[Federal Register Volume 65, Number 208 (Thursday, October 26, 2000)]
[Proposed Rules]
[Pages 64178-64188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-27522]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 10

[T.D. 00-74]
RIN 1515-AC79


Refund of Duties Paid on Imports of Certain Wool Products

AGENCY:  U.S. Customs Service, Department of the Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes to amend the Customs Regulations to 
implement the provisions of section 505 of Title V of the Trade and 
Development Act of 2000. Section 505 permits U.S. manufacturers of 
certain wool articles to claim a limited refund of duties paid in each 
of calendar years 2000, 2001, and 2002 on imports of select wool 
products. The maximum amount eligible to be refunded in each of these 
successive claim years is limited to an amount not to exceed one-third 
of the amount of duties actually paid on such wool products imported in 
calendar year 1999. The proposed amendments contained in this document 
set forth the eligibility, documentation, and procedural requirements 
necessary to substantiate a claim for a duty refund under the terms of 
the statute.

DATES: Comments must be received on or before November 16, 2000.

ADDRESSES: Written comments (preferably in triplicate) may be submitted 
to and inspected at the Regulations Branch, Office of Regulations and 
Rulings, U.S. Customs Service, 1300 Pennsylvania Avenue, NW., 3rd 
Floor, Washington, DC. 20229.

FOR FURTHER INFORMATION CONTACT: Bruce Ingalls, Chief, Entry and 
Drawback Management (202) 927-1082.

SUPPLEMENTARY INFORMATION:

Background

    On May 18, 2000, President Clinton signed into law the Trade and 
Development Act of 2000 (``the Act''), Public Law 106-200, 114 Stat. 
251. Title V of the Act concerns imports of certain wool articles and 
sets forth provisions intended to provide tariff relief to U.S. 
manufacturers of men's and boys' worsted wool suits, suit-type jackets, 
and trousers. Within Title V, section 505

[[Page 64179]]

provides for a limited refund of duties paid on imports of certain wool 
articles.

Section 505

    Paragraph (a) of section 505 provides for a refund of duties paid 
on imports of certain worsted wool fabrics. Specifically, paragraph (a) 
provides for a limited refund of duties paid, in each of calendar years 
2000, 2001 and 2002, on imports of worsted wool fabrics of the kind 
described in subheadings 9902.51.11 or 9902.51.12 of the Harmonized 
Tariff Schedule of the United States (HTSUS), to manufacturers of men's 
or boys' suits, suit-type jackets, or trousers of such imported worsted 
wool fabric, who may or may not be the importer of the worsted wool 
fabric. The amount of duties eligible to be refunded to the 
manufacturer in each of calendar years 2000, 2001, and 2002 is limited 
to an amount not to exceed one-third of the amount of duties actually 
paid by the manufacturer or the importer on such worsted wool fabrics 
imported in calendar year 1999.
    It is noted that the statute prohibits a broker or other individual 
acting on behalf of the manufacturer from being eligible to claim such 
a duty refund.
    Section 505(b) provides for a refund of duties paid on imports of 
certain wool yarn. This provision permits a manufacturer of worsted 
wool fabric, who has imported wool yarn of the kind described in 
subheading 9902.51.13, HTSUS, to be eligible to claim a limited refund 
of the duties paid on entries of such wool yarn in each of calendar 
years 2000, 2001, and 2002. The amount of duties eligible to be 
refunded in each of these calendar years is limited to an amount not to 
exceed one-third of the amount of duties actually paid by the 
importing-manufacturer on such wool yarn imported in calendar year 
1999.
    Section 505(c) provides for a refund of duties paid on imports of 
certain wool fiber and wool top. Paragraph (c) permits a manufacturer 
of wool yarn or wool fabric, who has imported wool fiber or wool top of 
the kind described in subheading 9902.51.14, HTSUS, to be eligible to 
claim a limited refund of the duties paid on entries of such wool fiber 
or wool top in each of calendar years 2000, 2001, and 2002. Again, the 
amount of duties eligible to be refunded in each of these calendar 
years is limited to an amount not to exceed one-third of the amount of 
duties actually paid by the importing-manufacturer on such wool yarn 
imported in calendar year 1999.
    It should be noted that while sections 505(b) and (c) require that 
a manufacturer also be the importer in order to be eligible to claim a 
wool duty refund under the terms of the statute, section 505(a) does 
not require a manufacturer of men's or boys' suits, suit-type jackets, 
or trousers of worsted wool fabric to also be the importer of the 
worsted wool fabric to be eligible for the refund.
    Section 505(d) requires that any claimant applying for a wool duty 
refund must identify each entry involved and provide appropriate 
information by which Customs is able to substantiate a claim for a 
refund of duties under this statute.

HTSUS Subheadings Identified in Sections 501, 502 and 505 of the Act

    Paragraphs (a), (b) and (c) to section 505 identify the HTSUS 
tariff provisions set forth in subchapter II of chapter 99 that provide 
the basis for a duty refund claim under this section. The chapter 99 
provisions were promulgated in sections 501 and 502 of the Act for 
purposes of implementing temporary duty reductions and temporary duty 
suspensions for certain wool products.
    Although the chapter 99 subheadings do not become effective until 
January 1, 2001, they are statutorily defined in sections 501 and 502 
of the Act as including subheadings for eligible wool products that 
were in effect in the 1999 and 2000 HTSUS. As section 505 permits 
claims for duty refunds to be made in calendar year 2000, and the 
amount of duties eligible to be refunded for claim year 2000 is limited 
to an amount not to exceed one-third of duties actually paid on select 
wool products imported in calendar year 1999, it is necessary to 
identify the 1999 and 2000, HTSUS, wool provisions that correlate to 
the chapter 99 subheadings identified in section 505. To that end, it 
is noted that:
     Section 501(a)(1) creates new subheading 9902.51.11, 
HTSUS, that describes ``[F]abrics, of worsted wool, with average fiber 
diameters greater than 18.5 micron, all the foregoing certified by the 
importer as suitable for use in making suits, suit-type jackets, or 
trousers (provided for in subheading 5111.11.70, 5111.19.60, 
5112.11.20, or 5112.19.90)'';
     Section 501(b)(1) creates new subheading 9902.51.12, 
HTSUS, that describes ``[F]abrics, of worsted wool, with average fiber 
diameters of 18.5 micron or less, all the foregoing certified by the 
importer as suitable for use in making suits, suit-type jackets, or 
trousers (provided for in subheading 5111.11.70, 5111.19.60, 
5112.11.20, or 5112.19.90)'';
     Section 502(a) creates new subheading 9902.51.13, HTSUS, 
that describes ``[Y]arn, of combed wool, not put up for retail sale, 
containing 85 percent or more by weight of wool, formed with wool 
fibers having diameters of 18.5 micron or less (provided for in 
subheading 5107.10.00)''; and
     Section 502(b) creates new subheading 9902.51.14, HTSUS, 
that describes ``[W]ool fiber, waste, garnetted stock, combed wool, or 
wool top, having average fiber diameters of 18.5 micron or less 
(provided for in subheadings 5101.11; 5101.19; 5101.21; 5101.29; 
5101.30; 5103.10; 5103.20; 5104.00; 5105.21; or 5105.29)''.

Proposed Implementation

    In this document, Customs is proposing its implementation of 
section 505. As the wool duty refund program authorized by section 505 
limits the total amount of refunds available to eligible claimants in 
each of calendar years 2000, 2001 and 2002, to an amount not to exceed 
one-third of the duties paid on eligible wool products imported in 
calendar year 1999, Customs needs to determine the total amount of 
duties paid in calendar year 1999 both on an aggregate level and per 
claimant.

Using ACS To Determine the Amount of Duty Refund Eligible To Be 
Received in Each of Calendar Years 2000, 2001 and 2002

    Customs will use government data generated by the Automated 
Commercial System (ACS) to determine the total amount of duties paid on 
eligible wool products imported in calendar year 1999. To this end, 
separate ACS queries will be run to determine the total amount of 
duties paid on wool products imported in calendar year 1999 for the 
following HTSUS subheading categories:

 5112.11.20 and 5112.19.90;
 5107.10.00; and
 5101.11, 5101.19, 5101.21, 5101.29, 5101.30, 5103.10, 5103.20, 
5104.00, 5105.21, and 5105.29.

