[Federal Register Volume 67, Number 168 (Thursday, August 29, 2002)]
[Proposed Rules]
[Pages 55375-55376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-22106]


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DEPARTMENT OF COMMERCE

International Trade Administration

DEPARTMENT OF THE INTERIOR

Office of Insular Affairs

15 CFR Part 303

[Docket No. 991228350-2176-03]
RIN 0625-AA57


Changes in the Insular Possessions Watch, Watch Movement and 
Jewelry Program

AGENCIES: Import Administration, International Trade Administration, 
Department of Commerce; Office of Insular Affairs, Department of the 
Interior.

ACTION: Notice of proposed rulemaking and request for comments.

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SUMMARY: The Departments propose amending their regulations governing 
watch duty-exemption allocations and the watch and jewelry duty-refund 
benefits for producers in the United States insular possessions (the 
U.S. Virgin Islands, Guam, American Samoa and the Commonwealth of the 
Northern Mariana Islands). The proposed rule would amend ITA 
regulations by clarifying the meaning of ``permanent resident'' which 
is a term used in Pub. L. 97-446 and the current regulations.

DATES: Written comments must be received on or before September 30, 
2002.

ADDRESSES: Address written comments to Faye Robinson, Acting Director, 
Statutory Import Programs Staff, FCB, Suite 4100W, U.S. Department of 
Commerce, 14th and Constitution Ave., NW., Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT: Faye Robinson, (202) 482-3526, same 
address as above.

SUPPLEMENTARY INFORMATION: The insular possessions watch industry 
provision in Sec. 110 of Pub. L. 97-446 (96 Stat. 2331) (1983), as 
amended by Sec. 602 of Pub. L. 103-465 (108 Stat. 4991) (1994); 
additional U.S. Note 5 to chapter 91 of the Harmonized Tariff Schedule 
of the United States (``HTSUS''), as amended by Pub. L. 94-241 (90 
Stat. 263) (1976) requires the Secretary of Commerce and the Secretary 
of the Interior, acting jointly, to establish a limit on the quantity 
of watches and watch movements which may be entered free of duty during 
each calendar year. The law also requires the Secretaries to establish 
the shares of this limited quantity which may be entered from the 
Virgin Islands, Guam, American Samoa and the Commonwealth of the 
Northern Mariana Islands (``CNMI''). After the Departments have 
verified the data submitted on the annual application (Form ITA-334P), 
the producers' duty-exemption allocations are calculated from the 
territorial share in accordance with 15 CFR 303.14 and each producer is 
issued a duty-exemption license. The law further requires the 
Secretaries to issue duty-refund certificates to each territorial watch 
and watch movement producer based on the company's duty-free shipments 
and creditable wages paid during the previous calendar year.
    Pub. L. 106-36 (113 Stat. 127) (1999) authorizes the issuance of a 
duty-refund certificate to each territorial jewelry producer for any 
article of jewelry provided for in heading 7113 of the HTSUS which is 
the product of any such territory. The value of the certificate is 
based on creditable wages paid and duty-free units shipped into the 
United States during the previous calendar year. Although the law 
specifically mentions the U.S. Virgin Islands, Guam and American Samoa, 
the issuance of the duty-refund certificate would also apply to the 
CNMI due to the Covenant to Establish a Commonwealth of the Northern 
Mariana Islands in Political Union with the United States of America 
(Pub. L. 94-241), which states that goods from the CNMI are entitled to 
the same tariff treatment as imports from Guam. See also 19 CFR 7.2(a). 
In order to be considered a product of such territories, the jewelry 
must meet the U.S. Customs Service substantial transformation 
requirements (the jewelry must become a new and different article of 
commerce as a result of production or manufacture performed in the 
territory). To receive duty-free treatment, the jewelry must also 
satisfy the requirements of General Note 3(a)(iv) of the HTSUS and 
applicable Customs Regulations (19 CFR 7.3).

