[Federal Register Volume 68, Number 190 (Wednesday, October 1, 2003)]
[Rules and Regulations]
[Pages 56555-56556]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-24903]



[[Page 56555]]

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DEPARTMENT OF COMMERCE

International Trade Administration

DEPARTMENT OF THE INTERIOR

Office of Insular Affairs

15 CFR Part 303

[Docket No. 030707164-3230-02]
RIN 0625-AA63


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: Final rule.

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SUMMARY: The Departments of Commerce and the Interior (the Departments) 
amend 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 rule 
amends existing regulations, due to changes in the industry, by 
updating the watch assembly requirements for purposes of the duty 
refund. We also amend 15 CFR part 303 to reflect the new designations 
that were created with the addition of the Department of Homeland 
Security.

DATES: This rule is effective October 1, 2003.

FOR FURTHER INFORMATION CONTACT: Faye Robinson, (202) 482-3526.

SUPPLEMENTARY INFORMATION: The Departments of Commerce and the Interior 
(the Departments) issue this rule to amend 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 background information and purpose of 
this rule is found in the preamble to the proposed rule (68 FR 45177, 
August 1, 2003) and is not repeated here.
    The Departments amend the definitions for Creditable wages and Non-
91/5 watches and watch movements, subpart A, 303.2(a)(13) and (14) 
respectively, to allow wages to be creditable towards the duty refund 
for watches containing preassembled movements provided (1) that the 
producer is unable to purchase the movements unassembled and (2) that 
it completes in the insular possession all other assembly operations 
required to make the movement into a watch (see discussion, below). In 
order for wages to be considered creditable for watch assembly 
operations which incorporate preassembled movements, the Departments 
also amend subpart A, 303.5(b)(6) to require producers who completely 
assemble watches in the insular possessions, with the exception of the 
movement, to maintain documentation that demonstrates that the 
preassembled movement the insular producer purchased could not have 
been purchased in an unassembled condition. This documentation must be 
available, along with other relevant company records, for review during 
the annual audit and verification of the data from the Annual 
Application ( Form ITA-334P). Producers are still required to meet the 
Bureau of Customs and Border Protection and the Departments' assembly 
requirements for purposes of the duty exemption.
    Finally, this rule amends 15 CFR part 303 to reflect the new 
designations that were created with the addition of the Department of 
Homeland Security.
    ITA received one comment in response to the proposed rule and 
request for comments. The commenter expressed support in totality for 
the new rule without revision. Accordingly, the Departments adopt the 
provisions in the proposed rule without change.

Administrative Law Requirements

    Administrative Procedure Act. The Departments waives the 30-day 
delay in effectiveness for this rule because this rule relieves a 
restriction. (See 5 U.S.C. 553(d)(1)). This rule provides more 
flexibility in the types of movements that can be used in the watch 
assembly than was allowed prior to the adoption of this rule. Also, 
this rule allows a duty refund benefit for watches assembled with 
partially or completely assembled movements if the movement cannot be 
purchased unassembled. Because, this rule relieves restrictions for 
watch manufacturers, the 30-day delay in effectiveness is waived and 
this rule is effective upon publication.
    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 would 
not have a significant economic impact on a substantial number of small 
entities. The factual basis for this certification was published in the 
proposed rule and is not repeated here. No comments were received 
regarding the economic impact of this rule on small entities. As a 
result, a final regulatory flexibility analysis was not prepared.
    Paperwork Reduction Act. This rulemaking contains revised 
collection of information requirements that have been approved by the 
Office of Management and Budget under control numbers 0625-0040 and 
0625-0134. Send comments regarding the burden estimate or any other 
aspect of the collection of information to U.S. Department of Commerce, 
ITA Information Officer, Washington, DC 20230 and the Office of 
Information and Regulations Officer, Office of Management and Budget, 
Washington, DC 20503 (Att: OMB Desk Officer).
    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.
    E.O. 12866. It has been determined that the 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 record keeping requirements, Virgin 
Islands, Watches and jewelry.


0
For reasons set forth above, the Departments amend 15 CFR part 303 as 
follows:

PART 303--WATCHES, WATCH MOVEMENTS AND JEWELRY PROGRAM

0
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. 167.

0
2. Title 15 CFR part 303 is amended by removing ``U.S. Customs 
Service'' or ``Customs Service'' wherever it appears and adding 
``Bureau of Customs and Border Protection'' in its place.

0
3. Title 15 CFR part 303 is amended by removing ``Department of the 
Treasury'' wherever it appears and adding ``Department of Homeland 
Security'' in its place.

0
4. Section 303.2 is amended by revising the first sentence of paragraph 
(a)(13) and the first sentence of paragraph (a)(14) as set forth below.

[[Page 56556]]

Sec.  303.2  Definitions and forms.

    (a) * * *
    (13) Creditable wages means all wages, up to an amount equal to 65% 
of the contribution and benefit base for Social Security as defined in 
the Social Security Act for the year in which the wages were earned, 
paid to permanent residents of the territories employed in a firm's 91/
5 watch and watch movement assembly operations, plus wages paid for the 
repair of non-91/5 watches up to an amount equal to 50% of the firm's 
total creditable wages, and for wages paid for the complete assembly of 
watches in the insular possession, with the exception of the movement, 
only in situations where the desired movement can not be purchased in 
an unassembled condition. * * *
    (14) Non-91/5 watches and watch movements include, but are not 
limited to, watches and movements which are liquidated as dutiable by 
the Bureau of Customs and Border Protection but do not include, for 
purposes of the duty refund, watches that are completely assembled in 
the insular possessions, with the exception of a desired movement if 
the movement cannot be purchased in an unassembled condition; contains 
any material which is the product of any country with respect to which 
Column 2 rates of duty apply; are ineligible for duty-free treatment 
pursuant to law or regulation; or are units the assembly of which the 
Departments have determined not to involve substantial and meaningful 
work in the territories (as elsewhere defined in these regulations).
* * * * *

0
5. Section 303.5(b)(6) is revised to read as set forth below.


Sec.  303.5  Application for annual allocation of duty-exemptions.

* * * * *
    (b) * * *
    (6) Records on purchases of components, including documentation on 
the purchase of any preassembled movements, which demonstrate that such 
movements could not have been purchased from the vendor in an 
unassembled condition, and records on the sales of insular watches and 
movements, including proof of payment; and''
* * * * *

James J. Jochum,
Acting Assistant Secretary for Import Administration, Department of 
Commerce.
Nikolao Pula,
 Director, Office of Insular Affairs, Department of the Interior.
[FR Doc. 03-24903 Filed 9-30-03; 8:45 am]
BILLING CODES 3510-DS-P and 4310-93-P