[Congressional Record Volume 142, Number 136 (Friday, September 27, 1996)]
[Senate]
[Pages S11583-S11604]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  AMENDMENTS TO THE UNITED STATES-ISRAEL FREE TRADE IMPLEMENTATION ACT

  Mr. NICKLES. Mr. President, I ask unanimous consent the Senate 
proceed to the immediate consideration of Calendar No. 404, H.R. 3074.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       A bill (H.R. 3074), to amend the United States-Israel Free 
     Trade Area Implementation Act of 1985, to provide the 
     President with additional proclamation authority with respect 
     to articles of the West Bank or Gaza Strip or a qualifying 
     industrial zone, reported with an amendment.

  The PRESIDING OFFICER. Is there objection to the immediate 
consideration of the bill?
  There being no objection, the Senate proceeded to consider the 
bill, which had been reported from the Committee on Finance, with an 
amendment to strike all after the enacting clause and inserting in lieu 
thereof the following:

     SECTION 1. TABLE OF CONTENTS.

       The table of contents is as follows:

Sec. 1. Table of contents.

         TITLE I--EXTENSION OF FREE TRADE TO WEST BANK AND GAZA

Sec. 101. Additional proclamation authority.

  TITLE II--APPROVAL AND IMPLEMENTATION OF OECD SHIPBUILDING AGREEMENT

                     Subtitle A--General Provisions

Sec. 201. Short title.

[[Page S11584]]

Sec. 202. Approval of the Shipbuilding Agreement.
Sec. 203. Injurious pricing and countermeasures relating to 
              shipbuilding.
Sec. 204. Enforcement of countermeasures.
Sec. 205. Judicial review in injurious pricing and countermeasure 
              proceedings.

                      Subtitle B--Other Provisions

Sec. 211. Equipment and repair of vessels.
Sec. 212. Effect of agreement with respect to private remedies.
Sec. 213. Implementing regulations.
Sec. 214. Amendments to the Merchant Marine Act, 1936.

                       Subtitle C--Effective Date

Sec. 221. Effective date.

              TITLE III--GENERALIZED SYSTEM OF PREFERENCES

Sec. 301. Short title.
Sec. 302. Generalized system of preferences.
Sec. 303. Effective date.
Sec. 304. Conforming amendments.

                       TITLE IV--REVENUE OFFSETS

Sec. 400. Amendment of 1986 Code.

                Subtitle A--Foreign Trust Tax Compliance

Sec. 401. Improved information reporting on foreign trusts.
Sec. 402. Comparable penalties for failure to file return relating to 
              transfers to foreign entities.
Sec. 403. Modifications of rules relating to foreign trusts having one 
              or more United States beneficiaries.
Sec. 404. Foreign persons not to be treated as owners under grantor 
              trust rules.
Sec. 405. Information reporting regarding foreign gifts.
Sec. 406. Modification of rules relating to foreign trusts which are 
              not grantor trusts.
Sec. 407. Residence of trusts, etc.

          Subtitle B--International Shipping Income Disclosure

Sec. 411. Penalties for failure to disclose position that certain 
              international shipping income is not includible in gross 
              income.
         TITLE I--EXTENSION OF FREE TRADE TO WEST BANK AND GAZA

     SEC. 101. ADDITIONAL PROCLAMATION AUTHORITY.

       The United States-Israel Free Trade Area Implementation Act 
     of 1985 (19 U.S.C. 2112 note) is amended by adding at the end 
     the following new section:

     ``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.

[[Page S11585]]

       ``(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 purposes 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.''.
  TITLE II--APPROVAL AND IMPLEMENTATION OF OECD SHIPBUILDING AGREEMENT
                     Subtitle A--General Provisions

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``OECD Shipbuilding 
     Agreement Act''.

     SEC. 202. APPROVAL OF THE SHIPBUILDING AGREEMENT.

       The Congress approves The Agreement Respecting Normal 
     Competitive Conditions in the Commercial Shipbuilding and 
     Repair Industry (hereafter in this title referred to as the 
     ``Shipbuilding Agreement''), a reciprocal trade agreement 
     which resulted from negotiations under the auspices of the 
     Organization for Economic Cooperation and Development, and 
     was entered into on December 21, 1994.

     SEC. 203. INJURIOUS PRICING AND COUNTERMEASURES RELATING TO 
                   SHIPBUILDING.

       The Tariff Act of 1930 is amended by adding at the end the 
     following new title:
    ``TITLE VIII--INJURIOUS PRICING AND COUNTERMEASURES RELATING TO 
                              SHIPBUILDING

       ``Subtitle A--Imposition of Injurious Pricing Charge and 
                            Countermeasures

``Sec. 801. Injurious pricing charge.
``Sec. 802. Procedures for initiating an injurious pricing 
              investigation.
``Sec. 803. Preliminary determinations.
``Sec. 804. Termination or suspension of investigation.
``Sec. 805. Final determinations.
``Sec. 806. Imposition and collection of injurious pricing charge.
``Sec. 807. Imposition of countermeasures.
``Sec. 808. Injurious pricing petitions by third countries.

                      ``Subtitle B--Special Rules

``Sec. 821. Export price.
``Sec. 822. Normal value.
``Sec. 823. Currency conversion.

                        ``Subtitle C--Procedures

``Sec. 841. Hearings.
``Sec. 842. Determinations on the basis of the facts available.
``Sec. 843. Access to information.
``Sec. 844. Conduct of investigations.
``Sec. 845. Administrative action following shipbuilding agreement 
              panel reports.

                       ``Subtitle D--Definitions

``Sec. 861. Definitions.
       ``Subtitle A--Imposition of Injurious Pricing Charge and 
                            Countermeasures

     ``SEC. 801. INJURIOUS PRICING CHARGE.

       ``(a) Basis for Charge.--If--
       ``(1) the administering authority determines that a foreign 
     vessel has been sold directly or indirectly to one or more 
     United States buyers at less than its fair value, and
       ``(2) the Commission determines that--
       ``(A) an industry in the United States--
       ``(i) is or has been materially injured, or
       ``(ii) is threatened with material injury, or
       ``(B) the establishment of an industry in the United States 
     is or has been materially retarded,

     by reason of the sale of such vessel, then there shall be 
     imposed upon the foreign producer of the subject vessel an 
     injurious pricing charge, in an amount equal to the amount by 
     which the normal value exceeds the export price for the 
     vessel. For purposes of this subsection and section 
     805(b)(1), a reference to the sale of a foreign vessel 
     includes the creation or transfer of an ownership interest in 
     the vessel, except for an ownership interest created or 
     acquired solely for the purpose of providing security for a 
     normal commercial loan.
       ``(b) Foreign Vessels Not Merchandise.--No foreign vessel 
     may be considered to be, or to be part of, a class or kind of 
     merchandise for purposes of subtitle B of title VII.

     ``SEC. 802. PROCEDURES FOR INITIATING AN INJURIOUS PRICING 
                   INVESTIGATION.

       ``(a) Initiation by Administering Authority.--
       ``(1) General rule.--Except in the case in which subsection 
     (d)(6) applies, an injurious pricing 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 charge under section 801(a) 
     exist, and whether a producer described in section 861(17)(C) 
     would meet the criteria of subsection (b)(1)(B) for a 
     petitioner.
       ``(2) Time for initiation by administering authority.--An 
     investigation may only be initiated under paragraph (1) 
     within 6 months after the time the administering authority 
     first knew or should have known of the sale of the vessel. 
     Any period during which an investigation is initiated and 
     pending as described in subsection (d)(6)(A) shall not be 
     included in calculating that 6-month period.
       ``(b) Initiation by Petition.--
       ``(1) Petition requirements.--
       ``(A) In general.--Except in a case in which subsection 
     (d)(6) applies, an injurious pricing proceeding shall be 
     initiated whenever an interested party, as defined in 
     subparagraph (C), (D), (E), or (F) of section 861(17), files 
     a petition with the administering authority, on behalf of an 
     industry, which alleges the elements necessary for the 
     imposition of an injurious pricing charge under section 
     801(a) and the elements required under subparagraph (B), (C), 
     (D), or (E) of this paragraph, and which is accompanied by 
     information reasonably available to the petitioner supporting 
     those allegations and identifying the transaction concerned.
       ``(B) Petitioners described in section 861(17)(c).--
       ``(i) In general.--If the petitioner is a producer 
     described in section 861(17)(C), and--

       ``(I) if the vessel was sold through a broad multiple bid, 
     the petition shall include information indicating that the 
     petitioner was invited to tender a bid on the contract at 
     issue, the petitioner actually did so, and the bid of the 
     petitioner substantially met the delivery date and technical 
     requirements of the bid,
       ``(II) if the vessel was sold through any bidding process 
     other than a broad multiple bid and the petitioner was 
     invited to tender a bid on the contract at issue, the 
     petition shall include information indicating that the 
     petitioner actually did so and the bid of the petitioner 
     substantially met the delivery date and technical 
     requirements of the bid, or
       ``(III) except in a case in which the vessel was sold 
     through a broad multiple bid, if there is no invitation to 
     tender a bid, the petition shall include information 
     indicating that the petitioner was capable of building the 
     vessel concerned and, if the petitioner knew or should have 
     known of the proposed purchase, it made demonstrable efforts 
     to conclude a sale with the United States buyer consistent 
     with the delivery date and technical requirements of the 
     buyer.

       ``(ii) Rebuttable presumption regarding knowledge of 
     proposed purchase.--For purposes of clause (i)(III), there is 
     a rebuttable presumption that the petitioner knew or should 
     have known of the proposed purchase if it is demonstrated 
     that--

       ``(I) the majority of the producers in the industry have 
     made efforts with the United States buyer to conclude a sale 
     of the subject vessel, or
       ``(II) general information on the sale was available from 
     brokers, financiers, classification societies, charterers, 
     trade associations, or other entities normally involved in 
     shipbuilding transactions with whom the petitioner had 
     regular contacts or dealings.

       ``(C) Petitioners described in section 861(17)(d).--If the 
     petitioner is an interested party described in section 
     861(17)(D), the petition shall include information indicating 
     that members of the union or group of workers described in 
     that section are employed by a producer that meets the 
     requirements of subparagraph (B) of this paragraph.
       ``(D) Petitioners described in section 861(17)(e).--If the 
     petitioner is an interested party described in section 
     861(17)(E), the petition shall include information indicating 
     that a member of the association described in that section is 
     a producer that meets the requirements of subparagraph (B) of 
     this paragraph.
       ``(E) Petitioners described in section 861(17)(f).--If the 
     petitioner is an interested party described in section 
     861(17)(F), the petition shall include information indicating 
     that a member of the association described in that section 
     meets the requirements of subparagraph (C) or (D) of this 
     paragraph.
       ``(F) Amendments.--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) Deadline for filing petition.--
       ``(A) Deadline.--(i) A petitioner to which paragraph 
     (1)(B)(i) (I) or (II) applies shall file the petition no 
     later than the earlier of--
       ``(I) 6 months after the time that the petitioner first 
     knew or should have known of the sale of the subject vessel, 
     or
       ``(II) 6 months after delivery of the subject vessel.
       ``(ii) A petitioner to which paragraph (1)(B)(i)(III) 
     applies shall--
       ``(I) file the petition no later than the earlier of 9 
     months after the time that the petitioner first knew or 
     should have known of the sale of the subject vessel, or 6 
     months after delivery of the subject vessel, and
       ``(II) submit to the administering authority a notice of 
     intent to file a petition no later than 6 months after the 
     time that the petitioner first knew or should have known of 
     the sale (unless the petition itself is filed within that 6-
     month period).
       ``(B) Presumption of knowledge.--For purposes of this 
     paragraph, if the existence of the sale, together with 
     general information concerning the vessel, is published in 
     the international trade press, there is a rebuttable 
     presumption that the petitioner knew or should have known of 
     the sale of the vessel from the date of that publication.
       ``(c) Actions Before Initiating Investigations.--
       ``(1) Notification of governments.--Before initiating an 
     investigation under either subsection (a) or (b), the 
     administering authority shall notify the government of the 
     exporting country of the investigation. In the case of the

[[Page S11586]]

     initiation of an investigation under subsection (b), such 
     notification shall include a public version of the petition.
       ``(2) 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 861(17) (C), (D), (E), or (F) before the 
     administering authority makes its decision whether to 
     initiate an investigation pursuant to a petition, except for 
     inquiries regarding the status of the administering 
     authority's consideration of the petition or a request for 
     consultation by the government of the exporting country.
       ``(3) Nondisclosure of certain information.--The 
     administering authority and the Commission shall not disclose 
     information with regard to any draft petition submitted for 
     review and comment before it is filed under subsection 
     (b)(1).
       ``(d) Petition Determination.--
        ``(1) Time for initial determination.--
       ``(A) In general.--Within 45 days after the date on which a 
     petition is filed under subsection (b), the administering 
     authority shall, 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--
       ``(i) alleges the elements necessary for the imposition of 
     an injurious pricing charge under section 801(a) and the 
     elements required under subsection (b)(1) (B), (C), (D), or 
     (E), 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) Calculation of 45-day period.--Any period in which 
     paragraph (6)(A) applies shall not be included in calculating 
     the 45-day period described in subparagraph (A).
       ``(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 vessel was sold at 
     less than fair value, unless paragraph (6) applies.
       ``(3) Negative determinations.--If--
       ``(A) the determination under clause (i) or (ii) of 
     paragraph (1)(A) is negative, or
       ``(B) paragraph (6)(B) applies,
     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 domestic industry, if--
       ``(i) the domestic producers or workers who support the 
     petition collectively account for at least 25 percent of the 
     total capacity of domestic producers capable of producing a 
     like vessel, and
       ``(ii) the domestic producers or workers who support the 
     petition collectively account for more than 50 percent of the 
     total capacity to produce a like vessel of that portion of 
     the domestic industry expressing support for or opposition to 
     the petition.
       ``(B) Certain positions disregarded.--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 the 
     foreign producer or United States buyer of the subject 
     vessel, or the domestic producer is itself the United States 
     buyer, unless such domestic producers demonstrate that their 
     interests as domestic producers would be adversely affected 
     by the imposition of an injurious pricing charge.
       ``(C) Polling the industry.--If the petition does not 
     establish support of domestic producers or workers accounting 
     for more than 50 percent of the total capacity to produce a 
     like vessel--
       ``(i) the administering authority shall 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.
       ``(D) 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 861(17) 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 interested parties as defined in section 
     861(17) (C), (D), (E), or (F).
       ``(6) Proceedings by wto members.--The administering 
     authority shall not initiate an investigation under this 
     section if, with respect to the vessel sale at issue, an 
     antidumping proceeding conducted by a WTO member who is not a 
     Shipbuilding Agreement Party--
       ``(A) has been initiated and has been pending for not more 
     than one year, or
       ``(B) has been completed and resulted in the imposition of 
     antidumping measures or a negative determination with respect 
     to whether the sale was at less than fair value or with 
     respect to injury.
       ``(e) Notification to Commission of Determination.--The 
     administering authority shall--
       ``(1) notify the Commission immediately of any 
     determination it makes under subsection (a) or (d), 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.

     ``SEC. 803. 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 
     802(d)(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 or has been materially injured, or
       ``(ii) is threatened with material injury, or
       ``(B) the establishment of an industry in the United States 
     is or has been materially retarded,

     by reason of the sale of the subject vessel. If the 
     Commission 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) 
     within 90 days after the date on which the petition is filed 
     or, in the case of an investigation initiated under section 
     802(a), within 90 days after the date on which the Commission 
     receives notice from the administering authority that the 
     investigation has been initiated under such section.
       ``(b) Preliminary Determination by Administering 
     Authority.--
       ``(1) Period of injurious pricing investigation.--
       ``(A) In general.--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 subject 
     vessel was sold at less than fair value.
       ``(B) Cost data used for normal value.--If cost data is 
     required to determine normal value on the basis of a sale of 
     a foreign like vessel that has not been delivered on or 
     before the date on which the administering authority 
     initiates the investigation, the administering authority 
     shall make its determination within 160 days after the date 
     of delivery of the foreign like vessel.
       ``(C) Normal value based on constructed value.--If normal 
     value is to be determined on the basis of constructed value, 
     the administering authority shall make its determination 
     within 160 days after the date of delivery of the subject 
     vessel.
       ``(D) Other cases.--In cases in which subparagraph (B) or 
     (C) does not apply, the administering authority shall make 
     its determination within 160 days after the date on which the 
     administering authority initiates the investigation under 
     section 802.
       ``(E) Affirmative determination by commission required.--In 
     no event shall the administering authority make its 
     determination before an affirmative determination is made by 
     the Commission under subsection (a).
       ``(2) De minimis injurious pricing margin.--In making a 
     determination under this subsection, the administering 
     authority shall disregard any injurious pricing margin that 
     is de minimis. For purposes of the preceding sentence, an 
     injurious pricing margin is de minimis if the administering 
     authority determines that the injurious pricing margin is 
     less than 2 percent of the export price.
       ``(c) Extension of Period in Extraordinarily Complicated 
     Cases or for Good Cause.--
       ``(1) In general.--If--
       ``(A) the administering authority concludes that the 
     parties concerned are cooperating and determines that--
       ``(i) the case is extraordinarily complicated by reason 
     of--

       ``(I) the novelty of the issues presented, or

       ``(II) the nature and extent of the information required, 
     and

       ``(ii) additional time is necessary to make the preliminary 
     determination, or
       ``(B) a party to the investigation requests an extension 
     and demonstrates good cause for the extension,

     then the administering authority may postpone the time for 
     making its preliminary determination.
       ``(2) Length of postponement.--The preliminary 
     determination may be postponed under paragraph (1)(A) or (B) 
     until not later than the 190th day after--
       ``(A) the date of delivery of the foreign like vessel, if 
     subsection (b)(1)(B) applies,
       ``(B) the date of delivery of the subject vessel, if 
     subsection (b)(1)(C) applies, or
       ``(C) the date on which the administering authority 
     initiates an investigation under section 802, in a case in 
     which subsection (b)(1)(D) applies.
       ``(3) 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 shall--
       ``(1) determine an estimated injurious pricing margin, and
       ``(2) make available to the Commission all information upon 
     which its determination was

[[Page S11587]]

     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.
       ``(e) 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. 804. TERMINATION OR SUSPENSION OF INVESTIGATION.

