of the Omnibus Trade and Competitiveness 189 790
Act of 1988......................................
Title VII of the Tariff Act of 1930, as amended... 83 478
Trade Adjustment Assistance....................... 142 691
Trade agreement objectives, authorities, and 225 926
requirements.....................................
Trade policy functions............................ 269 1119
Trade Sanctions Reform and Export Enhancement Act 221 894
of 20............................................
Trading with the Enemy Act, as amended............ 211 837
United Nations Conference on Trade and Development -- 1166
United States-Canada Free Trade Agreement......... 266 1081
United States-Canada Free Trade Agreement 267 1081
Implementation Act...............................
United States International Trade Commission...... 275 1149
United States-Israel Free Trade Area Agreement.... 263 1072
United States-Israel Free Trade Implementation Act 264 1075
of 1985..........................................
Uruguay Round Agreements.......................... 235 935
Uruguay Round Agreements Act...................... 237 935
U.S. Trade Representative (USTR).................. 271 1137
Wild Bird Conservation Act........................ 171 769
World Customs Organization........................ -- 1167
World Trade Organization.......................... passim 1165
World Trade Organization authorization............ 236 935
\1\ Chapter 8, passim.
\2\ Chapter 1, passim.
\3\ Chapter 9, 12, passim.