[Federal Register Volume 67, Number 155 (Monday, August 12, 2002)]
[Notices]
[Pages 52520-52522]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-20478]


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DEPARTMENT OF THE TREASURY

Customs Service


Wool Manufacturer Payment Clarification and Technical Corrections 
Act

AGENCY: Customs Service, Treasury.

ACTION: General notice.

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SUMMARY: On August 6, 2002, President Bush signed into law the Trade 
Act of 2002. Section 5101 of the Trade Act of 2002 amends section 505 
of the Trade and Development Act of 2000, which entitled U.S. 
manufacturers of certain wool articles to a limited refund of duties 
paid on imports of select wool products. The amendments concern the 
maximum amount manufacturers are eligible to receive and include a 
definition of the term ``manufacturer'' for purposes of determining 
eligibility. The amendments also authorize a new class of claimants as 
being eligible to receive a payment, establish new deadlines for the 
submission and payment of claims for all claimants, and generally 
simplify the claims process. Section 5102 of the Trade Act of 2002 
authorizes Customs to make two additional payments to eligible 
manufacturers. As sections 5101 and 5102 are self-effectuating, Customs 
will not be issuing regulations to implement the program as amended. 
Manufacturers are directed to follow the statutory procedures to claim 
a payment. For ease of reference, this document describes the changes 
to the wool duty payment program as set forth in section 505 of the 
Trade Act of 2002, as amended. The document also sets forth the address 
to which all wool duty payment documentation should be sent.

DATES: Claims by eligible U.S. manufacturers of men's or boys' suits, 
suit-type jackets and trousers, and by eligible U.S. importing-
manufacturers of wool fabric and wool yarn, must be submitted to 
Customs postmarked no later than August 21, 2002. Claims by eligible 
U.S. non-importing manufacturers of wool fabric and wool yarn must be 
received by Customs no later than September 20, 2002.

ADDRESSES: Claims for payments pursuant to section 505 of the Trade and 
Development Act, as amended, should be sent to the U.S. Customs 
Service, Office of Field Operations, Wool Duty Payment Unit, 5th Floor, 
Attention: Debbie Scott, 1300 Pennsylvania Avenue, NW., 5th Floor, 
Washington, D.C. 20229.

FOR FURTHER INFORMATION CONTACT: Debbie Scott (202) 927-1962 or Sherri 
Lee Hoffman (202) 927-0542.

SUPPLEMENTARY INFORMATION:

Background

    On May 18, 2000, President Clinton signed into law the Trade and 
Development Act of 2000 (``the Act''), Pub. L. 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 specific wool products. Within Title V, section 505 
permits eligible U.S. manufacturers to claim a limited refund of duties 
paid on imports of select wool articles.
    Section 505 was implemented in the Customs Regulations at 
Sec. 10.184 (19 CFR 10.184).
    On August 6, 2002, President Bush signed into law the Trade Act of 
2002, H.R. 3009 (the Public Law citation is unavailable at the time of 
this document's filing for public inspection at the Office of the 
Federal Register. Division E of the Trade Act of 2002 contains 
miscellaneous provisions. Within Division E, Title L sets forth 
miscellaneous trade benefits with Subtitle A pertaining specifically to 
wool provisions. Within Subtitle A, section 5101, entitled the ``Wool 
Manufacturer Payment Clarification and Technical Corrections Act,'' 
amends section 505. Specifically, section 5101 amends section 505 
regarding the maximum payment amount manufacturers are eligible to 
receive, defines the term ``manufacturer'' for purposes of section 505, 
authorizes a new class of claimants as eligible to receive a payment, 
establishes new deadlines for the submission and payment of claims, and 
simplifies the claims process. Section 5102(c) is a related statutory 
provision that authorizes Customs to make two additional payments to 
eligible manufacturers in years 2004 and 2005.

Explanation of Amendments to Section 505 Effected by Section 5101

    Section 5101 amends 505 in several key aspects, as discussed below.

