[Congressional Record Volume 157, Number 90 (Wednesday, June 22, 2011)]
[Senate]
[Pages S4025-S4028]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. INOUYE (for himself, Mr. Blunt, Mr. Reid, and Mr. Akaka):
  S. 1244. A bill to provide for preferential duty treatment to certain 
apparel articles of the Philippines; to the Committee on Finance.
  Mr. INOUYE. Mr. President, I am pleased to introduce legislation 
today, cosponsored by my colleagues Senator Reid of Nevada, Senator 
Blunt of Missouri, and Senator Akaka of Hawaii, that will provide duty-
free treatment to U.S. imports of finished Philippine apparel in return 
for purchasing and using fabrics and yarns made in the United States. 
This bill will promptly create an incentivized export market for our 
shrinking textile industry, and create new jobs.
  The Philippine apparel industry estimates that U.S. fabric sales 
spurred by the SAVE Act could reach potentially hundreds of millions of 
dollars and translate into upwards of 2,000 additional jobs in the 
United States fabric mill sector. With almost 99 percent of the U.S. 
apparel market now served by imports, U.S. textile manufacturers are 
reliant on export markets for their survival.
  The SAVE Act is patterned after the Dominican Republic, Central 
America Free Trade Agreement, or CAFTA, which permits tariff-free 
import of apparel assembled in those countries in return for using 
cotton and manmade fiber fabrics still made in the United States. The 
SAVE Act will provide our textile companies with a new opportunity to 
export fabrics into the dynamic Asian market.

[[Page S4026]]

  The Philippine apparel manufacturing industry is well established and 
known for its quality needlework and high-end fashion. It has been 
supplying top American brands and U.S. retailers for decades. With the 
growth of China in apparel production and the end of the quota system, 
Philippine apparel exports to the United States have dropped by 50 
percent in the last five years. The Philippine apparel sector is in 
critical decline, with employment dropping by 75 percent since 2003.
  The Philippines has been, arguably, our closest and most steadfast 
friend in Southeast Asia. They were our protectorate and strategic 
partner from the Spanish-American War through World War II. 10,000 
American and Filipino servicemen died together in the infamous Bataan 
Death March after our forces were overwhelmed by the Japanese Army in 
1942. More than 100,000 Filipinos then volunteered to fight alongside 
the United States and under U.S. command.
  More recently, the United States and the Philippines have partnered 
in successful efforts to combat terrorists in and around their islands. 
Campaigns by the Armed Forces of the Philippines, trained in 
counterterrorism by U.S. troops, resulted in the deaths of the Abu 
Sayyaf leader and his deputy in 2006, as well as two other leaders in 
2010.
  Our close partnership deserves to be mutually rewarding on an 
economic level. The SAVE Act would represent the first trade initiative 
with the Philippines in nearly four decades. Unlike other countries in 
the region, the United States and the Philippines share a balanced 
trade relationship. The SAVE Act would continue to build on this 
positive trade relationship and strengthen our economic ties with the 
Philippines by helping each other reestablish competitive textile 
industries.
  The SAVE Act would also allow duty-free treatment for a limited range 
of apparel not using U.S. fabrics so Philippine manufacturers can offer 
a complementary product line to U.S. brands and retailers. This 
category of apparel, which includes certain lines of coats, dresses, 
skirts, blouses, and infants' wear, will not contain any components 
that could have been made in the United States. These lines of apparel 
also will not compete against imports from third countries using U.S. 
components.
  With the Republic of the Philippines as a partner, we can expect 
proper customs enforcement. We believe the enforcement provisions of 
the SAVE Act are more rigorous than any comparable bill. At our 
request, Customs and Border Patrol, CBP, conducted an informal 
technical review of the SAVE bill. With their recommendations included, 
CBP concluded that the SAVE Act can be administered and enforced. The 
Philippine Department of Trade and Industry then reviewed and agreed to 
all the enforcement provisions.
  This bill will provide our manufacturers with new export markets and 
provide mutual benefits to a longstanding and erstwhile friend in 
Southeast Asia. The Philippines, in my view, should never be relegated 
to secondary consideration even as our focus shifts from one priority 
to another.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1244

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Save Our Industries Act of 
     2011'' or the ``SAVE Act''.