    For purposes of duty refund claims made pursuant to section 505(a), 
one-third of the ACS-generated amount for duties paid on 1999 imports 
of merchandise described in HTSUS subheadings 5112.11.20 and 5112.19.90 
will establish the maximum amount that is eligible to be refunded in 
calendar years 2000, 2001, and 2002.
    For purposes of duty refund claims made pursuant to section 505(b), 
one-third of the ACS-generated amount for duties paid on 1999 imports 
of merchandise described in HTSUS subheadings 5107.10.0 will establish 
the

[[Page 64180]]

maximum amount that is eligible to be refunded in calendar years 2000, 
2001, and 2002.
    For purposes of duty refund claims made pursuant to section 505(c), 
one-third of the ACS-generated amount for duties paid on 1999 imports 
of merchandise described in HTSUS subheadings 5101.11, 5101.19, 
5101.21, 5101.29, 5101.30, 5103.10, 5103.20, 5104.00, 5105.21, and 
5105.29 will establish the maximum amount that is eligible to be 
refunded in calendar years 2000, 2001, and 2002.
    It should be noted that although one-third of the ACS-generated 
figure for each of these categories establishes the maximum amount that 
is eligible to be refunded in calendar years 2000, 2001, and 2002, this 
entire amount may not necessarily be refunded. Only those amounts of 
duties that are substantiated by manufacturers, to Customs 
satisfaction, will be eligible for refund.

Carded Wool Fabrics Do Not Provide the Basis for a Section 505 Wool 
Duty Refund

    Customs notes that HTSUS subheadings 5111.11.70 and 5111.19.60 are 
not included in the above discussion for the following reason. Section 
505(a) of the Act authorizes a refund of duties paid on imports of 
worsted wool fabrics. Section 505(a) references two new HTSUS 
subheadings, 9902.51.11 and 9902.51.12, that describe worsted wool 
fabrics and were intended to provide the basis for a wool duty refund 
under the terms of the statute. Even though these chapter 99 tariff 
provisions were created in section 501(a)(1) of the Act and are 
statutorily defined as including HTSUS subheadings 5111.11.70 and 
5111.19.60, these two HTSUS subheadings provide for carded wool fabrics 
and not worsted wool fabrics. Accordingly, Customs will not consider 
them purposes of the proposed wool duty refund program. Rather, Customs 
will only consider the correlating subheadings covering worsted wool 
fabrics identified above, i.e., HTSUS subheadings 5112.11.20 and 
5112.19.90.

Proposed Customs Regulations

    Customs is proposing to amend the Customs Regulations by adding a 
new Sec. 10.184 to implement the terms of section 505. Section 10.184 
sets forth the proposed eligibility, documentation and procedural 
requirements necessary for a claimant to establish the amount of duties 
paid on eligible wool products in calendar year 1999, and to 
substantiate a claim for a duty refund in the years 2000, 2001 and 2002 
under the statute.

Prospective Wool Duty Refund Claimants Must File a Letter of Intent 
With Customs To Substantiate the Amount of Duties Paid on Eligible 
Wool Products Imported in Calendar Year 1999

    Customs is proposing that an eligible manufacturer that expects to 
seek a section 505 duty refund in calendar years 2000, 2001, and 2002, 
must file with Customs a letter of intent to that effect, along with 
documentation that substantiates, to Customs satisfaction, the amount 
of duties paid on eligible wool products imported in calendar year 
1999.
    As section 505 permits both importing-manufacturers and, in limited 
circumstances, manufacturers who are not importers, to claim a duty 
refund, the proposed requirements for filing a letter of intent, with 
appropriate substantiating documentation, are different for each class 
of claimant.

Substantiating the Amount of Duties Paid on Eligible Wool Products 
Imported in Calendar Year 1999 Where the Manufacturer Is the Importer

    In the case of a manufacturer who is the importer of the eligible 
wool products imported in calendar year 1999, it is proposed that the 
letter of intent set forth the total amount of duties actually paid by 
the importing-manufacturer on such merchandise. The prospective 
claimant must attach to the letter of intent a list of relevant entry 
summary numbers that substantiates this amount. The importing-
manufacturer may not list any entry summary number that did not 
liquidate under the HTSUS subheadings that provide a basis for a wool 
duty refund.

Substantiating the Amount of Duties Paid on Worsted Wool Fabric 
Imported in Calendar Year 1999 Where the Manufacturer Is Not the 
Importer, but Relevant Entry Summary Information Is Available

    In the case of a manufacturer who is not the importer of worsted 
wool fabric imported in calendar year 1999, it is proposed that the 
manufacturer's letter of intent must identify the importer(s) or 
supplier(s) who sold such fabric to the manufacturer. It is further 
proposed that the non-importing manufacturer must attach to the letter 
of intent copies of all relevant invoices, a completed Customs Form 
(CF) 5106--Importer ID Input Record (for purposes of administering the 
duty refund), and a signed affidavit that states that the manufacturer 
purchased the imported worsted wool fabric from an identified 
importer(s), or from an identified supplier(s) who has provided the 
manufacturer with invoices or other substantiating documentation that 
establishes that the identified supplier(s) purchased such fabric from 
the identified importer(s). The manufacturer's signed affidavit must 
state that either the importer of the worsted wool fabric has agreed to 
provide the relevant entry summary numbers directly to the 
manufacturer, in which case the relevant entry summary numbers will be 
attached to the manufacturer's signed affidavit, or the importer has 
agreed to submit the relevant entry summary information directly to 
Customs as an attachment to the importer's signed affidavit.

Required Content of an Importer's Signed Affidavit in Support of a Non-
Importing Manufacturer's Letter of Intent

    If an importer chooses to assist in the substantiation of a 
manufacturer's letter of intent, and elects to submit the relevant 
entry summary numbers directly to Customs, it is proposed that the 
importer must submit such information as an attachment to a signed 
affidavit. The attached entry summary numbers must substantiate the 
amount of fabric sold to the identified manufacturer, as evidenced by 
the manufacturer's submitted invoices, and the importer must state that 
no entry summary number has been listed that did not liquidate under 
HTSUS subheadings 5112.11.20 or 5112.19.90. The importer's signed 
affidavit must attest to the fact that the importer sold worsted wool 
fabric, of a kind described in HTSUS subheadings 5112.11.20 or 
5112.19.90, and imported in calendar year 1999, either directly to the 
identified manufacturer or to the manufacturer through an identified 
third-party supplier.

Substantiating the Amount of Duties Paid on Worsted Wool Fabric 
Imported in Calendar Year 1999 Where the Manufacturer Is Not the 
Importer, and Entry Summary Information Is Not Available

    Where a manufacturer is the purchaser, but not the importer, of 
worsted wool fabric of the kind imported in calendar year 1999 and 
described in HTSUS subheadings 5112.11.20 or 5112.19.90, and the 
importer of such fabric is unable or unwilling to provide the relevant 
entry summary numbers to either the manufacturer or Customs, Customs is 
aware that it may be difficult for the manufacturer to reconstruct the 
amount of duties actually paid on such imports. Accordingly, it is 
proposed that in such circumstances a non-importing

[[Page 64181]]