I. Payment Amounts and Simplified Claim Procedures

    The original terms of section 505 authorized certain manufacturers 
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 claim year was 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. In order to receive 
a refund, manufacturers had to substantiate their claim to Customs by 
submitting relevant entry summary documentation.
    Section 5101 amends section 505 regarding the amount of payment an 
eligible manufacturer may receive. Specifically, section 5101 
authorizes eligible manufacturers to receive a pro rata share of a 
statutorily designated amount. Section 5101(2) appropriates $36,251,000 
out of amounts in the General Fund of the Treasury to carry out the 
amendments to section 505 made by section 5101(1). This amount is 
divided into six separate accounts which are established for the 
purposes of funding payments to different types of eligible 
manufacturers.
    A claimant is no longer required to submit entry summary 
documentation to substantiate a claim. Rather, a claimant must make a 
claim for each claim year by submitting a signed affidavit to Customs, 
with return address clearly marked, that attests to the affiant's 
status as an eligible manufacturer. Claimants must submit affidavits by 
specific dates designated in the statute. Eligible U.S. manufacturers 
of men's or boys' suits, suit-type jackets and trousers, and eligible 
U.S. importing-manufacturers of wool fabric and wool yarn, must submit 
their 4 claims to Customs postmarked so that they are received by 
Customs no later than August 21, 2002. Eligible U.S. non-importing 
manufacturers of wool fabric and wool yarn must submit their claims so 
that Customs receives them no later than September 20, 2002.

II. Definition of ``Manufacturer'' Added to Section 505

    Section 5101 adds a new paragraph (g) to section 505 that sets 
forth the definition of manufacturer for purposes of the statute. The 
definition authorizes the party that owns specified types of wool 
imports at the time the imports are processed into designated products 
in the United States to be eligible to receive a payment. This 
definition permits manufacturers who either import the specified wool 
products directly or purchase the specified imports to be eligible. 
Additionally, the definition includes manufacturers who perform their 
own processing operations in the United States, as well as 
manufacturers who contract the work out to a U.S. processing facility, 
so long as in both instances the manufacturer

[[Page 52521]]

retains ownership of the wool imports at the time of processing.

III. New Class of Manufacturer Eligible to Receive Payment

    The original terms of section 505(b) and (c) required that a 
manufacturer of wool fabric or yarn be the importer of the wool inputs 
used in the manufacturer of the finished product in order to receive a 
refund. Therefore, non-importing manufacturers of wool fabric and yarn 
were ineligible for a refund.
    Pursuant to section 505(g)(2) and (3), non-importing manufacturers 
of wool fabric and yarn are now eligible to receive a payment. In order 
to be eligible to claim a payment, Customs must receive documentation 
from a non-importing manufacturer of wool fabric or yarn by September 
20, 2002, that establishes the amount the manufacturer paid for 
eligible wool products in 1999. This information will be used by 
Customs to determine the non-importing manufacturer's pro rata share of 
the fund established for this class of claimant.

New Address To Send Documentation Pertaining to Wool Payments

    As sections 5101 and 5102 are detailed and clear, Customs will not 
issue regulations to implement the wool duty payment program as amended 
(and 19 CFR 10.184 is superseded by statute). Accordingly, 
manufacturers are directed to follow the statutory procedures to claim 
a payment. While self-effectuating, section 505, as amended, does not 
state where claims and other documentation are to be sent. This 
document provides notice that claimants must send all statutorily 
required documentation pertaining to wool duty payments, including any 
additional information deemed necessary by Customs, to the U.S. Customs 
Service, Office of Field Operations, Wool Duty Payment Unit, 5th Floor, 
Attention: Debbie Scott, 1300 Pennsylvania Avenue, NW., 5th Floor, 
Washington, DC 20229.

Additional Wool Duty Payments

    Section 5102(c) of the Trade Act of 2002 authorizes Customs to pay 
each eligible manufacturer that receives a payment for calendar year 
2002 under section 505, as amended, two additional payments. To claim 
the additional payments, a manufacturer must submit a signed affidavit 
to the U.S. Customs Service, Office of Field Operations, Wool Duty 
Payment Unit, 5th Floor, Attention: Debbie Scott, 1300 Pennsylvania 
Avenue, NW., 5th Floor, Washington, DC 20229, for each additional claim 
year, attesting that the affiant remains a manufacturer in the United 
States as of January 1 of the additional claim year for which a payment 
is being sought. Each additional payment will be in an amount equal to 
the amount received by the claimant for calendar year 2002. The 
additional payments will be paid out in two installments: the first 
installment will be made by Customs after January 1, 2004, but on or 
before April 15, 2004, and; the second installment will be paid by 
Customs after January 1, 2005, but on or before April 15, 2005.