     SEC. 2. FINDINGS; PURPOSES.

       (a) Findings.--Congress finds the following:
       (1) The United States and the Republic of the Philippines 
     (in this Act referred to as the ``Philippines''), a former 
     colony, share deep historical and cultural ties. The 
     Philippines holds enduring political and security 
     significance to the United States. The 2 countries have 
     partnered very successfully in combating terrorism in 
     Southeast Asia.
       (2) The United States and the Philippines maintain a fair 
     trading relationship that should be expanded to the mutual 
     benefit of both countries. In 2010, United States exports to 
     the Philippines were valued at $7,375,000,000, and United 
     States imports from the Philippines were valued at 
     $7,960,000,000.
       (3) United States textile exports to the Philippines were 
     valued at just over $48,000,000 in 2010, consisting mostly of 
     industrial, specialty, broadwoven, and nonwoven fabrics. The 
     potential for export growth in this area can sustain and 
     create thousands of jobs.
       (4) The Philippines' textile and apparel industries, like 
     that of their counterparts in the United States, share the 
     same challenges and risks stemming from the end of the 
     textile and apparel quota system and from the end of United 
     States safe-guards that continued to control apparel imports 
     from the People's Republic of China until January 1, 2009.
       (5) The United States apparel fabrics industry is heavily 
     dependent on sewing outside the United States, and, for the 
     first time, United States textile manufacturers would have a 
     program that utilizes sewing done in an Asian country. In 
     contrast, most sewing of United States fabric occurs in the 
     Western Hemisphere, with about two-thirds of United States 
     fabric exports presently going to countries that are parties 
     to the North American Free Trade Agreement and the Dominican 
     Republic-Central America-United States Free Trade Agreement. 
     Increased demand for United States fabric in Asia will 
     increase opportunities for the United States industry.
       (6) Apparel producers in the Western Hemisphere are 
     excellent at making basic garments such as T-shirts and 
     standard 5-pocket jeans. However, the needle capability does 
     not exist to make high fashion, more sophisticated garments 
     such as embroidered T-shirts and fashion jeans with 
     embellishments. Such apparel manufacturing is done almost 
     exclusively in Asia.
       (7) A program that provides preferential duty treatment for 
     certain apparel articles of the Philippines will provide a 
     strong incentive for Philippine apparel manufacturers to use 
     United States fabrics, which will open new opportunities for 
     the United States textile industry and increase opportunities 
     for United States yarn manufacturers. At the same time, the 
     United States would be provided a more diverse range of 
     sourcing opportunities.
       (b) Purposes.--The purposes of this Act are--
       (1) to encourage higher levels of trade in textiles and 
     apparel between the United States and the Philippines and 
     enhance the commercial well-being of their respective 
     industries in times of global economic hardship;
       (2) to enhance and broaden the economic, security, and 
     political ties between the United States and the Philippines;
       (3) to stimulate economic activity and development 
     throughout the Philippines, including regions such as Manila 
     and Mindanao; and
       (4) to provide a stepping stone to an eventual free trade 
     agreement between the United States and the Philippines, 
     either bilaterally or as part of a regional agreement.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Classification under the hts.--The term 
     ``classification under the HTS'' means, with respect to an 
     article, the 6-digit subheading or 10-digit statistical 
     reporting number under which the article is classified in the 
     HTS.
       (2) Dobby woven fabric.--The term ``dobby woven fabric'' 
     means fabric, other than jacquard fabric, woven with the use 
     of a dobby attachment that raises or lowers the warp threads 
     during the weaving process to create patterns including, 
     stripes, and checks and similar designs.
       (3) Entered.--The term ``entered'' means entered, or 
     withdrawn from warehouse for consumption, in the customs 
     territory of the United States.
       (4) HTS.--The term ``HTS'' means the Harmonized Tariff 
     Schedule of the United States.
       (5) Knit-to-shape.--An article is ``knit-to shape'' if 50 
     percent or more of the exterior surface area of the article 
     is formed by major parts that have been knitted or crocheted 
     directly to the shape used in the article, with no 
     consideration being given to patch pockets, appliques, or the 
     like. Minor cutting, trimming, or sewing of those major parts 
     shall not affect the determination of whether an article is 
     ``knit-to-shape''.
       (6) Wholly assembled.--An article is ``wholly assembled'' 
     in the Philippines or the United States if--
       (A) all components of the article pre-existed in 
     essentially the same condition as the components exist in the 
     finished article and the components were combined to form the 
     finished article in the Philippines or the United States; and
       (B) the article is comprised of at least 2 components.
       (7) Wholly formed.--A yarn is ``wholly formed in the United 
     States'' if all of the yarn forming and finishing operations, 
     starting with the extrusion of filaments, strips, film, or 
     sheet, and including slitting a film or sheet into strip, or 
     the spinning of all fibers into yarn, or both, and ending 
     with a finished yarn or plied yarn, takes place in the United 
     States.