manufacturer may attempt to substantiate the amount of duties paid on 
calendar year 1999 imports of worsted wool fabric by submitting 
relevant calendar year 1999 invoices to Customs. Although early year 
1999 invoices may describe fabric that was actually imported in 
calendar year 1998, and, conversely, some worsted wool fabric that was 
actually imported in calendar year 1999 may be described in invoices 
dated year 2000 and later, Customs is of the view that limiting 
acceptable invoices for purposes of substantiating the amount of duties 
paid in calendar year 1999 to those invoices that are dated calendar 
year 1999 represents a reasonable compromise. An invoice used for this 
purpose must relate to fabric that is of the kind described in HTSUS 
subheadings 5112.11.20 or 5112.19.90. Additionally, it is proposed that 
where an invoice is used to substantiate the amount of duties paid on 
worsted wool fabric imported in calendar year 1999, an adjustment must 
be made to the monetary amount reflected in the invoice as that amount 
includes the fabric seller's mark-up, each supplier's mark-up in a 
distribution chain, as well as the duties already paid upon importation 
of the fabric. To take this into account Customs proposes, and is 
seeking public comment on, the use of the following formula to deduct 
mark-up and calculate the duties paid on the adjusted invoice amount:
    (1) Customs will deduct 10 percent (to reflect seller's imputed 
mark-up) from any invoice amount used to substantiate the amount of 
duties paid on worsted wool fabric imported in calendar year 1999;
    (2) Customs will divide the resulting adjusted invoice amount by 
100% plus the duty rate (the 1999 ad valorem duty rate of 30.6% 
applicable to subheadings 5112.11.20 and 5112.19.90) to back out the 
duty and determine the appraised value; and
    (3) Customs will then multiply the appraised value times the 30.6% 
duty rate.
    Although this formula is offered as a reasonable means of 
calculating the amount of duties paid on an invoice amount, there 
remain several variables that may substantially alter the accuracy of 
this formula. First, it is noted that there is no definitive way to 
establish that the fabric described in an invoice was, in fact, 
imported in calendar year 1999. Second, the 10% figure (a figure 
offered to Customs as reasonable by the trade) may be too low or, in 
the event there are several intermediary fabric sellers, there may be 
more than one mark-up reflected in the invoice amount. To ensure that 
these variables do not result in an artificially high baseline from 
which the calendar year 2000, 2001 and 2002 duty refunds are 
calculated, Customs will use ACS to determine importer-specific 
aggregate 1999 duty payments on HTSUS subheadings 5112.11.20 and 
5112.19.90. Customs will then compare the ACS determination with the 
importer-specific aggregates of all claimants. If the amount claimed 
exceeds the ACS amount, Customs will adjust the formula used for claims 
based on invoices associated with that importer. For example, if 
several manufacturers source their imported worsted wool fabric from 
the same importer, the aggregate amount claimed by those manufacturers 
as their 1999 duty payments may not exceed the aggregate amount paid by 
that importer in 1999. If the aggregate amount claimed for that 
importer exceeds the ACS aggregate, it is proposed that the 10% 
deduction, described in step 1 of the duty computation formula 
discussed above, for all invoice amounts associated with that importer 
which were used to substantiate the amount of duties paid in calendar 
year 1999 will be increased on a pro rata basis to ensure that 
aggregate claims do not exceed the ACS-generated amount. In this event, 
amounts substantiated by entry summary numbers will not be reduced. 
Thus, if one manufacturer bases his letter of intent on entry summaries 
associated with an importer and two other manufacturers, whose source 
is the same importer, base their letters of intent on invoices, and ACS 
indicates 1999 duty payments are less than the total ascribed to that 
importer in letters of intent, the 1999 duty amounts claimed by the 
manufacturer whose letter of intent is based on entry summaries will 
not be affected. However, the duty amounts claimed by the other two 
manufacturers will be reduced on a pro rata basis.

Invoices May Only Be Used To Substantiate the Amount of Duties Paid on 
Worsted Wool Fabric in Calendar Year 1999, and May Not Be Used To 
Substantiate Duties Paid in Claim Years 2000, 2001 and 2002

    Section 505(d) requires a wool duty refund claimant to properly 
identify and make appropriate claim to Customs for each entry used to 
substantiate the amount of duties paid on eligible wool products in 
each of calendar claim years 2000, 2001 and 2002. Accordingly, invoices 
may not be used to substantiate the amount of duties paid in each of 
these claim years, and may only be used for purposes of substantiating 
the amount of duties paid on worsted wool fabric imported in calendar 
year 1999 where the relevant entry summary information is not 
available.

Time To File Letter of Intent

    It is proposed that a prospective wool duty refund claimant's 
letter of intent, including all related substantiating documentation 
and, where necessary, the importer's signed affidavit with attached 
entry summary information, must be received by Customs no later than 
January 31, 2001, unless this date is extended upon due notice in the 
Federal Register.

Claimant's Individual Share of the Total Amount of Duties Eligible To 
Be Refunded

    Customs will calculate each claimant's individual share of the 
total amount of duties eligible to be refunded based on submitted 
documentation that substantiates, to Customs satisfaction, the amount 
of duties paid by each claimant, or importer on whom the claimant 
relies, on eligible wool products imported in calendar year 1999. One-
third of a claimant's individual share will constitute the maximum 
amount that claimant may receive in each of calendar years 2000, 2001, 
and 2002.

Wool Duty Refund Verification Letter

    It is proposed that Customs will issue a wool duty refund 
verification letter to each prospective claimant that timely and 
completely substantiates, to Customs satisfaction, the amount of duties 
paid on eligible wool products imported in calendar year 1999. The 
verification letter will set forth the prospective claimant's Customs 
identification number for purposes of the wool duty refund program, the 
ACS-generated amount of duties paid on calendar year 1999 imports of 
the eligible wool products per importer that provide the basis for the 
prospective claimant's wool duty refund claim, the maximum amount of 
wool duty refund that the prospective claimant is eligible to receive 
in each of calendar years 2000, 2001, and 2002, and, where the 
aggregate amount of eligible individual refunds exceeds the relevant 
ACS-generated amount, the pro rata deduction used to adjust the maximum 
amount of wool duty refund that the prospective claimant will be 
eligible to receive in each of the claim years.
    Customs proposes to issue a verification letter to the manufacturer 
no later than 30 calendar days from the date the manufacturer's letter 
of intent, and all required supporting documentation, is received by 
Customs,

[[Page 64182]]

unless this date is extended upon due notice in the Federal Register.

Procedures for Filing a Section 505 Wool Duty Refund Claim

    As section 505(d) requires claimants to identify each entry that 
provides the basis for a wool duty refund, it is proposed that all 
claims for a refund of duties paid on imports of eligible wool products 
in each of calendar years 2000, 2001, and 2002, must be substantiated 
by a list of entry summary numbers for that merchandise. No wool duty 
refunds will be issued to a claimant until all entry summary numbers 
submitted to Customs for purposes of substantiating the claim are 
liquidated.

Filing a Wool Duty Refund Claim Where the Manufacturer Is the Importer

    To file a wool duty refund claim, it is proposed that a 
manufacturer who is the importer of eligible wool products in calendar 
years 2000, 2001, or 2002, provide Customs with a copy of the 
verification letter the manufacturer received from Customs and a signed 
affidavit that contains the following information:
    (1) A statement that the affiant is a U.S. manufacturer of certain 
wool products in the current calendar claim year;
    (2) A statement that the affiant actually paid duties on imports of 
eligible wool products in the current calendar claim year;
    (3) A statement as to the total amount of duties paid on such 
merchandise in the current calendar claim year;
    (4) A list of current calendar claim year entry summary numbers, 
set forth as an attachment to the signed affidavit, that substantiates 
the total amount of duties paid as set forth in paragraph (3) above, 
and does not exceed the affiant's individual share of duties eligible 
to be refunded as set forth in the affiant's verification letter;
    (5) A statement that the manufacturer has not listed any entry 
summary in paragraph (4) above that has had 99% or more of the amount 
of duties paid on that entry refunded pursuant to any refund claim 
authorized by law; and
    (6) A list of entry summary numbers, set forth in paragraph (4) 
above, that is, or may become, subject to any outstanding drawback 
claim, protest, or any other refund claim authorized by law.

Filing a Wool Duty Refund Claim Where the Manufacturer Is Not the 
Importer

    Where a manufacturer of men's or boys' suits, suit-type jackets, or 
trousers of worsted wool fabric, of the kind described in HTSUS 
subheadings 5112.11.20, 5112.19.90, 9902.51.11 or 9902.51.12, is not 
the importer of such fabric, the manufacturer may not possess the 
requisite entry summary numbers necessary to substantiate a wool duty 
refund claim. In such situations, it is proposed that the non-importing 
manufacturer arrange for the importer of such fabric to supply the 
relevant entry summary numbers to Customs. The importer may either 
submit the relevant entry summary numbers directly to the non-importing 
manufacturer, who will attach this information to the manufacturer's 
signed affidavit, or the importer may submit this information directly 
to Customs as an attachment to the importer's signed affidavit.
    If the importer provides the relevant entry summary numbers 
directly to the non-importing manufacturer, it is proposed that the 
manufacturer substantiate a claim for a wool duty refund by submitting 
to Customs a copy of the verification letter the manufacturer received 
from Customs, copies of all relevant invoices, and a signed affidavit 
that contains the following information:
    (1) A statement that the affiant is a U.S. manufacturer, in the 
current calendar year, of men's or boys' suits, suit-type jackets, or 
trousers, of imported worsted wool of the kind described in HTSUS 
subheadings 5112.11.20, 5112.19.90, 9902.51.11, or 9902.51.12;
    (2) A statement that the affiant is not the importer, in the 
current calendar claim year, of imported worsted wool fabric of the 
kind described in paragraph (1) above;
    (3) A statement that the affiant purchased imported worsted wool 
fabric of the kind described in paragraph (1) above from an identified 
importer(s) or from an identified supplier(s), and copies of relevant 
invoices are attached;
    (4) Where the affiant purchased imported worsted wool fabric of the 
kind described in paragraph (1) above, a statement that the affiant has 
substantiating documentation that establishes that such fabric was 
imported by the identified importer(s); and
    (5) A list of relevant entry summary numbers that substantiates the 
amount of duties paid in the current calendar year on worsted wool 
fabric of the kind described in paragraph (1) above, that is identified 
in the manufacturer's submitted invoice(s).
    If the importer provides the relevant entry summary numbers 
directly to Customs as an attachment to the importer's signed 
affidavit, it is proposed that the manufacturer substantiate a claim 
for a wool duty refund in the same manner as described above, except 
that instead of submitting the relevant entry summary numbers to 
Customs, the non-importing manufacturer must state in the affidavit 
that the identified importer has agreed to submit this information 
directly to Customs as an attachment to the importer's signed 
affidavit. Unless Customs timely receives signed affidavits containing 
the requisite substantiating information from both the manufacturer 
and, where applicable, the importer, the manufacturer's claim for a 
wool duty refund pursuant to section 505 will be deemed incomplete and 
denied by Customs.