The Statute as Amended

    Section 505, as amended, is set forth below in its entirety for 
ease of reference.

SEC. 505.

    (a) Worsted Wool Fabrics.--For each of the calendar years 2000, 
2001, and 2002, a manufacturer of men's or boys' suits, suit-type 
jackets, or trousers (not a broker or other individual acting on of 
the manufacturer to process the import) of imported worsted wool 
fabrics of the kind described in heading 9902.51.11 or 9902.51.12 of 
the Harmonized Tariff Schedule of the United States shall be 
eligible for a payment equal to an amount determined pursuant to 
subsection (d)(1).
    (b) Wool Yarn.--(1) Importing Manufacturers.--For each of the 
calendar years 2000, 2001, and 2002, a manufacturer of worsted wool 
fabrics who imports wool yarn of the kind described in heading 
5107.10 or 9902.51.13 of the Harmonized Tariff Schedule of the 
United States shall be eligible for a payment equal to an amount 
determined pursuant to subsection (d)(2).
    (2) Nonimporting Manufacturers.--For each of the calendar years 
2001 and 2002, any other manufacturer of worsted wool fabrics of 
imported wool yarn of the kind described in heading 5107.10 or 
9902.51.13 of the Harmonized Tariff Schedule of the United States 
shall be eligible for a payment equal to an amount determined 
pursuant to subsection (d)(2).
    (c) Wool Fiber and Wool Top.--(1) Importing Manufacturers.--For 
each of the calendar years 2000, 2001, and 2002, a manufacturer of 
wool yarn or wool fabric who imports wool fiber or wool top of the 
kind described in heading 5101.11, 5101.19, 5101.21, 5101.29, 
5101.30, 5103.10, 5103.20, 5104.00, 5105.21, 5105.29, or 9902.51.14 
of the Harmonized Tariff Schedule of the United States shall be 
eligible for a payment equal to an amount determined pursuant to 
subsection (d)(3).
    (2) Nonimporting Manufacturers.--For each of the calendar years 
2001 and 2002, any other manufacturer of wool yarn or wool fabric of 
imported wool fiber or wool top of the kind described in heading 
5101.11, 5101.19, 5101.21, 5101.29, 5101.30, 5103.10, 5103.20, 
5104.00, 5105.21, 5105.29, or 9902.51.14 of the Harmonized Tariff 
Schedule of the United States shall be eligible for a payment equal 
to an amount determined pursuant to subsection (d)(3).
    (d) Amount of Annual Payments to Manufacturers.-- (1) 
Manufacturers of men's suits, etc., of imported worsted wool 
fabrics.--
    (A) Eligible to receive more than $5,000.--Each annual payment 
to manufacturers described in subsection (a) who, according to the 
records of the Customs Service as of September 11, 2001, are 
eligible to receive more than $5,000 for each of the calendar years 
2000, 2001, and 2002, shall be in an amount equal to one-third of 
the amount determined by multiplying $30,124,000 by a fraction--
    (i) The numerator of which is the amount attributable to the 
duties paid on eligible wool products imported in calendar year 1999 
by the manufacturer making the claim, and
    (ii) The denominator of which is the total amount attributable 
to the duties paid on eligible wool products imported in calendar 
year 1999 by all the manufacturers described in subsection (a) who, 
according to the records of the Customs Service as of September 11, 
2001, are eligible to receive more than $5,000 for each such 
calendar year under this section as it was in effect on that date.
    (B) Eligible wool products.--For purposes of subparagraph (A), 
the term ``eligible wool products'' refers to imported worsted wool 
fabrics described in subsection (a).
    (C) Others.--All manufacturers described in subsection (a), 
other than the manufacturers to which subparagraph (A) applies, 
shall each receive an annual payment in an amount equal to one-third 
of the amount determined by dividing $1,665,000 by the number of all 
such other manufacturers.
    (2) Manufacturers of worsted wool fabrics of imported wool 
yarn.--
    (A) Importing manufacturers.--Each annual payment to an 
importing manufacturer described in subsection (b)(1) shall be in an 
amount equal to one-third of the amount determined by multiplying 
$2,202,000 by a fraction--
    (i) The numerator of which is the amount attributable to the 
duties paid on eligible wool products imported in calendar year 1999 
by the importing manufacturer making the claim, and
    (ii) The denominator of which is the total amount attributable 
to the duties paid on eligible wool products imported in calendar 
year 1999 by all the importing manufacturers described in subsection 
(b)(1).
    (B) Eligible wool products.--For purposes of subparagraph (A), 
the term ``eligible wool products'' refers to imported wool yarn 
described in subsection (b)(1).
    (C) Nonimporting manufacturers.--Each annual payment to a 
nonimporting manufacturer described in subsection (b)(2) shall be in 
an amount equal to one-half of the amount determined by multiplying 
$141,000 by a fraction--
    (i) The numerator of which is the amount attributable to the 
purchases of imported eligible wool products in calendar year 1999 
by the nonimporting manufacturer making the claim, and
    (ii) The denominator of which is the total amount attributable 
to the purchases of