       ``(a) Termination of Investigation Upon Withdrawal of 
     Petition.--
       ``(1) In general.--Except as provided in paragraph (2), 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.
       ``(2) 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 803(b).
       ``(b) Termination of Investigations Initiated by 
     Administering Authority.--The administering authority may 
     terminate any investigation initiated by the administering 
     authority under section 802(a) after providing notice of such 
     termination to all parties to the investigation.
       ``(c) Alternate Equivalent Remedy.--The criteria set forth 
     in subparagraphs (A) through (D) of section 806(e)(1) shall 
     apply to any agreement that forms the basis for termination 
     of an investigation under subsection (a) or (b).
       ``(d) Proceedings by WTO Members.--
       ``(1) Suspension of investigation.--The administering 
     authority and the Commission shall suspend an investigation 
     under this section if a WTO member that is not a Shipbuilding 
     Agreement Party initiates an antidumping proceeding described 
     in section 861(30)(A) with respect to the sale of the subject 
     vessel.
       ``(2) Termination of investigation.--If an antidumping 
     proceeding described in paragraph (1) is concluded by--
       ``(A) the imposition of antidumping measures, or
       ``(B) a negative determination with respect to whether the 
     sale is at less than fair value or with respect to injury,

     the administering authority and the Commission shall 
     terminate the investigation under this section.
       ``(3) Continuation of investigation.--(A) If such a 
     proceeding--
       ``(i) is concluded by a result other than a result 
     described in paragraph (2), or
       ``(ii) is not concluded within one year from the date of 
     the initiation of the proceeding,
     then the administering authority and the Commission shall 
     terminate the suspension and continue the investigation. The 
     period in which the investigation was suspended shall not be 
     included in calculating deadlines applicable with respect to 
     the investigation.
       ``(B) Notwithstanding subparagraph (A)(ii), if the 
     proceeding is concluded by a result described in paragraph 
     (2)(A), the administering authority and the Commission shall 
     terminate the investigation under this section.

     ``SEC. 805. FINAL DETERMINATIONS.

       ``(a) Determinations by Administering Authority.--
       ``(1) In general.--Within 75 days after the date of its 
     preliminary determination under section 803(b), the 
     administering authority shall make a final determination of 
     whether the vessel which is the subject of the investigation 
     has been sold in the United States at less than its fair 
     value.
       ``(2) Extension of period for determination.--
       ``(A) General rule.--The administering authority may 
     postpone making the final determination under paragraph (1) 
     until not later than 290 days after--
       ``(i) the date of delivery of the foreign like vessel, in 
     an investigation to which section 803(b)(1)(B) applies,
       ``(ii) the date of delivery of the subject vessel, in an 
     investigation to which section 803(b)(1)(C) applies, or
       ``(iii) the date on which the administering authority 
     initiates the investigation under section 802, in an 
     investigation to which section 803(b)(1)(D) applies.
       ``(B) Request required.--The administering authority may 
     apply subparagraph (A) if a request in writing is made by--
       ``(i) the producer of the subject vessel, in a proceeding 
     in which the preliminary determination by the administering 
     authority under section 803(b) was affirmative, or
       ``(ii) the petitioner, in a proceeding in which the 
     preliminary determination by the administering authority 
     under section 803(b) was negative.
       ``(3) De minimis injurious pricing margin.--In making a 
     determination under this subsection, the administering 
     authority shall disregard any injurious pricing margin that 
     is de minimis as defined in section 803(b)(2).
       ``(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 or has been materially injured, or
       ``(ii) is threatened with material injury, or
       ``(B) the establishment of an industry in the United States 
     is or has been materially retarded,

     by reason of the sale of the vessel with respect to which the 
     administering authority has made an affirmative determination 
     under subsection (a)(1).
       ``(2) Period for injury determination following affirmative 
     preliminary determination by administering authority.--If the 
     preliminary determination by the administering authority 
     under section 803(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 803(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 803(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.
       ``(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 the administering authority shall--
       ``(A) 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, and
       ``(B) calculate an injurious pricing charge in an amount 
     equal to the amount by which the normal value exceeds the 
     export price of the subject vessel.
       ``(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 injurious pricing order under section 806. If 
     either of such determinations is negative, the investigation 
     shall be terminated upon the publication of notice of that 
     negative determination.
       ``(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. 806. IMPOSITION AND COLLECTION OF INJURIOUS PRICING 
                   CHARGE.

       ``(a) In General.--Within 7 days after being notified by 
     the Commission of an affirmative determination under section 
     805(b), the administering authority shall publish an order 
     imposing an injurious pricing charge on the foreign producer 
     of the subject vessel which--
       ``(1) directs the foreign producer of the subject vessel to 
     pay to the Secretary of the Treasury, or the designee of the 
     Secretary, within 180 days from the date of publication of 
     the order, an injurious pricing charge in an amount equal 
     to the amount by which the normal value exceeds the export 
     price of the subject vessel,
       ``(2) includes the identity and location of the foreign 
     producer and a description of the subject vessel, in such 
     detail as the administering authority deems necessary, and
       ``(3) informs the foreign producer that--
       ``(A) failure to pay the injurious pricing charge in a 
     timely fashion may result in the imposition of 
     countermeasures with respect to that producer under section 
     807,
       ``(B) payment made after the deadline described in 
     paragraph (1) shall be subject to interest charges at the 
     Commercial Interest Reference Rate (CIRR), and
       ``(C) the foreign producer may request an extension of the 
     due date for payment under subsection (b).
       ``(b) Extension of Due Date for Payment in Extraordinary 
     Circumstances.--
       ``(1) Extension.--Upon request, the administering authority 
     may amend the order under subsection (a) to set a due date 
     for payment or payments later than the date that is 180 days 
     from the date of publication of the order, if the 
     administering authority determines that full payment in 180 
     days would render the producer insolvent or would be 
     incompatible with a judicially supervised reorganization. 
     When an extended payment schedule provides for a series of 
     partial payments, the administering authority

[[Page S11588]]

     shall specify the circumstances under which default on one or 
     more payments will result in the imposition of 
     countermeasures.
       ``(2) Interest charges.--If a request is granted under 
     paragraph (1), payments made after the date that is 180 days 
     from the publication of the order shall be subject to 
     interest charges at the CIRR.
       ``(c) Notification of Order.--The administering authority 
     shall deliver a copy of the order requesting payment to the 
     foreign producer of the subject vessel and to an appropriate 
     representative of the government of the exporting country.
       ``(d) Revocation of Order.--The administering authority--
       ``(1) may revoke an injurious pricing order if the 
     administering authority determines that producers accounting 
     for substantially all of the capacity to produce a domestic 
     like vessel have expressed a lack of interest in the order, 
     and
       ``(2) shall revoke an injurious pricing order--
       ``(A) if the sale of the vessel that was the subject of the 
     injurious pricing determination is voided,
       ``(B) if the injurious pricing charge is paid in full, 
     including any interest accrued for late payment,
       ``(C) upon full implementation of an alternative equivalent 
     remedy described in subsection (e), or
       ``(D) if, with respect to the vessel sale that was at issue 
     in the investigation that resulted in the injurious pricing 
     order, an antidumping proceeding conducted by a WTO member 
     who is not a Shipbuilding Agreement Party has been completed 
     and resulted in the imposition of antidumping measures.
       ``(e) Alternative Equivalent Remedy.--
       ``(1) Agreement for alternate remedy.--The administering 
     authority may suspend an injurious pricing order if the 
     administering authority enters into an agreement with the 
     foreign producer subject to the order on an alternative 
     equivalent remedy, that the administering authority 
     determines--
       ``(A) is at least as effective a remedy as the injurious 
     pricing charge,
       ``(B) is in the public interest,
       ``(C) can be effectively monitored and enforced, and
       ``(D) is otherwise consistent with the domestic law and 
     international obligations of the United States.
       ``(2) Prior consultations and submission of comments.--
     Before entering into an agreement under paragraph (1), the 
     administering authority shall consult with the industry, and 
     provide for the submission of comments by interested parties, 
     with respect to the agreement.
       ``(3) Material violations of agreement.--If the injurious 
     pricing order has been suspended under paragraph (1), and the 
     administering authority determines that the foreign producer 
     concerned has materially violated the terms of the agreement 
     under paragraph (1), the administering authority shall 
     terminate the suspension.

     ``SEC. 807. IMPOSITION OF COUNTERMEASURES.

       ``(a) General Rule.--
       ``(1) Issuance of order imposing countermeasures.--Unless 
     an injurious pricing order is revoked or suspended under 
     section 806 (d) or (e), the administering authority shall 
     issue an order imposing countermeasures.
       ``(2) Contents of order.--The countermeasure order shall--
       ``(A) state that, as provided in section 468, a permit to 
     lade or unlade passengers or merchandise may not be issued 
     with respect to vessels contracted to be built by the foreign 
     producer of the vessel with respect to which an injurious 
     pricing order was issued under section 806, and
       ``(B) specify the scope and duration of the prohibition on 
     the issuance of a permit to lade or unlade passengers or 
     merchandise.
       ``(b) Notice of Intent To Impose Countermeasures.--
       ``(1) General rule.--The administering authority shall 
     issue a notice of intent to impose countermeasures not later 
     than 30 days before the expiration of the time for payment 
     specified in the injurious pricing order (or extended payment 
     provided for under section 806(b)), and shall publish the 
     notice in the Federal Register within 7 days after issuing 
     the notice.
       ``(2) Elements of the notice of intent.--The notice of 
     intent shall contain at least the following elements:
       ``(A) Scope.--A permit to lade or unlade passengers or 
     merchandise may not be issued with respect to any vessel--
       ``(i) built by the foreign producer subject to the proposed 
     countermeasures, and
       ``(ii) with respect to which the material terms of sale are 
     established within a period of 4 consecutive years beginning 
     on the date that is 30 days after publication in the Federal 
     Register of the notice of intent described in paragraph (1).
       ``(B) Duration.--For each vessel described in subparagraph 
     (A), a permit to lade or unlade passengers or merchandise may 
     not be issued for a period of 4 years after the date of 
     delivery of the vessel.
       ``(c) Determination To Impose Countermeasures; Order.--
       ``(1) General rule.--The administering authority shall, 
     within the time specified in paragraph (2), issue a 
     determination and order imposing countermeasures.
       ``(2) Time for determination.--The determination shall be 
     issued within 90 days after the date on which the notice of 
     intent to impose countermeasures under subsection (b) is 
     published in the Federal Register. The administering 
     authority shall publish the determination, and the order 
     described in paragraph (4), in the Federal Register within 7 
     days after issuing the final determination, and shall provide 
     a copy of the determination and order to the Customs Service.
       ``(3) Content of the determination.--In the determination 
     imposing countermeasures, the administering authority shall 
     determine whether, in light of all of the circumstances, an 
     interested party has demonstrated that the scope or duration 
     of the countermeasures described in subsection (b)(2) should 
     be narrower or shorter than the scope or duration set forth 
     in the notice of intent to impose countermeasures.
       ``(4) Order.--At the same time it issues its determination, 
     the administering authority shall issue an order imposing 
     countermeasures, consistent with its determination under 
     paragraph (1).
       ``(d) Administrative Review of Determination To Impose 
     Countermeasures.--
       ``(1) Request for review.--Each year, in the anniversary 
     month of the issuance of the order imposing countermeasures 
     under subsection (c), the administering authority shall 
     publish in the Federal Register a notice providing that 
     interested parties may request--
       ``(A) a review of the scope or duration of the 
     countermeasures determined under subsection (c)(3), and
       ``(B) a hearing in connection with such a review.
       ``(2) Review.--If a proper request has been received under 
     paragraph (1), the administering authority shall--
       ``(A) publish notice of initiation of a review in the 
     Federal Register not later than 15 days after the end of the 
     anniversary month of the issuance of the order imposing 
     countermeasures, and
       ``(B) review and determine whether the requesting party has 
     demonstrated that the scope or duration of the 
     countermeasures is excessive in light of all of the 
     circumstances.
       ``(3) Time for review.--The administering authority shall 
     make its determination under paragraph (2)(B) within 90 days 
     after the date on which the notice of initiation of the 
     review is published. If the determination under paragraph 
     (2)(B) is affirmative, the administering authority shall 
     amend the order accordingly. The administering authority 
     shall promptly publish the determination and any amendment to 
     the order in the Federal Register, and shall provide a copy 
     of any amended order to the Customs Service. In extraordinary 
     circumstances, the administering authority may extend the 
     time for its determination under paragraph (2)(B) to not 
     later than 150 days after the date on which the notice of 
     initiation of the review is published.
       ``(e) Extension of Countermeasures.--
       ``(1) Request for extension.--Within the time described in 
     paragraph (2), an interested party may file with the 
     administering authority a request that the scope or duration 
     of countermeasures be extended.
       ``(2) Deadline for request for extension.--
       ``(A) Request for extension beyond 4 years.--If the request 
     seeks an extension that would cause the scope or duration of 
     countermeasures to exceed 4 years, including any prior 
     extensions, the request for extension under paragraph (1) 
     shall be filed not earlier than the date that is 15 months, 
     and not later than the date that is 12 months, before the 
     date that marks the end of the period that specifies the 
     vessels that fall within the scope of the order by virtue of 
     the establishment of material terms of sale within that 
     period.
       ``(B) Other requests.--If the request seeks an extension 
     under paragraph (1) other than one described in subparagraph 
     (A), the request shall be filed not earlier than the date 
     that is 6 months, and not later than a date that is 3 months, 
     before the date that marks the end of the period referred to 
     in subparagraph (A).
       ``(3) Determination.--
       ``(A) Notice of request for extension.--If a proper request 
     has been received under paragraph (1), the administering 
     authority shall publish notice of initiation of an extension 
     proceeding in the Federal Register not later than 15 days 
     after the applicable deadline in paragraph (2) for requesting 
     the extension.
       ``(B) Procedures.--
       ``(i) Requests for extension beyond 4 years.--If paragraph 
     (2)(A) applies to the request, the administering authority 
     shall consult with the Trade Representative under paragraph 
     (4).
       ``(ii) Other requests.--If paragraph (2)(B) applies to the 
     request, the administering authority shall determine, within 
     90 days after the date on which the notice of initiation of 
     the proceeding is published, whether the requesting party has 
     demonstrated that the scope or duration of the 
     countermeasures is inadequate in light of all of the 
     circumstances. If the administering authority determines that 
     an extension is warranted, it shall amend the countermeasure 
     order accordingly. The administering authority shall promptly 
     publish the determination and any amendment to the order in 
     the Federal Register, and shall provide a copy of any amended 
     order to the Customs Service.
       ``(4) Consultation with trade representative.--If paragraph 
     (3)(B)(i) applies, the administering authority shall consult 
     with the Trade Representative concerning whether it would be 
     appropriate to request establishment of a dispute settlement 
     panel under the Shipbuilding Agreement for the purpose of 
     seeking authorization to extend the scope or duration of 
     countermeasures for a period in excess of 4 years.
       ``(5) Decision not to request panel.--If, based on 
     consultations under paragraph (4), the Trade Representative 
     decides not to request establishment of a panel, the Trade 
     Representative shall inform the party requesting the 
     extension of the countermeasures of the reasons for its 
     decision in writing. The decision shall not be subject to 
     judicial review.
       ``(6) Panel proceedings.--If, based on consultations under 
     paragraph (4), the Trade Representative requests the 
     establishment of a panel under the Shipbuilding Agreement to 
     authorize an extension of the period of countermeasures,