Required Content of an Importer's Signed Affidavit in Support of a Non-
Importing Manufacturer's Wool Duty Refund Claim

    If an importer chooses to assist in the substantiation of a non-
importing manufacturer's wool duty refund claim by submitting the 
relevant entry summary numbers directly to Customs as an attachment to 
the importer's signed affidavit, the affidavit must contain the 
following information:
    (1) A statement that the importer actually paid duties in the 
current calendar claim year on worsted wool fabric of the kind 
described in HTSUS subheadings 5112.11.20, 5112.19.90, 9902.51.11 or 
9902.51.12;
    (2) A statement that the importer sold worsted wool fabric of the 
kind described in paragraph (1) above to the identified manufacturer or 
to an identified supplier(s);
    (3) A list of relevant entry summary numbers for fabric of the kind 
described in paragraph (1), in an amount that substantiates that amount 
of fabric sold to the manufacturer, as evidenced by the manufacturer's 
invoices;
    (4) A list of any entry summary numbers in paragraph (3) above that 
has had 99% or more of the amount of duties paid on that entry refunded 
pursuant to any refund claim authorized by law; and
    (5) A list of entry summary numbers, set forth in paragraph (3) 
above, that is, or may become, subject to any outstanding drawback 
claim, protest, or any other refund claim authorized by law.

Timely and Complete Wool Duty Refund Claims

    In order for a manufacturer's wool duty refund claim to be deemed 
timely and complete, Customs must receive the substantiating 
documentation proposed above, including, where applicable, the 
importer's signed affidavit with relevant

[[Page 64183]]

attachments, no later than 90 calendar days from the last day of the 
calendar year in which duties were paid for which a refund is being 
sought.

Section 505  Wool Duty Refund Claims and Other Claims for Refunds or 
Drawback

    Once an entry summary has been used to provide the basis for a duty 
refund claim pursuant to section 505, and the entire amount of duties 
paid on eligible wool products is refunded to the claimant, it is 
proposed that Customs will deny any subsequent claim for drawback of 
the same duties, or any other claim for a refund of those duties. 
However, if an entry summary has been used to substantiate a claim for 
a section 505 duty refund, and an amount in duties paid on that entry 
has not been refunded, it is proposed that the remaining amount may be 
eligible for drawback or any other refund claim authorized by law. 
Conversely, if an entry summary has been used to substantiate a 
drawback claim, or any refund claim authorized by law, and an amount in 
duties paid on that entry has not been refunded, it is proposed that 
the remaining amount may be eligible for a subsequent section 505 duty 
refund claim.
    In situations where an entry summary is eligible to substantiate a 
section 505 claim, as well as a claim for drawback or any other claim 
authorized by law, it is proposed that the claim that is received first 
by Customs, and deemed timely and complete, will be processed first.

Comments

    Before adopting this proposal as a final rule, consideration will 
be given to any written comments timely submitted to Customs, including 
comments on the clarity of this interim rule and how it may be made 
easier to understand. Comments submitted will be available for public 
inspection in accordance with the Freedom of Information Act (5 U.S.C. 
552), Sec. 1.4 of the Treasury Department Regulations (31 CFR 1.4), and 
Sec. 103.11(b) of the 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, Office of Regulations and Rulings, U.S. Customs 
Service, 1300 Pennsylvania Avenue, NW., 3rd Floor, Washington, DC.

The Regulatory Flexibility Act and Executive Order 12866

    These proposed regulatory changes implement the terms of section 
505 of the Trade and Development Act of 2000, which went into effect 
May 18, 2000. Because these proposed changes benefit the public by 
allowing eligible claimants to receive a refund of duties paid on 
imports of certain wool products, pursuant to the provisions of the 
Regulatory Flexibility Act, 5 U.S.C. 601 et seq., it is certified that, 
if adopted, the proposed amendments will not have a significant impact 
on a substantial number of small entities. Further, these proposed 
amendments do not meet the criteria for a ``significant regulatory 
action'' as specified in E.O. 12866.

Paperwork Reduction Act

    The collection of information contained in this notice of proposed 
rulemaking has been reviewed under the requirements of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3507) and, pending receipt and 
evaluation of public comments, approved by the Office of Management and 
Budget (OMB) under control number 1515-0227. An agency may not conduct 
or sponsor, and a person is not required to respond to, a collection of 
information unless it displays a valid control number assigned by OMB.
    Comments on the collection of information should be sent to OMB, 
Attention: Desk Officer for the Department of the Treasury, Office of 
Information and Regulatory Affairs, Washington, DC 20503. A copy should 
also be sent to the Regulations Branch at the address set forth above. 
Comments should be submitted within the time frame that comments are 
due regarding the substance of the proposal.
    Comments are invited on:
    (a) Whether the collection of information is necessary for the 
proper performance of the functions of the agency, including whether 
the information will have practical utility;
    (b) The accuracy of the agency's estimate of the information 
collection burden;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (d) Ways to minimize the information collection burden on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    (e) Estimates of capital or start-up costs and costs of operations, 
maintenance, and purchase of services to provide information.
    The collection of information in this proposed rule is in 
Sec. 10.184. The information requested is necessary to implement the 
terms of section 505 of the Trade and Development Act of 2000, whereby 
Customs is authorized to substantiate and process claims for refunds of 
duties paid in each of calendar years 2000, 2001, and 2002, on imports 
of certain wool products. The collection of information is required in 
order for a claimant to obtain the duty refund. The likely respondents 
are business organizations who seek a refund of duties paid on imports 
of eligible wool products in each of calendar years 2000, 2001, and 
2002.
    Estimated total annual reporting and/or recordkeeping burden: 8,600 
hours.
    Estimated average annual burden per respondent/recordkeeper: 290 
hours.
    Estimated number of respondents and/or recordkeepers: 30.
    Estimated annual frequency of response: 2.
    If this proposal is adopted, part 178 of the Customs Regulations 
(19 CFR part 178), which lists the information collections contained in 
the regulations and control numbers assigned by OMB, will be amended 
accordingly

Drafting Information

    The principal author of this document was Suzanne Kingsbury, 
Regulations Branch, Office of Regulations and Rulings, U.S. Customs 
Service. However, personnel from other offices participated in its 
development.

List of Subjects in 19 CFR Part 10

    Customs duties and inspection, Imports, Reporting and recordkeeping 
requirements, Trade agreements.

Proposed Amendment to the Regulations

    For the reasons stated above, it is proposed to amend part 10 of 
the Customs Regulations (19 CFR part 10) as set forth below.

PART 10--ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE, 
ETC.

    1. The general authority citation for part 10 is revised, and a new 
specific authority citation for Sec. 10.184 is added, to read as 
follows:

    Authority: 19 U.S.C. 66, 1202 (General Note 22, Harmonized 
Tariff Schedule of the United States), 1321, 1481, 1484, 1498, 1508, 
1623, 1624, 3314.
* * * * *
    Section 10.184 is also issued under Sec. 505, Pub. L. 106-200, 114 
Stat. 251;
* * * * *
    2. A new center heading and wool refunds Sec. 10.184 is added to 
read as follows:


Sec. 10.184  Refund of duties on certain wool imports.