[[Page 52522]]

imported eligible wool products in calendar year 1999 by all the 
nonimporting manufacturers described in subsection (b)(2).
    (3) Manufacturers of wool yarn or wool fabric of imported wool 
fiber or wool top.--
    (A) Importing manufacturers.--Each annual payment to an 
importing manufacturer described in subsection (c)(1) shall be in an 
amount equal to one-third of the amount determined by multiplying 
$1,522,000 by a fraction--
    (i) The numerator of which is the amount attributable to the 
duties paid on eligible wool products imported in calendar year 1999 
by the importing manufacturer making the claim, and
    (ii) The denominator of which is the total amount attributable 
to the duties paid on eligible wool products imported in calendar 
year 1999 by all the importing manufacturers described in subsection 
(c)(1).
    (B) Eligible wool products.--For purposes of subparagraph (A), 
the term `eligible wool products' refers to imported wool fiber or 
wool top described in subsection (c)(1).
    (C) Nonimporting manufacturers.--Each annual payment to a 
nonimporting manufacturer described in subsection (c)(2) shall be in 
an amount equal to one-half of the amount determined by multiplying 
$597,000 by a fraction--
    (i) The numerator of which is the amount attributable to the 
purchases of imported eligible wool products in calendar year 1999 
by the nonimporting manufacturer making the claim, and
    (ii) The denominator of which is the amount attributable to the 
purchases of imported eligible wool products in calendar year 1999 
by all the nonimporting manufacturers described in subsection 
(c)(2).
    (4) Letters of intent.--Except for the nonimporting 
manufacturers described in subsections (b)(2) and (c)(2) who may 
make claims under this section by virtue of the enactment of the 
Wool Manufacturer Payment Clarification and Technical Corrections 
Act, only manufacturers who, according to the records of the Customs 
Service, filed with the Customs Service before September 11, 2001, 
letters of intent to establish eligibility to be claimants are 
eligible to make a claim for a payment under this section.
    (5) Amount attributable to purchases by nonimporting 
manufacturers.--
    (A) Amount attributable.--For purposes of paragraphs (2)(C) and 
(3)(C), the amount attributable to the purchases of imported 
eligible wool products in calendar year 1999 by a nonimporting 
manufacturer shall be the amount the nonimporting manufacturer paid 
for eligible wool products in calendar year 1999, as evidenced by 
invoices. The nonimporting manufacturer shall make such calculation 
and submit the resulting amount to the Customs Service, within 45 
days after the date of enactment of the Wool Manufacturer Payment 
Clarification and Technical Corrections Act, in a signed affidavit 
that attests that the information contained therein is true and 
accurate to the best of the affiant's belief and knowledge. The 
nonimporting manufacturer shall retain the records upon which the 
calculation is based for a period of five years beginning on the 
date the affidavit is submitted to the Customs Service.
    (B) Eligible wool product.--For purposes of subparagraph (A)--
    (i) The eligible wool product for nonimporting manufacturers of 
worsted wool fabrics is wool yarn of the kind described in heading 
5107.10 or 9902.51.13 of the Harmonized Tariff Schedule of the 
United States purchased in calendar year 1999; and
    (ii) The eligible wool products for nonimporting manufacturers 
of wool yarn or wool fabric are wool fiber or wool top of the kind 
described in heading 5101.11, 5101.19, 5101.21, 5101.29, 5101.30, 
5103.10, 5103.20, 5104.00, 5105.21, 5105.29, or 9902.51.14 of such 
Schedule purchased in calendar year 1999.
    (6) Amount attributable to duties paid.--For purposes of 
paragraphs (1), (2)(A), and (3)(A), the amount attributable to the 
duties paid by a manufacturer shall be the amount shown on the 