[[Page S11589]]

     and the panel authorizes such an extension, the administering 
     authority shall promptly amend the countermeasure order. The 
     administering authority shall publish notice of the amendment 
     in the Federal Register.
       ``(f) List of Vessels Subject to Countermeasures.--
       ``(1) General rule.--At least once during each 12-month 
     period beginning on the anniversary date of a determination 
     to impose countermeasures under this section, the 
     administering authority shall publish in the Federal Register 
     a list of all delivered vessels subject to countermeasures 
     under the determination.
       ``(2) Content of list.--The list under paragraph (1) shall 
     include the following information for each vessel, to the 
     extent the information is available:
       ``(A) The name and general description of the vessel.
       ``(B) The vessel identification number.
       ``(C) The shipyard where the vessel was constructed.
       ``(D) The last-known registry of the vessel.
       ``(E) The name and address of the last-known owner of the 
     vessel.
       ``(F) The delivery date of the vessel.
       ``(G) The remaining duration of countermeasures on the 
     vessel.
       ``(H) Any other identifying information available.
       ``(3) Amendment of list.---The administering authority may 
     amend the list from time to time to reflect new information 
     that comes to its attention and shall publish any amendments 
     in the Federal Register.
       ``(4) Service of list and amendments.--
       ``(A) Service of list.--The administering authority shall 
     serve a copy of the list described in paragraph (1) on--
       ``(i) the petitioner under section 802(b),
       ``(ii) the United States Customs Service,
       ``(iii) the Secretariat of the Organization for Economic 
     Cooperation and Development,
       ``(iv) the owners of vessels on the list,
       ``(v) the shipyards on the list, and
       ``(vi) the government of the country in which a shipyard on 
     the list is located.
       ``(B) Service of amendments.--The administering authority 
     shall serve a copy of any amendments to the list under 
     paragraph (3) or subsection (g)(3) on--
       ``(i) the parties listed in clauses (i), (ii), and (iii) of 
     subparagraph (A), and
       ``(ii) if the amendment affects their interests, the 
     parties listed in clauses (iv), (v), and (vi) of subparagraph 
     (A).
       ``(g) Administrative Review of List of Vessels Subject to 
     Countermeasures.--
       ``(1) Request for review.--
       ``(A) In general.--An interested party may request in 
     writing a review of the list described in subsection (f)(1), 
     including any amendments thereto, to determine whether--
       ``(i) a vessel included in the list does not fall within 
     the scope of the applicable countermeasure order and should 
     be deleted, or
       ``(ii) a vessel not included in the list falls within the 
     scope of the applicable countermeasure order and should be 
     added.
       ``(B) Time for making request.--Any request seeking a 
     determination described in subparagraph (A)(i) shall be made 
     within 90 days after the date of publication of the 
     applicable list.
       ``(2) Review.--If a proper request for review has been 
     received, the administering authority shall--
       ``(A) publish notice of initiation of a review in the 
     Federal Register--
       ``(i) not later than 15 days after the request is received, 
     or
       ``(ii) if the request seeks a determination described in 
     paragraph (1)(A)(i), not later than 15 days after the 
     deadline described in paragraph (1)(B), and
       ``(B) review and determine whether the requesting party has 
     demonstrated that--
       ``(i) a vessel included in the list does not qualify for 
     such inclusion, or
       ``(ii) a vessel not included in the list qualifies for 
     inclusion.
       ``(3) Time for determination.--The administering authority 
     shall make its determination under paragraph (2)(B) within 90 
     days after the date on which the notice of initiation of such 
     review is published. If the administering authority 
     determines that a vessel should be added or deleted from the 
     list, the administering authority shall amend the list 
     accordingly. The administering authority shall promptly 
     publish in the Federal Register the determination and any 
     such amendment to the list.
       ``(h) Expiration of Countermeasures.--Upon expiration of a 
     countermeasure order imposed under this section, the 
     administering authority shall promptly publish a notice of 
     the expiration in the Federal Register.
       ``(i) Suspension or Termination of Proceedings or 
     Countermeasures; Temporary Reduction of Countermeasures.--
       ``(1) If injurious pricing order revoked or suspended.--If 
     an injurious pricing order has been revoked or suspended 
     under section 806(d) or (e), the administering authority 
     shall, as appropriate, suspend or terminate proceedings under 
     this section with respect to that order, or suspend or revoke 
     a countermeasure order issued with respect to that injurious 
     pricing order.
       ``(2) If payment date amended.--
       ``(A) Suspension or modification of deadline.--Subject to 
     subparagraph (C), if the payment date under an injurious 
     pricing order is amended under section 845, the administering 
     authority shall, as appropriate, suspend proceedings or 
     modify deadlines under this section, or suspend or amend a 
     countermeasure order issued with respect to that injurious 
     pricing order.
       ``(B) Date for application of countermeasure.--In taking 
     action under subparagraph (A), the administering authority 
     shall ensure that countermeasures are not applied before the 
     date that is 30 days after publication in the Federal 
     Register of the amended payment date.
       ``(C) Reinstitution of proceedings.--If--
       ``(i) a countermeasure order is issued under subsection (c) 
     before an amendment is made under section 845 to the payment 
     date of the injurious pricing order to which the 
     countermeasure order applies, and
       ``(ii) the administering authority determines that the 
     period of time between the original payment date and the 
     amended payment date is significant for purposes of 
     determining the appropriate scope or duration of 
     countermeasures,

     the administering authority may, in lieu of acting under 
     subparagraph (A), reinstitute proceedings under subsection 
     (c) for purposes of issuing a new determination under that 
     subsection.
       ``(j) Comment and Hearing.--In the course of any proceeding 
     under subsection (c), (d), (e), or (g), the administering 
     authority--
       ``(1) shall solicit comments from interested parties, and
       ``(2)(A) in a proceeding under subsection (c), (d), or (e), 
     upon the request of an interested party, shall hold a hearing 
     in accordance with section 841(b) in connection with that 
     proceeding, or
       ``(B) in a proceeding under subsection (g), upon the 
     request of an interested party, may hold a hearing in 
     accordance with section 841(b) in connection with that 
     proceeding.

     ``SEC. 808. INJURIOUS PRICING PETITIONS BY THIRD COUNTRIES.

       ``(a) Filing of Petition.--The government of a Shipbuilding 
     Agreement Party may file with the Trade Representative a 
     petition requesting that an investigation be conducted to 
     determine if--
       ``(1) a vessel from another Shipbuilding Agreement Party 
     has been sold directly or indirectly to one or more United 
     States buyers at less than fair value, and
       ``(2) an industry, in the petitioning country, producing or 
     capable of producing a like vessel is materially injured by 
     reason of such sale.
       ``(b) Initiation.--The Trade Representative, after 
     consultation with the administering authority and the 
     Commission and obtaining the approval of the Parties Group 
     under the Shipbuilding Agreement, shall determine whether to 
     initiate an investigation described in subsection (a).
       ``(c) Determinations.--Upon initiation of an investigation 
     under subsection (a), the Trade Representative shall request 
     the following determinations be made in accordance with 
     substantive and procedural requirements specified by the 
     Trade Representative, notwithstanding any other provision of 
     this title:
       ``(1) Sale at less than fair value.--The administering 
     authority shall determine whether the subject vessel has been 
     sold at less than fair value.
       ``(2) Injury to industry.--The Commission shall determine 
     whether an industry in the petitioning country is or has been 
     materially injured by reason of the sale of the subject 
     vessel in the United States.
       ``(d) Public Comment.--An opportunity for public comment 
     shall be provided, as appropriate--
       ``(1) by the Trade Representative, in making the 
     determinations required by subsection (b), and
       ``(2) by the administering authority and the Commission, in 
     making the determinations 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--
       ``(1) order an injurious pricing charge in accordance with 
     section 806, and
       ``(2) make such determinations and take such other actions 
     as are required by sections 806 and 807, as if affirmative 
     determinations had been made under subsections (a) and (b) of 
     section 805.
       ``(f) Reviews of Determinations.--For purposes of review 
     under section 516B, if an order is issued under subsection 
     (e)--
       ``(1) the final determinations of the administering 
     authority and the Commission under subsection (c) shall be 
     treated as final determinations made under section 805, and
       ``(2) determinations of the administering authority under 
     subsection (e)(2) shall be treated as determinations made 
     under section 806 or 807, as the case may be.
       ``(g) Access to Information.--Section 843 shall apply to 
     investigations under this section, to the extent specified by 
     the Trade Representative, after consultation with the 
     administering authority and the Commission.
                      ``Subtitle B--Special Rules

     ``SEC. 821. EXPORT PRICE.

       ``(a) Export Price.--For purposes of this title, the term 
     `export price' means the price at which the subject vessel is 
     first sold (or agreed to be sold) by or for the account of 
     the foreign producer of the subject vessel to an unaffiliated 
     United States buyer. The term `sold (or agreed to be sold) by 
     or for the account of the foreign producer' includes any 
     transfer of an ownership interest, including by way of lease 
     or long-term bareboat charter, in conjunction with the 
     original transfer from the producer, either directly or 
     indirectly, to a United States buyer.
       ``(b) Adjustments to Export Price.--The price used to 
     establish export price shall be--
       ``(1) increased by 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 vessel, and

[[Page S11590]]

       ``(2) reduced by--
       ``(A) the amount, if any, included in such price, 
     attributable to any additional costs, charges, or expenses 
     which are incident to bringing the subject vessel from the 
     shipyard in the exporting country to the place of delivery,
       ``(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 vessel, and
       ``(C) all other expenses incidental to placing the vessel 
     in condition for delivery to the buyer.

     ``SEC. 822. NORMAL VALUE.

       ``(a) Determination.--In determining under this title 
     whether a subject vessel has been sold at less than fair 
     value, a fair comparison shall be made between the export 
     price and normal value of the subject vessel. In order to 
     achieve a fair comparison with the export price, normal value 
     shall be determined as follows:
       ``(1) Determination of normal value.--
       ``(A) In general.--The normal value of the subject vessel 
     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 under section 821(a).
       ``(B) Price.--The price referred to in subparagraph (A) 
     is--
       ``(i) the price at which a foreign like vessel is first 
     sold in the exporting country, in the ordinary course of 
     trade and, to the extent practicable, at the same level of 
     trade, or
       ``(ii) in a case to which subparagraph (C) applies, the 
     price at which a foreign like vessel is so sold for 
     consumption in a country other than the exporting country or 
     the United States, if--

       ``(I) such price is representative, and
       ``(II) the administering authority does not determine that 
     the particular market situation in such other country 
     prevents a proper comparison with the export price.

       ``(C) Third country sales.--This subparagraph applies 
     when--
       ``(i) a foreign like vessel is not sold in the exporting 
     country as described in subparagraph (B)(i), or
       ``(ii) the particular market situation in the exporting 
     country does not permit a proper comparison with the export 
     price.
       ``(D) Contemporaneous sale.--For purposes of subparagraph 
     (A), `a time reasonably corresponding to the time of the 
     sale' means within 3 months before or after the sale of the 
     subject vessel or, in the absence of such sales, such longer 
     period as the administering authority determines would be 
     appropriate.
       ``(2) Fictitious markets.--No pretended sale, and no sale 
     intended to establish a fictitious market, shall be taken 
     into account in determining normal value.
       ``(3) Use of constructed value.--If the administering 
     authority determines that the normal value of the subject 
     vessel cannot be determined under paragraph (1)(B) or (1)(C), 
     then the normal value of the subject vessel shall be the 
     constructed value of that vessel, as determined under 
     subsection (e).
       ``(4) Indirect sales.--If a foreign like vessel is sold 
     through an affiliated party, the price at which the foreign 
     like vessel is sold by such affiliated party may be used in 
     determining normal value.
       ``(5) Adjustments.--The price described in paragraph (1)(B) 
     shall be--
       ``(A) reduced by--
       ``(i) the amount, if any, included in the price described 
     in paragraph (1)(B), attributable to any costs, charges, and 
     expenses incident to bringing the foreign like vessel from 
     the shipyard to the place of delivery to the purchaser,
       ``(ii) the amount of any taxes imposed directly upon the 
     foreign like vessel or components thereof which have been 
     rebated, or which have not been collected, on the subject 
     vessel, but only to the extent that such taxes are added to 
     or included in the price of the foreign like vessel, and
       ``(iii) the amount of all other expenses incidental to 
     placing the foreign like vessel in condition for delivery to 
     the buyer, and
       ``(B) increased or decreased by the amount of any 
     difference (or lack thereof) between the 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) physical differences between the subject vessel and 
     the vessel used in determining normal value, or
       ``(ii) other differences in the circumstances of sale.
       ``(6) Adjustments for 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 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 and normal value, if the difference in level of 
     trade--
       ``(A) involves the performance of different selling 
     activities, and
       ``(B) 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.
       ``(7) 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 the sale of the foreign like vessel under 
     consideration for the determination of normal value has been 
     made at a price which represents less than the cost of 
     production of the foreign like vessel, the administering 
     authority shall determine whether, in fact, such sale was 
     made at less than the cost of production. If the 
     administering authority determines that the sale was made at 
     less than the cost of production and was not at a price which 
     permits recovery of all costs within 5 years, such sale may 
     be disregarded in the determination of normal value. Whenever 
     such a sale is disregarded, normal value shall be based on 
     another sale of a foreign like vessel 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 subject vessel.
       ``(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 the sale of a 
     foreign like vessel was made at a price that is less than the 
     cost of production of the vessel, if an interested party 
     described in subparagraph (C), (D), (E), or (F) of section 
     861(17) provides information, based upon observed prices or 
     constructed prices or costs, that the sale of the foreign 
     like vessel under consideration for the determination of 
     normal value has been made at a price which represents less 
     than the cost of production of the vessel.
       ``(B) Recovery of costs.--If the price is below the cost of 
     production at the time of sale but is above the weighted 
     average cost of production for the period of investigation, 
     such price shall be considered to provide for recovery of 
     costs within 5 years.
       ``(3) Calculation of cost of production.--For purposes of 
     this section, 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 
     vessel, during a period which would ordinarily permit the 
     production of that vessel in the ordinary course of business, 
     and
       ``(B) an amount for selling, general, and administrative 
     expenses based on actual data pertaining to the production 
     and sale of the foreign like vessel by the producer in 
     question.

     For purposes of subparagraph (A), if the normal value is 
     based on the price of the foreign like vessel sold 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 on 
     their disposition which are remitted or refunded upon 
     exportation.
       ``(c) Nonmarket Economy Countries.--
       ``(1) In general.--If--
       ``(A) the subject vessel is produced in a nonmarket economy 
     country, and
       ``(B) the administering authority finds that available 
     information does not permit the normal value of the subject 
     vessel to be determined under subsection (a),

     the administering authority shall determine the normal value 
     of the subject vessel on the basis of the value of the 
     factors of production utilized in producing the vessel and to 
     which shall be added an amount for general expenses and 
     profit plus the cost of expenses incidental to placing the 
     vessel in a condition for delivery to the buyer. 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 the subject vessel under 
     paragraph (1), the administering authority shall determine 
     the normal value on the basis of the price at which a vessel 
     that is--
       ``(A) comparable to the subject vessel, 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 the 
     vessel 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 vessels.
       ``(d) Special Rule for Certain Multinational 
     Corporations.--Whenever, in the course of an investigation 
     under this title, the administering authority determines 
     that--
       ``(1) the subject vessel was 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 a foreign 
     like vessel which are located in another country or 
     countries,

[[Page S11591]]

       ``(2) subsection (a)(1)(C) applies, and
       ``(3) the normal value of a foreign like vessel produced in 
     one or more of the facilities outside the exporting country 
     is higher than the normal value of the foreign like vessel 
     produced in the facilities located in the exporting country,

     the administering authority shall determine the normal value 
     of the subject vessel by reference to the normal value at 
     which a foreign like vessel is sold from one or more 
     facilities outside the exporting country. The administering 
     authority, in making any determination under this subsection, 
     shall make adjustments for the difference between the costs 
     of production (including taxes, labor, materials, and 
     overhead) of the foreign like vessel produced in facilities 
     outside the exporting country and costs of production of the 
     foreign like vessel produced in facilities in the exporting 
     country, if such differences are demonstrated to its 
     satisfaction.
       ``(e) Constructed Value.--
       ``(1) In general.--For purposes of this title, the 
     constructed value of a subject vessel shall be an amount 
     equal to the sum of--
       ``(A) the cost of materials and fabrication or other 
     processing of any kind employed in producing the subject 
     vessel, during a period which would ordinarily permit the 
     production of the vessel in the ordinary course of business, 
     and
       ``(B)(i) the actual amounts incurred and realized by the 
     foreign producer of the subject vessel for selling, general, 
     and administrative expenses, and for profits, in connection 
     with the production and sale of a foreign like vessel, in the 
     ordinary course of trade, in the domestic market of the 
     country of origin of the subject vessel, or
       ``(ii) if actual data are not available with respect to the 
     amounts described in clause (i), then--
       ``(I) the actual amounts incurred and realized by the 
     foreign producer of the subject vessel for selling, general, 
     and administrative expenses, and for profits, in connection 
     with the production and sale of the same general category of 
     vessel in the domestic market of the country of origin of the 
     subject vessel,

       ``(II) the weighted average of the actual amounts incurred 
     and realized by producers in the country of origin of the 
     subject vessel (other than the producer of the subject 
     vessel) for selling, general, and administrative expenses, 
     and for profits, in connection with the production and sale 
     of a foreign like vessel, in the ordinary course of trade, in 
     the domestic market, or
       ``(III) if data are not available under subclause (I) or 
     (II), 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 foreign 
     producers (other than the producer of the subject vessel) in 
     connection with the sale of vessels in the same general 
     category of vessel as the subject vessel in the domestic 
     market of the country of origin of the subject vessel.
     For purposes of this paragraph, the profit shall be based on 
     the average profit realized over a reasonable period of time 
     before and after the sale of the subject vessel and shall 
     reflect a reasonable profit at the time of such sale. For 
     purposes of the preceding sentence, a `reasonable period of 
     time' shall not, except where otherwise appropriate, exceed 6 
     months before, or 6 months after, the sale of the subject 
     vessel. In calculating profit under this paragraph, any 
     distortion which would result in other than a profit which is 
     reasonable at the time of the sale shall be eliminated.
       ``(2) Costs and profits based on other reasonable 
     methods.--When costs and profits are determined under 
     paragraph (1)(B)(ii)(III), such determination shall, except 
     where otherwise appropriate, be based on appropriate export 
     sales by the producer of the subject vessel or, absent such 
     sales, to export sales by other producers of a foreign like 
     vessel or the same general category of vessel as the subject 
     vessel in the country of origin of the subject vessel.
       ``(3) Costs of materials.--For purposes of paragraph 
     (1)(A), 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 vessel 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 foreign producer of the subject vessel, 
     if such records are kept in accordance with the generally 
     accepted accounting principles of the exporting country and 
     reasonably reflect the costs associated with the production 
     and sale of the vessel. The administering authority shall 
     consider all available evidence on the proper allocation of 
     costs, including that which is made available by the foreign 
     producer on a timely basis, if such allocations have been 
     historically used by the foreign 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 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 type of vessel 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 vessel 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 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.

