[Federal Register Volume 67, Number 27 (Friday, February 8, 2002)]
[Rules and Regulations]
[Pages 6116-6118]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-2917]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 25 and 52

[FAC 2001-04; FAR Case 2000-306; 
Item V]
RIN 9000-AJ27


Federal Acquisition Regulation; Caribbean Basin Country End 
Products

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comments.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on an interim 
rule amending the Federal Acquisition Regulation (FAR) to implement the 
determination of the United States Trade Representative (USTR) to 
extend the treatment of certain end products, from countries designated 
by the President as beneficiaries under the Caribbean Basin Economic 
Recovery Act, as eligible products under the Trade Agreements Act, with 
the exception of end products from the Dominican Republic, Honduras, 
and Panama. This rule also implements Section 211 of the United 
States--Caribbean Basin Trade Partnership Act and the determination of 
the USTR as to which countries qualify for the enhanced trade benefits 
under that Act.

DATES: Effective Date: February 20, 2002.
    Comment Date: Interested parties should submit comments to the FAR 
Secretariat at the address shown below on or before April 9, 2002, to 
be considered in the formulation of a final rule.

ADDRESSES: Submit written comments to: General Services Administration, 
FAR Secretariat (MVP), 1800 F Street, NW, Room 4035, Attn: Ms. Laurie 
Duarte, Washington, DC 20405.
    Submit electronic comments via the Internet to: farcase.2000-306@gsa.gov
    Please submit comments only and cite FAC 2001-04, FAR case 2000-
306, in all correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
Building, Washington, DC 20405, (202) 501-4755, for information 
pertaining to

[[Page 6117]]

status or publication schedules. For clarification of content, contact 
Ms. Cecelia L. Davis, Procurement Analyst, at (202) 219-0202. Please 
cite FAC 2001-04, FAR case 2000-306.

SUPPLEMENTARY INFORMATION:

A. Background

    The USTR published a notice in the Federal Register on December 14, 
2001 (66 FR 64897), renewing the treatment of certain end products, 
from countries designated by the President as beneficiaries under the 
Caribbean Basin Economic Recovery Act, as eligible products under the 
Trade Agreements Act, with the exception of end products from the 
Dominican Republic, Honduras, and Panama. This rule implements that 
determination.
    This interim rule also amends the FAR to implement Section 211 of 
the United States--Caribbean Basin Trade Partnership Act (Title II of 
Pub. L. 106-200) and the determinations of the USTR under that Act. To 
date, the USTR has published determinations in the Federal Register at 
65 FR 60236, October 10, 2000; 65 FR 69988, November 21, 2000; 66 FR 
9888, February 12, 2001, and 66 FR 31272, June 11, 2001. Section 211 
amends the Caribbean Basin Economic Recovery Act at 19 U.S.C. 2703 to 
provide enhanced trade benefits for Caribbean Basin countries that have 
implemented and follow, or are making substantial progress toward 
implementing and following, the customs procedures required by the 
Caribbean Basin Trade Partnership Act. Certain products of those 
countries now qualify for duty-free treatment, so they can be treated 
as Caribbean Basin country end products. Offerors can find these 
products, and the current list of countries, in the Harmonized Tariff 
Schedule (HTS). The FAR gives information on the HTS in FAR clause 
52.225-5, Trade Agreements. The USTR notices in the Federal Register 
announced the determination that Barbados, Belize, Costa Rica, 
Dominican Republic, El Salvador, Guatemala, Guyana, Haiti, Honduras, 
Jamaica, Nicaragua, Panama, Saint Lucia, and Trinidad and Tobago 
currently qualify for the enhanced trade benefits and modified the 
Harmonized Tariff Schedule of the United States accordingly.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The interim rule is not expected to have a significant economic 
impact on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because it only 
affects a limited number of products from a few Caribbean Basin 
countries. The Berry Amendment (formerly at 10 U.S.C. 2241, note, but 
recently enacted as 10 U.S.C. 2533a) still prohibits the Department of 
Defense from buying most of the textile and apparel articles receiving 
duty-free treatment under this Act. Therefore, an Initial Regulatory 
Flexibility Analysis has not been performed. The Councils will consider 
comments from small entities concerning the affected FAR parts in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 601, et seq. (FAC 2001-04, 
FAR case 2000-306), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose information collection requirements that require 
the approval of the Office of Management and Budget under 44 U.S.C. 
3501, et seq.

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense, the Administrator of General Services, and the 
Administrator of the National Aeronautics and Space Administration that 
urgent and compelling reasons exist to promulgate this interim rule 
without prior opportunity for public comment. This action is necessary 
because the determination of the USTR to provide enhanced benefits to 
the products of certain countries under the Caribbean Basin Trade 
Partnership Act became effective on October 2, 2000, and because the 
USTR reinstated the expired Caribbean Basin program on December 14, 
2001, effective immediately. However, pursuant to Public Law 98-577 and 
FAR 1.501, the Councils will consider public comments received in 
response to this interim rule in the formation of the final rule.

List of Subjects in 48 CFR Parts 25 and 52

    Government procurement.

    Dated: February 1, 2002.
Al Matera,
Director, Acquisition Policy Division.