     SEC. 4. TRADE BENEFITS.

       (a) Eligible Apparel Article.--For purposes of this 
     section, an eligible apparel article is any one of the 
     following:
       (1) Men's and boys' cotton shirts, T-shirts and tank tops 
     (other than underwear T-shirts and tank tops), pullovers, 
     sweatshirts, tops, and similar articles classifiable under 
     subheading 6105.10, 6105.90, 6109.10, 6110.20, 6110.90, 
     6112.11, or 6114.20 of the HTS.
       (2) Women's and girls' cotton shirts, blouses, T-shirts and 
     tank tops (other than underwear T-shirts and tank tops), 
     pullovers,

[[Page S4027]]

     sweatshirts, tops, and similar articles classifiable under 
     subheading 6106.10, 6106.90, 6109.10, 6110.20, 6110.90, 
     6112.11, 6114.20, or 6117.90 of the HTS.
       (3) Men's and boys' cotton trousers, breeches, and shorts 
     classifiable under subheading 6103.10, 6103.42, 6103.49, 
     6112.11, 6113.00, 6203.19, 6203.42, 6203.49, 6210.40, 
     6211.20, 6211.32 of the HTS.
       (4) Women's and girls' cotton trousers, breeches, and 
     shorts classifiable under subheading 6104.19, 6104.62, 
     6104.69, 6112.11, 6113.00, 6117.90, 6204.12, 6204.19, 
     6204.62, 6204.69, 6210.50, 6211.20, 6211.42, or 6217.90 of 
     the HTS.
       (5) Men's and boys' cotton underpants, briefs, underwear-
     type T-shirts and singlets, thermal undershirts, other 
     undershirts, and similar articles classifiable under 
     subheading 6107.11, 6109.10, 6207.11, or 6207.91 of the HTS.
       (6) Men's and boys' manmade fiber underpants, briefs, 
     underwear-type T-shirts and singlets, thermal undershirts, 
     other undershirts, and similar articles classifiable under 
     subheading 6107.12, 6109.90, 6207.19, or 6207.99 of the HTS.
       (7) Men's and boys' manmade fiber shirts, T-shirts and tank 
     tops (other than underwear T-shirts and tank tops), 
     pullovers, sweatshirts, tops, and similar articles 
     classifiable under subheading 6105.20, 6105.90, 6110.30, 
     6110.90, 6112.12, 6112.19, or 6114.30 of the HTS.
       (8) Women's and girls' manmade fiber shirts, blouses, T-
     shirts and tank tops (other than underwear T-shirts and tank 
     tops), pullovers, sweatshirts, tops, and similar articles 
     classifiable under subheading 6106.20, 6106.90, 6110.30, 
     6110.90, 6112.12, 6112.19, 6114.30, or 6117.90 of the HTS.
       (9) Men's and boys' manmade fiber trousers, breeches, and 
     shorts classifiable under subheading 6103.43, 6103.49, 
     6112.12, 6112.19, 6112.20, 6113.00, 6203.43, 6203.49, 
     6210.40, 6211.20, or 6211.33 of the HTS.
       (10) Women's and girls' manmade fiber trousers, breeches, 
     and shorts classifiable under subheading 6104.63, 6104.69, 
     6112.12, 6112.19, 6112.20, 6113.00, 6117.90, 6204.63, 
     6204.69, 6210.50, 6211.20, 6211.43, or 6217.90 of the HTS.
       (11) Men's and boys' manmade fiber shirts classifiable 
     under subheading 6205.30, 6205.90, or 6211.33 of the HTS.
       (12) Cotton brassieres and other body support garments 
     classifiable under subheading 6212.10, 6212.20, or 6212.30 of 
     the HTS.
       (13) Manmade fiber brassieres and other body support 
     garments classifiable under subheading 6212.10, 6212.20, or 
     6212.30 of the HTS.
       (14) Manmade fiber swimwear classifiable under subheading 
     6112.31, 6112.41, 6211.11, or 6211.12 of the HTS.
       (15) Cotton swimwear classifiable under subheading 6112.39, 
     6112.49, 6211.11, or 6211.12 of the HTS.
       (16) Men's and boys' manmade fiber coats, overcoats, 
     carcoats, capes, cloaks, anoraks (including ski-jackets), 
     windbreakers, padded sleeveless jackets with attachments for 
     sleeves, and similar articles classifiable under subheading 
     6101.30, 6101.90, 6112.12, 6112.19, 6112.20, or 6113.00 of 
     the HTS.
       (17) Women's and girls' manmade fiber coats, overcoats, 
     carcoats, capes, cloaks, anoraks (including ski-jackets), 
     windbreakers, padded sleeveless jackets with attachments for 
     sleeves, and similar articles classifiable under subheading 