    (a) General. Section 505 of Title V of Pub. L. 106-200 (114 Stat. 
251), entitled

[[Page 64184]]

the Trade and Development Act of 2000, authorizes the President to 
refund duties paid on imports of eligible wool products. The statute 
permits eligible importing-manufacturers and, in certain circumstances, 
manufacturers who are not importers, to apply for a refund of duties 
paid on imports of eligible wool products in each of three succeeding 
years. Claimants are eligible for a refund of duties paid on imports of 
eligible wool products in each of calendar years 2000, 2001 and 2002, 
limited to an amount not to exceed one-third of the duties paid on such 
wool products imported in calendar year 1999. This section sets forth 
the legal requirements and procedures that apply for purposes of 
obtaining this duty refund.
    (b) Eligible wool products. For purposes for this section, the term 
``eligible wool product'' means an imported wool product described 
under a Harmonized Tariff Schedule of the United States subheading 
listed under paragraph (c) of this section, relevant to a manufacturer 
of the particular wool products specified in paragraph (c).
    (c) Refunds authorized by section 505--(1) Worsted wool fabric. In 
each of calendar years 2000, 2001, and 2002, a manufacturer of men's or 
boys' suits, suit-type jackets, or trousers, of imported worsted wool 
fabric of the kind described in HTSUS subheadings 5112.11.20, 
5112.19.90, 9902.51.11 or 9902.51.12, is eligible to claim a refund of 
the duties paid on entries of such fabric that were purchased by the 
manufacturer. The amount of duties eligible to be refunded to the 
manufacturer in each of these calendar years is limited to an amount 
not to exceed one-third of the amount of duties paid on calendar year 
1999 imports of such worsted wool fabrics that were purchased by the 
manufacturer. A broker or other individual acting on behalf of the 
manufacturer is ineligible to claim a duty refund.
    (2) Wool yarn. A manufacturer of worsted wool fabric, who imports 
wool yarn of the kind described in HTSUS subheadings 5107.10.00 and 
9902.51.13, is eligible to claim a limited refund of the duties paid by 
the manufacturer on entries of such wool yarn in each of calendar years 
2000, 2001, and 2002. The amount of duties eligible to be refunded in 
each of these calendar years is limited to an amount not to exceed one-
third of the amount of duties paid by the importing-manufacturer on 
such wool yarn imported in calendar year 1999.
    (3) Wool fiber and wool top. A manufacturer of wool yarn or wool 
fabric, who imports wool fiber or wool top of the kind described in 
HTSUS subheadings 5101.11, 5101.19, 5101.21, 5101.29, 5101.30, 5103.10, 
5103.20, 5104.00, 5105.21, 5105.29, or 9902.51.14, is eligible to claim 
a limited refund of the duties paid by the manufacturer on entries of 
such wool fiber or wool top in each of calendar years 2000, 2001, and 
2002. The amount of duties eligible to be refunded in each of these 
calendar years is limited to an amount not to exceed one-third of the 
amount of duties paid by the importing-manufacturer on such wool yarn 
imported in calendar year 1999.
    (d) Manufacturer's letter of intent to file a claim for a wool duty 
refund. A manufacturer that expects to file a wool duty refund claim in 
calendar years 2000, 2001, and 2002, pursuant to the terms of paragraph 
(c) of this section, must first file with Customs a letter of intent to 
that effect. A manufacturer's letter of intent must substantiate, to 
Customs satisfaction, the amount of duties paid on eligible wool 
products imported in calendar year 1999.
    (1) Documentation required where the manufacturer is the importer. 
Where a manufacturer is the importer of the eligible wool products 
imported in calendar year 1999, a letter of intent to file a wool duty 
refund claim must be signed by the manufacturer or a knowledgeable 
authorized officer or employee of the manufacturer and must state that, 
to the best of the signer's knowledge and belief, the information 
contained in the letter is accurate and truthful. The letter of intent 
must contain the following information:
    (i) A statement of the total amount of duties paid by the 
importing-manufacturer on eligible wool products imported in calendar 
year 1999;
    (ii) A list of relevant entry summary numbers, set forth as an 
attachment in either a paper or an electronic format (the latter 
submitted to Customs on diskette), that substantiates the amount set 
forth in paragraph (d)(1)(i) of this section; and
    (iii) A statement that no entry summary has been listed in 
paragraph (d)(1)(ii) of this section that did not liquidate under the 
HTSUS subheadings that provide a basis for a wool duty refund.
    (1) Documentation required where the manufacturer is not the 
importer, but the manufacturer possesses the relevant entry summary 
numbers. Where a manufacturer described in paragraph (c)(1) of this 
section is not the calendar year 1999 importer of worsted wool fabric 
of the kind described in HTSUS subheadings 5112.11.20 or 5112.19.90, 
but possesses the relevant entry summary numbers, a letter of intent to 
file a wool duty refund claim must be submitted to Customs and signed 
by the non-importing manufacturer or a knowledgeable authorized officer 
or employee of the manufacturer. The letter of intent must state that, 
to the best of the signer's knowledge and belief, the information 
contained in the letter is accurate and truthful.
    (i) The non-importing manufacturer's letter of intent must contain 
the following information:
    (A) A statement as to the identity of the importer(s) or 
supplier(s) who sold imported worsted wool fabric of the kind described 
in HTSUS subheadings 5512.11.20 or 5112.19.90 to the manufacturer;
    (B) Copies of all relevant invoices, set forth as an attachment, 
that demonstrate that the manufacturer purchased imported worsted wool 
fabric of the kind described in paragraph (d)(2)(i)(A) of this section 
from an identified importer(s) or identified supplier(s) and that 
establish, where applicable, that the identified supplier(s) purchased 
such fabric from the identified importer(s);
    (B) A completed Customs Form (CF) 5106--Importer ID Input Record, 
set forth as an attachment; and
    (D) A signed affidavit, set forth as an attachment, that contains 
the following information:
    (1) A statement that the affiant is a U.S. manufacturer of men's or 
boys' suits, suit-type jackets, or trousers, of imported worsted wool 
of the kind described in HTSUS subheadings 5112.11.20, 5112.19.90, 
9902.51.11 or 9902.51.12;
    (2) A statement that the affiant was not the importer in calendar 
year 1999 of worsted wool fabric of the kind described in HTSUS 
subheadings 5112.11.20 or 5112.19.90;
    (3) A statement as to the quantity of imported worsted wool fabric 
of the kind described in paragraph (d)(2)(i)(D)(2) of this section that 
the affiant purchased from an identified importer(s) or from an 
identified supplier(s), with copies of relevant invoices attached;
    (4) If the affiant purchased fabric of the kind described in 
paragraph (d)(2)(i)(D)(2) of this section from an identified supplier, 
a statement that the affiant has been provided with substantiating 
documentation that establishes that the subject fabric was imported by 
the identified importer; and
    (5) A statement by the affiant that the identified importer(s) has 
provided a list of relevant entry summary numbers directly to the 
affiant that substantiates the amount of duties paid in calendar year 
1999 on the fabric identified in the submitted invoices, and such

[[Page 64185]]

information is set forth as an attachment; or
    (6) A statement by the affiant that the identified importer has 
agreed to submit a signed affidavit directly to Customs with the 
relevant entry summary numbers attached.
    (ii) A non-importing manufacturer's affidavit to substantiate the 
amount of duties paid on worsted wool fabric imported in calendar year 
1999 must be signed by the manufacturer or a knowledgeable authorized 
officer or employee of the manufacturer, and be submitted to Customs in 
the following format:

Non-Importing Manufacturer's Affidavit in Support of a Letter of Intent 
To File a Wool Duty Refund Claim (Where the Manufacturer Possesses the 
Relevant Entry Summary Numbers)

    1. The undersigned, (name of manufacturer), is a U.S. 
manufacturer of men's or boys' suits, suit-type jackets, or 
trousers, of imported worsted wool fabric of the kind described in 
HTSUS subheadings 5112.11.20, 5112.19.90, 9902.51.11 or 9902.51.12;
    2. The undersigned was not the importer in calendar year 1999 of 
worsted wool fabric of the kind described in item (1) above;
    3. The undersigned purchased (specify quantity) of imported 
worsted wool fabric of the kind described in item (1) above from 
(name of importer) or from a supplier (name of supplier), and copies 
of the relevant invoices are attached;
    4. Where the undersigned purchased imported worsted wool fabric 
of the kind described in item (1) above from (name of supplier), the 
undersigned has substantiating documentation that establishes that 
such fabric was imported by (name of importer);
    5(a). Attached is a list of relevant entry summary numbers, 
provided directly to the undersigned by (name of importer), that 
substantiates the amount of duties paid in calendar year 1999 on the 
fabric identified in the attached invoices; or
    5(b). The importer, (name of importer), has agreed to submit a 
signed affidavit directly to Customs that attests to the fact that 
the importer sold imported worsted wool fabric of the kind described 
in item (1) above to the undersigned or to identified supplier(s), 
and to attach a list of the relevant entry summary numbers that 
substantiates the amount of duties paid in calendar year 1999 on the 
fabric identified in the attached invoices; and
    6. The undersigned attests that the information set forth in 
this affidavit is true and accurate to the best of the affiant's 
knowledge and belief.