    Therefore, DoD, GSA, and NASA amend 48 CFR parts 25 and 52 as set 
forth below:

    1. The authority citation for 48 CFR parts 25 and 52 continues to 
read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 25--FOREIGN ACQUISITION

    2. Amend section 25.003 in the definition ``Caribbean Basin 
country'' by removing ``Panama,''; and by revising the definition 
``Caribbean Basin country end product'' to read as follows:


25.003    Definitions.

* * * * *
    Caribbean Basin country end product--
    (1) Means an article that--
    (i)(A) Is wholly the growth, product, or manufacture of a Caribbean 
Basin country; or
    (B) In the case of an article that consists in whole or in part of 
materials from another country, has been substantially transformed in a 
Caribbean Basin country into a new and different article of commerce 
with a name, character, or use distinct from that of the article or 
articles from which it was transformed; and
    (ii) Is not excluded from duty-free treatment for Caribbean 
countries under 19 U.S.C. 2703(b).
    (A) For this reason, the following articles are not Caribbean Basin 
country end products:
    (1) Tuna, prepared or preserved in any manner in airtight 
containers.
    (2) Petroleum, or any product derived from petroleum.
    (3) Watches and watch parts (including cases, bracelets, and 
straps) of whatever type including, but not limited to, mechanical, 
quartz digital, or quartz analog, if such watches or watch parts 
contain any material that is the product of any country to which the 
Harmonized Tariff Schedule of the United States (HTSUS) column 2 rates 
of duty apply (i.e., Afghanistan, Cuba, Laos, North Korea, and 
Vietnam).
    (4) Certain of the following: textiles and apparel articles; 
footwear, handbags, luggage, flat goods, work gloves, and leather 
wearing apparel; or handloomed, handmade, and folklore articles.
    (B) Access to the HTSUS to determine duty-free status of articles 
of the types listed in paragraph (1)(ii)(A)(4) of this definition is 
available via the Internet at

[[Page 6118]]

http://www.customs.ustreas.gov/impoexpo/impoexpo.htm. In particular, 
see the following:
    (1) General Note 3(c), Products Eligible for Special Tariff 
treatment.
    (2) General Note 17, Products of Countries Designated as 
Beneficiary Countries under the United States--Caribbean Basin Trade 
Partnership Act of 2000.
    (3) Section XXII, Chapter 98, Subchapter II, Articles Exported and 
Returned, Advanced or Improved Abroad, U.S. Note 7(b).
    (4) Section XXII, Chapter 98, Subchapter XX, Goods Eligible for 
Special Tariff Benefits under the United States-Caribbean Basin Trade 
Partnership Act; and
    (2) Refers to a product offered for purchase under a supply 
contract, but for purposes of calculating the value of the acquisition, 
includes services (except transportation services) incidental to the 
article, provided that the value of those incidental services does not 
exceed that of the article itself.
* * * * *


25.400  [Amended]

    3. Amend section 25.400 in paragraph (a)(2) by removing the words 
``Republic and Honduras'' and adding ``Republic, Honduras, and 
Panama,'' in its place.


25.404  [Amended]

    4. Amend section 25.404 by removing the second and third sentences.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    5. Amend section 52.225-5 by--
    a. Removing ``Panama,'' from the definition ``Caribbean Basin 
country''; and
    b. Revising the definition ``Caribbean Basin country end product'' 
to read as follows:


52.225-5    Trade Agreements.

* * * * *

Trade Agreements (Feb 2002)

    (a) * * *
* * * * *
    Caribbean Basin country end product--
    (1) Means an article that--
    (i)(A) Is wholly the growth, product, or manufacture of a 
Caribbean Basin country; or
    (B) In the case of an article that consists in whole or in part 
of materials from another country, has been substantially 
transformed in a Caribbean Basin country into a new and different 
article of commerce with a name, character, or use distinct from 
that of the article or articles from which it was transformed; and
    (ii) Is not excluded from duty-free treatment for Caribbean 
countries under 19 U.S.C. 2703(b).
    (A) For this reason, the following articles are not Caribbean 
Basin country end products:
    (1) Tuna, prepared or preserved in any manner in airtight 
containers;
    (2) Petroleum, or any product derived from petroleum;
    (3) Watches and watch parts (including cases, bracelets, and 
straps) of whatever type including, but not limited to, mechanical, 
quartz digital, or quartz analog, if such watches or watch parts 
contain any material that is the product of any country to which the 
Harmonized Tariff Schedule of the United States (HTSUS) column 2 
rates of duty apply (i.e., Afghanistan, Cuba, Laos, North Korea, and 
Vietnam); and
    (4) Certain of the following: textiles and apparel articles; 
footwear, handbags, luggage, flat goods, work gloves, and leather 
wearing apparel; or handloomed, handmade, and folklore articles;
    (B) Access to the HTSUS to determine duty-free status of 
articles of these types is available at http://www.customs.ustreas.gov/impoexpo/impoexpo.htm. In particular, see 
the following:
    (1) General Note 3(c), Products Eligible for Special Tariff 
treatment.
    (2) General Note 17, Products of Countries Designated as 
Beneficiary Countries under the United States--Caribbean Basin Trade 
Partnership Act of 2000.
    (3) Section XXII, Chapter 98, Subchapter II, Articles Exported 
and Returned, Advanced or Improved Abroad, U.S. Note 7(b).
    (4) Section XXII, Chapter 98, Subchapter XX, Goods Eligible for 
Special Tariff Benefits under the United States--Caribbean Basin 
Trade Partnership Act; and
    (2) Refers to a product offered for purchase under a supply 
contract, but for purposes of calculating the value of the 
acquisition, includes services (except transportation services) 
incidental to the article, provided that the value of those 
incidental services does not exceed that of the article itself.
* * * * *
[FR Doc. 02-2917 Filed 2-7-02; 8:45 am]
BILLING CODE 6820-EP-P