     For purposes of this subparagraph, the startup period ends at 
     the point at which the level of commercial production that is 
     characteristic of the vessel, the producer, or the industry 
     is achieved.
       ``(D) Costs due to extraordinary circumstances not 
     included.--Costs shall not include actual costs which are due 
     to extraordinary circumstances (including, but not limited 
     to, labor disputes, fire, and natural disasters) and which 
     are significantly over the cost increase which the 
     shipbuilder could have reasonably anticipated and taken into 
     account at the time of sale.
       ``(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 a 
     like vessel 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 subject vessel, 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. 823. CURRENCY CONVERSION.

       ``(a) In General.--In an injurious pricing 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 vessel, except 
     that if it is established that a currency transaction on 
     forward markets is directly linked to a sale under 
     consideration, the exchange rate specified with respect to 
     such foreign currency in the forward sale agreement shall be 
     used to convert the foreign currency.
       ``(b) Date of Sale.--For purposes of this section, `date of 
     sale' means the date of the contract of sale or, where 
     appropriate, the date on which the material terms of sale are 
     otherwise established. If the material terms of sale are 
     significantly changed after such date, the date of sale is 
     the date of such change. In the case of such a change in the 
     date of sale, the administering authority shall make 
     appropriate adjustments to take into account any unreasonable 
     effect on the injurious pricing margin due only to 
     fluctuations in the exchange rate between the original date 
     of sale and the new date of sale.
                        ``Subtitle C--Procedures

     ``SEC. 841. HEARINGS.

       ``(a) Upon Request.--The administering authority and the 
     Commission shall each hold a hearing in the course of an 
     investigation under this title, upon the request of any party 
     to the investigation, before making a final determination 
     under section 805.
       ``(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. 842. 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 the submission of the information or in the form and 
     manner requested, subject to subsections (b)(1) and (d) of 
     section 844,
       ``(C) significantly impedes a proceeding under this title, 
     or
       ``(D) provides such information but the information cannot 
     be verified as provided in section 844(g),

     the administering authority and the Commission shall, subject 
     to section 844(c), use the facts otherwise available in 
     reaching the applicable determination under this title.

[[Page S11592]]

       ``(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, or
       ``(2) 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 under this title, the administering 
     authority and 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. 843. ACCESS TO INFORMATION.

       ``(a) Information Generally Made Available.--
       ``(1) Progress of investigation reports.--The administering 
     authority and the Commission shall, from time to time upon 
     request, inform the parties to an investigation under this 
     title of the progress of that investigation.
       ``(2) 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 under this title, 
     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.
       ``(3) Summaries; nonproprietary submissions.--The 
     administering authority and the Commission shall disclose--
       ``(A) any proprietary information received in the course of 
     a proceeding under this title 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.
       ``(4) Maintenance of public record.--The administering 
     authority and the Commission shall maintain and make 
     available for public inspection and copying a record of all 
     information which is obtained by the administering authority 
     or the Commission, as the case may be, in a proceeding under 
     this title to the extent that public disclosure of the 
     information is not prohibited under this chapter or exempt 
     from disclosure under section 552 of title 5, United States 
     Code.
       ``(b) Proprietary Information.--
       ``(1) Proprietary status maintained.--
       ``(A) In general.--Except as provided in subsection (a)(4) 
     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 other proceeding under this 
     title covering the same subject vessel, 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 nonproprietary 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.
       ``(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 under this title (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 all interested parties 
     who are parties to the proceeding under a protective order 
     described in subparagraph (B), regardless of when the 
     information is submitted during the proceeding. Customer 
     names (other than the name of the United States buyer of the 
     subject vessel) obtained during any investigation which 
     requires a determination under section 805(b) may not be 
     disclosed by the administering authority under protective 
     order until either an order is published under section 806(a) 
     as a result of the investigation or the investigation is 
     suspended or terminated. The Commission may delay disclosure 
     of customer names (other than the name of the United States 
     buyer of the subject vessel) under protective order during 
     any such investigation until a reasonable time before any 
     hearing provided under section 841 is held.
       ``(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 limitations 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 803(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 803(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 or the Commission denies a request for information 
     under paragraph (1), then application may be made to the 
     United States Court of International Trade for an order 
     directing the administering authority or the Commission, as 
     the case may be, 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

[[Page S11593]]

     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, except that a 
     nonconfidential summary thereof shall be served upon all 
     other interested parties who are parties to the 
     proceeding.
       ``(e) 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), and such 
     information shall be treated as information described in 
     section 552(b)(3) of title 5, United States Code.
       ``(f) Opportunity for Comment by Vessel Buyers.--The 
     administering authority and the Commission shall provide an 
     opportunity for buyers of subject vessels to submit relevant 
     information to the administering authority concerning a sale 
     at less than fair value or countermeasures, and to the 
     Commission concerning material injury by reason of the sale 
     of a vessel at less than fair value.
       ``(g) Publication of Determinations; Requirements for Final 
     Determinations.--
       ``(1) In general.--Whenever the administering authority 
     makes a determination under section 802 whether to initiate 
     an investigation, or the administering authority or the 
     Commission makes a preliminary determination under section 
     803, a final determination under section 805, a determination 
     under subsection (b), (c), (d), (e)(3)(B)(ii), (g), or (i) of 
     section 807, or a determination to suspend an investigation 
     under this title, 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 United States buyer and the foreign 
     producer, and the country of origin of the subject vessel,
       ``(ii) a description sufficient to identify the subject 
     vessel (including type, purpose, and size),
       ``(iii) with respect to an injurious pricing charge, the 
     injurious pricing margin established and a full explanation 
     of the methodology used in establishing such margin,
       ``(iv) with respect to countermeasures, the scope and 
     duration of countermeasures and, if applicable, any changes 
     thereto, and
       ``(v) 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 under section 805 or 807(c) an explanation of 
     the basis for its determination that addresses relevant 
     arguments, made by interested parties who are parties to the 
     investigation, concerning the establishment of the injurious 
     pricing charge 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 concerning the 
     effects and impact on the industry of the sale of the subject 
     vessel.

     ``SEC. 844. CONDUCT OF INVESTIGATIONS.

       ``(a) 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.
       ``(b) 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 under this title, and shall provide to such 
     interested parties any assistance that is practicable in 
     supplying such information.
       ``(c) 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 (d), disregard all or 
     part of the original and subsequent responses.
       ``(d) Use of Certain Information.--In reaching a 
     determination under section 803, 805, or 807, 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.
       ``(e) Nonacceptance of Submissions.--If the administering 
     authority or the Commission declines to accept into the 
     record any information submitted in an investigation 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.
       ``(f) 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 805 or 807, 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.
       ``(g) Verification.--The administering authority shall 
     verify all information relied upon in making a final 
     determination under section 805.

     ``SEC. 845. ADMINISTRATIVE ACTION FOLLOWING SHIPBUILDING 
                   AGREEMENT PANEL REPORTS.

       ``(a) Action by United States International Trade 
     Commission.--
        ``(1) Advisory report.--If a dispute settlement panel 
     under the Shipbuilding Agreement finds in a report that an 
     action by the Commission in connection with a particular 
     proceeding under this title is not in conformity with the 
     obligations of the United States under the Shipbuilding 
     Agreement, the Trade Representative may request the 
     Commission to issue an advisory report on whether this title 
     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 concerning those 
     obligations. The Trade Representative shall notify the 
     Committee on Ways and Means of the House of Representatives 
     and the Committee on Finance of the Senate of such request.
       ``(2) Time limits for report.--The Commission shall 
     transmit its report under paragraph (1) to the Trade 
     Representative within 30 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 
     Representatives shall consult with the congressional 
     committees listed in paragraph (1) concerning the matter.
       ``(4) Commission determination.--Notwithstanding any other 
     provision of this title, 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. The Commission 
     shall issue its determination not later than 120 calendar 
     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 listed in paragraph (1) 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 injurious 
     pricing order is no longer supported by an affirmative 
     Commission

[[Page S11594]]

     determination under this title, the Trade Representative may, 
     after consulting with the congressional committees under 
     paragraph (5), direct the administering authority to revoke 
     the injurious pricing order.
       ``(b) Action by Administering Authority.--
       ``(1) Consultations with administering authority and 
     congressional committees.--Promptly after a report or other 
     determination by a dispute settlement panel under the 
     Shipbuilding Agreement is issued that contains findings 
     that--
       ``(A) an action by the administering authority in a 
     proceeding under this title is not in conformity with the 
     obligations of the United States under the Shipbuilding 
     Agreement,
       ``(B) the due date for payment of an injurious pricing 
     charge contained in an order issued under section 806 should 
     be amended,
       ``(C) countermeasures provided for in an order issued under 
     section 807 should be provisionally suspended or reduced 
     pending the final decision of the panel, or
       ``(D) the scope or duration of countermeasures imposed 
     under section 807 should be narrowed or shortened,

     the Trade Representative shall consult with the administering 
     authority and the congressional committees listed in 
     subsection (a)(1) on the matter.
       ``(2) Determination by administering authority.--
     Notwithstanding any other provision of this title, the 
     administering authority shall, in response to a written 
     request from the Trade Representative, issue a determination, 
     or an amendment to or suspension of an injurious pricing or 
     countermeasure order, as the case may be, 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.
       ``(3) Time limits for determinations.--The administering 
     authority shall issue its determination, amendment, or 
     suspension under paragraph (2)--
       ``(A) with respect to a matter described in subparagraph 
     (A) of paragraph (1), within 180 calendar days after the 
     request from the Trade Representative is made, and
       ``(B) with respect to a matter described in subparagraph 
     (B), (C), or (D) of paragraph (1), within 15 calendar days 
     after the request from the Trade Representative is made.
       ``(4) Consultations before implementation.--Before the 
     administering authority implements any determination, 
     amendment, or suspension under paragraph (2), the Trade 
     Representative shall consult with the administering authority 
     and the congressional committees listed in subsection (a)(1) 
     with respect to such determination, amendment, or suspension.
       ``(5) Implementation of determination.--The Trade 
     Representative may, after consulting with the administering 
     authority and the congressional committees under paragraph 
     (4), direct the administering authority to implement, in 
     whole or in part, the determination, amendment, or suspension 
     made under paragraph (2). The administering authority shall 
     publish notice of such implementation in the Federal 
     Register.
       ``(c) Opportunity for Comment by Interested Parties.--
     Before issuing a determination, amendment, or suspension, the 
     administering authority, in a matter described in subsection 
     (b)(1)(A), or the Commission, in a matter described in 
     subsection (a)(1), 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.
                       ``Subtitle D--Definitions

     ``SEC. 861. DEFINITIONS.

       ``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 as provided in paragraph 
     (16)(E)(iii), may not 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.--Except as used in section 808, the term 
     `industry' means the producers as a whole of a domestic like 
     vessel, or those producers whose collective capability to 
     produce a domestic like vessel constitutes a major proportion 
     of the total domestic capability to produce a domestic like 
     vessel.
       ``(B) Producer.--A `producer' of a domestic like vessel 
     includes an entity that is producing the domestic like vessel 
     and an entity with the capability to produce the domestic 
     like vessel.
       ``(C) Capability to produce a domestic like vessel.--A 
     producer has the `capability to produce a domestic like 
     vessel' if it is capable of producing a domestic like vessel 
     with its present facilities or could adapt its facilities in 
     a timely manner to produce a domestic like vessel.
       ``(D) Related parties.--(i) In an investigation under this 
     title, if a producer of a domestic like vessel and the 
     foreign producer, seller (other than the foreign producer), 
     or United States buyer of the subject vessel are related 
     parties, or if a producer of a domestic like vessel is also a 
     United States buyer of the subject vessel, the domestic 
     producer may, in appropriate circumstances, be excluded from 
     the industry.
       ``(ii) For purposes of clause (i), a domestic producer and 
     the foreign producer, seller, or United States buyer shall be 
     considered to be related parties, if--
       ``(I) the domestic producer directly or indirectly controls 
     the foreign producer, seller, or United States buyer,
       ``(II) the foreign producer, seller, or United States buyer 
     directly or indirectly controls the domestic producer,
       ``(III) a third party directly or indirectly controls the 
     domestic producer and the foreign producer, seller, or United 
     States buyer, or
       ``(IV) the domestic producer and the foreign producer, 
     seller, or United States buyer directly or indirectly control 
     a third party and there is reason to believe that the 
     relationship causes the domestic 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.
       ``(E) Product lines.--In an investigation under this title, 
     the effect of the sale of the subject vessel shall be 
     assessed in relation to the United States production (or 
     production capability) of a domestic like vessel if available 
     data permit the separate identification of production (or 
     production capability) in terms of such criteria as the 
     production process or the producer's profits. If the domestic 
     production (or production capability) of a domestic like 
     vessel has no separate identity in terms of such criteria, 
     then the effect of the sale of the subject vessel shall be 
     assessed by the examination of the production (or production 
     capability) of the narrowest group or range of vessels, which 
     includes a domestic like vessel, for which the necessary 
     information can be provided.
       ``(5) Buyer.--The term `buyer' means any person who 
     acquires an ownership interest in a vessel, including by way 
     of lease or long-term bareboat charter, in conjunction with 
     the original transfer from the producer, either directly or 
     indirectly, including an individual or company which owns or 
     controls a buyer. There may be more than one buyer of any one 
     vessel.
       ``(6) United states buyer.--The term `United States buyer' 
     means a buyer that is any of the following:
       ``(A) A United States citizen.
       ``(B) A juridical entity, including any corporation, 
     company, association, or other organization, that is legally 
     constituted under the laws and regulations of the United 
     States or a political subdivision thereof, regardless of 
     whether the entity is organized for pecuniary gain, privately 
     or government owned, or organized with limited or unlimited 
     liability.
       ``(C) A juridical entity that is owned or controlled by 
     nationals or entities described in subparagraphs (A) and (B). 
     For the purposes of this subparagraph--
       ``(i) the term `own' means having more than a 50 percent 
     interest, and
       ``(ii) the term `control' means the actual ability to have 
     substantial influence on corporate behavior, and control is 
     presumed to exist where there is at least a 25 percent 
     interest.

