[Federal Register Volume 63, Number 64 (Friday, April 3, 1998)]
[Notices]
[Pages 16474-16476]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8826]


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COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE AGREEMENTS


Implementation and Enforcement of the Special Access Program for 
Caribbean Basin Initiative and Andean Trade Preference Act Countries

March 30, 1998.
AGENCY: Committee for the Implementation of Textile Agreements (CITA).

ACTION: Notice and directive to the Commissioner of Customs amending 
requirements for participation in the Special Access Program for 
Caribbean Basin Initiative and Andean Trade Preference Act Countries; 
termination of Form ITA-370P.

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SUMMARY: This notice sets forth amended requirements for participating 
in the Caribbean Basin Initiative (CBI) Special Access Program and the 
Special Access Program for Andean Trade Preference Act (ATPA) countries 
(collectively, the ``Special Access Program''). Under the Special 
Access Program, textile products assembled in CBI and ATPA countries 
from fabric formed and cut in the United States that meet the 
requirements of the Special Access Program are guaranteed access to the 
U.S. market. Textile products that meet the requirements of the Special 
Access Program are eligible for tariff treatment as articles assembled 
abroad from U.S. components. Currently, participants in the Special 
Access Program are required to file a Special Access/Special Regime 
Export Declaration (Form ITA-370P) prior to the exportation of 
qualifying parts and to present a completed Form ITA-370P as part of 
the entry package when the assembled products are imported into

[[Page 16475]]

the United States. For products assembled from U.S. formed and cut 
fabric that are exported from the United States on or after May 4, 
1998, participants will no longer be required to file and present a 
Form ITA-370P. Failure to comply with the requirements set forth in 
this notice may result in suspension of eligibility to participate in 
the Special Access Program. This notice supersedes certain previous 
notices setting forth the requirements for participation in the Special 
Access Program.
EFFECTIVE DATE: May 4, 1998.
FOR FURTHER INFORMATION CONTACT: Lori E. Mennitt, International Trade 
Specialist, Office of Textiles and Apparel, U.S. Department of 
Commerce, (202) 482-3400.

SUPPLEMENTARY INFORMATION:

    Authority: Section 204 of the Agricultural Act of 1956, as 
amended (7 U.S.C. 1854); Executive Order 11651 of March 3, 1972, as 
amended.

    On February 20, 1986, the President announced a program to 
guarantee access to the U.S. market for Caribbean-produced textile 
products assembled from fabric formed and cut in the United States. 
Caribbean countries entered into bilateral agreements with the United 
States under which guaranteed levels of access were established for 
their exports of qualifying assembled textile products. These 
guaranteed access levels are distinct from the quotas or designated 
consultation levels which apply to textile products that do not meet 
the requirements of the Special Access Program. Textile products that 
meet the requirements of the Special Access Program must be entered 
under heading 9802.00.8015 of the Harmonized Tariff Schedule of the 
United States (HTSUS), which applies to articles assembled abroad from 
U.S. components, and are subject to duty on the value of the assembled 
textile product less the value of the U.S. components. The program has 
been implemented by Federal Register notices published on June 11, 1986 
(51 FR 21208); October 20, 1986 (51 FR 37214); May 15, 1987 (52 FR 
18414); July 10, 1987 (52 FR 26057); November 15, 1989 (54 FR 47549); 
December 6, 1989 (54 FR 50425) and June 7, 1991 (56 FR 26394). In a 
Federal Register notice dated August 30, 1995 (60 FR 45144), the 
Committee for the Implementation of Textile Agreements (CITA) announced 
the establishment of a similar Special Access Program for textile 
products assembled in ATPA designated countries from fabric formed and 
cut in the United States. These notices are hereby superseded. In this 
notice, the two programs are collectively referred to as the ``Special 
Access Program.'' Also see 52 FR 6049, published on February 27, 1987; 
52 FR 6594, published on March 4, 1987; 55 FR 3079, published on 
January 30, 1990; 55 FR 21047, published on May 22, 1990; 60 FR 2740, 
published on January 11, 1995; and 61 FR 38236, published on July 23, 
1996.
    General Requirements; Qualifying Products
    In order to qualify for Special Access Program treatment, a textile 
product must meet the following requirements:
    (1) the product must be assembled in a CBI or ATPA country with 
which the United States has entered into a bilateral agreement 
regarding guaranteed access levels under the Special Access Program;
    (2) the product must be assembled from fabric formed and cut in the 
United States; i.e., all fabric components of the assembled product 
(with the exception of findings and trimmings, including elastic 
strips) must be U.S. formed and cut. This requirement applies to all 
textile components of the assembled product, including linings and 
pocketing, except as provided in (4) below. Greige goods imported into, 
and then finished in, the United States are not considered fabric 
formed and cut in the United States. Fabric that is woven or knitted in 
the United States from yarn is considered U.S.-formed;
    (3) the importer of the product and the exporter of the component 
parts from which the product is assembled must be the same entity or 
person; and
    (4) findings and trimmings of non-U.S. origin may be incorporated 
into the assembled product provided they do not exceed 25 percent of 
the cost of the components of the assembled product. Findings and 
trimmings include sewing thread, hooks and eyes, snaps, buttons, ``bow 
buds,'' decorative lace trim, elastic strips, zippers, including zipper 
tapes, and labels. Elastic strips are considered findings or trimmings 
only if less than one inch in width and used in the production of 
brassieres. Certain non-U.S. formed, U.S. cut interlinings for suit 
jackets and suit-type jackets may currently qualify as findings and 
trimmings under a temporary amendment to the Special Access Program. 
See 62 FR 49206 (September 23, 1997) and 62 FR 66057 (December 17, 
1997);
    (5) upon entry into the United States, the product must be 
classified under heading 9802.00.8015 of the HTSUS.
    Recordkeeping Requirements
    The following documents shall be maintained and made available for 
review by the U.S. Customs Service and CITA:
    (1) entry documents made during the quarter;
    (2) design style costing sheets or similar documents providing a 
complete description of the assembled products;
    (3) cutting tickets, including the name and location of the cutting 
facility for those entries;
    (4) mill invoices, including the name of the mill where the fabric 
was formed. If the fabric was purchased from a third party, the 
participant is responsible for obtaining the mill invoice. The 
participant must also obtain a signed statement from a principal at the 
mill that the fabric is of U.S. origin. This can be stated directly on 
the invoice or on a separate document that relates to each specific 
shipment of fabric. Vertically integrated participants, i.e., 
participants which both form and cut fabric, should retain an internal 
transfer document or other documentary proof that they formed the 
fabric in the United States.
    (5) transportation documents (mill to cutting facility; cutting 
facility to border/assembler); and
    (6) export documentation.
    The above documents shall be maintained by calendar quarter, by 
country, and by category; and shall be retained for three years from 
the date of the exportation of the U.S. formed and cut fabric. The 
documents shall be organized and filed (preferably in a single 
location) to facilitate Customs review.
    Special Access/Special Regime Export Declaration (Form ITA-370P)
    CITA has determined that the Special Access/Special Regime Export 
Declaration (Form ITA-370P) is no longer necessary for the efficient 
administration of the Special Access Program. For component parts 
exported from the United States on or after May 4, 1998, participants 
in the Special Access Program will no longer be required to file and 
present this form. For assembled products imported into the United 
States that were made from component parts exported from the United 
States on or after May 4, 1998, participants in the Special Access 
Program will no longer be required to file and present this form. 
Participants should be aware, however, that the representations made at 
the time of entry of products alleged to qualify under the Special 
Access Program continue to be subject to federal law prohibiting false 
or misleading statements (see below).
    Enforcement Procedures and Penalties
    In order to determine that participants in the Special Access 
Program comply fully with the Special Access Program