     6102.30, 6102.90, 6104.33, 6104.39, 6112.12, 6112.19, 
     6112.20, 6113.00, or 6117.90 of the HTS.
       (18) Gloves, mittens, and mitts of manmade fibers 
     classifiable under subheading 6116.10, 6116.93, 6116.99, or 
     6216.00 of the HTS.
       (b) Duty-free Treatment for Certain Eligible Apparel 
     Articles.--
       (1) Duty-free treatment.--Subject to paragraphs (2) and 
     (3), an eligible apparel article shall enter the United 
     States free of duty if the article is wholly assembled in the 
     United States or the Philippines, or both, and if the 
     component determining the article's classification under the 
     HTS consists entirely of--
       (A) fabric cut in the United States or the Philippines, or 
     both, from fabric wholly formed in the United States from 
     yarns wholly formed in the United States;
       (B) components knit-to-shape in the United States from 
     yarns wholly formed in the United States; or
       (C) any combination of fabric or components knit-to-shape 
     described in subparagraphs (A) and (B).
       (2) Dyeing, printing, or finishing.--An apparel article 
     described in paragraph (1) shall be ineligible for duty-free 
     treatment under such paragraph if any component determining 
     the article's classification under the HTS comprises any 
     fabric, fabric component, or component knit-to-shape in the 
     United States that was dyed, printed, or finished at any 
     place other than in the United States.
       (3) Other processes.--An apparel article described in 
     paragraph (1) shall not be disqualified from eligibility for 
     duty-free treatment under such paragraph because it undergoes 
     stone-washing, enzyme-washing, acid-washing, permapressing, 
     oven baking, bleaching, garment-dyeing, screen printing, or 
     other similar processes in either the United States or the 
     Philippines.
       (c) Knit-to-shape Apparel Articles.--A knit-to-shape 
     apparel article shall enter the United States free of duty if 
     it is wholly assembled in the Philippines and if the 
     component determining the article's classification under the 
     HTS consists entirely of components knit-to-shape in the 
     Philippines from yarns wholly formed in the United States.
       (d) De Minimis Rules.--
       (1) In general.--An article that would otherwise be 
     ineligible for preferential treatment under this section 
     because the article contains fibers or yarns not wholly 
     formed in the United States or in the Philippines shall not 
     be ineligible for such treatment if the total weight of all 
     such fibers or yarns is not more than 10 percent of the total 
     weight of the article.
       (2) Elastomeric yarns.--Notwithstanding paragraph (1), an 
     article described in subsection (b) or (c) that contains 
     elastomeric yarns in the component of the article that 
     determines the article's classification under the HTS shall 
     be eligible for duty-free treatment under this section only 
     if such elastomeric yarns are wholly formed in the United 
     States or the Philippines.
       (3) Direct shipment.--Any apparel article described in 
     subsection (b) or (c) is an eligible article only if it is 
     imported directly into the United States from the 
     Philippines.
       (e) Single Transformation Rules.--Any of the following 
     apparel articles that are cut and wholly assembled, or knit-
     to-shape, in the Philippines from any combination of fabrics, 
     fabric components, components knit-to-shape, or yarns and are 
     imported directly into the United States from the Philippines 
     shall enter the United States free of duty, without regard to 
     the source of the fabric, fabric components, components knit-
     to-shape, or yarns from which the articles are made:
       (1) Except for brassieres classified in subheading 6212.10 
     of the HTS, any apparel article that is of a type listed in 
     chapter rule 3(a), 4(a), or 5(a) for chapter 62 of the HTS, 
     as such chapter rule is contained in paragraph 9 of section A 