     If ownership of a company is established under clause (i), 
     other control is presumed not to exist unless it is otherwise 
     established.
       ``(7) Ownership interest.--An `ownership interest' in a 
     vessel includes any contractual or proprietary interest which 
     allows the beneficiary or beneficiaries of such interest to 
     take advantage of the operation of the vessel in a manner 
     substantially comparable to the way in which an owner may 
     benefit from the operation of the vessel. In determining 
     whether such substantial comparability exists, the 
     administering authority shall consider--
       ``(A) the terms and circumstances of the transaction which 
     conveys the interest,
       ``(B) commercial practice within the industry,
       ``(C) whether the vessel subject to the transaction is 
     integrated into the operations of the beneficiary or 
     beneficiaries, and
       ``(D) whether in practice there is a likelihood that the 
     beneficiary or beneficiaries of such interests will take 
     advantage of and the risk for the operation of the vessel for 
     a significant part of the life-time of the vessel.
       ``(8) Vessel.--
       ``(A) In general.--Except as otherwise specifically 
     provided under international agreements, the term `vessel' 
     means--
       ``(i) a self-propelled seagoing vessel of 100 gross tons or 
     more used for transportation of goods or persons or for 
     performance of a specialized service (including, but not 
     limited to, ice breakers and dredgers), and
       ``(ii) a tug of 365 kilowatts or more,
     that is produced in a Shipbuilding Agreement Party or a 
     country that is not a Shipbuilding Agreement Party and not a 
     WTO member.
       ``(B) Exclusions.--The term `vessel' does not include--
       ``(i) any fishing vessel destined for the fishing fleet of 
     the country in which the vessel is built,
       ``(ii) any military vessel, and
       ``(iii) any vessel sold before the date that the 
     Shipbuilding Agreement enters into force with respect to the 
     United States, except that any vessel sold after December 21, 
     1994, for delivery more than 5 years after the date of the 
     contract of sale shall be a `vessel' for purposes of this 
     title unless the shipbuilder demonstrates to the 
     administering authority that the extended delivery date was 
     for normal commercial reasons and not to avoid applicability 
     of this title.
       ``(C) Self-propelled seagoing vessel.--A vessel is `self-
     propelled seagoing' if its permanent propulsion and steering 
     provide it all the characteristics of self-navigability in 
     the high seas.
       ``(D) Military vessel.--A `military vessel' is a vessel 
     which, according to its basic structural characteristics and 
     ability, is intended to be used exclusively for military 
     purposes.
       ``(9) Like vessel.--The term `like vessel' means a vessel 
     of the same type, same purpose,

[[Page S11595]]

     and approximate size as the subject vessel and possessing 
     characteristics closely resembling those of the subject 
     vessel.
       ``(10) Domestic like vessel.--The term `domestic like 
     vessel' means a like vessel produced in the United States.
       ``(11) Foreign like vessel.--Except as used in section 
     822(e)(1)(B)(ii)(II), the term `foreign like vessel' means a 
     like vessel produced by the foreign producer of the subject 
     vessel for sale in the producer's domestic market or in a 
     third country.
       ``(12) Same general category of vessel.--The term `same 
     general category of vessel' means a vessel of the same type 
     and purpose as the subject vessel, but of a significantly 
     different size.
       ``(13) Subject vessel.--The term `subject vessel' means a 
     vessel subject to investigation under section 801 or 808.
       ``(14) Foreign producer.--The term `foreign producer' means 
     the producer or producers of the subject vessel.
       ``(15) Exporting country.--The term `exporting country' 
     means the country in which the subject vessel was built.
       ``(16) Material injury.--
       ``(A) In general.--The term `material injury' means harm 
     which is not inconsequential, immaterial, or unimportant.
       ``(B) Sale and consequent impact.--In making determinations 
     under sections 803(a) and 805(b), the Commission in each 
     case--
       ``(i) shall consider--

       ``(I) the sale of the subject vessel,
       ``(II) the effect of the sale of the subject vessel on 
     prices in the United States for a domestic like vessel, and
       ``(III) the impact of the sale of the subject vessel on 
     domestic producers of a domestic like vessel, 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 or 
     has been material injury by reason of the sale of the subject 
     vessel.

     In the notification required under section 805(d), 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) Sale of the subject vessel.--In evaluating the sale 
     of the subject vessel, the Commission shall consider whether 
     the sale, either in absolute terms or relative to production 
     or demand in the United States, in terms of either volume or 
     value, is or has been significant.
       ``(ii) Price.--In evaluating the effect of the sale of the 
     subject vessel on prices, the Commission shall consider 
     whether--

       ``(I) there has been significant price underselling of the 
     subject vessel as compared with the price of a domestic like 
     vessel, and
       ``(II) the effect of the sale of the subject vessel 
     otherwise depresses or has depressed prices to a significant 
     degree or prevents or has prevented 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, including with 
     regard to sales,
       ``(III) actual and potential negative effects on cash flow, 
     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 a domestic like vessel, and

       ``(V) the magnitude of the injurious pricing margin.

     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.
       ``(D) Standard for determination.--The presence or absence 
     of any factor which the Commission is required to evaluate 
     under subparagraph (C) shall not necessarily give decisive 
     guidance with respect to the determination by the Commission 
     of material injury.
       ``(E) Threat of material injury.--
       ``(i) In general.--In determining whether an industry in 
     the United States is threatened with material injury by 
     reason of the sale of the subject vessel, the Commission 
     shall consider, among other relevant economic factors--

       ``(I) any existing unused production capacity or imminent, 
     substantial increase in production capacity in the exporting 
     country indicating the likelihood of substantially increased 
     sales of a foreign like vessel to United States buyers, 
     taking into account the availability of other export markets 
     to absorb any additional exports,
       ``(II) whether the sale of a foreign like vessel or other 
     factors indicate the likelihood of significant additional 
     sales to United States buyers,
       ``(III) whether sale of the subject vessel or sale of a 
     foreign like vessel by the foreign producer are at prices 
     that are likely to have a significant depressing or 
     suppressing effect on domestic prices, and are likely to 
     increase demand for further sales,
       ``(IV) the potential for product-shifting if production 
     facilities in the exporting country, which can presently be 
     used to produce a foreign like vessel or could be adapted in 
     a timely manner to produce a foreign like vessel, are 
     currently being used to produce other types of vessels,
       ``(V) 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 a domestic like vessel, and
       ``(VI) any other demonstrable adverse trends that indicate 
     the probability that there is likely to be material injury by 
     reason of the sale of the subject vessel.

       ``(ii) Basis for determination.--The Commission shall 
     consider the factors set forth in clause (i) as a whole. 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 injurious pricing in third-country 
     markets.--

       ``(I) In general.--The Commission shall consider whether 
     injurious pricing in the markets of foreign countries (as 
     evidenced by injurious pricing findings or injurious pricing 
     remedies of other Shipbuilding Agreement Parties, or 
     antidumping determinations of, or measures imposed by, other 
     countries, against a like vessel produced by the producer 
     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 
     producer or United States buyer concerning this issue.
       ``(II) European communities.--For purposes of this clause, 
     the European Communities as a whole shall be treated as a 
     single foreign country.

       ``(F) Cumulation for determining material injury.--
       ``(i) In general.--For purposes of clauses (i) and (ii) of 
     subparagraph (C), and subject to clause (ii) of this 
     subparagraph, the Commission shall cumulatively assess the 
     effects of sales of foreign like vessels from all foreign 
     producers with respect to which--

       ``(I) petitions were filed under section 802(b) on the same 
     day,
       ``(II) investigations were initiated under section 802(a) 
     on the same day, or
       ``(III) petitions were filed under section 802(b) and 
     investigations were initiated under section 802(a) on the 
     same day,

     if, with respect to such vessels, the foreign producers 
     compete with each other and with producers of a domestic like 
     vessel in the United States market.
       ``(ii) Exceptions.--The Commission shall not cumulatively 
     assess the effects of sales 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 sales before the 
     Commission's final determination is made, or
       ``(II) from any producer with respect to which the 
     investigation has been terminated.

       ``(iii) Records in final investigations.--In each final 
     determination in which it cumulatively assesses the effects 
     of sales under clause (i), the Commission may 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.
       ``(G) Cumulation for determining threat of material 
     injury.--To the extent practicable and subject to 
     subparagraph (F)(ii), for purposes of clause (i) (II) and 
     (III) of subparagraph (E), the Commission may cumulatively 
     assess the effects of sales of like vessels from all 
     countries with respect to which--
       ``(i) petitions were filed under section 802(b) on the same 
     day,
       ``(ii) investigations were initiated under section 802(a) 
     on the same day, or
       ``(iii) petitions were filed under section 802(b) and 
     investigations were initiated under section 802(a) on the 
     same day,

     if, with respect to such vessels, the foreign producers 
     compete with each other and with producers of a domestic like 
     vessel in the United States market.
       ``(17) Interested party.--The term `interested party' 
     means, in a proceeding under this title--
       ``(A)(i) the foreign producer, seller (other than the 
     foreign producer), and the United States buyer of the subject 
     vessel, or
       ``(ii) a trade or business association a majority of the 
     members of which are the foreign producer, seller, or United 
     States buyer of the subject vessel,
       ``(B) the government of the country in which the subject 
     vessel is produced or manufactured,
       ``(C) a producer that is a member of an industry,
       ``(D) a certified union or recognized union or group of 
     workers which is representative of an industry,
       ``(E) a trade or business association a majority of whose 
     members are producers in an industry,
       ``(F) an association, a majority of whose members is 
     composed of interested parties described in subparagraph (C), 
     (D), or (E), and
       ``(G) for purposes of section 807, a purchaser who, after 
     the effective date of an order issued under that section, 
     entered into a contract of sale with the foreign producer 
     that is subject to the order.

[[Page S11596]]

       ``(18) Affirmative determinations by divided commission.--
     If the Commissioners voting on a determination by the 
     Commission 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 or has been--
       ``(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 the sale of the subject vessel, an affirmative 
     vote on any of the issues shall be treated as a vote that the 
     determination should be affirmative.
       ``(19) Ordinary course of trade.--The term `ordinary course 
     of trade' means the conditions and practices which, for a 
     reasonable time before the sale of the subject vessel, have 
     been normal in the shipbuilding industry with respect to a 
     like vessel. 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 822(b)(1).
       ``(B) Transactions disregarded under section 822(f)(2).
       ``(20) 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 vessels in such country 
     do not reflect the fair value of the vessels.
       ``(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 A.
       ``(21) Shipbuilding agreement.--The term `Shipbuilding 
     Agreement' means The Agreement Respecting Normal Competitive 
     Conditions in the Commercial Shipbuilding and Repair 
     Industry, resulting from negotiations under the auspices of 
     the Organization for Economic Cooperation and Development, 
     and entered into on December 21, 1994.
       ``(22) Shipbuilding agreement party.--The term 
     `Shipbuilding Agreement Party' means a state or separate 
     customs territory that is a Party to the Shipbuilding 
     Agreement, and with respect to which the United States 
     applies the Shipbuilding Agreement.
       ``(23) WTO agreement.--The term `WTO Agreement' means the 
     Agreement defined in section 2(9) of the Uruguay Round 
     Agreements Act.
       ``(24) WTO member.--The term `WTO member' means 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.
       ``(25) Trade representative.--The term `Trade 
     Representative' means the United States Trade Representative.
       ``(26) 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.
       ``(27) Injurious pricing.--The term `injurious pricing' 
     refers to the sale of a vessel at less than fair value.
       ``(28) Injurious pricing margin.--
       ``(A) In general.--The term `injurious pricing margin' 
     means the amount by which the normal value exceeds the export 
     price of the subject vessel.
       ``(B) Magnitude of the injurious pricing margin.--The 
     magnitude of the injurious pricing margin used by the 
     Commission shall be--
       ``(i) in making a preliminary determination under section 
     803(a) in an investigation (including any investigation in 
     which the Commission cumulatively assesses the effect of 
     sales under paragraph (16)(F)(i)), the injurious pricing 
     margin or margins published by the administering authority in 
     its notice of initiation of the investigation; and
       ``(ii) in making a final determination under section 
     805(b), the injurious pricing margin or margins most recently 
     published by the administering authority before the closing 
     of the Commission's administrative record.
       ``(29) Commercial interest reference rate.--The term 
     `Commercial Interest Reference Rate' or `CIRR' means an 
     interest rate that the administering authority determines to 
     be consistent with Annex III, and appendices and notes 
     thereto, of the Understanding on Export Credits for Ships, 
     resulting from negotiations under the auspices of the 
     Organization for Economic Cooperation, and entered into on 
     December 21, 1994.
       ``(30) Antidumping.--
       ``(A) WTO members.--In the case of a WTO member, the term 
     `antidumping' refers to action taken pursuant to the 
     Agreement on Implementation of Article VI of the General 
     Agreement on Tariffs and Trade 1994.
       ``(B) Other cases.--In the case of any country that is not 
     a WTO member, the term `antidumping' refers to action taken 
     by the country against the sale of a vessel at less than fair 
     value that is comparable to action described in subparagraph 
     (A).
       ``(31) Broad multiple bid.--The term `broad multiple bid' 
     means a bid in which the proposed buyer extends an invitation 
     to bid to at least all the producers in the industry known by 
     the buyer to be capable of building the subject vessel.''.

     SEC. 204. ENFORCEMENT OF COUNTERMEASURES.

       Part II of title IV of the Tariff Act of 1930 is amended by 
     adding at the end the following:

     ``SEC. 468. SHIPBUILDING AGREEMENT COUNTERMEASURES.

       ``(a) In General.--Notwithstanding any other provision of 
     law, upon receiving from the Secretary of Commerce a list of 
     vessels subject to countermeasures under section 807, the 
     Customs Service shall deny any request for a permit to lade 
     or unlade passengers, merchandise, or baggage from or onto 
     those vessels so listed.
       ``(b) Exceptions.--Subsection (a) shall not be applied to 
     deny a permit for the following:
       ``(1) To unlade any United States citizen or permanent 
     legal resident alien from a vessel included in the list 
     described in subsection (a), or to unlade any refugee or any 
     alien who would otherwise be eligible to apply for asylum and 
     withholding of deportation under the Immigration and 
     Nationality Act.
       ``(2) To lade or unlade any crewmember of such vessel.
       ``(3) To lade or unlade coal and other fuel supplies (for 
     the operation of the listed vessel), ships' stores, sea 
     stores, and the legitimate equipment of such vessel.
       ``(4) To lade or unlade supplies for the use or sale on 
     such vessel.
       ``(5) To lade or unlade such other merchandise, baggage, or 
     passenger as the Customs Service shall determine necessary to 
     protect the immediate health, safety, or welfare of a human 
     being.
       ``(c) Correction of Ministerial or Clerical Errors.--
       ``(1) Petition for correction.--If the master of any vessel 
     whose application for a permit to lade or unlade has been 
     denied under this section believes that such denial resulted 
     from a ministerial or clerical error, not amounting to a 
     mistake of law, committed by any Customs officer, the master 
     may petition the Customs Service for correction of such 
     error, as provided by regulation.
       ``(2) Inapplicability of sections 514 and 520.--
     Notwithstanding paragraph (1), imposition of countermeasures 
     under this section shall not be deemed an exclusion or other 
     protestable decision under section 514, and shall not be 
     subject to correction under section 520.
       ``(3) Petitions seeking administrative review.--Any 
     petition seeking administrative review of any matter 
     regarding the Secretary of Commerce's decision to list a 
     vessel under section 807 must be brought under that section.
       ``(d) Penalties.--In addition to any other provision of 
     law, the Customs Service may impose a civil penalty of not to 
     exceed $10,000 against the master of any vessel--
       ``(1) who submits false information in requesting any 
     permit to lade or unlade; or
       ``(2) who attempts to, or actually does, lade or unlade in 
     violation of any denial of such permit under this section.''.

     SEC. 205. JUDICIAL REVIEW IN INJURIOUS PRICING AND 
                   COUNTERMEASURE PROCEEDINGS.

       (a) Judicial Review.--Part III of title IV of the Tariff 
     Act of 1930 is amended by inserting after section 516A the 
     following:

     ``SEC. 516B. JUDICIAL REVIEW IN INJURIOUS PRICING AND 
                   COUNTERMEASURE PROCEEDINGS.

       ``(a) Review of Determination.--
       ``(1) In general.--Within 30 days after the date of 
     publication in the Federal Register of--
       ``(A)(i) a determination by the administering authority 
     under section 802(c) not to initiate an investigation,
       ``(ii) a negative determination by the Commission under 
     section 803(a) as to whether there is or has been reasonable 
     indication of material injury, threat of material injury, or 
     material retardation,
       ``(iii) a determination by the administering authority to 
     suspend or revoke an injurious pricing order under section 
     806 (d) or (e),
       ``(iv) a determination by the administering authority under 
     section 807(c),
       ``(v) a determination by the administering authority in a 
     review under section 807(d),

[[Page S11597]]

       ``(vi) a determination by the administering authority 
     concerning whether to extend the scope or duration of a 
     countermeasure order under section 807(e)(3)(B)(ii),
       ``(vii) a determination by the administering authority to 
     amend a countermeasure order under section 807(e)(6),
       ``(viii) a determination by the administering authority in 
     a review under section 807(g),
       ``(ix) a determination by the administering authority under 
     section 807(i) to terminate proceedings, or to amend or 
     revoke a countermeasure order,
       ``(x) a determination by the administering authority under 
     section 845(b), with respect to a matter described in 
     paragraph (1)(D) of that section, or
       ``(B)(i) an injurious pricing order based on a 
     determination described in subparagraph (A) of paragraph (2),
       ``(ii) notice of a determination described in subparagraph 
     (B) of paragraph (2),
       ``(iii) notice of implementation of a determination 
     described in subparagraph (C) of paragraph (2), or
       ``(iv) notice of revocation of an injurious pricing order 
     based on a determination described in subparagraph (D) of 
     paragraph (2),

     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) Reviewable determinations.--The determinations 
     referred to in paragraph (1)(B) are--
       ``(A) a final affirmative determination by the 
     administering authority or by the Commission under section 
     805, including any negative part of such a determination 
     (other than a part referred to in subparagraph (B)),
       ``(B) a final negative determination by the administering 
     authority or the Commission under section 805,
       ``(C) a determination by the administering authority under 
     section 845(b), with respect to a matter described in 
     paragraph (1)(A) of that section, and
       ``(D) a determination by the Commission under section 
     845(a) that results in the revocation of an injurious pricing 
     order.
       ``(3) Exception.--Notwithstanding the 30-day limitation 
     imposed by paragraph (1) with regard to an order described in 
     paragraph (1)(B)(i), a final affirmative determination by the 
     administering authority under section 805 may be contested by 
     commencing an action, in accordance with the provisions of 
     paragraph (1), within 30 days after the date of publication 
     in the Federal Register of a final negative determination by 
     the Commission under section 805.
       ``(4) Procedures and fees.--The procedures and fees set 
     forth in chapter 169 of title 28, United States Code, apply 
     to an action under this section.
       ``(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) of 
     subsection (a)(1), to be arbitrary, capricious, an abuse of 
     discretion, or otherwise not in accordance with law, or
       ``(B) in an action brought under subparagraph (B) of 
     subsection (a)(1), to be unsupported by substantial evidence 
     on the record, or otherwise not in accordance with law.
       ``(2) Record for review.--
       ``(A) In general.--For 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 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 
     843(a)(2); 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.
       ``(c) Standing.--Any interested party who was a party to 
     the proceeding under title VIII shall have the right to 
     appear and be heard as a party in interest before the United 
     States Court of International Trade in an action under this 
     section. 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.
       ``(d) Definitions.--For purposes of this section:
       ``(1) Administering authority.--The term `administering 
     authority' has the meaning given that term in section 861(1).
       ``(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 861(17).''.
       (b) Conforming Amendments.--
       (1) Jurisdiction of the court.--Section 1581(c) of title 
     28, United States Code, is amended by inserting ``or 516B'' 
     after ``section 516A''.
       (2) Relief.--Section 2643 of title 28, United States Code, 
     is amended--
       (A) in subsection (c)(1) by striking ``and (5)'' and 
     inserting ``(5), and (6)''; and
       (B) in subsection (c) by adding at the end the following 
     new paragraph:
       ``(6) In any civil action under section 516B of the Tariff 
     Act of 1930, the Court of International Trade may not issue 
     injunctions or any other form of equitable relief, except 
     with regard to implementation of a countermeasure order under 
     section 468 of that Act, upon a proper showing that such 
     relief is warranted.''.
                      Subtitle B--Other Provisions

     SEC. 211. EQUIPMENT AND REPAIR OF VESSELS.