[[Page 16476]]

requirements set forth in this notice, Customs will continue to conduct 
a series of Post Entry Compliance reviews. These reviews will be 
conducted for entries made for the first quarter of 1998 and shall 
continue for each successive quarter. During the course of such a 
review, the participant must provide Customs officials with evidence, 
through the documents describes above, that all products entered under 
the Special Access Program qualify for Special Access Program 
treatment.
    False or inaccurate representations made in the context of the 
Special Access Program may result in liability under U.S. laws 
prohibiting false or misleading statements, including 18 U.S.C. 1001 
and 19 U.S.C. 1592. Moreover, participants may be suspended from 
participation in the Special Access Program for such representations, 
for failing to abide by the Special Access Program's record keeping 
requirements, or for otherwise violating the terms of the Program.
    In the event of credible evidence that a participant has violated 
the terms of the Special Access Program, the Chairman of CITA will 
notify the participant in writing of the alleged violation. The 
participant will have 30 days to respond and/or request a meeting with 
CITA representatives to discuss the alleged violation. After reviewing 
the evidence and the participant's response, CITA will determine 
whether a violation occurred and what penalty, if any, is appropriate. 
Penalties may include temporary or permanent suspension from 
participation in the Special Access Program. In determining the 
appropriate penalty, CITA will consider all relevant factors, including 
the seriousness of the violation, previous violations by the 
participant, the experience of the participant with the Special Access 
Program, and the steps taken by the participant to prevent future 
violations.
    CITA has determined that this action falls within the foreign 
affairs exception to the rulemaking provisions of 5 U.S.C. 553(a)(1).
J. Hayden Boyd,
Acting Chairman, Committee for the Implementation of Textile 
Agreements.

Committee for the Implementation of Textile Agreements
March 30, 1998.

Commissioner of Customs,
Department of the Treasury, Washington, DC 20229.

    Dear Commissioner: This directive amends, but does not cancel, 
the directives issued to you on May 15, 1990 for Costa Rica; 
February 25, 1987 for the Dominican Republic; January 6, 1995 for El 
Salvador; January 24, 1990 for Guatemala; July 18, 1996 for 
Honduras; and February 19, 1987 for Jamaica, by the Chairman, 
Committee for the Implementation of Textile Agreements, for the 
Special Access Program.
    Effective on May 4, 1998, for component parts exported from the 
United States on or after May 4, 1998, participants in the Special 
Access Program will no longer be required to file and present the 
Special Access/Special Regime Export Declaration (Form ITA-370P). 
For assembled products imported into the United States that were 
made from component parts exported from the United States on or 
after May 4, 1998, participants in the Special Access Program will 
no longer be required to file and present this form. The 
representations made at the time of entry of products alleged to 
qualify under the Special Access Program continue to be subject to 
federal law prohibiting false or misleading statements.
    In order to determine that participants in the Special Access 
Program comply fully with the Special Access Program requirements, 
Customs will continue to conduct a series of Post Entry Compliance 
reviews. These reviews will be conducted for entries made for the 
first quarter of 1998 and shall continue for each successive 
quarter. During the course of such a review, the participant must 
provide Customs officials with evidence that all products entered 
under the Special Access Program qualify for Special Access Program 
treatment.
    The Committee for the Implementation of Textile Agreements has 
determined that this action falls within the foreign affairs 
exception of the rulemaking provisions of 5 U.S.C. 553(a)(1).
    Sincerely,
J. Hayden Boyd,
Acting Chairman, Committee for the Implementation of Textile 
Agreements.
[FR Doc. 98-8826 Filed 4-2-98; 8:45 am]
BILLING CODE 3510-DR-F