[Federal Register Volume 63, Number 114 (Monday, June 15, 1998)]
[Notices]
[Pages 32697-32698]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-15809]
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DEPARTMENT OF THE TREASURY
Customs Service
Country of Origin Marking Rules for Textiles and Textile Products
Advanced in Value, Improved in Condition, or Assembled Abroad
AGENCY: U.S. Customs Service, Department of the Treasury.
ACTION: Proposed interpretation; solicitation of comments.
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SUMMARY: This notice advises the public that Customs is proposing a new
interpretation concerning the country of origin rules for certain
imported textiles and textile products. It is Customs' proposed
position that 19 CFR 12.130(c) should not control for purposes of
country of origin marking of textiles and textile products, and that
Chapter 98, Subchapter II, U.S. Note 2(a), Harmonized Tariff Schedule
of the United States (HTSUS), does not apply for country of origin
marking purposes.
DATES: Comments must be received on or before August 14, 1998.
ADDRESSES: Written comments (preferably in triplicate) may be addressed
to the Regulations Branch, Office of Regulations and Rulings, U.S.
Customs Service, 1300 Pennsylvania Avenue, N.W., Washington, D.C.
20229. Comments submitted may be inspected at the Regulations Branch,
Office of Regulations and Rulings, U.S. Customs Service, 1300
Pennsylvania Avenue, N.W., Washington, D.C.
FOR FURTHER INFORMATION CONTACT: Monika Brenner, Special Classification
and Marking Branch, Office of Regulations and Rulings (202-927-1675).
SUPPLEMENTARY INFORMATION:
Background
On May 9, 1984, the President issued Executive Order 12475 to
address a number of problems that had arisen in the context of the U.S.
textile import program. These problems included (1) the absence of
specific regulatory standards for determining the origin of imported
textiles and textile products for purposes of textile agreements and
(2) an ever increasing number and variety of instances in which
attempts were made to circumvent and frustrate the objectives of the
United States textile import program and the bilateral and multilateral
textile agreements negotiated thereunder. Section 1(a) of that
Executive Order instructed the Secretary of the Treasury, in accordance
with policy guidance provided by the Committee for the Implementation
of Textile Agreements (CITA) to issue regulations governing the entry
of textiles and textile products subject to section 204 of the
Agricultural Act of 1956, as amended (7 U.S.C. 1854).
By T.D. 85-38, published in the Federal Register on March 5, 1985
(50 FR 8710), Customs adopted as a final rule interim amendments to
part 12 of the Customs Regulations (19 CFR part 12), which involved the
addition of a new Sec. 12.130 that established criteria to be used in
determining the country of origin of imported textiles and textile
products for purposes of multilateral or bilateral textile agreements
entered into by the United States pursuant to section 204, Agricultural
Act of 1956, as amended. In that final rule document, Customs stated
that the principles of origin contained in Sec. 12.130 are applicable
to merchandise for all purposes, including duty and marking. In T.D.
90-17 (55 FR 7303, March 1, 1990), which involved a change of practice
to conform several previously published Customs positions to certain
provisions within 19 CFR 12.130, Customs again stated that the criteria
set forth in 19 CFR 12.130 should be used in making country of origin
determinations for all Customs purposes, including determinations for
purposes of country of origin marking and for assessing duty on
imported articles.
Paragraph (c) of Sec. 12.130 operates as an exception to the basic
country of origin rule set forth in paragraph (b) of Sec. 12.130.
Paragraph (c)(1) of Sec. 12.130 specifically provides, in part, that in
order to have:
a single country of origin for a textile or textile product,
notwithstanding paragraph (b), merchandise which falls within the
purview of Chapter 98, Subchapter II, Note 2, Harmonized Tariff
Schedule of the United States, may not, upon its return to the U.S.,
be considered a product of the U.S.
Furthermore, 19 CFR 12.130(c)(1) provides that:
Chapter 98, Subchapter II, Note 2, Harmonized Tariff Schedule of the
United States, provides that any product of the U.S. which is
returned after having been advanced in value or improved in
condition abroad, or assembled abroad, shall be a foreign article
for the purposes of the Tariff Act of 1930, as amended.
Paragraph (c)(2) of section 12.130, added by T.D. 93-27 (58 FR 19347,
April 14, 1993), accords essentially the same treatment to products of
insular possessions.