     of the Annex to Proclamation 8213 of the President of 
     December 20, 2007, (as amended by Proclamation 8272 of June 
     30, 2008, or any subsequent proclamation by the President).
       (2) Any article not described in paragraph (1) that is any 
     of the following:
       (A) Baby garments, clothing accessories, and headwear 
     classifiable under subheading 6111.20, 6111.30, 6111.90, 
     6209.20, 6209.30, 6209.90, or 6505.90 of the HTS.
       (B) Women's and girls' cotton coats, over coats, carcoats, 
     capes, cloaks, anoraks (including ski-jackets), windbreakers, 
     padded sleeveless jackets with attachments for sleeves, and 
     similar articles classifiable under subheading 6102.20, 
     6102.90, 6104.19, 6104.32, 6104.39, 6112.11, 6113.00, 
     6117.90, 6202.12, 6202.19, 6202.92, 6202.99, 6204.12, 
     6204.19, 6204.32, 6204.39, 6210.30, 6210.50, 6211.20, 
     6211.42, or 6217.90 of the HTS.
       (C) Cotton dresses classifiable under subheading 6104.42, 
     6104.49, 6204.42, or 6204.49 of the HTS.
       (D) Manmade fiber dresses classifiable under subheading 
     6104.43, 6104.44, 6104.49, 6204.43, 6204.44, or 6204.49 of 
     the HTS.
       (E) Men's and boys' cotton shirts classifiable under 
     statistical reporting number 6205.20.1000, 6205.20.2021, 
     6205.20.2026, 6205.20.2031, 6205.20.2061, 6205.20.2076, 
     6205.90, or 6211.32 of the HTS.
       (F) Men's and boys' cotton shirts not containing dobby 
     woven fabric classifiable under statistical reporting number 
     6205.20.2003, 6205.20.2016, 6205.20.2051, 6205.20.2066 of the 
     HTS.
       (G) Manmade fiber pajamas and sleepwear classifiable under 
     subheading 6107.22, 6107.99, 6108.32, 6207.22, 6207.99, or 
     6208.22 of the HTS.
       (H) Women's and girls' wool coats, overcoats, carcoats, 
     capes, cloaks, anoraks (including ski-jackets), windbreakers, 
     padded sleeveless jackets with attachments for sleeves, and 
     similar articles classifiable under subheading 6102.10, 
     6102.30, 6102.90, 6104.31, 6104.33, 6104.39, 6117.90, 
     6202.11, 6202.13, 6202.19, 6202.91, 6202.93, 6202.99, 
     6204.31, 6204.33, 6204.39, 6211.20, 6211.41, or 6117.90 of 
     the HTS.
       (I) Women's and girls' wool trousers, breeches, and shorts 
     classifiable under subheading 6104.61, 6104.63, 6104.69, 
     6117.90, 6204.61, 6204.63, 6204.69, 6211.20, 6211.41, or 
     6217.90 of the HTS.
       (J) Women's and girls' cotton shirts and blouses 
     classifiable under subheading 6206.10, 6206.30, 6206.90, 
     6211.42, or 6217.90 of the HTS.
       (K) Women's and girls' manmade fiber shirts, blouses, 
     shirt-blouses, sleeveless tank styles, and similar upper body 
     garments classifiable under subheading 6206.10, 6206.40, 
     6206.90, 6211.43, or 6217.90 of the HTS.
       (L) Women's and girls' manmade fiber coats, jackets, 
     carcoats, capes, cloaks, anoraks (including ski-jackets), 
     windbreakers, padded sleeveless jackets with attachments for 
     sleeves, and similar articles classifiable under subheading 
     6202.13, 6202.19, 6202.93, 6202.99, 6204.33, 6204.39, 
     6210.30, 6210.50, 6211.20, 6211.43, or 6217.90 of the HTS.
       (M) Cotton skirts classifiable under subheading 6104.19, 
     6104.52, 6104.59, 6204.12, 6204.19, 6204.52, or 6204.59 of 
     the HTS.
       (N) Manmade fiber skirts classifiable under subheading 
     6104.53, 6104.59, 6204.53, or 6204.59 of the HTS.
       (O) Men's and boys' manmade fiber coats, overcoats, 
     carcoats, capes, cloaks, anoraks (including ski-jackets), 
     windbreakers, padded sleeveless jackets with attachments for 
     sleeves, and similar articles classifiable under subheading 
     6201.13, 6201.19, 6201.93, 6201.99, 6210.20, 6210.40, 
     6211.20, or 6211.33 of the HTS.
       (P) Women's and girls' manmade fiber slips, petticoats, 
     briefs, panties, and underwear classifiable under subheading 
     6108.11, 6108.22, 6108.92, 6109.90, 6208.11, or 6208.92 of 
     the HTS.
       (Q) Gloves, mittens, and mitts of cotton classifiable under 
     subheading 6116.10, 6116.92, 6116.99, or 6216.00 of the HTS.