records of the Customs Service as of September 11, 2001, under this 
section as then in effect.
    (7) Schedule of payments; Reallocations.--
    (A) Schedule.--Of the payments described in paragraphs (1), 
(2)(A), and (3)(A), the Customs Service shall make the first and 
second installments on or before the date that is 45 days after the 
date of enactment of the Wool Manufacturer Payment Clarification and 
Technical Corrections Act, and the third installment on or before 
April 15, 2003. Of the payments described in paragraphs (2)(C) and 
(3)(C), the Customs Service shall make the first installment on or 
before the date that is 120 days after the date of enactment of the 
Wool Manufacturer Payment Clarification and Technical Corrections 
Act, and the second installment on or before April 15, 2003.
    (B) Reallocations.--In the event that a manufacturer that would 
have received payment under subparagraph (A) or (C) of paragraph 
(1), (2), or (3) ceases to be qualified for such payment as such a 
manufacturer, the amounts otherwise payable to the remaining 
manufacturers under such subparagraph shall be increased on a pro 
rata basis by the amount of the payment such manufacturer would have 
received.
    (8) Reference.--For purposes of paragraphs (1)(A) and (6), the 
``records of the Customs Service as of September 11, 2001'' are the 
records of the Wool Duty Unit of the Customs Service on September 
11, 2001, as adjusted by the Customs Service to the extent necessary 
to carry out this section. The amounts so adjusted are not subject 
to administrative or judicial review.
    (e) Affidavits by Manufacturers.--(1) Affidavit Required.--A 
manufacturer may not receive a payment under this section for 
calendar year 2000, 2001, or 2002, as the case may be, unless that 
manufacturer has submitted to the Customs Service for that calendar 
year a signed affidavit that attests that, during that calendar 
year, the affiant was a manufacturer in the United States described 
in subsection (a), (b), or (c).
    (2) Timing.--An affidavit under paragraph (1) shall be valid--
    (A) In the case of a manufacturer described in paragraph (1), 
(2)(A), or (3)(A) of subsection (d) filing a claim for a payment for 
calendar year 2000 or 2001, or both, only if the affidavit is 
postmarked no later than 15 days after the date of enactment of the 
Wool Manufacturer Payment Clarification and Technical Corrections 
Act; and
    (B) In the case of a claim for a payment for calendar year 2002, 
only if the affidavit is postmarked no later than March 1, 2003.
    (f) Offsets.--Notwithstanding any other provision of this 
section, any amount otherwise payable under subsection (d) to a 
manufacturer in calendar year 2001 and, where applicable, in 
calendar years 2002 and 2003, shall be reduced by the amount of any 
payment received by that manufacturer under this section before the 
enactment of the Wool Manufacturer Payment Clarification and 
Technical Corrections Act.
    (g) Definition.--For purposes of this section, the manufacturer 
is the party that owns--
    (1) Imported worsted wool fabric, of the kind described in 
heading 9902.51.11 or 9902.51.12 of the Harmonized Tariff Schedule 
of the United States, at the time the fabric is cut and sewn in the 
United States into men's or boys' suits, suit-type jackets, or 
trousers;
    (2) Imported wool yarn, of the kind described in heading 5107.10 
or 9902.51.13 of such Schedule, at the time the yarn is processed in 
the United States into worsted wool fabric; or
    (3) Imported wool fiber or wool top, of the kind described in 
heading 5101.11, 5101.19, 5101.21, 5101.29, 5101.30, 5103.10, 
5103.20, 5104.00, 5105.21, 5105.29, or 9902.51.14 of such Schedule, 
at the time the wool fiber or wool top is processed in the United 
States into wool yarn.

    Dated: August 8, 2002.
Jayson P. Ahern,
Assistant Commissioner, Office of Field Operations.
[FR Doc. 02-20478 Filed 8-8-02; 3:11 pm]
BILLING CODE 4820-02-P