       Section 466 of the Tariff Act of 1930 (19 U.S.C. 1466), is 
     amended by adding at the end the following new subsection:
       ``(i) The duty imposed by subsection (a) shall not apply 
     with respect to activities occurring in a Shipbuilding 
     Agreement Party, as defined in section 861(22), with respect 
     to--
       ``(1) self-propelled seagoing vessels of 100 gross tons or 
     more that are used for transportation of goods or persons or 
     for performance of a specialized service (including, but not 
     limited to, ice breakers and dredges), and
       ``(2) tugs of 365 kilowatts or more.

     A vessel shall be considered `self-propelled seagoing' if its 
     permanent propulsion and steering provide it all the 
     characteristics of self-navigability in the high seas.''.

     SEC. 212. 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 the 
     Shipbuilding Agreement or by virtue of congressional approval 
     of the agreement, 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, the 
     District of Columbia, any State, any political subdivision of 
     a State, or any territory or possession of the United States 
     on the ground that such action or inaction is inconsistent 
     with such agreement.

     SEC. 213. IMPLEMENTING REGULATIONS.

       After the date of the enactment of this title, the heads of 
     agencies with functions under this title and the amendments 
     made by this title may issue such regulations as may be 
     necessary to ensure that this title is appropriately 
     implemented on the date the Shipbuilding Agreement enters 
     into force with respect to the United States.

     SEC. 214. AMENDMENTS TO THE MERCHANT MARINE ACT, 1936.

       The Merchant Marine Act, 1936, is amended as follows:
       (1) Section 511(a)(2) (46 App. U.S.C. 1161(a)(2)) is 
     amended by inserting after ``1939,'' the following: ``or, if 
     the vessel is a Shipbuilding Agreement vessel, constructed in 
     a Shipbuilding Agreement Party, but only with regard to 
     moneys deposited, on or after the date on which the 
     Shipbuilding Trade Agreement Act takes effect, into a 
     construction reserve fund established under subsection (b)''.
       (2) Section 601(a) (46 App. U.S.C. 1171(a)) is amended by 
     striking ``, and that such vessel or vessels were built in 
     the United States, or have been documented under the laws of 
     the United States not later than February 1, 1928, or 
     actually ordered and under construction for the account of 
     citizens of the United States prior to such date;'' and 
     inserting ``and that such vessel or vessels were built in the 
     United States, or, if the vessel or vessels are Shipbuilding 
     Agreement vessels, in a Shipbuilding Agreement Party;''.
       (3) Section 606(6) (46 App. U.S.C. 1176(6)) is amended by 
     inserting ``or, if the vessel is a Shipbuilding Agreement 
     vessel, in a Shipbuilding Agreement Party or in the United 
     States,'' before ``, except in an emergency.''.
       (4) Section 607 (46 App. U.S.C. 1177) is amended as 
     follows:
       (A) Subsection (a) is amended by inserting ``or, if the 
     vessel is a Shipbuilding Agreement vessel, in a Shipbuilding 
     Agreement Party,'' after ``built in the United States''.
       (B) Subsection (k) is amended as follows:
       (i) Paragraph (1) is amended by striking subparagraph (A) 
     and inserting the following:
       ``(A)(i) constructed in the United States and, if 
     reconstructed, reconstructed in the United States or in a 
     Shipbuilding Agreement Party, or
       ``(ii) that is a Shipbuilding Agreement vessel and is 
     constructed in a Shipbuilding Agreement Party and, if 
     reconstructed, is reconstructed in a Shipbuilding Agreement 
     Party or in the United States,''.
       (ii) Paragraph (2)(A) is amended to read as follows:
       ``(A)(i) constructed in the United States and, if 
     reconstructed, reconstructed in the United States or in a 
     Shipbuilding Agreement Party, or
       ``(ii) that is a Shipbuilding Agreement vessel and is 
     constructed in a Shipbuilding Agreement Party and, if 
     reconstructed, is reconstructed in a Shipbuilding Agreement 
     Party or in the United States, but only with regard to moneys 
     deposited into the fund on or after the date on which the 
     Shipbuilding Trade Agreement Act takes effect.''.
       (5) Section 610 (46 App. U.S.C. 1180) is amended by 
     striking ``shall be built in a domestic yard or shall have 
     been documented under the laws of the United States not later 
     than February 1, 1928, or actually ordered and under 
     construction for the account of citizens of the United States 
     prior to such date,'' and inserting ``shall be built in the 
     United States or, if the vessel is a Shipbuilding Agreement 
     vessel, in a Shipbuilding Agreement Party,''.
       (6) Section 901(b)(1) (46 App. U.S.C. 1241(b)(1)) is 
     amended by striking the third sentence and inserting the 
     following:

     ``For purposes of this section, the term `privately owned 
     United States-flag commercial vessels' shall be deemed to 
     include--
       ``(A) any privately owned United States-flag commercial 
     vessel constructed in the United

[[Page S11598]]

     States, and if rebuilt, rebuilt in the United States or in a 
     Shipbuilding Agreement Party on or after the date on which 
     the Shipbuilding Trade Agreement Act takes effect, and
       ``(B) any privately owned vessel constructed in a 
     Shipbuilding Agreement Party on or after the date on which 
     the Shipbuilding Trade Agreement Act takes effect, and if 
     rebuilt, rebuilt in a Shipbuilding Agreement Party or in the 
     United States, that is documented pursuant to chapter 121 of 
     title 46, United States Code.
     The term `privately owned United States-flag commercial 
     vessels' shall also be deemed to include any cargo vessel 
     that so qualified pursuant to section 615 of this Act or this 
     paragraph before the date on which the Shipbuilding Trade 
     Agreement Act takes effect. The term `privately owned United 
     States-flag commercial vessels' shall not be deemed to 
     include any liquid bulk cargo vessel that does not meet the 
     requirements of section 3703a of title 46, United States 
     Code.''.
       (7) Section 905 (46 App. U.S.C. 1244) is amended by adding 
     at the end the following:
       ``(h) The term `Shipbuilding Agreement' means the Agreement 
     Respecting Normal Competitive Conditions in the Commercial 
     Shipbuilding and Repair Industry, which resulted from 
     negotiations under the auspices of the Organization for 
     Economic Cooperation and Development, and was entered into on 
     December 21, 1994.
       ``(i) The term `Shipbuilding Agreement Party' means a state 
     or separate customs territory that is a Party to the 
     Shipbuilding Agreement, and with respect to which the United 
     States applies the Shipbuilding Agreement.
       ``(j) The term `Shipbuilding Agreement vessel' means a 
     vessel to which the Secretary determines Article 2.1 of the 
     Shipbuilding Agreement applies.
       ``(k) The term `Export Credit Understanding' means the 
     Understanding on Export Credits for Ships which resulted from 
     negotiations under the auspices of the Organization for 
     Economic Cooperation and Development and was entered into on 
     December 21, 1994.
       ``(l) The term `Export Credit Understanding vessel' means a 
     vessel to which the Secretary determines the Export Credit 
     Understanding applies.''.
       (8) Section 1104A (46 App. U.S.C. 1274) is amended as 
     follows:
       (A) Paragraph (5) of subsection (b) is amended to read as 
     follows:
       ``(5) shall bear interest (exclusive of charges for the 
     guarantee and service charges, if any) at rates not to exceed 
     such percent per annum on the unpaid principal as the 
     Secretary determines to be reasonable, taking into account 
     the range of interest rates prevailing in the private market 
     for similar loans and the risks assumed by the Secretary, 
     except that, with respect to Export Credit Understanding 
     vessels, and Shipbuilding Agreement vessels, the obligations 
     shall bear interest at a rate the Secretary determines to be 
     consistent with obligations of the United States under the 
     Export Credit Understanding or the Shipbuilding Agreement, as 
     the case may be;''.
       (B) Subsection (i) is amended to read as follows:
       ``(i)(1) Except as provided in paragraph (2), the Secretary 
     may not, with respect to--
       ``(A) the general 75 percent or less limitation contained 
     in subsection (b)(2),
       ``(B) the 87\1/2\ percent or less limitation contained in 
     the 1st, 2nd, 4th, or 5th proviso to subsection (b)(2) or in 
     section 1112(b), or
       ``(C) the 80 percent or less limitation in the 3rd proviso 
     to such subsection,

     establish by rule, regulation, or procedure any percentage 
     within any such limitation that is, or is intended to be, 
     applied uniformly to all guarantees or commitments to 
     guarantee made under this section that are subject to the 
     limitation.
       ``(2) With respect to Export Credit Understanding vessels 
     and Shipbuilding Agreement vessels, the Secretary may 
     establish by rule, regulation, or procedure a uniform 
     percentage that the Secretary determines to be consistent 
     with obligations of the United States under the Export Credit 
     Understanding or the Shipbuilding Agreement, as the case may 
     be.''.
       (C) Section 1104B(b) (46 App. U.S.C. 1274a(b)) is amended 
     by striking the period at the end and inserting the 
     following:

     ``, except that, with respect to Export Credit Understanding 
     vessels and Shipbuilding Agreement vessels, the Secretary may 
     establish by rule, regulation, or procedure a uniform 
     percentage that the Secretary determines to be consistent 
     with obligations of the United States under the Export Credit 
     Understanding or the Shipbuilding Agreement, as the case may 
     be.''.
                       Subtitle C--Effective Date

     SEC. 221. EFFECTIVE DATE.

       This title and the amendments made by this title take 
     effect on the date that the Shipbuilding Agreement enters 
     into force with respect to the United States.
              TITLE III--GENERALIZED SYSTEM OF PREFERENCES

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``GSP Renewal Act of 1996''.

     SEC. 302. GENERALIZED SYSTEM OF PREFERENCES.

       (a) In General.--Title V of the Trade Act of 1974 is 
     amended to read as follows:
              ``TITLE V--GENERALIZED SYSTEM OF PREFERENCES

     ``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.

[[Page S11599]]

       ``(F) Such country aids or abets, by granting sanctuary 
     from prosecution to, any individual or group which has 
     committed an act of international terrorism.
       ``(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).

     Subparagraphs (D), (E), (F), and (G) 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.--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.
       ``(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--

[[Page S11600]]

       ``(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.--
     Subparagraph (A) shall not apply to any least-developed 
     beneficiary developing 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.

     ``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.

     ``SEC. 505. DATE OF TERMINATION.

       ``No duty-free treatment provided under this title shall 
     remain in effect after May 12, 1997.

     ``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. 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).''.
       (b) Table of Contents.--The items relating to title V in 
     the table of contents of the Trade Act of 1974 are amended to 
     read as follows:

              ``TITLE V--GENERALIZED SYSTEM OF PREFERENCES

``Sec. 501. Authority to extend preferences.
``Sec. 502. Designation of beneficiary developing countries.
``Sec. 503. Designation of eligible articles.
``Sec. 504. Review and report to Congress.
``Sec. 505. Date of termination.
``Sec. 506. Agricultural exports of beneficiary developing countries.
``Sec. 507. Definitions.''.

     SEC. 303. EFFECTIVE DATE.

       (a) In General.--The amendments made by this title apply to 
     articles entered on or after October 1, 1996.
       (b) Retroactive Application.--

[[Page S11601]]

       (1) General rule.--Notwithstanding section 514 of the 
     Tariff Act of 1930 or any other provision of law and subject 
     to subsection (c)--
       (A) any article that was entered--
       (i) after July 31, 1995, and
       (ii) before January 1, 1996, and
     to which duty-free treatment under title V of the Trade Act 
     of 1974 would have applied if the entry had been made on July 
     31, 1995, shall be liquidated or reliquidated as free of 
     duty, and the Secretary of the Treasury shall refund any duty 
     paid with respect to such entry, and
       (B) any article that was entered--
       (i) after December 31, 1995, and
       (ii) before October 1, 1996, and
     to which duty-free treatment under title V of the Trade Act 
     of 1974 (as amended by this title) would have applied if the 
     entry had been made on or after October 1, 1996, shall be 
     liquidated or reliquidated as free of duty, and the Secretary 
     of the Treasury shall refund any duty paid with respect to 
     such entry.
       (2) Limitation on refunds.--No refund shall be made 
     pursuant to this subsection before October 1, 1996.
       (3) Entry.--As used in this subsection, the term ``entry'' 
     includes a withdrawal from warehouse for consumption.
       (c) Requests.--Liquidation or reliquidation may be made 
     under subsection (b) with respect to an entry only if a 
     request therefor is filed with the Customs Service, within 
     180 days after the date of the enactment of this Act, that 
     contains sufficient information to enable the Customs 
     Service--
       (1) to locate the entry; or
       (2) to reconstruct the entry if it cannot be located.

     SEC. 304. CONFORMING AMENDMENTS.

       (a) Trade Laws.--
       (1) Section 1211(b) of the Omnibus Trade and 
     Competitiveness Act of 1988 (19 U.S.C. 3011(b)) is amended--
       (A) in paragraph (1), by striking ``(19 U.S.C. 2463(a), 
     2464(c)(3))'' and inserting ``(as in effect on July 31, 
     1995)''; and
       (B) in paragraph (2), by striking ``(19 U.S.C. 
     2464(c)(1))'' and inserting the following: ``(as in effect on 
     July 31, 1995)''.
       (2) Section 203(c)(7) of the Andean Trade Preference Act 
     (19 U.S.C. 3202(c)(7)) is amended by striking ``502(a)(4)'' 
     and inserting ``507(4)''.
       (3) Section 212(b)(7) of the Caribbean Basin Economic 
     Recovery Act (19 U.S.C. 2702(b)(7)) is amended by striking 
     ``502(a)(4)'' and inserting ``507(4)''.
       (4) General note 3(a)(iv)(C) of the Harmonized Tariff 
     Schedule of the United States is amended by striking 
     ``sections 503(b) and 504(c)'' and inserting ``subsections 
     (a), (c), and (d) of section 503''.
       (5) Section 201(a)(2) of the North American Free Trade 
     Agreement Implementation Act (19 U.S.C. 3331(a)(2)) is 
     amended by striking ``502(a)(2) of the Trade Act of 1974 (19 
     U.S.C. 2462(a)(2))'' and inserting ``502(f)(2) of the Trade 
     Act of 1974''.
       (6) Section 131 of the Uruguay Round Agreements Act (19 
     U.S.C. 3551) is amended in subsections (a) and (b)(1) by 
     striking ``502(a)(4)'' and inserting ``507(4)''.
       (b) Other Laws.--
       (1) Section 871(f)(2)(B) of the Internal Revenue Code of 
     1986 is amended by striking ``within the meaning of section 
     502'' and inserting ``under title V''.
       (2) Section 2202(8) of the Export Enhancement Act of 1988 
     (15 U.S.C. 4711(8)) is amended by striking ``502(a)(4)'' and 
     inserting ``507(4)''.
       (3) Section 231A(a) of the Foreign Assistance Act of 1961 
     (22 U.S.C. 2191a(a)) is amended--
       (A) in paragraph (1) by striking ``502(a)(4) of the Trade 
     Act of 1974 (19 U.S.C. 2462(a)(4))'' and inserting ``507(4) 
     of the Trade Act of 1974'';
       (B) in paragraph (2) by striking ``505(c) of the Trade Act 
     of 1974 (19 U.S.C. 2465(c))'' and inserting ``504 of the 
     Trade Act of 1974''; and
       (C) in paragraph (4) by striking ``502(a)(4)'' and 
     inserting ``507(4)''.
       (4) Section 1621(a)(1) of the International Financial 
     Institutions Act (22 U.S.C. 262p-4p(a)(1)) is amended by 
     striking ``502(a)(4)'' and inserting ``507(4)''.
       (5) Section 103B of the Agricultural Act of 1949 (7 U.S.C. 
     1444-2) is amended in subsections (a)(5)(F) (v) and (n)(1)(C) 
     by striking ``503(d) of the Trade Act of 1974 (19 U.S.C. 
     2463(d))'' and inserting ``503(b)(3) of the Trade Act of 
     1974''.
                       TITLE IV--REVENUE OFFSETS

     SEC. 400. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.
                Subtitle A--Foreign Trust Tax Compliance

     SEC. 401. IMPROVED INFORMATION REPORTING ON FOREIGN TRUSTS.