[[Page S4028]]

       (R) Other men's or boys' garments classifiable under 
     statistical reporting number 6211.32.0081 of the HTS.
       (f) Review and Report.--
       (1) In general.--The Comptroller General of the United 
     States shall, not later than 3 years after the date of the 
     enactment of this Act, and every 3 years thereafter, review 
     the effectiveness of this section in supporting the use of 
     United States fabrics and make recommendations necessary to 
     improve or expand the provisions of this section to ensure 
     support for the use of United States fabrics.
       (2) Recommendations.--After the second review required 
     under paragraph (1), the Comptroller General shall make a 
     determination regarding whether this section is effective in 
     supporting the use of United States fabrics and recommend to 
     Congress whether or not this section should be renewed.
       (g) Enforcement.--Preferential treatment under this section 
     shall not be provided to textile and apparel articles that 
     are imported from the Philippines unless the President 
     certifies to Congress that the Philippines is meeting the 
     following conditions:
       (1) A valid original textile visa issued by the Philippines 
     is provided to U.S. Customs and Border Protection with 
     respect to any article for which preferential treatment is 
     claimed. The visa issued is in the standard 9-digit format 
     required under the Electronic Visa Information System (ELVIS) 
     and meets all reporting requirements of ELVIS.
       (2) The Philippines is implementing the Electronic Visa 
     Information System (ELVIS) to assist in the prevention of 
     transshipment of apparel articles and the use of counterfeit 
     documents relating to the importation of apparel articles 
     into the United States.
       (3) The Philippines is enforcing the Memorandum of 
     Understanding between the United States of America and the 
     Republic of the Philippines Concerning Cooperation in Trade 
     in Textile and Apparel Goods, signed on August 23, 2006.
       (4) The Philippines agrees to provide, on a timely basis at 
     the request of U.S. Customs and Border Protection, and 
     consistently with the manner in which the records are kept in 
     the Philippines, a report on exports from the Philippines of 
     apparel articles eligible for preferential treatment under 
     this section, and on imports into the Philippines of yarns, 
     fabrics, fabric components, or components knit-to-shape that 
     are wholly formed in the United States.
       (5) The Philippines agrees to cooperate fully with the 
     United States to address and take action necessary to prevent 
     circumvention as provided in Article 5 of the Agreement on 
     Textiles and Clothing referred to in section 101(d)(4) of the 
     Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)).
       (6) The Philippines agrees to require Philippines producers 
     and exporters of articles eligible for preferential treatment 
     under this section to maintain, for at least 5 years after 
     the date of export, complete records of the production and 
     the export of such articles, including records of yarns, 
     fabrics, fabric components, and components knit-to-shape and 
     used in the production of such articles.
       (7) The Philippines agrees to provide, on a timely basis, 
     at the request of U.S. Customs and Border Protection, 
     documentation establishing the country of origin of articles 
     eligible for preferential treatment under this section, as 
     used by that country in implementing an effective visa 
     system.
       (8) The Philippines is to establish, within 60 days after 
     the date of the President's certification under this 