    (iii) If an importer assists in the substantiation of a non-
importing manufacturer's letter of intent by submitting relevant entry 
summary numbers directly to Customs as an attachment to a signed 
affidavit, the importer's affidavit must be signed by the importer or a 
knowledgeable officer or employee of the importer and must state that, 
to the best of the affiant's knowledge and belief, the information 
contained in the affidavit is accurate and truthful. The importer's 
signed affidavit must contain the following information:
    (A) A statement that the affiant paid duties on worsted wool fabric 
of the kind described in HTSUS subheadings 5112.11.20 or 5112.19.90, 
imported in calendar year 1999;
    (B) Identification of the claimant, or supplier to the claimant, to 
whom the affiant sold imported worsted wool fabric of the kind 
described in paragraph (d)(2)(iii)(A) of this section;
    (C) A list of relevant entry summary numbers for worsted wool 
fabric of the kind described in paragraph (d)(2)(iii)(A) of this 
section, imported in calendar year 1999, set forth as an attachment in 
either a paper or an electronic format (the latter submitted to Customs 
on diskette), that substantiates the amount of duty paid in calendar 
year 1999 on the fabric sold to the identified claimant or identified 
supplier, as evidenced by the claimant's invoices; and
    (D) A statement that the importer has not listed any entry summary 
in paragraph (d)(2)(iii)(C) of this section that did not liquidate 
under HTSUS subheadings 5112.11.20 or 5112.19.90.
    (iv) The importer's affidavit in support of a non-importing 
manufacturer's letter of intent to claim a wool duty refund must be 
signed by the importer or a knowledgeable officer or employee of the 
importer, and be submitted to Customs in the following format:

Importer's Affidavit in Support of a Non-Importing Manufacturer's 
Letter of Intent To Claim a Wool Duty Refund

    1. The undersigned, (name of importer), is an importer who paid 
duties on worsted wool fabric of the kind described in HTSUS 
subheadings 5112.11.20 or 5112.19.90, imported in calendar year 
1999;
    2. The undersigned sold worsted wool fabric of the kind 
described in item (1) above to a manufacturer identified as (name of 
manufacturer) or to a supplier(s) identified as (name of supplier);
    3. Attached is a list of relevant entry summary numbers for 
worsted wool fabric of the kind described in item (1) above that 
substantiates the amount of duties paid in calendar year 1999 on the 
fabric that was sold to (name of manufacturer) or to (name of 
supplier(s)) by the undersigned;
    4. The undersigned has not listed any entry summary in item (3) 
above that did not liquidate under HTSUS subheadings 5512.11.20 or 
5112.11.90; and
    5. The undersigned attests that the information set forth in 
this affidavit is true and accurate to the best of the affiant's 
knowledge and belief.

    (3) Documentation required where the manufacturer is not the 
importer and the manufacturer does not possess the relevant entry 
summary numbers. Where a manufacturer described in paragraph (c)(1) of 
this section is not the calendar year 1999 importer of worsted wool 
fabric of the kind described in HTSUS subheadings 5112.11.20 or 
5112.19.90, and does not possess the relevant entry summary numbers, a 
letter of intent to file a wool duty refund claim must be submitted to 
Customs and signed by the non-importing manufacturer or a knowledgeable 
authorized officer or employee of the manufacturer. The letter of 
intent must state that, to the best of the signer's knowledge and 
belief, the information contained in the letter is accurate and 
truthful.
    (i) The non-importing manufacturer's letter of intent, where the 
manufacturer does not possess the relevant entry summary numbers, must 
contain the following information:
    (A) A statement as to the identity of the importer(s) or 
supplier(s) who sold imported worsted wool fabric of the kind described 
in HTSUS subheadings 5512.11.20 or 5112.19.90 to the non-importing 
manufacturer;
    (B) Copies of all relevant calendar year 1999 invoices, set forth 
as an attachment, that demonstrate that the non-importing manufacturer 
purchased imported worsted wool fabric of the kind described in 
paragraph (d)(2)(i)(A) of this section from an identified importer(s) 
or identified supplier(s);
    (C) A statement that if the non-importing manufacturer purchased 
imported worsted wool fabric of the kind described in paragraph 
(d)(2)(i)(A) of this section from an identified supplier, the 
manufacturer has substantiating documentation that establishes that 
such fabric was imported by the identified importer;
    (D) A completed Customs Form (CF) 5106--Importer ID Input Record, 
set forth as an attachment; and
    (E) A signed affidavit, set forth as an attachment, that contains 
the following information:
    (1) A statement that the affiant is a U.S. manufacturer of men's or 
boys' suits, suit-type jackets, or trousers, of imported worsted wool 
of the kind described in HTSUS subheadings 5112.11.20, 5112.19.90, 
9902.51.11 or 9902.51.12;
    (2) A statement that the affiant was not the importer in calendar 
year 1999 of worsted wool fabric of the kind described in HTSUS 
subheadings 5112.11.20 or 5112.19.90;
    (3) A statement of the quantity of imported worsted wool fabric of 
the

[[Page 64186]]

kind described in paragraph (d)(3)(i)(D)(2) of this section that the 
affiant purchased from an identified importer(s) or from an identified 
supplier(s), with copies of the relevant invoices attached;
    (4) A statement that where the affiant purchased imported worsted 
wool fabric of the kind described in paragraph (d)(3)(i)(D)(2) of this 
section from an identified supplier, the affiant has substantiating 
documentation that establishes that such fabric was imported by the 
identified importer; and
    (5) A statement by the affiant that a good faith effort was made to 
contact the identified importer and request relevant entry summary 
numbers that substantiate the amount of duties paid in calendar year 
1999 on fabric identified in the submitted invoices, but the identified 
importer is unable or unwilling to provide such assistance.
    (ii) A non-importing manufacturer's affidavit to substantiate the 
amount of duties paid by the importer on worsted wool fabric imported 
in calendar year 1999, where no entry summary numbers are available, 
must be signed by the manufacturer or a knowledgeable authorized 
officer or employee of the manufacturer, and be submitted to Customs in 
the following format:

Non-Importing Manufacturer's Affidavit in Support of a Letter of Intent 
To File a Wool Duty Refund Claim (Where the Manufacturer Does Not 
Possess the Relevant Entry Summary Numbers)

    1. The undersigned, (name of manufacturer), is a U.S. 
manufacturer of men's or boys' suits, suit-type jackets, or 
trousers, of imported worsted wool fabric of the kind described in 
HTSUS subheadings 5112.11.20, 5112.19.90, 9902.51.11 or 9902.51.12;
    2. The undersigned was not the importer in calendar year 1999 of 
worsted wool fabric of the kind described in item (1) above;
    3. The undersigned purchased (specify quantity) of imported 
worsted wool fabric of the kind described in item (1) above from 
(name of importer) or from a supplier (name of supplier), and copies 
of relevant invoices are attached;
    4. If the undersigned has purchased imported worsted wool fabric 
of the kind described in item (1) above from (name of supplier), the 
undersigned has substantiating documentation that establishes that 
such fabric was imported by (name of importer);
    5. The undersigned attests that a good faith effort was made to 
contact the identified importer(s) and request that relevant entry 
summary numbers be provided to either the undersigned or directly to 
Customs that substantiate the amount of duties paid in calendar year 
1999 on fabric identified in the submitted invoices, but the 
identified importer is unable or unwilling to provide such 
assistance.
    6. The undersigned attests that the information set forth in 
this affidavit is true and accurate to the best of the affiant's 
knowledge and belief.