       (a) In General.--Section 6048 (relating to returns as to 
     certain foreign trusts) is amended to read as follows:

     ``SEC. 6048. INFORMATION WITH RESPECT TO CERTAIN FOREIGN 
                   TRUSTS.

       ``(a) Notice of Certain Events.--
       ``(1) General rule.--On or before the 90th day (or such 
     later day as the Secretary may prescribe) after any 
     reportable event, the responsible party shall provide written 
     notice of such event to the Secretary in accordance with 
     paragraph (2).
       ``(2) Contents of notice.--The notice required by paragraph 
     (1) shall contain such information as the Secretary may 
     prescribe, including--
       ``(A) the amount of money or other property (if any) 
     transferred to the trust in connection with the reportable 
     event, and
       ``(B) the identity of the trust and of each trustee and 
     beneficiary (or class of beneficiaries) of the trust.
       ``(3) Reportable event.--For purposes of this subsection--
       ``(A) In general.--The term `reportable event' means--
       ``(i) the creation of any foreign trust by a United States 
     person,
       ``(ii) the transfer of any money or property (directly or 
     indirectly) to a foreign trust by a United States person, 
     including a transfer by reason of death, and
       ``(iii) the death of a citizen or resident of the United 
     States if--

       ``(I) the decedent was treated as the owner of any portion 
     of a foreign trust under the rules of subpart E of part I of 
     subchapter J of chapter 1, or
       ``(II) any portion of a foreign trust was included in the 
     gross estate of the decedent.

       ``(B) Exceptions.--
       ``(i) Fair market value sales.--Subparagraph (A)(ii) shall 
     not apply to any transfer of property to a trust in exchange 
     for consideration of at least the fair market value of the 
     transferred property. For purposes of the preceding sentence, 
     consideration other than cash shall be taken into account at 
     its fair market value and the rules of section 679(a)(3) 
     shall apply.
       ``(ii) Deferred compensation and charitable trusts.--
     Subparagraph (A) shall not apply with respect to a trust 
     which is--

       ``(I) described in section 402(b), 404(a)(4), or 404A, or
       ``(II) determined by the Secretary to be described in 
     section 501(c)(3).

       ``(4) Responsible party.--For purposes of this subsection, 
     the term `responsible party' means--
       ``(A) the grantor in the case of the creation of an inter 
     vivos trust,
       ``(B) the transferor in the case of a reportable event 
     described in paragraph (3)(A)(ii) other than a transfer by 
     reason of death, and
       ``(C) the executor of the decedent's estate in any other 
     case.
       ``(b) United States Grantor of Foreign Trust.--
       ``(1) In general.--If, at any time during any taxable year 
     of a United States person, such person is treated as the 
     owner of any portion of a foreign trust under the rules of 
     subpart E of part I of subchapter J of chapter 1, such person 
     shall be responsible to ensure that--
       ``(A) such trust makes a return for such year which sets 
     forth a full and complete accounting of all trust activities 
     and operations for the year, the name of the United States 
     agent for such trust, and such other information as the 
     Secretary may prescribe, and
       ``(B) such trust furnishes such information as the 
     Secretary may prescribe to each United States person (i) who 
     is treated as the owner of any portion of such trust or (ii) 
     who receives (directly or indirectly) any distribution from 
     the trust.
       ``(2) Trusts not having united states agent.--
       ``(A) In general.--If the rules of this paragraph apply to 
     any foreign trust, the determination of amounts required to 
     be taken into account with respect to such trust by a United 
     States person under the rules of subpart E of part I of 
     subchapter J of chapter 1 shall be determined by the 
     Secretary.
       ``(B) United states agent required.--The rules of this 
     paragraph shall apply to any foreign trust to which paragraph 
     (1) applies unless such trust agrees (in such manner, subject 
     to such conditions, and at such time as the Secretary shall 
     prescribe) to authorize a United States person to act as such 
     trust's limited agent solely for purposes of applying 
     sections 7602, 7603, and 7604 with respect to--
       ``(i) any request by the Secretary to examine records or 
     produce testimony related to the proper treatment of amounts 
     required to be taken into account under the rules referred to 
     in subparagraph (A), or
       ``(ii) any summons by the Secretary for such records or 
     testimony.

     The appearance of persons or production of records by reason 
     of a United States person being such an agent shall not 
     subject such persons or records to legal process for any 
     purpose other than determining the correct treatment under 
     this title of the amounts required to be taken into 
     account under the rules referred to in subparagraph (A). A 
     foreign trust which appoints an agent described in this 
     subparagraph shall not be considered to have an office or 
     a permanent establishment in the United States, or to be 
     engaged in a trade or business in the United States, 
     solely because of the activities of such agent pursuant to 
     this subsection.
       ``(C) Other rules to apply.--Rules similar to the rules of 
     paragraphs (2) and (4) of section 6038A(e) shall apply for 
     purposes of this paragraph.
       ``(c) Reporting by United States Beneficiaries of Foreign 
     Trusts.--
       ``(1) In general.--If any United States person receives 
     (directly or indirectly) during any taxable year of such 
     person any distribution from a foreign trust, such person 
     shall make a return with respect to such trust for such year 
     which includes--
       ``(A) the name of such trust,
       ``(B) the aggregate amount of the distributions so received 
     from such trust during such taxable year, and
       ``(C) such other information as the Secretary may 
     prescribe.
       ``(2) Inclusion in income if records not provided.--
       ``(A) In general.--If adequate records are not provided to 
     the Secretary to determine the proper treatment of any 
     distribution from a foreign trust, such distribution shall be 
     treated as an accumulation distribution includible in the 
     gross income of the distributee under chapter 1. To

[[Page S11602]]

     the extent provided in regulations, the preceding sentence 
     shall not apply if the foreign trust elects to be subject to 
     rules similar to the rules of subsection (b)(2)(B).
       ``(B) Application of accumulation distribution rules.--For 
     purposes of applying section 668 in a case to which 
     subparagraph (A) applies, the applicable number of years for 
     purposes of section 668(a) shall be \1/2\ of the number of 
     years the trust has been in existence.
       ``(d) Special Rules.--
       ``(1) Determination of whether united states person makes 
     transfer or receives distribution.--For purposes of this 
     section, in determining whether a United States person makes 
     a transfer to, or receives a distribution from, a foreign 
     trust, the fact that a portion of such trust is treated as 
     owned by another person under the rules of subpart E of part 
     I of subchapter J of chapter 1 shall be disregarded.
       ``(2) Domestic trusts with foreign activities.--To the 
     extent provided in regulations, a trust which is a United 
     States person shall be treated as a foreign trust for 
     purposes of this section and section 6677 if such trust has 
     substantial activities, or holds substantial property, 
     outside the United States.
       ``(3) Time and manner of filing information.--Any notice or 
     return required under this section shall be made at such time 
     and in such manner as the Secretary shall prescribe.
       ``(4) Modification of return requirements.--The Secretary 
     is authorized to suspend or modify any requirement of this 
     section if the Secretary determines that the United States 
     has no significant tax interest in obtaining the required 
     information.''.
       (b) Increased Penalties.--Section 6677 (relating to failure 
     to file information returns with respect to certain foreign 
     trusts) is amended to read as follows:

     ``SEC. 6677. FAILURE TO FILE INFORMATION WITH RESPECT TO 
                   CERTAIN FOREIGN TRUSTS.

       ``(a) Civil Penalty.--In addition to any criminal penalty 
     provided by law, if any notice or return required to be filed 
     by section 6048--
       ``(1) is not filed on or before the time provided in such 
     section, or
       ``(2) does not include all the information required 
     pursuant to such section or includes incorrect information,

     the person required to file such notice or return shall pay a 
     penalty equal to 35 percent of the gross reportable amount. 
     If any failure described in the preceding sentence continues 
     for more than 90 days after the day on which the Secretary 
     mails notice of such failure to the person required to pay 
     such penalty, such person shall pay a penalty (in addition to 
     the amount determined under the preceding sentence) of 
     $10,000 for each 30-day period (or fraction thereof) during 
     which such failure continues after the expiration of such 90-
     day period. In no event shall the penalty under this 
     subsection with respect to any failure exceed the gross 
     reportable amount.
       ``(b) Special Rules for Returns Under Section 6048(b).--In 
     the case of a return required under section 6048(b)--
       ``(1) the United States person referred to in such section 
     shall be liable for the penalty imposed by subsection (a), 
     and
       ``(2) subsection (a) shall be applied by substituting `5 
     percent' for `35 percent'.
       ``(c) Gross Reportable Amount.--For purposes of subsection 
     (a), the term `gross reportable amount' means--
       ``(1) the gross value of the property involved in the event 
     (determined as of the date of the event) in the case of a 
     failure relating to section 6048(a),
       ``(2) the gross value of the portion of the trust's assets 
     at the close of the year treated as owned by the United 
     States person in the case of a failure relating to section 
     6048(b)(1), and
       ``(3) the gross amount of the distributions in the case of 
     a failure relating to section 6048(c).
       ``(d) Reasonable Cause Exception.--No penalty shall be 
     imposed by this section on any failure which is shown to be 
     due to reasonable cause and not due to willful neglect. The 
     fact that a foreign jurisdiction would impose a civil or 
     criminal penalty on the taxpayer (or any other person) for 
     disclosing the required information is not reasonable cause.
       ``(e) Deficiency Procedures Not To Apply.--Subchapter B of 
     chapter 63 (relating to deficiency procedures for income, 
     estate, gift, and certain excise taxes) shall not apply in 
     respect of the assessment or collection of any penalty 
     imposed by subsection (a).''.
       (c) Conforming Amendments.--
       (1) Paragraph (2) of section 6724(d) is amended by striking 
     ``or'' at the end of subparagraph (S), by striking the period 
     at the end of subparagraph (T) and inserting ``, or'', and by 
     inserting after subparagraph (T) the following new 
     subparagraph:
       ``(U) section 6048(b)(1)(B) (relating to foreign trust 
     reporting requirements).''.
       (2) The table of sections for subpart B of part III of 
     subchapter A of chapter 61 is amended by striking the item 
     relating to section 6048 and inserting the following new 
     item:

``Sec. 6048. Information with respect to certain foreign trusts.''.
       (3) The table of sections for part I of subchapter B of 
     chapter 68 is amended by striking the item relating to 
     section 6677 and inserting the following new item:

``Sec. 6677. Failure to file information with respect to certain 
              foreign trusts.''.
       (d) Effective Dates.--
       (1) Reportable events.--To the extent related to subsection 
     (a) of section 6048 of the Internal Revenue Code of 1986, as 
     amended by this section, the amendments made by this section 
     shall apply to reportable events (as defined in such section 
     6048) occurring after the date of the enactment of this Act.
       (2) Grantor trust reporting.--To the extent related to 
     subsection (b) of such section 6048, the amendments made by 
     this section shall apply to taxable years of United States 
     persons beginning after December 31, 1995.
       (3) Reporting by united states beneficiaries.--To the 
     extent related to subsection (c) of such section 6048, the 
     amendments made by this section shall apply to distributions 
     received after the date of the enactment of this Act.

     SEC. 402. COMPARABLE PENALTIES FOR FAILURE TO FILE RETURN 
                   RELATING TO TRANSFERS TO FOREIGN ENTITIES.

       (a) In General.--Section 1494 is amended by adding at the 
     end the following new subsection:
       ``(c) Penalty.--In the case of any failure to file a return 
     required by the Secretary with respect to any transfer 
     described in section 1491, the person required to file such 
     return shall be liable for the penalties provided in section 
     6677 in the same manner as if such failure were a failure to 
     file a notice under section 6048(a).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to transfers after the date of the enactment of 
     this Act.

     SEC. 403. MODIFICATIONS OF RULES RELATING TO FOREIGN TRUSTS 
                   HAVING ONE OR MORE UNITED STATES BENEFICIARIES.

       (a) Treatment of Trust Obligations, Etc.--
       (1) Paragraph (2) of section 679(a) is amended by striking 
     subparagraph (B) and inserting the following:
       ``(B) Transfers at fair market value.--To any transfer of 
     property to a trust in exchange for consideration of at least 
     the fair market value of the transferred property. For 
     purposes of the preceding sentence, consideration other than 
     cash shall be taken into account at its fair market value.''.
       (2) Subsection (a) of section 679 (relating to foreign 
     trusts having one or more United States beneficiaries) is 
     amended by adding at the end the following new paragraph:
       ``(3) Certain obligations not taken into account under fair 
     market value exception.--
       ``(A) In general.--In determining whether paragraph (2)(B) 
     applies to any transfer by a person described in clause (ii) 
     or (iii) of subparagraph (C), there shall not be taken into 
     account--
       ``(i) except as provided in regulations, any obligation of 
     a person described in subparagraph (C), and
       ``(ii) to the extent provided in regulations, any 
     obligation which is guaranteed by a person described in 
     subparagraph (C).
       ``(B) Treatment of principal payments on obligation.--
     Principal payments by the trust on any obligation referred to 
     in subparagraph (A) shall be taken into account on and after 
     the date of the payment in determining the portion of the 
     trust attributable to the property transferred.
       ``(C) Persons described.--The persons described in this 
     subparagraph are--
       ``(i) the trust,
       ``(ii) any grantor or beneficiary of the trust, and
       ``(iii) any person who is related (within the meaning of 
     section 643(i)(2)(B)) to any grantor or beneficiary of the 
     trust.''.
       (b) Exemption of Transfers to Charitable Trusts.--
     Subsection (a) of section 679 is amended by striking 
     ``section 404(a)(4) or 404A'' and inserting ``section 
     6048(a)(3)(B)(ii)''.
       (c) Other Modifications.--Subsection (a) of section 679 is 
     amended by adding at the end the following new paragraphs:
       ``(4) Special rules applicable to foreign grantor who later 
     becomes a united states person.--
       ``(A) In general.--If a nonresident alien individual has a 
     residency starting date within 5 years after directly or 
     indirectly transferring property to a foreign trust, this 
     section and section 6048 shall be applied as if such 
     individual transferred to such trust on the residency 
     starting date an amount equal to the portion of such trust 
     attributable to the property transferred by such individual 
     to such trust in such transfer.
       ``(B) Treatment of undistributed income.--For purposes of 
     this section, undistributed net income for periods before 
     such individual's residency starting date shall be taken into 
     account in determining the portion of the trust which is 
     attributable to property transferred by such individual to 
     such trust but shall not otherwise be taken into account.
       ``(C) Residency starting date.--For purposes of this 
     paragraph, an individual's residency starting date is the 
     residency starting date determined under section 
     7701(b)(2)(A).
       ``(5) Outbound trust migrations.--If--
       ``(A) an individual who is a citizen or resident of the 
     United States transferred property to a trust which was not a 
     foreign trust, and
       ``(B) such trust becomes a foreign trust while such 
     individual is alive,
     then this section and section 6048 shall be applied as if 
     such individual transferred to such trust on the date such 
     trust becomes a foreign trust an amount equal to the portion 
     of such trust attributable to the property previously 
     transferred by such individual to such trust. A rule similar 
     to the rule of paragraph (4)(B) shall apply for purposes of 
     this paragraph.''.
       (d) Modifications Relating to Whether Trust Has United 
     States Beneficiaries.--Subsection (c) of section 679 is 
     amended by adding at the end the following new paragraph:
       ``(3) Certain united states beneficiaries disregarded.--A 
     beneficiary shall not be treated as a United States person in 
     applying this section with respect to any transfer of 
     property to foreign trust if such beneficiary first became a 
     United States person more than 5 years after the date of such 
     transfer.''.
       (e) Technical Amendment.--Subparagraph (A) of section 
     679(c)(2) is amended to read as follows:

[[Page S11603]]

       ``(A) in the case of a foreign corporation, such 
     corporation is a controlled foreign corporation (as defined 
     in section 957(a)),''.
       (f) Regulations.--Section 679 is amended by adding at the 
     end the following new subsection:
       ``(d) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (g) Effective Date.--The amendments made by this section 
     shall apply to transfers of property after February 6, 1995.

     SEC. 404. FOREIGN PERSONS NOT TO BE TREATED AS OWNERS UNDER 
                   GRANTOR TRUST RULES.