In T.D. 95-69, published at 60 FR 46188 (September 5, 1995),
Customs issued final amendments to the Customs Regulations (set forth
principally at 19 CFR 102.21) to implement the provisions of section
334 of the Uruguay Round Agreements Act (URAA) regarding the country of
origin of textile and apparel products, that are to be used for
purposes of the Customs laws (including the marking statute, section
304, Tariff Act of 1930, as amended (19 U.S.C. 1304)) and the
administration of quantitative restrictions and except as otherwise
provided for by statute. T.D. 95-69 also amended 19 CFR 12.130(b), (d),
and (e)(1) to clarify that the origin of textile and apparel products
covered by 19 CFR 102.21 are determined pursuant to that regulatory
provision. Since T.D. 95-69 did not amend 19 CFR 12.130(c)(1) or (2),
and since T.D. 85-38 and T.D. 90-17 reflected the Customs position that
19 CFR 12.130 should be used in making country of origin determinations
for all Customs purposes, including determinations for purposes of
country of origin marking, 19 CFR 12.130(c) still applies to products
of the United States or insular possessions advanced in value, improved
in condition, or assembled abroad for purposes of country of origin
marking.
In connection with the development of the final NAFTA Marking Rules
(T.D. 96-48, published at 61 FR 28932, June 6, 1996), Customs stated in
a notice of proposed rulemaking, published at 60 FR 22312, 22318 (May
5, 1995), that it had reconsidered the position originally set forth in
the interim NAFTA Marking Rules (T.D. 94-4, published at 59 FR 110,
January 3, 1994) that Chapter 98, Subchapter II, U.S. Note 2(a), HTSUS,
has application for general country of origin purposes, including
marking. (Chapter 98, Subchapter II, U.S. Note 2(a), HTSUS, is
identical to the U.S. Note 2 referred to in 19 CFR 12.130(c);
subsequent to the promulgation of 19 CFR 12.130(c), U.S. Note 2 was
divided into two paragraphs, U.S. Note 2(a) and (b). U.S. Note 2(b)
provides a special preferential tariff treatment only for goods
imported from countries listed in General Note 7, HTSUS, that are made
wholly from U.S. materials and ingredients. U.S. Note 2(b) is not
applicable and totally unrelated to this proposal. See H.R. Conf. Rep.
No. 650, 101st Cong., 2d Sess. 133, reprinted in 1990 U.S. Code &
Admin. News 928, 1023; and subheading 9802.00.8040,
[[Page 32698]]
HTSUS). Accordingly, in order to reflect the reconsidered position of
Customs reflected in the May 5, 1995 notice of proposed rulemaking, the
final NAFTA Marking Rules document included the removal of 19 CFR
102.14 and 19 CFR 10.22. Section 102.14 provided that no good last
advanced in value or improved in condition outside the United States
has United States origin, and Sec. 10.22 provided that the country of
origin of assembled goods entitled to a duty allowance under subheading
9802.00.80, HTSUS, was the country of assembly for marking purposes.
Accordingly, since Customs has already stated that Chapter 98,
Subchapter II, U.S. Note 2(a), HTSUS, no longer applies for country of
origin marking purposes, Customs proposes to adopt a new position that
19 CFR 12.130(c) does not apply for purposes of country of origin
marking. However, 19 CFR 12.130(c) will still be applicable for all
other purposes specified in T.D. 85-38 and T.D. 90-17, since T.D. 95-69
as stated above did not repeal 19 CFR 12.130(c).
It should be noted that this change does not exempt textile and
apparel products imported into the United States from the labeling
requirements of the Textile Fiber Products Identification Act, 15
U.S.C. 70, enforced by the Federal Trade Commission. For example, the
Rules and Regulations under the Textile Fiber Products Identification
Act, 16 CFR 303.33(a)(1), provides that unless exempt under section 12
of that Act, each imported textile fiber product shall be labeled with
the name of the country where such imported product was processed or
manufactured. Therefore, once it is determined under the proposed new
position set forth herein that an imported textile or apparel product
is not required to be marked in accordance with 19 U.S.C. 1304, as
implemented by 19 CFR 102.21, the imported textile or apparel product
would still be required to be labeled in accordance with the Textile
Fiber Products Identification Act.
Authority
This notice is published in accordance with Sec. 177.9, Customs
Regulations (19 CFR 177.9).
Comments
Before adopting this proposed change in position, consideration
will be given to any written comments timely submitted to Customs.
Comments submitted will be available for public inspection in
accordance with the Freedom of Information Act (5 U.S.C. 552),
Sec. 1.4, Treasury Department Regulations (31 CFR 1.4), and
Sec. 103.11(b), Customs Regulations (19 CFR 103.11(b)), on regular
business days between the hours of 9 a.m. and 4:30 p.m. at the
Regulations Branch, 1300 Pennsylvania Avenue, NW., Washington, DC.
Samuel H. Banks,
Acting Commissioner of Customs.
Approved: May 26, 1998.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 98-15809 Filed 6-12-98; 8:45 am]
BILLING CODE 4820-02-P