     paragraph, procedures that allow the Office of Textiles and 
     Apparel of the Department of Commerce (OTEXA) to obtain 
     information when fabric wholly formed in the United States is 
     exported to the Philippines to allow for monitoring and 
     verification before the imports of apparel articles 
     containing the fabric for which preferential treatment is 
     sought under this section reach the United States. The 
     information provided upon export of the fabrics shall 
     include, among other things, the name of the importer of the 
     fabric in the Philippines, the 8-digit HTS subheading 
     covering the apparel articles to be made from the fabric, and 
     the quantity of the apparel articles to be made from the 
     fabric for importation into the United States.
       (9) The Philippines has enacted legislation or promulgated 
     regulations to allow for the seizure of merchandise 
     physically transiting the territory of the Philippines and 
     that appears to be destined for the United States in 
     circumvention of the provisions of this Act.
       (h) Customs Procedures.--
       (1) In general.--
       (A) Penalties for exporters.--If the President determines, 
     based on sufficient evidence, that an exporter has engaged in 
     transshipments as defined in paragraph (2), then the 
     President shall deny for a period of 5 years all benefits 
     under this section to such exporter, any successor of such 
     exporter, and any other entity owned or operated by the 
     principal of the exporter.
       (B) Penalties for importers.--If the President determines, 
     based on sufficient evidence, that an importer has engaged in 
     transshipments as defined in paragraph (2), then the 
     President shall deny for a period of 5 years all benefits 
     under this section to such importer, any successor of such 
     importer, or any entity owned or operated by the principal of 
     the importer.
       (2) Definition of transhipment.--For purposes of paragraph 
     (1) and subsection (g), transshipment has occurred when 
     preferential treatment for an apparel article under this 
     section has been claimed on the basis of material false 
     information concerning the country of origin, manufacture, 
     processing, cutting, or assembly of the article or of any 
     fabric, fabric component, or component knit-to-shape from 
     which the apparel article was cut and assembled. For purposes 
     of this paragraph, false information is material if 
     disclosure of the true information would have meant that the 
     article is or was ineligible for preferential treatment under 
     this section.
       (i) Proclamation Authority.--The President shall issue a 
     proclamation to carry out this section not later than 60 days 
     after the date of the enactment of this Act. The President 
     shall consult with the Committee on Finance of the Senate and 
     the Committee on Ways and Means of the House of 
     Representatives in preparing such proclamation.

     SEC. 5. EFFECTIVE DATE.

       This Act shall apply to articles entered, or withdrawn from 
     warehouse for consumption, on or after the 15th day after the 
     date on which the President issues the proclamation required 
     by section 4(i).

     SEC. 6. TERMINATION.

       (a) In General.--The preferential duty treatment provided 
     under this Act shall remain in effect for a period of 7 years 
     beginning on the effective date provided for in section 5.
       (b) GSP Eligibility.--The preferential duty treatment 
     provided under this Act shall terminate if and when the 
     Philippines becomes ineligible for designation as a 
     beneficiary developing country under title V of the Trade Act 
     of 1974 (19 U.S.C. 2461 et seq.).
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