       (a) General Rule.--
       (1) Subsection (f) of section 672 (relating to special rule 
     where grantor is foreign person) is amended to read as 
     follows:
       ``(f) Subpart Not To Result in Foreign Ownership.--
       ``(1) In general.--Notwithstanding any other provision of 
     this subpart, this subpart shall apply only to the extent 
     such application results in an amount (if any) being 
     currently taken into account (directly or through 1 or more 
     entities) under this chapter in computing the income of a 
     citizen or resident of the United States or a domestic 
     corporation.
       ``(2) Exceptions.--
       ``(A) Certain revocable and irrevocable trusts.--Paragraph 
     (1) shall not apply to any portion of a trust if--
       ``(i) the power to revest absolutely in the grantor title 
     to the trust property to which such portion is attributable 
     is exercisable solely by the grantor without the approval or 
     consent of any other person or with the consent of a related 
     or subordinate party who is subservient to the grantor, or
       ``(ii) the only amounts distributable from such portion 
     (whether income or corpus) during the lifetime of the grantor 
     are amounts distributable to the grantor or the spouse of the 
     grantor.
       ``(B) Compensatory trusts.--Except as provided in 
     regulations, paragraph (1) shall not apply to any portion of 
     a trust distributions from which are taxable as compensation 
     for services rendered.
       ``(3) Special rules.--Except as otherwise provided in 
     regulations prescribed by the Secretary--
       ``(A) a controlled foreign corporation (as defined in 
     section 957) shall be treated as a domestic corporation for 
     purposes of paragraph (1), and
       ``(B) paragraph (1) shall not apply for purposes of 
     applying section 1296.
       ``(4) Recharacterization of purported gifts.--In the case 
     of any transfer directly or indirectly from a partnership or 
     foreign corporation which the transferee treats as a gift or 
     bequest, the Secretary may recharacterize such transfer in 
     such circumstances as the Secretary determines to be 
     appropriate to prevent the avoidance of the purposes of this 
     subsection.
       ``(5) Special rule where grantor is foreign person.--If--
       ``(A) but for this subsection, a foreign person would be 
     treated as the owner of any portion of a trust, and
       ``(B) such trust has a beneficiary who is a United States 
     person,
     such beneficiary shall be treated as the grantor of such 
     portion to the extent such beneficiary or any member of such 
     beneficiary's family (within the meaning of section 
     267(c)(4)) has made (directly or indirectly) transfers of 
     property (other than in a sale for full and adequate 
     consideration) to such foreign person. For purposes of the 
     preceding sentence, any gift shall not be taken into account 
     to the extent such gift would be excluded from taxable gifts 
     under section 2503(b).
       ``(6) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this subsection, including regulations 
     providing that paragraph (1) shall not apply in appropriate 
     cases.''.
       (2) The last sentence of subsection (c) of section 672 of 
     such Code is amended by inserting ``subsection (f) and'' 
     before ``sections 674''.
       (b) Credit for Certain Taxes.--
       (1) Paragraph (2) of section 665(d) is amended by adding at 
     the end the following new sentence: ``Under rules or 
     regulations prescribed by the Secretary, in the case of any 
     foreign trust of which the settlor or another person would be 
     treated as owner of any portion of the trust under subpart E 
     but for section 672(f), the term `taxes imposed on the trust' 
     includes the allocable amount of any income, war profits, and 
     excess profits taxes imposed by any foreign country or 
     possession of the United States on the settlor or such other 
     person in respect of trust income.''.
       (2) Paragraph (5) of section 901(b) is amended by adding at 
     the end the following new sentence: ``Under rules or 
     regulations prescribed by the Secretary, in the case of any 
     foreign trust of which the settlor or another person would be 
     treated as owner of any portion of the trust under subpart E 
     but for section 672(f), the allocable amount of any income, 
     war profits, and excess profits taxes imposed by any foreign 
     country or possession of the United States on the settlor or 
     such other person in respect of trust income.''.
       (c) Distributions by Certain Foreign Trusts Through 
     Nominees.--
       (1) Section 643 is amended by adding at the end the 
     following new subsection:
       ``(h) Distributions by Certain Foreign Trusts Through 
     Nominees.--For purposes of this part, any amount paid to a 
     United States person which is derived directly or indirectly 
     from a foreign trust of which the payor is not the grantor 
     shall be deemed in the year of payment to have been directly 
     paid by the foreign trust to such United States person.''.
       (2) Section 665 is amended by striking subsection (c).
       (d) Effective Date.--
       (1) In general.--Except as provided by paragraph (2), the 
     amendments made by this section shall take effect on the date 
     of the enactment of this Act.
       (2) Exception for certain trusts.--The amendments made by 
     this section shall not apply to any trust--
       (A) which is treated as owned by the grantor under section 
     676 or 677 (other than subsection (a)(3) thereof) of the 
     Internal Revenue Code of 1986, and
       (B) which is in existence on September 19, 1995.

     The preceding sentence shall not apply to the portion of any 
     such trust attributable to any transfer to such trust after 
     September 19, 1995.
       (e) Transitional Rule.--If--
       (1) by reason of the amendments made by this section, any 
     person other than a United States person ceases to be treated 
     as the owner of a portion of a domestic trust, and
       (2) before January 1, 1997, such trust becomes a foreign 
     trust, or the assets of such trust are transferred to a 
     foreign trust,
     no tax shall be imposed by section 1491 of the Internal 
     Revenue Code of 1986 by reason of such trust becoming a 
     foreign trust or the assets of such trust being transferred 
     to a foreign trust.

     SEC. 405. INFORMATION REPORTING REGARDING FOREIGN GIFTS.

       (a) In General.--Subpart A of part III of subchapter A of 
     chapter 61 is amended by inserting after section 6039E the 
     following new section:

     ``SEC. 6039F. NOTICE OF LARGE GIFTS RECEIVED FROM FOREIGN 
                   PERSONS.

       ``(a) In General.--If the value of the aggregate foreign 
     gifts received by a United States person (other than an 
     organization described in section 501(c) and exempt from tax 
     under section 501(a)) during any taxable year exceeds 
     $10,000, such United States person shall furnish (at such 
     time and in such manner as the Secretary shall prescribe) 
     such information as the Secretary may prescribe regarding 
     each foreign gift received during such year.
       ``(b) Foreign Gift.--For purposes of this section, the term 
     `foreign gift' means any amount received from a person other 
     than a United States person which the recipient treats as a 
     gift or bequest. Such term shall not include any qualified 
     transfer (within the meaning of section 2503(e)(2)) or any 
     distribution properly disclosed in a return under section 
     6048(c).
       ``(c) Penalty for Failure To File Information.--
       ``(1) In general.--If a United States person fails to 
     furnish the information required by subsection (a) with 
     respect to any foreign gift within the time prescribed 
     therefor (including extensions)--
       ``(A) the tax consequences of the receipt of such gift 
     shall be determined by the Secretary, and
       ``(B) such United States person shall pay (upon notice and 
     demand by the Secretary and in the same manner as tax) an 
     amount equal to 5 percent of the amount of such foreign gift 
     for each month for which the failure continues (not to exceed 
     25 percent of such amount in the aggregate).
       ``(2) Reasonable cause exception.--Paragraph (1) shall not 
     apply to any failure to report a foreign gift if the United 
     States person shows that the failure is due to reasonable 
     cause and not due to willful neglect.
       ``(d) Cost-of-Living Adjustment.--In the case of any 
     taxable year beginning after December 31, 1996, the $10,000 
     amount under subsection (a) shall be increased by an amount 
     equal to the product of such amount and the cost-of-living 
     adjustment for such taxable year under section 1(f)(3), 
     except that subparagraph (B) thereof shall be applied by 
     substituting `1995' for `1992'.
       ``(e) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Clerical Amendment.--The table of sections for such 
     subpart is amended by inserting after the item relating to 
     section 6039E the following new item:

``Sec. 6039F. Notice of large gifts received from foreign persons.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts received after the date of the 
     enactment of this Act in taxable years ending after such 
     date.

     SEC. 406. MODIFICATION OF RULES RELATING TO FOREIGN TRUSTS 
                   WHICH ARE NOT GRANTOR TRUSTS.

       (a) Modification of Interest Charge on Accumulation 
     Distributions.--Subsection (a) of section 668 (relating to 
     interest charge on accumulation distributions from foreign 
     trusts) is amended to read as follows:
       ``(a) General Rule.--For purposes of the tax determined 
     under section 667(a)--
       ``(1) Interest determined using underpayment rates.--The 
     interest charge determined under this section with respect to 
     any distribution is the amount of interest which would be 
     determined on the partial tax computed under section 667(b) 
     for the period described in paragraph (2) using the rates and 
     the method under section 6621 applicable to underpayments of 
     tax.
       ``(2) Period.--For purposes of paragraph (1), the period 
     described in this paragraph is the period which begins on the 
     date which is the applicable number of years before the date 
     of the distribution and which ends on the date of the 
     distribution.
       ``(3) Applicable number of years.--For purposes of 
     paragraph (2)--
       ``(A) In general.--The applicable number of years with 
     respect to a distribution is the number determined by 
     dividing--

[[Page S11604]]

       ``(i) the sum of the products described in subparagraph (B) 
     with respect to each undistributed income year, by
       ``(ii) the aggregate undistributed net income.

     The quotient determined under the preceding sentence shall be 
     rounded under procedures prescribed by the Secretary.
       ``(B) Product described.--For purposes of subparagraph (A), 
     the product described in this subparagraph with respect to 
     any undistributed income year is the product of--
       ``(i) the undistributed net income for such year, and
       ``(ii) the sum of the number of taxable years between such 
     year and the taxable year of the distribution (counting in 
     each case the undistributed income year but not counting the 
     taxable year of the distribution).
       ``(4) Undistributed income year.--For purposes of this 
     subsection, the term `undistributed income year' means any 
     prior taxable year of the trust for which there is 
     undistributed net income, other than a taxable year during 
     all of which the beneficiary receiving the distribution was 
     not a citizen or resident of the United States.
       ``(5) Determination of undistributed net income.--
     Notwithstanding section 666, for purposes of this subsection, 
     an accumulation distribution from the trust shall be treated 
     as reducing proportionately the undistributed net income for 
     undistributed income years.
       ``(6) Periods before 1996.--Interest for the portion of the 
     period described in paragraph (2) which occurs before January 
     1, 1996, shall be determined--
       ``(A) by using an interest rate of 6 percent, and
       ``(B) without compounding until January 1, 1996.''.
       (b) Abusive Transactions.--Section 643(a) is amended by 
     inserting after paragraph (6) the following new paragraph:
       ``(7) Abusive transactions.--The Secretary shall prescribe 
     such regulations as may be necessary or appropriate to carry 
     out the purposes of this part, including regulations to 
     prevent avoidance of such purposes.''.
       (c) Treatment of Loans From Trusts.--
       (1) In general.--Section 643 (relating to definitions 
     applicable to subparts A, B, C, and D) is amended by adding 
     at the end the following new subsection:
       ``(i) Loans From Foreign Trusts.--For purposes of subparts 
     B, C, and D--
       ``(1) General rule.--Except as provided in regulations, if 
     a foreign trust makes a loan of cash or marketable securities 
     directly or indirectly to--
       ``(A) any grantor or beneficiary of such trust who is a 
     United States person, or
       ``(B) any United States person not described in 
     subparagraph (A) who is related to such grantor or 
     beneficiary,
     the amount of such loan shall be treated as a distribution by 
     such trust to such grantor or beneficiary (as the case may 
     be).
       ``(2) Definitions and special rules.--For purposes of this 
     subsection--
       ``(A) Cash.--The term `cash' includes foreign currencies 
     and cash equivalents.
       ``(B) Related person.--
       ``(i) In general.--A person is related to another person if 
     the relationship between such persons would result in a 
     disallowance of losses under section 267 or 707(b). In 
     applying section 267 for purposes of the preceding sentence, 
     section 267(c)(4) shall be applied as if the family of an 
     individual includes the spouses of the members of the family.
       ``(ii) Allocation.--If any person described in paragraph 
     (1)(B) is related to more than one person, the grantor or 
     beneficiary to whom the treatment under this subsection 
     applies shall be determined under regulations prescribed by 
     the Secretary.
       ``(C) Exclusion of tax-exempts.--The term `United States 
     person' does not include any entity exempt from tax under 
     this chapter.
       ``(D) Trust not treated as simple trust.--Any trust which 
     is treated under this subsection as making a distribution 
     shall be treated as not described in section 651.
       ``(3) Subsequent transactions regarding loan principal.--If 
     any loan is taken into account under paragraph (1), any 
     subsequent transaction between the trust and the original 
     borrower regarding the principal of the loan (by way of 
     complete or partial repayment, satisfaction, cancellation, 
     discharge, or otherwise) shall be disregarded for purposes of 
     this title.''.
       (2) Technical amendment.--Paragraph (8) of section 7872(f) 
     is amended by inserting ``, 643(i),'' before ``or 1274'' each 
     place it appears.
       (d) Effective Dates.--
       (1) Interest charge.--The amendment made by subsection (a) 
     shall apply to distributions after the date of the enactment 
     of this Act.
       (2) Abusive transactions.--The amendment made by subsection 
     (b) shall take effect on the date of the enactment of this 
     Act.
       (3) Loans from trusts.--The amendment made by subsection 
     (c) shall apply to loans of cash or marketable securities 
     made after September 19, 1995.

     SEC. 407. RESIDENCE OF TRUSTS, ETC.

       (a) Treatment as United States Person.--
       (1) In general.--Paragraph (30) of section 7701(a) is 
     amended by striking ``and'' at the end of subparagraph (C) 
     and by striking subparagraph (D) and by inserting the 
     following new subparagraphs:
       ``(D) any estate (other than a foreign estate, within the 
     meaning of paragraph (31)), and
       ``(E) any trust if--
       ``(i) a court within the United States is able to exercise 
     primary supervision over the administration of the trust, and
       ``(ii) one or more United States fiduciaries have the 
     authority to control all substantial decisions of the 
     trust.''.
       (2) Conforming amendment.--Paragraph (31) of section 
     7701(a) is amended to read as follows:
       ``(31) Foreign estate or trust.--
       ``(A) Foreign estate.--The term `foreign estate' means an 
     estate the income of which, from sources without the United 
     States which is not effectively connected with the conduct of 
     a trade or business within the United States, is not 
     includible in gross income under subtitle A.
       ``(B) Foreign trust.--The term `foreign trust' means any 
     trust other than a trust described in subparagraph (E) of 
     paragraph (30).''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply--
       (A) to taxable years beginning after December 31, 1996, or
       (B) at the election of the trustee of a trust, to taxable 
     years ending after the date of the enactment of this Act.
     Such an election, once made, shall be irrevocable.
       (b) Domestic Trusts Which Become Foreign Trusts.--
       (1) In general.--Section 1491 (relating to imposition of 
     tax on transfers to avoid income tax) is amended by adding at 
     the end the following new flush sentence:
     ``If a trust which is not a foreign trust becomes a foreign 
     trust, such trust shall be treated for purposes of this 
     section as having transferred, immediately before becoming a 
     foreign trust, all of its assets to a foreign trust.''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect on the date of the enactment of this Act.
          Subtitle B--International Shipping Income Disclosure

     SEC. 411. PENALTIES FOR FAILURE TO DISCLOSE POSITION THAT 
                   CERTAIN INTERNATIONAL SHIPPING INCOME IS NOT 
                   INCLUDIBLE IN GROSS INCOME.

       (a) In General.--Section 883 is amended by adding at the 
     end the following new subsection:
       ``(d) Penalties for Failure to Disclose Position That 
     Certain International Shipping Income Is Not Includible in 
     Gross Income.--
       ``(1) In general.--A taxpayer who, with respect to any tax 
     imposed by this title, takes the position that any of its 
     gross income derived from the international operation of a 
     ship or ships is not includible in gross income by reason of 
     subsection (a)(1) or section 872(b)(1) (or by reason of any 
     applicable treaty) shall be entitled to such treatment only 
     if such position is disclosed (in such manner as the 
     Secretary may prescribe) on the return of tax for such tax 
     (or any statement attached to such return).
       ``(2) Additional penalties for failing to disclose 
     position.--If a taxpayer fails to meet the requirement of 
     paragraph (1) with respect to any taxable year--
       ``(A) the amount of the income from the international 
     operation of a ship or ships--
       ``(i) which is from sources without the United States, and
       ``(ii) which is attributable to a fixed place of business 
     in the United States,
     shall be treated for purposes of this title as effectively 
     connected with the conduct of a trade or business within the 
     United States, and
       ``(B) no deductions or credits shall be allowed which are 
     attributable to income from the international operation of a 
     ship or ships.
       ``(3) Reasonable cause exception.--This subsection shall 
     not apply to a failure to disclose a position if it is shown 
     that such failure is due to reasonable cause and not due to 
     willful neglect.''
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 872(b) is amended by striking 
     ``Gross income'' and inserting ``Except as provided in 
     section 883(d), gross income''.
       (2) Paragraph (1) of section 883(a) is amended by striking 
     ``Gross income'' and inserting ``Except as provided in 
     subsection (d), gross income''.
       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years beginning after the later of--
       (A) December 31, 1996, or
       (B) the date that the Shipbuilding Agreement enters into 
     force with respect to the United States.
       (2) Coordination with treaties.--The amendments made by 
     this section shall not apply in any case where their 
     application would be contrary to any treaty obligation of the 
     United States.
       (d) Information To Be Provided by Customs Service.--The 
     United States Custom Service shall provide the Secretary of 
     the Treasury or his delegate with such information as may be 
     specified by such Secretary in order to enable such Secretary 
     to determine whether ships which are not registered in the 
     United States are engaged in transportation to or from the 
     United States.

  Mr. NICKLES. Mr. President, I ask unanimous consent the committee 
amendment be considered not agreed to; the bill be deemed read a third 
time, passed, the motion to reconsider be laid upon the table, the 
amendment to the title be considered tabled, and any statements 
relating to the bill be placed at the appropriate place in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The committee amendment was rejected.
  The bill (H.R. 3074) was deemed read for a third time, and passed.

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