    (4) Time to file a letter of intent. A manufacturer's letter of 
intent to file a wool duty refund claim, including all attachments and, 
where applicable, the importer's signed affidavit in support of the 
manufacturer's letter of intent, must be received by Customs no later 
than January 31, 2001, unless this date is extended upon due notice in 
the Federal Register.
    (e) Customs verification letter. Customs will issue to a 
prospective claimant a written verification letter within 30 calendar 
days from the date Customs receives a timely and complete letter of 
intent that substantiates, to Customs satisfaction, the amount of 
duties paid on eligible wool products imported in calendar year 1999. 
The amount of potential duty refund will be based on the quantity of 
eligible wool products that was imported by the prospective claimant 
or, where the prospective claimant was not the importer, purchased by 
the prospective claimant (as indicated by submitted invoices). If entry 
summary numbers are used to substantiate the amount of duties paid on 
eligible wool products in calendar year 1999, the potential refund 
amount will be limited to the amount of duties paid on such entry 
summaries that is attributable to that quantity of eligible wool 
products. If invoices are used to substantiate the amount of duties 
paid on worsted wool fabrics in calendar year 1999, the amount of 
duties will be determined by deducting 10 percent from the invoice 
amounts, dividing the resulting adjusted invoice amounts by 100% plus 
the duty rate (30.6%) to back out the duty, and then multiplying that 
amount times the duty rate (30.6%). If the aggregate amount of duties 
attributable to an importer exceeds the amount of duties paid by that 
importer in calendar year 1999, as indicated by ACS, an adjustment will 
be made to those claimants requiring use of the invoice formula. The 
percentage deducted from the invoice amounts for those claimants will 
be increased on a pro rata basis to ensure that the aggregate amount to 
be refunded does not exceed the ACS amount. Refund amounts 
substantiated by entry summary numbers will not be reduced. A letter of 
verification will set forth the following information:
    (1) The prospective claimant's claim identification number;
    (2) The ACS-generated amount of duties paid on calendar year 1999 
imports of the eligible wool products per importer that provide the 
basis for the prospective claimant's wool duty refund claim;
    (3) The maximum amount of wool duty refund that the individual 
prospective claimant will be eligible to receive in each of calendar 
years 2000, 2001, and 2002; and
    (4) Where invoices are used to substantiate the amount of duties 
paid on worsted wool fabric in calendar year 1999, the percentage that 
was deducted from the invoice amounts, with accompanying explanation.
    (f) Eligibility criteria to claim a duty refund in calendar years 
2000, 2001, and 2002. To be eligible to claim a refund of duties paid 
on imports of certain wool products in calendar years 2000, 2001, and 
2002, a claimant must be in receipt of a claim verification letter from 
Customs. Additionally, in each such calendar year a claimant must be:
    (1) A U.S. manufacturer of men's or boys' suits, suit-type jackets, 
or trousers, of imported worsted wool fabric of the kind described in 
HTSUS subheadings 5112.11.20, 5112.19.90, 9902.51.11 or 9902.51.12, for 
which duties were paid in that year;
    (2) A U.S. manufacturer of worsted wool fabric who paid duties in 
that year on imported wool yarn of the kind described in HTSUS 
subheadings 5107.10.00 or 9902.51.13; or
    (3) A U.S. manufacturer of wool yarn or wool fabric who paid duties 
in that year on imported wool fiber or wool top of the kind described 
in HTSUS subheadings 5101.11, 5101.19, 5101.21, 5101.29, 5101.30, 
5103.10, 5103.20, 5104.00, 5105.21, 5105.29 or 9902.51.14.
    (g) Procedures for filing a claim--(1) Time to file. An eligible 
claimant may submit to Customs, once per calendar year, a request for a 
refund of duties paid on imports of eligible wool products in each of 
calendar years 2000, 2001, and 2002. A claim may be amended within 30 
calendar days from the date of the original submission or, if Customs 
has notified the claimant in writing that the claim is insufficient to 
support a duty refund claim or is otherwise defective, within 30 
calendar days from the date of the Customs notification. All claims for 
a wool duty refund, whether original or amended, must be received by 
Customs within 90 calendar days from the last day of the calendar year 
for which a wool duty refund is being sought.
    (1) Place to file. A claim for a refund of duties paid on imports 
of eligible wool products must be submitted to: U.S. Customs Service, 
Wool Refund Claim, Residual Liquidation and Protest

[[Page 64187]]

Branch, Rm. 761, 6 World Trade Center, New York, N.Y. 10048-0945.
    (2) Documentation. (i) Where the manufacturer is the importer. To 
file a wool duty refund claim, an importing-manufacturer must provide 
Customs with a copy of the verification letter the claimant received 
from Customs and an affidavit, signed by the manufacturer or a 
knowledgeable officer or employee of the manufacturer, that contains 
the following information:
    (A) A statement that the affiant is a U.S. manufacturer of the kind 
described in either paragraphs (f)(1), (f)(2) or (f)(3) of this 
section, in the current calendar claim year;
    (B) A statement of the total amount of duties paid by the affiant 
in that year on eligible wool products;
    (C) The total amount of duty refund being claimed;
    (D) A list of relevant entry summary numbers, set forth as an 
attachment and submitted to Customs in either a paper or an electronic 
format (the latter on diskette), that substantiates the amount of 
duties for which a refund is being claimed in paragraph (g)(3)(i)(C) of 
this section, and does not exceed the affiant's share of duties 
eligible to be refunded as set forth in the attached verification 
letter;
    (E) A statement that no entry summary has been listed in paragraph 
(g)(3)(i)(D) of this section that has already had 99% or more of the 
amount of duties paid on that entry refunded pursuant to any refund 
claim authorized by law; and
    (F) A statement that identifies, if applicable, any entry summary 
listed in paragraph (g)(3)(i)(D) of this section that is, or may 
become, subject to an outstanding drawback claim, protest, or any other 
refund claim authorized by law.
    (ii) Form of affidavit. An importing-manufacturer's signed 
affidavit to substantiate a wool duty refund claim in calendar years 
2000, 2001, or 2002 must be signed by the manufacturer, or a 
knowledgeable officer or employee of the manufacturer, and be submitted 
to Customs in the following format:

Importing-Manufacturer's Affidavit in Support of a Claim for a Wool 
Duty Refund Under Section 505 of the Trade and Development Act of 2000, 
for Calendar Year

    1. The undersigned, (name of manufacturer), is a U.S. 
manufacturer of the kind described in either paragraph (f)(1) [__], 
(f)(2) [__] or (f)(3) [__] [check one] of Sec. 10.184 of the Customs 
Regulations (19 CFR 10.184(f), in the current calendar claim year;
    2. The undersigned paid (total amount of duties paid) in 
calendar year ________ on eligible wool products;
    3. The amount of wool duty refund being claimed is $________;
    4. Attached is a list of the relevant current claim year entry 
summary numbers that substantiate the amount of duty refund being 
claimed in item (3) above;
    5. The undersigned has not listed any entry summary in item (4) 
above that has had 99% or more of the amount of duties paid on that 
entry refunded pursuant to any refund claim authorized by law;
    6. The undersigned will list any entry summary in item (4) above 
that is, or may become, subject to an outstanding drawback claim, 
protest, or any other refund claim authorized by law; and
    7. The undersigned attests that the information set forth in 
this affidavit is true and accurate to the best of the affiant's 
knowledge and belief.

    (iii) Where the manufacturer is not the importer. To file a wool 
duty refund claim a manufacturer of men's or boys' suits, suit-type 
jackets, or trousers, of imported worsted wool fabric of the kind 
described in HSTUS subheadings 5112.11.20, 5112.19.90, 9902.51.11 or 
9902.51.12, who is a purchaser but not the importer of such fabric, 
must provide Customs with a copy of the verification letter the 
claimant received from Customs and an affidavit signed by the 
manufacturer, or a knowledgeable officer or employee of the 
manufacturer, that contains the following information:
    (A) A statement that the affiant is a U.S. manufacturer in the 
current calendar claim year of men's or boys' suits, suit-type jackets, 
or trousers, of imported worsted wool fabric of the kind described in 
HTSUS subheadings 5112.11.20, 5112.19.90, 9902.51.11 or 9902.51.12;
    (B) A statement that the affiant is not the importer in the current 
calendar year of imported worsted wool fabric of the kind described in 
paragraph (g)(3)(iii)(A) of this section;
    (C) A statement as to the quantity of imported worsted wool fabric 
of the kind described in paragraph (g)(3)(iii)(A) of this section that 
the affiant purchased from an identified importer(s) or from an 
identified supplier(s), with copies of relevant invoices attached;
    (D) A statement that where the affiant purchased imported worsted 
wool fabric of the kind described in paragraph (g)(3)(iii)(A) of this 
section from an identified supplier(s), the affiant has substantiating 
documentation that establishes that such fabric was imported by the 
identified importer(s);
    (E) A statement by the affiant that the identified importer(s) has 
provided a list of relevant entry summary numbers directly to the 
affiant that substantiates the amount of duties paid in the current 
calendar claim year on the fabric identified in the submitted invoices, 
and such information is set forth as an attachment; or
    (F) A statement by the affiant that the identified importer(s) has 
agreed to submit a signed affidavit directly to Customs with the 
relevant entry summary numbers attached, that substantiates the amount 
of duties paid in the current calendar claim year on the fabric 
identified in the submitted invoices.
    (iv) Form of affidavit. A manufacturer who is not the importer of 
the imported worsted wool fabric must submit to Customs an affidavit to 
substantiate a wool duty refund claim in calendar years 2000, 2001, or 
2002, signed by the manufacturer or a knowledgeable officer or employee 
of the manufacturer, in the following format:

Non-Importing Manufacturer's Affidavit in Support of a Claim for a Duty 
Refund Under Section 505 of the Trade and Development Act of 2000, for 
Calendar Year

    1. The undersigned, (name of manufacturer), is a U.S. 
manufacturer in calendar year ________ of men's or boys' suits, 
suit-type jackets, or trousers, of imported worsted wool of the kind 
described 5112.11.20, 5112.19.90, 9902.51.11 or 9902.51.12;
    2. The undersigned was not the importer of imported worsted wool 
fabric of the kind described in item (1) above;
    3. The undersigned purchased (specify quantity) of imported 
worsted wool fabric of the kind described in item (1) above from 
(name of importer(s)) or from a supplier(s), and the relevant 
invoices are attached;
    4. Where the undersigned purchased imported worsted wool fabric 
of the kind described in item (1) above from (name of supplier), the 
undersigned has substantiating documentation that establishes that 
such fabric was imported by (name of importer);
    5(a). Attached is a list of relevant entry summary numbers, 
provided directly to the undersigned by (name of importer), that 
substantiates the amount of duties paid in the current calendar 
claim year on the fabric identified in the attached invoices; or
    5(b). The importer, (name of importer), has agreed to submit a 
signed affidavit directly to Customs that attests to the fact that 
the importer sold imported worsted wool fabric of the kind described 
in item (1) above to the undersigned or to (name of supplier), and 
has agreed to attach a list of the relevant entry summary numbers 
that substantiates the amount of duties paid in the current calendar 
claim year on

[[Page 64188]]

the fabric identified in the attached invoices; and
    6. The undersigned attests that the information set forth in 
this affidavit is true and accurate to the best of the affiant's 
knowledge and belief.

    (v) Required content of an importer's signed affidavit in support 
of a manufacturer's wool duty refund claim. Where an importer chooses 
to assist in the substantiation of a non-importing manufacturer's wool 
duty refund claim by submitting relevant entry summary numbers directly 
to Customs, such entry information must be set forth as an attachment 
to an affidavit that is signed by the importer or by a knowledgeable 
officer or employee of the importer, and must contain the following 
information:
    (A) A statement as the total amount of duties that the importer 
paid in the current calendar claim year on worsted wool fabric of the 
kind described in paragraph (g)(3)(iii) of this section;
    (B) A statement that the importer sold worsted wool fabric of the 
kind described in paragraph (g)(3)(iii) of this section, to the 
identified manufacturer or to the identified supplier(s);
    (C) A list of relevant entry summary numbers for the worsted wool 
fabric of the kind described in paragraph (g)(3)(iii) of this section, 
set forth as an attachment in either a paper or an electronic format 
(the latter submitted to Customs on diskette), that substantiates the 
amount of duties paid during the current calendar claim year on such 
fabric that was sold by the importer to the identified manufacturer or 
to the identified supplier(s);
    (D) A statement that no entry summary number has been listed in 
paragraph (g)(3)(v)(C) of this section that has already had 99% or more 
of the amount of duties paid on that entry refunded pursuant to any 
refund claim authorized by law; and
    (E) A statement that lists any entry summary number in paragraph 
(g)(3)(v)(C) of this section that is, or may become, subject to an 
outstanding drawback claim, protest, or any other refund claim 
authorized by law.
    (vi) Form of affidavit. The importer's affidavit in support of a 
manufacturer's wool duty refund claim must be signed by the importer or 
by a knowledgeable officer or employee of the importer, and be 
submitted to Customs in the following format:

Importer's Affidavit in Support of a Non-Importing Manufacturer's Claim 
for a Duty Refund Under Section 505 of the Trade and Development Act of 
2000, for Calendar Year

    1. The undersigned, (name of importer), is an importer who paid 
duties in calendar year ________ on worsted wool fabric of the kind 
described in HTSUS subheadings 5112.11.20 or 5112.19.90, imported in 
calendar year 1999;
    2. The undersigned sold worsted wool fabric of the kind 
described in item (1) above to a manufacturer identified as (name of 
manufacturer) or to a supplier(s) identified as (name of supplier);
    3. Attached is a list of relevant entry summary numbers for 
worsted wool fabric of the kind described in item (1) above that 
substantiates the amount of duties paid in the current calendar 
claim year on such fabric that was sold by the undersigned to (name 
of manufacturer) or to an identified supplier(s) (name of supplier);
    4. The undersigned has not listed any entry summary in item (3) 
above that has had 99% or more of the amount of duties paid on that 
entry refunded pursuant to any refund claim authorized by law;
    5. The undersigned will list any entry summary in item (3) above 
that is, or may become, subject to an outstanding drawback claim, 
protest, or any other refund claim authorized by law; and
    6. The undersigned attests that the information set forth in 
this affidavit is true and accurate to the best of the affiant's 
knowledge and belief.

    (h) Wool duty refund claim processing procedures. Upon receipt of a 
timely and complete wool duty refund claim filed pursuant to the terms 
of this section, Customs will determine the liquidation status of the 
entry summaries used to substantiate the claim. No duty refund will be 
issued to a claimant until all the entry summaries identified for 
purposes of substantiating the claim have been liquidated.
    (i) Denial of a wool duty refund claim. Customs may deny a wool 
duty refund claim if the claim was not timely filed, if the claimant is 
not eligible pursuant to the terms of this section, or if the claimant 
has not complied with the requirements of this section. Customs will 
provide the claimant with written notice of the denial of the claim, 
including the reason for the denial.
    (j) Multiple refund claims and pending judicial review--(1) Order 
of precedence for multiple section 505 duty refund claims. An eligible 
claimant is entitled to payment in order of the precedence established 
by the date and time of submission of a timely and complete claim for a 
request for refund of duties pursuant to the terms of this section.
    (2) Order of precedence for section 505 duty refund claims and 
other refund claims. If a claim for a section 505 duty refund has been 
received by Customs, and a protest, request for reliquidation, drawback 
claim, or any other refund claim authorized by law, that relates to any 
of the eligible wool products identified in any of the entry summaries 
used to substantiate the filed section 505 claim, has also been filed 
with Customs but remains undecided, the claim that was received first 
by Customs, and deemed timely and complete, will be processed first.
    (3) Allowance or denial of subsequent claims. If an entry has been 
used to provide the basis for a duty refund claim pursuant to section 
505, and the entire amount of duties paid on that entry was refunded to 
the claimant, a claim for drawback, or any other refund claim 
authorized by law, that is based on that entry, will be denied by 
Customs. If an entry has been used to substantiate a claim for a 
section 505 duty refund, and an amount in duties paid on that entry has 
not been refunded, the remaining amount may be eligible for subsequent 
section 505 duty refund claims, drawback, or any other refund claim 
authorized by law. An entry that has already had 99% or more of the 
duties paid on that entry refunded by way of a drawback claim, protest, 
or any other claim authorized by law, may not be used to provide the 
basis for a wool duty refund claim.
    (4) Pending judicial review. If a summons involving the tariff 
classification or the dutiability of an imported wool product has been 
filed in the Court of International Trade, Customs will deem any entry 
summary at issue in that judicial proceeding ineligible to substantiate 
a duty refund claim.
    (k) Penalties and liquidated damages. A wool duty refund claimant's 
failure to comply with any of the procedural requirements set forth in 
this document, or failure to adhere to all applicable laws and 
regulations, may subject the claimant to penalties, liquidated damages 
or other administrative sanctions.

Raymond W. Kelly,
Commissioner of Customs.
    Approved: October 19, 2000.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 00-27522 Filed 10-24-00; 8:45 am]
BILLING CODE 4820-02-P