Proposed Amendments

    We propose amending Subpart A Sec. 303.2(a) by adding paragraph 
(a)(16) and Subpart B Sec. 303.16(a) by adding paragraph (a)(11) to 
provide a definition for ``permanent resident'' in order to clarify the 
meaning of the term for purposes of the insular program. The program 
was designed to spur local employment by giving producers benefits 
based on creditable wages paid to local people who were permanently 
domiciled in the insular possessions. Therefore, the Annual Application 
(Form ITA-334P) has always required each applicant to state the wages 
paid to employees who did not reside and work in the territory for at 
least six months during the calendar year so that the wages paid to 
non-residents could be deducted from the total wages before the 
creditable wages benefits were calculated. The program was not designed 
to give benefits based on creditable wages paid to program owners, 
shareholders or employees who are not domiciled in the insular 
possessions. We propose a definition that would continue to provide 
producers with benefits based on creditable wages including the 
creditable wages paid to program workers who meet the permanent 
resident criteria which require a person with one or more residences 
outside the insular possessions to maintain his or her domicile in the 
insular possessions, to reside (i.e., be physically present for at 
least 183 days per year) and work in the territory at a program 
company, and to maintain his or her principal office for day-to-day 
work in the insular possessions. There will continue to be no benefits 
based on wages paid to persons who do not meet these permanent resident 
criteria.

Administrative Law Requirements

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601 et 
seq., the Chief Counsel for Regulation at the Department of Commerce 
has certified to the Chief Counsel for Advocacy, Small Business 
Administration, that the proposed rule, if promulgated as final, will 
not have a significant economic impact on a substantial number of small 
entities. This rulemaking would clarify the meaning of ``permanent 
resident''. The clarification would have no economic impact on the 
companies since this would not be a change in policy and this would 
have no new burdens since there would be no new paperwork requirements.

Paperwork Reduction Act

    This proposed rulemaking does not involve new collection-of-
information requirements subject to review and approval by the Office 
of Management and Budget (OMB) under the Paperwork Reduction Act of 
1995. Collection activities are currently approved by the

[[Page 55376]]

Office of Management and Budget under control numbers 0625-0040 and 
0625-0134.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with a collection of information unless it 
displays a currently valid OMB Control Number.

Executive Order 12866

    It has been determined that the proposed rulemaking is not 
significant for purposes of Executive Order 12866.

List of Subjects in 15 CFR Part 303

    Administrative practice and procedure, American Samoa, Customs 
duties and inspection, Guam, Imports, Marketing quotas, Northern 
Mariana Islands, Reporting and recordkeeping requirements, Virgin 
Islands, Watches and jewelry.
    For reasons set forth above, the Departments propose to amend 15 
CFR Part 303 as follows:

PART 303--WATCHES, WATCH MOVEMENTS AND JEWELRY PROGRAM

    1. The authority citation for 15 CFR Part 303 continues to read as 
follows:

    Authority: Pub. L. 97-446, 96 Stat. 2331 (19 U.S.C. 1202, note); 
Pub. L. 103-465, 108 Stat. 4991; Pub. L. 94-241, 90 Stat. 263 (48 
U.S.C. 1681, note); Pub. L. 106-36, 113 Stat.127,167.

    2. Section 303.2 is amended by adding paragraph (a)(16) as follows:


Sec. 303.2  Definitions and forms.

    (a) * * *
    (16) Permanent resident means a person with one residence which is 
in the insular possessions or a person with one or more residences 
outside the insular possessions who meets criteria that include 
maintaining his or her domicile in the insular possessions, residing 
(i.e., be physically present for at least 183 days per year) and 
working in the territory at a program company, and maintaining his or 
her primary office for day-to-day work in the insular possessions.
* * * * *
    3. Section 303.16 is amended by adding paragraph (a)(11) as 
follows:


Sec. 303.16  Definitions and forms.

    (a) * * *
    (11) Permanent resident means a person with one residence which is 
in the insular possessions or a person with one or more residences 
outside the insular possessions who meets criteria that include 
maintaining his or her domicile in the insular possessions, residing 
(i.e., be physically present for at least 183 days per year) and 
working in the territory at a program company, and maintaining his or 
her primary office for day-to-day work in the insular possessions.
* * * * *

Faryar Shirzad,
Assistant Secretary for Import Administration, Department of Commerce.
Nikolao Pula,
Acting Deputy Assistant Secretary for Insular Affairs, Department of 
the Interior.
[FR Doc. 02-22106 Filed 8-28-02; 8:45 am]
BILLING CODES 3510-DS-P; 4310-93-P